CANADIAN UNDERWRITING AGREEMENT
May 9, 2002
Echo Bay Mines Ltd.
Suite 0000 Xxxxxxxx Xxxxx
00000 - 000 Xxxxxx
Xxxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xx. Xxxxxx Xxxxxxx, Chairman and Chief Executive Officer
Dear Sir:
Based upon and subject to the terms and conditions set out below, BMO
Xxxxxxx Xxxxx Inc. (the "Lead Manager") and National Bank Financial Inc.
(together with the Lead Manager, collectively, the "Canadian Underwriters"
and, individually, a "Canadian Underwriter") hereby severally and not jointly,
in their respective percentages set out below, offer to purchase from Echo Bay
Mines Ltd. (the "Corporation"), and by its acceptance of the offer constituted
by this letter, the Corporation agrees to issue and sell to the Canadian
Underwriters, at the Time of Closing (as hereinafter defined), 29,600,000
units (collectively, the "Units" and individually, a "Unit") of the
Corporation (the "Offered Securities"), each Unit consisting of one (1) common
share (a "Common Share") of the Corporation and one (1) common share purchase
warrant exercisable at a price per Common Share of U.S.$0.90 until November
14, 2003 (each whole warrant, a "Warrant"), at an offering price of $1.098 per
Unit for aggregate gross proceeds of $32,500,800. The offering of the Offered
Securities by the Corporation is hereinafter referred to as the "Offering".
The Corporation hereby grants to the Canadian Underwriters (in accordance
with the percentages set forth in Section 16) a one time non-assignable option
(the "Canadian Underwriters' Option") to purchase severally and not jointly up
to 4,440,000 additional Units (the "Additional Units") upon the terms and
conditions set forth herein only for the purpose of covering over-allotments
made in connection with the sale of the Offered Securities. The Canadian
Underwriters' Option shall be exercisable, in whole or in part, by the Lead
Manager giving notice to the Corporation not later than the earlier of (x) 30
days following the Time of Closing (as defined herein) and (y) the date upon
which the U.S. Underwriters exercise the U.S. Underwriting Option (as defined
therein) pursuant to the U.S. Underwriting Agreement, any such notice to
specify the number of Additional Units to be purchased and the closing date
with respect to such purchase (which closing shall be no later than five full
business days after written notice of election to purchase Additional Units
under the Canadian Underwriters' Option is given.) Pursuant to such notice,
the Canadian Underwriters shall purchase and the Corporation shall issue and
sell the number of Additional Units indicated in such notice, in accordance
with the provisions of Section 11 hereof. In this Canadian Underwriting
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Agreement, the Offered Securities, and to the extent that the Canadian
Underwriters' Option is exercised, the Additional Units, are collectively
called the "Securities".
This offer is conditional upon, among other things, the Corporation
having prepared and filed and obtained receipts for a preliminary short form
prospectus and a (final) short form prospectus in respect of the Securities
with and from the securities regulatory authorities in the provinces of
British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Newfoundland and
Labrador, Nova Scotia and Xxxxxx Xxxxxx Island (the "Qualifying Provinces"),
pursuant to the Short Form Prospectus System established under National
Instrument 44-101 of the Canadian Securities Administrators (the "POP
System"), qualifying the distribution by the Corporation of the Securities to
purchasers resident in such provinces.
The Corporation shall pay to the Lead Manager, on behalf of the Canadian
Underwriters, a fee (the "Underwriting Fee") at the Time of Closing equal to
$0.0549 per Offered Security sold pursuant to the terms of this Canadian
Underwriting Agreement (being 5% of the issue price per Offered Security) in
consideration of the services to be rendered by the Canadian Underwriters in
connection with the Offering. Such services shall include, without limitation:
(i) acting as financial advisors to the Corporation in the preparation of
documentation relating to the sale of the Securities; (ii) forming and
managing banking, selling and other groups for the sale of the Securities;
(iii) distributing the Securities to the public both directly and through
other registered dealers and brokers; (iv) assisting the Corporation in
connection with the preparation and finalization of the Preliminary Prospectus
and the Final Prospectus (each as hereinafter defined) qualifying the
Securities; (v) performing administrative work in connection with these
matters; and (vi) all other services arising out of the agreement resulting
from the Corporation's acceptance of this offer.
To the extent the Canadian Underwriter's Option is exercised, the
Corporation shall pay to the Lead Manager, on behalf of the Canadian
Underwriters, a fee at the Over-Allotment Closing (as defined herein) equal to
the Underwriting Fee for each Additional Unit sold under this Canadian
Underwriting Agreement.
The Canadian Underwriters and the Corporation acknowledge that Schedule A
forms a part of this agreement.
The Canadian Underwriters and the Corporation acknowledge that an
offering of the Units is also being concurrently conducted in the United
States by the U.S. Underwriters, who are affiliates of the Canadian
Underwriters, under the terms of the U.S. Underwriting Agreement and the terms
of the Inter-Dealer Agreement, as well as applicable U.S. Securities Laws.
The following are the terms and conditions of the agreement between the
Corporation and the Canadian Underwriters:
Section 1 Definitions and Interpretation
(1) In this agreement:
"business day" means any day other than a Saturday, Sunday or statutory
or civic holiday in the Cities of Xxxxxxx, Xxxxxxx, and City of New York,
New York;
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"Canadian Securities Laws" means, collectively, all applicable securities
laws of each of the Qualifying Provinces and the respective rules and
regulations under such laws together with applicable published policy
statements, notices and orders of the securities regulatory authorities
in the Qualifying Provinces;
"Continuous Disclosure Materials" means all documents previously
published or filed by the Corporation with the securities regulatory
authority in each Province of Canada and the Exchanges.
"Exchanges" means The Toronto Stock Exchange ("TSX") and the American
Stock Exchange ("AMEX");
"Inter-Dealer Agreement" means that certain inter-dealer agreement dated
the date hereof between the Canadian Underwriters and the U.S.
Underwriters;
"Material Subsidiaries" means the entities set out in Schedule A in which
the Corporation holds the types and percentages of securities or other
ownership interests therein set forth;
"MRRS Decision Document" means a decision document issued by the
applicable Canadian securities regulatory authority pursuant to National
Policy 43-201 and which evidences the receipt by the applicable Canadian
securities regulatory authority of the Qualifying Provinces for the
Preliminary Prospectus or the Final Prospectus, as the case may be.
"Preliminary Prospectus" and "Final Prospectus" mean the Canadian
preliminary short form prospectus and Canadian (final) short form
prospectus dated the date hereof, respectively, including in each case
any documents or information incorporated therein by reference, prepared
by the Corporation and relating to the distribution of the Securities and
the Offering;
"Prospectus Amendment" means any amendment to any or all of the
Preliminary Prospectus or the Final Prospectus required to be prepared
and filed by the Corporation under applicable Canadian Securities Laws in
connection with the Offering;
"Stock Option Plans" means the stock option plans of the Corporation as
constituted on the date hereof;
"Time of Closing" shall have the meaning ascribed thereto in Section
10(1) hereof;
"United States" means the United States of America, its territories and
possessions, any state of the Untied States, the District of Columbia,
and the areas subject to the jurisdiction of the United States of
America;
"U.S. Exchange Act" means the United States Securities Exchange Act of
1934, as amended;
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"U.S. Registration Statement" means the registration statement on Form
S-3 (File No.333-35857) filed with the United States Securities and
Exchange Commission, with respect to certain securities of the
Corporation, as amended, under the U.S. Securities Act, including the
U.S. Shelf Prospectus and the exhibits and financial statements schedules
thereto as amended on the date hereof;
"U.S. Securities Act" means the United States Securities Act of 1933, as
amended;
"U.S. Securities Laws" means the applicable blue sky or securities
legislation in the United States, together with the U.S. Exchange Act and
the U.S. Securities Act;
"U.S. Shelf Prospectus" means the prospectus dated February 11, 1998
included in the U.S. Registration Statement;
"U.S. Shelf Prospectus Supplement" means the U.S. Shelf Prospectus
together with the preliminary prospectus supplement dated the date hereof
relating to the offering of Units by the U.S. Underwriters in the United
States;
"U.S. Underwriting Agreement" means that certain underwriting agreement
dated the date hereof between the U.S. Underwriters and the Corporation;
"U.S. Underwriters" means BMO Xxxxxxx Xxxxx Corp. and NBC International
(USA), Inc. together, and "U.S. Underwriter" means any one of them; and
"Warrant Indenture" means the warrant indenture to be entered into
between the Corporation and Computershare Trust Company of Canada, as
trustee, providing for the creation and issue of the Warrants.
(2) 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.
(3) 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.
Section 2 Compliance with Securities Laws
(1) As of the date of this Canadian Underwriting Agreement, the Corporation
will have prepared and filed the Preliminary Prospectus with the
applicable Canadian securities regulatory authority in each of the
Qualifying Provinces together with the required supporting documents,
will have addressed the comments made by the such securities regulatory
authorities, in respect of the Preliminary Prospectus and any amendment
thereto, and shall have received an MRRS Decision Document in respect
thereof. The Corporation covenants and agrees with the Canadian
Underwriters that as soon as practicable, it will prepare (subject to
review by the Canadian Underwriters) and file
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with the applicable Canadian securities regulatory authorities in each of
the Qualifying Provinces, the Final Prospectus, together with the
required supporting documents, and use its reasonable best efforts to
obtain the MRRS Decision Document from such regulatory authorities in
order to qualify the distribution of the securities.
Section 3 Due Diligence
(1) Prior to the Time of Closing, and, if applicable, prior to the filing of
any Prospectus Amendment and prior to the filing of any Supplementary
Material (as defined in paragraph 13(1)(a) hereof), including on any
intervening weekends, the Corporation shall have allowed the Canadian
Underwriters to participate fully in the preparation of such documents
and shall have allowed the Canadian Underwriters to conduct all due
diligence which the Canadian Underwriters may reasonably require to
conduct in order to fulfil their obligations as underwriters and in order
to enable the Canadian Underwriters responsibly to execute any
certificate required to be executed by them, provided, however, that this
Section 3 is not intended to operate as a condition of the Offering.
Section 4 Conditions of the Offering
The Canadian Underwriters' obligations under this agreement are
conditional upon and subject to:
(1) the Canadian Underwriters receiving at the Time of Closing favourable
legal opinions to be delivered to the Canadian Underwriters by Fraser
Xxxxxx Casgrain LLP, Canadian counsel to the Corporation, (who may rely,
to the extent appropriate in the circumstances, on the opinions of local
counsel acceptable to counsel to the Corporation and counsel to the
Canadian Underwriters as to the qualification of the Securities for sale
to the public and as to other matters governed by the laws of
jurisdictions in Canada other than the provinces in which they are
qualified to practice and may rely, to the extent appropriate in the
circumstances, as to matters of fact on certificates of officers, public
and exchange officials or of the auditors or transfer agent of the
Corporation), to the effect set forth below:
(a) the Corporation having been incorporated and existing under the laws
of Canada;
(b) the Corporation 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;
(c) the authorized share capital of the Corporation being as described
in the Final Prospectus;
(d) all necessary corporate action having been taken by the Corporation
to authorize the execution and delivery of this Canadian
Underwriting Agreement and the performance of its obligations
hereunder and this agreement has been duly executed and delivered by
the Corporation and constitutes a legal, valid and
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binding obligation of, and is enforceable against, the Corporation
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, contribution and waiver of contribution) and
the execution and delivery by the Corporation of this agreement, the
fulfilment of the terms hereof by the Corporation, and the issue,
sale and delivery on the Closing Date of the Securities to the
Canadian Underwriters as contemplated herein do not constitute or
result in a breach of or a default under, and do not create 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
the Corporation;
(e) all necessary corporate action having been taken by the Corporation
to authorize the execution and delivery of the Warrant Indenture and
the performance of the its obligations thereunder has been duly
executed and delivered by the Corporation and constitutes a legal,
valid and binding obligation of, and is enforceable against, the
Corporation 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, contribution and waiver of
contribution);
(f) all documents required to be filed by the Corporation and all
proceedings required to be taken by the Corporation under applicable
Canadian Securities Laws having been filed and taken in order to
qualify the distribution (or distribution to the public, as the case
may be) of the Securities in each of the Qualifying Provinces
through investment dealers or brokers registered under the
applicable laws thereof who have complied with the relevant
provisions thereof;
(g) all legal requirements will have been fulfilled by the Corporation
under the applicable Canadian Securities Laws so that the issuance
of the Common Shares on exercise of Warrants (the "Underlying Common
Shares") will be exempt from the prospectus requirements of the
applicable Canadian Securities Laws, and such Underlying Common
Shares will not be subject to any statutory hold period, and no
other documents will be required to be filed, proceedings taken, or
approvals, permits, consents or authorizations obtained under the
applicable Canadian Securities Laws to permit the trading in the
Qualifying Provinces of the Underlying Shares, through registrants
registered under applicable Canadian Securities Laws or in
circumstances in which there is an exemption from the registration
requirements of such applicable laws, subject to usual exceptions;
(h) the Securities and the Underlying Common Shares having been
conditionally approved for listing on the TSX subject only to
compliance with the documentary filing requirements of such
exchange, and in the case of the listing of Warrants and Underlying
Common Shares, subject also to meeting the requirement of the TSX
that a minimum number of holders hold such Warrants;
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(i) the attributes and characteristics of the Securities being
accurately summarized in all material respects under the heading
"Details of the Offering") in the Final Prospectus;
(j) the Common Shares and the Underlying Common Shares, when and if
issued by the Corporation, having been validly issued by the
Corporation and being fully-paid and non-assessable shares in the
capital of the Corporation;
(k) the Securities being at the Time of Closing eligible for investment
in the statutes as set forth under the heading "Eligibility for
Investment" in the Final Prospectus; and
(l) as to certain Canadian federal income tax matters, as described in
the Final Prospectus under the heading "Certain Canadian Federal
Income Tax Considerations";
acceptable in all reasonable respects to Canadian counsel to the Canadian
Underwriters, Stikeman Elliott;
(2) at the Time of Closing, there having been no actual material adverse
change (whether financial or otherwise) in the business, affairs,
operations, assets, liabilities or financial condition of the Corporation
on a consolidated basis since the date hereof;
(3) the U.S. Underwriting Agreement having been executed by the Corporation
and the U.S. Underwriters, and none of the U.S. Underwriters shall have
relied upon any rights of termination in the U.S. Underwriting agreement
to terminate the offering of Securities in the United States; and
(4) the Canadian Underwriters receiving at the Time of Closing such further
certificates, opinions of counsel and other documentation from the
Corporation as may be contemplated herein or as the Canadian Underwriters
or their counsel may reasonably require, provided, however, that the
Canadian 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 the Corporation to obtain and deliver such certificate
or document, and in any event, at least 48 hours prior to the Time of
Closing.
Section 5 Covenants of the Canadian Underwriters
(1) The Canadian Underwriters:
(a) shall offer the Securities for sale to the public, directly and
through other investment dealers and brokers (the Canadian
Underwriters, together with such other investment dealers and
brokers, are referred to herein as the "Selling Firms"), only as
permitted by and in compliance with all relevant laws and regulatory
requirements of applicable Canadian Securities Laws, upon the terms
and conditions set forth in the Final Prospectus and in the
agreement resulting from the Corporation's acceptance of this offer
and will require each Selling Firm to so agree;
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(b) shall not solicit offers to purchase or sell the Securities so as to
require registration thereof or the filing of a prospectus or
similar document with respect thereto under the laws of any
jurisdiction other than the Qualifying Provinces, and will require
each Selling Firm to agree with the Canadian Underwriters not to so
solicit or sell. In this connection, the Canadian Underwriters agree
that they will not offer or sell any of the Securities constituting
a part of their allotment within the United States except, if
applicable, through the U.S. Underwriters on the terms and
conditions set forth in the U.S. Underwriting Agreement and the
Inter-Dealer Agreement. For the purposes of this section 5(1)(b),
the Canadian Underwriters shall be entitled to assume that the
Securities are qualified for distribution in any Qualifying Province
where a receipt or similar document for the Final Prospectus shall
have been obtained from the applicable Canadian securities
regulatory authority following the filing of the Final Prospectus;
(c) agree that if they offer to sell or sell any Securities in
jurisdictions other than the Qualifying Provinces, such offers and
sales shall be effected in accordance and compliance with the
applicable laws of such jurisdictions and shall be effected in such
manner so as not to: (i) require registration of the Securities, or
the filing of a prospectus or other document with respect thereto;
or (ii) subject the Corporation to any continuous disclosure or
similar reporting requirements under the laws of any jurisdiction
outside the Provinces of Canada or the United States, except that
offers and sales of the Securities in the United States will be made
in compliance with the U.S. Underwriting Agreement, the Inter-Dealer
Agreement, the U.S. Shelf Prospectus, the U.S. Shelf Prospectus
Supplement and U.S. Securities Laws;
(d) shall use all reasonable efforts to complete and to cause the other
Selling Firms to complete the distribution of the Securities as soon
as practicable;
(e) shall notify the Corporation when, in their opinion, the Canadian
Underwriters and the other Selling Firms have ceased distribution of
the Securities and shall provide a breakdown of the number of
Securities distributed in each of the Qualifying Provinces;
(f) shall not make use of any "green sheet" or other marketing material
in respect of the Securities without the prior approval of the
Corporation and shall comply with any applicable laws with respect
to the use of "green sheets" and other marketing material during the
"waiting period", as defined under applicable Canadian Securities
Laws.
(2) Notwithstanding the foregoing, no Canadian Underwriter shall be liable to
the Corporation with respect to any other Canadian Underwriter under this
section 5.
