EXHIBIT 99.14
-------------
UNDERWRITING AGREEMENT
November 19, 2003
Vermilion Energy Trust
Vermilion Resources Ltd.
0000, 000 - 0xx Xxxxxx XX
Xxxxxxx, XX X0X 0X0
ATTENTION: XX. XXXXXXX XXXXXXX, PRESIDENT AND CHIEF EXECUTIVE OFFICER
Dear Sirs:
RE: OFFERING OF UNITS OF VERMILION ENERGY TRUST
--------------------------------------------------------------------------------
CIBC World Markets Inc., BMO Xxxxxxx Xxxxx Inc., RBC Dominion Securities Inc.,
TD Securities Inc., National Bank Financial Inc., Canaccord Capital Corporation,
Scotia Capital Inc. and FirstEnergy Capital Corp. (the "UNDERWRITERS")
understand that Vermilion Energy Trust (the "TRUST") proposes to issue and sell
5,500,000 Units (as herein defined) (the "FIRM UNITS").
Subject to the terms and conditions hereof, the Underwriters hereby severally,
and not jointly, agree to purchase from the Trust the Firm Units at the Closing
Time (as herein defined) in the respective percentages set forth in section 18,
and the Trust hereby agrees to issue and sell to the Underwriters at the Closing
Time all, but not less than all, of the Firm Units at the purchase price of
$14.10 per Unit.
The Trust hereby grants to the Underwriters an option (the "UNDERWRITERS'
OPTION") to purchase from the Trust, at the Underwriters' election, up to
550,000 additional Units (the "UNDERWRITERS' OPTION UNITS") exercisable at any
time, in whole or in part, until 48 hours prior to the Closing Time. In the
event and to the extent that the Underwriters exercise the Underwriters' Option,
subject to the terms and conditions hereof, the Underwriters hereby severally,
and not jointly, agree to purchase from the Trust the number of Underwriters'
Option Units as to which the Underwriters' Option shall have been exercised in
the respective percentages set forth in section 18, and the Trust hereby agrees
to issue and sell such number of Underwriters' Option Units to the Underwriters
at the purchase price of $14.10 per Unit.
1. DEFINITIONS
In this agreement:
(a) "ABCA" means the Business Corporations Act (Alberta), R.S.A. 2000, c. B
9, as amended, including the regulations promulgated thereunder;
(b) "AIF" means the initial annual information form of the Trust dated
April 11, 2003;
(c) "APPLICABLE SECURITIES LAWS" means all applicable Canadian securities,
corporate and other laws, rules, regulations, notices and policies in
the Qualifying Provinces;
2
(d) "ARRANGEMENT" means the plan of arrangement under the ABCA completed on
January 22, 2003 pursuant to which, among other things, former holders
of common shares of Vermilion received Units or Exchangeable Shares, or
a combination thereof, and Vermilion became a wholly-owned subsidiary
of the Trust;
(e) "ASC" means the Alberta Securities Commission;
(f) "ASSETS" means the interests in oil and natural gas reserves and
associated facilities of Vermilion and its subsidiaries as described in
the Prospectuses;
(g) "AVENTURA" means Aventura Energy Inc., a corporation incorporated
pursuant to the ABCA;
(h) "AVENTURA SHARES" means the common shares of Aventura;
(i) "BUSINESS DAY" means a day which is not Saturday or Sunday or a legal
holiday in the City of Calgary, Alberta;
(j) "CLOSING DATE" means December 10, 2003 or such other date as may be
agreed to by the Underwriters and the Trust, but in any event, not
later than December 31, 2003;
(k) "CLOSING TIME" means 6:15 a.m. (Calgary time) or such other time, on
the Closing Date, as the Underwriters and the Trust may agree;
(l) "DOCUMENTS" means, collectively, the documents incorporated by
reference in the Prospectuses and any Supplementary Material including,
without limitation:
(i) the AIF;
(ii) the audited consolidated financial statements of Vermilion as
at and for the years ended December 31, 2002 and 2001,
together with the notes thereto and the auditors' report
thereon included as Schedule A to the AIF;
(iii) "Management's Discussion and Analysis" of financial results
and financial condition of Vermilion for the year ended
December 31, 2002 included on pages 48 to 58 of the AIF;
(iv) the comparative unaudited consolidated financial statements of
the Trust as at and for the nine month period ended September
30, 2003; and
(v) "Management's Discussion and Analysis" of financial results
and financial condition of the Trust for the nine month period
ended September 30, 2003;
(m) "EXCHANGE" means the Toronto Stock Exchange;
(n) "EXCHANGEABLE SHARES" means the Series A exchangeable shares in the
capital of Vermilion;
(o) "GLJ" means Xxxxxxx Xxxxxxxx Jung Associates Ltd., independent oil and
gas reservoir engineers of Calgary, Alberta;
(p) "GLJ REPORT" means the report prepared by GLJ dated March 20, 2003
evaluating, effective January 1, 2003, certain crude oil, natural gas
liquids and natural gas reserves attributable to Vermilion's
properties;
3
(q) "MATERIAL AGREEMENTS" means, collectively, the Trust Indenture, the
Voting and Exchange Trust Agreement, the Support Agreement, the
Vermilion Notes and the Royalty Agreement;
(r) "MRRS PROCEDURES" means the mutual reliance review system and
procedures provided for by National Policy 43-201 of the Canadian
Securities Administrators relating to the Mutual Reliance Review
System, as amended or replaced;
(s) "NI 44-101" means National Instrument 44-101 of the Canadian Securities
Administrators, as amended or replaced;
(t) "OFFERED UNITS" means, collectively, the Firm Units and the
Underwriters' Option Units;
(u) "PARTNERSHIP" means Vermilion Resources, the partners of which are
Vermilion and its wholly-owned subsidiary, 764031 Alberta Ltd.;
(v) "PRELIMINARY PROSPECTUS" means the preliminary short form prospectus of
the Trust to be dated November 21, 2003 and any amendments thereto, in
respect of the distribution of the Offered Units, in the English and
French languages, including the documents incorporated by reference
therein;
(w) "PROSPECTUS" means the (final) short form prospectus of the Trust and
any amendments thereto, in respect of the distribution of the Offered
Units, in the English and French languages, including the documents
incorporated by reference therein;
(x) "PROSPECTUSES" means, collectively, the Preliminary Prospectus and the
Prospectus;
(y) "PUBLIC RECORD" means all information filed after December 31, 2001 by
or on behalf of the Trust and its predecessor entities including,
without limitation, Vermilion, with the Securities Commissions,
including without limitation, the Documents, the Trust Financial
Statements, the Vermilion Financial Statements, the Prospectus, any
Supplementary Material and any other information filed with any
Securities Commission in compliance, or intended compliance, with any
Applicable Securities Laws;
(z) "QUALIFYING PROVINCES" means each of the provinces of British Columbia,
Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nova Scotia, New
Brunswick, Newfoundland and Labrador and Xxxxxx Xxxxxx Island;
(aa) "ROYALTY" means the royalty granted under the Royalty Agreement
entitling the Trust to approximately 99% of the net cash flow generated
from the present and future oil and natural gas interests, rights and
related tangibles of the Partnership after certain costs, expenditures
and deductions;
(bb) "ROYALTY AGREEMENT" means the royalty agreement among Vermilion, 764031
Alberta Ltd., the Partnership and the Trust dated January 22, 2003
providing for the creation of the Royalty;
(cc) "SECURITIES COMMISSIONS" means the securities commissions or similar
regulatory authorities in the Qualifying Provinces;
(dd) "SELLING DEALER GROUP" means the dealers and brokers other than the
Underwriters who participate in the offer and sale of the Offered Units
pursuant to this agreement;
4
(ee) "SPECIAL VOTING RIGHT" means the special voting right of the Trust,
issued and certified under the Trust Indenture for the time being
outstanding and entitled to the benefits and subject to the limitations
set forth therein;
(ff) "SUBSIDIARY" has the meaning assigned thereto in the ABCA and, in
respect of the Trust or Vermilion includes Aventura, 764031 Alberta
Ltd., Vermilion REP S.A., Vermilion (Barbados) (2003) Limited, Slimm
Investment BV, Vermilion Ontario Finance Ltd. and the Partnership;
(gg) "SUPPLEMENTARY MATERIAL" means, collectively, any amendment to the
Preliminary Prospectus or Prospectus, any amended or supplemented
Preliminary Prospectus or Prospectus or any ancillary material,
information, evidence, return, report, application, statement or
document which may be filed by or on behalf of the Trust under the
Applicable Securities Laws;
(hh) "SUPPORT AGREEMENT" means the support agreement entered into between
the Trust and Vermilion Acquisition Ltd. (prior to its amalgamation
with Vermilion) on January 16, 2003;
(ii) "TAX ACT" means the INCOME TAX ACT (Canada) and the regulations
thereunder;
(jj) "TRUSTEE" means Computershare Trust Company of Canada, as trustee of
the Trust;
(kk) "TRUST ASSETS" means, collectively, the Royalty, the Vermilion Notes,
common shares of Vermilion and cash;
(ll) "TRUST INDENTURE" means the amended and restated trust indenture dated
January 15, 2003 between the Trustee and Vermilion, pursuant to which
the Trust is governed;
(mm) "TRUST'S AUDITORS" means Deloitte & Touche LLP, chartered accountants,
Calgary, Alberta;
(nn) "TRUST'S COUNSEL" means Xxxxxxx Xxxxx LLP or such other legal counsel
as the Trust, with the consent of the Underwriters, may appoint;
(oo) "TRUST FINANCIAL STATEMENTS" means the unaudited comparative
consolidated financial statements of the Trust as at and for the nine
months ended September 30, 2003, together with the notes thereto;
(pp) "UNDERWRITERS' COUNSEL" means Burnet, Xxxxxxxxx & Xxxxxx LLP or such
other legal counsel as the Underwriters, with the consent of the Trust,
may appoint;
(qq) "UNITED STATES" means the United States of America, its territories and
possessions, any state of the United States and the District of
Columbia;
(rr) "UNITHOLDERS" means the holders from time to time of Units;
(ss) "UNITS" means trust units of the Trust, each unit representing an equal
fractional undivided beneficial interest in the Trust;
(tt) "VERMILION" means Vermilion Resources Ltd., a corporation amalgamated
under the ABCA;
(uu) "VERMILION FINANCIAL STATEMENTS" means the audited consolidated
financial statements of Vermilion as at and for the year ended December
31, 2002 together with the notes thereto and the auditors' report;
5
(vv) "VERMILION NOTES" means the unsecured, subordinated notes issued by
Vermilion under the Arrangement;
(ww) "VOTING AND EXCHANGE AGREEMENT TRUSTEE" means Computershare Trust
Company of Canada, the initial trustee under the Voting and Exchange
Trust Agreement; and
(xx) "VOTING AND EXCHANGE TRUST AGREEMENT" means the voting and exchange
trust agreement entered into on January 16, 2003 between the Trust,
Vermilion Acquisition Ltd. (prior to its amalgamation with Vermilion)
and the Voting and Exchange Agreement Trustee;
and "MISREPRESENTATION", "MATERIAL CHANGE" and "MATERIAL FACT" shall have the
meanings ascribed thereto under the Applicable Securities Laws of the Qualifying
Provinces, "DISTRIBUTION" means "DISTRIBUTION" or "DISTRIBUTION TO THE PUBLIC",
as the case may be, as defined under the Applicable Securities Laws of the
Qualifying Provinces and "distribute" has a corresponding meaning.
2. UNDERWRITING FEE
In consideration for their services in underwriting the distribution of and
purchasing the Offered Units, the Trust agrees to pay the Underwriters at the
Closing Time a fee of $0.705 per Offered Unit for each Offered Unit purchased
(being an aggregate amount of $3,877,500 in respect of the Firm Units and an
aggregate amount of $387,750 in respect of the Underwriters' Option Units, if
the Underwriters' Option is exercised in full).
The foregoing fees (the "UNDERWRITING FEE") may, at the sole option of the
Underwriters, be deducted from the aggregate gross proceeds of the sale of the
Offered Units and withheld for the account of the Underwriters. For greater
certainty, the services provided by the Underwriters in connection herewith will
not be subject to the Goods and Services Tax provided for in the EXCISE TAX ACT
(Canada) and taxable supplies provided will be incidental to the exempt
financial services provided. However, in the event that Canada Customs and
Revenue Agency determines that Goods and Services Tax provided for in the EXCISE
TAX ACT (Canada) is exigible on the Underwriting Fee, the Trust agrees to pay
the amount of Goods and Services Tax forthwith upon the request of the
Underwriters. The Trust also agrees to pay the Underwriters' expenses as set
forth in section 10.
