200,000,000 Principal Amount Coeur d’Alene Mines Corporation Underwriting Agreement
Exhibit 1.1
EXECUTION COPY
$200,000,000 Principal Amount
Coeur d’▇▇▇▇▇ ▇▇▇▇▇ Corporation
3.25% Convertible Senior Notes due 2028
March 12, 2008
Deutsche Bank Securities Inc.
As Representative of the Several
Underwriters Named in Schedule I
Underwriters Named in Schedule I
c/o Deutsche Bank Securities Inc.
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Ladies and Gentlemen:
Coeur d’▇▇▇▇▇ ▇▇▇▇▇ Corporation, an Idaho corporation (the “Company”), proposes, subject to
the terms and conditions stated herein, to issue and sell to the several underwriters (the
"Underwriters”) named in Schedule I hereto for whom Deutsche Bank Securities Inc. is acting as
representative (the “Representative”) $200,000,000 aggregate principal amount of its 3.25%
Convertible Senior Notes due 2028 (the “Firm Notes”). The respective amounts of the Firm Notes to
be so purchased by the several Underwriters are set forth opposite their names in Schedule I
hereto. In addition, the Company has granted the Underwriters an option to purchase up to an
additional $30,000,000 aggregate principal amount of its 3.25% Convertible Senior Notes due 2028
(the “Optional Notes”) as set forth below. The Firm Notes and the Optional Notes (to the extent
the aforementioned option is exercised) are herein collectively referred to as the “Notes”.
The Notes will be issued under an indenture, dated as of the Firm Notes Closing Date (as
defined herein), among the Company, as issuer, and The Bank of New York, as Trustee (the
"Indenture”). The Notes will be convertible into cash, shares of common stock, par value $1.00 per
share of the Company (the “Common Stock”) or a combination thereof at the Company’s election on the
terms, and subject to the conditions, set forth in the Indenture.
The Company has prepared and filed in conformity with the requirements of the Securities Act
and the published rules and regulations thereunder (the “Rules”) adopted by the Securities and
Exchange Commission (the “Commission”) an “automatic shelf registration statement” (as defined in
Rule 405 under the Securities Act) on Form S-3 (File No. 333-130711), including a related
prospectus (the “Base Prospectus”) relating to Common Stock, preferred stock, debt securities and
warrants of the Company that may be sold from time to time by the Company in accordance with
Rule 415 under the Securities Act. Copies of such registration statement (including all documents
deemed incorporated by reference therein) and of the related Base Prospectus have heretofore been
delivered by the Company or are otherwise available to the Representative. Such registration
statement, together with any registration statement filed by the Company pursuant to Rules 413(b)
and 462(f) under the Securities Act, is herein referred to as the “Registration Statement,” which
shall be deemed to include all information omitted therefrom in reliance upon Rules 430A, 430B and
430C under the Securities Act and contained in the Prospectus referred to below. The term
“Preliminary Prospectus” means any preliminary prospectus included in the Registration Statement or
filed with the Commission pursuant to Rule 424 of the Rules or any preliminary prospectus
supplement used prior to the filing of the Prospectus Supplement (as defined below). The term
“Pricing Prospectus” means the Base Prospectus, as amended and supplemented immediately prior to
the Applicable Time (as defined below) relating to the offer and sale of the Notes. The term
“Prospectus” means the Base Prospectus as amended and supplemented by the final prospectus
supplement (the “Prospectus Supplement”), filed pursuant to Rule 424(b) with the Commission in
connection with the proposed sale of the Notes contemplated by this Agreement. The term “Issuer
Free Writing Prospectus” means each “issuer free writing prospectus” (as defined in Rule 433 of the
Rules) prepared by or on behalf of the Company or used or referred to by the Company in connection
with the offering of the Notes. The term “Pricing Disclosure Package” means, as of the Applicable
Time, the Pricing Prospectus, together with each Issuer Free Writing Prospectus, if any, listed on
Schedule II hereto and the information, if any, included on Schedule III hereto. The term
“Effective Date” shall mean each date that the Registration Statement and any post effective
amendment or amendments thereto became or become effective. Unless otherwise stated herein, any
reference herein to the Registration Statement, the Base Prospectus, the Pricing Prospectus, any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the Securities Act, which
were filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) on or before
the date hereof, except to the extent that any information in any such incorporated document shall
have been superseded by information in any Preliminary Prospectus or any document subsequently
filed on or before the date hereof that is incorporated by reference. Any reference herein to the
terms “amend,” “amendment” or “supplement” with respect to the Registration Statement, any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any such document
filed or to be filed under the Exchange Act after the date hereof and prior to the termination of
the offering of the Notes by the Underwriters, and deemed to be incorporated therein by reference.
The term “Applicable Time” means 8:45 a.m., New York City time, on March 13, 2008.
The Company understands that the Underwriters propose to make a public offering of the Notes,
as set forth in and pursuant to the Pricing Disclosure Package and the Prospectus.
The Company hereby confirms that the Underwriters and dealers have been authorized to
distribute or cause to be distributed the Pricing Disclosure Package and the Prospectus (as from
time to time amended or supplemented if the Company furnishes amendments or supplements thereto to
the Underwriters).
In consideration of the mutual agreements contained herein and of the interests of the parties
in the transactions contemplated hereby, the parties hereto agree as follows:
1. Representations and Warranties of the Company. The Company represents and warrants
to each of the Underwriters as of the date hereof and as of each Closing Date as follows:
(a) The Company has been since the time of initial filing of the Registration Statement and
continues to be a “well-known seasoned issuer” (as defined in Rule 405 of the Rules) eligible to
use Form S-3 for the offering of the Notes including not having been an “ineligible issuer” (as
defined in Rule 405) at any such time or date. The Registration Statement is an “automatic shelf
registration statement” (as defined in Rule 405 of the Rules) and was filed not earlier than the
date that is three years prior to each Closing Date.
(b) The Company meets the requirements for use of Form S-3 under the Securities Act and has
filed with the Commission the Registration Statement on such form, including the Base Prospectus,
for registration under the Securities Act of the offering and sale of the Notes. When the
Registration Statement or any amendment thereof or supplement thereto was or is declared effective
or filed, as the case may be, it (i) complied or will comply in all material respects with the
applicable provisions of the Securities Act, the Rules and the Trust Indenture Act of 1939, as
amended (the “Trust Indenture Act”) and (ii) 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. When any related Preliminary Prospectus
included in the Pricing Disclosure Package was first filed with the Commission (whether filed as
part of the Registration Statement or any amendment thereto or pursuant to Rule 424(a) of the
Rules) and when any amendment thereof or supplement thereto was first filed with the Commission,
such Preliminary Prospectus (i) complied in all material respects with the applicable provisions of
the Securities Act and the Rules and (ii) did not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The Prospectus, as of its date, and
each Closing Date (i) will comply in all material respects with the applicable provisions of the
Securities Act and the Rules and (ii) will not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Pricing Disclosure Package, as of
the Applicable Time and each Closing Date (i) complied or will comply in all material respects with
the applicable provisions of the Securities Act and the Rules and (ii) did not and will not contain
any untrue statement of a material fact or omit to state any material fact necessary in order to
make the statements therein, in light of the circumstances under which they were made, not
misleading. Each Issuer Free Writing Prospectus, when considered together with the Pricing
Disclosure Package, as of the Applicable Time and all subsequent times through each Closing Date
(i) complied or will comply in all material respects with the applicable provisions of the
Securities Act and the Rules and (ii) did not or will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading. Each Issuer Free Writing
Prospectus does not or will not conflict with the information contained in the Registration
Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus. If applicable,
each Preliminary Prospectus, the Pricing Prospectus and the Prospectus delivered to the
Underwriters for use in connection with this offering was identical to the electronically
transmitted copies thereof filed with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
Notwithstanding the foregoing, none of the representations and warranties in this Section 1(b)
shall apply to statements in, or omissions from, the Registration Statement, any Preliminary
Prospectus, the Pricing Prospectus, any Issuer Free Writing Prospectus or the Prospectus made in
reliance upon, and in conformity with, information furnished in writing by any of the Underwriters
through the Representative for use in the Registration Statement or the Prospectus. With respect
to the preceding sentence, the Company acknowledges that the only information furnished in writing
by any of the Underwriters through the Representative for use in the Registration Statement, any
Preliminary Prospectus, the Pricing Prospectus, any Issuer Free Writing Prospectus or the
Prospectus is the statements contained in the third and ninth paragraphs under the caption
“Underwriting” in the Prospectus Supplement.
(c) The Company has not made any offer relating to the Notes that would constitute a “free
writing prospectus” as defined in Rule 405 under the Securities Act without the prior written
consent of Deutsche Bank Securities Inc.
(d) The Company has complied with the requirements of Rule 433 under the Securities Act
applicable to any Issuer Free Writing Prospectus, including timely filing with the Commission or
retention where required and legending.
(e) The Registration Statement is effective under the Securities Act and no stop order
preventing or suspending the effectiveness of the Registration Statement or suspending or
preventing the use of any Preliminary Prospectus, the Pricing Prospectus, any Issuer Free Writing
Prospectus or the Prospectus has been issued by the Commission and no proceedings for that purpose
have been instituted or, to the Company’s knowledge, are threatened under the Securities Act. Any
required filing of any Preliminary Prospectus, the Pricing Prospectus or the Prospectus and any
supplement thereto pursuant to Rule 424(b) of the Rules has been or will be made in the manner and
within the time period required by such Rule 424(b).
(f) The documents incorporated by reference in the Registration Statement, the Pricing
Prospectus and the Prospectus, as amended or superseded by documents subsequently filed on or
before the date hereof that are incorporated by reference therein, at the time they became
effective or were filed with the Commission, as the case may be, complied in all material respects
with the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents contain an 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, and any further
documents so filed and incorporated by reference in the Registration Statement, the Pricing
Prospectus and the Prospectus, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances under which they
are made, not misleading.
