EXHIBIT 3.1
PARAMOUNT RESOURCES LTD.
U.S.$150,000,000
[ ]% Senior Notes due 2010
UNDERWRITING AGREEMENT
----------------------
October [ ], 2003
New York, New York
UBS Securities LLC
As representative of the several Underwriters
named in SCHEDULE I hereto
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Paramount Resources Ltd., an Alberta corporation (the "COMPANY"), proposes
to issue and sell to the several Underwriters named in SCHEDULE I hereto (the
"UNDERWRITERS") U.S.$150,000,000 aggregate principal amount of [ ]% Senior Notes
due 2010 (the "SECURITIES"), subject to the terms and conditions set forth
herein. UBS Securities LLC shall act as representative ("REPRESENTATIVE") of the
several Underwriters. The Securities will be issued pursuant to an indenture
(the "INDENTURE"), to be dated the Closing Date (as defined herein), between the
Company and Bank of Nova Scotia Trust Company of New York as trustee (the
"Trustee").
Upon the closing of the offering of the Securities, the Company will make a
loan represented by an intercompany note (the "NEWCO MIRROR NOTE") of
U.S.$150,000,000 to Paramount Finance Ltd. ("NEWCO"), a corporation organized
under the laws of Alberta and a wholly owned subsidiary of the Company. The
Company will pledge the Newco Mirror Note and its interest in the Partnership
Mirror Note and the Mirror Note Guarantees (each as defined below) to the
Trustee to secure the Company's obligations under the Securities pursuant to a
pledge agreement between the Company and the Trustee (the "PARAMOUNT PLEDGE
AGREEMENT"). Newco will in turn make a loan represented by an intercompany note
(the "PARTNERSHIP MIRROR NOTE" and, together with the Newco Mirror Note, the
"MIRROR NOTES") of U.S.$150,000,000 to Paramount Resources, an Alberta general
partnership (the "PARTNERSHIP"). The Partnership Mirror Note and the related
Mirror Note Guarantees will be pledged to the Company by Newco to secure Newco's
obligations under the Newco Mirror Note pursuant to a pledge agreement between
Newco and the Company (the "NEWCO PLEDGE AGREEMENT" and, together with the
Paramount Pledge Agreement, the "PLEDGE AGREEMENTS"). The obligations of Newco
to the Company under its Mirror Note and the obligations of the Partnership
under its Mirror Note will be initially guaranteed (the "MIRROR NOTE
GUARANTEES") by each of the Company's wholly owned restricted subsidiaries
(each, a "MIRROR NOTE GUARANTOR") that guarantees the Company's credit facility
or has otherwise guaranteed or incurred in excess of US$2.0 million of debt.
SECTION 1. REGISTRATION STATEMENT AND PROSPECTUSES. The Company represents and
warrants to, and agrees with, each of the Underwriters and the QIU (as defined
in Section 11) that:
(i) The Company meets the requirements under the Securities Act (Alberta)
(the "ASA") and the rules, regulations, national, multijurisdictional
or local instruments and published policy statements applicable in the
Province of Alberta, including the rules and procedures established
for the pricing of securities after the final prospectus is receipted
pursuant to National Instrument 44-103 - Post-Receipt Pricing (the
"PREP Procedures"), for use of a short form prospectus with respect to
the Securities pursuant to National Instrument 44-101 - Short Form
Prospectus Distributions (collectively, "ALBERTA SECURITIES LAWS"); a
preliminary short form prospectus relating to the Securities to be
offered for sale outside of Canada has been filed with the Alberta
Securities Commission in the Province of Alberta (the "ASC") (the
"CANADIAN PRELIMINARY PROSPECTUS"); the ASC has issued a preliminary
receipt for the Canadian Preliminary Prospectus; a final short form
prospectus relating to the Securities to be offered for sale outside
of Canada has been filed with the ASC (the "BASE PREP PROSPECTUS")
which omits the PREP Information (as hereinafter defined) in
accordance with the PREP Procedures and the Company will prepare and
file, promptly after the execution and delivery of this Agreement,
with the ASC, in accordance with the PREP Procedures, a supplemented
PREP prospectus setting forth the PREP Information (the "SUPPLEMENTED
PREP PROSPECTUS"); the information included in the Supplemented PREP
Prospectus that is omitted from the Base PREP Prospectus and which is
deemed under the PREP Procedures to be incorporated by reference in
the Base PREP Prospectus as of the date of the Supplemented PREP
Prospectus is referred to herein as the "PREP INFORMATION"; the Base
PREP Prospectus for which a final receipt has been received from the
ASC, including the documents incorporated by reference therein, is
herein referred to as the "CANADIAN PROSPECTUS"; PROVIDED, HOWEVER,
that from and after the time that the Supplemented PREP Prospectus is
filed with the ASC, the term "CANADIAN PROSPECTUS" shall refer to such
Supplemented PREP Prospectus, including the documents incorporated by
reference therein; the Canadian Preliminary Prospectus and the
Canadian Prospectus for which a preliminary receipt and a final
receipt were issued by the ASC, respectively, were each in the form
heretofore delivered to you and each of the other Underwriters
(including all documents incorporated by reference in the prospectus
contained therein); no order having the effect of ceasing or
suspending the distribution of the Securities has been issued by the
ASC and no proceeding for that purpose has been initiated or, to the
knowledge of the Company, threatened by the ASC.
(ii) The Company meets the general eligibility requirements for use of Form
F-10 under the Securities Act of 1933, as amended (the "SECURITIES
ACT"), and a registration statement on Form F-10 (File No. 333-109343)
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covering the registration of the Securities under the Securities Act
has been filed with the United States Securities and Exchange
Commission (the "COMMISSION"); such registration statement and any
post-effective amendment thereto (including the Canadian Prospectus
with such deletions therefrom and additions thereto as are permitted
or required by Form F-10 and the applicable rules and regulations of
the Commission), each in the form heretofore delivered to you and each
of the other Underwriters (including all documents incorporated by
reference in the prospectus contained therein), have been declared
effective by the Commission in such form; no other document with
respect to such registration statement or documents incorporated by
reference therein has heretofore been filed or transmitted for filing
with the Commission; no stop order suspending the effectiveness of
such registration statement has been issued and no proceeding for that
purpose has been initiated or, to the knowledge of the Company,
threatened by the Commission; any preliminary prospectus included in
such registration statement or filed with the Commission in accordance
with the rules and regulations of the Commission under the Securities
Act, is hereinafter called a "U.S. PRELIMINARY PROSPECTUS"; the
various parts of such registration statement, including all exhibits
thereto and the documents incorporated by reference in the prospectus
contained in the registration statement at the time such part of the
registration statement became effective, each as amended at the time
such part of the registration statement became effective, but
excluding the Statement of Eligibility on Form T-1 under the Trust
Indenture Act of 1939, as amended (the "TRUST INDENTURE ACT"), are
hereinafter collectively called the "REGISTRATION STATEMENT"; the
Company will prepare and file, promptly after the execution and
delivery of this Agreement, with the Commission, in accordance with
General Instruction II.L of Form F-10, the Supplemented PREP
Prospectus (with such deletions therefrom and additions thereto as are
permitted or required by Form F-10 and the applicable rules and
regulations of the Commission) (the "U.S. SUPPLEMENTED PROSPECTUS");
the prospectus included in the Registration Statement at the time it
became effective, including the documents incorporated by reference
therein, is herein called the "U.S. PROSPECTUS"; provided, HOWEVER,
that from and after the time that the U.S. Supplemented Prospectus is
filed with the Commission, the term "U.S. PROSPECTUS" shall refer to
such U.S. Supplemented Prospectus, including the documents
incorporated by reference therein; the U.S. Preliminary Prospectus and
the Canadian Preliminary Prospectus are hereinafter collectively
called the "PRELIMINARY PROSPECTUS" and the U.S. Prospectus and the
Canadian Prospectus are hereinafter called the "PROSPECTUSES."
(iii) The Company has prepared and filed with the Commission an appointment
of agent for service of process upon the Company on Form F-X in
conjunction with the filing of the Registration Statement (the "FORM
F-X"). The Company has also caused the Trustee to prepare and
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file with the Commission a Statement of Eligibility under the Trust
Indenture Act on Form T-1 (the "FORM T-1").
(iv) No order preventing or suspending the use of the U.S. Preliminary
Prospectus or the U.S. Prospectus has been issued by the Commission,
and each U.S. Preliminary Prospectus and the U.S. Prospectus, at the
time of filing thereof, conformed in all material respects to the
requirements of the Securities Act and the Trust Indenture Act, and
the rules and regulations of the Commission thereunder, and did not
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 the light of the circumstances under which they
were made, not misleading; PROVIDED, HOWEVER, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter through UBS Securities LLC expressly
for use therein.
(v) No order preventing or suspending the use of the Canadian Preliminary
Prospectus or the Canadian Prospectus has been issued by the ASC, and
each Canadian Preliminary Prospectus and the Canadian Prospectus, at
the time of filing thereof, conformed in all material respects to the
requirements of the Alberta Securities Laws, and did not 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 the light of the circumstances under which they were made,
not misleading; PROVIDED, HOWEVER, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter through UBS Securities LLC expressly
for use therein.
(vi) The documents incorporated by reference in the Prospectuses, when they
were filed with the ASC, conformed in all material respects to the
requirements of the Alberta Securities Laws and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under
which they were made; and any further documents so filed and
incorporated by reference in the Prospectuses or any further amendment
or supplement thereto, as of the applicable filing date or effective
date, as the case may be, will conform in all material respects to the
applicable requirements of the Alberta Securities Laws and will not
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 not misleading in light of the circumstances under
which they were made; PROVIDED, HOWEVER, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with
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information furnished in writing to the Company by an Underwriter
through UBS Securities LLC expressly for use therein.
(vii) As of the applicable filing date or effective date, as the case may
be, (A) the Canadian Prospectus and any amendments or supplements
thereto complied and will comply in all material respects with the
Alberta Securities Laws; (B) the U.S. Prospectus and the Registration
Statement and any amendments or supplements thereto complied and will
comply in all material respects with the requirements of the
Securities Act and the applicable rules and regulations of the
Commission under the Securities Act and the Trust Indenture Act; (C)
the Form F-X and any amendments or supplements thereto complied and
will comply in all material respects with the applicable requirements
of the Securities Act and the applicable rules and regulations of the
Commission under the Securities Act; (D) neither the Registration
Statement nor any amendment or supplement thereto, together with each
document incorporated therein by reference (as modified or superseded
by the Registration Statement, any amendment or supplement thereto or
any subsequent document incorporated therein by reference), 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 not misleading; (E) the Canadian
Prospectus and any amendment or supplement thereto, together with each
document incorporated therein by reference (as modified or superseded
by the Prospectuses, any amendment or supplement thereto or any
subsequent document incorporated therein by reference), constituted
and will constitute full, true and plain disclosure of all material
facts relating to the Securities; and (F) the U.S Prospectus and any
amendment or supplement thereto, together with each document
incorporated therein by reference (as modified or superseded by the
U.S. Prospectus, any amendment or supplement thereto or any subsequent
document incorporated therein by reference) 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; PROVIDED, HOWEVER, that the representations and warranties
in this subsection (vii) shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through UBS
Securities LLC expressly for use therein.
(viii) There are no reports or information that in accordance with the
requirements of the ASC must be made publicly available in connection
with the offering of the Securities that have not been made publicly
available as required; there are no documents required to be filed
with the ASC in connection with the Canadian Prospectus that have not
been filed as required; there are no contracts, documents or other
materials required to be described or referred to in the Canadian
Prospectus or filed as
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exhibits to the Registration Statement or with the ASC that are not
described, referred to or filed as required.
SECTION 2. AGREEMENTS TO SELL AND PURCHASE AND LOCK-UP AGREEMENT. On the basis
of the representations and warranties contained in this Agreement, and subject
to the terms and conditions contained herein, the Company agrees to issue and
sell, and each Underwriter agrees, severally and not jointly, to purchase from
the Company at a purchase price equal to [ ]% of the principal amount thereof
(the "PURCHASE PRICE") an aggregate principal amount of Securities set forth
opposite the name of such Underwriter in Schedule I hereto. In consideration for
the Underwriters' agreement to purchase the Securities, and in consideration for
their services hereunder, the Company shall pay to the Representative, for the
account of the Underwriters, a commission of 2.25% of the principal amount of
Securities (the "UNDERWRITING FEE").
The Company hereby agrees not to, during the period from the date hereof to
and including the Closing Date, without the prior written consent of the
Representative, directly or indirectly, offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase or otherwise transfer or
dispose of any Securities or securities which are substantially similar to the
Securities, or any securities convertible into or exchangeable into or
exercisable for the Securities, or any substantially similar securities, or file
any registration statement under the Securities Act with respect to any of the
foregoing. The foregoing sentence shall not apply to any Securities sold
pursuant to this Agreement.