3. QUALIFICATION FOR SALE
(a) The Trust represents and warrants to the Underwriters that it is
eligible to use the prompt offering qualification system described in
NI 44-101 and the simplified prospectus rules of the Securities Act
(Quebec) for the distribution of the Offered Units.
(b) The Trust shall:
(i) not later than November 21, 2003, have prepared and filed the
Preliminary Prospectus (in the English and French languages)
and other documents required under the Applicable Securities
Laws with the Securities Commissions and designated the ASC as
the principal regulator; and
(ii) have obtained not later than November 24, 2003 a preliminary
MRRS decision document from the ASC dated not later than
November 21, 2003, evidencing that a receipt has been issued
for the Preliminary Prospectus in each Qualifying Province;
6
(iii) forthwith after any comments with respect to the Preliminary
Prospectus have been received from the Securities Commissions,
but not later than December 3, 2003 (or such later date as may
be agreed to in writing by the Trust, Vermilion and the
Underwriters), have:
(A) prepared and filed the Prospectus (in the English and
French languages) and other documents required under
the Applicable Securities Laws with the Securities
Commissions; and
(B) obtained a final MRRS decision document from the ASC,
evidencing that a receipt has been issued for the
Prospectus in each Qualifying Province, or otherwise
obtained a receipt for the Prospectus from each of
the Securities Commissions;
and otherwise fulfilled all legal requirements to
enable the Offered Units to be offered and sold to
the public in each of the Qualifying Provinces
through the Underwriters or any other investment
dealer or broker registered in the applicable
Qualifying Province; and
(iv) until the completion of the distribution of the Offered Units,
promptly take all additional steps and proceedings that from
time to time may be required under the Applicable Securities
Laws in each Qualifying Province to continue to qualify the
Offered Units for distribution or, in the event that the
Offered Units have, for any reason, ceased to so qualify, to
again qualify the Offered Units for distribution.
(c) Prior to the filing of the Prospectuses and, during the period of
distribution of the Offered Units, prior to the filing with any
Securities Commissions of any Supplementary Material, the Trust shall
have allowed the Underwriters and the Underwriters' counsel to
participate fully in the preparation of, and to approve the form of,
such documents and to have reviewed any documents incorporated by
reference therein.
(d) During the period from the date hereof until completion of the
distribution of the Offered Units, the Trust shall allow the
Underwriters to conduct all due diligence which they may reasonably
require in order to fulfil their obligations as underwriters and in
order to enable the Underwriters responsibly to execute the
certificates required to be executed by them in the Prospectuses or in
any Supplementary Material.
(e) The Trust shall take or cause to be taken all such other steps and
proceedings, including fulfilling all legal, regulatory and other
requirements, as required under Applicable Securities Laws to qualify
the Offered Units for distribution to the public in the Qualifying
Provinces.
4. DELIVERY OF PROSPECTUS AND RELATED DOCUMENTS
The Trust shall deliver or cause to be delivered without charge to the
Underwriters and the Underwriters' counsel the documents set out below at the
respective times indicated:
(a) prior to or contemporaneously, as nearly as practicable, with the
filing with the Securities Commissions of each of the Preliminary
Prospectus and the Prospectus:
7
(i) copies of the Preliminary Prospectus and the Prospectus, each
in the English and French languages, signed as required by the
Applicable Securities Laws of the Qualifying Provinces; and
(ii) copies of any documents incorporated by reference therein
which have not previously been delivered to the Underwriters;
(b) as soon as they are available, copies of any Supplementary Material, in
the English and French languages, as required, signed as required by
the Applicable Securities Laws and including, in each case, copies of
any documents incorporated by reference therein which have not been
previously delivered to the Underwriters;
(c) prior to the filing of the Prospectus with the Securities Commissions,
a "comfort letter" from each of the Trust's and Vermilion's auditors,
dated the date of the Prospectus, addressed to the Underwriters and
reasonably satisfactory in form and substance to the Underwriters and
the Underwriters' counsel, to the effect that they have carried out
certain procedures performed for the purposes of comparing certain
specified financial information and percentages appearing in the
Prospectus and the documents incorporated therein by reference with
indicated amounts in the financial statements or accounting records of
each of the Trust and Vermilion and have found such information and
percentages to be in agreement, which comfort letter shall be based on
each of the Trust's and Vermilion's auditors review having a cut off
date of not more than two Business Days prior to the date of the
Prospectus;
(d) at the respective times of delivery to the Underwriters of the
Preliminary Prospectus and the Prospectus, the Trust shall deliver to
the Underwriters:
(i) an opinion of local counsel in Quebec, addressed to the
Underwriters and the Underwriters' counsel and dated at the
date of the filing of the Preliminary Prospectus and the
Prospectus, respectively, in form acceptable to the
Underwriters and the Underwriters' counsel, acting reasonably,
to the effect that, except for information in the Prospectus
translated by each of the Trust's and Vermilion's auditors,
the French language version of such document (including
information incorporated by reference therein) is in all
material respects a complete and proper translation of the
English language versions thereof and is not susceptible to
any materially different interpretation with respect to any
material matter contained therein; and
(ii) an opinion from each of the Trust's and Vermilion's auditors,
addressed to the Underwriters and the Underwriters' counsel
and dated the date of the filing of the Preliminary Prospectus
and the Prospectus, respectively, in form acceptable to the
Underwriters and the Underwriters' counsel, acting reasonably,
to the effect that the information excepted from the opinion
of counsel referred to in subsection 4(d)(i) in the French
language version of such document (including information
incorporated by reference therein) is in all material respects
a complete and proper translation of the information contained
in the English language versions thereof and is not
susceptible to any materially different interpretation with
respect to any material matter contained therein.
Opinions and comfort letters similar to the foregoing shall be provided to the
Underwriters with respect to any Supplementary Material and any other relevant
document at the time the same is presented to the Underwriters for their
signature or, if the Underwriters' signature is not required, at the time the
same is
8
filed. All such letters shall be in form and substance acceptable to the
Underwriters and the Underwriters' counsel, acting reasonably.
The deliveries referred to in subsections 4(a) and (b) shall also constitute the
Trust's consent to the use by the Underwriters and other members of the Selling
Dealer Group of the Documents, the Prospectuses and any Supplementary Material
in connection with the offering and sale of the Offered Units.
5. COMMERCIAL COPIES
(a) The Trust shall, as soon as possible but in any event not later than
noon (local time at the place of delivery) on the Business Day
following the date of the filing of the Preliminary Prospectus or the
Prospectus, as the case may be, with the Securities Commissions and no
later than noon (local time) on the first Business Day after the
execution of any Supplementary Material in connection with the
Prospectuses cause to be delivered to the Underwriters, without charge,
commercial copies of the Preliminary Prospectus, the Prospectus or such
Supplementary Material (in both English and French languages as
required by applicable law) in such numbers and in such cities as the
Underwriters may reasonably request by oral or written instructions to
the Trust or the printer thereof given no later than the time when the
Trust authorizes the printing of the commercial copies of such
documents.
(b) The Trust shall cause to be provided to the Underwriters such number of
copies of any documents incorporated by reference in the Preliminary
Prospectus, the Prospectus or any Supplementary Materials as the
Underwriters may reasonably request.
6. MATERIAL CHANGE
(a) During the period of distribution of the Offered Units, the Trust and
Vermilion will promptly inform the Underwriters of the full particulars
of:
(i) any material change (actual, anticipated or threatened) in or
affecting the business, operations, capital, properties,
assets, liabilities (absolute, accrued, contingent or
otherwise), condition (financial or otherwise) or results of
operations of the Trust or Vermilion, or their respective
subsidiaries (taken as a whole);
(ii) any change in any material fact contained or referred to in
the Preliminary Prospectus, the Prospectus or any
Supplementary Material; and
(iii) the occurrence of a material fact or event, which, in any such
case, is, or may be, of such a nature as to:
(A) render the Preliminary Prospectus, the Prospectus or
any Supplementary Material untrue, false or
misleading in any material respect;
(B) result in a misrepresentation in the Preliminary
Prospectus, the Prospectus or any Supplementary
Material; or
(C) result in the Preliminary Prospectus, the Prospectus
or any Supplementary Material not complying in any
material respect with the Applicable Securities Laws,
9
provided that if the Trust or Vermilion are uncertain as to whether a
material change, change, occurrence or event of the nature referred to
in this paragraph has occurred, the Trust and Vermilion shall promptly
inform the Underwriters of the full particulars of the occurrence
giving rise to the uncertainty and shall consult with the Underwriters
as to whether the occurrence is of such nature.
(b) During the period of distribution of the Offered Units, the Trust and
Vermilion shall promptly inform the Underwriters of the full
particulars of:
(i) any request of any Securities Commission for any amendment to
the Preliminary Prospectus, the Prospectus or any other part
of the Public Record or for any additional information;
(ii) the issuance by any Securities Commission or similar
regulatory authority, the Exchange or any other competent
authority of any order to cease or suspend trading of any
securities of the Trust or Vermilion or of the institution or
threat of institution of any proceedings for that purpose; and
(iii) the receipt by the Trust or Vermilion of any communication
from any Securities Commission or similar regulatory
authority, the Exchange or any other competent authority
relating to the Preliminary Prospectus, the Prospectus, any
other part of the Public Record or the distribution of the
Offered Units.
(c) The Trust and Vermilion will promptly comply to the reasonable
satisfaction of the Underwriters and the Underwriters' counsel with
Applicable Securities Laws with respect to any material change, change,
occurrence or event of the nature referred to in subsections 6(a) or
(b) above and the Trust and Vermilion will prepare and file promptly at
the Underwriters' request any amendment to the Prospectus or
Supplementary Material as may be required under Applicable Securities
Laws; provided that the Trust and Vermilion shall have allowed the
Underwriters and the Underwriters' counsel to participate fully in the
preparation of any Supplementary Material, to have reviewed any other
documents incorporated by reference therein and conduct all due
diligence investigations which the Underwriters may reasonably require
in order to fulfill their obligations as underwriters and in order to
enable the Underwriters responsibly to execute the certificate required
to be executed by them in, or in connection with, any Supplementary
Material, such approval not to be unreasonably withheld and to be
provided in a timely manner. The Trust shall further promptly deliver
to each of the Underwriters and the Underwriters' counsel a copy of
each Supplementary Material in the English and French languages as
filed with the Securities Commissions, and of opinions and letters with
respect to each such Supplementary Material substantially similar to
those referred to in section 4 above.
(d) During the period of distribution of the Offered Units, the Trust will
promptly provide to the Underwriters, for review by the Underwriters
and the Underwriters' counsel, prior to filing or issuance:
(i) any financial statement of the Trust or Vermilion;
(ii) any proposed document, including without limitation any
amendment to the AIF, new annual information form, material
change report, interim report, or information circular, which
may be incorporated, or deemed to be incorporated, by
reference in the Prospectus; and
10
(iii) any press release of the Trust,
and provide to the Underwriters, for review by the Underwriters and the
Underwriters' counsel any draft or final report with respect to the
crude oil, natural gas liquids and natural gas reserves, or value,
attributable to the Assets prepared by GLJ or any other independent
engineer as soon as practicable following receipt thereof by the Trust
or Vermilion.
7. REPRESENTATIONS AND WARRANTIES OF THE TRUST AND VERMILION
(a) Each delivery of the Prospectus pursuant to section 4 above shall
constitute a joint and several representation and warranty to the
Underwriters by each of the Trust and Vermilion (and each of the Trust
and Vermilion hereby acknowledges that each of the Underwriters is
relying on such representations and warranties in entering into this
agreement) that:
(i) all of the information and statements (other than any
information or statement relating solely to the Underwriters
and furnished to the Trust by the Underwriters expressly for
inclusion in the Preliminary Prospectus, Prospectus or any
Supplementary Material) contained in the Preliminary
Prospectus, the Prospectus or any Supplementary Material, as
applicable, including, without limitation, the documents
incorporated by reference, as the case may be:
(A) are at the respective dates of such documents, true
and correct in all material respects;
(B) contain no misrepresentation; and
(C) constitute full, true and plain disclosure of all
material facts relating to the Trust, Vermilion and
the Offered Units;
(ii) the Preliminary Prospectus, the Prospectus, or any
Supplementary Material, as applicable, including, without
limitation, the documents incorporated by reference, as the
case may be, complies in all material respects with the
Applicable Securities Laws, including without limitation NI
44-101 and the simplified prospectus rules of the SECURITIES
ACT (Quebec); and
(iii) except as is disclosed in the Public Record, there has been no
intervening material change (actual, proposed or prospective,
whether financial or otherwise), from the date of the
Preliminary Prospectus, the Prospectus and any Supplementary
Material to the time of delivery thereof, in the business,
operations, capital, properties, assets, liabilities
(absolute, accrued, contingent or otherwise), condition
(financial or otherwise) or results of operations, or
ownership of the Trust, Vermilion or their subsidiaries (taken
as a whole).
