Exhibit 1.1
15,000,000
LIONS GATE ENTERTAINMENT CORP.
COMMON SHARES
UNDERWRITING AGREEMENT
_______________, 2003
XX XXXXX SECURITIES CORPORATION
As Representative of the several Underwriters
c/o XX Xxxxx Securities Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. INTRODUCTORY. Lions Gate Entertainment Corp., a British Columbia corporation
(the "Company") proposes to sell, pursuant to the terms of this Agreement, to
the several underwriters named in Schedule A hereto (the "Underwriters," or,
each, an "Underwriter"), an aggregate of 15,000,000 common shares, no par value
(the "Common Shares") of the Company. The aggregate of 15,000,000 Common Shares
so proposed to be sold is hereinafter referred to as the "Firm Shares". The
Company and the Selling Shareholder listed in Schedule B hereto (the "Selling
Shareholder") also propose to sell to the Underwriters, upon the terms and
conditions set forth in Section 3 hereof, up to an additional 2,250,000 Common
Shares (the "Optional Shares"). The Firm Shares and the Optional Shares are
hereinafter collectively referred to as the "Shares". XX Xxxxx Securities
Corporation ("XX Xxxxx") is acting as representative of the several Underwriters
and in such capacity is hereinafter referred to as the "Representative."
2. (I) REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to, and agrees with, the several Underwriters that:
(a) The Company meets the requirements under the Securities Act
(British Columbia) (the "BCSA") and the rules, regulations and
published policy statements applicable in the Province of British
Columbia, including the rules and procedures established for use of a
short form prospectus with respect to the Shares pursuant to National
Instrument 44-101-Short Form Prospectus Distributions (collectively,
"British Columbia Securities Laws"); a preliminary short form
prospectus relating to the distribution of the Shares in the United
States has been filed with the British Columbia Securities Commission
in the Province of British Columbia (the "BCSC") (the "Canadian
Preliminary Prospectus"); the BCSC has issued a preliminary receipt for
the Canadian Preliminary Prospectus; a final short form prospectus
relating to the distribution of the Shares in the United States has
been filed with the BCSC for which a final receipt has been received
from the BCSC, (the "Canadian Prospectus"); the Canadian Preliminary
Prospectus and the Canadian Prospectus for which a preliminary receipt
and a final receipt were issued by the BCSC, respectively, were each in
the form heretofore delivered to you and for each of the other
Underwriters (including all documents incorporated by reference in the
prospectus contained therein) and no other document with respect to
such Preliminary Canadian Prospectus or Canadian Prospectus or document
incorporated by reference therein has heretofore been filed or
transmitted for filing with the BCSC; no order having the effect of
ceasing or suspending the
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distribution of the Shares has been issued by the BCSC and no
proceeding for that purpose has been initiated or, to the best of the
Company's knowledge, threatened by the BCSC.
(b) A registration statement on Form S-2 (File No. 333-104836) (the
"Initial Registration Statement") in respect of the Shares has been
filed with the Securities and Exchange Commission (the "Commission");
the Initial Registration Statement and any post-effective amendment
thereto, each in the form heretofore delivered to you, and, excluding
exhibits thereto, but including all documents incorporated by reference
in the prospectus contained therein, to you for each of the other
Underwriters, have been declared effective by the Commission in such
form; other than a registration statement, if any, increasing the size
of the offering (a "Rule 462(b) Registration Statement") filed pursuant
to Rule 462(b) under the Securities Act of 1933, as amended (the
"Securities Act") and the rules and regulations (the "Rules and
Regulations") of the Commission thereunder, which became effective upon
filing, no other document with respect to the Initial Registration
Statement or document incorporated by reference therein has heretofore
been filed with the Commission; and no stop order suspending the
effectiveness of the Initial Registration Statement, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any,
has been issued and no proceeding for that purpose has been initiated
or, to the best of the Company's knowledge, threatened by the
Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule
424(a) of the Rules and Regulations, is hereinafter called a
"Preliminary Prospectus" and together with the Canadian Preliminary
Prospectus, the "Preliminary Prospectuses"); the various parts of the
Initial Registration Statement and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and including (i) the
information contained in the form of final prospectus filed with the
Commission pursuant to Rule 424(b) under the Securities Act and deemed
by virtue of Rule 430A under the Securities Act to be part of the
Initial Registration Statement at the time it was declared effective
and (ii) the documents incorporated by reference in the prospectus
contained in the Initial Registration Statement at the time such part
of the Initial Registration Statement became effective, each as amended
at the time such part of the Initial Registration Statement became
effective or such part of the Rule 462(b) Registration Statement, if
any, became or hereafter becomes effective, are hereinafter
collectively called the "Registration Statements"; such final
prospectus, in the form first filed pursuant to Rule 424(b) under the
Securities Act, is hereinafter called the "Prospectus" and any
reference herein to any Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-2 under the Securities
Act, as of the date of such Preliminary Prospectus or Prospectus, as
the case may be. No document has been or will be prepared or
distributed in reliance on Rule 434 under the Securities Act. No order
preventing or suspending the use of any Preliminary Prospectus has been
issued by the Commission.
(c) The Registration Statement conforms (and the Rule 462(b)
Registration Statement, if any, the Prospectus and any amendments or
supplements to either of the Registration Statements or the Prospectus,
when they become effective or are filed with the Commission, as the
case may be, will conform) in all material respects to the requirements
of the Securities Act and the Rules and Regulations and do not and will
not, as of the applicable effective date (as to the Registration
Statements and any amendment thereto) and as of the applicable filing
date (as to the Prospectus and any amendment or supplement thereto)
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the
foregoing representations and warranties shall not apply to information
contained in or omitted from the Registration Statements or the
Prospectus or any such amendment or supplement thereto in reliance
upon, and in conformity with, written information furnished to the
Company through the Representative by or on behalf of any Underwriter
specifically for inclusion therein, which information the parties
hereto agree is limited to the Underwriters' Information (as defined in
Section 16).
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(d) No order preventing or suspending the use of the Canadian
Preliminary Prospectus has been issued by the BCSC, and the Canadian
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the British Columbia
Securities Laws, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company through the
Representative by or on behalf of any Underwriter specifically for
inclusion therein, which information the parties hereto agree is
limited to the Underwriters' Information (as defined in Section 16).
(e) The documents incorporated by reference in the Canadian Prospectus
and the Prospectus (referred to collectively, as the "Prospectuses"),
when they were filed with the BCSC and the Commission, as the case may
be, conformed in all material respects to the requirements of the
British Columbia Securities Laws, and the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the rules and regulations of
the Commission thereunder, as the case may be, and none of such
documents contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary
to make the statements therein not misleading.
(f) The Company and each of its subsidiaries (as defined in Section
14) have been duly incorporated (or, with respect to subsidiaries that
are not corporations, duly organized) and are validly existing as
corporations (or as such other entities, as applicable) in good
standing under the laws of their respective jurisdictions of
incorporation (or organization, as applicable), are duly qualified to
do business and are in good standing as foreign corporations (or other
foreign entities, as applicable) in each jurisdiction in which their
respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power
and authority necessary to own or hold their respective properties and
to conduct the businesses in which they are engaged, except where the
failure to so qualify or have such power or authority would not
reasonably be expected to have, singularly or in the aggregate, a
material adverse effect on the condition (financial or otherwise),
results of operations or business of the Company and its subsidiaries
taken as a whole (a "Material Adverse Effect"). With regard to Lions
Gate Television Corp. ("LGTC"):
(i) A trust (the "Trust") is, and since June 1999 has
been, the sole registered shareholder of LGTC;
(ii) The Trust is, and since 1999 has been, a duly formed
and validly existing trust under the laws of the
Province of British Columbia;
(iii) Xxxxx Xxxxxxx, is, and since 1999 has been, the sole
trustee (the "Trustee") of the Trust;
(iv) The Company, LGTC and the Company's subsidiaries are,
and since 1999, have been, the sole beneficiaries
(the "Beneficiaries") of the Trust; and
(v) Pursuant to the terms of the Trust, all economic
benefit flowing from the ownership of the shares of
LGTC is to be held by the Trustee for and on behalf
of the Beneficiaries.
(g) This Agreement has been duly authorized, executed and delivered by
the Company.
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(h) The Shares to be issued and sold by the Company to the Underwriters
hereunder have been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein (including, if
applicable, pursuant to The Depository Trust Company's standard
procedures that include the electronic delivery of share capital), will
be duly and validly issued, fully paid and non-assessable and free of
any preemptive or similar rights and will conform to the description
thereof contained in the Prospectuses.
(i) The Company has an authorized capitalization as set forth in the
Prospectuses, and all of the issued shares of the Company have been
duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectuses.
(j) All the outstanding shares or other equity interests of each
subsidiary of the Company have been duly authorized and validly issued,
are fully paid and non-assessable and, except to the extent set forth
in the Prospectuses with respect to LGTC, are owned by the Company
directly or indirectly through one or more wholly-owned subsidiaries,
free and clear of any claim, lien, encumbrance, security interest,
restriction upon voting or transfer or any other claim of any third
party (except for pledges of shares or other equity interests of
certain subsidiaries pursuant to the Credit, Security, Guaranty and
Pledge Agreement by and among the Company, the subsidiaries referred to
therein, and the lenders referred to therein, dated as of September 25,
2000, as amended to date).
(k) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby
will not (i) conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, (ii) result in any violation of the provisions
of the charter or by-laws (or other organizational documents, as
applicable) of the Company or any of its subsidiaries or (iii) result
in any violation of any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties or
assets, other than, in the case of each of clauses (i) and (iii), any
such conflict, breach, violation or default that would not, singularly
or in the aggregate, have a Material Adverse Effect.
(l) Except for the registration of the Shares under the Securities Act
and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act, applicable
state securities laws in the United States, and the British Columbia
Securities Laws in connection with the purchase and distribution of the
Shares by the Underwriters, no consent, approval, authorization or
order of, or filing or registration with, any court or governmental
agency or body is required for the execution, delivery and performance
of this Agreement by the Company and the consummation of the
transactions contemplated hereby.
(m) Each of Ernst & Young LLP and PricewaterhouseCoopers LLP, who have
expressed their opinions on the audited financial statements and
related schedules included or incorporated by reference in the
Registration Statements and the Prospectuses, are independent public
accountants as required by the Securities Act and the Rules and
Regulations.
(n) The consolidated financial statements, together with the related
notes and schedules, included or incorporated by reference in the
Prospectuses and in each Registration Statement fairly present the
financial condition, results of operations and cash flows of the
Company and its consolidated subsidiaries and other consolidated
entities at the respective dates or for the
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respective periods therein specified. Such statements and related notes
and schedules have been prepared in accordance with Canadian generally
accepted accounting principles applied on a consistent basis, except as
may be set forth in the Prospectuses, and comply as to form with all
applicable accounting requirements of the Securities Act and the Rules
and Regulations and the British Columbia Securities Laws, as the case
may be. No other financial statements or supporting schedules or
exhibits are required by the Securities Act or the Rules and
Regulations, or the British Columbia Securities Laws, as the case may
be, to be included in the Prospectuses.
(o) Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectuses, any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth in the Prospectus; and, since such date, there has
not been any change in the share capital or long-term debt of the
Company or any of its subsidiaries or any material adverse change or,
to the Company's knowledge, any development involving a prospective
material adverse change, in or affecting the business, general affairs,
management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole,
otherwise than as set forth in the Prospectuses.
(p) Except as set forth in the Prospectuses, there is no legal or
governmental proceeding pending to which the Company or any of its
subsidiaries is a party or of which any property or assets of the
Company or any of its subsidiaries is the subject which, singularly or
in the aggregate, if determined adversely to the Company or any of its
subsidiaries, would reasonably be expected to have a Material Adverse
Effect or would prevent or adversely affect the ability of the Company
to perform its obligations under this Agreement; and to the best of the
Company's knowledge, no such proceedings have been threatened by
governmental authorities or others.