(g) The consolidated financial statements of the Company (including all notes and schedules
thereto) included or incorporated by reference in the Registration Statement, the Pricing
Disclosure Package and the Prospectus present fairly, in all material respects, the financial
position of the Company and its consolidated subsidiaries at the dates indicated and the statement
of operations, stockholders’ equity and cash flows of the Company and its consolidated subsidiaries
for the periods specified; and such consolidated financial statements and related schedules and
notes thereto, and the unaudited financial information filed with the Commission as part of the
Registration Statement, the Pricing Disclosure Package and the Prospectus, have been prepared in
conformity with generally accepted accounting principles, consistently applied throughout the
periods involved. The summary and selected financial data included or incorporated by reference in
the Pricing Disclosure Package and the Prospectus present fairly the information shown therein as
at the respective dates and for the respective periods specified and have been presented on a basis
consistent with the Company’s consolidated financial statements set forth in the Prospectus. The
pro forma financial statements and other pro forma financial information included or incorporated
by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus
present fairly the information shown therein, have been prepared in accordance with the
Commission’s rules and guidelines with respect to pro forma financial statements, have been
properly compiled on the pro forma bases described therein, and, in the opinion of the Company, the
assumptions used in the preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to therein. The financial
information included in or incorporated in the Registration Statement, the Pricing Disclosure
Package and the Prospectus complies with the requirements of Regulation G of the Exchange Act and
Item 10 of Regulation S-K of the Commission. The Company and its subsidiaries do not have any
material liabilities or obligations, direct or contingent (including any off-balance sheet
obligations or any “variable interest entities” within the meaning of Financial Accounting
Standards Board Interpretation No. 46), not disclosed in the Registration Statement, the Pricing
Disclosure Package and the Prospectus. There are no financial statements (historical or pro forma)
that are required to be included or incorporated in the Registration Statement, the Pricing
Disclosure Package or the Prospectus that are not included or incorporated as required.
(h) To the best of the Company’s knowledge after due inquiry: (i) the consolidated financial
statements of each Bolnisi Gold NL (“Bolnisi”) and Palmarejo Silver and Gold Corporation
(“Palmarejo”) (including all notes and schedules thereto) incorporated by reference in the
Registration Statement, the Pricing Disclosure Package and the Prospectus presented fairly in
accordance with Canadian generally accepted accounting principles and Australian equivalents to
International Financial Reporting Standards, in all material respects, the financial position of
Bolnisi and Palmarejo and their consolidated subsidiaries as at the dates indicated and the
statement of operations, stockholders’ equity and cash flows of Bolnisi and Palmarejo and their
consolidated subsidiaries for the periods specified; (ii) such consolidated financial statements
and related schedules and notes thereto were prepared in conformity with Canadian generally
accepted accounting principles and Australian equivalents to International Financial Reporting
Standards, consistently applied throughout the periods involved; and (iii) such consolidated
financial statements and related schedules and notes thereto comply with the Securities Act and the
Rules.
(i) KPMG LLP, who has certified certain of the Company’s financial statements filed with the
Commission as part of, or incorporated by reference in, the Registration Statement, the Pricing
Disclosure Package and the Prospectus, is an independent registered public accounting firm with
respect to the Company and its subsidiaries within the meaning of the Securities Act and the Rules
and the Public Company Accounting Oversight Board (United States) (the “PCAOB”).
(j) KPMG, who has certified certain of Bolnisi’s financial statements filed with the
Commission as part of, or incorporated by reference in, the Registration Statement, the Pricing
Disclosure Package and the Prospectus, is an independent registered public accounting firm with
respect to Bolnisi’s and the Company and its subsidiaries within the meaning of the Securities Act
and the Rules and the PCAOB.
(k) KPMG LLP Chartered Accountants, who has certified certain of Palmarejo’s financial
statements filed with the Commission as part of, or incorporated by reference in, the Registration
Statement, the Pricing Disclosure Package and the Prospectus, is an independent registered public
accounting firm with respect to Palmarejo’s and the Company and its subsidiaries within the meaning
of the Securities Act and the Rules and the PCAOB.
(l) Each of the Company and its significant subsidiaries, as such term is defined in Rule 1-02
of Regulation S-X (the “Significant Subsidiaries”), is duly organized, validly existing and in good
standing (to the extent good standing is applicable in such jurisdiction) under the laws of its
respective jurisdiction of incorporation or organization. Each of the Company and each Significant
Subsidiary is duly qualified to do business and is in good standing (to the extent good standing is
applicable in such jurisdiction) as a foreign corporation in each jurisdiction in which the nature
of the business conducted by it or location of the assets or properties owned, leased or licensed
by it requires such qualification, except for such jurisdictions where the failure to so qualify
individually or in the aggregate would not have a material adverse effect on the assets,
properties, condition, financial or otherwise, or in the results of operations, business affairs or
business prospects of the Company and its subsidiaries considered as a whole (a “Material Adverse
Effect”); and to the Company’s knowledge, no proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such power
and authority or qualification which reasonably would be expected to result in a Material Adverse
Effect.
(m) Each of the Company and its subsidiaries has all requisite corporate power and authority,
and all necessary authorizations, approvals, consents, orders, licenses, certificates and permits
of and from all governmental or regulatory bodies or any other person or entity (collectively, the
"Permits”), to own, lease and license its assets and properties and conduct its business, all of
which are valid and in full force and effect, except where the lack of such Permits, individually
or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect. The
Company and each of its subsidiaries has fulfilled and performed in all material respects all of
its material obligations with respect to such Permits and no event has occurred that allows, or
after notice or lapse of time would allow, revocation or termination thereof or results in any
other material impairment of the rights of the Company or any of its subsidiaries, as the case may
be, thereunder, except for such failures to fulfill or perform any material obligation or such
revocations or terminations or other impairments that would not
reasonably be expected to result in a Material Adverse Effect. Except as may be required
under the Securities Act and state and foreign blue sky laws, no other Permits are required to
enter into, deliver and perform this Agreement, to issue and sell the Notes and to issue shares of
Common Stock, if any, issuable upon conversion of the Notes.
(n) Each of the Company and its subsidiaries owns or possesses legally enforceable rights to
use all trademarks, trademark applications, trade names, service marks, copyrights, copyright
applications, licenses, know-how and other similar rights and proprietary knowledge (collectively,
"Intangibles”) necessary for the conduct of its business, except where the failure to own or
possess any of the foregoing would not reasonably be expected to result in a Material Adverse
Effect. Neither the Company nor any of its subsidiaries has received any notice of, or is not
aware of, any infringement of or conflict with asserted rights of others with respect to any
Intangibles that reasonably would be expected to result in a Material Adverse Effect.
(o) The Company and each of its subsidiaries has good and marketable title in fee simple to
all real property, and good and marketable title to all other material property owned by it, in
each case free and clear of all liens, encumbrances, claims, security interests and defects, except
(A) as disclosed in the Company’s filings with the Commission under the Exchange Act and (B) for
any failure to have such title or for any such liens, encumbrances, claims, security interests and
defects that do not materially affect the value of such property to the Company and its
subsidiaries, do not materially interfere with the use made or proposed to be made of such property
by the Company and its subsidiaries and would not reasonably be expected to result in a Material
Adverse Effect. All material property held under lease by the Company and its subsidiaries is held
by them under valid, existing and enforceable leases, free and clear of all liens, encumbrances,
claims, security interests and defects, except for any failure to have such lease or for any such
liens, encumbrances, claims, security interests and defects that do not materially interfere with
the use made or proposed to be made of such property by the Company and its subsidiaries and would
not reasonably be expected to result in a Material Adverse Effect.
(p) With respect to information set forth or incorporated by reference in the Pricing
Disclosure Package and the Offering Memorandum: (a) information relating to the estimates of
mineral reserves and mineral resources has been reviewed and verified by the Company or independent
consultants to the Company; (b) the mineral reserve and mineral resource information has been
prepared in accordance with National Instrument 43-101 — “Standards of Disclosure for Mineral
Projects” by or under the supervision of a qualified person as defined therein; (c) the method of
estimating the mineral reserves and mineral resources has been validated by mining experience; (d)
the information upon which the estimates of mineral reserves and mineral resources was based was,
at the time of the delivery thereof, complete and accurate in all material respects; and (e) there
have been no material changes to such information since the date of delivery or preparation
thereof.
(q) There are no litigation or governmental proceedings to which the Company or any of its
subsidiaries is subject or that is pending or, to the knowledge of the Company, threatened, against
the Company or any of its subsidiaries that, individually or in the aggregate, would reasonably be
expected to result in a Material Adverse Effect, affect the
consummation of this Agreement or that is required to be disclosed in the Registration
Statement, the Pricing Disclosure Package and the Prospectus that is not so disclosed.
(r) Since the respective dates as of which information is given in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, except as described therein or contemplated
thereby, (i) there has not been any change in the assets or properties, business, results of
operations, prospects or condition (financial or otherwise), of the Company and its subsidiaries
taken as a whole, whether or not arising from transactions in the ordinary course of business which
would reasonably be expected to result in a Material Adverse Effect; (ii) neither the Company nor
any of its subsidiaries has sustained any loss or interference with its assets, businesses or
properties (whether owned or leased) from fire, explosion, earthquake, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or any court or legislative or other
governmental action, order or decree which would reasonably result in a Material Adverse Effect;
and (iii) since the date of the latest balance sheet included or incorporated by reference in the
Registration Statement, the Pricing Disclosure Package and the Prospectus, neither the Company nor
its subsidiaries has (A) issued any securities or incurred any material liability or obligation,
direct or contingent, for borrowed money, except for such liabilities or obligations incurred in
the ordinary course of business, (B) entered into any material transaction not in the ordinary
course of business or (C) except for regular dividends on the Common Stock in amounts per share
that are consistent with past practice, declared or paid any dividend or made any distribution on
any shares of its stock or redeemed, purchased or otherwise acquired or agreed to redeem, purchase
or otherwise acquire any shares of its capital stock.
(s) There is no document, contract or other agreement required to be described in the
Registration Statement, Pricing Disclosure Package or Prospectus or to be filed as an exhibit to
the Registration Statement which is not described or filed as required by the Securities Act or
Rules. Each description of a contract, document or other agreement in the Registration Statement,
the Pricing Disclosure Package and the Prospectus complies in all material respects with the
applicable requirements of the Securities Act and the Rules and accurately summarizes the terms of
the underlying contract, document or other agreement purported to be described therein. Neither
the Company nor any of its subsidiaries, if a subsidiary is a party, is in default in the
observance or performance of any term or obligation to be performed by it under any such agreement,
and no event has occurred which with notice or lapse of time or both would constitute such a
default, in any such case which default or event, individually or in the aggregate, would
reasonably be expected to result in a Material Adverse Effect. No default exists, and no event has
occurred which with notice or lapse of time or both would constitute a default, in the due
performance and observance of any term, covenant or condition, by the Company or its subsidiary, if
a subsidiary is a party thereto, of any other agreement or instrument to which the Company or any
of its subsidiaries is a party or by which Company or its properties or business or a subsidiary or
its properties or business may be bound or affected which default or event, individually or in the
aggregate, would reasonably be expected to result in a Material Adverse Effect.
(t) Neither the Company nor any of its subsidiaries is in violation of any term or provision
of (i) its charter or by-laws or (ii) any franchise, license, permit, judgment, decree, order,
statute, rule or regulation, where, solely with respect to clause (ii), the consequences of
such violation, individually or in the aggregate, would reasonably be expected to result in a
Material Adverse Effect.
