1
EXHIBIT 1.1
EXFO ELECTRO-OPTICAL ENGINEERING INC.
(incorporated under the Canada Business Corporations Act)
7,000,000 Subordinate Voting Shares
FORM OF PURCHASE AGREEMENT
Dated June 29, 2000
2
Table of Contents
PURCHASE AGREEMENT............................................................1
SECTION 1 Representations and Warranties................................5
(a) Representations and Warranties by the Company.................5
(i) Compliance with Registration Requirements............5
(ii) Compliance with Canadian Prospectus Requirements.....6
(iii) Independent Accountants..............................7
(iv) Financial Statements.................................8
(v) No Material Adverse Change in Business...............8
(vi) Good Standing of the Company.........................8
(vii) Capitalization.......................................9
(viii) Authorization of Agreement..........................10
(ix) Authorization and Description of Securities.........10
(x) Absence of Defaults and Conflicts...................11
(xi) Absence of Labor Dispute............................12
(xii) Absence of Proceedings..............................12
(xiii) Accuracy of Exhibits................................12
(xiv) Possession of Intellectual Property.................12
(xv) Absence of Further Requirements.....................13
(xvi) Possession of Licenses and Permits..................13
(xvii) Title to Property...................................14
(xviii) Investment Company Act..............................14
(xix) Environmental Laws..................................14
(xx) No Stabilization or Manipulation....................15
(xxi) Registration Rights.................................15
(xxii) Year 2000 Problem...................................15
(xxiii) Taxes...............................................16
(xxiv) Insurance...........................................16
(xxv) Compliance with Laws................................16
(xxvi) No Broker...........................................16
(xvii) Adequate Accounting.................................16
(xviii) Principal Shareholders..............................17
(xxix) Non-Arm's Length Transactions.......................17
(xxx) Stamp Tax...........................................17
(xxxi) Registrar and Transfer Agent........................17
(b) Officer's Certificates.......................................18
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SECTION 2. Sale and Delivery to Underwriters; Closing..................18
(a) Initial Securities......................................18
(b) Option Securities.......................................18
(c) Payment.................................................19
(d) Denominations; Registration.............................19
(e) Sub-underwriter Notification............................20
SECTION 3. Covenants of the Company....................................20
(a) Compliance with Securities Regulations
and Commission Requests...............................20
(b) Filing of Amendments....................................21
(c) Delivery of Filed Documents.............................21
(d) Delivery of Prospectuses................................22
(e) Continued Compliance with Securities Laws...............22
(f) Blue Sky Qualifications.................................23
(g) Rule 158................................................23
(h) Use of Proceeds.........................................24
(i) Restriction on Sale of Securities.......................24
(j) Listing.................................................24
(k) Reporting Requirements..................................25
(l) PREP Procedures and Rule 424(b).........................25
(m) Translation Opinions....................................25
(n) Translation Opinions--Financial Statements..............26
(o) Lock-Up Agreements......................................26
(p) Press Releases and Press Conferences....................26
SECTION 4. Payment of Expenses.........................................26
(a) Expenses................................................26
(b) Termination of Agreement................................27
SECTION 5. Conditions of Underwriters' Obligations.....................28
(a) Effectiveness of Registration Statement.................28
(b) Opinion of Canadian Counsel for Company.................28
(c) Opinion of U.S. Counsel for Company.....................29
(d) Opinion of Canadian Counsel for Underwriters
and the Sub-underwriter...............................29
(e) Opinion of U.S. Counsel for Underwriters
and the Sub-underwriter...............................30
(f) Opinion of In-house Counsel.............................30
(g) Opinion of Swiss Counsel for the Company................30
(h) Opinion of French Counsel for the Company...............31
(i) Opinions of Patent Counsel..............................31
(j) Officers' Certificate...................................31
(k) Accountant's Comfort Letter.............................32
(l) Bringdown Comfort Letter................................32
(m) No Objection............................................32
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(n) Lock-Up Agreements........................................32
(o) Approval of Listing.......................................33
(p) Capital Reorganization....................................33
(q) Escrow Agreement..........................................33
(r) Conditions to Purchase of Option Securities...............33
(i) Opinion of Canadian Counsel for Company............33
(ii) Opinion of U.S. Counsel for Company................33
(iii) Opinion of Canadian Counsel for Underwriters
and the Sub-underwriter..........................34
(iv) Opinion of U.S. Counsel for Underwriters
and the Sub-underwriter..........................34
(v) Opinion of In-house Counsel........................34
(vi) Opinion of Swiss Counsel to the Company............34
(vii) Opinion of French Counsel to the Company...........34
(viii) Opinions of Patent Counsel.........................34
(ix) Officers' Certificate..............................34
(x) Bring-down Comfort Letter..........................35
(s) Additional Documents.....................................35
(t) Termination of Agreement.................................35
SECTION 6. Indemnification..............................................36
(a) Indemnification of Underwriters and the Sub-underwriter..36
(b) Indemnification of Company, Directors and Officers.......38
(c) Actions against Parties; Notification....................38
(d) Settlement without Consent if Failure to Reimburse.......39
(e) Indemnification for Reserved Securities..................39
SECTION 7. Contribution.................................................40
SECTION 8. Representations, Warranties and Agreements
to Survive Delivery........................................42
SECTION 9. Termination of Agreement.....................................42
(a) Termination; General.....................................42
(b) Liabilities..............................................43
SECTION 10. Default by One or More of the Underwriters..................43
SECTION 11. Agent for Service; Submission to Jurisdiction;
Waiver of Immunities......................................44
SECTION 12. Notices.....................................................44
SECTION 13. Parties.....................................................45
SECTION 14. GOVERNING LAW AND TIME......................................45
SECTION 15. Effect of Headings..........................................45
SCHEDULES
Schedule A - List of Underwriters..................................Sch A-1
Schedule B - Pricing Information...................................Sch B-1
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Schedule C - List of Persons and Entities Subject to Lock-up....... Sch C-1
Schedule I - Certificate........................................... Sch I-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Canadian Counsel............ A-1
Exhibit B - Form of Opinion of Company's U.S. Counsel................ B-1
Exhibit C - Form of Opinion of Company's In-house Counsel............ C-1
Exhibit D - Form of Opinion of Swiss Counsel for the Company......... D-1
Exhibit E - Form of Opinion of French Counsel for the Company........ E-1
Exhibit F - Form of Opinion of Company's Patent Counsel.............. F-1
Exhibit G - Form of Lock-up Letter................................... G-1
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EXFO ELECTRO-OPTICAL ENGINEERING INC.
(incorporated under the Canada Business Corporations Act)
7,000,000 Subordinate Voting Shares
PURCHASE AGREEMENT
June 29, 2000
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
RBC Dominion Securities Inc.
Wit SoundView Corporation
CIBC World Markets Inc.
as Representatives of the several Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
World Financial Center, North Tower
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000-0000
Ladies and Gentlemen:
EXFO Electro-Optical Engineering Inc., a company incorporated under the
Canada Business Corporations Act (the "Company") confirms its agreement with
Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("Xxxxxxx Xxxxx"), and each of the other Underwriters named in Schedule A hereto
(collectively, the "Underwriters", which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom Xxxxxxx
Xxxxx, RBC Dominion Securities Inc., Wit SoundView Corporation and CIBC World
Markets Inc. are acting as representatives (in such capacity, the
"Representatives"), with respect to the issue and sale by the Company and the
purchase by the
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Underwriters, acting severally and not jointly, of the respective numbers of
Subordinate Voting Shares, without par value, of the Company ("Subordinate
Voting Shares") set forth in said Schedule A and with respect to the grant by
the Company to the Underwriters, acting severally and not jointly, of the option
described in Section 2(b) hereof to purchase all or any part of 1,050,000
additional Subordinate Voting Shares to cover over-allotments, if any. The
aforesaid 7,000,000 Subordinate Voting Shares (the "Initial Securities") to be
purchased by the Underwriters and all or any part of the 1,050,000 Subordinate
Voting Shares subject to the option described in Section 2(b) hereof (the
"Option Securities") are hereinafter called, collectively, the "Securities".
The Company understands that the Underwriters propose to make a public
offering of the Securities in the United States and in each of the provinces of
Canada upon the terms set forth in the U.S. Prospectus (as defined below) and
the Canadian Prospectus (as defined below) as soon as the Underwriters deem
advisable after this Agreement has been executed and delivered.
The Company and the Underwriters agree that up to 490,000 shares of the
Initial Securities to be purchased by the Underwriters (the "Reserved
Securities") shall be reserved for sale by the Underwriters to certain eligible
employees and persons having business and other relationships with the Company,
as part of the distribution of the Securities by the Underwriters, subject to
the terms of this Agreement, the applicable rules, regulations and
interpretations of the National Association of Securities Dealers, Inc. and all
other applicable laws, rules and regulations. To the extent that such Reserved
Securities are not orally confirmed for purchase by such eligible employees and
persons having business and other relationships with the Company by the end of
the first business day after the date of this Agreement, such Reserved
Securities may be offered to the public as part of the public offering
contemplated hereby.
The Company has prepared and filed with the U.S. Securities and Exchange
Commission (the "Commission") a registration statement on Form F-1 (No.
333-38956) covering the registration of the Securities under the U.S. Securities
Act of 1933, as amended (the "1933 Act"), including the related U.S. Preliminary
Prospectuses (as defined below) or U.S. Prospectus. Promptly after execution and
delivery of this Agreement, the Company will either (i) prepare and file a U.S.
prospectus in accordance with the provisions of Rule 430A ("Rule 430A") of the
rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act
Regulations or (ii) if the Company has elected to rely upon Rule 434 ("Rule
434") of the 1933 Act Regulations, prepare and file a term sheet (a "Term
Sheet") in
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accordance with the provisions of Rule 434 and Rule 424(b). The information
included in such U.S. prospectus or in such Term Sheet, as the case may be, that
was omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective (a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule
430A Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." Each prospectus used before such registration statement
became effective, and any prospectus that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, is herein called a
"U.S. Preliminary Prospectus." Such registration statement, including the
exhibits thereto and schedules thereto at the time it became effective and
including the Rule 430A Information and the Rule 434 Information, as applicable,
is herein called the "Registration Statement." Any registration statement filed
pursuant to Rule 462(b) of the 1933 Act Regulations is herein referred to as the
"Rule 462(b) Registration Statement," and after such filing the term
"Registration Statement" shall include the Rule 462(b) Registration Statement.
The final prospectus in the form first furnished to the Underwriters for use in
connection with the offering of the Securities in the United States is herein
called the "U.S. Prospectus." If Rule 434 is relied on, the term "U.S.
Prospectus" shall refer to the preliminary prospectus dated June 9, 2000
together with the Term Sheet and all references in this Agreement to the date of
the U.S. Prospectus shall mean the date of the Term Sheet. For purposes of this
Agreement, all references to the Registration Statement, any U.S. Preliminary
Prospectus, the U.S. Prospectus or any Term Sheet or any amendment or supplement
to any of the foregoing shall be deemed to include the copy thereof filed with
the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("XXXXX").
The Company has also prepared and filed with the Commission des valeurs
mobilieres du Quebec (the "Reviewing Authority") and the provincial securities
regulatory authorities (the "Qualifying Authorities") in each of the provinces
of Canada (the "Qualifying Provinces") a preliminary long-form prospectus
relating to the Securities (in the English and French languages, as applicable,
the "Canadian Preliminary Prospectus") covering the distribution of the
Securities under applicable Canadian securities legislation. The Reviewing
Authority has been assigned to the Company as the designated jurisdiction
regulating the offering of the Securities. In addition, the Company (A) has
prepared and filed with the Reviewing Authority and the Qualifying Authorities,
a final long-form prospectus relating to the Securities (in the English and
French languages, as applicable, the "Final PREP Prospectus") omitting the PREP
Information (as hereinafter defined) in accordance with the rules and procedures
established pursuant to Canadian National Policy Statement No. 44
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and similar procedures under the securities legislation of the Province of
Quebec, as amended by proposed National Instrument 44-103 entitled "Post Receipt
Pricing" for the pricing of securities after the final receipt for a prospectus
has been obtained (the "PREP Procedures"), and (B) will prepare and file,
promptly after the execution and delivery of this Agreement, with the Reviewing
Authority and the Qualifying Authorities, in accordance with the PREP
Procedures, a supplemental prospectus setting forth the PREP Information (in the
English and French languages, as applicable, the "Supplemental PREP
Prospectus"). The information, if any, included in the Supplemental PREP
Prospectus that is omitted from the Final PREP Prospectus for which a receipt
has been obtained from the Reviewing Authority on behalf of itself and the
Qualifying Authorities but that is deemed under the PREP Procedures to be
incorporated by reference into the Final PREP Prospectus as of the date of the
Supplemental PREP Prospectus is referred to herein as the "PREP Information."
Each prospectus relating to the Securities used in Canada (1) before a receipt
for the Final PREP Prospectus had been obtained from the Reviewing Authority on
behalf of itself and the Qualifying Authorities or (2) after such receipt had
been obtained and prior to the execution and delivery of this Agreement, that
omits the PREP Information, is herein called a "Canadian Preliminary
Prospectus." The Final PREP Prospectus for which a receipt has been obtained
from the Reviewing Authority on behalf of itself and the Qualifying Authorities
is herein referred to as the "Canadian Prospectus,"except that, if, after the
execution of this Agreement, a Supplemental PREP Prospectus containing the PREP
Information is thereafter filed with the Reviewing Authority and the Qualifying
Authorities, the term "Canadian Prospectus"shall refer to such Supplemental PREP
Prospectus. Any amendment to the Canadian Prospectus, any amended or
supplemental prospectus or auxiliary material, information, evidence, return,
report, application, statement or document that may be filed by or on behalf of
the Company under the securities laws of the Province of Quebec or the
Qualifying Provinces prior to the Closing Time (as hereinafter defined) or,
where such document is deemed to be incorporated by reference in the Final PREP
Prospectus, prior to the expiry of the period of distribution of the Securities,
is referred to herein collectively as the "Supplementary Material." For the
purposes of this Agreement, all references to the Canadian Preliminary
Prospectus, Final PREP Prospectus, Supplemental PREP Prospectus and Canadian
Prospectus shall be deemed to include the copy thereof filed with the Reviewing
Authority and the Qualifying Authorities pursuant to the System for Electronic
Document Analysis and Retrieval ("SEDAR"). Each U.S. Preliminary Prospectus and
Canadian Preliminary Prospectus is herein called a "preliminary prospectus."
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The Company understands that a portion of the Securities may be offered and
sold in a public offering in the Province of Quebec and the Qualifying Provinces
conducted through Xxxxxxx Xxxxx Canada Inc., an affiliate of Xxxxxxx Xxxxx (the
"Sub-underwriter") and that any other offers and sales of the Securities in
Canada by other underwriters shall also be made by affiliates duly qualified and
authorized to sell the Securities in Canada pursuant to the Canadian Prospectus.
The Sub-underwriter, subject to the terms and conditions set forth herein,
agrees and covenants with the Company to use reasonable efforts to sell the
Securities in the Province of Quebec and the Qualifying Provinces. Any
Securities so sold will be purchased by the Sub-underwriter from Xxxxxxx Xxxxx
at the Closing Time at a price equal to the purchase price as set forth in
Schedule B hereto or such purchase price less an amount to be mutually agreed
upon by the Sub-underwriter and Xxxxxxx Xxxxx, which amount shall not be greater
than the underwriting commission as set forth in Schedule B hereto.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents and
warrants to each Underwriter and the Sub-underwriter as of the date hereof, as
of the Closing Time referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b) hereof, and agrees with each
Underwriter and the Sub-underwriter, as follows:
(i) Compliance with Registration Requirements. Each of the Registration
Statement and any Rule 462(b) Registration Statement has become effective
under the 1933 Act and no stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration Statement has been
issued under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are
contemplated by the Commission, and any request on the part of the
Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and did not and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and the U.S. Prospectus, any U.S. Preliminary Prospectus
and any supplement thereto or prospectus wrapper prepared in connection
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therewith, at their respective times of issuance and at the Closing Time,
complied and will comply in all material respects with any applicable laws
or regulations of foreign jurisdictions in which the U.S. Prospectus and
such U.S. Preliminary Prospectus, as amended or supplemented, if
applicable, are distributed in connection with the offer and sale of
Reserved Securities. Neither the U.S. Prospectus nor any amendments or
supplements thereto (including any prospectus wrapper), at the time the
U.S. Prospectus or any such amendment or supplement was issued and at the
Closing Time (and, if any Option Securities are purchased, at the Date of
Delivery), included or will include an untrue statement of a material fact
or omitted or will 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. If Rule 434 is used, the Company will comply
with the requirements of Rule 434 and the U.S. Prospectus shall not be
"materially different", as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time it became
effective. The representations and warranties in this subsection shall not
apply to statements in or omissions from the Registration Statement or U.S.
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through the
Representatives expressly for use in the Registration Statement or U.S.
Prospectus (or any amendment or supplement thereto).
Each U.S. Preliminary Prospectus and the U.S. Prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each U.S. Preliminary Prospectus and the U.S. Prospectus
delivered to the Underwriters for use in connection with this offering was
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation
S-T.
(ii) Compliance with Canadian Prospectus Requirements. The Company
is eligible to use the PREP Procedures by way of an exemption order issued
by the Reviewing Authority on June 29, 2000. A receipt has been obtained
from the Reviewing Authority on behalf of itself and the Qualifying
Authorities in respect of the Final PREP Prospectus and no order suspending
the distribution of the Securities has been issued by the Reviewing
Authority or any of the Qualifying Authorities. At the time the
Registration Statement became effective under the 1933 Act and at all times
subsequent thereto up to and including the Closing Time (and if any Option
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Securities are purchased, at the Date of Delivery), the Canadian Prospectus
complied and will comply in all material respects with the securities laws
applicable in the Province of Quebec as interpreted and applied by the
Reviewing Authority (including the PREP Procedures); and each of the
Canadian Prospectus, and Supplementary Material or any amendment or
supplement thereto, together with each document incorporated therein by
reference, constituted and will constitute full, true and plain disclosure
of all material facts relating to the Company and the Securities, and did
not and will not include an untrue statement of 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.
The representations and warranties in this subsection shall not apply to
statements in or omissions from the Canadian Prospectus or any
Supplementary Material made in reliance upon and in conformity with
information furnished to the Company in writing by any Underwriter through
Xxxxxxx Xxxxx or the Sub-underwriter expressly for use in the Canadian
Prospectus or any Supplementary Material.
Each Canadian Preliminary Prospectus and the Canadian Prospectus
complied when filed in all material respects with the applicable securities
legislation of the Province of Quebec and the Qualifying Provinces and each
Canadian Preliminary Prospectus and the Canadian Prospectus delivered to
the Underwriters for use in connection with this offering was identical to
the electronically transmitted copies thereof filed with SEDAR.
(iii) Independent Accountants. The accountants who audited the financial
statements included in the U.S. Prospectus and the Canadian Prospectus, are
independent public accountants as required by the 1933 Act and the 1933 Act
Regulations and are independent with respect to the Company within the
meaning of the Canada Business Corporations Act and applicable Canadian
securities laws and regulations and policies thereunder.
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(iv) Financial Statements. The financial statements included in the U.S.
Prospectus and the Canadian Prospectus, together with the related
schedules, if any, and notes, present fairly, in all material respects, the
financial position of the Company and its consolidated subsidiaries at the
dates indicated and the statements of operations and retained earnings and
cash flows of the Company and its consolidated subsidiaries for the periods
specified; such financial statements have been prepared in conformity with
generally accepted accounting principles in Canada ("Canadian GAAP")
applied on a consistent basis throughout the periods involved, except as
may be set forth in the U.S. Prospectus and the Canadian Prospectus, and
have been reconciled to generally accepted accounting principles in the
United States of America ("U.S. GAAP") in accordance with Item 18 of Form
20-F under the U.S. Securities Exchange Act of 1934, as amended (the "1934
Act"). The selected consolidated financial data and the summary
consolidated financial data included in the U.S. Prospectus and the
Canadian Prospectus present fairly, in all material respects, the
information shown therein and have been compiled on a basis consistent with
that of the audited financial statements included in the U.S. Prospectus
and the Canadian Prospectus.
(v) No Material Adverse Change in Business. Since the respective dates as
of which information is given in the U.S. Prospectus, the Canadian
Prospectus and the Supplementary Material, except as otherwise stated
therein or contemplated thereby, (A) there has been no material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course
of business (a "Material Adverse Effect"), (B) there have been no
transactions entered into by the Company or any of its subsidiaries other
than those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one enterprise,
and (C) there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its share capital.