(q) Neither the Company nor any of its subsidiaries (i) is in violation
of its charter or by-laws (or other organizational documents, as
applicable), (ii) is in default in any respect, and no event has
occurred which, with the giving of notice or lapse of time or both,
would constitute such a default, in the due performance or observance
of any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it is bound or to which
any of its property or assets is subject or (iii) is in violation in
any respect of any law, ordinance, governmental rule, regulation or
court decree to which it or its property or assets may be subject
except, in the case of each of clauses (ii) and (iii), any violations
or defaults which, singularly or in the aggregate, would not have a
Material Adverse Effect.
(r) The Company and each of its subsidiaries possess all licenses,
certificates, authorizations and permits issued by, and have made all
declarations and filings with, the appropriate federal, state,
provincial or foreign regulatory agencies or bodies which are necessary
for the ownership of their respective properties or the conduct of
their respective businesses as described in the Prospectuses except
where any failures to possess or make the same, singularly or in the
aggregate, would not reasonably be expected to have a Material Adverse
Effect, and the Company has not received notification of any revocation
or modification of any such license, authorization or permit and has no
reason to believe that any such license, certificate, authorization or
permit will not be renewed except where such non-renewal, singularly or
in the aggregate, would not have a Material Adverse Effect.
(s) Neither the Company nor any of its subsidiaries is or, after giving
effect to the offering of the Shares and the application of the
proceeds thereof as described in the Prospectuses will
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become, an "investment company" within the meaning of the Investment
Company Act of 1940, as amended and the rules and regulations of the
Commission thereunder.
(t) Neither the Company nor, to the Company's knowledge, any of its
officers, directors or affiliates has taken, directly or indirectly,
any action designed or intended to stabilize or manipulate the price of
any security of the Company, or which caused or resulted in, or which
might in the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of the
Company.
(u) The Company and its subsidiaries own or possess the right to use
all patents, trademarks, trademark registrations, service marks,
service xxxx registrations, trade names, copyrights, licenses,
inventions, trade secrets and rights (including all rights to market,
sell, distribute, exhibit, commercially exploit and otherwise use all
material film and television titles) material to the conduct of their
respective businesses, singularly and in the aggregate, and the Company
is not aware of any claim to the contrary or any challenge by any other
person to the rights of the Company or any of its subsidiaries with
respect to the foregoing, except any such claim or challenge that would
not have a Material Adverse Effect. The business of the Company and its
subsidiaries as now conducted and as proposed to be conducted does not
and will not infringe or conflict with any patents, trademarks, service
marks, trade names, copyrights, trade secrets, licenses or other
intellectual property or franchise right of any person, except as would
not have a Material Adverse Effect. No claim has been made against the
Company or any of its subsidiaries alleging the infringement by the
Company or any of its subsidiaries of any patent, trademark, service
xxxx, trade name, copyright, trade secret, license in or other
intellectual property right or franchise right of any person, except as
would not have a Material Adverse Effect.
(v) The Company and each of its subsidiaries have good and marketable
title in fee simple to, or have valid rights to lease or otherwise use,
all items of real or personal property, whether tangible or intangible,
which are material to the business of the Company and its subsidiaries
taken as a whole, in each case free and clear of all liens,
encumbrances, claims and defects that would reasonably be expected to
have a Material Adverse Effect.
(w) No labor disturbance by the employees of the Company or any of its
subsidiaries exists or, to the best of the Company's knowledge, is
imminent which would reasonably be expected to have a Material Adverse
Effect. Except as set forth in the section in the Prospectus entitled
"Risk Factors -- The loss of key personnel could adversely affect our
business", the Company is not aware that any key employee of the
Company plans to terminate employment with the Company.
(x) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder ("ERISA"), or
Section 4975 of the Internal Revenue Code of 1986, as amended from time
to time (the "Code")) or "accumulated funding deficiency" (as defined
in Section 302 of ERISA) or any of the events set forth in Section
4043(b) of ERISA (other than events with respect to which the 30-day
notice requirement under Section 4043 of ERISA has been waived) has
occurred with respect to any employee benefit plan which would
reasonably be expected to have a Material Adverse Effect; each employee
benefit plan is in compliance in all material respects with applicable
law, including ERISA and the Code; the Company has not incurred and
does not expect to incur any material liability under Title IV of ERISA
with respect to the termination of, or withdrawal from, any "pension
plan"; and each "pension plan" (as defined in ERISA) for which the
Company would have any liability that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material respects and
nothing has occurred, whether by action or by failure to act, which
could cause the loss of such qualification.
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(y) There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission, or other release of any kind
of toxic or other wastes or other hazardous substances by, due to, or
caused by the Company or any of its subsidiaries (or, to the best of
the Company's knowledge, any other entity for whose acts or omissions
the Company or any of its subsidiaries is or may be liable) upon any of
the property now or previously owned or leased by the Company or any of
its subsidiaries, or upon any other property, in violation of any
statute or any ordinance, rule (including rule of common law),
regulation, order, judgment, decree or permit or which would, under any
statute or any ordinance, rule (including rule of common law),
regulation, order, judgment, decree or permit, give rise to any
liability, except for any violation or liability which would not have,
singularly or in the aggregate with all such violations and
liabilities, a Material Adverse Effect; there has been no disposal,
discharge, emission or other release of any kind onto such property or
into the environment surrounding such property of any toxic or other
wastes or other hazardous substances with respect to which the Company
or any of its subsidiaries have knowledge, except for any such
disposal, discharge, emission, or other release of any kind which would
not have, singularly or in the aggregate with all such discharges and
other releases, a Material Adverse Effect.
(z) Each of the Company and each of its Significant Subsidiaries (as
defined below) and LGTC (i) has filed all necessary federal, state,
provincial and foreign income and franchise tax returns, (ii) has paid
all material federal, state, provincial, local and foreign taxes due
and payable for which it is liable, and (iii) does not have any tax
deficiency or claims outstanding or assessed or, to the best of the
Company's knowledge, proposed against it which such deficiency or claim
could reasonably be expected to have a Material Adverse Effect. Each of
the Company's subsidiaries (other than the Significant Subsidiaries and
LGTC) (A) has filed all necessary federal, state, provincial and
foreign income and franchise tax returns, (B) has paid all material
federal state, provincial, local and foreign taxes due and payable for
which it is liable, and (C) does not have any tax deficiency or claims
outstanding or assessed or, to the best of the Company's knowledge,
proposed against it which, in the case of any of (A), (B) or (C), could
reasonably be expected to have a Material Adverse Effect.
(aa) The Company and each of its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is customary for
companies engaged in similar businesses in similar industries.
(bb) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with Canadian generally accepted accounting principles and
to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(cc) The minute books of the Company, each of the Principal U.S.
Subsidiaries and Principal Canadian Subsidiaries and LGTC have been
made available to the Underwriters and counsel for the Underwriters,
and such books (i) contain a complete summary in all material respects
of all meetings and actions of the board of directors (including each
board committee) and shareholders of the Company and each of such
subsidiaries since the time of its respective incorporation through the
date of the latest meeting and action, and (ii) accurately in all
material respects reflect all transactions referred to in such minutes.
For purposes of this Agreement, the "Principal U.S. Subsidiaries" are
Lions Gate Entertainment Inc., Lions Gate Films Inc., Lions Gate
Television
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Inc., and LG Pictures Inc., and the "Principal Canadian Subsidiaries"
are Lions Gate Films Corp. and 408376 BC Ltd.
(dd) There is no franchise, lease, contract, agreement or document
required by British Columbia Securities Laws, the Securities Act or by
the Rules and Regulations to be described in the Prospectuses or to be
filed as an exhibit to the Registration Statements which is not
described or filed therein as required; and all descriptions of any
such franchises, leases, contracts, agreements or documents contained
in the Registration Statements are accurate and complete descriptions
of such documents in all material respects. No such franchise, lease,
contract or agreement has been suspended or terminated for convenience
or default by the Company or any of the other parties thereto except as
would not, singularly or in the aggregate, have a Material Adverse
Effect, and the Company has not received notice and has no other
knowledge of any such pending or threatened suspension or termination,
except for such pending or threatened suspensions or terminations that
would not reasonably be expected to, singularly or in the aggregate,
have a Material Adverse Effect.
(ee) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, shareholders,
customers or suppliers of the Company on the other hand, which is
required to be described in the Prospectuses and which is not so
described.
(ff) No person or entity has the right to require registration of any
shares or other securities of the Company because of the filing or
effectiveness of the Registration Statements or otherwise, except for
persons and entities who have expressly waived such right (including,
if applicable, the right to timely and proper notice) or who have been
given timely and proper notice and have failed to exercise such right
within the time or times required under the terms and conditions of
such right.
(gg) Neither the Company nor any of its subsidiaries owns any "margin
securities" as that term is defined in Regulation U of the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board"),
and none of the proceeds of the sale of the Shares will be used,
directly or indirectly, for the purpose of purchasing or carrying any
margin security, for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any
margin security or for any other purpose which might cause any of the
Shares to be considered a "purpose credit" within the meanings of
Regulation T, U or X of the Federal Reserve Board.
(hh) Neither the Company nor any of its subsidiaries is a party to any
contract, agreement or understanding with any person or entity that
would give rise to a valid claim against the Company or the
Underwriters for a brokerage commission, finder's fee or like payment
in connection with the offering and sale of the Shares.
(ii) No forward-looking statement (within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act) contained in
the Prospectuses has been made or reaffirmed without a reasonable basis
or has been disclosed other than in good faith.
(jj) The Shares have been approved for listing subject to notice of
issuance on the American Stock Exchange (which exchange is the primary
exchange market for the Company's common shares) and on the Toronto
Stock Exchange.
(kk) The Company is in compliance with all applicable corporate
governance requirements set forth in the American Stock Exchange (AMEX)
- AMEX Company Guide.
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(ll) The Company is in compliance with all applicable requirements of
the Toronto Stock Exchange, including corporate governance
requirements.
(mm) The Company is in compliance with all applicable provisions of the
Xxxxxxxx-Xxxxx Act of 2002 and all rules and regulations promulgated
thereunder or implementing the provisions thereof (the "Xxxxxxxx-Xxxxx
Act") that are currently in effect.
(II) REPRESENTATIONS AND WARRANTIES AND AGREEMENTS OF THE SELLING
SHAREHOLDER. The Selling Shareholder represents and warrants to, and agrees
with, the several Underwriters that the Selling Shareholder:
(a) Has, and immediately prior to each Closing Date (as defined in
Section 3 hereof) the Selling Shareholder will have, good and valid
title to the Shares to be sold by the Selling Shareholder hereunder on
such date, free and clear of all liens, encumbrances, equities or
claims; and upon delivery of such shares and payment therefor pursuant
hereto, good and valid title to such Shares, free and clear of all
liens, encumbrances, equities or claims (other than any liens imposed
by the Underwriters), will pass to the several Underwriters.
(b) Has duly and irrevocably executed and delivered a custody
agreement, in substantially the form heretofore delivered by the
Representative (the "Custody Agreement"), with the Company as custodian
(the "Custodian"), pursuant to which certificates in negotiable form
for the Shares to be sold by the Selling Shareholder hereunder have
been placed in custody for delivery under this Agreement, and pursuant
to which the Custodian has the authority to act on behalf of the
Selling Shareholder in connection with the delivery of the Shares under
this Agreement.
