Exhibit 10.34
UNDERWRITING
AGREEMENT
September 26,
2007
Western
Goldfields Inc.
2 Bloor St.
West, Suite 2102
Toronto,
Ontario M4W 3E2
Attention: Raymond
Threlkeld, President and Chief Executive Officer
Dear
Sir:
Wellington West Capital Markets Inc. (“
WWCM ”) and RBC Dominion Securities Inc. (“
RBC ”), acting as co-lead managers and joint book
runners, and Scotia Capital Inc. (collectively, the “
Underwriters ” and individually an “
Underwriter ” ) understand that Western
Goldfields Inc. (“ Western ” or the “
Company ”) proposes to issue and sell to the
Underwriters 9,840,000 common shares (the “ Purchased
Shares ”), and at the election of the Underwriters, up to
1,476,000 additional common shares to cover over-allotments (the
common shares in respect of which such option is exercised are
called “ Over-Allotment Shares ”). The Purchased
Shares and the Over-Allotment Shares are referred to collectively
herein as the “ Shares ”.
The Underwriters understand that the Company
will file within the time limits and on the terms set out below, a
preliminary short form prospectus (the “ Preliminary
Prospectus ”) and a (final) short form prospectus (the
“ Final Prospectus ”) and all related documents,
including all documents incorporated by reference therein, with the
securities regulatory authority in each of the provinces of Canada,
other than Quebec (the “ Securities Commissions
”, and the provinces, the “ Qualifying
Jurisdictions ”) in order to qualify for distribution to
the public the Shares in each of the provinces of Canada, other
than Quebec.
The Shares will also be distributed in the
United States on a private placement basis by U.S. Affiliates
(defined below) of the Underwriters to QIBs (defined below)
pursuant to the U.S. 144A Memorandum (defined below). Subject to
applicable law, including U.S. Securities Laws (defined below) and
the terms of this underwriting agreement (the “
Agreement ”), the Shares may also be distributed
outside Canada and the United States by the registered
broker-dealer affiliates of the Underwriters, where they may be
lawfully sold on a basis exempt from the prospectus and
registration requirements of any such jurisdictions.
Except as set forth in this Agreement, the
purchase and sale of the Purchased Shares shall occur on October
12, 2007 (the “ Closing Date ”).
The Company, as and to the extent indicated
above, hereby grants to the Underwriters the right to purchase at
their election up to 1,476,000 Over-Allotment Shares, at the
purchase price per share set forth in the paragraph below, for the
sole purpose of covering over-allotments in the sale of the
Purchased Shares and for market stabilization purposes permitted
pursuant to Applicable Securities Laws, provided, however, that the
number of Over-Allotment Shares to be purchased shall not exceed
15% of the total number of Purchased Shares purchased by the
Underwriters. Any such election to purchase Over-Allotment Shares
may be exercised only by written notice from WWCM on behalf of the
Underwriters, to the Company at any time until the close of
business on the 30th day following the Closing Date, such notice to
set forth (i) the aggregate number of Over-Allotment Shares to be
purchased, and (ii) the closing date for the Over-Allotment Shares,
provided that unless otherwise agreed such Closing Date shall not
be less than three (3) Business Days and no more than seven (7)
Business Days following the date of such notice.
On the basis of
the representations, warranties, covenants and agreements contained
herein, but subject to the terms and conditions further set out
below:
|
|
|
the Company
agrees to sell to each of the Underwriters and each of the
Underwriters agrees, severally, and not jointly, to purchase from
the Company the respective percentage of the Purchased Shares set
forth opposite the respective names of the Underwriters in Section
18, at a purchase price of $3.05 per share for Purchased Shares
(the “ Offering Price ”); and
|
|
|
|
in the event
and to the extent that the Underwriters shall exercise the election
to purchase any or all Over-Allotment Shares (the “
Over-Allotment Option ”) as provided herein, the
Company agrees to sell to each of the Underwriters and each of the
Underwriters agrees, severally, and not jointly, to purchase from
the Company the respective percentage of Over-Allotment Shares set
forth opposite the name of such Underwriter in Section 18 at a
purchase price equal to the Offering Price per share for
Over-Allotment Shares.
|
The Company and the Underwriters agree that any
sales or purchases of Shares in the United States will be conducted
through a duly registered affiliate of each Underwriter in
compliance with U.S. Securities Laws.
The Company shall pay to the Underwriters a fee
of 5% of the gross proceeds realized on the sale of Shares in
consideration of the services to be provided by the Underwriters
under this Agreement (the “ Underwriting Fee ”)
and as further set forth in Section 13 herein.
The Underwriters may offer the Purchased Shares
at a price less than the Offering Price in compliance with the
requirements under National Instrument 44-101 – Short
Form Prospectus Distributions and the disclosure concerning the
same contained in the Preliminary Prospectus and the Final
Prospectus.
The Underwriters and the Company acknowledge
that Schedule “A” forms a part of this
Agreement.
