UNDERWRITING AGREEMENT
Exhibit
10.34
September
26, 0000
Xxxxxxx
Xxxxxxxxxx Inc.
0 Xxxxx
Xx. Xxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxx X0X 0X0
Attention: Xxxxxxx
Xxxxxxxxx, President and Chief Executive Officer
Dear
Sir:
Wellington
West Capital Markets Inc. (“WWCM”) and RBC Dominion Securities Inc.
(“RBC”),
acting as co-lead managers and joint book runners, and Scotia Capital
Inc. (collectively, the “Underwriters” and individually an “Underwriter”) understand that Western Goldfields
Inc. (“Western” or the “Company”) proposes to issue and sell to the
Underwriters 9,840,000 common shares (the “Purchased Shares”), and at the election of the
Underwriters, up to 1,476,000 additional common shares to cover over-allotments
(the common shares in respect of which such option is exercised are called “Over-Allotment Shares”). The Purchased Shares and the
Over-Allotment Shares are referred to collectively herein as the “Shares”.
The
Underwriters understand that the Company will file within the time limits and on
the terms set out below, a preliminary short form prospectus (the “Preliminary Prospectus”) and a (final) short form prospectus
(the “Final Prospectus”) and all related documents,
including all documents incorporated by reference therein, with the securities
regulatory authority in each of the provinces of Canada, other than Quebec (the
“Securities Commissions”, and the provinces, the “Qualifying Jurisdictions”) in order to qualify for
distribution to the public the Shares in each of the provinces of Canada, other
than Quebec.
The
Shares will also be distributed in the United States on a private placement
basis by U.S. Affiliates (defined below) of the Underwriters to QIBs (defined
below) pursuant to the U.S. 144A Memorandum (defined below). Subject to
applicable law, including U.S. Securities Laws (defined below) and the terms of
this underwriting agreement (the “Agreement”), the Shares may also be distributed
outside Canada and the United States by the registered broker-dealer affiliates
of the Underwriters, where they may be lawfully sold on a basis exempt from the
prospectus and registration requirements of any such jurisdictions.
Except as
set forth in this Agreement, the purchase and sale of the Purchased Shares
shall
occur on October 12, 2007 (the “Closing Date”).
The
Company, as and to the extent indicated above, hereby grants to the Underwriters
the right to purchase at their election up to 1,476,000 Over-Allotment Shares,
at the purchase price per share set forth in the paragraph below, for the sole
purpose of covering over-allotments in the sale of the Purchased Shares and for
market stabilization purposes permitted pursuant to Applicable Securities Laws,
provided, however, that the number of Over-Allotment Shares to be purchased
shall not exceed 15% of the total number of Purchased Shares purchased by the
Underwriters. Any such election to purchase Over-Allotment Shares may be
exercised only by written notice from WWCM on behalf of the Underwriters, to the
Company at any time until the close of business on the 30th day following the
Closing Date, such notice to set forth (i) the aggregate number of
Over-Allotment Shares to be purchased, and (ii) the closing date for the
Over-Allotment Shares, provided that unless otherwise agreed such Closing Date
shall not be less than three (3) Business Days and no more than seven (7)
Business Days following the date of such notice.
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On the
basis of the representations, warranties, covenants and agreements contained
herein, but subject to the terms and conditions further set out
below:
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(a)
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the
Company agrees to sell to each of the Underwriters and each of the
Underwriters agrees, severally, and not jointly, to purchase from the
Company the respective percentage of the Purchased Shares set forth
opposite the respective names of the Underwriters in Section 18, at a
purchase price of $3.05 per share for Purchased Shares (the “Offering Price”);
and
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(b)
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in
the event and to the extent that the Underwriters shall exercise the
election to purchase any or all Over-Allotment Shares (the “Over-Allotment Option”) as provided herein, the
Company agrees to sell to each of the Underwriters and each of the
Underwriters agrees, severally, and not jointly, to purchase from the
Company the respective percentage of Over-Allotment Shares set forth
opposite the name of such Underwriter in Section 18 at a purchase price
equal to the Offering Price per share for Over-Allotment
Shares.
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The
Company and the Underwriters agree that any sales or purchases of Shares in the
United States will be conducted through a duly registered affiliate of each
Underwriter in compliance with U.S. Securities Laws.
The
Company shall pay to the Underwriters a fee of 5% of the gross proceeds realized
on the sale of Shares in consideration of the services to be provided by the
Underwriters under this Agreement (the “Underwriting Fee”) and as further set forth in Section
13 herein.
The
Underwriters may offer the Purchased Shares at a price less than the Offering
Price in compliance with the requirements under National Instrument
44-101 – Short Form Prospectus Distributions and the disclosure concerning
the same contained in the Preliminary Prospectus and the Final
Prospectus.
The
Underwriters and the Company acknowledge that Schedule “A” forms a part of this
Agreement.
The
following are the terms and conditions of the agreement between the Company and
the Underwriters:
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TERM
AND CONDITIONS
Section
1 Definitions and
Interpretation
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(1)
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In
this Agreement:
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“Affiliate” means an affiliated entity for
purposes of the Securities Act (Ontario);
“Applicable Securities Laws” means the Canadian Securities Laws
and the U.S. Securities Laws;
“Business Day” means any day other than a Saturday,
Sunday or statutory or civic holiday in the city of Toronto,
Ontario;
“Canadian Securities Laws” means, collectively, all applicable
securities laws of each of the Qualifying Jurisdictions and the respective rules
and regulations under such laws together with applicable published instruments,
notices and orders of the securities regulatory authorities in the Qualifying
Jurisdictions;
“Closing Date” means October 12, 2007 or any
earlier or later date as may be agreed to by Western and the Underwriters, each
acting reasonably, but will in any event not be
later than October 30, 2007;
“distribution” means distribution or distribution
to the public, as the case may be, for the purposes of Applicable Securities
Laws or any of them;
“Exchange” means the TSX;
“Final Prospectus” has the meaning ascribed in the
second paragraph of this Agreement, such prospectus expected to be dated on or
about October 5, 2007;
“Final U.S. Private Placement Memorandum” means the U.S. private placement
memorandum, in a form satisfactory to the Underwriters, to which will be
attached the Final Prospectus, to be delivered to any offerees and purchasers of
the Shares in the United States in accordance with Schedule “A”
hereto;
“Financial Information” means the annual consolidated
financial statements of Western (or its predecessor) incorporated by reference
into the Preliminary Prospectus, the Final Prospectus and any Supplementary
Material, including the notes with respect thereto together with the respective
auditors’ reports thereon as at and for the periods included therein, and the
respective accompanying Management’s Discussion and Analyses;
“Indemnified Party” has the meaning given to that term
in Section 15 of this Agreement;
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“Liens” means any encumbrance or title
defect of whatever kind or nature, regardless of form, whether or not registered
or registrable and whether or not consensual or arising by law (statutory or
otherwise), including any mortgage, lien, charge, pledge or security interest,
whether fixed or floating, or any assignment, lease, option, right of
pre-emption, privilege, encumbrance, easement, servitude, right of way,
restrictive covenant, right of use or any other right or claim of any kind or
nature whatever which affects ownership or possession of, or title to, any
interest in, or the right to use or occupy such property or assets;
“Material Adverse Effect” means the effect resulting from any
event or change which has a material adverse effect on the business, affairs,
capital, operations, Mining Claims or assets of Western considered on a
consolidated basis;
“material change” means a material change for the
purposes of Applicable Securities Laws or any of them, or where undefined under
the Applicable Securities Laws of an Offering Jurisdiction means a change in the
business, affairs, operations, assets, financial condition or capital of Western
on a consolidated basis that would reasonably be expected to have a significant
effect on the market price or value of the common shares, and includes a
decision to implement such a change made by the directors of
Western;
“material fact” means a material fact for the
purposes of Applicable Securities Laws or any of them, or where undefined under
the Applicable Securities Laws of an Offering Jurisdiction means a fact that
would reasonably be expected to have a significant effect on the market price or
value of the common shares;
“Material Subsidiaries” means each of Western Goldfields USA
Inc., Western Goldfields (Canada) Inc. and Western Mesquite Mines,
Inc.;
“Mesquite Project” means the mine project located in
Imperial County, California, U.S.A. as further described in the Technical
Report;
“Mining Claims” has the meaning given to such term
in Section 7(1)(m);
“misrepresentation” means a misrepresentation for the
purposes of the Applicable Securities Laws or any of them, or where undefined
under the Applicable Securities Laws of an Offering Jurisdiction means: (i) an
untrue statement of a material fact, or (ii) an omission to state a material
fact that is required to be stated or that is necessary to make a statement not
misleading in light of the circumstances in which it was made;
“MRRS” means the mutual reliance review
system procedures provided for under National Policy 43-201 “Mutual Reliance
Review System for Prospectuses and Annual Information Forms” among the
securities commissions and other securities regulatory authorities in each of
the provinces and territories of Canada;
“MRRS Decision Document” means a decision document issued by
the applicable Canadian securities regulatory authority pursuant to the MRRS and
which evidences the receipt by the applicable Securities Commission of the
Qualifying Jurisdictions for the Preliminary Prospectus or the Final Prospectus,
as the case may be;
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“Offering” means distribution of the Shares in
each of the Offering Jurisdictions;
“Offering Documents” means, collectively, the Preliminary
Prospectus, the Final Prospectus, any Prospectus Amendment, the U.S. 144A
Memorandum and any Supplementary Material;
“Offering Jurisdictions” means the United States and the
Qualifying Jurisdictions;
“Over-Allotment Closing Date” means no less than three (3)
Business Days and no more than seven (7) Business Days following the date of the
notice of exercise of the Over-Allotment Option being delivered to the Company,
or any earlier or later date as may be agreed to in writing by the Company and
the Underwriters, each acting reasonably;
“Preliminary Prospectus” has the meaning ascribed in the
second paragraph of this Agreement, such amended and restated preliminary short
form prospectus dated the date hereof;
“Preliminary U.S. Private Placement
Memorandum” means the U.S.
private placement memorandum, in a form satisfactory to the Underwriters, to
which will be attached a copy of any Preliminary Prospectus, to be delivered to
offerees and purchasers of the Shares in the United States in accordance with
Schedule “A” hereto;
“Prospectus Amendment” means any amendment to any or all of
the Preliminary Prospectus or the Final Prospectus required to be prepared and
filed by Western under Applicable Securities Laws in connection with the
Offering;
“QIB” or “Qualified Institutional Buyer” means a “qualified institutional
buyer” as defined in Rule 144A;
“Qualifying Jurisdictions” means, collectively, each of the
provinces of Canada, other than Quebec;
“Rule 144A” means Rule 144A adopted by the SEC
under the U.S. Securities Act;
“SEC” means the United States Securities
and Exchange Commission;
“Securities Commissions” means the applicable securities
commission or regulatory authority in each of the Qualifying
Jurisdictions;
“Standard Listing Conditions” has the meaning given to that term
in Section 3(3)(c) of this Agreement;
“Subsidiary” means a subsidiary for purposes of
the Securities Act (Ontario);
“Supplementary Material” means, collectively, any amendment
to the Preliminary Prospectus, the Final Prospectus, the U.S. 144A Memorandum,
any amendment or supplemental prospectus or ancillary materials that may be
filed by or on behalf of Western under Applicable Securities Laws relating to
the qualification for distribution of, inter alia, the Shares;
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“Technical Report” means the “Mesquite Mine Expansion
Feasibility Study Technical Report” dated August 6, 2006 prepared by Micon
International Limited;
“Time of Closing” means 8:00 a.m. (Toronto time) on
the Closing Date or the Over-Allotment Closing Date, as applicable, or any other
time on the Closing Date or the Over-Allotment Closing Date as may be agreed to
by Western and the Underwriters;
“TSX” means the Toronto Stock
Exchange;
“United States” means the United States of America,
its territories and possessions, any state of the United States, and the
District of Columbia;
“U.S. Affiliate” means the U.S. registered
broker-dealer affiliate of any Underwriter;
“U.S. Exchange Act” means the United States Securities
Exchange Act of 1934, as amended;
“U.S. Securities Act” means the United States Securities
Act of 1933, as amended;
“U.S. Securities Laws” means all applicable securities
legislation in the United States, including without limitation, the U.S.
Securities Act, the U.S. Exchange Act and the rules and regulations promulgated
thereunder, and any applicable state securities laws;
“U.S. 144A Memorandum” means, together, the Preliminary
U.S. Private Placement Memorandum and the Final U.S. Private Placement
Memorandum; and
“Western Auditor” means HJ & Associates,
LLP;
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(2)
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Headings, etc. The
division of this Agreement into sections, subsections, paragraphs and
other subdivisions and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation of
this Agreement. Unless something in the subject matter or context is
inconsistent therewith, references herein to sections, subsections,
paragraphs and other subdivisions are to sections, subsections, paragraphs
and other subdivisions of this
Agreement.
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(3)
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Currency. Except as
otherwise indicated, all amounts expressed herein in terms of money refer
to lawful currency of Canada and all payments to be made hereunder shall
be made in such currency.
