Royal Gold, Inc. 2,000,000 Shares Common Stock (par value $0.01 per share) Underwriting Agreement New York, New York September 21, 2005
Exhibit 1.1
Royal Gold, Inc.
2,000,000 Shares
Common Stock
(par value $0.01 per share)
Common Stock
(par value $0.01 per share)
HSBC Securities (USA) Inc.
as Representative of the several Underwriters
c/o HSBC Securities (USA) Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
as Representative of the several Underwriters
c/o HSBC Securities (USA) Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Royal Gold, Inc., a corporation organized under the laws of Delaware (the “Company”), proposes
to sell to the several underwriters named in Schedule I to this Agreement (the “Underwriters”), for
whom you (the “Representative”) are acting as representative, 2,000,000 shares of common stock, par
value $0.01 per share (“Common Stock”) of the Company (said shares to be issued and sold by the
Company being hereinafter called the “Underwritten Securities”). The Company also proposes to
grant to the Underwriters an option to purchase up to 300,000 additional shares of Common Stock to
cover over-allotments (the “Option Securities”; the Option Securities, together with the
Underwritten Securities, being hereinafter called the “Securities”). The use of the neuter in this
Agreement shall include the feminine and masculine wherever appropriate. Any reference herein to
the Registration Statement, the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus shall be deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the Exchange Act on or before the Effective
Date of the Registration Statement or the issue date of the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus, as the case may be, and the Canadian offering memorandum (the
“Canadian Offering Memorandum”) delivered to purchasers of Common Stock in the Provinces of
Alberta, British Columbia, Ontario and Quebec (the “Canadian Jurisdictions”); and any reference
herein to the terms “amend”, “amendment” or “supplement” with respect to the Registration
Statement, the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall be
deemed to refer to and include the filing of any document under the Exchange Act after the
Effective Date of the Registration Statement or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may be, deemed to be incorporated
therein by reference. Certain terms used herein are defined in Section 17 hereof.
1. Representations and Warranties.
The Company represents and warrants to, and agrees with, each Underwriter as set forth below
in this Section 1.
(i) The Company meets the requirements for use of Form S-3 under the Act and has
prepared and filed with the Commission a registration statement (file number 333-111490) on
Form S-3, including a related basic prospectus, for registration under the Act of the
offering and sale of the Securities. The Company may have filed one or more amendments
thereto, including a Preliminary Final Prospectus, each of which has previously been
furnished to you. The Company will next file with the Commission one of the following: (1)
after the Effective Date of such registration statement, a final prospectus supplement
relating to the Securities in accordance with Rules 430A and 424(b), (2) prior to the
Effective Date of such registration statement, an amendment to such registration statement
(including the form of final prospectus supplement) or (3) a final prospectus in accordance
with Rules 415 and 424(b). In the case of clause (1), the Company has included in such
registration statement, as amended at the Effective Date, all information (other than Rule
430A Information) required by the Act and the rules thereunder to be included in such
registration statement and the Final Prospectus. As filed, such final prospectus supplement
or such amendment and form of final prospectus supplement shall contain all Rule 430A
Information, together with all other such required information, and, except to the extent
the Representative shall agree in writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific additional information and
other changes (beyond that contained in the Basic Prospectus and any Preliminary Final
Prospectus) as the Company has advised you, prior to the Execution Time, will be included or
made therein. The Registration Statement, at the Execution Time, meets the requirements set
forth in Rule 415(a)(1)(x). No order preventing or suspending the use of any prospectus has
been issued by the Commission.
(ii) On the Effective Date, the Registration Statement did or will, and when the Final
Prospectus is first filed (if required) in accordance with Rule 424(b) and on the Closing
Date (as defined herein) and on any date on which Option Securities are purchased, if such
date is not the Closing Date (a “settlement date”), the Final Prospectus (and any
supplements thereto) will, comply in all material respects with the applicable requirements
of the Act and the Exchange Act and the respective rules thereunder; on the Effective Date
and at the Execution Time, the Registration Statement did not or will not contain any untrue
statement of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading; and, on the
Effective Date, the Final Prospectus, if not filed pursuant to Rule 424(b), will not, and on
the date of any filing pursuant to Rule 424(b) and on the Closing Date and any settlement
date, the Final Prospectus (together with any supplement thereto) will not, include any
untrue statement of a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that the Company makes no representations or warranties
as to the information contained in or omitted from the
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Registration Statement or the Final Prospectus (or any supplement thereto) in reliance
upon and in conformity with information furnished in writing to the Company by or on behalf
of any Underwriter through the Representative specifically for inclusion in the Registration
Statement or the Final Prospectus (or any supplement thereto).
(iii) Each of the Company and its subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the jurisdiction in
which it is chartered or organized with full corporate power and authority to own or lease,
as the case may be, and to operate its properties and conduct its business as described in
the Final Prospectus, and is duly qualified to do business as a foreign corporation and is
in good standing under the laws of each jurisdiction which requires such qualification, and
in which the failure to qualify would have a Material Adverse Effect.
(iv) All the outstanding shares of capital stock of each subsidiary of the Company have
been duly and validly authorized and issued and are fully paid and nonassessable, and,
except as otherwise set forth in the Final Prospectus, all outstanding shares of capital
stock of the Company’s subsidiaries are owned by the Company either directly or through
wholly owned subsidiaries free and clear of any security interests, claims, liens or
encumbrances.
(v) The Company’s authorized equity capitalization is as set forth in the Final
Prospectus. The share capital of the Company conforms in all material respects to the
description thereof contained in the Final Prospectus. The outstanding shares of Common
Stock have been duly and validly authorized and issued and are fully paid and nonassessable.
The Securities being sold hereunder by the Company have been duly and validly authorized,
and, when issued and delivered to and paid for by the Underwriters pursuant to this
Agreement, will be fully paid and nonassessable. The certificates for the Securities are in
valid and sufficient form. The holders of outstanding shares of capital stock of the
Company are not entitled to preemptive or other rights to subscribe for the Securities; and,
except as set forth in the Final Prospectus, no options, warrants or other rights to
purchase, agreements or other obligations to issue, or rights to convert any obligations
into or exchange any securities for, shares of capital stock of or ownership interests in
the Company are outstanding.