(u) Neither the execution, delivery or performance of this Agreement by the Company nor the
consummation of any of the transactions contemplated hereby (including, without limitation, the
issuance and sale by the Company of the Notes and the issuance of shares of Common Stock, if any,
issuable upon conversion of the Notes) will give rise to a right to terminate or accelerate the due
date of any payment due under, or conflict with or result in the breach of any term or provision
of, or constitute a default (or an event which with notice or lapse of time or both would
constitute a default) under, or require any consent or waiver under, or result in the execution or
imposition of any lien, charge or encumbrance upon any properties or assets of the Company or its
subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by which either the
Company or its subsidiaries or any of their properties or businesses is bound, or any franchise,
license, permit, judgment, decree, order, statute, rule or regulation applicable to the Company or
any of its subsidiaries or violate any provision of the charter or by-laws of the Company or any of
its subsidiaries, except for such consents or waivers which have already been obtained and are in
full force and effect.
(v) The Company has an authorized capitalization as set forth in the Pricing Disclosure
Package and the Prospectus, and all the issued shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and nonassessable. Except as disclosed in
the Registration Statement, the Pricing Disclosure Package and the Prospectus, there are no
statutory preemptive or other similar rights to subscribe for or to purchase or acquire any shares
of Common Stock of the Company or any of its subsidiaries or any such rights pursuant to its
certificate of incorporation or by-laws or any agreement or instrument to or by which the Company
or any of its subsidiaries is a party or bound. The shares of Common Stock issuable upon
conversion of the Notes have been duly authorized and reserved for issuance and, when issued and
delivered in accordance with the provisions of the Notes and the Indenture, will be validly issued,
fully paid and nonassessable and none of them will be issued in violation of any preemptive or
other similar right and will conform to the description of the Common Stock in the Prospectus.
Except as disclosed in the Registration Statement, the Pricing Disclosure Package and the
Prospectus, there is no outstanding option, warrant or other right calling for the issuance of, and
there is no commitment, plan or arrangement to issue, any share of stock of the Company or any of
its subsidiaries or any security convertible into, or exercisable or exchangeable for, such stock.
The Common Stock and the Notes conform in all material respects to all statements in relation
thereto contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
(w) All outstanding shares of capital stock of each of the Significant Subsidiaries have been
duly authorized and validly issued, and, except for directors’ qualifying shares, are fully paid
and nonassessable and are owned directly by the Company or by another wholly-owned subsidiary of
the Company free and clear of any security interests, liens, encumbrances, equities or claims,
other than those described in the Registration Statement, the Pricing Disclosure Package and the
Prospectus.
(x) No holder of any security of the Company has any right, which has not been waived, to have
any security owned by such holder included in the Registration Statement or to demand registration
of any security owned by such holder for a period of 90 days after the date of this Agreement. An
enforceable written Lockup agreement in the form attached to this Agreement as Annex I (“Lockup
Agreement”) has been delivered to the Representative by each person listed on Exhibit A thereto.
(y) The Notes have been duly authorized by the Company and, when executed, authenticated and
issued in accordance with the terms of the Indenture and delivered to and paid for by the
Underwriters pursuant to this Agreement, will constitute valid and legally binding obligations of
the Company entitled to the benefits provided by the Indenture and enforceable against the Company
in accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors’ rights generally and to general
equitable principles. The Indenture has been duly authorized and duly qualified under the Trust
Indenture Act and, when executed and delivered by the Company and the Trustee, will constitute a
valid and legally binding instrument, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement
of creditors’ rights generally and to general equitable principles. The Notes and the Indenture
will conform to the descriptions thereof in the Pricing Disclosure Package and the Prospectus and
will be in substantially the form previously delivered to you.
(z) All necessary corporate action has been duly and validly taken by the Company to authorize
the execution, delivery and performance by the Company of this Agreement, the issuance and sale by
the Company of the Notes and the issuance by the Company of the shares of Common Stock issuable
upon conversion of the Notes. This Agreement has been duly and validly authorized, executed and
delivered by the Company and constitutes the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights
generally and to general equitable principles.
(aa) Neither the Company nor any of its subsidiaries is involved in any labor dispute nor, to
the knowledge of the Company, is any such dispute threatened, which dispute would reasonably be
expected to result in a Material Adverse Effect. The Company is not aware of any threatened or
pending litigation between the Company or its subsidiaries and any of its executive officers which,
if adversely determined, would reasonably be expected to result in a Material Adverse Effect and
has no reason to believe that such officers will not remain in the employment of the Company.
(bb) No transaction has occurred between or among the Company and any of its officers or
directors, stockholders or any affiliate or affiliates of any such officer or director or
stockholder that is required to be described in and is not described in the Registration Statement,
the Pricing Disclosure Package and the Prospectus.
(cc) The Company has not taken, nor will it take, directly or indirectly, any action designed
to or which might reasonably be expected to cause or result in, or which has
constituted or which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the Common Stock or any security of the Company to facilitate the sale
or resale of any of the Notes.
(dd) The Company and each of its Significant Subsidiaries has filed all Federal, state, local
and foreign tax returns which are required to be filed through the date hereof, which returns are
true and correct in all material respects or has received timely extensions thereof, and has paid
all taxes shown on such returns and all assessments received by it to the extent that the same are
material and have become due. There are no tax audits or investigations pending, which would
reasonably be expected to result in a Material Adverse Effect; nor are there any material proposed
additional tax assessments against the Company or any of its Significant Subsidiaries.
(ee) The shares of Common Stock issuable upon conversion of the Notes have been duly
authorized for listing on the New York Stock Exchange and the Toronto Stock Exchange on or prior to
the Firm Notes Closing Date (as defined herein), subject to official notice of issuance.
(ff) The Company has taken no action designed to, or likely to have the effect of, terminating
the registration of the Common Stock under the Exchange Act or listing on the New York Stock
Exchange or the Toronto Stock Exchange, nor has the Company received any notification that the
Commission, the New York Stock Exchange or the Toronto Stock Exchange is contemplating terminating
such registration or quotation.
(gg) The books, records and accounts of the Company and its subsidiaries accurately, fairly
and reasonably reflect the transactions in, and dispositions of, the assets of, and the results of
operations of, the Company and its subsidiaries. The Company and each of its subsidiaries maintain
a system of internal accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management’s general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of consolidated financial statements
in accordance with 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.
(hh) The Company and its Significant Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as are customary in the
businesses in which they are engaged or propose to engage after giving effect to the transactions
described in the Prospectus, and such policies are in full force and effect.
(ii) Each approval, consent, order, authorization, designation, declaration or filing of, by
or with any regulatory, administrative or other governmental body necessary in connection with the
execution and delivery by the Company of this Agreement and the consummation of the transactions
herein contemplated required to be obtained or performed by the Company (including the
qualification of the Indenture under the Trust Indenture Act but except such additional steps as
may be required by the Financial Industry Regulatory Authority
(“FINRA”) or may be necessary to qualify the Notes for public offering by the Underwriters
under the state securities or blue sky laws in such states as the Underwriters have requested
filings to be made) has been obtained or made and is in full force and effect.
(jj) There are no affiliations with FINRA among the Company’s officers, directors or, to the
best of the knowledge of the Company, any five percent or greater stockholder of the Company,
except as set forth in the Registration Statement, the Pricing Disclosure Package, the Prospectus
or otherwise disclosed in writing to the Underwriters.
(kk) Except (A) as disclosed in the Company’s filings with the Commission under the Exchange
Act and (B) as would not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect, (i) each of the Company and each of its subsidiaries is in compliance in
all material respects with all rules, laws and regulation relating to the use, treatment, storage
and disposal of toxic substances and protection of health or the environment (“Environmental Law”)
which are applicable to its business; (ii) neither the Company nor its subsidiaries has received
any notice from any governmental authority or third party of an asserted claim under Environmental
Laws; (iii) each of the Company and each of its subsidiaries has received all permits, licenses or
other approvals required of it under applicable Environmental Laws to conduct its business and is
in compliance with all terms and conditions of any such permit, license or approval; (iv) to the
Company’s knowledge, no facts currently exist that will require the Company or any of its
subsidiaries to make future material capital expenditures to comply with Environmental Laws; and
(v) no property which is or has been owned, leased or occupied by the Company or its subsidiaries
has been designated as a Superfund site pursuant to the Comprehensive Environmental Response,
Compensation of Liability Act of 1980, as amended (42 U.S.C. Section 9601, et. seq.) (“CERCLA
1980”) or otherwise designated as a contaminated site under applicable state or local law. Neither
the Company nor any of its subsidiaries has been named as a “potentially responsible party” under
the CERCLA 1980.
(ll) 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 the Company 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).
(mm) The Company is not and, after giving effect to the offering and sale of the Notes and the
application of proceeds thereof as described in the Prospectus, will not be required to register as
an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
(nn) The Company or any other person affiliated with or acting on behalf of the Company
including, without limitation, any officer, director, employee, or agent of the Company or any
stockholder thereof acting on behalf of the Company or its subsidiaries, has not, directly or
indirectly, while acting on behalf of the Company or its subsidiaries (i) used any corporate funds
for unlawful contributions, gifts, entertainment or other unlawful expenses relating to
political activity; (ii) made any unlawful payment to foreign or domestic government officials
or employees or to foreign or domestic political parties or campaigns from corporate funds; (iii)
violated any provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any
other unlawful payment.
(oo) The operations of the Company and its subsidiaries are and have been conducted at all
times in compliance with applicable financial record-keeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering
statutes and applicable rules and regulations thereunder (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 Company’s knowledge, threatened.
(pp) Except as described in the Pricing Disclosure Package and the Prospectus, the Company has
not sold or issued any shares of, or securities convertible into, Common Stock or a class similar
to Common Stock during the six-month period preceding the date of the Prospectus, including any
sales pursuant to Rule 144A under, or Regulations D or S, of the Securities Act, other than shares
issued pursuant to employee benefit plans, qualified stock options plans or other employee
compensation plans or pursuant to outstanding options, rights or warrants.
(qq) Except as would not, individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect, the Company has fulfilled its obligations, if any, under the minimum
funding standards of Section 302 of the U.S. Employee Retirement Income Security Act of 1974
(“ERISA”) and the regulations and published interpretations thereunder with respect to each “plan”
as defined in Section 3(3) of ERISA and such regulations and published interpretations in which its
employees are eligible to participate and each such plan is in compliance in all material respects
with the presently applicable provisions of ERISA and such regulations and published
interpretations. No “Reportable Event” (as defined in 12 ERISA) has occurred with respect to any
“Pension Plan” (as defined in ERISA) for which the Company could have any liability.