Section 6 Representations and Warranties of the Corporation
(1) The Corporation hereby represents and warrants to the Canadian
Underwriters, intending that the same may be relied upon by the Canadian
Underwriters that:
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(a) each of the Corporation and the Material Subsidiaries has been duly
incorporated or amalgamated and organized and is validly existing
under the laws of its jurisdiction of incorporation, has all
requisite corporate power and authority to carry out its business as
now conducted and as contemplated by the Final Prospectus and the
documents incorporated by reference therein, and to own, lease and
operate its properties and assets, and the Corporation has all
requisite power and authority carry out its obligations under this
agreement;
(b) the only major operating subsidiaries of the company are listed in
Schedule A;
(c) the Corporation or one of its subsidiaries owns the issued and
outstanding shares of each of the Material Subsidiaries as set out
in Schedule A, in each case free and clear of any pledge, lien,
security interest, charge, claim or encumbrance, other than the
securities of Round Mountain Gold Corporation;
(d) the Corporation is a reporting issuer in each of the Provinces of
Canada and the Corporation is not in default of any of the
requirements of the securities laws of such jurisdictions;
(e) the Corporation's Common Shares are posted and listed for trading on
the Exchanges and the Corporation is not in default of any of the
listing requirements of the Exchanges, other than has been disclosed
in the Final Prospectus or the Continuous Disclosure Materials;
(f) other than has been disclosed in the Final Prospectus or the
Continuous Disclosure Materials, and other than options under the
Corporation's Stock Option Plans, there are no options, agreements
or other rights outstanding to acquire any Common Shares of the
Corporation;
(g) as at the date hereof, the authorized share capital of the
Corporation consists of an unlimited number of Common Shares and an
unlimited number of preferred shares, of which 502,168,375 Common
Shares and no preferred shares are issued and outstanding;
(h) the Corporation and each of its Material Subsidiaries hold all
licences and permits that are required for carrying on their
business in the manner in which such business has been, and is,
carried on, except where the failure to hold such a licence or
permit could not reasonably be expected to have a material adverse
effect (whether financial or otherwise) on the business, affairs,
operations, assets, liabilities or financial condition of the
Corporation on a consolidated basis (a "Material Adverse Effect");
(i) the Corporation and each of its Material Subsidiaries have good and
marketable title to all assets owned by them free and clear of all
liens, charges and encumbrances that materially interfere with the
use made or to be made thereof by them, save and except as specified
in paragraph 6(1)(c) and as disclosed in the Final Prospectus and
the Continuous Disclosure Materials;
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(j) all interests in natural resource properties of the Corporation or
the Material Subsidiaries as set out in the Final Prospectus and the
Continuous Disclosure Materials that are owned, leased or held by
the Corporation or its Material Subsidiaries as owner or lessee
thereof are so owned with good and marketable title or are so leased
with good and valid title, are in good standing, are valid and
enforceable, are free and clear of any liens, charges or
encumbrances that materially interfere with the use made or to be
made thereof by them and no royalty is payable in respect of any of
them, except as set out in the Final Prospectus or the Continuous
Disclosure Materials; no other property rights are necessary for the
conduct of the Corporation's or the Material Subsidiaries business;
and there are no material restrictions on the ability of the
Corporation or the Material Subsidiaries to use, transfer or
otherwise exploit any such property rights except as set out in the
Final Prospectus or the Continuous Disclosure Materials or as
required by applicable law;
(k) (A) the Corporation and its Material Subsidiaries are in compliance
in all material respects with all terms and provisions of all
contracts, agreements, indentures, leases, instruments and licences
in connection with the conduct of its business and (B), to the best
of the Corporation's knowledge, all such contracts, agreements,
indentures, leases, policies, instruments and licences are valid and
binding in accordance with their terms and in full force and effect,
except in each case with respect to clauses (A) and (B), as could
not reasonably be expected to have a Material Adverse Effect;
(l) except as disclosed in the Final Prospectus or the Continuous
Disclosure Materials, and to the best knowledge of the Corporation,
the Corporation and its subsidiaries are in compliance with all
material environmental laws in the jurisdictions in which the such
entities conducts its business;
(m) except as disclosed in the Final Prospectus or the Continuous
Disclosure Materials, the Corporation and each of its Material
Subsidiaries maintain insurance against loss of, or damage to, their
assets by all insurable risks on a replacement cost basis, and all
of the policies in respect of such insurance coverage are in good
standing in all respects and not in default except in each case as
could not reasonably be expected to have a Material Adverse Effect;
(n) the consolidated audited financial statements of the Corporation for
its fiscal years ended December 31, 2000 and December 31, 2001 and
the unaudited interim financial statements of the Corporation for
the quarter ended March 31, 2002 (collectively the "Corporation's
Financial Statements"), copies of which are incorporated by
reference in the Preliminary Prospectus and Final Prospectus, are
true and correct in every material respect and present fairly and
accurately the financial position and results of the operations of
the Corporation on a consolidated basis for the periods then ended
and the Corporation's Financial Statements have been prepared in
accordance with generally accepted accounting principles in Canada
applied on a consistent basis;
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(o) this agreement has been duly authorized, executed and delivered by
the Corporation and is a legal, valid and binding obligation of, and
is enforceable against, the Corporation 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);
(p) the Corporation was and is eligible to use the POP System and at the
respective times of filing, each of the Preliminary Prospectus and
the Final Prospectus together with any Prospectus Amendment and any
Supplementary Material have and will comply with the requirements of
the applicable Canadian Securities Laws pursuant to which they have
been filed, have and will provide full, true and plain disclosure of
all material facts (as defined in the Securities Act (Ontario))
relating to the Corporation on a consolidated basis and to the
Securities and will not contain any misrepresentation (as defined in
the Securities Act (Ontario)), provided that the foregoing shall not
apply with respect to statements contained in such documents
relating solely to the Canadian Underwriters;
(q) except as disclosed in the Final Prospectus or the Continuous
Disclosure Materials, as of the date hereof, there has been no
actual material adverse change in the business, affairs, operations,
assets, liabilities or financial condition of the Corporation on a
consolidated basis since March 31, 2002;
(r) the directors and officers of the Corporation and their compensation
arrangements with the Corporation, whether as directors, officers or
employees of the Corporation are as disclosed in the Preliminary
Prospectus and Final Prospectus or in the Continuous Disclosure
Materials;
(s) all of the material contracts and agreements of the Corporation and
of its Material Subsidiaries not made in the ordinary course of
business (collectively the "Material Contracts") have been disclosed
in the Continuous Disclosure Materials;
(t) all tax returns, reports, elections, remittances and payments of the
Corporation and of its Material Subsidiaries required by law to have
been filed or made in any applicable jurisdiction, have been filed
or made (as the case may be), other than for taxes being contested
in good faith, and, to the knowledge of the Corporation, are
substantially true, complete and correct and all taxes of the
Corporation and of its Material Subsidiaries (other than taxes being
contested in good faith) have been paid or accrued in the
Corporation's Financial Statements;
(u) except as disclosed in the Final Prospectus or in the Continuous
Disclosure Materials, there are no actions, suits, judgments,
investigations or proceedings outstanding, pending or, to the best
of its knowledge, threatened against or affecting the Corporation,
its subsidiaries, or their respective directors, officers or
promoters (in their capacity as such), at law or in equity or before
or by any federal, provincial, state, municipal or other
governmental department,
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commission, board, bureau or agency of any kind whatsoever, except
in each case as could not reasonably be expected to have a Material
Adverse Effect;
(v) all necessary corporate action has been taken or will have been
taken prior to the Time of Closing (as defined below) by the
Corporation so as to validly issue and sell the Securities to the
Canadian Underwriters and upon receipt by the Corporation of the
purchase price as consideration for the issue of the Securities,
such Securities will be validly issued and outstanding as fully paid
and non-assessable shares of the Corporation;
(w) Computershare Trust Company of Canada, at its principal office in
Toronto, has been duly appointed as the transfer agent and registrar
for the Common Shares and the Warrants;
(x) the forms of the certificates representing the Warrants have been
duly approved by the Corporation and comply with the provisions of
the laws of its jurisdiction of incorporation and the regulations of
the TSX; and
(y) the Preliminary Prospectus and Final Prospectus, including any and
all amendments thereto, contains and will contain no untrue
statement of a material fact and does not and will not omit to state
a material fact that is required to be stated or that is necessary
to make statements therein not misleading in light of the
circumstances in which they are made.
(2) The representations and warranties of the Corporation contained in this
Canadian Underwriting Agreement shall be true at the Time of Closing as
though they were made at the Time of Closing and they shall survive the
completion of the transactions contemplated under this Canadian
Underwriting Agreement and remain in full force and effect thereafter for
the benefit of the Canadian Underwriters for a period ending on the
expiry date of the Warrants.
Section 7 Representations and Warranties of the Canadian Underwriters
(1) The Canadian Underwriters hereby severally and not jointly represent and
warrant that:
(a) the Canadian Underwriter is, and will remain so, until the
completion of the Offering, appropriately registered under
applicable Canadian Securities Laws so as to permit it to lawfully
fulfil its obligations hereunder and the Canadian Underwriter is,
and will remain so, until the completion of the Offering, a member
in good standing of the TSX; and
(b) the Canadian Underwriter has good and sufficient right and authority
to enter into this Canadian Underwriting Agreement and complete its
transactions contemplated under this Canadian Underwriting Agreement
on the terms and conditions set forth herein.
(2) The representations and warranties of each of the Canadian Underwriters
contained in this Canadian Underwriting 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
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transactions contemplated under this Canadian Underwriting Agreement but
shall terminate on the completion of the Offering.
Section 8 Covenants of the Corporation
The Corporation covenants with the Canadian Underwriters that:
(a) the Corporation will comply with section 57 of the Securities Act
(Ontario) and with the comparable provisions of the other relevant
Canadian Securities Laws, and, after the date hereof and prior to
the completion of the distribution of the Securities, the
Corporation will promptly advise the Canadian Underwriters in
writing of the full particulars of any material change, (as defined
in the Securities Act (Ontario)), in the assets, liabilities,
business or operations of the Corporation on a consolidated basis or
of any change in any material fact (as defined in the Securities Act
(Ontario)) contained or referred to in the Preliminary Prospectus,
the Final Prospectus, or any Prospectus Amendment or Supplementary
Material which is, or may be, of such a nature as to render any of
them untrue, false or misleading in a material respect, result in a
misrepresentation (as defined in the Securities Act (Ontario)), or
result in any of such documents not complying with the laws of any
jurisdiction in which the Securities are to be offered for sale. The
Corporation will promptly prepare and file with the securities
authorities in the Qualifying Provinces any amendment or supplement
thereto which in the opinion of the Canadian Underwriters and the
Corporation, each acting reasonably, may be necessary or advisable
to correct such untrue or misleading statement or omission. The
Corporation shall in good faith discuss with the Canadian
Underwriters any change in circumstances which is of such a nature
that there may be a reasonable doubt as to whether written notice
need be given to the Canadian Underwriters under the provisions of
this clause 8(a);
(b) the Corporation will deliver to the Canadian Underwriters prior to
the filing of the Final Prospectus, a copy of the Preliminary
Prospectus and the Final Prospectus signed and certified as required
by the applicable Canadian Securities Laws;
(c) the Corporation will deliver without charge to the Canadian
Underwriters, as soon as practicable, and in any event no later than
May 15, 2002 in the case of the Final Prospectus, and thereafter
from time to time during the distribution of the Securities, in such
cities as the Canadian Underwriters shall notify the Corporation, as
many commercial copies of each of the Preliminary Prospectus and the
Final Prospectus, respectively, (and in the event of any Prospectus
Amendment, such Prospectus Amendment) as the Canadian Underwriters
may reasonably request for the purposes contemplated by the relevant
securities laws and such delivery shall constitute consent by the
Corporation to the use by the Canadian Underwriters and other
investment dealers and brokers of such documents in connection with
the Offering in all Qualifying Provinces, subject to the provisions
of applicable Canadian Securities Laws. The Corporation shall
similarly cause to be delivered commercial copies of the
Supplementary Material in such quantities as the Canadian
Underwriters may reasonably request.
-14-
(d) the Corporation shall use its reasonable best efforts to arrange
that the Securities shall be listed and posted for trading on the
TSX and AMEX on the Closing Date, subject only to the documentary
filing requirements of such exchange, and, in the case of the
Warrants, subject also to meeting the requirements of the TSX and
AMEX that minimum number of holders hold such Warrants;
(e) it will not: (i) offer, pledge, sell, contract to sell any option or
contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, or otherwise lend,
transfer or dispose of, directly or indirectly, any Common Shares or
securities convertible into or exercisable or exchangeable for
Common Shares; or (ii) enter into any swap or other arrangement that
transfers, in whole or in part, any of the economic consequences of
ownership of Common Shares or such other securities, whether any
such transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Shares or such other securities, in
cash or otherwise (other than the Securities other than in
connection with the grant or exercise of options, issuances under
the Corporation's existing Stock Option Plans or employee share
purchase plan or any other existing rights of conversion or
securities issued as consideration for an acquisition of assets or
shares), for a period ending 90 days after the closing of the
Offering without the prior written consent of the Lead Manager, such
consent not to be unreasonably withheld;
Section 9 Additional Documents upon Filing of Final Prospectus
(1) The Canadian Underwriters' obligations under this agreement are
conditional upon the receipt by the Canadian Underwriters concurrently
with the filing of the Final Prospectus, and any amendment thereto, as is
applicable:
(a) a comfort letter dated the date of Final Prospectus from the
auditors of the Corporation, addressed to the Canadian Underwriters,
in form and substance reasonably satisfactory to the Canadian
Underwriters, relating to the verification of the financial
information and accounting data and other numerical data of a
financial nature contained in the Final Prospectus and matters
involving changes or developments since the respective dates as of
which specified financial information is given in the Final
Prospectus to a date not more than two business days prior to the
date of such letter. Such letter shall further state that such
auditors are independent with respect to the Corporation within the
meaning of applicable Canadian Securities Laws, and that in their
opinion the audited financial statements of the Corporation included
in the Final Prospectus comply as to form in all material respects
with the applicable accounting requirements of applicable Canadian
Securities Laws.
(2) Similar opinions and comfort letters shall be delivered to the Canadian
Underwriters with respect to any Prospectus Amendment (provided, in the
case of comfort letters, that the Prospectus Amendment contains any
financial, accounting or other numerical data of a financial nature), or
required by the terms of the U.S. Underwriting Agreement to be delivered
to the U.S. Underwriters.
-15-
Section 10 Closing
(1) The Offering will be completed at the offices of Stikeman Elliott in
Toronto at 8:00 a.m. (Toronto time) on May 17, 2002 (the "Time of
Closing" and the "Closing Date", respectively) or at such other time
and/or on such other date as the Canadian Underwriters and the
Corporation may agree upon, but in any event no later than June 21, 2002.
(2) At the Time of Closing, subject to the terms and conditions contained in
this agreement, the Corporation shall deliver to the Canadian
Underwriters a certificate or certificates representing the Offered
Securities against payment of the purchase price by certified cheque,
bank draft or wire transfer dated the Closing Date payable to the
Corporation. The Corporation will, at the Time of Closing and upon such
payment of the purchase price to the Corporation, make payment in full of
the Underwriting Fee.
(3) The Canadian Underwriters' obligations under this agreement are
conditional upon and subject to the Corporation delivering a certificate
signed on behalf of the Corporation by the Chief Executive Officer of the
Corporation and the Chief Financial Officer of the Corporation, addressed
to the Canadian Underwriters and dated the Closing Date, in a form
satisfactory to the Canadian Underwriters' counsel, acting reasonably,
certifying for and on behalf of the Corporation and not in their personal
capacities that to the actual knowledge of the persons signing such
certificate after having made due inquiry:
(a) the Corporation has complied in all material respects with all
covenants and satisfied all terms and conditions of this agreement
on its part to be complied with and satisfied at or prior to the
Time of Closing on the Closing Date;
(b) no order, ruling or determination having the effect of ceasing or
suspending trading in any securities of the Corporation or
prohibiting the sale of the Securities or any of the Corporation's
issued securities has been issued and no proceeding for such purpose
is pending or, to the knowledge of such officers, threatened;
(c) the Corporation is a "reporting issuer" or its equivalent under the
securities laws of each of the Qualifying Provinces and eligible to
use the POP System and no material change relating to the
Corporation on a consolidated basis has occurred since the date
hereof with respect to which the requisite material change report
has not been filed and no such disclosure has been made on a
confidential basis that remains subject to confidentiality; and
(d) all of the representations and warranties made by the Corporation in
this agreement are true and correct as of the Time of Closing with
the same force and effect as if made at and as of the Time of
Closing after giving effect to the transactions contemplated hereby.
(4) The Canadian Underwriters' obligations under this agreement are
conditional upon and subject to the Corporation causing its auditors to
deliver to the Canadian Underwriters a comfort letter, dated the Closing
Date, in form and substance satisfactory to the
-16-
Canadian Underwriters, acting reasonably, bringing forward to a date not
more than two business days prior to the Closing Date the information
contained in the comfort letter referred to in paragraph 10(1)(a).
Section 11 Closing of Canadian Underwriters' Option
(1) The purchase and sale of the Additional Units shall be completed at such
time and place as the Canadian Underwriters and the Corporation may
agree, but in no event shall such closing occur later than five (5) full
business days after written notice to purchase Additional Units under the
Canadian Underwriters' Option is given in the manner contemplated by the
second paragraph of this Agreement (the "Over-Allotment Closing").
(2) At the Over-Allotment Closing, subject to the terms and conditions
contained in this agreement, the Corporation shall deliver to the
Canadian Underwriters a certificate or certificates representing the
Additional Units against payment of the purchase price by certified
cheque, bank draft or wire transfer dated the date of the Over-Allotment
Closing payable to the Corporation. The Corporation will, at the time of
the Over-Allotment Closing and upon such payment of the purchase price to
the Corporation, make payment in full of the Underwriting Fee in respect
of the Additional Units.
Section 12 Termination Rights
(1) All terms and conditions set out herein shall be construed as conditions
and any breach or failure by the Corporation to comply with any such
conditions in favour of the Canadian Underwriters shall entitle the
Canadian Underwriters to terminate their obligation to purchase the
Securities by written notice to that effect given to the Corporation
prior to the Time of Closing on the Closing Date. The Corporation shall
use its reasonable best efforts to cause all conditions in this agreement
to be satisfied. It is understood that the Canadian 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 Canadian Underwriters, any such waiver or extension must be in
writing.
(2) In addition to any other remedies which may be available to the Canadian
Underwriters, the Canadian Underwriters shall be entitled, at their
option, to terminate and cancel, without any liability on the Canadian
Underwriters' part, their obligations under this agreement to purchase
the Securities, by giving written notice to the Corporation at any time
at or prior to the Time of Closing on the Closing Date:
(a) if there should occur any suspension or limitation of trading in
securities generally on the TSX or AMEX, or if a general moratorium
on commercial banking activities in Toronto or New York should be
declared by the relevant authorities, or if, in relation to the
Corporation, any inquiry, investigation or other proceeding (whether
formal or informal) is commenced, threatened or announced or any
order or ruling is issued by any officer of such exchange or market,
or by the SEC, 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
-17-
of any province thereof or of the United States or any state or
territory thereof is promulgated or changed which, in the reasonable
opinion of the U.S. Underwriters (or any of them) operates to
prevent or materially restrict trading the Common Shares or the
distribution of the Securities or could reasonably be expected to
have a material adverse effect on the market price of the Common
Shares or the Securities;
(b) if any inquiry, investigation or other proceeding is commenced or
any other order is issued under or pursuant to any statute of Canada
or any province thereof (other than an inquiry, investigation or
other proceeding order based solely upon the activities or alleged
activities of any Canadian Underwriter or Selling Firm) or the
United States of America or any division thereof or there is any
change of law or the interpretation or administration thereof by a
securities regulator or other public authority, which in the
reasonable opinion of the Canadian Underwriters, operates to prevent
or materially restrict the trading in any Common Shares or the
distribution of the Securities;
(c) if there shall occur any actual material adverse change in the
business, affairs, operations, assets, liabilities or financial
condition of the Corporation on a consolidated basis which in the
Canadian Underwriters' reasonable opinion would reasonably be
expected to have a material adverse effect on the market price or
value of any of the Securities or Common Shares; or
(d) 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 Canadian
Underwriters' reasonable opinion, materially adversely affects or
involves, or will materially adversely affect or involve, the
Canadian or United States financial markets and/or prevents or
materially restricts the trading of the Common Shares or the
distribution of the Securities.
(3) The Canadian Underwriters shall make reasonable best efforts to give
notice to the Corporation (in writing or by other means) of the
occurrence of any of the events referred to in clauses 12(2)(a), (b), or
(c), provided that neither the giving nor the failure to give such notice
shall in any way affect the entitlement of the Canadian Underwriters to
exercise this right at any time prior to or at the Time of Closing.
(4) The rights of termination contained in this section may be exercised by
the Canadian Underwriters and are in addition to any other rights or
remedies the Canadian Underwriters may have in respect of any default,
act or failure to act or non-compliance by the Corporation in respect of
any of the matters contemplated by this agreement.
(5) If the obligations of the Canadian Underwriters are terminated under this
agreement pursuant to these termination rights, the Corporation's
liabilities to the Canadian Underwriters shall be limited to the
Corporation's obligations under Sections 13, 14 and 15.
-18-
Section 13 Indemnity
(1) The Corporation covenants and agrees to protect, indemnify, and save
harmless, each of the Canadian Underwriters, and their respective
directors, officers, employees and agents (individually, an "Indemnified
Party" and collectively, the "Indemnified Parties"), against all losses,
claims, damages, liabilities, reasonable costs or expenses caused or
incurred by reason of:
(a) any statement, other than a statement relating solely to the
Canadian Underwriters, contained in the Preliminary Prospectus, the
Final Prospectus, or in any Prospectus Amendment, or in any
supplemental or additional or ancillary material, information,
evidence, return, report, application, statement or document
(collectively, the "Supplementary Material") that has been filed by
or on behalf of the Corporation in connection with the Offering
under the relevant securities laws of any of the Qualifying
Provinces 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);
(b) the omission or alleged omission to state in the Preliminary
Prospectus, the Final Prospectus, any Prospectus Amendment or in any
Supplementary Material or any certificate of the Corporation
delivered hereunder or pursuant hereto any material fact (as defined
in the Securities Act (Ontario)) (other than a material fact
relating solely to the Canadian Underwriters) required to be stated
therein or necessary to make any statement therein not misleading in
light of the circumstances under which it was made;
(c) any order made or inquiry, investigation or proceeding commenced or
threatened by any securities commission or other competent authority
based upon any untrue statement or omission or alleged untrue
statement or omission in the Preliminary Prospectus, the Final
Prospectus, or Prospectus Amendment, or any Supplementary Material,
other than a statement relating solely to the Canadian Underwriters,
which prevents or restricts the trading in any of the Common Shares
or the distribution or distribution to the public, as the case may
be, of any of the Securities in any of the Qualifying Provinces;
(d) the Corporation not complying with any requirement of any applicable
Canadian Securities Laws; or
(e) any material breach of a representation or warranty of the
Corporation contained herein or the failure of the Corporation to
comply with any of its obligations hereunder, in all material
respects.
(2) To the extent that any Indemnified Party is not a party to this
agreement, the Canadian Underwriters shall obtain and hold the right and
benefit of the above-noted indemnity in trust for and on behalf of such
Indemnified Party.
-19-
(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 Corporation as soon as possible of the nature of such
claim (provided that omission to so notify the Corporation will not
relieve the Corporation of any liability which it may otherwise have to
the Indemnified Party hereunder, except to the extent the Corporation is
materially prejudiced by such omission) and the Corporation 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 Corporation 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 Corporation and such
Indemnified Party mutually agree to retain other legal counsel; or (ii)
the representation of the Corporation and such Indemnified Party by the
same legal counsel would be inappropriate due to actual or potential
differing interests, in which event such fees and disbursements shall be
paid by the Corporation to the extent that they have been reasonably
incurred, provided that in no circumstances will the Corporation be
required to pay the fees and expenses of more than one set of legal
counsel for all Indemnified Parties.
(5) The rights of indemnity contained in this section shall not enure to the
benefit of any Indemnified Party if the Canadian Underwriters were
provided with a copy of any amendment or supplement to the Final
Prospectus which corrects any untrue statement or omission or alleged
omission which is the basis of a claim by a party against such
Indemnified Party and which is required, under the applicable securities
legislation or regulations, to be delivered to such party by the Canadian
Underwriters or members of the Selling Firms.
Section 14 Contribution
In the event that the indemnity provided for in section 13 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 Canadian Underwriters
and the Corporation shall contribute to the aggregate of all losses, claims,
costs, damages, expenses or liabilities of the nature provided for above such
that each Canadian Underwriter shall be responsible for that portion
represented by the percentage that the portion of the Underwriting Fee payable
by the Corporation to such Canadian Underwriter bears to the gross proceeds
realized by the Corporation from the Offering, whether or not the Canadian
Underwriters have been sued together or separately, and the Corporation 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 Canadian Underwriter. In the event
that the Corporation may be held to be entitled to contribution from the
Canadian Underwriters under the provisions of any statute or law, the
Corporation 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, liabilities,
-20-
giving rise to such contribution for which such Canadian Underwriter is
responsible; and (b) the amount of the Underwriting Fee actually received by
any Canadian Underwriter. Notwithstanding the foregoing, a person guilty of
fraud, fraudulent misrepresentation or gross negligence 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 Canadian Underwriters may have by statute or otherwise by law.
Section 15 Expenses
Whether or not the transactions provided for herein (including the
Offering) are completed, the Corporation shall pay all costs, fees and
expenses of or incidental to the performance of its obligations under this
agreement including, without limitation: (i) the cost of qualifying the
Securities, including the costs of the Corporation's professional advisors,
(ii) the cost of printing the Preliminary Prospectus, the Final Prospectus,
any Prospectus Amendment and Supplementary Material and certificates for the
Securities, and (iii) the fees and expenses of the Corporation's auditors,
counsel and any local counsel (including U.S. counsel). Except as provided in
this agreement, the fees and disbursements of any counsel to the Canadian
Underwriters and out-of-pocket expenses of the Canadian Underwriters shall be
borne by the Canadian Underwriters; provided that in the event that the sale
and purchase of the Securities is not completed in accordance with the terms
hereof (other than as a result of a breach by the Canadian Underwriters of any
of its obligations hereunder or the exercise by the Canadian Underwriters of
the termination rights contained herein), the Corporation shall assume and pay
the out-of-pocket expenses of the Canadian Underwriters and the reasonable
fees and disbursements of counsel to the Canadian Underwriters (including U.S.
counsel).
Section 16 Liability of Canadian Underwriters
(1) The obligation of the Canadian Underwriters to purchase the Securities in
connection with the Offering at the Time of Closing on the Closing Date
shall be several and not joint or joint and several and shall be as to
the following percentages of the Offered Securities to be purchased at
that time:
BMO Xxxxxxx Xxxxx Inc. 60%
National Bank Financial Inc. 40%
----
100%
(2) If one of the Canadian Underwriters fails to purchase its applicable
percentages of the aggregate amount of the Offered Securities at the
Closing Time, the other Canadian Underwriter shall have the right, but
shall not be obligated, to purchase, all but not less than all, of the
Offered Securities which would otherwise have been purchased by the
Canadian Underwriter which failed to purchase. If, with respect to the
Offered
-21-
Securities, any non-defaulting Canadian Underwriter elects not to
exercise such right so as to assume the entire obligation of the
defaulting Underwriter or Canadian Underwriters (the Offered Securities
in respect of which the defaulting Underwriter(s) fail to purchase and
the non-defaulting Canadian Underwriters do not elect to purchase being
hereinafter called the "Default Shares"), then the Corporation shall have
the right to either (i) proceed with the sale of the Offered Securities
(less the Default Shares) to the non-defaulting Canadian Underwriter or
(ii) terminate its obligations hereunder without liability to the
non-defaulting Canadian Underwriters except under sections 13, 14 and 15.
Nothing in this paragraph shall oblige the Corporation to sell to any of
the Canadian Underwriters less than all of the Offered Securities or
shall relieve any of the Canadian Underwriters in default hereunder from
liability to the Corporation.
(3) Notwithstanding the foregoing, the Canadian Underwriters shall have the
right, but not the obligation, to sell to the U.S. Underwriters, any
Offered Securities pursuant to the Inter-Dealer Agreement, and subject to
the terms and conditions set out therein.
Section 17 Action by Canadian Underwriters
All steps which must or may be taken by the Canadian Underwriters in
connection with the agreement resulting from the Corporation's acceptance of
this offer, with the exception of the matters relating to termination
contemplated by section 12, may be taken by the Lead Manager on behalf of
themselves and the other Canadian Underwriters and the acceptance of this
offer by the Corporation shall constitute the Corporation's authority for
accepting notification of any such steps from, and for delivering the
definitive documents constituting the Securities to or to the order of the
Lead Manager.
Section 18 Governing Law; Time of Essence
This agreement shall be governed by and construed in accordance with the
laws of the Province of Ontario and the federal laws of Canada applicable
therein and time shall be of the essence hereof.
Section 19 Survival of Warranties, Representations, Covenants and Agreements
All warranties, representations, covenants and agreements of the
Corporation and the Canadian Underwriters herein contained or contained in
documents submitted or required to be submitted pursuant to this agreement
shall survive the purchase by the Canadian Underwriters of the Securities and
shall continue in full force and effect, regardless of the closing of the sale
of the Securities and regardless of any investigation which may be carried on
by the Canadian Underwriters, or on their behalf, for a period of three 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.
Section 20 Press Releases
The Corporation shall provide the Canadian Underwriters and their counsel
with a copy of all press releases to be issued by the Corporation concerning
the Offering contemplated hereby prior to the issuance thereof, and shall give
the Canadian Underwriters and their counsel a reasonable opportunity to
provide comments on any press release.
-22-
Section 21 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 the Corporation at:
Suite 0000 Xxxxxxxx Xxxxx
00000 - 000 Xxxxxx
Xxxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxx Xxxxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Fraser Xxxxxx Casgrain LLP
0000 Xxxxxxxx Xxxxx
00000 - 000 Xxxxxx
Xxxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxxx Xxxxxxxx
Facsimile No.: (000) 000-0000
(b) to the Lead Manager at:
BMO Xxxxxxx Xxxxx Inc.
0 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxx Xxxxxxxxx
Facsimile No.: (000) 000-0000
and, in the case of the other Canadian Underwriters, as the Lead
Manager may notify the Corporation;
-23-
with a copy to:
Stikeman Elliott
0000 Xxxxxxxx Xxxxx Xxxx
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxx X. Xxxxxxxxx
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 facsimile (with receipt confirmed).
Section 22 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 23 Entire Agreement
This agreement constitutes the entire agreement between the Canadian
Underwriters and the Corporation relating to the subject matter hereof and
supersede all prior agreements between the Canadian Underwriters and the
Corporation.
(The remainder of this page has been left blank intentionally)
-24-
Section 24 Acceptance
If this offer accurately reflects the terms of the transaction which we
are to enter into and if such terms are agreed to by the Corporation, please
communicate your acceptance by executing where indicated below and returning
by facsimile one copy and returning by courier one originally executed copy to
BMO Xxxxxxx Xxxxx Inc. (Attention: Xxxxxx Xxxxxxxxx).
Yours very truly,
BMO XXXXXXX XXXXX INC.
By: /s/ Xxxx Xxxxxxx
--------------------------
Authorized Signing Officer
NATIONAL BANK FINANCIAL INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
--------------------------
Authorized Signing Officer
- 25 -
The foregoing accurately reflects the terms of the transaction that we
are to enter into and such terms are agreed to.
ACCEPTED at as of this 9th day of May 2002.
ECHO BAY MINES LTD.
By: /s/ Xxx S.Q. Yip
--------------------------
Authorized Signing Officer
SCHEDULE A
MATERIAL SUBSIDIARIES
Name Type of Ownership Percentage
---- ----------------- ----------
Echo Bay Inc. (Delaware, Shares 100%
United States)
Echo Bay Finance Corporation Shares 100%
(Delaware, United States)
Echo Bay Exploration Inc. Shares 100%
(Delaware, United States)
Round Mountain Gold Corporation Shares 100%
(Delaware, United States)
Corp. Air Inc. (Alberta, Canada) Shares 100%
Sunnyside Gold Corporation Shares 100%
(Delaware, United States)
Echo Bay Minerals Company Shares 100%
(Delaware, United States)
Echo Bay Resources Inc. Shares 100%
(Delaware, United States)
Echo Bay Management Corporation Shares 100%
(Delaware, United States)
