EXHIBIT 99.2
EXECUTION COPY
BRASCAN CORPORATION
Debt Securities
Underwriting Agreement
June 12, 2002
Credit Suisse First Boston Corporation
Banc One Capital Markets, Inc.
BNP Paribas Securities Corp.
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Xxxxx Xxxxxx Inc.
CIBC World Markets Corp.
Trilon International Inc.
c/o Credit Suisse First Boston Corporation
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Brascan Corporation, a corporation amalgamated under the laws of
Ontario, Canada (the "Company") proposes, subject to the terms and conditions
stated herein and in the Underwriting Agreement Standard Provisions, dated June
12, 2002 (the "Standard Provisions"), to issue and sell to the Underwriters
named in Schedule I hereto (the "Underwriters") the Securities specified in
Schedule II hereto (the "Designated Securities"). A copy of the Standard
Provisions is set forth in Schedule III hereto. Each of the provisions of the
Standard Provisions is incorporated herein by reference in its entirety, and
shall be deemed to be a part of this Underwriting Agreement to the same extent
as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Underwriting Agreement. Each reference to the
Representatives herein and in the Standard Provisions so incorporated by
reference shall be deemed to refer to you. Unless otherwise defined herein,
terms defined in the Standard Provisions are used herein as therein defined. The
Representatives designated to act on behalf of the Representatives and on behalf
of each of the Underwriters of the Designated Securities pursuant to Section 12
of the Standard Provisions and the address of the Representatives referred to in
such Section 12 are set forth at the end of Schedule II hereto.
A supplement to the Amended Shelf Prospectus relating to the
Designated Securities, substantially in the form heretofore delivered to you, is
now proposed to be filed with the OSC, and a supplement to the Prospectus
relating to the Designated Securities, substantially in the form heretofore
delivered to you, is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the
Standard Provisions incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in Schedule II hereto,
the principal amount of Designated Securities set forth opposite the name of
such Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us twelve counterparts hereof, and upon
acceptance hereof by you, on behalf of each of the Underwriters, this letter and
such acceptance hereof, including the Standard Provisions incorporated herein by
reference, shall constitute a binding agreement among each of the Underwriters
and the Company. It is understood that your acceptance of this letter on behalf
of each of the Underwriters is or will be pursuant to the authority set forth in
a form of Agreement Among Underwriters, the form of which shall be submitted to
the Company for examination upon request, but without warranty on the part of
the Representatives as to the authority of the signers thereof.
Very truly yours,
Brascan Corporation
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Executive Vice-President
and Chief Financial Officer
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice-President, Finance
Accepted as of the date hereof:
Credit Suisse First Boston Corporation
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director,
Chairman and Chief Executive Officer
of Credit Suisse First Boston Canada Inc.
For itself and as Representative of the other Underwriters named in Schedule I
hereto.
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SCHEDULE I
Principal Amount of Designated
Underwriter Securities to be Purchased
----------- ------------------------------
Credit Suisse First Boston Corporation $175,000,000
Banc One Capital Markets, Inc. 38,500,000
BNP Paribas Securities Corp. 38,500,000
Xxxxxxx, Sachs & Co. 38,500,000
Xxxxxxx Xxxxx Xxxxxx Inc. 38,500,000
CIBC World Markets Corp. 10,500,000
Trilon International Inc. 10,500,000
--------------
Total: US$350,000,000
==============
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SCHEDULE II
Title of Designated Securities:
7 1/8% Notes due June 15, 2002
Aggregate principal amount:
US$350,000,000
Price to Public:
98.628% of the principal amount of the Designated Securities, plus
accrued interest, if any, from June 17, 2002
Purchase Price by Underwriters:
97.978% of the principal amount of the Designated Securities, plus
accrued interest, if any, from June 17, 2002
Underwriting Commission (including aggregate dollar amount):
0.650% of the principal amount of the Designated Securities
(US$2,275,000)
Specified funds for payment of purchase price:
Same day funds, to be paid by wire transfer, net of commission, to the
Company
Indenture:
Indenture dated September 20, 1995, as supplemented by the Fourth
Supplemental Indenture, to be dated as of June 17, 2002, made between
the Company, as issuer, and Computershare Trust Company of Canada, as
Trustee (the "Indenture")
Maturity: June 15, 2012
Interest Rate:
7 1/8%
Interest Payment Dates:
June 15 and December 15, commencing December 15, 2002
Redemption Provisions:
The Designated Securities are redeemable as a whole, but not in part,
at the option of the Company in the event of certain changes affecting
Canadian withholding taxes. Otherwise the Designated Securities will
not be redeemable prior to maturity.
Sinking Fund Provisions:
No sinking fund provisions
Manner of Delivery of Designated Securities:
Registered Global Securities
II-1
Time of Delivery:
9:00 a.m. (New York City time), June 17, 2002
Closing location:
Torys LLP
Suite 3000, Maritime Life Tower
TD Centre
Xxxxxxx, Xxxxxxx
X0X 0X0
Other Provisions:
The commercial (printed) copies of the Prospectus as amended or
supplemented in relation to the Designated Securities requested by the
Underwriters shall be made available to the Underwriters in New York,
New York no later than 10:00 a.m. on the business day next succeeding
the date of the Underwriting Agreement.
Names and addresses of Designated Representative:
Credit Suisse First Boston Corporation
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
II-2
Schedule III
BRASCAN CORPORATION
Debt Securities
Underwriting Agreement
Standard Provisions
June 12, 2002
From time to time Brascan Corporation, a corporation amalgamated under
the laws of Ontario, Canada (the "Company"), may enter into one or more
underwriting agreements ("Underwriting Agreements"), and, subject to the terms
and conditions stated or provided for therein, issue and sell to the firms named
as underwriters in the applicable Underwriting Agreement (such firms
constituting the "Underwriters" with respect to such Underwriting Agreement and
the securities specified therein) certain of its debt securities specified in
such Underwriting Agreement (with respect to such Underwriting Agreement, the
"Designated Securities"). The standard provisions set forth herein may be
incorporated by reference in any Underwriting Agreement and each reference
herein to the Underwriting Agreement shall refer to the Underwriting Agreement
with respect to a particular issuance and sale of Designated Securities.
The terms and rights of the Designated Securities shall be as
specified in the Underwriting Agreement and in or pursuant to the indenture,
including any supplements thereto (the "Indenture"), identified in the
Underwriting Agreement.
1. The Underwriting Agreement shall specify the firms designated as
representatives (the "Representatives") of the Underwriters of the Designated
Securities. The term "Representatives" also refers to a single firm acting as
sole representative of the Underwriters and to Underwriters who act without any
firm being designated as their representative. The obligation of the Company to
issue and sell any of its debt securities and the obligation of any of the
Underwriters to purchase any of the debt securities of the Company shall be
evidenced by the Underwriting Agreement with respect to the Designated
Securities specified therein. The Underwriting Agreement shall specify the
aggregate principal amount of the
Designated Securities, the initial public offering price of the Designated
Securities, the purchase price to be paid to the Company by the Underwriters
for the Designated Securities, the commission to be paid by the Company to the
Underwriters with respect to the sale of the Designated Securities, the names
of the Underwriters of the Designated Securities, the names of the
Representatives of such Underwriters and the principal amount of the Designated
Securities to be purchased by each Underwriter and shall set forth the date,
time and manner of delivery of the Designated Securities and payment
therefor. The Underwriting Agreement shall also specify (to the extent not set
forth in the Indenture and the registration statement and prospectus with
respect thereto) the terms of the Designated Securities, shall be in the form
of an executed writing (which may be in counterparts), and may be evidenced by
an exchange of telegraphic communications or any other rapid transmission
device designed to produce a written record of communications transmitted. The
obligations of the Underwriters under the Underwriting Agreement shall be
several and not joint.