(vi) Neither the Company nor any of its subsidiaries has sustained since the date of
the latest audited financial statements included or incorporated by reference in the Final
Prospectus any material loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor dispute or court
or governmental action, order or decree, otherwise than as set forth or contemplated in the
Final Prospectus; and, since the respective dates as of which information is given in the
Registration Statement and the Final Prospectus, there has not been any change in the
capital stock or long-term debt of the Company or any of its subsidiaries or any material
adverse change, or any development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position, stockholders’ equity or
results of operations of the Company and its subsidiaries, except as set forth in or
contemplated in the Final Prospectus.
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(vii) There is no franchise, contract or other document of a character required to be
described in the Registration Statement or Final Prospectus, or to be filed as an exhibit
thereto, which is not described or filed as required; and the statements in the Final
Prospectus under the headings “Tax Considerations,” “Risk Factors — Risks Related to Our
Business — Anticipated federal legislation could decrease our royalty revenues” and “— The
mining industry is subject to significant environmental risks,” and “Certain United States
Federal Income Tax Considerations for Non-U.S. Holders” and in the Basic Prospectus under
the heading “Description of Common Stock,” insofar as such statements summarize legal
matters, agreements, documents or proceedings discussed therein, are accurate and fair
summaries of such legal matters, agreements, documents or proceedings.
(viii) The Company is not and, after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described in the Final Prospectus,
will not be an “investment company” as defined in the Investment Company Act of 1940, as
amended.
(ix) No consent, approval, authorization, filing with or order of any court or
governmental agency or body is required in connection with the transactions contemplated
herein, except such as have been obtained under the Act, such as may be required by the
National Association of Securities Dealers and the Toronto Stock Exchange, such as may be
required under the blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner contemplated herein and in
the Final Prospectus and such as may be required with the securities regulatory authorities
in each of the Canadian Jurisdictions.
(x) None of the issue and sale of the Securities, the execution and delivery by the
Company of this Agreement and the consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will conflict with, result in a breach
or violation of, or result in the imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries pursuant to: (i) the
organizational documents of the Company or any of its subsidiaries, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the Company or any of its
subsidiaries is a party or bound or to which its or their property is subject, except for
the Loan Agreement between Royal Gold, Inc. and HSBC Bank (USA), Inc. dated December 18,
2000, for which the Company has received a waiver from HSBC Bank USA as of September 21,
2005, (iii) any statute, law, rule, or regulation, or (iv) any judgment, writ, injunction,
ruling, order or decree of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the Company or any of its
subsidiaries or any of its or their properties.
(xi) The consolidated historical financial statements of the Company and its
subsidiaries included or incorporated by reference in the Final Prospectus and the
Registration Statement present fairly in all material respects the consolidated financial
condition, results of operations and cash flows of the Company and its subsidiaries as of
the dates and for the periods indicated, comply as to form with the applicable accounting
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requirements of the Act and the Exchange Act and have been prepared in conformity with
United States generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as otherwise noted therein). The selected
consolidated financial data set forth under the caption “Prospectus Supplement Summary —
Summary of Consolidated Financial Data” in the Final Prospectus and the Registration
Statement fairly present, on the basis stated in the Final Prospectus and the Registration
Statement, the information included therein.
(xii) No action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its subsidiaries or its
or their property is pending or, to the knowledge of the Company, threatened that (i) could
reasonably be expected to have a Material Adverse Effect, except as set forth in or
contemplated in the Final Prospectus (exclusive of any supplement thereto).
(xiii) Each of the Company and each of its Significant Subsidiaries owns or leases all
such properties as are necessary to the conduct of its operations as presently conducted;
the Company and its subsidiaries have good and marketable title to all real property owned
by them in fee simple, defensible title to all unpatented mining claims owned by them
(subject to the paramount title of the United States), and good and marketable title to all
personal property owned by them, in each case free and clear of all liens, encumbrances and
defects except as set forth in or contemplated in the Final Prospectus or such as do not
materially affect the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its subsidiaries; and any real
property and buildings held under lease by the Company and its Significant Subsidiaries are
held by them under valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such property and
buildings by the Company and its Significant Subsidiaries.
(xiv) Neither the Company nor any subsidiary of the Company is in violation or default
of (i) any provision of its organizational documents, (ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which it is a party or bound or to which
its property is subject, or (iii) any statute, law, rule, regulation, judgment, order or
decree of any court, regulatory body, administrative agency, governmental body, arbitrator
or other authority having jurisdiction over the Company or such subsidiary or any of its
properties, as applicable, any of which defaults or violations described in clauses (ii)
through (iii) will have, or after any required notice and passage of any applicable grace
period, would have a Material Adverse Effect.
(xv) PricewaterhouseCoopers LLP, who have certified certain financial statements of the
Company and its consolidated subsidiaries and delivered their report with respect to the
audited consolidated financial statements and schedules included or incorporated by
reference in the Final Prospectus, is an independent registered public accounting firm with
respect to the Company within the meaning of the Act and the Exchange Act and the applicable
published rules and regulations thereunder.
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(xvi) The Company has filed all foreign, federal, state and local tax returns that are
required to be filed or has requested extensions thereof (except in any case in which the
failure so to file would not have a Material Adverse Effect, except as set forth in or
contemplated in the Final Prospectus (exclusive of any supplement thereto)) and has paid all
taxes required to be paid by it and any other assessment, fine or penalty levied against it,
to the extent that any of the foregoing is due and payable, except for any such assessment,
fine or penalty that is currently being contested in good faith or as would not have a
Material Adverse Effect, except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(xvii) No labor problem or dispute with the employees of the Company or any of its
Significant Subsidiaries exists or is threatened or imminent, and the Company is not aware
of any existing or imminent labor disturbance by the employees of any of its or its
Significant Subsidiaries’ principal suppliers, contractors or customers, that could have a
Material Adverse Effect, except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(xviii) The Company and each of its Significant Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such amounts as are
prudent and customary in the businesses in which they are engaged; all policies of insurance
and fidelity or surety bonds insuring the Company or any of its Significant Subsidiaries or
their respective businesses, assets, employees, officers and directors are in full force and
effect; the Company and its Significant Subsidiaries are in compliance with the terms of
such policies and instruments in all material respects; and there are no claims by the
Company or any of its subsidiaries under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation of rights clause;
neither the Company nor any such Significant Subsidiary has been refused any insurance
coverage sought or applied for; and neither the Company nor any such Significant Subsidiary
has any reason to believe that it will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business at a cost that would not have a Material Adverse
Effect, except as set forth in or contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(xix) No subsidiary of the Company is currently prohibited, directly or indirectly,
from paying any dividends to the Company, from making any other distribution on such
subsidiary’s capital stock, from repaying to the Company any loans or advances to such
subsidiary from the Company or from transferring any of such subsidiary’s property or assets
to the Company or any other subsidiary of the Company, except as set forth in or
contemplated in the Final Prospectus (exclusive of any supplement thereto).
(xx) The Company and its subsidiaries possess all licenses, concessions, certificates,
permits and other authorizations issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective businesses (“Permits”); the
Company and its subsidiaries have fulfilled and performed all of their respective
obligations with respect to such Permits and neither the Company nor any such
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subsidiary has received any notice of proceedings relating to the revocation or
modification of any such Permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse Effect, except as set
forth in or contemplated in the Final Prospectus (exclusive of any supplement thereto).
(xxi) The Company and each of its subsidiaries maintains and will maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations; (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with United States generally accepted accounting
principles and to maintain asset accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. The Company maintains and will
maintain disclosure controls and procedures (as defined as Rule 13a-15 of the Exchange Act)
designed to ensure that information required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is recorded, processed, summarized and
reported in accordance with the Exchange Act and the rules and regulations thereunder. The
Company has carried out and will carry out evaluations, under the supervision and with the
participation of the Company’s management, of the effectiveness of the design and operation
of the Company’s disclosure controls and procedures in accordance with Rule 13a-15 of the
Exchange Act.
(xxii) The Company has not taken, directly or indirectly, any action designed to or
that would constitute or that might reasonably be expected to cause or result in, under the
Exchange Act or otherwise, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(xxiii) The Company and its subsidiaries (i) have been and are in compliance with any
and all applicable foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants (“Environmental Laws”), (ii) have received and have been
and are in compliance with all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (iii) have not
received notice of any actual or potential liability under any environmental law, except
where such non-compliance with Environmental Laws, failure to receive required permits,
licenses or other approvals, or liability would not, individually or in the aggregate, have
a Material Adverse Effect, except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto). Except as set forth in the Final Prospectus
(exclusive of any supplement thereto), neither the Company nor any of its subsidiaries has
been named as a “potentially responsible party” under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, or is subject to any pending
or threatened proceeding in which a governmental entity is a party except for such
proceedings that would involve monetary sanctions of less than $100,000.
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(xxiv) In the ordinary course of its business, the Company periodically reviews the
effect of Environmental Laws on the business, operations and properties of the Company and
its subsidiaries, in the course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws, or any permit,
license or approval, any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly or in the aggregate,
have a Material Adverse Effect, except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto).
(xxv) The minimum funding standard under Section 302 of the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published interpretations
thereunder (“ERISA”), has been satisfied by each “pension plan” (as defined in Section 3(2)
of ERISA) which has been established or maintained by the Company and/or one or more of its
subsidiaries, and the trust forming part of each such plan which is intended to be qualified
under Section 401 of the Code is so qualified except in any case in which the failure to
maintain such minimum funding standard or such qualification would not have a Material
Adverse Effect; each of the Company and its subsidiaries has fulfilled its obligations, if
any, under Section 515 of ERISA; neither the Company nor any of its subsidiaries maintains
or is required to contribute to a “welfare plan” (as defined in Section 3(1) of ERISA) which
provides for retiree or other post-employment welfare benefits or insurance coverage as to
which the Company has not reserved its right to amend or terminate the plan in its
discretion (other than “continuation coverage” (as defined in Section 602 of ERISA)); each
pension plan and welfare plan established or maintained by the Company and/or one or more of
its subsidiaries is in compliance in all material respects with the currently applicable
provisions of ERISA; and neither the Company nor any of its subsidiaries has incurred or
could reasonably be expected to incur any withdrawal liability under Section 4201 of ERISA,
any liability under Section 4062, 4063, or 4064 of ERISA, or any other liability under Title
IV of ERISA.
(xxvi) There is and has been no failure on the part of the Company and any of the
Company’s directors or officers, in their capacities as such, to comply with any provision
of the Sarbanes Oxley Act of 2002 and the rules and regulations promulgated in connection
therewith (the “Sarbanes Oxley Act”), including Section 402 related to loans and Sections
302 and 906 related to certifications.
(xxvii) Neither the Company nor any of its subsidiaries nor, to the knowledge of the
Company, any director, officer, agent, employee or affiliate of the Company or any of its
subsidiaries is aware of or has taken any action, directly or indirectly, that would result
in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and
the rules and regulations thereunder (“FCPA”), including, without limitation, making use of
the mails or any means or instrumentality of interstate commerce corruptly in furtherance of
an offer, payment, promise to pay or authorization of the payment of any money, or other
property, gift, promise to give, or authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the FCPA) or any foreign
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political party or official thereof or any candidate for foreign political office, in
contravention of the FCPA and the Company and its subsidiaries have conducted their
businesses in compliance with the FCPA and have instituted and maintain policies and
procedures designed to ensure, and which are reasonably expected to continue to ensure,
continued compliance therewith.
(xxviii) The operations of the Company and its subsidiaries are and have been conducted
at all times in compliance in all material respects with applicable financial recordkeeping
and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as amended, the money laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued, administered
or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no
action, suit or proceeding by or before any court or governmental agency, authority or body
or any arbitrator involving the Company or any of its subsidiaries with respect to the Money
Laundering Laws is pending or, to the knowledge of the Company, threatened.
(xxix) Neither the Company nor any of its subsidiaries nor, to the knowledge of the
Company, any director, officer, agent or employee of the Company or any of its subsidiaries
is currently subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or
indirectly use the proceeds of the offering, or lend, contribute or otherwise make available
such proceeds to any subsidiary, joint venture partner or other person or entity, for the
purpose of financing the activities of any person currently subject to any U.S. sanctions
administered by OFAC.
(xxx) The Company and its subsidiaries own, possess, license or have other rights to
use, on reasonable terms, all patents, patent applications, trade and service marks, trade
and service ▇▇▇▇ registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property (collectively, the
“Intellectual Property”) necessary for the conduct of the Company’s business as now
conducted or as proposed in the Final Prospectus to be conducted. Except as set forth in
the Final Prospectus, (i) to the Company’s knowledge, there are no rights of third parties
to any such Intellectual Property; (ii) to the Company’s knowledge, there is no material
infringement by third parties of any such Intellectual Property; (iii) there is no pending
or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others
challenging the Company’s rights in or to any such Intellectual Property, and the Company is
unaware of any facts which would form a reasonable basis for any such claim; (iv) there is
no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by
others challenging the validity or scope of any such Intellectual Property, and the Company
is unaware of any facts which would form a reasonable basis for any such claim; (v) there is
no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by
others that the Company infringes or otherwise violates any patent, trademark, copyright,
trade secret or other proprietary rights of others, and the Company is unaware of any other
fact which would form a reasonable basis for any such claim; (vi) to the Company’s
knowledge, there is no U.S. or foreign patent or published U.S. patent application which
contains claims that dominate or may
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dominate any Intellectual Property described in the Final Prospectus as being owned by
or licensed to the Company or that interferes with the issued or pending claims of any such
Intellectual Property; and (vii) there is no prior art of which the Company is aware that
may render any U.S. patent held by the Company invalid or any U.S. patent application held
by the Company unpatentable which has not been disclosed to the U.S. Patent and Trademark
Office.
(xxxi) Except as disclosed in the Registration Statement and the Final Prospectus, the
Company (i) does not have any material lending or other relationship with any bank or
lending affiliate of the Representative and (ii) does not intend to use any of the proceeds
from the sale of the Securities hereunder to repay any outstanding debt owed to any
affiliate of the Representative.
Any certificate signed by any officer of the Company and delivered to the Representative or
counsel for the Underwriters in connection with the offering of the Securities shall be deemed a
representation and warranty by the Company, as to matters covered thereby, to each Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company agrees to sell to each Underwriter,
and each Underwriter agrees, severally and not jointly, to purchase from the Company, at a purchase
price of $24.70 per share, the amount of the Underwritten Securities set forth opposite such
Underwriter’s name in Schedule I to this Agreement.
(b) Subject to the terms and conditions and in reliance upon the representations and
warranties herein set forth, the Company hereby grants an option to the several Underwriters to
purchase, severally and not jointly, up to 300,000 Option Securities at the same purchase price per
share as the Underwriters shall pay for the Underwritten Securities. Such option may be exercised
in whole or in part to cover over-allotments at any time on or before the 30th day after the date
of the Final Prospectus upon written or telegraphic notice by the Representative to the Company
setting forth the number of shares of the Option Securities as to which the several Underwriters
are exercising the option and the settlement date. The number of Option Securities to be purchased
by each Underwriter shall be the same percentage of the total number of shares of the Option
Securities to be purchased by the several Underwriters as such Underwriter is purchasing of the
Underwritten Securities, subject to such adjustments as you in your absolute discretion shall make
to eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment for the Underwritten Securities and
the Option Securities (if the option provided for in Section 2(b) hereof shall have been exercised
on or before the third Business Day prior to the Closing Date) shall be made at 10:00 AM, New York
City time, on September 26, 2005, or at such time on such later date not more than three Business
Days after the foregoing date as the Representative shall designate, which date and time may be
postponed by agreement between the Representative and the Company or as provided in Section 9
hereof (such date and time of delivery and payment for the Securities being herein called the
“Closing Date”). Delivery of the Securities shall be made to the Representative for the respective
accounts of the several Underwriters against payment by the several Underwriters through the
Representative of the respective aggregate purchase prices of
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the Securities being sold by the Company to or upon the order of the Company by wire
transfer payable in same-day funds to the accounts specified by the Company. Delivery of the
Underwritten Securities and the Option Securities shall be made through the facilities of The
Depository Trust Company unless the Representative shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised after the third Business Day
prior to the Closing Date, the Company will deliver the Option Securities (at the expense of the
Company) to the Representative, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ the date specified by
the Representative (which shall be within three Business Days after exercise of such option) for
the respective accounts of the several Underwriters, against payment by the several Underwriters
through the Representative of the purchase price thereof to or upon the order of the Company by
wire transfer payable in same-day funds to the accounts specified by the Company. If settlement
for the Option Securities occurs after the Closing Date, the Company will deliver to the
Representative on the settlement date for the Option Securities, and the obligation of the
Underwriters to purchase the Option Securities shall be conditioned upon receipt of, supplemental
opinions, certificates and letters confirming as of such date the opinions, certificates and
letters delivered on the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the several Underwriters propose to
offer the Securities for sale to the public as set forth in the Final Prospectus and in accordance
with the selling restrictions set forth in Exhibit C hereto. With respect to the Canadian
Jurisdictions, the several Underwriters agree that they shall offer for sale and sell the Common
Stock only in such jurisdictions, and therein only in such manner that, pursuant to the applicable
laws of the Canadian Jurisdictions, no prospectus need be delivered to purchasers or be filed in
connection therewith, and therein only to purchasers eligible to purchase such securities in the
jurisdiction of their residence. The Underwriters will utilize a form of subscription agreement
(the “Subscription Agreement”) in the Canadian Jurisdictions satisfactory to the Company and its
counsel, acting reasonably.
5. Agreements.
The Company agrees with the several Underwriters that:
(i) The Company will use its best efforts to cause the Registration Statement, if not
effective at the Execution Time, and any amendment thereof, to become effective. Prior to
the termination of the offering of the Securities, the Company will not file any amendment
of the Registration Statement or supplement (including the Final Prospectus or any
Preliminary Final Prospectus) to the Basic Prospectus or any Rule 462(b) Registration
Statement unless the Company has furnished you a copy for your review prior to filing and
will not file any such proposed amendment or supplement to which you reasonably object,
unless required by the Act or the Exchange Act. Subject to the foregoing sentence, if the
Registration Statement has become or becomes effective pursuant to Rule 430A, or filing of
the Final Prospectus is otherwise required under Rule 424(b), the Company will cause the
Final Prospectus, properly completed, and any supplement thereto to be filed in a form
approved by the Representative with the Commission pursuant to the applicable paragraph of
Rule 424(b) within the time period prescribed and will provide evidence satisfactory to the
Representative of such timely
11
filing. The Company will promptly advise the Representative (1) when the Registration
Statement, if not effective at the Execution Time, shall have become effective, (2) when the
Final Prospectus, and any supplement thereto, shall have been filed (if required) with the
Commission pursuant to Rule 424(b) or when any Rule 462(b) Registration Statement shall have
been filed with the Commission, (3) when, prior to termination of the offering of the
Securities, any amendment to the Registration Statement shall have been filed or become
effective, (4) of any request by the Commission or its staff for any amendment of the
Registration Statement, or any Rule 462(b) Registration Statement, or for any supplement to
the Final Prospectus or for any additional information, (5) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration Statement or
the institution or threatening of any proceeding for that purpose and (6) of the receipt by
the Company of any notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the institution or threatening of any proceeding
for such purpose. The Company will use its best efforts to prevent the issuance of any such
stop order or the suspension of any such qualification and, if issued, to obtain as soon as
possible the withdrawal thereof.