(c) Has full right, power and authority to enter into this Agreement
and the Custody Agreement; the execution, delivery and performance of
this Agreement and the Custody Agreement by the Selling Shareholder and
the consummation by the Selling Shareholder of the transactions
contemplated hereby and thereby will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Selling Shareholder is a
party or by which the Selling Shareholder is bound or to which any of
the property or assets of the Selling Shareholder is subject, nor will
such actions result in any violation of any statute or any order, rule
or regulation of any court or governmental agency or body having
jurisdiction over the Selling Shareholder or the property or assets of
the Selling Shareholder; and, except for the registration of the Shares
under the Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange
Act and applicable state securities laws in connection with the
purchase and distribution of the Shares by the Underwriters, no
consent, approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is required for the
execution, delivery and performance of this Agreement or the Custody
Agreement by such Selling Shareholder and the consummation by the
Selling Shareholder of the transactions contemplated hereby and
thereby.
(d) The Registration Statements do not, and the Prospectus and any
further amendments or supplements to the Registration Statements or the
Prospectus will not, as of the applicable effective date (as to the
Registration Statements and any amendment thereto) and as of the
applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. The preceding
sentence applies only to information concerning the Selling Shareholder
in his capacity as such, to the extent that any information contained
in or omitted from the Registration Statements or
10
Prospectus was in reliance upon and in conformity with written
information furnished to the Company by such Selling Shareholder
specifically for inclusion therein.
(e) To the Selling Shareholder's knowledge, the Registration Statements
do not, and the Prospectus and any further amendments or supplements to
the Registration Statements or the Prospectus will not, as of the
applicable effective date (as to the Registration Statements and any
amendment thereto) and as of the applicable filing date (as to the
Prospectus and any amendment or supplement thereto) contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that the foregoing
representations and warranties shall not apply to information contained
in or omitted from the Registration Statements or the Prospectus or any
such amendment or supplement thereto in reliance upon, and in
conformity with, written information furnished to the Company through
the Representative by or on behalf of any Underwriter specifically for
inclusion therein, which information the parties hereto agree is
limited to the Underwriters' Information (as defined in Section 16);
and provided further, that the foregoing representations and warranties
shall not apply to any information described in Section 2(II)(d).
(f) To the Selling Shareholder's knowledge, the documents incorporated
by reference in the Prospectus, when it was filed with the Commission,
did not contain any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading.
3. PURCHASE SALE AND DELIVERY OF OFFERED SHARES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Company that number of Firm Shares (rounded up or down, as determined
by XX Xxxxx in its discretion, in order to avoid fractions) obtained by
multiplying [ ] Firm Shares by a fraction the numerator of which is the number
of Firm Shares set forth opposite the name of such Underwriter in Schedule A
hereto and the denominator of which is the total number of Firm Shares.
The purchase price per share to be paid by the Underwriters to the Company
for the Shares will be $_____ per share (the "Purchase Price").
The Company will deliver the Firm Shares to the Representative for the
respective accounts of the several Underwriters in either (i) the form of
definitive certificates, issued in such names and in such denominations (and
including such legends as may be required pursuant to British Columbia
Securities Laws for those certificates representing any Shares sold in Canada)
as the Representative may direct by notice in writing to the Company given at or
prior to 12:00 Noon, New York time, on the second full business day preceding
the First Closing Date (as defined below) or (ii) in accordance with The
Depository Trust Company's standard procedures that include the electronic
delivery of share capital, against payment of the aggregate Purchase Price
therefor by wire transfer to an account at a bank acceptable to XX Xxxxx,
payable to the order of the Company, all at the offices of XX Xxxxx, 0000 Xxxxxx
xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligations of each Underwriter hereunder. The time and date of
the delivery and closing shall be at 10:00 A.M., New York time, on
_________________, 2003, in accordance with Rule 15c6-1 of the Exchange Act. The
time and date of such payment and delivery are herein referred to as the "First
Closing Date". The First Closing Date and the location of delivery of, and the
form of payment for, the Firm Shares may be varied by agreement between the
Company and XX Xxxxx.
11
If physical certificates are used, the Company shall make the
certificates for the Shares available to the Representative for examination on
behalf of the Underwriters in New York, New York at least twenty-four hours
prior to the First Closing Date. If electronic delivery is used in accordance
with The Depository Trust Company's standard procedures, the Company shall make
the certificates to be deposited in the name of The Depository Trust Company's
nominee, Cede & Co., available to the Representative for examination on behalf
of the Underwriters in New York, New York at least twenty-four hours prior to
the First Closing Date.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Shares as contemplated by the Prospectuses,
the Underwriters may purchase all or less than all of the Optional Shares. The
price per share to be paid for the Optional Shares shall be the Purchase Price.
The Company and the Selling Shareholder agree, severally and not jointly, to
sell to the Underwriters the number of Optional Shares specified in the written
notice by XX Xxxxx described below and the Underwriters agree, severally and not
jointly, to purchase such Optional Shares. The Company and the Selling
Shareholder agree, severally and not jointly, to sell to the Underwriters the
respective numbers of Optional Shares obtained by multiplying the number of
Optional Shares specified in such notice by a fraction the numerator of which is
1,250,000 shares in the case of the Company and 1,000,000 shares in the case of
the Selling Shareholder and the denominator of which is the total number of
Optional Shares (subject to adjustment by XX Xxxxx to eliminate fractions). Such
Optional Shares shall be purchased from the Company and the Selling Shareholder
for the account of each Underwriter in the same proportion as the number of Firm
Shares set forth opposite such Underwriter's name bears to the total number of
Firm Shares (subject to adjustment by XX Xxxxx to eliminate fractions). The
option granted hereby may be exercised as to all or any part of the Optional
Shares at any time, and from time to time, not more than thirty (30) days
subsequent to the date of this Agreement. No Optional Shares shall be sold and
delivered unless the Firm Shares previously has been, or simultaneously is, sold
and delivered. The right to purchase the Optional Shares or any portion thereof
may be surrendered and terminated at any time upon notice by XX Xxxxx to the
Company and the Selling Shareholder.
The option granted hereby may be exercised by written notice being
given to the Company and the Selling Shareholder by XX Xxxxx setting forth the
number of the Optional Shares to be purchased by the Underwriters and the date
and time for delivery of and payment for the Optional Shares. Each date and time
for delivery of and payment for the Optional Shares (which may be the First
Closing Date, but not earlier) is herein called the "Option Closing Date" and
shall in no event be earlier than two (2) business days nor later than five (5)
business days after written notice is given. (The Option Closing Date and the
First Closing Date are herein together called the "Closing Dates".)
The Company and the Selling Shareholder will deliver the Optional
Shares to the Underwriters either (i) in the form of definitive certificates,
issued in such names and in such denominations as the Representative may direct
by notice in writing to the Company given at or prior to 12:00 Noon, New York
time, on the second full business day preceding the Option Closing Date or (ii)
in accordance with The Depository Trust Company's standard procedures that
include the electronic delivery of share capital, against payment of the
aggregate Purchase Price therefor in federal (same day) funds by certified or
official bank check or checks or wire transfer to an account at a bank
acceptable to XX Xxxxx payable to the order of the Company for its own account
and as Custodian for the Selling Shareholder all at the offices of XX Xxxxx,
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000. Time shall be of the
essence, and delivery at the time and place specified pursuant to this Agreement
is a further condition of the obligations of each Underwriter hereunder. The
Company and the Selling Shareholder shall make the certificates for the Optional
Shares available to the Representative for examination on behalf of the
Underwriters in New York, New York not later than 10:00 A.M., New York Time, on
the business day preceding the Option Closing Date. The Option Closing Date and
the location of delivery of, and the form of payment for, the Optional Shares
may be varied by agreement among the Company, the Selling Shareholder, and XX
Xxxxx.
12
The several Underwriters propose to offer the Shares for sale upon the
terms and conditions set forth in the Prospectuses.
4. (I) FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with the several
Underwriters that:
(a) The Company will prepare the Rule 462(b) Registration Statement, if
necessary, in a form approved by the Representative and file such Rule
462(b) Registration Statement with the Commission on the date hereof;
prepare the Prospectus in a form approved by the Representative and
file such Prospectus pursuant to Rule 424(b) under the Securities Act
not later than the second business day following the execution and
delivery of this Agreement; make no further amendment or any supplement
to the Registration Statements or to the Prospectuses to which the
Representative shall reasonably object by notice to the Company after a
reasonable period to review; advise the Representative, promptly after
it receives notice thereof, of the time when any amendment to either
Registration Statement has been filed or becomes effective or any
supplement to the Prospectuses or any amended Prospectuses have been
filed and to furnish the Representative with copies thereof; advise the
Representative, promptly after it receives notice thereof, of the
issuance by the BCSC or the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectuses
or the Prospectuses, of the suspension of the qualification of the
Shares for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request
by the BCSC or the Commission, as the case may be, for the amending or
supplementing of the Registration Statements or the Prospectuses or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any of the
Preliminary Prospectuses or the Prospectuses or suspending any such
qualification, use promptly its best efforts to obtain its withdrawal.
(b) If at any time prior to the expiration of nine months after the
effective date of the Initial Registration Statement when a prospectus
relating to the Shares is required to be delivered any event occurs as
a result of which the Prospectus as then amended or supplemented would
include 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, or if it is
necessary at any time to amend the Prospectus to comply with the
Securities Act, the Company will promptly notify the Representative
thereof and upon their request will prepare an amended or supplemented
Prospectus which will correct such statement or omission or effect such
compliance. The Company will furnish without charge to each Underwriter
and to any dealer in securities as many copies as the Representative
may from time to time reasonably request of such amended or
supplemented Prospectus; and in case any Underwriter is required to
deliver a prospectus relating to the Shares nine months or more after
the effective date of the Initial Registration Statement, the Company
upon the request of the Representative and at the expense of such
Underwriter will prepare promptly an amended or supplemented Prospectus
as may be necessary to permit compliance with the requirements of
Section 10(a)(3) of the Securities Act.
(c) To furnish promptly to the Representative and to counsel for the
Underwriters a signed copy of each of the Registration Statements as
originally filed with the Commission, and each amendment thereto filed
with the Commission, including all consents and exhibits filed
therewith.
(d) To deliver promptly to the Representative in New York City such
number of the following documents as the Representative shall
reasonably request: (i) conformed copies of the Registration Statements
as originally filed with the Commission and each amendment thereto (in
each case excluding exhibits); (ii) each of the Preliminary
Prospectuses; (iii) the Prospectuses
13
(not later than 10:00 A.M., New York time, of the business day
following the execution and delivery of this Agreement) and any amended
or supplemented Prospectuses (not later than 10:00 A.M., New York City
time, on the business day following the date of such amendment or
supplement); and (iv) any document incorporated by reference in the
Prospectuses (excluding exhibits thereto).
(e) To make generally available to its shareholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Securities Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Securities Act and the Rules and Regulations (including, at the
option of the Company, Rule 158).
(f) The Company will promptly take from time to time such actions as
the Representative may reasonably request to qualify the Shares for
offering and sale under the securities or Blue Sky laws of such
jurisdictions as the Representative may designate and to continue such
qualifications in effect for so long as required for the distribution
of the Shares; provided that the Company and its subsidiaries shall not
be obligated to qualify as foreign corporations (or other foreign
entities) in any jurisdiction in which they are not so qualified or to
file a general consent to service of process in any jurisdiction.
(g) During the period of three years from the date hereof, the Company
will deliver to the Representative (i) as soon as they are available,
copies of all reports or other communications furnished to shareholders
and (ii) as soon as they are available, copies of any reports and
financial statements furnished or filed with the Commission pursuant to
the Exchange Act, filed in Canada through the System for Electronic
Document Analysis and Retrieval (SEDAR), or any national securities
exchange or automatic quotation system on which the Shares are listed
or quoted.