SECTION 3. TERMS OF PUBLIC OFFERING.
(a) The Company is advised by you that the Underwriters propose (i) to
make a public offering in the United States of their respective
portions of the Securities as soon after the execution and delivery of
this Agreement as in your judgment is advisable and (ii) initially to
offer the Securities upon the terms set forth in the Prospectuses.
(b) Each of the Underwriters, severally and not jointly, agrees with the
Company that it will not sell any Securities purchased by it from the
Company pursuant to this Agreement in any province or territory of
Canada unless the sale is made: (i) through an appropriately
registered dealer or in accordance with an exemption from the dealer
registration requirements of applicable securities laws; and (ii)
pursuant to an exemption from the prospectus requirements of
applicable securities laws.
SECTION 4. DELIVERY AND PAYMENT. Delivery of, and payment of the Purchase Price
for, the Securities shall be made at 9:00 A.M., New York City time, on October
[ ], 2003 or at such other time on the same date or such other date as shall be
agreed upon by the Representative and the Company in writing. The time and date
of such delivery and the payment for the Securities are herein called the
"CLOSING DATE."
One or more of the certificates (in denominations of U.S.$1,000 or integral
multiples thereof) in definitive global form, registered in the name of Cede &
Co., as nominee of
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The Depository Trust Company ("DTC"), having an aggregate principal amount
corresponding to the aggregate principal amount of the Securities purchased by
the Underwriters hereunder (collectively, the "GLOBAL NOTE"), shall be delivered
by the Company to the Representative (or as the Representative directs) in each
case with any transfer taxes thereon, together with the Underwriting Fee, duly
paid by the Company against payment by the Underwriters of the Purchase Price
thereof by electronic transfer of immediately available Funds to an account
specified by the Company at least 2 business days prior to the Closing Date. The
Global Note shall be made available to the Underwriters for inspection not later
than 9:30 A.M., New York City time, on the business day immediately preceding
the Closing Date.
The documents to be delivered on the Closing Date on behalf of the parties
hereto pursuant to Section 8 of this Agreement shall be delivered at the offices
of Xxxxxxx Xxxxx LLP, 3700 Canterra Tower, 000 0xx Xxxxxx X.X., Xxxxxxx, Xxxxxxx
X0X 0X0, Xxxxxx, or such other location as may be mutually acceptable and the
Securities shall be delivered as specified by the Representative, all on the
Closing Date.
SECTION 5. AGREEMENTS OF THE COMPANY. The Company agrees with you as follows:
(a) To prepare the Supplemented PREP Prospectus and the U.S. Supplemented
Prospectus in a form approved by you, acting reasonably, and (i) to
file such Supplemented PREP Prospectus with the ASC in accordance with
the PREP Procedures not later than the ASC's close of business on the
first business day following the execution and delivery of this
Agreement and (ii) to file such U.S. Supplemented Prospectus with the
Commission pursuant to General Instruction II.L. of Form F-10 not
later than the Commission's close of business on the first business
day following the day that the filing of the Supplemented PREP
Prospectus is made with the ASC; to notify the Underwriters promptly,
and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall have been filed with the
Commission or shall have become effective, and when any supplement or
amendment to the Prospectuses shall have been filed, (ii) of the
receipt of any comments from the ASC or the Commission, (iii) of any
request by the ASC to amend or supplement the Base PREP Prospectus or
the Canadian Prospectus or for additional information, or of any
request by the Commission to amend the Registration Statement or to
amend or supplement the U.S. Prospectus or for additional information,
(iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus, or of
the suspension of the qualification of the Securities for offering or
sale in any jurisdiction, or of the institution or, to the knowledge
of the Company, the threatening of any proceedings for any such
purpose, and (v) of the issuance by the ASC of any order having the
effect of ceasing or suspending the distribution of the Securities or
the trading in the securities of the Company, or of the institution
or, to the knowledge of the Company, the threatening of any
proceedings for any such purpose; to use its best 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 Securities or the trading in the securities of the
Company and, if any such order is issued, to promptly use its best
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efforts to obtain the withdrawal of such order at the earliest
possible time; to file promptly all reports required to be filed by
the Company (i) with the Commission pursuant to Section 13(a), 13(c)
or 15(d) of the Securities Exchange Act of 1934 (the "EXCHANGE ACT"),
and (ii) with the ASC in accordance with Alberta Securities Laws, in
each case subsequent to the date of the Prospectuses and for so long
as the delivery of a prospectus is required in connection with the
offering or sale of the Securities, and to make no further amendment
or any supplement to the Registration Statement or the Prospectuses
unless approved by you (which approval shall not be unreasonably
withheld) after reasonable notice thereof;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions in the United States as you may
reasonably request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution of the
Securities, PROVIDED that in connection therewith the Company shall
not be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction and further
provided that nothing contained in this Section 5(b) shall require the
Company to file or qualify a prospectus in any province or territory
of Canada, other than Alberta (for the purpose of qualifying under
Alberta Securities Laws the distribution of the Securities in the
United States), in connection with an offer and sale of the Securities
in any such province or territory;
(c) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Securities Act, any event occurs as
a result of which, in the determination of the Company after
consultation with the Underwriters, the Prospectuses would include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it
shall be necessary to amend the Registration Statement or the
Prospectuses to comply with Alberta Securities Laws, the Securities
Act or the Exchange Act, or the respective rules thereunder, the
Company promptly will (i) notify the Representative of such event,
(ii) prepare and file with the ASC and the Commission, subject to the
first sentence of paragraph (a) of this Section 5, an amendment or
supplement which will correct such statement or omission or effect
such compliance and (iii) supply any amended Canadian Prospectus, U.S.
Prospectus and Registration Statement to the Representative in such
quantities as it may reasonably request;
(d) Prior to 5:00 P.M., New York City time, on the New York business day
next succeeding the date of this Agreement and from time to time until
the distribution of the Securities has been completed, to furnish the
Underwriters with written and electronic copies of the U.S. Prospectus
in New York City in such quantities as you may reasonably request,
and, if the delivery of a prospectus is required by applicable law, if
at such time any event shall have occurred as a result of which the
Prospectuses as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary in order to
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make the statements therein, in light of the circumstances under which
they were made when such Prospectuses are delivered, not misleading,
or, if for any other reason it shall be necessary to amend or
supplement the Prospectuses or to file under Alberta Securities Laws
or under the Exchange Act any document incorporated by reference in
the Prospectuses in order to comply with Alberta Securities Laws, the
Securities Act, the Exchange Act or the Trust Indenture Act, to notify
you and upon your request to file such document and to prepare and
furnish without charge to each Underwriter and to any dealer in
securities as many written and electronic copies as you may from time
to time reasonably request of amended Prospectuses or supplements to
the Prospectuses which will correct such statement or omission or
effect such compliance. The Company has furnished or will deliver to
the Underwriters and counsel for the Underwriters, without charge, a
copy of the Canadian Preliminary Prospectus, the Base PREP Prospectus
and the Canadian Prospectus, approved, signed and certified as
required by the Alberta Securities Laws, and signed copies of the
Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by
reference therein and including a signed copy of the Form F-X) and
signed copies of all consents and certificates of experts; the copies
of the Canadian Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the ASC pursuant to the System
for Electronic Document Analysis and Retrieval (SEDAR);
(e) The Company will cooperate with you and counsel for the Underwriters
in connection with the registration or qualification of the Securities
for offer and sale by the several Underwriters and by dealers under
the state securities or Blue Sky laws of such jurisdictions in the
United States as you may reasonably request, to continue such
registration or qualification in effect so long as reasonably required
for distribution of the Securities and to file such consents to
service of process or other documents as may be necessary in order to
effect such registration or qualification; PROVIDED, HOWEVER, that the
Company shall not be required in connection therewith to qualify as a
foreign corporation in any jurisdiction in which it is not now so
qualified or to take any action that would subject it to general
consent to service of process or taxation other than as to matters and
transactions relating to the Prospectuses, the Registration Statement
or the offering or sale of the Securities, in any jurisdiction in
which it is not now so subject.
(f) To make generally available to its securityholders as soon as
practicable, but in any event not later than twelve months after the
effective date of the Registration Statement (as defined in Rule
158(c) under the Securities Act), an earnings statement of the Company
and its subsidiaries (which need not be audited) complying with
Section 11(a) of the Securities Act and the rules and regulations
thereunder (including Rule 158 under the Securities Act);
(g) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incidental
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to the performance of its obligations under this Agreement, including:
(i) the fees, disbursements and expenses of the Company's counsel and
the Company's accountants in connection with the qualification for
distribution of the Securities under Alberta Securities Laws, the
registration and delivery of the Securities under the Securities Act
and all other fees and expenses in connection with the preparation,
printing, filing and distribution of the Registration Statement
(including financial statements and exhibits), the U.S. Preliminary
Prospectus, the U.S. Prospectus, the Canadian Preliminary Prospectus
and the Canadian Prospectus and all amendments and supplements to any
of the foregoing, including the mailing and delivering of copies
thereof to the Underwriters and dealers in the quantities specified
herein, (ii) all costs and expenses related to the transfer and
delivery of the Securities to the Underwriters, including any transfer
or other taxes payable thereon, (iii) all expenses in connection with
the registration or qualification of the Securities for offer and sale
under the securities or Blue Sky laws of the several states and all
costs of printing or producing any Preliminary and Supplemental Blue
Sky Memoranda in connection therewith (including the filing fees and
reasonable fees and disbursements of counsel for the Underwriters in
connection with such registration or qualification and memoranda
relating thereto), (iv) the cost of printing certificates representing
the Securities, (v) the costs and charges of any transfer agent,
registrar and/or depositary (including DTC), (vi) the fees and
expenses of the Trustee, including the reasonable fees and
disbursements of counsel for the Trustee in connection with the
Indenture and the Securities, (vii) any fees charged by rating
agencies for the rating of the Securities, and (viii) all other costs
and expenses incidental to the performance of the obligations of the
Company hereunder for which provision is not otherwise made in this
Section.
(h) To do and perform all things required or necessary to be done and
performed under this Agreement by the Company prior to and after the
Closing Date, as the case may be, and to satisfy all conditions
precedent to the delivery of the Securities.
(i) To use the net proceeds received by it from the sale of the Securities
pursuant to this Agreement in the manner specified in the Prospectuses
under the caption "Use of Proceeds."
(j) To not take, directly or indirectly, any action which is designed to
or which has constituted or which might be reasonably be expected to
cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or distribution of the
Securities in violation of applicable securities laws.
(k) To obtain the approval of DTC for "book-entry" transfer of the
Securities, and to comply in all material respects with all of its
agreements set forth in the representation letters of the Company to
DTC relating to the approval of the Securities by DTC for "book-entry"
transfer.
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(l) Prior to the filing of any prospectus supplement or amendment, the
Company shall allow the Underwriters to conduct all due diligence
investigations which they reasonably require in order to fulfill their
obligations as underwriters under the applicable laws.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter and to the QIU (as defined in
Section 11) that:
(a) The Company has been duly incorporated, is validly existing under the
laws of its jurisdiction of incorporation, amalgamation or continuance
and has the corporate power and authority to carry on its business as
described in the Prospectuses and to own, lease and operate its
properties and assets, and is duly qualified and is in good standing
as a corporation authorized to do business in each jurisdiction in
which the nature of its business or its ownership or leasing of
property requires such qualification, except where the failure to be
so qualified would not have a material adverse effect on the business,
properties, prospects, financial condition or results of operations of
the Company and its Subsidiaries (as defined herein), taken as a whole
(a "MATERIAL ADVERSE EFFECT").
(b) The Company's only direct or indirect subsidiaries are listed on
SCHEDULE II hereto (collectively, the "SUBSIDIARIES" and individually,
a "SUBSIDIARY"). Except as would not have a Material Adverse Effect,
each Subsidiary (i) is a corporation or partnership duly incorporated
or formed, as the case may be, validly existing and, to the extent
required under applicable law, in good standing under the laws of the
jurisdiction of its incorporation or formation, as applicable, (ii)
has the corporate or partnership power, as the case may be, and
authority under such laws to own, lease and operate its properties and
conduct its business as described in the Prospectuses and (iii) is
duly qualified to transact business as a foreign corporation or
partnership, as the case may be, and is in good standing in each other
jurisdiction in which it owns or leases property of a nature, or
transacts business of a type, that would make such qualification
necessary.
(c) There are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or liens granted or
issued by the Subsidiaries relating to or entitling any person to
purchase or otherwise acquire any shares in the capital of the
Subsidiaries, except (i) as otherwise disclosed in the Registration
Statement and the Prospectuses; (ii) as described in Section 6(g)
below; or (iii) as would not individually or in the aggregate have a
Material Adverse Effect.