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(vi) Good Standing of the Company. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of
Canada and has the corporate power and authority under such laws to own,
lease and operate its properties and to conduct its business as described
in the U.S. Prospectus and the Canadian Prospectus; and the Company is not
required to be duly qualified or registered as a foreign corporation to
transact business in any other jurisdiction in which such qualification or
registration may be required by reason of the conduct of business, except
where the failure so to qualify or register would not result in a Material
Adverse Effect. The following is a list of the Company's subsidiaries
(each, a "Material Subsidiary"): GAP Optique S.A., GEXFO Distribution
Internationale inc., Nortech Fibronic Inc. (Canada), EXFO Europe S.A.R.L.
and EXFO America Inc. Each subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has all necessary corporate power and authority under
such laws to own, lease and operate its properties and to conduct its
business as described in the U.S. Prospectus and the Canadian Prospectus;
and each Material Subsidiary is not required to be duly qualified or
registered as a foreign corporation to transact business in any other
jurisdiction in which such qualification or registration may be required by
reason of the conduct of business, except where the failure so to qualify
or register would not result in a Material Adverse Effect.
(vii) Capitalization. The authorized, issued and outstanding share
capital of the Company is as set forth in the U.S. Prospectus and the
Canadian Prospectus under the caption "Description of Share Capital" and in
the column entitled "Actual" under the caption "Capitalization" (except for
any subsequent issuances pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the U.S.
Prospectus and the Canadian Prospectus or pursuant to the capital
reorganization referred to in the U.S. Prospectus and the Canadian
Prospectus). All of the issued and outstanding shares in the capital of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable and have been issued in compliance with all U.S. and
Canadian securities laws; none of the outstanding shares in the capital of
the Company were issued in violation of the preemptive or other similar
rights of any shareholder of the Company. Except as disclosed in and or
contemplated by the U.S. Prospectus and the Canadian Prospectus and the
financial statements of the Company and related notes thereto included in
the U.S. Prospectus and the Canadian Prospectus, the Company does not have
any options or warrants to purchase, or any pre-emptive rights or other
rights to
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subscribe for or to purchase any securities or obligations convertible
into, or any contracts or commitments to issue or sell, any of its share
capital or any such options, rights, convertible securities or obligations
except for options granted subsequent to the date of the information
provided in the U.S. Prospectus and the Canadian Prospectus pursuant to the
Company's employee stock option plan disclosed in the U.S. Prospectus and
the Canadian Prospectus. The description of the Company's stock option and
other stock plans or arrangements, and the options or other rights granted
thereunder, as set forth in the U.S. Prospectus and the Canadian
Prospectus, accurately and fairly presents the information required to be
disclosed with respect to such plans, arrangements, options and rights.
Except as disclosed in the U.S. Prospectus and the Canadian Prospectus, to
the knowledge of the Company, there are no agreements, arrangements or
understandings among or between any shareholder of the Company with respect
to the Company or the voting or disposition of the Company's capital stock
that will survive the sale of the Securities pursuant to this Agreement.
All of the issued and outstanding shares in the capital of each Material
Subsidiary have been duly authorized and validly issued and are fully paid
and non-assessable and are owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; none of the outstanding shares in the
capital of each of the Material Subsidiaries was issued in violation of the
preemptive or other similar rights of any shareholder of such Material
Subsidiary.
(viii) Authorization of Agreement. The Company has the corporate power
and authority to execute, deliver and perform its obligations under this
Agreement and this Agreement has been duly authorized, executed and
delivered by the Company, and is enforceable in accordance with its terms,
except as rights to indemnification contained herein may be limited by
applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.
(ix) Authorization and Description of Securities. The Securities to be
sold by the Company under this Agreement have been duly authorized for
issuance and sale to the Underwriters pursuant to this Agreement and, when
issued and delivered by the Company pursuant to this Agreement against
payment of the consideration set forth herein, will be validly issued and
fully paid and non-assessable; the Subordinate Voting Shares of the Company
conform to all statements relating thereto contained in the U.S. Prospectus
and the Canadian Prospectus and such description conforms to the rights set
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forth in the instruments defining the same; no holder of the Securities
will be subject to personal liability solely by reason of being such a
holder; and the issuance of the Securities is not subject to the preemptive
or other similar rights of any shareholder of the Company.
(x) Absence of Defaults and Conflicts. Neither the Company nor any of its
subsidiaries is in violation of its charter document or bylaws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease, license or other agreement
or instrument to which the Company or any of its subsidiaries is a party or
by which it or any of them may be bound, or to which any of the property or
assets of the Company or any subsidiary is subject (collectively,
"Agreements and Instruments") except for such defaults that would not
result in a Material Adverse Effect. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein and in the U.S. Prospectus and the Canadian Prospectus
(including the authorization, issuance, sale and delivery of the Securities
and the use of the proceeds from the sale of the Securities as described in
the U.S. Prospectus and the Canadian Prospectus under the caption "Use of
Proceeds") and compliance by the Company with its obligations hereunder
have been duly authorized by all necessary corporate action and do not and
will not, whether with or without the giving of notice or passage of time
or both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company
pursuant to, the Agreements and Instruments (except for such conflicts,
breaches or defaults, Repayment Events or liens, charges or encumbrances
that would not result in a Material Adverse Effect), nor will such action
result in any violation or conflict with the provisions of the charter
document or bylaws of the Company or any subsidiary or any existing
applicable law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any subsidiary or any of
their assets, properties or operations, except for such violations or
conflicts that would not, singly or in the aggregate, result in a Material
Adverse Effect. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other evidence
of indebtedness (or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary.
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(xi) Absence of Labor Dispute. No labor dispute with the employees of the
Company or any subsidiary exists or, to the knowledge of the Company, is
imminent, and the Company is not aware (without conducting any
investigation) of any existing or imminent labor disturbance by the
employees of any of its or any subsidiary's principal suppliers,
manufacturers, customers or contractors, which, in either case, may
reasonably be expected to result in a Material Adverse Effect.
(xii) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency, governmental instrumentality or body, domestic or foreign, now
pending, or, to the knowledge of the Company, threatened, against or
affecting the Company or any subsidiary, which is required to be disclosed
in the U.S. Prospectus, the Canadian Prospectus or the Supplementary
Material (other than as described therein), or which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably
be expected to materially and adversely affect the consummation of the
transactions contemplated in this Agreement or the performance by the
Company of its obligations hereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any subsidiary is a party
or of which any of their respective property or assets is the subject which
are not described in the U.S. Prospectus, the Canadian Prospectus or the
Supplementary Material, including ordinary routine litigation incidental to
the business of the Company, would not reasonably be expected to result in
a Material Adverse Effect.
(xiii) Accuracy of Exhibits. There are no contracts or documents which
are required to be described in the Registration Statement or the U.S.
Prospectus and the Canadian Prospectus or to be filed as exhibits to the
Registration Statement which have not been so described and filed as
required.
(xiv) Possession of Intellectual Property. Except as disclosed in the
U.S. Prospectus and Canadian Prospectus and the Supplementary Material, the
Company and its subsidiaries own or possess, or can acquire on reasonable
terms, adequate patents, patent rights, licenses, inventions, copyrights,
knowhow (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
as now operated by them and as described in the U.S. Prospectus and the
Canadian Prospectus, and neither the Company nor any of its subsidiaries
has received any notice or is otherwise aware of any infringement of or
conflict
18
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with asserted rights of others with respect to any Intellectual Property or
of any facts or circumstances which would render any Intellectual Property
invalid or inadequate to protect the interest of the Company or any of its
subsidiaries therein, and which infringement or conflict (if the subject of
any unfavorable decision, ruling or finding) or invalidity or inadequacy,
singly or in the aggregate, would result in a Material Adverse Effect.
(xv) Absence of Further Requirements. No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree
of, any court or governmental authority or agency is necessary or required
for the performance by the Company of its obligations hereunder, in
connection with the offering, issuance or sale of the Securities hereunder
or the consummation of the transactions contemplated by this Agreement,
except (A) such as have been already obtained, or as may be required, under
the 1933 Act or the 1933 Act Regulations or the securities or blue sky laws
of any state, (B) such as have been obtained, or as may be required, under
the securities laws and regulations of the Province of Quebec and the
Qualifying Provinces and (C) such as have been obtained under the laws and
regulations of jurisdictions outside the United States and Canada in which
the Reserved Securities are offered.
(xvi) Possession of Licenses and Permits. Except in each case as would
not individually or in an aggregate have a Material Adverse Effect, (A) the
Company and its subsidiaries possess such permits, certificates, licenses,
approvals, consents and other authorizations (collectively, "Governmental
Licenses") issued by the appropriate federal, provincial, state, local or
foreign regulatory agencies or bodies necessary to conduct the business as
now operated by them and as described in the U.S. Prospectus and the
Canadian Prospectus; (B) the Company and its subsidiaries are in compliance
with the terms and conditions of all such Governmental Licenses; (C) all of
the Governmental Licenses are valid and in full force and effect; and (D)
neither the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses.
(xvii) Title to Property. Other than as described in the U.S. Prospectus
and the Canadian Prospectus, the Company and its subsidiaries have good and
marketable title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (A) are
described in the U.S. Prospectus and the Canadian Prospectus or (B) do not,
singly or in the aggregate, materially affect the value of such property
and do
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not materially interfere with the use made and proposed to be made of such
property by the Company or any of its subsidiaries; and all of the leases
and subleases material to the business of the Company and its subsidiaries,
considered as one enterprise, and under which the Company or any of its
subsidiaries holds properties described in the U.S. Prospectus and the
Canadian Prospectus, are in full force and effect, and neither the Company
nor any subsidiary has any notice of any material claim of any sort that
has been asserted by anyone adverse to the rights of the Company or any
subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary to
the continued possession of the leased or subleased premises under any such
lease or sublease.
(xviii) Investment Company Act. The Company is not subject to
registration or regulation as, and upon the issuance and sale of the
Securities as herein contemplated and the application of the net proceeds
therefrom as described in the U.S. Prospectus and the Canadian Prospectus;
will not be required to register as an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended (the "1940 Act").
(xix) Environmental Laws. Except as described in the U.S. Prospectus and
the Canadian Prospectus and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company nor
any of its subsidiaries is in violation of any federal, provincial, state,
local, municipal or foreign statute, law, rule, regulation, ordinance,
code, policy or rule of common or civil law or any judicial or
administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata)
or wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and its subsidiaries have or are in the process of
obtaining all permits, authorizations and approvals required under any
applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or, to the knowledge of the Company,
threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Laws
20
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against the Company or any of its subsidiaries and (D) there are no events
or circumstances that might reasonably be expected to form the basis of an
order for cleanup or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting the
Company or any of its subsidiaries relating to Hazardous Materials or any
Environmental Laws. The Company does not anticipate any difficulty in
obtaining the required permits, authorizations and approvals referred to in
(B) above.
(xx) No Stabilization or Manipulation. Neither the Company nor, to its
knowledge, any of its officers, directors or affiliates, has taken or will
take, directly or indirectly, any action designed to, or that might be
reasonably expected to, cause or result in stabilization or manipulation of
the price of the Securities.
(xxi) Registration Rights. Except as described in the U.S. Prospectus and
the Canadian Prospectus, there are no persons with registration rights or
other similar rights to have any securities registered or qualified for
distribution pursuant to the Registration Statement, the Canadian
Prospectus or otherwise registered by the Company under the 1933 Act or
qualified for distribution under any Canadian provincial securities
legislation.
(xxii) Year 2000 Problem. The Year 2000 Problem as it relates to the
Company has been accurately described in the U.S. Prospectus and the
Canadian Prospectus in all material respects. The "Year 2000 Problem" as
used herein means any significant risk that computer hardware or software
used in the receipt, transmission, processing, manipulation, storage,
retrieval, retransmission or other utilization of data or in the operation
of mechanical or electrical systems of any kind will not, in the case of
dates or time periods occurring after December 31, 1999, function at least
as effectively as in the case of dates or time periods occurring prior to
January 1, 2000.
(xxiii) Taxes. Except as would not result in a Material Adverse Effect,
the Company and its subsidiaries have filed all necessary United States and
Canadian federal, state, provincial, local and foreign income, payroll,
franchise, use and other tax returns and has paid all taxes shown as due
thereon or with respect to any of its properties or any transactions to
which it was a party (except for such taxes, if any, as are being, or will
be, contested in good faith and as to which adequate reserves have been
provided), and there is no tax deficiency that has been, or to the
knowledge of the Company is likely to be, asserted against the Company or
any of its subsidiaries or any of their properties or assets that would
result in a Material Adverse Effect.
(xxiv) Insurance. Except as disclosed in the U.S. Prospectus and the
Canadian Prospectus, or as otherwise would not have a Material Adverse
21
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Effect, the Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
customary in the business in which it is engaged or proposes to engage; the
Company has no reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not result in a Material Adverse Effect.
(xxv) Compliance with Laws. Except as would not have a Material Adverse
Effect, the Company and its subsidiaries are in all materials respects in
compliance with, and conduct their businesses in conformity with, all
applicable U.S. and Canadian federal, state, provincial, local and foreign
laws, rules and regulations or any court or governmental agency or body,
The Toronto Stock Exchange (the "TSE") or the Nasdaq National Market.
(xxvi) No Broker. Other than as contemplated by this Agreement, there is
no broker, finder or other party that is entitled to receive from the
Company any brokerage or finder's fee or other fee or commission as a
result of any of the transactions contemplated by this Agreement.
(xxvii) Adequate Accounting. The Company and each of its subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that: (i) transactions are executed in accordance
with management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with Canadian GAAP and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(xxviii) Principal Shareholders. Except as disclosed in writing to the
Representatives, to the knowledge of the Company, after due inquiry, none
of the directors or officers or shareholders of the Company listed under
"Principal Shareholders" in the U.S. Prospectus and Canadian Prospectus is
or has ever been subject to prior criminal or bankruptcy proceedings in the
United States, Canada or elsewhere.
(xxix) Non-Arm's Length Transactions. To the knowledge of the Company,
after due inquiry, except as disclosed in writing to the Representatives or
in the U.S. Prospectus and Canadian Prospectus, neither the Company nor any
of its subsidiaries is a party to any contract, agreement or understanding
with any officer, director, employee or any other person not dealing at
arm's length with the Company which is required to be disclosed by
applicable securities legislation of the Qualifying Provinces.
22
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(xxx) Stamp Tax. No stamp duty, registration or documentary taxes, duties
or similar charges (except for those paid, or will be paid, by the Company)
are payable under the federal laws of Canada or the laws of the Province of
Quebec in connection with the creation, issuance, sale and delivery to the
Underwriters of the Securities or the authorization, execution, delivery
and performance of this Agreement or the resale of Securities by an
Underwriter to U.S. residents.
(xxxi) Registrar and Transfer Agent. CIBC Mellon Trust Company, at its
principal offices in Montreal, Toronto and Vancouver, and ChaseMellon
Shareholder Services, L.L.C., at its principal office in New York have been
duly appointed as the co-registrars and co-transfer agents in respect of
the Subordinate Voting Shares of the Company.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Representatives or to
counsel for the Underwriters and the Sub-underwriter shall be deemed a
representation and warranty by the Company to each Underwriter and the
Sub-underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at
the price per share set forth in Schedule B, the number of Initial Securities
set forth in Schedule A opposite the name of such Underwriter, plus any
additional number of Initial Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Option Securities. In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriters, severally and
not jointly, to purchase up to an additional 1,050,000 Subordinate Voting Shares
at the price per share set forth in Schedule B, less an amount per share equal
to any dividends or distributions declared by the Company and payable on the
Initial Securities but not payable on the Option Securities. The option hereby
granted will expire 30 days after the date hereof and may be exercised in whole
or in part from time to time only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Initial Securities upon notice by the Representatives to the Company setting
forth the number of Option Securities as to which the several Underwriters are
then exercising the option and the time and date of payment and delivery for
such Option Securities. Any such time and date of delivery (a "Date of
Delivery") shall be determined by the Representatives, but shall
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not be later than seven full business days after the exercise of said option,
nor in any event prior to the Closing Time, as hereinafter defined. If the
option is exercised as to all or any portion of the Option Securities, each of
the Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of Option Securities then being purchased which
the number of Initial Securities set forth in Schedule A opposite the name of
such Underwriter bears to the total number of Initial Securities, subject in
each case to such adjustments as the Representatives in their discretion shall
make to eliminate any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of certificates
for, the Initial Securities shall be made at the offices of Fasken Xxxxxxxxx
XxXxxxxx, 000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxx X0X 0X0, or at such
other place as shall be agreed upon by the Representatives and the Company, at
8:30 A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30
P.M. (Eastern Time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Representatives and the Company (such time and date of payment and delivery
being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company, on each Date of Delivery as specified in the notice from the
Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately
available (same day) funds to a bank account designated by the Company not less
than 24 hours prior to Closing Time relevant Date of Delivery against delivery
to the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized Xxxxxxx Xxxxx, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Payment to the Company with respect to Securities the Underwriters
have sold or expect to sell in the United States shall be made in U.S. dollars
and payment to the Company with respect to Securities the Underwriters have sold
or expect to sell in Canada shall be made in Canadian dollars, as set forth in
Schedule B hereto. Xxxxxxx Xxxxx, individually and not as representative of the
Underwriters or the Sub-underwriter, may (but shall not be obligated to) make
payment of the purchase price for the Initial Securities or the Option
Securities, if any, to be purchased by any Underwriter or the Sub-underwriter
whose funds have not been received by the Closing Time, or the relevant Date of
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Delivery, as the case may be, but such payment shall not relieve such
Underwriter or the Sub-Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial Securities and
the Option Securities, if any, shall be in such denominations and registered in
such names as the Representatives may request in writing at least 48 hours
before the Closing Time or the relevant Date of Delivery, as the case may be.
The Initial Securities and the Option Securities, if any, will be made available
for examination and packaging by the Representatives in The City of New York not
later than 10:00 A.M. (Eastern time) on the business day prior to the Closing
Time or the relevant Date of Delivery, as the case may be.
(e) Sub-underwriter Notification. The Sub-underwriter shall notify Xxxxxxx
Xxxxx at least 48 hours prior to the Closing Time (or Time of Delivery, as
applicable) of the number of the Securities to be sold by the Sub-underwriter in
the Province of Quebec and the Qualifying Provinces and, subject to the
completion of the purchase of the Securities by Xxxxxxx Xxxxx hereunder, Xxxxxxx
Xxxxx agrees to sell to the Sub-underwriter, and the Sub-underwriter agrees to
purchase from Xxxxxxx Xxxxx, at a price equal to the purchase price set forth in
Schedule B hereto or at such purchase price less an amount to be mutually agreed
upon by the Sub-underwriter and Xxxxxxx Xxxxx, which amount shall not be greater
than the underwriting commission as set forth in Schedule B hereto, such number
of the Securities at the Closing Time (or Time of Delivery as applicable).
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter and the Sub-underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company will comply with the requirements of the PREP Procedures and Rule 430A
or Rule 434, as applicable, and will notify the Representatives promptly, and
confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall have been filed with the Commission or shall have
become effective, and when any supplement to the U.S. Prospectus or the Canadian
Prospectus or any amended U.S. Prospectus, Canadian Prospectus or any
Supplementary Material shall have been filed, (ii) of the receipt of any
comments from the Reviewing Authority, any Qualifying Authority or the
Commission, (iii) of any request by the Reviewing Authority to amend or
supplement the Final PREP Prospectus or the Canadian Prospectus or for
additional information, or of any request by the Commission to amend the
Registration Statement or to amend or supplement the U.S. Prospectus or for
additional information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any U.S. preliminary
25
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prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the institution or, to the knowledge
of the Company, threatening of any proceedings for any such purpose, and (v) of
the issuance by the Reviewing Authority, any Qualifying Authority or any stock
exchange of any order having the effect of ceasing or suspending the
distribution of the Securities or the trading (during the period of the
distribution of the Securities) in the securities of the Company, or of the
institution or, to the knowledge of the Company, threatening of any proceedings
for any such purpose. The Company will use every reasonable effort to prevent
the issuance of any such stop order or of any order preventing or suspending
such use or such order ceasing or suspending the distribution of the Securities
or the trading (during the period of the distribution of the Securities) in the
Securities of the Company and, if any such order is issued, to obtain the
lifting thereof at the earliest possible time.
(b) Filing of Amendments. The Company will not at any time file or make any
amendment to the Registration Statement (including any filing under Rule
462(b)), any Term Sheet, any amendment or supplement to the Final PREP
Prospectus, or any amendment or supplement to any of the prospectus included in
the Registration Statement at the time it becomes effective, the U.S.
Prospectus, the Supplemental PREP Prospectus or any Supplementary Material, of
which the Representatives shall not have previously been advised and furnished a
copy or to which the Representatives or counsel for the Underwriters shall have
objected promptly, acting reasonably; provided, however, that this provision
shall not prohibit the Company from complying in a timely manner with its
disclosure obligations under applicable securities legislation and the
requirements of any relevant stock exchange.
(c) Delivery of Filed Documents. The Company has furnished or will deliver to
each of the Representatives and counsel for the Underwriters, without charge, a
copy of the Canadian Preliminary Prospectus, the Final PREP Prospectus, the
Canadian Prospectus and any Supplementary Material, approved, signed and
certified as required by the securities laws of the Province of Quebec and the
Qualifying Provinces and conformed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein) and signed copies of all
consents and certificates of experts. The copies of the Registration Statement
and each amendment thereto furnished to the Representatives will be identical to
the electronically transmitted copies thereof filed with the Commission pursuant
to XXXXX, except to the extent permitted by Regulation S-T. The copies of the
Canadian Preliminary Prospectus, the Final PREP Prospectus, the Canadian
Prospectus and any Supplementary Material and any amendments or supplements
thereto furnished to the Underwriters
26
-21-
will be identical to the electronically transmitted copies thereof filed with
the Province of Quebec and the Qualifying Provinces pursuant to SEDAR.
(d) Delivery of Prospectuses. The Company has delivered to each Underwriter
and the Sub-underwriter, without charge, as many copies of each U.S. Preliminary
Prospectus and Canadian Preliminary Prospectus and any prospectus wrappers
prepared in connection with the distribution of the Reserved Securities as such
Underwriter and the Sub-underwriter have reasonably requested, and the Company
hereby consents to the use of such copies for the purposes permitted by the 1933
Act and applicable Canadian securities laws. The Company will deliver to each
Underwriter and the Sub-underwriter, without charge, during the period when the
U.S. Prospectus is required to be delivered under the 1933 Act or the 1934 Act
and during the period when the Canadian Prospectus is required to be delivered
under the securities laws of the Province of Quebec and the Qualifying
Provinces, but no later than the first business day after the date hereof, such
number of copies of the U.S. Prospectus and Canadian Prospectus, respectively
(each as supplemented or amended) as such Underwriter and the Sub-underwriter
may reasonably request. The U.S. Prospectus and any amendments or supplements
thereto furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX, except
to the extent permitted by Regulation S-T. The Canadian Prospectus and any
amendments or supplements thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Province of Quebec and the Qualifying Provinces pursuant to SEDAR.
(e) Continued Compliance with Securities Laws. The Company will comply with
the 1933 Act and the 1933 Act Regulations and the securities laws of the
Province of Quebec and the Qualifying Provinces so as to permit the completion
of the distribution of the securities as contemplated in this Agreement and in
the U.S. Prospectus and the Canadian Prospectus. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with sales
of the Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters or the
Sub-underwriter or for the Company, acting reasonably, to amend the Registration
Statement or amend or supplement the U.S. Prospectus or the Canadian Prospectus
in order that the U.S. Prospectus or the Canadian Prospectus will not include
any untrue statements of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the light of
the circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, acting reasonably, at any
such time to amend the Registration Statement or amend or supplement the U.S.
Prospectus or the Canadian Prospectus in order to comply with the requirements
of the 1933 Act or the 1933 Act Regulations or the securities laws
27
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of the Province of Quebec and the Qualifying Provinces, the Company will
promptly prepare and file with the Commission and/or with the Reviewing
Authority and the Qualifying Authorities, subject to Section 3(b), such
amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement or the U.S. Prospectus or the
Canadian Prospectus comply with such requirements, and the Company will furnish
to the Underwriters and the Sub-underwriter such number of copies of such
amendment or supplement as the Underwriters and the Sub-underwriter may
reasonably request. The Underwriters and the Sub-underwriter shall notify, in
writing, the Company upon their completion of the distribution of the Securities
as contemplated by the U.S. Prospectus or the Canadian Prospectus.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
(domestic or foreign) as the Representatives may designate and to maintain such
qualifications in effect for a period of not less than one year from the
effective date of the Registration Statement and any Rule 462(b) Registration
Statement subject to any limitations set forth in such laws; provided, however,
that the Company shall not be obligated to file any general consent to service
of process or to qualify as a foreign corporation or as a dealer in securities
in any jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject. In each jurisdiction in which the Securities have been so
qualified, the Company will file such statements and reports as may be required
by the laws of such jurisdiction to continue such qualification in effect for a
period of not less than one year from the effective date of the Registration
Statement and any Rule 462(b) Registration Statement subject to any limitations
set forth in such laws.
(g) Rule 158. The Company will timely file such reports pursuant to the 1934
Act as are necessary in order to make generally available to its securityholders
as soon as practicable an earnings statement (which need not be audited) for the
purposes of, and to provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act and the 1933 Act Regulations.
(h) Use of Proceeds. The Company will use the net proceeds received by it from
the sale of the Securities in the manner specified in the U.S. Prospectus and
the Canadian Prospectus under "Use of Proceeds."
(i) Restriction on Sale of Securities. During a period of 180 days from the
date of the U.S. Prospectus and the Canadian Prospectus, the Company will not,
without the prior written consent of Xxxxxxx Xxxxx, (i) directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend or
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otherwise transfer or dispose of any Subordinate Voting Shares or any securities
convertible into or exercisable or exchangeable for Subordinate Voting Shares or
file any registration statement under the 1933 Act, other than a registration
statement on Form S-8 (or an equivalent registration form then in effect), with
respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Subordinate Voting
Shares, whether any such swap or transaction described in clause (i) or (ii)
above is to be settled by delivery of Subordinate Voting Shares or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Securities to be sold hereunder, (B) any Subordinate Voting Shares issued or
options to purchase Subordinate Voting Shares granted pursuant to existing
employee plans of the Company referred to in the U.S. Prospectus and the
Canadian Prospectus, provided that none of those options shall vest or shares be
transferred during the 180 day period referred to in the previous sentence and
the Company shall enter stop transfer instructions with its registrar and
transfer agent against the transfer of such shares, (C) any Subordinate Voting
Shares issued by the Company upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof and referred to in the
U.S. Prospectus and the Canadian Prospectus, (D) a total of not more than
1,000,000 Subordinate Voting Shares issued by the Company in connection with any
strategic acquisition, merger or similar transaction, provided that any such
Subordinate Voting Shares issued under this clause (D) shall thereafter be
subject to the restrictions set forth in the previous sentence, (E) any
securities issuable upon the conversion of a security outstanding on the date
hereof and referred to in the U.S. Prospectus and the Canadian Prospectus; and
(F) any securities issuable in connection with the capital reorganization
referred to in the U.S. Prospectus and the Canadian Prospectus.
(j) Listing. The Company has obtained the conditional approval of the TSE for
the listing of the Subordinate Voting Shares (including the Securities) and will
use its best efforts to satisfy any requirements of the TSE to the listing
thereof within the time specified in such approval. The Company has obtained the
approval (subject to notice of issuance) of the Nasdaq National Market to quote
the Subordinate Voting Shares (including the Securities) and will use its best
efforts to effect and maintain the quotation of the Subordinate Voting Shares
(including the Securities) on the Nasdaq National Market and will file with the
Nasdaq National Market all documents and notices required by the Nasdaq National
Market.
(k) Reporting Requirements. The Company, during the period when the U.S.
Prospectus or Canadian Prospectus is required to be delivered under the 1933 Act
or the 1934 Act or under applicable Canadian securities legislation, will file
all documents required to be filed by the Company (i) with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act and
the rules and
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regulations of the Commission thereunder, and (ii) with the Province of Quebec
and the Qualifying Provinces in accordance with applicable Canadian securities
legislation.
(l) PREP Procedures and Rule 424(b). The Company will take such steps as it
deems necessary to ascertain promptly whether the form of Canadian Prospectus
containing the PREP Information was received for filing by the Reviewing
Authority and the Qualifying Authorities and whether the form of prospectus
transmitted for filing pursuant to Rule 424(b) was received for filing by the
Commission and, in the event that any such prospectuses were not received for
filing, it will promptly file any such prospectus not then received for filing.
(m) Translation Opinions. The Company shall cause Fasken Xxxxxxxxx XxXxxxxx to
deliver to the Underwriters and the Sub-underwriter opinions, dated the date of
the filing, of the French language versions of each of the Final PREP Prospectus
and the Supplemental PREP Prospectus, to the effect that the French language
version of each such prospectus (other than the financial statements and the
information set forth under the caption "Capitalization" and the caption
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and other financial data contained therein or omitted therefrom) is
in all material respects a complete and proper translation of the English
versions thereof and is not susceptible of any materially different
interpretation with respect to any material matter contained therein. The
Company shall cause Fasken Xxxxxxxxx DuMoulin to deliver to the Underwriters and
the Sub-underwriter similar opinions as to the French language translation of
any information contained in any Supplementary Material, in form and substance
satisfactory to the Underwriters and the Sub-underwriter, prior to the filing
thereof with the Reviewing Authority.
(n) Translation Opinions--Financial Statements. The Company shall cause
PricewaterhouseCoopers LLP to deliver to the Underwriters and the
Sub-underwriter opinions, dated the date of the filing, of the French language
versions of each of the Final PREP Prospectus and the Supplemental PREP
Prospectus, to the effect that the financial statements and other financial
data, including the information set forth under the caption "Capitalization" and
the caption "Management's Discussion and Analysis of Financial Condition and
Results of Operations") contained in the French language version of each such
prospectus, together with each document incorporated therein by reference, is in
all material respects a complete and proper translation of the English versions
thereof and is not susceptible of any materially different interpretation with
respect to any material matter contained therein. The Company shall cause
PricewaterhouseCoopers LLP to deliver to the Underwriters and the
Sub-underwriter similar opinions as to the French language translation of any
information contained in any Supplementary Material, in form and
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substance satisfactory to the Underwriters and the Sub-underwriter, prior to the
filing thereof with the Reviewing Authority.
(o) Lock-Up Agreements. The Company will use its best efforts to ensure that
those persons listed in Schedule C hereto comply with the conditions contained
in the agreements signed by such persons substantially in the form of Exhibit G
hereto. The Company will not release any of its officers, directors or
shareholders from any lock-up agreements currently existing or hereafter
effected without the prior written consent of Xxxxxxx Xxxxx. The Company also
will not release any shareholders of the Company from contractual resale
restrictions imposed by the Company's Share Purchase Plan for a period of
180 days following this Agreement without the prior written consent of Xxxxxxx
Xxxxx.
(p) Press Releases and Press Conferences. Prior to the Closing Time (and if
any Option Securities are purchased, to the Date of Delivery), the Company shall
not, without the prior consent of Xxxxxxx Xxxxx, issue a press release or hold a
press conference with respect to the Company or any of its subsidiaries.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the performance of
its obligations under this Agreement, including (i) the preparation, printing
and filing of the Registration Statement (including financial statements and
exhibits) and of each amendment thereto, the preliminary prospectuses, the U.S.
Prospectus, the Final PREP Prospectus, the Canadian Prospectus and the
Supplementary Material and any amendments or supplements thereto, and the cost
of furnishing copies thereof to the Underwriters and the Sub-underwriter,
(ii) the preparation, printing and delivery to the Underwriters and the
Sub-underwriter of this Agreement, any Agreement among Underwriters and such
other documents as may be required in connection with the offering, purchase,
sale, issuance or delivery of the Securities, (iii) the preparation, printing,
issuance and delivery of the certificates for the Securities to the Underwriters
and the Sub-underwriter, including any stock or other transfer taxes and any
stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the Underwriters or the Sub-underwriter, (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors, (v) the
qualification of the Securities under applicable securities laws in accordance
with the provisions of Section 3(f) hereof, including filing fees of any
necessary filings under state law and the reasonable fees and disbursements of
counsel for the Underwriters in connection therewith and in connection with the
preparation of the Blue Sky Survey and any supplement thereto, (vi) the printing
and delivery to the Underwriters and the Sub-underwriter of commercial copies of
each preliminary prospectus, and Term Sheets and of the U.S. Prospectus and the
Canadian Prospectus and any amendments or supplements thereto, (vii) the
preparation, printing and delivery to the Underwriters of commercial copies of
the
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Blue Sky Survey and any supplement thereto, (viii) the fees and expenses of any
transfer agent or registrar for the Securities, (ix) the filing fees incident
to, and the reasonable fees and disbursements of counsel to the Underwriters and
the Sub-underwriter in connection with, the review by the National Association
of Securities Dealers, Inc. (the "NASD") of the terms of the sale of the
Securities, (x) the fees and expenses incurred in connection with the listing of
the Securities on the TSE and inclusion of the Securities in the Nasdaq National
Market, and (xi) all costs and expenses of the Underwriters and the
Sub-underwriter, including the fees and disbursements of counsel to the
Underwriters and the Sub-underwriter in connection with matters related to the
Reserved Securities which are designated by the Company for sale to employees
and others having a business or other relationship with the Company. It is
understood, however, that except as provided in this Section 4(a) and Section
4(b) below, the Underwriters and the Sub-underwriter will pay all of their own
costs and expenses, including (without limitation) the fees of their counsel.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters and the
Sub-underwriter for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriters and the
Sub-underwriter.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company delivered pursuant to the
provisions hereof, to the performance by the Company of its covenants and other
obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Final PREP Prospectus has
been filed with the Reviewing Authority and with the Qualifying Authorities and
a receipt obtained therefor and the Registration Statement, including any Rule
462(b) Registration Statement, has become effective under the 1933 Act; and at
the Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or, to the Company's knowledge, threatened by the Commission, no order
having the effect of ceasing or suspending the distribution of the Securities or
the trading in the securities of the Company or any other securities of the
Company shall have been issued or proceedings therefor initiated or, to the
Company's knowledge, threatened by any securities commission, securities
regulatory authority or stock exchange in Canada or the United States, and any
request on the part of the Reviewing Authority, any Qualifying Authority or the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Underwriters and the Sub-underwriter.
A Supplemental PREP Prospectus containing the PREP
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Information shall have been filed with the Reviewing Authority and with the
Qualifying Authorities in accordance with the PREP Procedures. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to rely on Rule 434, a
Term Sheet shall have been filed with the Commission in accordance with Rule
424(b).
(b) Opinion of Canadian Counsel for Company. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Fasken Xxxxxxxxx XxXxxxxx, Canadian counsel for the Company, in form
and substance satisfactory to counsel for the Underwriters and the
Sub-underwriter, together with signed or reproduced copies of such opinion for
each of the Underwriters and the Sub-underwriter to the effect set forth in
Exhibit A hereto and to such further effect as counsel to the Underwriters and
the Sub-underwriter may reasonably request. In giving such opinion such counsel
may rely, as to all matters governed by the laws of jurisdictions other than the
laws of the Provinces of Quebec, Ontario and British Columbia and the federal
laws of Canada applicable therein upon the opinions of counsel satisfactory to
counsel for the Underwriters and the Sub-underwriter. Such counsel may also
state that, insofar as such opinion involves factual matters, they have relied,
to the extent they deem proper, upon certificates of officers of the Company and
certificates of public officials, and have made all reasonable assumptions
usually found in such opinions.
(c) Opinion of U.S. Counsel for Company. At Closing Time, the Representatives
shall have received the favorable opinion dated as of the Closing Time, of Xxxx,
Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, United States counsel for the Company,
together with signed or reproduced copies of such opinion for each of the other
Underwriters and the Sub-underwriter, in form and substance satisfactory to
counsel for the Underwriters and the Sub-underwriter to the effect set forth in
Exhibit B hereto and to such further effect as counsel to the Underwriters and
the Sub-underwriter may reasonably request. In giving such opinion such counsel
may rely, as to all matters governed by the laws of jurisdictions other than the
law of the State of New York, the General Corporation Law of the State of
Delaware and the federal law of the United States, upon the opinions of counsel
satisfactory to counsel for the Underwriters and the Sub-underwriter. Such
counsel may also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of officers
of the Company and certificates of public officials, and have made all
reasonable assumptions usually found in such opinions.
(d) Opinion of Canadian Counsel for Underwriters and the Sub-underwriter. At
Closing Time, the Representatives shall have received the favorable
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opinion, dated as of Closing Time, of, Xxxxxx Xxxxxxx, Canadian counsel for the
Underwriters and the Sub-underwriter, together with signed or reproduced copies
of such opinion for each of the other Underwriters, in form and substance
satisfactory to the Representatives. In giving such opinion such counsel may
rely, as to all matters governed by the laws of jurisdictions other than the
laws of the Provinces of Quebec and Ontario and the federal laws of Canada
applicable therein upon the opinions of counsel satisfactory to the
Representatives. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and certificates of public officials and
have made all reasonable assumptions usually found in such opinions.
(e) Opinion of U.S. Counsel for Underwriters and the Sub-underwriter. At
Closing Time, the Representatives shall have received the favorable opinion,
dated as of Closing Time, of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, United
States counsel for the Underwriters and the Sub-underwriter, together with
signed or reproduced copies of such opinion for each of the other Underwriters,
in form and substance satisfactory to the Representatives. In giving such
opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York and the federal law of
the United States, upon the opinions of counsel satisfactory to the
Representatives. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and certificates of public officials and
have made all reasonable assumptions usually found in such opinions.
(f) Opinion of In-house Counsel. At Closing Time, the Representatives shall
have received the favorable opinion, dated as of Closing Time, of the Company's
In-house Counsel, together with signed or reproduced copies of such letter for
each of the other Underwriters, in form and substance satisfactory to counsel
for the Underwriters and the Sub-underwriter to the effect set forth in Exhibit
C hereto and to such further effect as counsel to the Underwriters and the
Sub-underwriter may reasonably request. In giving such opinion such counsel may
rely, as to all matters governed by the laws of jurisdictions other than the
laws of the Province of Quebec and the federal laws of Canada applicable
therein, upon the opinions of counsel satisfactory to the Representatives. Such
counsel may also state that, insofar as such opinion involves factual matters,
he has relied, to the extent he deems proper, upon certificates of public
officials.
(g) Opinion of Swiss Counsel for the Company. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of the
Closing Time of Mtre Xxxxxx Xxxxx, together with signed or reproduced copies of
such opinion for each of the other Underwriters, in form and substance
satisfactory to counsel for the Underwriters and the Sub-underwriter to the
effect set forth in
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Exhibit D hereto and to such further effect as counsel to the Underwriters and
the Sub-underwriter may reasonably request. In giving such opinion such counsel
may rely, as to all matters governed by the laws of jurisdictions other than the
laws of Switzerland upon the opinions of counsel satisfactory to counsel for the
Underwriters and the Sub-underwriter. Such counsel may also state that, insofar
as such opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers of the Company and certificates of
public officials, and have made all reasonable assumptions usually found in such
opinions.
(h) Opinion of French Counsel for the Company. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of the
Closing Time of Mtre Philippe Auzas, together with signed or reproduced copies
of such opinion for each of the other Underwriters, in form and substance
satisfactory to counsel for the Underwriters and the Sub-underwriter to the
effect set forth in Exhibit E hereto and to such further effect as counsel to
the Underwriters and the Sub-underwriter may reasonably request. In giving such
opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the laws of France upon the opinions of counsel
satisfactory to counsel for the Underwriters and the Sub-underwriter. Such
counsel may also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of officers
of the Company and certificates of public officials, and have made all
reasonable assumptions usually found in such opinions.
(i) Opinions of Patent Counsel. At Closing Time, the Representatives shall
have received favorable opinion, dated as of Closing Time, of Xxxxxx Xxxxx &
Associes, patent counsel for the Company, together with signed or reproduced
copies of such opinions for each of the other Underwriters, in form and
substance satisfactory to counsel for the Underwriters and the Sub-underwriter
to the effect set forth in Exhibit F hereto and to such further effect as
counsel to the Underwriters and the Sub-underwriter may reasonably request. In
giving such opinions such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the federal laws of the United States and
Canada, as applicable, upon the opinions of counsel satisfactory to the
Representatives. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and certificates of public officials.
(j) Officers' Certificate. At Closing Time, there shall not have been, since
the date hereof or since the respective dates as of which information is given
in the U.S. Prospectus and the Canadian Prospectus, any material adverse change
in the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and the
Representatives shall have received a certificate of each of the Chief Executive
Officer of the Company and the
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Chief Financial Officer of the Company, dated as of Closing Time, to the effect
that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct with
the same force and effect as though expressly made at and as of Closing Time,
(iii) the Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to Closing Time, (iv) no
stop order suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are pending
or, to the knowledge of the Company, are contemplated by the Commission, and (v)
no order having the effect of ceasing or suspending the distribution of the
Securities shall have been issued and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are contemplated
by any securities commission or securities regulatory authority in Canada.
(k) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from PricewaterhouseCoopers
LLP, a letter dated such date, in form and substance satisfactory to the
Representatives together with signed or reproduced copies of such letter for
each of the other Underwriters and the Sub-underwriter containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the U.S. Prospectus and the Canadian Prospectus.
(l) Bringdown Comfort Letter. At Closing Time, the Representatives shall have
received from PricewaterhouseCoopers LLP, a letter, dated as of Closing Time, to
the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (i) of this Section, except that the "specified date"
referred to shall be a date not more than three business days prior to Closing
Time.
(m) No Objection. The NASD has confirmed that it has not raised any objection
with respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(n) Lock-Up Agreements. At the date of this Agreement, the Representatives
shall have received an agreement substantially in the form set forth in Exhibit
G hereto, signed by the persons listed on Schedule C hereto, who represent all
of the directors and officers of the Company and all of the shareholders of
record of the Company other than those shareholders that are contractually
restricted from selling the Company's securities until at least October 21, 2003
pursuant to the Company's Share Purchase Plan referred to in Section 3(o) hereof
and under the caption "Management - Share Plan" in the U.S. Prospectus and the
Canadian Prospectus.
(o) Approval of Listing. At Closing Time, the Securities shall have been
conditionally approved for listing on the TSE, subject only to official notice
of
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issuance. At Closing Time, the Securities shall have been approved for inclusion
in the Nasdaq National Market, subject only to official notice of issuance.
(p) Capital Reorganization. At the date of this Agreement, the Company shall
have completed the capital reorganization referred to in the U.S. Prospectus and
the Canadian Prospectus under "Description of Share Capital."
(q) Escrow Agreement. Contemporaneous with the purchase of the Initial
Securities by the Underwriters pursuant to this Agreement, the transactions
contemplated by the agreement, dated May 19, 2000 and the agreement, dated June
12, 2000, each among X. Xxxxxxx Investissements Financiers Inc., Fiducie Xxxxxxx
Xxxxxxx, Xxxxxxx Xxxxxxx, X. Xxxxxxxx Investissements Financiers Inc., Fiducie
Xxxxxx Xxxxxxxx, Xxxxxx Xxxxxxxx, Gexfo Investissements Technologiques Inc. and
the Company, shall have been completed.
(r) Conditions to Purchase of Option Securities. In the event that the
Underwriters and the Sub-underwriter exercise their option provided in Section
2(b) hereof to purchase all or any portion of the Option Securities, the
representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company hereunder shall be true
and correct as of each Date of Delivery and, at the relevant Date of Delivery,
the Representatives shall have received:
(i) Opinion of Canadian Counsel for Company. The favorable opinion of
Fasken Xxxxxxxxx DuMoulin, Canadian counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters and the
Sub-underwriter, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(b) hereof.
(ii) Opinion of U.S. Counsel for Company. The favorable opinion of Xxxx,
Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, U.S. counsel for the Company, in form
and substance satisfactory to counsel for the Underwriters and the
Sub-underwriter, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(c) hereof.
(iii) Opinion of Canadian Counsel for Underwriters and the
Sub-underwriter. The favorable opinion of Xxxxxx Xxxxxxx, Canadian counsel
for the Underwriters and the Sub-underwriter, dated such Date of Delivery,
relating to the Option Securities to be purchased on such Date of Delivery
and otherwise to the same effect as the opinion required by Section 5(d)
hereof.
(iv) Opinion of U.S. Counsel for Underwriters and the Sub-underwriter.
The favorable opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, U.S.
counsel for the Underwriters and the Sub-underwriter, dated
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such Date of Delivery, relating to the Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(e) hereof.
(v) Opinion of In-house Counsel. The favorable opinion of the Company's
In-house counsel, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(f) hereof.
(vi) Opinion of Swiss Counsel to the Company. The favorable opinion of
Mtre Xxxxxx Xxxxx, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(g) hereof.
(vii) Opinion of French Counsel to the Company. The favorable opinion of
Mtre Philippe Auzas, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(h) hereof.
(viii) Opinions of Patent Counsel. The favorable opinion of Xxxxxx Xxxxx
& Associes, patent counsel for the Company, dated such Date of Delivery,
relating to the Option Securities to be purchased on such Date of Delivery
and otherwise to the same effect as the opinion required by Section 5(i)
hereof.
(ix) Officers' Certificate. A certificate, dated such Date of Delivery,
of the Chief Executive Officer of the Company and the Chief Financial
Officer of the Company confirming that the certificate delivered at Closing
Time pursuant to Section 5(j) hereof remains true and correct as of such
Date of Delivery.
(x) Bring-down Comfort Letter. A letter from PricewaterhouseCoopers LLP,
in form and substance satisfactory to the Representatives and dated such
Date of Delivery, to the effect that they reaffirm the statements made in
the letter furnished to the Representatives pursuant to Section 5(k)
hereof, except that the "specified date" in the letter furnished pursuant
to this paragraph shall be a date not more than three business days prior
to such Date of Delivery.
(s) Additional Documents. At Closing Time, and at each Date of Delivery,
counsel for the Underwriters and the Sub-underwriter shall have been furnished
with such documents, including certificates as to tax matters, and opinions as
they may reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall
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be satisfactory in form and substance to the Representatives and counsel for the
Underwriters and the Sub-underwriter.
(t) Termination of Agreement. If any condition specified in this Section shall
not have been fulfilled when and as required to be fulfilled, this Agreement, or
in the case of any condition to the purchase of Option Securities on a Date of
Delivery which is after the Closing Time, the obligations of the several
Underwriters and the Sub-underwriter to purchase the relevant Option Securities,
may be terminated by the Representatives by notice to the Company at any time at
or prior to Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any
such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters and the Sub-underwriter. The Company
agrees to indemnify and hold harmless each Underwriter and the Sub-underwriter
and each person, if any, who controls any Underwriter or any Sub-underwriter
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the PREP Information and the Rule
430A Information or Rule 434 Information, as applicable, or the omission or
alleged omission therefrom of a material fact required to be stated therein
or necessary to make the statements therein not misleading or arising out
of any untrue statement or alleged untrue statement of a material fact
included in any preliminary prospectus or the U.S. Prospectus, the Canadian
Prospectus or any Supplementary Material (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of (A) the violation of any applicable
laws or regulations of foreign jurisdictions where Reserved Securities have
been offered and (B) any untrue statement or alleged untrue statement of a
material fact included in the supplement or prospectus wrapper material
distributed in such jurisdictions in connection with the reservation and
sale of the Reserved Securities or the omission or alleged omission
therefrom of a material fact necessary to make the statements therein, when
considered in
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conjunction with the U.S. Prospectus or Canadian Prospectus or any
preliminary prospectus, not misleading;
(iii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission or in connection with any violation of
the nature referred to in Section 6(a)(ii)(A) hereof; provided that
(subject to Section 6(d) below) any such settlement is effected with the
written consent of the Company; and
(iv) against any and all expense whatsoever, as incurred (including the
reasonable fees and disbursements of counsel chosen by Xxxxxxx Xxxxx),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission or in connection with any violation of the nature referred to in
Section 6(a)(ii)(A) hereof, to the extent that any such expense is not paid
under (i) or (iii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter or the Sub-underwriter through the Representatives expressly for use
in the Registration Statement (or any amendment thereto), including the PREP
Information and the Rule 430A Information or Rule 434 Information, as
applicable, or any preliminary prospectus, the U.S. Prospectus or the Canadian
Prospectus (or any amendment or supplement thereto); and provided, further, that
this indemnity agreement shall not apply to any loss, liability, claim, damage
or expense to the extent that the Company shall sustain the burden of proving
that any such loss, liability, claim, damage or expense resulted from the fact
that such Underwriter or the Sub-underwriter, in contravention of a requirement
of this Agreement or applicable law, sold Securities to a person to whom such
Underwriter failed to send or give, at or prior to the Closing Date, a copy of
the U.S. Prospectus or Canadian Prospectus, as then amended or supplemented if:
(i) the Company has previously furnished copies thereof (sufficiently in advance
of the Closing Date and in sufficient
40
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quantity to allow for distribution by the Closing Date) to the Underwriters and
the Sub-underwriter and the loss, liability, claim, damage or expense of such
Underwriter or the Sub-underwriter resulted from an untrue statement or omission
of a material fact contained in or omitted from the U.S. Preliminary Prospectus
or Canadian Preliminary Prospectus which was corrected in the U.S. Prospectus or
Canadian Prospectus as, if applicable, amended or supplemented prior to the
Closing Date and such U.S. Prospectus or Canadian Prospectus, as applicable, was
required by law to be delivered at or prior to the written confirmation of sale
to such person, and (ii) such failure to give or send such U.S. Prospectus or
Canadian Prospectus, as applicable, the Closing Date to the party or parties
asserting such loss, liability, claim, damage or expense would have constituted
a defense to the claim asserted by such person.
(b) Indemnification of Company, Directors and Officers. Each Underwriter and
the Sub-underwriter severally agrees to indemnify and hold harmless the Company,
its directors, each of its officers who signed the Registration Statement or the
Canadian Prospectus, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto),
including the PREP Information, the Rule 430A Information or Rule 434
Information, as applicable, or any preliminary prospectus or the U.S.
Prospectus, the Canadian Prospectus or any Supplementary Material (or any
amendment or supplement thereto), in reliance upon and in conformity with
written information furnished to the Company by any Underwriter or the
Sub-underwriter through the Representatives expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the U.S. Prospectus, the Canadian Prospectus or any Supplementary Material
(or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall give
notice as promptly as reasonably practicable to each indemnifying party of any
action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the
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Company. An indemnifying party may participate at its own expense in the defense
of any such action; provided, however, that counsel to the indemnifying party
shall not (except with the consent of the indemnified party) also be counsel to
the indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(iii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement; provided, that an indemnifying party shall not be liable for any
settlement of the nature contemplated by Section 6(a)(iii) effected without its
consent if such indemnifying party, prior to the date of such settlement, (i)
reimburses such indemnified party in accordance with such request for the amount
of such fees and expenses of counsel as the indemnifying party believes in good
faith to be reasonable, and (ii) provides written notice to the indemnified
party that the indemnifying party disputes in good faith the reasonableness of
the unpaid balance of such fees and expenses.