(h) The Company will not directly or indirectly offer, sell, assign,
transfer, pledge, contract to sell, or otherwise dispose of any Common
Shares or securities convertible into or exercisable or exchangeable
for Common Shares for a period of 180 days from the date of the
Prospectus without the prior written consent of XX Xxxxx other than the
Company's sale of the Shares hereunder and the issuance of shares
pursuant to employee benefit plans, qualified option plans or other
employee compensation plans existing on the date hereof or pursuant to
currently outstanding options, warrants or rights. The Company will
cause each officer, director and shareholder listed in Schedule C to
furnish to the Representative, prior to the First Closing Date, a
letter, substantially in the form of Exhibit I hereto, pursuant to
which each such person shall agree not to directly or indirectly offer,
sell, assign, transfer, pledge, contract to sell, or otherwise dispose
of any Common Shares or securities convertible into or exercisable or
exchangeable for Common Shares for a period of 180 days from the date
of the Prospectuses, without the prior written consent of XX Xxxxx.
(i) The Company will supply the Representative with copies of all
correspondence to and from, and all documents issued to and by, the
Commission in connection with the registration of the Shares under the
Securities Act, or the BCSC in connection with the filing of the
Canadian Prospectus.
(j) Prior to each of the Closing Dates the Company will furnish to the
Representative, as soon as they have been prepared, copies of any
unaudited interim consolidated financial statements of the Company for
any periods subsequent to the periods covered by the financial
statements appearing in the Registration Statement and the
Prospectuses.
14
(k) Prior to each of the Closing Dates, except for routine
communications in the ordinary course of business and consistent with
the past practices of the Company, the Company will not issue any press
release or other communication directly or indirectly or hold any press
conference with respect to the Company, its condition, financial or
otherwise, or earnings, business affairs or business prospects, without
the prior written consent of the Representative, unless in the judgment
of the Company and its counsel, and after notification to the
Representative, such press release or communication is required by law
or by an applicable stock exchange.
(l) In connection with the offering of the Shares, until XX Xxxxx shall
have notified the Company of the completion of the resale of the
Shares, the Company will not, and will cause its affiliated purchasers
(as defined in Regulation M under the Exchange Act) not to, either
alone or with one or more other persons, bid for or purchase, for any
account in which it or any of its affiliated purchasers has a
beneficial interest, any Shares, or attempt to induce any person to
purchase any Shares; and not to, and to cause its affiliated purchasers
not to, make bids or purchase for the purpose of creating actual, or
apparent, active trading in or of raising the price of the Shares.
(m) The Company shall comply with all applicable provisions of the
Xxxxxxxx-Xxxxx Act at all times after the effectiveness of such
provisions.
(n) The Company will apply the net proceeds from the sale of the Shares
as set forth in the Prospectuses under the heading "Use of Proceeds".
(o) The Company will use its best efforts to ensure that the Company's
common shares remain listed on the Toronto Stock Exchange and the
American Stock Exchange.
(II) FURTHER AGREEMENTS OF THE SELLING SHAREHOLDER. The Selling
Shareholder agrees with the several Underwriters that:
(a) The Selling Shareholder will furnish to the Representative, prior
to the First Closing Date, a letter, substantially in the form
previously agreed by the Selling Shareholder and the Representative,
pursuant to which the Selling Shareholder shall agree not to directly
or indirectly offer, sell, assign, transfer, pledge, contract to sell,
or otherwise dispose of any Common Shares or securities convertible
into or exercisable or exchangeable for Common Shares other than the
sale of the Shares hereunder for a period of 180 days from the date of
the Prospectus, without the prior written consent of XX Xxxxx.
(b) The Shares represented by the certificates held in custody under
the Custody Agreement are for the benefit of and coupled with and
subject to the interests of the Underwriters, and that the arrangement
for such custody and the appointment of the Custodian as the Selling
Shareholder's attorney-in-fact are irrevocable; that the obligations of
the Selling Shareholder hereunder shall not be terminated by operation
of law, whether by the death or incapacity, liquidation or distribution
of the Selling Shareholder, or any other event, that if the Selling
Shareholder should die or become incapacitated or is liquidated or
dissolved or any other event occurs, before the delivery of the Shares
hereunder, certificates for the Shares to be sold by the Selling
Shareholder shall be delivered on behalf of the Selling Shareholder in
accordance with the terms and conditions of this Agreement and the
Custody Agreement, and action taken by the Custodian under the Custody
Agreement shall be as valid as if such death, incapacity, liquidation
or dissolution or other event had not occurred, whether or not the
Custodian shall have notice of such death, incapacity, liquidation or
dissolution or other event.
15
(c) The Selling Shareholder will deliver to XX Xxxxx on or prior to the
Option Closing Date a properly completed and executed United States
Treasury Department Form W-8 (if the Selling Shareholder is a
non-United States person) or Form W-9 (if the Selling Shareholder is a
United States person) or such other applicable form or statement
specified by Treasury Department regulations in lieu thereof.
5. PAYMENT OF EXPENSES. The Company agrees with the Underwriter to pay: (a) the
costs incident to the authorization, issuance, sale, preparation and delivery
(including electronic delivery) of the Shares and any taxes payable in that
connection; (b) the costs incident to the Registration of the Shares under the
Securities Act; (c) the costs incident to the preparation, printing and
distribution of the Registration Statement, Preliminary Prospectuses,
Prospectuses, any amendments and exhibits thereto or any document incorporated
by reference therein, the costs of printing, reproducing and distributing, the
"Agreement Among Underwriters" between the Representative and the Underwriters,
the Master Selected Dealers' Agreement, the Underwriters' Questionnaire and this
Agreement by mail, telex or other means of communications and the costs of
preparing, printing, reproducing and distributing the additional Canadian
supplement prepared in connection with the offering of the Shares in Canada on a
private placement basis; (d) the fees and expenses (including related fees and
expenses of counsel for the Underwriters) incurred in connection with filings
made with the National Association of Securities Dealers, Inc.; (e) any
applicable listing or other fees; (f) the fees and expenses of qualifying the
Shares under the securities laws of the several jurisdictions as provided in
Section 4(f) and of preparing, printing and distributing Blue Sky Memoranda and
Legal Investment Surveys (including related fees and expenses of counsel to the
Underwriters); (g) all fees and expenses of the registrar and transfer agent of
the Shares; and (h) all other costs and expenses incident to the performance of
the obligations of the Company under this Agreement (including, without
limitation, the fees and expenses of the Company's counsel and the Company's
independent accountants); provided that, except as otherwise provided in this
Section 5 and in Section 10, the Underwriters shall pay their own costs and
expenses, including the fees and expenses of their counsel, any transfer taxes
on the Shares which they may sell and the expenses of advertising any offering
of the Shares made by the Underwriters.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective obligations of the
several Underwriters hereunder are subject to the accuracy, when made and on
each of the Closing Dates, of the representations and warranties of the Company
and (solely with respect to the Option Closing Date) the Selling Shareholder
contained herein, to the accuracy of the statements of the Company and (solely
with respect to the Option Closing Date) the Selling Shareholder made in any
certificates pursuant to the provisions hereof, to the performance by the
Company and the Selling Shareholder of their obligations hereunder, and to each
of the following additional terms and conditions:
(a) No stop order suspending the effectiveness of either the
Registration Statements or the Canadian Prospectus shall have been
issued and no proceedings for that purpose shall have been initiated or
threatened by the Commission or the BCSC, and any request for
additional information on the part of the Commission or the BCSC (to be
included in the Registration Statements or the Prospectuses or
otherwise) shall have been complied with to the reasonable satisfaction
of the Representative. The Rule 462(b) Registration Statement, if any,
and the Prospectus shall have been timely filed with the Commission in
accordance with Section 4(a), and a final short form prospectus
relating to the distribution of the Shares in the United States shall
have been timely filed with the BCSC for which a final receipt shall
have been received from the BCSC.
(b) None of the Underwriters shall have discovered and disclosed to the
Company on or prior to the Closing Date that the Registration Statement
or any of the Prospectuses or any amendment or supplement thereto
contains an untrue statement of a fact which, in the opinion of counsel
for the Underwriters, is material or omits to state any fact which, in
the opinion of such counsel, is
16
material and is required to be stated therein or is necessary to make
the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of this Agreement, the Custody
Agreement, the Shares, the Registration Statement and the Prospectuses
and all other legal matters relating to this Agreement and the
transactions contemplated hereby shall be reasonably satisfactory in
all material respects to counsel for the Underwriters, and the Company
and the Selling Shareholder shall have furnished to such counsel all
documents and information that they may reasonably request to enable
them to pass upon such matters.
(d) O'Melveny & Xxxxx LLP (the Company's United States counsel) shall
have furnished to the Representatives such counsel's written opinion,
as counsel to the Company, addressed to the Underwriters and dated the
Closing Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that:
(i) Lions Gate Entertainment Inc., Lions Gate Films Inc.,
Lions Gate Television Inc. and LG Pictures Inc. (the
"Principal U.S. Subsidiaries") have each been duly
incorporated and each is a corporation validly
existing under the laws of the State of Delaware,
with corporate power to own its properties and assets
and to carry on its business as described in the
Prospectus.
(ii) Based solely on a review of good standing
certificates, each of Lions Gate Entertainment Inc.,
Lions Gate Films Inc and Lions Gate Television Inc.
are qualified as foreign corporations to do business
in the State of California, and are in good standing
in the State of California. Lions Gate Films Inc. is
qualified as a foreign corporation to do business in
the State of New York, and is in good standing in the
State of New York.
(iii) The outstanding shares of capital stock of each
Principal U.S. Subsidiary have been duly authorized
by all necessary corporate action on the part of such
corporation, are validly issued, fully paid and
nonassessable. Based solely on a review of records
certified to such counsel as the charter documents of
the Principal U.S. Subsidiaries and their respective
corporate minute books, to the best of such counsel's
knowledge, the shares of capital stock are owned free
and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity, except under the
Credit, Security, Guaranty and Pledge Agreement by
and among the Company, the subsidiaries referred to
therein, and the lenders referred to therein, dated
as of September 25, 2000, as amended to date (as
described in the Prospectus).
(iv) The execution and delivery by the Principal U.S.
Subsidiaries of the Agreement do not, and the
Principal U.S. Subsidiaries' performance of their
obligations under the Agreement will not, (x) violate
the Principal U.S. Subsidiaries' Certificates of
Incorporation or Bylaws, (y) violate, breach, or
result in a default under, any existing obligation of
or restriction on the Principal U.S. Subsidiaries
under any other agreement identified in Exhibit A to
the opinion, which Exhibit A shall list all
agreements listed in Item 16 of the Registration
Statements and which are governed by California, New
York or U.S. federal law (the "Other Agreements"), or
(z) breach or otherwise violate any existing
obligation of or restriction on the Principal U.S.
Subsidiaries under any order, judgment or decree of
any California, New York or U.S. federal court or
governmental authority binding on the Principal U.S.
Subsidiaries identified in the Company Certificate.
We express no opinion as to the effect of the
Principal U.S. Subsidiaries'
17
performance of their obligations in the Agreement on
the Principal U.S. Subsidiaries' compliance with
financial covenants in the Other Agreements.
(v) The execution and delivery by the Principal U.S.
Subsidiaries of the Agreement do not, and the
Principal U.S. Subsidiaries' performance of their
obligations under the Agreement will not, violate the
current Delaware General Corporation Law or any
current California, New York or U.S. federal statute,
rule or regulation that we have, in the exercise of
customary professional diligence, recognized as
applicable to the Company or to transactions of the
type contemplated by the Agreement.
