Exhibit 2.1
METHANEX CORPORATION
-% SENIOR NOTES DUE -, 2015
UNDERWRITING AGREEMENT
July -, 2005
ABN AMRO Incorporated
BNP Paribas Securities Corp.,
As representatives of the several Underwriters
named in Schedule I hereto,
c/o ABN AMRO Incorporated
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BNP Paribas Securities Corp.,
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Ladies and Gentlemen:
Methanex Corporation, a Canadian corporation (the "COMPANY"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of US$150,000,000 principal amount of the Company's -% Senior Notes due -, 2015
(the "SECURITIES").
1. The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(a) The Company meets the requirements under the Securities
Act (British Columbia) (the "BCSA") and the rules, regulations and
published policy statements applicable in the Province of British
Columbia, including the rules and procedures established for the
pricing of securities after the final prospectus is receipted pursuant
to National Instrument 44-103 - Post-Receipt Pricing (the "PREP
PROCEDURES"), for use of a short form prospectus with respect to the
Securities pursuant to National Instrument 44-101-Short Form Prospectus
Distributions (collectively, "BRITISH COLUMBIA SECURITIES LAWS"); a
preliminary short form
prospectus relating to the Securities has been filed with the British
Columbia Securities Commission in the Province of British Columbia (the
"BCSC") (the "CANADIAN PRELIMINARY PROSPECTUS"); the BCSC has issued a
preliminary receipt for the Canadian Preliminary Prospectus; a final
short form prospectus relating to the Securities has been filed with
the BCSC (the "BASE PREP Prospectus") which omits the PREP Information
(as hereinafter defined) in accordance with the PREP Procedures and the
Company will prepare and file, promptly after the execution and
delivery of this Agreement, with the BCSC, in accordance with the PREP
Procedures, a supplemented PREP prospectus setting forth the PREP
Information (the "SUPPLEMENTED PREP PROSPECTUS"); the information
included in the Supplemented PREP Prospectus that is omitted from the
Base PREP Prospectus and which is deemed under the PREP Procedures to
be incorporated by reference in the Base PREP Prospectus as of the date
of the Supplemented PREP Prospectus is referred to herein as the "PREP
INFORMATION"; the Base PREP Prospectus for which a final receipt has
been received from the BCSC, including the documents incorporated by
reference therein, is herein referred to as the "CANADIAN PROSPECTUS",
provided, however, that, from and after the time that the Supplemented
PREP Prospectus is filed with the BCSC, the term "CANADIAN PROSPECTUS"
shall refer to such Supplemented Prep Prospectus, including the
documents incorporated by reference therein; the Canadian Preliminary
Prospectus and the Canadian Prospectus for which a preliminary receipt
and a final receipt were issued by the BCSC, respectively, were each in
the form heretofore delivered to you and for each of the other
Underwriters (including all documents incorporated by reference in the
prospectus contained therein) and no other document with respect to
such Preliminary Canadian Prospectus or Canadian Prospectus or document
incorporated by reference therein has heretofore been filed or
transmitted for filing with the BCSC; no order having the effect of
ceasing or suspending the distribution of the Securities has been
issued by the BCSC and no proceeding for that purpose has been
initiated or, to the best of the Company's knowledge, threatened by the
BCSC;
(b) The Company meets the general eligibility requirements
for use of Form F-9 under the Securities Act of 1933, as amended (the
"ACT") and a registration statement on Form F-9 (File No. 333- -)
covering the registration of the Securities under the Act has been
filed with the United States Securities and Exchange Commission (the
"COMMISSION"); such registration statement and any post-effective
amendment thereto (including the Canadian Prospectus with such
deletions therefrom and additions thereto as are permitted or required
by Form F-9 and the applicable rules and regulations of the
Commission), each in the form heretofore delivered to you and for each
of the other Underwriters (including all documents incorporated by
reference in the prospectus contained therein), have been declared
effective by the Commission in such form; no other document with
respect to such registration statement or document incorporated by
reference therein has heretofore been filed or transmitted for filing
with the Commission; no stop order suspending the effectiveness of such
registration statement has been issued and no proceeding for that
purpose has been initiated or, to the best of the Company's knowledge,
threatened by the Commission (any preliminary prospectus included in
such registration statement or filed with the Commission in accordance
with the rules and regulations of the Commission under the Securities
Act, is hereinafter called a "U.S.
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PRELIMINARY PROSPECTUS"); the various parts of such registration
statement, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained in the
registration statement at the time such part of the registration
statement became effective, each as amended at the time such part of
the registration statement became effective, but excluding the
Statement of Eligibility on Form T-1 under the Trust Indenture Act of
1939, as amended (the "TRUST INDENTURE ACT"), are hereinafter
collectively called the "REGISTRATION Statement"; the Company will
prepare and file, promptly after the execution and delivery of this
Agreement, with the Commission, in accordance with General Instruction
II.K of Form F-9, the Supplemented PREP Prospectus (with such deletions
therefrom and additions thereto as are permitted or required by Form
F-9 and the applicable rules and regulations of the Commission) (the
"U.S. SUPPLEMENTED PROSPECTUS"); the prospectus included in the
Registration Statement at the time it became effective, including the
documents incorporated by reference therein, is herein called the "U.S.
PROSPECTUS", provided, however, that, from and after the time that the
U.S. Supplemented Prospectus is filed with the Commission, the term
"U.S. PROSPECTUS" shall refer to such U.S. Supplemented Prospectus,
including the documents incorporated by reference therein; the U.S.
Preliminary Prospectus and the Canadian Preliminary Prospectus are
hereinafter called the "PRELIMINARY PROSPECTUS" and the U.S. Prospectus
and the Canadian Prospectus are hereinafter called the "PROSPECTUSES";
(c) The Company has prepared and filed with the Commission
an appointment of agent for service of process upon the Company on Form
F-X in conjunction with the filing of the Registration Statement (the
"FORM F-X"); the Company has also caused the Trustee to prepare and
file with the Commission a Statement of Eligibility under the Trust
Indenture Act on Form T-1;
(d) No order preventing or suspending the use of any
preliminary prospectus has been issued by the Commission or the BCSC,
and each preliminary prospectus, at the time of filing thereof,
conformed in all material respects to the requirements of the British
Columbia Securities Laws, the Act and the Trust Indenture Act, and the
rules and regulations of the Commission thereunder, and did not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter through ABN AMRO Incorporated or BNP
Paribas Securities Corp. expressly for use therein;
(e) The documents incorporated by reference in the
Prospectuses, when they became effective or were filed with the BCSC
and the Commission, as the case may be, conformed in all material
respects to the requirements of the British Columbia Securities Laws
and the Act or the Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), as applicable, and the rules and regulations of the Commission
thereunder, and, none of such documents contained an untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or
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necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the
Prospectuses or any further amendment or supplement thereto, when such
documents become effective or are filed with the BCSC and the
Commission, as the case may be, will conform in all material respects
to the requirements of the British Columbia Securities Laws and the Act
or the Exchange Act, as applicable, and the rules and regulations of
the Commission thereunder, and will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through ABN AMRO Incorporated or BNP Paribas Securities
Corp. expressly for use therein;
(f) As of the applicable filing date or effective date, as
the case may be, (A) the Canadian Prospectus and any amendments or
supplements thereto complied and will comply in all material respects
with the British Columbia Securities Laws; (B) the U.S. Prospectus and
the Registration Statement and any amendments or supplements thereto
complied and will comply in all material respects with the requirements
of the Act and the applicable rules and regulations of the Commission
under the Act and the Trust Indenture Act; (C) the Form F-X and any
amendments or supplements thereto complied and will comply in all
material respects with the requirements of the Act and the applicable
rules and regulations of the Commission under the Act; (D) neither the
Registration Statement nor any amendment or supplement thereto,
together with each document incorporated therein by reference (as
modified or superseded by the Registration Statement, any amendment or
supplement thereto or any subsequent document incorporated therein by
reference), contained or will contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and (E) each
of the Canadian Prospectus and the U.S. Prospectus and any amendment or
supplement thereto, together with each document incorporated therein by
reference (as modified or superseded by the Prospectuses, any amendment
or supplement thereto or any subsequent document incorporated therein
by reference), constituted and will constitute full, true and plain,
disclosure of all material facts relating to the Company and the
Securities, 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 clauses (D) and (E) above do not apply to
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of an
Underwriter through ABN AMRO Incorporated or BNP Paribas Securities
Corp. expressly for use in the Registration Statement, the
Prospectuses, and any amendment or supplement thereto;
(g) There are no reports or information that in accordance
with the requirements of the BCSC must be made publicly available in
connection with the offering of the Securities that have not been made
publicly available as required; there are no documents required to be
filed with the BCSC in connection with any preliminary prospectus or
the Canadian Prospectus that
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have not been filed as required; there are no contracts, documents or
other materials required to be described or referred to in the
Registration Statement or the Prospectuses or to be filed as exhibits
to the Registration Statement or with the BCSC that are not described,
referred to or filed as required;
(h) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial statements
included or incorporated by reference in the Prospectuses, any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectuses, except where
such event has not had or would not have a Material Adverse Effect (as
defined herein); and, since the respective dates as of which
information is given in the Registration Statement and the
Prospectuses, there has not been any change in the share capital or
long-term debt of the Company or any of its subsidiaries or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole
("MATERIAL ADVERSE EFFECT"), otherwise than as set forth or
contemplated in the Prospectuses;
(i) The Company or one of its subsidiaries has good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by it and that is
material to the business of the Company and its subsidiaries, taken as
a whole, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectuses or such as do
not individually or in the aggregate materially affect the value of
such property and do not individually or in the aggregate interfere
with the use made and proposed to be made of such property by the
Company or its subsidiaries; and any real property and buildings, that
are material to the business of the Company and its subsidiaries, taken
as a whole, held under lease by the Company or one of its subsidiaries
is held by it under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company
or its subsidiaries;
(j) Each subsidiary of the Company, as that term is defined
in Rule 1-02 of Regulation S-X under the Act ("RULE 1-02"), that is a
"significant subsidiary" of the Company (as such term is defined in
Rule 1-02) (each a "SIGNIFICANT SUBSIDIARY" and, collectively, the
"SUBSIDIARIES") is listed in Schedule II to this Agreement;
(k) Each of the Company and its Subsidiaries has been duly
incorporated, amalgamated, organized, continued or formed and is
validly existing as a corporation or partnership in good standing under
the laws of its jurisdiction of incorporation, amalgamation,
organization, continuance or formation with power and authority
(corporate and other) to own its properties and conduct its business as
described in the Prospectuses, and has been duly qualified as an
extra-provincial or foreign corporation or partnership for the
transaction of
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business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, or is subject to no
liability or disability by reason of the failure to be so qualified in
any such jurisdiction, except where such failure to be so qualified
would not have a Material Adverse Effect;
(l) The Company has an authorized capitalization as set
forth in the Prospectuses, and all of the issued shares in the capital
of the Company have been duly and validly authorized and issued and are
fully paid and non-assessable; and all of the issued and outstanding
shares or partnership interests of each Subsidiary have been duly and
validly authorized and issued, are fully paid and non-assessable and
(except for directors' qualifying shares) are owned directly or
indirectly by the Company in the percentages set forth on Schedule II
hereto, free and clear of all liens, encumbrances, equities or claims
(except for encumbrances on the shares of Atlas Methanol Company
Unlimited incurred in connection with the limited recourse debt
facilities described in note 7 to the Company's annual consolidated
financial statements for the year ended December 31, 2004) and there
are no restrictions on transfers of the Securities, subsequent to their
issue, under the laws of Canada and of the United States, except for
Securities sold in Canada pursuant to the Canadian Offering Memorandum
(as defined herein);
(m) The Securities have been duly authorized and, when
issued and delivered pursuant to this Agreement and the Indenture (as
defined herein), will have been duly executed, authenticated, issued
and delivered and will constitute valid and legally binding obligations
of the Company entitled to the benefits provided by the indenture dated
as of July 20, 1995 (the "INITIAL INDENTURE") between the Company and
The Bank of New York (formerly United States Trust Company of New
York), as Trustee (the "TRUSTEE"), as supplemented by the First
Supplemental Indenture dated as of June 18, 2002, as supplemented by
the Second Supplemental Indenture dated as of June 19, 2002, as
supplemented by the Third Supplemental Indenture dated as of December
9, 2003, and as further supplemented by the Fourth Supplemental
Indenture to be dated as of July -, 2005 (the "SUPPLEMENTAL INDENTURE")
(as so supplemented, the "INDENTURE") between the Company and the
