A corporation incorporated under the laws of Canada) 21,551,700 Common Shares UNDERWRITING AGREEMENT
Exhibit 1
(A corporation incorporated under the laws of Canada)
21,551,700 Common Shares
Dated: December 12, 2007
(A corporation incorporated under the laws of Canada)
21,551,700 Common Shares
December 12, 2007
The Underwriters named in Schedule A hereto
c/o
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RBC Dominion Securities Inc. | |
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Ladies and Gentlemen:
Agrium Inc., a corporation incorporated under the Canada Business Corporations Act (the
“Company”), confirms its agreement with RBC Dominion Securities Inc. and each of the other
underwriters named in Schedule A hereto (collectively, the “Underwriters,” which term shall also
include any underwriter substituted as hereinafter provided in Section 11 hereof), for whom RBC
Dominion Securities Inc. is acting as representative (in such capacity, the “Representative”), with
respect to the issue and sale by the Company and the purchase by the Underwriters, acting severally
and not jointly, of 21,551,700 common shares, no par value, of the Company (“Common Shares”) in the
respective amounts set forth in Schedule A hereto. The Company also proposes to grant to the
Underwriters an option to purchase up to an additional 2,155,100 Common Shares to cover
over-allotments. The aforesaid 21,551,700 Common Shares (the “Initial Shares”) to be purchased by
the Underwriters and all or any part of the 2,155,100 Common Shares subject to the option described
in Section 2(b) hereof (the “Over-Allotment Shares”) are hereinafter called, collectively, the
“Offered Shares”.
On December 2, 2007, the Company entered into an agreement and plan of merger (the “Merger
Agreement”) among the Company, Utah Acquisition Co. (“Merger Sub”), the Company’s indirect
wholly-owned subsidiary, and UAP Holding Corp. (“UAP”) pursuant to which a direct or indirect
wholly-owned subsidiary of the Company commenced a tender offer (the “Offer”) on December 10, 2007
for all of the outstanding shares of common stock of UAP (the “UAP Shares”) on the basis of
U.S.$39.00 in cash for each UAP Share (the “Offer Price”), representing aggregate cash
consideration of approximately U.S.$2.146 billion for all of the outstanding UAP Shares (on a fully
diluted basis). Following the Company’s acceptance for payment and payment for UAP Shares pursuant
to the Offer, Merger Sub will consummate a merger with UAP (the “Merger”) in which Merger Sub will
merge with and into UAP and each outstanding UAP Share not owned by the Company directly or
indirectly will be converted into the right to receive the Offer Price (the acquisition of UAP
Shares pursuant to the Offer and the subsequent Merger being, collectively, the “UAP Acquisition”).
The Company has prepared and filed with the securities regulatory authorities (the “Qualifying
Authorities”) in each of the provinces of Canada (the “Qualifying Provinces”) (1) a preliminary
short form base shelf prospectus (the “Canadian Preliminary Base Shelf Prospectus”), in the English
and French languages, relating to US$1,000,000,000 of Common Shares, preferred shares, subscription
receipts, debt securities and units (collectively, the “Initial Shelf Securities”) under the rules
and procedures established in National Instrument 44-102 of the Canadian Securities Administrators
(the “Shelf Procedures”), (2) a final short form base shelf prospectus, in the English and French
languages, relating to the Initial Shelf Securities, (the “Initial Canadian Final Base Shelf
Prospectus”) and (3) an amendment to the Initial Canadian Final Base Shelf Prospectus, in the
English and French languages, relating to the Initial Shelf Securities and an additional
US$2,000,000,000 of Common Shares, preferred shares, subscription receipts, debt securities and
units (the “Amendment to the Canadian Final Base Shelf Prospectus”). The Initial Canadian Final
Base Shelf Prospectus, as amended by the Amendment to the Canadian Final Base Shelf Prospectus, is
hereinafter referred to as the “Canadian Final Base Shelf Prospectus”. The US$3,000,000,000 of
securities qualified by the Canadian Final Base Shelf Prospectus are referred to herein as the
“Shelf Securities”. The Canadian Final Base Shelf Prospectus together with the documents
incorporated by reference therein filed with the Qualifying Authorities is hereinafter referred to
as the “Canadian Shelf Prospectus”. The term “Canadian Prospectus” shall mean the Canadian
Preliminary Prospectus (as defined below) until such time as the Canadian Final Prospectus (as
defined below) is filed with the Qualifying Authorities, after which time “Canadian Prospectus”
shall mean the Canadian Final Prospectus.
The Company has also prepared and filed with the United States Securities and Exchange
Commission (the “Commission”) (1) a registration statement on Form F-10 (File No. 333-145395)
covering the registration of the Initial Shelf Securities (the “Initial Registration Statement”)
under the Securities Act of 1933, as amended (the “1933 Act”), including the Canadian Preliminary
Base Shelf Prospectus (with such deletions therefrom and additions thereto as are permitted or
required by Form F-10 and the applicable rules and regulations of the Commission and including
exhibits to such registration statement and all documents incorporated by reference in the
prospectus contained therein, each in the form heretofore delivered or to be delivered to the
Representative) (the “U.S. Preliminary Base Shelf Prospectus”), (2) an amendment to such Initial
Registration Statement, including the Initial Canadian Final Base Shelf Prospectus (with such
deletions therefrom and additions thereto as are permitted or required by Form F-10 and the
applicable rules and regulations of the Commission) (the “Initial U.S. Final Base Shelf
Prospectus”) and (3) a registration statement on Form F-10 (File No. 333-147767) in accordance with
Rule 429 under the 1933 Act with respect to the Shelf Securities (the “Additional Registration
Statement”) including the Canadian Shelf Prospectus (with such deletions therefrom and additions
thereto as are permitted or required by Form F-10 and the applicable rules and regulations of the
Commission and including exhibits to such registration statement and all documents incorporated by
reference in the prospectus contained therein, each in the form heretofore delivered or to be
delivered to the Representative) (the “U.S. Final Base Shelf Prospectus”). The various parts of the
Additional Registration Statement, including all exhibits thereto and the documents incorporated by
reference in the prospectus contained in the Additional Registration Statement at the time it
became effective, as amended at the time the Additional Registration Statement became effective and
including any
post-effective amendment thereto, are hereinafter collectively referred to as the “Registration
Statement”. The U.S. Final Base Shelf Prospectus together with the documents incorporated by
reference therein is hereinafter referred to as the “U.S. Shelf Prospectus”. The term “U.S.
Prospectus” shall refer to the U.S. Preliminary Prospectus (as defined below), until such time as a
U.S. Final Prospectus (as defined below) is thereafter (whether or not such prospectus is required
to be filed pursuant to the rules and regulations of the Commission under the 1933 Act (the “1933
Act Regulations”)) furnished to the Underwriters after the execution of this Agreement, after which
time the term “U.S. Prospectus” shall refer to the U.S. Final Prospectus.
In addition, the Company (A) has prepared and (1) filed with the Qualifying Authorities
pursuant to the Shelf Procedures, a preliminary prospectus supplement (in the English and French
languages) relating to the Offered Shares and including the Canadian Shelf Prospectus (the
“Canadian Preliminary Prospectus”) and (2) filed with the Commission, in accordance with General
Instruction II.L. of Form F-10, a preliminary prospectus supplement consisting of the Canadian
Preliminary Prospectus (with such deletions therefrom and additions thereto as are permitted or
required by Form F-10 and the applicable rules and regulations of the Commission) (the “U.S.
Preliminary Prospectus”), and (B) will prepare and file, (1) with the Qualifying Authorities,
pursuant to the Shelf Procedures, a final prospectus supplement (in the English and French
languages) including the Canadian Shelf Prospectus (the “Canadian Final Prospectus”), on or before
the earlier of the date the Canadian Final Prospectus is first sent or delivered to a purchaser or
a prospective purchaser and two Business Days (the term “Business Day” means any day other than a
day on which banks are permitted or required to be closed in New York City or Calgary) after the
date hereof, and (2) with the Commission, in accordance with General Instruction II.L. of Form
F-10, a final prospectus supplement consisting of the Canadian Final Prospectus (with such
deletions therefrom and additions thereto as are permitted or required by Form F-10 and the
applicable rules and regulations of the Commission) (the “U.S. Final Prospectus”).
The U.S. Preliminary Prospectus and the Canadian Preliminary Prospectus are referred to herein
as the “Preliminary Prospectuses,” and the U.S. Final Prospectus and the Canadian Final Prospectus
are referred to herein as the “Final Prospectuses.” Any amendment to the Canadian Prospectus, any
amended or supplemental prospectus or auxiliary material, information, evidence, return, report,
application, statement or document that may be filed by or on behalf of the Company under the
securities laws of the Qualifying Provinces prior to the Closing Time (as hereinafter defined) or,
where such document is deemed to be incorporated by reference into the Canadian Prospectus from the
date of this Agreement and prior to the expiry of the period of distribution of the Offered Shares,
is referred to herein collectively as the “Supplementary Material”.
For purposes of this Agreement, all references to the Registration Statement, the Additional
Registration Statement, the U.S. Preliminary Base Shelf Prospectus, the Initial U.S. Final Base
Shelf Prospectus, the U.S. Final Base Shelf Prospectus, any U.S. Preliminary Prospectus, the U.S.
Final Prospectus, or any amendment or supplement to any of the foregoing shall be deemed to include
the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system (“▇▇▇▇▇”). For purposes of this Agreement, all references to the Canadian
Preliminary Base Shelf Prospectus, the Initial Canadian Final Base Shelf Prospectus, the Amendment
to the Canadian Final Base Shelf Prospectus, the Canadian
Final Base Shelf Prospectus, the Canadian Preliminary Prospectus and the Canadian Final
Prospectus, the documents incorporated by reference in the Canadian Prospectus, or any amendment or
supplement to any of the foregoing (including any Supplementary Material), shall be deemed to
include the copy filed with the Qualifying Authorities pursuant to the System for Electronic
Document Analysis and Retrieval (“SEDAR”).
The Company has also 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 Initial
Registration Statement (the “Initial Form F-X”) and an appointment of agent for service of process
upon the Company on Form F-X in conjunction with the filing of the Additional Registration
Statement (the “Additional Form F-X” and together with the Initial Form F-X, the “Company Form
F-X”).
The Company understands that the Underwriters propose to make a public offering of the Offered
Shares in the United States and in the Qualifying Provinces upon the terms set forth in the General
Disclosure Package (as defined herein) and the Final Prospectuses upon the terms and conditions of
this Agreement as soon as the Representative deems advisable after this Agreement has been executed
and delivered.
All references in this Agreement to financial statements and schedules and other information
which is “contained”, “included”, “incorporated by reference” or “stated” (and other references of
like import) in the Registration Statement, the Canadian Preliminary Base Shelf Prospectus, U.S.
Preliminary Base Shelf Prospectus, the Initial Canadian Final Base Shelf Prospectus, the Initial
U.S. Final Base Shelf Prospectus, the Amendment to the Canadian Final Base Shelf Prospectus, the
Canadian Final Base Shelf Prospectus, the U.S. Final Base Shelf Prospectus, the Canadian Shelf
Prospectus, the U.S. Shelf Prospectus, the Canadian Preliminary Prospectus, the Canadian Final
Prospectus, the Canadian Prospectus, the U.S. Preliminary Prospectus, the U.S. Final Prospectus and
the U.S. Prospectus (collectively, the “Filed Documents”) shall be deemed to mean and include all
such financial statements and schedules and other information filed under the Securities Exchange
Act of 1934, as amended (the “1934 Act”), or the securities laws applicable in the Qualifying
Provinces and incorporated by reference in or otherwise deemed to be included in any one or more of
the Filed Documents, and all references in this Agreement to amendments or supplements (and other
references of like import) to any one or more of the Filed Documents (including any Supplementary
Material) shall be deemed to mean and include the filing of any document under the 1934 Act or the
securities laws applicable in the Qualifying Provinces which is incorporated by reference or
otherwise deemed to be included in any one or more of the Filed Documents.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents and warrants to each
Underwriter as of the date hereof, as of the Applicable Time referred to in Section 1(a)(i) hereof,
as of the Closing Time referred to in Section 2(c) hereof, and as of each Date of Delivery (if any)
referred to in Section 2(c) hereof, and agrees with each Underwriter, as follows:
(i) Compliance with Registration Requirements. The Company is qualified to file
a prospectus in the form of a short form shelf prospectus pursuant to the Shelf Procedures.
The Canadian Preliminary Base Shelf Prospectus, the Initial Canadian Final Base Shelf
Prospectus and the Amendment to the Canadian Final Base Shelf Prospectus have been filed
with the Qualifying Authorities, for which receipts have been obtained from the Qualifying
Authorities in respect of such Canadian Preliminary Base Shelf Prospectus, the Initial
Canadian Final Base Shelf Prospectus and the Amendment to the Canadian Final Base Shelf
Prospectus. The Canadian Preliminary Prospectus has been filed with the Qualifying
Authorities and no order suspending the distribution of the Offered Shares has been issued
by any of the Qualifying Authorities and no proceeding for that purpose has been initiated
or, to the knowledge of the Company, threatened by any of the Qualifying Authorities. The
Company meets the general eligibility requirements for use of Form F-10 under the 1933 Act.