(vi) No order, consent, permit or approval of, or filing
or registration with, any California, New York or
U.S. federal governmental authority is required on
the part of the Company for the execution and
delivery of the Agreement or for the issuance and
sale of the Shares, except such as have been obtained
under the Securities Act and such as may be required
under applicable Blue Sky or state securities laws.
(vii) The statements in the Prospectus under the caption
"Taxation," insofar as they summarize provisions of
U.S. federal law, fairly present the information
required by Form S-2 and fairly summarize the matters
described therein in all material respects.
(viii) There are no actions, suits or proceedings pending or
threatened against the Company or any of its
subsidiaries, with respect to which such counsel has
given substantive attention on behalf of the Company
or any of its subsidiaries.
(ix) The Registration Statement has been declared
effective under the Securities Act and, to our
knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued or
threatened by the Commission.
(x) The Registration Statement, and each amendment
thereto, and the 462(b) Registration Statement, on
their respective filing dates, appeared on its face
to comply in all material respects with the
requirements as to form for registration statements
on Form S-2 under the Securities Act and the related
rules and regulations in effect at the date of
filing, except that we express no opinion concerning
the financial statements and other financial
information contained or incorporated by reference
therein.
(xi) The documents incorporated by reference in the
prospectus contained in the Registration Statements
(the "Incorporated Documents"), on the respective
dates they were filed, appeared on their face to
comply in all material respects with the requirements
as to form for reports on Form 10-K, Form 10-Q and
Form 8-K, as the case may be, under the Securities
Exchange Act of 1934, as amended, and the related
rules and regulations in effect at the respective
dates of their filing, except that we express no
opinion concerning the financial statements and other
financial information contained or incorporated by
reference therein.
(xii) The Company is not an investment company required to
register under the Investment Company Act of 1940, as
amended.
18
O'Melveny & Xxxxx LLP shall also have furnished to the
Representative a written statement, addressed to the Representative
and dated the Closing Date, in form and substance satisfactory to the
Representative, to the effect that: (x) O'Melveny & Xxxxx LLP has
acted as counsel to the Company in connection with the preparation of
the Registration Statements; (y) such counsel has participated in
conferences in connection with the preparation of the Registration
Statements and the Prospectuses, and has also reviewed such documents
and the Incorporated Documents but has not independently verified the
accuracy, completeness or fairness of the statements contained or
incorporated in those documents, and although such counsel is unable
to assume, and does not assume, any responsibility for such accuracy,
completeness or fairness (except as otherwise specifically stated in
paragraph (vii) above), on the basis of such participation and review,
such counsel does not believe that the Registration Statements, as of
the effective date of the applicable Registration Statements,
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, and does not believe that the
Prospectuses, on the Closing Date, contain any untrue statement of a
material fact or omit 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; and (z) such counsel expresses no
opinion or belief as to any document filed by the Company under the
Securities Exchange Act of 1934, as amended, whether before or after
the effective date of the applicable Registration Statements, except
to the extent that any such document is an Incorporated Document read
together with the Registration Statements or the Prospectuses and
considered as a whole and as specifically stated in paragraph (xi)
above, nor does such counsel express any opinion or belief as to the
financial statements and other financial information contained or
incorporated by reference in the Registration Statements, the
Prospectuses or the Incorporated Documents.
(e) Xxxxxx Blaikie LLP (the Company's Canadian counsel) shall have
furnished to the Representative such counsel's written opinion, as
counsel to the Company, addressed to the Underwriters and dated the
Closing Date, in form and substance reasonably satisfactory to the
Representative, to the effect that:
(i) The Company, LGTC and each of the Principal Canadian
Subsidiaries have been duly incorporated and are
validly existing in good standing under the laws of
their respective jurisdictions of incorporation, are
duly qualified to do business and are in good
standing as foreign corporations in each jurisdiction
in which their respective ownership or lease of
property or the conduct of their respective
businesses requires such qualification, and have all
power and authority necessary to own or hold their
respective properties and to conduct the businesses
in which they are engaged, except where the failure
to so qualify or have such power or authority would
not have, singularly or in the aggregate, a Material
Adverse Effect.
(ii) The Company has an authorized capitalization as set
forth in the Prospectuses, and all of the outstanding
shares of the Company, including the Shares being
delivered on the Closing Date, have been duly and
validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof
contained in the Prospectuses.
(iii) All the outstanding shares of LGTC and each Principal
Canadian Subsidiary have been duly authorized and
validly issued, are fully paid and non-assessable
and, except to the extent set forth in the
Prospectuses, are owned by the Company directly or
indirectly through one or more wholly-owned
subsidiaries, free and
19
clear of any claim, lien, encumbrance, security
interest, restriction upon voting or transfer or any
other claim of any third party.
(iv) The Company is a reporting issuer or the equivalent
in each of the provinces of British Columbia,
Alberta, Manitoba, Ontario and Quebec and is not on
the list of defaulting issuers maintained by any
securities regulatory authorities in any such
jurisdiction; and the Company is a "qualifying
issuer" as such term is defined in Multilateral
Instrument 45-102 - Resale of Securities.
(v) To the best of such counsel's knowledge and other
than as set forth in the Prospectus, there are no
Canadian federal or provincial legal or governmental
proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property
or asset of the Company or any of its subsidiaries is
the subject which, singularly or in the aggregate, if
determined adversely to the Company or any of its
subsidiaries, might have a Material Adverse Effect or
would prevent or adversely affect the ability of the
Company to perform its obligations under this
Agreement; and, to the best of such counsel's
knowledge, no such proceedings have been threatened
by governmental authorities or others.
(vi) To the best of such counsel's knowledge, none of the
Company, LGTC or any of the Principal Canadian
Subsidiaries (a) is in violation of its charter or
by-laws, (b) is in default, and no event has
occurred, which, with notice or lapse of time or
both, would constitute a default, in the due
performance or observance of any term, covenant or
condition contained in any agreement or instrument to
which it is a party or by which it is bound or to
which any of its properties or assets is subject or
(c) is in violation of any law, ordinance,
governmental rule, regulation or court decree to
which it or its property or assets may be subject or
has failed to obtain any license, permit,
certificate, franchise or other governmental
authorization or permit necessary to the ownership of
its property or to the conduct of its business
except, in the case of clauses (b) and (c), for those
defaults, violations or failures which, either
singularly or in the aggregate, would not have a
Material Adverse Effect.
(vii) There are no preemptive or other rights to subscribe
for or to purchase, nor any restriction upon the
voting or transfer of, any Shares pursuant to the
Company's charter or by-laws or any agreement or
other instrument known to such counsel.
(viii) There are no restrictions of the corporate power and
capacity of the Company to enter into this Agreement
or to carry out its obligations under this Agreement;
and this Agreement has been duly authorized, and
executed and delivered by the Company.
(ix) The execution, delivery and performance of this
Agreement and the consummation of the transactions
contemplated hereby by the Company, LGTC and the
Principal Canadian Subsidiaries will not conflict
with or result in a breach or violation of any of the
terms or provisions of, or constitute a default
under, any of the Other Agreements, nor will such
actions result in any violation of the charter or
by-laws of the Company or the charter or by-laws of
LGTC or any of the Principal Canadian Subsidiaries or
any statute or any order, rule or regulation of any
Canadian federal or provincial court or governmental
agency or body or court having jurisdiction over the
Company, LGTC or any of the Principal Canadian
Subsidiaries or any of their properties or assets.
20
(x) The offering, issuance, sale and delivery of the
Shares by the Company to qualified purchasers in
British Columbia, Alberta, Manitoba, Ontario and
Quebec (the "Private Placement Provinces") pursuant
to the Company's Canadian offering memorandum (the
"Offering Memorandum"), are exempt from the
prospectus requirements of the securities laws of
each of the Private Placement Provinces and no
prospectus is required nor are other documents
required to be filed, proceedings taken or approvals,
permits, consents or authorizations of regulatory
authorities obtained under the securities laws of any
of the Private Placement Provinces to permit the
offering, issue, sale and delivery of the Shares by
the Company to qualified purchasers in the Private
Placement Provinces, except for the requirements that
the Company file the required trade reports,
accompanied by the prescribed fees and deliver a copy
of the Offering Memorandum, in each of the Private
Placement Provinces, as applicable.
(xi) No prospectus is required nor are other documents
required to be filed (other than the filing with the
Ontario Securities Commission by the seller of a
report on Form 45-501F2, prepared and executed in
accordance with section 7.2 of Ontario Securities
Commission Rule 45-501 - Exempt Distributions,
accompanied by the prescribed fee, or the equivalent
provisions of applicable securities laws in any of
the other Private Placement Provinces), proceedings
taken, or approvals, permits, consents or
authorizations of regulatory authorities obtained
under the securities laws of the Private Placement
Provinces to permit a holder of Shares, to trade such
securities in the Private Placement Provinces, either
through registrants or dealers registered under
applicable laws who comply with such applicable laws
or in circumstances in which there is an exemption
from the registration requirements of the applicable
laws, provided that:
(a) at the time of such trade, the Company is,
and has been, a reporting issuer in one or
more of the Provinces of Alberta, British
Columbia, Manitoba, Ontario or Quebec,
within the meaning of the securities laws of
that province, for at least four months;
(b) at the time of such trade, at least four
months have elapsed from the date of this
opinion letter;
(c) a certificate evidencing the Shares being
traded was issued that carried a legend in
the form prescribed by Multilateral
Instrument 45-102 - Resale of Securities to
the effect that, unless permitted under
securities legislation, the holder shall not
trade them before the date which is four
months and one day from the date of this
opinion letter;
(d) no unusual effort is made to prepare the
market or to create a demand for the
securities that are the subject of the
trade;
(e) no extraordinary commission or consideration
is paid to a person or company in respect of
the trade;
(f) the trade is not a control distribution
within the meaning of Multilateral
Instrument 45-102 - Resale of Securities;
and
21
(g) if the holder is an insider or officer of
the Company, the holder has no reasonable
grounds to believe that the Company is in
default of securities legislation.
(xii) Except for consents, approvals, authorizations,
registrations or qualifications as may be required
under British Columbia Securities Laws and the
Toronto Stock Exchange with the purchase and
distribution of the Shares by the Underwriters, no
consent, approval, authorization or order of, or
filing or registration with, any Canadian federal or
provincial court or governmental agency or body is
required for the execution, delivery and performance
of this Agreement by the Company and the consummation
of the transactions contemplated hereby.
(xiii) The form of share certificate for the Shares has been
duly approved by the Company and complies with the
provisions of the charter and by-laws of the Company
and the Company Act (British Columbia).
(xiv) The statements in the Prospectuses under the heading
"Taxation" to the extent that they constitute
summaries of matters of Canadian federal or
provincial law or regulation or legal conclusions,
have been reviewed by such counsel and fairly
summarize the matters described therein in all
material respects.
(xv) The statements contained in the Prospectuses under
the caption "Risk Factors - We may lose investment
funds, tax credits and other benefits if we fail to
meet Canadian regulatory requirements"; "Risk Factors
- We may not be eligible to receive certain British
Columbia refundable tax credits"; "Risk Factors - We
may lose certain benefits by failing to meet certain
regulatory standards"; "Risk Factors - We face other
risks in obtaining production financing from private
and other international sources"; "Risk Factors - An
Investment by non-Canadians in our business is
potentially reviewable by the Minister of Canadian
Heritage"; "Risk Factors - A failure to meet Canadian
programming restrictions may decrease the time slots
or amount of license fees and incentive programs
available to us"; "Business - Government Incentives
and Regulation - Regulation by CRTC"; "Business -
Government Incentives and Regulation - Government
Financial Support"; "Business - Government Incentives
and Regulation - Tax Credits"; "Business -
Co-Production Treaties"; "Business - Government
Incentives and Regulation - Investment Canada Act
(Canada)"; "Description of Share Capital"; "Canadian
Statutory Rights of Withdrawal and Rescission"; and
in Part II of the Registration Statement -
Information Not Required in Prospectus - Item 15 -
"Indemnification of Directors and Officers"; insofar
as such statements purport to summarize the laws of
the Provinces of Ontario or British Columbia and the
federal laws of Canada applicable therein, are fair
descriptions of those laws.