The following are the terms and conditions of
the agreement between the Company and the Underwriters:
TERM AND
CONDITIONS
Section
1 Definitions and
Interpretation
“
Affiliate ” means an affiliated entity for purposes of
the Securities Act (Ontario);
“
Applicable Securities Laws ” means the Canadian
Securities Laws and the U.S. Securities Laws;
“
Business Day ” means any day other than a Saturday,
Sunday or statutory or civic holiday in the city of Toronto,
Ontario;
“
Canadian Securities Laws ” means, collectively, all
applicable securities laws of each of the Qualifying Jurisdictions
and the respective rules and regulations under such laws together
with applicable published instruments, notices and orders of the
securities regulatory authorities in the Qualifying
Jurisdictions;
“
Closing Date ” means October 12, 2007 or any earlier
or later date as may be agreed to by Western and the Underwriters,
each acting reasonably, but will in any event not be later than
October 30, 2007;
“
distribution ” means distribution or distribution to
the public, as the case may be, for the purposes of Applicable
Securities Laws or any of them;
“
Exchange ” means the TSX;
“
Final Prospectus ” has the meaning ascribed in the
second paragraph of this Agreement, such prospectus expected to be
dated on or about October 5, 2007;
“
Final U.S. Private Placement Memorandum ” means the
U.S. private placement memorandum, in a form satisfactory to the
Underwriters, to which will be attached the Final Prospectus, to be
delivered to any offerees and purchasers of the Shares in the
United States in accordance with Schedule “A”
hereto;
“
Financial Information ” means the annual consolidated
financial statements of Western (or its predecessor) incorporated
by reference into the Preliminary Prospectus, the Final Prospectus
and any Supplementary Material, including the notes with respect
thereto together with the respective auditors’ reports
thereon as at and for the periods included therein, and the
respective accompanying Management’s Discussion and
Analyses;
“
Indemnified Party ” has the meaning given to that term
in Section 15 of this Agreement;
“
Liens ” means any encumbrance or title defect of
whatever kind or nature, regardless of form, whether or not
registered or registrable and whether or not consensual or arising
by law (statutory or otherwise), including any mortgage, lien,
charge, pledge or security interest, whether fixed or floating, or
any assignment, lease, option, right of pre-emption, privilege,
encumbrance, easement, servitude, right of way, restrictive
covenant, right of use or any other right or claim of any kind or
nature whatever which affects ownership or possession of, or title
to, any interest in, or the right to use or occupy such property or
assets;
“
Material Adverse Effect ” means the effect resulting
from any event or change which has a material adverse effect on the
business, affairs, capital, operations, Mining Claims or assets of
Western considered on a consolidated basis;
“
material change ” means a material change for the
purposes of Applicable Securities Laws or any of them, or where
undefined under the Applicable Securities Laws of an Offering
Jurisdiction means a change in the business, affairs, operations,
assets, financial condition or capital of Western on a consolidated
basis that would reasonably be expected to have a significant
effect on the market price or value of the common shares, and
includes a decision to implement such a change made by the
directors of Western;
“
material fact ” means a material fact for the purposes
of Applicable Securities Laws or any of them, or where undefined
under the Applicable Securities Laws of an Offering Jurisdiction
means a fact that would reasonably be expected to have a
significant effect on the market price or value of the common
shares;
“
Material Subsidiaries ” means each of Western
Goldfields USA Inc., Western Goldfields (Canada) Inc. and Western
Mesquite Mines, Inc.;
“
Mesquite Project ” means the mine project located in
Imperial County, California, U.S.A. as further described in the
Technical Report;
“
Mining Claims ” has the meaning given to such term in
Section 7(1)(m);
“
misrepresentation ” means a misrepresentation for the
purposes of the Applicable Securities Laws or any of them, or where
undefined under the Applicable Securities Laws of an Offering
Jurisdiction means: (i) an untrue statement of a material fact, or
(ii) an omission to state a material fact that is required to be
stated or that is necessary to make a statement not misleading in
light of the circumstances in which it was made;
“
MRRS ” means the mutual reliance review system
procedures provided for under National Policy 43-201 “Mutual
Reliance Review System for Prospectuses and Annual Information
Forms” among the securities commissions and other securities
regulatory authorities in each of the provinces and territories of
Canada;
“ MRRS
Decision Document ” means a decision document issued by
the applicable Canadian securities regulatory authority pursuant to
the MRRS and which evidences the receipt by the applicable
Securities Commission of the Qualifying Jurisdictions for the
Preliminary Prospectus or the Final Prospectus, as the case may
be;
“
Offering ” means distribution of the Shares in each of
the Offering Jurisdictions;
“
Offering Documents ” means, collectively, the
Preliminary Prospectus, the Final Prospectus, any Prospectus
Amendment, the U.S. 144A Memorandum and any Supplementary
Material;
“
Offering Jurisdictions ” means the United States and
the Qualifying Jurisdictions;
“
Over-Allotment Closing Date ” means no less than three
(3) Business Days and no more than seven (7) Business Days
following the date of the notice of exercise of the Over-Allotment
Option being delivered to the Company, or any earlier or later date
as may be agreed to in writing by the Company and the Underwriters,
each acting reasonably;
“
Preliminary Prospectus ” has the meaning ascribed in
the second paragraph of this Agreement, such amended and restated
preliminary short form prospectus dated the date hereof;
“
Preliminary U.S. Private Placement Memorandum ” means
the U.S. private placement memorandum, in a form satisfactory to
the Underwriters, to which will be attached a copy of any
Preliminary Prospectus, to be delivered to offerees and purchasers
of the Shares in the United States in accordance with Schedule
“A” hereto;
“
Prospectus Amendment ” means any amendment to any or
all of the Preliminary Prospectus or the Final Prospectus required
to be prepared and filed by Western under Applicable Securities
Laws in connection with the Offering;
“
QIB ” or “ Qualified Institutional Buyer
” means a “qualified institutional buyer” as
defined in Rule 144A;
“
Qualifying Jurisdictions ” means, collectively, each
of the provinces of Canada, other than Quebec;
“ Rule
144A ” means Rule 144A adopted by the SEC under the U.S.
Securities Act;
“
SEC ” means the United States Securities and Exchange
Commission;
“
Securities Commissions ” means the applicable
securities commission or regulatory authority in each of the
Qualifying Jurisdictions;
“
Standard Listing Conditions ” has the meaning given to
that term in Section 3(3)(c) of this Agreement;
“
Subsidiary ” means a subsidiary for purposes of the
Securities Act (Ontario);
“
Supplementary Material ” means, collectively, any
amendment to the Preliminary Prospectus, the Final Prospectus, the
U.S. 144A Memorandum, any amendment or supplemental prospectus or
ancillary materials that may be filed by or on behalf of Western
under Applicable Securities Laws relating to the qualification for
distribution of, inter alia, the Shares;
“
Technical Report ” means the “Mesquite Mine
Expansion Feasibility Study Technical Report” dated August 6,
2006 prepared by Micon International Limited;
“ Time
of Closing ” means 8:00 a.m. (Toronto time) on the
Closing Date or the Over-Allotment Closing Date, as applicable, or
any other time on the Closing Date or the Over-Allotment Closing
Date as may be agreed to by Western and the
Underwriters;
“
TSX ” means the Toronto Stock Exchange;
“
United States ” means the United States of America,
its territories and possessions, any state of the United States,
and the District of Columbia;
“ U.S.
Affiliate ” means the U.S. registered broker-dealer
affiliate of any Underwriter;
“ U.S.
Exchange Act ” means the United States Securities
Exchange Act of 1934, as amended;
“ U.S.
Securities Act ” means the United States Securities Act
of 1933, as amended;
“ U.S.
Securities Laws ” means all applicable securities
legislation in the United States, including without limitation, the
U.S. Securities Act, the U.S. Exchange Act and the rules and
regulations promulgated thereunder, and any applicable state
securities laws;
“ U.S.
144A Memorandum ” means, together, the Preliminary U.S.
Private Placement Memorandum and the Final U.S. Private Placement
Memorandum; and
“
Western Auditor ” means HJ & Associates,
LLP;
|
|
Headings,
etc. The division of this
Agreement into sections, subsections, paragraphs and other
subdivisions and the insertion of headings are for convenience of
reference only and shall not affect the construction or
interpretation of this Agreement. Unless something in the subject
matter or context is inconsistent therewith, references herein to
sections, subsections, paragraphs and other subdivisions are to
sections, subsections, paragraphs and other subdivisions of this
Agreement.
|
|
|
Currency. Except as otherwise indicated, all amounts
expressed herein in terms of money refer to lawful currency of
Canada and all payments to be made hereunder shall be made in such
currency.
|
Section
2 Filing of the
Preliminary and Final Prospectuses
|
|
The Company
shall, as soon as possible and not later than 12:00 noon (Toronto
time) on September 26, 2007 have prepared and filed under the
Canadian Securities Laws, and shall have obtained a receipt
therefor from each of the Qualifying Jurisdictions (in the form of
a preliminary MRRS Decision Document) by 5:00 p.m. (Toronto time)
on September 26, 2007, for the Preliminary Prospectus and other
related documents relating to the proposed distribution in Canada
of the Shares.
|
|
|
Unless
otherwise agreed to in writing by WWCM and RBC on behalf of the
Underwriters, the Company shall use its reasonable commercial
efforts to satisfy all comments with respect to the Preliminary
Prospectus and the Company shall, not later than 5:00 p.m. (Toronto
time) on October 5, 2007, have made all its reasonable commercial
efforts to have prepared and filed under the Canadian Securities
Laws, and shall have obtained a receipt therefor from each of the
Qualifying Jurisdictions (in the form of a final MRRS Decision
Document) by 5:00 p.m. (Toronto time) on such date, the Final
Prospectus and other related documents relating to the proposed
distribution in Canada of the Shares; and shall have taken all
other steps and proceedings that may be necessary to be taken by
the Company in order to qualify the Shares for distribution (or
distribution to the public, as the case may be) in each of the
other Qualifying Jurisdictions by the Underwriters under the
Canadian Securities Laws by 5:00 p.m. (Toronto time) on such
date.
|
|
|
Until the date
on which the distribution of the Shares is completed, the Company
will promptly take, or cause to be taken, all additional steps and
proceedings that may from time to time be required under Applicable
Securities Laws to continue to qualify the distribution of the
Shares or, in the event that the Shares have, for any reason,
ceased so to qualify, to so qualify again the Shares, as
applicable, for distribution.
|
Section
3 Delivery of the Final
Prospectus and Related Matters
|
|
The Company
shall deliver without charge to the Underwriters, as soon as
practicable and in any event no later than September 26, 2007 in
the case of the Preliminary Prospectus and the Preliminary U.S.