(ii) If, at any time when a prospectus relating to the Securities is required to be
delivered under the Act, any event occurs as a result of which the Final Prospectus as then
supplemented would include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of the circumstances
under which they were made not misleading, or if it shall be necessary to amend the
Registration Statement or supplement the Final Prospectus to comply with the Act or the
Exchange Act or the respective rules thereunder, the Company promptly will (1) notify the
Representative of such event, (2) prepare and file with the Commission, subject to the
second sentence of paragraph (i) of this Section 5, an amendment or supplement which will
correct such statement or omission or effect such compliance and (3) supply any supplemented
Final Prospectus to you in such quantities as you may reasonably request.
(iii) As soon as practicable, the Company will make generally available to its security
holders and to the Representative an earnings statement or statements of the Company and its
subsidiaries which will satisfy the provisions of Section 11(a) of the Act and Rule 158
under the Act.
(iv) The Company will use the net proceeds received by it from the sale of the Common
Stock pursuant to this Agreement in the manner specified in the Final Prospectus under the
caption “Use of Proceeds.”
(v) The Company will use its best efforts to list for quotation the Securities on the
Nasdaq National Market and the Toronto Stock Exchange and maintain its status as a
“reporting issuer” under the applicable securities laws of the Canadian Jurisdictions other
than the Province of Quebec.
(vi) The Company will furnish to the Representative and counsel for the Underwriters
signed copies of the Registration Statement (including exhibits thereto) and to each other
Underwriter a copy of the Registration Statement (without exhibits thereto)
12
and, so long as delivery of a prospectus by an Underwriter or dealer may be required by
the Act, as many copies of each Preliminary Final Prospectus and the Final Prospectus and
any supplement thereto as the Representative may reasonably request.
(vii) The Company will arrange, if necessary, for the qualification of the Securities
for sale under the laws of such jurisdictions as the Representative may designate and will
maintain such qualifications in effect so long as required for the distribution of the
Securities; provided that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take any action that
would subject it to service of process in suits, other than those arising out of the
offering or sale of the Securities, in any jurisdiction where it is not now so subject.
(viii) The Company will not, without the prior written consent of the Representative,
offer, sell, contract to sell, pledge, or otherwise dispose of (or enter into any
transaction which is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic disposition due to cash
settlement or otherwise) by the Company or any affiliate of the Company, directly or
indirectly, including the filing (or participation in the filing) of a registration
statement with the Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the meaning of Section
16 of the Exchange Act, with respect to any other shares of Common Stock or any securities
convertible into, or exercisable or exchangeable for, such Common Stock; or publicly
announce an intention to effect any such transaction, for a period of 90 days after the date
of this Agreement, provided, however, that the Company may (i) issue and sell Common Stock
or grant options pursuant to any employee stock option plan, stock ownership plan or
dividend reinvestment plan of the Company in effect at the Execution Time and set forth in
the Final Prospectus (exclusive of any supplement thereto) and (ii) issue Common Stock
issuable upon the conversion of securities or the exercise of warrants or options
outstanding at the Execution Time.
(ix) The Company will comply with all applicable securities and other applicable laws,
rules and regulations, including, without limitation, the Sarbanes Oxley Act, and will use
its best efforts to cause the Company’s directors and officers, in their capacities as such,
to comply with such laws, rules and regulations, including, without limitation, the
provisions of the Sarbanes Oxley Act.
(x) The Company will not take, directly or indirectly, any action designed to or that
would constitute or that might reasonably be expected to cause or result in, under the
Exchange Act or otherwise, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(xi) The Company agrees to pay the costs and expenses relating to the following
matters: (i) the preparation, printing or reproduction and filing with the Commission of the
Final Prospectus, and each amendment or supplement thereto; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges for counting
and packaging) of such copies of the Registration Statement, each Preliminary Final
Prospectus, the Final Prospectus, and all amendments or supplements
13
to any of them, as may, in each case, be reasonably requested for use in connection
with the offering and sale of the Securities; (iii) the preparation, printing,
authentication, issuance and delivery of certificates (if any) for the Securities, including
any stamp or transfer taxes in connection with the original issuance and sale of the
Securities; (iv) the printing (or reproduction) and delivery of this Agreement, any blue sky
memorandum and all other agreements or documents printed (or reproduced) and delivered in
connection with the offering of the Securities; (v) the registration of the Securities under
the Exchange Act and the listing for quotation of the Securities on the Toronto Stock
Exchange and the Nasdaq National Market; (vi) any registration or qualification of the
Securities for offer and sale under the securities or blue sky laws of the several states
(including filing fees and the reasonable fees and expenses of counsel for the Underwriters
relating to such registration and qualification); (vii) any filings required to be made with
the National Association of Securities Dealers, Inc. (including filing fees and the
reasonable fees and expenses of counsel for the Underwriters relating to such filings);
(viii) the transportation and other expenses incurred by or on behalf of Company
representatives in connection with presentations to prospective purchasers of the
Securities; (ix) the fees and expenses of the Company’s accountants and the fees and
expenses of counsel for the Company; and (x) all other costs and expenses incident to the
performance by the Company of its obligations under this Agreement.
6. Conditions to the Obligations of the Underwriters. The obligations of the
Underwriters to purchase the Underwritten Securities and the Option Securities, as the case may be,
shall be subject to the accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time, the Closing Date and any settlement date pursuant to
Section 3 hereof, to the accuracy of the statements of the Company made in any certificates
pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder
and to the following additional conditions:
(a) If the Registration Statement has not become effective prior to the Execution Time, unless
the Representative agrees in writing to a later time, the Registration Statement will become
effective not later than (i) 6:00 PM New York City time on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New York City time on such
date or (ii) 9:30 AM on the Business Day following the day on which the public offering price was
determined, if such determination occurred after 3:00 PM New York City time on such date; if filing
of the Final Prospectus, or any supplement thereto, is required pursuant to Rule 424(b), the Final
Prospectus, and any such supplement, will be filed in the manner and within the time period
required by Rule 424(b); and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have been instituted or
threatened.