(e) Indemnification for Reserved Securities. In connection with the offer and
sale of the Reserved Securities, the Company agrees, promptly upon a request in
writing, to indemnify and hold harmless the Underwriters and the Sub-underwriter
from and against any and all losses, liabilities, claims, damages and expenses
incurred by them as a result of the failure of eligible employees and persons
having
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business or other relationships with the Company to pay for and accept delivery
of Reserved Securities which, by the end of the first business day following the
date of this Agreement, were subject to a properly confirmed agreement to
purchase. The Underwriters and the Sub-underwriter agree to use their reasonable
efforts to sell any such Reserved Securities to other purchasers as part of the
public offering contemplated hereby and to apply the proceeds from any such sale
against any losses, liabilities, claims, damages and expenses incurred by the
Underwriters and the Sub-underwriter as a result of the failure of the Reserved
Securities participants to pay for and accept delivery of such Reserved
Securities.
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters and the Sub-underwriter on the
other hand from the offering of the Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and of the Underwriters and the Sub-underwriter on the
other hand in connection with the statements or omissions, or in connection with
any violation of the nature referred to in Section 6(a)(ii)(A) hereof, which
resulted in such losses, liabilities, claims, damages or expenses, as well as
any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters and the Sub-underwriter on the other hand in connection with the
offering of the Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the Securities pursuant to this Agreement (before deducting expenses) received
by the Company and the total underwriting commission received by the
Underwriters, in each case as set forth on the cover of the U.S. Prospectus and
Canadian Prospectus, or, if Rule 434 is used, the corresponding location on the
Term Sheet, bear to the aggregate initial public offering price of the
Securities as set forth on such cover.
The relative fault of the Company on the one hand and the Underwriters and
the Sub-underwriter on the other hand shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the
Sub-underwriter and the
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parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission or a violation of the nature
referred to in Section 6(a)(ii)(A) hereof.
The Company and the Underwriters and the Sub-underwriter agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters and the
Sub-underwriter were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this Section 7. The aggregate amount of losses,
liabilities, claims, damages and expenses incurred by an indemnified party and
referred to above in this Section 7 shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter and no
Sub-underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter or the Sub-underwriter has otherwise been
required to pay by reason of any such untrue or alleged untrue statement or
omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter or the Sub-underwriter within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall have the same rights to contribution as
such Underwriter or Sub-underwriter, and each director of the Company, each
officer of the Company who signed the Registration Statement or the Canadian
Prospectus, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company. The Underwriters' respective obligations
to contribute pursuant to this Section 7 are several in proportion to the number
of Initial Securities set forth opposite their respective names in Schedule A
hereto and not joint. The Sub-underwriter's obligation to contribute pursuant to
this Section 7 is in proportion to
44
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the number of Initial Securities it purchased from Xxxxxxx Lynch, Pierce, Xxxxxx
& Xxxxx Incorporated.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries delivered
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter, any
Sub-underwriter or controlling person, or by or on behalf of the Company, and
shall survive delivery of the Securities to the Underwriters and the
Sub-underwriter.
SECTION 9. Termination of Agreement
(a) Termination; General. The Representatives may terminate this Agreement, by
notice to the Company, at any time at or prior to Closing Time (i) if there has
been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the U.S. Prospectus and the Canadian
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company, and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States, the
Canadian or international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in U.S., Canadian or international political,
financial or economic conditions, in each case the effect of which is such as to
make it, in the judgment of the Representatives impracticable to market the
Securities or to enforce contracts for the sale of the Securities, or (iii) if
trading in any securities of the Company has been suspended or materially
limited by the Commission, the Reviewing Authority, any Qualifying Authority,
any other securities commission or securities regulatory authority in Canada or
the TSE, or if trading generally on the New York Stock Exchange, the TSE, or in
the Nasdaq National Market has been suspended or materially limited, or minimum
or maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the Reviewing Authority, any Qualifying Authority, any other
securities commission or securities regulatory authority in Canada, the NASD or
any other governmental authority, or (iv) if a banking moratorium has been
declared by either United States federal, New York state or Canadian federal
authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section 9,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7 and 8 shall survive such termination and remain in full force and effect.
45
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SECTION 10. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at Closing Time or a Date of Delivery to purchase the
Securities which it or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), the Representatives shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters or the Sub-underwriter, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, the
Representatives shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the number of
Securities to be purchased hereunder, the non-defaulting Underwriters or the
Sub-underwriter shall be obligated, each severally and not jointly, to purchase
the full amount thereof in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of all non-defaulting
Underwriters or the Sub-underwriter, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Date of Delivery which occurs after Closing Time, the obligation of the
Underwriters to purchase and of the Company to sell the Option Securities to be
purchased and sold on such Date of Delivery, shall terminate without liability
on the part of any non-defaulting Underwriter or the non-defaulting
Sub-underwriter.
No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, or in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the Representatives or the Company shall have the
right to postpone the Closing Time or the relevant Date of Delivery, as the case
may be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement, the U.S. Prospectus or the Canadian
Prospectus or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10.
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SECTION 11. Agent for Service; Submission to Jurisdiction; Waiver of
Immunities. By the execution and delivery of this Agreement, the Company (i)
acknowledges that it has, by separate written instrument, irrevocably designated
and appointed CT Corporation System (or any successor) (together with any
successor, the "Agent for Service"), as its authorized agent upon which process
may be served in any suit or proceeding arising out of or relating to this
Agreement or the Securities, that may be instituted in any federal or state
court in the State of New York, or brought under U.S. federal or state
securities laws, and acknowledges that the Agent for Service has accepted such
designation, (ii) submits to the jurisdiction of any such court in any such suit
or proceeding, and (iii) agrees that service of process upon the Agent for
Service (or any successor) and written notice of said service to the Company
(mailed or delivered to its General Counsel at its principal office in Xxxxxx,
Xxxxxx, Xxxxxx) shall be deemed in every respect effective service of process
upon the Company in any such suit or proceeding. The Company further agrees to
take any and all action, including the execution and filing of any and all such
documents and instruments, as may be necessary to continue such designation and
appointment of the Agent for Service in full force and effect so long as any of
the Securities shall be outstanding.
To the extent that the Company has or hereafter may acquire any immunity
from jurisdiction of any court or from any legal process (whether through
service of notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise) with respect to the Company or its respective property,
it hereby irrevocably waives such immunity in respect of its obligations under
the above-referenced documents, to the extent permitted by law.
SECTION 12. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or transmitted
by any standard form of telecommunication. Notices to the Underwriters shall be
directed to the Representatives c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated at Xxxxxxx Xxxxx Canada Inc., 0000 Xxxx Xxxxxxxx Xxxx. Xxxx, Xxxxx
0000, Xxxxxxxx, Xxxxxx, Xxxxxx H3B 4W8, attention of Xxxxxxx X.X. XxxXxxxxx;
notices to the Company shall be directed to it at 000 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxx X0X 0X0 (Tel: (000) 000-0000; Fax (000) 000-0000.)
SECTION 13. Parties. This Agreement shall inure to the benefit of and be
binding upon the Underwriters, the Sub-underwriter, the Company, and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters and the Sub-underwriter, the Company and their respective
successors and the controlling persons and officers and directors referred to in
Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim
47
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under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters and the Sub-underwriter, the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any Underwriter or the Sub-underwriter shall be deemed to be a successor by
reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings herein and
the Table of Contents are for convenience only and shall not affect the
construction hereof.
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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters, the Sub-underwriter and the Company in accordance with its
terms.
Very truly yours,
EXFO ELECTRO-OPTICAL ENGINEERING INC.
By:__________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
RBC Dominion Securities Inc.
Wit SoundView Corporation
CIBC World Markets Inc.
XXXXXXX XXXXX CANADA INC.
BY: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
By:__________________________
Authorized Signatory
For themselves and as Representatives of
the other Underwriters named in Schedule A hereto.
49
SCHEDULE A
NUMBER OF
NAME OF UNDERWRITER INITIAL SECURITIES
------------------- ------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated...........
RBC Dominion Securities Inc..................................
Wit SoundView Corporation....................................
CIBC World Markets Inc.......................................
Total........................................................ ------------------
7,000,000
------------------
50
SCHEDULE B
EXFO ELECTRO-OPTICAL ENGINEERING INC.
7,000,000 Subordinate Voting Shares
(without par value)
1. The initial public offering price per share for the Securities, determined
as provided in Section 2, shall be US$[ ] per share for [ ]
Securities initially offered in the United States or Cdn$[ ] (being
based on the equivalent of the United States dollar price per share based
on the noon buying rate in The City of New York for cable transfers in
Canadian dollars as certified for customs purposes by the Federal Reserve
Bank of New York (the "Noon Buying Rate") on the date hereof) for
Securities initially offered in Canada.
2. The purchase price per share for the Securities sold or expected to be
sold in the United States to be paid by the several Underwriters shall be
US$[ ] being an amount equal to the initial public offering price set
forth above less US$[ ] per share, representing the underwriting
commission as set forth in paragraph 3 below; the purchase price per share
for the Securities sold or expected to be sold in Canada to be paid by the
several Underwriters shall be Cdn$[ ], being an amount equal to the
initial offering price in Canada set forth above less Cdn$[ ] per
share, representing the underwriting commission as set forth in paragraph 3
below (being based on the equivalent of the corresponding United States
dollar amount based on the Noon Buying Rate on the date hereof); provided
that the purchase price per share for any Option Securities purchased upon
the exercise of the over-allotment option described in Section 2(b) shall
be reduced by an amount per share equal to any dividends or distributions
declared by the Company and payable on the Initial Securities but not
payable on the Option Securities.
3. The underwriting commission per share payable for the Securities to be paid
by the Company shall be US$[ ] per share for Securities initially
offered in the United States or Cdn$[ ] (being based on the equivalent
of the Noon Buying Rate on the date hereof) for Securities initially
offered in Canada.
51
SCHEDULE C
Xxxxxx-Xxxxxx Xxxx Xxxx-Xxxxxx Xxxxxxxx
0000-0000 Xxxxxx inc. Xxxxx Xxxxxx
Xxxxxxx Xxxxxxx Xxxxx Xxxxxxx
Xxxxxx Xxxxxxxxx Xxxxxxx Xxxxxx
9086-9314 Quebec inc. Xxxxxxx Xxxx
Xxxxxxx Xxxxxx Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx Xxxx-Xxxxxxxx Xxxxxx
Fiducie Xxxxxxx Xxxxxxx Xxxxxxx Xxxxx
X. Xxxxxxx Investissements Financiers Inc. Xxxxxxxx Xxxxx
GEXFO Investissements Technologiques inc. Xxxxxx Xxxxxxxxxxx
Xxxxx Xxxxxxxx Xxxxx X. Xxxxxxxx