2. The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(a) The Company is qualified to file a short form prospectus that is a
base shelf prospectus pursuant to the requirements of National Instrument 44-101
- Short Form Prospectus Distribution and 44-102 - Shelf Distributions. The
Company has prepared and filed with the Ontario Securities Commission in the
province of Ontario (the "Reviewing Authority") and with the securities
regulatory authorities (the "Qualifying Authorities") in each of the other
provinces of Canada (the "Qualifying Provinces") a preliminary base shelf
prospectus relating to US$500,000,000 aggregate principal amount of debt
securities (the "Initial Securities") (in the English and French languages, as
applicable, the "Preliminary Shelf Prospectus"), has prepared and filed with the
Reviewing Authority and the Qualifying Authorities, a final base shelf
prospectus relating to the Initial Securities (in the English and French
languages, as applicable, and as it may be amended, the "Shelf Prospectus"), and
has prepared and filed with the Reviewing Authority and the Qualifying
Authorities, an amendment No. 1 to the Shelf Prospectus relating to the Initial
Securities and an additional US$400,000,000 aggregate principal amount of debt
securities (the "Additional Securities", and together with the Initial
Securities, the "Securities") (in the English and French languages, as
applicable, the "Amendment", and the Shelf Prospectus, as amended by the
Amendment being hereinafter called the "Amended Shelf Prospectus"). The Company
has filed the Preliminary Shelf Prospectus, the Shelf Prospectus and the
Amendment with the Reviewing Authority and the Qualifying Authorities pursuant
to National Policy 43-201 - Mutual Reliance Review System for Prospectuses and
Annual Information Forms and its related memorandum of understanding, and the
Reviewing Authority is acting as principal regulator. The Reviewing Authority
has issued, on behalf of itself and the Qualifying
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Authorities, a preliminary Mutual Reliance Review System Decision Document for
the Preliminary Shelf Prospectus, a final Mutual Reliance Review System Decision
Document for the Shelf Prospectus and a final Mutual Reliance Review System
Decision Document for the Amendment, each in the form heretofore delivered to
the Representatives. No other document with respect to such base shelf
prospectus, amendments thereto, or document incorporated by reference therein
has heretofore been filed or transmitted for filing with the Reviewing Authority
or the Qualifying Authorities, except for any documents filed with the Reviewing
Authority or the Qualifying Authorities subsequent to the date of issuance of
the final Mutual Reliance Review System Decision Document for the Amendment in
the form heretofore delivered to the Representatives for each of the
Underwriters; and no order having the effect of preventing or suspending the use
of any prospectus relating to the Securities has been issued and no proceeding
for that purpose has been initiated or, to the knowledge of the Company,
threatened by the Reviewing Authority or any of the Qualifying Authorities. Any
reference to the Amended Shelf Prospectus as further amended or supplemented
shall be deemed to refer to the Amended Shelf Prospectus as amended or
supplemented in relation to the Designated Securities in accordance with Section
5(a) hereof, including any documents incorporated by reference therein as of the
date of filing of such amendment or supplement;
(b) The Company meets the eligibility requirements for use of Form F-9
("Form F-9") under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to the Securities and has filed a registration statement, as
amended, on Form F-9, including the final short form shelf prospectus for which
the Reviewing Authority has issued a final Mutual Reliance Review System
Decision Document and modified as required or permitted by Form F-9 (File No.
333-14130), with respect to the Initial Securities (the "Initial Registration
Statement") and an appointment of agent for service of process upon the Company
on Form F-X (the "Initial Form F-X") with the Securities and Exchange Commission
(the "Commission") in connection thereto, and has filed an additional
registration statement on Form F-9, in accordance with Rule 429 under the
Securities Act, including the Amended Shelf Prospectus for which the Reviewing
Authority has issued a final Mutual Reliance Review System Decision Document and
modified as required or permitted by Form F-9 (File No. 333-90216), with respect
to the Securities (the "Additional Registration Statement") and an appointment
of agent for service of process upon the Company on Form F-X (the "Additional
Form F-X", and together with the Initial Form F-X, the "Form F-X") with the
Commission in connection thereto; such registration statements (including any
pre-effective amendment thereto) and any post-effective amendment thereto, each
in the form heretofore delivered to the Representatives, excluding exhibits to
such registration statements, but 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
statements or document incorporated by reference therein has heretofore been
filed or transmitted
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for filing with the Commission, except for any documents filed with the
Commission subsequent to the date of such effectiveness in the form heretofore
delivered to the Representatives for each of the Underwriters; and no stop order
suspending the effectiveness of either 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 (including any supplement thereto) included in such registration
statements being herein after called a "Preliminary Prospectus"); the various
parts of such Initial Registration Statement and Additional Registration
Statement, including all exhibits thereto and the documents incorporated by
reference in the prospectus contained in the registration statements at the time
such part of the registration statements became effective, and including any
amendment or supplement to the Amended Shelf Prospectus that is deemed by the
securities laws in each of the Province of Ontario and the Qualifying Provinces
to be incorporated by reference into the Amended Shelf Prospectus as of the date
of such amendment or supplement prepared and filed with the Reviewing Authority
and the Qualifying Authorities in accordance with the securities laws in each of
the Province of Ontario and the Qualifying Provinces being hereinafter
collectively called the "Registration Statement"; the prospectus relating to the
Securities, in the form in which it has most recently been filed, or transmitted
for filing, with the Commission on or prior to the date of the Underwriting
Agreement, being hereinafter called the "Prospectus"; any reference herein to
any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after the date of such
Preliminary Prospectus or Prospectus, as the case may be, under the securities
laws in each of the Province of Ontario and the Qualifying Provinces or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as the case
may be, and incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; and any reference to the Prospectus as amended
or supplemented shall be deemed to refer to the Prospectus as amended or
supplemented in relation to the Designated Securities in accordance with Section
5(a) hereof, including any documents incorporated by reference therein as of the
date of filing of such amendment or supplement;
(c) The Prospectus consists of, and the Prospectus as amended or
supplemented will consist of, the Amended Shelf Prospectus and the Amended Shelf
Prospectus as amended or supplemented, respectively, except in each case for
modifications required or permitted by Form F-9 and the applicable rules and
regulations of the Commission;
(d) The documents incorporated by reference in the Prospectus, when they
were filed with Reviewing Authority and the Qualifying Authorities, complied
4
in all material respects with the applicable requirements of the securities laws
of each of the Province of Ontario and the Qualifying Provinces, and none of
such documents, as of their respective issue dates, 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; and
any further documents so filed and incorporated by reference in the Prospectus
or any further amendment or supplement thereto, when such documents are filed
with the Reviewing Authority and the Qualifying Authorities and the Commission
will comply in all material respects with the applicable requirements of the
securities laws of each of the Province of Ontario and the Qualifying Provinces,
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
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 or on behalf of an
Underwriter of Designated Securities through the Representatives expressly for
use in the Prospectus as amended or supplemented relating to such Securities;
(e) No order preventing or suspending the use of any Preliminary
Prospectus or preliminary prospectus supplement has been issued by the
Commission, and each Preliminary Prospectus and preliminary prospectus
supplement did not contain an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they 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 the Representatives expressly
for use therein;
(f) The Amended Shelf Prospectus conforms, and any further amendments or
supplements to the Amended Shelf Prospectus, will conform, in all material
respects, with the applicable requirements of the securities laws of each of the
Province of Ontario and the Qualifying Provinces, and do not and will not, as of
their respective filing dates, 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 or on behalf
of an Underwriter of Designated Securities through the Representatives expressly
for use in the Amended Shelf Prospectus as amended or supplemented relating to
such Securities;
(g) The Registration Statement, the Prospectus and the Form F-X conform and
any further amendments or supplements thereto will conform, in all
5
material respects, with the applicable requirements of the Securities Act and
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") and the