Private Placement Memorandum, and no later than noon (Toronto time)
on October 6, 2007 (or other such date that is the day following
the filing of the Final Prospectus) in the case of the Final
Prospectus and the Final U.S. Private Placement Memorandum and
thereafter from time to time during the distribution of the Shares,
as many commercial copies of the Preliminary Prospectus, the
Preliminary U.S. Private Placement Memorandum, the Final Prospectus
and the Final U.S. Private Placement Memorandum, as the case may
be, (and in the event of any Prospectus Amendment, such Prospectus
Amendment) as the Underwriters may reasonably request in advance
for the purposes contemplated by the relevant securities laws. The
Company will similarly cause to be delivered to the Underwriters,
commercial copies of any Supplementary Material required to be
delivered to purchasers or prospective purchasers of the Shares.
Each delivery of the Preliminary Prospectus, the Preliminary U.S.
Private Placement Memorandum, the Final Prospectus, the Final U.S.
Private Placement Memorandum or any Supplementary Material will
have constituted and constitute the Company’s consent to the
use of the Preliminary Prospectus, the Preliminary U.S. Private
Placement Memorandum, the Final Prospectus, the Final U.S. Private
Placement Memorandum and any Supplementary Material by the
Underwriters for the distribution of the Shares in the Offering
Jurisdictions in compliance with the provisions of this Agreement
and Applicable Securities Laws.
|
|
|
Each delivery
of the Preliminary Prospectus, the Preliminary U.S. Private
Placement Memorandum, the Final Prospectus, the Final U.S. Private
Placement Memorandum and any Supplementary Material to the
Underwriters by Western in accordance with this Agreement will
constitute the representation and warranty of Western to the
Underwriters that (except for information and statements relating
solely to the Underwriters and furnished by them specifically for
use in the Preliminary Prospectus, the Preliminary U.S. Private
Placement Memorandum, the Final Prospectus and the Final U.S.
Private Placement Memorandum under the heading “Plan of
Distribution”), at the respective times of
delivery:
|
|
|
|
the information
and statements contained in each of the Preliminary Prospectus, the
Preliminary U.S. Private Placement Memorandum, the Final
Prospectus, the Final U.S. Private Placement Memorandum and any
Supplemental Material, together with the documents incorporated by
reference therein:
|
|
|
|
are true and
correct in all material respects and contain no misrepresentation;
and
|
|
|
|
constitute
full, true and plain disclosure of all material facts relating to
the Shares, and Western and its Material Subsidiaries considered as
a whole;
|
|
|
|
no material
fact has been omitted from any of the Offering Documents that is
required to be stated in the document or is necessary to make the
statements therein not misleading in the light of the circumstances
in which they were made;
|
|
|
|
to the
knowledge of the Company based on the advice of its legal counsel
and auditors, each of the Preliminary Prospectus, the Final
Prospectus and the Supplemental Material, as applicable, complies
in all material respects with the form requirements of Canadian
Securities Laws; and
|
|
|
|
to the
knowledge of the Company based on the advice of its legal counsel
and auditors, each of the Preliminary U.S. Private Placement
Memorandum and the Final U.S. Private Placement Memorandum complies
in all material respects with U.S. Securities Laws.
|
|
|
Western will
also deliver to the Underwriters, without charge, contemporaneously
with, or prior to the filing of, the Preliminary Prospectus and the
Final Prospectus, unless otherwise indicated:
|
|
|
|
a copy of the
Preliminary Prospectus and the Final Prospectus, each manually
signed on behalf of Western, by the persons and in the form
required by Canadian Securities Laws;
|
|
|
|
a copy of the
Final U.S. Private Placement Memorandum in the form required by
U.S. Securities Laws;
|
|
|
|
evidence
satisfactory to the Underwriters by the date of the Final
Prospectus that Western has applied for the approval (or
conditional approval) for the listing and posting for trading on
the TSX of the Shares and received such approval (or conditional
approval) subject only to satisfaction by Western of customary
post-closing conditions imposed by the TSX in similar circumstances
(the “ Standard Listing Conditions
”);
|
|
|
|
in the case of
the Final Prospectus, a “long-form” comfort letter or
letters dated the date of the Final Prospectus, in form and
substance satisfactory to the Underwriters and their counsel,
acting reasonably, addressed to the Underwriters, from the Western
Auditor, and based on a review completed not more than two (2)
Business Days prior to the date of such letter, with respect to
financial and accounting information relating to Western, included
in the Offering Documents, which letter shall be in addition to the
auditor’s report contained in the Final Prospectus and any
auditor’s comfort letter addressed to the Securities
Commissions and filed with or delivered to the Securities
Commissions under the Canadian Securities Laws. Each such letter
shall further state that:
|
|
(i)
|
such auditors are independent with respect to
the Company within the meaning of Applicable Securities
Laws;
|
|
(ii)
|
that in the opinion of such auditors, the
audited financial statements of the Company included in the
Offering Documents comply in all material respects with the
applicable accounting requirements of the Applicable Securities
Laws;
|
|
(iii)
|
that they have performed the procedures set
forth in SAS No. 100 and CICA Handbook Section 7200 on the
unaudited financial statements included in the Offering Documents
and nothing has come to their attention that caused them to believe
that said unaudited financial statements did not comply in all
material respects with the applicable accounting requirements of
U.S. Securities Laws and Canadian Securities Laws; and
|
|
(iv)
|
shall address
such other matters as the Underwriters shall reasonably
request.
|
|
|
Opinions,
comfort letters and other documents substantially similar to those
referred to in this section of this Agreement will be delivered to
the Underwriters and Western, and their respective counsel, as
applicable, with respect to any Supplementary Material,
contemporaneously with, or prior to the filing of, any
Supplementary Material.