(b) In addition to the representations and warranties contained in
subsection (a) hereof, each of the Trust and Vermilion jointly and
severally represents and warrants to the Underwriters, and acknowledges
that each of the Underwriters is relying upon such representations and
warranties in entering into this agreement, that:
(i) the Trust has been properly created and organized and is a
valid and subsisting trust under the laws of the Province of
Alberta and has all requisite trust authority and power to
carry on its activities as described in the Prospectuses
including, without limitation, to
11
perform its obligations under the Material Agreements to which
it is a party and to own and administer its properties and
assets including, without limitation, the Trust Assets;
(ii) each of Vermilion and its subsidiaries has been duly
incorporated, or in the case of the non-corporate subsidiaries
formed, and organized and is valid and subsisting in good
standing under the laws of its jurisdiction of incorporation
or formation, as the case may be, and has all requisite
authority and power to carry on its business as described in
the Prospectuses and to own, lease and operate its properties
and assets as described in the Prospectuses including, without
limitation, to perform its obligations under the Material
Agreements to which it is a party;
(iii) each of Vermilion and its subsidiaries is qualified to carry
on business and is validly subsisting under the laws of each
jurisdiction in which it carries on its business and the Trust
is qualified to carry on its activities including, without
limitation, owning the Trust Assets in each jurisdiction where
it carries on such activities;
(iv) with the exception of Aventura, 764031 Alberta Ltd., Vermilion
REP S.A., Vermilion (Barbados) (2003) Limited, Slimm
Investment BV, Vermilion Ontario Finance Ltd. and the
Partnership, neither the Trust nor Vermilion has any
subsidiaries (as defined in the ABCA), and neither the Trust
nor Vermilion is "affiliated" with or a "holding corporation"
of any body corporate (within the meaning of those terms in
the ABCA);
(v) the Trust is a "unit trust" and a "mutual fund trust" under
the Tax Act and the Trust shall at all times conduct its
affairs so as to continue to qualify as a "unit trust" and a
"mutual fund trust", including by limiting its activities to
investing the property of the Trust in the Trust Assets and
other property in which a "mutual fund trust" is permitted by
the Tax Act to invest, and will not carry on any other
business;
(vi) all of the issued and outstanding securities of Vermilion,
764031 Alberta Ltd., Vermilion (Barbados) (2003) Limited,
Slimm Investment BV, Vermilion Ontario Finance Ltd., and
Vermilion REP S.A., and all of the equity and voting interests
of the Partnership are fully paid and non-assessable and
(other than 5,269,266 Exchangeable Shares of Vermilion)
legally and beneficially owned by the Trust in the case of
Vermilion, by Vermilion in the case of 000000 Xxxxxxx Ltd.,
Vermilion (Barbados) (2003) Limited, Slimm Investment BV,
Vermilion Ontario Finance Ltd. and Vermilion REP S.A., and by
Vermilion and 000000 Xxxxxxx Ltd. in the case of the
Partnership, free and clear of all mortgages, liens, charges,
pledges, security interests, encumbrances, claims or demands
whatsoever and (other than the holders of the 5,269,266
Exchangeable Shares who are entitled to receive Units on
exchange or retraction thereof) no person holds any securities
convertible into or exchangeable for issued or unissued shares
of Vermilion, 764031 Alberta Ltd., Vermilion REP S.A.,
Vermilion (Barbados) (2003) Limited, Slimm Investment BV,
Vermilion Ontario Finance Ltd. or the Partnership or has any
agreement, warrant, option, right or privilege (whether
pre-emptive or contractual) being or capable of becoming an
agreement, warrant, option or right for the acquisition of any
unissued or issued securities of Vermilion, 764031 Alberta
Ltd., Vermilion REP S.A., Vermilion (Barbados) (2003) Limited,
Slimm Investment BV, Vermilion Ontario Finance Ltd. or the
Partnership;
(vii) the Trust has full power and authority to issue the Firm Units
and the Underwriters' Option Units and to grant the
Underwriters' Option and, at the Closing Date, the Firm Units
and the Underwriters' Option Units will be duly and validly
authorized, allotted and
12
reserved for issuance and, upon receipt of the purchase price
therefor, will be duly and validly issued as fully paid and
non-assessable;
(viii) neither the Trust nor Vermilion is in default or breach of,
and the execution and delivery of, and the performance of and
compliance with the terms of this agreement by the Trust and
Vermilion and the transactions contemplated hereby does not
and will not result in any breach of, or constitute a default
under, and does not and will not create a state of facts
which, after notice or lapse of time or both, would result in
a breach of or constitute a default under, the Trust
Indenture, any term or provision of the articles or by-laws of
Vermilion or resolutions of the Trust or Vermilion, or any
indenture, mortgage, note, contract, agreement (written or
oral), instrument, lease or other document including, without
limitation, any Material Agreement to which the Trust or
Vermilion is a party or by which any of the Trust or Vermilion
is bound, or any judgment, decree, order, statute, rule or
regulation applicable to the Trust or Vermilion, which default
or breach might reasonably be expected to materially adversely
affect the business, operations, capital, properties, assets,
liabilities (absolute, accrued, contingent or otherwise),
condition (financial or otherwise) or results of operations of
the Trust, Vermilion and their subsidiaries (taken as a
whole);
(ix) each of the Trust and Vermilion has full trust or corporate
power and authority to enter into this agreement and to
perform its obligations set out herein and this agreement has
been duly authorized, executed and delivered by the Trust and
Vermilion and this agreement is a legal, valid and binding
obligation of the Trust and Vermilion enforceable against the
Trust and Vermilion in accordance with its terms subject to
the general qualifications set forth in the opinion of the
Trust's counsel in section 12(a)(viii);
(x) there has not been any material change in the capital, assets,
liabilities or obligations (absolute, accrued, contingent or
otherwise) of the Trust or Vermilion from the position set
forth in the Trust Financial Statements except as contemplated
by the Prospectuses and there has not been any adverse
material change in the business, operations, capital,
properties, assets, liabilities (absolute, accrued, contingent
or otherwise), condition (financial or otherwise) or results
of operations of the Trust, Vermilion and their subsidiaries
(taken as a whole) since December 31, 2002 except as disclosed
in the Prospectuses; and since that date there have been no
material facts, transactions, events or occurrences which
could materially adversely affect the business, operations,
capital, properties, assets, liabilities (absolute, accrued,
contingent or otherwise), condition (financial or otherwise)
or results of operations of the Trust, Vermilion and their
subsidiaries (taken as a whole) which have not been disclosed
in the Prospectuses;
(xi) the Trust Financial Statements fairly present, in accordance
with generally accepted accounting principles in Canada,
consistently applied, the financial position and condition,
the results of operations, cash flows and the other
information purported to be shown therein of the Trust and
Vermilion as at the dates thereof and for the periods then
ended and reflect all assets, liabilities and obligations
(absolute, accrued, contingent or otherwise) of the Trust and
Vermilion as at the dates thereof required to be disclosed by
generally accepted accounting principles in Canada, and
include all adjustments necessary for a fair presentation;
(xii) the Vermilion Financial Statements fairly present, in all
material respects, in accordance with generally accepted
accounting principles in Canada, consistently applied, the
financial position and condition, the results of operations,
cash flows and the other
13
information purported to be shown therein of Vermilion as at
the dates thereof and for the periods then ended and reflect
all assets, liabilities and obligations (absolute, accrued,
contingent or otherwise) of Vermilion as at the dates thereof
required to be disclosed by generally accepted accounting
principles in Canada, and include all adjustments necessary
for a fair presentation;
(xiii) the pro forma financial statements, including the notes
thereto, of the Trust contained in the Prospectuses and
incorporated by reference therein have been prepared in
accordance with Canadian generally accepted accounting
principles, consistently applied, have been prepared and
presented in accordance with Applicable Securities Laws, and
include all adjustments necessary for a fair presentation; the
assumptions contained in such pro forma financial statements
are suitably supported and consistent with the financial
results of the Trust and Vermilion, and such statements
provide a reasonable basis for the compilation of the pro
forma financial statements and such pro forma financial
statements, accurately reflect such assumptions;
(xiv) no authorization, approval or consent of any court or
governmental authority or agency is required to be obtained by
the Trust or Vermilion in connection with the sale and
delivery of the Offered Units hereunder, except such as may be
required under the Applicable Securities Laws;
(xv) there are no actions, suits, proceedings or inquiries pending
or (as far as the Trust or Vermilion are aware) threatened
against or affecting the Trust, Vermilion or their
subsidiaries at law or in equity or before or by any federal,
provincial, municipal or other governmental department,
commission, board, bureau, agency or instrumentality which in
any way materially adversely affects, or may in any way
materially adversely affect, the business, operations,
capital, properties, assets, liabilities (absolute, accrued,
contingent or otherwise), condition (financial or otherwise)
or results of operations of the Trust or Vermilion (taken as a
whole) or which affects or may affect the distribution of the
Offered Units;
(xvi) each of the Trust, Vermilion and their subsidiaries has
conducted and is conducting its business in all material
respects in compliance with all applicable laws, rules and
regulations of each jurisdiction in which it carries on
business and holds all material licences, registrations and
qualifications in all jurisdictions in which it carries on
business necessary to carry on its business as now conducted
and as contemplated to be conducted in the Prospectuses,
including, without limitation, performing its obligations
under the Material Agreements, if any, to which it is a party
except where such non-compliance or lack of license,
registration or qualification, in aggregate, would not have a
material adverse affect on the capital, assets, liabilities
(absolute, accrued, contingent or otherwise), business,
operations or condition (financial or otherwise) or the
results of the operations of the Trust or Vermilion (taken as
a whole);
(xvii) each of the Material Agreements is properly described as to
parties, dates, terms, conditions and amendments thereto, each
of such agreements is a legal, valid and binding obligation of
the respective parties thereto enforceable against such
parties in accordance with its terms subject to the general
qualifications set forth in the opinion of counsel in section
12(a)(viii) and each of the Trust and Vermilion, as
applicable, are in compliance with the terms of such Material
Agreements except where such non-compliance, in aggregate,
would not have a material adverse affect on the capital,
assets, liabilities (absolute accrued, contingent or
otherwise), business, operations or condition (financial
14
or otherwise) or the results of the operations of the Trust or
Vermilion (taken as a whole) and neither the Trust nor
Vermilion is aware of any default or breach of a material
nature under any of such Material Agreements by any other
party thereto;
(xviii) the information and statements set forth in the Public Record
to the extent incorporated by reference in the Prospectuses
were true, correct, and complete and did not contain any
misrepresentation, as of the date of such information or
statements;
(xix) the authorized capital of the Trust consists of an unlimited
number of Units and an unlimited number of Special Voting
Rights of which 52,544,594 Units and one Special Voting Right
(5,269,266 votes) are issued and outstanding;
(xx) no person holds any securities convertible into or
exchangeable for Units or Special Voting Rights or has any
agreement, warrant, option, right or privilege being or
capable of becoming an agreement, warrant, option or right for
the acquisition of any unissued Units or Special Voting Rights
or other securities of the Trust except for: up to 4,477,600
Units issuable pursuant to the Trust's trust unit rights
incentive plan; 5,892,831 Units (including adjustments for
distributions) issuable on the exchange of 5,269,266
outstanding Exchangeable Shares; Units issuable pursuant to
the Trust's distribution reinvestment and optional trust unit
purchase plan; and up to 2,000,000 Units issuable pursuant to
the Trust's employee bonus plan;
(xxi) no Securities Commission, stock exchange or similar regulatory
authority has issued any order preventing or suspending
trading in any securities of the Trust and no proceedings,
investigations or inquiries for such purpose are pending or
contemplated or (as far as the Trust or Vermilion are aware)
threatened;
(xxii) Computershare Trust Company of Canada at its principal office
in the cities of Calgary and Toronto, is the duly appointed
registrar and transfer agent of the Trust with respect to its
Units;
(xxiii) the minute books of the Trust, Vermilion and their
subsidiaries are true and correct and at the Closing Date will
contain the minutes of all meetings and all resolutions of the
trustee and of the directors, shareholders and Unitholders of
the Trust, Vermilion and their subsidiaries;
(xxiv) other than as provided for in this agreement, neither the
Trust, Vermilion nor any of their subsidiaries has incurred
any obligation or liability (absolute, accrued, contingent or
otherwise) for brokerage fees, finder's fees, agent's
commission or other similar forms of compensation with respect
to the transactions contemplated herein;
(xxv) the issued and outstanding Units are listed and posted for
trading on the Exchange;
(xxvi) the Trust is a "reporting issuer" in the provinces of Alberta,
British Columbia, Newfoundland and Labrador, Nova Scotia,
Ontario, Xxxxxx Xxxxxx Island, Quebec and Saskatchewan within
the meaning of the Applicable Securities Laws in such
provinces and has equivalent status in the provinces of
Manitoba and New Brunswick and is not in default of any
requirement of the Applicable Securities Laws in any material
respect;
(xxvii) the definitive form of certificates for the Units is in due
and proper form under the laws governing the Trust and in
compliance with the requirements of the Exchange;
15
(xxviii) the Trust and Vermilion have made available to GLJ, prior to
the issuance of the GLJ Report, for the purpose of preparing
the GLJ Report, all information requested by GLJ, which
information does not contain any material misrepresentation.