(rr) None of the Company, its directors or its officers has distributed and none of them will
distribute prior to the later of (i) the Closing Date and (ii) completion of the distribution of
the Notes, any offering material in connection with the offering and sale of the Notes other than
any Preliminary Prospectus, the Pricing Disclosure Package, the Prospectus, the Registration
Statement and any Issuer Free Writing Prospectus to which the Representative has consented in
accordance with Section 4(o)(i) herein.
(ss) There is and has been no failure on the part of the Company to comply in all material
respects with the applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and
regulations promulgated in connection therewith that are effective, including Sections 302 and 906
related to certifications.
2. Purchase, Sale and Delivery of the Notes.
(a) On the basis of the representations, warranties and covenants herein contained, and
subject to the conditions herein set forth, the Company agrees to sell to the Underwriters and each
Underwriter agrees, severally and not jointly, to purchase, at a price of 96.75% of the principal
amount thereof (the “Purchase Price”), the principal amount of Firm Notes set forth opposite such
Underwriter’s name on Schedule I hereto, subject to adjustments in accordance with Section 11
hereof.
(b) The Notes to be purchased by the Underwriters hereunder will be represented by one or more
definitive global notes in book-entry form which will be deposited by or on behalf of the Company
with The Depository Trust Company in New York or its designated custodian (“DTC”). The Company
will deliver the Notes to you for your account, against payment by or on behalf of you of the
Purchase Price therefor by wire transfer of Federal (same-day) funds to the account specified by
the Company to you at least forty-eight hours in advance, by causing DTC to credit the Notes to
your account at DTC. The Company will cause the Firm Notes to be made available to you for
checking at least twenty-four hours prior to the Firm Notes Closing Date (as defined below) at the
office of DTC or its designated custodian (the “Designated Office”). The time and date of such
delivery and payment shall be, with respect to the Firm Notes, 10:00 a.m., New York City time, on
March 18, 2008 or such other time and date as the Representative and the Company may agree upon in
writing (the “Firm Notes Closing Date”).
(c) In addition, on the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company hereby grants an option to the
several Underwriters to purchase the Optional Notes at the Purchase Price. The option granted
hereby may be exercised in whole or in part by giving written notice (i) at any time before the
Firm Notes Closing Date and (ii) only once thereafter within 30 days after the date of this
Agreement, by the Representative to the Company setting forth the principal amount of Optional
Notes as to which the several Underwriters are exercising the option and the time and date at which
such certificates are to be delivered. The time and date at which certificates for Optional Notes
are to be delivered shall be determined by the Representative but shall not be earlier than three
nor later than 10 full Business Days after the exercise of such option, nor in any event prior to
the Firm Notes Closing Date (such time and date being herein referred to as the “Optional Notes
Closing Date”). If the date of exercise of the option is three or more days before the Firm Notes
Closing Date, the notice of exercise shall set the Firm Notes Closing Date as the Optional Notes
Closing Date. The principal amount of Optional Notes to be purchased by each Underwriter shall be
in the same proportion to the total principal amount of Optional Notes being purchased as the
principal amount of Firm Notes being purchased by such Underwriter bears to the total principal
amount of Firm Notes, adjusted by you in such manner as to avoid principal amounts of less than
$1,000. The option with respect to the Optional Notes granted hereunder may be exercised only to
cover over-allotments in the sale of the Firm Notes by the Underwriters. The Representative of the
several Underwriters, may cancel such option at any time prior to its expiration by giving written
notice of such cancellation to the Company. To the extent, if any, that the option is exercised,
payment for the Optional Notes shall be made on the Optional Notes Closing Date in Federal (same
day funds) through the facilities of DTC, New
York drawn to the order of the Company. As used in this Agreement, the term “Closing Date”
means the Firm Notes Closing Date and, if applicable, the Optional Notes Closing Date.
(d) The documents to be delivered at each Closing Date by or on behalf of the parties hereto
pursuant to Section 6 hereof, including the cross-receipt for the Notes and any additional
documents requested by the Representative pursuant to Section 6(m) hereof, will be delivered at the
offices of Shearman & Sterling LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the “Closing
Location”), and the Notes will be delivered at the Designated Office, all at such Closing Date. A
meeting will be held at the Closing Location at 1:00 p.m., New York City time, on the Business Day
next preceding such Closing Date, at which meeting the final drafts of the documents to be
delivered pursuant to the preceding sentence will be available for review by the parties hereto.
As used in this Agreement, “Business Day” means a day on which the New York Stock Exchange is open
for trading and on which banks in New York are open for business and are not permitted by law or
executive order to be closed.
(e) The Company acknowledges and agrees that the Underwriters, in providing investment banking
services to the Company in connection with the offering of the Notes, including in acting pursuant
to the terms of this Agreement, have acted and are acting as independent contractors on an arm’s
length basis and not as fiduciaries and the Company does not intend the Underwriters to act in any
capacity other than independent contractor, including as a fiduciary or in any other position of
higher trust. The Company shall be responsible for making its own independent investigation and
appraisal of the transactions contemplated by this Agreement and the Underwriters shall have no
responsibility or liability with respect to such investigation and appraisal.
3. Offering by the Underwriters.
It is understood that the several Underwriters are to make a public offering of the Firm Notes
as soon as the Representative deems it advisable to do so. The Firm Notes are to be initially
offered to the public at the initial public offering price set forth in the Prospectus. The
Representative may from time to time thereafter change the public offering price and other selling
terms.
4. Covenants of the Company and the Underwriters.
The Company covenants and agrees as follows:
(a) The Company will use its best efforts to cause the Registration Statement, if not
effective at the time of execution of this Agreement, and any amendments thereto, to become
effective as promptly as possible. The Company shall prepare the Prospectus in a form reasonably
approved by the Representative and file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than the Commission’s close of business on the second Business Day
following the execution and delivery of this Agreement, or, if applicable, such earlier time as may
be required by the Rules.
(b) The Company shall promptly advise the Representative in writing (A) when any
post-effective amendment to the Registration Statement shall have become effective or any
supplement to the Prospectus shall have been filed, (B) of any request by the
Commission for any amendment of the Registration Statement, any Preliminary Prospectus or the Prospectus
or for any additional information, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any order preventing or suspending
the use of any Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus or the
institution or threatening of any proceeding for that purpose and (D) of the receipt by the Company
of any notification with respect to the suspension of the qualification of the Notes for sale in
any jurisdiction or the initiation or threatening of any proceeding for such purpose. The Company
shall not file any amendment of the Registration Statement or distribute any amendment or
supplement to the Pricing Disclosure Package or the Prospectus or any document incorporated by
reference in the Registration Statement unless the Company has furnished the Representative a copy
for its review prior to filing and shall not file any such proposed amendment or supplement to
which the Representative reasonably objects. The Company shall use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as possible the withdrawal
thereof.
(c) If, at any time when a prospectus relating to the Notes is required to be delivered under
the Securities Act or the Rules, any event occurs as a result of which the Prospectus as then
amended or 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 or supplement the
Prospectus to comply with the Securities Act, the Rules or the Trust Indenture Act, the Company
promptly shall prepare and file with the Commission, subject to the second sentence of Section
4(b), an amendment or supplement which shall correct such statement or omission or an amendment
which shall effect such compliance.
(d) The Company shall make generally available to its security holders as soon as practicable,
but not later than 45 days after the end of the 12-month period beginning at the end of the fiscal
quarter of the Company during which the Effective Date occurs (or 90 days if such 12-month period
coincides with the Company’s fiscal year), an earning statement (which need not be audited) of the
Company, covering such 12-month period, which shall satisfy the provisions of Section 11(a) of the
Securities Act or Rule 158 of the Rules.
(e) The Company shall reasonably cooperate with the Representative and its counsel in
endeavoring to qualify the Notes and the shares of Common Stock issuable upon conversion of the
Notes for offer and sale in connection with the offering under the laws of such jurisdictions as
the Representative reasonably may designate and shall maintain such qualifications in effect so
long as required for the distribution of the Notes; provided, however, that the Company shall not
be required in connection therewith, as a condition thereof, to qualify as a foreign corporation or
to execute a general consent to service of process in any jurisdiction or subject itself to
taxation as doing business in any jurisdiction.
(f) The Company, during the period when the Prospectus is required to be delivered under the
Securities Act and the Rules or the Exchange Act, will file all reports and other documents
required to be filed with the Commission pursuant to Section 13, 14 or 15 of the Exchange Act
within the time periods required by the Exchange Act and the regulations promulgated thereunder.
(g) Without the prior written consent of Deutsche Bank Securities Inc., for a period of 90
days after the date of this Agreement, the Company and the individuals listed on Schedule IV hereto
shall not issue, sell or register with the Commission (other than on Form S-8 or on any successor
form), or otherwise dispose of, directly or indirectly, any equity securities of the Company (or
any securities convertible into, exercisable for or exchangeable for equity securities of the
Company), except for (A) those shares of Common Stock set forth in the Lockup Agreement, (B) the
issuance of shares pursuant to the Company’s existing stock option plan or bonus plan as described
in the Registration Statement and the Prospectus and (C) the issuance of shares of the Company’s
Common Stock upon the exercise or conversion of securities of the Company outstanding on the date
hereof and disclosed in the Registration Statement or Prospectus. In the event that during this
period, (A) any shares are issued pursuant to the Company’s existing stock option plan or bonus
plan that are exercisable during such 90-day period or (B) any registration is effected on Form S-8
or on any successor form relating to shares that are exercisable during such 90-day period, the
Company shall use its best efforts to obtain the written agreement of such grantee or purchaser or
holder of such registered securities that, for a period of 90 days after the date of this
Agreement, such person will not, without the prior written consent of Deutsche Bank Securities
Inc., offer for sale, sell, distribute, grant any option for the sale of, or otherwise dispose of,
directly or indirectly, or exercise any registration rights with respect to, any shares of Common
Stock (or any securities convertible into, exercisable for, or exchangeable for, any shares of
Common Stock) owned by such person.
(h) The Company will reserve and keep available at all times, free of preemptive rights,
shares of Common Stock for the purpose of enabling the Company to satisfy any obligations to issue
shares of its Common Stock upon conversion of the Notes.
(i) On or before completion of this offering, the Company shall make all filings required
under applicable securities laws and by each of the New York Stock Exchange (including any required
registration under the Exchange Act) and the Toronto Stock Exchange in connection with the
transactions contemplated by this Agreement.
(j) Prior to the Closing Date, the Company will not issue any press release or other
communications directly or indirectly or hold any press conference with respect to the Company, the
condition, financial or otherwise, or the earnings, business affairs or business prospects of any
of them, or the offering of the Notes without the prior written consent of the Representative
unless in the judgment of the Company and its counsel, and after notification to the
Representative, such press release or communication is required by law.