rules and regulations of the Commission thereunder, and do not and will not, as
of the applicable effective date as to the Registration Statement and any
amendment thereto and as of the applicable filing date as to the Prospectus and
any amendment or supplement thereto, 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; 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 or on behalf of an Underwriter of Designated Securities through the
Representatives expressly for use in the Prospectus as amended or supplemented
relating to such Securities;
(h) Neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included or incorporated by
reference in the Prospectus any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or decree,
which loss or interference is materially adverse to the Company and its
subsidiaries, on a consolidated basis, otherwise than as set forth or
contemplated in the Prospectus as amended or supplemented; and, since the
respective dates as of which information is given in the Registration Statement
and the Prospectus and, otherwise than as set forth or contemplated in the
Prospectus as amended or supplemented, there has not been any change in the
capital stock of the Company (other than pursuant to stock dividends,
conversions of securities, employee stock options and other employee benefit
plans and agreements described or referred to in the Prospectus as amended or
supplemented), any increase in the long-term debt of the Company and its
subsidiaries on a consolidated basis, except as provided for in the Underwriting
Agreement, or any change, or any development involving a prospective change, in
or affecting the general affairs, management, financial position or results of
operations of the Company and its subsidiaries, which change is (or, in the case
of prospective changes, will be) materially adverse to the Company and its
subsidiaries on a consolidated basis;
(i) The Company has been duly amalgamated and is validly existing as a
corporation under the laws of Ontario, Canada and is current with respect to the
filing of annual returns with the Minister of Consumer and Commercial Relations
for the Province of Ontario, with power and authority (corporate, regulatory and
other) to own its properties and conduct its business as described in the
Prospectus as amended or supplemented;
(j) The Company has an authorized capitalization as set forth in the
Prospectus as amended or supplemented;
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(k) The Securities have been duly authorized, and, when the Designated
Securities are issued and delivered pursuant to the Underwriting Agreement, the
Designated Securities will have been duly executed, authenticated, issued and
delivered and will constitute valid and legally binding obligations of the
Company entitled to the benefits provided by the Indenture, which will be
substantially in the form, save for any indenture supplements relating to a
particular issuance of Designated Securities, filed as an exhibit to the
Registration Statement; the Indenture has been duly authorized and duly
qualified under the Trust Indenture Act and, at the Time of Delivery (as defined
in Section 4 hereof) for the Designated Securities, the Indenture will
constitute a valid and legally binding instrument, enforceable in accordance
with its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles; and the Indenture conforms,
and the Designated Securities will conform, to the descriptions thereof
contained in the Prospectus as amended or supplemented;
(l) The issue and sale of the Designated Securities and the compliance by
the Company with all of the provisions of the Designated Securities, the
Indenture, the Underwriting Agreement, and the consummation of the transactions
therein contemplated will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject, nor
will such action result in any violation of the provisions of the articles or
by-laws of the Company or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company or any
of its properties; and no consent, approval, authorization, order, registration,
clearance or qualification of or with any such court or governmental agency or
body is required for the issue and sale of the Designated Securities or the
consummation by the Company of the transactions contemplated by the Underwriting
Agreement or the Indenture, except such as have been, or will have been prior to
the Time of Delivery, obtained under the securities laws of the Province of
Ontario, the Securities Act and the Trust Indenture Act and such consents,
approvals, authorizations, orders, registrations, clearances or qualifications
as may be required under state securities or Blue Sky laws in connection with
the purchase and distribution of the Designated Securities by the Underwriters;
(m) The statements set forth in the Prospectus under the caption
"Description of Debt Securities" and in the Prospectus as amended or
supplemented under the caption "Description of the Notes", insofar as they
purport to constitute a summary of the terms of the Securities and the
Designated Securi-
7
ties, respectively, and under the captions "Plan of Distribution" in the
Prospectus and "Underwriting" in the Prospectus as amended or supplemented,
insofar as they purport to describe the provisions of the laws and documents
referred to therein, are fair summaries of the matters referred to therein;
(n) Neither the Company nor any of its subsidiaries is in violation of its
certificate of incorporation or by-laws. Neither the Company nor any of its
subsidiaries is in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound, except such
violations or defaults which the Company has reasonable cause to believe would
not individually or in the aggregate have a material adverse effect on the
consolidated financial position, shareholders' equity or results of operation of
the Company and its subsidiaries on a consolidated basis;
(o) Other than as set forth in the Prospectus as amended or supplemented,
there are no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property of the Company or
any of its subsidiaries is the subject which the Company has reasonable cause to
believe would individually or in the aggregate have a material adverse effect on
the consolidated financial position, shareholders' equity or results of
operations of the Company and its subsidiaries on a consolidated basis; and, to
the best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(p) The Company is not and, after giving effect to the offering and sale
of the Designated Securities, will not be required to register as an "investment
company," as such term is defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act");
(q) The Company is not a holding company within the meaning of the Public
Utility Holding Company Act of 1935, as amended (the "Public Utility Act"), and
is not required to be registered as a holding company under the Public Utility
Act in order to conduct its business as is presently conducted or proposed to be
conducted as described in the Prospectus or to consummate the transactions
contemplated by the Underwriting Agreement;
(r) No stamp or other issuance or transfer taxes or duties and no
withholding or other taxes are payable by or on behalf of the Underwriters to
Canada or any political subdivision or taxing authority thereof or therein in
connection with (A) the issuance, sale and delivery by the Company outside
Canada to or for the respective accounts of the Underwriters of the Designated
8
Securities or (B) the sale and delivery outside Canada by the Underwriters of
the Designated Securities to the initial purchasers thereof (assuming (i) the
Underwriters are not, and are not deemed to be, resident in Canada for the
purpose of the Income Tax Act (Canada) and (ii) the Underwriters do not hold or
use the Designated Securities in the course of carrying on business in Canada
for the purpose of the Income Tax Act (Canada)); and
(s) Deloitte & Touche LLP, chartered accountants, who have certified
certain financial statements of the Company and its subsidiaries, are
independent public accountants as required by the Securities Act and the rules
and regulations of the Commission thereunder.
3. (a) Upon the execution of the Underwriting Agreement and
authorization by the Representatives of the release of the Designated
Securities, the several Underwriters propose to offer the Designated Securities
for sale upon the terms and conditions set forth in the Prospectus as amended or
supplemented.
(b) Each Underwriter represents that it has not offered or sold, directly
or indirectly, and agrees that it will not, directly or indirectly, offer, sell
or deliver any of the Designated Securities purchased by it under the
Underwriting Agreement, in Canada or to any resident of Canada, in contravention
of the securities laws of any province or territory of Canada. Each Underwriter
further agrees that it will include a comparable provision in any
sub-underwriting, banking group or selling group agreement or similar
arrangement with respect to the Designated Securities that may be entered into
by such Underwriter.
4. Designated Securities to be purchased by each Underwriter
pursuant to the Underwriting Agreement, in definitive form to the extent
practicable (except as otherwise provided in the Underwriting Agreement) and in
such authorized denominations and registered in such names as the
Representatives may request upon at least forty-eight hours' prior notice to the
Company, and payment of the aggregate underwriting commission in respect of the
Designated Securities set forth in the Underwriting Agreement, shall be
delivered by or on behalf of the Company to the Representatives for the account
of such Underwriter, against payment by such Underwriter or on its behalf of the
purchase price for such Designated Securities set forth in the Underwriting
Agreement, each such payment to be made in the manner and in the funds specified
in the Underwriting Agreement, all at the place and time and date specified in
the Underwriting Agreement or in such other manner and funds and at such other
place and time and date as the Representatives and the Company may agree upon in
writing, such time and date being herein called the "Time of Delivery" for such
Designated Securities.
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5. The Company agrees with each of the Underwriters of the
Designated Securities:
(a) To prepare a supplement to the Amended Shelf Prospectus in accordance
with the requirements of the securities laws of each of the Province of Ontario
and the Qualifying Provinces and a supplement to the Prospectus consisting of
the supplement to the Amended Shelf Prospectus modified as required or permitted
by Form F-9, in each case in a form approved by the Representatives and (i) to
file such supplement to the Amended Shelf Prospectus with the Reviewing
Authority and the Qualifying Authorities pursuant to the securities laws of each
of the Province of Ontario and the Qualifying Provinces not later than the close
of business on the second business day following the execution and delivery of
the Underwriting Agreement or, if applicable, such earlier time as may be
required by the securities laws of each of the Province of Ontario and the
Qualifying Provinces, and (ii) to file such supplement to the Prospectus with
the Commission pursuant to General Instruction II.K. of Form F-9 not later than
the Commission's close of business on the next business day following such
filing with the Reviewing Authority or, if applicable, such earlier time as may
be required by such General Instruction II.K. or the Securities Act (Ontario)
(the "OSA"); to make no further amendment or supplement to the Amended Shelf
Prospectus, the Registration Statement or the Prospectus after the date of the
Underwriting Agreement and prior to the Time of Delivery unless such amendment
or supplement is approved by the Representatives after reasonable notice thereof
(which approval shall not be unreasonably withheld); to advise the
Representatives promptly of any such amendment or supplement after such Time of
Delivery and furnish the Representatives with copies thereof; to file promptly
with the Reviewing Authority and the Qualifying Authorities all documents
required to be filed by the Company with the Reviewing Authority and the
Qualifying Authorities that are deemed to be incorporated by reference into the
Amended Shelf Prospectus and with the Commission all reports and any definitive
proxy or information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act, in
each case, for so long as the delivery of a prospectus is required in connection
with the offering or sale of such Securities, and during such same period to
advise the Representatives, promptly after it receives notice thereof, of the
time when any amendment to the Amended Shelf Prospectus or Registration
Statement has been filed or becomes effective or any supplement to the Amended
Shelf Prospectus, the Prospectus or any amended Prospectus has been filed with
the Reviewing Authority and the Qualifying Authorities or the Commission, of the
issuance by the Reviewing Authority, any Qualifying Authority or the Commission
of any stop order or of any order preventing or suspending the use of any
prospectus, relating to the Securities, of the suspension of the qualification
of such
10
Securities for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Reviewing Authority, any Qualifying Authority or the Commission for the amending
or supplementing of the Amended Shelf Prospectus, the Registration Statement or
the Prospectus or for additional information relating to the Securities, the
Amended Shelf Prospectus, the Registration Statement or the Prospectus; and, in
the event of the issuance of any such stop order or of any such order preventing
or suspending the use of any prospectus relating to the Securities or suspending
any such qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) Promptly from time to time to take such action as the Representatives
may reasonably request to qualify such Securities for offering and sale under
the securities laws of such jurisdictions as the Representatives 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 such Securities; provided, however, that the
Company shall not be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction, (ii) file any general consent to
service of process or (iii) subject itself to taxation in any jurisdiction if it
is not so subject;
(c) To furnish the Underwriters in New York City or at such other places
as requested by the Underwriters with copies of the Prospectus as amended or
supplemented in such reasonable quantities as the Representatives may from time
to time reasonably request, and, if the delivery of a prospectus is required by
law at any time in connection with the offering or sale of the Designated
Securities and if at such time any event shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such same period to amend or
supplement the Amended Shelf Prospectus or the Prospectus or to file under the
securities laws of each of the Province of Ontario and the Qualifying Provinces
or the Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the securities laws of each of the Province of Ontario and
the Qualifying Provinces, the Securities Act, the Exchange Act, the Business
Corporations Act (Ontario) or the Trust Indenture Act, to notify the
Representatives and upon their reasonable request to file such document and to
prepare and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representatives may from time to time
reasonably request of an amended Prospectus or a supplement to the Prospectus
which will correct such statement or omission or effect such compliance;
11
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen 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 of the Commission thereunder (including, at the
option of the Company, Rule 158 thereunder); and
(e) During the period beginning from the date of the Underwriting
Agreement and continuing to and including the Time of Delivery for the
Designated Securities, not to offer, sell, contract to sell or otherwise dispose
of any debt securities of the Company which mature more than one year after such
Time of Delivery and which are substantially similar to the Designated
Securities, without the prior written consent of the Representatives, such
consent not to be unreasonably withheld.
6. The Company covenants and agrees with the several Underwriters
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the filing with respect to the Securities under the securities
laws of each of the Province of Ontario and the Qualifying Provinces, the
registration of the Securities under the Securities Act, any listing of the
Designated Securities on a stock exchange or automated quotation system, and all
other expenses in connection with the preparation, printing and filing in
Ontario and the Qualifying Provinces and the United States of America, as may be
applicable, of the Registration Statement, any Preliminary Prospectus and the
Prospectus and amendments and supplements thereto and the mailing and delivering
of copies thereof to the Underwriters and dealers; (ii) subject to such
limitation as may be set forth in the Underwriting Agreement, the cost of
printing or producing any Agreement among the Underwriters, these Standard
Provisions and the Underwriting Agreement; (iii) the cost of printing or
producing any Indenture, any Blue Sky and Legal Investment Memoranda and any
other documents in connection with the offering, purchase, sale and delivery of
the Designated Securities; (iv) subject to such limitation as may be set forth
in the Underwriting Agreement, all reasonable expenses in connection with the
qualification of the Designated Securities for offering and sale under state
securities laws as provided in Section 5(b) hereof, including the reasonable
fees and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky and legal investment surveys;
(v) any fees charged by securities rating services for rating the Securities;
(vi) any filing fees incident to any required review by the National Association
of Securities Dealers, Inc. of the terms of the sale of the Securities; (vii)
the cost of preparing the Securities; (viii) the fees and expenses of any
Trustee and any agent of any Trustee and the reasonable fees and disburse-
12
ments of counsel for any Trustee in connection with any Indenture and the
Securities; and (ix) all other costs and expenses incident to the performance of
its obligations pursuant to the Underwriting Agreement which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as otherwise specifically provided in this Section, Section 8 and Section
11 hereof, the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel, transfer taxes on resale of any of the
Securities by them, and any advertising expenses connected with any offers they
may make, including the expenses of any "tombstone" advertisement related to the
offering of the Designated Securities; provided, that no such tombstone
advertisement shall be published without the prior approval of the Company,
which approval shall not be unreasonably withheld.
7. The obligations of the Underwriters of the Designated Securities
under the Underwriting Agreement shall be subject, in the discretion of the
Representatives, to the condition that all representations and warranties and
other statements of the Company in or incorporated by reference in the
Underwriting Agreement are, at and as of the Time of Delivery, true and correct,
the condition that the Company shall have performed all of its obligations
pursuant to the Underwriting Agreement theretofore to be performed, and the
following additional conditions:
(a) The supplement to the Amended Shelf Prospectus shall have been filed
with the Reviewing Authority and the Qualifying Authorities pursuant National
Policy 43-201 and its related memorandum of understanding within the applicable
time period prescribed for such filing thereunder and the supplement to the
Prospectus shall have been filed with the Commission pursuant to General
Instruction II.K. of Form F-9 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, to the
knowledge of the Company, threatened by the Commission; no order having the
effect of preventing or suspending the use of any prospectus relating to the
Securities shall have been issued and no proceeding for that purpose shall have
been initiated or, to the knowledge of the Company, threatened by the Reviewing
Authority or any Qualifying Authorities; and all requests for additional
information on the part of the Reviewing Authority, any Qualifying Authority and
the Commission shall have been complied with to the Representatives' reasonable
satisfaction;
(b) Counsel for the Underwriters shall have furnished to the
Representatives such opinion or opinions, dated the Time of Delivery for the
Designated Securities, with respect to the validity of the Indenture, the
Designated Securities,
13
the Registration Statement, the Prospectus as amended or supplemented and other
related matters as the Representatives may reasonably request, and such counsel
shall have received such papers and information as they may reasonably request
to enable them to pass upon such matters (it being understood that, to the
extent such opinion relates to the laws of Ontario and the federal laws of
Canada applicable therein, such counsel shall be entitled to rely on the opinion
of Canadian counsel to the Company delivered pursuant to Section 7(c) hereof);
(c) The Company shall have furnished to the Representatives the written
opinion of Torys LLP, Canadian and United States counsel for the Company (or
other Canadian or United States counsel for the Company reasonably satisfactory
to the Representatives), dated the Time of Delivery for the Designated
Securities, in form and substance satisfactory to the Representatives, to the
effect that:
(i) The Company has been duly amalgamated and is validly
existing as a corporation under the laws of the Province of Ontario,
with the corporate power and authority to own its property and conduct
its business as described in the Prospectus, as amended or
supplemented;
(ii) The Company has an authorized share capital as set forth in
the Prospectus, as amended or supplemented;
(iii) To such counsel's knowledge, and other than as set forth in
the Prospectus as amended or supplemented: (A) there are no legal or
governmental proceedings in Canada or the United States that are
pending to which the Company, Brookfield Properties Corporation, Great
Lakes Power Inc. or Brascan Financial Corporation is a party or of
which any property of the Company, Brookfield Properties Corporation,
Great Lakes Power Inc. or Brascan Financial Corporation is subject,
which, if determined adversely to the Company, Brookfield Properties
Corporation, Great Lakes Power Inc. or Brascan Financial Corporation,
would give such counsel reasonable cause to believe that such
proceedings are required by the Securities Act (Ontario) and the rules
and regulations adopted thereunder to be described or referred to in
the Amended Shelf Prospectus, as amended or supplemented, and (B) no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(iv) The Underwriting Agreement has been duly authorized,
executed and delivered by the Company;
14
(v) The Designated Securities have been duly authorized,
executed and delivered by the Company and they have been duly
authenticated and issued pursuant to the Indenture; the Designated
Securities constitute legal, valid and binding obligations of the
Company, enforceable against it in accordance with their terms;
(vi) The Indenture has been duly authorized, executed and
delivered by the Company and constitutes a legal, valid and binding
obligation of the Company, enforceable against it in accordance with
the terms of the Indenture. The Designated Securities and the
Indenture conform, in all material respects, to the descriptions
thereof in the Prospectus. The Indenture has been duly qualified under
the Trust Indenture Act of 1939, as amended;
(vii) The issue and sale of the Designated Securities pursuant to
the Indenture and the Underwriting Agreement, the performance by the
Company of its obligations under the Designated Securities, the
Underwriting Agreement and Indenture and the consummation of the
transactions contemplated therein will not (A) to such counsel's
knowledge, conflict with, or result in a breach or violation of, or
constitute a default under, any of the terms or provisions of any
indenture, mortgage, deed of trust, loan agreement or other material
agreement or instrument known to such counsel to which the Company is
a party or by which the Company is bound or to which any of the
property or assets of the Company is subject; or (B) result in a
violation of the articles or by-laws of the Company or, to such
counsel's knowledge, without any special enquiry, any statute, rule or
regulation or of any order of an Ontario Court, a Canadian federal
court, an Ontario governmental authority or body or a Canadian federal
governmental authority or body known to such counsel to be applicable
to the Company or any of its properties;
(viii) No consents, approvals, authorizations, orders,
registrations, clearances or qualifications of or with any court or
governmental authorities are required in connection with the issue and
sale of the Designated Securities or the consummation by the Company
of the transactions contemplated by the Underwriting Agreement or the
Indenture, except such as have been obtained under the securities laws
of the Province of Ontario, the Securities Act and the Trust Indenture
Act, and such consents, approvals, authorizations, orders,
registrations, clearances or qualifications as
15
may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Designated Securities by the
Underwriters;
(ix) The Amended Shelf Prospectus, as amended or supplemented,
and the Prospectus, as amended or supplemented, has been duly approved
by, or under the authority of, the Board of Directors of the Company,
and the Amended Shelf Prospectus and each amendment thereto has been
duly executed on behalf of the Company in accordance with the
securities laws of the Province of Ontario;
(x) The Amended Shelf Prospectus, as amended or supplemented
(other than the financial statements and related schedules deemed to
be incorporated by reference therein and the auditors' report thereon
and any other financial information contained therein or omitted
therefrom, as to which such counsel need express no opinion), as of
its issue date and the date it was filed with the Reviewing Authority
and the Qualifying Authorities, complied as to form, in all material
respects, with the applicable requirements of the securities laws of
the Province of Ontario;
(xi) The Amended Shelf Prospectus, as amended or supplemented,
if supplemented with a certificate of the Underwriters, would
constitute the entire disclosure document required to offer and
distribute the Designated Securities in the Province of Ontario; the
exhibits to the Registration Statement included or incorporated by
reference in the Amended Shelf Prospectus and the documents
incorporated by reference in the Amended Shelf Prospectus, as amended
or supplemented, include all reports or information that in accordance
with the requirements of Ontario law are required to be made publicly
available in connection with the offering and distribution of the
Designated Securities in the Province of Ontario;
(xii) The Company has received a Mutual Reliance Review System
Decision document from the Reviewing Authority on behalf of itself and
the Qualifying Authorities in respect of the Amended Shelf Prospectus
and any amendments thereto, and the prospectus supplement constituting
part of the Amended Shelf Prospectus was filed with the Reviewing
Authority in the manner and within the time period required by
applicable Ontario securities laws; to such counsel's knowledge,
without having made any special inquiry, no order having the effect of
ceasing or suspending the
16
effectiveness of such Mutual Reliance Review System decision document
has been issued and no proceeding for that purpose has been initiated
or threatened by the Reviewing Authority;
(xiii) The statements in the Prospectus, as amended or
supplemented, set forth under the captions "Certain Canadian Federal
Income Tax Considerations," and "Certain United States Federal Income
Tax Considerations" fairly and accurately summarize the matters
described therein in all material respects;
(xiv) The statements in each of the Initial and Additional
Registration Statements under "Part II - Information Not Required to
Be Delivered to Offerees or Purchasers - Indemnification" fairly and
accurately summarize the matters described therein in all material
respects;
(xv) The Company is not required, nor will it be required after
giving effect to the issue and sale of the Designated Securities, to
be registered as an "investment company", as such term is defined in
the Investment Company Act;
(xvi) Each of the Initial and Additional Registration Statements
and the Prospectus, as amended or supplemented, and any further
amendments and supplements thereto made by the Company prior to the
Time of Delivery for the Designated Securities (other than the
financial statements and related schedules deemed to be incorporated
by reference therein and the auditors' report thereon, any other
financial information contained therein or omitted therefrom the Form
F-X of the Trustee, as to which such counsel need express no opinion)
appear on their face to conform in all material respects with the
requirements of the Securities Act and the rules and regulations
thereunder; and such counsel does not know of (A) any amendment to
either of the Initial or Additional Registration Statement required to
be filed with the Commission, (B) any documents that are required to
be filed as an exhibit to either of the Initial or Additional
Registration Statement, or (C) any documents that are required to be
incorporated by reference into the Prospectus, as amended or
supplemented, which were not so incorporated by reference.
(xvii) Each of the Initial and Additional Registration Statements
are effective under the Securities Act; each of the Initial and
Additional Forms F-X of the Company and the Trustee were filed with
17
the Commission prior to the effectiveness of the Initial and
Additional Registration Statement, respectively; any required filing
of the Prospectus or any supplement thereto was made in accordance
with General Instruction II.K. of Form F-9; and such counsel was
informed telephonically by a member of the staff of the Commission at
approximately 5:30 p.m. on the day prior to the Time of Delivery that
there are no stop orders suspending the effectiveness of the
Registration Statement.
(xviii) No withholding taxes are payable under the federal laws
of Canada in respect of the commissions or fees to be paid by the
Company pursuant to the Underwriting Agreement to any Underwriter who
is a non-resident of Canada and with whom the Company deals at arm's
length within the meaning of the Income Tax Act (Canada), provided
that such commissions or fees are reasonable in the circumstances and
are payable in respect of identifiable services rendered by such
Underwriter outside of Canada and which are performed by such
Underwriter in the ordinary course of a business carried on by it that
includes the performance of such services for a commission or fee;
(xix) A court of competent jurisdiction in the Province of
Ontario (a "Canadian Court") would give effect to the choice of the
law of the State of New York ("New York law") as the proper law
governing the Indenture, the Designated Securities and the
Underwriting Agreement, provided that such choice of law is bona fide
(in the sense that it was not made with a view to avoiding the
consequences of the laws of any other jurisdiction) and provided that
such choice of law is not contrary to public policy, as that term is
understood under the laws in the Province of Ontario and the federal
laws of Canada applicable therein; a Canadian Court would not refuse
to give effect to the choice of New York law as the proper law
governing the enforcement of the Indenture, the Designated Securities
or the Underwriting Agreement on the ground that such choice of law is
not bona fide or that such choice is contrary to public policy, as
that term is understood under the laws in the Province of Ontario and
the federal laws of Canada applicable therein;
(xx) In an action on a final and conclusive judgment in
personam of any federal or state court sitting in the Borough of
Manhattan, The City of New York, New York (a "New York Court") that is
not impeachable as void or voidable under New York law, a Canadian
18
Court would give effect to the appointment by the Company of CT
Corporation System, as its agent for service in the United States of
America under the Indenture, the Designated Securities and the
Underwriting Agreement and to the provisions in the Indenture and the
Underwriting Agreement whereby the Company has submitted to the
non-exclusive jurisdiction of a New York Court;
(xxi) If the Indenture, the Designated Securities or the
Underwriting Agreement are sought to be enforced in the Province of
Ontario in accordance with the laws applicable thereto as chosen by
the parties, namely New York law, a Canadian Court would, subject to
the qualifications set out in paragraph (xix) above, recognize the
choice of New York law, and, upon appropriate evidence as to such law
being specifically pleaded and proved, apply such law, provided that
none of the provisions of the Indenture, the Designated Securities or
the Underwriting Agreement or of applicable New York law is contrary
to public policy, as that term is understood under the laws of the
Province of Ontario and the federal laws of Canada applicable therein;
provided, however, that, in matters of procedure, the laws of the
Province of Ontario will be applied, and a Canadian Court will retain
discretion to decline to hear such action if it is contrary to public
policy, as that term is understood under the laws of the Province of
Ontario and the federal laws of Canada applicable therein, for such
court to do so, or if such court is not the proper forum to hear such
an action or if concurrent proceedings are being brought elsewhere;
and none of the provisions of the Indenture, the Designated Securities
or the Underwriting Agreement are contrary to public policy, as that
term is understood under the laws of the Province of Ontario and the
federal laws of Canada applicable therein, except that rights of
indemnity and contribution pursuant to the Underwriting Agreement may
be contrary to public policy; and
(xxii) A Canadian Court would enforce a final and conclusive
judgment in personam of a New York Court that is subsisting and
unsatisfied respecting the enforcement of the Indenture, the
Designated Securities and the Underwriting Agreement that is not
impeachable as void or voidable under New York law for a sum certain
if: (A) the court rendering such judgment had jurisdiction over the
judgment debtor, as recognized by the courts of the Province of
Ontario (and submission by the Company to the jurisdiction of the New
York Court pursuant to the Indenture, the Designated Securities and
the Underwriting Agreement will be sufficient
19
for this purpose); (B) such judgement was not obtained by fraud or in
a manner contrary to natural justice and the enforcement thereof would
not be inconsistent with public policy, as such term is understood
under the laws of the Province of Ontario and the federal laws of
Canada as applicable therein or contrary to any order made by the
Attorney General of Canada under the Foreign Extraterritorial Measures
Act (Canada); (C) the enforcement of such judgment does not
constitute, directly or indirectly, the enforcement of foreign
revenue, expropriatory or penal laws; and (D) there has been
compliance with the Limitations Act (Ontario); under the Currency Act
(Canada), a Canadian Court may give judgement only in Canadian
dollars, however where a contractual obligation provides for a manner
of conversion to Canadian currency of an amount in foreign currency, a
Canadian Court will give effect to the manner of conversion in the
obligation; and, there is some doubt as to the enforceability in
Canada, against the Company or against any of its respective
directors, officers and experts who are not residents of the United
States, by a court in original actions, or in actions to enforce
judgments of United States courts, of civil liabilities predicated
solely upon the United States federal securities laws.
Such counsel shall also state that it has participated in the preparation of the
Amended Shelf Prospectus, as amended or supplemented, the Initial Registration
Statement and Additional Registration Statement and the Prospectus, as amended
or supplemented and in conferences with representatives of the Company, the
Representatives, representatives of the independent auditors of the Company, and
counsel for the Underwriters, at which the contents of the Amended Shelf
Prospectus as amended or supplemented, the Initial Registration Statement and
Additional Registration Statement and the Prospectus, as amended or supplemented
and related matters were discussed and, although such counsel is not passing
upon and does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Amended Shelf Prospectus or
Prospectus or any amendment thereto or supplement thereof, except as expressly
stated in such counsel's opinion pursuant to the requirements of this Section
7(c), no facts have come to such counsel's attention which lead it to believe
that: (i) either the Amended Shelf Prospectus or Prospectus, as amended or
supplemented or any further amendment or supplement thereto made by the Company
prior to the Time of Delivery (other than the financial statements and related
schedules deemed to be incorporated by reference in the Amended Shelf Prospectus
and Prospectus and the report of the auditors thereon and any other financial
information contained in the Amended Shelf Prospectus and Prospectus or omitted
therefrom and other than any information contained in
20
the Amended Shelf Prospectus and Prospectus, or deemed to be incorporated by
reference therein, or omitted therefrom, relating to Noranda Inc. and/or any of
its subsidiaries, as to which such counsel need express no opinion), as of its
date or as of the Time of Delivery, contained or contains an untrue statement of
a material fact or omitted or omits to state a material fact necessary to make
the statements therein, in the light of the circumstances in which they were
made, not misleading; or (ii) the Initial Registration Statement and Additional
Registration Statement as amended or supplemented and any further amendments and
supplements thereto made by the Company prior to the Time of Delivery for the
Designated Securities (other than the financial statements and other financial
data contained therein or omitted therefrom and other than any information
contained therein or omitted therefrom relating to Noranda Inc. and/or all of
its subsidiaries, as to which such counsel need express no opinion), as of their
respective effective dates, 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.
(d) The Company shall have furnished to the Representatives the written
opinion of XxXxxxxx Xxxxxxxx, counsel for Noranda Inc., dated the Time of
Delivery for the Designated Securities, in form and substance satisfactory to
the Representatives, to the effect that, solely with respect to the information
therein relating to Noranda Inc., although such counsel assumes no
responsibility for the accuracy, completeness or fairness of statements
contained in the Initial or Additional Registration Statement or the Prospectus,
no facts have come to the attention of such counsel which would lead such
counsel to believe that, as of its effective date, the Initial or Additional
Registration Statement or any further amendment thereto (other than the
financial statements and related reports thereon or schedules and other
financial information contained therein), made by the Company prior to the Time
of Delivery contained an untrue statement of a material fact (which, for the
purpose of this clause, has the meaning ascribed thereto in the OSA) or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus as amended or
supplemented or any further amendment or supplement thereto made by the Company
prior to the Time of Delivery (other than the financial statements and related
reports thereon or schedules and other financial information contained therein),
as of its date or as of the Time of Delivery, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances in
which they were made, not misleading;
(e) On the date of the Underwriting Agreement and at the Time of Delivery
for the Designated Securities, Deloitte & Touche LLP, chartered accountants,
shall have furnished to the Representatives a letter, dated the date of
21
delivery of such letter to the effect set forth in Annex I hereto, and with
respect to such letter dated such Time of Delivery, as to such other matters of
the type ordinarily included in "comfort letters" from accountants to
underwriters as the Representatives may reasonably request and in form and
substance reasonably satisfactory to the Representatives;
(f) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the most recent audited consolidated financial
statements included or incorporated by reference in the Prospectus any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus as amended or supplemented, and (ii) since the
respective dates as of which information is given in the Prospectus and,
otherwise than as set forth or contemplated in the Prospectus as amended or
supplemented, there shall not have been any change in the capital stock of the
Company (other than pursuant to stock dividends, conversions of securities,
employee stock options and other employee benefit plans and agreements described
or referred to in the Prospectus as amended or supplemented), any increase in
the long-term debt of the Company and its subsidiaries on a consolidated basis,
except as provided for in the Underwriting Agreement, or any change, or any
development or event involving a prospective change, in or affecting the general
affairs, business, properties, management, financial position or results of
operations of the Company and its subsidiaries on a consolidated basis,
otherwise than as set forth or contemplated in the Prospectus as amended or
supplemented, the effect of which, in any such case described in Clause (i) or
(ii), is in the reasonable judgment of the Representatives so material and
adverse to the Company and its subsidiaries on a consolidated basis as to make
it impractical or inadvisable to proceed with the completion of the public
offering or the delivery of the Designated Securities on the terms and in the
manner contemplated in the Prospectus as amended or supplemented;
(g) On or after the date of the Underwriting Agreement and at or prior to
the Time of Delivery (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities by Xxxxx'x Investors Service, Inc.,
Standard & Poor's Ratings Group, a division of McGraw Hill Inc., or Dominion
Bond Rating Service Limited, and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities;
(h) On or after the date of the Underwriting Agreement and at or prior to
the Time of Delivery there shall not have occurred any of the following:
22
(i) any change in U.S., Canadian or international financial, political or
economic conditions or currency exchange rates or exchange controls as would, in
the judgment of a majority in interest of the Underwriters including the
Representatives, be likely to prejudice materially the success of the proposed
issue, sale or distribution of the Designated Securities, whether in the primary
market or in respect of dealings in the secondary market; (ii) any material
suspension or material limitation of trading in securities generally on the New
York Stock Exchange or The Toronto Stock Exchange, or a suspension or material
limitation in trading in the Company's securities on the New York Stock Exchange
or The Toronto Stock Exchange, or any setting of minimum prices for trading on
such exchange, or any suspension of trading of any securities of the Company on
any exchange or in the over-the-counter market; (iii) any banking moratorium
declared by U.S. Federal, New York or Canadian authorities; (iv) any major
disruption of settlements of securities or clearance services in the United
States or Canada or (v) any attack on, outbreak or escalation of hostilities or
act of terrorism involving the United States or Canada, any declaration of war
by Congress or any other national or international calamity or emergency if, in
the judgment of a majority in interest of the Underwriters including the
Representatives, the effect of any such attack, outbreak, escalation, act,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the public offering or the sale of and payment for
the Designated Securities; and
(i) The Company shall have furnished or caused to be furnished to the
Representatives at the Time of Delivery for the Designated Securities a
certificate or certificates of officers of the Company reasonably satisfactory
to the Representatives as to the accuracy of the representations and warranties
of the Company herein at and as of such Time of Delivery, as to the performance
by the Company of all of its obligations pursuant to the Underwriting Agreement
to be performed at or prior to such Time of Delivery, as to the matters set
forth in subsections (a) and (g) of this Section and as to such other matters as
the Representatives may reasonably request.
8. (a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Securities, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will
23
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Securities, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Underwriter of Designated Securities through the Representatives expressly
for use in the Prospectus as amended or supplemented relating to such
Securities; and provided, further, that the Company shall not be liable to any
Underwriter under the indemnity agreement in this subsection (a) with respect to
any Preliminary Prospectus to the extent that any such loss, claim, damage or
liability of such Underwriter results from the fact that such Underwriter sold
Designated Securities to a person as to whom it shall be established that there
was not sent or given, at or prior to the written confirmation of such sale, a
copy of the Prospectus as then amended or supplemented (excluding documents
incorporated by reference) in any case where such delivery is required by the
Securities Act if the Company has previously furnished copies thereof in
sufficient quantity to such Underwriter and the loss, claim, damage or liability
of such Underwriter results from an untrue statement contained in, or omission
of a material fact from, the Preliminary Prospectus which was corrected in the
Prospectus as then amended or supplemented (excluding documents incorporated by
reference).
(b) Each Underwriter will indemnify and hold harmless the Company against any
losses, claims, damages or liabilities to which the Company may become subject,
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Securities, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Underwriter
24
through the Representatives expressly for use therein; and will reimburse the
Company for any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action, shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it may elect by written notice delivered to such
indemnified party promptly after receiving the aforesaid notice from the,
indemnified party, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. Notwithstanding the foregoing, the
indemnified party 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 such
indemnified party unless (i) the employment of such counsel shall have been
authorized in writing by the indemnifying party in connection with the defense
of such action, (ii) such indemnified party shall have been advised by counsel
that there may be defenses available to it which are different from or
additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to direct the defense of such action
on behalf of the indemnified party with respect to such different or additional
defenses), in any of which events such fees and expenses shall be borne by the
indemnifying party.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such Indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Com-
25
pany on the one hand and the Underwriters of the Designated Securities on the
other from the offering of the Designated Securities to which such loss, claim,
damage or liability (or action in respect thereof) relates. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters of the Designated
Securities on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and such Underwriters on the
other in connection with the offering of the Designated Securities to which such
losses, claims, damages or liabilities relate shall be deemed to be in the same
proportion as the total net proceeds from such offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by such Underwriters in respect thereof. The relative fault
of the Company on the one hand and of the Underwriters on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or such Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subsection (d) 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 which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Designated Securities underwritten by it 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 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 obligations of the Underwriters
of Designated Securities in this subsection (d) to contribute
26
are several in proportion to their respective underwriting obligations with
respect to such Securities and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Securities Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Securities
Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Designated Securities which it has agreed to purchase under the
Underwriting Agreement, the Representatives may in their discretion arrange for
themselves or another party or other parties to purchase such Designated
Securities on the terms contained herein. If within thirty-six hours after such
default by any Underwriter the Representatives do not arrange for the purchase
of such Designated Securities, then the Company shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to the Representatives to purchase such Designated
Securities on such terms. In the event that, within the respective prescribed
period, the Representatives notify the Company that they have so arranged for
the purchase of such Designated Securities, or the Company notifies the
Representatives that it has so arranged for the purchase of such Designated
Securities, the Representatives or the Company shall have the right to postpone
the Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus as amended or supplemented, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Representatives may thereby be made necessary. The term
"Underwriter" as used herein and in the Underwriting Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to the Underwriting Agreement.
(b) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
the Designated Securities, then the Company shall have the right to require each
27
non-defaulting Underwriter to purchase the principal amount of Designated
Securities which such Underwriter agreed to purchase under the Underwriting
Agreement and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the principal amount of Designated
Securities which such Underwriter agreed to purchase under the Underwriting
Agreement) of the Designated Securities of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of such Designated Securities which remains
unpurchased exceeds one-eleventh of the aggregate principal amount of the
Designated Securities, as referred to in subsection (b) above, or if the Company
shall not exercise the right described in subsection (b) above to require
non-defaulting Underwriters to purchase Designated Securities of a defaulting
Underwriter or Underwriters, then the Underwriting Agreement shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or
the Company, except for the expenses to be borne by the Company and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
set forth in these Standard Provisions or made by or on behalf of them,
respectively, pursuant to the Underwriting Agreement, shall remain in full force
and effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter or any controlling person of
any Underwriter, or the Company, or any officer or director or controlling
person of the Company, and shall survive delivery of and payment for the
Securities.
11. If the Underwriting Agreement shall be terminated pursuant to
Section 9 hereof, the Company shall not then be under any liability to any
Underwriter except as provided in Section 6 and Section 8 hereof; but, if the
Underwriting 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 fulfil any of the conditions of the Underwriting Agreement, or if
for any reason the Company shall be unable to perform its obligations under the
Underwriting Agreement, the Company will reimburse the Underwriters through the
Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
28
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of the Designated Securities, but the Company shall then be under no
further liability to any Underwriter except as provided in Section 6 and Section
8 hereof.
12. In all dealings pursuant to the Underwriting Agreement, the
Representatives shall act on behalf of each of the Underwriters, and the parties
hereto shall be entitled to act and rely upon any statement, request, notice or
agreement on behalf of any Underwriter made or given by the Representatives
jointly or by such of the Representatives, if any, as may be designated for such
purpose in the Underwriting Agreement.
All statements, requests, notices and agreements pursuant to the
Underwriting Agreement shall be in writing, and if to the Underwriters shall be
delivered or sent by mail, telex or facsimile transmission to the address of the
Representatives as set forth in the Underwriting Agreement; and if to the
Company shall be delivered or sent by mail, telex or facsimile transmission to
the address of the Company set forth in the Registration Statement: Attention:
Secretary; provided, however, that any notice to an Underwriter pursuant to
Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter as its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Company by the Representatives upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. The Underwriting Agreement shall be binding upon, and inure
solely to the benefit of, the Underwriters, the Company and, to the extent
provided in Section 8 and Section 10 hereof, the officers and directors of the
Company and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of the
Underwriting Agreement. No purchaser of any of the Securities from any
Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence of the Underwriting Agreement. As
used herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business; provided that, with respect to filings to
be made with the Reviewing Authority, "business day" shall mean any day when the
Reviewing Authority's office in Toronto is open for business.
15. The Underwriting Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
29
16. In respect of any judgment or order given or made for any amount
due hereunder that is expressed and paid in a currency (the "judgment currency")
other than United States dollars, the indemnifying party will indemnify each
indemnified party or other person to whom such amount is due against any loss
incurred by such indemnified party or other person, as the case may be, as a
result of any variation as between (i) the rate of exchange at which the
currency amount of the country of the indemnified party is converted into the
judgment currency for the purpose of such judgment or order and (ii) the rate of
exchange at which such indemnified party or other person, as the case may be, is
able to purchase the currency, of the country of the indemnified party with the
amount of the judgment currency actually received by such indemnified party or
other person, as the case may be. The foregoing indemnity shall constitute a
separate and independent obligation of each indemnifying party and shall
continue in full force and effect notwithstanding any such judgment or order as
aforesaid. The term "rate of exchange" shall include any premiums and costs of
exchange payable in connection with the purchase of or conversion into the
currency of the country of the indemnified party.
17. The Company hereby irrevocably agrees that any legal suit, action
or proceeding arising out of or based upon this Agreement or the transaction
contemplated hereby may be instituted in any state or federal court in The City
of New York and in the respective courts of each party's own corporate (or, in
the case of the Underwriters, partnership) domicile with respect to actions
brought against it, hereby irrevocably waives, to the fullest extent it may
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any such proceeding in any state or federal court in The City
of New York and hereby irrevocably submits to the jurisdiction of such courts in
any such suit, action or proceeding. The Company hereby appoints CT Corporation
System, 000 0xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 as its authorized agent (the
"Authorized Agent") upon whom process may be served in any such action arising
out of or based on this Agreement or the transaction contemplated hereby which
may be instituted in any state or federal court in The City of New York,
expressly consents to the jurisdiction of any such court in respect of any such
action and waives any other requirements of or objections to personal
jurisdiction with respect thereto and designates its domicile, the domicile of
CT Corporation System specified above and any domicile that CT Corporation
System may have in the future as its domicile to receive any notice hereunder
(including service of process). Such appointment shall be irrevocable. If for
any reason CT Corporation System (or any successor agent for this purpose) shall
cease to act as agent for service of process as provided above, the Company will
promptly appoint a successor agent for this purpose reasonably acceptable to the
Representatives. The Company represents and warrants that the Authorized Agent
has agreed to act as said agent for service of process, and the Company agrees
to take any and
30
all action, including the filing of any and all documents and instruments in
full force and effect, as aforesaid. Service of process upon the Authorized
Agent and written notice of such service to the Company shall be deemed, in
every respect, effective service of process upon the Company.
18. The Underwriting Agreement may be executed by any one or more of
the parties hereto and thereto in any number of counterparts, each of which,
when so executed and delivered, shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.
31
ANNEX I
DESCRIPTION OF COMFORT LETTER
Pursuant to Section 7(f) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriters to the effect that:
(i) They are the auditors of the Company and are independent as
required by the OSA, the Securities Act and the applicable rules and
regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited by them and included or
incorporated by reference in the Registration Statement or the Prospectus
comply as to form in all material respect with the applicable accounting
requirements of the OSA, the Securities Act and the related published rules
and regulations thereunder;
(iii) On the basis of limited procedures, not constituting an audit in
accordance with Canadian generally accepted auditing standards, consisting
of the performance of procedures specified by the American Institute of
Certified Public Accountants for a review of interim financial statements
as described in SAS No.71, a reading of the unaudited financial statements
and other information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries since
the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of the
Company responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, nothing came
to their attention that caused them to believe that:
(A) (i) the unaudited interim consolidated statement of financial
position and the consolidated statements of earnings, and changes in
financial position included or incorporated by reference in the
Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the OSA, the Securities Act and
the applicable rules and regulations thereunder or are not presented,
in all material respects, in accordance with Canadian generally
accepted accounting principles applied on a basis substantially
consistent with the basis for the audited consolidated balance sheets
and the consolidated statements of earnings and
A-1
retained earnings, and changes in financial position included in the
Company's Annual Information Form for the most recent fiscal year; or
(ii) any material modifications should be made to the unaudited
interim consolidated statement of financial position and the
consolidated statements of earnings, and changes in financial position
included or incorporated by reference in the Prospectus for them to be
in conformity with Canadian generally accepted accounting principles;
(B) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the consolidated
capital stock or in the consolidated long-term debt of the Company and
its subsidiaries, or any decreases in consolidated net current assets
or net assets or stockholders' equity or other items specified by the
representatives of the Underwriters (the "Representatives"), or by any
increases in any items specified by the Representatives, in each case
as compared with amounts shown in the latest balance sheet included or
incorporated by reference in the Prospectus, except in each case for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(C) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the
specified date referred to in Clause (B) there were any decreases in
consolidated net revenues or operating profit or in the total or per
share amounts of consolidated net income or other items specified by
the Representative, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period
of the preceding year and with any other period of corresponding
length specified by the Representatives, except in each case for
increase or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter and;
(iv) In addition to the audit referred to in their report(s) included
or incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraph (iii) above, they have carried out certain specified procedures,
not constituting an audit in accordance with Canadian generally accepted
auditing standards, with respect to certain amounts, percentages and
financial information specified by the Representative, which appear in the
Prospectus or in documents incorporated by reference in the Prospectus,
A-2
and have compared certain of such amounts, percentages and financial
information with the accounting records of the Company and its subsidiaries
and have found them to be in agreement.
All references in this Annex I to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Underwriting Agreement as of the date of the
letter delivered on the date of the Underwriting Agreement for purposes of
such letter and to the Prospectus as amended or supplemented (including the
documents incorporated by reference therein) in relation to the applicable
Designated Securities for purposes of the letter delivered at the Time of
Delivery for such Designated Securities.
A-3