Neither the Trust nor Vermilion has any knowledge of a
material adverse change in any production, cost, price (except
for changes in commodity prices), reserves or other relevant
information provided to GLJ since the date that such
information was so provided. Each of the Trust and Vermilion
believes that the GLJ Report reasonably presents the quantity
and pre tax present worth values of the oil and gas reserves
attributable to the crude oil, natural gas liquids and natural
gas properties evaluated in such reports as at January 1, 2003
based upon information available at the time such reserves
information was prepared, and the Trust and Vermilion believe
that at the date of such report, such report did not (and as
of the date hereof, except as may be attributable to changes
in commodity prices and production since the date of such
report, does not) overstate the aggregate quantity or pre tax
present worth values of such reserves or the estimated monthly
production volumes therefrom;
(xxix) neither the Trust nor Vermilion is aware of any defects,
failures or impairments in the title of Vermilion or any of
its subsidiaries to the Assets, whether or not an action,
suit, proceeding or inquiry is pending or threatened or
whether or not discovered by any third party, which in
aggregate could have a material adverse effect on: (A) the
quantity and pre tax present worth values of the Assets; (B)
the current production volumes of Vermilion on a consolidated
basis; or (C) the current cash flow of Vermilion;
(xxx) to the knowledge of the Trust and Vermilion, the Trust has
good and marketable title to the Trust Assets, free and clear
of all liens, charges, encumbrances and security interests of
any nature or kind, all as described in the Prospectuses;
(xxxi) Vermilion has the necessary power and authority to execute and
deliver the Prospectuses on behalf of the Trust and all
requisite action has been taken by Vermilion to authorize the
execution and delivery by it of the Prospectuses on behalf of
the Trust;
(xxxii) the attributes and characteristics of the Offered Units
conform in all material respects to the attributes and
characteristics thereof described in the Prospectuses;
(xxxiii) with such exceptions as are not material to the Trust and
Vermilion (taken as a whole), each of the Trust and Vermilion
has duly and on a timely basis filed all tax returns required
to be filed by it, has paid all taxes due and payable by it
and has paid all assessments and reassessments and all other
taxes, governmental charges, penalties, interest and other
fines due and payable by it and which were claimed by any
governmental authority to be due and owing and adequate
provision has been made for taxes payable for any completed
fiscal period for which tax returns are not yet required and
there are no agreements, waivers, or other arrangements
providing for an extension of time with respect to the filing
of any tax return or payment of any tax, governmental charge
or deficiency by the Trust or Vermilion and to the best of the
knowledge, information and belief of the Trust and Vermilion
there are no actions, suits, proceedings, investigations or
claims threatened or pending against the Trust or Vermilion in
respect of taxes, governmental charges or assessments or any
matters under discussion with any governmental authority
relating to taxes, governmental charges or assessments
asserted by any such authority;
16
(xxxiv) Vermilion is the beneficial owner of 32,271,590 Aventura
Shares, which represent, to the best of its knowledge,
information and belief, 72.2% of the outstanding Aventura
Shares, and to the best of its knowledge, information and
belief, all of such shares have been duly and validly issued
and are fully paid and non-assessable and all such shares are
held by Vermilion free and clear of all mortgages, liens,
charges, pledges, security interests, encumbrances, claims or
demands whatsoever and no person has any agreement, warrant,
option, right or privilege (whether pre-emptive or
contractual) being or capable of becoming an agreement,
warrant, option or right for the acquisition of any of such
Aventura Shares;
and each of the Trust and Vermilion covenants and agrees that:
(xxxv) provided the Closing Time occurs on or before December 31,
2003, the Trust shall pay on the Firm Units, and, if issued,
on the Underwriters' Option Units, and the holders thereof
will be entitled to receive on or about January 15, 2004 the
distribution payable to Unitholders of record on December 31,
2003.
8. INDEMNITY
(a) Each of the Trust and Vermilion, jointly and severally, shall indemnify
and save the Underwriters, and each of the Underwriters' agents,
directors, officers, shareholders and employees harmless against and
from all liabilities, claims, demands, losses (other than losses of
profit in connection with the distribution of the Offered Units), costs
(including, without limitation, legal fees and disbursements on a full
indemnity basis), damages and expenses to which the Underwriters, or
any of the Underwriters' agents, directors, officers, shareholders or
employees may be subject or which the Underwriters, or any of the
Underwriters' agents, directors, officers, shareholders or employees
may suffer or incur, whether under the provisions of any statute or
otherwise, in any way caused by, or arising directly or indirectly from
or in consequence of:
(i) any information or statement contained in the Preliminary
Prospectus, the Prospectus, any Supplementary Material or in
any other document or material filed or delivered pursuant
hereto (other than any information or statement relating
solely to the Underwriters and furnished to the Trust by the
Underwriters expressly for inclusion in the Preliminary
Prospectus, Prospectus or any Supplementary Material) which is
or is alleged to be untrue or any omission or alleged omission
to provide any information or state any fact (other than any
information or fact relating solely to the Underwriters) the
omission of which makes or is alleged to make any such
information or statement untrue or misleading in light of the
circumstances in which it was made;
(ii) any misrepresentation or alleged misrepresentation (except a
misrepresentation which is based upon information relating
solely to the Underwriters and furnished to the Trust by the
Underwriters expressly for inclusion in the Preliminary
Prospectus, Prospectus or any Supplementary Material)
contained in the Preliminary Prospectus, the Prospectus, any
Supplementary Materials or in any other document or any other
part of the Public Record filed by or on behalf of the Trust;
(iii) any prohibition or restriction of trading in the securities of
the Trust or any prohibition or restriction affecting the
distribution of the Offered Units imposed by any competent
authority if such prohibition or restriction is based on any
misrepresentation or alleged misrepresentation of a kind
referred to in subsection 8(a)(ii);
17
(iv) any order made or any inquiry, investigation (whether formal
or informal) or other proceeding commenced or threatened by
any one or more competent authorities (not based upon the
activities or the alleged activities of the Underwriters or
their banking or Selling Dealer Group members, if any)
prohibiting, restricting, relating to or materially affecting
the trading or distribution of the Offered Units; or
(v) any breach of, default under or non-compliance by the Trust or
Vermilion with any requirements of the Applicable Securities
Laws, the by-laws, rules or regulations of the Exchange or any
representation, warranty, term or condition of this agreement
or in any certificate or other document delivered by or on
behalf of the Trust or Vermilion hereunder or pursuant hereto;
provided, however, no party who has engaged in any fraud, wilful
misconduct, fraudulent misrepresentation or negligence shall be
entitled, to the extent that the liabilities, claims, losses, costs,
damages or expenses were caused by such activity, to claim
indemnification from any person who has not engaged in such fraud,
wilful misconduct, fraudulent misrepresentation or negligence (provided
that, for greater certainty, the foregoing shall not disentitle an
Underwriter from claiming indemnification hereunder to the extent that
the negligence, if any, relates to the Underwriter's failure to conduct
adequate "due diligence").
(b) If any claim contemplated by subsection 8(a) shall be asserted against
any of the persons or corporations in respect of which indemnification
is or might reasonably be considered to be provided for in such
paragraphs, such person or corporation (the "INDEMNIFIED PERSON") shall
notify the Trust and Vermilion (collectively the "INDEMNIFYING
PARTIES") (provided that failure to so notify the Indemnifying Parties
of the nature of such claim in a timely fashion shall relieve the
Indemnifying Parties of liability hereunder only if and to the extent
that such failure materially prejudices the Indemnifying Parties'
ability to defend such claim) as soon as possible of the nature of such
claim and the Indemnifying Parties shall be entitled (but not required)
to assume the defence of any suit brought to enforce such claim,
provided however, that the defence shall be through legal counsel
selected by the Indemnifying Parties and acceptable to the Indemnified
Person acting reasonably and that no settlement may be made by the
Indemnifying Parties or the Indemnified Person without the prior
written consent of the other, such consent not to be unreasonably
withheld. The Indemnified Person shall have the right to retain its own
counsel in any proceeding relating to a claim contemplated by
subsection 8(a) if:
(i) the Indemnified Person has been advised by counsel that there
may be a reasonable legal defense available to the Indemnified
Person which is different from or additional to a defense
available to an Indemnifying Party and that representation of
the Indemnified Person and any one or more of the Indemnifying
Parties by the same counsel would be inappropriate due to the
actual or potential differing interests between them (in which
case the Indemnifying Parties shall not have the right to
assume the defense of such proceedings on the Indemnified
Person's behalf);
(ii) the Indemnifying Parties shall not have taken the defense of
such proceedings and employed counsel within ten (10) days
after notice has been given to the Indemnifying Parties of
commencement of such proceedings; or
(iii) the employment of such counsel has been authorized by the
Indemnifying Parties in connection with the defense of such
proceedings;
18
and, in any such event, the reasonable fees and expenses of such
Indemnified Person's counsel (on a solicitor and his client basis)
shall be paid by the Indemnifying Parties, provided that the
Indemnifying Parties shall not, in connection with any one such action
or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one
separate law firm (in addition to any local counsel) for all such
Indemnified Persons.
(c) Each of the Indemnifying Parties hereby waives its rights to recover
contribution from the Underwriters with respect to any liability of the
Indemnifying Party by reason of or arising out of any misrepresentation
in the Preliminary Prospectus, the Prospectus, any Supplementary
Material or any other part of the Public Record provided, however, that
such waiver shall not apply in respect of liability caused or incurred
by reason of any misrepresentation which is based upon information
relating solely to the Underwriters contained in such document and
furnished to the Trust by the Underwriters expressly for inclusion in
the Preliminary Prospectus, the Prospectus or any Supplementary
Material.
(d) If any legal proceedings shall be instituted against an Indemnifying
Party in respect of the Preliminary Prospectus, the Prospectus, any
Supplementary Material or any other part of the Public Record or the
Offered Units or if any regulatory authority or stock exchange shall
carry out an investigation of an Indemnifying Party in respect of the
Preliminary Prospectus, the Prospectus, any Supplementary Material or
any other part of the Public Record or the Offered Units and, in either
case, any Indemnified Person is required to testify, or respond to
procedures designed to discover information, in connection with or by
reason of the services performed by the Underwriters hereunder, the
Indemnified Persons may employ their own legal counsel and the
Indemnifying Parties shall pay and reimburse the Indemnified Persons
for the reasonable fees, charges and disbursements (on a full indemnity
basis) of such legal counsel, the other expenses reasonably incurred by
the Indemnified Persons in connection with such proceedings or
investigation and a fee at the normal per diem rate for any director,
officer or employee of the Underwriters involved in the preparation for
or attendance at such proceedings or investigation.
(e) The rights and remedies of the Indemnified Persons set forth in
sections 8 and 9 hereof are to the fullest extent possible in law
cumulative and not alternative and the election by any Underwriter or
other Indemnified Person to exercise any such right or remedy shall not
be, and shall not be deemed to be, a waiver of any other rights and
remedies.
(f) The Indemnifying Parties hereby acknowledge that the Underwriters are
acting as agents for the Underwriters' respective agents, directors,
officers, shareholders and employees under this section 8 and under
section 9 with respect to all such agents, directors, officers,
shareholders and employees.
(g) The Indemnifying Parties waive any right they may have of first
requiring an Indemnified Person to proceed against or enforce any other
right, power, remedy or security or claim or to claim payment from any
other person before claiming under this indemnity. It is not necessary
for an Indemnified Person to incur expense or make payment before
enforcing such indemnity.
(h) The rights of indemnity contained in this section 8 shall not apply if
the Indemnifying Parties have complied with the provisions of sections
3, 4 and 5 and the person asserting any claim contemplated by this
section 8 was not provided with a copy of the Prospectus or any
amendment to the Prospectus or other document which corrects any
misrepresentation or alleged misrepresentation which is the basis of
such claim and which was required, under Applicable Securities Laws, to
be delivered to such person by the Underwriters.