(k) The Company shall (A) furnish to the Underwriters and counsel for the Underwriters,
without charge, copies of the Registration Statement, each Preliminary Prospectus, the Pricing
Prospectus and the Prospectus (without exhibits thereto) and all amendments thereof (i) prior to
10:00 a.m. New York City time on the Business Day next succeeding date of this Agreement, (ii) so
long as delivery of a prospectus by an underwriter or dealer may be required by the Securities Act
or the Rules in connection with the offer, sale or issuance of the Notes (or in lieu thereof, the
notice referred to in Rule 173(a) under the Securities Act) and (B) if at such time any event shall
have occurred as a result of which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact necessary in order to make
the statements therein, in light of the circumstances under which
they were made when such Prospectus (or in lieu thereof, the notice referred to in Rule 173(a)
under the Securities Act) is delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus in order to comply with the
Securities Act, the Exchange Act or the Trust Indenture Act, to notify you and upon your request to
file such document and to prepare and furnish without charge to each Underwriter and to any dealer
in securities as many written and electronic copies as you may from time to time reasonably request
of an amended Prospectus or a prospectus supplement which will correct such statement or omission
or effect such compliance. If applicable, the copies of the Registration Statement, each
Preliminary Prospectus, the Pricing Prospectus and the Prospectus and each amendment and supplement
thereto furnished to the Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation
S-T;
(l) The Company will apply the net proceeds from the offering of the Notes in the manner set
forth under “Use of Proceeds” in the Prospectus;
(m) The Company will (i) not without the prior consent of the Representative, make any offer
relating to the Notes that would constitute a “free writing prospectus” as defined in Rule 405
under the Securities Act, provided that the prior written consent of the Representative shall be
deemed to have been given in respect of the Issuer Free Writing Prospectuses included in Schedule
II hereto; (any such free writing prospectus the use of which has been consented to by the Company
and the Representative is referred to herein as a “Permitted Free Writing Prospectus”); (ii) comply
with the requirements of Rules 163, 164 and 433 under the Securities Act applicable to any Issuer
Free Writing Prospectus, including timely filing with the Commission or record keeping and
legending; (iii) treat each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus;
and (iv) not take any action that would result in an Underwriter or the Company being required to
file with the Commission pursuant to Rule 433(d) under the Securities Act a free writing prospectus
prepared by or on behalf of such Underwriter that such Underwriter otherwise would not have been
required to file;
(n) The Company will, if at any time following issuance of an Issuer Free Writing Prospectus
any event occurred or occurs as a result of which such Issuer Free Writing Prospectus would
conflict with the information in the Registration Statement, the Pricing Prospectus or the
Prospectus or would include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the circumstances then
prevailing, not misleading, (i) give prompt notice thereof to the Representative (ii) and, if
requested by the Representative, prepare and furnish without charge to each Underwriter an Issuer
Free Writing Prospectus or other document which will correct such conflict, statement or omission;
provided, however, that this representation and warranty shall not apply to any statements or
omissions in an Issuer Free Writing Prospectus made in reliance upon and in conformity with
information furnished in writing to the Company by the Underwriters through the Representative
expressly for use therein;
(o) If immediately prior to the third anniversary (the “Renewal Deadline”) of the initial
effective date of the Registration Statement, any of the Notes remain unsold by the Underwriters,
the Company will, prior to the Renewal Deadline file, if it has not already done so
and is eligible to do so, a new automatic shelf registration statement relating to the Notes,
in a form reasonably satisfactory to the Representative. If the Company is no longer eligible to
file an automatic shelf registration statement, the Company will, prior to the Renewal Deadline, if
it has not already done so, file a new shelf registration statement relating to the Notes, in a
form reasonably satisfactory to the Representative, and will use commercially reasonable efforts to
cause such registration statement to be declared effective within 180 days after the Renewal
Deadline. The Company will, prior to the Renewal Deadline, take all other commercially reasonable
action necessary or appropriate to permit the public offering and sale of the Notes to continue as
contemplated in the Registration Statement. References herein to the Registration Statement shall
include such new automatic shelf registration statement or such new shelf registration statement,
as the case may be.
(p) The Company will pay the required filing fees to the Commission relating to the Notes
within the time required by Rule 456(b)(1) under the Securities Act without regard to the proviso
therein and otherwise in accordance with Rules 456(b) and 457(r) under the Securities Act.
The Underwriters, severally and not jointly, covenant and agree as follows:
(q) Each Underwriter will not include any “issuer information” (as defined in Rule 433) in any
“free writing prospectus” (as defined in Rule 405) used or referred to by such Underwriter without
the prior written consent of the Company.
5. Costs and Expenses.
The Company will pay, or reimburse if paid by the Representative all costs, expenses and fees
incident to the performance of the obligations of the Company as provided under this Section and
Sections 8 and 10 of this Agreement, including, without limiting the generality of the foregoing,
the following: accounting fees of the Company; the fees and disbursements of counsel for the
Company; the cost of printing and delivering to, or as requested by, the Underwriters copies of the
Registration Statement, any Preliminary Prospectuses, the Pricing Prospectus, any Issuer Free
Writing Prospectus, the Prospectus, this Agreement, the Underwriters’ Selling Memorandum, the
Underwriters’ Invitation Letter, a blue sky survey and any supplements or amendments thereto; the
filing fees of the Commission; the filing fees and expenses (including reasonable legal fees and
disbursements) incident to securing any required review by the NASD of the terms of the sale of the
Notes; any fees incurred in connection with the listing on the New York Stock Exchange or the
Toronto Stock Exchange of the shares of Common Stock issuable upon conversion of the Notes; the
fees and expenses of the Trustee and expenses of any agent of the Trustee and the fees and expenses
of counsel for the Trustee in connection with the Indenture and the Notes; the expenses, including
the reasonable fees and disbursements of counsel for the Underwriters, incurred in connection with
the qualification of the Notes and the shares of Common Stock issuable upon conversion of the Notes
under state securities or blue sky laws; and all other costs and expenses of the Company incident
to the performance of its obligations hereunder which are not otherwise specifically provided for
in this Section. The Company shall not, however, be required to pay for any of the Underwriters’
expenses (other than those related to qualification under NASD regulation and state securities or
blue sky laws) except that, if this Agreement shall not be consummated because the conditions in
Section 6 hereof are not satisfied, or because this Agreement is terminated by the
Representative pursuant to Section 10 hereof, or by reason of any failure, refusal or inability on
the part of the Company to perform any undertaking or satisfy any condition of this Agreement or to
comply with any of the terms hereof on its part to be performed, unless such failure, refusal or
inability is due primarily to the default or omission of any Underwriter, the Company shall
reimburse each Underwriter for reasonable out-of-pocket expenses, including reasonable fees and
disbursements of counsel, reasonably incurred in connection with investigating, marketing and
proposing to market the Notes or in contemplation of performing their obligations hereunder; but
the Company shall not in any event be liable to any of the Underwriters for damages on account of
loss of anticipated profits from the sale by them of the Notes.
6. Conditions of Obligations of the Underwriters.
The several obligations of the Underwriters to purchase the Firm Notes on the Firm Notes
Closing Date and the Optional Notes, if any, on the Optional Notes Closing Date are subject to each
of the following terms and conditions:
(a) Notification that all filings related to the Registration Statement, the Pricing
Disclosure Package, the Prospectus, and the offering of the Notes required by Rule 424 of the Rules
shall have been made within the applicable time period and that all filings related to each Issuer
Free Writing Prospectus, including filing all material required to be filed by the Company pursuant
to Rule 433 under the Securities Act, shall have been made within the applicable time period;
(b) No order preventing or suspending the use of any Preliminary Prospectus, the Prospectus or
any Issuer Free Writing Prospectus shall have been or shall be in effect and no order suspending
the effectiveness of the Registration Statement shall be in effect and no proceedings for such
purpose shall be pending before or threatened by the Commission, and any requests for additional
information on the part of the Commission (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the satisfaction of the Commission and
the Representative. If the Company has elected to rely upon Rule 430A, Rule 430A information
previously omitted from the effective Registration Statement pursuant to Rule 430A shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) within the prescribed time period
and the Company shall have provided evidence satisfactory to the Representative of such timely
filing, or a post-effective amendment providing such information shall have been promptly filed and
declared effective in accordance with the requirements of Rule 430A;
(c) The representations and warranties of the Company contained in this Agreement and in the
certificates delivered pursuant to Section 6(d) shall be true and correct as of the Applicable Time
and each Closing Date, as if made on such date. The Company shall have performed all covenants and
agreements and satisfied all the conditions contained in this Agreement required to be performed or
satisfied by them at or before each Closing Date;
(d) The Representative shall have received on each Closing Date,
(i) a certificate of the Company, addressed to the Representative and dated
each Closing Date, executed by the chief executive or chief operating
officer and the chief financial officer or chief accounting officer of the
Company, to the effect that: (1) the representations, warranties and agreements of
the Company in this Agreement were true and correct when made and are true and
correct as of each Closing Date; (2) the Company has performed all covenants and
agreements and satisfied all conditions contained herein; (3) no stop order
suspending the effectiveness of the Registration Statement has been issued and, to
their knowledge, no proceedings for that purpose have been instituted or are pending
under the Securities Act; and (4) there has not been any downgrading, and no notice
has been given of any intended or potential downgrading or of any review for a
possible change that does not indicate the direction of the possible change, in the
rating accorded any securities or any of its Significant Subsidiaries by any
“nationally recognized statistical rating organization” as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act;
(ii) a certificate of the Company, addressed to the Representative and dated
each Closing Date, signed by the chief financial officer or chief accounting officer
of the Company, in a form reasonably acceptable to the Representative, to the effect
that certain information contained in the Pricing Disclosure Package and the
Prospectus is correct in all material respects; and
(iii) certificates of the Company, addressed to the Representative and dated
each Closing Date, executed by of each of the managers of operations of each of the
Company’s mines, in a form reasonably acceptable to the Representative, to the
effect that, all mines have in place and currently in effect all material permits
(including, e.g., environmental permits) licenses, consents, approvals,
determinations and other authorizations, whether governmental or private, necessary
for the mine to conduct fully its business and operations, are in full compliance
with all laws, regulations, codes, and other requirements applicable to the conduct
of its business and operations and is not subject of any investigation or review by
any Federal, state or local regulatory agency, and no mine has received in the last
24 months any notice from any governmental or other authority that it is in
violation or non-compliance with any licenses, permits, or other authorizations;
(e) The Representative shall have received, at the time this Agreement is executed and on each
Closing Date a signed letter from KPMG LLP addressed to the Representative and dated, respectively,
the date of this Agreement and each Closing Date, in form and substance reasonably satisfactory to
the Representative containing statements and information of the type ordinarily included in
accountants’ “comfort letters” to underwriters with respect to the Company’s consolidated financial
statements and certain financial information contained, or incorporated by reference, in the
Registration Statement and the Prospectus;
(f) The Representative shall have received, at the time this Agreement is executed and on each
Closing Date a signed letter from KPMG addressed to the Representative and dated, respectively, the
date of this Agreement and each Closing Date, in form and substance reasonably satisfactory to the
Representative containing statements and information of the type ordinarily included in
accountants’ “comfort letters” to underwriters with respect to Bolnisi’s
consolidated financial statements and certain financial information contained, or incorporated
by reference, in the Registration Statement and the Prospectus;
(g) The Representative shall have received, at the time this Agreement is executed and on each
Closing Date a signed letter from KPMG LLP Chartered Accountants addressed to the Representative
and dated, respectively, the date of this Agreement and each Closing Date, in form and substance
reasonably satisfactory to the Representative containing statements and information of the type
ordinarily included in accountants’ “comfort letters” to underwriters with respect to Palmarejo’s
consolidated financial statements and certain financial information contained, or incorporated by
reference, in the Registration Statement and the Prospectus;
(h) The Representative shall have received on each Closing Date from ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇
LLP, counsel for the Company, (i) an opinion, addressed to the Representative and dated each
Closing Date, and (ii) a separate letter addressed to the Representative and dated each Closing
Date, in each case substantially to the effect previously agreed upon;
(i) The Representative shall have received on each Closing Date from ▇▇▇▇▇ ▇▇▇▇, Esq.,
Secretary and General Counsel of the Company, an opinion, addressed to the Representative, and
dated each Closing Date, substantially to the effect previously agreed upon;
(j) The Representative shall have received on each Closing Date from foreign counsel of the
Company, opinions reasonably satisfactory in form and substance to the Representative and its
counsel;
(k) All proceedings taken in connection with the sale of the Notes as herein contemplated
shall be reasonably satisfactory in form and substance to the Representative and its counsel and
the Representative shall have received from Shearman & Sterling LLP a favorable letter, addressed
to the Representative and dated each Closing Date with respect to the Notes, the Registration
Statement, the Pricing Disclosure Package and the Prospectus, and such other related matters as the
Representative may reasonably request, and the Company shall have furnished to Shearman & Sterling
LLP such documents as they may reasonably request for the purpose of enabling them to pass upon
such matters;
(l) The Representative shall have received copies of the Lockup Agreements, in the form set
forth in Annex I hereto, executed by each entity or person listed therein;
(m) The Company shall have furnished or caused to be furnished to the Representative such
further certificates or documents as the Representative shall have reasonably requested;
(n) The Company shall have complied with the provisions of Section 4(m) hereof with respect to
the furnishing of prospectuses on the Business Day next succeeding the date of this Agreement; and
(o) On or after the Applicable Time no downgrading, or placement on any watch list for
possible downgrading, in the rating of any of the Company’s debt securities by any
“nationally recognized statistical rating organization” (as defined for purposes of Rule
436(g) under the Exchange Act) shall have occurred.
If any of the conditions hereinabove provided for in this Section 6 shall not have been
fulfilled when and as required by this Agreement to be fulfilled, the obligations of the
Underwriters hereunder may be terminated by the Representative by notifying the Company of such
termination in writing at or prior to each Closing Date.
In such event, the Company and the Representative shall not be under any obligation to each
other (except to the extent provided in Sections 5 and 8 hereof).
7. Conditions of the Obligations of the Company.
The obligations of the Company to sell and deliver the portion of the Notes required to be
delivered as and when specified in this Agreement are subject to the conditions that at each
Closing Date no stop order suspending the effectiveness of the Registration Statement shall have
been issued and in effect or proceedings therefor initiated or threatened.
8. Indemnification.
(a) The Company agrees:
(i) to indemnify and hold harmless each Underwriter, each of its directors,
officers, employees, agents and each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, against any losses, claims, damages or liabilities to which an
Underwriter, any of its director, officer, employee, agent or any such controlling
person may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Pricing Disclosure Package, the Prospectus or any
amendment or supplement thereto or any Issuer Free Writing Prospectus or (ii) with
respect to the Registration Statement or any amendment or supplement thereto, 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 or (iii) with
respect any Preliminary Prospectus, the Pricing Disclosure Package, the Prospectus
or any amendment or supplement thereto or any Issuer Free Writing Prospectus, the
omission or alleged omission to state therein a material fact necessary to make the
statements therein not misleading in the light of the circumstances under which they
were made; 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 an untrue statement or alleged untrue statement, or omission or alleged
omission made in the Registration Statement, any Preliminary Prospectus, the Pricing
Disclosure Package, the Prospectus, or such amendment or supplement, or any Issuer
Free Writing Prospectus in reliance upon and in
conformity with written information furnished to the Company by or through the
Representative specifically for use in the preparation thereof; and
(ii) to reimburse each Underwriter, each of its directors, officers, employees,
agents and each such controlling person upon demand for any legal or other
out-of-pocket expenses reasonably incurred by each Underwriter, each of its
directors, officers, employees, agents or each such controlling person in connection
with investigating or defending any such loss, claim, damage or liability, action or
proceeding or in responding to a subpoena or governmental inquiry related to the
offering of the Notes, whether or not such Underwriter, director, officer, employee,
agent or controlling person is a party to any action or proceeding. In the event
that it is finally judicially determined that the Underwriters were not entitled to
receive payments for legal and other expenses pursuant to this subparagraph, the
Underwriters will promptly return all sums that had been advanced pursuant hereto.
(b) Each Underwriter severally and not jointly will indemnify and hold harmless the Company,
each of its directors, each of its officers who have signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act, against any losses, claims, damages or liabilities to which
the Company or any such director, officer, or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement, any Preliminary
Prospectus, the Pricing Disclosure Package, any Issuer Free Writing Prospectus, the Prospectus or
any amendment or supplement thereto, or (ii) the omission or the alleged omission to state therein
a material fact required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made; and will reimburse any
legal or other expenses reasonably incurred by the Company or any such director, officer, or
controlling person in connection with investigating or defending any such loss, claim, damage,
liability, action or proceeding; provided, however, that each Underwriter will be liable in each
case to the extent, but only to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission has been made in the Registration Statement, any Preliminary
Prospectus, the Pricing Disclosure Package, any Issuer Free Writing Prospectus, the Prospectus or
such amendment or supplement, in reliance upon and in conformity with written information furnished
to the Company by or through the Representative specifically for use in the preparation thereof.
This indemnity agreement will be in addition to any liability which such Underwriter may otherwise
have.
(c) In case any proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to this Section 8, such
person (the “indemnified party”) shall promptly notify the person against whom such indemnity may
be sought (the “indemnifying party”) in writing. No indemnification provided for in Section 8(a),
(b) or (c) shall be available to any party who shall fail to give notice as provided in this
Section 8(d) if the party to whom notice was not given was unaware of the proceeding to which such
notice would have related and was materially prejudiced by the failure to give such notice, but the
failure to give such notice shall not relieve the indemnifying party or
parties from any liability which it or they may have to the indemnified party for contribution
or otherwise than on account of the provisions of Section 8(a), (b) or (c). In case any such
proceeding shall be brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to participate therein
and, to the extent that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such indemnified party and
shall pay as incurred the fees and disbursements of such counsel related to such proceeding. In
any such proceeding, any indemnified party shall have the right to retain its own counsel at its
own expense. Notwithstanding the foregoing, the indemnifying party shall pay as incurred (or
within 30 days of presentation) the fees and expenses of the counsel retained by the indemnified
party in the event (i) the indemnifying party and the indemnified party shall have mutually agreed
to the retention of such counsel, (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual or potential differing
interests between them or (iii) the indemnifying party shall have failed to assume the defense and
employ counsel acceptable to the indemnified party within a reasonable period of time after notice
of commencement of the action. It is understood that the indemnifying party shall not, in
connection with any proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm for all such indemnified parties. Such
firm shall be designated in writing by you in the case of parties indemnified pursuant to Section
8(a), (b) or (c) and by the Company in the case of parties indemnified pursuant to Section 8(c).
The indemnifying party shall not be liable for any settlement of any proceeding effected without
its written consent but if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any
loss or liability by reason of such settlement or judgment. In addition, the indemnifying party
will not, without the prior written consent of the indemnified party, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action or proceeding of
which indemnification may be sought hereunder (whether or not any indemnified party is an actual or
potential party to such claim, action or proceeding) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability arising out of such
claim, action or proceeding.
(d) To the extent the indemnification provided for in this Section 8 is unavailable to or
insufficient to hold harmless an indemnified party under Section 8(a), (b) or (c) above in respect
of any losses, claims, damages or liabilities (or actions or proceedings in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the other from the
offering of the Notes. If, however, the allocation provided by the immediately preceding sentence
is not permitted by applicable law then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company on the one hand and the
Underwriters on the other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions or proceedings in respect thereof), as well as
any other relevant equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company on the one hand or the Underwriters on the
other and the parties’ relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this Section 8(d) were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable considerations referred to above
in this Section 8(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to
above in this Section 8(d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this subsection (d), (i) no Underwriter shall be required
to contribute any amount in excess of the underwriting discounts and commissions applicable to the
Notes purchased by such Underwriter, and (ii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(e) In any proceeding relating to the Registration Statement, any Preliminary Prospectus, any
Issuer Free Writing Prospectus, any Pricing Disclosure Package, the Prospectus or any supplement or
amendment thereto, each party against whom contribution may be sought under this Section 8 hereby
consents to the jurisdiction of any court having jurisdiction over any other contributing party,
agrees that process issuing from such court may be served upon it by any other contributing party
and consents to the service of such process and agrees that any other contributing party may join
it as an additional defendant in any such proceeding in which such other contributing party is a
party.
(f) Any losses, claims, damages, liabilities or expenses for which an indemnified party is
entitled to indemnification or contribution under this Section 8 shall be paid by the indemnifying
party to the indemnified party as such losses, claims, damages, liabilities or expenses are
incurred. The indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company set forth in this Agreement shall remain operative
and in full force and effect, regardless of (i) any investigation made by or on behalf of any
Underwriter, any of its directors, officers, employees, agents or any person controlling any
Underwriter, the Company, its directors or officers or any persons controlling the Company, (ii)
acceptance of any Notes and payment therefor hereunder, and (iii) any termination of this
Agreement. A successor to any Underwriter, any of its directors, officers, employees, agents, or
any person controlling any Underwriter, or to the Company, its directors or officers, or any person
controlling the Company, shall be entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section 8.
9. Notices.
All communications hereunder shall be in writing and, except as otherwise provided herein,
will be mailed, delivered, telecopied or telegraphed and confirmed as follows: if to the
Representative, to Deutsche Bank Securities Inc., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇; Attention: Syndicate Manager, with a copy to Deutsche Bank Securities Inc., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel, with a copy, which shall not constitute
notice, to Shearman & Sterling LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇ ▇▇▇▇▇ III and if to the Company, to its agent for service as such agent’s address appears on
the cover page of the Registration Statement with a copy to ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
10. Termination.
This Agreement may be terminated by the Representative by notice to the Company any time prior
to the Firm Notes Closing Date or any Optional Notes Closing Date (if different from the Firm Notes
Closing Date and then only as to Optional Notes) if any of the following has occurred: (i) since
the respective dates as of which information is given in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, any material adverse change or any development involving a
prospective material adverse change in or affecting the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise) or prospects of the Company and its
subsidiaries taken as a whole, whether or not arising in the ordinary course of business, (ii) any
outbreak or escalation of hostilities or declaration of war or national emergency or other national
or international calamity or crisis or change in economic or political conditions if the effect of
such outbreak, escalation, declaration, emergency, calamity, crisis or change on the financial
markets of the United States would, in your reasonable judgment, make it impracticable or
inadvisable to market the Notes or to enforce contracts for the sale of the Notes, or (iii)
suspension of trading in securities generally on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market or limitation on prices (other than limitations on hours or
numbers of days of trading) for securities on either such exchange, (iv) the enactment,
publication, decree or other promulgation of any statute, regulation, rule or order of any court or
other governmental authority which in your opinion materially and adversely affects or may
materially and adversely affect the business or operations of the Company, (v) the declaration of a
banking moratorium by United States or New York State authorities, (vi) any downgrading, or
placement on any watch list for possible downgrading, in the rating of any of the Company’s debt
securities by any “nationally recognized statistical rating organization” (as defined for purposes
of Rule 436(g) under the Exchange Act); (vii) the suspension of trading of the Company’s Common
Stock by the New York Stock Exchange, the Toronto Stock Exchange, the Commission, or any other
governmental authority or, (viii) the taking of any action by any governmental body or agency in
respect of its monetary or fiscal affairs which in your reasonable opinion has a Material Adverse
Effect on the securities markets in the United States; or as provided in Sections 6 and 11 of this
Agreement.
11. Default by Underwriters.
If on a Closing Date, any Underwriter shall fail to purchase and pay for the principal amount
of Notes which such Underwriter has agreed to purchase and pay for on such Closing Date (otherwise
than by reason of any default on the part of the Company) the Representative shall use
reasonable efforts to procure within 36 hours thereafter one or more of the other Underwriters, or
any others, to purchase from the Company in such principal amounts as may be agreed upon and upon
the terms set forth herein, the Notes which the defaulting Underwriter or Underwriters failed to
purchase. If during such 36 hours the Representative shall not have procured such other
Underwriters, or any others, to purchase the Notes agreed to be purchased by the defaulting
Underwriter or Underwriters, then (a) if the aggregate principal amount of Notes with respect to
which such default shall occur does not exceed 10% of the principal amount of Notes to be purchased
on such Closing Date, the other Underwriters shall be obligated, severally, in proportion to the
respective principal amount of Notes which they are obligated to purchase hereunder, to purchase
the principal amount of Notes which such defaulting Underwriter or Underwriters failed to purchase,
or (b) if the aggregate principal amount of Notes with respect to which such default shall occur
exceeds 10% of the principal amount of Notes to be purchased on such Closing Date, the Company or
the Representative will have the right, by written notice given within the next 36-hour period to
the parties to this Agreement, to terminate this Agreement without liability on the part of the
non-defaulting Underwriters or of the Company except to the extent provided in Sections 5 and 8
hereof. In the event of a default by any Underwriter or Underwriters on a Closing Date, as set
forth in this Section 11, such Closing Date may be postponed for such period, not exceeding seven
days, as you, as Representative, may determine in order that the required changes in the
Registration Statement, the Pricing Disclosure Package or in the Prospectus or in any other
documents or arrangements may be effected. The term “Underwriter” includes any person substituted
for a defaulting Underwriter. Any action taken under this Section 11 shall not relieve any
defaulting Underwriter from liability in respect of any default of such Underwriter under this
Agreement.
12. Successors.
This Agreement has been and is made solely for the benefit of the Underwriters, the Company
and their respective successors, executors, administrators, heirs and assigns, and the officers,
directors and controlling persons referred to herein, and no other person will have any right or
obligation hereunder. No purchaser of any of the Notes from any Underwriter shall be deemed a
successor or assign merely because of such purchase.
13. Miscellaneous.
The reimbursement, indemnification and contribution agreements contained in this Agreement and
the representations, warranties and covenants in this Agreement shall remain in full force and
effect regardless of (a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or any of its directors, officers, employees, agents or controlling
person thereof, or by or on behalf of the Company or its directors or officers and (c) delivery of
and payment for the Notes under this Agreement.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument.
This Agreement shall be governed by, and construed in accordance with, the law of the State of
New York without regard to the conflict of laws provisions thereof.
If the foregoing letter is in accordance with your understanding of our agreement, please sign
and return to us the enclosed duplicates hereof, whereupon it will become a binding agreement
between the Company and the several Underwriters in accordance with its terms.
| Very truly yours, | ||||||||
| COEUR D’▇▇▇▇▇ ▇▇▇▇▇ | ||||||||
| CORPORATION | ||||||||
| By | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |||||||
| Name: | ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |||||||
| Title: | Chairman and Chief Executive | |||||||
| Officer | ||||||||
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
is hereby confirmed and accepted as
of the date first above written.
DEUTSCHE BANK SECURITIES INC.
As Representative of the Several
Underwriters Named in Schedule I.
Underwriters Named in Schedule I.
By:
|
Deutsche Bank Securities Inc. | |||
By:
|
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
|
|||
| Authorized Officer | ||||
By:
|
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
|
|||
| Authorized Officer |
(Signature Page to Underwriting Agreement)
29
SCHEDULE I
Schedule of Underwriters
| Aggregate Principal Amount of | ||||
| Underwriters | Firm Notes to be Purchased | |||
Deutsche Bank Securities Inc. |
$ | 140,000,000 | ||
▇.▇. ▇▇▇▇▇▇ Securities Inc. |
60,000,000 | |||
Total |
$ | 200,000,000 | ||
30
SCHEDULE II
Issuer Free Writing Prospectuses Included in the Pricing Disclosure Package
None.
31
SCHEDULE III
Material Other Than That Listed On Schedule II
Included In The Pricing Disclosure Package
Included In The Pricing Disclosure Package
Pricing Term Sheet
March 12, 2008
COEUR D’▇▇▇▇▇ ▇▇▇▇▇ CORPORATION
$200,000,000 aggregate principal amount of 3.25% Convertible Senior Notes due 2028
The information in this Pricing Term Sheet supplements and, as appropriate, supersedes the
information contained in the Preliminary Prospectus Supplement of Coeur d’▇▇▇▇▇ ▇▇▇▇▇ Corporation
dated March 12, 2008.
Title of Securities:
|
3.25% Convertible Senior Notes due 2028 (the “Notes”) | |
Aggregate Principal Amount Offered:
|
$200,000,000 | |
Over-allotment Option:
|
$ 30,000,000 | |
Offer price:
|
100.000% of principal amount | |
Use of proceeds:
|
Coeur d’▇▇▇▇▇ ▇▇▇▇▇ Corporation intends to use the net proceeds from this offering to complete the construction of the San Bartolomé silver project in Bolivia and fund construction of the Palmarejo silver/gold project in Mexico. Any additional remaining proceeds may be used to repay borrowings under our bridge loan facility and for general corporate purposes | |
Interest payment dates:
|
March 15 and September 15 of each year, commencing September 15, 2008 | |
Maturity:
|
March 15, 2028 | |
Ranking:
|
The Notes will be our senior unsecured obligations and will rank pari passu with all of our other senior unsecured debt and senior to any of our future debt subordinated to the Notes. The Notes will be effectively subordinated to all present and future debt and other obligations of our subsidiaries. In addition, the Notes are effectively subordinated to all of our present and future secured debt to the extent of the collateral securing that debt | |
Coupon:
|
3.25% | |
Principal amount per note:
|
$ 1,000 | |
Closing Price (March 12, 2008)
|
$ 4.37 | |
Conversion Price (approximately):
|
Initially $5.68 per share of common stock | |
Conversion Rate Per Note
|
Initially 176.0254 | |
Optional Redemption:
|
On or after March 22, 2015, Coeur d’▇▇▇▇▇ ▇▇▇▇▇ Corporation may redeem the Notes for cash as a whole at any time, or from time to time in part, at a redemption price of 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest up to, but not including, the redemption date |
Repurchase of Notes at Holder’s
Option:
|
Holders have the right to require Coeur d’▇▇▇▇▇ ▇▇▇▇▇ Corporation to purchase all or a portion of their Notes on March 15, 2013, March 15, 2015, March 15, 2018 and March 15, 2023 for a purchase price equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest, up to but not including the date of repurchase. In lieu of paying cash for the repurchase price, Coeur d’▇▇▇▇▇ ▇▇▇▇▇ Corporation may elect to pay shares of common stock or a combination of cash and shares of common stock | |
Repurchase upon a Fundamental Change: |
If a fundamental change occurs, holders will have the option to require Coeur d’▇▇▇▇▇ ▇▇▇▇▇ Corporation to purchase all or any part of their Notes at a purchase price equal to 100% of the principal amount of the notes, plus accrued and unpaid interest, payable in cash | |
Qualifying Fundamental Change Protection: |
Adjustment to the applicable conversion rate upon a qualifying fundamental change (per attached table) | |
Registration:
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The Notes are registered under Coeur d’▇▇▇▇▇ ▇▇▇▇▇ Corporation’s shelf registration statement | |
Net Proceeds:
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Approximately $193.2 million, after deducting underwriters’ discounts, commissions and estimated offering expenses (or approximately $222.3 million after exercising the over-allotment option in full) | |
Sole Book-Running Manager:
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Deutsche Bank Securities Inc. | |
Co-Manager:
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JPMorgan | |
Trade date:
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▇▇▇▇▇ ▇▇, ▇▇▇▇ | |
▇▇▇▇▇▇▇▇▇▇ date:
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March 18, 2008 | |
CUSIP / ISIN
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▇▇▇▇▇▇▇▇▇ / US192108AR96 |
Adjustment to Shares Delivered Upon Conversion Upon a Qualifying Fundamental Change
The following table sets forth the increase in the conversion rate, expressed as a number of
additional shares to be added per $1,000 principal amount of notes.
| Effective Date | Stock Price | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | 4.37 | $ | 4.50 | $ | 4.75 | $ | 5.00 | $ | 5.25 | $ | 5.50 | $ | 6.00 | $ | 7.00 | $ | 8.00 | $ | 9.00 | $ | 10.00 | $ | 12.50 | $ | 15.00 | $ | 20.00 | |||||||||||||||||||||||||||||
March 18, 2008
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52.80 | 50.71 | 45.32 | 40.62 | 36.50 | 32.87 | 26.81 | 18.14 | 12.42 | 8.52 | 5.80 | 1.96 | 0.36 | 0.00 | ||||||||||||||||||||||||||||||||||||||||||
March 15, 2009
|
52.80 | 52.80 | 47.70 | 42.62 | 38.19 | 34.29 | 27.82 | 18.62 | 12.63 | 8.59 | 5.79 | 1.91 | 0.33 | 0.00 | ||||||||||||||||||||||||||||||||||||||||||
March 15, 2010
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52.80 | 52.80 | 49.73 | 44.24 | 39.45 | 35.27 | 28.36 | 18.67 | 12.45 | 8.34 | 5.53 | 1.73 | 0.25 | 0.00 | ||||||||||||||||||||||||||||||||||||||||||
March 15, 2011
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52.80 | 52.80 | 50.81 | 44.87 | 39.73 | 35.26 | 27.96 | 17.91 | 11.65 | 7.59 | 4.90 | 1.37 | 0.12 | 0.00 | ||||||||||||||||||||||||||||||||||||||||||
March 15, 2012
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52.80 | 52.80 | 49.85 | 43.50 | 38.07 | 33.41 | 25.92 | 15.95 | 9.98 | 6.26 | 3.87 | 0.89 | 0.01 | 0.00 | ||||||||||||||||||||||||||||||||||||||||||
March 15, 2013
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52.80 | 51.17 | 44.27 | 38.39 | 33.36 | 29.03 | 22.09 | 12.95 | 7.63 | 4.44 | 2.49 | 0.31 | 0.00 | 0.00 | ||||||||||||||||||||||||||||||||||||||||||
March 15, 2014
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52.80 | 48.23 | 40.37 | 33.77 | 28.22 | 23.58 | 16.41 | 7.85 | 3.65 | 1.58 | 0.55 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||||||||||||||||||||
March 15, 2015
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52.80 | 46.17 | 34.48 | 23.95 | 14.43 | 5.77 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||||||||||||||||||||||||||||
The stock prices and additional share amounts set forth above are based upon a closing sale
price of $4.37 on March 12, 2008 and an initial conversion price of approximately $5.68.
Notwithstanding anything in the indenture to the contrary, we may not increase the conversion
rate to more than 228.8329 shares per $1,000 principal amount of notes pursuant to qualifying
fundamental change events, though we will adjust such number of shares for the same events that
require anti-dilution adjustments of the conversion rate as described in the Preliminary Prospectus
Supplement under “Description of the Notes—Conversion Rate Adjustments,” in the same manner as the
conversion rate is adjusted under that section.
The exact stock prices and effective dates may not be set forth in the table above, in which
case if the stock price is (i) between two stock price amounts in the table or the effective date
is between two effective dates in the table, the number of additional shares will be determined by
a straight-line interpolation between the number of additional shares set forth for the higher and
lower stock price amounts and the two dates, as applicable, based on a 365-day year; (ii) in excess
of $20.00 per share (subject to adjustment), no increase in the conversion rate will be made; and
(iii) less than $4.37 per share (subject to adjustment), no increase in the conversion rate will be
made.
Because we cannot calculate and deliver the additional conversion consideration due as a
result of an increase in the conversion rate resulting from a given qualifying fundamental change
until after the effective date of that qualifying fundamental change has occurred, we will not
deliver such additional conversion consideration until after the effective date of the qualifying
fundamental change it relates to even if the settlement date in respect of other conversion
consideration occurs earlier. As a result, you may receive conversion consideration in two payments
rather than one. We will deliver the portion of the conversion consideration that is payable on
account of the increase in the conversion rate as soon as practicable, but in no event after the
third business day after the later of (i) the date the holder surrenders the note for conversion;
(ii) the last trading day in the applicable conversion settlement averaging period; and (iii) the
effective date of the qualifying fundamental change.
If you surrender a note for conversion in connection with a qualifying fundamental change we
have announced, but the qualifying fundamental change is not consummated, then you will not be
entitled to the increased conversion rate referred to above in connection with the conversion.
CAPITALIZATION
The following table sets forth our consolidated cash, cash equivalents and short-term
investment balances and our capitalization as of December 31, 2007, on an actual basis and as
adjusted basis to give effect to this offering and the application of the use of proceeds as
described herein. You should read all of this information in conjunction with our financial
statements and other financial information that are incorporated by reference in the preliminary
prospectus supplement dated March 12, 2008.
| December 31, 2007 | ||||||||
| Actual | As Adjusted | |||||||
| (in thousands) | ||||||||
Cash, cash equivalents and short-term investments |
$ | 151,710 | $ | 344,870 | ||||
Current portion of long-term debt and capital lease obligations |
$ | 30,831 | $ | 30,831 | ||||
1.25% Convertible Senior Notes due January 2024 |
$ | 180,000 | $ | 180,000 | ||||
Obligations under capital leases |
$ | 23,661 | $ | 23,661 | ||||
New 3.25% Convertible Senior Notes due 2028(1) |
$ | — | $ | 200,000 | ||||
Total long-term debt |
$ | 234,492 | $ | 434,492 | ||||
Shareholders’ equity: |
||||||||
Common Stock, par value $1.00 per share; authorized
750,000,000 shares; 551,512,230 shares issued and outstanding
(1,059,211 shares held in treasury)(2) |
551,512 | 551,512 | ||||||
Additional paid in capital |
1,607,737 | 1,607,737 | ||||||
Accumulated deficit |
(419,331 | ) | (419,331 | ) | ||||
Shares held in treasury |
(13,190 | ) | (13,190 | ) | ||||
Accumulated other comprehensive income |
639 | 639 | ||||||
Total shareholders’ equity |
$ | 1,727,367 | $ | 1,727367 | ||||
Total capitalization |
$ | 1,961,859 | $ | 2,161,859 | ||||
| (1) | Assumes no exercise of the underwriters’ over-allotment option. | |
| (2) | Does not include 23,684,211 shares issuable upon conversion of our 1.25% Convertible Senior Notes due 2024, 6,004 shares reserved for issuance under our executive compensation plan and 759,435 shares reserved for issuance under our director compensation plan. |
The Company has filed a registration statement (including a prospectus dated as of December 27,
2005 and a preliminary prospectus supplement dated as of March 12, 2008) with the Securities and
Exchange Commission, or SEC, for the offering to which this communication relates. Before you
invest, you should read the preliminary prospectus supplement, the accompanying prospectus and the
other documents the Company has filed with the SEC for more complete information about the Company
and this offering. You may get these documents for free by visiting ▇▇▇▇▇ on the SEC web site at
▇▇▇.▇▇▇.▇▇▇. Alternatively, Deutsche Bank Securities Inc. will arrange to send you the prospectus
if you request it by calling toll-free 1-800-503-4611.
This communication should be read in conjunction with the preliminary prospectus supplement dated
as of March 12, 2008 and the accompanying prospectus. The information in this communication
supersedes the information in the preliminary prospectus supplement and the accompanying prospectus
to the extent inconsistent with the information in the preliminary prospectus supplement and the
accompanying prospectus.
ANY DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS COMMUNICATION AND
SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER NOTICES WERE AUTOMATICALLY GENERATED AS A RESULT
OF THIS COMMUNICATION BEING SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM.
SCHEDULE IV
Parties to Lockup Agreements
Parties to Lockup Agreements
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ANNEX I
Form of Lockup Agreement
March , 2008
| Deutsche Bank Securities Inc. | ||||
| As Representative of the Several | ||||
| Underwriters | ||||
c/o Deutsche Bank Securities Inc.
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Re: Coeur d’▇▇▇▇▇ ▇▇▇▇▇ Corporation Lockup Agreement
Ladies & Gentlemen:
The undersigned, a holder of common stock (“Common Stock”) or rights to acquire Common Stock of
Coeur d’▇▇▇▇▇ ▇▇▇▇▇ Corporation (the “Company”), understands that the Company proposes to carry out
an offering (the “Offering”) of Convertible Senior Notes due 2028 (the “Notes”). The Notes will be
convertible into cash, shares of Common Stock or a combination thereof under certain circumstances.
The undersigned further understands that Deutsche Bank Securities Inc., as representative (the
“Representative”) of the several underwriters (the “Underwriters”), is contemplating entering into
an underwriting agreement (the “Underwriting Agreement”) with the Company in connection with the
Offering. The undersigned acknowledges that the Representative is relying on the representations
and agreements of the undersigned contained in this letter in carrying out the Offering and in
entering into the Underwriting Agreement with the Company with respect to the Offering.
In order to induce the Company and the Representative to enter into the Underwriting Agreement and
to proceed with the Offering, the undersigned agrees, for the benefit of the Company and the
Underwriters (including the Representative), that should the Offering be effected the undersigned
(along with all of the officers and directors of the Company party to a similar Lockup agreement
with the Representatives listed on Exhibit A hereto, other than the undersigned, the “Other
Parties”), will not, without the prior written consent of the Representative, directly or
indirectly, make any offer, sale, assignment, transfer, encumbrance, contract to sell, grant of an
option to purchase or other disposition any Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock (collectively, “Stock”) beneficially owned (within the
meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) by the undersigned for
a period of 90 days subsequent to the date of the Underwriting Agreement (the “Restriction
Period”). Notwithstanding the foregoing, during the Restriction Period, the undersigned (i) may
sell shares of Common Stock beneficially owned (within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934, as amended) by the undersigned as of the date hereof or acquired
by the undersigned pursuant to the Company’s Executive Compensation Program or Non-Employee
Directors Stock Option Plan; provided, however, that in no event shall the number of shares of
Stock sold by the undersigned, when added to the number of shares of Stock
sold by the Other Parties, exceed 1,000,000, and (ii) may transfer Stock as a gift or gifts
provided that any donee thereof agrees in writing to be bound by the terms hereof.
The undersigned, whether or not participating in the Offering, confirms that he, she or it
understands that the Underwriters (including the Representative) and the Company will rely upon the
representations set forth in this agreement in proceeding with the Offering. This agreement shall
be binding on the undersigned and his, her or its respective successors, heirs, personal
representatives and assigns. The undersigned agrees and consents to the entry of stop-transfer
instructions with the Company’s transfer agent against the transfer of Common Stock or securities
convertible into or exchangeable for Common Stock held by the undersigned except in compliance with
this agreement.
Very truly yours,
Dated: March , 2008
EXHIBIT A
Parties to Lockup Agreement
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