The Registration Statement has been declared effective by the Commission under the 1933 Act
and no stop order suspending the effectiveness of the Registration Statement has been issued
under the 1933 Act and no proceedings for that purpose have been instituted or are pending
or, to the knowledge of the Company, are contemplated by the Commission, and any request on
the part of the Commission for additional information has been complied with. The Company
has filed with the Commission the U.S. Preliminary Prospectus.
At the time the Registration Statement became effective under the 1933 Act and at all
times subsequent thereto up to and including the Closing Time referred to below: (A) the
Canadian Prospectus complied and will comply in all material respects with the securities
laws applicable in the Qualifying Provinces, including the Shelf Procedures, as interpreted
and applied by the Qualifying Authorities; (B) the U.S. Prospectus conformed and will
conform to the Canadian Prospectus except for such deletions therefrom and additions thereto
as are permitted or required by Form F-10 and the applicable rules and regulations of the
Commission; (C) the Registration Statement and any amendments or supplements thereto
complied and will comply in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations; (D) neither the Registration Statement nor any amendment or
supplement thereto contained or will contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the statements
therein not misleading; and (E) each of the U.S. Prospectus, the Canadian Prospectus and any
amendment or supplement thereto (including any Supplementary Material), including each
document incorporated therein by reference, constituted and will constitute full, true and
plain disclosure of all material facts relating to the Company and its subsidiaries,
considered as one enterprise, and the Offered Shares, and contains no misrepresentation that
is likely to affect the value or the market price of the Offered Shares, and each of the
U.S. Prospectus, the Canadian Prospectus or any amendment or supplement thereto (including
any Supplementary Material), including each document incorporated therein by reference, 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 and the paragraphs below within this subsection shall
not apply to statements in or omissions from the Registration Statement, the U.S.
Prospectus, the Canadian Prospectus, any Issuer Free Writing Prospectus (as defined below)
and any
Supplementary Material made in reliance upon and in conformity with information
furnished in writing to the Company by any Underwriter through the Representative expressly
for use therein.
The U.S. Shelf Prospectus (including the prospectus or prospectuses filed as part of
the Registration Statement or any amendment thereto) complied when so filed in all material
respects with the 1933 Act Regulations.
As of the Applicable Time (as defined below), neither (x) the Issuer General Use Free
Writing Prospectus(es) (as defined below) issued at or prior to the Applicable Time and the
Preliminary Prospectuses as of the Applicable Time and the information included on Schedule
B hereto, all considered together (collectively, the “General Disclosure Package”), nor (y)
any individual Issuer Limited Use Free Writing Prospectus, when considered together with the
General Disclosure Package, included any untrue statement of a material fact or omitted to
state any material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The preceding sentence does
not apply to statements in or omissions from the General Disclosure Package or any Issuer
Limited Use Free Writing Prospectus made in reliance upon and in conformity with information
furnished in writing to the Company by any Underwriter through the Representative expressly
for use therein.
As used in this subsection and elsewhere in this Agreement:
“Applicable Time” means 7:00 p.m. (Eastern Time) on December 12, 2007 or such other
time as agreed by the Company and the Representative.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined
in Rule 433 of the 1933 Act Regulations (“Rule 433”), relating to the Offered Shares that
(i) is required to be filed with the Commission by the Company, (ii) is a “road show that is
a written communication” within the meaning of Rule 433(d)(8)(i), whether or not required to
be filed with the Commission or (iii) is exempt from filing pursuant to Rule 433(d)(5)(i)
because it contains a description of the Offered Shares or of the offering that does not
reflect the final terms, in each case in the form filed or required to be filed with the
Commission or, if not required to be filed, in the form retained in the Company’s records
pursuant to Rule 433(g), as evidenced by its being specified in Schedule C hereto.
“Issuer General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is intended for general distribution to prospective investors, as evidenced by its
being specified in Schedule C hereto.
“Issuer Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is not an Issuer General Use Free Writing Prospectus.
Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Offered Shares or until any
earlier date that the issuer notified or notifies the Representative as described in Section
3(e), did not, does not and will not include any information that conflicted,
conflicts or will conflict with the information contained in the Registration
Statement, the Preliminary Prospectuses or the Final Prospectuses, including any document
incorporated by reference therein that has not been superseded or modified. The preceding
sentence does not apply to statements in or omissions from any Issuer Free Writing
Prospectus made in reliance upon and in conformity with information furnished in writing to
the Company by any Underwriter through the Representative expressly for use therein.
(ii) Incorporated Documents. Each document filed or to be filed with the
Qualifying Authorities and incorporated or deemed to be incorporated by reference in the
Canadian Prospectus complied or will comply when so filed and at the Closing Time (and, if
any Over-Allotment Shares are purchased, at any Date of Delivery) in all material respects
with the securities laws applicable in the Qualifying Provinces as interpreted and applied
by the Qualifying Authorities, respectively, and none of such documents contained or will
contain at the time of its filing and at the Closing Time (and, if any Over-Allotment Shares
are purchased, at any Date of Delivery) any untrue statement of a material fact or any
misrepresentation that is likely to affect the value or the market price of the Offered
Shares or omitted or will omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under which they
were or are made, not misleading.
The documents incorporated or deemed to be incorporated by reference in the
Registration Statement, the U.S. Shelf Prospectus, the U.S. Preliminary Prospectus and the
U.S. Final Prospectus or otherwise deemed to be a part thereof or included therein, at the
time they were or hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1934 Act, and the rules and regulations of
the Commission thereunder (the “1934 Act Regulations”), and, when read together with the
other information in (A) the U.S. Shelf Prospectus at the time the Registration Statement
became effective, (B) the General Disclosure Package at the Applicable Time, and (C) the
U.S. Final Prospectus as of its date and at the Closing Time (and, if any Over-Allotment
Shares are purchased, at any Date of Delivery), did not 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.
(iii) Independent Accountants for the Company. KPMG LLP, who have audited the
Company’s consolidated financial statements and supporting schedules, if any, included or
incorporated by reference in the Registration Statement, the General Disclosure Package and
the Final Prospectuses, are independent public accountants as required by the 1933 Act and
the 1933 Act Regulations and are independent with respect to the Company within the meaning
of the Canada Business Corporations Act, as amended (the “CBCA”), and applicable Canadian
securities laws and regulations and policies thereunder and there has never been any
reportable event (within the meaning of National Instrument 51-102) with the present or any
former auditors of the Company.
(iv) Independent Accountants for UAP. To the Company’s knowledge, Deloitte &
Touche LLP, who have audited UAP’s consolidated financial statements and supporting
schedules, if any, included or incorporated by reference in the Registration
Statement, the General Disclosure Package and the Final Prospectuses, are independent
public accountants as required by the 1933 Act and the 1933 Act Regulations.
(v) Company Financial Statements. The consolidated financial statements of the
Company included or incorporated by reference in the Registration Statement, the General
Disclosure Package and the Final Prospectuses, together with the related schedules, if any,
and notes thereto, present fairly the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the consolidated statement of operations, retained
earnings and cash flows of the Company and its consolidated subsidiaries present fairly the
results of operations for the periods specified (subject, in the case of unaudited
statements, to normal year-end adjustments and to any other adjustments described therein,
including the notes thereto); such consolidated 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 (except as may be indicated in the
notes thereto); and such consolidated financial statements have been reconciled to generally
accepted accounting principles in the United States of America (“U.S. GAAP”) in accordance
with Item 18 of Form 20-F under the 1934 Act. The selected consolidated financial
information included in the Registration Statement, the General Disclosure Package and the
Final Prospectuses presents fairly the information shown therein and has been compiled on a
basis consistent with that of the audited consolidated financial statements included or
incorporated by reference in the Registration Statement, the General Disclosure Package and
the Final Prospectuses. The pro forma consolidated financial statements and the related
notes thereto included or incorporated by reference in the Registration Statement, the
General Disclosure Package and the Final Prospectuses present fairly the information shown
therein, have been prepared in accordance with the rules of the Qualifying Authorities with
respect to pro forma consolidated financial statements and have been properly compiled on
the bases described therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect to the
transactions and circumstances referred to therein. The selected pro forma consolidated
financial information included in the Registration Statement, the General Disclosure Package
and the Final Prospectuses presents fairly the information shown therein and has been
compiled on a basis consistent with that of the pro forma consolidated financial statements
and the related notes included or incorporated by reference in the Registration Statement,
the General Disclosure Package and the Final Prospectuses. There have been no changes in the
consolidated assets or liabilities of the Company from the position thereof as set forth in
the consolidated financial statements included or incorporated by reference in the
Registration Statement, the General Disclosure Package or the Final Prospectuses, except
changes arising from transactions in the ordinary course of business which, in the
aggregate, have not been material to the Company and the Subsidiaries (as hereinafter
defined) (taken together as a single enterprise) and except changes that are disclosed in
the General Disclosure Package and the Final Prospectuses.
(vi)
UAP Financial Statements. To the knowledge of the Company, (i) the consolidated financial statements
of UAP incorporated by reference in the Registration Statement, the General Disclosure
Package and the Final Prospectuses, together with the
related notes, present fairly in all
material respects the financial position and results of operations of UAP and its
consolidated subsidiaries at the dates indicated and for the periods specified (subject, in
the case of unaudited statements, to normal year-end adjustments and to any other
adjustments described therein, including the notes thereto); and (ii) such consolidated
financial statements have been prepared in accordance with U.S. GAAP applied on a consistent
basis throughout the periods involved (except as may be indicated in the notes thereto) and
have been reconciled to Canadian GAAP.
(vii) UAP Acquisition. To the Company’s knowledge, the representations and
warranties of UAP contained in the Merger Agreement are accurate in all material respects
and the Company is not aware of any material non-compliance or anticipated non-compliance by
UAP with any of the covenants contained in the Merger Agreement.
(viii) No Material Adverse Change in Business of the Company. Since the
respective dates as of which information is given in the Registration Statement, the General
Disclosure Package, the Final Prospectuses and the Supplementary Material, except as
otherwise stated therein, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a “Material Adverse Effect”), (B) there have been no
transactions entered into by the Company or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) except for regular semi-annual dividends
on the Company’s issued and outstanding Common Shares in amounts per share that are
consistent with past practice, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its share capital.
(ix) No Material Adverse Change in Business of UAP. To the knowledge of the
Company, since the respective dates as of which information is given in the Registration
Statement, the General Disclosure Package, the Final Prospectuses and the Supplementary
Material, except as otherwise stated therein, (A) there has been no material adverse change
in the condition, financial or otherwise, or in the earnings, business affairs or business
prospects of UAP and its subsidiaries considered as one enterprise, whether or not arising
in the ordinary course of business (a “UAP Material Adverse Effect”) and (B) there have been
no transactions entered into by UAP or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the UAP and its subsidiaries
considered as one enterprise.
(x) Good Standing of the Company. The Company has been duly organized and is
validly existing as a corporation in good standing under the CBCA and has the corporate
power and authority to own, lease and operate its properties and to conduct its business as
described in the General Disclosure Package and the Final Prospectuses and
to enter into and perform its obligations under this Agreement; and the Company is duly
qualified or registered as an extra-provincial corporation or a foreign corporation to
transact business and is in good standing in each jurisdiction in which such qualification
or registration is required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or register or to be in good
standing would not result in a Material Adverse Effect.
(xi) Good Standing of Subsidiaries. The following is a list of the Company’s
wholly-owned or majority-owned subsidiaries which constitute a “significant subsidiary” of
the Company (as such term is defined under Rule 1-02 of Regulation S-X under the ▇▇▇▇ ▇▇▇)
and joint ventures that are otherwise material: the Agrium Partnership (as defined in the
Preliminary Prospectuses and the Final Prospectuses) and its subsidiaries (the
“Partnership”)), Agrium U.S. Inc., Crop Production Services, Inc., Western Farm Service,
Inc., Nu-West Industries, Inc. and Profertil S.A. (each a “Subsidiary” and collectively the
“Subsidiaries”). All other wholly-owned or majority-owned subsidiaries of the Company do
not, singly, constitute “significant subsidiaries” (as such term is defined under Rule 1-02
of Regulation S-X under the 1934 Act). Each Subsidiary, and to the Company’s knowledge, each
of UAP and United Agri Products, Inc. (the “UAP Subsidiary”), has been duly organized and is
validly existing as a corporation or partnership in good standing under the laws of the
jurisdiction of its incorporation or formation, has the corporate or partnership power and
authority to own, lease and operate its properties and to conduct its business as described
in the General Disclosure Package and the Final Prospectuses and is duly qualified as an
extra-provincial or foreign corporation or partnership to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business or otherwise, except where
the failure so to qualify, register or be in good standing would not result in a Material
Adverse Effect; except as otherwise disclosed in the General Disclosure Package and the
Final Prospectuses, all of the issued and outstanding share capital or partnership interests
of each such Subsidiary, and to the Company’s knowledge, of each of UAP and of the UAP
Subsidiary, has been duly authorized and validly issued, is fully paid and non-assessable
and all (or, in the case of Profertil S.A. 50%) of the issued and outstanding share capital
or partnership interests of each such Subsidiary or, to the Company’s knowledge, of the UAP
Subsidiary is owned by the Company or UAP respectively, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding share capital or partnership interests of any Subsidiary, or
to the Company’s knowledge, of UAP or of the UAP Subsidiary, was issued in violation of the
preemptive or similar rights of any securityholder of such Subsidiary or of UAP or of the
UAP Subsidiary, respectively.