(d) The authorized, issued and outstanding share capital and debt of the
Company was as set forth in the Prospectuses and the Registration
Statement under the caption "Capitalization," at the date indicated,
and all the outstanding shares of the Company have been duly
authorized and validly issued and are fully paid, non-assessable and
not subject to any preemptive or similar rights.
(e) The statements set forth in the Prospectuses, under the captions
"Description of Other Indebtedness" and "Description of the Notes",
insofar as they purport to
- 11 -
constitute a summary of the Securities, and under the caption
"Canadian and U.S. Income Tax Consequences", insofar as they purport
to describe the provisions of the documents, laws and regulations
referred to therein, constitute fair and adequate summaries of the
matters referred to therein.
(f) The Securities have been duly authorized and, on the Closing Date,
will have been validly executed and delivered by the Company. When the
Securities have been authenticated in accordance with the provisions
of the Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, the Securities will be
entitled to the benefits of the Indenture and will be valid and
binding obligations of the Company, enforceable in accordance with
their terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent conveyance) or similar laws affecting
creditors' rights generally and (ii) the availability of equitable
remedies may be limited by equitable principles of general
applicability (regardless of whether enforcement is considered in a
proceeding in equity or at law). On the Closing Date, the Securities
will conform to the description thereof contained in the Prospectuses
and the Indenture.
(g) All of the outstanding and issued shares and all the partnership
interests, as the case may be, of each of Newco, the Partnership and
each of the Subsidiaries that owns in excess of 5% of the consolidated
assets of the Company have been duly authorized and validly issued
and, in the case of shares, are fully paid and non-assessable, and
except as set forth in SCHEDULE II attached hereto, and, except as
disclosed in the Prospectuses, are owned by the Company, directly or
indirectly through one or more Subsidiaries, free and clear of any
security interest, claim, lien, encumbrance or adverse interest of any
nature (each, a "LIEN") except for Permitted Liens (as defined in the
Prospectus under the heading "Description of the notes--Certain
definitions") other than any Permitted Liens securing Indebtedness.
(h) Except as would not have a Material Adverse Effect, neither the
Company nor any of the Subsidiaries is (i) in violation of its
respective organizational documents, certificate of incorporation,
partnership agreement, charter or by-laws, or (ii) is in default in
the performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease or other
agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which the Company or any of the
Subsidiaries or their respective property is bound.
(i) The execution, delivery and performance of this Agreement, the
Indenture, the Mirror Notes, the Mirror Note Guarantees, the Pledge
Agreements and the issuance and delivery of Securities by the Company
and the Subsidiaries, as applicable, the compliance by the Company and
the Subsidiaries, as applicable, with all the provisions hereof and
thereof and the consummation of the transactions contemplated hereby
and thereby will not (i) require any consent, approval, authorization
or other order of, or qualification with, any court or
- 12 -
governmental body or agency (except such as may be required under U.S.
federal securities laws or Alberta Securities Laws or Blue Sky laws of
the various states), (ii) conflict with or constitute a breach of any
of the terms or provisions of, or a default under, the articles,
charter or by-laws of the Company or any of the Subsidiaries or any
indenture, loan agreement, mortgage, lease or other agreement or
instrument to which the Company or any of the Subsidiaries is a party
or by which the Company or any of the Subsidiaries or their respective
property is bound, except such conflict, breach or default as would
not have, singly or in the aggregate, a Material Adverse Effect, (iii)
violate or conflict with any applicable law or any rule, regulation,
judgment, order or decree of any court or any governmental body or
agency having jurisdiction over the Company, any of the Subsidiaries
or their respective property, except such violations or conflicts as
would not have, singly or in the aggregate, a Material Adverse Effect,
(iv) except as created by the Pledge Agreements, result in the
imposition or creation of (or the obligation to create or impose) a
Lien under any agreement or instrument to which the Company or any of
the Subsidiaries is a party or by which the Company or any of the
Subsidiaries or their respective property is bound, except as would
not have, singly or in the aggregate, a Material Adverse Effect, or
(v) result in the suspension, termination or revocation of any
Authorization (as defined below) of the Company or any of the
Subsidiaries or any other impairment of the rights of the holder of
any such Authorization, except such terminations, suspensions,
revocations or impairments as would not have, singly or in the
aggregate, a Material Adverse Effect.
(j) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened or any related party transactions
to which the Company or any of its Subsidiaries is or could be a party
or to which any of their respective property is or could be subject,
that are required to be described in the Prospectuses and are not so
described.
(k) Except as set forth in the Prospectuses and except as would not have a
Material Adverse Effect, the Company and the Subsidiaries are (i) in
compliance with any and all applicable laws, statutes, ordinances,
regulations, rules, decrees, orders, judgments, consent orders,
consent decrees or other binding requirements and the common law
relating to the protection of public health or the environment or the
release or threatened release of hazardous material (including,
without limitation, any material, substance, waste, constituent,
compound, pollutant or contaminant, including, without limitation,
petroleum (including, without limitation, crude oil or any fraction
thereof or any petroleum product)) (collectively, "ENVIRONMENTAL
LAWS") and (ii) each of the Company and its Subsidiaries is in
compliance with all terms and conditions of any required permits,
licenses and authorizations, and is also in compliance with all other
applicable limitations, restrictions, conditions, standards,
prohibitions, requirements and obligations contained in the
Environmental Laws.
(l) Except as set forth in the Prospectuses and except as would not have a
Material Adverse Effect, the Company and its Subsidiaries have such
permits, licenses,
- 13 -
consents, exemptions, franchises, authorizations and other approvals
(each, an "AUTHORIZATION") of, and have made all filings with and
notices to, all governmental or regulatory authorities and
self-regulatory organizations and all courts and other tribunals,
including, without limitation, under any applicable laws regulating
Environmental Laws, as are necessary to own, lease, license and
operate their respective properties and to conduct their business,
except where the failure to have any such Authorization or to make any
such filing or notice would not, singly or in the aggregate, have a
Material Adverse Effect. Except as disclosed in the Prospectuses, each
such Authorization is valid and in full force and effect and the
Company and the Subsidiaries are in compliance with all the terms and
conditions thereof and with the rules and regulations of the
authorities and governing bodies having jurisdiction with respect
thereto; and no event has occurred (including, without limitation, the
receipt of any notice from any authority or governing body) which
allows or, after notice or lapse of time or both, would allow,
revocation, suspension or termination of any such Authorization or
results or, after notice or lapse of time or both, would result in any
other impairment of the rights of the holder of any such
Authorization; except where such failure to be valid and in full force
and effect or to be in compliance, the occurrence of any such event or
the presence of any such restriction would not, singly or in the
aggregate, have a Material Adverse Effect.
(m) This Agreement has been duly authorized, executed and delivered by the
Company.
(n) The Indenture has been duly authorized by the Company and, on the
Closing Date, will have been validly executed and delivered by the
Company. When the Indenture has been validly executed and delivered by
the Company (assuming the due authorization, execution and delivery by
the Trustee), the Indenture will be a valid and binding agreement of
the Company, enforceable against the Company in accordance with its
terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent conveyance) or similar laws affecting
creditors' rights generally and (ii) the availability of equitable
remedies may be limited by equitable principles of general
applicability (regardless of whether enforcement is considered in a
proceeding in equity or at law). On the Closing Date, the Indenture
will conform in all material respects to the requirements of the Trust
Indenture Act, the rules and regulations of the Commission applicable
to an indenture which is qualified thereunder and to the requirements
of the Business Corporations Act (Alberta) (the "ABCA") (except to the
extent that exemptive relief has been obtained).
(o) The Newco Mirror Note has been duly authorized and, when executed and
delivered by Newco, will constitute the legal, valid and binding
obligation of Newco enforceable against Newco in accordance with its
terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent conveyance) or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of
- 14 -
general applicability (regardless of whether enforcement is considered
in a proceeding in equity or at law); the Partnership Mirror Note has
been duly authorized and, when executed and delivered by the
Partnership, will constitute the legal, valid and binding obligation
of the Partnership enforceable against the Partnership in accordance
with its terms except as (i) the enforceability thereof may be limited
by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent conveyance) or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability (regardless of whether enforcement
is considered in a proceeding in equity or at law).
(p) The Paramount Pledge Agreement has been duly authorized by the Company
and, when executed by the Company and the Trustee, will constitute the
legal, valid and binding obligation of the Company enforceable against
the Company in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
conveyance) or similar laws affecting creditors' rights generally and
(ii) rights of acceleration and the availability of equitable remedies
may be limited by equitable principles of general applicability
(regardless of whether enforcement is considered in a proceeding in
equity or at law). Upon execution by the Company and the Trustee of
the Paramount Pledge Agreement and delivery of the Mirror Notes to the
Trustee, no further action will be required in order for the Trustee
to have a first priority perfected security interest in the Newco
Mirror Note and the Company's interest in the Partnership Mirror Note
other than the registration of notice of such security interest under
the Alberta Personal Property Security Act.
(q) The Newco Pledge Agreement has been duly authorized by Newco, and when
executed by the Company and Newco, will constitute the legal, valid
and binding obligation of Newco enforceable against the Company and
Newco in accordance with its terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent conveyance) or similar
laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability (regardless of
whether enforcement is considered in a proceeding in equity or at
law). Upon execution by the Company and Newco of the Newco Pledge
Agreement and delivery of the Partnership Mirror Note to the Company,
no further action will be required in order for the Company to have a
first priority perfected security interest in the Partnership Mirror
Note other than the registration of notice of such security interest
under the Alberta Personal Property Security Act.
(r) The Mirror Note Guarantees have been duly authorized by each Mirror
Note Guarantor and, when executed by each Mirror Note Guarantor, will
constitute the legal, valid and binding obligation of each Mirror Note
Guarantor enforceable against such Mirror Note Guarantor in accordance
with its terms except as (i) the enforceability thereof may be limited
by bankruptcy, insolvency (including,
- 15 -
without limitation, all laws relating to fraudulent conveyance) or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability (regardless of
whether enforcement is considered in a proceeding in equity or at
law).
(s) Ernst & Young LLP, the Company's auditors, are independent chartered
accountants and independent public accountants with respect to the
Company, as required by the Securities Act, the Exchange Act, the ABCA
and Alberta Securities Laws. The historical financial statements of
the Company and Summit Resources Limited, together with the related
schedules and notes, set forth or incorporated by reference in the
U.S. Prospectus comply as to form in all material respects with the
requirements applicable under the Alberta Securities Laws and to
registration statements on Form F-10 under the Securities Act.
(t) (i) The Company's consolidated financial statements included or
incorporated by reference in the Registration Statement and the
Prospectuses, together with related schedules and notes, present
fairly, in all material respects, the consolidated financial position,
results of operations and cash flows of the Company and its
Subsidiaries on the basis stated therein at the respective dates or
for the respective periods to which they apply; such statements and
related schedules and notes have been prepared in accordance with
Canadian generally accepted accounting principles ("CANADIAN GAAP")
consistently applied throughout the periods involved, except as
disclosed therein, and have been reconciled to United States generally
accepted accounting principles ("U.S. GAAP") in accordance with the
requirements of Item 18 of Form 20-F; (ii) the consolidated audited
financial statements of Summit Resources Limited included or
incorporated by reference in the Registration Statement and the
Prospectuses, together with the related schedules and notes, present
fairly, in all material respects, the consolidated financial position,
results of operations and cash flows of the acquired business on the
basis stated therein at the respective dates or for the respective
periods to which they apply; such statements and related schedules and
notes have been prepared in accordance with Canadian GAAP,
consistently applied throughout the periods involved, except as
disclosed therein, and have been reconciled to U.S. GAAP in accordance
with the requirements of Item 17 of Form 20-F; (iii) the Company's (a)
unaudited consolidated balance sheet as of June 30, 2003 and December
31, 2002 and (b) the unaudited condensed consolidated statements of
income (loss) and cash flows for the three month periods ended June
30, 2003 and 2002 included or incorporated by reference into the
Registration Statement and the Prospectuses present fairly, in all
material respects, the consolidated financial position, results of
operations and cash flows of the Company and its Subsidiaries on the
basis stated therein at the respective dates or for the respective
periods to which they apply and have been prepared in accordance with
Canadian GAAP applied on a basis substantially consistent with that of
the Company's audited consolidated financial statements included or
incorporated by reference into the Registration Statement and the
Prospectuses and have been reconciled to U.S. GAAP in accordance with
the requirements of Item 18 of Form 20-F; (iv) Summit
- 16 -
Resources Limited's (a) unaudited consolidated balance sheet as of
March 31, 2002 and December 31, 2001 and (b) the unaudited condensed
consolidated statements of income (loss) and cash flows for the three
month periods ended March 31, 2002 and 2001, included or incorporated
by reference into the Registration Statement and the Prospectuses
present fairly, in all material respects, the consolidated financial
position, results of operations and cash flows of Summit Resources
Limited on the basis stated therein at the respective dates or for the
respective periods to which they apply and have been prepared in
accordance with Canadian GAAP applied on a basis substantially
consistent with that of Summit Resources Limited's audited
consolidated financial statements included or incorporated by
reference into the Registration Statement and the Prospectuses and
have been reconciled to U.S. GAAP in accordance with the requirements
of Item 17 of Form 20-F.