Trustee, under which they are to be issued, which will be substantially
in the form filed as an exhibit to the Registration Statement; the
Initial Indenture has been duly authorized and duly qualified under the
Trust Indenture Act and, when the Supplemental Indenture is executed
and delivered by the Company and the Trustee, the Indenture will
constitute a valid and legally binding instrument of the Company,
enforceable against the Company in accordance with its terms, subject,
to applicable bankruptcy, insolvency, moratorium, fraudulent conveyance
and other similar laws affecting creditors' right and remedies
generally and general principles of equity including, without
limitation, standards of materiality, good faith, fair dealing and
reasonableness, equitable defenses and limits as to the availability of
equitable remedies, whether such principles are considered in a
proceeding at law or in equity and the Securities and the Indenture
will conform to the descriptions thereof in the Prospectuses;
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(n) The Company has the corporate power and authority to
execute, deliver and perform its obligations under this Agreement and
this Agreement has been duly authorized, executed and delivered by the
Company;
(o) The issue and sale of the Securities and the compliance
by the Company with all of the provisions of the Securities, the
Indenture and this Agreement and the consummation of the transactions
herein and therein contemplated will not (i) conflict with or result in
a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject (except for such
conflicts, breaches, violations or defaults which would not result in a
Material Adverse Effect), (ii) result in any violation of the
provisions of the Articles of Continuance or By-laws, as amended, of
the Company or (iii) contravene any statute or any order, rule or
regulation of any court, central bank, stock exchange or governmental
agency or body ("GOVERNMENTAL AGENCY") having jurisdiction over the
Company or any of its subsidiaries or any of their properties that
would have a Material Adverse Effect; and no consent, approval,
authorization, order, registration, clearance or qualification
("GOVERNMENTAL AUTHORIZATION") of or with any such Governmental Agency
is required for the issue and sale of the Securities or the
consummation by the Company of the transactions contemplated by this
Agreement or the Indenture, except the registration under the Act of
the Securities and such Governmental Authorization as may be required
under British Columbia Securities Laws, such as have been obtained
under the Trust Indenture Act and the Canada Business Corporations Act,
and such Governmental Authorizations as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters;
(p) Neither the Company nor any of its Subsidiaries is (A)
in violation of its Articles of Continuance or By-laws (or other
constating instrument, as applicable) or (B) in default in the
performance or observance of any obligation, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement,
lease or other agreement or instrument to which it is a party or by
which it or any of its properties may be bound (except, in the case of
clause (B) above, for such defaults which would not result in a
Material Adverse Effect);
(q) The statements set forth in the Prospectuses under the
captions "Description of the Notes", insofar as they purport to
constitute a summary of the terms of the Securities; under the captions
"Tax Considerations", "Description of Certain Indebtedness" and
"Underwriting", insofar as they purport to describe the provisions of
the laws and documents referred to therein, are a fair summary of such
terms and provisions and insofar as such statements constitute legal
considerations, are accurate and correct in all material respects;
(r) Except as disclosed in the Prospectuses or as would not
individually or in the aggregate have a Material Adverse Effect (A) the
Company and its subsidiaries are each in compliance with all applicable
Environmental Laws (as defined herein), (B) the Company and
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its subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are in compliance
with their requirements, (C) there are no pending or, to the knowledge
of the Company, threatened Environmental Claims (as defined herein)
against the Company or any of its subsidiaries, and (D) to the
knowledge of the Company, there are no circumstances with respect to
any property or operations of the Company or its subsidiaries that
could reasonably be anticipated to form the basis of an Environmental
Claim against the Company or its subsidiaries. In addition, based upon
the Company's reviews, conducted in the ordinary course of its
business, of the effect of Environmental Laws on the business and
operations of the Company and its subsidiaries, the Company has
reasonably concluded that, except as disclosed in the Prospectuses, the
costs and liabilities under Environmental Laws (including, without
limitation, any capital or operating expenditures required for
clean-up, remediation, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and potential liabilities to third
parties) would not, singularly or in the aggregate, have a Material
Adverse Effect, or be required to be disclosed in the Prospectuses;
For purposes of this subsection, the following terms shall
have the following meanings: "ENVIRONMENTAL LAW" means any Canadian,
United States, Chilean, New Zealand, Trinidad, Korean or Egyptian (or
other applicable jurisdiction's) federal, provincial, state, local or
municipal statute, law, rule, regulation, ordinance, code, or rule of
common law and any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree or
judgment, relating to the environment, health, safety or any chemical,
material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority. "ENVIRONMENTAL CLAIM" means
any administrative, regulatory or judicial action, suit, demand, demand
letter, claim, lien, notice of noncompliance or violation,
investigation or proceeding relating in any way to any Environmental
Law;
(s) Other than as set forth in the Prospectuses, there are
no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would individually
or in the aggregate have a Material Adverse Effect; and, to the best of
the Company's knowledge, no such proceedings are threatened or
contemplated by any Governmental Agency or threatened by others;
(t) The Company is not and, after giving effect to the
offering and sale of the Securities, will not be an "INVESTMENT
COMPANY", as such term is defined in the Investment Company Act of
1940, as amended (the "INVESTMENT COMPANY ACT");
(u) No Governmental Authorization of or with any
Governmental Agency is required to effect payments of principal,
premium, if any, and interest on the Securities;
(v) No withholding tax imposed under the federal laws of
Canada or the laws of the Province of British Columbia will be payable
in respect of the payment of the commissions
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contemplated by this Agreement by the Company to an Underwriter,
provided that the Underwriter deals at arm's length with the Company
(as such term is understood for purposes of the Income Tax Act
(Canada)), and that such commissions are payable in respect of services
rendered by the Underwriter wholly outside of Canada that are performed
in the ordinary course of business carried on by the Underwriter that
includes the performance of such services for a fee and any such amount
is reasonable in the circumstances;
(w) No goods and services tax imposed under the federal
laws of Canada will be payable by the Company in respect of the payment
of commissions as contemplated by this Agreement to an Underwriter,
provided that such commissions are in respect of services performed by
an Underwriter wholly outside of Canada;
(x) No stamp duty, documentary taxes or similar taxes are
payable by the Company under the federal laws of Canada or the laws of
the Province of British Columbia in connection with the sale and
delivery of the Securities pursuant to this Agreement by the Company;
(y) The Company and each of its subsidiaries have all
licenses, franchises, permits, authorizations, approvals and orders and
other concessions of and from all Governmental Agencies (collectively,
"PERMITS") that are necessary to own or lease their properties and
conduct their businesses as described in the Prospectuses, except where
the failure to obtain such Permit would not have a Material Adverse
Effect;
(z) The Company or one of its subsidiaries owns or
possesses, or can acquire on reasonable terms, adequate patents, patent
rights, licenses, inventions, copyrights, know how (including trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service
marks, trade names or other intellectual property (collectively,
"INTELLECTUAL PROPERTY") necessary to carry on the business now
operated by the Company and its subsidiaries, and neither the Company
nor any of its subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others
with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of its
subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, individually or in the aggregate, would result in a
Material Adverse Effect;
(aa) Neither the Company nor any of its subsidiaries has
taken, directly or indirectly, any action which was designed to or
which has constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any security of
the Company or, except as permitted by this Agreement, facilitate the
sale or resale of the Securities;
(bb) KPMG LLP, who have audited and reported on certain
annual consolidated financial statements of the Company and its
subsidiaries, are independent public accountants as required by the Act
and the rules and regulations thereunder and are independent with
respect to
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the Company within the meaning of the Canada Business Corporations Act
and the BCSA and regulations and policies thereunder;
(cc) The consolidated financial statements included in the
Prospectuses, together with the related schedules, if any, and notes,
present fairly the financial position of the Company and its
consolidated subsidiaries at the dates indicated and the consolidated
statements of income and retained earnings and cash flows of the
Company and its consolidated subsidiaries for the periods specified;
such financial statements have been prepared in accordance with
generally accepted accounting principles in Canada ("CANADIAN GAAP")
applied on a consistent basis throughout the periods involved and,
except for the interim consolidated financial statements included in
the Prospectuses, have been reconciled to generally accepted accounting
principles in the United States of America ("U.S. GAAP") in accordance
with Item 17 of Form 20-F under the Exchange Act. The selected
consolidated financial data and the summary consolidated financial data
included in the Prospectuses present fairly the information shown
therein and have been compiled on a basis consistent with that of the
audited and unaudited consolidated financial statements included in the
Prospectuses;
(dd) No labor dispute with the employees of the Company or
any subsidiary exists or, to the knowledge of the Company, is imminent,
and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or any subsidiary's
principal suppliers, manufacturers, customers or contractors, which, in
either case, may reasonably be expected to result in a Material Adverse
Effect;
(ee) Except as disclosed in the Prospectuses, neither the
Company nor any of its subsidiaries is a party to any contract,
agreement or understanding with any officer, director, employee or any
other person not dealing at arm's length with the Company which is
required to be disclosed under the Act or applicable British Columbia
Securities Laws and the Company does not have any outstanding loans to
any of its officers or directors;
(ff) The Company will not offer or sell the Securities,
directly or indirectly, in Canada, or to or for the benefit of any
resident of Canada, except in, or to or for the benefit of residents
of, the Provinces of British Columbia, Alberta, Ontario or Quebec (the
"DESIGNATED PROVINCES") on a private placement basis, under an offering
memorandum (the "CANADIAN OFFERING MEMORANDUM") prepared for such
purpose, pursuant to exemptions from the prospectus requirements of the
securities laws of the Designated Provinces and otherwise in compliance
with those laws, and any such sales will only be made through the
Underwriters or their Canadian affiliates;
(gg) Neither the Company nor any of its subsidiaries has
conducted any transactions with the government of Cuba, Libya, Iran,
Iraq, Sudan, Angola, North Korea, Syria, or Myanmar (Burma) (the
"PROHIBITED COUNTRIES" ) or with any person or entity located in any of
the Prohibited Countries;
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The net proceeds from the sale of the Securities (as described
in the Prospectuses under the caption "Use of Proceeds") have not been
and will not be, directly or indirectly, invested in or committed to
any business activities in any of the Prohibited Countries;
(hh) The Indenture and the issuance of the Securities
thereunder are exempt from Part VIII of the Canada Business Corporation
Act pursuant to an exemption order obtained under the provisions of the
Canada Business Corporation Act and, except for the filing of the
Indenture with the BCSC, no other registration, recording or filing of
the Indenture is required under the federal laws of Canada or the laws
of the Province of British Columbia in connection with the
authorization, execution, delivery and performance by the Company of
the Indenture;
(ii) The Company maintains disclosure controls and procedures
as required by Rule 13a-15 or Rule 15d-15 under the Exchange Act and as
contemplated by the certifications required under Form 52-109F1 and
Form 52-109F2 under Multilateral Instrument 52-109 - Certification of
Disclosures in Issuer's Annual and Interim Filings ('"52-109"), and
such controls and procedures are effective to ensure that all material
information concerning the Company is made known, on a timely basis, to
the individuals responsible for the preparation of the Company's
filings with the Commission and the BCSC. The Company has disclosed to
its auditors and the audit committee of its board of directors (a) all
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting (as such term is
defined by Rules 13a-15(f) and 15d-15(f) under the Exchange Act and, in
Canada, under 52-109) which are reasonably likely to adversely affect
the Company's ability to record, process, summarize and report
financial information and (b) any fraud, whether or not material, that
involves management or other employees who have a significant role in
the Company's internal controls over financial reporting;
(jj) The Company maintains systems of internal accounting
controls sufficient to provide reasonable assurance that (A)
transactions are executed in accordance with management's general or
specific authorizations; (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability;
(C) access to assets is permitted only in accordance with management's
general or specific authorization; and (D) the recorded accountability
for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences; and
(kk) The Company has complied in all material respects with
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the corporate governance rules of
the Nasdaq National Market applicable to it.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price of -% of the principal amount thereof, plus accrued interest,
if any, from July -, 2005 to the Time of Delivery hereunder, the principal
amount of Securities set forth opposite the name of such Underwriter in Schedule
I hereto.
