Exhibit 99.3
NORTEL NETWORKS CORPORATION
25,000 PURCHASE CONTRACTS
UNDERWRITING AGREEMENT
June 6, 2002
Credit Suisse First Boston Corporation
X.X. Xxxxxx Securities Inc.
Xxxxxxx Xxxxx Barney Inc.
AS REPRESENTATIVES OF THE SEVERAL UNDERWRITERS
c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. Nortel Networks Corporation, a Canadian corporation
(the "COMPANY"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the several Underwriters named in Schedule A hereto
(collectively, the "UNDERWRITERS") 25,000 of its prepaid forward purchase
contracts (the "PURCHASE CONTRACTS") (the "FIRM SECURITIES") and, at the
election of Credit Suisse First Boston Corporation ("CSFBC"), X.X. Xxxxxx
Securities Inc. and Xxxxxxx Xxxxx Barney Inc. (together with CSFBC, the
"REPRESENTATIVES"), sell to the Underwriters an aggregate of up to an additional
3,750 Purchase Contracts (the "OPTIONAL SECURITIES") (the Firm Securities and
the Optional Securities which the Underwriters may elect to purchase pursuant to
Section 3 hereof are herein collectively called the "OFFERED SECURITIES"). Each
Purchase Contract shall entitle the holder to receive from the Company on August
15, 2005 a number of common shares (the "ISSUABLE COMMON SHARES"), no par value,
of the Company (the "COMMON SHARES") equal to the applicable Settlement Rate as
set forth in the Purchase Contract and Unit Agreement to be dated as of the
First Closing Date (as defined below) (the "PURCHASE CONTRACT AGREEMENT")
between the Company, Computershare Trust Company of Canada, as Purchase Contract
Agent (the "PURCHASE CONTRACT AGENT") and as transfer agent and registrar, and
the holders of Equity Units and Purchase Contracts from time to time (the
"HOLDERS"). Each Purchase Contract shall be one component of an equity unit (the
"EQUITY Unit") evidencing (a) one Purchase Contract and (b) ownership of
specified zero-coupon U.S. treasury securities that mature on a semi-annual
basis from February 15, 2003 through August 15, 2005 (together with that
holder's pro rata portion of zero-coupon U.S. treasury securities that mature on
August 15, 2002) (the "TREASURY STRIPS"), each having a principal amount of
U.S.$1,000, which Treasury Strips shall be acquired by CSFBC as contemplated by
the Purchase Contract Agreement and delivered to the Custodian on behalf
of the Holders to be received and held in accordance with the Custodial
Agreement (each as defined below).
The Treasury Strips will be held by Citibank N.A., as Custodian (the
"CUSTODIAN"), for the holders of the Equity Units, pursuant to a custodial
agreement to be dated as of the First Closing Date between the Purchase Contract
Agent, the Custodian and the holders of Equity Units from time to time
(the "CUSTODIAL AGREEMENT"). The Company hereby agrees with the several
Underwriters as follows:
2. (A) Representations, Warranties and Covenants of the Company. The
Company represents, warrants and covenants to, and agrees with, the Underwriters
that:
(a) A registration statement on Form S-3 (File number 333-88164)
with respect to common shares, preferred shares, debt securities, warrants
to purchase equity securities, warrants to purchase debt securities, share
purchase contracts and share purchase or equity units, which contemplates
an offering of Equity Units and/or Purchase Contracts, has been prepared
by the Company in conformity in all material respects with the
requirements of the United States Securities
Act of 1933 (the "ACT"), and the rules and regulations (the "RULES AND
REGULATIONS") of the Securities and Exchange Commission (the "SEC")
thereunder, has been filed with the SEC and has become effective. As used
in this Agreement: (i) "REGISTRATION STATEMENT" means such registration
statement (including all documents incorporated therein by reference), as
amended at the date of this Agreement; (ii) "BASIC PROSPECTUS" means the
prospectus (including all documents incorporated therein by reference)
included in the Registration Statement; and (iii) "U.S. PROSPECTUS" means
the Basic Prospectus, together with any amendments or supplements thereto,
including without limitation, any preliminary prospectus supplement and
any prospectus supplement (the "PROSPECTUS SUPPLEMENT") (including in each
case all documents incorporated therein by reference) specifically
relating to the Equity Units, as filed with the SEC pursuant to Rule
424(b) of the Rules and Regulations. The SEC has not issued any order
preventing or suspending the use of the U.S. Prospectus or the
distribution of securities thereunder, and, to the Company's knowledge, no
proceedings for such purpose are pending before, or threatened by, the
SEC.
(b) The Company has prepared and filed with the securities
regulatory authorities (collectively, the "CANADIAN SECURITIES
REGULATORS") in each of the provinces and territories of Canada
(collectively, the "QUALIFYING PROVINCES") in accordance with National
Instrument 44-101 - Short Form Prospectus Distributions (the "POP
PROCEDURES") and National Instrument 44-102 - Shelf Distributions (the
"SHELF PROCEDURES"), a preliminary short form base shelf prospectus dated
May 13, 2002 relating to common shares, preferred shares, debt securities,
warrants to purchase equity securities, warrants to purchase debt
securities, share purchase contracts and share purchase or equity units
(in the English and French languages, as applicable, the "CANADIAN
PRELIMINARY PROSPECTUS") and has obtained a preliminary decision document
(the "DECISION DOCUMENT") dated May 14, 2002 from the Ontario Securities
Commission (the "OSC"), in its capacity as principal regulator pursuant to
the mutual reliance review system procedures provided for under National
Policy 43-201 - Mutual Reliance Review System for Prospectuses and Annual
Information Forms of the Canadian Securities Regulators (the "MRRS").
(c) The Company has prepared and filed in the Qualifying Provinces,
in accordance with the POP Procedures and the Shelf Procedures, a final
short form base shelf prospectus dated May 29, 2002 relating to common
shares, preferred shares, debt securities, warrants to purchase equity
securities, warrants to purchase debt securities, share purchase contracts
and share purchase or equity units (in the English and French languages,
as applicable, the "CANADIAN FINAL PROSPECTUS") and has obtained a final
Decision Document dated May 30, 2002 from the OSC, in its capacity as
principal regulator pursuant to the MRRS on behalf of the Canadian
Securities Regulators.
(d) The Company has also prepared and delivered to the Underwriters
as contemplated by Section 2(o) hereof a preliminary prospectus supplement
dated June 3, 2002 to the Canadian Final Prospectus relating to the
Equity Units (the "CANADIAN PRELIMINARY SUPPLEMENT") in both the English
and French languages. The Company will prepare and file in the Qualifying
Provinces, in accordance with the Shelf Procedures, promptly, and
in any event within the earlier of: (A) the date the final prospectus
supplement to the Canadian Final Prospectus relating to the Equity Units
(the "CANADIAN FINAL SUPPLEMENT") is first sent or delivered to a
purchaser; and (B) two Business Days after the execution and delivery of
this Agreement, the Canadian Final Supplement, in both the English and
French languages, setting forth the Shelf Information (defined below). The
information, if any, included in the Canadian Final Supplement that is
omitted from the Canadian Final Prospectus but that is deemed under the
Shelf Procedures to be incorporated by reference into the Canadian Final
Prospectus as of the date of the Canadian Final Supplement is referred to
as the "SHELF INFORMATION". "CANADIAN PROSPECTUS" means the Canadian Final
Prospectus, together with the Canadian Final Supplement, including the
documents incorporated by reference therein, provided that prior to the
filing of the Canadian Final Supplement in the Qualifying Provinces,
"Canadian Prospectus" shall mean the Canadian Final Prospectus, together
with the Canadian Preliminary Supplement, including the documents
incorporated by reference therein. The U.S. Prospectus and the Canadian
Prospectus are referred to collectively herein as the "PROSPECTUS". None
of the Canadian Securities Regulators has issued any order preventing or
suspending the use of the Canadian Prospectus or the distribution of
securities thereunder and, to the Company's
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knowledge, no proceedings for such purpose are pending before, or
threatened by, any Canadian Securities Regulator.
(e) The Registration Statement, as amended, as of the time it became
effective and as of the date of this Agreement and the U.S. Prospectus
complied and, in the case of any amendment or supplement to any such
document, or any material incorporated by reference in any such document
filed with the SEC after the date as of which this representation is being
made, will comply, in all material respects, at all times during the
period specified in Section 5(d) hereof and on the Closing Date, with the
provisions of the Act, the Rules and Regulations, the United States
Securities Exchange Act of 1934 (the "EXCHANGE ACT") and the rules and
regulations of the SEC thereunder. The Registration Statement, as of the
time it became effective and as of the date of this Agreement, did not and
will not at any time during the period specified in Section 5(d) hereof
and on the Closing Date, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
in order to make the statements made therein not misleading; and the U.S.
Prospectus, as amended or supplemented as of the date of this Agreement
and at the time the Registration Statement became effective, did not and
will not, at any time during the period specified in Section 5(d) and on
the Closing Date, contain 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. Notwithstanding the foregoing, the Company makes no
representation or warranty as to: (i) that part of the Registration
Statement that constitutes the Statements of Eligibility and
Qualifications under the Trust Indenture Act (Form T-1) of the Trustees;
or (ii) information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity with
written information furnished to the Company through the Representatives
by or on behalf of any Underwriter specifically for use therein, it being
understood and agreed that the only such information is that described as
such in Section 7(b) hereof.