(xvi) The Toronto Stock Exchange has conditionally approved
the listing of the Shares in accordance with the
requirements of such exchange on or before [INSERT
DATE].
(xvii) The Registration Statements, as of the respective
effective dates and the Prospectuses, as of their
respective dates, and any further amendments or
supplements thereto, as of their respective dates,
made by the Company prior to the Closing Date (other
than the financial statements and other financial
data contained therein, as to which such counsel need
express no opinion) complied as to form in all
material respects with the requirements of the
British Columbia
22
Securities Laws; and the documents incorporated by
reference in the Prospectuses (other than the
financial statements and related schedules therein,
as to which such counsel need express no opinion),
when they were filed with the BCSC complied as to
form in all material respects with the requirements
of applicable securities laws of Canada and the rules
and regulations of the BCSC.
(xviii) To the best of such counsel's knowledge, except as
set forth in the Prospectus under the caption
"Description of Share Capital - Registration Rights
Agreements", no person or entity has the right to
require registration of any Common Shares or other
securities of the Company because of the filing or
effectiveness of the Registration Statements or
otherwise, except for persons and entities who have
expressly waived such right or who have been given
proper notice and have failed to exercise such right
within the time or times required under the terms and
conditions of such right.
(xix) The choice of the laws of the State of New York ("New
York Law") as the governing law of this Agreement
will be upheld as a valid choice of law by a court of
competent jurisdiction of the Province of Ontario (an
"Ontario Court") and by a court of competent
jurisdiction of the Province of British Columbia (a
"British Columbia Court", and together with an
Ontario Court, the "Relevant Canadian Courts")
provided that such choice of law is bona fide (in the
sense that it was not made with a view to avoiding
the consequences of the law of any other
jurisdiction) and is not contrary to public policy as
this term is understood under the laws of the
Province of Ontario ("Ontario Law") or the laws of
British Columbia ("British Columbia Law"), as the
case may be. We have no reason to believe that the
choice of New York Law in this Agreement is not bona
fide or is contrary to public policy under Ontario
Law or British Columbia Law.
(xx) In the event that this Agreement is sought to be
enforced in either an Ontario court or a British
Columbia court, those courts would, subject to
subparagraph (xix) above, apply New York Law, upon
proper proof of those laws, except to the extent that
the provisions of this Agreement or New York Law are
contrary to public policy as that term is understood
under Ontario Law or BC Law, as the case may be, or
those laws are foreign revenue, expropriatory or
penal laws; provided, however, that:
(a) a Relevant Canadian Court would not apply
New York Law in matters of procedure or
applicable laws in force which are
applicable by reason of their particular
object; and
(b) a Relevant Canadian Court may not enforce an
obligation enforceable under New York Law
where performance of the obligation would be
illegal by the laws of the place of
performance.
(xxi) A final and conclusive civil judgment for a sum
certain obtained in a court of competent jurisdiction
of the State of New York ("a New York Court") against
the parties hereto in connection with any action
arising out of or relating to this Agreement would be
recognized and could be sued upon in a Relevant
Canadian Court and such court would grant a judgment
which would be enforceable against the parties hereto
in the Province of Ontario or the Province of British
Columbia, as the case may be, provided that:
23
(a) the New York Court had jurisdiction over the
judgment debtor in the action according to
the applicable law in the Relevant Canadian
Court;
(b) such judgment was not obtained by fraud on
the New York Court or in any manner contrary
to natural justice and the enforcement
thereof would not be inconsistent with
public policy as such term is understood
under the applicable law in the Relevant
Canadian Court;
(c) enforcement of such judgment would not be
inconsistent with public policy as such term
is understood under the applicable law in
the Relevant Canadian Court and, in
particular, would not constitute, directly
or indirectly, the enforcement of foreign
revenue, expropriatory or penal laws;
(d) a dispute between the same parties based on
the same subject matter has not given rise
to a decision rendered by a Relevant
Canadian Court or been decided by a foreign
authority and that decision meets the
necessary conditions for recognition under
the applicable law in the Relevant Canadian
Court;
(e) no new admissible evidence is discovered
after the New York Court has rendered
judgment which could not have been
discovered by the exercise of due diligence
prior to the New York Court rendering
judgment and no new facts have arisen which
once presented before a Relevant Canadian
Court would give rise to a finding in the
Relevant Canadian Court contrary to
subpararaphs (a), (b) or (c) above;
(f) a judgment of a Relevant Canadian Court will
be denominated in Canadian currency in
accordance with, in the case of the Province
of Ontario, the Courts of Justice Act
(Ontario), and in the case of the Province
of British Columbia, the Foreign Money
Claims Act (British Columbia); and
(g) the action in the Relevant Canadian Court
commenced within the time limits set out in
the Limitations Act (Ontario) or the
Limitation Act (British Columbia), as the
case may be.
Xxxxxx Xxxxxxx LLP shall also have furnished to the Representative a
written opinion in form acceptable to the Representative with respect to the
formation and operation of the Trust, the ownership by the Trust of all shares
of LGTC for the Beneficiaries, and such other matters as may be requested by the
Representative.
Xxxxxx Blaikie LLP shall also have furnished to the Representative a
written statement, addressed to the Underwriters and dated the Closing Date, in
form and substance satisfactory to the Representative, to the effect that (x)
such counsel has acted as counsel to the Company in connection with the
preparation of the Registration Statements and (y) based on such counsel's
examination of the Registration Statements and such counsel's investigations
made in connection with the preparation of the Registration Statements and
conferences with certain officers and employees of and with auditors for and
counsel to the Company, such counsel has no reason to believe that (I) the
Registration Statements, as of the respective effective dates, contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading, or that the
24
Prospectuses contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading or (II) any document incorporated by reference in the
Prospectuses, when they were filed with the Commission, contained any untrue
statement of a material fact or omitted to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading; it being understood that such counsel need
express no opinion as to the financial statements or other financial data
contained or incorporated by reference in the Registration Statement or the
Prospectuses.
The foregoing opinions and statements may be qualified by a statement
to the effect that such counsel has not independently verified the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectuses and takes no responsibility therefor except to the
extent set forth in the opinion described in clauses (e)(xiv) and (e)(xv) above.
(f) Xxxx Xxxxxxx LLP shall have furnished to the Representative such
counsel's written opinion, as counsel to the Selling Shareholder,
addressed to the Underwriters and dated the Option Closing Date, in
form and substance reasonably satisfactory to the Representative, to
the effect that:
(i) The Selling Shareholder has full right, power and authority to
enter into this Agreement and the Custody Agreement; the
execution, delivery and performance of this Agreement and the
Custody Agreement by the Selling Shareholder and the
consummation by the Selling Shareholder of the transactions
contemplated hereby and thereby will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any statute, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the
Selling Shareholder is a party or by which the Selling
Shareholder is bound or to which any of the property or assets
of the Selling Shareholder is subject, nor will such actions
result in any violation of any statute or any order, rule or
regulation known to such counsel of any court or governmental
agency or body having jurisdiction over the Selling
Shareholder or the property or assets of the Selling
Shareholder; and, to the knowledge of such counsel, except for
the registration of the Shares under the Securities Act and
such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and
applicable state securities laws in connection with the
purchase and distribution of the Shares by the Underwriters,
no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or
body is required for the execution, delivery and performance
of this Agreement or the Custody Agreement by the Selling
Shareholder and the consummation by the Selling Shareholder of
the transactions contemplated hereby and thereby.
(ii) This Agreement has been duly executed and delivered by or on
behalf of the Selling Shareholder.
(iii) The Custody Agreement has been duly executed and delivered by
the Selling Shareholder and constitutes the valid and binding
agreement of the Selling Shareholder.
25
(iv) Upon payment for, and delivery of, the Shares to be sold by
the Selling Shareholder under this Agreement in accordance
with the terms hereof, and assuming the Underwriters are
acquiring such Shares in good faith without notice of any
adverse claim, the Underwriters will acquire such Shares, free
and clear of all adverse claims.
In rendering the opinions covered by this Section 6(f), as to any factual
matters, such counsel may rely upon one or more certificates of the Selling
Shareholder, on any representations of the Selling Shareholder set forth in this
Agreement and on certificates of government officials.
(g) The Representative shall have received from Paul, Hastings,
Xxxxxxxx & Xxxxxx LLP and Osler, Xxxxxx & Harcourt LLP, counsel for the
Underwriters, such opinions, dated the Closing Date, with respect to
such matters as the Underwriters may reasonably require, and the
Company shall have furnished to such counsel such documents as they
request for enabling them to pass upon such matters.
(h) At the time of the execution of this Agreement, the Representative
shall have received from each of Ernst & Young LLP and
PricewaterhouseCoopers LLP a letter, addressed to the Underwriters and
dated such date, in form and substance satisfactory to the
Representative (i) confirming that they are independent certified
public accountants with respect to the Company and its subsidiaries
within the meaning of the Securities Act and the Rules and Regulations
and (ii) stating the conclusions and findings of such firm with respect
to the financial statements and certain financial information contained
or incorporated by reference in the Prospectuses.
(i) On the Closing Date, the Representative shall have received a
letter (the "bring-down letter") from each of Ernst & Young LLP and
PricewaterhouseCoopers LLP addressed to the Underwriters and dated the
Closing Date confirming, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given
in the Prospectuses as of a date not more than three business days
prior to the date of the bring-down letter), the conclusions and
findings of such firm with respect to the financial information and
other matters covered by its letter delivered to the Representative
concurrently with the execution of this Agreement pursuant to Section
6(h).
(j) The Company shall have furnished to the Representative a
certificate, dated the Closing Date, of its Chairman of the Board, its
President or a Vice President and its Chief Financial Officer stating
that (i) such officers have carefully examined the Registration
Statements and the Prospectuses and, in their opinion, the Registration
Statements as of their respective effective dates and the Prospectuses,
as of each such effective date, did not include any untrue statement of
a material fact and did not omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, (ii) since the effective date of the Initial Registration
Statement no event has occurred which should have been set forth in a
supplement or amendment to the Registration Statements or the
Prospectuses, (iii) to the best of their knowledge after reasonable
investigation, as of the Closing Date, the representations and
warranties of the Company in this Agreement are true and correct and
the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date, and (iv) subsequent to the date of the most
recent financial statements included or incorporated by reference in
the Prospectuses, there has been no material adverse change in the
financial position or results of operation of the Company and its
subsidiaries, or any change, or, to the knowledge of the Company, any
development including a prospective change, in or affecting the
condition (financial or otherwise), results of operations or business
of the Company and its subsidiaries taken as a whole, except as set
forth in the Prospectuses.
26
(k) The Selling Shareholder shall have furnished to the Representative
on the Option Closing Date a certificate, dated such date, signed by,
or on behalf of, the Selling Shareholder stating that the
representations, warranties and agreements of the Selling Shareholder
contained herein are true and correct as of the Option Closing Date and
that the Selling Shareholder has complied with all agreements contained
herein to be performed by the Selling Shareholder at or prior to the
Option Closing Date. Notwithstanding the provisions of Section 19, the
Representative shall not waive this provision.
(l) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectuses any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectuses, (ii) since such
date there shall not have been any change in the equity or long-term
debt of the Company or any of its subsidiaries or any change, or, to
the knowledge of the Company, any development involving a prospective
change, in or affecting the business, general affairs, management,
financial position, shareholders' equity or results of operations of
the Company and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectuses, the effect of which, in any such case
described in clause (i) or (ii), is, in the judgment of the
Representative, so material and adverse as to make it impracticable or
inadvisable to proceed with the sale or delivery of the Shares on the
terms and in the manner contemplated in the Prospectuses.
(m) No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental
agency or body or any stock exchange in Canada or the United States
which would, as of the Closing Date, prevent the issuance or sale of
the Shares or materially and adversely affect or potentially materially
and adversely affect the business or operations of the Company; and no
injunction, restraining order or order of any other nature by any
federal or state court of competent jurisdiction shall have been issued
as of the Closing Date which would prevent the issuance or sale of the
Shares or materially and adversely affect or potentially materially and
adversely affect the business or operations of the Company.
(n) Subsequent to the execution and delivery of this Agreement there
shall not have occurred or be existing any of the following: (i)
trading in securities generally on the New York Stock Exchange or the
American Stock Exchange or the Toronto Stock Exchange or in the
over-the-counter market, or trading in any securities of the Company on
any exchange or in the over-the-counter market, shall have been
suspended or minimum or maximum prices or maximum range for prices
shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction; (ii) a banking moratorium
shall have been declared by United States Federal or state authorities,
or Canadian federal or provincial authorities, or a material disruption
has occurred in commercial banking or securities settlement or
clearance services in the United States or Canada; (iii) (A) a
declaration of a national emergency or war by the United States, or an
outbreak or escalation of hostilities between the United States and any
foreign power, (B) an outbreak or escalation of any other insurrection
or armed conflict, or act of terrorism involving the United States, or
any other national or international crisis, calamity or emergency or
(C) any material change in the political conditions, financial markets
or economic conditions in the United States which, in the case of (A),
(B) or (C) above, in the sole judgment of the Representative, makes it
impracticable or inadvisable to proceed with the sale or the delivery
of the Shares on the terms and in the manner contemplated in the
Prospectuses; or (iv) there shall have occurred such a material adverse
change in general economic, political or financial conditions (or the
effect of international conditions on the financial markets in the
United States shall be such) as to make it, in the sole
27
judgment of the Representative, impracticable or inadvisable to proceed
with the sale or delivery of the Shares on the terms and in the manner
contemplated in the Prospectuses.
(o) The American Stock Exchange, Inc. and the Toronto Stock Exchange
shall have each approved the Shares for listing, subject only to
official notice of issuance.
(p) XX Xxxxx shall have received the written agreements, substantially
in the form of Exhibit I hereto, of the officers, directors and
shareholders of the Company listed in Schedule C to this Agreement.
(q) XX Xxxxx shall have received an officer's certificate of the
General Counsel of the Company, certifying as to the following:
(i) To the best of such officer's knowledge, neither the Company
nor any of its subsidiaries (A) is in violation of its charter
or by-laws, (B) is in default, and no event has occurred,
which, with notice or lapse of time or both, would constitute
a default, in the due performance or observance of any term,
covenant or condition contained in any agreement or instrument
to which it is a party or by which it is bound or to which any
of its properties or assets is subject or (C) is in violation
of any law, ordinance, governmental rule, regulation or court
decree to which it or its property or assets may be subject or
has failed to obtain any license, permit, certificate,
franchise or other governmental authorization or permit
necessary to the ownership of its property or to the conduct
of its business except, in the case of clauses (B) and (C),
for those defaults, violations or failures which, either
individually or in the aggregate, would not have a Material
Adverse Effect.
(ii) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property or asset of
the Company or any of its subsidiaries is the subject which,
singularly or in the aggregate, if determined adversely to the
Company or any of its subsidiaries, would reasonably be
expected to have a Material Adverse Effect or would prevent or
adversely affect the ability of the Company to perform its
obligations under this Agreement; and, to the best of such
counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others.
(iii) For purposes of such certificate, "subsidiary" shall not
include any of CinemaNow, Inc., Xxxxxxxx Films Distribution
Inc. or CineGroupe Inc.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company and the Principal U.S. Subsidiaries and the Principal
Canadian Subsidiaries (collectively, the "Principal Subsidiaries"), and
the Selling Shareholder, jointly and severally, shall indemnify and
hold harmless each Underwriter, its officers, employees,
representatives and agents and each person, if any, who controls any
Underwriter within the meaning of the Securities Act (collectively, the
"Underwriter Indemnified Parties" and each, an
28
"Underwriter Indemnified Party") against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which
that Underwriter Indemnified Party may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in
any of the Preliminary Prospectuses, any of the Registration Statements
or the Prospectuses or in any amendments or supplements thereto or (ii)
the omission or alleged omission to state in any of the Preliminary
Prospectuses, any of the Registration Statements or the Prospectuses or
in any amendments or supplements thereto a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and shall reimburse each Underwriter Indemnified Party
promptly upon demand for any legal or other expenses reasonably
incurred by that Underwriter Indemnified Party in connection with
investigating or preparing to defend or defending against or appearing
as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred; provided,
however, that the Company and the Principal Subsidiaries and the
Selling Shareholder shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of or
is based upon an untrue statement or alleged untrue statement in or
omission or alleged omission from any of the Preliminary Prospectuses,
any of the Registration Statements or the Prospectuses or any such
amendments or supplements in reliance upon and in conformity with
written information furnished to the Company through the Representative
by or on behalf of any Underwriter specifically for use therein, which
information the parties hereto agree is limited to the Underwriters'
Information. This indemnity agreement is not exclusive and will be in
addition to any liability which the Company and Principal Subsidiaries
and the Selling Shareholder might otherwise have and shall not limit
any rights or remedies which may otherwise be available at law or in
equity to each Underwriter Indemnified Party; provided, however, that
the liability of the Selling Shareholder under this Section 7(a) and
Section 7(b) shall not exceed the product of the purchase price for
each Optional Share set forth in Section 3 hereof multiplied by the
number of Optional Shares sold by the Selling Shareholder hereunder;
and provided further, that the Selling Shareholder shall have liability
under this Section 7(a) only to the extent that the Selling Shareholder
had knowledge at the time it was made that the statement was untrue, or
omitted to state a material fact described in (i) or (ii),
respectively.
(b) The Selling Shareholder shall indemnify and hold harmless each
Underwriter Indemnified Party, against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which
that Underwriter Indemnified Party may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in
the Preliminary Prospectus, either of the Registration Statements or
the Prospectus or in any amendment or supplement thereto or (ii) the
omission or alleged omission to state in any Preliminary Prospectus,
either of the Registration Statements or the Prospectus or in any
amendment or supplement thereto a material fact required to be stated
therein or necessary to make the statements therein not misleading, but
in each case only to the extent that the untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the
Company by or on behalf of the Selling Shareholder specifically for
inclusion therein, and shall reimburse each Underwriter Indemnified
Party promptly upon demand for any legal or other expenses reasonably
incurred by that Underwriter Indemnified Party in connection with
investigating or preparing to defend or defending against or appearing
as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred. This
indemnity agreement is not exclusive and will be in addition to any
liability which the Selling Shareholder might otherwise have and shall
not limit any rights or remedies which may otherwise be available at
law or in equity to each Underwriter Indemnified Party; provided,
however, that the liability of the Selling Shareholder under Section
7(a) and this Section 7(b) shall not exceed the product of the purchase
29
price for each Optional Share set forth in Section 3 hereof multiplied
by the number of Optional Shares sold by the Selling Shareholder
hereunder.
(c) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company its officers, employees, representatives and
agents, each of its directors and each person, if any, who controls the
Company within the meaning of the Securities Act (collectively the
"Company Indemnified Parties" and each a "Company Indemnified Party")
and the Selling Shareholder, against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which
the Company Indemnified Parties and the Selling Shareholder may become
subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of or is based upon (i)
any untrue statement or alleged untrue statement of a material fact
contained in any of the Preliminary Prospectuses, any of the
Registration Statements or the Prospectuses or in any amendments or
supplements thereto or (ii) the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, but in each case only to
the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company through
the Representative by or on behalf of that Underwriter specifically for
use therein, and shall reimburse the Company Indemnified Parties and
the Selling Shareholder for any legal or other expenses reasonably
incurred by such parties in connection with investigating or preparing
to defend or defending against or appearing as third party witness in
connection with any such loss, claim, damage, liability or action as
such expenses are incurred; provided that the parties hereto hereby
agree that such written information provided by the Underwriters
consists solely of the Underwriters' Information. This indemnity
agreement is not exclusive and will be in addition to any liability
which the Underwriters might otherwise have and shall not limit any
rights or remedies which may otherwise be available at law or in equity
to the Company Indemnified Parties and the Selling Shareholder.
(d) Promptly after receipt by an indemnified party under this Section 7
of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 7, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under
this Section 7 except to the extent it has been materially prejudiced
by such failure; and, provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under this Section 7. If
any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that
it wishes, jointly with any other similarly notified indemnifying
party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, the indemnifying party shall not
be liable to the indemnified party under this Section 7 for any legal
or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that any indemnified party shall have
the right to employ separate counsel in any such action and to
participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i)
the employment thereof has been specifically authorized by the
indemnifying party in writing, (ii) such indemnified party shall have
been advised in writing by such counsel that there may be one or more
legal defenses available to it which are different from or additional
to those available to the indemnifying party and in the reasonable
judgment of such counsel it is advisable for such indemnified party to
employ separate counsel or (iii) the indemnifying party has failed to
assume the defense of such action and employ counsel
30
reasonably satisfactory to the indemnified party, in which case, if
such indemnified party notifies the indemnifying party in writing that
it elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the
defense of such action on behalf of such indemnified party, it being
understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys at any
time for all such indemnified parties, which firm shall be designated
in writing by XX Xxxxx, if the indemnified parties under this Section 7
consist of any Underwriter Indemnified Party, by the Company if the
indemnified parties under this Section 7 consist of any Company
Indemnified Parties, or by the Selling Shareholder if the sole
indemnified party under this Section 7 is the Selling Shareholder. Each
indemnified party, as a condition of the indemnity agreements contained
in Sections 7(a) and 7(b), shall use all reasonable efforts to
cooperate with the indemnifying party in the defense of any such action
or claim. No indemnifying party shall be liable for any settlement of
any such action effected without its written consent (which consent
shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such
action, the indemnifying party agrees to indemnify and hold harmless
any indemnified party from and against any loss or liability by reason
of such settlement or judgment.
(e) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
Section 7(a) or 7(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Principal Subsidiaries and the Selling
Shareholder on the one hand and the Underwriters on the other from the
offering of the Shares, or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company and the
Principal Subsidiaries and the Selling Shareholder on the one hand and
the Underwriters on the other with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or
action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Principal Subsidiaries on the one hand and the Underwriters on the
other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Shares
purchased under this Agreement (before deducting expenses) received by
the Company and the Principal Subsidiaries and the Selling Shareholder
bear to the total underwriting discounts and commissions received by
the Underwriters with respect to the Shares purchased under this
Agreement, in each case as set forth in the table on the cover page of
the Prospectuses. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company and the
Principal Subsidiaries and the Selling Shareholder on the one hand or
the Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission; provided that the parties
hereto agree that the written information furnished to the Company
through the Representative by or on behalf of the Underwriters for use
in any of the Preliminary Prospectuses, any of the Registration
Statements or any of the Prospectuses consists solely of the
Underwriters' Information. The Company and the Principal Subsidiaries
and the Selling Shareholder and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this Section
7(e) were to be determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take into account the
equitable considerations referred to
31
herein. The amount paid or payable by an indemnified party as a result
of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 7(e) shall be deemed to include, for
purposes of this Section 7(e), 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 7(e), 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 less the amount of any damages which such Underwriter has
otherwise paid or become liable to pay by reason of any 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 Underwriters' obligations to contribute as provided in this Section
7(e) are several in proportion to their respective underwriting
obligations and not joint.
8. TERMINATION. The obligations of the Underwriters hereunder may be terminated
by XX Xxxxx, in its absolute discretion by notice given to and received by the
Company prior to delivery (including electronic delivery) of and payment for the
Firm Shares if, prior to that time, any of the events described in Sections
6(l), 6(m) or 6(n) have occurred or if the Underwriters shall decline to
purchase the Shares for any reason permitted under this Agreement.
9. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If (a) this Agreement shall have
been terminated pursuant to Section 8, (b) the Company shall fail to tender the
Shares for delivery (including electronic delivery) to the Underwriters for any
reason permitted under this Agreement, or (c) the Underwriters shall decline to
purchase the Shares for any reason permitted under this Agreement the Company
shall reimburse the Underwriters for the fees and expenses of their counsel and
for such other out-of-pocket expenses as shall have been reasonably incurred by
them in connection with this Agreement and the proposed purchase of the Shares,
and within thirty (30) days of demand the Company shall pay the full amount
thereof to the XX Xxxxx.
10. SUBSTITUTION OF UNDERWRITERS. If any Underwriter or Underwriters shall
default in its or their obligations to purchase Shares hereunder and the
aggregate number of shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed ten percent (10%) of the total
number of shares underwritten, the other Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the shares which such defaulting Underwriter or Underwriters agreed but failed
to purchase. If any Underwriter or Underwriters shall so default and the
aggregate number of shares with respect to which such default or defaults occur
is more than ten percent (10%) of the total number of shares underwritten and
arrangements satisfactory to the Representative and the Company for the purchase
of such shares by other persons are not made within forty-eight (48) hours after
such default, this Agreement shall terminate.
If the remaining Underwriters or substituted Underwriters are required
hereby or agree to take up all or part of the Shares of a defaulting Underwriter
or Underwriters as provided in this Section 10, (i) the Company and the Selling
Shareholder shall have the right to postpone the Closing Dates for a period of
not more than five (5) full business days in order that the Company and the
Selling Shareholder may effect whatever changes may thereby be made necessary in
the Registration Statement or the Prospectuses, or in any other documents or
arrangements, and the Company agrees promptly to file any amendments to the
Registration Statement or supplements to the Prospectuses which may thereby be
made necessary, and (ii) the respective numbers of shares to be purchased by the
remaining Underwriters or substituted Underwriters shall be taken as the basis
of their underwriting obligation for all purposes of this Agreement. Nothing
herein contained shall relieve any defaulting Underwriter of its liability to
the Company, the Selling Shareholder or the other Underwriters for damages
occasioned by its default
32
hereunder. Any termination of this Agreement pursuant to this Section 10 shall
be without liability on the part of any non-defaulting Underwriter, the Selling
Shareholder or the Company, except expenses to be paid or reimbursed pursuant to
Sections 5 and 9 and except the provisions of Section 7 shall not terminate and
shall remain in effect.
11. SUCCESSORS; PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the several Underwriters, the
Company and the Selling Shareholder and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person other than the persons mentioned in the preceding sentence any
legal or equitable right, remedy or claim under or in respect of this Agreement,
or any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person; except that the
representations, warranties, covenants, agreements and indemnities of the
Company and the Selling Shareholder contained in this Agreement shall also be
for the benefit of the Underwriter Indemnified Parties, and the indemnities of
the several Underwriters shall also be for the benefit of the Company
Indemnified Parties and the Selling Shareholder. It is understood that the
Underwriters' responsibility to the Company is solely contractual in nature and
the Underwriters do not owe the Company, or any other party, any fiduciary duty
as a result of this Agreement.
12. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The respective
indemnities, covenants, agreements, representations, warranties and other
statements of the Company, the Selling Shareholder and the several Underwriters,
as set forth in this Agreement or made by them respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter, the Selling Shareholder,
the Company or any person controlling any of them and shall survive delivery
(including electronic delivery) of and payment for the Shares.
13. NOTICES. All statements, requests, notices and agreements hereunder shall be
in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to XX Xxxxx Securities Corporation,
Attention: General Counsel, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (Fax: 000-000-0000);
(b) if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to Lions Gate Entertainment Corp., Attention:
Xxxxx Xxxxx, 0000 Xxxxxxx Xxx., Xxxxx 000, Xxxxxx xxx Xxx, Xxxxxxxxxx
00000 (Fax: 000-000-0000);
(c) if to any Selling Shareholder, shall be delivered or sent by mail,
telex or facsimile transmission to such Selling Shareholder at the
address set forth on Schedule B hereto;
provided, however, that any notice to an Underwriter pursuant to
Section 7 shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its
acceptance telex to the Representative, which address will be supplied
to any other party hereto by the Representative upon request. Any such
statements, requests, notices or agreements shall take effect at the
time of receipt thereof.
14. DEFINITION OF CERTAIN TERMS. For purposes of this Agreement: (a) "business
day" means any day on which the New York Stock Exchange, Inc. is open for
trading; (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules and
Regulations; provided, however, that solely for purposes of this Agreement the
term "subsidiary" shall include LGTC; and (c) "Significant Subsidiary" has the
meaning set forth in Section 1-02(w) of Regulation S-X of the Commission.
33
15. GOVERNING LAW AND SUBMISSION TO JURISDICTION. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO ANY CONFLICTS OF LAWS PRINCIPLES THAT WOULD RESULT IN THE
APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION. EACH OF THE PARTIES HERETO
WAIVES THE RIGHT TO TRIAL BY JURY.
16. UNDERWRITERS' INFORMATION. The parties hereto acknowledge and agree that,
for all purposes of this Agreement, the term "Underwriters' Information"
consists solely of the following information in the Prospectuses: (i) the last
paragraph on the front cover page concerning the terms of the offering by the
Underwriters; and (ii) the statements concerning the Underwriters contained in
the table below the first paragraph and contained in the third paragraph under
the heading "Underwriting."
17. AUTHORITY OF THE REPRESENTATIVE. In connection with this Agreement, you will
act for and on behalf of the several Underwriters, and any action taken under
this Agreement by the Representative, will be binding on all the Underwriters;
and any action taken under this Agreement by any of the Attorneys in fact will
be binding on all the Selling Shareholder.
18. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or
enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
19. GENERAL. This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject
matter hereof. In this Agreement, the masculine, feminine and neuter genders and
the singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company, the Selling Shareholder, and the
Representative.
20. COUNTERPARTS. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
[Signature page follows]
34
If the foregoing is in accordance with your understanding of the
agreement between the Company, the Selling Shareholder and the several
Underwriters, kindly indicate your acceptance in the space provided for that
purpose below.
Very truly yours,
LIONS GATE ENTERTAINMENT CORP.
By:
-----------------------
Name:
Title:
SELLING SHAREHOLDER
--------------------------
Xxxx Xxxx
Accepted as of
the date first above written:
XX XXXXX SECURITIES CORPORATION
Acting on its own behalf
and as Representative of several
Underwriters referred to in the
foregoing Agreement.
By: XX XXXXX SECURITIES CORPORATION
By:
----------------------------------
Name: Xxxxxxx X. Xxxxxxxx, Xx.
Title: Head of Equity Capital Markets
35
SCHEDULE A
Number Number of
of Firm Optional
Shares Shares
to be to be
Name Purchased Purchased
---- ---------- ----------
XX Xxxxx Securities Corporation
---------- ----------
Natexis Bleichroeder Inc.
---------- ----------
Xxxxxx Xxxxxx NBF Securities Inc.
---------- ----------
Total
========== ==========
36
SCHEDULE B
Selling Shareholder Number of Number of
------------------- Firm Optional
Shares to Shares to
be Sold be Sold
------- -------
Xxxx Xxxx
c/o Lions Gate Entertainment Corp. 0 1,000,000
Suite 0000
Xxxxx Xxxxxxx Xxxxxx
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0XX
Total 0 1,000,000
37
SCHEDULE C
Xxxxx Xxxxxxxx
Xxxx Xxxxxx
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxxxx
Xxxxx Xxxxx
Xxxxxxx Xxxxx
Xxxxxxx Xxxxxx
Xxxxx Xxxxxxxxx
Xxxxxx Xxxxxx
Xxx Xxxxxxxx
Xxxxxxx Xxxxxxx
Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxxx
Xxxx Xxxxx
Xxxxx Xxxxxx
Xxx Xxxxxxxxxx
Xxxx Xxxxxxxx
Xxxxx Xxxxxxx
Xxxxxxxx Xxxxx
ENT Holding Corporation
Xxxxxx Keep
SBS Broadcasting S.A.
Telemuchen Fernseh GmbH & Co.
38
EXHIBIT I
[Form of Lock-Up Agreement]
[Date]
XX Xxxxx Securities Corporation
As representative of the
several Underwriters
c/o XX Xxxxx Securities Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Lions Gate Entertainment Corp. 15,000,000 Common Shares
Dear Sirs:
In order to induce XX Xxxxx Securities Corporation ("XX Xxxxx") to
enter in to a certain underwriting agreement with Lions Gate Entertainment
Corp., a British Columbia corporation (the "Company"), with respect to the
public offering of common shares, no par value ("Common Shares") of the Company,
the undersigned hereby agrees that for a period commencing with the printing and
distribution of the red xxxxxxx and ending 180 days following the date of the
final prospectus filed by the Company with the Securities and Exchange
Commission in connection with such public offering (the "Offering"), the
undersigned will not, without the prior written consent of XX Xxxxx, directly or
indirectly, (i) offer, sell, assign, transfer, pledge, contract to sell, or
otherwise dispose of, any Common Shares (including, without limitation, Common
Shares which may be deemed to be beneficially owned by the undersigned in
accordance with the rules and regulations promulgated under the Securities Act
of 1933, as the same may be amended or supplemented from time to time (such
shares, the "Beneficially Owned Shares")) or securities convertible into or
exercisable or exchangeable in Common Shares (such securities, together with the
Common Shares and Beneficially Owned Shares, the "Relevant Securities"), (ii)
enter into any swap, hedge or similar agreement or arrangement that transfers in
whole or in part, the economic risk of ownership of the Relevant Securities or
(iii) engage in any short selling of the Common Shares (all collectively, the
"Lock-Up").
Notwithstanding the foregoing, the undersigned may transfer Relevant
Securities (i) by bona fide gift, will or intestate succession and (ii) to any
trust for the direct or indirect benefit of the undersigned or the immediate
family of the undersigned, provided as to each of (i) and (ii) above, each
resulting transferee of Relevant Securities executes and delivers to you an
agreement certifying that such transferee is bound by the terms of this letter
agreement, and provided further that any such transfer not involve a disposition
for value. For the purposes of this letter agreement, "immediate family" means
any relationship by blood, marriage or adoptions, not more remote than first
cousin.
In addition, the undersigned hereby waives, from the date hereof until
the expiration of the 180 day period following the date of the Company's final
prospectus filed by the Company with the Securities and Exchange Commission in
connection with the Offering, any and all rights, if any, to request or demand
registration pursuant to the Securities Act of any Common Shares that are
registered in the name of the undersigned or that are Beneficially Owned Shares.
In order to enable the aforesaid covenants to be enforced, the undersigned
hereby consents to the placing of stop transfer orders with the transfer agent
of the Common Shares with respect to any Common Shares or Beneficially Owned
Shares.
39
Delivery of a signed copy of this letter agreement by facsimile
transmission shall be effective as delivery of the original hereof.
By:
----------------------------
Name:
Title:
