Back to top

UNDERWRITING AGREEMENT

Underwriting Agreement

UNDERWRITING AGREEMENT | Document Parties: WESTERN GOLDFIELDS INC. | RBC Dominion Securities Inc | Scotia Capital Inc You are currently viewing:
This Underwriting Agreement involves

WESTERN GOLDFIELDS INC. | RBC Dominion Securities Inc | Scotia Capital Inc

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.
Title: UNDERWRITING AGREEMENT
Date: 3/11/2009
Industry: Gold and Silver     Sector: Basic Materials

UNDERWRITING AGREEMENT, Parties: western goldfields inc. , rbc dominion securities inc , scotia capital inc
50 of the Top 250 law firms use our Products every day

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.

 

 

 


 

- 2 -

 

On the basis of the representations, warranties, covenants and agreements contained herein, but subject to the terms and conditions further set out below:

 

 

(a)

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

 

 

(b)

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:

 

 

 


 

- 3 -

 

TERM AND CONDITIONS

 

Section 1        Definitions and Interpretation

 

(1) 

In this Agreement:

 

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;

 

 

 


 

- 4 -

 

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;

 

 

 


 

- 5 -

 

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;

 

 

 


 

- 6 -

 

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;

 

(2)

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.

 

(3)

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

 

(1)

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.

 

 

 


 

- 7 -

 

(2)

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.

 

(3)

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

 

(1)

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.

 

 

 


 

- 8 -

 

(2)

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:

 

 

(a)

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:

 

 

(i)

are true and correct in all material respects and contain no misrepresentation; and

 

 

(ii)

constitute full, true and plain disclosure of all material facts relating to the Shares, and Western and its Material Subsidiaries considered as a whole;

 

 

(b)

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;

 

 

(c)

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

 

 

(d)

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.

 

(3)

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)

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;

 

 

 


 

- 9 -

 

 

(b)

a copy of the Final U.S. Private Placement Memorandum in the form required by U.S. Securities Laws;

 

 

(c)

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 ”);

 

 

(d)

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.

 

(4)

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.

 

 

 


 

- 10 -

 

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:

 

 

(a)

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;

 

 

(b)

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;

 

 

(c)

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

 

 

(d)

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:

 

 

(e)

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;

 

 

(f)

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;

 

 

(g)

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:

 

 

 


 

- 11 -

 

 

(a)

when any supplement to the Offering Documents or any Supplementary Material shall have been filed;

 

 

(b)

of any request by any Securities Commission to amend or supplement the Preliminary Prospectus or the Final Prospectus or for additional information; and

 

 

(c)

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.

 

(3)

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.

 

(4)

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.

 

(5)

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.

 

(6)

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.

 

 

 


 

- 12 -

 

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:

 

 

(a)

Western having been incorporated and existing under the laws of the Province of Ontario;

 

 

(b)

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;

 

 

 


 

- 13 -

 

 

(c)

the authorized share capital of Western being as described in the Final Prospectus;

 

 

(d)

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;

 

 

(e)

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);

 

 

(f)

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;

 

 

(g)

all necessary corporate action having been taken by Western to authorize the creation, execution, issuance and delivery of the Shares;

 

 

(h)

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;

 

 

(j)

the Shares having been conditionally approved for listing on the TSX subject only to the Standard Listing Conditions;

 

 

 


 

- 14 -

 

 

(k)

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;

 

 

(l)

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;

 

 

(m)

the statements under the headings “Eligibility for Investment” in the Final Prospectus being true and correct;

 

(2)

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.

 

(3)

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;

 

(4)

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;

 

(5)

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;

 

 

(b)

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;

 

 

 


 

- 15 -

 

(6)

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;

 

(7)

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:

 

 

(a)

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;

 

 

(b)

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;

 

 

(c)

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;

 

 

(d)

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

 

 

(e)

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;

 

(8)

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;

 

 

 


 

- 16 -

 

(9)

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);

 

(10)

No Termination. The Underwriters not having exercised any rights of termination set forth in Section 14;

 

(11)

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;

 

(12)

Exchange. At the Closing Time, the Shares having been listed, or conditionally listed, for trading on the TSX; and

 

(13)

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

 

(1)

Western hereby represents and warrants to the Underwriters, intending that the same may be relied upon by the Underwriters that:

 

 

(a)

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.

 

 

 


 

- 17 -

 

 

(b)

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.

 

 

(c)

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:

 

 

(i)

the Final Prospectus complied and will comply in all material respects with Canadian Securities Laws as interpreted and applied by the Securities Commissions;

 

 

(ii)

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

 

 

 


 

- 18 -

 

(iii)

 

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.

 

 

(d)

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.

 

 

(e)

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.

 

 

(f)

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.

 

 

(g)

Financial Statements The Financial Information incorporated by reference in the Offering Documents and the notes thereto,

 

 

 


 

- 19 -

 

 

 (i)

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


 
SITE SEARCH

AGREEMENTS / CONTRACTS

Document Title:

Entire Document: (optional)

Governing Law:(optional)


Try our advanced search >>
 

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates
Email:
This is only a partial view of this document. We have millions of legal documents and clauses drafted by top law firms. learn more search for free browse for free learn more