19
(i) If the Indemnifying Parties have assumed the defense of any suit
brought to enforce a claim hereunder, the Indemnified Person shall
provide the Indemnifying Parties copies of all documents and
information in its possession pertaining to the claim, take all
reasonable actions necessary to preserve its rights to object to or
defend against the claim, consult and reasonably cooperate with the
Indemnifying Parties in determining whether the claim and any legal
proceeding resulting therefrom should be resisted, compromised or
settled and reasonably cooperate and assist in any negotiations to
compromise or settle, or in any defense of, a claim undertaken by the
Indemnifying Parties.
9. CONTRIBUTION
In order to provide for just and equitable contribution in circumstances in
which the indemnification provided for in this agreement is due in accordance
with its terms but is, for any reason, held by a court to be unavailable from
one or more of the Indemnifying Parties on grounds of policy or otherwise, the
Indemnifying Parties and the party or parties seeking indemnification shall
contribute to the aggregate liabilities, claims, demands, losses (other than
losses of profit in connection with the distribution of the Offered Units),
costs (including, without limitation, legal fees and disbursements on a full
indemnity basis), damages and expenses to which they may be subject or which
they may suffer or incur:
(a) in such proportion as is appropriate to reflect the relative benefit
received by the Indemnifying Parties on the one hand, and by the
Underwriters on the other hand, from the offering of the Offered Units;
or
(b) if the allocation provided by subsection 9(a) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in subsection 9(a) above but
also to reflect the relative fault of the Underwriters on the one hand,
and the Indemnifying Parties, on the other hand, in connection with the
statements, commissions or omissions or other matters which resulted in
such liabilities, claims, demands, losses, costs, damages or expenses,
as well as any other relevant equitable considerations.
The relative benefits received by the Indemnifying Parties, on the one hand, and
the Underwriters, on the other hand, shall be deemed to be in the same
proportion that the total proceeds of the offering received by the Indemnifying
Parties (net of fees but before deducting expenses) bear to the fees received by
the Underwriters. In the case of liability arising out of the Preliminary
Prospectus, the Prospectus, any Supplementary Material or any other part of the
Public Record, the relative fault of the Indemnifying Parties, on the one hand,
and of the Underwriters, on the other hand, shall be determined by reference,
among other things, to whether the misrepresentation or alleged
misrepresentation, order, inquiry, investigation or other matter or thing
referred to in section 8 relates to information supplied or which ought to have
been supplied by, or steps or actions taken or done on behalf of or which ought
to have been taken or done on behalf of, one or more of the Indemnifying Parties
or the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such misrepresentation or
alleged misrepresentation, order, inquiry, investigation or other matter or
thing referred to in section 8.
The amount paid or payable by an Indemnified Person as a result of liabilities,
claims, demands, losses (other than losses of profit in connection with the
distribution of the Offered Units), costs, damages and expenses (or claims,
actions, suits or proceedings in respect thereof) referred to above shall,
without limitation, include any legal or other expenses reasonably incurred by
the Indemnified Person in connection with investigating or defending such
liabilities, claims, demands, losses, costs, damages and expenses (or claims,
actions, suits or proceedings in respect thereof) whether or not resulting in
any action, suit, proceeding or claim.
20
Each of the Indemnifying Parties and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this agreement were determined
by pro rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to in the immediately
preceding paragraphs. The rights to contribution provided in this section 9
shall be in addition to, and without prejudice to, any other right to
contribution which the Underwriters or other Indemnified Persons may have.
Any liability of the Underwriters under this section 9 shall be limited to the
amount actually received by the Underwriters under section 2.
10. EXPENSES
Whether or not the transactions contemplated herein shall be completed, all of
the Trust's, Vermilion's and all third party costs and expenses (including
applicable goods and services tax) of or incidental to the transactions
contemplated hereby including, without limitation, those relating to the
distribution of the Offered Units shall be borne by the Trust including, without
limitation, all costs and expenses of or incidental to the preparation, filing,
reproduction (including the commercial copies thereof) and translation of the
Preliminary Prospectus, the Prospectus, any Supplementary Material and the
"greensheet" and the delivery thereof to the Underwriters, the fees and expenses
of the Trust's counsel, the fees and expenses of agent counsel retained by the
Trust or the Trust's counsel, the fees and expenses of the Trust's transfer
agent, auditors, engineers and other outside consultants, the reasonable fees
and disbursements of the Underwriters' counsel, the out-of-pocket expenses of
the Underwriters, all stock exchange listing fees, the cost of preparing record
books for all of the parties to this agreement and their respective counsel and
all other third party and Trust and Vermilion costs and expenses relating to
this transaction.
11. TERMINATION
(a) The Underwriters, or any of them, may, without liability, terminate
their obligations hereunder, by written notice to the Trust, in the
event that after the date hereof and at or prior to the Closing Time:
(i) any order to cease or suspend trading in any securities of the
Trust or Vermilion or prohibiting or restricting the
distribution of any of the Offered Units, is made, or
proceedings are announced, commenced or threatened for the
making of any such order, by any securities commission or
similar regulatory authority, the Exchange or any other
competent authority, and has not been rescinded, revoked or
withdrawn;
(ii) there should occur or commence, or be announced or threatened,
any inquiry, action, suit, investigation or other proceeding
(whether formal or informal); or any order is issued by any
governmental authority or exchange; or any law or regulation
is promulgated, changed or announced; or any change or
proposed change in the income tax laws of Canada or the
interpretation or administration thereof occurs or is
announced or threatened; which in the opinion of the
Underwriters or any one of them, acting reasonably, is
expected to adversely affect the trading in or the
distribution of the Offered Units or any other securities of
the Trust or would be expected to have a material adverse
effect on the market price or value of the Units or other
securities of the Trust;
(iii) there shall have occurred any adverse change, as determined by
the Underwriters or any one of them in their sole discretion,
acting reasonably, in the senior management of Vermilion, or
in the business, operations, capital or condition (financial
or otherwise),
21
business prospects, properties, assets, liabilities or
obligations (absolute, accrued, contingent or otherwise) of
the Trust or Vermilion which in the Underwriters' opinion,
could reasonably be expected to have a significant adverse
effect on the market price or value of the Offered Units or
the investment quality or marketability of the Offered Units;
(iv) there should develop, occur or come into effect or existence
any event, action, state, condition or major financial
occurrence of national or international consequence, any law
or regulation, or any other occurrence of any nature
whatsoever, which, in the sole opinion of the Underwriters or
any one of them, acting reasonably, seriously adversely
affects, or involves, or will seriously adversely affect, or
involve, the financial markets or the business, operations or
affairs of the Trust or Vermilion (taken as a whole);
(v) the Underwriters shall become aware of any adverse material
change with respect to the Trust, Vermilion or any of their
subsidiaries (taken as a whole) which had not been publicly
disclosed or disclosed in writing to the Underwriters at or
prior to the date hereof which, in the sole opinion of the
Underwriters or any one of them, could reasonably be expected
to have a significant adverse effect on the market price or
value of the Offered Units or the investment quality or
marketability of the Offered Units; or
(vi) the Trust or Vermilion shall be in breach or default under or
non compliance with any representation, warranty, term or
condition of this agreement, in any material respect.
(b) The Underwriters, or any of them, may exercise any or all of the rights
provided for in subsection 11(a) or section 12 or 16 notwithstanding
any material change, change, event or state of facts and (except where
the Underwriter purporting to exercise any of such rights is in breach
of its obligations under this agreement) notwithstanding any act or
thing taken or done by the Underwriters or any inaction by the
Underwriters, whether before or after the occurrence of any material
change, change, event or state of facts including, without limitation,
any act of the Underwriters related to the offering or continued
offering of the Offered Units for sale and any act taken by the
Underwriters in connection with any amendment to the Prospectus
(including the execution of any amendment or any other Supplementary
Material) and the Underwriters shall only be considered to have waived
or be estopped from exercising or relying upon any of their rights
under or pursuant to subsection 11(a) or section 12 or 16 if such
waiver or estoppel is in writing and specifically waives or estops such
exercise or reliance.
(c) Any termination pursuant to the terms of this agreement shall be
effected by notice in writing delivered to the Trust, provided that no
termination shall discharge or otherwise affect any obligation of the
Trust or Vermilion under section 8, 9, 10 or 16. The rights of the
Underwriters to terminate their obligations hereunder are in addition
to, and without prejudice to, any other remedies they may have.
(d) If an Underwriter elects to terminate its obligation to purchase the
Offered Units as aforesaid, whether the reason for such termination is
within or beyond the control of the Trust or Vermilion, the liability
of the Trust or Vermilion hereunder shall be limited to the indemnity
referred to in section 8, the contribution rights referred to in
section 9 and the payment of expenses referred to in section 10
provided, however, an Underwriter shall not be entitled to the payment
of expenses referred to in section 10 if an Underwriter is in breach of
or default under or non-compliance with any representation, warranty,
term or condition of this agreement, in any material respect.
22
12. CLOSING DOCUMENTS
The obligations of the Underwriters hereunder, as to the Offered Units to be
purchased at the Closing Time shall be conditional upon all representations and
warranties and other statements of the Trust and Vermilion herein being, at and
as of the Closing Time, true and correct in all material respects, the Trust and
Vermilion having performed in all material respects, at the Closing Time, all of
their obligations hereunder theretofore to be performed, the Underwriters due
diligence review not revealing any material adverse information or fact which is
not currently generally known to the public which would, in the Underwriters'
reasonable opinion, seriously adversely affect the value or market price of the
Units or the investment quality or marketability of the Units and the
Underwriters receiving at the Closing Time:
(a) favourable legal opinions of the Trust's counsel and the Underwriters'
counsel addressed to the Underwriters, in form and substance reasonably
satisfactory to the Underwriters, with respect to such matters as the
Underwriters may reasonably request relating to the offering of the
Offered Units, the Trust and Vermilion and the transactions
contemplated hereby, including, without limitation, that:
(i) the Trust is valid and existing as a trust under the laws of
the Province of Alberta and having the Trustee as its trustee;
(ii) the Trust has the capacity and power to own and lease its
properties and assets and to conduct its business as described
in the Prospectuses;
(iii) each of Vermilion, 764031 Alberta Ltd., Vermilion REP S.A. and
Aventura has been duly incorporated, is validly subsisting and
has all requisite corporate power and authority to carry on
its business as now conducted by it and to own its properties
and assets and is qualified to carry on business under the
laws of the jurisdictions where it carries on a material
portion of its business;
(iv) the Partnership has been duly formed and organized and is
validly subsisting as a partnership under the laws of the
Province of Alberta and has all requisite partnership power
and authority to carry on its business as now conducted by it
and to own its properties and assets and is qualified to carry
on business under the laws of the jurisdictions where it
carries on a material portion of its business;
(v) the Trust is the registered and beneficial holder of all
issued and outstanding shares of Vermilion (other than
5,269,266 Exchangeable Shares of Vermilion), all of which have
been duly authorized and validly issued as fully paid and
non-assessable;
(vi) Vermilion is the registered and beneficial holder of all
issued and outstanding shares of 000000 Xxxxxxx Ltd.,
Vermilion (Barbados) (2003) Limited, Slimm Investment BV,
Vermilion Ontario Finance Ltd. and Vermilion REP S.A. and is
the beneficial holder of 32,271,590 Aventura Shares, all of
which have been duly authorized and validly issued as fully
paid and non-assessable;
(vii) Vermilion and 000000 Xxxxxxx Ltd. are collectively the
registered and beneficial holders of all issued and
outstanding equity and voting interests of the Partnership,
all of which have been duly authorized and validly issued as
fully paid and non-assessable;
(viii) each of the Trust and Vermilion has all necessary trust or
corporate power and authority to enter into this agreement and
to perform its obligations set out herein, and this
23
agreement has been duly authorized, executed and delivered by
the Trust and Vermilion, respectively, and constitutes a
legal, valid and binding obligation of each of the Trust and
Vermilion enforceable against the Trust and Vermilion in
accordance with its terms except that the validity, binding
effect and enforceability of the terms of agreements and
documents are subject to the qualification that such validity,
binding effect and enforceability may be limited by:
(A) applicable bankruptcy, insolvency, moratorium,
reorganization or other laws affecting creditors'
rights generally;
(B) equitable remedies, including the remedies of
specific performance and injunctive relief, being
available only in the discretion of the applicable
court;
(C) the statutory and inherent powers of a court to grant
relief from forfeiture, to stay execution of
proceedings before it and to stay executions on
judgments;
(D) the applicable laws regarding limitations of actions;
(E) enforceability of provisions which purport to sever
any provision which is prohibited or unenforceable
under applicable law without affecting the
enforceability or validity of the remainder of such
document would be determined only in the discretion
of the court;
(F) enforceability of the provisions exculpating a party
from liability or duty otherwise owed by it may be
limited under applicable law; and
(G) that rights to indemnity, contribution and waiver
under the documents may be limited or unavailable
under applicable law;
(ix) the execution and delivery of this agreement and the
fulfilment of the terms hereof by each of the Trust and
Vermilion, and the performance of and compliance with the
terms of this agreement by the Trust and Vermilion does not
and will not result in a breach of, or constitute a default
under, and does not create a state of facts which, after
notice or lapse of time or both, will result in a breach of or
constitute a default under, any applicable laws or any term or
provision of the Trust Indenture, the articles or by-laws of
Vermilion or resolutions of the Unitholders or the directors
or shareholders of the Trust or Vermilion, as applicable, or
any mortgage, note, indenture, contract, agreement (written or
oral), instrument, lease or other document to which the Trust
or Vermilion is a party or by which it is bound, of which such
counsel is aware including, without limitation, the Material
Agreements;
(x) the form of the definitive certificate representing the Units
has been approved and adopted by the Trust and complies with
all legal requirements (including all applicable requirements
of the Exchange) relating thereto;
(xi) the Offered Units have been duly and validly created, allotted
and issued as fully paid and non-assessable Units of the
Trust;
(xii) the Trust and the attributes of the Offered Units conform in
all material respects with the description thereof contained
in the Prospectuses;
24
(xiii) the Offered Units are eligible investments as set out under
the heading "Eligibility for Investment" in the Prospectuses;
(xiv) all necessary documents have been filed, all necessary
proceedings have been taken and all legal requirements have
been fulfilled as required under the Applicable Securities
Laws of each of the Qualifying Provinces in order to qualify
the Offered Units for distribution and sale to the public in
each of such Qualifying Provinces by or through investment
dealers and brokers duly registered under the applicable laws
of such provinces who have complied with the relevant
provisions of such Applicable Securities Laws;
(xv) the Trust is a "reporting issuer" not in default of any
requirement of the Securities Act (Alberta) and the
regulations thereunder and has a similar status under the
Applicable Securities Laws of each of the other Qualifying
Provinces;
(xvi) each of the Trust and Vermilion have the necessary power and
authority to execute and deliver the Prospectuses and all
necessary action has been taken by each of the Trust and
Vermilion to authorize the execution and delivery by it of the
Prospectuses and the filing thereof, as the case may be, in
each of the Qualifying Provinces in accordance with Applicable
Securities Laws;
(xvii) subject to the qualifications set out therein, the statements
in the Prospectus under the heading "Canadian Federal Income
Tax Considerations" constitute a fair summary of the principal
Canadian federal income tax consequences arising under the Tax
Act to persons referred to therein who hold Offered Units;
(xviii) all laws of the Province of Quebec relating to the use of the
French language have been complied with in connection with the
sale of the Offered Units to purchasers in the Province of
Quebec;
(xix) the Offered Units are conditionally listed and, upon
notification to the Exchange of the issuance and sale thereof,
will be posted for trading on the Exchange;
(xx) the authorized and issued capital of the Trust;
(xxi) Computershare Trust Company of Canada, at its principal
offices in Calgary and Toronto has been duly appointed the
transfer agent and registrar for the Trust Units (including
the Offered Units);
and as to all other legal matters, including compliance with Applicable
Securities Laws in any way connected with the issuance, sale and
delivery of the Offered Units as the Underwriters may reasonably
request.
It is understood that the respective counsel may rely on the opinions
of local counsel acceptable to them as to matters governed by the laws
of jurisdictions other than where they are qualified to practice law,
and on certificates of officers of the Trust, Vermilion, the transfer
agent and the Trust's and Vermilion's auditors as to relevant matters
of fact. It is further understood that the Underwriters' counsel may
rely on the opinion of the Trust's counsel as to matters which
specifically relate to the Trust, Vermilion and the Units, including
the issuance of the Offered Units;
25
(b) a certificate of each of the Trust and Vermilion dated the Closing
Date, addressed to the Underwriters and signed on behalf of the Trust
and Vermilion by the Chief Executive Officer and Chief Financial
Officer of Vermilion or such other officers or directors of Vermilion
satisfactory to the Underwriters, acting reasonably, certifying that:
(i) each of the Trust and Vermilion has complied with and
satisfied in all material respects all terms and conditions of
this agreement on its part to be complied with or satisfied at
or prior to the Closing Time, as applicable;
(ii) the representations and warranties of the Trust and Vermilion
set forth in this agreement are true and correct in all
material respects at the Closing Time, as if made at such
time;
(iii) no event of a nature referred to in subsection 11(a)(i), (ii)
or (iii) has occurred or to the knowledge of such officer is
pending, contemplated or threatened; and
(iv) such officer has no reason to believe that a distribution will
not be declared and paid to Unitholders of record on or about
December 31, 2003;
and the Underwriters shall have no knowledge to the contrary;
(c) a comfort letter of each of the Trust's and Vermilion's auditors,
addressed to the Underwriters and dated the Closing Date, as
applicable, satisfactory in form and substance to the Underwriters,
acting reasonably, bringing the information contained in the comfort
letter or letters referred to in subsection 4(c) up to the Closing
Time, as applicable, which comfort letter shall be not more than two
Business Days prior to the Closing Date;
(d) evidence satisfactory to the Underwriters that the Offered Units have
been conditionally listed on the Exchange not later than the close of
business on the last Business Day preceding the Closing Date and shall
be posted for trading as at the opening of business on the Closing
Date; and
(e) such other certificates and documents as the Underwriters may request,
acting reasonably.
13. DELIVERIES
The sale of the Firm Units and, if applicable, the Underwriters' Option Units,
shall be completed at the Closing Time at the offices of the Trust's counsel in
Calgary, Alberta or at such other place as the Trust and the Underwriters may
agree. Subject to the conditions set forth in section 12, the Underwriters, on
the Closing Date, shall deliver to the Trust by wire or inter-bank transfer of
immediately available funds payable to or to the order of the Trust, the sum of
$14.10 for each of the Offered Units purchased by the Underwriters, net of the
Underwriting Fee, against delivery by the Trust of:
(a) the opinions, certificates and documents referred to in section 12; and
(b) definitive certificates representing, in the aggregate, all of the Firm
Units and, if applicable, the Underwriters' Option Units, registered in
the name of CDS & Co or in such name or names as the CIBC World Markets
Inc. shall notify the Trust in writing not less than 24 hours prior to
the Closing Time.
26
14. RESTRICTIONS ON OFFERINGS
The Trust agrees that, prior to 90 days after the Closing Date, it shall not,
directly or indirectly, sell or offer to sell any Units, or otherwise issue,
lend, transfer or dispose of any securities exchangeable, convertible or
exercisable into Units or enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of Units, whether any such transaction is settled by delivery of Units
or other such securities, in cash or otherwise, or announce any intention to do
any of the foregoing, without the prior consent of CIBC World Markets Inc., on
behalf of the Underwriters, which consent may not be unreasonably withheld;
provided that the foregoing will not restrict the Trust from issuing rights
pursuant to the Trust's trust unit rights incentive plan described in the
Prospectuses, issuing Units pursuant to rights to purchase Units outstanding
under such plan on the date hereof, issuing Units pursuant to the Trust's
distribution reinvestment and optional purchase plan, issuing Units pursuant to
the Exchangeable Shares or issuing Units pursuant to the Trust's employee bonus
plan, in each case subject to the limitations, if any, in section 7(b)(xx).
15. NOTICES
Any notice or other communication to be given hereunder shall, in the case of
notice to be given to the Trust or Vermilion, be addressed to Vermilion,
Attention: Xxxxxxx Xxxxxxx, President and Chief Executive Officer, at the above
address, Fax No. (000) 000-0000 with a copy to:
Xxxxxxx Xxxxx LLP
Canterra Tower
0000, 000 - 0xx Xxxxxx XX
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxx X. Xxxxxxx
Fax No.: (000) 000-0000
and, in the case of notice to be given to the Underwriters, be addressed to:
CIBC World Markets Inc.
000, 000 - 0xx Xxxxxx XX
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxx X. Xxxxx
Fax No.: (000) 000 0000
BMO Xxxxxxx Xxxxx Inc.
0000, 000 - 0xx Xxxxxx XX
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxx X. Xxxxxx
Fax No.: (000) 000-0000
27
RBC Dominion Securities Inc.
Xxxxx 0000, Xxxxxxx Xxxx Xxxx
888 - 3rd Street SW
Calgary, Alberta T2P 5C5
Attention: Xxxx Xxxxxxxx
Fax No.: (000) 000-0000
TD Securities Inc.
800 Home Oil Tower
000 - 0xx Xxxxxx XX
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxxx X. Saksida
Fax No.: (000) 000-0000
National Bank Financial Inc.
0000, 000 - 0xx Xxxxxx XX
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxx X. Xxxxxxx
Fax No.: (000) 000-0000
Canaccord Capital Corporation
0xx Xxxxx, 000 - 0xx Xxxxxx XX
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxx X. Xxxxxxx
Fax No.: (000) 000-0000
Scotia Capital Inc.
0000, 000 - 0xx Xxxxxx XX
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxx XxXxxxxx
Fax No.: (000) 000-0000
FirstEnergy Capital Corp.
0000, 000 - 0xx Xxxxxx XX
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxxx X. Xxxx
Fax No.: (000) 000-0000
28
and a copy to:
Burnet, Xxxxxxxxx & Xxxxxx LLP
0000, 000 - 0xx Xxxxxx XX
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxxx X. Maslechko
Fax No.: (000) 000-0000
or to such other address as the party may designate by notice given to the
other. Each communication shall be personally delivered to the addressee or sent
by facsimile transmission to the addressee, and:
(a) a communication which is personally delivered shall, if delivered
before 4:00 p.m. (local time at the place of delivery) on a Business
Day, be deemed to be given and received on that day and, in any other
case be deemed to be given and received on the first Business Day
following the day on which it is delivered; and
(b) a communication which is sent by facsimile transmission shall, if sent
on a Business Day before 4:00 p.m. (local time at the place of
receipt), be deemed to be given and received on that day and, in any
other case, be deemed to be given and received on the first Business
Day following the day on which it is sent.
16. CONDITIONS
All terms, covenants and conditions of this agreement to be performed by the
Trust and Vermilion shall be construed as conditions, and any breach or failure
to comply with any material terms and conditions which are for the benefit of
the Underwriters shall entitle the Underwriters to terminate their obligations
to purchase the Offered Units, by written notice to that effect given to the
Trust prior to the Closing Time. The Underwriters may waive in whole or in part
any breach of, default under or non compliance with any representation,
warranty, term or condition hereof, or extend the time for compliance therewith,
without prejudice to any of their rights in respect of any other representation,
warranty, term or condition hereof or any other breach of, default under or non
compliance with any other representation, warranty, term or condition hereof,
provided that any such waiver or extension shall be binding on the Underwriters
only if the same is in writing.
17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All representations, warranties, terms and conditions herein (including, without
limitation, those contained in section 7) or contained in certificates or
documents submitted pursuant to or in connection with the transactions
contemplated herein shall survive the payment by the Underwriters for the
Offered Units, the termination of this agreement and the distribution of the
Offered Units pursuant to the Prospectus and shall continue in full force and
effect for the benefit of the Underwriters regardless of any investigation by or
on behalf of the Underwriters with respect thereto.
18. SEVERAL LIABILITY OF UNDERWRITERS
The Underwriters' rights and obligations under this agreement are several and
not joint and several including, without limitation, that:
(a) each of the Underwriters shall be obligated to purchase only the
percentage of the total number of Offered Units set forth opposite
their names set forth in this section 18;
29
(b) if one of the Underwriters does not purchase its applicable percentage
of the total number of Offered Units and the aggregate amount of such
Offered Units which such defaulting Underwriter or Underwriters agreed
but failed to purchase is more than 7.5% of the aggregate amount of the
Offered Units to be purchased on such date, each of the other
Underwriters who shall be willing and able to purchase its own
applicable percentage of the total number of Offered Units shall be
relieved of its obligations hereunder on submission to the Trust of
reasonable evidence of its ability and willingness to fulfil its
obligations hereunder at the Closing Time, provided that,
notwithstanding the provisions of paragraph (b) of this section 18, the
Underwriters who shall be willing and able to purchase their applicable
percentage of the total number of Offered Units shall have the right,
but not the obligation, to purchase the total number of Offered Units;
and
(c) if one or more of the Underwriters does not purchase its applicable
percentage of the total number of Offered Units and the aggregate
amount of such Offered Units which such defaulting Underwriter or
Underwriters agreed but failed to purchase is equal to or less than
7.5% of the aggregate amount of the Offered Units to be purchased on
such date, the non-defaulting Underwriters shall be obligated
severally, in the proportions that the respective percentages set forth
opposite their names set forth in this section 18 bear to the aggregate
of the percentages set forth opposite the names of all such
non-defaulting Underwriters, to purchase the Offered Units with such
defaulting Underwriter or Underwriters agreed but failed to purchase at
such time.