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Section
2 Filing of the Preliminary and Final
Prospectuses
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(1)
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The
Company shall, as soon as possible and not later than 12:00 noon (Toronto
time) on September 26, 2007 have prepared and filed under the Canadian
Securities Laws, and shall have obtained a receipt therefor from each of
the Qualifying Jurisdictions (in the form of a preliminary MRRS Decision
Document) by 5:00 p.m. (Toronto time) on September 26, 2007, for the
Preliminary Prospectus and other related documents relating to the
proposed distribution in Canada of the
Shares.
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(2)
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Unless
otherwise agreed to in writing by WWCM and RBC on behalf of the
Underwriters, the Company shall use its reasonable commercial efforts to
satisfy all comments with respect to the Preliminary Prospectus and the
Company shall, not later than 5:00 p.m. (Toronto time) on October 5, 2007,
have made all its reasonable commercial efforts to have prepared and filed
under the Canadian Securities Laws, and shall have obtained a receipt
therefor from each of the Qualifying Jurisdictions (in the form of a final
MRRS Decision Document) by 5:00 p.m. (Toronto time) on such date, the
Final Prospectus and other related documents relating to the proposed
distribution in Canada of the Shares; and shall have taken all other steps
and proceedings that may be necessary to be taken by the Company in order
to qualify the Shares for distribution (or distribution to the public, as
the case may be) in each of the other Qualifying Jurisdictions by the
Underwriters under the Canadian Securities Laws by 5:00 p.m. (Toronto
time) on such date.
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(3)
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Until
the date on which the distribution of the Shares is completed, the Company
will promptly take, or cause to be taken, all additional steps and
proceedings that may from time to time be required under Applicable
Securities Laws to continue to qualify the distribution of the Shares or,
in the event that the Shares have, for any reason, ceased so to qualify,
to so qualify again the Shares, as applicable, for
distribution.
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Section
3 Delivery of the Final Prospectus and
Related Matters
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(1)
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The
Company shall deliver without charge to the Underwriters, as soon as
practicable and in any event no later than September 26, 2007 in the case
of the Preliminary Prospectus and the Preliminary U.S. Private Placement
Memorandum, and no later than noon (Toronto time) on October 6, 2007 (or
other such date that is the day following the filing of the Final
Prospectus) in the case of the Final Prospectus and the Final U.S. Private
Placement Memorandum and thereafter from time to time during the
distribution of the Shares, as many commercial copies of the Preliminary
Prospectus, the Preliminary U.S. Private Placement Memorandum, the Final
Prospectus and the Final U.S. Private Placement Memorandum, as the case
may be, (and in the event of any Prospectus Amendment, such Prospectus
Amendment) as the Underwriters may reasonably request in advance for the
purposes contemplated by the relevant securities laws. The Company will
similarly cause to be delivered to the Underwriters, commercial copies of
any Supplementary Material required to be delivered to purchasers or
prospective purchasers of the Shares. Each delivery of the Preliminary
Prospectus, the Preliminary U.S. Private Placement Memorandum, the Final
Prospectus, the Final U.S. Private Placement Memorandum or any
Supplementary Material will have constituted and constitute the Company’s
consent to the use of the Preliminary Prospectus, the Preliminary U.S.
Private Placement Memorandum, the Final Prospectus, the Final U.S. Private
Placement Memorandum and any Supplementary Material by the Underwriters
for the distribution of the Shares in the Offering Jurisdictions in
compliance with the provisions of this Agreement and Applicable Securities
Laws.
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(2)
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Each
delivery of the Preliminary Prospectus, the Preliminary U.S. Private
Placement Memorandum, the Final Prospectus, the Final U.S. Private
Placement Memorandum and any Supplementary Material to the Underwriters by
Western in accordance with this Agreement will constitute the
representation and warranty of Western to the Underwriters that (except
for information and statements relating solely to the Underwriters and
furnished by them specifically for use in the Preliminary Prospectus, the
Preliminary U.S. Private Placement Memorandum, the Final Prospectus and
the Final U.S. Private Placement Memorandum under the heading “Plan of
Distribution”), at the respective times of
delivery:
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(a)
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the
information and statements contained in each of the Preliminary
Prospectus, the Preliminary U.S. Private Placement Memorandum, the Final
Prospectus, the Final U.S. Private Placement Memorandum and any
Supplemental Material, together with the documents incorporated by
reference therein:
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(i)
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are
true and correct in all material respects and contain no
misrepresentation; and
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(ii)
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constitute
full, true and plain disclosure of all material facts relating to the
Shares, and Western and its Material Subsidiaries considered as a
whole;
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(b)
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no
material fact has been omitted from any of the Offering Documents that is
required to be stated in the document or is necessary to make the
statements therein not misleading in the light of the circumstances in
which they were made;
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(c)
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to
the knowledge of the Company based on the advice of its legal counsel and
auditors, each of the Preliminary Prospectus, the Final Prospectus and the
Supplemental Material, as applicable, complies in all material respects
with the form requirements of Canadian Securities Laws;
and
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(d)
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to
the knowledge of the Company based on the advice of its legal counsel and
auditors, each of the Preliminary U.S. Private Placement Memorandum and
the Final U.S. Private Placement Memorandum complies in all material
respects with U.S. Securities Laws.
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(3)
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Western
will also deliver to the Underwriters, without charge, contemporaneously
with, or prior to the filing of, the Preliminary Prospectus and the Final
Prospectus, unless otherwise
indicated:
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(a)
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a
copy of the Preliminary Prospectus and the Final Prospectus, each manually
signed on behalf of Western, by the persons and in the form required by
Canadian Securities Laws;
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(b)
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a
copy of the Final U.S. Private Placement Memorandum in the form required
by U.S. Securities Laws;
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(c)
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evidence
satisfactory to the Underwriters by the date of the Final Prospectus that
Western has applied for the approval (or conditional approval) for the
listing and posting for trading on the TSX of the Shares and received such
approval (or conditional approval) subject only to satisfaction by Western
of customary post-closing conditions imposed by the TSX in similar
circumstances (the “Standard Listing Conditions”);
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(d)
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in
the case of the Final Prospectus, a “long-form” comfort letter or letters
dated the date of the Final Prospectus, in form and substance satisfactory
to the Underwriters and their counsel, acting reasonably, addressed to the
Underwriters, from the Western Auditor, and based on a review completed
not more than two (2) Business Days prior to the date of such letter, with
respect to financial and accounting information relating to Western,
included in the Offering Documents, which letter shall be in addition to
the auditor’s report contained in the Final Prospectus and any auditor’s
comfort letter addressed to the Securities Commissions and filed with or
delivered to the Securities Commissions under the Canadian Securities
Laws. Each such letter shall further state
that:
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(i)
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such
auditors are independent with respect to the Company within the
meaning of Applicable Securities
Laws;
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(ii)
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that
in the opinion of such auditors, the audited financial
statements
of
the Company included in the Offering Documents comply in all
material
respects with the applicable accounting requirements of the
Applicable
Securities Laws;
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(iii)
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that
they have performed the procedures set forth in SAS No. 100 and
CICA
Handbook Section 7200 on the unaudited financial statements included
in the Offering Documents and nothing has come to their attention
that caused them to believe that said unaudited financial statements
did not comply in all material respects with the applicable accounting
requirements of U.S. Securities Laws and Canadian Securities
Laws; and
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(iv)
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shall
address such other matters as the Underwriters shall reasonably
request.
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(4)
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Opinions,
comfort letters and other documents substantially similar to those
referred to in this section of this Agreement will be delivered to the
Underwriters and Western, and their respective counsel, as applicable,
with respect to any Supplementary Material, contemporaneously with, or
prior to the filing of, any Supplementary
Material.
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Section
4 Material Changes During the
Distribution of the Shares
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(1)
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Western
will promptly inform the Underwriters in writing during the period prior
to
the
completion of the distribution of the Shares of the full particulars
of:
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(a)
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any
material change (whether actual, anticipated, threatened, contemplated, or
proposed by, to, or against) (whether financial or otherwise) in the
assets, liabilities (contingent or otherwise), business, affairs,
operations, assets, financial condition, capital or prospects of Western,
considered on a consolidated basis;
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(b)
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any
material fact that has arisen or has been discovered and would have been
required to have been stated in any of the Offering Documents had that
fact arisen or been discovered on, or prior to, the date of the Offering
Documents, as the case may be;
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(c)
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any
change in any material fact or any misstatement of any material fact
contained in any of the Offering Documents, or the existence of any new
material fact; and
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(d)
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any
change in applicable laws, materially and adversely affecting, or which
would reasonably be expected to materially and adversely affect, the
condition (financial or otherwise), or the properties, business,
prospects, affairs, operations, assets or liabilities of the Company and
its subsidiaries on a consolidated basis, the Shares or the distribution
thereof, under the Final Prospectus or the Final U.S. Private Placement
Memorandum,
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which
change or new material fact is, or may reasonably be expected to be, of such a
nature as:
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(e)
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to
render any of the Offering Documents or any Supplementary Material, as
they exist taken together in their entirety immediately prior to such
change or new material fact, misleading or untrue in any respect or would
result in any of such documents, as they exist taken together in their
entirety immediately prior to such change or material fact, containing a
misrepresentation;
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(f)
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would
result in any of the Offering Documents or any Supplementary Material, as
they exist taken together in their entirety immediately prior to such
change or material fact, not complying with any Applicable Securities
Laws;
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(g)
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would
reasonably be expected to have a material effect on the market price or
value of any of the Shares or constitute a Material Adverse Effect;
or
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(h) would
be material to a prospective purchaser of the Shares.
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(2)
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The
Company will notify the Underwriters promptly, and confirm the notice in
writing:
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(a)
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when
any supplement to the Offering Documents or any Supplementary Material
shall have been filed;
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(b)
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of
any request by any Securities Commission to amend or supplement the
Preliminary Prospectus or the Final Prospectus or for additional
information; and
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(c)
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of
the issuance by any Securities Commission or any Exchange of any order
having the effect of ceasing or suspending the distribution of the Shares
or the trading in any securities of the Company, or of the institution or,
to the knowledge of the Company, threatening of any proceedings for any
such purpose. The Company will use reasonable commercial efforts to
prevent the issuance of any such stop order or of any order preventing or
suspending such use or such order ceasing or suspending the distribution
of the Shares or the trading in the shares of the Company and, if any such
order is issued, to obtain the lifting thereof at the earliest possible
time.
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(3)
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Western
shall comply with section 57 of the Securities Act (Ontario) and with the
comparable provisions of U.S. Securities Laws, and Western will prepare
and will file promptly at the request of the Underwriters, any
Supplementary Material, which, in the opinion of the Underwriters and
their counsel, acting reasonably, may be necessary or desirable, and will,
until the distribution of the Shares is complete, otherwise comply with
all applicable filing and other requirements under Applicable Securities
Laws arising as a result of such fact or change necessary to continue to
qualify the Shares for distribution in each of the Offering
Jurisdictions.
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(4)
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The
Company and the Underwriters acknowledge that the Company is required by
Canadian Securities Laws to prepare and file a Prospectus Amendment, if at
any time prior to the completion of the distribution of the Shares, the
Final Prospectus (as then amended) contains a misrepresentation. The
Company will promptly prepare and file with the securities authorities in
the Qualifying Jurisdictions any amendment or supplement thereto which in
the opinion of the Underwriters and the Company, each acting reasonably,
may be necessary or advisable to correct such
misrepresentation.
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(5)
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In
addition, if, during the period from the date hereof to the later of the
Closing Date and the date of the completion of the distribution of the
Shares, it shall be necessary to file a Prospectus Amendment to comply
with any Applicable Securities Laws, the Company shall, in co-operation
with the Underwriters and their counsel, make any such filing as soon as
reasonably possible.
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(6)
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In
addition to the provisions of Subsections 4(1) and 4(2), Western will, in
good faith, discuss with the Underwriters any change, event, development
or fact, contemplated, anticipated, threatened, or proposed in Subsections
4(1) and 4(2) that is of such a nature that there may be reasonable doubt
as to whether written notice should be given to the Underwriters under
Section 4 of this Agreement and will consult with the Underwriters with
respect to the form and content of any Supplementary Material proposed to
be filed by Western, it being understood and agreed that no such
Supplementary Material will be filed with any Securities Commission until
the Underwriters and their legal counsel have been given a reasonable
opportunity to review and approve such material, acting
reasonably.
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Section
5 Due Diligence
Prior to
the Time of Closing, and, if applicable, prior to the filing of any
Supplementary Material, the Underwriters, their legal counsel, and technical
consultants will be provided with timely access to all information required to
permit them to conduct a full due diligence investigation of Western and its
business operations, properties, assets, affairs and financial condition. In
particular, the Underwriters shall be permitted to conduct all due diligence
that they may, in their sole discretion acting reasonably, require in order to
fulfil their obligations under Applicable Securities Laws, and in that regard,
Western will make available to the Underwriters, their legal counsel and
technical consultants, on a timely basis, all corporate and operating records,
material contracts, reserve reports, technical reports, feasibility studies,
financial information, budgets, key officers, and other relevant information
necessary in order to complete the due diligence investigation of Western and
its business, properties, assets, affairs and financial condition for this
purpose, and without limiting the scope of the due diligence inquiries the
Underwriter may conduct, to participate in one or more due diligence sessions to
be held prior to the Time of Closing. All information requested by the
Underwriters, their counsel and technical consultants in connection with the due
diligence investigations of the Underwriters will be treated by the
Underwriters, their counsel and technical consultants as confidential and will
only be used in connection with the Offering. It shall be a condition precedent
to the Underwriters’ execution of any certificate in any Offering Document that
the Underwriters be satisfied, acting reasonably, as to the form and content of
the document. The Underwriters shall not unreasonably withhold or delay the
execution of any such Offering Document required to be executed by the
Underwriters and filed in compliance with the Securities Laws for the purpose of
the Offering.
Section
6 Conditions of Closing
The
Underwriters’ obligations under this Agreement (including the obligation to
complete the purchase of the Shares or any of them) are conditional upon and
subject to:
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(1)
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Canadian Legal Opinions.
The Underwriters receiving at the Time of Closing favourable legal
opinions from Xxxxxxx Xxxxx & Xxxxxxxxx LLP, Canadian counsel to
Western, as to the qualification of the Shares for sale to the public and
as to other matters governed by the laws of Ontario (with separate legal
opinions provided by local counsel in other Canadian provinces) and may
rely as to matters of fact on certificates of officers, public and
exchange officials or of the auditor or transfer agent of Western), to the
effect set forth below:
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(a)
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Western
having been incorporated and existing under the laws of the Province of
Ontario;
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(b)
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Western
having the corporate capacity and power to own and lease its properties
and assets and to conduct its business as described in the Final
Prospectus and to execute and deliver this Agreement and to carry out the
transactions contemplated hereby under the laws of the Province of
Ontario;
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(c)
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the
authorized share capital of Western being as described in the Final
Prospectus;
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(d)
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all
necessary corporate action having been taken by Western to authorize the
execution and delivery of this Agreement and the performance of its
obligations hereunder;
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(e)
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this
Agreement having been duly executed and delivered by Western and
constituting a legal, valid and binding obligation of, and is enforceable
against Western, in accordance with its terms (subject to bankruptcy,
insolvency or other laws affecting the rights of creditors generally,
general equitable principles including the availability of equitable
remedies and the qualification that no opinion need be expressed as to
rights to indemnity, or
contribution);
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(f)
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the
execution and delivery by Western of this Agreement, the fulfilment of the
terms hereof by Western, and the issue, sale and delivery on the Closing
Date of the Purchased Shares (and subsequently the Over-Allotment Shares,
if issued) to the Underwriters as contemplated herein, not constituting or
result in a breach of or a default under, and do not creating a state of
facts which, after notice or lapse of time or both, will constitute or
result in a breach of, and will not conflict with, any of the terms,
conditions or provisions of the articles or by-laws of
Western;
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(g)
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all
necessary corporate action having been taken by Western to authorize the
creation, execution, issuance and delivery of the
Shares;
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(h)
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all
documents required to be filed by Western and all proceedings required to
be taken by Western under Canadian Securities Laws having been filed and
taken in order to qualify the distribution of the Shares in each of the
Qualifying Jurisdictions through investment dealers or brokers registered
under the applicable laws thereof who have complied with the relevant
provisions thereof and no other documents will be required to be filed,
proceedings taken, or approvals, permits, consents or authorizations
obtained under Canadian Securities Laws to permit the trading in the
Qualifying Jurisdictions of the Shares, through registrants registered
under Canadian Securities Laws or in circumstances in which there is an
exemption from the registration requirements of such applicable
laws;
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(i)
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the
attributes of the Shares conforming in all respects to the description
thereof
in the Final Prospectus;
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(j)
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the
Shares having been conditionally approved for listing on the TSX subject
only to the Standard Listing
Conditions;
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(k)
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the
Purchased Shares (and subsequently the Over-Allotment Shares, if issued)
having been validly issued by Western and being fully-paid and
non-assessable shares in the capital of
Western;
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(l)
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(m)
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the
statements under the headings “Eligibility for Investment” in the Final
Prospectus being true and correct;
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(2)
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U.S. Legal Opinion. At
the Closing Time, the Underwriters shall have received the favourable
opinion, dated the Closing Date, of United States counsel for the Company,
in form and substance satisfactory to United States counsel for the
Underwriters (acting reasonably), as to the tax disclosure included in the
Final Prospectus and to the effect that it is not necessary in connection
with the offer and sale of the Shares in the United States to register the
Shares under the U.S. Securities
Act.
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(3)
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Title Opinion. At the
Closing Time, the Underwriters shall have received the favourable opinion,
dated the Closing Date, of United States counsel for the Company, in form
and substance satisfactory to United States counsel for the Underwriters
(acting reasonably), as to the title and ownership interest in the
Company’s material properties;
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(4)
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Canadian Local Counsel
Opinion. The Underwriters receiving at the Time of Closing,
favourable legal opinions of local Canadian counsel as to the
qualification of the Shares for sale to the public and as to other matters
governed by the laws of the jurisdictions in Canada which Xxxxxxx Xxxxx
& Xxxxxxxxx LLP is not qualified to practice, in each case in a form
acceptable in all reasonable respects to counsel to the Underwriters,
Stikeman Elliott LLP;
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(5)
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Secretary Certificates.
The Underwriters having received certificates dated the Closing
Date signed by the Corporate Secretary of Western or another officer
acceptable to the Underwriters, acting reasonably, in form and content
satisfactory to the Underwriters, acting reasonably, with respect
to:
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(a)
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the
constating documents of Western;
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(b)
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the
resolutions of the directors of Western relevant to the Offering,
allotment, issue (or reservation for issue) and sale of the Shares and, as
applicable, the authorization of this Agreement, and the other agreements
and transactions contemplated by this Agreement;
and
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(c)
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the
incumbency and signatures of signing officers of
Western;
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(6)
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Certificates of Status.
Western having delivered to the Underwriters, at the Time of
Closing, certificates of status and/or compliance, where issuable under
applicable law, for each of the Material Subsidiaries and Western, each
dated within two (2) days of the Closing
Date;
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(7)
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Closing Certificates.
Western having delivered to the Underwriters, at the Time of
Closing, a certificate dated the Closing Date addressed to the
Underwriters and signed by the Chief Executive Officer and Chief Financial
Officer of Western (or such other senior officers as acceptable to the
Underwriters), certifying for and on behalf of Western, and not in their
personal capacities, after having made due inquiries, with respect to the
following matters:
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(a)
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Western
having complied with all the covenants and satisfied all the terms and
conditions of this Agreement on its part to be complied with and satisfied
at or prior to the Time of Closing;
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(b)
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no
order, ruling or determination (including any stop order) having the
effect of ceasing or suspending trading in any securities of the Company
or prohibiting the sale of the Shares or any of the Company’s issued
securities having been issued and no proceeding for such purpose being
pending or, to the knowledge of such officers, threatened by any
securities regulatory authority or stock exchange in Canada or the United
States;
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(c)
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subsequent
to the respective dates as at which information is given in the Final
Prospectus, there having not occurred a Material Adverse Effect, or any
change or development involving a prospective Material Adverse Effect, or
the coming into existence of a new material fact, other than as disclosed
in the Final Prospectus or any Supplementary Material, as the case may
be;
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(d)
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the
Company being a “reporting issuer” or its equivalent under the securities
laws of each of the Qualifying Jurisdictions, being eligible in accordance
with the provisions of NI 44-101 to file a short form prospectus with the
Canadian Securities Administrators and no material change relating to the
Company on a consolidated basis having occurred since the date hereof with
respect to which the requisite material change report has not been filed
and no such disclosure having been made on a confidential basis that
remains subject to confidentiality;
and
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(e)
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the
representations and warranties of Western contained in this Agreement and
in any certificates of Western delivered pursuant to or in connection with
this Agreement, being true and correct as at the Time of Closing, with the
same force and effect as if made on and as at the Time of Closing, after
giving effect to the transactions contemplated by this
Agreement;
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(8)
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Certificate of Transfer Agent.
Western having delivered to the Underwriters at the Time of
Closing, a certificate of Computershare Investor Services Inc., as
registrar and transfer agent of the common shares, which certifies the
number of common shares issued and outstanding on the date prior to the
Closing Date;
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(9)
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Bring Down Auditor Comfort
Letters. Western having caused the Western Auditor to deliver to
the Underwriters at the Time of Closing a comfort letter, dated the
Closing Date, in form and substance satisfactory to the Underwriters,
acting reasonably, bringing forward to the date which is two (2) Business
Days prior to the Closing Date, the information contained in the comfort
letter referred to in Subsection Section
3(3)(d);
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(10)
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No Termination. The
Underwriters not having exercised any rights of termination set forth in
Section 14;
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(11)
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Adverse Proceedings. At
the Closing Time, no order, ruling or determination having the effect of
ceasing or suspending trading in any securities of the Company or
prohibiting the sale of the Shares or any of the Company’s issued
securities being issued and no proceeding for such purpose being pending
or, to the knowledge of the Company, threatened by any securities
regulatory authority or stock exchange in Canada or the United
States;
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(12)
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Exchange. At the
Closing Time, the Shares having been listed, or conditionally listed, for
trading on the TSX; and
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(13)
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Other Documentation.
The Underwriters having received at the Time of Closing such
further certificates, opinions of counsel and other documentation from
Western as may be contemplated herein or as the Underwriters or their
counsel may reasonably require, provided, however, that the Underwriters
or their counsel shall request any such certificate or document within a
reasonable period prior to the Time of Closing that is sufficient for
Western to obtain and deliver such certificate, opinion or document, and
in any event, at least two (2) Business Days prior to the Time of
Closing.
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Section
7 Representations and Warranties of
Western
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(1)
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Western
hereby represents and warrants to the Underwriters, intending that the
same may be relied upon by the Underwriters
that:
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(a)
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Good Standing of Western.
Western has been duly incorporated or organized and is validly
existing under the laws of Ontario, and has all requisite corporate power
and authority to carry on its business, as now conducted and as presently
proposed to be conducted by it, and to own, lease and operate its
properties and assets and to carry out the transactions contemplated by
this Agreement; and that the Company is duly qualified as an
extra-provincial corporation to transact business and is in good standing
(in respect of the filing of annual returns where required or other
information filings under applicable corporations information legislation)
in each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify or to be in good standing would not
reasonably be expected to result in a Material Adverse
Effect.
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(b)
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Good Standing of Subsidiaries.
At the Time of Closing, Western’s only subsidiaries will be the
Material Subsidiaries. At the Time of Closing, each Material Subsidiary
will be a corporation or company incorporated or established, organized
and existing under the laws of the jurisdiction of its incorporation, will
be current and up-to-date with all material filings required to be made
under the laws of its jurisdiction of incorporation and will have the
requisite corporate power and capacity to own, lease and operate its
properties and to conduct its business as now carried on by it, and will
be duly qualified to transact business and will be in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure to be so would not reasonably be expected to
result in a Material Adverse Effect. At the Time of Closing, all of the
issued and outstanding shares in the capital of each Material Subsidiary
will have been duly authorized and validly issued, will be fully paid and
non-assessable and will be directly or indirectly beneficially owned by
Western, free and clear of any Lien (except pursuant to any security
interest pursuant to its amended and restated credit facility originally
dated March 30, 2007 as amended and restated May 31, 2007 (the “Credit Facility”)); and none of the outstanding
shares of the capital stock of any Material Subsidiary was issued in
violation of pre-emptive or similar rights of any security holder of such
subsidiary. Other than as disclosed in the Final Prospectus, there exist
no options, warrants, purchase rights, or other contracts or commitments
that could require Western to sell, transfer or otherwise dispose of any
capital stock of any Material Subsidiary. No act or proceeding has been
taken by or against the Material Subsidiaries in connection with their
liquidation, winding-up or
bankruptcy.
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(c)
|
Compliance with Prospectus and
Registration Requirements. The Company meets the general
eligibility requirements for use of a short form prospectus under National
Instrument 44-101. No order suspending the distribution of the Shares has
been issued by the Securities Commissions under Canadian Securities Laws
and no proceedings for that purpose have been instituted or are pending
or, to the knowledge of the Company, are contemplated by any Securities
Commissions, and any request on the part of any Securities Commissions for
additional information has been complied
with.
|
At all
times up to any Closing Time:
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(i)
|
the
Final Prospectus complied and will comply in all material respects with
Canadian Securities Laws as interpreted and applied by the Securities
Commissions;
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(ii)
|
none
of the Offering Documents nor any amendment or supplement thereto
contained or will contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein, or necessary to
make the statements therein, in light of the circumstances in which they
were made, not misleading; and
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(iii)
|
each
of the Offering Documents, and any Supplementary Material or any amendment
or supplement thereto constituted and will constitute full, true and plain
disclosure of all material facts relating to the Company and its Material
Subsidiaries, considered as one enterprise, and the Shares, and did not
and will not include 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, except that the representations and warranties contained in
paragraph (ii) above and this paragraph (iii) do not apply to statements
relating solely to the Underwriters or furnished by the Underwriters
concerning the Underwriters under the section “Plan of Distribution”
contained in the Offering Documents, any Prospectus Amendment or
Supplementary Material.
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(d)
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Share Capital of Western.
The share capital of Western described under the heading
“Description of Securities Distributed” in the Final Prospectus is true
and correct. At the Time of Closing, but prior to giving effect to the
issuance of any Shares, the issued share capital of Western will consist
only of common shares, and no other equity or voting
shares.
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(e)
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Authorization and Description
of Shares. The Shares have been duly authorized for issuance and
sale to the Underwriters pursuant to this Agreement and when issued and
delivered by Western pursuant to this Agreement, against payment of the
consideration set forth herein, will be validly issued as fully paid and
non-assessable shares. The Shares conform and will conform to all
statements relating thereto contained in the Offering Documents and such
description conforms to the rights set forth in the instruments defining
the same. The issuance of the Shares is not subject to the pre-emptive
rights of any shareholder of Western (or such rights have been irrevocably
waived), and all corporate action required to be taken by Western for the
authorization, issuance, sale and delivery of the Shares has been validly
taken at the date hereof.
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(f)
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Absence of Rights. No
person has any right, agreement or option, present or future, contingent
or absolute, or any right capable of becoming a right, agreement or
option, for the issue or allotment of any unissued shares of Western or
any other agreement or option, for the issue or allotment of any unissued
shares of Western or any other security convertible into or exchangeable
for any such shares or to require Western to purchase, redeem or otherwise
acquire any of the issued and outstanding shares of Western except as
otherwise disclosed in the Offering
Documents.
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(g)
|
Financial Statements
The Financial Information incorporated by reference in the Offering
Documents and the notes
thereto,
|
- 19
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|
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(i)
|
present
fairly, in all material respects, the financial position of Western and
its subsidiaries, and the statements of operations, retained earnings,
cash flow from operations and changes in financial information
of Western and its subsidiaries for the periods specified in such
Financial Information;
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(ii)
|
have
been prepared in conformity with generally accepted accounting principles
in the United States of America (“U.S. GAAP”) in accordance with and to the
full extent required by applicable U.S. Securities Laws;
and
|
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(iii)
|
as
it relates to the audited financial statements of Western for the
financial years ended 2006, 2005 and 2004, do not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated or that is necessary to make a statement not misleading in light
of the circumstances under which it was made, with respect to the period
covered by the Financial
Information.
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|
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(h)
|
Liabilities. Neither
Western nor its subsidiaries, have any liabilities, obligations,
indebtedness or commitments, whether accrued, absolute, contingent or
otherwise, which are not disclosed or referred to in the Financial
Information or referred to or disclosed herein, other than liabilities,
obligations, or indebtedness or commitments (i) incurred in the normal
course of business, or (ii) which would not have a Material Adverse
Effect.
|
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(i)
|
No Default. The Company
is not in default or breach or violation of, and the execution and
delivery of, and the performance of, and compliance with, the terms of
this Agreement do not and will not:
|
|
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(i)
|
result
in any breach of, or constitute a default under, and do not and will not
create a state of facts which, after notice or lapse of time or both,
would result in a breach of or constitute a default under, any term or
provision of the constating documents, or resolutions of the Company, any
applicable laws, mortgage, note, contract, agreement (written or oral),
instrument, lease or other document to which the Company is a party or by
which it is bound, or any judgment, decree, order, statute, rule or
regulation applicable to the Company or any subsidiaries, which default or
breach might reasonably be expected to have a Material Adverse Effect;
or
|
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(ii)
|
create
a right for any other party to terminate, accelerate or in any way alter
any other rights existing under any indenture, mortgage, note, contract,
agreement (written or oral), instrument, lease or other document to which
the Company or any subsidiary is a party or by which it is bound which,
upon exercise of such right, might reasonably be expected to have a
Material Adverse Effect;
|
- 20
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(j)
|
Independent Accountants.
The accountants who reported on and certified the Financial
Information, are independent public accountants as required by the U.S.
Securities Act and the rules and regulations thereunder, and are
independent with respect to the Company within the meaning of the Canadian
Institute of Chartered Accountants
Handbook.
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(k)
|
Accounting Controls.
Western and each of its Material Subsidiaries maintains, and will
maintain, at all times prior to the Closing Date a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with U.S. GAAP
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.
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(l)
|
Title to Real Property.
At the Time of Closing, all of the leases, subleases and agreements
in real property (other than mining claims, mineral or exploration
concessions and other mineral property rights) material to the business of
Western and the Material Subsidiaries, considered as one enterprise, and
under which Western or any of the Material Subsidiaries has an interest as
described in the Offering Documents, are in full force and effect, and
neither Western nor any Material Subsidiary has received any notice of any
material claim of any sort that has been asserted by anyone adverse to the
rights of Western or any Material Subsidiary under any of the lease or
subleases mentioned above, or affecting or questioning the rights of
Western or such Material Subsidiary to the continued possession of the
property under any such lease, sublease, or agreement, except as disclosed
in the Offering Documents.
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(m)
|
Mining Claims. The
material mining licenses claims, concessions, exploration, extraction and
other mineral property rights that are set forth in the title opinion (the
“January Title Opinion”) provided to WWCM pursuant to
the Company’s most recent equity financing completed in January 2007
(collectively, the “Mining Claims”) is, in all material respects
(but subject to non-material variations since the date of the January
Title Opinion), a complete and accurate list of all such rights held by
Western and the Material Subsidiaries. All Mining Claims of Western and
the Material Subsidiaries that are held by Western or the Material
Subsidiaries, are in good standing, are valid and enforceable, are free
and clear of any material Liens or charges (except pursuant to security
interests granted under the Credit Facility) and no material royalty is
payable in respect of any of them, except as set out in the Offering
Documents. Except as set out in the Offering Documents, no other property
rights are necessary for the conduct of Western’s or the Material
Subsidiaries’ business as it is currently being conducted; and there are
no material restrictions on the ability of Western or the Material
Subsidiaries to use, transfer or otherwise exploit any such property
rights except as required by applicable law. Except as disclosed in the
Offering Documents, the Material Subsidiaries are the owners of Mining
Claims necessary to carry on their current and proposed mining and
exploration activities as disclosed in the Offering Documents. Except as
disclosed in the Offering Documents, Mining Claims held by Western or the
Material Subsidiaries cover the properties required by Western for such
purposes as contemplated by the Technical
Report.
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21 -
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(n)
|
Mineral Information.
The information set forth in the Offering Documents relating to the
estimates by Western and the Material Subsidiaries of the mineral
resources and mineral reserves have been reviewed and verified by the
qualified persons described under the heading “Interests of Experts” and,
in all cases, the resource information has been prepared in accordance
with Canadian industry standards set forth in National Instrument 43-101
-“Standards of Disclosure for Mineral Projects”, and the information upon
which the estimates of resources and reserves were based, was, at the time
of delivery thereof, complete and accurate in all material respects and
there have been no material adverse changes to such information since the
date of delivery or preparation thereof. The Technical Report is a
“current” technical report for the purposes of National Instrument 43-101
“Standards of Disclosure for Mineral
Projects”.
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(o)
|
Environmental Laws.
Except as described in the Offering Documents, (a) neither Western
nor any of the Material Subsidiaries is in violation of any federal,
provincial, state, local, municipal or foreign statute, law, rule,
regulation, ordinance, code, policy or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent decree or judgment, relating to pollution or protection of human
health, the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to
the release or threatened release of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum or petroleum
products (collectively, “Hazardous Materials”) or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, “Environmental Laws”) except where such violations
would not be reasonably expected, on an individual or aggregate basis, to
have a Material Adverse Effect, (b) Western and the Material Subsidiaries
have all permits, authorizations and approvals required under any
applicable Environmental Laws and are each in compliance with their
requirements, except where the failure to have such permits,
authorizations and approvals would not reasonably be expected, on an
individual or aggregate basis, to have a Material Adverse Effect, and (c)
there are no pending or threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
non-compliance or violation, investigation or proceedings relating to any
Environmental Laws against Western or any of the Material Subsidiaries,
which if determined adversely, would reasonably be expected to have a
Material Adverse Effect.
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22 -
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|
(p)
|
Possession of Licenses and
Permits. Western and the Material Subsidiaries possess such
permits, certificates, licenses, approvals, consents and other
authorizations (collectively, “Governmental Licenses”) issued by the appropriate
federal, provincial, state, local or foreign regulatory agencies or bodies
necessary to own, lease, stake or maintain the Mining Claims and other
property interests and to conduct the business now operated, including to
conduct mining and processing operations on the Mesquite Project, except
where the failure to possess such permits, certificates, licenses,
approvals, consents or authorizations would not reasonably be expected to
have a Material Adverse Effect or where such failure has been disclosed or
referred to in the Offering Documents. Western and the Material
Subsidiaries are in compliance, in all material respects, with the terms
and conditions of all such Governmental Licenses. All of the Governmental
Licenses are valid and in full force and effect. Neither Western nor any
of the Material Subsidiaries have received any notice of proceedings
relating to the revocation or material modification of any such
Governmental Licenses.
|
|
|
(q)
|
Insurance. Western and
each Material Subsidiary maintains policies of insurance in force as at
the date hereof that adequately cover all those risks reasonably and
prudently foreseeable in the current operation and conduct of their
respective businesses which, having regard to the nature of such risk and
the relative costs of obtaining insurance, it is reasonable to seek rather
than to provide for self-insurance.
|
|
|
(r)
|
Executive Compensation.
The directors and officers of Western and their compensation
arrangements with Western, whether as directors, officers or employees of
Western are as disclosed in the Offering
Documents.
|
|
|
(s)
|
Material Contracts. All
of the material contracts and agreements of Western and of the Material
Subsidiaries not made in the ordinary course of business (collectively the
“Material Contracts”) have been disclosed in the
Offering Documents and if required under the Applicable Securities Laws
have been filed with the applicable Securities Commissions. Neither
Western nor any Material Subsidiary has received notification from any
party claiming that Western is in material breach or default under any
Material Contract.
|
|
|
(t)
|
No Material Adverse Effect.
Since June 30, 2006, (a) there has been no change in the condition
(financial or otherwise), or in the properties, capital, affairs,
prospects, operations, assets or liabilities of Western and the Material
Subsidiaries considered on a consolidated basis, whether or not arising in
the ordinary course of business which would give rise to a Material
Adverse Effect, and (b) there have been no transactions entered into by
Western or any of the Material Subsidiaries, other than those in the
ordinary course of business, which are material with respect to Western
and the Material Subsidiaries considered as one enterprise, in each case,
except as disclosed in the Offering
Documents.
|
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|
|
(u)
|
Absence of Proceedings.
There is no action, suit, proceeding, inquiry or investigation
before or brought by any court or governmental agency, governmental
instrumentality or body, domestic or foreign, now pending or, to the
knowledge of Western, threatened against or affecting Western or any
Material Subsidiary, which is required to be disclosed in the Offering
Documents and which is not so disclosed, or which if determined adversely,
would have a Material Adverse Effect, or which if determined adversely
would materially and adversely affect the consummation of the transactions
contemplated in this Agreement or the performance by Western of its
obligations hereunder.
|
|
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(v)
|
Transfer Agent. Each of
Computershare Investor Services Inc., at its offices in Xxxxxxx, Xxxxxxx,
and Computershare Trust Company, Inc., at its offices in Golden, Colorado,
has been duly appointed as transfer agent and registrar for the Common
Shares.
|
|
|
(w)
|
Absence of Further
Requirements. No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of any court or
governmental authority or agency is necessary or required for the
performance by the Company of its obligations hereunder, in connection
with the proposed distribution, issuance or sale of the Shares hereunder,
or the consummation of the transactions contemplated by this Agreement,
except (a) such as have been already obtained or as may be required under
the U.S. Securities Laws, and (b) such as have been obtained, or as may be
required, under Canadian Securities
Laws.
|
|
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(x)
|
Unlawful Payment.
Neither Western nor any of its Material Subsidiaries nor, any
employee or agent of Western or any Material Subsidiary, has made any
unlawful contribution or other payment to any official of, or candidate
for, any federal, state, provincial or foreign office, or failed to
disclose fully any contribution, in violation of any law, or made any
payment to any foreign, Canadian, United States or provincial or state
governmental officer or official, or other person charged with similar
public or quasi-public duties, other than payments required or permitted
by applicable laws.
|
|
|
(y)
|
Brokerage Fees. Other
than the Underwriters, there is no person, firm or corporation acting or,
to the knowledge of Western, purporting to act at the request of Western,
who is entitled to any brokerage or finder’s fees in connection with the
Offering contemplated herein.
|
|
|
(z)
|
Agreement. This
Agreement has been duly authorized, executed and delivered by Western and
is a legal, valid and binding obligation of, and is enforceable against,
Western in accordance with its terms (subject to bankruptcy, insolvency or
other laws affecting the rights of creditors generally, the availability
of equitable remedies and the qualification that rights to indemnity and
waiver of contribution may be contrary to public
policy).
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|
(aa)
|
Directors and Officers.
None of the directors or officers of Western are now, or have ever
been, subject to an order or ruling of any securities regulatory authority
or stock exchange prohibiting such individual from acting as a director or
officer of a public company or of a company listed on a particular stock
exchange.
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(bb)
|
No Cease Trade Orders.
No securities commission or any similar regulatory authority in any
jurisdiction has issued any order which is currently outstanding
preventing or suspending trading in any securities of the Company, no such
proceeding is, to the knowledge of the Company, pending, contemplated or
threatened, and the Company is not in default of any requirement of
Canadian Securities Laws which would have a Material Adverse Effect on the
Offering or the Company.
|
|
|
(cc)
|
Reporting Issuer Status.
The Company is a “reporting issuer” in the provinces of British
Columbia, Alberta, Ontario and
Manitoba.
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|
|
(dd)
|
Short Form Eligibility.
Western is eligible to file a prospectus in the form of a short
form prospectus under National Instrument 44-101 of the Canadian
Securities Administrators.
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|
(ee)
|
Disclosure. Western has
filed all documents or information required to be filed by it with the
Securities Commissions or the SEC under Applicable Securities Laws. Each
such document or item of information filed by Western, as of its date, did
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading at the time at which it was filed with applicable
securities regulators, including, without limitation, the Securities
Commissions and the SEC. The Company has not filed any confidential
material change report with any securities regulatory authority or
regulator or any Exchange or any document for confidential treatment with
the SEC that at the date hereof remains
confidential.
|
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|
(ff)
|
Passive Foreign Investment
Company. Western was not a passive foreign investment company (a
“PFIC”) within the meaning of section 1297 of the Code for its taxable
year ended December 31, 2006 and expects that it will not constitute a
PFIC for its current taxable year ending December 31,
2007.
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|
(gg)
|
Labour Practices.
Neither Western no any Material Subsidiary is engaged in any unfair
labour practice; except for matters which would not, individually or in
the aggregate, have a Material Adverse Affect and that, to the Company’s
knowledge:
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|
|
(i)
|
there
is no unfair labour practice complaint pending or threatened against
the Company or a Material Subsidiary and no grievance or arbitration
proceeding arising out of or under collective bargaining agreements is
pending or threatened;
|
|
|
(ii)
|
no
strike, labour dispute, slowdown or stoppage is pending or threatened
against the Company or a Material
Subsidiary;
|
|
|
(iii)
|
there
is no union representation dispute currently existing concerning
the
employees of the Company or a Material
Subsidiary;
|
|
|
(iv)
|
there
are no union organizing activities currently taking place concerning
employees of the Company or a Material Subsidiary;
and
|
|
|
(v)
|
there
has been no violation of any federal, state, provincial, local or foreign
law relating to discrimination in the hiring, promotion or pay of
employees, and applicable wage or hour laws or any provision of the
Employee Retirement Income Security Act of 1974 or the rules and
regulations promulgated thereunder concerning the Company or a Material
Subsidiary.
|
|
|
(hh)
|
Forward Looking Statements.
Each “forward looking statement” contained or incorporated by
reference in the Offering Documents, if any, has been made or reaffirmed
with a reasonable basis and in good
faith.
|
|
|
(ii)
|
Trading in Securities.
Neither the Company, nor any Material Subsidiary nor to the
Company’s knowledge any of their respective directors, officers or
controlling persons has taken, directly or indirectly, any action
designed, or which has constituted or might reasonably be expected to
cause or result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Shares.
|
|
Section
8
|
Representations
and Warranties of the Underwriters
|
|
(1)
|
Each
Underwriter hereby severally, and not jointly, represents and warrants
that:
|
|
|
(a)
|
it
is, and will remain so, until the completion of the Offering,
appropriately registered under Applicable Securities Laws so as to permit
it to lawfully fulfil its obligations hereunder;
and
|
|
|
(b)
|
it
has all requisite corporate power and authority to enter into this
Agreement and to carry out the transactions contemplated under this
Agreement on the terms and conditions set forth
herein.
|
|
(2)
|
Any
offer or sale of the Shares in the United States or to U.S. person will be
made in accordance
with Schedule “A” which forms part of this
Agreement.
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26 -
|
(3)
|
The
representations and warranties of each of the Underwriters contained in
this Agreement shall be true at the Time of Closing as though they were
made at the Time of Closing and they shall not survive the completion of
the transactions contemplated under this Agreement but shall terminate on
the completion of the distribution of the
Shares.
|
|
Section
9
|
Additional
Covenants of Western
|
In
addition to any other covenant of Western set forth in this Agreement, Western
covenants with the Underwriters that:
|
|
(a)
|
Stock Exchange Listings.
Western will file or cause to be filed with the TSX all necessary
documents and will take, or cause to be taken, all necessary steps to
ensure that the Shares have been approved (or conditionally approved) for
listing and for trading on the TSX, prior to the filing of the Final
Prospectus with the Securities Commissions, subject only to satisfaction
by Western of the Standard Listing Conditions, and Western shall
thereafter, fulfill the Standard Listing Conditions within the time period
prescribed by the TSX;
|
|
|
(b)
|
Other Filings. Western
will make all necessary filings, obtain all necessary regulatory consents
and approvals (if any) and Western will pay all filing fees required to be
paid in connection with the transactions contemplated in this
Agreement;
|
|
|
(c)
|
Press Releases. Subject
to compliance with applicable law, any press release of Western relating
to the Offering will be provided in advance to WWCM and RBC on behalf of
the Underwriters, and Western will use its reasonable commercial efforts
to agree to the form and content thereof with WWCM and RBC on behalf of
the Underwriters, prior to the release
thereof;
|
|
|
(d)
|
Use of Proceeds.
Western confirms its intention to use the net proceeds from the
purchase and sale of the Shares in accordance with the descriptions set
forth under the heading “Use of Proceeds” in the Final Prospectus. The
Underwriters acknowledge that there may be circumstances where, for sound
business reasons, a re-allocation of funds may be necessary or advisable;
and
|
|
|
(e)
|
Blackout Period.
Western agrees that neither Western, nor any of its subsidiaries
nor officers nor directors shall, directly or indirectly, offer, sell or
issue for sale or resale any Shares or financial instruments or securities
convertible into or exercisable or exchangeable for Shares, or agree to or
announce any such offer, sale or issuance, except for (i) the issuance of
securities pursuant to an exercise of already issued convertible
securities or existing agreements, (ii) grant of such options or other
securities under the Issuer’s incentive plans, and (iii) issuance of
securities in connection with strategic merger and acquisition
transactions, for a period of 90 days from Closing Date without the prior
written consent of WWCM and RBC, such consent not to be unreasonably
withheld. Western shall use its commercially reasonable best efforts to
cause each of its directors and officers to enter into lock-up agreements
in form and substance satisfactory to WWCM and RBC evidencing their
agreement to be bound by the terms of this Subsection
9(e);
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-
27 -
|
Section
10
|
Covenants
of the Underwriters
|
|
(1)
|
The
Underwriters hereby severally, and not jointly, covenant and agree with
Western
the following:
|
|
|
(a)
|
Offering Jurisdictions and
Offering Price. During the period of distribution of the Shares by
or through the Underwriters, the Underwriters will offer and sell Shares
to the public only in the Offering Jurisdictions or where they may
lawfully be offered for sale or sold, at an offering price not exceeding
the offering price set forth on the cover page of the Final Prospectus.
For the purposes of this Subsection 10(1)(a) the Underwriters shall be
entitled to assume that the Shares are qualified for distribution in any
Qualifying Jurisdiction where an MRRS Decision Document for the Final
Prospectus shall have been obtained from the applicable Securities
Commission following the filing of the Final
Prospectus.
|
|
|
(b)
|
Compliance with Securities
Laws. The Underwriters will comply with and shall require any other
person participating in offer or sell activities to comply with Applicable
Securities Laws in connection with the offer to sell and the distribution
of the Shares, and all such selling persons will be registered (or have
such exemptions from registration requirements) under the Applicable
Securities Laws as may be required.
|
|
|
(c)
|
Completion of Distribution.
The Underwriters will use their reasonable commercial efforts to
complete the distribution of the Shares as promptly as possible after the
Time of Closing and all parties agree that the distribution of the Shares
shall be deemed to have been completed at 5:00 p.m. (Toronto time) on the
Over-Allotment Closing Date. The Underwriters will notify Western when, in
the Underwriters’ opinion, the Underwriters have ceased the distribution
of the Shares, and, within 30 days after completion of the distribution,
will provide Western, in writing, with a breakdown of the number of Shares
distributed in each of the Offering Jurisdictions where that breakdown is
required by a Securities Commission or the SEC, as the case may be, for
the purpose of calculating fees payable to, or making filings with, that
Securities Commission or SEC, as the case may
be.
|
|
(2)
|
Liability on Default.
No Underwriter shall be liable to Western under this Section 10
with
respect to a default by any of the other
Underwriters.
|
|
Section
11
|
Closing
|
|
(1)
|
Location of Closing.
The Offering of the Purchased Shares will be completed at the
offices of Xxxxxxx Xxxxx & Xxxxxxxxx LLP in Toronto, Ontario at the
Time of Closing on the Closing
Date.
|
-
28 -
|
(2)
|
Certificates. At the
Time of Closing, subject to the terms and conditions contained in this
Agreement, Western shall deliver to the Underwriters a certificate or
certificates representing the Shares against payment of the purchase price
by certified cheque, bank draft or wire transfer dated the Closing Date
payable to Western. Western will, at the Time of Closing and upon such
payment of the aggregate Offer Price to Western, make payment in full of
the Underwriting Fee and such amounts as are due pursuant to Section 17
(the “Expenses”) which shall be made by
Western directing WWCM to withhold the Underwriting Fee and the Expenses
from the payment of the aggregate Offer Price. Certificates shall be
registered in such names as the Underwriters may
request.
|
|
Section
12
|
Over
Allotment Option Closing
|
|
(1)
|
Closing. In the event
that the Over-Allotment Option is exercised by the Underwriters and any of
the Over-Allotment Shares are purchased by the Underwriters, payment of
the purchase price for, and delivery of certificates for, such
Over-Allotment Shares shall be made at the offices mentioned in Section 11
above, or at such other place as shall be agreed upon by the Underwriters
and the Company, on the Over-Allotment Closing Date as specified in the
written notice from the Underwriters to the Company giving notice of the
exercise of the Over-Allotment
Option.
|
|
(2)
|
Payments and Certificates.
At the Time of Closing, if any, for the exercise of the
Over-Allotment Option, subject to the terms and conditions contained in
this Agreement, the Company shall deliver to the Underwriters a
certificate or certificates representing the Over-Allotment Shares against
payment of the purchase price by certified cheque, bank draft or wire
transfer dated the Over-Allotment Closing Date payable to the Company. The
Company will, at the time of the Over-Allotment Closing Date and upon such
payment of the purchase price to the Company, make payment in full of the
Underwriting Fee in respect of the Over-Allotment Shares by directing WWCM
to withhold the Underwriting Fee and the Expenses from the payment of the
aggregate Over-Allotment Share purchase price. Certificates shall be
registered in such names as the Underwriters may
request.
|
|
Section
13
|
Compensation
of the Underwriters
|
|
(1)
|
Underwriting Fee on Shares.
Western shall pay to the Underwriters at the Time of Closing a fee
(the “Underwriting Fee”) equal to $0.1525 per Share
sold pursuant to the terms of this Agreement (being 5% of the aggregate
gross cash proceeds received from the sale of each of the Shares) in
consideration of the services to be rendered by the Underwriters in
connection with the Offering.
|
|
(2)
|
Underwriting Fee on
Over-Allotment Shares. Western shall pay to the Underwriters at the
closing of the exercise of the Over-Allotment Option, if any, the
Underwriting Fee per Over-Allotment Shares
purchased.
|
-
29 -
|
Section
14
|
Termination
Rights
|
|
(1)
|
All
terms and conditions set out in this Agreement shall be construed as
conditions and any breach or failure by Western to comply with any such
conditions in favour of the Underwriters shall entitle the Underwriters to
terminate their obligation to purchase the Shares by written notice to
that effect given to Western prior to the Time of Closing on the Closing
Date. Western shall use its reasonable commercial efforts to cause all
conditions in this Agreement to be satisfied. It is understood that the
Underwriters may waive in whole or in part, or extend the time for
compliance with, any of such terms and conditions without prejudice to
their rights in respect of any subsequent breach or non-compliance,
provided that to be binding on the Underwriters, any such waiver or
extension must be in writing.
|
|
(2)
|
In
addition to any other remedies which may be available to the Underwriters
in respect of any default, act or failure to act, or non-compliance with
the terms of this Agreement by Western, the Underwriters shall be
entitled, at their option, to terminate and cancel, without any liability
on the part of the Underwriters, their obligations under this Agreement to
purchase the Shares by giving written notice to Western at any time at or
prior to the Time of Closing on the Closing
Date:
|
|
|
(a)
|
if,
in relation to Western, any inquiry, investigation or other proceeding
(whether formal or informal) is commenced, threatened or announced, or any
order or ruling is issued by any exchange or market, or any other
regulatory authority in Canada, or the United States, or if any law or
regulation under or pursuant to any statute of Canada or of any province
thereof, or of the United States or any state or territory thereof or, is
promulgated or changed which moratorium, inquiry, investigation,
proceeding, order, ruling, law or regulation, in the reasonable opinion of
the Underwriters (or any of them), operates to prevent or materially
restrict trading of the common shares or the distribution of the Shares or
could reasonably be expected to have a Material Adverse Effect, including
as to the market price or value of the
Shares;
|
|
|
(b)
|
if
there is, in the reasonable opinion of any of the Underwriters: (i) a
material change; (ii) a change in any material fact; or (iii) a new
material fact that has arisen, or an Underwriter become aware of any
undisclosed material change or material fact, that could reasonably be
expected to have a Material Adverse
Effect;
|
|
|
(c)
|
if
there should develop, occur or come into effect or existence any event,
action, state, condition or major financial occurrence of national or
international consequence, including without limiting the generality of
the foregoing, any military conflict, civil insurrection, or any terrorist
action (whether or not in connection with such conflict or insurrection),
which, in the Underwriters’ reasonable opinion (or any one of them),
materially adversely affects or involves, or will materially adversely
affect or involve, the Canadian, or United States financial markets and/or
prevent or materially restrict the trading of the Common Shares or the
distribution of the Shares, may result in a Material Adverse
Effect;
|
-
30 -
|
|
(d)
|
if
the Company fails to file the Preliminary Prospectus, or the Final
Prospectus, and obtain receipts therefore, within the time limits set
forth in this Agreement; or
|
|
|
(e)
|
if
Western is in material breach of any term, condition or covenant of this
Agreement, or any representation or warranty given by Western in this
Agreement becomes or is materially
false.
|
|
(3)
|
If
the obligations of the Underwriters are terminated under this Agreement
pursuant to these termination rights, the liability of Western to the
Underwriters shall be limited to the obligations under Sections 15, 16 and
17.
|
|
Section
15
|
Indemnity
|
|
(1)
|
Western
(for the purposes of this Section 15, the “Indemnifiers”) covenants and agrees to
protect, indemnify, and save harmless, each of the Underwriters and their
respective U.S. broker-dealer affiliates, and each of their respective
directors, officers, employees, affiliates and agents and each person, if
any, who controls any Underwriter or its U.S. broker-dealer affiliates
within the meaning of section 15 of the U.S. Securities Act or section 20
of the U.S. Exchange Act (individually, an “Indemnified Party” and collectively, the “Indemnified Parties”), against all losses (other
than loss of profits), claims, damages, suits, liabilities, costs,
damages, or expenses caused or incurred, whether directly or indirectly,
by reason of:
|
|
|
(a)
|
any
statement (except for statements relating solely to the Underwriters and
furnished by them specifically for use in any of the Offering Documents)
contained in the Offering Documents (including in any documents
incorporated by reference therein), which at the time and in the light of
the circumstances under which it was made contains or is alleged to
contain a misrepresentation (as such term is defined in the Securities Act
(Ontario)) or any misstatement of a material
fact;
|
|
|
(b)
|
the
omission or alleged omission to state in the Offering Documents (including
in any documents incorporated by reference therein), or any certificate of
Western delivered hereunder or pursuant hereto, any material fact (other
than a material fact relating solely to the Underwriters) required to be
stated therein or necessary to make any statement therein not
misleading;
|
|
|
(c)
|
any
order made, or inquiry, investigation or proceeding commenced by any
securities regulatory authority or other competent authority based upon
any misrepresentation, untrue statement or omission or alleged untrue
statement or omission in the Offering Documents (including in any
documents incorporated by reference therein), (except for information and
statements relating solely to the Underwriters and furnished by them
specifically for use in the Offering Documents) that prevents or restricts
the trading in any of Western’s securities or the distribution or
distribution to the public, as the case may be, of any of the Shares in
any of the Offering
Jurisdictions;
|
- 31
-
|
|
(d)
|
Western
not complying with any requirement of Applicable Securities Laws or stock
exchange requirements in connection with the transactions herein
contemplated including Western’s non-compliance with any statutory
requirement to make any document available for inspection;
or
|
|
|
(e)
|
any
breach of a representation or warranty of Western contained in this
Agreement or the failure of Western to comply with any of its obligations
hereunder.
|
|
(2)
|
Notwithstanding
Section 15(1), the indemnification in Section 15(1) does not and shall not
apply to the extent that a court of competent jurisdiction in a final
judgment that has become non-appealable shall determine that such losses,
claims, liabilities, damages or expenses were caused or incurred solely by
negligence, dishonesty, fraud or wilful misconduct of the
Underwriters.
|
|
(3)
|
If
any matter or thing contemplated by this section shall be asserted against
any Indemnified Party in respect of which indemnification is or might
reasonably be considered to be provided, such Indemnified Party will
notify the Indemnifiers as soon as possible of the nature of such claim
(provided that omission to so notify the Indemnifiers will not relieve the
Indemnifiers of any liability that it may otherwise have to the
Indemnified Party hereunder, except to the extent the Indemnifiers are
materially prejudiced by such omission) and the Indemnifiers shall be
entitled (but not required) to assume the defence of any suit brought to
enforce such claim; provided, however, that the defence shall be through
legal counsel reasonably acceptable to such Indemnified Party and that no
settlement may be made by the Indemnifiers or such Indemnified Party
without the prior written consent of the other, such consent not to be
unreasonably withheld.
|
|
(4)
|
In
any such claim, such Indemnified Party shall have the right to retain
other legal counsel to act on such Indemnified Party’s behalf, provided
that the fees and disbursements of such other legal counsel shall be paid
by such Indemnified Party, unless: (i) the Indemnifiers and such
Indemnified Party mutually agree to retain other legal counsel; or (ii)
the representation of the Indemnifiers and such Indemnified Party by the
same legal counsel would, in the opinion of such counsel, be inappropriate
due to actual or potential differing interests, in which event such fees
and disbursements shall be paid by the Indemnifiers to the extent that
they have been reasonably incurred, provided that in no circumstances will
the Indemnifiers be required to pay the fees and expenses of more than one
set of legal counsel for all Indemnified
Parties.
|
|
(5)
|
To
the extent that any Indemnified Party is not a party to this Agreement,
the Underwriters shall obtain and hold the right and benefit of this
section in trust for and on behalf of such Indemnified
Party.
|
|
(6)
|
The
Indemnifiers hereby consents to personal jurisdiction in any court in
which any claim that is subject to indemnification hereunder is brought
against the Underwriters or any Indemnified Party and to the assignment of
the benefit of this section to any Indemnified Party for the purpose of
enforcement provided that nothing herein shall limit Western’s right or
ability to contest the appropriate jurisdiction or forum for the
determination of any such
claims.
|
- 32
-
|
(7)
|
The
rights of the Indemnifiers contained in this section shall not enure to
the benefit of any Indemnified Party if the Underwriters were provided
with a copy of any amendment or supplement to the Offering Documents which
corrects any untrue statement or omission or alleged omission that is the
basis of a claim by a party against such Indemnified Party and that is
required, under the applicable securities legislation or regulations, to
be delivered to such party by the
Underwriters.
|
|
(8)
|
The
rights of the Indemnifiers contained in this section shall not enure to
the benefit of any Indemnified Party to the extent that any such loss,
claim, damage, or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made
in any Offering Document in reliance upon and in conformity with written
information concerning the Underwriters furnished to Western by the
Underwriters in writing specifically for use therein under the heading
“Plan of Distribution” contained in the Offering
Documents.
|
|
(9)
|
Western
shall not be liable under this section for any settlement of any claim or
action effected without its prior written consent, which shall not be
unreasonably withheld.
|
|
Section
16
|
Contribution
|
In the
event that the indemnity provided for in Section 15 is declared by a court of
competent jurisdiction to be illegal or unenforceable as being contrary to
public policy or for any other reason, the Underwriters and the Indemnifiers
shall contribute to the aggregate of all losses, claims, costs, damages,
expenses or liabilities of the nature provided for above such that each
Underwriter shall be responsible for that portion represented by the percentage
that the portion of the Underwriting Fee payable by Western to such Underwriter
bears to the gross proceeds realized by Western from the distribution, whether
or not the Underwriters have been sued together or separately, and the
Indemnifiers shall be responsible for the balance, provided that, in no event,
shall an Underwriter be responsible for any amount in excess of the portion of
the Underwriting Fee actually received by such Underwriter. In the event that
the Indemnifiers, or any of them may be held to be entitled to contribution from
the Underwriters under the provisions of any statute or law, the Indemnifiers
shall be limited to contribution in an amount not exceeding the lesser of: (a)
the portion of the full amount of losses, claims, costs, damages, expenses, and
liabilities giving rise to such contribution for which such Underwriter is
responsible; and (b) the amount of the Underwriting Fee actually received by any
Underwriter. Notwithstanding the foregoing, a person guilty of fraud or
fraudulent misrepresentation shall not be entitled to contribution from any
other party. Any party entitled to contribution will, promptly after receiving
notice of commencement of any claim, action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties under this section, notify such party or parties from whom
contribution may be sought, but the omission to so notify such party shall not
relieve the party from whom contribution may be sought from any obligation it
may have otherwise under this section, except to the extent that the party from
whom contribution may be sought is materially prejudiced by such omission. The
right to contribution provided herein shall be in addition and not in derogation
of any other right to contribution which the Underwriters may have by statute or
otherwise by law.
-
33 -
|
Section
17
|
Expenses
|
The
Company will be responsible, whether or not the Offering is completed, for all
reasonable expenses and fees in connection with the Offering, including, without
limitation, all expenses of or incidental to the issue, sale or distribution of
the Shares; the fees and expenses of the Company’s counsel, auditors and
independent engineers; all costs incurred in connection with the preparation of
documents relating to the Offering; and all expenses and fees incurred by the
Underwriters which shall include the reasonable fees and disbursements of the
Underwriters’ counsel and applicable taxes thereon (such fees not to exceed
$100,000 excluding disbursements and taxes). All such expenses incurred by or on
behalf of the Underwriters shall be payable by the Company forthwith upon
receiving an invoice in respect thereof and may be deducted from the gross
proceeds of the Offering at the Time of Closing.
|
Section
18
|
Liability
of the Underwriters
|
|
(1)
|
The
obligation of the Underwriters to purchase the Purchased Shares (or the
Over-Allotment Shares, if the Over-Allotment Option is exercised) in
connection with the Offering at the Time of Closing on the Closing Date
shall be several, and not joint, nor joint and several, and shall be as to
the following percentages of the Purchased Shares to be purchased at any
such time:
|
| 40 | % | |||
|
RBC
Dominion Securities Inc.
|
40 | % | ||
|
Scotia
Capital Inc.
|
20 | % |
|
(2)
|
If
one of the Underwriters fails to purchase its applicable percentages of
the aggregate amount of the Purchased Shares (or the Over-Allotment
Shares, if the Over-Allotment Option is exercised) at the Time of Closing,
the other Underwriters shall have the right, but shall not be obligated,
to purchase, all but not less than all, of the applicable Shares which
would otherwise have been purchased by the Underwriter that failed to
purchase. If, with respect to the Shares, any non-defaulting Underwriter
elects not to exercise such right so as to assume the entire obligation of
the defaulting Underwriter (the Shares in respect of which the defaulting
Underwriter(s) fail to purchase and the non-defaulting Underwriters do not
elect to purchase being hereinafter called the “Default Securities”),
Western shall have the right to either (i) proceed with the sale of
the Shares (less the Default Securities) to the non-defaulting
Underwriters, or (ii) terminate its obligations hereunder without
liability to the non-defaulting Underwriters except under Sections 15, 16
and 17.
|
-
34 -
|
Section
19
|
Action
by Underwriters
|
All steps
which must or may be taken by the Underwriters in connection with this
Agreement, with the exception of the matters relating to termination
contemplated by Section 14, may be taken by WWCM on behalf of itself and the
other Underwriters, and the execution of this Agreement by Western shall
constitute Western’s authority for accepting notification of any such steps
from, and for delivering the definitive documents constituting the Shares to, or
to the order of, WWCM.
|
Section
20
|
Governing
Law
|
This
Agreement shall be governed by and construed in accordance with the laws of the
Province of Ontario and the laws of Canada applicable therein.
|
Section
21
|
Survival
of Warranties, Representations, Covenants and
Agreements
|
Except as
expressly provided for in this Agreement, all warranties, representations,
covenants and agreements of Western herein contained, or contained in, documents
submitted or required to be submitted pursuant to this Agreement, shall survive
the purchase by the Underwriters of the Shares and shall continue in full force
and effect, regardless of the closing of the sale of the Shares and regardless
of any investigation which may be carried on by the Underwriters, or on their
behalf, for a period of two years following the Closing Date. Without limitation
of the foregoing, the provisions contained in this Agreement in any way related
to the indemnification or the contribution obligations shall survive and
continue in full force and effect, indefinitely, subject only to the limitation
requirements of applicable law.
|
Section
22
|
Notices
|
All
notices or other communications by the terms hereof required or permitted to be
given by one party to another shall be given in writing by personal delivery or
by facsimile delivered or facsimile to such other party as follows:
(a)
to Western at:
0 Xxxxx
Xx. Xxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxx X0X 0X0
Attention: Xxxxxxx
Xxxxxxxxx, President and Chief Executive Officer
Facsimile
No.: 000-000-0000
with a
copy (for informational purposes only and not constituting notice) to:
Xxxxxxx
Xxxxx & Xxxxxxxxx LLP
2100
Scotia Plaza
00 Xxxx
Xxxxxx Xxxx
Xxxxxxx,
Xxxxxxx X0X 0X0
-
35 -
Attention: Xxxxxxx
Xxxxxx
Facsimile
No.: 000-000-0000
(b)
to the Underwriters at:
Wellington
West Capital Markets Inc.
Investment
Banking
000 Xxxx
Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxx X0X 0X0
Attention: Xxxx
Xxxxxxxxxx, Managing Director, Investment Banking
Facsimile
No.: 000-000-0000
and
RBC
Dominion Securities Inc.
Xxxxx
Xxxx Xxxxx, 000 Xxx Xxxxxx
0xx Xxxxx,
Xxxxx Xxxxx
Xxxxxxx,
Xxxxxxx X0X 0X0
Attention: Xxx
Xxxx, Vice President, Corporate Finance
Facsimile
No.: 000-000-0000
with a
copy to:
Stikeman
Elliott LLP
0000
Xxxxxxxx Xxxxx Xxxx
000 Xxx
Xxxxxx
Xxxxxxx,
Xxxxxxx X0X 0X0
Attention: Xxxxxxx
Xxxxxx
Facsimile
No.: 000-000-0000
or at
such other address or facsimile number as may be given by either of them to the
other in writing from time to time and such notices or other communications
shall be deemed to have been received when delivered or, if facsimile, on the
next business day after such notice or other communication has been sent (with
receipt confirmed).
Section
23 Counterpart Signature
This
Agreement may be executed in one or more counterparts (including counterparts by
facsimile), which together shall constitute an original copy hereof as of the
date first noted above.
Section
24 Time Of The Essence
Time
shall be of the essence in this Agreement.
- 36
-
Section
25 Severability
If any
provision of this Agreement is determined to be void or unenforceable, in whole
or in part, such void or unenforceable provision shall not affect or impair the
validity of any other provision of this Agreement and shall be severable from
this Agreement.
Section
26 Entire Agreement
This
Agreement constitutes the entire agreement between the Underwriters and Western
relating to the subject matter hereof and supersedes all prior agreements
between the Underwriters and Western.
Section
27 General
The
parties have expressly required this Agreement and all other documents required
or permitted to be given or entered into pursuant hereto to be drawn up in the
English language only. Les parties ont expressément
demandé
que la présente convention ainsi que tout autre document à
être
ou pouvant être donné ou conclu en vertu des dispositions des présentes, soient
rédigés en langue anglaise seulement.
[The
Remainder of this page is intentionally blank.]
- 37 -
If this
agreement accurately reflects the terms of the transaction which we are to enter
into and if such terms are agreed to by Western, please communicate your
acceptance by executing where indicated below and returning by facsimile one
copy and returning by courier an originally executed copy to each of WWCM and
RBC.
|
Yours
very truly,
|
|
WELLINGTON
WEST CAPITAL MARKETS INC.
|
|
(Signed)
XXXX XXXXXXXXXX
Managing
Director
RBC DOMINION SECURITIES
INC.
|
|
(Signed)
XXX
XXXX
Vice
President
|
|
SCOTIA
CAPITAL
INC.
|
|
(Signed)
XXXX XXXXXXXX
|
|
Managing
Director
|
- 38
-
The
foregoing accurately reflects the terms of the transaction that we are to enter
into and such terms are agreed to.
ACCEPTED
at Toronto as of this _________ day of ________________,
2007.
|
(Signed)
Xxxxx Xxxxx
Chief
Financial
Officer
|
- 1
-
SCHEDULE
“A”
UNITED
STATES OFFERS AND SALES
U.S. Selling
Restrictions
As used
in this Schedule “A”, the following terms have the following
meanings:
“Directed Selling Efforts”
means directed selling efforts as that term is defined in Regulation S.
Without limiting the foregoing, but for greater clarity in this Schedule “A”, it
means, subject to the exclusions from the definition of directed selling efforts
contained in Regulation S, any activity undertaken for the purpose of, or that
could reasonably be expected to have the effect of, conditioning the market in
the United States for any of the Shares and shall include, without limitation,
the placement of any advertisement in a publication with a general circulation
in the United States that refers to the offering of any of the
Shares;
“Foreign Issuer” means a
foreign issuer as that term is defined in Regulation S. Without limiting the
foregoing, but for greater clarity in this Schedule, it means any issuer which
is (a) the government of any foreign country or of any political subdivision of
a foreign country; or (b) a corporation or other organization incorporated under
the laws of any foreign country, except an issuer meeting the following
conditions: (1) more than 50 percent of the outstanding voting securities of
such issuer are held of record either directly or through voting trust
certificates or depositary receipts by residents of the United States; and (2)
any of the following: (i) the majority of the executive officers or directors
are United States citizens or residents, (ii) more than 50 percent of the assets
of the issuer are located in the United States, or (iii) the business of the
issuer is administered principally in the United States;
“General Solicitation” and
“General Advertising”
means “general solicitation” and “general advertising”, respectively, as
used in Rule 502(c) of Regulation D, including, without limitation,
advertisements, articles, notices or other communications published in any
newspaper, magazine or similar media or broadcast over television, radio or the
Internet, or any seminar or meeting whose attendees had been invited by general
solicitation or general advertising or in any other manner involving a public
offering within the meaning of Section 4(2) of the U.S. Securities
Act;
“Regulation D” means
Regulation D adopted by the SEC under the U.S. Securities Act;
“Regulation S” means
Regulation S adopted by the SEC under the U.S. Securities Act;
“Selling Dealer Group” means
the dealers and brokers other than the Underwriters who participate in the offer
and sale of the Shares pursuant to the Underwriting Agreement;
“Substantial U.S. Market Interest”
means “substantial U.S. market interest” as that term is defined in
Regulation S;
All other
capitalized terms used but not otherwise defined in this Schedule “A” shall have
the meanings assigned to them in the Agreement to which this Schedule “A” is
attached.
X-0
- 0
-
|
0.
|
Xxxx
Xxxxxxxxxxx represents and warrants to the Company
that:
|
|
|
(a)
|
It
acknowledges that the Shares have not been and will not be registered
under the U.S. Securities Act and may not be offered or sold within the
United States or to, or for the account or benefit of, U.S. persons,
except in accordance with Regulation S or pursuant to an exemption from
the registration requirements of the U.S. Securities Act. It has not
offered and sold and will not offer and sell the Shares (i) as part of its
distribution at any time and (ii) otherwise until 40 days after the later
of the commencement of the offering and the closing date, except in
accordance with Rule 903 of Regulation S or as provided in paragraphs 2 or
3 below. It agrees that, at or prior to confirmation of the sale of the
Shares, it will have sent to each distributor, dealer or person receiving
a selling concession, fee or other remuneration that purchases Shares from
it during the restricted period a confirmation or notice to substantially
the following effect:
|
“The
securities covered hereby have not been registered under the U.S. Securities Act
of 1933, as amended, (the ”U.S. Securities Act“) and may not be offered or sold
within the United State or to, or for the account or benefit of, U.S. persons
(i) as part of their distribution at any time or (ii) otherwise until 40 days
after the later of the commencement of the offering and the closing date, except
in either case in accordance with Regulation S under the U.S. Securities
Act.”
Furthermore,
neither it nor its affiliate(s), nor any persons acting on its or their behalf
have engaged or will engage in any Directed Selling Efforts with respect to the
Shares;
|
|
(b)
|
It
has not entered and will not enter into any contractual arrangement with
respect to the distribution of the Shares, except with its affiliates, any
Selling Dealer Group members or with the prior written consent of the
Company; and
|
|
|
(c)
|
It
shall require each Selling Dealer Group member to agree, for the benefit
of the Company, to comply with, and shall use its best efforts to ensure
that each Selling Dealer Group member complies with, the applicable
provisions of this Schedule “A” as if such provisions applied to such
Selling Dealer Group member.
|
|
2.
|
Each
Underwriter covenants to and agrees with the Company
that:
|
|
|
(a)
|
All
offers and sales of the Shares in the United States will be effected
through one or more United States affiliates of an Underwriter (each, a
“U.S. Placement Agent”) in accordance with all applicable U.S.
broker-dealer requirements;
|
|
|
(b)
|
Each
U.S. Placement Agent is a Qualified Institutional Buyer, is a duly
registered broker-dealer with the SEC, and is a member of, and in good
standing with, the National Association of Securities Dealers, Inc. on the
date such representation is
made;
|
A-2
- 3
-
|
|
(c)
|
It
will not, either directly or through a U.S. Placement Agent, solicit
offers for, or offer to sell, the Shares in the United States by means of
any form of General Solicitation or General Advertising and neither it nor
its affiliate(s), nor any persons acting on its or their behalf have
engaged or will engage in any Directed Selling Efforts with respect to the
Shares;
|
|
|
(d)
|
It
will solicit, and will cause each U.S. Placement Agent to solicit, offers
for the Shares in the United States only from, and will offer the Shares
only to, persons it reasonably believes to be Qualified Institutional
Buyers in accordance with Rule 144A. It also agrees that it will solicit
offers for the Shares only from, and will offer the Shares only to,
persons that in purchasing such Shares will be deemed to have represented
and agreed as provided in paragraphs (3)(a) through (l)
below;
|
|
|
(e)
|
It
will inform, and cause each U.S. Placement Agent to inform, all purchasers
of the Shares in the United States that the Shares have not been and will
not be registered under the U.S. Securities Act and are being sold to them
without registration under the U.S. Securities Act in reliance upon Rule
144A;
|
|
|
(f)
|
It
will deliver, through a U.S. Placement Agent, a copy of a Final U.S.
Private Placement Memorandum which shall include the Final Prospectus
(together, the “U.S. Offering Documents”) to each person in the United
States purchasing Shares from it;
|
|
|
(g)
|
It
shall cause each U.S. Placement Agent to agree, for the benefit of the
Company, to the same provisions as are contained in paragraphs (1) and (2)
of this Schedule “A”;
|
|
|
(h)
|
At
least one business day prior to closing, it shall cause each U.S.
Placement Agent to provide Computershare Investor Services Inc.
(“Computershare”) with a list of all purchasers of the Shares in the
United States; and
|
|
|
(i)
|
If
it or its United States affiliates have offered or sold Shares in the
United States, at closing it, together with each such U.S. Placement
Agent, will provide a certificate, substantially in the form of Exhibit 1
to this Schedule “A”, relating to the manner of the offer and sale of the
Shares in the United States.
|
|
3.
|
It
is understood and agreed by the Underwriters that the Shares may be
offered and resold by the Underwriters and members of the Selling Dealer
Group in the United States pursuant to the provisions of Rule 144A to
persons who are, or are reasonably believed by them to be, Qualified
Institutional Buyers in transactions meeting the requirements of Rule 144A
and in compliance with any applicable state securities laws of the United
States, provided that prior to any such sale each purchaser shall have
been provided with the U.S. Offering Documents and by purchasing Shares,
each purchaser shall be deemed to have represented and warranted for the
benefit of the Company and the Underwriters
that:
|
|
|
(a)
|
It
is authorized to consummate the purchase of the
Shares;
|
A-3
- 4
-
|
|
(b)
|
It
understands and acknowledges that the Shares have not been and will not be
registered under the U.S. Securities Act or the securities laws of any
state of the United States, and that the offer and sale of Shares to it
are being made in reliance upon Rule 144A and exemptions from registration
under applicable state securities
law;
|
|
|
(c)
|
It
is a Qualified Institutional Buyer and is acquiring the Shares for its own
account or for the account of one or more Qualified Institutional Buyers
with respect to which it exercises sole investment discretion and not with
a view to any resale, distribution or other disposition of the Shares in
violation of United States federal or state securities
laws;
|
|
|
(d)
|
It
acknowledges that it has not purchased the Shares as a result of any
General Solicitation or General Advertising, including advertisements,
articles, notices or other communications published in any newspaper,
magazine or similar media, or broadcast over radio, television or the
Internet or any seminar or meeting whose attendees have been invited by
general solicitation or general advertising or in any other manner
involving a public offering within the meaning of Section 4(2) of the U.S.
Securities Act;
|
|
|
(e)
|
It
understands and acknowledges that the if it should reoffer, resell, pledge
or otherwise transfer Shares prior to the date that is the later of (x)
the date which is two years after the later of the last date of original
issuance of such Shares (which would include the issuance of
Over-Allotment Shares pursuant to the exercise of the overallotment
option) and the last date that the Company or its affiliates were owners
of such Shares (or any predecessor thereto) or such shorter period of time
as permitted by Rule 144(k) under the U.S. Securities Act or any successor
provision thereunder and (y) such later date, if any, as may be required
by applicable law, it will do so only (i) to the Company; (ii) pursuant to
an effective registration statement under the U.S. Securities Act; (iii)
to a Qualified Institutional Buyer in compliance with Rule 144A; (iv) in
an offshore transaction in compliance with Rule 904 under Regulation S; or
(v) pursuant to the exemption from registration under the U.S. Securities
Act provided by Rule 144 thereunder (if available) or any other available
exemption from registration under the U.S. Securities Act, in each case in
accordance with all applicable state securities
laws;
|
|
|
(f)
|
It
will deliver to each person to whom it transfers any of the Shares notice
of any restrictions on transfer of such
Shares;
|
|
|
(g)
|
It
understands and acknowledges that the Shares sold in reliance on Rule 144A
as part of this offering will bear a legend substantially to the following
effect unless otherwise agreed by the Company and the holder
thereof:
|
THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE “1933 ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE ACQUIROR
A-4
- 5
-
|
|
(a)
|
REPRESENTS
THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED
INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 000X XXXXX XXX 0000 XXX)
AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH
ACCOUNT;
|
|
|
(b)
|
AGREES
FOR THE BENEFIT OF THE CORPORATION THAT IT WILL NOT OFFER, SELL, PLEDGE OR
OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, PRIOR
TO THE DATE THAT IS THE LATER OF
|
|
|
(X)
|
TWO
YEARS AFTER THE LATER OF THE LAST ORIGINAL ISSUE DATE HEREOF (WHICH WOULD
INCLUDE THE ISSUANCE OF SECURITIES PURSUANT TO THE EXERCISE OF THE
OVERALLOTMENT OPTION) AND THE LAST DATE ON WHICH THE CORPORATION OR ANY
AFFILIATE OF THE CORPORATION WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF THIS SECURITY) OR SUCH SHORTER PERIOD OF TIME AS PERMITTED
BY RULE 144(K) UNDER THE 1933 ACT OR ANY SUCCESSOR PROVISION THEREUNDER,
AND
|
|
|
(Y)
|
SUCH
LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE
LAW,
|
EXCEPT
ONLY:
|
(i)
|
TO
THE CORPORATION;
|
|
|
(ii)
|
PURSUANT
TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE 1933
ACT;
|
|
|
(iii)
|
TO
A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
1933 ACT;
|
|
|
(iv)
|
IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATIONS UNDER
THE 1933 ACT; OR
|
|
|
(v)
|
PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE 1933
ACT,
|
A-5
-
6 -
IN EACH
SUCH CASE IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS.
DELIVERY
OF THIS CERTIFICATE MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF
TRANSACTIONS ON STOCK EXCHANGES IN CANADA. IF THE CORPORATION
IS A “FOREIGN ISSUER” WITHIN THE MEANING OF REGULATION S UNDER THE 1933 ACT AT
THE TIME OF TRANSFER, FOR ANY TRANSFER IN ACCORDANCE WITH (b)(iv) ABOVE, THE
LEGEND MAY BE REMOVED BY PROVIDING A DULY COMPLETED AND SIGNED CERTIFICATE, THE
FORM OF WHICH MAY BE OBTAINED FROM COMPUTERSHARE TRUST COMPANY, INC. (THE
“TRANSFER AGENT”), TO THE TRANSFER AGENT DELIVERY OF WHICH WILL CONSTITUTE “GOOD
DELIVERY”. FOR ANY TRANSFER IN ACCORDANCE WITH (b)(v) ABOVE, THE LEGEND MAY BE
REMOVED BY DELIVERY TO THE TRANSFER AGENT OF AN OPINION OF COUNSEL,
OF RECOGNIZED STANDING REASONABLY SATISFACTORY TO THE CORPORATION,
TO THE EFFECT THAT SUCH LEGEND IS NO LONGER REQUIRED UNDER APPLICABLE
REQUIREMENTS OF THE 1933 ACT OR STATE SECURITIES LAWS.
If the
Company is a Foreign Issuer at the time of transfer, and the Shares are being
sold in compliance with the requirements of Rule 904 of Regulation S, then
unless the Company or Computershare (or its successor) requires a legal opinion,
the legend may be removed by providing a declaration to Computershare (or its
successor), in the form attached hereto as Exhibit 2 (or as the Company may
prescribe from time to time).
If the
Shares are being sold under Rule 144, the legend may be removed by delivering to
Computershare (or its successor) and to the Company an opinion of counsel of
recognized standing reasonably satisfactory to the Company to the effect, that
the legend is no longer required under the U.S. Securities Act or state
securities laws;
|
|
(h)
|
It
consents to the Company making a notation on its records or giving
instructions to any transfer agent of the Shares in order to implement the
restrictions on transfer set out and described in paragraph 3(e)
above;
|
|
|
(i)
|
It
understands and acknowledges that the Company is not obligated to file and
has no present intention of filing with the SEC or with any state
securities administrator any registration statement in respect of resales
of the Shares in the United States;
|
|
|
(j)
|
It
acknowledges that neither the Company, the Underwriters nor any person
representing the Company or the Underwriters has made any representation
to it with respect to the Company or the offering of Shares, other than
the information contained or incorporated by reference in the U.S.
Offering Documents, which has been delivered to it and upon which it is
relying in making its investment decision with respect to the Shares.
Accordingly, it acknowledges that no representation or warranty is made by
the Underwriters as to the accuracy or completeness of such materials. It
has had access to such financial and other information concerning the
Company and the Shares as it has deemed necessary in connection with its
decision to purchase the Shares, including an opportunity to ask questions
of and request information from the Company and the
Underwriters;
|
A-6
- 7
-
|
|
(k)
|
It
acknowledges that the Company, the Underwriters and others will rely upon
the truth and accuracy of the foregoing acknowledgements, representations,
and agreements, and agrees that if any of the acknowledgements,
representations or warranties deemed to have been made by it by its
purchase of Shares are no longer accurate, it shall promptly notify the
Company and the Underwriters. If it is acquiring any of the Shares as a
fiduciary or agent for one or more investor accounts, it represents that
it has sole investment discretion with respect to each such account and it
has full power to make the foregoing acknowledgements, representations and
agreements on behalf of each such
account;
|
|
|
(l)
|
It
understands and acknowledges that the Company (i) is not obligated to
remain a Foreign Issuer, (ii) may not, at the time the Shares are resold
by it or at any other time, be a Foreign Issuer, and (iii) may engage in
one or more transactions which could cause the Company not to be a Foreign
Issuer; and
|
|
|
(l)
|
It
understands and acknowledges that it is making the representations and
warranties and agreements contained herein with the intent that they may
be relied upon by the Company, the Underwriters and the affiliates of the
Underwriters in determining its eligibility or (if applicable) the
eligibility of others on whose behalf it is contracting hereunder to
purchase the Shares.
|
|
4.
|
The
Underwriters have not entered, and will not enter, into any contractual
arrangement with respect to the distribution of the Shares, except (a)
with their affiliates, (b) with members of the Selling Dealer Group in
accordance with paragraph 1(c) of this Schedule “A”, or (c) with the prior
written consent of the Company.
|
|
5.
|
The
Company represents, warrants, covenants and agrees to and with the
Underwriters that:
|
|
(a)
|
it
is a Foreign issuer;
|
|
|
(b)
|
it
is not, and giving effect to the offering and sale of the Shares and the
application of the proceeds thereof as described in the Offering
Documents, will not be required to register as an “investment company”
pursuant to the provisions of the United States Investment Company Act of
1940, as amended;
|
|
|
(c)
|
at
the date hereof, the Shares are not (A) part of a class listed on a
national securities exchange in the United States, (B) quoted in an
automated inter-dealer system in the United States, or (C) convertible or
exchangeable at an effective conversion premium (calculated as specified
in paragraph (a)(6) of Rule 144A under the U.S. Securities Act) of less
than ten percent for securities so listed or
quoted;
|
A-7
- 8
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(d)
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for
so long as any of the Shares are outstanding and are “restricted
securities” within the meaning of Rule 144(a)(3) under the U.S. Securities
Act, it shall either: (A) furnish to the SEC all information required to
be furnished in accordance with Rule 12g3-2(b) under the U.S. Exchange
Act; (B) file reports and other information with the SEC under Section 13
or 15(d) of the U.S. Exchange Act; or (C) provide to any holder of Shares
and any prospective purchaser of Shares designated by such holder, upon
the request of such holder, the information required to be provided by
paragraph (d)(4), of Rule 144A;
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(e)
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none
of it, its affiliates or any person acting on its or their behalf has
offered or will offer to sell the Shares by means of any form of General
Solicitation or General Advertising;
and
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(f)
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none
of it, its affiliates or any person acting on its or their behalf has
engaged or will engage in any Directed Selling Efforts with respect to the
Shares.
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A-8
EXHIBIT
1 TO SCHEDULE “A”
FORM
OF UNDERWRITERS’ CERTIFICATE
In
connection with the offer and sale of common shares (the “Shares”) of Western
Goldfields Inc. (the “Company”) to one or more U.S. institutional investors, the
undersigned [Name of
Underwriter], on behalf of the several underwriters (the “Underwriters”)
referred to in the Underwriting Agreement dated as of [date] among the Company and
the Underwriters (the “Underwriting Agreement”), and [Name of U.S. broker-dealer affiliate
of Underwriter], who has signed below in its capacity as placement agent
in the United States for the Underwriters (the “U.S. Placement Agent”), do
hereby certify that:
(a) we
acknowledge that the Shares have not been and will not be registered under the
U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”), and may not
be offered or sold within the United States or to, or for the account or benefit
of, U.S. persons, except in accordance with Regulation S under the U.S.
Securities Act (“Regulation S”) or pursuant to an exemption from the
registration requirements of the U.S. Securities Act. We have not offered or
sold, and will not offer or sell, the Shares (A) as part of our distribution at
any time and (B) otherwise until 40 days after the later of the commencement of
the offering and the closing date, except in accordance with Rule 903 of
Regulation S or as provided in paragraphs (b) through (f) below. We sent to each
distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases Shares from us during the restricted period a
confirmation or notice to substantially the following effect:
“The
securities covered hereby have not been registered under the U.S. Securities Act
of 1933, as amended (the ”U.S. Securities Act“), and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S. persons
(i) as part of their distribution at any time or (ii) otherwise until 40 days
after the later of the commencement of the offering and the closing date, except
in either case in accordance with Regulation S under the U.S. Securities
Act.”
(b) the
U.S. Placement Agent is a duly registered broker-dealer with the Securities and
Exchange Commission, and is a member of, and in good standing with, the National
Association of Securities Dealers, Inc. on the date hereof, and all offers and
sales of Shares in the United States have been and will be effected by the U.S.
Placement Agent in accordance with all U.S. broker-dealer
requirements;
(c) neither
we nor our representatives have utilized, and neither we nor our representatives
will utilize, any form of general solicitation or general advertising (as those
terms are used in Regulation D under the U.S. Securities Act, including
advertisements, articles, notices or other communications published in any
newspaper, magazine or similar media or broadcast over television, radio or
Internet, or any seminar or meeting whose attendees had been invited by general
solicitation or general advertising or in any other manner involving a public
offering within the meaning of Section 4(2) of the U.S. Securities Act, in
connection with the offer or sale of the Shares in the United States or to U.S.
persons;
Schedule
A-1
(d) each
offeree was provided with the final prospectus of the Company, together with a
U.S. covering memorandum relating to the offering of the Shares in the United
States (together, the “Offering Documents”), and we have not used and will not
use any written material other that the Offering Documents;
(e) immediately
prior to transmitting the Offering Documents to offerees, we had reasonable
grounds to believe and did believe that each offeree was a qualified
institutional buyer as defined in Rule 144A under the U.S. Securities Act (a
“Qualified
Institutional Buyer”), and, on the date hereof, we continue to believe
that each purchaser of the Shares is a Qualified Institutional
Buyer;
(f) the
offering of the Shares in the United States has been conducted by us in
accordance with the Underwriting Agreement.
Terms
used in this certificate have the meanings given to them in the Underwriting
Agreement unless otherwise defined herein.
Dated:_________________________
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[Underwriter]
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[U.S.
Broker-Dealer Affiliate of
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Underwriter]
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By:
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By:
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Name:
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Name:
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Title:
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Title:
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Schedule
A-2
EXHIBIT
2 TO SCHEDULE “A”
FORM
OF DECLARATION FOR REMOVAL OF LEGEND
AND TO:
Computershare Investor Services Inc.
The
undersigned:
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¨
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acknowledges
that the sale of _______ common
shares of Western Goldfields Inc. represented by certificate No. ___ to
which this declaration relates is being made in reliance on Rule 904 of
Regulation S (“Regulation S”) under the United States Securities Act of
1933, as amended (the “U.S. Securities Act”),
and
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¨
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certifies
that:
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1.
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it
is not an affiliate (as defined in Rule 405 under the U.S. Securities Act)
of Western Goldfields Inc.;
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2.
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the
offer of the securities was not made to a person in the United States and
either (a) at the time the buy order was originated, the buyer was outside
the United States, or the seller and any person acting on its behalf
reasonably believe that the buyer was outside the United States, or (b)
the transaction was executed on or through the facilities of the Toronto
Stock Exchange, and neither the seller nor any person acting on its behalf
knows that the transaction has been prearranged with a buyer in the United
States;
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3.
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neither
the seller nor any affiliate of the seller nor any person acting on any of
their behalf has engaged or will engage in any “directed selling efforts”
(as such term is defined in Regulation S) in the United States in
connection with the offer and sale of the
securities;
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4.
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the
sale is bona fide and not for the purpose of “washing off” the resale
restrictions imposed because the securities are “restricted securities”
(as that term is defined in Rule 144(a)(3) under the U.S. Securities
Act);
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5.
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the
seller does not intend to replace the securities sold in reliance on Rule
904 of Regulation S with fungible unrestricted securities;
and
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6.
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the
contemplated sale is not a transaction, or part of a series of
transactions which, although in technical compliance with Regulation S, is
part of a plan or scheme to evade the registration provisions of the U.S.
Securities Act.
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Dated:___________________________________
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By:
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Name:
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Title
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Schedule
A-3