(u) The PRO FORMA financial statements of the Company and its Subsidiaries
and the related notes thereto set forth or incorporated by reference
in the Registration Statement and the Prospectuses have been prepared
on a basis consistent with the historical financial statements of the
Company and its Subsidiaries, give effect to the assumptions used in
the preparation thereof on a reasonable basis and in good faith and
present fairly the historical transactions contemplated by the
Registration Statement and the Prospectuses. Such PRO FORMA financial
statements have been prepared in accordance with the applicable
requirements of the Alberta Securities Laws and Canadian GAAP and have
been reconciled to U.S. GAAP in accordance with the requirements of
Item 18 of Form 20-F. The other PRO FORMA financial and statistical
information and data set forth in the Registration Statement and the
Prospectuses are, in all material respects, accurately presented and
prepared on a basis consistent with the PRO FORMA financial
statements.
(v) The Company is not and, after giving effect to the offering and sale
of the Securities and the application of the net proceeds therefrom as
described in the Prospectuses, will not be required to register as, an
"investment company" as such term is defined in the Investment Company
Act of 1940, as amended.
(w) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the
Company to file a registration statement under the Securities Act or a
prospectus under Alberta Securities Laws with respect to any
securities of the Company or to require the Company to include such
securities with the Securities registered pursuant to the Registration
Statement.
(x) No "nationally recognized statistical rating organization" as such
term is defined for purposes of Rule 436(g)(2) under the Securities
Act (i) has imposed (or has informed the Company that it is
considering imposing) any condition (financial or otherwise) on the
Company's retaining any rating assigned to the Company or any
securities of the Company or (ii) has indicated to the Company that it
is considering (a) the downgrading, suspension, or withdrawal of, or
any review for a possible change that does not indicate the direction
of the possible change in,
- 17 -
any rating so assigned or (b) any change in the outlook for any rating
of the Company or any securities of the Company other than an upgrade
of any rating of the Company or any securities of the Company.
(y) Since the respective dates as of which information is given in the
Prospectuses and other than as set forth in the Prospectuses
(exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), (i) there has not occurred any material
adverse change or any development involving a prospective material
adverse change in the condition, financial or otherwise, or the
earnings, business, management or operations of the Company and its
Subsidiaries, taken as a whole, (ii) there has not been any material
adverse change or any development involving a prospective material
adverse change in the share capital or in the long-term debt of the
Company and its Subsidiaries, taken as a whole, and (iii) neither the
Company nor any of its Subsidiaries has incurred any liability or
obligation, direct or contingent, which liability or obligation could
have a Material Adverse Effect.
(z) No labor dispute exists with its employees or with employees of any of
the Subsidiaries or is imminent that is reasonably likely to have a
Material Adverse Effect.
(aa) The Company and its Subsidiaries own or have the right to use all real
property and personal property described in the Prospectuses as being
owned or used by them except where the lack of such ownership or
rights would not, individually or in the aggregate, have a Material
Adverse Effect, and there are no liens, encumbrances or defects with
respect to such real property and personal property, except (i) such
as are described in the Prospectuses, or (ii) for Permitted Liens
other than any Permitted Liens securing Indebtedness.
(bb) The Company and each of its Subsidiaries have filed all tax returns,
if any, which are required to be filed by them pursuant to domestic or
foreign laws and have paid all taxes due pursuant to such returns or
pursuant to any assessment received by them (except where the
requirement for payment of such taxes is being contested in good faith
in appropriate proceedings) except such failure to file or pay as
would not have a Material Adverse Effect. Except as would not have a
Material Adverse Effect, the charges, accruals and reserves on the
books of the Company and its Subsidiaries in respect of taxes or other
governmental charges are adequate.
(cc) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is
- 18 -
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(dd) Any statistical and market-related data included in the Prospectuses
are based on or derived from sources that the Company believes to be
reliable and accurate, and the Company has obtained the written
consent to the use of such data from such sources to the extent
required.
(ee) Neither the Company nor any of its Subsidiaries nor any of their
respective directors, officers, partners, affiliates or controlling
persons has taken, directly or indirectly, any action designed, or
which has constituted or might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(ff) The Company has no reason to believe that the historical information
or the estimates, on the basis of which the reserve and related
information included in the Prospectus was prepared, was not, in the
case of the historical information, true and correct in all material
respects, or in the case of the estimates, prepared on the basis of
reasonable assumptions.
(gg) The Company has filed with the ASC all of the technical reports
required to be filed under Alberta Securities Laws in respect of each
property material to the Company.
(hh) No withholding tax imposed under the federal laws of Canada or the
laws of the Province of Alberta will be payable in respect of the
payment or crediting of the fees contemplated by this Agreement by the
Company to an Underwriter that is not a resident of Canada for the
purposes of the INCOME TAX ACT (Canada), or on any interest or deemed
interest on the resale of Securities by an Underwriter to U.S.
residents provided that the Underwriter deals at arm's length with the
Company (as such term is understood for purposes of the INCOME TAX ACT
(Canada)), and that such fees are payable in respect of services
rendered by the Underwriter wholly outside of Canada that are
performed in the ordinary course of business carried on by the
Underwriter that includes the performance of such services for a fee.
(ii) No goods and services tax or sales tax imposed under the federal laws
of Canada or under the laws of the Province of Alberta will be payable
by the Company or collectable by an Underwriter in respect of the
payment of fees as contemplated by this Agreement to an Underwriter or
the QIU that is not a resident of Canada, provided that such fees are
in respect of services performed by an Underwriter wholly outside of
Canada.
(jj) No stamp duty, documentary taxes or similar taxes are payable by the
Company under the federal laws of Canada or the laws of the Province
of Alberta in connection with the sale and delivery of the Securities
pursuant to this Agreement
- 19 -
by the Underwriters or the resale of Securities by an Underwriter to
U.S. residents.
(kk) The Company believes that the historical production information and
the estimates of production and related information included in the
Prospectuses are, in the case of the historical information, true and
correct in all material respects, or in the case of the estimates,
prepared on the basis of reasonable assumptions.
SECTION 7. INDEMNITY AND CONTRIBUTION.
(a) (i) The Company agrees to indemnify, defend and hold harmless each
Underwriter, its partners, directors and officers, and any person who
controls any Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, and the successors
and assigns of all of the foregoing persons from and against any loss,
damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, any such Underwriter or
any such person may incur under the Securities Act, the Exchange Act,
Alberta Securities Laws, the common law or otherwise, insofar as such
loss, damage, expense, liability or claim arises out of or is based
upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or any amendment thereof
or the Prospectuses (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or arises out
of or is based upon any omission or alleged omission to state therein
a material fact required to be stated in either such Registration
Statement or such Prospectus or necessary to make the statements made
therein not misleading (in the case of the Registration Statement, or
not misleading in light of the circumstances under which they were
made, in the case of such Prospectus), except insofar as any such
loss, damage, expense, liability or claim arises out of or is based
upon any untrue statement or alleged untrue statement of a material
fact contained in and in conformity with information concerning an
Underwriter furnished in writing by or on behalf of such Underwriter
through the Representative to the Company expressly for use therein or
arises out of or is based upon any omission or alleged omission to
state a material fact in connection with such information required to
be stated in such Registration Statement or such U.S. Prospectus or
Canadian Prospectus or necessary to make such information not
misleading (in the case of the Registration Statement, or not
misleading in light of the circumstances under which they were made,
in the case of such Prospectus).
(ii) If any action, suit or proceeding (together, a "PROCEEDING") is
brought against an Underwriter or any such person in respect of which
indemnity may be sought against the Company pursuant to the foregoing
paragraphs, such Underwriter or such person shall promptly notify the
Company in writing of the institution of such Proceeding and the
Company shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified
party and payment of all fees and expenses; PROVIDED, HOWEVER, that
the omission to so notify the Company shall not relieve the Company
from any liability which
- 20 -
the Company may have to any Underwriter or any such person or
otherwise except to the extent that such failure materially prejudices
the Company's ability to defend such Proceeding. Such Underwriter or
such person shall have the right to employ its or their own counsel in
any such case, but the fees and expenses of such counsel shall be at
the expense of such Underwriter or of such person unless the
employment of such counsel shall have been authorized in writing by
the Company in connection with the defense of such Proceeding or the
Company shall not have, within a reasonable period of time in light of
the circumstances, employed counsel to have charge of the defense of
such Proceeding or such indemnified party or parties shall have
reasonably concluded, after consulting with counsel, that there may be
defenses available to it or them which are different from, additional
to or in conflict with those available to the Company (in which case
the Company shall not have the right to direct the defense of such
Proceeding on behalf of the indemnified party or parties), in any of
which events such reasonable fees and expenses shall be borne by the
Company and paid as incurred (it being understood, however, that the
Company shall not be liable for the expenses of more than one separate
counsel (in addition to any local counsel) in any one Proceeding or
series of related Proceedings in the same jurisdiction representing
the indemnified parties who are parties to such Proceeding). The
Company shall not be liable for any settlement of any Proceeding
effected without its written consent but if settled with the written
consent of the Company, the Company agrees to indemnify and hold
harmless any Underwriter and any such person from and against any loss
or liability by reason of such settlement. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for
fees and expenses of counsel as contemplated by the second sentence of
this paragraph, then the indemnifying party agrees that it shall be
liable for any settlement of any Proceeding effected without its
written consent if (i) such settlement is entered into more than 90
days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of
such settlement and (iii) such indemnified party shall have given the
indemnifying party at least 45 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder
by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such Proceeding and does not
include an admission of fault, culpability or a failure to act, by or
on behalf of such indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company, its directors and officers, and any person who
controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, and the successors
and assigns of all of the foregoing persons from and against any loss,
damage, expense, liability or claim (including the reasonable
- 21 -
cost of investigation) which, jointly or severally, the Company or any
such person may incur under the Securities Act, the Exchange Act, the
Alberta Securities Laws, the common law or otherwise, insofar as, and
only to the extent that, such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact contained in and in conformity
with information concerning such Underwriter furnished in writing by
or on behalf of such Underwriter through the Representative to the
Company expressly for use in the Registration Statement, the
Prospectuses or any amendments or supplements thereto, or arises out
of or is based upon any omission or alleged omission to state a
material fact in connection with such information required to be
stated in such Registration Statement or such U.S. Prospectus or
Canadian Prospectus or necessary to make such information not
misleading.
It is agreed that the information furnished in writing by or on behalf
of an Underwriter through the Representative to the Company expressly
for use with reference to such Underwriter in the Registration
Statement, the Prospectuses, or any amendments or supplements thereto
is limited to the following: the marketing names of the Underwriters
set forth on the front and back covers of the U.S. Prospectus and the
legal names of the Underwriters and the statements in the fourth
paragraph and the third and fourth sentences of the sixth paragraph,
in each case, set forth under the heading "Underwriting" in the
Prospectuses.
If any Proceeding is brought against the Company or any such person in
respect of which indemnity may be sought against any Underwriter
pursuant to the foregoing paragraph, the Company or such person shall
promptly notify such Underwriter in writing of the institution of such
Proceeding and such Underwriter shall assume the defense of such
Proceeding, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and
expenses; PROVIDED, HOWEVER, that the omission to so notify such
Underwriter shall not relieve such Underwriter from any liability
which such Underwriter may have to the Company or any such person or
otherwise. The Company or such person shall have the right to employ
its own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of the Company or such person unless
the employment of such counsel shall have been authorized in writing
by such Underwriter in connection with the defense of such Proceeding
or such Underwriter shall not have, within a reasonable period of time
in light of the circumstances, employed counsel to defend such
Proceeding or such indemnified party or parties shall have reasonably
concluded, after consulting with counsel, that there may be defenses
available to it or them which are different from or additional to or
in conflict with those available to such Underwriter (in which case
such Underwriter shall not have the right to direct the defense of
such Proceeding on behalf of the indemnified party or parties, but
such Underwriter may employ counsel and participate in the defense
thereof but the reasonable fees and expenses of such counsel shall be
at the expense of such Underwriter), in any of which events such
reasonable fees and expenses shall be borne by such Underwriter and
paid as incurred (it being understood, however, that such
- 22 -
Underwriter shall not be liable for the expenses of more than one
separate counsel (in addition to any local counsel) in any one
Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such
Proceeding). No Underwriter shall be liable for any settlement of any
such Proceeding effected without the written consent of such
Underwriter but if settled with the written consent of such
Underwriter, such Underwriter agrees to indemnify and hold harmless
the Company and any such person from and against any loss or liability
by reason of such settlement. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable
for any settlement of any Proceeding effected without its written
consent if (i) such settlement is entered into more than 90 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement and
(iii) such indemnified party shall have given the indemnifying party
at least 45 days' prior notice of its intention to settle. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
Proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that
are the subject matter of such Proceeding and does not include an
admission of fault, culpability or a failure to act, by or on behalf
of such indemnified party.
(c) If the indemnification provided for in this Section 7 is unavailable
to an indemnified party under subsections (a) and (b) of this Section
7 in respect of any losses, damages, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
damages, expenses, liabilities or claims (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company
on the one hand and the Underwriters on the other hand from the
offering of the Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
Company on the one hand and of the Underwriters on the other in
connection with the statements or omissions which resulted in such
losses, damages, expenses, liabilities or claims, as well as any other
relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriters on the other shall be
deemed to be in the same respective proportions as the total proceeds
from the offering (net of underwriting discounts and commissions but
before deducting expenses) received by the Company and the total
underwriting fees received by the Underwriters, bear to the aggregate
public offering price of the Securities. The relative fault of the
Company on the one hand and of the Underwriters on the other shall be
determined by reference
- 23 -
to, among other things, whether the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission relates
to information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
amount paid or payable by a party as a result of the losses, damages,
expenses, liabilities and claims referred to in this subsection shall
be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating, preparing to
defend or defending any Proceeding.
(d) The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that
does not take account of the equitable considerations referred to in
subsection (c) above. Notwithstanding the provisions of this Section
7, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Securities
underwritten by such Underwriter and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such
untrue statement or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 7 are several in proportion to their
respective underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in this Section 7
and the covenants, warranties and representations of the Company
contained in this Agreement shall remain in full force and effect
regardless of any investigation made by or on behalf of any
Underwriter, its partners, directors or officers or any person
(including each partner, officer or director of such person) who
controls any Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, or by or on behalf
of the Company, its directors or officers or any person who controls
the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, and shall survive any termination of
this Agreement or the issuance and delivery of the Securities. The
Company and each Underwriter agree promptly to notify each other of
the commencement of any Proceeding against it and, in the case of the
Company, against any of the Company's officers or directors in
connection with the issuance and sale of the Securities, or in
connection with the Registration Statement, U.S. Prospectus or
Canadian Prospectus.
SECTION 8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters to purchase the Securities under this Agreement are subject to
the satisfaction of each of the following conditions:
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(a) All the representations and warranties of the Company contained in
this Agreement shall be true and correct on the Closing Date with the
same force and effect as if made on and as of the Closing Date.
(b) The Supplemented PREP Prospectus shall have been filed with the ASC
under the PREP Procedures within the applicable time period prescribed
for such filing thereunder and the U.S. Supplemented Prospectus shall
have been filed with the Commission pursuant to General Instruction
II.L of Form F-10 within the applicable time period prescribed for
such filing by the rules and regulations under the Securities Act and,
in each case, in accordance with Section 5(a) hereof; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; no order
having the effect of ceasing or suspending the distribution of the
Securities or the trading in the Securities or any other securities of
the Company shall have been issued or proceedings therefore initiated
or threatened by any securities commission, securities regulatory
authority or stock exchange in Canada or the United States; no
amendment or supplement to the Registration Statement or Prospectuses,
including documents deemed to be incorporated by reference therein,
shall have been filed to which the Underwriters reasonably objected in
writing; the Registration Statement and all amendments thereto, or
modifications thereof, if any, shall constitute full, true and plain
disclosure of all material facts regarding the Company and the
Securities and shall not 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 not misleading; the
Prospectuses and all amendments or supplements thereto, or
modifications thereof, if any, shall not contain an untrue statement
of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they are made, not misleading; and all requests for
additional information on the part of the ASC or the Commission shall
have been complied with to your reasonable satisfaction;
(c) You shall have received on the Closing Date a certificate dated the
Closing Date, signed by any two of the Chief Executive Officer, the
President and the Chief Financial Officer of the Company, confirming
the matters set forth in Sections 8(a), 8(b) and 8(e) and stating that
the Company has complied with all of the agreements and satisfied all
of the conditions herein contained and required to be complied with or
satisfied by the Company on or prior to the Closing Date.
(d) Since the respective dates as of which information is given in the
U.S. Prospectus and the Canadian Prospectus, other than as set forth
in the U.S. Prospectus and the Canadian Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement), (i) there shall not have occurred any change or any
development involving a prospective change in the condition, financial
or otherwise, or the business, properties, prospects, financial
condition or results of operations of the Company and its
Subsidiaries, taken as a whole, (ii) there shall not have been any
change or any development involving a prospective
- 25 -
change in the share capital or in the long-term debt of the Company or
any of its Subsidiaries and (iii) neither the Company nor any of its
Subsidiaries shall have incurred any liability or obligation, direct
or contingent, the effect of which, in any such case described in
clause 8(d)(i), 8(d)(ii) or 8(d)(iii), in your judgment, is material
and adverse and, in your judgment, acting reasonably, makes it
impracticable to market the Securities on the terms and in the manner
contemplated in the U.S. Prospectus and the Canadian Prospectus.
(e) (i) There shall not have occurred any downgrading, suspension or
withdrawal of, nor shall any notice be given of any potential or
intended downgrading, suspension or withdrawal of, or of any review
(or of any potential or intended review) for a possible change that
does not indicate the direction of the possible change in, any rating
of the Company, the Securities or any other securities of the Company
(including, without limitation, the placing of any of the foregoing
ratings on credit watch with negative or developing implications or
under review with an uncertain direction) by any "nationally
recognized statistical rating organization" as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act, (ii) there
shall not have occurred any negative change, nor shall any notice have
been given of any potential or intended negative change, in the
outlook for any rating of the Company or any securities of the Company
by any such rating organization, and (iii) no such rating organization
shall have given notice that it has assigned (or is considering
assigning) a lower rating to the Securities than that on which the
Securities were marketed.
(f) You shall have received on the Closing Date the following opinions:
(i) OPINION OF CANADIAN COUNSEL FOR THE COMPANY. The Underwriters
shall have received the favorable opinion dated as of the Closing
Date, of Xxxxxxx Xxxxx LLP, Canadian counsel for the Company, in
form and substance satisfactory to counsel for the Underwriters,
to the effect set forth in Exhibit A hereto.
(ii) OPINION OF SPECIAL UNITED STATES COUNSEL FOR THE COMPANY. The
Underwriters shall have received the favorable opinion, dated as
of the Closing Date, of Torys LLP, special United States counsel
for the Company, in form and substance satisfactory to counsel
for the Underwriters, to the effect set forth in Exhibit B
hereto.
(iii) OPINION OF U.S. COUNSEL FOR THE UNDERWRITERS. The Underwriters
shall have received an opinion, dated as of the Closing Date, of
Xxxxxx Xxxxxx & Xxxxxxx LLP, U.S. counsel for the Underwriters,
in form and substance satisfactory to the Representative.
(iv) OPINION OF CANADIAN COUNSEL FOR THE UNDERWRITERS. The
Underwriters shall have received an opinion, dated as of the
Closing Date, of Osler, Xxxxxx & Harcourt LLP, Canadian counsel
for the Underwriters, in form and substance satisfactory to the
Representative.
- 26 -
(g) You shall have received, from each of Ernst & Young LLP and KPMG LLP
on the date hereof, letters dated the date hereof and from Ernst &
Young LLP a letter dated the Closing Date, in each case, in form and
substance satisfactory to you containing the information and
statements of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in or incorporated by
reference in the Registration Statement and the Prospectuses, as of a
date not more than two business days prior to the date of the letter.
(h) The Underwriters shall have received a counterpart, conformed as
executed, of the Indenture which shall have been entered into by the
Company and the Trustee.
(i) The Company shall have performed and complied with on or prior to the
Closing Date all of the agreements herein contained and required to be
performed or complied with by the Company, on or prior to the Closing
Date.
(j) On the Closing Date, Newco shall have executed and delivered the Newco
Mirror Note.
(k) On the Closing Date, the Partnership shall have executed and delivered
the Partnership Mirror Note.
(l) On the Closing Date, each Mirror Note Guarantor shall have executed
its Mirror Note Guarantee.
(m) The Representative shall be satisfied that substantially concurrently
with the Closing (after giving effect to the transactions contemplated
hereby), the Company shall execute and deliver the Paramount Pledge
Agreement to the Trustee and the Company will take all other actions
required to ensure that the Trustee has a first priority perfected
security interest in the Newco Mirror Note and the Company's interest
in the Partnership Mirror Note.
(n) The Representative shall be satisfied that substantially concurrently
with the Closing (after giving effect to the transactions contemplated
hereby), the Company and Newco shall execute and deliver the Newco
Pledge Agreement and the Company and Newco shall take all other
actions required to ensure that the Company has a first priority
perfected security interest in the Partnership Mirror Note.
(o) The Company shall have either (i) executed an amendment related to its
senior credit facility (the "EXISTING FACILITY") dated June 28, 2002,
as amended, to permit the issuance of the Notes or (ii) consummated
the refinancing of the Existing Facility pursuant to documentation
reasonably satisfactory to the Representative consistent with the term
sheet dated September 30, 2003.
SECTION 9. EFFECTIVENESS OF THIS AGREEMENT AND TERMINATION. This Agreement
shall become effective upon the execution and delivery of this Agreement by
the parties hereto.
- 27 -
The Underwriters shall have the right to terminate this Agreement at any
time prior to the Closing Date by notice to the Company from the Representative,
without liability on the Underwriters' part to the Company if, on or prior to
such date, (i) the Company or any Subsidiary shall have failed, refused or been
unable to perform in any material respect any agreement on its part to be
performed under this Agreement when and as required, (ii) any condition to the
obligations of the Underwriters under this Agreement to be fulfilled by the
Company or any of its Subsidiaries pursuant to Section 8 is not fulfilled when
and as required, (iii) trading in securities generally on the New York Stock
Exchange, the Nasdaq National Market or the Toronto Stock Exchange shall have
been suspended or materially limited, or minimum prices shall have been
established thereon by the Commission, or by such exchange or other regulatory
body or governmental authority having jurisdiction, (iv) a general banking
moratorium shall have been declared by U.S. federal or New York State, Canadian
federal or Province of Alberta authorities, (v) there is an outbreak or
escalation of hostilities or other national or international calamity, in any
case involving the United States, on or after the date of this Agreement, or if
there has been a declaration by the United States of a national emergency or war
or other national or international calamity or crisis (economic, political,
financial or otherwise) which affects the U.S. and international markets, making
it, in the Representative's judgment, impracticable to proceed with the offering
or delivery of the Securities on the terms and in the manner contemplated in the
Prospectuses or (vi) there shall have been such a material adverse change in
general economic, political or financial conditions or the effect (or potential
effect if the financial markets in the United States have not yet opened) of
international conditions on the financial markets in the United States shall be
such as, in the Representative's judgment, to make it inadvisable or
impracticable to proceed with the offering or delivery of the Securities on the
terms and in the manner contemplated in the Prospectuses.
If, on the Closing Date, any one or more of the Underwriters shall fail or
refuse to purchase Securities that it has or they have agreed to purchase
hereunder on such date, and the aggregate principal amount of Securities which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate principal amount of the
Securities to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the principal amount of Securities
set forth opposite their respective names in Schedule I bears to the aggregate
principal amount of Securities set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may specify, to
purchase the Securities which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase on such date; PROVIDED that in no event shall
the principal amount of Securities that any Underwriter has agreed to purchase
pursuant to this Agreement be increased pursuant to this Section 9 by an amount
in excess of one-ninth of such principal amount of Securities without the
written consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Securities and the aggregate
principal amount of Securities with respect to which such default occurs is more
than one-tenth of the aggregate principal amount of Securities to be purchased,
and arrangements satisfactory to you and the Company for the purchase of such
Securities are not made within 36 hours after such default, this Agreement shall
terminate automatically without liability on the part of any non-defaulting
Underwriter or the Company. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
- 28 -
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
SECTION 10. CONSENT TO JURISDICTION; APPOINTMENT OF AGENT FOR SERVICE OF
PROCESS. The Company, by its execution and delivery of this Agreement, agrees
that service of process may be made upon Torys LLP in the United States of
America in any suit or proceeding against the Company instituted by the
Underwriters, any indemnified party or by any person, if any, controlling the
Underwriters within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act based on or arising under this Agreement in any federal
or state court in the State of New York, County of New York, and hereby
irrevocably consents and submits to the nonexclusive jurisdiction of any such
court in personam generally and unconditionally in respect of any such suit or
proceeding.
The Company further, by its execution and delivery of this Agreement,
irrevocably designates, appoints and empowers Torys LLP as its designee,
appointee and authorized agent to receive for and on its behalf service of any
and all legal process, summons, notices and documents that may be served in any
action, suit or proceeding brought against the Company with respect to its
obligations, liabilities or any other matter arising out of or in connection
with this Agreement and that may be made on such designee, appointee and
authorized agent in accordance with legal procedures prescribed for such courts,
and it being understood that the designation and appointment of Torys LLP as
such authorized agent shall become effective immediately without any further
action on the part of the Company. The Company further agrees that, to the
extent permitted by law, proper service of process upon Torys LLP at its office
set forth in Section 12 and written notice of said service to the Company
pursuant to this Section 10, shall be deemed in every respect effective service
of process upon the Company in any such suit or proceeding. If for any reason
such designee, appointee and agent hereunder shall cease to be available to act
as such, the Company agrees to designate a new designee, appointee and agent in
The City of New York, New York on the terms and for the purposes of this Section
10 reasonably satisfactory to the Underwriters. The Company further hereby
irrevocably consents and agrees to the service of any and all legal process,
summons, notices and documents in any such action, suit or proceeding against
the Company by serving a copy thereof upon the relevant agent for service of
process referred to in this Section 10 (whether or not the appointment of such
agent shall for any reason prove to be ineffective or such agent shall accept or
acknowledge such service) and by mailing copies thereof by registered or
certified air mail, postage prepaid, to the Company at its address specified in
or designated pursuant to this Agreement. The Company agrees that the failure of
any such designee, appointee and agent to give any notice of such service to it
shall not impair or affect in any way the validity of such service or any
judgment rendered in any action or proceeding based thereon. Nothing herein
shall in any way be deemed to limit the ability of the Underwriters to serve any
such legal process, summons, notices and documents in any other manner permitted
by applicable law or to obtain jurisdiction over the Company or bring actions,
suits or proceedings
- 29 -
against the Company in such other jurisdictions, and in such manner, as may be
permitted by applicable law. The Company hereby irrevocably and unconditionally
waives, to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of venue of any of the aforesaid actions, suits or
proceedings arising out of or in connection with this Agreement brought in the
federal courts located in The City of New York, New York or the courts of the
State of New York located in The City of New York, New York and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.
The obligation of the Company in respect of any sum due to the Underwriters
shall, not withstanding any judgment in a currency other than U.S. dollars, not
be discharged until the first business day, following receipt by the
Underwriters of any sum adjudged to be so due in such other currency, on which
(and only to the extent that) the Underwriters may in accordance with normal
banking procedures purchase U.S. dollars with such other currency; if the U.S.
dollars so purchased are less than the sum originally due to the Underwriters
hereunder, the Company agrees, as a separate obligation and notwithstanding any
such judgment, to indemnify such Underwriters against such loss. If the U.S.
dollars so purchased are greater than the sum originally due to such
Underwriters hereunder, such Underwriters agree to pay to the Company an amount
equal to the excess of the U.S. dollars so purchased over the sum originally due
to the Underwriters hereunder.
The provisions of this Section 10 shall survive any termination of this
Agreement, in whole or in part.
SECTION 11. QUALIFIED INDEPENDENT UNDERWRITER.
(a) INDEMNIFICATION OF QIU. The Company agrees to indemnify, defend and
hold harmless UBS Securities LLC, in its capacity as a "qualified
independent underwriter" within the meaning of Rule 2720 ("RULE 2720")
of the Rules of Conduct of the NASD (the "QIU"), and its affiliates,
and each person, if any, who controls the QIU within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act to
the extent and in the manner set forth in clauses (i), (ii) and (iii)
below:
(i) against any and all loss, liability, claim (including the
reasonable cost of investigation), damage and expense whatsoever,
as incurred, resulting from any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, the U.S. Prospectus or the
Canadian Prospectus (as amended or supplemented if the Company
shall have furnished any amendments or supplements thereto), or
arising out of or based upon any omission or alleged omission
therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they are made, not misleading (in the case of the Registration
Statement), or not misleading in light of the circumstances under
which they were made (in the case of such Prospectus);
- 30 -
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; PROVIDED that (subject to Section 11(c) hereof) any
such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred (including
the reasonable fees and disbursements of counsel chosen by the
QIU), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under
clause (i) or (ii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to
any loss, liability, claim, damage or expense of the QIU to the extent
arising out of any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with
written information furnished to the Company by the QIU expressly for
use in the Registration Statement or any amendment thereof, the U.S.
Prospectus or the Canadian Prospectus (as amended or supplemented if
the Company shall have furnished any amendments or supplements
thereto).
(b) ACTIONS AGAINST PARTIES; NOTIFICATION. The QIU shall promptly notify
the Company of any Proceeding commenced against the QIU in respect of
which indemnity may be sought hereunder, but failure to so notify the
Company shall not relieve the Company from any liability which the
Company may have to the QIU or any such person or otherwise. The
Company may participate at its own expense in the defense of any such
action; PROVIDED, HOWEVER, that counsel to the Company shall not
(except with the consent of the QIU or except as provided in the next
sentence) also be counsel to the QIU. If it so elects within a
reasonable time after receipt of such notice, the Company, jointly
with any other indemnifying parties receiving such notice, may assume
the defense of such action with counsel chosen by it and which counsel
is reasonably acceptable to the QIU, unless the QIU reasonably objects
to such assumption on the ground that there may be legal defenses
available to it which are different from or in addition to those
available to the Company. In no event shall the Company be liable for
fees and expenses of more than one counsel (in addition to any local
counsel) separate from its own counsel for the QIU in connection with
any Proceeding or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or
circumstances. The Company shall not, without the prior written
consent of the QIU, settle or compromise or consent to the entry of
any judgment with respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or any claim
- 31 -
whatsoever in respect of which indemnification or contribution could
be sought under this Section 11 hereof (whether or not the QIU is an
actual or potential party thereto), unless such settlement, compromise
or consent (i) includes an unconditional release of the QIU from all
liability arising out of such litigation, investigation, proceeding or
claim and (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act by or on behalf of the QIU.
(c) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time the
QIU shall have requested the Company to reimburse the QIU for fees and
expenses of counsel, then the Company agrees that it shall be liable
for any settlement of the nature contemplated by Section 11(a)(ii)
effected without its written consent if (i) such settlement is entered
into more than 90 days after receipt by the Company of the aforesaid
request, (ii) the Company shall not have reimbursed the QIU in
accordance with such request prior to the date of such settlement and
(iii) the QIU shall have given the Company at least 45 days' prior
notice of its intention to settle, unless the Company shall in good
faith contest the reasonableness of such fees and expenses (but only
to the extent so contested) or the entitlement of the QIU to
indemnification under the terms of this Section 11.
(d) CONTRIBUTION. If the indemnification provided for in this Section 11
is for any reason unavailable to or insufficient to hold harmless the
QIU in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then the Company shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and
expenses incurred by the QIU, as incurred, (i) in such proportion as
is appropriate to reflect the relative benefits received by the
Company on the one hand and the QIU on the other hand from the
offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the QIU on the
other hand in connection with the statements or omissions which
resulted in such losses, liabilities, claims, damages or expenses, as
well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
QIU on the other shall be deemed to be in the same respective
proportions as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses)
received by the Company and the total fee received by the QIU, bear to
the aggregate public offering price of the Securities.
The relative fault of the Company on the one hand and the QIU on the
other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to
information supplied by the Company or by the QIU and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
- 32 -
The Company and the QIU agree that it would not be just and equitable
if contribution pursuant to this Section 11 were determined by pro
rata allocation or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
Section 11. The aggregate amount of losses, liabilities, claims,
damages and expenses incurred by the QIU and referred to above in this
Section 11 shall be deemed to include any legal or other fees or
expenses reasonably incurred by the QIU in investigating, preparing or
defending against any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 11, the QIU shall not
be required to contribute any amount in excess of the amount by which
the total fees received by it hereunder exceed the amount of any
damages which the QIU otherwise would have been required to pay by
reason of such untrue or alleged untrue statement or omission or
alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
For purposes of this Section 11, each person, if any, who controls the
QIU within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act and affiliates of the QIU shall have the same
rights to contribution as the QIU, and each officer and director of
the Company and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act shall have the same rights to contribution as the
Company.
(e) The Company hereby confirms its engagement of the services of the QIU
as, and the QIU hereby confirms its agreement with the Company to
render services as, a "qualified independent underwriter" within the
meaning of Rule 2720 with respect to the offering and sale of the
Securities.
(f) The QIU hereby represents and warrants to, and agrees with, the
Company and the Underwriters that with respect to the offering and
sale of the Securities as described in the Prospectuses:
(i) The QIU constitutes a "qualified independent underwriter" within
the meaning of Rule 2720;
(ii) The QIU has conducted due diligence in respect of the offering
and sale of the Securities as described in the Prospectuses;
(iii) The QIU has undertaken the legal responsibilities and
liabilities of an underwriter under the Securities Act
specifically including those inherent in Section 11 thereof;
- 33 -
(iv) The QIU recommends, as of the date of the execution and delivery
of this Agreement, that the yield on the Securities shall not be
lower than [ ]% (corresponding to an initial public offering
price of [ ]%).
(g) The QIU hereby agrees with the Company and the Underwriters that, as
part of its services hereunder, in the event of any amendment or
supplement to the Prospectuses, the QIU will render services as a
"qualified independent underwriter" within the meaning of Rule 2720
with respect to the offering and sale of the Securities as described
in the Prospectuses as so amended or supplemented that are
substantially the same as those services being rendered with respect
to the offering and sale of the Securities as described in the
Prospectuses (including those described in subsection (b) above).
(h) The Company agrees to pay the QIU a fee of $10,000 for serving as QIU
in connection with the offering and sale of Securities.
The QIU hereby consents to the references to it as set forth under the
caption "Underwriting" in the Prospectuses and in any amendment or
supplement thereto made in accordance with Section 5 hereof.
SECTION 12. MISCELLANEOUS. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (i) if to the Company, to Paramount
Resources Ltd., 000 Xxxxx Xxxxxx S.W., Bankers Hall West, Suite 4700, Calgary,
Alberta, Canada T2P 5C2, Attention: X.X. Xxx, Esq. at (000) 000-0000 or by
facsimile to (000) 000-0000, with a copy to Torys LLP, 000 Xxxx Xxxxxx, Xxx
Xxxx, XX 00000-0000, facsimile (000) 000-0000, Attention: Xxxxxx X. Xxxx, Esq.,
and a copy to Xxxxxxx Xxxxx LLP, 3700 Canterra Tower, 000 Xxxxx Xxxxxx, X.X.,
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0, facsimile (000) 000-0000, Attention: Xxxxx
Xxxxxxx, Esq., and (ii) if to the Underwriters, to UBS Securities LLC, 000 Xxxx
Xxxxxx, Xxx Xxxx, XX 00000-0000, Attention: Syndicate Department, with a copy to
Xxxxxx Xxxxxx & Xxxxxxx LLP, 00 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, facsimile (212)
269-5420, Attention: Xxxxxxx Xxxxxx, Esq., and with a copy (for informational
purposes only) to High Yield Syndication Department, UBS Securities LLC, 000
Xxxx Xxxxxx, Xxx Xxxx, XX 00000, facsimile (000) 000-0000, or in any case to
such other address as the person to be notified may have requested in writing.
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Company, the Underwriters, the
Underwriters' directors and officers, any controlling persons referred to
herein, the Company's directors and the Company's officers who sign the
Registration Statement and their respective successors and assigns, all as and
to the extent provided in this Agreement, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Securities from any of the
several Underwriters merely because of such purchase.
This Agreement shall be governed and construed in accordance with the laws
of the State of New York.
- 34 -
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
- 35 -
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
PARAMOUNT RESOURCES LTD.
By:____________________________________
Name:
Title:
By:____________________________________
Name:
Title:
UBS SECURITIES LLC
Acting for itself, on behalf of the several
Underwriters named in SCHEDULE I hereto
and as QIU
By: UBS SECURITIES LLC
By: ________________________________
Name:
Title:
By: ________________________________
Name:
Title:
- 36 -
SCHEDULE I
PRINCIPAL AMOUNT
UNDERWRITERS OF SECURITIES
------------ ----------------
UBS Securities LLC U.S.$82,500,000
Xxxxxx Xxxxxxx Corp. 22,500,000
Scotia Capital (USA) Inc. 22,500,000
CIBC World Markets Corp. 22,500,000
----------------
Total U.S.$150,000,000
================
SCH. I-1
SCHEDULE II
SUBSIDIARIES
PERCENT DIRECTLY OR JURISDICTION OF
SUBSIDIARY INDIRECTLY OWNED INCORPORATION
---------- ----------------------- -----------------------
Paramount Resources Partnership 100.00% ALBERTA
----------------------------------------------------- ----------------------- -----------------------
Summit Resources Limited 100.00% ALBERTA
----------------------------------------------------- ----------------------- -----------------------
Summit Resources Inc. 100.00% MONTANA
----------------------------------------------------- ----------------------- -----------------------
Shehtah Xxxxxx Drilling Partnership 99.00% ALBERTA
----------------------------------------------------- ----------------------- -----------------------
910083 Alberta Limited 100.00% ALBERTA
----------------------------------------------------- ----------------------- -----------------------
Paramount Resources U.S. LLC. 100.00% DELAWARE
----------------------------------------------------- ----------------------- -----------------------
Paramount Transmission Ltd. 100.00% FEDERAL (CANADA)
----------------------------------------------------- ----------------------- -----------------------
938335 Alberta Ltd. 100.00% ALBERTA
----------------------------------------------------- ----------------------- -----------------------
649561 B.C. Ltd. 100.00% BRITISH COLUMBIA
----------------------------------------------------- ----------------------- -----------------------
649564 B.C. Ltd. 100.00% BRITISH COLUMBIA
----------------------------------------------------- ----------------------- -----------------------
649565 B.C. Ltd. 100.00% BRITISH COLUMBIA
----------------------------------------------------- ----------------------- -----------------------
649567 B.C. Ltd. 100.00% BRITISH COLUMBIA
----------------------------------------------------- ----------------------- -----------------------
977554 Alberta Ltd. 100.00% ALBERTA
----------------------------------------------------- ----------------------- -----------------------
994742 Alberta Ltd. 100.00% ALBERTA
----------------------------------------------------- ----------------------- -----------------------
Paramount International Resources Ltd. 100.00% ALBERTA
----------------------------------------------------- ----------------------- -----------------------
Paramount Energy Inc. 100.00% ALBERTA
----------------------------------------------------- ----------------------- -----------------------
586319 ALBERTA INC. 100.00% ALBERTA
----------------------------------------------------- ----------------------- -----------------------
SCH. II-1
EXHIBIT A
FORM OF OPINION OF CANADIAN COUNSEL
FOR THE COMPANY TO BE DELIVERED
PURSUANT TO SECTION 8(f)(i)
(1) The Company, Newco and each of the Subsidiaries has been duly
incorporated or formed, is validly existing as a corporation or other entity
under the laws of its jurisdiction of incorporation and has the organizational
power and capacity to carry on its business in the places and in the manner
described in the U.S. Prospectus and the Canadian Prospectus and to own, lease
and operate its properties and assets.
(2) The Company has all necessary corporate power and authority to execute,
deliver and perform its obligations under the Paramount Pledge Agreement and the
Indenture and to create, issue and sell the Securities in accordance with the
terms of the Indenture. Each of the Indenture and the Securities has been duly
authorized and, to the extent execution and delivery are governed by the laws of
the Province of Alberta, executed and delivered by the Company. The filing of
the Registration Statement and the U.S. Prospectus with the Commission and the
filing of the Canadian Prospectus with the ASC in each case have been duly
authorized by and on behalf of the Company; and the Registration Statement has
been duly executed pursuant to such authorization by and on behalf of the
Company. The Indenture complies with all applicable requirements of the Business
Corporations Act (Alberta), except to the extent that discretionary exemptive
relief from such requirements has been obtained; and no registration, filing or
recording of the Indenture under the federal laws of Canada or the laws of the
Province of Alberta is necessary in order to preserve or protect the validity or
enforceability of the Indenture or the Securities issued thereunder.
(3) The Paramount Pledge Agreement has been duly authorized and, to the
extent execution and delivery are governed by the laws of the Province of
Alberta, executed and delivered by the Company. Upon taking possession of the
Newco Mirror Note and the Partnership Mirror Note in the Province of Alberta,
the Trustee will have a first priority perfected security interest in the Newco
Mirror Note and the Company's interest in the Partnership Mirror Note, and
notice of such security interest has been registered under the Alberta Personal
Property Security Act (Registration No. ). Upon the Trustee taking possession
of the Newco Mirror Note and the Partnership Mirror Note in Alberta, the Trustee
will have a perfected first priority security interest in the Newco Mirror Note
and the Partnership Mirror Note. Assuming that the Trustee maintains a perfected
first priority security interest in the Partnership Mirror Note and the Newco
Mirror Note under the laws of New York by possession of each such Mirror Note in
the State of New York, an Alberta court would treat the Trustee as having a
perfected first priority security interest in the Mirror Notes.
(4) The Partnership and Newco have all necessary partnership or corporate
power and authority to execute, deliver and perform their obligations under the
Mirror Notes and, in the case of Newco, the Newco Pledge Agreement. The
Partnership and Newco have
A-1
taken all necessary partnership or corporate action to authorize the execution
and delivery of the Mirror Notes and, in the case of Newco, the Newco Pledge
Agreement.
(5) Each of the Mirror Notes has been duly authorized and, to the extent
execution and delivery are governed by the laws of the Province of Alberta,
executed and delivered by Newco and the Partnership, as applicable.
(6) Each Mirror Note Guarantee has been duly authorized and, to the extent
execution and delivery are governed by the laws of the Province of Alberta,
executed and delivered by the applicable Mirror Note Guarantor.
(7) The Newco Pledge Agreement has been duly authorized and, to the extent
execution and delivery are governed by the laws of the Province of Alberta,
executed and delivered by each of Newco and the Company. The Company has a first
priority perfected security interest in the Partnership Mirror Note and the
Mirror Note Guarantees, respectively, and notice of such security interest has
been registered under the Alberta Personal Property Security Act (Registration
No. ).
(8) No authorization, approval, consent or order of, or filing with, any
government, governmental agency, regulatory body or court in Canada is required
to be obtained by the Company or any of the Subsidiaries under the laws of the
Province of Alberta or with respect to the federal laws of Canada applicable
therein, except as has been obtained in connection with the valid authorization,
issue and sale of the Securities and the consummation by the Company and the
Subsidiaries of the other transactions contemplated by the Underwriting
Agreement.
(9) The execution, delivery and performance by the Company of its
obligations under the Indenture, the Underwriting Agreement and the Paramount
Pledge Agreement, the execution, delivery and performance by Newco of its
obligations under the Newco Mirror Note and the Newco Pledge Agreement, the
execution, delivery and performance by the Partnership of its obligations under
the Partnership Mirror Note, the execution, delivery and performance of the
Mirror Note Guarantees by the Mirror Note Guarantors and the issuance, offering
and sale of the Securities by the Company pursuant to the Underwriting Agreement
(i) do not conflict with, or result in the breach of any of the terms or
provisions of, or constitute a default under any existing applicable laws, rules
or regulations of the Province of Alberta or the federal laws of Canada
applicable therein, (ii) will not require any consent, approval, authorization
or other order of, or qualification with, any federal or Province of Alberta
court or governmental body or agency (except as may be required under the
Securities Act (Alberta)), (iii) will not conflict with or constitute a breach
of any terms or provisions of, or a default under, the articles, partnership
agreement, by-laws or other organizational documents of the Company or any of
the Subsidiaries, or (iv) do not conflict with or constitute a breach of any of
the terms or provisions of, or a default under, any indenture, loan agreement,
mortgage, lease or other agreement or instrument that is material to the Company
and the Subsidiaries, taken as a whole, to which the Company or any of the
Subsidiaries is a party or by which the Company or any of the Subsidiaries or
their respective property is bound, except such conflict, breach or default as
would not have a Material Adverse Effect.
A-2
(10) The Company has the power to submit, and there is no prohibition or
restriction under Alberta law or the federal laws of Canada applicable therein
on the Company submitting, pursuant to the Indenture and Underwriting Agreement,
to the personal jurisdiction of any federal or state court in the State of New
York, County of New York. The Company has the power to designate, appoint and
empower, and there is no prohibition or restriction under Alberta law or the
federal laws of Canada on the Company designating, appointing or empowering,
pursuant to the Underwriting Agreement, an agent for service of process and the
Company has legally, validly, effectively and irrevocably designated, appointed
and empowered Torys LLP agent for service of process in any suit or proceeding
based on or arising under the Indenture and the Underwriting Agreement in any
federal or state court in the State of New York, County of New York. A court of
competent jurisdiction in the Province of Alberta (an "ALBERTA COURT") would
give effect to the appointment by the Company of Torys LLP as its agent to
receive service of process in the United States under the Indenture and the
Underwriting Agreement and to the provisions in the Indenture and the
Underwriting Agreement whereby the Company submits to non-exclusive jurisdiction
of a New York court.
(11) The laws of the Province of Alberta and the federal laws of Canada
applicable therein permit an action to be brought in an Alberta Court with
respect to the enforcement of the Underwriting Agreement, the Indenture, the
Pledge Agreements, the Mirror Notes, the Mirror Note Guarantees and the
Securities. An Alberta Court would recognize, in an original action for
enforcement brought before it, the choice of New York law as the law governing
the Underwriting Agreement, the Indenture, the Pledge Agreements, the Mirror
Notes, the Mirror Note Guarantees and the Securities and, upon appropriate
evidence as to such law being adduced, would apply such law.
(12) An Alberta Court would give a judgment in Canadian dollars at an
exchange rate determined in accordance with Alberta Law based upon a final and
conclusive IN PERSONAM judgment of a U.S. federal or New York State court
located in the State of New York for a sum certain, obtained against the
Company, Newco or the Partnership under the Underwriting Agreement, the
Indenture, the Pledge Agreements, the Mirror Notes, the Mirror Note Guarantees
or the Securities, as the case may be, without reconsideration of the merits.
(13) The statements in the U.S. Prospectus and/or the Canadian Prospectus
under the captions "Description of Notes," "Description of Other Indebtedness,"
"Business--Regulation," "Business--Environmental," "Certain Canadian and U.S.
Income Tax Consequences--Canadian Federal Income Tax Consequences,"
"Enforceability of Civil Liabilities" and "Purchasers' Statutory Rights," to the
extent they constitute descriptions of documents or matters of law of Alberta or
the federal laws of Canada applicable therein or legal conclusions with respect
thereto, have been prepared or reviewed by us and are accurate in all material
respects; the information in the Registration Statement under "Part II,
Indemnification" is correct in all material respects.
(14) The Company is a reporting issuer not in default for the purposes of
the Alberta Securities Laws.
(15) Each document filed with the Alberta Securities Commission (the "ASC")
and incorporated by reference in the Canadian Prospectus, and each amendment or
supplement
A-3
thereto as of its respective effective date or issue date (excluding the
financial statements and other financial data and reserve information included
or incorporated therein or omitted therefrom and the Trustee's Statement of
Eligibility, as to which such counsel need express no opinion), appear on their
face to have been appropriately responsive in all material respects with the
requirements of the securities laws, rules and regulations of the Province of
Alberta as interpreted and applied by the ASC.
(16) The Company is eligible to file a short-form prospectus with the ASC
in respect of the Securities.
(17) The Canadian Prospectus (excluding the financial statements and other
financial data included or incorporated therein or omitted therefrom, as to
which no opinion need be expressed) appears on its face to have been
appropriately responsive in all material respects with the securities laws,
rules and regulations of the Province of Alberta as interpreted and applied by
the ASC.
(18) All documents have been filed, all proceedings have been taken and all
requirements under the applicable securities laws of the Province of Alberta
have been fulfilled by the Company to qualify the Securities for distribution
and sale to the public; provided, HOWEVER, such counsel need express no opinion
as to whether the Canadian Prospectus constitutes full, true and plain
disclosure of all material facts relating to the Securities.
(19) To such counsel's knowledge, after reasonable investigation, there are
no contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the Company
or to require the Company to include such securities with the Securities
registered pursuant to the Registration Statement.
(20) Except as described in the U.S. Prospectus and the Canadian
Prospectus, there are no legal or governmental proceedings pending or, to our
knowledge, threatened to which the Company or any of the Material Subsidiaries
is or could be a party or to which any of their respective property is or could
be subject which might result, singly or in the aggregate, in a Material Adverse
Effect.
(21) No withholding tax imposed under the federal laws of Canada or the
laws of the Province of Alberta will be payable in respect of the payment or
crediting of the fees contemplated by this Agreement by the Company to an
Underwriter that is not a resident of Canada for the purposes of the INCOME TAX
ACT (Canada), or on any interest or deemed interest on the resale of Securities
by an Underwriter to U.S. residents provided that the Underwriter deals at arm's
length with the Company (as such term is understood for purposes of the INCOME
TAX ACT (Canada)), and that such fees are payable in respect of services
rendered by the Underwriter wholly outside of Canada that are performed in the
ordinary course of business carried on by the Underwriter that includes the
performance of such services for a fee.
(22) No goods and services tax imposed under the federal laws of Canada or
provincial taxes under the laws of the Province of Alberta will be payable by
the Company or collectable by an Underwriter in respect of the payment of fees
as contemplated by this
A-4
Agreement to an Underwriter that is not a resident of Canada, provided that such
fees are in respect of services performed by an Underwriter wholly outside of
Canada.
(23) No stamp duty, documentary taxes or similar taxes are payable by the
Company under the federal laws of Canada or the laws of the Province of Alberta
in connection with the sale and delivery of the Securities pursuant to this
Agreement by the Underwriters or the resale of Securities by an Underwriter to
U.S. residents.
In addition, such counsel shall state that it has participated in
conferences, in person or by telephone, with officers and other representatives
of the Company, with representatives of the chartered accountants for the
Company and with your representatives and your counsel. At such meetings the
contents of the Registration Statement, the U.S. Prospectus and the Canadian
Prospectus and related matters were discussed among the parties present at such
meetings. Although such counsel will not be passing upon and will not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement, the Canadian Prospectus and the U.S.
Prospectus except as set forth in paragraphs (13), (16) and (18) above, on the
basis of the foregoing (relying as to materiality to the extent such counsel
deems appropriate upon the opinions of officers and other authorized
representatives of the Company), no information has come to such counsel's
attention that lead it to believe that, as of its effective date under the
Securities Act, (A) the Registration Statement (excluding the financial
statements, other financial and statistical data and reserve information
included or incorporated therein or omitted therefrom, as to which such counsel
need not comment) or any amendment thereto made prior to the Closing Date, at
the time the Registration Statement or any such amendment became effective under
the Securities Act, contained an untrue statement of a material fact or omits or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or (B) the U.S. Prospectus or the
Canadian Prospectus or any amendment or supplement thereto made prior to the
Closing Date (excluding the financial statements, other financial and
statistical data and reserve information included or incorporated therein or
omitted therefrom, as to which such counsel need not comment), at the time such
Prospectus was issued, at the time prior to the Closing Date at which any such
amended or supplemented prospectus was issued and as of the Closing Date,
included or includes an untrue statement of a material fact or omitted or omits
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.
In making the statements regarding the matters covered by the preceding
paragraph, such counsel may state that its statements and belief are based upon
its participation in the preparation of the Registration Statement and the
Prospectuses and review and discussion of the contents thereof, but are without
independent check or verification except as specified. Such counsel may also
rely on the other opinions addressed to the Underwriters and delivered pursuant
to the Underwriting Agreement.
A-5
EXHIBIT B
FORM OF OPINION OF SPECIAL UNITED STATES COUNSEL
FOR THE COMPANY TO BE DELIVERED PURSUANT TO SECTION 8(f)(ii)
(1) Assuming the due authorization of the Indenture by the Company, the
Indenture has been duly executed and delivered by the Company, to the extent
execution and delivery are governed by New York law, and, assuming the due
authorization, execution and delivery thereof by the Trustee, constitutes a
valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except to the extent that the enforceability thereof
may be limited by (i) bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent conveyance), reorganization, moratorium and other
similar laws now or hereafter in effect relating to or affecting creditors'
rights generally and (ii) general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity). The Indenture has
been duly qualified under the Trust Indenture Act.
(2) Assuming the due authorization of the Newco Mirror Note by Newco, the
Newco Mirror Note has been duly executed and delivered by Newco, to the extent
execution and delivery thereof are a matter governed by the laws of New York,
and constitutes a valid and binding obligation of Newco enforceable against
Newco in accordance with its terms except as (i) the enforceability thereof may
be limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent conveyance) or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability
(regardless of whether enforcement is considered in a proceeding in equity or at
law).
(3) Assuming the due authorization of the Partnership Mirror Note by the
Partnership, the Partnership Mirror Note has been duly executed and delivered by
the Partnership, to the extent execution and delivery thereof are a matter
governed by the laws of New York, and constitutes a valid and binding obligation
of the Partnership enforceable against the Partnership in accordance with its
terms except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
conveyance) or similar laws affecting creditors' rights generally and (ii)
rights of acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(4) Assuming the due authorization of each Mirror Note Guarantee by the
applicable Mirror Note Guarantor, each Mirror Note Guarantee has been duly
executed and delivered by the applicable Mirror Note Guarantor, to the extent
execution and delivery thereof are a matter governed by the laws of New York,
and constitutes a valid and binding obligation of each Mirror Note Guarantor
enforceable against each Mirror Note Guarantor in accordance with its terms
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
conveyance) or similar laws affecting creditors' rights generally and (ii)
rights of acceleration and the availability of equitable
B-1
remedies may be limited by equitable principles of general applicability
(regardless of whether enforcement is considered in a proceeding in equity or at
law).
(5) Assuming the due authorization of the Paramount Pledge Agreement by the
Company, the Paramount Pledge Agreement has been duly executed and delivered by
the Company, to the extent execution and delivery thereof are a matter governed
by the laws of New York, and (assuming the due authorization, execution and
delivery thereof by the Trustee) constitutes a valid and binding obligation of
the Company enforceable against the Company in accordance with its terms (i)
except as the enforceability thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent conveyance) or
similar laws affecting creditors' rights generally; (ii) except as rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability (regardless of whether enforcement
is considered in a proceeding in equity or at law); and (iii) subject to the
qualification that certain remedial provisions of the Paramount Pledge Agreement
are or may be unenforceable in whole or in part under the laws of the State of
New York, but the inclusion of such provisions does not make the remedies
afforded by the Paramount Pledge Agreement inadequate for the practical
realization of the rights and benefits purported to be provided by the Paramount
Pledge Agreement except for the economic consequences resulting from any delay
imposed by, or any procedure required by, applicable New York laws, rules,
regulations and court decisions and by constitutional requirements in and of the
State of New York. The Paramount Pledge Agreement creates in favor of the
Trustee a security interest in the collateral described therein in which a
security interest may be created under Article 9 of the Uniform Commercial Code
of the State of New York (the "UCC"). Upon delivery to the Trustee and the
Trustee taking possession of the Newco Mirror Note and the Partnership Mirror
Note in the State of New York, and assuming continued possession thereof, the
Trustee will have a perfected security interest in the Newco Mirror Note and the
Partnership Mirror Note.
(6) Assuming the due authorization of the Newco Pledge Agreement by Newco
and the Company, the Newco Pledge Agreement has been duly executed and delivered
by the Company and Newco, to the extent execution and delivery thereof are a
matter governed by the laws of New York and constitutes a valid and binding
obligation of Newco enforceable against Newco in accordance with its terms (i)
except as the enforceability thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent conveyance) or
similar laws affecting creditors' rights generally; (ii) except as rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability (regardless of whether enforcement
is considered in a proceeding in equity or at law); and (iii) subject to the
qualification that certain remedial provisions of the Paramount Pledge Agreement
are or may be unenforceable in whole or in part under the laws of the State of
New York, but the inclusion of such provisions does not make the remedies
afforded by the Paramount Pledge Agreement inadequate for the practical
realization of the rights and benefits purported to be provided by the Paramount
Pledge Agreement except for the economic consequences resulting from any delay
imposed by, or any procedure required by, applicable New York laws, rules,
regulations and court decisions and by constitutional requirements in and of the
State of New York. The Newco Pledge Agreement creates in favor of the Company a
security interest in the collateral described therein in which a security
interest may be created under Article 9 of the UCC.
B-2
(7) The Registration Statement has become effective under the Securities
Act, and the Form F-X was submitted to the Commission prior to the effectiveness
of the Registration Statement; any required filing of the U.S. Prospectus or any
supplement thereto pursuant to General Instruction II.L. of Form F-10 has been
made in the manner and within the time period required by said General
Instruction II.L.; and, to such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or threatened
under the Securities Act.
(8) Each of the Registration Statement, the U.S. Prospectus and each
amendment or supplement thereto (except for the financial statements and other
financial and statistical data and reserve information included or incorporated
therein or omitted therefrom, as to which such counsel need express no opinion)
as of its respective effective date or issue date appears on its face to be
appropriately responsive in all material respects to the applicable requirements
of the Securities Act and the regulations thereunder; the Form F-X, as of its
date, appears on its face to be appropriately responsive in all material
respects with the applicable requirements of the Securities Act and the
regulations thereunder.
(9) Assuming the due authorization of the Securities by the Company, the
Securities, when duly executed and delivered, in accordance with the provisions
of the Indenture (assuming the due authorization, execution and delivery of the
Indenture by the Trustee and the due authentication and delivery of the
Securities by the Trustee in accordance with the Indenture) and paid for by the
Underwriters in accordance with the terms of the Underwriting Agreement, will be
entitled to the benefits of the Indenture and will be valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms, except to the extent that the enforceability thereof may be limited
by (i) bankruptcy, insolvency (including, without limitation, all laws relating
to fraudulent conveyance), reorganization, moratorium and other similar laws now
or hereafter in effect relating to or affecting creditors' rights generally and
(ii) general principles of equity (regardless of whether enforcement is sought
in a proceeding at law or in equity).
(10) No consent, approval, authorization or order of, or filing,
registration or qualification with, any Governmental Authority, which has not
been obtained, taken or made (other than as required by any state securities
laws) is required under any Applicable Law for the issuance, authentication or
sale of the Securities. For purposes of this opinion, (i) the term "Governmental
Authority" means any executive, legislative, judicial, administrative or
regulatory body of the State of New York or the United States of America and
(ii) the term "Applicable Law" means the Business Corporation Law of the State
of New York, and those laws, rules and regulations of the United States of
America and the State of New York, in each case which in such counsel's
experience are normally applicable to the transactions of the type contemplated
by the Underwriting Agreement.
(11) The statements in the U.S. Prospectus under the headings "Description
of the notes" and "Certain Canadian and U.S. income tax consequences--Certain
United States federal income tax consequences," to the extent they purport to
describe the provisions of laws and documents referred to therein, are accurate
and fair summaries of the matters disclosed therein. The Securities are in all
material respects in the form contemplated by the Indenture.
B-3
(12) The execution, delivery and performance by the Company of its
obligations under the Indenture, the Underwriting Agreement and the Paramount
Pledge Agreement, the execution, delivery and performance by Newco of its
obligations under the Newco Mirror Note and the Newco Pledge Agreement, the
execution, delivery and performance by the Partnership of its obligations under
the Partnership Mirror Note, the execution, delivery and performance of the
Mirror Note Guarantees by the Mirror Note Guarantors and the issuance, offering
and sale of the Securities by the Company pursuant to the Underwriting Agreement
do not conflict with or violate any Applicable Law.
(13) The Company is not and, after giving effect to the offering and sale
of the Securities and the application of the proceeds therefrom as described in
the U.S. Prospectus, will not be required to register as an "investment company"
as defined in the United States Investment Company Act of 1940, as amended.
(14) Assuming the due authorization, execution and delivery of the
Underwriting Agreement by each party thereto, the submission by the Company to
the non-exclusive jurisdiction of any United States or state court in the State
of New York, County of New York, is effective and the appointment of Torys LLP
as its authorized agent in any suit or proceeding against it based on or arising
under the Underwriting Agreement is binding on the Company.
In addition, such counsel shall state that it has participated in
conferences, in person or by telephone, with officers and other representatives
of the Company, with representatives of the chartered accountants for the
Company and with your representatives and your counsel. At such meetings the
contents of the Registration Statement and the U.S. Prospectus and related
matters were discussed among the parties present at such meetings. Although such
counsel will not be passing upon and will not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the U.S. Prospectus except as set forth in paragraph
(11) above, on the basis of the foregoing (relying as to materiality to the
extent such counsel deems appropriate upon the opinions of officers and other
authorized representatives of the Company), no information has come to such
counsel's attention that leads it to believe that, as of its effective date
under the Securities Act, (A) the Registration Statement (excluding the
financial statements, other financial and statistical data and reserve
information included or incorporated therein or omitted therefrom, and the
Statement of Eligibility on Form T-1 of the Trustee under the Trust Indenture
Act, as to which such counsel need not comment) or any amendment thereto made
prior to the Closing Date, at the time the Registration Statement or any such
amendment became effective under the Securities Act, contained an untrue
statement of a material fact or omits or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or (B) the U.S. Prospectus or any amendment or supplement thereto
made prior to the Closing Date (excluding the financial statements, other
financial and statistical data and reserve information included or incorporated
therein or omitted therefrom, as to which such counsel need not comment), at its
issue date, the date at which any such amended or supplemented prospectus was
issued and as of and at the Closing Date, included or includes an untrue
statement of a material fact or omitted or omits 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.
B-4
In making the statements regarding the matters covered by the preceding
paragraph, such counsel may state that its statements and belief are based upon
its participation in the preparation of the Registration Statement and the U.S.
Prospectus and review and discussion of the contents thereof, but are without
independent check or verification except as specified. Such counsel may also
rely on the other opinions addressed to the Underwriters and delivered pursuant
to the Underwriting Agreement.
B-5
