EXHIBIT 1.1
6,500,000 SHARES
COREL CORPORATION
COMMON SHARES
UNDERWRITING AGREEMENT
__________, 2006
_____________, 2006
Xxxxxx Xxxxxxx & Co. Incorporated
X.X. Xxxxxx Securities Inc.
Deutsche Bank Securities Inc.
Xxxxx Xxxxxxx & Co.
CIBC World Markets Corp.
Canaccord Xxxxx Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
Corel Corporation, a Canadian corporation (the "COMPANY"), proposes to
issue and sell to the several Underwriters named in Schedule II hereto (the
"UNDERWRITERS"), and certain shareholders of the Company (the "SELLING
SHAREHOLDERS") named in Schedule I hereto severally propose to sell to the
several Underwriters, an aggregate of 6,500,000 common shares of the Company
(the "FIRM SHARES"), of which 5,000,000 shares are to be issued and sold by the
Company and 1,500,000 shares are to be sold by the Selling Shareholders, each
Selling Shareholder selling the amount set forth opposite such Selling
Shareholder's name in Schedule I hereto.
The Company and the Selling Shareholders also propose to issue and sell to
the several Underwriters not more than an additional 975,000 common shares
(the "ADDITIONAL SHARES") if and to the extent that you, as managers of the
offering, shall have determined to exercise, on behalf of the Underwriters, the
right to purchase such common shares granted to the Underwriters in Section 4
hereof. The Firm Shares and the Additional Shares are hereinafter collectively
referred to as the "SHARES." The common shares to be outstanding after giving
effect to the sales contemplated hereby are hereinafter referred to as the
"COMMON SHARES." The Company and the Selling Shareholders are hereinafter
sometimes collectively referred to as the "SELLERS."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
Shares. The registration statement as amended at the time it becomes effective,
including the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter
referred to as the "REGISTRATION STATEMENT"; the prospectus in the form first
used to confirm sales of Shares is hereinafter referred to as the "PROSPECTUS"
(and shall, with respect to sales of Shares in Canada, also include the Canadian
Supplemented Prospectus (as
defined in Section 7(i) hereof)). If the Company has filed an abbreviated
registration statement to register additional Common Shares pursuant to Rule
462(b) under the Securities Act (the "RULE 462 REGISTRATION STATEMENT"), then
any reference herein to the term "REGISTRATION STATEMENT" shall be deemed to
include such Rule 462 Registration Statement.
For purposes of this Agreement, "FREE WRITING PROSPECTUS" has the meaning
set forth in Rule 405 under the Securities Act, "TIME OF SALE PROSPECTUS" means
the preliminary prospectus contained in the Registration Statement, together
with the final term sheet and free writing prospectuses, if any, each identified
in Schedule III hereto, and "BROADLY AVAILABLE ROAD SHOW" means a "bona fide
electronic road show" as defined in Rule 433(h)(5) under the Securities Act that
has been made available without restriction to any person.
1. Representations and Warranties of the Company. The Company represents
and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or, to the Company's knowledge
(after telephone inquiry of the Commission), threatened by the Commission.
(b) (i) The Registration Statement, when it became effective, did not
contain and, as amended or supplemented, if applicable, will not contain any
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,
(ii) the Canadian Final Prospectus (as defined in Section 1(d)) when it was
filed did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading,
(iii) the Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder, (iv) the Canadian Final Prospectus complies and, as amended or
supplemented, if applicable, will comply in all material respects with Canadian
Securities Laws and the applicable rules and regulations of the Canadian
Securities Commissions thereunder, (v) the Time of Sale Prospectus does not, and
at the time of each sale of the Shares in connection with the offering when the
Prospectus is not yet available to prospective purchasers and at the Closing
Date (as defined in Section 5), the Time of Sale Prospectus, as then amended or
supplemented by the Company, if applicable, will not, contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, (vi) each broadly available road show, if any, when
considered together with the Time of Sale Prospectus, does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, and (vii) the Prospectus does not contain and, as
amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph do
not apply to statements or omissions in the Registration Statement (or any
amendment thereto), the Time of Sale Prospectus or the Prospectus (or any
supplement thereto) or the Canadian Final Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein.
(c) The Company is a "foreign private issuer" within the meaning of Rule
405 under the Securities Act. The Company is not an "ineligible issuer" in
connection with the offering pursuant to Rules 164, 405 and 433 under the
Securities Act. Any free writing prospectus that the Company is required to file
pursuant to Rule 433(d) under the Securities Act has been, or will be, filed
with the Commission in accordance with the requirements of the Securities Act
and the applicable rules and regulations of the Commission thereunder. Each free
writing prospectus that the Company has filed, or is required to file, pursuant
to Rule 433(d) under the Securities Act or that was prepared by or behalf of or
used or referred to by the Company complies or will comply in all material
respects with the requirements of the Securities Act and the applicable rules
and regulations of the Commission thereunder. Except for the free writing
prospectuses, if any, identified in Schedule III hereto, and electronic road
shows, if any, furnished to you before first use, the Company has not prepared,
used or referred to, and will not, without your prior consent, prepare, use or
refer to, any free writing prospectus.
(d) The Company has complied with all applicable securities laws in each of
the provinces in Canada emanating from governmental authorities, including the
respective rules and regulations made thereunder together with applicable
published national and local instruments, policy statements, notices, blanket
rulings and orders of the Canadian Securities Commissions, all discretionary
rulings and orders applicable to the Company, if any, of the Canadian Securities
Commissions ("CANADIAN SECURITIES LAWS") required to be complied with by the
Company to qualify the distribution of the Shares as contemplated hereby in each
of the provinces of Canada. The Company has prepared and filed a preliminary
base PREP prospectus relating to the Shares in the English and French languages
(the "CANADIAN PRELIMINARY PROSPECTUS") with the Ontario Securities Commission
(the "OSC") and with the securities commissions or other securities regulatory
authorities in each of the provinces of Canada ("CANADIAN SECURITIES
COMMISSIONS") pursuant to National Policy 43-201. The Company has obtained a
preliminary decision document issued by the OSC evidencing that receipts of the
Canadian Securities Commissions in each of the provinces of Canada have been
issued in respect of the Canadian Preliminary Prospectus. The Company has also
prepared and filed with the OSC and the other Canadian Securities Commissions a
final base PREP prospectus relating to the Shares in the English and French
languages in accordance with National
Instrument 44-103 for the pricing of securities after the receipt for a
prospectus has been obtained (the "CANADIAN FINAL Prospectus"), and has obtained
a final decision document issued by the OSC evidencing that final receipts of
the Canadian Securities Commissions in each of the provinces of Canada have been
issued in respect of the Canadian Final Prospectus.
(e) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Time of Sale Prospectus and the
Prospectus and is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not reasonably be
expected to have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(f) Each significant subsidiary of the Company (as defined in Rule 1-02(w)
of Regulation S-X, a "SIGNIFICANT SUBSIDIARY") has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the Time of Sale
Prospectus and is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not reasonably be
expected to have a material adverse effect on the Company and its subsidiaries,
taken as a whole; all of the issued shares of capital stock of each subsidiary
of the Company have been duly and validly authorized and issued, are fully paid
and non-assessable and are owned directly by the Company (other than as required
by law), or in the case of Winzip (defined below) will be owned directly by the
Company as of the Closing Date, free and clear of all liens, encumbrances,
equities or claims. All references to a "Significant Subsidiary" and
"Significant Subsidiaries" of the Company throughout this Agreement, including
without limitation in the representations and warranties in this Section 1,
shall include Cayman Ltd. Holdco ("WINZIP").
(g) This Agreement has been duly authorized, executed and delivered by the
Company. All necessary corporate action has been taken by the Company to
authorize the execution and delivery of this Agreement and the transactions
contemplated hereby, including execution and delivery of each of the Canadian
Preliminary Prospectus and the Canadian Final Prospectus and the filing thereof
and the Canadian Supplemented Prospectus (defined in Section 7(i)) under
Canadian Securities Laws in each province of Canada.
(h) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Time of Sale Prospectus and
the Prospectus.
(i) The Common Shares (including the Shares to be sold by the Selling
Shareholders) outstanding prior to the issuance of the Shares to be sold by the
Company have been duly authorized and are validly issued, fully paid and
non-assessable.
(j) The Shares to be sold by the Company have been duly authorized and,
when issued and delivered in accordance with the terms of this Agreement, will
be validly issued, fully paid and non-assessable, and the issuance of such
Shares will not be subject to any preemptive or similar rights.
(k) The execution and delivery by the Company of, and the performance by
the Company of its obligations under, this Agreement will not contravene any
provision of applicable law or the articles of incorporation or by-laws of the
Company or any agreement or other instrument binding upon the Company or any of
its subsidiaries that is material to the Company and its subsidiaries, taken as
a whole, or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or any subsidiary, where such
contravention of such agreement, instrument or judgment, order or decree would
reasonably be expected to have a material adverse effect on the Company and its
subsidiaries taken as a whole, and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency (including any
Canadian court or Canadian federal or provincial governmental authority) is
required for the performance by the Company of its obligations under this
Agreement, except (i) as may be required by the securities or Blue Sky laws of
the various states or the bylaws and rules and regulations of the National
Association of Securities Dealers, Inc. in connection with the offer and sale of
the Shares, and (ii) for the filing of the Canadian Supplemented Prospectus (as
defined in Section 7(i)).
(l) There has not occurred any material adverse change, or any development
involving a prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Time of Sale
Prospectus.
(m) There are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or to which any of the properties
of the Company or any of its subsidiaries is subject other than proceedings
accurately described in all material respects in the Time of Sale Prospectus and
proceedings that would not reasonably be expected to have a material adverse
effect on the Company and its subsidiaries, taken as a whole, or on the power or
ability of the Company to perform its obligations under this Agreement or to
consummate the transactions contemplated by the Time of Sale Prospectus. There
are no legal or governmental proceedings pending nor any statutes, regulations,
contracts or other documents to which the Company or any of its subsidiaries are
subject or by which the Company or any of its subsidiaries is bound that are
required to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement that are not described or
filed as
required, and to the knowledge of the Company, no such legal or governmental
proceedings are threatened.
(n) Each preliminary prospectus filed as part of the registration statement
as originally filed or as part of any amendment thereto, or filed pursuant to
either Rule 424 under the Securities Act or Canadian Securities Laws, complied
when so filed in all material respects with either the Securities Act and the
applicable rules and regulations of the Commission thereunder, or Canadian
Securities Laws and the applicable rules and regulations of Canadian Securities
Commissions, as applicable.
(o) The Company is not, and after giving effect to the offering and sale of
the Shares and the application of the proceeds thereof as described in the
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.
(p) The Company and its subsidiaries (i) are in compliance with any and all
applicable U.S., Canadian and other foreign federal, state, provincial,
territorial and local laws and regulations relating to the protection of human
health and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, be reasonably expected to have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(q) There are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating activities and
any potential liabilities to third parties) which would, singly or in the
aggregate, be reasonably expected to have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(r) The Company and its subsidiaries have complied and are in compliance
with all federal, state, local, provincial and foreign statutes, executive
orders, proclamations, rules, regulations, orders and similar provisions having
the force of law and all judicial and administrative orders and rulings, and
common law concerning the importation or export of products and technology in
connection with the Company's or any subsidiary's business except where the
failure to be in compliance would not be reasonably expected to have a material
adverse effect on the Company and its subsidiaries taken as a whole. Neither the
Company nor any of its subsidiaries has made any payment, offer, gift, or
authorized or otherwise participated in, assisted or facilitated any payment or
gift
related to the Company's or any subsidiary's business that is prohibited by the
United States Foreign Corrupt Practices Act or the Corruption of Foreign Public
Officials Act of Canada.
(s) Other than as described in the Time of Sale Prospectus, there are no
contracts, agreements or understandings between the Company and any person
(which term shall, throughout this agreement, also refer to entities) granting
such person the right to require the Company to file a registration statement
under the Securities Act or a prospectus under Canadian Securities Laws with
respect to any securities of the Company at any time prior to 180 days after the
Closing Date (as such 180 day period may be extended as described in Section
3(c)), or to require the Company to include such securities with the Shares
registered pursuant to the Registration Statement or granting such person any
preemptive right, right of first offer or similar right with respect to any
securities of the Company.
(t) Subsequent to the respective dates as of which information is given in
the Registration Statement, the Prospectus and the Time of Sale Prospectus, (i)
the Company and its subsidiaries have not incurred any material liability or
obligation, direct or contingent, nor entered into any material transaction;
(ii) the Company has not purchased any of its outstanding shares, nor declared,
paid or otherwise made any dividend or distribution of any kind on its shares
other than ordinary and customary dividends; and (iii) there has not been any
material change in the shares (including securities convertible or exercisable
into or exchangeable for shares), short-term debt or long-term debt of the
Company and its subsidiaries, except in each case as described in each of the
Registration Statement, the Prospectus and the Time of Sale Prospectus,
respectively.
(u) The Company and its subsidiaries have good and marketable title to all
personal property owned by them which is material to the business of the Company
and its subsidiaries, taken as a whole, in each case free and clear of all
liens, encumbrances and defects except such as are described in the Time of Sale
Prospectus or such as do not materially affect the value of such property and do
not interfere with the use made and proposed in the Time of Sale Prospectus to
be made of such property by the Company and its subsidiaries, taken as a whole;
and any real property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed in the Time of Sale Prospectus to be made of such property and
buildings by the Company and its subsidiaries, in each case except as described
in the Time of Sale Prospectus. The Company and its subsidiaries do not own any
real property.
(v) The Company and its subsidiaries own, possess or license, or can
acquire or license on reasonable terms, all material patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks and trade names currently employed by
them in connection with the business now operated by them, and neither the
Company nor any of its subsidiaries has received any notice of infringement of
asserted rights of others with respect to any of the foregoing (or any written
correspondence implying infringement by means of offer of a license) which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would be reasonably expected to have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(w) No material labor dispute with current and former employees of the
Company or any of its subsidiaries exists, except as described in the Time of
Sale Prospectus, or, to the knowledge of the Company, is imminent.
(x) The Company and each of its Significant Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which they
are engaged; and neither the Company nor any of its subsidiaries has any 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
be reasonably likely to have a material adverse effect on the Company and its
subsidiaries, taken as a whole, except as described in the Time of Sale
Prospectus.
(y) The Company and its Significant Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state, provincial
or foreign regulatory authorities necessary to conduct their respective
businesses, and neither the Company nor any of its subsidiaries has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would be reasonably
expected to have a material adverse effect on the Company and its subsidiaries,
taken as a whole, except as described in the Time of Sale Prospectus.
(z) Except as described in the Time of Sale Prospectus, the Company and
each of its Significant Subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorizations;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles and to
maintain asset accountability; (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 the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. No deficiencies in the Company's internal control over financial
reporting have been identified that could reasonably be expected to constitute a
material weakness.
(aa) PricewaterhouseCoopers LLP (Canada), which has expressed its opinion
with respect to certain of the financial statements of the Company filed with
the Commission as a part of the Registration Statement and included in each of
the Time of Sale Prospectus and the Prospectus, is a registered public
accounting firm as required by the Securities Act and can express opinions under
Canadian Securities Laws. PricewaterhouseCoopers LLP (US), which has expressed
its opinion with respect to certain of the financial statements of Winzip filed
with the Commission as a part of the Registration Statement and included in the
Time of Sale Prospectus and the Prospectus, are independent public accountants
as required by the Securities Act. Ernst & Young LLP, which has expressed its
opinion with respect to certain of the financial statements of Jasc Software,
Inc. ("JASC") and supporting schedules filed with the Commission as a part of
the Registration Statement and included in the Time of Sale Prospectus and the
Prospectus, are independent public or certified public accountants as required
by the Securities Act and under Canadian Securities Laws.
(bb) The financial statements of the Company filed with the Commission as a
part of the Registration Statement and included in each of the Time of Sale
Prospectus and the Prospectus, including without limitation the historical
financial statements of Jasc and Winzip and the combined Company-Winzip
financial statements, present fairly the consolidated financial position of the
Company and its subsidiaries as of the dates indicated and the results of their
operations and cash flows for the periods specified. Such financial statements
have been prepared in conformity with generally accepted accounting principles
as applied in the United States applied on a consistent basis throughout the
periods involved. The financial data set forth in the Prospectus under the
captions "Prospectus Summary--Summary Consolidated Financial Data,"
"Capitalization" and "Selected Consolidated Financial Data" present fairly the
information set forth therein on a basis consistent with that of the audited
financial statements contained in the Registration Statement, the Time of Sale
Prospectus and the Prospectus. The financial data set forth in the Prospectus
under the caption "Expected Results for the Three Months Ended February 28,
2006" were derived from the accounting records of the Company and its
subsidiaries and present fairly the information shown thereby as of and for the
three-month period ended February 28, 2006.
(cc) No other financial statements or schedules of the Company or any other
entity are required to be included in the Registration Statement or the
Prospectus pursuant to any requirement of the Securities Act or any rules and
regulations thereunder, including Rules 3-05 and 11 of Regulation S-X, or the
Canadian Securities Laws.
(dd) There are no transactions or loans between the Company and any holder
of 5% or more of the Common Shares, any director, any director nominee or any
executive officer, or members of such individuals' immediate families, or any
enterprise in which a substantial interest in the voting power is owned,
directly or indirectly, by any of such individuals other than those described in
the Time of Sale Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement). In particular, no such person or
entity (i) has any direct or indirect ownership interest in, or any employment
or consulting agreement with, any firm or corporation that competes with the
Company, (ii) is directly or indirectly interested in any contract with the
Company, except for compensation and standard benefits for services as a
director, officer or employee that is disclosed in the Time of Sale Prospectus
(to the extent it is required to be disclosed), (iii) has any ownership interest
in any property, real or personal, tangible or intangible, used in the Company's
business, except for the normal rights of a shareholder, or (iv) has, either
directly or indirectly, a material interest in any person which purchases from
or sells, licenses or furnishes to Company any goods, property, technology or
intellectual or other property rights or services (except in the case of (i) -
(iv) above, with respect to any interest of less than 5% of the outstanding
voting shares of any corporation whose stock is publicly traded).
(ee) Except as described in the Registration Statement (exclusive of any
amendments thereto subsequent to the date of this Agreement), the Company has
not sold, issued or distributed any Common Shares during the six-month period
preceding the date hereof, including any sales pursuant to Rule 144A under, or
Regulation D or S of, the Securities Act or under Canadian Securities Laws,
other than shares issued pursuant to employee benefit plans, qualified stock
option plans or other employee compensation plans or pursuant to outstanding
options, rights or warrants.
(ff) To the Company's knowledge, the information provided by and on behalf
of the Company in the Company's applications for listing of the Common Shares
for trading on the Nasdaq Stock Market, Inc. and the Toronto Stock Exchange was
true, correct and complete in all material respects through the listing date
2. Representations and Warranties of the Selling Shareholders. Each Selling
Shareholder, severally and not jointly, represents and warrants to and agrees
with each of the Underwriters that:
(a) This Agreement has been duly authorized, executed and delivered by or
on behalf of such Selling Shareholder.
(b) The execution and delivery by such Selling Shareholder of, and the
performance by such Selling Shareholder of its obligations under, this
Agreement, the Custody Agreement and the Power of Attorney signed by such
Selling Shareholder and CIBC Mellon Trust Company, as Custodian, relating to the
deposit of the Shares to be sold by such Selling Shareholder and appointing
certain individuals as such Selling Shareholder's attorneys-in-fact to the
extent set forth therein, relating to the transactions contemplated hereby and
by the Registration Statement (the "CUSTODY AGREEMENT AND POWER OF ATTORNEY")
will not contravene any provision of any law applicable to such Selling
Shareholder or the Custody Agreement and Power of Attorney, or the articles of
incorporation or by-laws of such Selling Shareholder (if such Selling
Shareholder is a corporation), or any agreement or other instrument binding upon
such Selling Shareholder (other than the Pledge Agreement dated February 16,
2005 from the pledgors named therein, including one of the Selling Shareholders,
to the Collateral Agent named therein (the "PLEDGE AGREEMENT") for which a
waiver will be obtained prior to the Closing Date) or any judgment, order or
decree applicable to such Selling Shareholder of any foreign or domestic
governmental body, agency or court having jurisdiction over
such Selling Shareholder, and no consent, approval, authorization or order of,
or qualification with, any governmental body or agency (including without
limitation any Canadian court or Canadian federal or provincial governmental
authority) is required for the performance by such Selling Shareholder of its
obligations under this Agreement or the Custody Agreement and Power of Attorney
entered into by such Selling Shareholder, except (i) as may be required by the
securities or Blue Sky laws of the various states in connection with the offer
and sale of the Shares, and (ii) for the filing of the Canadian Supplemented
Prospectus.
(c) Such Selling Shareholder has, and on the Closing Date will have, valid
title to, or a valid "security entitlement" within the meaning of Section 8-501
of the New York Uniform Commercial Code in respect of, the Shares to be sold by
such Selling Shareholder free and clear of all security interests, claims,
liens, equities or other encumbrances (except for such restrictions, legends,
proxies or other encumbrances disclosed to the Underwriters listed on the first
page of this Agreement (the "REPRESENTATIVES") or referenced in clause (b) above
with respect to the Pledge Agreement and which will be released or shall
terminate as of the Closing Date) and the legal right and power, and all
authorization and approval required by law, to enter into this Agreement and the
Custody Agreement and Power of Attorney and to sell, transfer and deliver the
Shares to be sold by such Selling Shareholder or a security entitlement in
respect of such Shares.
(d) The Custody Agreement and Power of Attorney has been duly authorized,
executed and delivered by such Selling Shareholder and is a valid and binding
agreement of such Selling Shareholder, except as the enforcement of rights to
indemnity and contribution thereunder may be limited by federal or state
securities laws or principles of public policy and subject to the qualification
that the enforceability of obligations of such Selling Shareholder thereunder
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of auditors' rights generally and by
general equitable principles (whether applied in law or equity).
(e) Upon payment for the Shares to be sold by such Selling Shareholder
pursuant to this Agreement, delivery of such Shares, as directed by the
Underwriters, to Cede & Co. ("CEDE") or such other nominee as may be designated
by the Depository Trust Company ("DTC"), registration of such Shares in the name
of Cede or such other nominee and the crediting of such Shares on the books of
DTC to securities accounts of the Underwriters (assuming that neither DTC nor
any such Underwriter has notice of any adverse claim (within the meaning of
Section 8-105 of the New York Uniform Commercial Code (the "UCC")) to such
Shares), (A) DTC shall be a "protected purchaser" of such Shares within the
meaning of Section 8-303 of the UCC, (B) under Section 8-501 of the UCC, the
Underwriters will acquire a valid security entitlement in respect of such Shares
and (C) no action based on any "adverse claim", within the meaning of Section
8-102 of the UCC, to such Shares may be asserted against the Underwriters with
respect to such security entitlement; for purposes of this representation, such
Selling Shareholder may assume that when
such payment, delivery and crediting occur, (x) such Shares will have been
registered in the name of Cede or another nominee designated by DTC, in each
case on the Company's share registry in accordance with its articles of
incorporation, bylaws and applicable law, (y) DTC will be registered as a
"clearing corporation" within the meaning of Section 8-102 of the UCC and (z)
appropriate entries to the accounts of the several Underwriters on the records
of DTC will have been made pursuant to the UCC.
(f) Such Selling Shareholder is not prompted by any information concerning
the Company or its subsidiaries which is not set forth in the Time of Sale
Prospectus to sell its Shares pursuant to this Agreement.
(g) All information furnished by or on behalf of such Selling Stockholder
for use in the Prospectus and the Canadian Final Prospectus does not, and on the
date of the Time of Sale Prospectus, the Closing Date and any Additional Closing
Date will not, contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(h) If such Selling Shareholder was requested to complete an "NASD
Questionnaire", the written response to such document provided by such Selling
Shareholder to counsel for the Underwriters is true, correct and complete.
(i) In order to document the Underwriters' compliance with the reporting
and withholding provisions of the Tax Equity and Fiscal Responsibility Act of
1982 with respect to the transactions herein contemplated, such Selling
Shareholder will deliver to the Representatives prior to or at the Closing Date
a properly completed and executed U.S. Treasury Department Form W-9 (or other
applicable form or statement specified by the U.S. Treasury Department
regulations in lieu thereof).
The Underwriters hereby acknowledge that Xxxxxx X. Xxxx, Xxxxx Xxxxxx Xxxx
and Xxxxxx X. Xxxx GRAT, being certain Selling Shareholders, are parties to a
Minority Shareholders Agreement dated October 25, 2004 (the "MINORITY
SHAREHOLDERS AGREEMENT") which will terminate pursuant to its terms immediately
prior to the initial closing of the offer and sale of the Firm Shares and that
all of the representations, warranties, covenants and agreements of Xxxxxx X.
Xxxx, Xxxxx Xxxxxx Xxxx and Xxxxxx X. Xxxx GRAT set forth above, insofar as they
may relate to periods prior to the closing of the offering, are qualified by
reference to the terms and conditions of the Minority Shareholders Agreement.
3. Agreements to Sell and Purchase.
(a) Each Seller, severally and not jointly, hereby agrees to sell to the
several Underwriters the number of Firm Shares set forth on Schedule I hereto
opposite the name of such Seller, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from such
Seller the number of Firm Shares set forth in Schedule II hereto opposite the
name of such Underwriter, at a price of U.S. $____ per share (the "U.S. PURCHASE
PRICE") with respect to _____ of the Firm Shares (the "US FIRM SHARES"), and at
a price of Cdn $____ per share (the "CANADIAN PURCHASE PRICE") with respect to
_______ of the Firm Shares (the "CANADIAN FIRM SHARES") (the U.S. Purchase
Price and Canadian Purchase Price are sometimes referred to collectively herein
as the "PURCHASE PRICE").
(b) On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Sellers, severally and
not jointly, agree to sell to the Underwriters the Additional Shares, and the
Underwriters shall have the right to purchase, severally and not jointly, up to
the number of Additional Shares set forth in Schedule II hereto opposite the
name of such Underwriter, at the U.S. Purchase Price. You may exercise this
right on behalf of the Underwriters in whole or from time to time in part by
giving written notice of each election to exercise this option not later than 30
days after the date of this Agreement. Any exercise notice shall specify the
number of Additional Shares to be purchased by the Underwriters and the date on
which such shares are to be purchased. Each purchase date must be at least two
business days after the written notice is given and may not be earlier than the
closing date for the Firm Shares nor later than ten business days after the date
of such notice. Additional Shares may be purchased as provided in Section 5
hereof solely for the purpose of covering over-allotments made in connection
with the offering of the Firm Shares. On each day, if any, that Additional
Shares are to be purchased (an "OPTION CLOSING DATE"), each Underwriter agrees,
severally and not jointly, to purchase the number of Additional Shares (subject
to such adjustments to eliminate fractional shares as you may determine) that
bears the same proportion to the total number of Additional Shares to be
purchased on such Option Closing Date as the number of Firm Shares set forth in
Schedule II hereto opposite the name of such Underwriter bears to the total
number of Firm Shares.
(c) The Company hereby agrees that, without the prior written consent of
Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not, during the period
ending 180 days after the date of the Prospectus, (1) 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
otherwise transfer or dispose of, directly or indirectly, any Common Shares or
any securities convertible into or exercisable or exchangeable for Common Shares
or (2) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Common
Shares, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Shares or such other securities, in cash or
otherwise or (3) file any registration statement with the Commission relating to
the offering of any Common Shares or any securities convertible into or
exercisable or exchangeable for Common Shares.
The restrictions contained in the preceding paragraph shall not apply to (i) the
Shares to be sold hereunder, (ii) the issuance by the Company of common shares
upon the exercise of an option or warrant or the conversion of a security
outstanding on the date hereof and reflected in the Time of Sale Prospectus,
(iii) the issuance of Common Shares, or options to purchase Common Shares, to
employees, officers, directors, advisors or consultants of the Company pursuant
to employee benefit plans described in the Time of Sale Prospectus, (iv) the
filing of a registration statement on Form S-8 to register the issuance of
Common Shares upon exercise of equity awards granted under Corel Corporation's
2006 Equity Incentive Plan or 2003 Share Option and Phantom Unit Plan; (v)
transactions effected in accordance with the WinZip acquisition described in the
Time of Sale Prospectus, or (vi) offers, sales, contracts to sell, the issuance
of or the registration of common shares as consideration for one or more
acquisitions, provided that the aggregate fair market value of the Common Shares
issued or agreed to be issued in all such acquisitions (based on the closing
price on the Nasdaq National Market on the trading day immediately preceeding
the date of the applicable acquisition agreement) does not exceed $75,000,000.
Notwithstanding the foregoing, if (1) during the last 17 days of the
180-day restricted period the Company issues an earnings release or material
news or a material event relating to the Company occurs; or (2) prior to the
expiration of the 180-day restricted period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of
the 180-day period, the restrictions imposed by this paragraph shall continue to
apply until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event. The
Company shall promptly notify Xxxxxx Xxxxxxx of any earnings release, news or
event that may give rise to an extension of the initial 180-day restricted
period.
4. Terms of Public Offering. The Sellers are advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective and an MRRS receipt has been issued in respect of the Canadian
Final Prospectus as in your judgment is advisable. The Sellers are further
advised by you that the Shares are to be offered to the public initially at U.S.
$___ per share (the "U.S. PUBLIC OFFERING PRICE") with respect to the US Firm
Shares and any Additional Shares and, with respect to the Canadian Firm Shares,
at Cdn $___ per share (the "CANADIAN PUBLIC OFFERING PRICE", and collectively
with the U.S. Public Offering Price, "PUBLIC OFFERING PRICE") and to certain
dealers selected by you at a price that represents a concession not in excess of
U.S. $____ per share under the U.S. Public Offering Price, and that any
Underwriter may allow, and such dealers may reallow, a concession, not in excess
of U.S. $___ per share, to any Underwriter or to certain other dealers.
5. Payment and Delivery. Payment for the Firm Shares to be sold by each
Seller shall be made to such Seller in Federal or other funds, denominated in
the currency in which the Public Offering Price was received, immediately
available in New York City against delivery of such Firm Shares for the
respective accounts of the several Underwriters at 10:00 a.m., New York City
time, on ____________, 2006, or at such other time on the same or such other
date, not later than _________, 2006, as shall be designated in writing by you.
The time and date of such payment are hereinafter referred to as the "CLOSING
DATE."
Payment for any Additional Shares shall be made to the Sellers in Federal
or other funds immediately available in New York City against delivery of such
Additional Shares for the respective accounts of the several Underwriters at
8:00 a.m., New York City time, on the date specified in the corresponding notice
described in Section 3 or at such other time on the same or on such other date,
in any event not later than _______, 2006 as shall be designated in writing by
you.
The Firm Shares and Additional Shares shall be registered in such names and
in such denominations as you shall request in writing not later than one full
business day prior to the Closing Date or the applicable Option Closing Date, as
the case may be. The Firm Shares and Additional Shares shall be delivered to you
on the Closing Date or an Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
6. Conditions to the Underwriters' Obligations. The obligations of the
Sellers to sell the Shares to the Underwriters and the several obligations of
the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the conditions that the Registration Statement shall have become
effective and the OSC shall have issued the decision document for the Canadian
Final Prospectus not later than [__________] (New York City time) on the date
hereof.
The several obligations of the Underwriters are subject to the following
further conditions:
(a) Subsequent to the execution and delivery of this Agreement and prior to
the Closing Date:
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any of the Company's securities by
any "nationally recognized statistical rating organization," as such term
is defined for purposes of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company and
its subsidiaries, taken as a whole, from that set forth in the Time of Sale
Prospectus that, in your judgment, is material and adverse and that makes
it, in your judgment, impracticable to market the Shares on the terms and
in the manner contemplated in the Time of Sale Prospectus.
(b) The representations and warranties of the Company, shall be true and
correct as of the Closing Date, and the Underwriters shall have received on the
Closing Date a certificate, dated the Closing Date and signed by an executive
officer of the Company, to this effect and to the effect set forth in Section
6(a)(i) above and that the Company has complied in all material respects with
all of the agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely upon the best
of his or her knowledge as to proceedings threatened.
(c) The representations and warranties of the Selling Shareholders shall be
true and correct as of the Closing Date, and the Underwriters shall have
received on the Closing Date a certificate, dated the Closing Date and signed by
an Attorney-in-Fact for the Selling Shareholders, to this effect.
(d) The Underwriters shall have received on the Closing Date an opinion of
Torys LLP, outside counsel for the Company, dated the Closing Date, to the
effect that:
(i) the Company and each of its Significant Subsidiaries listed on
Schedule A to such opinion (which schedule will indicate those Significant
Subsidiaries organized in Delaware, or under the OBCA or CBCA) is duly
incorporated and has the corporate power and authority to own its property
and to conduct its business as described in the Time of Sale Prospectus and
the Prospectus (and, based on certificates from public officials, such
counsel confirms that the Company and each of such Significant Subsidiaries
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation);
(ii) the authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Time of Sale Prospectus
and the Prospectus;
(iii) the Common Shares (including the Shares to be sold by the
Selling Shareholders) outstanding prior to the issuance of the Shares to be
sold by the Company have been duly authorized and are validly issued, fully
paid and non-assessable;
(iv) all of the issued shares of each Significant Subsidiary of the
Company listed on Schedule A to such opinion have been duly and validly
authorized and issued, are fully paid and non-assessable;
(v) the Shares to be sold by the Company have been duly authorized
and, when issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive or similar
rights contained in the Company's articles of incorporation, bylaws, or
under applicable Delaware or Canadian law;
(vi) this Agreement has been duly authorized, executed and delivered
by the Company;
(vii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will
not contravene any provision of applicable law or the articles of
incorporation or by-laws of the Company or, to such counsel's knowledge,
any agreement or other instrument set forth on Schedule A to such opinion,
or, to such counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or
any subsidiary, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement;
(viii) the statements relating to legal matters, documents or
proceedings included in (A) the Prospectus under the captions "Legal
Proceedings," "Description of Capital Stock," "Certain Relationships and
Related Party Transactions," and "Underwriters" insofar as they purport to
summarize legal matters, documents or proceedings, accurately summarize
those matters, documents or proceedings, and (B) "Shares Eligible for
Future Sale," insofar as it purports to summarize Rule 144, accurately
summarizes Rule 144;
(ix) the Company is not, and after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described
in the Time of Sale Prospectus or the Prospectus will not be, an
"investment company" as such term is defined in the Investment Company Act
of 1940, as amended;
(x) the Shares are qualified investments under the Income Tax Act
(Canada) and the regulations thereunder (the "TAX ACT") for trusts governed
by registered retirement savings plans, registered retirement income funds,
deferred profit sharing plans and registered education savings plans;
(xi) the Registration Statement, the Time of Sale Prospectus and the
Prospectus (except for the financial statements and notes thereto and
financial statement schedules and other financial and statistical data
included therein, as to which such counsel need not express any belief)
comply as to form in all material respects to the requirements of the
Securities Act and the applicable rules and regulations of the Commission
thereunder and of the Canadian Securities Laws; and
(xii) nothing has come to the attention of such counsel that causes
such counsel to believe that (A) the Registration Statement (except for the
financial statements and notes thereto and financial statement schedules
and other financial and statistical data included therein, as to which such
counsel need not express any belief) at the time the Registration Statement
became effective contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, (B) the Time of Sale
Prospectus (except for the financial statements and financial schedules and
other financial data included therein, as to which such counsel need not
express any belief) as of the date of this Agreement contained any untrue
statement of a material fact or omitted to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or (C) the Prospectus (except
for the financial statements and notes thereto and financial statement
schedules and other financial and statistical data included therein, as to
which such counsel need not express any belief) as of its date or as
amended or supplemented, if applicable, as of the Closing Date contained or
contains any untrue statement of a material fact or omitted or omits 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.
In addition, such counsel does not know of any legal or governmental
proceedings pending or threatened to which the Company or any of its
subsidiaries is a party or to which any of the properties of the Company or
any of its subsidiaries is subject that are required to be described in the
Registration Statement, the Time of Sale Prospectus or the Prospectus and
are not described in such Registration Statement, Time of Sale Prospectus
or Prospectus.
(e) The Underwriters shall have received on the Closing Date an opinion of
Xxxxx Xxxx & Xxxxxxxx to the effect that nothing has come to the attention of
such counsel that causes such counsel to believe that (A) the Registration
Statement (except for the financial statements and notes thereto and financial
statement schedules and other financial and statistical data included therein,
as to which such counsel need not express any belief) at the time the
Registration Statement became effective contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, (B) the Time of Sale
Prospectus (except for the financial statements and financial schedules and
other financial data included therein, as to which such counsel need not express
any belief) as of the date of this Agreement contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading or (C) the Prospectus (except for the financial statements and
notes
thereto and financial statement schedules and other financial and statistical
data included therein, as to which such counsel need not express any belief) as
of its date or as amended or supplemented, if applicable, as of the Closing Date
contained or contains any untrue statement of a material fact or omitted or
omits 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.
(f) The Underwriters shall have received on the Closing Date an opinion of
Torys LLP, counsel for the Selling Shareholder listed on Schedule I-A hereto,
dated the Closing Date, to the effect that:
(i) this Agreement has been duly authorized, executed and delivered by
or on behalf of such Selling Shareholder;
(ii) the execution and delivery by such Selling Shareholder of, and
the performance by such Selling Shareholder of its obligations (including
the sale, transfer and delivery of the Shares) under, this Agreement and
the Custody Agreement and Power of Attorney entered into by such Selling
Shareholder will not contravene any provision of applicable law, or the
articles of incorporation or by-laws of such Selling Shareholder (if such
Selling Shareholder is a corporation), or, to such counsel's knowledge, any
agreement or other instrument binding upon such Selling Shareholder or, to
such counsel's knowledge, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over such Selling Shareholder,
and no consent, approval, authorization or order of, or qualification with,
any governmental body or agency is required for the performance by such
Selling Shareholder of its obligations under this Agreement or the Custody
Agreement and Power of Attorney entered into by such Selling Shareholder,
except such as may be required under U.S. state securities laws or pursuant
to the rules of the NASD and except for the filing of the Canadian
Supplemental Prospectus;
(iii) such Selling Shareholder has the legal right and power, and all
authorization and approval required by law, to enter into this Agreement
and the Custody Agreement and Power of Attorney entered into by such
Selling Shareholder and to sell, transfer and deliver the Shares to be sold
by such Selling Shareholder;
(iv) the Custody Agreement and Power of Attorney entered into by such
Selling Shareholder has been duly authorized, executed and delivered by
such Selling Shareholder and is a valid and binding agreement of such
Selling Shareholder;
(v) upon payment for the Shares to be sold by such Selling Shareholder
pursuant to this Agreement, delivery of such Shares, as directed by the
Underwriters, to Cede or such other nominee as may be designated by DTC,
registration of such Shares in the name of Cede or such other nominee and
the crediting of such Shares on the books of DTC
to securities accounts of the Underwriters (assuming that neither DTC nor
any such Underwriter has notice of any adverse claim within the meaning of
Section 8-105 of the UCC to such Shares), (A) DTC shall be a "protected
purchaser" of such Shares within the meaning of Section 8-303 of the UCC,
(B) under Section 8-501 of the UCC, the Underwriters will acquire a valid
security entitlement in respect of such Shares and (C) no action based on
any "adverse claim" (within the meaning of Section 8-102 of the UCC) to
such Shares may be asserted against the Underwriters with respect to such
security entitlement; in giving this opinion, counsel for such Selling
Shareholder may assume that when such payment, delivery and crediting
occur, (x) such Shares will have been registered in the name of Cede or
another nominee designated by DTC, in each case on the Company's share
registry in accordance with its articles of incorporation, bylaws and
applicable law, (y) DTC will be registered as a "clearing corporation"
within the meaning of Section 8-102 of the UCC and (z) appropriate entries
to the accounts of the several Underwriters on the records of DTC will have
been made pursuant to the UCC; and
(vi) nothing has come to the attention of such counsel that causes
such counsel to believe that (A) the Registration Statement (except for the
financial statements and notes thereto and financial statement schedules
and other financial and statistical data included therein, as to which such
counsel need not express any belief) at the time the Registration Statement
became effective contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, (B) the Time of Sale
Prospectus (except for the financial statements and financial schedules and
other financial data included therein, as to which such counsel need not
express any belief) as of the date of this Agreement contained any untrue
statement of a material fact or omitted to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or (C) the Prospectus (except
for the financial statements and notes thereto and financial statement
schedules and other financial and statistical data included therein, as to
which such counsel need not express any belief) as of its date or as
amended or supplemented, if applicable, as of the Closing Date contained or
contains any untrue statement of a material fact or omitted or omits 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;
provided, however, that such opinion shall only apply to information
furnished in writing by the Selling Shareholder listed on Schedule I-A
expressly for use therein.
(g) The Underwriters shall have received on the Closing Date an opinion of
Faegre & Xxxxxx LLP, counsel for the Selling Shareholders listed on Schedule I-B
hereto, dated the Closing Date, to the effect that:
(i) this Agreement has been duly authorized, executed and delivered by
or on behalf of each such Selling Shareholder;
(ii) the execution and delivery by each such Selling Shareholder of,
and the performance by each such Selling Shareholder of its obligations
(including the sale, transfer and delivery of the Shares) under, this
Agreement and the Custody Agreement and Power of Attorney entered into by
such Selling Shareholder will not contravene any provision of applicable
law, or the articles of incorporation or by-laws of such Selling
Shareholder (if such Selling Shareholder is a corporation), or, to such
counsel's knowledge, any agreement or other instrument binding upon such
Selling Shareholder or, to such counsel's knowledge, any judgment, order or
decree of any governmental body, agency or court having jurisdiction over
such Selling Shareholder, and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency is required for
the performance by such Selling Shareholder of its obligations under this
Agreement or the Custody Agreement and Power of Attorney entered into by
such Selling Shareholder, except such as may be required under U.S. state
securities laws or pursuant to the rules of the NASD and except for the
filing of the Canadian Supplemental Prospectus;
(iii) each such Selling Shareholder has the legal right and power, and
all authorization and approval required by law, to enter into this
Agreement and the Custody Agreement and Power of Attorney entered into by
such Selling Shareholder and to sell, transfer and deliver the Shares to be
sold by such Selling Shareholder;
(iv) the Custody Agreement and Power of Attorney entered into by each
such Selling Shareholder has been duly authorized, executed and delivered
by such Selling Shareholder and is a valid and binding agreement of such
Selling Shareholder;
(v) upon payment for the Shares to be sold by each such Selling
Shareholder pursuant to this Agreement, delivery of such Shares, as
directed by the Underwriters, to Cede or such other nominee as may be
designated by DTC, registration of such Shares in the name of Cede or such
other nominee and the crediting of such Shares on the books of DTC to
securities accounts of the Underwriters (assuming that neither DTC nor any
such Underwriter has notice of any adverse claim within the meaning of
Section 8-105 of the UCC to such Shares), (A) DTC shall be a "protected
purchaser" of such Shares within the meaning of Section 8-303 of the UCC,
(B) under Section 8-501 of the UCC, the Underwriters will acquire a valid
security entitlement in respect of such Shares and (C) no action based on
any "adverse claim" (within the meaning of Section 8-102 of the UCC) to
such Shares may be asserted against the Underwriters with respect to such
security entitlement; in giving this opinion, counsel for such Selling
Shareholders may assume that when such payment, delivery
and crediting occur, (x) such Shares will have been registered in the name
of Cede or another nominee designated by DTC, in each case on the Company's
share registry in accordance with its articles of incorporation, bylaws and
applicable law, (y) DTC will be registered as a "clearing corporation"
within the meaning of Section 8-102 of the UCC and (z) appropriate entries
to the accounts of the several Underwriters on the records of DTC will have
been made pursuant to the UCC; and
(vi) nothing has come to the attention of such counsel that causes
such counsel to believe that (A) the Registration Statement (except for the
financial statements and notes thereto and financial statement schedules
and other financial and statistical data included therein, as to which such
counsel need not express any belief) at the time the Registration Statement
became effective contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, (B) the Time of Sale
Prospectus (except for the financial statements and financial schedules and
other financial data included therein, as to which such counsel need not
express any belief) as of the date of this Agreement contained any untrue
statement of a material fact or omitted to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or (C) the Prospectus (except
for the financial statements and notes thereto and financial statement
schedules and other financial and statistical data included therein, as to
which such counsel need not express any belief) as of its date or as
amended or supplemented, if applicable, as of the Closing Date contained or
contains any untrue statement of a material fact or omitted or omits 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;
provided, however, that such opinion shall only apply to information
furnished by the Selling Shareholders listed on Schedule I-B in the Xxxx
Selling Shareholder Blood Letter dated April __, 2006.
(h) The Underwriters shall have received on the Closing Date an opinion of
each of Fenwick & West LLP and Osler, Xxxxxx & Harcourt LLP, counsel for the
Underwriters, dated the Closing Date, covering the matters referred to in
Sections 6(d)(v) (but not with respect to "preemptive or similar rights"),
6(d)(vi), 6(d)(viii) (but only as to the statements in the Prospectus under
"Underwriters") and 6(d)(xi) above.
With respect to Section 6(d)(xi) above, Torys LLP, Xxxxx Xxxx & Xxxxxxxx,
Xxxxxxx & West LLP and Osler, Xxxxxx & Harcourt LLP may state that their
opinions and beliefs are based upon their participation in the preparation of
the Registration Statement and Prospectus and any amendments or supplements
thereto and review and discussion of the contents thereof, but are without
independent check or verification, except as specified. With respect to Section
6(d)(i) above as such opinion relates to international subsidiaries, Torys LLP
may
rely upon an opinion or opinions of foreign counsel; provided that (A) each such
counsel is satisfactory to your counsel, (B) a copy of each opinion so relied
upon is delivered to you and is in form and substance satisfactory to your
counsel, and (C) Torys LLP shall state in its opinion that it is justified in
relying on each such other opinion. With respect to Section 6(f) and 6(g) above,
Torys LLP and Faegre & Xxxxxx LLP, respectively, may rely upon an opinion or
opinions of counsel for any Selling Shareholder and, with respect to factual
matters and to the extent such counsel deems appropriate, upon the
representations of each Selling Shareholder contained herein and in the Custody
Agreement and Power of Attorney entered into by such Selling Shareholder;
provided that (A) each such counsel for the Selling Shareholders is satisfactory
to your counsel, (B) a copy of each opinion so relied upon is delivered to you
and is in form and substance satisfactory to your counsel, (C) copies of such
Custody Agreements and Powers of Attorneys shall be delivered to you and shall
be in form and substance satisfactory to your counsel and (D) Torys LLP or
Faegre & Xxxxxx LLP, as applicable, shall state in their opinion that they are
justified in relying on each such other opinion.
The opinions of Torys LLP, Xxxxx Xxxx & Xxxxxxxx and Faegre & Xxxxxx LLP
described in Sections 6(d), 6(e), 6(f) and 6(g) above (and any opinions of
counsel for any Selling Shareholder referred to in the immediately preceding
paragraph) shall be rendered to the Underwriters at the request of the Company
or one or more of the Selling Shareholders, as the case may be, and shall so
state therein.
(i) The Underwriters shall have received, on each of the date hereof and
the Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to the Underwriters, from
PricewaterhouseCoopers LLP, independent public accountants, 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 (including without limitation adjusting entries
made to certain pro forma financial presentations) contained in the Registration
Statement, the Time of Sale Prospectus and the Prospectus; provided that the
letter delivered on the Closing Date shall use a "cut-off date" not earlier than
the date hereof.
(j) The Underwriters shall have received, on each of the date hereof and
the Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to the Underwriters, from
________________regarding compliance with the laws of Quebec relating to the use
of the French language in connection with the documents (including the
Prospectus and certificates representing the Shares) to be delivered to
purchasers in Quebec.
(k) The "lock-up" agreements, each substantially in the form of Exhibit A
hereto between you and each shareholder, each officer and director of the
Company and certain other holders of the Company's securities relating to
sales and certain other dispositions of Common Shares or certain other
securities, shall have been delivered to you on or before the date hereof, and
shall be in full force and effect on the Closing Date.
(l) The Underwriters shall have received opinions of Osler, Xxxxxx &
Harcourt LLP, dated the date of the Canadian Preliminary Prospectus, the date of
the Canadian Final Prospectus and the date of the Canadian Supplemented
Prospectus, in form and substance satisfactory to the Underwriters, addressed to
the Underwriters, the Company and their respective counsel, to the effect that
the French language version of each of the Canadian Preliminary Prospectus, the
Canadian Final Prospectus and the Canadian Supplemented Prospectus, except for
the consolidated financial statements and notes to such statements and the
related auditors' report on such statements (collectively, the "FINANCIAL
INFORMATION"), as to which no opinion need be expressed by such counsel, is, in
all material respects, a complete and accurate translation of the English
language version thereof.
(m) The Underwriters shall have received opinions of PricewaterhouseCoopers
LLP dated the date of the Canadian Preliminary Prospectus, the date of the
Canadian Final Prospectus and the date of the Canadian Supplemented Prospectus,
in form and substance satisfactory to the Underwriters, addressed to the
Underwriters, the Company and their respective counsel, to the effect that the
French language version of the Financial Information contained in the Canadian
Preliminary Prospectus, the Canadian Final Prospectus and the Canadian
Supplemented Prospectus is, in all material respects, a complete and proper
translation of the English language version thereof.
(n) The Company shall have consummated its acquisition of Winzip on the
terms as described in the Time of Sale Prospectus in all material respects.
(o) The Company shall have (1) obtained a pay-off letter or paid off and
satisfied all remaining obligations under (or received waivers with respect to
such obligations) under the agreements listed in Schedule 6-A, and (2) entered
into the agreement listed in Schedule 6-B.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the delivery to you on the applicable Option Closing
Date of such documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of the Additional
Shares to be sold on such Option Closing Date and other matters related to the
issuance of such Additional Shares.
7. Covenants of the Company. In further consideration of the agreements of
the Underwriters herein contained, the Company covenants with each Underwriter
as follows:
(a) To furnish to you, without charge, seven (7) signed copies of the
Registration Statement (including exhibits thereto) and for delivery to each
other Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and to furnish to you in New York City (and in Toronto and
Montreal with respect to the Canadian Supplemented Prospectus in the English and
French languages), without charge, as soon as practicable on the business day
next succeeding the date of this Agreement and during the period mentioned in
Section 7(d) below, as many copies of the Time of Sale Prospectus, the
Prospectus and any supplements and amendments thereto or to the Registration
Statement as you may reasonably request.
(b) Before amending or supplementing the Registration Statement, the Time
of Sale Prospectus or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed amendment or
supplement to which you reasonably object.
(c) To furnish to you a copy of each proposed free writing prospectus to be
prepared by or on behalf of, used by, or referred to by the Company and not to
use or refer to any proposed free writing prospectus to which you reasonably
object.
(d) Not to take any action that would result in an Underwriter or the
Company being required to file with the Commission pursuant to Rule 433(d) under
the Securities Act a free writing prospectus prepared by or on behalf of the
Underwriter that the Underwriter otherwise would not have been required to file
thereunder.
(e) If the Time of Sale Prospectus is being used to solicit offers to buy
the Shares at a time when the Prospectus is not yet available to prospective
purchasers and any event shall occur or condition exist as a result of which it
is necessary to amend or supplement the Time of Sale Prospectus in order to make
the statements therein, in the light of the circumstances, not misleading, or if
any event shall occur or condition exist as a result of which the Time of Sale
Prospectus conflicts with the information contained in the Registration
Statement then on file, or if, in the opinion of counsel for the Underwriters,
it is necessary to amend or supplement the Time of Sale Prospectus to comply
with applicable law, forthwith to prepare, file with the Commission and furnish,
at its own expense, to the Underwriters and to any dealer upon request, either
amendments or supplements to the Time of Sale Prospectus so that the statements
in the Time of Sale Prospectus as so amended or supplemented will not, in the
light of the circumstances when delivered to a prospective purchaser, be
misleading or so that the Time of Sale Prospectus, as amended or supplemented,
will no longer conflict with the Registration Statement, or so that the Time of
Sale Prospectus, as amended or supplemented, will comply with applicable law.
(f) If, during such period after the first date of the public offering of
the Shares as in the opinion of counsel for the Underwriters the Prospectus (or
in lieu thereof the notice referred to in Rule 173(a) under the Securities Act)
is
required by law to be delivered in connection with sales by an Underwriter or
dealer, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus (or in lieu
thereof the notice referred to in Rule 173(a) under the Securities Act) is
delivered to a purchaser, not misleading, or if, in the opinion of counsel for
the Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the Commission [and
the Canadian Securities Commissions, as required by law] and furnish, at its own
expense, to the Underwriters and to the dealers (whose names and addresses you
will furnish to the Company) to which Shares may have been sold by you on behalf
of the Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances when the
Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under the
Securities Act) is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(g) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(h) To make generally available to the Company's security holders and to
you as soon as practicable an earning statement covering the twelve-month period
ending ________, 2007 that satisfies the provisions of Section 11(a) of the
Securities Act and the rules and regulations of the Commission thereunder.
(i) To prepare and file with the OSC and the other Canadian Securities
Commissions promptly after the execution and delivery of this Agreement, a
supplemented prospectus in the English and French languages that complies with
National Instrument 44-103 (the "CANADIAN SUPPLEMENTED PROSPECTUS"), in a form
reasonably satisfactory to the Underwriters.
8. Covenants of the Underwriters.
(a) Each Underwriter severally covenants with the Company not to take any
action that would result in the Company being required to file with the
Commission under Rule 433(d) a free writing prospectus prepared by or on behalf
of such Underwriter that otherwise would not be required to be filed by the
Company thereunder, but for the action of the Underwriter.
(b) The Underwriters will notify the Company and the Toronto Stock Exchange
when, in the Underwriters' opinion, the Underwriters and the members of their
selling group (if any) have ceased distribution of the Shares and, promptly
after completion of the distribution, will provide the Company, in writing, with
a breakdown of the number of Shares distributed in each of the provinces of
Canada where that breakdown is required by the Canadian Securities Commission of
that jurisdiction for the purpose of calculating fees payable to that Canadian
Securities Commission.
9. Expenses. Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, the Company agrees to pay or
cause to be paid all expenses incident to the performance of the Sellers
obligations under this Agreement, including: (i) the fees, disbursements and
expenses of the Company's counsel and the Company's accountants in connection
with the registration and delivery of the Shares under the Securities Act and
Canadian Securities Laws and all other fees or expenses in connection with the
preparation and filing of the Registration Statement, any preliminary
prospectus, the Time of Sale Prospectus, the Prospectus, any free writing
prospectus prepared by or on behalf of, used by, or referred to by the Company,
the Canadian Supplemented Prospectus and amendments and supplements to any of
the foregoing, including all printing and translation costs associated
therewith, and the mailing and delivering of copies thereof to the Underwriters
and dealers, in the quantities hereinabove specified; provided, however, that on
the Closing Date, the Underwriters shall reimburse to the Company the fees and
expenses of Xxxxx Xxxx & Xxxxxxxx incurred in connection with the satisfaction
of the condition set forth in Section 6(e) hereof in an amount not to exceed
$______, (ii) all costs and expenses related to the transfer and delivery of the
Shares to the Underwriters, including any transfer or other taxes payable
thereon (except that each Selling Shareholder agrees to pay or cause to be paid
all transfer or other taxes payable with respect to the Shares sold by such
Selling Shareholder), (iii) all expenses in connection with the qualification of
the Shares for offer and sale under state and Canadian provincial securities
laws as provided in Sections 7(g) and 7(i) hereof, including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in connection
with such qualification, (iv) all filing fees and the reasonable fees and
disbursements of counsel to the Underwriters incurred in connection with the
review and qualification of the offering of the Shares by the National
Association of Securities Dealers, Inc., (v) all fees and expenses in connection
with the preparation and filing of the registration statement on Form 8-A
relating to the Common Shares and all costs and expenses incident to listing the
Shares on the Nasdaq National Market and the Toronto Stock Exchange, (vi) the
cost of printing certificates representing the Shares, (vii) the costs and
charges of any transfer agent, registrar or depositary, (viii) the costs and
expenses of the Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the Shares
including, without limitation, expenses associated with the production of road
show slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of the
Company, travel and lodging expenses of the representatives and officers of the
Company and any such consultants, provided however that (a) the cost of any
aircraft chartered in connection with the road show shall be borne 50% by the
Company and 50% by the Underwriters and (b) the cost of any Canadian firms hired
for the purposes of assisting with Canadian road shows be borne by the
Underwriters, (ix) the document production charges and expenses associated with
printing this Agreement, and (x) all other costs and expenses incident to the
performance of the obligations of the Company hereunder for which provision is
not otherwise made in this Section. The Selling Shareholder listed on Schedule
I-
A hereto agrees to pay or cause to be paid all fees, disbursements and expenses
of Torys LLP as counsel for such Selling Shareholders. The Selling Shareholders
listed on Schedule I-B hereto agree to pay or cause to be paid all fees,
disbursements and expenses of Faegre & Xxxxxx LLP as counsel for such Selling
Shareholders. It is understood, however, that except as provided in this
Section, Section 10 entitled "Indemnity and Contribution," and the last
paragraph of Section 13 below, the Underwriters will pay all of their costs and
expenses, including fees and disbursements of their counsel, stock transfer
taxes payable on resale of any of the Shares by them and any advertising
expenses connected with any offers they may make.
The provisions of this Section shall not supersede or otherwise affect any
agreement that the Sellers may otherwise have for the allocation of such
expenses among themselves.
10. Indemnity and Contribution. (a) The Company agrees to indemnify and
hold harmless each Underwriter, each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, and each affiliate of any Underwriter within the
meaning of Rule 405 under the Securities Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus, the Time of Sale
Prospectus, any issuer free writing prospectus as defined in Rule 433(h) under
the Securities Act, any Company information that the Company has filed, or is
required to file, pursuant to Rule 433(d) of the Securities Act or the
Prospectus or any amendment or supplement thereto, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein.
(b) Each Selling Shareholder agrees, severally and not jointly, to
indemnify and hold harmless each Underwriter, each person, if any, who controls
any Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, and each affiliate of any Underwriter within the
meaning of Rule 405 under the Securities Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus, the Time of Sale
Prospectus, any issuer free writing prospectus as defined in Rule 433(h) under
the Securities Act,
any Company information that the Company has filed, or is required to file,
pursuant to Rule 433(d) of the Securities Act or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but in all cases only with reference to information
relating to such Selling Shareholder furnished by or on behalf of such Selling
Shareholder in writing expressly for use therein. The liability of each Selling
Shareholder under the indemnity agreement contained in this paragraph shall be
limited to an amount equal to the product of the Purchase Price per share
multiplied by the number of Shares sold by such Selling Shareholder under this
Agreement.
(c) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Sellers, the directors of the Company, the officers of the
Company who sign the Registration Statement and each person, if any, who
controls the Company or any Selling Shareholder within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company to such Underwriter in
Section 10(a) or from the Selling Shareholder to such Underwriter in Section
10(b), as the case may be, but only with reference to information relating to
such Underwriter furnished to the Company in writing by such Underwriter through
you expressly for use in the Registration Statement, any preliminary prospectus,
the Time of Sale Prospectus, any issuer free-writing prospectus as defined in
Rule 433(h) under the Securities Act, or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto).
(d) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to Section 10(a), 10(b) or 10(c), such person (the "INDEMNIFIED PARTY")
shall promptly notify the person against whom such indemnity may be sought (the
"INDEMNIFYING PARTY") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding; provided, however,
that the failure to notify the indemnifying party shall not relieve it from any
liability that it may have under Section 10(a), 10(b) or 10(c) above except to
the extent that it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for (i) the fees and expenses of more than one
separate firm (in addition to any local counsel) for all Underwriters and all
persons, if any, who control any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act or who are
affiliates of any Underwriter within the meaning of Rule 405 under the
Securities Act, (ii) the fees and expenses of more than one separate firm (in
addition to any local counsel) for the Company, its directors, its officers who
sign the Registration Statement and each person, if any, who controls the
Company within the meaning of either such Section, and (iii) the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all Selling Shareholders and all persons, if any, who control such Selling
Shareholders within the meaning of either such Section. In the case of any such
separate firm for the Underwriters and such control persons and affiliates of
any Underwriters, such firm shall be designated in writing by Xxxxxx Xxxxxxx. In
the case of any such separate firm for the Company, and such directors, officers
and control persons of the Company, such firm shall be designated in writing by
the Company. In the case of any such separate firm for the Selling Shareholders
and such control persons of any Selling Shareholders, such firm shall be
designated in writing by the persons named as attorneys-in-fact for the Selling
Shareholders under the Custody Agreement and Power of Attorney entered into by
each Selling Shareholder. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(e) To the extent the indemnification provided for in Section 10(a), 10(b)
or 10(c) is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand from the offering of the Shares
or (ii) if the allocation provided by clause 10(e)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 10(e)(i) above but also the relative
fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Sellers on the one hand and the Underwriters
on the other hand in connection with the offering of the Shares shall be deemed
to be in the same respective proportions as the net proceeds from the offering
of the Shares (before deducting expenses) received by each Seller and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate U.S. Public Offering Price of the Shares. The relative fault of the
Company and/or the Selling Shareholders, on the one hand, and the Underwriters,
on the other hand, shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, the Selling Shareholders or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Underwriters' respective
obligations to contribute pursuant to this Section 10 are several in proportion
to the respective number of Shares they have purchased hereunder, and not joint.
The liability of each Selling Shareholder under the contribution agreement
contained in this paragraph shall be several and not joint, and shall be limited
to an amount equal to the product of the Purchase Price per share multiplied by
the number of Shares sold by such Selling Shareholder under this Agreement.
(f) The Sellers and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 10 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 10(e). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 10, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 10 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(g) The indemnity and contribution provisions contained in this Section 10
and the representations, warranties and other statements of the Company and the
Selling Shareholders contained in this Agreement shall remain operative and in
full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any Underwriter, any
person controlling any Underwriter or any affiliate of any Underwriter, any
Selling Shareholder or any person controlling any Selling Shareholder, their
general or limited partners, or the Company, its officers or directors or any
person controlling the Company and (iii) acceptance of and payment for any of
the Shares.
11. Termination. The Underwriters may terminate this Agreement by notice
given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on, or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the Nasdaq National Market or
the Toronto Stock Exchange, (ii) trading of any securities of the Company shall
have been suspended on any exchange or in any over-the-counter market, (iii) a
material disruption in securities settlement, payment or clearance services in
the United States or Canada shall have occurred, (iv) any moratorium on
commercial banking activities shall have been declared by Federal or New York
State or Canadian authorities or (v) there shall have occurred any outbreak or
escalation of hostilities, or any change in financial markets, currency exchange
rates or controls or any calamity or crisis (including without limitation a
terrorist attack or major weather calamity) that, in your judgment, is material
and adverse and which, singly or together with any other event specified in this
clause (v), makes it, in your judgment, impracticable or inadvisable to proceed
with the offer, sale or delivery of the Shares on the terms and in the manner
contemplated in the Time of Sale Prospectus or the Prospectus.
12. Entire Agreement. (a) This Agreement, together with any contemporaneous
written agreements and any prior written agreements (to the extent not
superseded by this Agreement) that relate to the offering of the Shares,
represents the entire agreement between the Sellers, on the one hand, and the
Underwriters, on the other, with respect to the preparation of any preliminary
prospectus, the Time of Sale Prospectus or the Prospectus, the conduct of the
offering, and the purchase and sale of the Shares.
(b) The Sellers acknowledge that in connection with the offering of the
Shares: (i) the Underwriters have acted at arms length, are not agents of, and
owe no fiduciary duties to, the Sellers or any other person, (ii) the
Underwriters owe the Sellers only those duties and obligations set forth in this
Agreement and prior written agreements (to the extent not superseded by this
Agreement), if any, and (iii) the Underwriters may have interests that differ
from those of the Sellers. The Sellers waive to the full extent permitted by
applicable law any claims they may have against the Underwriters arising from an
alleged breach of fiduciary duty in connection with the offering of the Shares
13. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or an Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Shares that it
has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule II bears to the aggregate number of
Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided that in no event shall the number of
Shares that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 13 by an amount in excess of one-ninth of
such number of Shares without the written consent of such Underwriter. If, on
the Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of Firm
Shares to be purchased on such date, and arrangements satisfactory to you, the
Company and the Selling Shareholders for the purchase of such Firm Shares are
not made within 36 hours after such default, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter, the Company or
the Selling Shareholders. In any such case either you or the relevant Sellers
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the Registration
Statement in the Time of Sale Prospectus and in the Prospectus or in any other
documents or arrangements may be effected. If, on an Option Closing Date, any
Underwriter or Underwriters shall fail or refuse to purchase Additional Shares
and the aggregate number of Additional Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Additional Shares to be
purchased on such Option Closing Date, the non-defaulting Underwriters shall
have the option to (i) terminate their obligation hereunder to purchase the
Additional Shares to be sold on such Option Closing Date or (ii) purchase not
less than the number of Additional Shares that such non-defaulting Underwriters
would have been obligated to purchase in the absence of such default. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of any Seller to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason any Seller shall be unable to perform its obligations under this
Agreement, such defaulting Sellers will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and disbursements
of their counsel) reasonably incurred by such Underwriters in connection with
this Agreement or the offering contemplated hereunder.
14. Jurisdiction. The parties hereto hereby irrevocably submit to the
exclusive jurisdiction of the courts of the State of New York and the Federal
courts of the United States of America located within the City of New York in
the State of New York, in respect of the interpretation and enforcement of the
provisions of this Agreement and of the documents referred to in this Agreement,
and in respect of the transactions contemplated hereby and thereby, and hereby
waive, and agree not to assert, as a defense in any action, suit or proceeding
for the interpretation or enforcement hereof or thereof, that it is not subject
thereto or that such action, suit or proceeding may not be brought or is not
maintainable in said courts or that the venue thereof may not be appropriate or
that this Agreement or any such document may not be enforced in or by such
courts, and the parties hereto irrevocably agree that all claims with respect to
such action or proceeding shall be heard and determined in such a New York State
or Federal court. The parties hereby consent to and grant any such court
jurisdiction over the person of such parties and over the subject matter of such
dispute and agree that mailing of process or other papers in connection with any
such action or proceeding in the manner provided in Section 19 or as otherwise
permitted under applicable law, rules and regulations, shall be valid and
sufficient service thereof. With respect to any particular action, suit or
proceeding, venue shall lie solely in the City of New York, New York.
15. Judgment Currency. If for the purposes of obtaining judgment in any
court it is necessary to convert a sum due hereunder into any currency other
than United States dollars, the parties hereto agree, to the fullest extent
permitted by law, that the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Underwriters could purchase United
States dollars with such other currency in The City of New York on the business
day preceding that on which final judgment is given. The obligation of each
Seller with respect to any sum due from it to any Underwriter or any person
controlling any Underwriter shall, notwithstanding any judgment in a currency
other than United States dollars, not be discharged until the first business day
following receipt by such Underwriter or controlling person of any sum in such
other currency, and only to the extent that such Underwriter or controlling
person may in accordance with normal banking procedures purchase United States
dollars with such other currency. If the United States dollars so purchased are
less than the sum originally due to such Underwriter or controlling person
hereunder, the Sellers agree as a separate obligation and notwithstanding any
such judgment, to indemnify such Underwriter or controlling person against such
loss. If the United States dollars so purchased are greater than the sum
originally due to such Underwriter or controlling person hereunder, such
Underwriter or controlling person agrees to pay to the Sellers an amount equal
to the excess of the dollars so purchased over the sum originally due to such
Underwriter or controlling person hereunder.
16. Counterparts. This Agreement may be signed in two or more counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
17. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
18. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
19. Notices. All communications hereunder shall be in writing and effective
only upon receipt and if to the Underwriters shall be delivered, mailed or sent
to you in care of Xxxxxx Xxxxxxx at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Equity Syndicate Desk, with a copy to the Legal Department; if to the
Company shall be delivered, mailed or sent to 0000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxx, Xxxxxx X0X 0X0, Attention: Xxxxxxxxxxx XxXxxxxxxxx; if to the Selling
Shareholder listed on Schedule I-A shall be delivered, mailed or sent to Vector
Capital, 000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000,
Attention: Xxxxx Xxxxxxxx; and if to the Selling Shareholders listed on Schedule
I-B shall be delivered, mailed or sent to Xxxxxx Xxxx, 00000 X Xxx Xxxxx Xxxxx,
Xxxxxx, XX 00000-0000.
Very truly yours,
COREL CORPORATION
By:
--------------------------------------
Name:
Title:
The Selling Shareholders named in Schedule I hereto, acting severally
By:
--------------------------------------
Attorney-in Fact
[Signature Page to Corel Underwriting Agreement]
Accepted as of the date hereof
Xxxxxx Xxxxxxx & Co. Incorporated
X.X. Xxxxxx Securities Inc.
Deutsche Bank Securities Inc.
Xxxxx Xxxxxxx & Co.
CIBC World Markets Corp.
Canaccord Xxxxx Inc.
Acting severally on behalf of themselves and
the several Underwriters named in
Schedule II hereto
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:
--------------------------------------
Name: Xxxxxx Xxx
Title: Executive Director
[Signature Page to Corel Underwriting Agreement]
SCHEDULE I
NUMBER OF FIRM SHARES TO NUMBER OF OPTION SHARES
BE SOLD THAT MAY BE SOLD
------------------------ -----------------------
NAME OF SELLING SHAREHOLDER
Corel Holdings, L.P...............................
Xxxxxx X. Xxxx....................................
Xxxxxx X. Xxxx GRAT...............................
Xxxxx X. Xxxx.....................................
--------- -------
Total:............................................ 1,500,000 225,000
========= =======
SCHEDULE I-A
SELLING SHAREHOLDER
-------------------
Corel Holdings, L.P.
SCHEDULE I-B
SELLING SHAREHOLDER
-------------------
Xxxxxx X. Xxxx
Xxxxxx X. Xxxx GRAT
Xxxxx X. Xxxx
SCHEDULE II
NUMBER OF FIRM SHARES TO BE
UNDERWRITER PURCHASED
----------- ---------------------------
Xxxxxx Xxxxxxx & Co. Incorporated..........
X.X. Xxxxxx Securities Inc. ...............
Deutsche Bank Securities Inc...............
Xxxxx Xxxxxxx & Co. .......................
CIBC World Markets Corp. ..................
Canaccord Xxxxx Inc. ......................
------------
Total:............................
============
SCHEDULE III
TIME OF SALE PROSPECTUS
1. Preliminary Prospectus issued April 7, 2006
2. Final Term Sheet attached hereto as Exhibit B
SCHEDULE 6-A
First Lien Credit Agreement, dated as of February 16, 2005, among the Borrowers,
the lenders named therein and Credit Suisse First Boston Toronto Branch, as
administrative agent, collateral agent, syndication agent and documentation
agent.
Second Lien Credit Agreement, dated as of February 16, 2005, among the
Borrowers, the lenders named therein and Credit Suisse First Boston Toronto
Branch, as administrative agent, collateral agent, syndication agent and
documentation agent.
Credit Agreement, dated as of June 29, 2005, among WinZip International LLC, as
borrower, Cayman Ltd. Holdco, as guarantor, the lenders party thereto and Xxxxx
Fargo Foothill, Inc., as arranger and Administrative Agent.
SCHEDULE 6-B
Credit Agreement among Corel Corporation, Corel US Holdings, LLC, the Lenders
Party hereto, and Xxxxxx Xxxxxxx Senior Funding Inc., as Administrative Agent
and Collateral Agent, Xxxxxx Xxxxxxx Senior Funding Inc., as Sole Bookrunner and
Lead Arranger, X.X. Xxxxxx Securities Inc. and Deutsche Bank Securities Inc., as
Co-Lead Arrangers, Xxxxxx Xxxxxxx Senior Funding Inc., as Syndication Agent and
Documentation Agent.
EXHIBIT A
FORM OF LOCK-UP LETTER