(f) The issue and sale of the Offered Securities have been duly
authorized by the Company and, when the Offered Securities have been
delivered and paid for pursuant to this Agreement and the Purchase
Contract Agreement, the Offered Securities will have been duly executed,
issued and delivered by the Company. Such Offered Securities will conform
to the description thereof contained in the Prospectus with respect to the
obligations of the Company and the Offered Securities will constitute
valid and binding obligations of the Company, entitled to the benefits
provided in the Purchase Contract Agreement and enforceable in accordance
with their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability or
foreign governmental actions relating to or affecting creditors' rights
and to general equity principles.
(g) Assuming (i) the delivery of the Treasury Strips to the
Custodian by CSFBC for and on behalf of the Holders and (ii) that
the Treasury Strips conform to the description thereof contained in the
Prospectus, the Equity Units conform in all material respects to the
description thereof contained in the Prospectus.
(h) The Company has been duly incorporated under the laws of Canada
and is not discontinued and has not been dissolved; the Company has
corporate power and authority to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement and the Purchase Contract Agreement.
(i) The execution and delivery of the Purchase Contract Agreement
have been duly authorized by all necessary corporate action of the
Company, and assuming due authorization, execution and delivery thereof by
the other parties thereto, when executed and delivered by the Company,
will have been duly executed and delivered and will constitute a valid and
binding agreement of the Company, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability or
foreign governmental actions relating to or affecting creditors' rights
and to general equity principles.
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(j) The execution and delivery of this Agreement have been duly
authorized by all necessary corporate action of the Company, and this
Agreement constitutes a legal, valid and binding obligation of the
Company, enforceable against it in accordance with its terms.
(k) The Company is a "reporting issuer" (or equivalent thereof) in
each Qualifying Province where such concept exists not in default in any
material respect of any requirement under Canadian Securities Laws.
(l) The authorized capital of the Company is as set forth in the
Prospectus under "Description of Share Capital". No person has any
agreement or option, or right or privilege (whether pre-emptive or
contractual) capable of becoming an agreement or option, for the purchase
from the Company of any unissued shares, securities or warrants of the
Company except as otherwise described in the Prospectus and other than:
(i) issuances of stock options or issuances of Common Shares upon exercise
of stock options pursuant to compensation arrangements existing on the
date hereof, (ii) issuances required in connection with earnout payments
for acquisitions prior to the date hereof or upon the exercise of any
outstanding securities or rights convertible, exchangeable or exercisable
for Common Shares, or (iii) the Company's sale of Common Shares pursuant
to an underwriting agreement dated the same date as this Agreement.
(m) The Company is eligible to distribute securities pursuant to the
POP Procedures in each of the Qualifying Provinces.
(n) At the respective times of filing (or, in the case where a
Canadian Preliminary Supplement has been delivered to the Underwriters by
the Company, the date of such delivery) and at all times subsequent to the
filing thereof during the period of distribution or distribution to the
public, as the case may be, of the Equity Units in Canada, the Canadian
Prospectus (and any amendment thereto) will comply in all material
respects with the requirements of all applicable securities laws in each
of the Qualifying Provinces and the respective regulations made
thereunder, together with applicable published national and local policy
statements, rules, notices, blanket orders and blanket rulings of the
Canadian Securities Regulators (collectively, the "CANADIAN SECURITIES
LAWS"), and the Canadian Prospectus will provide full, true and plain
disclosure of all material facts relating to the Company and to the Equity
Units as required by Canadian Securities Laws, and the Canadian Prospectus
will not contain any misrepresentation (as defined in Canadian Securities
Laws) (provided that the foregoing representation and warranty of the
Company shall not apply, in each case, to the written information
furnished to the Company through the Representatives by or on behalf of
any Underwriter specifically for use in connection with the preparation of
the foregoing documents).
(o) The delivery by the Company to the Underwriters of commercial
copies of the Prospectus shall constitute the consent of the Company to
use such documents in connection with the distribution of the Offered
Securities evidenced by the Equity Units pursuant to the terms of this
Agreement.
(p) The Company has not filed any confidential material change
reports under Canadian Securities Laws since May 29, 2002.
(q) The Issuable Common Shares have been duly authorized for
issuance upon settlement of the Purchase Contracts and, when issued in
accordance with the terms of the Purchase Contracts, will be validly
issued, fully paid and nonassessable; and the shareholders of the Company
have no preemptive rights with respect to the Offered Securities or the
Issuable Common Shares.
(r) The issuance and sale by the Company of the Offered Securities,
the issuance of the Issuable Common Shares, the compliance by the Company
with all the provisions of the Offered Securities, this Agreement and the
Purchase Contract Agreement and the consummation by the Company of the
other transactions contemplated by this Agreement do not require the
consent, approval, authorization, order or qualification of, or filing or
registration with, any governmental
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body or regulatory authority in the United States or Canada, except for
(i) any consents, approvals or notifications under Canadian Securities
Laws (which consents or approvals the Company has applied for and
obtained); (ii) the filing of the Canadian Final Supplement with the
Canadian Securities Regulators and the Prospectus with the SEC; (iii)
required approvals, notices and filings to or with the Toronto Stock
Exchange (the "TSX") and the New York Stock Exchange (the "NYSE") (with
respect to Issuable Common Shares); and (iv) any qualifications required
under blue sky or state securities laws.
(s) The issuance and sale of the Offered Securities and the Issuable
Common Shares and the performance by the Company of all of its obligations
under the Offered Securities, the Purchase Contract Agreement and this
Agreement will not conflict with or result in a breach or violation of (i)
the constating documents or by-laws of the Company, or (ii) any of the
agreements to which the Company is a party filed as an exhibit to, or
incorporated by reference into the Registration Statement or the
Prospectus, other than any conflict, breach or violation which would
individually or in the aggregate not have a material adverse effect on the
financial condition, business, properties or results of operations of the
Company and its subsidiaries taken as a whole ("MATERIAL ADVERSE EFFECT").
(t) Except as disclosed in the Prospectus, to the knowledge of the
Company, there is no litigation, arbitration or legal proceeding involving
the Company or any of its subsidiaries that, if determined adversely to
the Company, would individually or in the aggregate have a Material
Adverse Effect, and no such litigation, arbitration or legal proceeding is
pending or threatened.
(u) Except as disclosed in the Prospectus, since the date of the
latest unaudited consolidated financial statements included or
incorporated by reference in the Prospectus, there has been no change, nor
any development or event involving a prospective change, which would
result in a Material Adverse Effect and, except as disclosed or
contemplated by the Prospectus, there has been no dividend or distribution
of any kind declared, paid or made by the Company on any class of its
capital stock.
(v) The Company is not and, after giving effect to the offering and
sale of the Offered Securities and the application of the proceeds thereof
as described in the Prospectus, will not be an "investment company" as
defined in the United States Investment Company Act of 1940.
(w) The historical consolidated financial statements (including the
related notes and supporting schedules) of the Company contained or
incorporated by reference in the Registration Statement and the Prospectus
comply in all material respects with the applicable requirements under the
Act, the Exchange Act (except that certain supporting schedules are
omitted) and Canadian Securities Laws; such consolidated financial
statements have been prepared in accordance with accounting principles
generally accepted in Canada and the United States noted therein and
fairly present the financial position of the Company at the respective
dates indicated and the results of its operations and its cash flows for
the respective periods indicated.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Company agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Company, at a purchase price of U.S.$22,542.53 per Firm Security, the
number of Firm Securities set forth opposite the names of the several
Underwriters in Schedule A. In consideration of the Underwriters' purchase of
the Firm Securities, the Company agrees to pay to the Underwriters on the First
Closing Date a commission of U.S.$857.13 per Firm Security, being an aggregate
fee of U.S.$21,428,250.
The Company will deliver against payment of the purchase price the Firm
Securities in the form of one or more permanent global securities (the "FIRM
GLOBAL SECURITIES") deposited with The Depository Trust Company ("DTC") and
registered in the name of Cede & Co., as nominee for DTC. Interests in any
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Firm Global Securities will be held only in book-entry form through DTC, except
in the limited circumstances described in the Prospectus. Payment for the Firm
Securities shall be made by the Representatives in Federal (same day) funds by
official check or checks or wire transfer to an account designated by the
Company at either of Citibank N.A. or Royal Bank of Canada (New York branch)
drawn to the order of Nortel Networks Corporation at the office of Cleary,
Gottlieb, Xxxxx & Xxxxxxxx, Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 8:30
A.M. (New York time), on June 12, 2002, or at such other time not later than
seven full Business Days ("BUSINESS DAY" means any day other than Saturday,
Sunday or other day on which commercial banks in the State of New York or the
chartered banks in the Province of Ontario are authorized or required by law or
executive order to close) thereafter as the Representatives and the Company
determine, such time being herein referred to as the "FIRST CLOSING DATE",
against delivery to DTC of the Firm Global Securities representing all of the
Firm Securities. The Firm Global Securities will be made available for checking
at the above office of Cleary, Gottlieb, Xxxxx & Xxxxxxxx at least 24 hours
prior to the First Closing Date.
In addition, upon written notice from the Representatives given to the
Company from time to time not more than 30 days subsequent to the date of this
Agreement, the Underwriters may purchase all or less than all of the Optional
Securities at the same purchase price per Optional Security as they pay for each
Firm Security. In consideration of the Underwriters' purchase of the Optional
Securities, the Company agrees to pay to the Underwriters on each Option Closing
Date (as defined below) the same commission for each Optional Security purchased
on that date as it pays for each Firm Security. The Company agrees to sell to
the Underwriters the number of Optional Securities specified in such notice and
the Underwriters agree, severally and not jointly, to purchase such Optional
Securities. Such Optional Securities shall be purchased from the Company by the
Underwriters on a pro rata basis according to the number of Firm Securities
purchased by each Underwriter. No Optional Securities shall be sold or delivered
unless the Firm Securities previously have been, or simultaneously are, sold and
delivered. The right to purchase the Optional Securities or any portion thereof
may be exercised from time to time and to the extent not previously exercised
may be surrendered and terminated at any time upon notice by the Representatives
to the Company.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as the "OPTION CLOSING DATE", which may be the First
Closing Date (the First Closing Date and each Option Closing Date, if any, being
sometimes referred to as a "CLOSING DATE"), shall be determined by the
Representatives but shall not be later than seven full business days after
written notice of election to purchase Optional Securities is given. The Company
will deliver against payment of the purchase price for the Optional Securities
the Optional Securities being purchased on each Option Closing Date in the form
of one or more permanent global securities in definitive form (each, an
"OPTIONAL GLOBAL SECURITY") deposited with DTC and registered in the name of
Cede & Co., as nominee for DTC. Payment for such Optional Securities shall be
made by the Representatives in Federal (same day) funds by official check or
checks or wire transfer to an account designated by the Company at either of
Citibank or Royal Bank of Canada (New York branch) drawn to the order of Nortel
Networks Corporation at the office of Cleary, Gottlieb, Xxxxx & Xxxxxxxx, Xxx
Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, against delivery to DTC of the Optional
Global Securities representing all of the Optional Securities being purchased on
such Option Closing Date.
The Company shall not be obligated to deliver any Offered Securities
except upon payment for all Offered Securities to be purchased pursuant to this
Agreement as herein provided.
4. Offering by Underwriters.
(a) It is understood that the Underwriters propose to offer the
Offered Securities for sale to the public as set forth in, and only
through, the Prospectus.
(b) The obligations of the Company to sell the Firm Securities on
the First Closing Date and the Optional Securities on each Option Closing
Date will be subject to receipt by the Purchase Contract Agent from the
Custodian of confirmation on the First Closing Date and on each
Option Closing Date of the Custodian's receipt of delivery from
CSFBC, on behalf of the Holders as contemplated in the Purchase Contract
Agreement, of
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sufficient Treasury Strips to constitute the Treasury Strip component, as
contemplated in the Purchase Contract Agreement, of the Equity Units to be
offered to the public on the First Closing Date or such Option Closing
Date, as the case may be.
(c) CSFBC will not purchase any Treasury Strips evidenced by the
Equity Units from itself or any of its affiliates.
5. Certain Agreements of the Company. The Company agrees with the
several Underwriters that:
(a) The Company (i) shall furnish promptly to the Representatives
and to counsel for the Underwriters a signed copy of the Registration
Statement as originally filed and a copy of each amendment thereto (in
each case together with all exhibits filed therewith) filed prior to or on
the date of this Agreement or related to or covering the Equity Units, and
a copy of the U.S. Prospectus filed with the SEC, and (ii) shall advise
the Representatives promptly of any proposal to amend or supplement the
Registration Statement or the U.S. Prospectus and will not effect such
amendment or supplementation without the Representatives' consent, which
shall not be unreasonably withheld.
(b) The Company shall deliver promptly to the Representatives,
without charge, such number of the following documents as the
Representatives may reasonably request: (i) conformed copies of the
Registration Statement (excluding exhibits thereto); (ii) the Prospectus;
and (iii) any documents incorporated by reference in the Prospectus; and
the Company authorizes the Underwriters and all dealers to whom any
Offered Securities may be offered or sold by the Underwriters to use such
documents during the period referred to in Section 5(d) in connection with
the sale of the Offered Securities in accordance with the applicable
provisions of the Act, the Rules and Regulations and Canadian Securities
Laws; provided that the Company shall be deemed to have complied with the
requirements of clause (iii) of this paragraph with respect to any
document filed electronically with the SEC or a Canadian Securities
Regulator.
(c) Promptly following the execution and delivery of this Agreement
(and concurrently with the execution of this Agreement in respect of those
opinions contemplated in (v) and (vi) below to be dated the date of the
Canadian Preliminary Supplement), the Company shall deliver to each of the
Underwriters:
(i) a copy of the Canadian Final Supplement in the English
language signed and certified;
(ii) a copy of the Canadian Final Supplement in the French
language signed and certified;
(iii) a copy of the certificates of authentication in respect
of the Canadian Final Prospectus and the Canadian Final Supplement
signed and certified as required by the Canadian Securities Laws;
(iv) a copy of any other document required to be filed by the
Company under the laws of each of the Qualifying Provinces in
compliance with the Canadian Securities Laws in connection with the
offering of the Equity Units;
(v) legal opinions dated the date of each of the Canadian
Preliminary Supplement and the Canadian Final Supplement, in form
and substance satisfactory to the Representatives, addressed to the
Underwriters, the Company and counsel to the Underwriters from
counsel to the Company to the effect that the French language
version of the Canadian Prospectus, except for the consolidated
financial statements and notes to such statements and the related
auditors' report on such statements and any financial information in
the Canadian Prospectus, including any such information contained in
any document incorporated by reference therein and certain other
information (collectively, the "FINANCIAL
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INFORMATION") and any exhibit to any document incorporated by
reference therein, as to which no opinion need be expressed by such
counsel, is, in all material respects, a complete and accurate
translation of the English language version thereof, and that the
English and French language versions are not susceptible of any
materially different interpretation with respect to any material
matter contained therein; and
(vi) opinions dated the date of each of the Canadian
Preliminary Supplement and the Canadian Final Supplement, in form
and substance satisfactory to the Representatives, addressed to the
Underwriters, the Company and their respective counsel from the
auditors of the Company to the effect that the French language
version of the Financial Information contained in the Canadian
Prospectus is, in all material respects, a complete and proper
translation of the English language version thereof.
(d) During such period following the date of this Agreement, (X) in
the case of the offering of the Equity Units in the United States, if in
the opinion of counsel for the Underwriters, a prospectus is required by
law to be delivered and (Y) in the case of the offering of the Equity
Units in the Qualifying Provinces, until the completion of distribution or
distribution to the public, as the case may be, the Company shall furnish
copies of: (i) any amendment to the Registration Statement; (ii) the
Prospectus or any amendment or supplement thereto; or (iii) any document
incorporated by reference in any of the foregoing or any amendment or
supplement to any such incorporated document to the Representatives and to
counsel for the Underwriters prior to filing any of such items with the
SEC or a Canadian Securities Regulator and shall not file any such item to
which the Representatives shall reasonably object; provided that despite
any such objection but after consultation with the Representatives,
including the furnishing to the Representatives of drafts thereof, the
Company may file any amendment, supplement, report or statement which in
the opinion of its counsel it is required to file pursuant to the Act, the
Exchange Act or Canadian Securities Laws.
(e) The Company shall advise the Representatives promptly: (i) when
any post-effective amendment to the Registration Statement related to or
covering the Offered Securities and the Issuable Common Shares becomes
effective; (ii) of any request by the SEC or a Canadian Securities
Regulator for an amendment or supplement (insofar as the amendment or
supplement relates to or covers the Offered Securities and the Issuable
Common Shares) to the Registration Statement, to the Prospectus, to any
document incorporated by reference in any of the foregoing or for any
additional information related to the Registration Statement (insofar as
such information relates to or covers the Offered Securities and the
Issuable Common Shares); (iii) the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or the issuance
of any order by the SEC or a Canadian Securities Regulator directed to the
Prospectus or any document incorporated therein by reference or the
initiation of any stop order proceeding or of any challenge to the
accuracy or adequacy of any document incorporated by reference in the
Prospectus (insofar as it relates to the Purchase Contracts and the
Issuable Common Shares); and (iv) of receipt by the Company of any
notification with respect to the suspension of the qualification of the
Equity Units for sale in any jurisdiction or the initiation of any
proceeding for that purpose. If at any time during the period referred to
in Section 5(d) when the Prospectus related to the Equity Units is
required to be delivered under the Act or under Canadian Securities Laws,
any event occurs as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of 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,
or if it shall be necessary to amend or supplement the Prospectus to
comply with the Act, the Rules and Regulations, the Exchange Act, or the
Canadian Securities Laws, the Company shall promptly prepare and file with
the SEC or a Canadian Securities Regulator, as the case may be, subject to
Section 5(d), an amendment or supplement that will correct such statement
or omission or an amendment or supplement which will effect such
compliance.
(f) If, during the period referred to in Section 5(d), the SEC or a
Canadian Securities Regulator shall issue a stop order suspending the
effectiveness of the Registration Statement or
8
retracting or suspending the use of the Prospectus, the Company shall make
every commercially reasonable effort to obtain the lifting of that order
at the earliest possible time.
(g) As soon as practicable, or in accordance with Rule 158 of the
Rules and Regulations, the Company shall make generally available to its
security holders and to the Representatives an earnings statement (which
need not be audited) of the Company and its consolidated subsidiaries,
that will satisfy the provisions of Section 11(a) of the Act and Rule 158
thereunder.
(h) The Company will pay all expenses incidental to the performance
of its obligations under this Agreement and the Purchase Contract
Agreement including (i) the fees and expenses of the Purchase Contract
Agent and its professional advisers; (ii) expenses in connection with the
execution, issue, authentication, packaging and initial delivery of the
Offered Securities, the printing (or reproduction) of this Agreement, the
Purchase Contract Agreement, the Offered Securities, the Prospectus and
amendments and supplements thereto, and any other document relating to the
issuance, offer, sale and delivery of the Offered Securities; (iii) the
cost of qualifying the Issuable Common Shares for listing on the NYSE and
the TSX and any expenses incidental thereto, (iv) for any expenses
(including reasonable fees and disbursements of counsel) incurred in
connection with qualification of the Equity Units for sale under the laws
of such jurisdictions as the Representatives designate and the printing of
memoranda relating thereto, and (v) for expenses incurred in distributing
any Registration Statement, Basic Prospectus and Prospectus (including any
amendments and supplements thereto) to the Underwriters. The Company will
reimburse the Underwriters for all reasonable travel expenses of the
Underwriters and the Company's officers and employees and any other
reasonable expenses of the Underwriters and the Company in connection with
attending or hosting meetings with prospective Underwriters of the Equity
Units. For the avoidance of doubt, the Underwriters shall pay for the fees
and expenses of their counsel in connection with the performance of their
respective obligations under this Agreement and the offering of the Equity
Units, including any fees and expenses related to the purchase of the
Treasury Strips by CSFBC, as contemplated by the Purchase Contract
Agreement.
(i) In connection with the offering, until the Representatives shall
have notified the Company and the other Underwriters of the completion of
the sale of the Equity Units, the Company will not take, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation of the price of any security of
the Company or to facilitate the sale of the Offered Securities or the
offering of Equity Units.
(j) In connection with the offering, until the Representatives shall
have notified the Company and the other Underwriters of the completion of
the sale of the Equity Units, neither the Company nor any of its
affiliates has or will, either alone or with one or more other persons,
bid for or purchase for any account in which it or any of its affiliates
has a beneficial interest in any Offered Securities or the Equity Units or
attempt to induce any person to purchase any Offered Securities or the
Equity Units (provided that this subsection (j) shall not apply to
directors and officers who purchase Equity Units in this offering pursuant
to the prospectus); and neither it nor any of its affiliates will make
bids or purchases for the purpose of creating actual, or apparent, active
trading in, or of raising the price of, the Offered Securities or the
Equity Units.
(k) For a period of 60 days after the date of the initial offering
of the Offered Securities by the Underwriters, the Company will not offer,
sell, contract to sell, pledge, or otherwise dispose of, directly or
indirectly, or file with the SEC or a Canadian Securities Regulator a
registration statement or another offering document relating to, any
securities of the Company that are substantially similar to the Offered
Securities or the Issuable Common Shares, or securities convertible into
or exchangeable or exercisable for Common Shares of the Company or
warrants or other rights to purchase Common Shares of the Company, without
the prior written consent of the Representatives, or publicly disclose the
intention to make any such offer, sale, pledge, disposition or filing,
other than (i) issuances of stock options or Common Shares upon exercise
of stock options or otherwise pursuant to compensation arrangements
existing on the date hereof, (ii) issuances required in connection with
earnout payments for acquisitions prior to the date hereof or upon the
exercise of any outstanding securities or rights convertible, exchangeable
or exercisable for Common Shares,
9
(iii) issuances of rights under the Company's shareholder rights plan and
the Common Shares issuable upon exercise of those rights, (iv) the
issuance of the Issuable Common Shares upon settlement of the Offered
Securities or (v) any filing of a registration statement in connection
with any of the items listed in the foregoing clauses (i) to (iv), (vi)
the Company's sale of Common Shares pursuant to an underwriting agreement
dated the same date as this Agreement.
(l) The Company will reimburse the Underwriters against any
documentary, stamp or similar issuance tax, including any interest and
penalties, on the creation, issuance and sale of the Offered Securities
and on the execution and delivery of this Agreement. All payments to be
made by the Company hereunder shall be made without withholding or
deduction for or on account of any present or future taxes, duties or
governmental charges whatsoever unless the Company is compelled by law to
deduct or withhold such taxes, duties or charges. In that event, the
Company shall pay such additional amounts as may be necessary in order
that the net amounts received after such withholding or deduction shall
equal the amounts that would have been received if no withholding or
deduction had been made.
(m) The Company shall make every reasonable effort to arrange for
the qualification of the Equity Units for sale under the laws of such
jurisdictions as the Representatives may reasonably designate and the
Company shall approve, which approval shall not be unreasonably withheld,
and the Company shall pay all reasonable expenses (including reasonable
fees and disbursements of counsel) in connection with such qualifications
and shall maintain such qualifications in effect during the period set
forth in Section 5(d); provided, however, that the Company shall not be
required to qualify to do business in any jurisdiction where it is not so
qualified at the date of this Agreement or to take any action that would
subject it to general or unlimited service of process or to the imposition
of any taxes based on, or measured by, all or any part of the income of
the Company, in any jurisdiction where it is not at such date so subject;
(n) Prior to the filing of the Canadian Final Supplement (and any
amendments thereto), the Company shall permit the Underwriters and their
counsel to participate fully in the preparation of such documents and
allow the Underwriters and their counsel to conduct all due diligence
which the Underwriters may reasonably require in order to fulfill their
obligations under Canadian Securities Laws and in order to enable the
Underwriters to execute responsibly any certificate required to be
executed by the Underwriters in connection with the Canadian Preliminary
Supplement and the Canadian Final Supplement (and any amendments thereto);
(o) The Issuable Common Shares will be authorized by the Company for
issuance upon settlement of the Purchase Contracts and the Company shall
use its commercially reasonable best efforts to ensure that the Issuable
Common Shares will be listed and posted for trading on the NYSE and the
TSX upon issuance.
6. Conditions of the Obligations of the Underwriters. The obligations
of the Underwriters to purchase and pay for the Firm Securities on the First
Closing Date and for the Optional Securities on each Option Closing Date will be
subject to the accuracy in all material respects of the representations and
warranties not qualified as to materiality or Material Adverse Effect and the
accuracy in all respects of the representations and warranties qualified as to
materiality or Material Adverse Effect on the part of the Company herein, to the
accuracy in all material respects of the statements of officers of the Company
made pursuant to the provisions hereof, to the performance in all material
respects by the Company of its obligations hereunder and to the following
additional conditions precedent:
(a) At or before the Closing Date, no stop order suspending the
effectiveness of the Registration Statement or any order directed to any
document incorporated by reference in the Prospectus shall have been
issued and remain in effect and no proceeding for that purpose shall be
pending or, to the knowledge of the Company or the Representatives,
threatened by the SEC or a Canadian Securities Regulator.
10
(b) The Underwriters shall have received a letter, dated the date of
this Agreement, of Deloitte & Touche LLP confirming that they are
independent public accountants within the meaning of the Act, the Rules
and Regulations and Canadian Securities Laws and to the effect that:
(i) in their opinion the consolidated financial statements
examined by them and included in the Prospectus comply as to form in
all material respects with the applicable accounting requirements of
the Act, the related published Rules and Regulations and Canadian
Securities Laws;
(ii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement of Auditing
Standards No. 71, Interim Financial Information and the procedures
specified by the Canadian Institute of Chartered Accountants for a
review of interim financial statements by an entity's auditor, on
the unaudited condensed consolidated financial statements included
in the Prospectus;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim unaudited condensed
consolidated financial statements of the Company, inquiries of
officials of the Company who have responsibility for financial and
accounting matters and other specified procedures, nothing came to
their attention that caused them to believe that:
(A) the unaudited condensed consolidated financial
statements included in the Prospectus do not comply as to form
in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations and Canadian Securities Laws or any material
modifications should be made to such unaudited condensed
consolidated financial statements for them to be in conformity
with accounting principles generally accepted in the United
States of America and Canada, as the case may be;
(B) the unaudited consolidated net sales, net operating
income, net income and net income per share amounts for the
three-month periods ended March 31, 2002 and March 31, 2001
included in the Prospectus do not agree with the amounts set
forth in the unaudited condensed consolidated financial
statements for those same periods;
(C) at the date of the latest available consolidated
balance sheet read by such accountants, or at a subsequent
specified date not more than three business days prior to the
date of this Agreement, there was any change in the capital
stock or any increase in long-term debt in excess of $50
million of the Company and its consolidated subsidiaries or,
at the date of the latest available consolidated balance sheet
read by such accountants, there was any decrease in
consolidated net current assets or net assets, as compared
with amounts shown on the latest consolidated balance sheet
included in the Prospectus; or
(D) for the period from the closing date of the latest
consolidated income statement included in the Prospectus to
the closing date of the latest available income statement read
by such accountants there were any decreases, as compared with
the corresponding period of the previous year and with the
period of corresponding length ended the date of the latest
consolidated income/loss statement included in the Prospectus,
in consolidated net sales, net operating income/loss or in the
total or per share amounts of consolidated income/loss before
extraordinary items or net income/loss;
11
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such
letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained in the Prospectus (in each case to the extent
that such dollar amounts, percentages and other financial
information are derived from the general accounting records of the
Company and its subsidiaries subject to the internal controls of the
Company's accounting system or are derived directly from such
records by analysis or computation) with the results obtained from
inquiries, a reading of such general accounting records and other
procedures specified in such letter and have found such dollar
amounts, percentages and other financial information to be in
agreement with such results, except as otherwise specified in such
letter.
(c) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change in U.S., Canadian or
international financial, political or economic conditions as would, in the
judgment of the Representatives be likely to prejudice materially the
success of the proposed issue, sale or distribution of the Equity Units,
whether in the primary market or in respect of dealings in the secondary
market, (ii) any change, or any development or event involving a
prospective change, in the financial condition, business, properties or
results of operations of the Company and its subsidiaries taken as one
enterprise which, in the judgment of a majority in interest of the
Underwriters, including the Representatives, is material and adverse and
makes it impractical or inadvisable to proceed with completion of the
public offering of the Equity Units or the sale of and payment for the
Offered Securities; (iii) any material suspension or material limitation
of trading in securities generally on the NYSE, the TSX or any setting of
minimum prices for trading on such exchange other than as a result of
systems difficulties experienced by either the NYSE or the TSX, or any
material suspension of trading of any securities of the Company on the
NYSE or the TSX; (iv) any banking moratorium declared by U.S. Federal, New
York or Canadian authorities; (v) any major disruption of settlements of
securities or clearance services in the United States or Canada, or (vi)
any attack on, or outbreak or escalation of hostilities or act of
terrorism involving the United States or Canada, any declaration of war by
Congress or any other national or international calamity or emergency if,
in the judgment of a majority in interest of the Underwriters including
the Representatives, the effect of any such attack, outbreak, escalation,
act, declaration, calamity or emergency makes it impractical or
inadvisable to proceed with completion of the public offering or the sale
of and payment for the Equity Units.
(d) The Underwriters shall have received an opinion, dated such
Closing Date, of Xxxxxxxx X. XxXxxx, Chief Legal Officer of the Company,
that:
(i) The Company has been duly incorporated under the laws
of Canada, with corporate power and authority to conduct its
business as currently conducted and described in the Prospectus and
is not discontinued and has not been dissolved;
(ii) The execution and delivery of the Purchase Contract
Agreement have been duly authorized by all necessary corporate
action of the Company; the Purchase Contract Agreement has been
executed and delivered by the Company; and, assuming due payment by
the Underwriters in accordance with the terms of this Agreement, the
Purchase Contract Agreement and the Offered Securities delivered on
such Closing Date constitute valid and binding obligations of the
Company enforceable in accordance with their terms, and the Offered
Securities will be entitled to the benefits provided by the Purchase
Contract Agreement and the Custodial Agreement;
(iii) The Offered Securities are in the form contemplated
by the Purchase Contract Agreement, have been duly authorized by the
Company and have been duly executed, issued and delivered by the
Company;
12
(iv) The execution and delivery of this Agreement have
been duly authorized by all necessary corporate action of the
Company and this Agreement constitutes a valid and binding
obligation of the Company, enforceable in accordance with its terms;
(v) The Registration Statement is effective under the Act
and, to the best of such Counsel's knowledge, no stop order with
respect thereto has been issued, or proceeding for that purpose has
been instituted or threatened, by the SEC;
(vi) To the best of such Counsel's knowledge, no order
directed to any document incorporated by reference in the Prospectus
has been issued and remains in effect, or is threatened to be
issued, by the SEC or a Canadian Securities Regulator;
(vii) To the best of such Counsel's knowledge, other than
as disclosed in the Prospectus neither the Company nor any of its
properties is involved in any litigation, arbitration or legal
proceedings which would individually or in the aggregate have a
Material Adverse Effect, nor is there any such litigation,
arbitration or legal proceedings pending or threatened;
(viii) The statements set forth under the caption
"Description of Share Capital" in the Basic Prospectus, insofar as
they purport to constitute a summary of certain terms of the Common
Shares, fairly summarize in all material respects the matters
referred to therein,
(ix) The issue and sale of the Offered Securities by the
Company pursuant to this Agreement and the performance by the
Company of its obligations pursuant to this Agreement and the
Purchase Contract Agreement do not conflict with or constitute a
breach of or default under the (A) constating documents or by-laws
of the Company or (B) any of the agreements to which the Company is
a party which are filed as an exhibit to, or incorporated by
reference into the Registration Statement or the Prospectus, other
than a conflict, breach or default which would not have a Material
Adverse Effect;
(x) The Issuable Common Shares issuable upon settlement
of the Offered Securities delivered on such Closing Date have been
duly authorized for issuance upon such settlement and, when issued
in accordance with the terms of the Purchase Contracts, will be
validly issued, fully paid and nonassessable and will conform in all
material respects to the description of the Issuable Common Shares
contained in the Basic Prospectus;
(xi) Assuming that the choice of the laws of the State of
New York as the governing law of this Agreement has been made in
good faith and not with a view to avoiding the consequences of the
laws of any other relevant jurisdiction, such choice would, to the
extent such laws were specifically pleaded and proved as a fact by
expert evidence, be recognized and applied in an action brought
before a court of competent jurisdiction in the Province of Ontario,
and such laws would accordingly be applied by such court to all
issues which under conflict of law rules in the Province of Ontario
are characterized to be contract issues, except for such laws as
such court considered: (1) to be procedural in nature; (2) to be
revenue, penal, public or similar laws; and (3) the application of
which would be inconsistent with the public policy of Ontario;
(xii) The submission by the Company to the non-exclusive
jurisdiction of the federal and state courts in the Borough of
Manhattan in The City of New York, contained in Section 15 of this
Agreement, would be recognized and given effect to by the courts of
the Province of Ontario as a valid submission to the jurisdiction of
such courts, provided that the provisions of Section 15 respecting
service of process on the Company are duly complied with;
(xiii) The Company is a "reporting issuer" or equivalent in
each of the Qualifying Provinces where such concept applies and does
not appear on any list of defaulting reporting issuers in any
Qualifying Province where the Canadian Securities Regulator therein
maintains such a list and makes such a list publicly available;
13
(xiv) No person has any agreement or option, or right or
privilege (whether pre-emptive or contractual) capable of becoming
an agreement or option, for the purchase from the Company of any
unissued shares, securities or warrants of the Company except as
otherwise described in the Prospectus and other than: (i) issuances
of stock options or issuances of Common Shares upon exercise of
stock options pursuant to compensation arrangements existing on the
date hereof, (ii) issuances required in connection with earnout
payments for acquisitions prior to the date hereof or upon the
exercise of any outstanding securities or rights convertible,
exchangeable or exercisable for Common Shares, or (iii) the
Company's sale of Common Shares pursuant to an underwriting
agreement dated the same date as this Agreement; and
(xv) The Company is eligible to distribute securities
pursuant to the POP Procedures.
The opinions expressed above will be subject to those assumptions and
qualifications reasonably satisfactory to such counsel including, without
limitation, with respect to the opinions expressed in Sections 6(d)(ii) and (iv)
above that:
(i) enforceability may be limited by bankruptcy, insolvency,
reorganization, arrangement, moratorium, or other laws
or foreign governmental actions affecting the
enforcement of creditors' rights generally;
(ii) equitable remedies, including the remedies of specific
performance and injunction, may only be granted at the
discretion of a court of competent jurisdiction;
(iii) the Currency Act (Canada) precludes the courts in Canada
from awarding a judgment for an amount expressed in a
currency other than Canadian dollars; and
(iv) no opinion is expressed with respect to the
enforceability of any provisions relating to indemnity
and contribution.
In rendering his opinion, he may rely as to matters of fact, to the extent
he deems proper, on certificates of responsible officers of the Company and its
subsidiaries or public officials. He may also rely upon legal opinions provided
to him. In addition, he may rely upon determinations of responsible officers of
the Company with respect to the verification, characterization and
quantification of various assets and liabilities. Furthermore, he may assume
without independent investigation: (i) the authenticity of any document or
instrument submitted to him as an original, the conformity to the authentic
original of any document or instrument submitted to him as a certified,
conformed or photographic copy and the genuineness of all signatures on such
originals or copies; and (ii) with respect to parties to an agreement, other
than the Company, the due execution and delivery, pursuant to due authorization,
of such agreement and that such agreement constitutes a valid and binding
agreement of all such parties.
Such counsel shall further deliver a letter to the effect
that:
(A) the Canadian Prospectus, or any document
incorporated by reference therein (in each case, except the
consolidated financial statements and schedules and other
financial and related statistical data included therein, as to
which such counsel expresses no view), appeared on their face
to be appropriately responsive in all material respects to the
requirements of the Canadian Securities Laws applicable in the
Province of Ontario;
(B) no information has come to such counsel's attention
that causes him to believe that the Registration Statement
(except the consolidated financial statements and schedules
and other financial and related statistical data, included
14
therein, as to which such counsel expresses no view) at the
time it became effective contained any untrue statement of a
material fact or omitted to state any material fact necessary
in order to make the statements therein not misleading, or
that the Prospectus (except as aforesaid) as of the date of
the Prospectus and as of the date of such opinion contained or
contains any untrue statement of a material fact or omitted or
omits 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;
provided, that, in each of (A) and (B) above, counsel's opinion shall not
extend to (i) that part of the Registration Statement that constitutes the
Statements of Eligibility and Qualifications under the Trust Indenture Act (Form
T-1) of the Trustees, or (ii) statements in or omissions from the Prospectus
based upon written information furnished to the Company by any Underwriter.
(e) The Underwriters shall have received an opinion, dated such Closing
Date, of Osler, Xxxxxx & Harcourt LLP, special Canadian tax counsel to the
Company, that (a) the statements set forth in the Prospectus under the headings
"Canadian Federal Income Tax Consequences", insofar as such statements purport
to summarize certain federal income tax laws of Canada, constitute a fair
summary of the principal Canadian federal income tax consequences of an
investment in the Offered Securities and Treasury Strips evidenced by the Equity
Units and (b) as of the Closing Date the Offered Securities and Treasury Strips
evidenced by the Equity Units are qualified investments under the Income Tax Act
(Canada) (the "TAX ACT") and the Regulations thereunder for trusts governed by
registered retirement savings plans, registered retirement income funds and
deferred profit sharing plans (collectively, "Deferred Income Plans") and trusts
governed by registered educational savings plans, the Offered Securities are
not, but that the Treasury Strips are, "foreign property" as defined in the Tax
Act for Deferred Income Plans and other persons subject to tax under Part XI of
the Tax Act.
(f) The Underwriters shall have received an opinion, dated such Closing
Date, of Xxxxxx Xxxxxxx, special Canadian counsel to the Company, that:
(i) The issue and sale of the Offered Securities by the
Company pursuant to this Agreement and the performance by the
Company of its obligations pursuant to this Agreement and the
Purchase Contract Agreement do not require the consent, approval or
authorization of or filing or registration with, any governmental
body or regulatory authority in the Provinces of Ontario, British
Columbia, Alberta or Quebec, except for (i) required filings with
relevant Canadian securities regulatory authorities; and (ii)
required approvals, notices and filings to or with the TSX;
(ii) All documents have been filed and all requisite
proceedings have been taken by the Company and all approvals,
permits, consents and authorizations of the Canadian Securities
Regulators under the Canadian Securities Laws have been obtained by
the Company to qualify the Equity Units for distribution or
distribution to the public in each of the Qualifying Provinces
through investment dealers or brokers duly registered under the
applicable laws of the Qualifying Provinces who have complied with
such applicable laws, provided however that such counsel need
express no opinion as to whether the Canadian Prospectus constitutes
full, true and plain disclosure of all material facts relating to
the Company and the Equity Units;
(iii) The issuance of Issuable Common Shares in accordance
with the terms of the Purchase Contracts will be exempt from, or not
subject to, the prospectus requirements contained in the Canadian
Securities Laws and the registration requirements contained in the
Canadian Securities Laws and no other documents are required to be
filed, proceedings taken or approvals, permits, consents or
authorizations of appropriate regulatory authorities obtained in
order to permit such issuance of the Issuable Common Shares, other
than those disclosed to the Underwriters and described in such
opinion; and
15
(iv) The first trade of the Issuable Common Shares issued in
accordance with the terms of a Purchase Contract will be exempt
from, or not subject to, the prospectus requirements contained in
the Canadian Securities Laws and no other documents are required to
be filed, proceedings taken or approvals, permits, consents or
authorizations obtained, other than those disclosed in such opinion,
under the Canadian Securities Laws of any of the Qualifying
Provinces to permit such first trade of Issuable Common Shares,
provided that such trade is conducted through persons who are duly
registered in a category permitting them to so trade such Issuable
Common Shares under the applicable laws of each such Qualifying
Province and who have complied with the relevant provisions of such
legislation or such trade is made pursuant to an exemption from the
registration requirements of such legislation.
The opinions expressed above will be subject to those assumptions
and qualifications reasonably satisfactory to such counsel including,
without limitation, with respect to the opinions expressed in Section
6(f)(iv) above, that such first trade is not made by a "control person"
(or equivalent) and that such first trade satisfies applicable
requirements. In rendering such opinion, counsel may rely as to matters of
fact, to the extent it deems proper, on certificates of responsible
officers of the Company and its subsidiaries or public officials. Counsel
may also rely upon legal opinions provided to it. In addition, counsel may
rely upon determinations of responsible officers of the Company with
respect to certain factual matters. Furthermore, counsel may assume
without independent verification the authenticity of any document or
instrument submitted to it as an original, the conformity to the authentic
original of any document or instrument submitted to it as a certified,
conformed or photographic copy and the genuineness of all signatures.
(g) The Underwriters shall have received an opinion, dated such Closing
Date, of Cleary, Gottlieb, Xxxxx & Xxxxxxxx, special United States counsel to
the Company, that:
(i) the Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of
the net proceeds thereof as described in the Prospectus, will not be
an "investment company" as defined in the Investment Company Act of
1940;
(ii) the Purchase Contract Agreement has been duly executed
and delivered by the Company under the law of the State of New York
and is a valid and binding obligation of the Company enforceable in
accordance with its terms;
(iii) the Offered Securities have been duly executed and
delivered by the Company under the law of the State of New York and
are the valid and binding obligations of the Company enforceable
against the Company in accordance with their terms and entitled to
the benefits of the Purchase Contract Agreement;
(iv) assuming (i) the delivery of the Treasury Strips to the
Custodian by CSFBC for and on behalf of the Holders and (ii) that
the Treasury Strips conform to the description thereof contained in
the Prospectus, the Equity Units conform in all material respects to
the description thereof contained in the Prospectus;
(v) the statements set forth in the Prospectus Supplement
under the caption "U.S. Federal Income Tax Consequences," insofar as
such statements purport to summarize the principal U.S. federal
income tax consequences of an investment in the Equity Units,
provide, subject to the qualifications and limitations stated
therein, a fair summary of such provisions; and
(vi) the issuance and sale of the Offered Securities to the
Underwriters pursuant to this Agreement, and the performance by the
Company of its obligations in this Agreement and the Purchase
Contract Agreement (x) do not require any consent, approval,
authorization, registration or qualification of or with any
governmental authority of the
16
United States, except such as have been obtained or effected under
the Act and the Exchange Act (but we express no opinion as to any
consent, approval, authorization, registration or qualification that
may be required under state securities or blue sky laws).
The opinions expressed above will be subject to those assumptions
and qualifications reasonably satisfactory to such counsel including, without
limitation, with respect to the opinions expressed in Sections 6(g)(ii) and
(iii) above that:
(i) enforceability may be limited by bankruptcy, insolvency,
reorganization, arrangement, moratorium, or other laws
or foreign governmental actions affecting the
enforcement of creditors' rights generally;
(ii) equitable remedies, including the remedies of specific
performance and injunction, may only be granted at the
discretion of a court of competent jurisdiction; and
(iii) no opinion is expressed with respect to the
enforceability of any provisions relating to indemnity
and contribution.
In rendering such opinion, counsel may rely as to matters of fact, to the
extent it deems proper, on certificates of responsible officers of the Company
and its subsidiaries or public officials. Counsel may also rely upon legal
opinions provided to it. In addition, counsel may rely upon determinations of
responsible officers of the Company with respect to the verification,
characterization and quantification of various assets and liabilities.
Furthermore, counsel may assume without independent investigation: (i) the
authenticity of any document or instrument submitted to it as an original, the
conformity to the authentic original of any document or instrument submitted to
it as a certified, conformed or photographic copy and the genuineness of all
signatures on such originals or copies; and (ii) with respect the validity,
binding effect or enforceability of any agreement or obligation of the Company,
such counsel has assumed that the Company and each other party to such agreement
or obligation has satisfied those legal requirements that are applicable to it
to the extent necessary to make such agreement or obligation enforceable against
it (except that no such assumption is made as to the Company regarding matters
of the law of the State of New York).
Such counsel shall further deliver a letter to the effect that, in the
course of such counsel's acting as special U.S. counsel to the Company in
connection with its preparation of the Registration Statement and the
Prospectus, based on such counsel's participation in conferences and telephone
conversations with representatives of the Company, representatives of the
independent public accountants for the Company, representatives of the
Underwriters and representatives of counsel for the Underwriters, during which
conferences and conversations the contents of the Registration Statement and the
Prospectus, portions of certain of the documents incorporated by reference
therein and related matters were discussed, and such counsel's review of certain
corporate records and documents furnished to such counsel by the Company, such
counsel's understanding of the U.S. federal securities laws and the experience
such counsel has gained in their practice thereunder, such counsel advises that
(1) the Registration Statement (except the financial statements and schedules
and other financial and related statistical data included therein, as to which
such counsel expresses no view), at the time it became effective, and the
Prospectus (except as aforesaid), as of the date thereof, appeared on their face
to be appropriately responsive in all material respects to the requirements of
the Act and the Rules and Regulations thereunder other than Regulation S-T under
the Act and (2) the documents incorporated by reference in the Registration
Statement and the Prospectus (except the financial statements and the schedules
and other financial and related statistical data included therein, as to which
such counsel expresses no view), as of the respective dates of their filing with
the SEC, appeared on their face to be appropriately responsive in all material
respects to the requirements of the Act and the Rules and Regulations
thereunder, and (y) no information has come to such counsel's attention (A) that
causes such counsel to believe that the Registration Statement (except the
financial statements and schedules and other financial and related statistical
data,
17
included therein, as to which such counsel expresses no view) at the time it
became effective contained any untrue statement of a material fact or omitted to
state any material fact necessary in order to make the statements therein not
misleading, or (B) that the Prospectus (except as aforesaid) as of the date of
the Prospectus and as of the date of such opinion contained or contains any
untrue statement of a material fact or omitted or omits 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; provided, that, in
each of (x) and (y) above, counsel's letter shall not extend to statements in or
omissions from the Prospectus based upon written information furnished to the
Company by any Underwriter or to that part of the Registration Statement that
constitutes the Statements of Eligibility and Qualifications under the Trust
Indenture Act (Form T-1) of the Trustees.
(h) The Underwriters shall have received from Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, special United States counsel for the Underwriters, such
opinion or opinions, dated such Closing Date, with respect to the validity of
the Equity Units, the Offered Securities, the Prospectus and other related
matters as the Representatives may require, and the Company shall have furnished
to such counsel such documents as they request for the purpose of enabling them
to pass upon such matters.
(i) The Underwriters shall have received an opinion, dated such Closing
Date, from Blake, Xxxxxxx & Xxxxxxx LLP, special Canadian counsel to the
Underwriters, with respect to such matters relating to the sale of the Equity
Units as the Representatives may require; provided that such counsel providing
such opinion shall be entitled to rely on or deliver the opinions of local
counsel in the relevant Qualifying Provinces.
(j) The Underwriters shall have received a certificate, dated such
Closing Date, of either (x) both the President and Chief Executive Officer and
the Chief Financial Officer (provided that, if the aforesaid offices are held by
one person, such person's signature shall also be accompanied by that of an
officer set forth in (y)) or (y) of one of the aforesaid officers and any one of
the Corporate Secretary, the Controller, the Treasurer, any Assistant Secretary,
any Assistant Controller or any Assistant Treasurer of the Company in which such
officers, to the best of their knowledge after reasonable investigation, shall
state on behalf of the Company as to the accuracy in all material respects of
the representations and warranties not qualified as to materiality or Material
Adverse Effect and the accuracy in all respects of the representations and
warranties qualified as to materiality or Material Adverse Effect on the part of
the Company herein, that the Company has complied in all material respects with
all agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to such Closing Date, and that, subsequent to
the date of the most recent consolidated financial statements included or
incorporated in the Prospectus there has been no change, nor any development or
event involving a prospective change, which would result in a Material Adverse
Effect except as set forth in or contemplated by the Prospectus or as described
in such certificate.
(k) The Underwriters shall have received an opinion, dated such Closing
Date, from in-house counsel to Citibank N.A., the Custodian, that:
(i) Citibank N.A. is a national banking association duly
incorporated and validly existing under the laws of United States;
(ii) The execution, delivery and performance by the Custodian
of the Custodial Agreement have each been duly authorized by all
necessary corporate action on the part of such Custodian; the
Custodial Agreement has been duly executed and delivered by the
Custodian and constitutes a valid and binding obligation of the
Custodian, enforceable against such Custodian in accordance with its
terms;
(iii) The execution, delivery and performance by the Custodian
of the Custodial Agreement do not violate or constitute a breach of
the Articles of Incorporation or By-Laws of the Custodian; and
18
(iv) No consent of any federal or state banking authority is
required for the execution, delivery or performance by the Custodian
of its obligations under the Custodial Agreement.
(l) The Underwriters shall have received an opinion, dated such Closing
Date, from Stikeman Elliott, special counsel to the Purchase Contract Agent,
that:
(i) Computershare Trust Company of Canada is a company
continued and existing as a trust company under the laws of Canada;
and
(ii) the execution, delivery and performance by the Purchase
Contract Agent of the Purchase Contract Agreement and the
authentication and delivery by the Purchase Contract Agent of the
certificates evidencing the Equity Units and the Offered Securities
have been authorized by all necessary corporate action on the part
of the Purchase Contract Agent; the Purchase Contract Agreement has
been duly executed and delivered by the Purchase Contract Agent and
the certificates evidencing the Offered Securities have been duly
authenticated by the Purchase Contract Agent.
(m) The Underwriters shall have received an opinion, dated such Closing
Date, from XxXxxxxxx, Will & Xxxxx, special counsel to the Purchase Contract
Agent, that the execution, delivery and performance by the Purchase Contract
Agent of the Purchase Contract Agreement and the authentication and delivery by
the Purchase Contract Agent of the certificates evidencing the Equity Units and
the Offered Securities, have been duly authorized by all necessary corporate
action on the part of the Purchase Contract Agent under the laws of the State of
New York; the Purchase Contract Agreement has been duly executed and delivered
by the Purchase Contract Agent and such agreement constitutes a valid and
binding obligation of the Purchase Contract Agent, enforceable against the
Purchase Contract Agent in accordance with its terms under the laws of the State
of New York; and the certificates evidencing the Offered Securities have been
duly authenticated by the Purchase Contract Agent.
(n) The Underwriters shall have received a letter, dated such Closing
Date, of Deloitte & Touche LLP which meets the requirements of subsection (b) of
this Section, except that the specified date referred to in such subsection will
be a date not more than three days prior to such Closing Date for the purposes
of this subsection.
(o) CSFBC shall have received, on or prior to the date of this
Agreement, lockup letters from each of the directors of the Company and each of
the executive officers named in Schedule B hereto. The form of such lockup
letter is attached as Schedule C hereto.
The Company will furnish the Underwriters with such conformed copies of
such opinions, certificates, letters and documents as the Underwriters
reasonably request. The Representatives may in their sole discretion waive on
behalf of the Underwriters compliance with any conditions to the obligations of
the Underwriters hereunder, whether in respect of an Option Closing Date or
otherwise.
7. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each Underwriter,
its partners, directors and officers and each person, if any, who controls
such Underwriter within the meaning of Section 15 of the Act, against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act, the Exchange Act, Canadian
Securities Laws
19
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in
the Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending
any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company will not be liable in any
such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through any of the Representatives specifically
for use therein, it being understood and agreed that the only such
information consists of the information described as such in subsection
(b) below; provided, further, that with respect to any untrue statement or
alleged untrue statement in or omission or alleged omission from any
preliminary prospectus, the indemnity agreement contained in this
subsection (a) shall not inure to the benefit of any Underwriter that sold
the Equity Units concerned to the person asserting any such losses,
claims, damages or liabilities, to the extent that any such sale was an
initial sale by such Underwriter and any such loss, claim, damage or
liability of such Underwriter results from the fact that there was not
sent or given to such person at or prior to the written confirmation of
the sale of such Equity Units to such person, as applicable, a copy of the
U.S. Prospectus (exclusive of any material incorporated therein) or the
Canadian Final Supplement together with the Canadian Final Prospectus if
the Company had previously furnished copies thereof to such Underwriter.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company, its directors and officers and each person, if any,
who controls the Company within the meaning of Section 15 of the Act,
against any losses, claims, damages or liabilities to which the Company
may become subject, under the Act, the Exchange Act, Canadian Securities
Laws or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in
the Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are
based upon the omission or the alleged omission to state therein a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, in
each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through any of the Representatives
specifically for use therein, and will reimburse any legal or other
expenses reasonably incurred by the Company in connection with
investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred, it being understood and agreed that
the only such information furnished by any Underwriter consists of the
following information in the Prospectus: the fifth, thirteenth,
eighteenth, nineteenth and twentieth paragraphs under the caption
"Underwriting".
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) or (b) above, notify the
indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party otherwise than under subsection (a)
or (b) above. In case any such action is brought against any indemnified
party and it notifies the indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party),
and after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section for any legal
or other expenses subsequently incurred by such
20
indemnified party in connection with the defense thereof. No indemnifying
party shall be liable for any settlement of any action contemplated by
subsections (a) or (b) above effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its
written consent or if there be a final judgment for the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless
any indemnified party from and against any loss or liability by reason of
such settlement or judgment. No indemnifying party shall, without the
prior written consent of the indemnified party (which consent shall not be
unreasonably withheld), effect any settlement of any pending or threatened
action in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified
party unless such settlement (i) includes an unconditional release of such
indemnified party from all liability on any claims that are the subject
matter of such action and (ii) does not include a statement as to or an
admission of fault or failure to act by or on behalf of any indemnified
party.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or
(b) above (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 from the offering of the Offered Securities or (ii) if the
allocation provided by clause (i) above 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 the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other equitable
considerations; provided, however, that (i) in no case shall the
Underwriters be responsible, in the aggregate, for any amount in excess of
the purchase discount or commission applicable to the Offered Securities,
as set forth in this Agreement, and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall
be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. Benefits received by the Company shall be
deemed to be equal to the sum of the total net proceeds from the offering
(before deducting expenses) of the Offered Securities. Benefits received
by the Underwriters shall be deemed to be equal to the total purchase
commissions received in connection with the offering of the Equity Units.
The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid by
an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (d) shall
be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any
action or claim which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), no Underwriter
shall be required to contribute any amount in excess of the amount by
which the total price at which the Equity Units sold by it exceeds the
amount of any damages which such Underwriter has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective purchase
obligations and not joint.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act or the Exchange
Act; and the obligations of the Underwriters under this Section shall be
in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to
each person, if any, who controls the Company within the meaning of the
Act or the Exchange Act.
8. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities hereunder on either the First
Closing Date or any Option Closing Date and the
21
number of the Offered Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed 10% of the total
number of the Offered Securities that the Underwriters are obligated to purchase
on such Closing Date, the Representatives may make arrangements satisfactory to
the Company for the purchase of such Offered Securities by other persons
including any of the non-defaulting Underwriters, but if no such arrangements
are made by such Closing Date, the non-defaulting Underwriters shall be
obligated severally, in proportion to their respective commitments hereunder, to
purchase the Offered Securities that such defaulting Underwriters agreed but
failed to purchase on such Closing Date. If any Underwriter or Underwriters so
default and the aggregate number of the Offered Securities with respect to which
such default or defaults occur exceeds 10% of the total number of the Offered
Securities that the Underwriters are obligated to purchase on such Closing Date
and arrangements satisfactory to the Representatives and the Company for the
purchase of such Offered Securities by other persons are not made within 36
hours after such default, this Agreement will terminate without liability on the
part of any non-defaulting Underwriter or the Company, except as provided in
Section 9 (provided that if such default occurs with respect to Optional
Securities after the First Closing Date, this Agreement shall not terminate as
to the Firm Securities or any Optional Securities purchased prior to such
termination). As used in this Agreement, the term " Underwriter" includes any
person substituted for a Underwriter under this Section. Nothing herein will
relieve a defaulting Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If this Agreement is terminated pursuant
to Section 8 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Company and the Underwriters pursuant to Section 7 shall
remain in effect and if any Offered Securities have been purchased hereunder the
representations and warranties in Section 2 and all obligations under Section 5
shall remain in effect. If the purchase of the Offered Securities by the
Underwriters is not consummated for any reason other than solely because of the
termination of this Agreement pursuant to Section 8 or the occurrence of any
event specified in clause (v), (vi) or (vii) of Section 6(c), the Company will
reimburse the Underwriters for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by them in connection with the
offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters will be mailed, delivered or telegraphed and confirmed to
the Underwriters, c/o Credit Suisse First Boston Corporation, Eleven Madison
Avenue, New York, N.Y. 10010-3629, Attention: Transactions Advisory Group, or,
if sent to the Company, will be mailed, delivered or telegraphed and confirmed
to it at 0000 Xxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0,
Attention: Assistant Secretary; provided, however, that any notice to a
Underwriter pursuant to Section 7 will be mailed, delivered or telegraphed and
confirmed to such Underwriter.
11. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the controlling
persons referred to in Section 7, and no other person will have any right or
obligation hereunder.
12. Representation of Underwriters. The Representatives will act for the
several Underwriters in connection with this purchase, and any action under this
Agreement taken by the Representatives will be binding upon all the
Underwriters.
13. 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. The
transmission by facsimile of a copy of the execution page hereof reflecting the
execution of this Agreement by any party hereto shall be effective to evidence
that party's intention to be bound by this
22
Agreement and that party's agreement to the terms, provisions and conditions
hereof, all without the necessity of having to produce an original copy of such
execution page.
14. Severability. If any provision of this Agreement is determined to be
void or unenforceable in whole or in part, it shall be deemed not to affect or
impair the validity of any other provision of this Agreement and such void or
unenforceable provision shall be severable from this Agreement.
15. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS TO THE EXTENT SUCH RULES WOULD REQUIRE THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby. The Company irrevocably appoints CT
Corporation System, as its authorized agent in the Borough of Manhattan in The
City of New York upon which process may be served in any such suit or
proceeding, and agrees that service of process upon such agent, and written
notice of said service to the Company, by the person serving the same to the
address provided in Section 10, shall be deemed in every respect effective
service of process upon the Company, as the case may be, in any such suit or
proceeding. The Company further agrees to take any and all action as may be
necessary to maintain such designation and appointment of such agent in full
force and effect for a period of seven years from the date of this Agreement.
The obligation of the Company in respect of any sum due to any Underwriter
shall, notwithstanding any judgment in a currency other than United States
dollars, not be discharged until the first business day, following receipt by
such Underwriter of any sum adjudged to be so due in such other currency, on
which (and only to the extent that) such Underwriter may in accordance with
normal banking procedures purchase United States dollars with such other
currency; if the United States dollars so purchased are less than the sum
originally due to such Underwriter hereunder, the Company agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify such Underwriter
against such loss. If the United States dollars so purchased are greater than
the sum originally due to such Underwriter hereunder, such Underwriter agrees to
promptly pay to the Company, as the case may be, an amount equal to the excess
of the dollars so purchased over the sum originally due to such Underwriter
hereunder.
23
If the foregoing is in accordance with the Underwriters' understanding of
our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement among the Company and the
several Underwriters in accordance with its terms.
Very truly yours,
NORTEL NETWORKS CORPORATION
By /s/ Xxxxx X. Xxxx
_________________________________________
Xxxxx X. Xxxx
President, Chief Executive Officer and
Chief Financial Officer
By /s/ Xxxxxxxxx X. Xxxxxxxxx
_________________________________________
Xxxxxxxxx X. Xxxxxxxxx
Treasurer
The foregoing Underwriting Agreement is
hereby confirmed and accepted as of the
date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
X.X. XXXXXX SECURITIES INC.
XXXXXXX XXXXX XXXXXX INC.
Acting on behalf of themselves and
as the Representatives of the
several Underwriters.
By CREDIT SUISSE FIRST BOSTON CORPORATION
By /s/ Xxxxx X. Host
________________________
Xxxxx X. Host
Director, Head of Global Communications
Equipment Technology Group
24
SCHEDULE A
AMOUNT OF
UNDERWRITER FIRM SECURITIES
----------- ---------------
Credit Suisse First Boston Corporation............................... 6,127
X.X. Xxxxxx Securities Inc. ......................................... 6,125
Xxxxxxx Xxxxx Xxxxxx Inc............................................. 6,125
RBC Dominion Securities Inc.......................................... 2,375
ABN AMRO Rothschild LLC.............................................. 750
CIBC World Markets Corp.............................................. 750
HSBC Securities (USA) Inc............................................ 000
XX Xxxxx Securities Corporation...................................... 750
Barclays Bank plc.................................................... 312
BNP Paribas Securites Corp........................................... 312
Scotia Capital Inc................................................... 312
TD Securities Inc.................................................... 312
Total................................................................ 25,000
SCHEDULE B
Officers Required to Provide Lock-Up Letters Pursuant To Section 6(h)
X.X. Xxxx
Director, President, Chief Executive Officer and Chief Financial Officer
X. Xxxxxxx
President, Global Customer Customer Care & Supply Chain Operations
N.J. XxXxxx
Chief Legal Officer
X.X. Xxxxxxx
President, Americas
X. Xxxxxxxx
President, Metro & Enterprise Networks
X.X. Xxxxxx
Controller
X. Xxxxx
President, Wireless Networks
X.X. Xxxxxxx
Senior Vice President, Human Resources
X. Xxxxxxxxx
Treasurer
X. Xxxxxxx
Chief Technology Officer
X. XxXxxxxx
President, Optical Long-Haul Networks
X. Xxxxx
President, Europe, Middle East and Africa
M. Tariq
President, Asia
SCHEDULE C
June , 2002
Credit Suisse First Boston Corporation
[ ]
c/o Credit Suisse First Boston Corporation
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Dear Sirs:
As an inducement to the Underwriters to execute an underwriting
agreement (the "EQUITY UNITS UNDERWRITING AGREEMENT"), pursuant to which to
which an offering will be made that is intended to result in the establishment
of a public market for equity units (the "EQUITY UNITS"), and/or an underwriting
agreement (the "COMMON SHARE UNDERWRITING AGREEMENT" and, together with the
Equity Units Underwriting Agreement, the "UNDERWRITING AGREEMENTS"), pursuant to
which an offering will be made of common shares (the "OFFERED COMMON Shares"
and, together with the Equity Units, the "SECURITIES") of Nortel Networks
Corporation, and any successor (by merger or otherwise) thereto, (the
"COMPANY"), the undersigned hereby agrees that from the date hereof and until 60
days after the later of the respective offering dates set forth on the final
prospectus supplements used to sell the Securities (the "OFFERING DATE")
pursuant to either or both of the Underwriting Agreements, to which you are or
expect to become parties, the undersigned will not offer, sell, contract to
sell, pledge or otherwise dispose of, directly or indirectly, any common shares
of the Company (the "COMMON SHARES") or securities convertible into or
exchangeable or exercisable for, or entitling the holder to receive, any shares
of Common Shares, enter into a transaction which would have the same effect, or
enter into any swap, hedge or other arrangement that transfers, in whole or in
part, any of the economic consequences of ownership of the Common Shares,
whether any such aforementioned transaction is to be settled by delivery of the
Common Shares or such other securities, in cash or otherwise, or publicly
disclose the intention to make any such offer, sale, pledge or disposition, or
to enter into any such transaction, swap, hedge or other arrangement, without,
in each case, the prior written consent of Credit Suisse First Boston
Corporation and RBC Dominion Securities Inc. In addition, the undersigned agrees
that, without the prior written consent of Credit Suisse First Boston
Corporation and RBC Dominion Securities Inc., it will not, during the period
commencing on the date hereof and ending 60 days after the Offering Date, make
any demand for or exercise any right with respect to, the registration of any
Common Shares or any security convertible into or exercisable or exchangeable
for, or entitling the holder to receive, the Common Shares.
Any Common Shares received upon exercise of options granted to the
undersigned will also be subject to this Agreement. Notwithstanding the
foregoing, the undersigned may transfer the undersigned's Common Shares (i)
provided they were purchased on the open market, (ii) as a bona fide gift or
gifts, provided that the donee or donees thereof agree to be bound in writing by
the restrictions set forth herein, (iii) to any corporation controlled by the
undersigned or trust for the direct or indirect benefit of the undersigned or
the immediate family of the undersigned, provided in the case of a transfer to
any such trust that the trustee of the trust agrees to be bound in writing by
the restrictions set forth herein, and provided further that any such transfer
shall not involve a disposition for value other than for the benefit of the
undersigned's immediate family, or (iv) as pledges of Common Shares in
connection with the purchase of such Common Shares upon the exercise of stock
options following termination of employment or service with the Company,
provided that the lender or lenders to whom such Common Shares are pledged agree
in writing to be bound by the restrictions set forth herein. For purposes of
this agreement, "immediate family" shall mean any relationship by blood,
marriage or adoption, not more remote than first cousin.
In furtherance of the foregoing, the Company and its transfer agent
and registrar are hereby authorized to decline to make any transfer of Common
Shares if such transfer would constitute a violation or breach of this
Agreement.
This Agreement shall be binding on the undersigned and the
successors, heirs, personal representatives and assigns of the undersigned. This
Agreement shall lapse and become null and void if the Offering Date shall not
have occurred on or before June 19, 2002.
Very truly yours,
_________________________________
Name:
Title:
27