(xii) Capitalization. The authorized, issued and outstanding share capital of
the Company is as set forth in the General Disclosure Package and the Final Prospectuses
under the caption “Consolidated Capitalization” in the column entitled “Actual” (except for
subsequent issuances, if any, pursuant to (A) reservations, agreements or employee benefit
plans referred to in the General Disclosure Package and the Final Prospectuses or (B) the
exercise of convertible securities or options referred to in the General Disclosure Package
and the Final Prospectuses). All of the issued and outstanding shares in the
capital of the Company have been duly authorized and validly issued and are fully paid
and non-assessable and have been issued in compliance with all U.S. and Canadian securities
laws; none of the outstanding shares in the capital of the Company was issued in violation
of the preemptive or other similar rights of any securityholder of the
Company. Except as
disclosed in the General Disclosure Package and the Final Prospectuses, the Company does not
have any options or warrants to purchase, or any preemptive rights or other rights to
subscribe for or to purchase, any securities or obligations convertible into, or any
contracts or commitments to issue or sell, any of its share capital or any such options,
rights, convertible securities or obligations. The description of the Company’s employee
benefit plans, and the options or other rights granted thereunder, as set forth in the
General Disclosure Package and the Final Prospectuses, accurately and fairly presents the
information required to be disclosed with respect to such plans, options and rights. Except
as disclosed in the General Disclosure Package and the Final Prospectuses, to the knowledge
of the Company, there are no agreements, arrangements or understandings among or between any
shareholders of the Company with respect to the Company or the voting or disposition of the
Company’s share capital.
(xiii) Authorization of Agreement. 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.
(xiv) Authorization of the Merger Agreement. The Merger Agreement was duly
authorized by the Company and Merger Sub prior to its execution, and constitutes a valid and
binding agreement of the Company and Merger Sub, enforceable against the Company and Merger
Sub in accordance with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’
rights generally and except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a proceeding in equity or at
law). Merger Sub is a wholly-owned subsidiary of the Company and, except as disclosed in
the General Disclosure Package and the Final Prospectuses, the Company is not aware of any
reason why the UAP Acquisition will not be completed as contemplated by the Merger
Agreement, subject to the conditions set forth in the Merger Agreement. The Merger
Agreement conforms in all material respects to the description thereof in the General
Disclosure Package and the Final Prospectuses.
(xv) Authorization of the Offered Shares. The Offered Shares to be purchased by
the Underwriters from the Company have been duly authorized for issuance, sale and delivery
to the Underwriters pursuant to this Agreement; the Offered Shares offered hereby, when
issued and delivered by the Company pursuant to this Agreement against payment of the
consideration set forth herein will be validly issued and fully paid and non-assessable; the
Offered Shares conform to all statements relating thereto contained in the General
Disclosure Package and the Final Prospectuses and such description conforms to the rights
set forth in the instruments defining the same; no holder of the Offered Shares will be
subject to personal liability by reason of being such a holder; and
the issuance of the Offered Shares is not subject to any preemptive or other similar
rights of any securityholder of the Company.
(xvi) Absence of Defaults and Conflicts. Neither the Company nor any of its
Subsidiaries nor, to the knowledge of the Company, UAP or the UAP Subsidiary is in
violation
of its charter or by-laws or partnership agreement, as the case may be, or in default in the
performance or observance of any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease,
license or other agreement or instrument to which the Company or any of its subsidiaries or
UAP or any of its subsidiaries is a party or by which it or any of its subsidiaries or UAP
or any of its subsidiaries may be bound, or to which any of the property or assets of the
Company or any of its subsidiaries or UAP or any of its subsidiaries is subject
(collectively, “Agreements and Instruments”) except for such defaults that would not result
in a Material Adverse Effect or a UAP Material Adverse Effect, as the case may be; and the
execution, delivery and performance of this Agreement and the Merger Agreement and the
consummation of the transactions contemplated herein, therein and in the General Disclosure
Package and the Final Prospectuses (including the issuance and sale of the Offered Shares
and the use of the proceeds from the sale of the Offered Shares as described in the General
Disclosure Package and the Final Prospectuses under the caption “Use of Proceeds”) and
compliance by the Company with its obligations hereunder and under the Merger Agreement have
been duly authorized by all necessary corporate action and do not and will not, whether with
or without the giving of notice or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined below) other than Repayment Events for
UAP or its subsidiaries arising from the UAP Acquisition under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the Company or
any subsidiary pursuant to, the Agreements and Instruments (except for such conflicts,
breaches or defaults, Repayment Events or liens, charges or encumbrances that would not
result in a Material Adverse Effect), nor will such action result in any violation of or
conflict with the provisions of the charter or by-laws of the Company or any of its
subsidiaries or any applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic or foreign, or stock
exchange, having jurisdiction over the Company or any of its subsidiaries or any of their
assets, properties or operations. As used herein, a “Repayment Event” means any event or
condition which gives the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder’s behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the Company or any of
its subsidiaries or by UAP or any of its subsidiaries, as the case may be.
(xvii) Absence of Labor Dispute. No labor dispute with the employees of the
Company or any of its subsidiaries or, to the knowledge of the Company, UAP or any of its
subsidiaries 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 of
its subsidiaries or UAP’s or any of its subsidiaries’ principal suppliers, manufacturers,
customers or contractors, which, in each case, may reasonably be
expected to result in a Material Adverse Effect or a UAP Material Adverse Effect, as
the case may be.
(xviii) Absence of Proceedings. There is no action, suit, proceeding, inquiry
or investigation before or brought by any court or governmental agency, governmental
instrumentality or body, domestic or foreign, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company or any of its subsidiaries or, to the
knowledge of the Company, UAP or any of its subsidiaries, which is required to be disclosed
in the Registration Statement, the General Disclosure Package or the Final Prospectuses or
the Supplementary Material (other than as disclosed therein), or which might reasonably be
expected to result in a Material Adverse Effect or a UAP Material Adverse Effect, as the
case may be, or, with respect to the Company or any of its subsidiaries, which might
reasonably be expected to materially and adversely affect the consummation of the
transactions contemplated in this Agreement or the performance by the Company of its
obligations hereunder; the aggregate of all pending legal or governmental proceedings to
which the Company or any of its subsidiaries or, to the knowledge of the Company, UAP or any
of its subsidiaries is a party or of which any of their respective property or assets is the
subject which are not described in the Registration Statement, the General Disclosure
Package or the Final Prospectuses or the Supplementary Material, including ordinary routine
litigation incidental to the business of the Company or UAP, could not reasonably be
expected to result in a Material Adverse Effect or a UAP Material Adverse Effect, as the
case may be.
(xix) Accuracy of Exhibits. There are no contracts or documents which are
required to be described in the Registration Statement, the General Disclosure Package or
the Final Prospectuses or to be filed as exhibits thereto which have not been so described
and filed as required.
(xx) Possession of Intellectual Property. The Company and its subsidiaries and,
to the Company’s knowledge, UAP and its subsidiaries own or possess, 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 them except, in each case, as would not have a Material Adverse
Effect or a UAP Material Adverse Effect, as the case may be, and neither the Company nor any
of its subsidiaries, nor, to the Company’s knowledge, UAP or 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 or, to the Company’s knowledge, UAP 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, singly or in the aggregate, would
result in a Material Adverse Effect or a UAP Material Adverse Effect, as the case may be.
(xxi) No Stabilization or Manipulation. Neither the Company nor any affiliate
of the Company has taken, nor will the Company or any affiliate take, directly or indirectly
any action which is designed to or which has constituted or that might be reasonably
expected to cause or result in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Offered Shares.
(xxii) Absence of Further Requirements. No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any government,
governmental instrumentality, agency, authority or court of (A) any of the Qualifying
Provinces, (B) the federal government of Canada, (C) the federal government of the United
States or (D) the various States of the United States in which the Offered Shares are to be
offered for sale or sold, or of any political subdivision of any of the foregoing is
necessary or required for the performance by the Company of its obligations hereunder, in
connection with the offering, valid authorization, issuance, sale and delivery of the
Offered Shares or the consummation of the transactions contemplated by this Agreement or for
the due execution, delivery or performance of this Agreement as contemplated by the General
Disclosure Package and the Final Prospectuses, except such as have been already obtained or
as may be required under the 1933 Act, the 1933 Act Regulations, the state securities laws
of the various States of the United States, the CBCA and the securities laws of the
Qualifying Provinces.
(xxiii) Possession of Licenses and Permits. The Company and its subsidiaries
and, to the Company’s knowledge, UAP and its subsidiaries, possess such permits,
certificates, licenses, approvals, consents and other authorizations (collectively,
“Governmental Licenses”) issued by the appropriate federal, state, provincial, state, local
or foreign regulatory agencies or bodies necessary to conduct the business now operated by
them, except where the failure to so possess would not, singly or in the aggregate, result
in a Material Adverse Effect or a UAP Material Adverse Effect, as the case may be; the
Company and its subsidiaries and, to the Company’s knowledge, UAP and its subsidiaries are
in compliance with the terms and conditions of all such Governmental Licenses, except where
the failure so to comply would not, singly or in the aggregate, result in a Material Adverse
Effect or a UAP Material Adverse Effect, as the case may be; all of the Governmental
Licenses are valid and in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be in full force and
effect would not, singly or in the aggregate, result in a Material Adverse Effect or a UAP
Material Adverse Effect, as the case may be; and neither the Company nor any of its
subsidiaries nor, to the Company’s knowledge, UAP or its subsidiaries has received any
notice of proceedings relating to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect or a UAP Material Adverse
Effect, as the case may be.
(xxiv) Title to Property. The Company and its subsidiaries and, to the
Company’s knowledge, UAP and its subsidiaries have good and marketable title to all real
property owned by the Company and its subsidiaries and UAP and its subsidiaries, as the case
may be, and good title to all other properties owned by them, in each case free and clear of
all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of
any
kind except such as (a) are described in the General Disclosure Package and the Final
Prospectuses or (b) do not, singly or in the aggregate, affect the value of such property
and do not interfere with the use made and proposed to be made of such property by the
Company, or any of its subsidiaries, or UAP or any of its subsidiaries except in each case
that would not have a Material Adverse Effect or a UAP Material Adverse Effect, as the case
may be; and all of the leases and subleases of the Company and its subsidiaries,
considered
as one enterprise, and under which the Company or any of its subsidiaries holds properties
described in the General Disclosure Package and the Final Prospectuses, are in full force
and effect except as would not have Material Adverse Effect, and neither the Company nor any
of its subsidiaries nor, to the Company’s knowledge, UAP or any of its subsidiaries has any
notice of any claim of any sort that has been asserted by anyone adverse to the rights of
the Company or any of its subsidiaries or UAP or any of its subsidiaries under any of the
leases or subleases mentioned above, or affecting or questioning the rights of the Company
or such subsidiary or UAP or such subsidiary, as the case may be, to the continued
possession of the leased or subleased premises under any such lease or sublease except in
each case as would not have a Material Adverse Effect or a UAP Material Adverse Effect, as
the case may be.
(xxv) Compliance with ▇▇▇▇▇-▇▇▇▇▇▇ Act. Neither the Company nor any of its
affiliates nor to the Company’s knowledge UAP is in violation of the provisions of the U.S.
Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996.
(xxvi) Investment Company Act. The Company is not required, and upon the
issuance and sale of the Offered Shares as herein contemplated and the application of the
net proceeds therefrom as described in the General Disclosure Package and the Final
Prospectuses will not be required, to register as, an “investment company” or an entity
“controlled” by an “investment company” as such terms are defined in the United States
Investment Company Act of 1940, as amended (the “1940 Act”).
(xxvii)
Environmental Laws. Except as described in the General Disclosure Package and the Final
Prospectuses and except as would not, singly or in the aggregate, result in a Material Adverse
Effect or a UAP Material Adverse Effect, as the case may be, (A) neither the Company nor any of
its subsidiaries nor, to the Company’s knowledge, UAP or any of its subsidiaries is in violation
of any federal, provincial, state, local, municipal or foreign statute, law, rule, regulation,
ordinance, code, policy or rule of common law or civil law or any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent, decree or judgment,
relating to pollution or protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum
products, asbestos-containing materials or mold (collectively, “Hazardous Materials”) or to the
manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, “Environmental Laws”), (B) the Company and its subsidiaries and,
to the Company’s knowledge, UAP and its subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or, to the knowledge of the Company and its subsidiaries, threatened
administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating to any Environmental
Law against the Company or any of its subsidiaries or, to the knowledge of the Company, UAP or any
of its subsidiaries and (D) to the knowledge of the Company and its subsidiaries, there are no
events or circumstances that would reasonably be expected to form the basis of an order
for clean-up or remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of its subsidiaries or
UAP or any of its subsidiaries relating to Hazardous Materials or any Environmental Laws.
In the ordinary course of its business, the Company periodically reviews the effect of
Environmental Laws on the business, operations and properties of the Company and the
subsidiaries, in the course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws, or any permit,
license or approval, any related constraints on operating activities and any potential
liabilities to third parties); on the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities that have not been accounted for would
not, singly or in the aggregate, have a Material Adverse Effect.
(xxviii) Registration Rights. There are no persons with registration rights or
other similar rights to have any securities registered or qualified for distribution
pursuant to the Registration Statement, the Canadian Prospectus or otherwise registered by
the Company under the 1933 Act or qualified for distribution under any Canadian provincial
securities legislation.