11
As compensation to the Underwriters for their respective commitments
hereunder, at the Time of Delivery the Company will pay to ABN AMRO Incorporated
and BNP Paribas Securities Corp., for the accounts of the several Underwriters,
an underwriting commission equal to -% of the principal amount of the
Securities.
3. Upon the authorization by ABN AMRO Incorporated and BNP Paribas
Securities Corp. of the release of the Securities, the several Underwriters
propose to offer the Securities for sale upon the terms and subject to the
conditions set forth in this Agreement and the Prospectuses. Additionally, the
Underwriters: (1) will not offer or sell Securities in any province or territory
of Canada except in, or to or for the benefit of residents of, the Designated
Provinces on a private placement basis under the Canadian Offering Memorandum
prepared for such purpose, pursuant to exemptions from the prospectus
requirements of the securities laws of the Designated Provinces and otherwise in
compliance with those laws, and any such sales will only be made through the
Underwriters or their Canadian affiliates; (2) have not offered or sold and,
prior to the expiry of a period of six months from the Time of Delivery, will
not offer or sell any Securities to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring, holding, managing
or disposing of investments (as principal or agent) for the purposes of their
businesses or, from July 1, 2005, are registered as qualified investors within
the meaning of Article 2(e) of the Prospectus Directive (2003/71/EC) or
otherwise in circumstances which have not resulted and will not result in an
offer of transferable securities to the public in the United Kingdom within the
meaning of the Public Offers of Securities Regulations 1995 and, after July 1,
2005, Section 102B of the FSMA; (3) have only communicated or caused to be
communicated and will only communicate or cause to be communicated any
invitation or inducement to engage in investment activity (within the meaning of
section 21 of the FSMA) received by them in connection with the issue or sale of
any Securities in circumstances in which section 21 (1) of the FSMA does not
apply to the Company; and (4) have complied and will comply with all applicable
provisions of the FSMA with respect to anything done by them in relation to the
Securities in, from or otherwise involving the United Kingdom.
4. (a) The Securities to be purchased by each Underwriter hereunder
will be represented by one or more definitive global Securities in book-entry
form which will be deposited by or on behalf of the Company with The Depository
Trust Company ("DTC") or its designated custodian. The Company will deliver the
Securities to ABN AMRO Incorporated and BNP Paribas Securities Corp., for the
account of each Underwriter, against payment by or on behalf of such Underwriter
of the purchase price therefor in U.S. dollars by wire transfer of Federal
(same-day) funds to the account specified by the Company to ABN AMRO
Incorporated and BNP Paribas Securities Corp. at least forty-eight hours in
advance, by causing DTC to credit the Securities to the account of ABN AMRO
Incorporated at DTC. The Company will cause the certificates representing the
Securities to be made available to ABN AMRO Incorporated and BNP Paribas
Securities Corp. for checking at least twenty-four hours prior to the Time of
Delivery (as defined below) at the office of DTC or its designated custodian
(the "DESIGNATED OFFICE"). The time and date of such delivery and payment shall
be 9:30 a.m., New York City time, on July -, 2005 or such other time and date as
ABN AMRO Incorporated, BNP Paribas Securities Corp. and the Company may agree
upon in writing. Such time and date are herein called the "TIME OF DELIVERY".
12
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional documents requested by the
Underwriters pursuant to Section 7(p) hereof, will be delivered at the offices
of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ (the "CLOSING LOCATION"), and the Securities will be delivered at the
Designated Office, all at the Time of Delivery. A meeting will be held at the
Closing Location at 2:00 p.m., New York City time, on the New York Business Day
next preceding the Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For the purposes of this Section 4 and Section
5, "NEW YORK BUSINESS DAY" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in New York or
Vancouver, British Columbia are generally authorized or obligated by law or
executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Supplemented PREP Prospectus and the
U.S. Supplemented Prospectus in a form approved by you and (i) to file
such Supplemented PREP Prospectus with the BCSC in accordance with the
PREP Procedures not later than the BCSC's close of business on the
second business day following the execution and delivery of this
Agreement and (ii) to file such U.S. Supplemented Prospectus with the
Commission pursuant to General Instruction II.K. of Form F-9 not later
than the Commission's close of business on the first business day
following the day that the filing of the Supplemented PREP Prospectus
is made with the BCSC; to notify the Underwriters promptly, and confirm
the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall have been filed with the Commission or
shall have become effective, and when any supplement or amendment to
the U.S. Prospectus or the Canadian Prospectus shall have been filed,
(ii) of the receipt of any comments from the BCSC or the Commission,
(iii) of any request by the BCSC to amend or supplement the Base PREP
Prospectus or the Canadian Prospectus or for additional information, or
of any request by the Commission to amend the Registration Statement or
to amend or supplement the U.S. Prospectus or for additional
information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any preliminary prospectus,
or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the institution or, to the
knowledge of the Company, threatening of any proceedings for any such
purpose, and (v) of the issuance by the BCSC of any order having the
effect of ceasing or suspending the distribution of the Securities or
the trading in the securities of the Company, or of the institution or,
to the knowledge of the Company, threatening of any proceedings for any
such purpose; to use its best efforts to prevent the issuance of any
such stop order or of any order preventing or suspending such use or
such order ceasing or suspending the distribution of the Securities or
the trading in the securities of the Company and, if any such order is
issued, to promptly use its best efforts to obtain the withdrawal of
such order at the earliest possible time; to file promptly all reports
required to be filed by the Company (i) with the Commission pursuant to
Section 13(a), 13(c) or 15(d) of the Exchange Act, and (ii) with the
BCSC in
13
accordance with British Columbia Securities Laws, in each case
subsequent to the date of the Prospectuses and for so long as the
delivery of a prospectus is required in connection with the offering or
sale of the Securities; and to make no further amendment or any
supplement to the Registration Statement or the Prospectuses which
shall be disapproved by you promptly after reasonable notice thereof;
(b) Promptly from time to time to take such action as you
may reasonably request to qualify the Securities for offering and sale
under the securities laws of such jurisdictions as you may reasonably
request and to comply with such laws so as to permit the continuance of
sales and dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of the Securities, provided that
in connection therewith the Company shall not be required to qualify as
a foreign corporation or to file a general consent to service of
process in any jurisdiction and further provided that nothing contained
in this Section 5(b) shall require the Company to file or qualify a
prospectus in any province or territory of Canada, other than British
Columbia (for the purpose of qualifying under British Columbia
Securities Laws the distribution of the Securities in the United States
and elsewhere outside of Canada), in connection with an offer and sale
of the Securities in any such province or territory;
(c) Prior to 12:00 pm, New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time
to time, to furnish the Underwriters with written and electronic copies
of the U.S. Prospectus in New York City in such quantities as you may
reasonably request, and to furnish the Underwriters with written copies
of the Canadian Offering Memorandum in Toronto in such quantities as
you may reasonably request, and, if the delivery of a prospectus is
required by applicable law, at any time prior to the expiration of nine
months after the time of issue of the Prospectuses in connection with
the offering or sale of the Securities and if at such time any event
shall have occurred as a result of which the Prospectuses as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made when such Prospectuses are delivered, not misleading, or, if for
any other reason it shall be necessary during such same period to amend
or supplement the Prospectuses or to file under British Columbia
Securities Laws or under the Exchange Act any document incorporated by
reference in the Prospectuses in order to comply with British Columbia
Securities Laws, the Act, the Exchange Act or the Trust Indenture Act,
to notify you and upon your request to file such document and to
prepare and furnish without charge to each Underwriter and to any
dealer in securities as many written and electronic copies as you may
from time to time reasonably request of amended Prospectuses or
supplements to the Prospectuses which will correct such statement or
omission or effect such compliance; and in case any Underwriter is
required, by applicable law, to deliver a prospectus in connection with
sales of any of the Securities at any time nine months or more after
the time of issue of the Prospectuses, upon your request but at the
expense of such Underwriter, to prepare and deliver to such Underwriter
as many written and electronic copies as you may reasonably request of
an amended or supplemented U.S. Prospectus complying with Section
10(a)(3) of the Act. The Company has furnished or will deliver to the
Underwriters and counsel for the Underwriters,
14
without charge, a copy of the Canadian Preliminary Prospectus and the
Base PREP Prospectus, approved, signed and certified as required by the
British Columbia Securities Laws, and signed copies of the Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein and
including a signed copy of the Form F-X) and signed copies of all
consents and certificates of experts; the copies of the Canadian
Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to the electronically transmitted copies
thereof filed with the BCSC pursuant to the System for Electronics
Document Analysis and Retrieval (SEDAR);
(d) To make generally available to its securityholders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Act), an earnings statement of the Company and
its subsidiaries (which need not be audited) complying with Section
11(a) of the Act and the rules and regulations thereunder (including,
at the option of the Company, Rule 158 under the Act);
(e) During the period beginning from the date hereof and
continuing to and including the later of the Time of Delivery and such
earlier time as you may notify the Company, not to offer, sell,
contract to sell or otherwise dispose of, except as provided hereunder,
any securities of the Company that are substantially similar to the
Securities;
(f) To furnish to holders of the Securities as soon as
practicable after the end of each fiscal year an annual report
(including a balance sheet and statements of income, shareholders'
equity and cash flows of the Company and its consolidated subsidiaries
audited by independent chartered accountants and prepared in conformity
with Canadian GAAP, together with a reconciliation to U.S. GAAP in
accordance with Item 17 of Form 20-F under the Exchange Act) and, as
soon as practicable after the end of each of the first three quarters
of each fiscal year prepared in accordance with Canadian GAAP
(beginning with the fiscal quarter ending after the effective date of
the Registration Statement), consolidated summary financial information
of the Company and its subsidiaries for such quarter in reasonable
detail;
(g) During a period of three years from the effective date
of the Registration Statement, to furnish to you copies of all reports
or other communications (financial or other) furnished to shareholders
of the Company, and to deliver to you (i) as soon as they are
available, copies of any reports and financial statements furnished to
or filed with the BCSC, the Commission or any securities exchange on
which any class of securities of the Company is listed; and (ii) such
additional information concerning the business and financial condition
of the Company as you may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the
accounts of the Company and its subsidiaries are consolidated in
reports furnished to its shareholders generally or to the BCSC or the
Commission), provided that, to the extent such information is not
publicly available, such information shall be provided to you on a
confidential basis;
15
(h) To use the net proceeds received by it from the sale of
the Securities pursuant to this Agreement in the manner specified in
the Prospectuses under the caption "Use of Proceeds";
(i) Not to (and to cause its subsidiaries not to) take,
directly or indirectly, any action which is designed to or which
constitutes or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Company or, except as permitted by this Agreement, facilitate the sale
or resale of the Securities; and
(j) The Company will take such steps as it deems necessary
to ascertain promptly whether the form of Supplemented PREP Prospectus
was received for filing by the BCSC and whether the U.S. Supplemented
Prospectus transmitted for filing pursuant to General Instruction II.K.
of Form F-9 was received for filing by the Commission and, in the event
that any such prospectuses were not received for filing, it will
promptly file any such prospectus not then received for filing.
6. The Company covenants and agrees with the several Underwriters
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the qualification for distribution of the Securities under
British Columbia Securities Laws and the registration of the Securities under
the Act and all other expenses in connection with the preparation, printing and
filing of the Registration Statement, any preliminary prospectus and the
Prospectuses and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the fees,
disbursements and expenses of the Company's counsel in connection with the
private placement of the Securities in Canada, as well as the cost of printing
or producing any Canadian Offering Memorandum to be used in connection with the
offering, purchase, sale and delivery of the Securities in Canada; (iii) the
cost of printing or producing any Agreement among Underwriters, this Agreement,
the Supplemental Indenture, any Blue Sky and Legal Investment Memoranda, closing
documents (including any compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Securities;
(iv) all expenses in connection with the qualification of the Securities for
offering and sale under state and other securities laws as provided in Section
5(b) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky and legal investment surveys; (v) any fees charged by securities rating
services for rating the Securities; (vi) the filing fees incident to, and the
fees and disbursements of counsel for the Underwriters in connection with, any
required review by the National Association of Securities Dealers, Inc. of the
terms of the sale of the Securities; (vii) the cost of preparing the Securities;
(viii) the fees and expenses of the Trustee and any agent of the Trustee and the
fees and disbursements of counsel for the Trustee in connection with the
Indenture and the Securities; (ix) all expenses and all stamp or other issuance
or transfer taxes or duties or withholding taxes payable to the Government of
Canada or any political subdivision or taxing authority thereof or therein
arising as a result of the issuance, sale and delivery of the Securities, or as
a result of the sale and delivery of the Securities outside of Canada of the
Securities by the Underwriters to the initial purchasers thereof in the manner
contemplated under this Agreement; and (x) all other costs and expenses incident
to the
16
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, and Sections 8 and 11 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder shall be
subject, in their discretion, to the condition that all representations and
warranties and other statements of the Company herein are, at and as of the Time
of Delivery, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Supplemented PREP Prospectus shall have been filed
with the BCSC under the PREP Procedures within the applicable time
period prescribed for such filing thereunder and the U.S. Supplemented
Prospectus shall have been filed with the Commission pursuant to
General Instruction II.K of Form F-9 within the applicable time period
prescribed for such filing by the rules and regulations under the Act
and, in each case, in accordance with Section 5(a) hereof; no stop
order suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; no order
having the effect of ceasing or suspending the distribution of the
Securities or the trading in the Securities or any other securities of
the Company shall have been issued or proceedings therefor initiated or
threatened by any securities commission, securities regulatory
authority or stock exchange in Canada or the United States; and all
requests for additional information on the part of the BCSC or the
Commission shall have been complied with to your reasonable
satisfaction;
(b) Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for
the Underwriters, shall have furnished to you such written opinion or
opinions (a draft of each such opinion is attached as Annex II(a)
hereto), dated the Time of Delivery, with respect to the matters as you
may reasonably request, and such counsel shall have received such
papers and information as they may reasonably request to enable them to
pass upon such matters;
(c) Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, U.S.
counsel for the Company, shall have furnished to you their written
opinion (a draft of such opinion is attached as Annex II(b) hereto),
dated the Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) Methanex Holdings Ltd. is validly existing in
good standing under the laws of the State of Delaware
(ii) The Registration Statement is effective under
the Act and the Form T-1 and the Form F-X were filed with the
Commission prior to the effectiveness of the Registration
Statement; any required filing of the U.S. Prospectus or any
supplement thereto pursuant to General Instruction II.K. of
Form F-9 has been made in the manner and within the time
period required by said General Instruction II.K.; and no stop
order
17
suspending the effectiveness of the Registration Statement has
been issued and, no proceedings for that purpose have been
instituted or are pending or threatened under the Act;
(iii) The Registration Statement and the U.S.
Prospectus and any further amendments and supplements thereto
made by the Company prior to the Time of Delivery (other than
the financial statements, notes and schedules and the
financial or accounting data included therein or omitted
therefrom, as to which we express no opinion) appear on their
face to be responsive as to form in all material respects with
the requirements of the Act and the Trust Indenture Act and
the rules and regulations thereunder;
(iv) The Form F-X, as of its date, appears on its
face to be responsive as to form in all material respects with
the requirements of the Act and the rules and regulations
thereunder;
(v) Assuming the due authorization, execution and
delivery of the Underwriting Agreement under the laws of the
Province of British Columbia and the federal laws of Canada
applicable therein, the Underwriting Agreement (to the extent
that execution and delivery are governed by the laws of the
State of New York) has been duly executed and delivered by the
Company;
(vi) Assuming the due authorization, execution,
issuance and delivery of the Securities under the laws of the
Province of British Columbia and the federal laws of Canada
applicable therein, and assuming the Securities have been
authenticated by the Trustee, the Securities (to the extent
execution, issuance and delivery are governed by the laws of
the State of New York) have been duly executed, issued and
delivered and constitute valid and binding obligations of the
Company enforceable against the Company in accordance with
their terms;
(vii) Assuming the due authorization, execution and
delivery of the Initial Indenture by the Company under all
relevant Canadian federal and British Columbia law and New
York law, and assuming the due authorization, execution and
delivery of the Supplemental Indenture, which also forms a
part of the Indenture, under all relevant Canadian federal and
British Columbia law, the Supplemental Indenture (to the
extent the execution and delivery thereof are governed by the
laws of the State of New York) has been duly executed and
delivered by the Company, and the Indenture constitutes a
valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms; and the
Indenture has been qualified under the Trust Indenture Act;
(viii) No consent, approval, authorization, order,
registration, clearance or qualification of or with any
Governmental Agency of the United States or the State of New
York is required for the issue and sale of the Securities or
the consummation by
18
the Company of the transactions contemplated by the
Underwriting Agreement or the Indenture, except such as have
been obtained under the Securities Act and the Trust Indenture
Act and such consents, approvals, authorizations, orders,
registrations, clearances or qualifications as may be required
under state securities or Blue Sky laws or by requirements of
the National Association of Securities Dealers, Inc. in
connection with the purchase and distribution of the
Securities by the Underwriters;
(ix) The statements set forth in the U.S. Prospectus,
as amended or supplemented, under the caption "Description of
the Notes", insofar as they constitute summaries of legal
matters or documents referred to therein, fairly summarize in
all material respects the matters referred to therein;
(x) The statements set forth in the U.S. Prospectus,
as amended or supplemented, under the caption "Tax
Considerations - Certain U.S. Federal Income Tax
Considerations", insofar as such statements purport to
summarize matters of U.S. federal income tax laws or legal
conclusions with respect thereto, and subject to the
limitations, qualifications and assumptions set forth therein,
fairly summarize in all material respects the matters set
forth therein;
(xi) The Company is not, and after giving effect to
the sale of Securities and the application of the net proceeds
as described in the U.S. Prospectus, will not be an
"investment company", as such term is defined in the
Investment Company Act; and
(xii) Under the laws of the State of New York relating
to personal jurisdiction, the Company has, pursuant to Section
14 of the Underwriting Agreement and Section 13.10 of the
Indenture, validly submitted to the personal jurisdiction of
any state or federal court located in the Borough of
Manhattan, The City of New York, New York (each a "New York
Court") in any action arising out of or relating to the
Underwriting Agreement or the Indenture or the transactions
contemplated hereby, has validly waived any objection to the
venue of a proceeding in any such court, and has validly
appointed the Authorized Agent as its authorized agent for the
purpose described in Section 14 of the Underwriting Agreement
and Section 13.10 of the Indenture; and service of process
effected on such agent in the manner set forth in Section 14
of the Underwriting Agreement and Section 13.10 of the
Indenture will be effective to confer valid personal
jurisdiction over the Company;
(d) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, Canadian counsel for the
Company, shall have furnished to you their written opinion (a draft of
such opinion is attached as Annex II(c) hereto), dated the Time of
Delivery, in form and substance satisfactory to you, to the effect
that:
(i) The Company has been duly continued and is
validly existing as a corporation under the federal laws of
Canada, with corporate power and authority to own its
properties and conduct its business as described in the
Prospectuses, and any amendment or supplement thereto; the
Company has all requisite corporate power and
19
authority to execute, deliver and perform its obligations
under this Agreement, the Indenture and the Securities;
(ii) The Company has an authorized capitalization as
set forth in the Prospectuses, and any amendment or supplement
thereto, and all of the issued and outstanding shares in the
capital of the Company have duly authorized and validly issued
and are fully paid and non-assessable (such counsel being
entitled to rely in respect of matters of fact upon
certificates of the Company and the transfer agent of the
Company);
(iii) The Company has been extra-provincially
registered or otherwise duly qualified as an extra-provincial
or as a foreign corporation for the transaction of business
under the laws of each other jurisdiction in which it owns or
leases properties or conducts any business so as to require
such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any
such jurisdiction (such counsel being entitled to rely in
respect of the opinion in this clause upon opinions of local
counsel and in respect of matters of fact upon certificates of
officers of the Company, provided that such counsel shall
state that they believe that both you and they are justified
in relying upon such opinions);
(iv) To such counsel's knowledge, based solely upon
documents provided to such counsel by the Company and
conferences with officers and other representatives of the
Company in connection with the offering of the Securities, and
other than as set forth in the Prospectuses, and any amendment
or supplement thereto, there are no legal or governmental
proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which are of
a character required by the British Columbia Securities Laws
to be described or referred to in the Prospectuses and any
amendment or supplement thereto, and no such proceedings are
threatened or contemplated by any Governmental Agency or
threatened by others;
(v) This Agreement has been duly authorized and, to
the extent that execution and delivery are governed by the
laws of the Province of British Columbia and the federal laws
of Canada applicable therein, executed and delivered by the
Company;
(vi) The Indenture and the Securities have been duly
authorized and, to the extent that execution, issuance and
delivery are matters governed by the laws of the Province of
British Columbia and the federal laws of Canada applicable
therein, the Indenture has been duly executed and delivered by
the Company and the Securities have been duly executed, issued
and delivered by the Company; and the Securities and the
Indenture conform in all material respects to the descriptions
thereof in the Prospectuses as amended or supplemented;
20
(vii) The form of global certificate representing the
Securities, as included in the Indenture, has been duly
approved and adopted by the Company and complies in all
material respects with all applicable statutory requirements
of the Province of British Columbia and of Canada applicable
therein and with any applicable requirements of the constating
documents of the Company;
(viii) The Indenture and the issuance of the Securities
thereunder comply, to the extent applicable, with the
provisions of the Canada Business Corporations Act. No
registration, filing or recording of the Indenture under
British Columbia Securities Laws is necessary in order to
preserve or protect the validity or enforceability of the
Indenture or the Securities issued thereunder;
(ix) The issue and sale of the Securities and the
compliance by the Company with all of the provisions of the
Securities, the Indenture and this Agreement and the
consummation by the Company of the transactions herein and
therein contemplated will not (A) conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any of the agreements or
instruments set forth in the Company's officer's certificate
prepared in support of such counsel's opinion and delivered in
draft form to counsel for the Underwriters prior to the
execution of this Agreement, (B) result in any violation of
the provisions of the Articles of Continuance or the By-laws,
as amended of the Company or (C) contravene any federal,
provincial or local law, rule or regulation of the Province of
British Columbia or Canada applicable to the transactions
contemplated by the issue and sale of the Securities or the
provisions of the Indenture or this Agreement or, to the best
of such counsel's knowledge, any order applicable to the
Company of any court or of any other governmental body or
instrumentality having jurisdiction over it or any of its
property that would have a Material Adverse Effect (it being
understood that for the purpose of the opinion in this clause
(C), such counsel is not passing upon compliance with respect
to antifraud or similar provisions of any securities laws of
the Province of British Columbia or the Federal laws of Canada
applicable therein);
(x) No Governmental Authorization of or with any
Governmental Agency in Canada is required for the issue and
sale of the Securities or the consummation by the Company of
the transactions contemplated by this Agreement or the
Indenture, except such as have been obtained;
(xi) To such counsel's knowledge, the Company is not
in violation of its constating documents or in default in the
performance or observance of any material obligation, covenant
or condition contained in any of the agreements or instruments
set forth in the Company's officer's certificate prepared in
support of such counsel's opinion and delivered in draft form
to counsel for the Underwriters prior to the execution of this
Agreement;
21
(xii) To such counsel's knowledge, all descriptions in
the Prospectuses as amended or supplemented of contracts,
agreements, arrangements and other documents to which the
Company or its subsidiaries are a party are correct in all
material respects;
(xiii) The information in the Registration Statement
under "Part II - Indemnification of Directors and Officers"
and the statements set forth in the Prospectuses under the
captions "Risk Factors -- Risks Related to the Notes and Our
Structure -- "It may be difficult for you...", "Description of
the Notes -- Enforceability of Judgments", and "Tax
Considerations -- Certain Canadian Federal Income Tax
Considerations", insofar as they purport to describe the
provisions of the laws of the Province of British Columbia or
the federal laws of Canada applicable therein, and under the
captions "Underwriting" and "Description of Certain
Indebtedness" have been reviewed by such counsel and, to the
extent that such statements constitute matters of law or legal
conclusions, such statements fairly present the information
disclosed therein and, insofar as such statements purport to
describe the provisions of laws or documents referred to
therein, such statements are correct in all material respects;
(xiv) Insofar as matters of the laws of the Province
of British Columbia and the federal laws of Canada applicable
therein are concerned, the Registration Statement and the
filing of the Registration Statement with the Commission have
been duly authorized by and on behalf of the Company; and the
Registration Statement has been duly executed pursuant to such
authorization by and on behalf of the Company;
(xv) A final receipt has been obtained in respect of
the Base PREP Prospectus from the BCSC and, subject to the
filing of standard post closing notices, all necessary
documents have been filed, all necessary proceedings have been
taken and all necessary authorizations, approvals, permits and
consents have been obtained under British Columbia Securities
Laws to permit the Securities to be offered, sold and
delivered, as contemplated by this Agreement and pursuant to
the U.S./Canada Multi-Jurisdictional Disclosure System
("MJDS"), in the United States, and no other Governmental
Authorization of or with any Governmental Agency in Canada or
the Province of British Columbia is required for such
offering, sale or delivery of the Securities pursuant to the
MJDS in the United States or the consummation by the Company
of the transactions contemplated by this Agreement, except
such as have been obtained;
(xvi) The Company is a "Reporting issuer" under the
securities legislation of the Province of British Columbia and
is not on the list of defaulting issuers maintained under such
legislation; and the Company meets the general requirements to
use a short form prospectus under National Instrument
44-101-Short Form Prospectus Distributions;
(xvii) To such counsel's knowledge, there are no
franchises, contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments that in
22
accordance with the requirements of the BCSC are required to
be made publicly available in connection with the offering of
the Securities that have not been made publicly available as
would be required; and there are no documents required to be
filed with the BCSC in connection with the offering of the
Securities that have not been filed as required;
(xviii) No withholding tax imposed under the federal
laws of Canada or the laws of the Province of British Columbia
will be payable in respect of the payment of the commissions
contemplated by this Agreement by the Company to an
Underwriter, provided that the Underwriter deals at arm's
length with the Company (as such term is understood for
purposes of the Income Tax Act (Canada)), and that such
commissions are payable in respect of services rendered by the
Underwriter wholly outside of Canada that are performed in the
ordinary course of business carried on by the Underwriter that
includes the performance of such services for a fee and any
such amount is reasonable in the circumstances;
(xix) No goods and services tax imposed under the
federal laws of Canada will be payable by the Company in
respect of the payment of commissions as contemplated by this
Agreement to an Underwriter, provided that such commissions
are in respect of services performed by an Underwriter wholly
outside of Canada;
(xx) No stamp duty, documentary taxes or similar
taxes are payable by the Company under the federal laws of
Canada or the laws of the Province of British Columbia in
connection with the sale and delivery of the Securities
pursuant to this Agreement by the Company;
(xxi) A court of competent jurisdiction in the
Province of British Columbia (a "BRITISH COLUMBIA COURT")
would give effect to the choice of the law of the State of New
York ("NEW YORK LAW") as the proper law governing this
Agreement, the Indenture and the Securities, provided that
such choice of law is: (A) bona fide (primarily in the sense
that it was not made with a view to avoiding the consequences
of the laws of any other jurisdiction); (B) legal; and (C) not
contrary to public policy as that term is applied by a British
Columbia Court ("PUBLIC POLICY"). To such counsel's knowledge,
no Public Policy would be offended by recognition of this
choice of law, nor are we aware of any basis upon which such
choice of law would not be bonafide and legal;
(xxii) In an action on a final and conclusive judgment
in personam of any federal or state court in the State of New
York (a "NEW YORK COURT") that is not impeachable as void or
voidable under New York law, a British Columbia Court would
give effect to the appointment by the Company of CT
Corporation System as its agent to receive service of process
in the United States of America under this Agreement and the
Indenture and to the provisions in this Agreement and the
Indenture whereby the
23
Company submits to the non-exclusive jurisdiction of a New
York Court, except that a British Columbia Court may not
consider itself bound by any provision of this Agreement or
the Indenture purporting to make that submission to
jurisdiction exclusive;
(xxiii) If this Agreement, the Indenture or the
Securities are sought to be enforced in the Province of
British Columbia in accordance with the laws applicable
thereto as chosen by the parties, namely New York law, a
British Columbia Court would, subject to paragraph (xxi)
above, recognize the choice of New York law and, upon such law
being specifically pleaded and appropriate evidence as to such
law being adduced, apply such law to all issues that under the
conflict rules of the Province of British Columbia, are to be
determined in accordance with the proper or governing law of
the contract, provided that: (A) none of the provisions of
this Agreement, the Indenture or the Securities, as the case
may be, or of applicable New York law, are contrary to Public
Policy; (B) such New York law does not constitute, directly or
indirectly, revenue, expropriatory, public or penal laws; (C)
in matters of procedure, the laws of the Province of British
Columbia will be applied; (D) a British Columbia Court will
retain discretion to decline to hear such action if it is
contrary to Public Policy for it to do so, or if it is not the
appropriate forum to hear such an action, or if concurrent
proceedings are being brought elsewhere; and (E) a British
Columbia Court may not enforce an obligation enforceable under
the laws of the Province of British Columbia where performance
of the obligation would be illegal under the laws of the place
of performance;
(xxiv) The laws of the Province of British Columbia and
the federal laws of Canada applicable therein permit an action
to be brought in a British Columbia Court on a final and
conclusive judgment in personam of a New York Court that is
subsisting and unsatisfied respecting the enforcement of this
Agreement, the Indenture or the Securities, that is not
impeachable as void or voidable under New York law and that is
for a sum certain if: (A) the New York Court that rendered
such judgment had jurisdiction over the judgment debtor, as
recognized by a British Columbia Court (and submission by the
Company in this Agreement and the Indenture to the
jurisdiction of the New York Court will be deemed sufficient
for such purpose); (B) proper service of process in respect of
the proceeding in which such judgment was obtained was made in
accordance with New York law; (C) such judgment was not
obtained by fraud or in a manner contrary to natural justice
and the enforcement thereof would not be inconsistent with
Public Policy or contrary to any order made by the Attorney
General of Canada under the Foreign Extraterritorial Measures
Act (Canada) or contrary to any order made by the Competition
Tribunal under the Competition Act (Canada); (D) the
enforcement of such judgment in British Columbia does not
constitute, directly or indirectly, the enforcement of any
laws of the State of New York or of the United States of
America which a British Columbia Court would characterize as
revenue, expropriatory, public or penal laws; (E) in an action
to enforce a default judgment, the judgment does not
24
contain a manifest error on its face; (F) the action to
enforce such judgment is commenced within the applicable
limitation period after the date of such judgment; and (G) the
judgment does not conflict with another final and conclusive
judgment in the same cause of action, provided that a British
Columbia Court may stay an action to enforce a foreign
judgment if an appeal of a judgment is pending or the time for
appeal has not expired, and provided, further, that under the
Currency Act (Canada) a British Columbia Court may only give
judgment in Canadian dollars;
(xxv) No Governmental Authorization of or with any
Governmental Agency is required to effect payments of
principal, premium, if any, and interest on the Securities;
(xxvi) The Canadian Prospectus and any supplement or
amendment thereto in connection with the offering of the
Securities (including the PREP Information, but excluding the
financial statements and other financial data included or
incorporated therein or omitted therefrom, as to which such
counsel need express no opinion) appear on their face to be
appropriately responsive as to form in all material respects
to the requirements, including the PREP Procedures, of the
securities laws, rules and regulations of the Province of
British Columbia as interpreted and applied by the BCSC;
(xxvii) The offering, issue, sale and delivery of the
Securities by the Company to purchasers in the Designated
Provinces, in accordance with the terms of the Canadian
Offering Memorandum dated the date of the Supplemented PREP
Prospectus, are exempt from the prospectus requirements of the
securities laws of the Designated Provinces and no prospectus
is required nor are other documents required to be filed,
proceedings taken or approvals, permits, consents or
authorizations of regulatory authorities obtained by the
Company under such securities laws to permit the offering,
issue, sale and delivery of the Securities by the Company or
the Underwriters to purchasers resident in the Designated
Provinces, either through registrants or dealers registered
under applicable laws who comply with such applicable laws or
in circumstances in which there is an exemption from the
registration requirements of the applicable laws, except such
filings as may be required after the Time of Delivery under
the securities laws of the Designated Provinces in connection
with such offering, issue, sale and delivery;
Such written opinion shall additionally state that such
counsel has participated in the preparation of the
Registration Statement, the U.S. Prospectus and the Canadian
Prospectus and in conferences with officers and other
representatives of the Company, representatives of the
independent chartered accountants for the Company, and
representatives of the Underwriters, at which the contents of
the Registration Statement, the U.S. Prospectus and the
Canadian Prospectus, and related matters were discussed and,
although they are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement or the
Prospectuses, except for those referred to in the opinion in
subsection
25
xiii of this Section 7(d), such counsel has no reason to
believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by the Company
prior to the Time of Delivery (other than the financial
statements and related schedules therein, as to which such
counsel need express no opinion) contained an untrue statement
of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading or that, as of their dates,
the Prospectuses or any further amendment or supplement
thereto made by the Company prior to the Time of Delivery
(other than the financial statements and related schedules
therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading or that, as of the Time of Delivery,
the Prospectuses or any further amendment or supplement
thereto made by the Company prior to the Time of Delivery
(other than the financial statements and related schedules
therein, as to which such counsel need express no opinion)
contains an untrue statement of a material fact or omits to
state a material fact necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading;
In giving such opinion, such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the
laws of the Provinces of British Columbia, Alberta, Ontario
and Quebec and the federal laws of Canada applicable therein,
upon opinions of local counsel, who shall be counsel
satisfactory to counsel for the Underwriters, in which case
the opinion shall state that they believe the Underwriters and
they are entitled to so rely. Such counsel may also state
that, insofar as such opinion involves factual matters, they
have relied, to the extent they deem proper, upon certificates
of officers of the Company and certificates of public
officials; provided that such certificates have been delivered
to the Underwriters. Such opinion may be subject to
assumptions, qualifications and limitations as are reasonable
and customary in legal opinions of this type and as shall be
satisfactory to counsel for the Underwriters but shall not
state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other
document relating to legal opinions.