(b) The Company shall have requested and caused ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., U.S. counsel for the
Company, and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Casgrain LLP, Canadian counsel for the Company, to have furnished to
the Representative their opinions substantially in the forms set forth in Exhibits D-1 and D-2
hereto, respectively, dated the Closing Date and any settlement date and addressed to the
Representative.
14
(c) The Representative shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel
for the Underwriters, such opinion or opinions, dated the Closing Date and any settlement date and
addressed to the Representative, with respect to the issuance and sale of the Securities, the
Registration Statement, the Final Prospectus (together with any supplement thereto) and other
related matters as the Representative may reasonably require, and the Company shall have furnished
to such counsel such documents as they request for the purpose of enabling them to pass upon such
matters.
(d) The Company shall have furnished to the Representative a certificate of the Company,
signed by the Chairman of the Board or the President and the principal financial or accounting
officer of the Company, dated the Closing Date and any settlement date, to the effect that the
signers of such certificate have carefully examined the Registration Statement, the Final
Prospectus, any supplements to the Final Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this Agreement are true and
correct on and as of the Closing Date and any settlement date with the same effect as if
made on the Closing Date and any settlement date and the Company has complied with all the
agreements and satisfied all the conditions on its part to be performed or satisfied at or
prior to the Closing Date and any settlement date;
(ii) no stop order suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or, to the Company’s
knowledge, threatened; and
(iii) since the date of the most recent financial statements included or incorporated
by reference in the Final Prospectus (exclusive of any supplement thereto), there has been
no Material Adverse Effect, except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(e) The Company shall have requested and caused PricewaterhouseCoopers LLP to have furnished
to the Representative letters, at the Execution Time and at the Closing Date and any settlement
date, dated respectively as of the Execution Time and as of the Closing Date and any settlement
date, in form and substance satisfactory to the Representative, confirming that it is an
independent registered public accounting firm within the meaning of the Act and the Exchange Act
and the respective applicable rules and regulations adopted by the Commission thereunder and
stating in effect that:
(i) in their opinion the audited financial statements and financial statement schedules
included or incorporated by reference in the Registration Statement and the Final Prospectus
and reported on by them comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the respective related rules and
regulations adopted by the Commission;
(ii) on the basis of carrying out certain specified procedures (but not an examination
in accordance with generally accepted auditing standards); a reading of the minutes of the
meetings of the shareholders and directors of the Company; and inquiries of certain
officials of the Company who have responsibility for financial and accounting
15
matters of the Company and its subsidiaries as to transactions and events subsequent to
June 30, 2005, nothing came to their attention which caused them to believe that:
(1) with respect to the period subsequent to June 30, 2005, there were any
changes, at a specified date not more than five days prior to the date of the
letter, in the long-term debt of the Company and its subsidiaries or capital stock
of the Company as compared with the amounts shown on the June 30, 2005 consolidated
balance sheet included or incorporated by reference in the Registration Statement
and the Final Prospectus, except in all instances for changes or decreases set forth
in such letter, in which case the letter shall be accompanied by an explanation by
the Company as to the significance thereof unless said explanation is not deemed
necessary by the Representative;
(2) the information included or incorporated by reference in the Registration
Statement and Final Prospectus in response to Regulation S-K, Item 301 (Selected
Financial Data) is not in conformity with the applicable disclosure requirements of
Regulation S-K; and
(iii) they have performed certain other specified procedures as a result of which they
determined that certain information of an accounting, financial or statistical nature (which
is limited to accounting, financial or statistical information derived from the general
accounting records of the Company and its subsidiaries) set forth in the Registration
Statement and the Final Prospectus and in Exhibit 12.1 of the Registration Statement,
including the information set forth under the captions “Prospectus Supplement Summary,”
“Risk Factors,” “Dividend Policy” and “Capitalization” in the Final Prospectus, the
information included or incorporated by reference in Items 1, 2, 5, 6, 7, 7A and 11 of the
Company’s Annual Report on Form 10-K, incorporated by reference in the Registration
Statement and the Final Prospectus and agrees with the accounting records of the Company and
its subsidiaries, excluding any questions of legal interpretation.
References to the Final Prospectus in this paragraph (e) include any supplement thereto at
the date of the letter.
(f) Subsequent to the Execution Time or, if earlier, the dates as of which information is
given in the Registration Statement (exclusive of any amendment thereof) and the Final Prospectus
(exclusive of any supplement thereto), there shall not have been (i) any change or decrease
specified in the letter or letters referred to in paragraph (e) of this Section 6 or (ii) any
Material Adverse Effect, except as set forth in or contemplated in the Final Prospectus (exclusive
of any supplement thereto) the effect of which, in any case referred to in clause (i) or (ii)
above, is, in the sole judgment of the Representative, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Registration Statement (exclusive of any amendment thereof) and the Final
Prospectus (exclusive of any supplement thereto).
16
(g) Prior to the Closing Date and any settlement date, the Company shall have furnished to the
Representative such further information, certificates and documents as the Representative may
reasonably request.
(h) The Securities shall have been approved for quotation on the Nasdaq National Market and
the Toronto Stock Exchange, subject only to official notice of issuance, and satisfactory evidence
of such actions shall have been provided to the Representative.
(i) At the Execution Time, the Company shall have furnished to the Representative a letter
substantially in the form of Exhibit A to this Agreement from each officer and director of the
Company addressed to the Representative.
(j) The Underwriters having received duly completed and executed Subscription Agreements from
purchasers in the Canadian Jurisdictions by no later than 5:00 p.m. (New York time) on September
23, 2005.
If any of the conditions specified in this Section 6 shall not have been fulfilled when and as
provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere
in this Agreement shall not be reasonably satisfactory in form and substance to the Representative
and counsel for the Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the Representative. Notice of
such cancellation shall be given to the Company in writing or by telephone or facsimile confirmed
in writing.
The documents required to be delivered by this Section 6 shall be delivered at the office of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on the Closing Date.
7. Reimbursement of Underwriters’ Expenses. If the sale of the Securities provided for
herein is not consummated because any condition to the obligations of the Underwriters set forth in
Section 6 hereof is not satisfied, because of any termination pursuant to Section 10 hereof or
because of any refusal, inability or failure on the part of the Company to perform any agreement
herein or comply with any provision hereof other than by reason of a default by any of the
Underwriters, the Company will reimburse the Underwriters severally through the Representative on
demand for all out-of-pocket expenses (including reasonable fees and disbursements of counsel) that
shall have been incurred by them in connection with the proposed purchase and sale of the
Securities.
8. Indemnification and Contribution. (a) The Company agrees to indemnify and hold
harmless each Underwriter, the directors, officers, employees and agents of each Underwriter and
each person who controls any Underwriter within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the registration statement for the registration of
the Securities as originally filed or in any amendment thereof, or in the Basic
17
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in conformity with
written information furnished to the Company by or on behalf of any Underwriter through the
Representative specifically for inclusion therein; provided further, that with respect to
any untrue statement or omission of material fact made in any Preliminary Final Prospectus, the
indemnity agreement contained in this Section 8(a) shall not inure to the benefit of any
Underwriter from whom the person asserting any such loss, claim, damage or liability purchased the
securities concerned, to the extent that any such loss, claim, damage or liability of such
Underwriter occurs under the circumstance where it shall have been determined by a court of
competent jurisdiction by final and nonappealable judgment that (w) the Company had previously
furnished copies of the Final Prospectus to the Representative, (x) delivery of the Final
Prospectus was required by the Act to be made to such person, (y) the untrue statement or omission
of a material fact contained in the Preliminary Final Prospectus was corrected in the Final
Prospectus and (z) there was not sent or given to such person, at or prior to the written
confirmation of the sale of such securities to such person, a copy of the Final Prospectus. This
indemnity agreement will be in addition to any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who signs the Registration Statement, and each
person who controls the Company within the meaning of either the Act or the Exchange Act to the
same extent as the foregoing indemnity to each Underwriter, but only with reference to written
information relating to such Underwriter furnished to the Company by or on behalf of such
Underwriter through the Representative specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition to any liability which any
Underwriter may otherwise have. The Company acknowledges that the statements set forth in the last
paragraph of the cover page regarding delivery of the Securities and, under the heading
“Underwriting,” (i) the list of underwriters and their respective participation in the sale of the
Securities, (ii) the sentences related to concessions and reallowances and (iii) the paragraphs
related to stabilization, syndicate covering transactions and penalty bids in any Preliminary Final
Prospectus and the Final Prospectus constitute the only information furnished in writing by or on
behalf of the several Underwriters for inclusion in any Preliminary Final Prospectus or the Final
Prospectus.
(c) Promptly after receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under this Section 8, notify the indemnifying party in writing
of the commencement thereof; but the failure so to notify the indemnifying party (i) will not
relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the indemnifying party
of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party
18
from any obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint
counsel of the indemnifying party’s choice at the indemnifying party’s expense to represent the
indemnified party in any action for which indemnification is sought (in which case the indemnifying
party shall not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below); provided, however, that
such counsel shall be satisfactory to the indemnified party. Notwithstanding the indemnifying
party’s election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel
if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would
present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel satisfactory to
the indemnified party to represent the indemnified party within a reasonable time after notice of
the institution of such action or (iv) the indemnifying party shall authorize the indemnified party
to employ separate counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or compromise or consent
to the entry of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought hereunder (whether or
not the indemnified parties are actual or potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional release of each indemnified party from
all liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party for any reason, the Company
and the Underwriters severally agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection with investigating
or defending same) (collectively “Losses”) to which the Company and one or more of the Underwriters
may be subject in such proportion as is appropriate to reflect the relative benefits received by
the Company and by the Underwriters from the offering of the Securities; provided, however, that in
no case shall (i) any Underwriter (except as may be provided in any agreement among underwriters
relating to the offering of the Securities) be responsible for any amount in excess of the
underwriting discount or commission applicable to the Securities purchased by such Underwriter
hereunder. If the allocation provided by the immediately preceding sentence is unavailable for any
reason, the Company and the Underwriters shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the Company and of the
Underwriters in connection with the statements or omissions which resulted in such Losses as well
as any other relevant equitable considerations. Benefits received by the Company shall be deemed
to be equal to the total net proceeds from the offering (before deducting expenses) received by it,
and benefits received by the Underwriters shall be deemed to be equal to the total underwriting
discounts and commissions, in each case as set forth on the cover page of the Final Prospectus.
Relative fault shall be determined by reference to, among other things, whether any untrue or any
alleged untrue statement of a material fact or the omission or alleged omission to state a material
fact relates to information provided by the
19
Company on the one hand or the Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent such untrue
statement or omission. The Company and the Underwriters agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any other method of allocation
which does not take account of the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8, each person who
controls an Underwriter within the meaning of either the Act or the Exchange Act and each director,
officer, employee and agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of either the Act or the
Exchange Act, each officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the Company, subject in each
case to the applicable terms and conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters shall fail to purchase
and pay for any of the Securities agreed to be purchased by such Underwriter or Underwriters
hereunder and such failure to purchase shall constitute a default in the performance of its or
their obligations under this Agreement, the remaining Underwriters shall be obligated severally to
take up and pay for (in the respective proportions which the amount of Securities set forth
opposite their names in Schedule I to this Agreement bears to the aggregate amount of Securities
set forth opposite the names of all the remaining Underwriters) the Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase; provided, however, that in the event
that the aggregate amount of Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate amount of Securities set forth in Schedule I
to this Agreement, the remaining Underwriters shall have the right to purchase all, but shall not
be under any obligation to purchase any, of the Securities, and if such non-defaulting Underwriters
do not purchase all the Securities, this Agreement will terminate without liability to any
non-defaulting Underwriter or the Company. In the event of a default by any Underwriter as set
forth in this Section 9, the Closing Date and any settlement date shall be postponed for such
period, not exceeding five Business Days, as the Representative shall determine in order that the
required changes in the Registration Statement and the Final Prospectus (and any supplement
thereto) or in any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to the Company and any
non-defaulting Underwriter for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the absolute
discretion of the Representative, by notice given to the Company prior to delivery of and payment
for the Securities, if at any time prior to such time (i) trading in the Company’s Common Stock
shall have been suspended by the Commission, the Toronto Stock Exchange or the Nasdaq National
Market or trading in securities generally on the New York Stock Exchange, or the Nasdaq National
Market shall have been suspended or limited or minimum prices shall have been established on such
Exchange or the Nasdaq National Market, (ii) a banking moratorium shall have been declared by
Federal, New York State or Canadian authorities or (iii) there shall have occurred any outbreak or
escalation of hostilities, declaration by the United
20
States or Canada of a national emergency or war, or other calamity or crisis the effect of
which on financial markets is such as to make it, in the sole judgment of the Representative,
impractical or inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Final Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Company or its officers and of
the Underwriters set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter or the Company or
any of the officers, directors, employees, agents or controlling persons referred to in Section 8
hereof, and will survive delivery of and payment for the Securities. The provisions of Sections 7
and 8 hereof shall survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and effective only on
receipt, and, if sent to the Representative, will be mailed, delivered or telefaxed to HSBC
Securities (USA) Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (fax
no.: (▇▇▇) ▇▇▇-▇▇▇▇), with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇); or, if sent to the
Company, will be mailed, delivered or telefaxed to Royal Gold, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Chairman of the Board of Directors and
Chief Executive Officer (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇); with a copy to ▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P., ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention: ▇▇▇▇ ▇▇▇▇▇▇ (fax no.: (▇▇▇)
▇▇▇-▇▇▇▇).
13. Successors. This Agreement will inure to the benefit of and be binding upon the
parties to this Agreement and their respective successors and the officers, directors, employees,
agents and controlling persons referred to in Section 8 hereof, and no other person will have any
right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and to be performed within the
State of New York.
15. Counterparts. This Agreement may be signed in one or more counterparts, each of
which shall constitute an original and all of which together shall constitute one and the same
agreement.
16. Headings. The section headings used herein are for convenience only and shall not
affect the construction hereof.
17. Definitions. The terms which follow, when used in this Agreement, shall have the
meanings indicated.
“Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the
Commission promulgated thereunder.
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“Basic Prospectus” shall mean the prospectus referred to in paragraph 1(i) above contained in
the Registration Statement at the Effective Date including any Preliminary Final Prospectus.
“Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday or a day
on which banking institutions or trust companies are authorized or obligated by law to close in New
York City.
“Commission” shall mean the Securities and Exchange Commission.
“Effective Date” shall mean each date and time that the Registration Statement, any
post-effective amendment or amendments thereto and any Rule 462(b) Registration Statement became or
become effective.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder.
“Execution Time” shall mean the date and time that this Agreement is executed and delivered by
the parties to this Agreement.
“Final Prospectus” shall mean the prospectus supplement relating to the Securities that was
first filed pursuant to Rule 424(b) after the Execution Time, together with the Basic Prospectus.
“Material Adverse Effect” shall mean any event that (i) could reasonably be expected to have a
material adverse effect on the performance of this Agreement or the consummation of any of the
transactions contemplated hereby or (ii) could reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), prospects, earnings, business or properties of
the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the
ordinary course of business.
“Preliminary Final Prospectus” shall mean any preliminary prospectus supplement to the Basic
Prospectus which describes the Securities and the offering thereof and is used prior to filing of
the Final Prospectus, together with the Basic Prospectus.
“Registration Statement” shall mean the registration statement referred to in paragraph 1(i)
above, including exhibits and financial statements, as amended at the Execution Time (or, if not
effective at the Execution Time, in the form in which it shall become effective) and, in the event
any post-effective amendment thereto or any Rule 462(b) Registration Statement becomes effective
prior to the Closing Date, shall also mean such registration statement as so amended or such Rule
462(b) Registration Statement, as the case may be. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as provided by Rule 430A.
“Rule 415”, “Rule 424”, “Rule 430A” and “Rule 462” refer to such rules under the Act.
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“Rule 430A Information” shall mean information with respect to the Securities and the offering
thereof permitted to be omitted from the Registration Statement when it becomes effective pursuant
to Rule 430A.
“Rule 462(b) Registration Statement” shall mean a registration statement and any amendments
thereto filed pursuant to Rule 462(b) relating to the offering covered by the registration
statement referred to in Section 1(i) of this Agreement.
“Significant Subsidiary” shall mean each significant subsidiary of the Company as defined by
Rule 1-02 of Regulation S-X or listed on Exhibit B attached hereto.
18. Arm’s Length Transaction. The Company acknowledges and agrees that (i) the
Underwriters are acting solely in the capacity of an arm’s length contractual counterparty to the
Company with respect to the offering of Securities contemplated hereby (including in connection
with determining the terms of the offering) and not as a financial advisor or a fiduciary to, or an
agent of, the Company or any other person. Additionally, neither the Representative nor any other
Underwriter is advising the Company or any other person as to any legal, tax, investment,
accounting or regulatory matters in any jurisdiction. The Company shall consult with its own
advisors concerning such matters and shall be responsible for making its own independent
investigation and appraisal of the transactions contemplated hereby, and the Underwriters shall
have no responsibility or liability to the Company with respect thereto. Any review by the
Underwriters of the Company, the transactions contemplated hereby or other matters relating to such
transactions will be performed solely for the benefit of the Underwriters and shall not be on
behalf of the Company.
This Agreement supersedes all prior agreements and understandings (whether written or oral)
between the Company and the Underwriters, or any of them, with respect to the subject matter
hereof.
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If the foregoing is in accordance with your understanding of our agreement, please sign and
return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall
represent a binding agreement between the Company and the several Underwriters.
| Very truly yours, ROYAL GOLD, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
The foregoing Agreement is hereby confirmed and accepted as of the date first above written.
HSBC SECURITIES (USA) INC. |
||||
By: |
||||
| Authorized Signatory | ||||
For themselves and the other several Underwriters named in Schedule I to the foregoing Agreement.
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SCHEDULE I
| UNDERWRITERS | NUMBER OF | |||
| UNDERWRITTEN | ||||
| SECURITIES TO BE | ||||
| PURCHASED | ||||
HSBC Securities (USA) Inc. |
1,400,000 | |||
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated |
500,000 | |||
National Bank Financial Inc. |
100,000 | |||
Total |
2,000,000 | |||
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