(xxix) Other Reports and Information. There are no reports or information that,
in accordance with the requirements of applicable Canadian securities legislation, must be
made publicly available in connection with the offering of the Offered Shares that have not
been made publicly available as required; no material change reports or other documents have
been filed on a confidential basis with any of the Qualifying Authorities which as at the
date hereof remain confidential; there are no documents required to be filed with the
Qualifying Authorities or with any other Canadian provincial securities regulatory authority
in connection with the Canadian Prospectus that 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, the General Disclosure Package and the Final Prospectuses or to be
filed as exhibits to the Registration Statement that are not described, referred to or filed
as required.
(xxx) Accounting Controls. The Company and the Subsidiaries and, to the
Company’s knowledge, UAP and the UAP Subsidiary maintain a system of internal accounting
controls sufficient to provide reasonable assurances that (1) transactions are executed in
accordance with management’s general or specific authorization; (2) transactions are
recorded as necessary to permit preparation of financial statements in conformity with
Canadian GAAP and reconciled to U.S. GAAP and to maintain accountability for assets; (3)
access to assets is permitted only in accordance with management’s general or specific
authorization; and (4) the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with respect to any
differences. Since the end of the Company’s most recent audited fiscal year (1) there has
been no material weakness in the Company’s internal control over financial reporting
(whether or not remedied) and (2) there has been no change in the Company’s internal control
over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company’s internal control
over financial reporting.
(xxxi) Disclosure Controls. The Company and the Subsidiaries and, to the
Company’s knowledge, UAP and the UAP Subsidiary maintain disclosure controls and procedures
as required by Rule 13a-15 or Rule 15d-15 of the 1934 Act Regulations, as applicable, 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, as applicable; such controls and procedures are effective to provide reasonable
assurances that all material information concerning the Company and the Subsidiaries is made
known, on a timely basis, to the individuals responsible for the preparation of the
Company’s filings with the Commission and the Qualifying Authorities.
(xxxii) Compliance with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. There is and has been no
failure on the part of the Company or, to the Company’s knowledge, UAP or any of the
Company’s or UAP’s directors or officers, in their capacities as such, to comply in all
material respects with any provision of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and
regulations promulgated in connection therewith (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act”), including
Section 402 related to loans and Sections 302 and 906 related to certifications.
(xxxiii) Taxes. There are no transfer taxes or other similar fees or charges
under Canadian or U.S. federal laws or the laws of any state, province or any political
subdivision thereof, required to be paid in connection with the execution and delivery of
this Agreement or the issuance by the Company or sale by the Company of the Offered Shares.
No stamp duty, registration or documentary taxes, duties or similar charges are payable
under the federal laws of Canada or the laws of any province in connection with the
creation, issuance, sale and delivery to the Underwriters of the Offered Shares or the
authorization, execution, delivery and performance of this Agreement or the resale of
Offered Shares by an Underwriter to U.S. residents.
(xxxiv) Statistical and Market-Related Data. Any statistical, industry and
market-related data included in the Registration Statement, the General Disclosure Package
and the Final Prospectuses is based on or derived from sources that the Company believes to
be reliable and accurate, and the Company has obtained the written consent to the use of
such data from such sources, to the extent any such consent is required.
(xxxv) Foreign Corrupt Practices Act. Neither the Company nor, to the
Company’s knowledge, UAP nor, to the knowledge of the Company, any director, officer, agent,
employee, affiliate or other person acting on behalf of the Company or UAP or any of the
Subsidiaries is aware of or has taken any action, directly or indirectly, that would result
in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and
the rules and regulations thereunder (the “FCPA”), including, without limitation, making use
of the mails or any means or instrumentality of interstate commerce corruptly in furtherance
of an offer, payment, promise to pay or authorization of the payment of any money, or other
property, gift, promise to give, or authorization of
the giving of anything of value to any “foreign official” (as such term is defined in
the FCPA) or any foreign political party or official thereof or any candidate for foreign
political office, in contravention of the FCPA and the Company and, to the knowledge of the
Company, its affiliates and UAP and its affiliates have conducted their businesses in
compliance with the FCPA and have instituted and maintain policies and procedures designed
to ensure, and which are reasonably expected to continue to ensure, continued compliance
therewith.
(xxxvi) OFAC. Neither the Company nor, to the Company’s knowledge, UAP nor, to
the knowledge of the Company, any director, officer, agent, employee, affiliate or person
acting on behalf of the Company or UAP is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury Department
(“OFAC”); and the Company will not directly or indirectly use the proceeds of the offering,
or lend, contribute or otherwise make available such proceeds to any subsidiary, joint
venture partner or other person or entity, for the purpose of financing the activities of
any person currently subject to any U.S. sanctions administered by OFAC.
(xxxvii) No Broker. Other than as contemplated by this Agreement, there is no
broker, finder or other party that is entitled to receive from the Company any brokerage or
finder’s fee or other fee or commission as a result of the sale of Offered Shares
contemplated by this Agreement.
(xxxviii) NYSE Listing; TSX Listing. The currently issued and outstanding
Common Shares are listed on the New York Stock Exchange (“NYSE”) and the Company is in
compliance with all applicable corporate governance requirements set forth in the NYSE Rules
and all applicable corporate governance and other requirements contained in the listing
agreement to which the Company and the NYSE are parties, except where the failure to be in
compliance would not reasonably be expected to result in delisting or any suspension of
trading or other privileges. The currently issued and outstanding Common Shares are listed
on the Toronto Stock Exchange (“TSX”) and the Company is in compliance with all applicable
requirements of the TSX, except where the failure to be in compliance would not reasonably
be expected to result in delisting or any suspension of trading or other privileges. The
NYSE has conditionally approved the listing of the Offered Shares, subject to notice of
official issuance and evidence of satisfactory distribution; the TSX has conditionally
approved the listing of the Offered Shares, subject to the Company fulfilling all of the
requirements of the TSX before March 7, 2008.
(xxxix) Pending Proceedings and Examinations. The Registration Statement is not
the subject of a pending proceeding or examination under Section 8(d) or 8(e) of the 1933
Act, and the Company is not the subject of a pending proceeding under Section 8A of the 1933
Act in connection with the offering of the Offered Shares.
(xl) Commitment Letter. The Company has entered into a commitment letter
agreement with a Canadian chartered bank whereby the bank agreed to provide the Company with
new committed senior, unsecured credit facilities comprised of: (i) a nine month bridge
credit facility in an aggregate principal amount of up to $1,250,000,000; (ii)
an 18 month bridge credit facility in an aggregate principal amount of up to
$900,000,000; and (iii) a five year term credit facility totaling $460,000,000 for the
purpose of partially funding the UAP Acquisition, paying certain fees and expenses related
to the UAP Acquisition and refinancing existing debt of UAP and its subsidiaries. The
disclosure in the General Disclosure Package and the Final Prospectuses under the heading
“Proposed UAP Acquisition” accurately summarizes the terms and conditions of such commitment
letter.
(xli) Relationships with Underwriters. Except as disclosed in the General
Disclosure Package and the Final Prospectuses, neither the Company nor any of the
Subsidiaries (i) has any material lending or other relationship with any bank or lending
affiliate of any of the Underwriters, or (ii) intends to use any of the proceeds from the
sale of the Offered Shares hereunder to repay any outstanding debt owed to any affiliate of
any of the Underwriters.
(xlii) French Language Documents. The French language versions of the Canadian
Preliminary Prospectus and the Canadian Final Prospectus, including each document
incorporated therein by reference therein and the financial statements and other financial
data contained therein, is in all material respects a complete and proper or complete and
accurate translation of the English language versions thereof.
(b) Officer’s Certificates. Any certificate signed by any officer of the Company or any of its
Subsidiaries delivered to the Representative or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Shares. On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company agrees to sell to each
Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to
purchase from the Company, at a net purchase price of $55.825 per Initial Share (the “Purchase
Price”) (being an amount equal to the public offering price of $58.00 per Initial Share less $2.175
per share, representing the underwriting commission payable by the Company to the Underwriters for
underwriting the Offered Shares), the amount of Initial Shares set forth in Schedule A opposite the
name of such Underwriter, plus any additional Initial Shares which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 11 hereof.
(b) Over-Allotment Shares. Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants an option to the several
Underwriters to purchase, severally and not jointly, up to the number of Over-Allotment Shares set
forth in Schedule B hereto at the same Purchase Price per share as the Underwriters shall pay for
the Initial Shares less an amount per share equal to any dividends or distributions declared by the
Company and payable on the Initial Shares but not payable on the Over-Allotment Shares. Said
option may be exercised to cover over-allotments in the sale of the Initial Shares by the
Underwriters. Said option may be exercised in whole or in part at any time on or before 5:00 p.m.,
Calgary time, on the 30th day after the Closing Time upon written or
telegraphic notice by the Representative to the Company setting forth the number of
Over-Allotment Shares as to which the several Underwriters are exercising the option and the
settlement date. The number of Over-Allotment Shares to be purchased by each Underwriter shall be
the same percentage of the total number of Over-Allotment Shares to be purchased by the several
Underwriters as such Underwriter is purchasing of the Initial Shares, subject to such adjustments
as the Representative in its absolute discretion shall make to eliminate any fractional securities.
(c) Payment. Payment of the Purchase Price for, and delivery of certificates for, the Initial
Shares, and the Over-Allotment Shares (if the option provided in Section 2(b) hereof is exercised
on or before the second Business Day prior to the Closing Time) shall be made at the offices of
Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, Calgary, Alberta, Canada, or at such other place as shall be agreed
upon by the Representative and the Company, at 9:00 a.m. (Eastern time) on the fourth Business Day
after the date hereof (unless postponed in accordance with the provisions of Section 11 hereof), or
at such other time not later than ten Business Days after such date as shall be agreed upon by the
Representative and the Company (such time and date of payment and delivery being herein called the
“Closing Time”).
Payment shall be made to the Company by wire transfer of immediately available funds to a bank
account designated by the Company, against delivery to the Representative for the respective
accounts of the Underwriters of certificates for the Offered Shares to be purchased by them. It is
understood that each Underwriter has authorized the Representative, for its account, to accept
delivery of, receipt for, and make payment of the Purchase Price for, the Offered Shares which it
has agreed to purchase. The Representative individually, and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the Purchase Price for the
Offered Shares to be purchased by any Underwriter whose funds have not been received by the Closing
Time, but such payment shall not relieve such Underwriter from its obligations hereunder.
If the option provided for in Section 2(b) hereof is exercised after the third Business Day
prior to the Closing Time, the Company will deliver the Over-Allotment Shares (at the expense of
the Company) to the Representative on behalf of the Underwriters on the date specified by the
Representative on not less than two Business Days prior written notice to the Company (which shall
be within three Business Days after exercise of said option) for the respective accounts of the
several Underwriters, against payment by the several Underwriters through the Representative of the
Purchase Price thereof to or upon the order of the Company by wire transfer payable in same-day
funds to an account specified by the Company. If settlement for the Over-Allotment Shares occurs
after the Closing Time, the Company will deliver to the Representative on the settlement date for
the Over-Allotment Shares, and the obligation of the Underwriters to purchase the Over-Allotment
Shares shall be conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered at the Closing Time
pursuant to Section 6 hereof. Any time and date for such payment for the Over-Allotment Shares, if
other than the Closing Time, is herein referred to as a “Date of Delivery”.
The services provided by the Underwriters in connection herewith will not be subject to the
goods and services tax provided for in the Excise Tax Act (Canada) and taxable supplies provided
will be incidental to the exempt financial services provided.
(d) Denominations; Registration. Certificates for the Initial Shares and the Over-Allotment
Shares, if any, shall be in such denominations and registered in such names as the Representative
may request in writing at least one full Business Day before the Closing Time or the relevant Date
of Delivery, as the case may be. The certificates for the Initial Shares and the Over-Allotment
Shares, if any, will be made available for examination and packaging by the Representative not
later than 10:00 a.m. (Eastern Time) on the Business Day prior to the Closing Time or the relevant
Date of Delivery, as the case may be. Delivery of the Offered Shares shall be made through the
facilities of the CDS Clearing and Depository Services Inc. (“CDS”) unless the Representative shall
otherwise instruct.
SECTION 3. Covenants of the Company. The Company covenants with each Underwriter as
follows:
(a) Compliance with Securities Regulations and Commission Requests. The Company, subject to
Section 3(b), will comply with the requirements of the Shelf Procedures and General Instruction
II.L. of Form F-10, and the Company will notify the Representative immediately, and confirm the
notice in writing, (i) when any post-effective amendment to the Registration Statement or new
registration statement relating to the Offered Shares shall have been filed with the Commission or
shall have become effective, or when any supplement or amendment to the U.S. Prospectus or the
Canadian Prospectus or any amended U.S. Prospectus or Canadian Prospectus or any Supplementary
Material shall have been filed, (ii) of the receipt of any comments from the Qualifying Authorities
or the Commission, (iii) of any request by the Qualifying Authorities to amend or supplement the
Canadian Prospectus or for additional information or of any request by the Commission for any
amendment to the Registration Statement or the filing of a new registration statement or any
amendment or supplement to the U.S. Prospectus or any document incorporated by reference therein or
otherwise deemed to be a part thereof or for additional information, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration Statement or such new
registration statement or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Offered Shares for offering or sale in
any jurisdiction, or of the institution or, to the knowledge of the Company, the initiation or
threatening of any proceedings for any of such purposes or of any examination pursuant to Section
8(e) of the 1933 Act concerning the Registration Statement, (v) if the Company becomes subject of a
proceeding under Section 8A of the 1933 Act in connection with the offering of the Offered Shares
and (vi) of the issuance by the Qualifying Authorities or any stock exchange in Canada or the
United States of any order having the effect of ceasing or suspending the distribution of the
Offered Shares or the trading in the Common Shares or any other securities of the Company, or of
the institution or, to the knowledge of the Company, threatening of any proceedings for any such
purpose. The Company will effect the filings required pursuant to General Instruction II.L of Form
F-10 not later than the Commission’s close of business on the Business Day following the date of
filing thereof with the Qualifying Authorities and will take such steps as it deems necessary to
ascertain promptly whether the form of prospectus transmitted for filing pursuant to General
Instruction II.L of Form F-10 was received for filing by the Commission and, in the
event that it was not, it will promptly file such prospectus. The Company will use every
reasonable effort 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 Offered Shares or
the trading in the Common Shares or any other securities of the Company and, if any such order is
issued, to obtain the lifting thereof at the earliest possible time.
(b) Filing of Amendments and Exchange Act Documents. The Company will not at any time prior to
the later of the Closing Time and the completion of the offering of the Offered Shares file or make
any amendment to the Registration Statement or new registration statement relating to the Offered
Shares, any amendment, supplement or revision to the Canadian Preliminary Prospectus, the U.S.
Preliminary Prospectus or any amendment or supplement to any of the prospectuses included in the
Registration Statement at the time it becomes effective, the U.S. Prospectus, the Canadian
Prospectus or any Supplementary Material, of which the Representative shall not have previously
been advised and furnished copies a reasonable amount of time prior to such proposed filing or use,
as the case may be, or to which the Representative shall have reasonably objected promptly after
reasonable notice thereof; provided, however, that this provision shall not prohibit the Company
from complying in a timely manner with its timely disclosure obligations under applicable
securities legislation and the requirements of any relevant stock exchange arising out of any
material change in the business or affairs of the Company. The Company has given the Representative
notice of any filings made pursuant to the 1934 Act or the 1934 Act Regulations, within 48 hours
prior to the Applicable Time; the Company will give the Representative notice of its intention to
make any such filing from the Applicable Time to the Closing Time and will furnish the
Representative with copies of any such documents a reasonable amount of time prior to such proposed
filing and will not file or use any such document to which the Representative shall reasonably
object.
(c) Delivery of Filed Documents. The Company has furnished or will deliver to each of the
Underwriters, without charge, a copy of the Initial Canadian Final Base Shelf Prospectus (in
English and French), the Amendment to the Canadian Final Base Shelf Prospectus (in English and
French), the Canadian Preliminary Prospectus (in English and French), the Canadian Final Prospectus
(in English and French), the documents incorporated by reference in the Canadian Prospectus (in
English and French), and any Supplementary Material (in English and French), approved, signed and
certified as required by the securities laws of the Qualifying Provinces and signed and conformed
copies of the Registration Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein and documents incorporated or deemed
to be incorporated by reference therein or otherwise deemed a part thereof), the Company Form F-X
and signed copies of all consents and certificates of experts. The copies of the English and French
versions of the Initial Canadian Final Base Shelf Prospectus, the Amendment to the Canadian Final
Base Shelf Prospectus, the Canadian Preliminary Prospectus, the Canadian Final Prospectus, the
documents incorporated by reference in the Canadian Prospectus, and any Supplementary Material
furnished to the Underwriters will be identical to the corresponding electronically transmitted
copies thereof filed with the Qualifying Authorities pursuant to SEDAR, and the copies of the
Registration Statement and each amendment or supplement thereto furnished to the Underwriters will
be identical to the electronically transmitted copies thereof filed with the Commission pursuant to
▇▇▇▇▇, except to the extent permitted by Regulation S-T. The Company will also deliver to the
Representative and counsel for the Underwriters copies of all correspondence with the Qualifying
Authorities
relating to any proposed or requested exemptions from the requirements of applicable Canadian
securities laws.
(d) Delivery of Commercial Prospectuses. The Company has delivered to each Underwriter,
without charge, as many commercial copies of the U.S. Preliminary Prospectus and the Canadian
Preliminary Prospectus (in the English and French languages) as such Underwriter has reasonably
requested, and the Company hereby consents to the use of such copies for purposes permitted by the
1933 Act and applicable Canadian securities laws. The Company will furnish to each Underwriter,
without charge, during the period when a prospectus is required by the 1933 Act, the 1933 Act
Regulations or applicable Canadian securities laws to be delivered in connection with sales of the
Offered Shares, such number of copies of the U.S. Final Prospectus and Canadian Final Prospectus
(in the English and French languages) and any Issuer Free Writing Prospectus (each as amended or
supplemented) as such Underwriter may reasonably request. The copies of the English and French
versions of the Canadian Preliminary Prospectus and the Canadian Final Prospectus furnished to the
Underwriters will be identical to the corresponding electronically transmitted copies thereof filed
with the Qualifying Authorities pursuant to SEDAR, and the copies of the U.S. Preliminary
Prospectus and the U.S. Final Prospectus furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except to
the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply with the 1933 Act and
the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations and the securities laws of the
Qualifying Provinces so as to permit the completion of the distribution of the Offered Shares as
contemplated in this Agreement, the General Disclosure Package and the Final Prospectuses. If at
any time when a prospectus is required by the 1933 Act or the securities laws of the Qualifying
Provinces to be delivered in connection with sales of the Offered Shares, any event shall occur or
condition shall exist as a result of which it is necessary, in the opinion of counsel for the
Underwriters or for the Company, to amend the Registration Statement or to file a new registration
statement or to amend or supplement the U.S. Prospectus or the Canadian Prospectus in order that
the U.S. Prospectus or the Canadian Prospectus will not include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is delivered to a purchaser,
or if it shall be necessary, in the opinion of such counsel, at any such time to amend the
Registration Statement, file a new registration statement, or amend or supplement the U.S.
Prospectus or the Canadian Prospectus in order to comply with the requirements of the 1933 Act or
the 1933 Act Regulations or the securities laws of the Qualifying Provinces, the Company will
promptly prepare and file with the Commission and with the Qualifying Authorities, subject to
Section 3(b), such amendment, supplement or new registration statement as may be necessary to
correct such statement or omission or to make the Registration Statement or the U.S. Prospectus or
the Canadian Prospectus comply with such requirements, the Company will use its reasonable efforts
to have such amendment, supplement or new registration statement declared effective as soon as
practicable and the Company will furnish to the Underwriters such number of copies of such
amendment, supplement or new registration statement as the Underwriters may reasonably request. If
at any time following the issuance of an Issuer Free Writing Prospectus there occurred or occurs an
event or development as a result of which such Issuer Free Writing Prospectus conflicted or would
conflict with the
information contained in the Registration Statement, (or any other registration statement
relating to the Offered Shares), the General Disclosure Package or the Final Prospectuses or
included or would include an untrue statement of a material fact or omitted or would omit to state
a material fact necessary in order to make the statements therein, in the light of the
circumstances prevailing at that subsequent time, not misleading, the Company will promptly notify
the Representative, upon which notification, the Underwriters agree to discontinue use of such
Issuer Free Writing Prospectus, and the Company will promptly amend or supplement, at its own
expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue
statement or omission.
(f) Blue Sky Qualifications. The Company will use its reasonable efforts, in cooperation with
the Underwriters, to qualify the Offered Shares for offering and sale under the applicable
securities laws of such states and other jurisdictions as the Representative may reasonably
designate and to maintain such qualifications in effect for a period of not less than one year from
the date hereof; provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as a dealer in securities
in any jurisdiction in which it is not so qualified or so subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject. In each jurisdiction in
which the Offered Shares have been so qualified, the Company will file such statements and reports
as may be required by the laws of such jurisdiction to continue such qualification in effect for a
period of not less than one year from the effective date of the Registration Statement. The Company
will also supply the Underwriters with such information as is necessary for the determination of
the legality of the Offered Shares for investment under the laws of such jurisdictions as the
Underwriters may request.
(g) Rule 158. The Company will timely file such reports pursuant to the 1934 Act as are
necessary in order to make generally available to its securityholders as soon as practicable an
earnings statement for the purposes of, and to provide to the Underwriters the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by it from the sale of the
Offered Shares in the manner specified in the Preliminary Prospectuses and the Final Prospectuses
under “Use of Proceeds”.
(i) Listing. The Company will use its reasonable best efforts to effect and maintain the
listing of the Offered Shares on the NYSE and the TSX.
(j) Restriction on Sale of Offered Shares. During a period of 90 days from the date of the
Final Prospectuses, the Company will not, without the prior written consent of the Representative
on behalf of the Underwriters, (i) directly or indirectly, offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of any Common Shares or any
securities convertible into or exercisable or exchangeable for Common Shares or file any
registration statement under the 1933 Act (other than on Form S-8) or a prospectus under applicable
Canadian securities laws with respect to any of the foregoing or (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Shares, whether any such
swap or transaction described in clause (i) or (ii) above is to be settled by delivery of
Common Shares or such other securities, in cash or otherwise. The foregoing sentence shall not
apply to (A) the Offered Shares to be sold hereunder, (B) any Common Shares issued by the Company
upon the exercise of an option or warrant or the conversion of a security outstanding on the date
hereof and referred to in the Final Prospectuses or (C) any Common Shares issued or options to
purchase Common Shares granted pursuant to existing employee benefit plans of the Company referred
to in the General Disclosure Package and the Final Prospectuses. Notwithstanding the foregoing, if
(1) during the last 17 days of the 90-day restricted period the Company issues an earnings release
or material news or a material event relating to the Company occurs or (2) prior to the expiration
of the 90-day restricted period, the Company announces that it will release earnings results or
becomes aware that material news or a material event will occur during the 16-day period beginning
on the last day of the 90-day restricted period, the restrictions imposed in this clause (j) shall
continue to apply until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event.
(k) Reporting Requirements. The Company, during the period when the U.S. Prospectus or the
Canadian Prospectus is required to be delivered under the 1933 Act or the 1934 Act or under
applicable Canadian securities legislation, will file all documents required to be filed by the
Company with (i) the Commission pursuant to the 1934 Act within the time periods required by the
1934 Act and the 1934 Act Regulations, and (ii) the Qualifying Authorities under the applicable
securities laws of the provinces of Canada.
(l) Subsequent Filings with Canadian Regulatory Authorities. In the event that any document is
filed with Canadian securities regulatory authorities subsequent to the time the Registration
Statement becomes effective that is deemed to be incorporated by reference in the Canadian
Prospectus, the Company will, if required by the 1933 Act Regulations, file such document in
accordance with the 1933 Act and the 1933 Act Regulations.
(m) Translation Opinions. The Company shall cause Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP to deliver to
the Underwriters customary opinions, dated the date of the filing of the French language version of
the Canadian Final Prospectus, to the effect that the French language version of such prospectus,
together with each document incorporated by reference therein (other than the Company Financial
Information and the UAP Financial Information, each as defined below), is in all material respects
a complete and proper translation of the English language version thereof. The Company shall cause
Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP to deliver to the Underwriters similar opinions as to the French
language translation of any information contained in any Supplementary Material, in form and
substance satisfactory to the Underwriters, prior to the filing thereof with the Qualifying
Authorities.
As used in this subsection and elsewhere in this Agreement:
“Company Financial Information” means (i) the material under the headings “Selected Historical
and Pro Forma Consolidated Financial Information”, “Historical and Pro Forma Consolidated Operating
Statement Items” and “Historical and Pro Forma Consolidated Balance Sheet Items” in the Summary of
the Canadian Final Prospectus, (ii) the material under the headings “SELECTED HISTORICAL AND PRO
FORMA CONSOLIDATED FINANCIAL INFORMATION” and “CONSOLIDATED CAPITALIZATION” in the Canadian Final
Prospectus, (iii) the Pro Forma Consolidated Financial Statements of the Company commencing on page
F-1 of the Canadian Final Prospectus and included as Schedule “B” to the material change report of
the Company dated December 10, 2007 relating to the proposed UAP Acquisition, (iv) the material
under the headings “AUDITORS’ CONSENT” on page 29 of the Canadian Shelf Prospectus, (v) the
documents described in items (c),(d),(e),(f),(g) and (h) under the heading “DOCUMENTS INCORPORATED
BY REFERENCE IN THE PROSPECTUS” in the Canadian Final Prospectus, (vi) the material under the
heading “INTEREST COVERAGE RATIOS” on page 26 of the Canadian Shelf Prospectus, and (vii) the
documents described in items (f), (g) and (h) under the heading “DOCUMENTS INCORPORATED BY
REFERENCE” on page 4 in the Canadian Final Base Shelf Prospectus.
“UAP Financial Information” means the material contained in Schedule “A” to the material
change report of the Company dated December 10, 2007 relating to the proposed UAP Acquisition.
(n) Translation Opinions — Financial Statements. The Company shall cause KPMG LLP to deliver
to the Underwriters customary opinions, dated the date of the filing of the French language version
of the Canadian Final Prospectus, to the effect that the Company Financial Information contained in
the French language version of such prospectus, together with the documents incorporated therein by
reference, is in all material respects a complete and proper translation of the English language
version thereof. The Company shall cause KPMG LLP to deliver to the Underwriters similar opinions
as to the French language translation of any similar information contained in any Supplementary
Material, in form and substance satisfactory to the Underwriters, prior to the filing thereof with
the Qualifying Authorities.
(o) Translation Opinions — Financial Statements. The Company shall cause Deloitte & Touche LLP
to deliver to the Underwriters customary opinions, dated the date of the filing of the French
language version of the Canadian Final Prospectus, to the effect that the UAP Financial Information
contained in the French language version of such prospectus, together with the documents
incorporated therein by reference, is in all material respects a complete and proper translation of
the English language version thereof. The Company shall cause Deloitte & Touche LLP to deliver to
the Underwriters similar opinions as to the French language translation of any similar information
contained in any Supplementary Material, in form and substance satisfactory to the Underwriters,
prior to the filing thereof with the Qualifying Authorities.
(p) Issuer Free Writing Prospectuses. The Company represents and agrees that, unless it
obtains the prior consent of the Representative, and each Underwriter represents and agrees that,
unless it obtains the prior consent of the Company and the Representative, it has not made and will
not make any offer relating to the Offered Shares that would constitute an “issuer free writing
prospectus,” as defined in Rule 433, or that would otherwise constitute a “free writing
prospectus,” as defined in Rule 405, required to be filed with the Commission. Any such free
writing prospectus consented to by the Company and the Representative is hereinafter referred to as
a “Permitted Free Writing Prospectus” and is listed on Schedule C hereto. The Company represents
that it has treated or agrees that it will treat each Permitted Free Writing Prospectus as an
“issuer free writing prospectus,” as defined in Rule 433, and has complied and will comply with the
requirements of Rule 433 applicable to any Permitted Free Writing
Prospectus, including timely filing with the Commission where required, legending and record
keeping.
SECTION 4. Covenants of the Underwriters. The Underwriters covenant with the Company
as follows:
(a) The Underwriters and their respective affiliates have not, directly or indirectly,
offered, sold or delivered and will not, directly or indirectly, offer, sell or deliver any Offered
Shares in any jurisdiction except in compliance with all applicable securities laws; and the
Underwriters will comply with the selling restrictions set forth in the “Plan of Distribution”
section of the Preliminary Prospectuses and the Final Prospectuses. The Underwriters shall cause a
similar covenant to be contained in any agreement entered into with any selling agent or with any
selling dealer group established in connection with the distribution of the Offered Shares.
(b) The Underwriters will not advertise the proposed offering or sale of the Offered Shares in
the printed media of general and regular paid circulation, radio, television or telecommunications
including electronic display.
(c) The Underwriters will give prompt notice to the Company when, in the opinion of the
Underwriters, distribution of the Offered Shares has ceased.
(d) The Underwriters will, as soon as practicable and in any event within 30 days of the
Closing Time or if any Over-Allotment Shares are purchased, the Date of Delivery, as applicable,
provide to the Company a breakdown of the number of Initial Shares or Over-Allotment Shares sold in
each jurisdiction where such information is required for the purpose of calculating any filing or
listing fees payable by the Company in such jurisdiction.
(e) The Underwriters will notify promptly, and in any event within 30 days of the Closing Time
or if any Over-Allotment Shares are purchased, the Date of Delivery, as applicable, each Qualifying
Authority, where required, of the number of Initial Shares or Over-Allotment Shares sold in the
relevant Qualifying Province.
SECTION 5. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the performance of its obligations
under this Agreement, including (i) the preparation, printing and filing of the Registration
Statement (including financial statements and exhibits and the Company Form F-X) as originally
filed and of each amendment thereto, the U.S. Preliminary Base Shelf Prospectus, the U.S. Final
Base Shelf Prospectus, the U.S. Preliminary Prospectus, the U.S. Final Prospectus, the Initial
Canadian Final Base Shelf Prospectus, the Amendment to the Canadian Final Base Shelf Prospectus,
the Canadian Shelf Prospectus, the Canadian Preliminary Prospectus, the Canadian Final Prospectus,
any Issuer Free Writing Prospectuses and any Supplementary Material and any amendments or
supplements thereto, and the cost of furnishing copies thereof to the Underwriters, (ii) the
preparation, printing and delivery to the Underwriters of this Agreement, any Agreement among
Underwriters and such other documents as may be required in connection with the offering, purchase,
sale, issuance or delivery of the Offered Shares;
provided, however, that this clause (ii) shall not include the fees of counsel to the
Underwriters in connection with the foregoing, (iii) the preparation, issuance and delivery of the
certificates for the Offered Shares to the Underwriters, including any charges of CDS in connection
therewith, (iv) the fees and disbursements of the Company’s counsel, accountants (including UAP’s
accountants) and other advisers, (v) the qualification of the Offered Shares under applicable
securities laws in accordance with the provisions of Section 3(f) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Underwriters in connection therewith and
in connection with the preparation of the Blue Sky Survey and any supplement thereto, (vi) the
printing and delivery to the Underwriters of copies of each preliminary prospectus, the U.S.
Preliminary Base Shelf Prospectus, the U.S. Final Base Shelf Prospectus, any Permitted Free Writing
Prospectus, the U.S. Preliminary Prospectus, the U.S. Final Prospectus, the Initial Canadian Final
Base Shelf Prospectus, the Amendment to the Canadian Final Base Shelf Prospectus, the Canadian
Shelf Prospectus, the Canadian Preliminary Prospectus, the Canadian Final Prospectus, and
Supplemental Material and any amendments or supplements thereto, (vii) the preparation, printing
and delivery to the Underwriters of copies of the Blue Sky Survey and any supplement thereto,
(viii) the fees and disbursements of counsel for the Underwriters in connection with compliance
with the rules and regulations of the Financial Industry Regulatory Authority, Inc., (ix) the costs
and expenses of the Company relating to investor presentations on any “road show” undertaken in
connection with the marketing of the Offered Shares, including without limitation, expenses
associated with the production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations, travel and lodging expenses of
the representatives and officers of the Company and any such consultants, and the cost of aircraft
and other transportation chartered in connection with the road show and any fees payable in
connection with the rating of the Offered Shares, and (x) the fees and expenses incurred in
connection with the listing of the Offered Shares on the NYSE and the TSX. Except as indicated
above in this paragraph, it is understood that the Underwriters will pay all of their costs and
expenses, including the fees and expenses of their counsel and certain advertising expenses in
connection with any offer the Underwriters make with respect to the Offered Shares.
(b) Termination of Agreement. If this Agreement is terminated by the Representative in
accordance with the provisions of Section 6 or Section 10(a)(i) hereof, the Company shall reimburse
the Underwriters for all of their out-of-pocket expenses, including the reasonable fees and
disbursements of U.S. and Canadian counsel for the Underwriters within 30 days of receipt of
reasonable evidence of such expenses.
SECTION 6. Conditions of Underwriters’ Obligations. The obligations of the several
Underwriters hereunder are subject to the accuracy of the representations and warranties of the
Company contained in Section 1 hereof or in certificates of any officer of the Company or any
Subsidiary of the Company delivered pursuant to the provisions hereof, to the performance by the
Company of its covenants and other obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Canadian Final Prospectus shall have been
filed with the Qualifying Authorities under the Shelf Procedures and the Registration Statement
shall have become effective; and at the Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, no order having the effect of
ceasing or suspending the distribution of the Offered Shares or the trading in the Common Shares of
the Company 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 any request on the part of the Qualifying Authorities
or the Commission for additional information shall have been complied with to the reasonable
satisfaction of the Underwriters. Each of (i) the Canadian Preliminary Prospectus and the Canadian
Final Prospectus shall have been filed with the Qualifying Authorities under the Shelf Procedures,
and (iii) the U.S. Preliminary Prospectus and the U.S. Final Prospectus shall have been filed with
the Commission in accordance with General Instruction II.L. of Form F-10, in each case, within the
time period prescribed for such filing, as applicable.
(b) Opinion and 10b-5 Statement of Canadian Counsel for the Company. At the Closing Time, the
Representative shall have received the favorable opinion and Rule 10b-5 negative assurance
statement, dated as of the Closing Time, of Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, Canadian counsel for the
Company, in form and substance reasonably satisfactory to counsel for the Underwriters, together
with signed or reproduced copies of such letter for each of the other Underwriters.
(c) Opinion of General Counsel for the Company. At the Closing Time, the Representative shall
have received the favorable opinion, dated as of the Closing Time, of ▇▇▇▇▇▇ ▇’▇▇▇▇▇▇▇▇, general
counsel of the Company, in form and substance reasonably satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letter for each of the other
Underwriters.
(d) Opinion and 10b-5 Statement of U.S. Counsel for the Company. At the Closing Time, the
Representative shall have received the favorable opinion and Rule 10b-5 negative assurance
statement, dated as of the Closing Time, of ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, United
States counsel for the Company, together with signed or reproduced copies of such opinion for each
of the other Underwriters, in form and substance reasonably satisfactory to counsel for the
Underwriters.
(e) Opinion of Special Colorado Counsel for Agrium U.S. Inc. At the Closing Time, the
Representative shall have received the favorable opinion dated as of the Closing Time, of special
Colorado counsel for Agrium U.S. Inc. acceptable to the Representative, together with signed or
reproduced copies of such opinion for each of the other Underwriters, in form and substance
reasonably satisfactory to counsel for the Underwriters.
(f) Opinion of Special Argentina Counsel for Profertil S.A. At the Closing Time, the
Representative shall have received the favorable opinion dated as of the Closing Time, of special
Argentina counsel for Profertil S.A. acceptable to the Representative, together with signed or
reproduced copies of such opinion for each of the other Underwriters, in form and substance
reasonably satisfactory to counsel for the Underwriters.
(g) Opinion of Special Spanish Counsel for Agrium Investments Spain, S.L.U. At the Closing
Time, the Representative shall have received the favorable opinion dated as of the
Closing Time, of special Spanish counsel for Agrium Investments Spain, S.L.U. acceptable to
the Representative, together with signed or reproduced copies of such opinion for each of the other
Underwriters, in form and substance reasonably satisfactory to counsel for the Underwriters.
(h) Opinion and 10b-5 Statement of Canadian Counsel for the Underwriters. At the Closing Time,
the Representative shall have received the favorable opinion and Rule 10b-5 negative assurance
statement, dated as of the Closing Time, of ▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP, Canadian counsel for the
Underwriters. In giving such opinion such counsel may rely, as to certain matters relating to the
Company, upon the opinion of Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP and, as to all other matters governed by
the laws of Qualifying Provinces other than the Province of Alberta and the federal laws of Canada,
upon the opinions of counsel satisfactory to the Representative. 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 its subsidiaries and certificates of public
officials.
(i) Opinion and 10b-5 Statement of U.S. Counsel for the Underwriters. At the Closing Time, the
Representative shall have received the favorable opinion and Rule 10b-5 negative assurance
statement, dated as of the Closing Time, of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, United States
counsel for the Underwriters. Such counsel may 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 its subsidiaries and certificates of public officials.
(j) Officers’ Certificate. At the Closing Time, there shall not have been, since the date
hereof or since the respective dates as of which information is given in the General Disclosure
Package and the Final Prospectuses, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the ordinary course of
business, and the Representative shall have received a certificate of the President or a Vice
President of the Company and of the chief financial officer or chief accounting officer of the
Company, dated as of Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1(a) hereof are true and correct with
the same force and effect as though expressly made at and as of the Closing Time, (iii) the Company
has complied with all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Time, (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have been instituted or
are pending or, to the knowledge of the Company, are contemplated by the Commission, and (v) no
order having the effect of ceasing or suspending the distribution of the Offered Shares shall have
been issued and no proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Company, are contemplated by the Qualifying Authorities.
(k) Accountant’s Comfort Letter. At the time of the execution of this Agreement, the
Representative shall have received (i) from KPMG LLP, a letter dated such date, in form and
substance satisfactory to the Representative, together with signed or reproduced copies of such
letter for each of the other Underwriters containing statements and information of the type
ordinarily included in accountants’ “comfort letters” to U.S. and Canadian underwriters with
respect to the financial statements and certain financial information relating to the Company and
the pro forma financial statements and certain pro forma financial information included or
incorporated by reference in the General Disclosure Package and (ii) from Deloitte & Touche LLP, a
letter dated such date, in form and substance satisfactory to the Representative, together with
signed or reproduced copies of such letter for each of the other Underwriters containing statements
and information of the type ordinarily included in accountants’ “comfort letters” to U.S. and
Canadian underwriters with respect to the financial statements and certain financial information of
UAP included or incorporated by reference in the General Disclosure Package.
(l) Bring-down Comfort Letter. At the Closing Time, the Representative shall have received (i)
from KPMG LLP, a letter dated such date, in form and substance satisfactory to the Representative,
together with signed or reproduced copies of such letter for each of the other Underwriters
containing statements and information of the type ordinarily included in accountants’ “comfort
letters” to U.S. and Canadian underwriters with respect to the financial statements and certain
financial information relating to the Company and the pro forma financial statements and certain
pro forma financial information included or incorporated by reference in the Final Prospectuses and
(ii) from Deloitte & Touche LLP, a letter dated such date, in form and substance satisfactory to
the Representative, together with signed or reproduced copies of such letter for each of the other
Underwriters containing statements and information of the type ordinarily included in accountants’
“comfort letters” to U.S. and Canadian underwriters with respect to the financial statements and
certain financial information of UAP included or incorporated by reference in the Final
Prospectuses.
(m) Approval of Listing. At the Closing Time, the Offered Shares shall have been (A) listed
and admitted and authorized for trading on the NYSE subject to notice of official issuance, and (B)
conditionally approved for listing on the TSX, subject only to satisfaction by the Company of
customary listing conditions on or before March 7, 2008, and in each case satisfactory evidence of
such actions shall have been provided to the Representative.
(n) Lock-up Agreements. At the date of this Agreement, the Representative shall have received
agreements substantially in the form of Schedule E hereto signed by the persons listed on Schedule
D hereto.
(o) Agent for Service. Prior to the Closing Time, the Company shall have furnished to the
Representative satisfactory evidence of its due and valid authorization of CT Corporation System as
its agent to receive service of process in the United States pursuant to Section 12 hereof and
satisfactory evidence of CT Corporation System accepting its appointment as such agent.
(p) Conditions to Purchase of Over-Allotment Shares. In the event that the Underwriters
exercise their option provided in Section 2(b) hereof to purchase all or any portion of the
Over-Allotment Shares, the representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company and any Subsidiary hereunder shall be true
and correct as of each Date of Delivery and, at the relevant Date of Delivery, the Representative
shall have received:
(i) Officers’ Certificate. A certificate, dated such Date of Delivery, of the
President and Chief Executive Officer of the Company and of the Chief Financial Officer
of the Company confirming that the certificate delivered at the Closing Time pursuant
to Section 6(j) hereof remains true and correct as of such Date of Delivery.
(ii) Opinion of Canadian Counsel for Company. The favorable opinion of Blake,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, Canadian counsel for the Company, in form and substance satisfactory
to counsel for the Underwriters, dated such Date of Delivery, relating to the Over-Allotment
Shares to be purchased on such Date of Delivery and otherwise to the same effect as the
opinion required by Section 6(b) hereof.
(iii) Opinion of General Counsel for the Company. The favorable opinion of
▇▇▇▇▇▇ ▇’▇▇▇▇▇▇▇▇, general counsel of the Company, in form and substance satisfactory to
counsel for the Underwriters, dated such Date of Delivery, relating to the Over-Allotment
Shares to be purchased on such Date of Delivery and otherwise to the same effect as the
opinion required by Section 6(c) hereof
(iv) Opinion of United States Counsel for Company. The favorable opinion of
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, United States counsel for the Company, in form
and substance satisfactory to counsel for the Underwriters, dated such Date of Delivery,
relating to the Over-Allotment Shares to be purchased on such Date of Delivery and otherwise
to the same effect as the opinion required by Section 6(d) hereof.
(v) Opinion of Special Colorado Counsel for Agrium U.S. Inc. The favorable
opinion of special Colorado counsel for Agrium U.S. Inc., in form and substance satisfactory
to counsel for the Underwriters, dated such Date of Delivery, relating to the Over-Allotment
Shares to be purchased on such Date of Delivery and otherwise to the same effect as the
opinion required by Section 6(e) hereof.
(vi) Opinion of Special Argentina Counsel for Profertil S.A. The favorable
opinion of special Argentina counsel for Profertil S.A., in form and substance satisfactory
to counsel for the Underwriters, dated such Date of Delivery, relating to the Over-Allotment
Shares to be purchased on such Date of Delivery and otherwise to the same effect as the
opinion required by Section 6(f) hereof.
(vii) Opinion of Special Spanish Counsel for Agrium Investments Spain, S.L.U.
The favorable opinion of special Spanish counsel for Agrium Investments Spain, S.L.U., in
form and substance satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Over-Allotment Shares to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 6(g) hereof.
(viii) Opinion of Canadian Counsel for the Underwriters. The favorable opinion
of ▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP, counsel for the Underwriters, dated such Date of Delivery, relating to
the Over-Allotment Shares to be purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 6(h) hereof.
(ix) Opinion of United States Counsel for the Underwriters. The favorable
opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, United States counsel for the
Underwriters, dated such Date of Delivery, relating to the Over-Allotment Shares to be
purchased on such Date of Delivery and otherwise to the same effect as the opinion
required by Section 6(i) hereof.
(x) Bring-down Comfort Letters. A letter from each of KPMG LLP and Deloitte &
Touche LLP, in form and substance satisfactory to the Representative and dated such Date of
Delivery, substantially in the same form and substance as the letter furnished to the
Representative pursuant to Section 6(l) hereof, except that the “specified date” in the
letter furnished pursuant to this paragraph shall be a date not more than three days prior
to such Date of Delivery.
(q) Additional Documents. At the Closing Time and at each Date of Delivery, counsel for the
Underwriters shall have been furnished with such documents and opinions as they may require for the
purpose of enabling them to pass upon the issuance and sale of the Offered Shares as herein
contemplated, or in order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of the Offered Shares as herein contemplated shall
be satisfactory in form and substance to the Representative and counsel for the Underwriters.
(r) Termination of Agreement. If any condition specified in this Section 6 shall not have been
fulfilled when and as required to be fulfilled, this Agreement, or, in the case of any condition to
the purchase of Over-Allotment Shares on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Over-Allotment Shares, may be
terminated by the Representative by notice to the Company at any time at or prior to the Closing
Time, or such Date of Delivery, as the case may be, and such termination shall be without liability
of any party to any other party except as provided in Section 5 and except that Sections 1, 7, 8
and 9 shall survive any such termination and remain in full force and effect. The Underwriters may
waive in whole or in part or extend the time for compliance with any such terms and conditions
without prejudice to their rights in respect of any other of such terms or conditions or any other
or subsequent breach or non-compliance, provided that to be binding on the Underwriters any such
waiver or extension must be in writing.
SECTION 7. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to indemnify and hold harmless each
Underwriter and each of their respective broker-dealer affiliates, its selling agents and each
person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, arising out of any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Preliminary Prospectuses, the Final
Prospectuses, any Issuer Free Writing Prospectus, the General Disclosure Package, or any
Supplementary Material (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not
misleading, or any misrepresentation (as defined under Canadian securities laws) contained
therein;
(ii) against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or threatened, or
of any claim whatsoever based upon any such untrue statement, omission or misrepresentation,
or any such alleged untrue statement, omission or misrepresentation; provided that (subject
to Section 7(d) below) any such settlement is effected with the written consent of the
Company;
(iii) against any and all expense whatsoever reasonably incurred, as incurred
(including the fees and disbursements of U.S. and Canadian counsel chosen by the
Representative), in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement, omission or misrepresentation, or
any such alleged untrue statement, omission or misrepresentation, to the extent that any
such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the Representative expressly for
use in the Registration Statement (or any amendment thereto), the Preliminary Prospectuses, the
Final Prospectuses, any Issuer Free Writing Prospectus, the General Disclosure Package or any
Supplementary Material (or any amendment or supplement thereto).
(b) Indemnification of Company, Directors and Officers. Each Underwriter severally agrees to
indemnify and hold harmless the Company, its directors, each of its officers who signed the
Registration Statement, the Canadian Preliminary Prospectus and the Canadian Final Prospectus, and
each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage and expense described
in the indemnity contained in subsection (a) of this Section 7, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), the Preliminary Prospectuses, the Final
Prospectuses, any Issuer Free Writing Prospectus, the General Disclosure Package, or any
Supplementary Material (or any amendment or supplement thereto) in reliance upon and in conformity
with written information furnished to the Company by such Underwriter through the Representative
expressly for use therein.
(c) Actions Against Parties; Notification. Each indemnified party shall give notice as
promptly as reasonably practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party
shall not relieve such indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it from
any liability which it may have otherwise than on account of this indemnity agreement. In the
case of parties indemnified pursuant to Section 7(a) above, counsel to the indemnified parties
shall be selected by the Representative, and, in the case of parties indemnified pursuant to
Section 7(b) above, counsel to the indemnified parties shall be selected by the Company. An
indemnifying party may participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any judgment with respect to
any litigation, or any investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or contribution could be
sought under this Section 7 or Section 8 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out of such litigation,
investigation, proceeding 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) Settlement without Consent if Failure to Reimburse. If at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature
contemplated by Section 7(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into, and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request prior to the date of such
settlement. Notwithstanding the immediately preceding sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, an indemnifying party shall not be liable for any settlement of the nature contemplated
by Section 7(a)(ii) effected without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent it considers such request to be
reasonable and (ii) provides written notice to the indemnified party substantiating the unpaid
balance as unreasonable, in each case prior to the date of such settlement.
SECTION 8. Contribution. If the indemnification provided for in Section 7 hereof is
for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of
any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying
party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and
expenses incurred by such indemnified party, as incurred, (i) 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 hand from the offering of the Offered Shares pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i) above but also the
relative fault of
the Company on the one hand and of the Underwriters on the other hand in connection with the
statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, 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 hand in connection with the offering of the Offered Shares pursuant to this Agreement shall
be deemed to be in the same respective proportions as the total net proceeds from the offering of
the Offered Shares pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting commission received by the Underwriters, in each case as set forth on
the cover of the Final Prospectuses, bear to the aggregate initial public offering price of the
Offered Shares as set forth on the cover of the Final Prospectuses.
The relative fault of the Company on the one hand and the Underwriters on the other hand shall
be determined by reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters 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 Section 8 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 Section 8. The aggregate amount
of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred
to above in this Section 8 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged
omission.
Notwithstanding the provisions of this Section 8, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which the Offered Shares
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 any such untrue
or alleged untrue statement or omission or alleged omission or misrepresentation.
No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
For purposes of this Section 8, each person, if any, who controls an Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each Underwriter’s
affiliates as such term is defined in Rule 501(b) under the 1933 Act (each, an “Affiliate”) and
selling agents shall have the same rights to contribution as such Underwriter, and each director of
the Company, each officer of the Company who signed the Registration Statement or the Canadian
Preliminary Prospectus or the Canadian Final Prospectus, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company. The Underwriters’ respective
obligations to contribute pursuant to this Section 8 are several in proportion to the number of
Initial Shares set forth opposite their respective names in Schedule A hereto and not joint.
SECTION 9. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement or in certificates of
officers of the Company or any of its Subsidiaries submitted pursuant hereto, shall remain
operative and in full force and effect regardless of (i) any investigation made by or on behalf of
any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter, its
officers or directors or any person controlling the Company, and (ii) delivery of and payment for
the Offered Shares.
SECTION 10. Termination of Agreement.
(a) Termination, General. In addition to any other remedies which may be available to the
Underwriters, the Underwriters (collectively or any one of them) may, at their option, without any
further liability on their part, terminate and cancel their obligations under this Agreement by
notice to the Company at any time at or prior to the Closing Time:
(i) if there occurs any material adverse change in the condition, financial or otherwise, or
in the earnings business affairs or business prospects of the Company and its subsidiaries,
considered as one enterprise, whether or not arising in the ordinary course of business,
which, in the reasonable opinion of the Underwriters (or any one of them), would be expected
to (A) have a material adverse effect on the market price or value of the Offered Shares or
any other securities of the Company, or (B) prevent, suspend or restrict or adversely affect
the trading in, or the distribution of, the Offered Shares or any other securities of the
Company;
(ii) if there has occurred any event, action, state, condition or major financial occurrence
of national or international consequence (including any act of terrorism, war or like
event), or any governmental action, law, regulation, inquiry or similar occurrence, which,
in the reasonable opinion of the Underwriters (or any one of them), seriously adversely
affects or may seriously adversely affect the financial markets in Canada or the United
States or the business, operations or affairs of the Company and its subsidiaries,
considered as one enterprise;
(iii) as a result of investigations after the date hereof, the Underwriters (or any one of
them) determine that there exists any fact or circumstance which existed prior to the date
hereof and had not been disclosed prior to the date hereof, which, in the reasonable opinion
of the Underwriters (or any one of them), would be expected to (A) have a material adverse
effect on the market price or value of the Offered Shares or any other securities of the
Company, or (B) prevent, suspend or restrict or adversely affect the trading in, or the
distribution of, the Offered Shares or any other securities of the Company;
(iv) if any inquiry, suit, investigation or other proceeding is commenced, announced or
threatened or any order is issued under or pursuant to any relevant statute or by any stock
exchange or other regulatory authority or there is any change of law, interpretation or
administration thereof, which, in the reasonable opinion of the Underwriters (or any one of
them), operates or could operate to prevent, suspend or restrict or adversely affect the
trading in, or the distribution of, the Offered Shares or any other securities of the
Company.
(v) the Company shall be in breach of, default under or non-compliance with any material
representation, warranty, covenant, term or condition of this Agreement;
(vi) a material disruption has occurred in commercial banking or securities settlement or
clearance services in the United States or Canada;
(vii) if a banking moratorium has been declared by either the United States federal, New
York state or Canadian federal or provincial authorities; or
(viii) if there has been a material change in the terms of the Merger Agreement or the
Merger Agreement is terminated.
(b) Liabilities. If this Agreement is terminated pursuant to this Section 10, such termination
shall be without liability of any party to any other party except as provided in Section 5 hereof,
and that Sections 1, 7, 8, 9 and 12 shall survive such termination and remain in full force and
effect.
SECTION 11. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at the Closing Time or a Date of Delivery to purchase the Offered Shares
which it or they are obligated to purchase under this Agreement (the “Defaulted Securities”), the
Representative shall have the right, within 24 hours thereafter, to make arrangements for one or
more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less
than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms
herein set forth; if, however, the Representative shall not have completed such arrangements within
such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the number of Offered Shares
to be purchased on such date, each of the non-defaulting Underwriters shall be obligated, severally
and not jointly, to purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of Offered Shares to be
purchased on such date, this Agreement or, with respect to any Date of Delivery which occurs after
the Closing Time, the obligation of the Underwriters to purchase and of the Company to sell the
Over-Allotment Shares to be purchased and sold on such Date of Delivery, shall terminate without
liability on the part of any non-defaulting Underwriter or the Company
No action taken pursuant to this Section 11 shall relieve any defaulting Underwriter from
liability in respect of its default.
In the event of any such default which does not result in a termination of this Agreement or,
in the case of a Date of Delivery which is after the Closing Time, which does not result in a
termination of the obligation of the Underwriters to purchase and the Company to sell the relevant
Over-Allotment Shares, as the case may be, either the Representative or the Company shall have the
right to postpone the Closing Time or the relevant Date of Delivery, as the case may be, for a
period not exceeding seven days to the extent such delay is necessary to effect any required
changes in the Registration Statement, the U.S. Prospectus or the Canadian Prospectus or in any
other material documents. As used herein, the term “Underwriter” includes any person substituted
for an Underwriter under this Section 11.
SECTION 12. Agent for Service; Submission to Jurisdiction; Waiver of Immunities. By
the execution and delivery of this Agreement, the Company (i) acknowledges that it has, by separate
written instrument, irrevocably designated and appointed CT Corporation System (or any successor)
(together with any successor, the “Agent for Service”), as its authorized agent upon which process
may be served in any suit or proceeding arising out of or relating to this Agreement that may be
instituted in any federal or state court in the State of New York, or brought under federal or
state securities laws, and acknowledges that the Agent for Service has accepted such designation,
(ii) submits to the jurisdiction of any such court in any such suit or proceeding, and (iii) agrees
that service of process upon the Agent for Service (or any successor) and written notice of said
service to the Company (mailed or delivered to its Corporate Secretary at its principal office in
Calgary, Alberta, Canada), shall be deemed in every respect effective service of process upon the
Company in any such suit or proceeding. The Company further agrees to take any and all action,
including the execution and filing of any and all such documents and instruments, as may be
necessary to continue such designation and appointment of the Agent for Service in full force and
effect so long as any of the Offered Shares shall be outstanding.
To the extent that the Company has acquired or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service of notice, attachment
prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself
or its property, it hereby irrevocably waives such immunity in respect of its obligations under the
above-referenced documents, to the extent permitted by law.
The provisions of this Section 12 shall survive any termination of this Agreement, in whole or
in part.
SECTION 13. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by any standard form
of telecommunication. Notices to the Underwriters shall be directed to the Representative at RBC
Dominion Securities Inc., ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ Bank Plaza, 4th Floor, South Tower
Toronto, Ontario M5J 2W7, attention of ▇▇▇▇▇▇ ▇. ▇▇▇▇; and notices to the Company shall be directed
to it at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇, attention of Corporate
Secretary.
SECTION 14. No Advisory or Fiduciary Relationship. The Company acknowledges and
agrees that (a) the purchase and sale of the Offered Shares pursuant to this Agreement, including
the determination of the public offering price of the Offered Shares and any related discounts and
commissions, is an arm’s-length commercial transaction between the Company, on the one hand,
and the several Underwriters, on the other hand, (b) in connection with the offering contemplated
hereby each Underwriter is and has been acting solely as a principal and not as the agent or
fiduciary of the Company or its shareholders, creditors, employees or any other party, (c) no
Underwriter has assumed or will assume an advisory or fiduciary responsibility in favor of the
Company with respect to the offering contemplated hereby or the process leading thereto
(irrespective of whether such Underwriter has advised or is currently advising the Company on other
matters) and no Underwriter has any obligation to the Company with respect to the offering
contemplated hereby except the obligations expressly set forth in this Agreement, (d) the
Underwriters and their respective affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Company, and (e) the Underwriters have not provided
any legal, accounting, regulatory or tax advice with respect to the offering contemplated hereby
and the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent
it deemed appropriate.
SECTION 15. Integration. This Agreement supersedes all prior agreements and
understandings (whether written or oral) between the Company and the Underwriters, or any of them,
with respect to the subject matter hereof.
SECTION 16. Parties. This Agreement shall inure to the benefit of and be binding upon
the Underwriters and the Company and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or corporation, other
than the Underwriters and the Company and their respective successors and the controlling persons
and officers and directors referred to in Sections 7 and 8 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Underwriters and the Company
and their respective successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Offered Shares from any Underwriter shall be deemed to be a successor by reason merely
of such purchase.
SECTION 17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 18. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS OTHERWISE
SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same Agreement.
SECTION 20. Effect of Headings. The Section headings herein are for convenience only
and shall not affect the construction hereof.
If the foregoing is in accordance with your understanding of our agreement, please sign and
return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts,
will become a binding agreement between the Underwriters and the Company in accordance with its
terms.
| Very truly yours, | ||||||
| AGRIUM INC. | ||||||
| By | “▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇” | |||||
| Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |||||
| Title: | Vice-President & Treasurer | |||||
| By: | “▇▇▇▇ ▇. ▇▇▇▇▇▇” | |||||
| Name: | ▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||||
| Title: | Assistant Corporate Secretary | |||||
CONFIRMED AND ACCEPTED
as of the date first above written:
as of the date first above written:
| RBC DOMINION SECURITIES INC. | CREDIT SUISSE SECURITIES (CANADA), INC. | |||||||
By
|
“▇▇▇▇▇▇ ▇. ▇▇▇▇” | By | “▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇” | |||||
Name:
|
▇▇▇▇▇▇ ▇. ▇▇▇▇ | Name: | ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ | |||||
Title:
|
Managing Director | Title: | Director | |||||
| ▇▇▇▇▇▇▇ ▇▇▇▇▇ CANADA INC. | NATIONAL BANK FINANCIAL INC. | |||||||
By
|
“▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇” | By | “▇▇▇▇ ▇▇▇▇▇” | |||||
Name:
|
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | Name: | ▇▇▇▇ ▇▇▇▇▇ | |||||
Title:
|
Director, Investment Banking | Title: | Director | |||||
| SCOTIA CAPITAL INC. | CIBC WORLD MARKETS INC. | |||||||
By
|
“▇▇▇▇▇▇ ▇. ▇▇▇▇▇” | By | “▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇” | |||||
Name:
|
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||||
Title:
|
Managing Director | Title: | Managing Director | |||||
| UBS SECURITIES CANADA INC. | TD SECURITIES INC. | |||||||
By
|
“▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇” | By | “▇▇▇▇ ▇▇▇▇▇▇▇” | |||||
Name:
|
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | Name: | ▇▇▇▇ ▇▇▇▇▇▇▇ | |||||
Title:
|
Managing Director | Title: | Managing Director | |||||
| BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ INC. | ||||||||
By
|
“▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇” | |||||||
Name:
|
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |||||||
Title:
|
Managing Director | |||||||
SCHEDULE A
| Name of Underwriter | Number of Initial Shares | |||
RBC Dominion Securities Inc. |
6,465,509 | |||
▇▇▇▇▇▇▇ ▇▇▇▇▇ Canada Inc. |
3,232,755 | |||
Scotia Capital Inc. |
3,232,755 | |||
UBS Securities Canada Inc. |
3,232,755 | |||
BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc. |
2,155,170 | |||
Credit Suisse Securities (Canada), Inc. |
1,077,585 | |||
National Bank Financial Inc. |
1,077,585 | |||
CIBC World Markets Inc. |
538,793 | |||
TD Securities Inc. |
538,793 | |||
Total |
21,551,700 | |||
SCHEDULE B
| 1. | The public offering price per share for the Offered Shares shall be U.S.$58.00. | |
| 2. | The net purchase price per share for the Offered Shares to be paid by the several Underwriters shall be U.S.$55.825, being an amount equal to the public offering price set forth above less U.S.$2.175 per share, representing the underwriting commission payable by the Company to the Underwriters for underwriting the Offered Shares; provided that the purchase price per share for any Over- Allotment Shares purchased upon the exercise of the over-allotment option described in Section 2(b) shall be reduced by an amount per share equal to any dividends or distributions declared by the Company and payable on the Initial Shares but not payable on the Over-Allotment Shares. | |
| 3. | The number of Initial Shares to be sold by the Company is: 21,551,700 | |
| 4. | The number of Over-Allotment Shares to be sold by the Company is: 2,155,100 |
SCHEDULE C
| A. | LIST OF ISSUER GENERAL USE FREE WRITING PROSPECTUSES |
None.
| B. | LIST OF ISSUER FREE WRITING PROSPECTUSES |
None.
SCHEDULE D
LIST OF PERSONS/ENTITIES EXECUTING LOCK-UP LETTERS
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
D. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Dr. ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇’▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
SCHEDULE E
FORM OF LOCK-UP LETTER
December , 2007
RBC Dominion Securities Inc.
as Representative of the several Underwriters
as Representative of the several Underwriters
| c/o | RBC Dominion Securities Inc. | |||
| ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ Bank Plaza | ||||
| ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ | ||||
| ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ | ||||
| Re: | Proposed Public Offering by Agrium Inc. | |||
Ladies and Gentlemen:
The undersigned, an officer and/or director of Agrium Inc., a corporation existing under the
laws of Canada (the “Company”), understands that RBC Dominion Securities Inc. (“RBC”) proposes to
enter into an Underwriting Agreement (the “Underwriting Agreement”) with the Company providing for
the public offering of common shares, no par value, of the Company (“Common Shares”). In
recognition of the benefit that such an offering will confer upon the undersigned as an officer
and/or director of the Company, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees with each underwriter to be
named in the Underwriting Agreement that, during a period of 60 days from the date of the Final
Prospectuses (as defined in the Underwriting Agreement), the undersigned will not, without the
prior written consent of RBC, directly or indirectly, (i) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant for the sale of, or otherwise dispose of or transfer any Common Shares or any
securities convertible into or exchangeable or exercisable for Common Shares, whether now owned or
hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter
acquires the power of disposition, or file, or cause to be filed, any registration statement under
the Securities Act of 1933, as amended, or prospectus under applicable Canadian securities laws
with respect to any of the foregoing (collectively, the “Lock-Up Securities”) or (ii) enter into
any swap or any other agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Lock-Up Securities, whether any such swap
or transaction is to be settled by delivery of Common Shares or other securities, in cash or
otherwise.
Notwithstanding the foregoing, and subject to the conditions below, the undersigned may
transfer the Lock-Up Securities without the prior written consent of RBC, provided that (1) RBC
receives a signed lock-up agreement for the balance of the lockup period from each donee, trustee,
distributee, or transferee, as the case may be, and (2) any such transfer shall not involve a
disposition for value:
| a) | as a bona fide gift or gifts; or |
| b) | to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned (for purposes of this lock-up agreement, “immediate family” shall have the meaning set forth in Multilateral Instrument 52-110); or | ||
| c) | as a distribution to limited partners or stockholders of the undersigned; or | ||
| d) | to the undersigned’s affiliates or to any investment fund or other entity controlled or managed by the undersigned; or | ||
| e) | to any beneficiary of the undersigned pursuant to a will or other testamentary document or applicable laws of descent. |
Notwithstanding the foregoing, if:
(1) during the last 17 days of the 60-day lock-up period, the Company issues an earnings
release or material news or a material event relating to the Company occurs; or
(2) prior to the expiration of the 60-day lock-up period, the Company announces that it will
release earnings results or becomes aware that material news or a material event will occur during
the 16-day period beginning on the last day of the 60-day lock-up period,
the restrictions imposed by this lock-up agreement shall continue to apply until the expiration of
the 18-day period beginning on the date of issuance of the earnings release or the date of
occurrence of the material news or material event, as applicable, unless RBC waives, in writing,
such extension; provided that in no event shall any such extension of the 60-day lock-up period
exceed the 34th day following the originally contemplated end of such period.
The undersigned agrees that, prior to engaging in any transaction or taking any other action
that is subject to the terms of this lock-up agreement during the period from the date of this
lock-up agreement to and including the 34th day following the expiration of the initial
60-day lock-up period, it will give notice thereof to the Company and will not consummate such
transaction or take any such action unless it has received written confirmation from the Company
that the 60-day lock-up period (as may have been extended pursuant to the previous paragraph) has
expired.
The undersigned also agrees and consents to the entry of stop transfer instructions with the
Company’s transfer agent and registrar against the transfer of the Lock-Up Securities except in
compliance with the foregoing restrictions.
If for any reason, (i) the Underwriting Agreement shall be terminated prior to the Closing
Time (as defined in the Underwriting Agreement), (ii) the Board of Directors of the Company and the
Representative agree not to pursue the offering contemplated by the Underwriting Agreement or (iii)
the Underwriting Agreement is terminated in accordance with its terms prior to the end of the
60-day lock-up period, the agreement set forth in this letter will be terminated and the
undersigned will be released from its obligations hereunder.
| Very truly yours, | ||||
| Signature: | ||||
| Print Name: | ||||