The applicable percentage of the total number of Offered Units which each of the
Underwriters shall be separately obligated to purchase is as follows:
CIBC World Markets Inc. 25%
BMO Xxxxxxx Xxxxx Inc. 15%
RBC Dominion Securities Inc. 15%
TD Securities Inc. 15%
National Bank Financial Inc. 10%
Canaccord Capital Corporation 7.5%
Scotia Capital Inc. 7.5%
FirstEnergy Capital Corp. 5%
--------
100%
========
Nothing in this agreement shall obligate the Trust to sell the Underwriters less
than all of the Firm Units or shall relieve any Underwriter in default from
liability to the Trust, Vermilion or any non defaulting Underwriter in respect
of the defaulting Underwriter's default hereunder. In the event of a termination
by the Trust or Vermilion of their obligations under this agreement, there shall
be no further liability on the part of the Trust or Vermilion to the
Underwriters except in respect of any liability which may have arisen or may
thereafter arise under section 8, 9 or 10.
19. AUTHORITY TO BIND UNDERWRITERS
The Trust and Vermilion shall be entitled to and shall act on any notice,
waiver, extension or communication given by or on behalf of the Underwriters by
CIBC World Markets Inc., which shall represent the Underwriters and which shall
have the authority to bind the Underwriters in respect of all matters hereunder,
except in respect of any settlement under section 8 or 9, any matter referred to
in section 11 or any agreement under section 18. While not affecting the
foregoing, CIBC World Markets Inc. shall consult with the other Underwriters
with respect to any such notice, waiver, extension or other communication.
30
20. UNDERWRITERS COVENANTS
(a) Each of the Underwriters covenants and agrees with the Trust that it
will:
(i) conduct activities in connection with the proposed offer and
sale of the Offered Units in compliance with all the
Applicable Securities Laws and cause a similar covenant to be
contained in any agreement entered into with any Selling
Dealer Group established in connection with the distribution
of the Offered Units;
(ii) not solicit subscriptions for the Offered Units, trade in
Offered Units or otherwise do any act in furtherance of a
trade of Offered Units outside of the Qualifying Provinces or,
subject to subsection 20(c), in other jurisdictions outside of
Canada;
(iii) use all reasonable efforts to complete the distribution of the
Offered Units as soon as possible; and
(iv) as soon as reasonably practicable after the Closing Date
provide the Trust with a breakdown of the number of Offered
Units sold in each of the Qualifying Provinces and, upon
completion of the distribution of the Offered Units, provide
to the Trust notice to that effect, if required by Applicable
Securities Laws.
(b) For the purposes of this section 20, the Underwriters shall be entitled
to assume that the Offered Units may be lawfully offered for sale and
sold in the Qualifying Provinces if the final MRRS decision document
has been issued evidencing that a receipt for the Prospectus has been
issued by the Securities Commissions, provided the Underwriters do not
have actual knowledge, and have not been notified in writing by the
Trust or Vermilion, of any circumstances that would legally prohibit
such distribution.
(c) The Underwriters shall be entitled to offer the Offered Units to
certain purchasers in the United States in accordance with the terms
set out in SCHEDULE "A" attached hereto, which terms, and the
representations, warranties and covenants set out in such Schedule,
shall be deemed to be incorporated by reference into this agreement.
(d) No Underwriter will be liable to the Trust under this section 20 with
respect to a default by any of the other Underwriters but will be
liable to the Trust only for its own default.
21. SEVERANCE
If one or more of the provisions contained herein shall, for any reason, be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this
agreement, but this agreement shall be construed as if such invalid, illegal or
unenforceable provision or provisions had never been contained herein.
22. RELATIONSHIP BETWEEN THE TRUST, VERMILION AND THE UNDERWRITERS
The Trust and Vermilion: (i) acknowledge and agree that the Underwriters have
certain statutory obligations as registrants under the Applicable Securities
Laws and have fiduciary relationships with their clients; (ii) acknowledge and
agree that the Underwriters are neither the agents of the Trust or Vermilion nor
otherwise fiduciaries of the Trust or Vermilion; and (iii) consent to the
Underwriters acting hereunder while continuing to act for their clients. To the
extent that the Underwriters' statutory obligations as registrants under the
Applicable Securities Laws or fiduciary relationships with their clients
conflicts with
31
their obligations hereunder the Underwriters shall be entitled to fulfil their
statutory obligations as registrants under the Applicable Securities Laws and
their duties to their clients. Nothing in this agreement shall be interpreted to
prevent the Underwriters from fulfilling their statutory obligations as
registrants under the Applicable Securities Laws or to act as a fiduciary of
their clients.
23. STABILIZATION
In connection with the distribution of the Offered Units, the Underwriters may
over-allot or effect transactions which stabilize or maintain the market price
of the Units at levels other than those which might otherwise prevail in the
open market, but in each case only as permitted by applicable law. Such
stabilizing transactions, if any, may be discontinued at any time.
24. GOVERNING LAW
This agreement shall be governed by and construed in accordance with the laws of
the Province of Alberta and the laws of Canada applicable therein. Each of the
Trust and Vermilion and the Underwriters hereby attorn to the non exclusive
jurisdiction of the courts of the Province of Alberta.
25. TIME OF THE ESSENCE
Time shall be of the essence of this agreement.
26. COUNTERPART EXECUTION
This agreement may be executed in one or more counterparts each of which so
executed shall constitute an original and all of which together shall constitute
one and the same agreement. Delivery of counterparts may be effected by
facsimile transmission.
27. CONTRACTUAL OBLIGATIONS OF TRUST
The parties hereto acknowledge that the obligations of the Trust hereunder shall
not be personally binding upon the Trustee, or any of the unitholders of the
Trust and that any recourse against the Trust, the Trustee or any unitholder in
any manner in respect of any indebtedness, obligation or liability of the Trust
arising hereunder or arising in connection herewith or from the matters to which
this agreement relates, if any, including without limitation claims based on
negligence or otherwise tortuous behaviour, shall be limited to, and satisfied
only out of, the Trust Fund, as defined in the Trust Indenture, as amended from
time to time.
28. FURTHER ASSURANCES
Each party to this agreement covenants agrees that, from time to time, it will,
at the request of the requesting party, execute and deliver all such documents
and do all such other acts and things as any party hereto, acting reasonably,
may from time to time request be executed or done in order to better evidence or
perfect or effectuate any provision of this agreement or of any agreement or
other document executed pursuant to this agreement or any of the respective
obligations intended to be created hereby or thereby.
29. USE OF PROCEEDS
Each of Vermilion and the Trust hereby covenant and agree to use the net
proceeds of the sale of the Units hereunder in accordance with the disclosure in
the Prospectus.
32
30. DISTRIBUTIONS
The Trust agrees that, provided the Closing Date occurs on or prior to December
31, 2003, it shall not prior to the Closing Date declare or pay or establish a
record date for any distributions to Unitholders of the Trust prior to the
Closing Date, other than the regular monthly distribution of $0.17 per Unit
which is payable on December 15, 2003 to Unitholders of record on November 28,
2003. The Trust agrees that it is a material term of this agreement and the
determination of the purchase price of the Offered Units that the distribution
to be paid to Unitholders of record on December 31, 2003 be paid on the Firm
Units and, if applicable, the Underwriters' Option Units. Accordingly, the Trust
agrees that if for any reason the condition referred to in subsection 12(e) is
not satisfied (other than as a result of the Closing Date not occurring on or
before December 31, 2003 as a result of a default by the Underwriters
hereunder), the Trust shall, at the Underwriters' election, reduce the purchase
price for the Firm Units and, if applicable, the Underwriters' Option Units by
the amount of the distribution referred to above (and the amount of any other
distribution declared after the date hereof and before the Closing Time) and the
Underwriters shall have the right to postpone the Closing Time for such period,
not exceeding ten Business Days, in order that the required changes in the
Prospectuses and in any other documents or arrangements may be effected.
33
31. ENTIRE AGREEMENT
It is understood that the terms and conditions of this agreement supersede any
previous verbal or written agreement between the Underwriters and the Trust or
Vermilion.
If the foregoing is in accordance with your understanding and is agreed to by
you, please confirm your acceptance by signing the enclosed copies of this
letter at the place indicated and by returning the same to CIBC World Markets
Inc.
CIBC WORLD MARKETS INC.
(signed) "T. Xxxxxxx Kitchen"
34
BMO XXXXXXX XXXXX INC.
(signed) "Xxxxx X. Xxxxxx"
RBC DOMINION SECURITIES INC.
(signed) "Xxxx Xxxxxxxx"
TD SECURITIES INC.
(signed) "Xxxxxxx X. Saksida"
NATIONAL BANK FINANCIAL INC.
(signed) "Xxxxx X. Xxxxxxx"
CANACCORD CAPITAL CORPORATION
(signed) "Xxxx X. Xxxxxxx"
SCOTIA CAPITAL INC.
(signed) "Xxxxx X. Xxxxxxx"
FIRSTENERGY CAPITAL CORP.
(signed) "Xxxxxxx X. Xxxx"
35
ACCEPTED AND AGREED to as of
the 19th day of November, 2003.
VERMILION ENERGY TRUST, VERMILION RESOURCES LTD.
by Vermilion Resources Ltd.
(signed) "Xxxxxxx Xxxxxxx" (signed) "Xxxxxxx Xxxxxxx"
(signed) "Xxxxxx X. Xxxxx" (signed) "Xxxxxx X. Xxxxx"
SCHEDULE "A" to the underwriting agreement among CIBC World
Markets Inc., BMO Xxxxxxx Xxxxx Inc., RBC Dominion Securities
Inc., TD Securities Inc., Canaccord Capital Corporation,
Scotia Capital Inc., FirstEnergy Capital Corp., Vermilion
Energy Trust and Vermilion Resources Ltd. made as of November
19, 2003
U.S. SELLING RESTRICTIONS
Capitalized terms used but not defined in this Schedule "A" shall have
the meaning ascribed thereto in the underwriting agreement (the "UNDERWRITING
AGREEMENT") to which this Schedule "A" is attached.
1. For the purpose of this Schedule "A", the following terms shall have
the meanings indicated:
(a) "DIRECTED SELLING EFFORTS" means directed selling efforts as
that term is defined in Regulation S. Without limiting the
foregoing, but for greater clarity in this Schedule "A", it
means, subject to the exclusions from the definition of
directed selling efforts contained in Regulation S, any
activity undertaken for the purpose of, or that could
reasonably be expected to have the effect of, conditioning the
market in the United States for the Securities, and includes
the placement of any advertisement in a publication with a
"general circulation in the United States" that refers to the
offering of the Securities;
(b) "FOREIGN ISSUER" means a foreign issuer as that term is
defined in Regulation S. Without limiting the foregoing, but
for greater clarity in this Schedule "A", it means any issuer
that is (a) the government of any country, or of any political
subdivision of a country, other than the United States; or (b)
a corporation or other organization incorporated under the
laws of any country other than the United States, except an
issuer meeting the following conditions: (1) more than 50
percent of the outstanding voting securities of such issuer
are directly or indirectly owned of record by residents of the
United States; and (2) any of the following: (i) the majority
of the executive officers or directors are United States
citizens or residents, (ii) more than 50 percent of the assets
of the issuer are located in the United States, or (iii) the
business of the issuer is administered principally in the
United States;
(c) "GENERAL SOLICITATION" and "GENERAL ADVERTISING" means
"general solicitation" and "general advertising",
respectively, as used in Rule 502(c) of Regulation D,
including, without limitation, advertisements, articles,
notices or other communication published in any newspaper,
magazine or similar media or broadcast over television or
radio, or any seminar or meeting whose attendees had been
invited by general solicitation or general advertising;
(d) "QUALIFIED INSTITUTIONAL BUYER" means a "qualified
institutional buyer" as defined in Rule 144A;
(e) "REGULATION D" means Regulation D adopted by the SEC under the
U.S. Securities Act;
(f) "REGULATION S" means Regulation S adopted by the SEC under the
U.S. Securities Act;
(g) "RULE 144A" means Rule 144A adopted by the SEC under the U.S.