(e) ▇▇▇▇▇▇▇▇, Yrarrazaval, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Ltda., special
Chilean counsel for the Company, shall have furnished to you their
written opinion, dated the Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) Methanex Chile Limited ("METHANEX CHILE") is
registered as a Chilean branch of a foreign company and is in
good standing to own, lease and operate its properties and
assets in conducting its business in Chile;
(ii) To the best of such counsel's knowledge, there
are no Chilean statutes or regulations or any pending or
threatened legal or governmental proceedings that are material
to the Company or its subsidiaries taken as a whole that are
not described under the caption headings "Natural Gas Supply",
"Foreign Operations and Government
26
Regulation" and "Environmental and Social Matters" in the
Company's Annual Information Form dated March 21, 2005;
(iii) The descriptions contained in the Prospectuses
of the Chilean statutes, regulations, orders, governmental
franchises and licenses and legal or governmental proceedings
with respect to the Company and its subsidiaries taken as a
whole are accurate and fairly summarize such statutes,
regulations, orders, franchises, licenses and proceedings.
(iv) To such counsel's knowledge, no default exists
in the performance or observance of any material obligation,
agreement, covenant or condition contained in any contract,
indenture, loan agreement, note, lease or other agreement or
instrument to which Methanex Chile, jointly or severally, is a
party;
(v) The issue and sale of the Securities and the
entering into, execution and delivery of this Agreement and
the Indenture by the Company, and the compliance by the
Company with and the consummation by the Company of the
transactions contemplated in this Agreement, the Indenture and
Registration Statement, do not and will not conflict with, or
result in a breach of any of the terms or provisions of, or
constitute a default (or an event which with notice or lapse
of time, or both, would constitute a default or permit
acceleration) under or result in the creation or imposition of
any lien, charge or encumbrance upon any properties or assets
of Methanex Chile under (i) to such counsel's knowledge, any
indenture, mortgage, loan agreement or other agreement or
instrument to which Methanex Chile, jointly or severally, is a
party or by which it may be bound or to which any of its
properties or assets may be subject, (ii) any existing
applicable Chilean statute, regulation or rule, or (iii) to
such counsel's knowledge, any judgment, order or decree of any
government, governmental, regulatory or administration agency,
authority, commission or instrumentality or court having
jurisdiction over Methanex Chile or any of its properties or
assets;
(vi) To such counsel's knowledge, Methanex Chile has
not failed to obtain any licence, permit, franchise or other
administrative, governmental or regulatory approval necessary
to the ownership of its property or to the conduct of its
businesses, which failure to obtain has or could have a
material adverse effect on the businesses of Methanex Chile;
and
(vii) To such counsel's knowledge, other than as
described in the Prospectuses, no revocation or limitation of
any permit, licence, franchise or approval held by Methanex
Chile is pending or threatened and Methanex Chile is not in
default or violation of any thereof, and the authorization,
issuance and delivery of the Securities and the compliance by
the Company with the terms of the Indenture do not and will
not conflict with, or result in a breach of any of the terms
or provisions of, or constitute a default under, any of such
permits, licences, franchises and approvals, where such
27
revocation, limitation, default, violation, conflict or breach
has or could have a material adverse effect on Methanex Chile;
to such counsel's knowledge, other than as described in the
Prospectuses, there is not threatened or pending any change in
any law, rule or regulation which would have a material
adverse effect on the businesses of Methanex Chile.
(f) ▇▇▇▇▇▇▇ Grierson, special New Zealand counsel for the
Company, shall have furnished to you their written opinion, dated the
Time of Delivery, in form and substance satisfactory to you, to the
effect that:
(i) The descriptions contained in the Prospectuses
of the New Zealand statutes, regulations, orders, governmental
franchises and licences and legal or governmental proceedings
with respect to the Company and its subsidiaries taken as a
whole are accurate and fairly summarize in all material
respects such statutes, regulations, orders, franchises,
licences and proceedings;
(ii) To such counsel's knowledge there are no New
Zealand statutes or regulations or any pending or threatened
legal or governmental proceedings that are material to the
Company or its subsidiaries taken as a whole that are not
described under the caption headings "Natural Gas Supply",
"Foreign Operations and Government Regulation" and
"Environmental and Social Matters" in the Company's Annual
Information Form dated March 21, 2005;
(iii) Methanex New Zealand Limited ("METHANEX NEW
ZEALAND") has been duly incorporated and is validly existing
and in good standing (in respect of the filing of annual
returns where required) under the laws of New Zealand as of
the Time of Delivery and has full corporate power and
authority to own, lease and operate its properties and assets
and conduct its business in New Zealand;
(iv) All of the issued and outstanding shares in the
capital of Methanex New Zealand have been duly authorized and
validly issued and are fully paid and non-assessable;
(v) Other than as disclosed in the Prospectuses, to
such counsel's knowledge after due enquiry, Methanex
International Holdings Limited is the registered holder of all
of the issued and outstanding ordinary shares and Methanex
Netherlands BV is the registered holder of all issued and
outstanding redeemable preference shares in Methanex New
Zealand;
(vi) To such counsel's knowledge based solely upon a
review of the corporate minute books of Methanex New Zealand,
there are no rights granted to or in favor of any person to
acquire any unissued shares or other securities of Methanex
New Zealand;
28
(vii) To such counsel's knowledge, no default exists
in the performance or observance of any material obligation,
agreement, covenant or condition contained in any contract,
indenture, loan agreement, note, lease or other agreement or
instrument to which Methanex New Zealand is a party;
(viii) The issue and sale of the Securities and the
entering into, execution and delivery of this Agreement and
the Indenture by the Company, and the compliance by the
Company with and the consummation by the Company of the
transactions contemplated in this Agreement, the Indenture and
Registration Statement, do not and will not result in any
violation of the constitution of Methanex New Zealand, and do
not and will not conflict with, or result in a breach of any
of the terms or provisions of, or constitute a default (or an
event which with notice or lapse of time, or both, would
constitute a default or permit acceleration) under or result
in the creation or imposition of any lien, charge or
encumbrance upon any properties or assets of Methanex New
Zealand under (i) to such counsel's knowledge, any indenture,
mortgage, loan agreement or other agreement or instrument to
which the Methanex New Zealand is a party or by which it may
be bound or to which any of it properties or assets may be
subject, (ii) any existing applicable New Zealand statute,
regulation or rule, or (iii) to such counsel's knowledge, any
judgment, order or decree of any government, governmental,
regulatory or administration agency, authority, commission or
instrumentality or court having jurisdiction over Methanex New
Zealand or any of its properties or assets;
(ix) To such counsel's knowledge, Methanex New
Zealand has not failed to obtain any licence, permit,
franchise or other administrative, governmental or regulatory
approval necessary to the ownership of its property or to the
conduct of its business, which failure to obtain has or could
have a material adverse effect on the business of Methanex New
Zealand; and
(x) To such counsel's knowledge, other than as
described in the Prospectuses, no revocation or limitation of
any permit, licence, franchise or approval held by Methanex
New Zealand is pending or threatened and Methanex New Zealand
is not in default or violation of any thereof, and the
authorization, issuance and delivery of the Securities and the
compliance by the Company with the terms of the Indenture do
not and will not conflict with, or result in a breach of any
of the terms or provisions of, or constitute a default under,
any of such permits, licences, franchises and approvals, where
such revocation, limitation, default, violation, conflict or
breach has or could have a material adverse effect on Methanex
New Zealand; to such counsel's knowledge, other than as
described in the Prospectuses, there is not threatened or
pending any change in any law, rule or regulation which would
have a material adverse effect on the business of Methanex New
Zealand.
29
(g) ▇. ▇▇▇▇▇-▇▇▇▇▇ & Co., special Trinidad counsel for the
Company, shall have furnished to you their written opinion, dated the
Time of Delivery, in form and substance satisfactory to you, to the
effect that:
(i) The descriptions contained in the Prospectuses
of the Trinidad statutes, regulations, orders, governmental
franchises and licences and legal or governmental proceedings
with respect to the Company and its subsidiaries taken as a
whole are accurate and fairly summarize in all material
respects such statutes, regulations, orders, franchises,
licences and proceedings;
(ii) To such counsel's knowledge there are no
Trinidad statutes or regulations or (based entirely on a
certificate of an officer of each of the Trinidad
Subsidiaries) any pending or threatened legal or governmental
proceedings that are material to the Company or its
subsidiaries taken as a whole that are not described under the
caption headings "Natural Gas Supply", "Foreign Operations and
Government Regulation" and "Environmental and Social Matters"
in the Company's Annual Information Form dated March 21, 2005;
(iii) Each of Methanex Trinidad Unlimited and Atlas
Methanol Company Unlimited (the "TRINIDAD SUBSIDIARIES") has
been duly incorporated and is validly existing and in good
standing under the laws of Trinidad as of the Time of Delivery
and has full corporate power and authority to own, lease and
operate its properties and assets and conduct its businesses
in Trinidad;
(iv) All of the issued and outstanding shares in the
capital of the Trinidad Subsidiaries have been duly authorized
and validly issued and are fully paid and non-assessable;
(v) Other than as disclosed in the Prospectuses, to
such counsel's knowledge after due enquiry, Methanex Trinidad
Holdings Limited is the registered holder of all of the issued
and outstanding shares of Methanex Trinidad Unlimited and
Methanex Atlas Holdings Limited is the registered holder of
63.1% of the issued and outstanding shares of Atlas Methanol
Company Unlimited;
(vi) To such counsel's knowledge, based entirely on a
certificate of an officer of each of the Trinidad
Subsidiaries, there are no rights granted to or in favor of
any person to acquire any unissued shares or other securities
of the Trinidad Subsidiaries;
(vii) To such counsel's knowledge, based entirely on a
certificate of an officer of each of the Trinidad
Subsidiaries, no default exists in the performance or
observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, loan
agreement, note, lease or other agreement or instrument to
which the Trinidad Subsidiaries, jointly or severally, are a
party;
30
(viii) The issue and sale of the Securities and the
entering into, execution and delivery of this Agreement and
the Indenture by the Company, and the compliance by the
Company with and the consummation by the Company of the
transactions contemplated in this Agreement, the Indenture and
Registration Statement, do not and will not result in any
violation of the articles of continuance of Methanex Trinidad
Unlimited or the articles of incorporation of Atlas Methanol
Company Unlimited, and do not and will not conflict with, or
result in a breach of any of the terms or provisions of, or
constitute a default (or an event which with notice or lapse
of time, or both, would constitute a default or permit
acceleration) under or result in the creation or imposition of
any lien, charge or encumbrance upon any properties or assets
of the Trinidad Subsidiaries under (i) to such counsel's
knowledge, any indenture, mortgage, loan agreement or other
agreement or instrument to which the Trinidad Subsidiaries,
jointly or severally, are a party or by which they may be
bound or to which any of their properties or assets may be
subject, (ii) any existing applicable Trinidad statute,
regulation or rule, or (iii) to such counsel's knowledge,
based entirely on a certificate of an officer of each Trinidad
Subsidiary, any order or decree of any government,
governmental, regulatory or administration agency, authority,
commission or instrumentality, or (iv) to such counsel's
knowledge, any judgment of any court in Trinidad having
jurisdiction over the Trinidad Subsidiaries or any of their
properties or assets;
(ix) To such counsel's knowledge, the Trinidad
Subsidiaries have not failed to obtain any licence, permit,
franchise or other administrative, governmental or regulatory
approval necessary to the ownership of their property or to
the conduct of their businesses, which failure to obtain has
or could have a material adverse effect on the businesses of
the Trinidad Subsidiaries, taken as a whole; and
(x) To such counsel's knowledge, based entirely on a
certificate of an officer of each Trinidad Subsidiary, other
than as described in the Prospectuses, no revocation or
limitation of any permit, licence, franchise or approval held
by the Trinidad Subsidiaries is pending or threatened and the
Trinidad Subsidiaries are not in default or violation of any
thereof. To such counsel's knowledge, the authorization,
issuance and delivery of the Securities and the compliance by
the Company with the terms of the Indenture do not and will
not conflict with, or result in a breach of any of the terms
or provisions of, or constitute a default under, any of such
permits, licences, franchises and approvals, where such
revocation, limitation, default, violation, conflict or breach
has or could have a material adverse effect on the Trinidad
Subsidiaries, taken as a whole; to such counsel's knowledge,
other than as described in the Prospectuses, there is not
threatened or pending any change in any law, rule or
regulation which would have a material adverse effect on the
businesses of the Trinidad Subsidiaries, taken as a whole.
31
(h) Chancery ▇▇▇▇▇▇▇▇, special Barbados counsel for the
Company, shall have furnished to you their written opinion, dated the
Time of Delivery, in form and substance satisfactory to you, to the
effect that:
(i) Each of Methanex Chile Limited, Cape Horn
Finance Limited, Waterfront Shipping Company Limited, Methanex
Holdings (Barbados) Limited, Methanex Trinidad Holdings
Limited and Methanex Atlas Holdings Limited (the "BARBADOS
SUBSIDIARIES") has been duly incorporated or continued (as the
case may be) and is validly existing and in good standing
under the laws of Barbados as of the Time of Delivery and has
full corporate power and authority to own, lease and operate
its properties and assets and conduct its business;
(ii) All of the issued and outstanding shares in the
capital of each of the Barbados Subsidiaries have been duly
authorized and validly issued and are fully paid and
non-assessable;
(iii) To such counsel's knowledge after due inquiry,
Methanex International Holdings Limited is the registered
holder of all of the issued and outstanding shares of the
Barbados Subsidiaries;
(iv) To such counsel's knowledge based solely upon a
review of the corporate minute books of the Barbados
Subsidiaries, there are no rights granted to or in favor of
any person to acquire any unissued share or other securities
of any of the Barbados Subsidiaries;
(v) To such counsel's knowledge, no default exists
in the performance or observance of any material obligation,
agreement, covenant or condition contained in any contract,
indenture, loan agreement, note, lease or other agreement or
instrument to which the Barbados Subsidiaries, jointly or
severally, are a party;
(vi) The issue and sale of the Securities and the
entering into, execution and delivery of this Agreement and
the Indenture by the Company, and the compliance by the
Company with and the consummation by the Company of the
transactions contemplated in this Agreement, the Indenture and
Registration Statement, do not and will not result in any
violation of the Articles of Incorporation or Continuance, as
the case may be, the By-Laws (as amended) or the international
business company licence of the Barbados Subsidiaries, and do
not and will not conflict with, or result in a breach of any
of the terms or provisions of, or constitute a default (or an
event which with notice or lapse of time, or both, would
constitute a default or permit acceleration) under or result
in the creation or imposition of any lien, charge or
encumbrance upon any properties or assets of the Barbados
Subsidiaries under (a) to such counsel's knowledge, any
indenture, mortgage, loan agreement or other agreement or
instrument to which the Barbados Subsidiaries, jointly or
severally, are a party or by which they may be bound or to
which any of their properties or assets may be subject, (b)
any existing applicable
32
Barbados statute, regulation or rule, or (c) to such counsel's
knowledge, any judgment, order or decree of any government,
governmental, regulatory or administration agency, authority,
commission or instrumentality or court having jurisdiction
over the Barbados Subsidiaries or any of their properties or
assets.
(vii) To such counsel's knowledge, the Barbados
Subsidiaries have not failed to obtain any licence, permit,
franchise or other administrative, governmental or regulatory
approval necessary to the ownership of their property or to
the conduct of their businesses, which failure to obtain has
or could have a material adverse effect on the businesses of
the Barbados Subsidiaries, taken as a whole;
(viii) To such counsel's knowledge, other than as
described in the Prospectuses, no revocation or limitation of
any permit, license, franchise or approval held by the
Barbados Subsidiaries is pending or threatened and the
Barbados Subsidiaries are not in default or violation of any
thereof, and the authorization, issuance and delivery of the
Securities and the compliance by the Company with the terms of
the Indenture do not and will not conflict with, or result in
a breach of any of the terms or provisions of, or constitute a
default under, any of such permits, licences, franchises and
approvals, where such revocation, limitation, default,
violation, conflict or breach has or could have a material
adverse effect on the Barbados Subsidiaries, taken as a whole;
and
(ix) To such counsel's knowledge, other than as
described in the Prospectuses, there is no threatened or
pending change in any law, rule or regulation which would have
a material adverse effect on the businesses of the Barbados
Subsidiaries, taken as a whole.
(i) ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, special Cayman Islands counsel
for the Company, shall have furnished to you their written opinion,
dated the Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) Methanex International Holdings Limited ("MIHL")
has been duly incorporated and is validly existing and in good
standing under the laws of the Cayman Islands as of the date
hereof and has full corporate power and authority to own,
lease and operate its properties and assets and conduct its
business in the jurisdictions in which such business is
transacted as described in the Prospectuses;
(ii) All of the issued and outstanding shares in the
capital of MIHL have been duly authorized and validly issued
and are fully paid and non-assessable;
(iii) The issue and sale of the Securities and the
entering into, execution and delivery of this Agreement and
the Indenture by the Company, and the compliance of the
Company with and the consummation by the Company of the
transactions contemplated in this Agreement, the Indenture and
Registration Statement, do not and
33
will not result in any violation of the Memorandum and
Articles of Association of MIHL, and do not and will not
conflict with, or result in a breach of any of the terms or
provisions of (i) any existing applicable Cayman Islands
statute, regulation or rule; or (ii) to such counsel's
knowledge, any order or decree of any Cayman Islands
government, governmental, regulatory or administration agency,
authority, commission or instrumentality having jurisdiction
over MIHL or any of its properties or assets;
(iv) MIHL has not failed to obtain any licence,
permit, franchise or other administrative, governmental or
regulatory approval in the Cayman Islands necessary to the
ownership of its property or to the conduct of its business,
which failure to obtain has or could have a material adverse
effect on the business of MIHL;
(v) Based solely on such counsel's search of the
Cause List at the office of the Clerk of the Grand Court,
▇▇▇▇▇▇ Town, Grand Cayman on or immediately prior to the Time
of Delivery and on a certificate of the Secretary of MIHL in
support of such counsel's opinion, a copy of which shall be
provided to you, MIHL is not the subject of any legal
proceedings before any Court of the Cayman Islands; there is
no mechanism for identifying whether MIHL is the subject of
proceedings before any arbitrator or governmental body in the
Cayman Islands, but such counsel has not been informed or
notified of any such proceedings.
The opinion shall make reference to, and have annexed, a
certified true copy of the Register of Members of MIHL,
showing who are the current shareholders of MIHL as of the
Time of Delivery.
(j) Loyens & Loeff, N.V., special Netherlands counsel for
the Company, shall have furnished to you their written opinion, dated
the Time of Delivery, in form and substance satisfactory to you, to the
effect that:
(i) Methanex Netherlands BV has been duly
incorporated and is validly existing under the law of the
Netherlands as a legal entity in the form of a private company
with limited liability ("besloten vennootschap met beperkte
aansprakelijkheid");
(ii) Upon the incorporation of Methanex Netherlands
BV 178,000 (one hundred and seventy-eight thousand) shares
with a nominal value of NLG 1 (one guilder) each in the
capital of Methanex Netherlands BV were duly issued; and
(iii) According to the Shareholders Register, all
80,864 (eighty thousand eight-hundred and sixty-four) issued
and outstanding shares in the capital of Methanex Netherlands
BV are held by Methanex International Holdings Limited.
(k) On the date of the Prospectuses at a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on the
effective date of any post-effective
34
amendment to the Registration Statement filed subsequent to the date of
this Agreement and also at the Time of Delivery, KPMG LLP shall have
furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the
effect set forth in Annex I hereto (the executed copy of the letter
delivered prior to the execution of this Agreement is attached as Annex
I(a) hereto and a draft of the form of letter to be delivered on the
effective date of any post-effective amendment to the Registration
Statement and as of each Time of Delivery is attached as Annex I(b)
hereto);
(l) (i) Neither the Company nor any of its subsidiaries
shall have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectuses
any loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectuses, and
(ii) since the respective dates as of which information is given in the
Prospectuses there shall not have been any change in the share capital
or long-term debt of the Company or any of its subsidiaries or any
change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case
described in clause (i) or (ii), is in the judgment of the Underwriters
so material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Securities on
the terms and in the manner contemplated in the Prospectuses;
(m) On or after the date hereof (i) no downgrading shall
have occurred in the rating accorded the Company's debt securities by
any "nationally recognized statistical rating organization", as that
term is defined by the Commission for purposes of Rule 436(g)(2) under
the Act, and (ii) no such organization shall have publicly announced
that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities;
(n) On or after the date hereof there shall not have
occurred any of the following: (i) a suspension or material limitation
in trading in securities generally on the Nasdaq National Market
("NASDAQ"), or the New York Stock Exchange ("NYSE"), or The Toronto
Stock Exchange (the "TSX"); (ii) a suspension or material limitation in
trading in the Company's securities on Nasdaq or the TSX; (iii) a
general moratorium on commercial banking activities in New York or
Canada declared by the relevant authorities, or a material disruption
in commercial banking or securities settlement or clearance services in
the United States or Canada; (iv) a change or development involving a
prospective change in Canada taxation affecting the Company, the
Securities or the transfer thereof or (v) the outbreak or escalation of
hostilities involving the United States or Canada or the declaration by
the United States or Canada of a national emergency or war or (vi) the
occurrence of any other calamity or crisis or any change in financial,
political or economic conditions or currency exchange rates or controls
in the United States, Canada or elsewhere, if the effect of any such
event specified in clause (v)
35
or (vi) in the judgment of the Underwriters makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities on the terms and in the manner contemplated in the
Prospectuses;
(o) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on
the New York Business Day next succeeding the date of this Agreement;
and
(p) The Company shall have furnished or caused to be
furnished to you at the Time of Delivery certificates of officers of
the Company satisfactory to you as to the accuracy of the
representations and warranties of the Company herein at and as of such
Time of Delivery, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (l) of
this Section and as to such other matters as you may reasonably
request.
8. (a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act, any
British Columbia Securities Laws or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, the Registration Statement (including
PREP Information), the U.S. Prospectus or the Canadian Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any preliminary
prospectus, the Registration Statement (including the PREP Information), the
U.S. Prospectus or the Canadian Prospectus or any such amendment or supplement
in reliance upon and in conformity with written information furnished to the
Company by any Underwriter through ABN AMRO Incorporated or BNP Paribas
Securities Corp. expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act, any British Columbia Securities Laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus, the
Registration Statement (including the PREP Information), the U.S. Prospectus or
the Canadian Prospectus, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in any preliminary prospectus, the
36
Registration Statement (including the PREP Information), the U.S. Prospectus or
the Canadian Prospectus or any such amendment or supplement in reliance upon and
in conformity with written information furnished to the Company by such
Underwriter through ABN AMRO Incorporated or BNP Paribas Securities Corp.
expressly for use therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be
37
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectuses. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company on the one hand or the Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this subsection
(d) were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company (including any
person who, with his or her consent, is named in the Registration Statement as
about to become a director of the Company) and to each person, if any, who
controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Securities which it has agreed to purchase hereunder, you may in
your discretion arrange for you or another party or other parties to purchase
such Securities on the terms contained herein. If within thirty-six hours after
such default by any Underwriter you do not arrange for the purchase of such
Securities, then the Company shall be entitled to a further period of thirty-six
hours within which to procure another party or other parties satisfactory to you
to purchase such Securities on such terms. In the event that, within the
respective prescribed periods, you notify the Company that you have so arranged
for the purchase of such Securities, or the Company notifies you that it has so
arranged for the purchase of such Securities, you or the Company shall have the
right to postpone the Time of Delivery for a period of not more than seven days,
in order to effect whatever changes may thereby be made necessary in the
Registration
38
Statement or the Prospectuses, or in any other documents or arrangements, and
the Company agrees to file promptly any amendments to the Registration Statement
or the Prospectuses which in your opinion may thereby be made necessary. The
term "Underwriter" as used in this Agreement shall include any person
substituted under this Section with like effect as if such person had originally
been a party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Underwriter or Underwriters by you and the
Company as provided in subsection (a) above, the aggregate principal amount of
such Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Underwriter to purchase the principal
amount of Securities which such Underwriter agreed to purchase hereunder and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the principal amount of Securities which such Underwriter agreed
to purchase hereunder) of the Securities of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Underwriter or Underwriters by you and the
Company as provided in subsection (a) above, the aggregate principal amount of
Securities which remains unpurchased exceeds one-eleventh of the aggregate
principal amount of all the Securities, or if the Company shall not exercise the
right described in subsection (b) above to require non-defaulting Underwriters
to purchase Securities of a defaulting Underwriter or Underwriters, then this
Agreement shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company, except for the expenses to be borne
by the Company and the Underwriters as provided in Section 6 hereof and the
indemnity and contribution agreements in Section 8 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
except as provided in Sections 6 and 8 hereof; but, if for any other reason, the
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Securities, but the Company shall then be
under no further liability to any Underwriter except as provided in Sections 6
and 8 hereof.
39
12. In all dealings hereunder, you shall act on behalf of each of
the Underwriters, and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by ABN AMRO Incorporated or BNP Paribas Securities Corp.
on behalf of the Underwriters.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of ABN AMRO
Incorporated, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
Syndicate Desk, ▇▇▇ ▇▇▇▇, Fax: (▇▇▇) ▇▇▇-▇▇▇▇ and BNP Paribas Securities Corp.,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇ ▇▇▇▇▇▇,
Fax: (▇▇▇) ▇▇▇-▇▇▇▇; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Chief Financial Officer; provided, however,
that any notice to an Underwriter pursuant to Section 8(c) hereof shall be
delivered or sent by mail, telex or facsimile transmission to such Underwriter
at its address set forth in its Underwriters' Questionnaire, or telex
constituting such Questionnaire, which address will be supplied to the Company
by you upon request. Any such statements, requests, notices or agreements shall
take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Securities from any Underwriter shall be deemed a successor or assign
by reason merely of such purchase.
14. The Company irrevocably (i) agrees that any legal suit, action
or proceeding against the Company brought by any Underwriter or by any person
who controls any Underwriter arising out of or based upon this Agreement or the
transactions contemplated hereby may be instituted in any New York Court, (ii)
waives, to the fullest extent it may effectively do so, any objection which it
may now or hereafter have to the laying of venue of any such proceeding and
(iii) submits to the exclusive jurisdiction of such courts in any such suit,
action or proceeding. The Company irrevocably waives any immunity to
jurisdiction to which it may otherwise be entitled or become entitled (including
sovereign immunity, immunity to pre-judgment attachment, post-judgment
attachment and execution) in any legal suit, action or proceeding against it
arising out of or based on this Agreement or the transactions contemplated
hereby which is instituted in any New York Court or in any competent court in
Canada. The Company has appointed CT Corporation System ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as its authorized agent (the "AUTHORIZED AGENT") upon whom
process may be served in any such action arising out of or based on this
Agreement or the transactions contemplated hereby which may be instituted in any
New York Court by any Underwriter or by any person who controls any Underwriter,
expressly consents to the jurisdiction of any such court in respect of any such
action, and waives any other requirements of or objections to personal
jurisdiction with respect thereto. Such appointment shall be irrevocable. The
Company represents and warrants that the Authorized Agent has agreed to act as
such agent for service of process and agrees to take any and all action,
including the
40
filing of any and all documents and instruments, that may be necessary to
continue such appointment in full force and effect as aforesaid. Service of
process upon the Authorized Agent and written notice of such service to the
Company shall be deemed, in every respect, effective service of process upon the
Company.
15. In respect of any judgment or order given or made for any amount
due hereunder that is expressed and paid in a currency (the "JUDGMENT CURRENCY")
other than United States dollars, the Company will indemnify each Underwriter
against any loss incurred by such Underwriter as a result of any variation as
between (i) the rate of exchange at which the United States dollar amount is
converted into the judgment currency for the purpose of such judgment or order
and (ii) the rate of exchange at which an Underwriter is able to purchase United
States dollars with the amount of judgment currency actually received by such
Underwriter. The foregoing indemnity shall constitute a separate and independent
obligation of the Company and shall continue in full force and effect
notwithstanding any such judgment or order as aforesaid. The term "RATE OF
EXCHANGE" shall include any premiums and costs of exchange payable in connection
with the purchase of or conversion into United States dollars.
16. Time shall be of the essence of this Agreement. As used herein,
and except as otherwise provided, the term "BUSINESS DAY" shall mean any day
when the Commission's office in Washington, D.C. is open for business.
17. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
18. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
19. The Company is authorized, subject to applicable law, to
disclose any and all aspects of this potential transaction that are necessary to
support any U.S. federal income tax benefits expected to be claimed with respect
to such transaction, and all materials of any kind (including tax opinions and
other tax analyses) related to those benefits, without the Underwriters imposing
any limitation of any kind.
41
If the foregoing is in accordance with your understanding, please sign
and return to us eight counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement between each of the Underwriters and
the Company. It is understood that your acceptance of this letter on behalf of
each of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on your part as to
the authority of the signers thereof.
Very truly yours,
METHANEX CORPORATION
By:
-------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice-President, Finance
& Chief Financial Officer
Accepted as of the
date hereof on
behalf of themselves
and the other
Underwriters:
ABN AMRO Incorporated
By:
---------------------------------
Name:
Title:
BNP Paribas Securities Corp.
By:
---------------------------------
Name:
Title:
42
SCHEDULE I
PRINCIPAL AMOUNT
OF SECURITIES
TO BE PURCHASED
----------------
ABN AMRO Incorporated ........................................ $
BNP Paribas Securities Corp. .................................
CIBC World Market Corp. ......................................
RBC Capital Markets Corporation ..............................
----------------
Total ...................................... $
================
SCHEDULE II
SIGNIFICANT SUBSIDIARIES
OWNERSHIP
NAME JURISDICTION BY COMPANY
Cape Horn Finance Limited Barbados 100%
Methanex Atlas Holdings Limited Barbados 100%
Methanex Chile Limited Barbados 100%
Methanex Holdings (Barbados) Limited Barbados 100%
Methanex Trinidad Holdings Limited Barbados 100%
Waterfront Shipping Company Limited Barbados 100%
Methanex Europe N.V. Belgium 100%
Methanex International Holdings Limited Cayman Islands 100%
Methanex Chile Limited (Agencia) Chile 100%
Methanex Holdings Ltd. Delaware 100%
Methanex Netherlands BV Netherlands 100%
Methanex New Zealand Limited New Zealand 100%
Methanex Methanol Company Texas 100%
Atlas Methanol Company Unlimited Trinidad 63.1%
Methanex Trinidad Unlimited Trinidad 100%
ANNEX I
FORM OF ANNEX I DESCRIPTION OF COMFORT LETTER
Pursuant to Section 7(j) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning British
Columbia Securities Laws, the Act and the applicable published rules
and regulations thereunder (collectively, the "ACCOUNTING
REQUIREMENTS");
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) audited by
them and included in the Prospectuses and the Registration Statement
comply as to form in all material respects with the Accounting
Requirements and, if applicable, they have made a review in accordance
with standards established by the Canadian Institute of Chartered
Accountants ("CICA"), which are substantially similar to those of the
American Institute of Certified Public Accountants ("AICPA") of the
unaudited consolidated interim financial statements, and if applicable,
selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited
financial statements of the Company for the periods specified in such
letter, as indicated in their reports thereon, copies of which have
been separately furnished to the representatives of the Underwriters
(the "REPRESENTATIVES") and are attached hereto;
(iii) They have made a review in accordance with standards
established by CICA, which are substantially similar to those of AICPA
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectuses and on the basis of specified procedures
including inquiries of officials of the Company who have responsibility
for financial and accounting matters regarding whether the unaudited
condensed consolidated financial statements referred to in paragraph
(vi)(A)(i) below comply as to form in all material respects with the
Accounting Requirements, nothing came to their attention that cause
them to believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with the
Accounting Requirements;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the
Prospectuses agrees with the corresponding amounts (after restatements
where applicable) in the audited consolidated financial statements for
such five fiscal years which
were included or incorporated by reference in the Company's Annual
Reports on Form 40-F or Annual Information Form for such fiscal years;
(v) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting as applicable in the circumstances of a reading of the
unaudited financial statements and other information referred to below,
a reading of the latest available interim financial statements of the
Company and its subsidiaries, inspection of the minute books of the
Company and its subsidiaries since the date of the latest audited
financial statements included in the Prospectuses, inquiries of
officials of the Company and its subsidiaries responsible for financial
and accounting matters and such other inquiries and procedures as may
be specified in such letter, nothing came to their attention that
caused them to believe that:
(A) (i) the unaudited consolidated statements of
income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectuses do not
comply as to form in all material respects with the Accounting
Requirements, or (ii) any material modifications should be
made to the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectuses for them
to be in conformity with Canadian GAAP applicant on the basis
substantially consistent with that of the audited financial
statements in the Prospectuses;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectuses do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included in the Prospectuses;
(C) if applicable, any unaudited pro forma
consolidated condensed financial statements included in the
Prospectuses do not comply as to form in all material respects
with the Accounting Requirements or the pro forma adjustments
have not been properly applied to the historical amounts in
the compilation of those statements;
(D) as of a specified date not more than five days
prior to the date of such letter, there have been no changes
in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest financial statements
included in the Prospectuses) or any increase in the
consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current
assets or stockholders' equity or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with amounts
shown in the latest
Annex I-2
balance sheet included in the Prospectus, except in each case
for changes, increases or decreases which the Prospectus
disclose have occurred or may occur or which are described in
such letter; and
(E) for the period from the date of the latest
financial statements included in the Prospectuses to the
specified date referred to in clause (E) there were no
decreases in consolidated net revenues or operating profit or
the total or per share amounts of consolidated net income or
other items specified by the Representatives, or any increases
in any items specified by the Representatives, in each case as
compared with the comparable period of the preceding year and
with any other period of corresponding length specified by the
Representatives, except in each case for decreases or
increases which the Prospectuses discloses have occurred or
may occur or which are described in such letter; and
(i) In addition to the examination referred to in their
report(s) included in the Prospectuses and the limited procedures,
inspection of minute books, inquiries and other procedures referred to
in paragraphs (iii) and (vi) above, they have carried out certain
specified procedures, not constituting an examination in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives, which are derived from the general accounting records
of the Company and its subsidiaries, which appear in the Prospectuses,
or in Part II of, or in exhibits and schedules to, the Registration
Statement specified by the Representatives, and have compared certain
of such amounts, percentages and financial information with the
accounting records of the Company and its subsidiaries and have found
them to be in agreement.
Annex I-3