|
Section
4 Material Changes During
the Distribution of the Shares
|
(1)
|
Western will promptly inform the Underwriters in
writing during the period prior to the completion of the
distribution of the Shares of the full particulars of:
|
|
|
|
any material
change (whether actual, anticipated, threatened, contemplated, or
proposed by, to, or against) (whether financial or otherwise) in
the assets, liabilities (contingent or otherwise), business,
affairs, operations, assets, financial condition, capital or
prospects of Western, considered on a consolidated
basis;
|
|
|
|
any material
fact that has arisen or has been discovered and would have been
required to have been stated in any of the Offering Documents had
that fact arisen or been discovered on, or prior to, the date of
the Offering Documents, as the case may be;
|
|
|
|
any change in
any material fact or any misstatement of any material fact
contained in any of the Offering Documents, or the existence of any
new material fact; and
|
|
|
|
any change in
applicable laws, materially and adversely affecting, or which would
reasonably be expected to materially and adversely affect, the
condition (financial or otherwise), or the properties, business,
prospects, affairs, operations, assets or liabilities of the
Company and its subsidiaries on a consolidated basis, the Shares or
the distribution thereof, under the Final Prospectus or the Final
U.S. Private Placement Memorandum,
|
which change or
new material fact is, or may reasonably be expected to be, of such
a nature as:
|
|
|
to render any
of the Offering Documents or any Supplementary Material, as they
exist taken together in their entirety immediately prior to such
change or new material fact, misleading or untrue in any respect or
would result in any of such documents, as they exist taken together
in their entirety immediately prior to such change or material
fact, containing a misrepresentation;
|
|
|
|
would result in
any of the Offering Documents or any Supplementary Material, as
they exist taken together in their entirety immediately prior to
such change or material fact, not complying with any Applicable
Securities Laws;
|
|
|
|
would
reasonably be expected to have a material effect on the market
price or value of any of the Shares or constitute a Material
Adverse Effect; or
|
(h) would
be material to a prospective purchaser of the Shares.
|
(2)
|
The Company
will notify the Underwriters promptly, and confirm the notice in
writing:
|
|
|
|
when any
supplement to the Offering Documents or any Supplementary Material
shall have been filed;
|
|
|
|
of any request
by any Securities Commission to amend or supplement the Preliminary
Prospectus or the Final Prospectus or for additional information;
and
|
|
|
|
of the issuance
by any Securities Commission or any Exchange of any order having
the effect of ceasing or suspending the distribution of the Shares
or the trading in any securities of the Company, or of the
institution or, to the knowledge of the Company, threatening of any
proceedings for any such purpose. The Company will use reasonable
commercial efforts to prevent the issuance of any such stop order
or of any order preventing or suspending such use or such order
ceasing or suspending the distribution of the Shares or the trading
in the shares of the Company and, if any such order is issued, to
obtain the lifting thereof at the earliest possible
time.
|
|
|
Western shall
comply with section 57 of the Securities Act (Ontario) and with the
comparable provisions of U.S. Securities Laws, and Western will
prepare and will file promptly at the request of the Underwriters,
any Supplementary Material, which, in the opinion of the
Underwriters and their counsel, acting reasonably, may be necessary
or desirable, and will, until the distribution of the Shares is
complete, otherwise comply with all applicable filing and other
requirements under Applicable Securities Laws arising as a result
of such fact or change necessary to continue to qualify the Shares
for distribution in each of the Offering Jurisdictions.
|
|
|
The Company and
the Underwriters acknowledge that the Company is required by
Canadian Securities Laws to prepare and file a Prospectus
Amendment, if at any time prior to the completion of the
distribution of the Shares, the Final Prospectus (as then amended)
contains a misrepresentation. The Company will promptly prepare and
file with the securities authorities in the Qualifying
Jurisdictions any amendment or supplement thereto which in the
opinion of the Underwriters and the Company, each acting
reasonably, may be necessary or advisable to correct such
misrepresentation.
|
|
|
In addition,
if, during the period from the date hereof to the later of the
Closing Date and the date of the completion of the distribution of
the Shares, it shall be necessary to file a Prospectus Amendment to
comply with any Applicable Securities Laws, the Company shall, in
co-operation with the Underwriters and their counsel, make any such
filing as soon as reasonably possible.
|
|
|
In addition to
the provisions of Subsections 4(1) and 4(2), Western will, in good
faith, discuss with the Underwriters any change, event, development
or fact, contemplated, anticipated, threatened, or proposed in
Subsections 4(1) and 4(2) that is of such a nature that there may
be reasonable doubt as to whether written notice should be given to
the Underwriters under Section 4 of this Agreement and will consult
with the Underwriters with respect to the form and content of any
Supplementary Material proposed to be filed by Western, it being
understood and agreed that no such Supplementary Material will be
filed with any Securities Commission until the Underwriters and
their legal counsel have been given a reasonable opportunity to
review and approve such material, acting reasonably.
|
Section
5 Due
Diligence
Prior to the Time of Closing, and, if
applicable, prior to the filing of any Supplementary Material, the
Underwriters, their legal counsel, and technical consultants will
be provided with timely access to all information required to
permit them to conduct a full due diligence investigation of
Western and its business operations, properties, assets, affairs
and financial condition. In particular, the Underwriters shall be
permitted to conduct all due diligence that they may, in their sole
discretion acting reasonably, require in order to fulfil their
obligations under Applicable Securities Laws, and in that regard,
Western will make available to the Underwriters, their legal
counsel and technical consultants, on a timely basis, all corporate
and operating records, material contracts, reserve reports,
technical reports, feasibility studies, financial information,
budgets, key officers, and other relevant information necessary in
order to complete the due diligence investigation of Western and
its business, properties, assets, affairs and financial condition
for this purpose, and without limiting the scope of the due
diligence inquiries the Underwriter may conduct, to participate in
one or more due diligence sessions to be held prior to the Time of
Closing. All information requested by the Underwriters, their
counsel and technical consultants in connection with the due
diligence investigations of the Underwriters will be treated by the
Underwriters, their counsel and technical consultants as
confidential and will only be used in connection with the Offering.
It shall be a condition precedent to the Underwriters’
execution of any certificate in any Offering Document that the
Underwriters be satisfied, acting reasonably, as to the form and
content of the document. The Underwriters shall not unreasonably
withhold or delay the execution of any such Offering Document
required to be executed by the Underwriters and filed in compliance
with the Securities Laws for the purpose of the
Offering.
Section
6 Conditions of
Closing
The Underwriters’ obligations under this
Agreement (including the obligation to complete the purchase of the
Shares or any of them) are conditional upon and subject
to:
|
(1)
|
Canadian Legal Opinions. The Underwriters receiving at the Time of
Closing favourable legal opinions from Cassels Brock &
Blackwell LLP, Canadian counsel to Western, as to the qualification
of the Shares for sale to the public and as to other matters
governed by the laws of Ontario (with separate legal opinions
provided by local counsel in other Canadian provinces) and may rely
as to matters of fact on certificates of officers, public and
exchange officials or of the auditor or transfer agent of Western),
to the effect set forth below:
|
|
|
|
Western having
been incorporated and existing under the laws of the Province of
Ontario;
|
|
|
|
Western having
the corporate capacity and power to own and lease its properties
and assets and to conduct its business as described in the Final
Prospectus and to execute and deliver this Agreement and to carry
out the transactions contemplated hereby under the laws of the
Province of Ontario;
|
|
|
|
the authorized
share capital of Western being as described in the Final
Prospectus;
|
|
|
|
all necessary
corporate action having been taken by Western to authorize the
execution and delivery of this Agreement and the performance of its
obligations hereunder;
|
|
|
|
this Agreement
having been duly executed and delivered by Western and constituting
a legal, valid and binding obligation of, and is enforceable
against Western, in accordance with its terms (subject to
bankruptcy, insolvency or other laws affecting the rights of
creditors generally, general equitable principles including the
availability of equitable remedies and the qualification that no
opinion need be expressed as to rights to indemnity, or
contribution);
|
|
|
|
the execution
and delivery by Western of this Agreement, the fulfilment of the
terms hereof by Western, and the issue, sale and delivery on the
Closing Date of the Purchased Shares (and subsequently the
Over-Allotment Shares, if issued) to the Underwriters as
contemplated herein, not constituting or result in a breach of or a
default under, and do not creating a state of facts which, after
notice or lapse of time or both, will constitute or result in a
breach of, and will not conflict with, any of the terms, conditions
or provisions of the articles or by-laws of Western;
|
|
|
|
all necessary
corporate action having been taken by Western to authorize the
creation, execution, issuance and delivery of the
Shares;
|
|
|
|
all documents
required to be filed by Western and all proceedings required to be
taken by Western under Canadian Securities Laws having been filed
and taken in order to qualify the distribution of the Shares in
each of the Qualifying Jurisdictions through investment dealers or
brokers registered under the applicable laws thereof who have
complied with the relevant provisions thereof and no other
documents will be required to be filed, proceedings taken, or
approvals, permits, consents or authorizations obtained under
Canadian Securities Laws to permit the trading in the Qualifying
Jurisdictions of the Shares, through registrants registered under
Canadian Securities Laws or in circumstances in which there is an
exemption from the registration requirements of such applicable
laws;
|
|
(i)
|
the attributes
of the Shares conforming in all respects to the description thereof
in the Final Prospectus;
|
|
|
|
the Shares
having been conditionally approved for listing on the TSX subject
only to the Standard Listing Conditions;
|
|
|
|
the Purchased
Shares (and subsequently the Over-Allotment Shares, if issued)
having been validly issued by Western and being fully-paid and
non-assessable shares in the capital of Western;
|
|
|
|
the Company
being a reporting issuer (or equivalent) under the securities laws
of British Columbia, Alberta, Manitoba and Ontario, and not being
included on a list of defaulting reporting issuers maintained by
the securities regulators of British Columbia, Alberta, Manitoba
and Ontario;
|
|
|
|
the statements
under the headings “Eligibility for Investment” in the
Final Prospectus being true and correct;
|
|
|
U.S. Legal
Opinion. At the Closing
Time, the Underwriters shall have received the favourable opinion,
dated the Closing Date, of United States counsel for the Company,
in form and substance satisfactory to United States counsel for the
Underwriters (acting reasonably), as to the tax disclosure included
in the Final Prospectus and to the effect that it is not necessary
in connection with the offer and sale of the Shares in the United
States to register the Shares under the U.S. Securities
Act.
|
|
|
Title
Opinion. At the Closing
Time, the Underwriters shall have received the favourable opinion,
dated the Closing Date, of United States counsel for the Company,
in form and substance satisfactory to United States counsel for the
Underwriters (acting reasonably), as to the title and ownership
interest in the Company’s material properties;
|
|
|
Canadian
Local Counsel Opinion. The Underwriters receiving at the Time of
Closing, favourable legal opinions of local Canadian counsel as to
the qualification of the Shares for sale to the public and as to
other matters governed by the laws of the jurisdictions in Canada
which Cassels Brock & Blackwell LLP is not qualified to
practice, in each case in a form acceptable in all reasonable
respects to counsel to the Underwriters, Stikeman Elliott
LLP;
|
|
|
Secretary
Certificates. The
Underwriters having received certificates dated the Closing Date
signed by the Corporate Secretary of Western or another officer
acceptable to the Underwriters, acting reasonably, in form and
content satisfactory to the Underwriters, acting reasonably, with
respect to:
|
|
(a)
|
the constating
documents of Western;
|
|
|
|
the resolutions
of the directors of Western relevant to the Offering, allotment,
issue (or reservation for issue) and sale of the Shares and, as
applicable, the authorization of this Agreement, and the other
agreements and transactions contemplated by this Agreement;
and
|
|
(c)
|
the incumbency and signatures of signing
officers of Western;
|
|
|
Certificates
of Status. Western having
delivered to the Underwriters, at the Time of Closing, certificates
of status and/or compliance, where issuable under applicable law,
for each of the Material Subsidiaries and Western, each dated
within two (2) days of the Closing Date;
|
|
|
Closing
Certificates. Western
having delivered to the Underwriters, at the Time of Closing, a
certificate dated the Closing Date addressed to the Underwriters
and signed by the Chief Executive Officer and Chief Financial
Officer of Western (or such other senior officers as acceptable to
the Underwriters), certifying for and on behalf of Western, and not
in their personal capacities, after having made due inquiries, with
respect to the following matters:
|
|
|
|
Western having
complied with all the covenants and satisfied all the terms and
conditions of this Agreement on its part to be complied with and
satisfied at or prior to the Time of Closing;
|
|
|
|
no order,
ruling or determination (including any stop order) having the
effect of ceasing or suspending trading in any securities of the
Company or prohibiting the sale of the Shares or any of the
Company’s issued securities having been issued and no
proceeding for such purpose being pending or, to the knowledge of
such officers, threatened by any securities regulatory authority or
stock exchange in Canada or the United States;
|
|
|
|
subsequent to
the respective dates as at which information is given in the Final
Prospectus, there having not occurred a Material Adverse Effect, or
any change or development involving a prospective Material Adverse
Effect, or the coming into existence of a new material fact, other
than as disclosed in the Final Prospectus or any Supplementary
Material, as the case may be;
|
|
|
|
the Company
being a “reporting issuer” or its equivalent under the
securities laws of each of the Qualifying Jurisdictions, being
eligible in accordance with the provisions of NI 44-101 to file a
short form prospectus with the Canadian Securities Administrators
and no material change relating to the Company on a consolidated
basis having occurred since the date hereof with respect to which
the requisite material change report has not been filed and no such
disclosure having been made on a confidential basis that remains
subject to confidentiality; and
|
|
|
|
the
representations and warranties of Western contained in this
Agreement and in any certificates of Western delivered pursuant to
or in connection with this Agreement, being true and correct as at
the Time of Closing, with the same force and effect as if made on
and as at the Time of Closing, after giving effect to the
transactions contemplated by this Agreement;
|
|
|
Certificate
of Transfer Agent. Western having delivered to the Underwriters at
the Time of Closing, a certificate of Computershare Investor
Services Inc., as registrar and transfer agent of the common
shares, which certifies the number of common shares issued and
outstanding on the date prior to the Closing Date;
|
|
|
Bring Down
Auditor Comfort Letters. Western having caused the Western Auditor to
deliver to the Underwriters at the Time of Closing a comfort
letter, dated the Closing Date, in form and substance satisfactory
to the Underwriters, acting reasonably, bringing forward to the
date which is two (2) Business Days prior to the Closing Date, the
information contained in the comfort letter referred to in
Subsection Section 3(3)(d);
|
|
|
No
Termination. The
Underwriters not having exercised any rights of termination set
forth in Section 14;
|
|
|
Adverse
Proceedings. At the
Closing Time, no order, ruling or determination having the effect
of ceasing or suspending trading in any securities of the Company
or prohibiting the sale of the Shares or any of the Company’s
issued securities being issued and no proceeding for such purpose
being pending or, to the knowledge of the Company, threatened by
any securities regulatory authority or stock exchange in Canada or
the United States;
|
|
|
Exchange. At the Closing Time, the Shares having been
listed, or conditionally listed, for trading on the TSX;
and
|
|
|
Other
Documentation. The
Underwriters having received at the Time of Closing such further
certificates, opinions of counsel and other documentation from
Western as may be contemplated herein or as the Underwriters or
their counsel may reasonably require, provided, however, that the
Underwriters or their counsel shall request any such certificate or
document within a reasonable period prior to the Time of Closing
that is sufficient for Western to obtain and deliver such
certificate, opinion or document, and in any event, at least two
(2) Business Days prior to the Time of Closing.
|
Section
7 Representations and
Warranties of Western
|
|
Western hereby
represents and warrants to the Underwriters, intending that the
same may be relied upon by the Underwriters that:
|
|
|
|
Good
Standing of Western. Western has been duly incorporated or organized
and is validly existing under the laws of Ontario, and has all
requisite corporate power and authority to carry on its business,
as now conducted and as presently proposed to be conducted by it,
and to own, lease and operate its properties and assets and to
carry out the transactions contemplated by this Agreement; and that
the Company is duly qualified as an extra-provincial corporation to
transact business and is in good standing (in respect of the filing
of annual returns where required or other information filings under
applicable corporations information legislation) in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or to be in good
standing would not reasonably be expected to result in a Material
Adverse Effect.
|
|
|
|
Good
Standing of Subsidiaries. At the Time of Closing, Western’s only
subsidiaries will be the Material Subsidiaries. At the Time of
Closing, each Material Subsidiary will be a corporation or company
incorporated or established, organized and existing under the laws
of the jurisdiction of its incorporation, will be current and
up-to-date with all material filings required to be made under the
laws of its jurisdiction of incorporation and will have the
requisite corporate power and capacity to own, lease and operate
its properties and to conduct its business as now carried on by it,
and will be duly qualified to transact business and will be in good
standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property
or the conduct of business, except where the failure to be so would
not reasonably be expected to result in a Material Adverse Effect.
At the Time of Closing, all of the issued and outstanding shares in
the capital of each Material Subsidiary will have been duly
authorized and validly issued, will be fully paid and
non-assessable and will be directly or indirectly beneficially
owned by Western, free and clear of any Lien (except pursuant to
any security interest pursuant to its amended and restated credit
facility originally dated March 30, 2007 as amended and restated
May 31, 2007 (the “ Credit Facility ”)); and
none of the outstanding shares of the capital stock of any Material
Subsidiary was issued in violation of pre-emptive or similar rights
of any security holder of such subsidiary. Other than as disclosed
in the Final Prospectus, there exist no options, warrants, purchase
rights, or other contracts or commitments that could require
Western to sell, transfer or otherwise dispose of any capital stock
of any Material Subsidiary. No act or proceeding has been taken by
or against the Material Subsidiaries in connection with their
liquidation, winding-up or bankruptcy.
|
|
|
|
Compliance
with Prospectus and Registration Requirements.
The Company meets the general
eligibility requirements for use of a short form prospectus under
National Instrument 44-101. No order suspending the distribution of
the Shares has been issued by the Securities Commissions under
Canadian Securities Laws and no proceedings for that purpose have
been instituted or are pending or, to the knowledge of the Company,
are contemplated by any Securities Commissions, and any request on
the part of any Securities Commissions for additional information
has been complied with.
|
At all times up
to any Closing Time:
|
|
|
the Final
Prospectus complied and will comply in all material respects with
Canadian Securities Laws as interpreted and applied by the
Securities Commissions;
|
|
|
|
none of the
Offering Documents nor any amendment or supplement thereto
contained or will contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein, or
necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading;
and
|
|
|
each of the
Offering Documents, and any Supplementary Material or any amendment
or supplement thereto constituted and will constitute full, true
and plain disclosure of all material facts relating to the Company
and its Material Subsidiaries, considered as one enterprise, and
the Shares, and did not and will not include an untrue statement of
a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the
representations and warranties contained in paragraph (ii) above
and this paragraph (iii) do not apply to statements relating solely
to the Underwriters or furnished by the Underwriters concerning the
Underwriters under the section “Plan of Distribution”
contained in the Offering Documents, any Prospectus Amendment or
Supplementary Material.
|
|
|
|
Share
Capital of Western. The
share capital of Western described under the heading
“Description of Securities Distributed” in the Final
Prospectus is true and correct. At the Time of Closing, but prior
to giving effect to the issuance of any Shares, the issued share
capital of Western will consist only of common shares, and no other
equity or voting shares.
|
|
|
|
Authorization and Description of
Shares. The Shares have
been duly authorized for issuance and sale to the Underwriters
pursuant to this Agreement and when issued and delivered by Western
pursuant to this Agreement, against payment of the consideration
set forth herein, will be validly issued as fully paid and
non-assessable shares. The Shares conform and will conform to all
statements relating thereto contained in the Offering Documents and
such description conforms to the rights set forth in the
instruments defining the same. The issuance of the Shares is not
subject to the pre-emptive rights of any shareholder of Western (or
such rights have been irrevocably waived), and all corporate action
required to be taken by Western for the authorization, issuance,
sale and delivery of the Shares has been validly taken at the date
hereof.
|
|
|
|
Absence of
Rights. No person has any
right, agreement or option, present or future, contingent or
absolute, or any right capable of becoming a right, agreement or
option, for the issue or allotment of any unissued shares of
Western or any other agreement or option, for the issue or
allotment of any unissued shares of Western or any other security
convertible into or exchangeable for any such shares or to require
Western to purchase, redeem or otherwise acquire any of the issued
and outstanding shares of Western except as otherwise disclosed in
the Offering Documents.
|
|
|
|
Financial
Statements The Financial
Information incorporated by reference in the Offering Documents and
the notes thereto,
|
|
|
|
present fairly,
in all material respects, the financial position of Western and its
subsidiaries, and the statements of operations, retained earnings,
cash flow from operations and changes in
financial information of Western and
|
|