Securities Act;
(h) "SEC" means the United States Securities and Exchange
Commission;
2
(i) "SECURITIES" means the Offered Units;
(j) "SELLING DEALER GROUP" means dealers or brokers other than the
Underwriters and their U.S. affiliates who participate in the
offer and sale of Securities pursuant to the Underwriting
Agreement;
(k) "SUBSTANTIAL U.S. MARKET INTEREST" means "substantial U.S.
market interest" as that term is defined in Regulation S;
(l) "UNITED STATES" means the United States of America, its
territories and possessions, any state of the United States,
and the District of Columbia;
(m) "U.S. EXCHANGE ACT" means the United States Securities
Exchange Act of 1934, as amended;
(n) "U.S. PERSON" means a "U.S. PERSON" as that term is defined in
Regulation S; and
(o) "U.S. SECURITIES ACT" means the United States Securities Act
of 1933, as amended.
2. Each Underwriter, its U.S. affiliates and each member of the Selling
Dealer Group acknowledges that the Securities have not been and will
not be registered under the U.S. Securities Act, and have not been and
will not be offered or sold within the United States or to, or for the
account or benefit of, U.S. Persons, except pursuant to the exemption
from the registration requirements of the U.S. Securities Act provided
by Rule 144A. Each Underwriter agrees that it, its U.S. affiliates and
each member of the Selling Dealer Group will offer and sell the
Securities only in accordance with Rule 903 of Regulation S or in
accordance with the restrictions set forth in paragraphs 3 and 4 of
this Schedule "A". Accordingly, no Underwriter, its U.S. affiliates or
any Selling Dealer Group member, or any persons acting on their behalf
have engaged or will engage in any Directed Selling Efforts.
Each Underwriter acknowledges that it has not entered and will not
enter into any contractual arrangement with respect to the distribution
of the Securities, except (i) with its affiliates, (ii) with members of
the Selling Dealer Group in accordance with this paragraph 2 or (iii)
otherwise with the prior written consent of the Trust.
3. Each Underwriter represents, warrants and covenants to the Trust that,
in connection with all sales of the Securities in the United States or
to, or for the account of, a U.S. Person:
(a) its U.S. affiliates are duly registered brokers or dealers
with the SEC and are members of, and in good standing with,
the National Association of Securities Dealers, Inc. on the
date such representation is given;
(b) all offers and sales of the Securities in the United States
will be effected by CIBC World Markets Corp. (the "U.S.
PLACEMENT AGENT") in accordance with all applicable U.S.
broker-dealer requirements;
(c) the U.S. Placement Agent is a Qualified Institutional Buyer;
(d) it has not used and will not use any written material other
than the Prospectuses together with the Preliminary U.S.
Private Placement Memorandum and the U.S. Private Placement
Memorandum (all such documents, the "OFFERING DOCUMENTS"), and
each
3
offeree of the Securities in the United States has been sent a
copy of the Offering Documents;
(e) neither it nor its representatives nor the U.S. Placement
Agent has used, and none of such persons will use, any form of
General Solicitation or General Advertising in connection with
the offer or sale of the Securities in the United States or to
U.S. persons;
(f) it will solicit, and will cause the U.S. Placement Agent to
solicit, offers for the Securities in the United States only
from, and will offer the Securities only to, persons it
reasonably believes to be Qualified Institutional Buyers in
accordance with Rule 144A. It also agrees that it will solicit
offers for the Securities only from, and will offer the
Securities only to, persons that in purchasing such Securities
will be deemed to have represented and agreed as provided in
paragraphs (4)(a) through (d) below (to the extent such
representations are applicable to the purchaser concerned);
(g) it will inform, and cause the U.S. Placement Agent to inform,
all purchasers of the Securities in the United States that the
Securities have not been and will not be registered under the
U.S. Securities Act and are being sold to them without
registration under the U.S. Securities Act in reliance on Rule
144A;
(h) at least one business day prior to closing, it shall cause the
U.S. Placement Agent to provide Computershare Trust Company of
Canada with a list of all purchasers of the Securities in the
United States; and
(i) at closing it, together with the U.S. Placement Agent, will
provide a certificate, substantially in the form of Exhibit I
to this Schedule A.
4. It is understood and agreed by the Underwriters that the Securities may
be offered and resold by the Underwriters and members of the Selling
Dealer Group in the United States pursuant to the provisions of Rule
144A to persons who are, or are reasonably believed by them to be,
Qualified Institutional Buyers in transactions meeting the requirements
of Rule 144A and in compliance with any applicable state securities
laws of the United States, provided that prior to any such sale each
purchaser shall have been provided with the Offering Documents and by
purchasing Securities, each purchaser shall be deemed to have
represented and warranted for the benefit of the Trust and the
Underwriters that:
(a) it is a Qualified Institutional Buyer and acknowledges that
the sale of Securities to it is being made in reliance on Rule
144A, and it is acquiring such Securities for its own account
or for the account of one or more Qualified Institutional
Buyers with respect to which it exercises sole investment
discretion;
(b) it understands and acknowledges that the Securities will not
be and have not been registered under the Securities Act or
the securities laws of any state of the United States, and are
therefore "restricted securities" within the meaning of the
Rule 144, and that if in the future it shall decide to resell,
pledge or otherwise transfer such Securities, the same may be
resold, pledged or otherwise transferred only (A) to the
Trust, (B) in the United States, in accordance with Rule 144A
to a person it reasonably believes is a Qualified
Institutional Buyer that purchases for its own account or for
the account of a Qualified Institutional Buyer and to whom
notice is given that the offer, sale or transfer is being made
in reliance on Rule 144A, (C) outside the United States, in
accordance with Rule 904 of Regulation S and in compliance
with applicable local laws and regulations,
4
(D) in a transaction exempt from registration under the U.S.
Securities Act pursuant to Rule 144 and in compliance with any
applicable state securities laws of the United States, or (E)
in a transaction that does not require registration under the
U.S. Securities Act or any applicable United States state
securities laws, and it has furnished to the Trust an opinion
of counsel of recognized standing reasonably satisfactory to
the Trust to that effect;
(c) it understands that all Securities sold in the United States
as part of this offering will bear a legend to the following
effect:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR STATE
SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING
SUCH SECURITIES, AGREES FOR THE BENEFIT OF VERMILION
ENERGY TRUST THAT SUCH SECURITIES MAY BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO VERMILION
ENERGY TRUST, (B) OUTSIDE THE UNITED STATES IN
ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES IN
ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT,
(D) PURSUANT TO THE EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER,
OR (E) PURSUANT TO ANOTHER EXEMPTION FROM
REGISTRATION AFTER PROVIDING A LEGAL OPINION
SATISFACTORY TO VERMILION ENERGY TRUST.
A NEW CERTIFICATE BEARING NO LEGEND MAY BE OBTAINED
FROM COMPUTERSHARE TRUST COMPANY OF CANADA UPON
DELIVERY OF THIS CERTIFICATE AND A DULY EXECUTED
DECLARATION, IN A FORM SATISFACTORY TO COMPUTERSHARE
TRUST COMPANY OF CANADA AND VERMILION ENERGY TRUST,
TO THE EFFECT THAT THE SALE OF THE SECURITIES
REPRESENTED HEREBY IS BEING MADE IN COMPLIANCE WITH
RULE 904 OF REGULATION S UNDER THE SECURITIES ACT."
If the Securities are being sold in compliance with the
requirements of Rule 904 of Regulation S, the legend may be
removed by providing a declaration to Computershare Trust
Company of Canada to the following effect (or as the Trust may
prescribe from time to time):
"The undersigned (A) acknowledges that the sale of
the securities to which this declaration relates is
being made in reliance on Rule 904 of Regulation S
under the U.S. Securities Act of 1933, as amended,
and (B) certifies that (1) it is not an "affiliate"
(as defined in Rule 405 under the Securities Act, as
amended) of Vermilion Energy Trust, (2) the offer of
such securities was not made to a person in the
United States and either (a) at the time the buy
order was originated, the buyer was outside the
United States, or the seller and any person acting on
its behalf
5
reasonably believe that the buyer was outside the
United States or (b) the transaction was executed on
or through the facilities of the Toronto Stock
Exchange and neither the seller nor any person acting
on its behalf knows that the transaction has been
prearranged with a buyer in the United States and (3)
neither the seller nor any person acting on its
behalf engaged in any directed selling efforts in
connection with the offer and sale of such
securities. Terms used herein have the meanings given
to them by Regulation S."
If the Securities are being sold under Rule 144 of the U.S.
Securities Act, the legend may be removed by delivery to
Computershare Trust Company of Canada of an opinion of counsel
of recognized standing and reasonably satisfactory to the
Trust, to the effect that such legend is no longer required
under the U.S. Securities Act or state securities laws; and
(d) it understands and acknowledges that it is making the representations
and warranties and agreements contained herein with the intent that
they may be relied upon by the Trust and the Underwriters in
determining its eligibility or (if applicable) the eligibility of
others on whose behalf it is contracting hereunder to purchase the
Securities.
5. At the closing, CIBC World Markets Inc., together with the U.S.
Placement Agent, will provide a certificate, substantially in the form
of Exhibit I to this Schedule "A", relating to the manner of the offer
and sale of the Securities in the United States.
6. The Trust represents, warrants and agrees that (i) none of the Trust,
its subsidiaries or any person acting on its or their behalf including,
without limitation Vermilion, have engaged or will engage in any
directed selling efforts (within the meaning of Regulation S) with
respect to the Securities; (ii) none of the Trust, its subsidiaries or
any person acting on its or their behalf including, without limitation
Vermilion, have offered or will offer to sell any of the Securities by
means of any form of general solicitation or general advertising (as
those terms are used in Regulation D); (iii) it is a Foreign Issuer and
reasonably believes that there is no Substantial U.S. Market Interest
in the Securities; (iv) it is not required to register as an
"investment company" pursuant to the provisions of the U.S. Investment
Company Act of 1940; (v) at the date hereof, the Securities are not (A)
part of a class listed on a national securities exchange in the United
States, (B) quoted in an automated inter-dealer system in the United
States, or (C) convertible or exchangeable at an effective conversion
premium (calculated as specified in paragraph (a)(6) of Rule 144A) of
less than 10% for securities so listed or quoted; and (vi) for so long
as any of the Securities are outstanding and are "restricted
securities" within the meaning of Rule 144(a)(3) under the U.S.
Securities Act, it shall either: (A) furnish to the SEC all information
required to be furnished in accordance with Rule 12g3-2(b) under the
U.S. Exchange Act; (B) file reports and other information with the SEC
under Section 13 or 15(d) of the U.S. Exchange Act; or (C) provide to
any holder of Securities and any prospective purchaser of Securities
designated by such holder, upon the request of such holder, the
information required to be provided by paragraph (d)(4) of Rule 144A
EXHIBIT 1
UNDERWRITERS' CERTIFICATE
In connection with the private placement of trust units (the
"Securities") of Vermilion Energy Trust (the "Trust") with one or more U.S.
institutional investors (the "U.S. Purchasers"), the undersigned CIBC World
Market Inc., on behalf of the several underwriters (the "Underwriters") referred
to in the Underwriting Agreement, dated as of November 19, 2003, among the
Trust, Vermilion Resources Ltd. and the Underwriters (the "Underwriting
Agreement"), and its U.S. affiliate who has signed below in its capacity as
placement agent in the United States for the Underwriters (the "U.S. Placement
Agent"), do hereby certify that:
(a) the U.S. Placement Agent is a duly registered broker-dealer
with the United States Securities and Exchange Commission and
is a member of, and in good standing with, the National
Association of Securities Dealers, Inc. on the date hereof;
(b) all offers and sales of the Securities in the United States
have been effected by the U.S. Placement Agent in accordance
with all applicable U.S. broker-dealer requirements;
(c) in connection with offers and sales of the Securities in the
United States, we have not used and will not use any written
material other than the Prospectuses together with a United
States covering memorandum relating to the offering in the
United States (all such documents, the "Offering Documents"),
and each offeree of the Securities in the United States has
been sent a copy of each of the Offering Documents;
(d) immediately prior to transmitting the Offering Documents to
such offerees, we had reasonable grounds to believe and did
believe that each offeree was a Qualified Institutional Buyer
as defined in Rule 144A under the UNITED STATES SECURITIES ACT
OF 1933, as amended (the "U.S. Securities Act") and, on the
date hereof, we continue to believe that each U.S. Purchaser
is a Qualified Institutional Buyer as defined in Rule 144A
under the U.S. Securities Act;
(e) neither we nor our representatives have utilized, and neither
we nor our representatives will utilize, any form of general
solicitation or general advertising (as those terms are used
in Regulation D under the U.S. Securities Act); and
(f) the offering of the Securities in the United States has been
conducted by us in accordance with the Underwriting Agreement.
Terms used in this certificate have the meanings given to them in the
Underwriting Agreement unless otherwise defined herein.
Dated: _____________________, 2003
CIBC WORLD MARKETS INC. CIBC WORLD MARKETS CORP.
By: /s/ By: /s/
------------------------------- -----------------------------
Name: Name:
Title: Title:
