Exhibit 1.1
SPARKLING SPRING WATER HOLDINGS LIMITED
COMMON SHARES
(WITHOUT PAR VALUE)
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UNDERWRITING AGREEMENT
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................., 2002
Xxxxxxx, Xxxxx & Co.,
UBS Warburg LLC,
X.X. Xxxxxx Securities Inc.,
TD Securities Inc.,
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Xxxxx & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Ladies and Gentlemen:
Sparkling Spring Water Holdings Limited, a corporation organized under
the laws of Nova Scotia (the "Company"), proposes, subject to the terms and
conditions stated herein, to issue and sell to the Underwriters named in
Schedule I hereto (the "Underwriters") an aggregate of ........ common shares
and, at the election of the Underwriters, up to ........... additional common
shares (without par value) (the "Stock") of the Company, and the shareholders of
the Company named in Schedule II hereto (the "Selling Shareholders") propose,
subject to the terms and conditions stated herein, to sell to the Underwriters,
at the election of the Underwriters, up to ........ Shares. The aggregate of
......... shares to be sold by the Company is herein called the "Firm Shares" and
the aggregate of ........ additional shares to be sold by the Company and the
Selling Shareholders is herein called the "Optional Shares". The Firm Shares and
the Optional Shares that the Underwriters elect to purchase pursuant to Section
2 hereof are herein collectively called the "Shares".
The Company and the Underwriters, in accordance with the requirements of
Rule 2720 ("Rule 2720") of the National Association of Securities Dealers, Inc.
(the "NASD") and subject to the terms and conditions stated herein, also hereby
confirm the engagement of the services of Xxxxxxx, Sachs & Co. (in such
capacity, the "Independent Underwriter") as a "qualified independent
underwriter" within the meaning of clause (b)(15) of Rule 2720 in connection
with the offering and sale of the Shares.
1. (a) The Company represents and warrants to, and agrees with, each of
the Underwriters and the Independent Underwriter that:
(i) A registration statement on Form F-1 (File No. 333-....) (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, 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 "Act"),
which became effective upon filing, no other document with respect to
the Initial Registration Statement 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 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 of the Act, is hereinafter called a
"U.S. Preliminary Prospectus"; the various parts of the Initial
Registration Statement and the Rule 462(b) Registration Statement, if
any, including all exhibits thereto and including the information
contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 6(a)
hereof and deemed by virtue of Rule 430A under the Act to be part of the
Initial Registration Statement at the time it was declared 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 Statement"; and such
final prospectus, in the form first filed pursuant to Rule 424(b) under
the Act, is hereinafter called the "U.S. Prospectus");
(ii) A preliminary prospectus and a final prospectus have been
filed with the securities regulatory authorities in each of the
Provinces of Canada other than the Province of Quebec, (collectively,
the "Canadian Securities Regulatory Authorities"), including with the
Nova Scotia Securities Commission (the "Reviewing Authority") which has
been notified that it has been selected as the principal regulator
pursuant to National Policy 43-201, in compliance with all applicable
securities regulations and rules of the Canadian Securities Regulatory
Authorities, including any applicable published policy statements of the
Canadian Securities Regulatory Authorities (collectively, the "Canadian
Securities Laws"); a receipt has been issued by the Reviewing Authority
on behalf of the Canadian Securities Regulatory Authorities with respect
to such final prospectus and any amendment thereto in the form
heretofore delivered to you for each of the Underwriters (together with
all documents filed in connection therewith); no other document with
respect to such final prospectus, or amendment thereto, has heretofore
been filed or transmitted for filing with the Canadian Securities
Regulatory Authorities and no order having the effect of ceasing or
suspending the distribution of the Shares has been issued by any
Canadian Securities Regulatory Authority and no proceeding for that
purpose has been initiated or, to the best of the Company's knowledge,
threatened by any Canadian Securities Regulatory Authority (the
preliminary prospectus, as the same may have been amended, filed with
the Reviewing Authority being hereinafter called the "Canadian
Preliminary Prospectus" and the final prospectus, as most recently
amended, filed with the Reviewing Authority and for which a final
receipt document has been obtained, being hereinafter called the
"Canadian Prospectus"; provided that, from and after the time the
supplemented Canadian Prospectus (containing previously omitted pricing
information) is filed with the Reviewing Authority in accordance with
Section 6(a) hereof, any reference to the Canadian Prospectus herein
shall be deemed to refer to the Canadian Prospectus as so supplemented);
the U.S. Preliminary Prospectus and the Canadian Preliminary Prospectus
are hereinafter called the
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"Preliminary Prospectuses", and individually a "Preliminary Prospectus";
and the U.S. Prospectus and the Canadian Prospectus are hereinafter
collectively called the "Prospectuses", and individually a "Prospectus";
(iii) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission or any of the Canadian
Securities Regulatory Authorities, and each U.S. Preliminary Prospectus
and Canadian Preliminary Prospectus, at the time of filing thereof,
conformed in all material respects to the requirements of the Act and
the rules and regulations of the Commission thereunder and the
requirements of Canadian Securities Laws, as applicable, 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 by an Underwriter through Xxxxxxx, Xxxxx & Co. or by the
Independent Underwriter expressly for use therein;
(iv) The Registration Statement conforms, and the U.S. Prospectus
and Canadian Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectuses will conform, in all material
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder and the requirements of Canadian Securities
Laws, as applicable; the Canadian Prospectus and any amendment or
supplement thereto as of the applicable filing date, constitutes and
will constitute full, true and plain disclosure of all material facts
relating to the Company and its subsidiaries and the Shares and do not
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case within the meaning
of Canadian Securities Laws; and the Registration Statement and any
amendment thereto, as of the applicable effective date, and the U.S.
Prospectus and any amendment or supplement thereto, as of the applicable
filing date, do not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
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 by an Underwriter
through Xxxxxxx, Sachs & Co. or by the Independent Underwriter expressly
for use therein;
(v) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included 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 or contemplated in the
Prospectuses; and, except as otherwise set forth in or contemplated by
the Prospectuses, since the respective dates as of which information is
given in the Registration Statement and the Prospectuses, there has not
been any change in the share capital of the Company or any of its
subsidiaries (other than the issuance of stock options to purchase
common shares pursuant to stock option plans existing on the date of
this Agreement and the issuance of common shares upon the exercise of
outstanding warrants or stock options issued under existing stock option
plans or the repurchase of common shares by the Company pursuant to
existing repurchase plans or rights exercised in connection with the
termination of employment with the Company), any net increase in the
consolidated
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long-term debt of the Company in excess of U.S. $10,000,000 or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole; and
other than the subsidiaries listed on Schedule III attached hereto
(together, the "Material Subsidiaries" and, individually, each a
"Material Subsidiary"), there are no subsidiaries of the Company that
would constitute significant subsidiaries as defined in Rule 1-02(w) of
Regulation S-X;
(vi) The Company and its Material Subsidiaries have good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as are
described in the Prospectuses or such as do not materially affect the
value of such property and do not materially interfere with the use made
and proposed to be made of such property by the Company and its Material
Subsidiaries; and any real property and buildings held under lease by
the Company and its Material Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not
material and do not materially interfere with the use made and proposed
to be made of such property and buildings by the Company and its
Material Subsidiaries;
(vii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Nova
Scotia, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectuses,
and has been duly qualified as a foreign corporation for the transaction
of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, or is subject to no
liability or disability by reason of the failure to be so qualified in
any such jurisdiction, except where the failure to be so qualified could
not reasonably be expected to have a material adverse effect or
prospective material adverse effect on the general affairs, management,
current or future consolidated financial position, shareholders' equity
or results of operations of the Company and its subsidiaries, taken as a
whole (a "Material Adverse Effect"); and each subsidiary of the Company
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation, with
power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectuses, and has been duly
qualified as a foreign corporation for the transaction of business and
is in good standing under the laws of each other jurisdiction in which
it owns or leases properties or conducts any business so as to require
such qualification, or is subject to no liability or disability by
reason of the failure to be so qualified in any such jurisdiction,
except where the failure to be so qualified or to be in good standing
could not reasonably be expected to have a Material Adverse Effect;
(viii) 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 of the Stock contained in
the Prospectuses; and all of the issued shares of each subsidiary of the
Company have been duly and validly authorized and issued, are fully paid
and non-assessable and are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims, other
than liens, encumbrances and equities created under loan documentation
relating to indebtedness of the Company described in the Prospectuses;
the holders of outstanding shares of the Company are not entitled to
preemptive or other rights that have not been waived to acquire the
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Shares; and there are no outstanding securities convertible into or
exchangeable for, or warrants, rights or options to purchase from the
Company, or obligations of the Company to issue, the Stock or any other
class of shares of the Company (except as set forth in the Prospectus
under "Description of Share Capital");
(ix) The unissued 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,
will be duly and validly issued and fully paid and non-assessable and
will conform to the description of the Stock contained in the
Prospectuses;
(x) This Agreement has been duly authorized, executed and delivered
by the Company;
(xi) The issue and sale of the Shares to be sold by the Company
hereunder and the compliance by the Company with all of the provisions
of this Agreement and the consummation of the transactions herein
contemplated 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 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 except for conflicts, breaches, violations and defaults that
could not reasonably be expected to have a Material Adverse Effect, nor
will such action result in any violation of the provisions of the
memorandum and articles of association or articles or certificate of
incorporation or by-laws, or other organizational documents of the
Company or any of its subsidiaries or any statute or any order, rule or
regulation of any court or governmental agency or body or any stock
exchange authorities (a "Governmental Agency") having jurisdiction over
the Company or any of its subsidiaries or any of their properties; and
no consent, approval, authorization, order, registration or
qualification (each, a "Governmental Authorization") of or with any
Governmental Agency having jurisdiction over the Company or any of its
subsidiaries or any of their properties or any stock exchange
authorities is required for the issue and sale of the Shares or the
consummation by the Company of the transactions contemplated by this
Agreement, except (A) the registration under the Act of the Shares and
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act") of the Stock, and the qualification of the distribution of the
Shares under the Canadian Securities Laws (which registrations and
qualifications have been obtained), (B) such Governmental Authorizations
as have been duly obtained and are in full force and effect and copies
of which have been furnished to you, (C) the listing of the Shares on
the New York Stock Exchange, and (D) such Governmental Authorizations as
may be required under state securities or Blue Sky laws or any laws of
jurisdictions outside the United States and Canada in connection with
the purchase and distribution of the Shares by or for the account of the
Underwriters;
(xii) Neither the Company nor any of its subsidiaries is in
violation of its memorandum and articles of association or articles or
certificate of incorporation or by-laws, or other organizational
documents, or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement lease or other agreement or
instrument to which it is a party or by which it or any of its
properties may be bound, except for such defaults that could not
reasonably be expected to have a Material Adverse Effect;
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(xiii) No stamp or other issuance or transfer taxes or duties and
no capital gains, income, withholding or other taxes are payable by or
on behalf of the Underwriters to Canada or any political subdivision or
taxing authority thereof or therein in connection with (A) the execution
and delivery of this Agreement, (B) the sale and delivery by the Company
and the Selling Shareholders of the Shares or the issuance of the Shares
by the Company to or for the respective accounts of the Underwriters or
(C) the sale and delivery outside Canada by the Underwriters of the
Shares to the initial purchasers thereof;
(xiv) Neither the Company nor any of its subsidiaries has taken,
directly or indirectly, any action which was designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares;
(xv) The statements set forth in the Prospectuses under the caption
"Description of Share Capital", insofar as they purport to constitute a
summary of the terms of the Stock, and under the captions "United States
Federal Tax Considerations" and "Canadian Federal Tax Considerations for
United States Residents", insofar as they purport to describe the
provisions of the laws referred to therein, are accurate and fair in all
material respects;
(xvi) Other than as set forth in the Prospectuses, 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 of the Company or
any of its subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect; and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated
by any Governmental Agency or threatened by others;
(xvii) The Company is not and, after giving effect to the offering
and sale of the Shares, will not be an "investment company", as such
term is defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(xviii) The Company and each of its subsidiaries have all licenses,
franchises, permits, authorizations, approvals and orders and other
concessions of and from all Governmental Agencies that are necessary to
own or lease their other properties and conduct their businesses as
described in the Prospectuses, except where the failure to have such
licenses, franchises, permits, authorizations, approvals, orders and
other concessions could not reasonably be expected to have a Material
Adverse Effect;
(xix) The Company is not a Passive Foreign Investment Company
("PFIC") within the meaning of Section 1296 of the United States
Internal Revenue Code of 1986, as amended, and is not likely to become a
PFIC;
(xx) Neither the Company nor any of its affiliates does business
with the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Section 517.075, Florida Statutes;
(xxi) Ernst & Young LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(xxii) The Company and its subsidiaries have complied at all times
with all applicable Environmental Health and Safety Laws, hold all
permits, licenses and approvals under Environmental Health and Safety
Laws material to the conduct of the
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business of the Company and its subsidiaries and are in compliance with
their respective environmental permits, except where such non-compliance
or the failure to hold any such licenses or approvals could not
reasonably be expected to have a Material Adverse Effect; to the best of
the Company's knowledge, no property currently owned or operated by the
Company or its subsidiaries (including soils, groundwater, surface
water, buildings or other structures) is contaminated with any Hazardous
Substance, which contamination could reasonably be expected to have a
Material Adverse Effect; to the best of the Company's knowledge, no
property formerly owned or operated by the Company or any of its
subsidiaries was contaminated with any Hazardous Substance during or
prior to such period of ownership or operation; neither the Company nor
any of its subsidiaries is subject to liability for any Hazardous
Substance disposal or contamination on any third party property, which
liability could reasonably be expected to have a Material Adverse
Effect; neither the Company nor any of its subsidiaries has released or
is aware of any past or present threat of release by the Company or any
of its subsidiaries of any Hazardous Substance that has had or could
reasonably be expected to have a Material Adverse Effect; neither the
Company nor any of its subsidiaries has received any notice, demand,
letter, claim or request for information alleging that the Company or
any of its subsidiaries may be in violation of or subject to liability
under any Environmental Health and Safety Law; neither the Company nor
any of its subsidiaries is subject to any order, decree, injunction or
other agreement with any Governmental Agency or any indemnity or other
agreement with any third party relating to liability under any
Environmental Health and Safety Law or relating to Hazardous Substances;
to the best of the Company's knowledge, there are no other circumstances
or conditions involving the Company or any of its subsidiaries that
could reasonably be expected to result in a Material Adverse Effect
pursuant to any Environmental Health and Safety Law; and the Company has
made available to you copies of all material written environmental
reports, studies, assessments, sampling data and other environmental
information in its possession relating to the Company or its
subsidiaries or their respective current and former properties or
operations. For the purposes of this section, "Environmental Health and
Safety Law" shall mean any law, statute, ordinance, rule, regulation,
order, decree, or requirement of any Governmental Agency relating to:
(i) the protection, investigation or restoration of the environment,
health, safety, or natural resources, (ii) the handling, use, presence,
disposal, release or threatened release of any Hazardous Substance (iii)
noise, odor, indoor air, employee exposure, wetlands, pollution,
contamination or any injury or threat of injury to persons or property,
(iv) the handling, storage, shipment or production of food or beverages,
or (v) safety or quality of, or standards for, food or beverages or
human health. For the purposes of this section, "Hazardous Substance"
shall mean any substance that is: (A) listed, classified or regulated
pursuant to any Environmental Health and Safety Law; (B) any petroleum
product or by-product, asbestos-containing material, lead-containing
paint, polychlorinated biphenyls, radioactive material or radon; or (C)
any other substance that may be the subject of regulatory action by any
Government Agency in connection with any Environmental Health and Safety
Law;
(xxiii) Except as disclosed in the Prospectuses, (A) neither the
Company nor any of its subsidiaries is a party to any collective
bargaining agreement or other labor union contract applicable to persons
employed by the Company or its subsidiaries, nor are they under any
current obligation to bargain with any bargaining agent on behalf of any
such persons, nor, to the best of the Company's knowledge, are there or
have there been any organizational campaigns, petitions or other
unionization activities seeking recognition of a collective bargaining
unit which could materially affect the Company or
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any of its Material Subsidiaries, (B) there are no controversies,
strikes, slowdowns or work stoppages pending or, to the knowledge of the
Company, threatened between the Company or any of its subsidiaries, on
the one hand, and any of their respective employees, on the other hand,
which could reasonably be expected to have a Material Adverse Effect,
and the Company has not experienced any controversy, strike, slowdown or
work stoppage within the past three years that has had a Material
Adverse Effect, (C) the Company and its subsidiaries are currently in
compliance with all applicable laws relating to the employment of labor,
except for such noncompliance which could not reasonably be expected to
have a Material Adverse Effect, (D) neither the Company nor any of its
subsidiaries is a party to, or otherwise bound by, any consent decree
with, or citation by, any Governmental Agency relating to employees or
employment practices, (E) neither the Company nor any of its
subsidiaries has received written notice of the intent of any federal,
state, local or foreign Governmental Agency responsible for the
enforcement of labor or employment laws to conduct an investigation with
respect to or relating to the Company or any of its subsidiaries which
could reasonably be expected to have a Material Adverse Effect and no
such investigation is in progress.
(b) Each of the Selling Shareholders severally represents and warrants
to, and agrees with, each of the Underwriters, the Independent Underwriter and
the Company that:
(i) All Governmental Authorizations required for the sale and
delivery of the Shares to be sold by the Selling Shareholder hereunder
and for the execution and delivery by such Selling Shareholder of this
Agreement, the Power of Attorney and the Custody Agreement hereinafter
referred to, and for the sale and delivery of the Shares to be sold by
such Selling Shareholder hereunder, have been obtained, except (A) the
registration under the Act of the Shares and under the Exchange Act of
the Stock, and the qualification of the distribution of the Shares under
the Canadian Securities Laws, (B) such Governmental Authorizations as
have been duly obtained and are in full force and effect and copies of
which have been furnished to you, (C) the listing of the Shares on the
New York Stock Exchange, and (D) such Governmental Authorizations as may
be required under state securities or Blue Sky laws or any laws of
jurisdictions outside the United States and Canada in connection with
the purchase and distribution of the Shares by or for the account of the
Underwriters; and such Selling Shareholder has full right, power and
authority to enter into this Agreement, the Power of Attorney and the
Custody Agreement and to sell, assign, transfer and deliver the Shares
to be sold by such Selling Shareholder hereunder;
(ii) The sale of the Shares to be sold by such Selling Shareholder
hereunder and the compliance by such Selling Shareholder with all of the
provisions of this Agreement, the Power of Attorney and the Custody
Agreement and the consummation of the transactions herein contemplated
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 such Selling Shareholder is a party or by which such Selling
Shareholder is bound, or to which any of the property or assets of such
Selling Shareholder is subject, nor will such action result in any
violation of any statute or any order, rule or regulation of any
Governmental Agency having jurisdiction over such Selling Shareholder or
the property of such Selling Shareholder;
(iii) Such Selling Shareholder has, and immediately prior to each
Time of Delivery (as defined in Section 5 hereof) such Selling
Shareholder will have, good and valid title to the Shares to be sold by
such Selling Shareholder hereunder, free and clear
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of all liens, encumbrances, equities or claims; and, upon delivery of
such Shares and payment therefor pursuant hereto and thereto, good and
valid title to such Shares, free and clear of all liens, encumbrances,
equities or claims, will pass to the several Underwriters;
(iv) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares;
(v) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectuses or
any amendment or supplement thereto are made in reliance upon and in
conformity with written information furnished to the Company by such
Selling Shareholder expressly for use therein, such Preliminary
Prospectus and the Registration Statement did, and the Prospectuses and
any further amendments or supplements to the Registration Statement and
the Prospectuses, when they become effective or are filed with the
Commission or with the Canadian Securities Regulatory Authorities, as
the case may be, will conform in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and to the requirements of Canadian Securities Laws and will
not 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;
(vi) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Shareholder will deliver to you prior to or
at the First Time of Delivery (as hereinafter defined) a properly
completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department
regulations in lieu thereof);
(vii) Certificates in negotiable form representing all of the
Shares to be sold by such Selling Shareholder hereunder have been placed
in custody under a Custody Agreement (the "Custody Agreement"), in the
form heretofore furnished to you, duly executed and delivered by such
Selling Shareholder to [NAME OF CUSTODIAN], as custodian (the
"Custodian"), and such Selling Shareholder has duly executed and
delivered a Power of Attorney (the "Power of Attorney"), in the form
heretofore furnished to you, appointing the persons indicated in
Schedule II hereto, and each of them, as such Selling Shareholder's
attorneys-in-fact (the "Attorneys-in-Fact") with authority to execute
and deliver this Agreement on behalf of such Selling Shareholder, to
determine the purchase price to be paid by the Underwriters to the
Selling Shareholders as provided in Section 2 hereof, to authorize the
delivery of the Shares to be sold by such Selling Shareholder hereunder
and otherwise to act on behalf of such Selling Shareholder in connection
with the transactions contemplated by this Agreement and the Custody
Agreement; and
(viii) The Shares represented by the certificates held in custody
for such Selling Shareholder under the Custody Agreement are subject to
the interests of the Underwriters hereunder; the arrangements made by
such Selling Shareholder for such custody, and the appointment by such
Selling Shareholder of the Attorneys-in-Fact by the Power of Attorney,
are to that extent irrevocable; the obligations of the Selling
Shareholders hereunder shall not be terminated by operation of law,
whether by the death or incapacity of any individual Selling Shareholder
or, in the case of an estate or
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trust, by the death or incapacity of any executor or trustee or the
termination of such estate or trust, or in the case of a partnership or
corporation, by the dissolution of such partnership or corporation, or
by the occurrence of any other event; if any individual Selling
Shareholder or any such executor or trustee should die or become
incapacitated, or if any such estate or trust should be terminated, or
if any such partnership or corporation should be dissolved, or if any
other such event should occur, before the delivery of the Shares
hereunder, certificates representing the Shares shall be delivered by or
on behalf of the Selling Shareholders in accordance with the terms and
conditions of this Agreement and of the Custody Agreements; and actions
taken by the Attorneys-in-Fact pursuant to the Powers of Attorney shall
be as valid as if such death, incapacity, termination, dissolution or
other event had not occurred, regardless of whether or not the
Custodian, the Attorneys-in-Fact, or any of them, shall have received
notice of such death, incapacity, termination, dissolution or other
event.
2. Subject to the terms and conditions herein set forth, (a) the Company
agrees to sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at a purchase price per
Share of $......................, the number of Firm Shares set forth opposite
the name of each Underwriter on Schedule I hereto and (b) in the event and to
the extent that the Underwriters shall exercise the election to purchase
Optional Shares as provided below, the Company and each of the Selling
Shareholders agree, severally and not jointly to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company and each of the Selling Shareholders, at the purchase
price per Share set forth in clause (a) of this Section 2, that portion of the
number of Optional Shares as to which such election shall have been exercised
(to be adjusted by you so as to eliminate fractional shares) determined by
multiplying such number of Optional Shares by a fraction the numerator of which
is the maximum number of Optional Shares which such Underwriter is entitled to
purchase as set forth opposite the name of such Underwriter in Schedule I hereto
and the denominator of which is the maximum number of Optional Shares that all
of the Underwriters are entitled to purchase hereunder.
The Company and the Selling Shareholders, as and to the extent indicated
in Schedule II hereto, hereby grant, severally and not jointly, to the
Underwriters the right to purchase at their election up to .......... Optional
Shares, at the purchase price per Share set forth in the paragraph above, for
the sole purpose of covering sales of shares in excess of the number of Firm
Shares. Any such election to purchase Optional Shares shall be made initially
with respect to the Optional Shares to be sold by the Selling Shareholders, in
proportion to the maximum number of Optional Shares to be sold by each Selling
Shareholder as set forth in Schedule II hereto, and then with respect to the
Company up to the maximum number of Optional Shares to be sold by the Company as
set forth on Schedule II hereto. Any such election to purchase Optional Shares
may be exercised only by written notice from you to the Company and the
Attorneys-in-Fact given within a period of 30 calendar days after the date of
this Agreement and setting forth the aggregate number of Optional Shares to be
purchased and the date on which such Optional Shares are to be delivered, as
determined by you but in no event earlier than the First Time of Delivery (as
defined in Section 5 hereof) or, unless you and the Company or the
Attorneys-in-Fact otherwise agree in writing, earlier than two or later than ten
business days after the date of such notice.
As compensation to the Underwriters for their commitments hereunder, at
each Time of Delivery (as defined in Section 5 hereof) the Company or the
applicable Selling Shareholder will pay to Xxxxxxx, Xxxxx & Co., for the
accounts of the several Underwriters, a commission per Share sold to the
Underwriters by the Company or the Selling Shareholder, as the case may be,
equal to $........................
10
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectuses.
4. (a) The Company hereby confirms its engagement of the services of the
Independent Underwriter as, and the Independent Underwriter hereby confirms its
agreement with the Company to render services as, a "qualified independent
underwriter" within the meaning of Rule 2720(b)(15) with respect to the offering
and sale of the Shares.
(b) The Independent Underwriter hereby represents and warrants to, and
agrees with, the Company and the Underwriters that with respect to the offering
and sale of the Shares as described in the U.S. Prospectus:
(i) The Independent Underwriter constitutes a "qualified
independent underwriter" within the meaning of Rule 2720(b)(15);
(ii) Subject to the provisions of Section 8 hereof, the Independent
Underwriter will furnish to the Underwriters at the First Time of
Delivery a letter, dated such Time of Delivery, in form and substance
satisfactory to the Underwriters, to the effect of clause (i) above.
(c) As compensation for the services of the Independent Underwriter
hereunder, the Company agrees to pay the Independent Underwriter $10,000 at the
First Time of Delivery. In addition, the Company agrees promptly to reimburse
the Independent Underwriter for all out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred in its capacity as the Independent
Underwriter in connection with this Agreement and the services to be rendered
hereunder.
5. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Xxxxxxx, Sachs & Co. may request upon at least forty-eight hours' prior
notice to the Company and, if applicable, the Custodian, shall be delivered by
or on behalf of the Company and the Selling Shareholders to Xxxxxxx, Xxxxx &
Co., through the facilities of The Depository Trust Company ("DTC") for the
account of such Underwriter, against payment by or on behalf of such Underwriter
of the purchase price therefor by wire transfer of Federal (same-day) funds to
the account specified by the Company to Xxxxxxx, Sachs & Co. at least
forty-eight hours in advance. The Company and the Selling Shareholders will
cause the certificates representing the Shares to be made available for checking
and packaging at least twenty-four hours prior to the Time of Delivery (as
defined below) with respect thereto at the office of DTC or its designated
custodian (the "Designated Office"). The time and date of such delivery and
payment shall be, with respect to the Firm Shares, 9:30 a.m., New York City
time, on ............., 2002 or such other time and date as Xxxxxxx, Xxxxx & Co.
and the Company may agree upon in writing, and, with respect to the Optional
Shares, 9:30 a.m., New York City time, on the date specified by Xxxxxxx, Sachs &
Co. in the written notice given by Xxxxxxx, Xxxxx & Co. of the Underwriters'
election to purchase such Optional Shares, or such other time and date as
Xxxxxxx, Sachs & Co. and the Company or Xxxxxxx Xxxxx & Co. and the Selling
Shareholders, as the case may be, may agree upon in writing. Such time and date
for delivery of the Firm Shares is herein called the "First Time of Delivery",
such time and date for delivery of the Optional Shares, if not the First Time of
Delivery, is herein called the "Second Time of Delivery", and each such time and
date for delivery is herein called a "Time of Delivery".
At each Time of Delivery, the Company and the Selling Shareholders will
pay, or cause to be paid, the commission payable at such Time of Delivery to the
Underwriters under Section
11
2 hereof by wire transfer of Federal (same-day) funds to the account specified
by Xxxxxxx, Sachs & Co.
(b) The documents to be delivered each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 8 hereof, including the cross-receipt
for the Shares and any additional documents requested by the Underwriters
pursuant to Section 8(q) hereof, will be delivered at the offices of Xxxxxxx
Coie LLP, 0000 X.X. Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxx 00000 (the
"Closing Location"), and the Shares will be delivered as specified in Section
(a) above, all at such Time of Delivery. A meeting will be held at the Closing
Location at .......p.m., New York City time, on the New York Business Day next
preceding such Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For the purposes of this Section 5, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
6. (a) The Company agrees with each of the Underwriters:
(i) To prepare the U.S. Prospectus and supplemented Canadian
Prospectus in forms approved by you and to file such U.S.
Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following
the execution and delivery of this Agreement, or, if applicable,
such earlier time as may be required by Rule 430A(a)(3) under the
Act, and to file such supplemented Canadian Prospectus (containing
previously omitted pricing information) with each of the Canadian
Securities Regulatory Authorities not later than such Authorities'
close of business on the second business day following the
execution and delivery of this Agreement; to make no further
amendment or any supplement to the Registration Statement, U.S.
Prospectus or Canadian Prospectus which shall be disapproved by you
promptly after reasonable notice thereof; to advise you, promptly
after it receives notice thereof, of the time when any amendment to
the Registration Statement has been filed or becomes effective or
any supplement to the U.S. Prospectus or Canadian Prospectus or any
amended U.S. Prospectus or Canadian Prospectus has been filed and
to furnish you copies thereof; to file promptly all reports
required to be filed by the Company with the Commission pursuant to
Section 13(a), 13(c) or 15(d) of the Exchange Act or with the
Canadian Securities Regulatory Authorities pursuant to the Canadian
Securities Laws, as applicable, subsequent to the date of the
Prospectuses and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Shares; to
advise you, promptly after it receives notice thereof, of the
issuance by the Commission or any of the Canadian Securities
Regulatory Authorities of any stop order or of any order preventing
or suspending the use of any Preliminary Prospectus or prospectus,
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
Commission or any of the Canadian Securities Regulatory Authorities
for the amending or supplementing of the Registration Statement,
U.S. Prospectus or Canadian Prospectus, as applicable, 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
Preliminary Prospectus or prospectus or suspending any such
qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
12
(ii) Promptly from time to time to take such action as you
may reasonably request to qualify the Shares for offering and sale
under the securities laws of such jurisdictions (other than the
Province of Quebec) as you may request and to comply with such laws
so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the
distribution of the Shares, provided that in connection therewith
the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in
any jurisdiction;
(iii) Prior to 12:00 P.M., New York City time, on the New
York Business Day next succeeding the date of this Agreement and
from time to time, to furnish the Underwriters with written and
electronic copies of the U.S. Prospectus in New York City and,
prior to 10:00 A.M., New York City time, on the second New York
Business Day succeeding the date of this Agreement and from time to
time, to furnish the Underwriters with written and electronic
copies of the Canadian Prospectus in Toronto, each in such
quantities as you may reasonably request, and, if the delivery of a
prospectus is required at any time prior to the expiration of nine
months after the time of issue of the Prospectuses in connection
with the offering or sale of the Shares and if at such time any
events shall have occurred as a result of which the Prospectuses as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made when such Prospectuses are delivered,
not misleading, or, if for any other reason it shall be necessary
during such period to amend or supplement the U.S. Prospectus or
the Canadian Prospectus in order to comply with the Act or the
Canadian Securities Laws, to notify you and upon your request to
prepare and furnish without charge to each Underwriter and to any
dealer in securities as many written and electronic copies as you
may from time to time reasonably request of an amended Prospectus
or a supplement to a Prospectus which will correct such statement
or omission or effect such compliance, and in case any Underwriter
is required to deliver a prospectus in connection with sales of any
of the Shares at any time nine months or more after the time of
issue of the Prospectuses, upon your request but at the expense of
such Underwriter, to prepare and deliver to such Underwriter as
many written and electronic copies as you may request of an amended
or supplemented U.S. Prospectus complying with Section 10(a)(3) of
the Act or an amended or supplemented Canadian Prospectus complying
with the Canadian Securities Laws;
(iv) To make generally available to its securityholders 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 Act), an earning statement of the
Company and its subsidiaries (which need not be audited) complying
with Section 11(a) of the Act and the rules and regulations of the
Commission thereunder (including, at the option of the Company,
Rule 158);
(v) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectuses, (i) not to offer, sell, contract to sell or otherwise
dispose of, except as provided hereunder, any securities of the
Company that are substantially similar to the Shares, including but
not limited to any securities that are convertible into or
exchangeable for, or that represent the right to receive, Stock or
any such substantially similar securities
13
(other than pursuant to employee stock option plans existing on, or
upon the conversion or exchange of convertible or exchangeable
securities outstanding as of, the date of this Agreement or, up to
an aggregate of [insert number equal to 20% of Company's
outstanding common shares after this offering] common shares issued
as direct consideration for acquisitions of companies or businesses
by the Company or its subsidiaries, provided, the recipients of
such common shares agree to be bound by the restrictions in this
Section 6(a)(v)), without your prior written consent and (ii) with
respect to any option to purchase Stock that is not exercisable by
its terms during such 180 day period, not to take any action that
would permit any such option to become exercisable during such 180
day period, without your prior written consent;
(vi) To furnish to its shareholders as soon as practicable
after the end of each fiscal year an annual report (including a
balance sheet and statements of income, shareholders' equity and
cash flows of the Company and its consolidated subsidiaries
certified by independent public accountants and prepared in
conformity with generally accepted accounting principles in the
United States ("GAAP") and, as soon as practicable after the end of
each of the first three quarters of each fiscal year prepared in
accordance with GAAP (beginning with the fiscal quarter ending
after the effective date of the Registration Statement), to make
available to its shareholders consolidated summary financial
information of the Company and its subsidiaries for such quarter in
reasonable detail;
(vii) During a period of five years from the effective date
of the Registration Statement, to furnish to you copies of all
reports or other communications (financial or other) furnished to
shareholders, and to deliver to you (i) as soon as they are
available, copies of any reports and financial statements furnished
to or filed with the Commission or any securities exchange on which
any class of securities of the Company is listed; and (ii) such
additional information concerning the business and financial
condition of the Company as you may from time to time reasonably
request (such financial statements to be on a consolidated basis to
the extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its shareholders generally or
to the Commission); provided, however, that the Company shall not
be required to deliver any information that would cause the Company
or any affiliate thereof, if subject to such regulation, to make a
filing under Regulation FD as promulgated under the Exchange Act;
(viii) To use the net proceeds received by it from the sale
of the Shares pursuant to this Agreement in the manner specified in
the Prospectuses under the caption "Use of Proceeds";
(ix) Not to (and to cause its subsidiaries not to) take,
directly or indirectly, any action which is designed to or which
constitutes or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any
security of the Company or facilitate the sale or resale or the
Shares;
(x) To use its best efforts to list, subject to notice of
issuance, the Shares on the New York Stock Exchange (the
"Exchange");
(xi) To file with the Commission such information as may be
required by Rule 463 under the Act;
(xii) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with
14
Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of
this Agreement, and the Company shall at the time of filing either
pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act; and
(xiii) Upon request of any Underwriter, to furnish, or cause
to be furnished, to such Underwriter an electronic version of the
Company's trademarks, servicemarks and corporate logo for use on
the website, if any, operated by such Underwriter for the purpose
of facilitating the on-line offering of the Shares (the "License");
provided, however, that the License shall be used solely for the
purpose described above, is granted without any fee and may not be
assigned or transferred.
(b) Each of the Selling Shareholders agrees with each of the
Underwriters:
(i) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectuses, not to offer, sell, contract to sell or otherwise
dispose of, except as provided hereunder, any securities of the
Company that are substantially similar to the Shares, including but
not limited to any securities that are convertible into or
exchangeable for, or that represent the right to receive, Stock or
any such substantially similar securities (other than pursuant to
employee stock option plans existing on, or upon the conversion or
exchange of convertible or exchangeable securities outstanding as
of, the date of this Agreement), without your prior written
consent; and
(ii) Not to (and to cause its affiliates not to) take,
directly or indirectly, any action which is designed to or which
constitutes or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any
security of the Company or facilitate the sale or resale or the
Shares.
7. The Company and each of the Selling Shareholders covenant and agree
with one another and with the several Underwriters that the Company will pay or
cause to be paid the following: (i) the fees, disbursements and expenses of the
Company's counsel and accountants in connection with the registration of the
Shares under the Act, the qualification of the Shares for distribution by
prospectus under Canadian Securities Laws and all other expenses in connection
with the preparation, printing and filing of the Registration Statement, any
Preliminary Prospectus and the Prospectuses and amendments and supplements
thereto and the mailing and delivering of copies thereof to the Underwriters and
dealers; (ii) the cost of printing or producing any Agreement among
Underwriters, this Agreement, the Blue Sky Memorandum, closing documents
(including compilations thereof) and any other documents in connection with the
offering, purchase, sale and delivery of the Shares; (iii) all expenses in
connection with the qualification of the Shares for offering and sale under U.S.
state and Canadian provincial securities laws as provided in Section 6(a)(ii)
hereof, including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky surveys; (iv) all fees and expenses in connection with listing the
Shares on the New York Stock Exchange; (v) the filing fees incident to, and the
reasonable fees and disbursements of counsel for the Underwriters in connection
with, securing any required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Shares; (vi) the fees and expenses
of the Authorized Agent (as defined in Section 15 hereof); (vii) the cost of
preparing share certificates; (viii) the cost and charges of any transfer agent
or registrar; (ix) all other costs and expenses incident to the performance of
its obligations hereunder which are not otherwise specifically provided for in
this Section; (x) the fees and expenses of a single counsel for all the Selling
Shareholders; (xi) the fees and
15
expenses of the Attorneys-in-Fact and the Custodian; and (xii) all taxes arising
as a result of the sale and delivery of the Shares by the Company to or for the
account of the Underwriters including, any Canadian withholding, transfer or
other tax (but excluding any Canadian income tax on the income of any
Underwriter whose net income is otherwise subject to tax by Canada) asserted
against an Underwriter by reason of the purchase and sale of a Share pursuant to
this Agreement. Each of the Selling Shareholders covenants and agrees with one
another and with the several Underwriters that such Selling Shareholder will pay
or cause to be paid all costs, expenses and taxes incident to the performance of
such Selling Shareholder's obligations hereunder, including the sale and
delivery of the Shares to be sold by such Selling Shareholders to the
Underwriters hereunder, which are not otherwise specifically provided for in
this Section; provided, however, that Xxxxxxx, Xxxxx & Co. agrees to pay New
York State stock transfer tax, and each Selling Shareholder agrees to reimburse
Xxxxxxx, Sachs & Co. for associated carrying costs if such tax payment is not
rebated on the day of payment and for any portion of such tax payment not
rebated. It is understood, however, that, except as provided in this Section,
and Sections 9 and 12 hereof, the Underwriters will pay all of their own costs
and expenses, including the fees of their counsel, stock transfer taxes (other
than any imposed by Canada or any political subdivision or taxing authority
thereof or therein) on resale of any of the Shares by them, and any advertising
expenses connected with any offers they may make.
8. The respective obligations of the Underwriters and the Independent
Underwriter hereunder, as to the Shares to be delivered at each Time of
Delivery, shall be subject, in their discretion, to the condition that all
representations and warranties and other statements of the Company and of the
Selling Shareholders herein are, at and as of such Time of Delivery, true and
correct, the condition that the Company and the Selling Shareholders shall have
performed all of its and their obligations hereunder theretofore to be
performed, the condition (in the case of the Underwriters) that the Independent
Underwriter shall have furnished to the Underwriters the letter referred to in
clause (ii) of Section 4(b) hereof and the following additional conditions:
(a) The U.S. Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 6(a) hereof; if the Company has elected to rely upon Rule
462(b), the Rule 462(b) Registration Statement shall have become
effective by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement; the supplemented Canadian Prospectus shall have been filed
with the Canadian Securities Regulatory Authorities in accordance with
Section 6(a) hereof; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by
the Commission; no order having the effect of ceasing or suspending the
distribution of the Shares shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by any Canadian
Securities Regulatory Authority; and all requests for additional
information on the part of the Commission or any of the Canadian
Securities Regulatory Authorities shall have been complied with to your
reasonable satisfaction;
(b) Xxxxxxxx & Xxxxxxxx, United States counsel for the
Underwriters, shall have furnished to you such written opinion or
opinions (a draft of each such opinion is attached as Annex II(a)
hereto), dated such Time of Delivery, with respect to such matters as
you may reasonably request, and such counsel shall have received such
papers and information as they may reasonably request to enable them to
pass upon such matters;
16
(c) Xxxxxxx Coie LLP, United States counsel for the Company, shall
have furnished to you their written opinion (a draft of such opinion is
attached as Annex II(b) hereto), dated such Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) Each Material Subsidiary of the Company incorporated
under the laws of the States of Delaware or Washington
(collectively, the "U.S. Material Subsidiaries") has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation. The
U.S. Material Subsidiaries have been duly qualified to do business
in the jurisdictions so indicated on a Schedule attached to such
opinion;
(ii) All of the issued and outstanding shares of capital
stock of the U.S. Material Subsidiaries have been duly authorized,
validly issued, are fully paid and non-assessable, and are owned,
directly or indirectly, by the Company, and, to such counsel's
knowledge, free and clear of all liens, encumbrances or claims,
other than liens, encumbrances or claims created under loan
documentation relating to indebtedness of the Company described in
the Prospectuses (such counsel being entitled to rely in respect of
matters of fact upon certificates of officers of the Company or its
subsidiaries, provided that such counsel shall state that it is not
aware of any facts that would cause it to believe that the
foregoing opinion is not accurate);
(iii) This Agreement has been duly executed and delivered by
the Company;
(iv) The submission by the Company, pursuant to Section 15 of
this Agreement, to the exclusive jurisdiction of any state or
federal court located in the Borough of Manhattan, The City of New
York, New York (each a "New York Court") in any action arising out
of or relating to this Agreement or the transactions contemplated
hereby is a valid and irrevocable submission to the jurisdiction of
such courts. The Company has validly and irrevocably waived any
objection to the venue of a proceeding in any such court, and has
validly and irrevocably appointed the Authorized Agent (as defined
herein) as its authorized agent for the purpose described in
Section 15 hereof; and service of process effected on such agent in
the manner set forth in Section 15 hereof will be effective to
confer valid personal jurisdiction over the Company;
(v) To such counsel's knowledge and other than as set forth
in the Prospectuses, 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 of the Company or any of its subsidiaries
is the subject which, if determined adversely to the Company or any
of its subsidiaries, would individually or in the aggregate have a
material adverse effect on the current or future consolidated
financial position, shareholders' equity or results of operations
of the Company and its subsidiaries; and, to such counsel's
knowledge, no such proceedings are threatened or contemplated by
any Governmental Agency or threatened by others that are not set
forth in the Prospectuses;
(vi) The issue and sale of the Shares being delivered at such
Time of Delivery to be sold by the Company and the compliance by
the Company with all of the provisions of this Agreement and the
consummation of the transactions herein contemplated 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,
17
deed of trust, loan agreement or other agreement or instrument
known to such counsel 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, nor will such
action result in any violation of (A) the federal laws of the
United States, the laws of the States of New York and Washington or
the General Corporate Law of the State of Delaware, in each case
which, in such counsel's experience, are normally applicable to
transactions of the type contemplated by this Agreement or (B) any
order or decree of any United States Federal, New York, Washington
or Delaware court or Governmental Agency known to such counsel and
that is binding upon or effective against the Company or any of its
subsidiaries or any of their properties;
(vii) No Governmental Authorization of the United States or
the State of New York is required for the issue and sale of the
Shares or the consummation by the Company of the transactions
contemplated by this Agreement, except the registration under the
Act of the Shares and under the Exchange Act of the Stock (which
registrations have been completed), and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters;
(viii) The statements set forth in the Prospectuses under the
caption "United States Federal Income Tax Considerations", insofar
as such statements constitute summaries of the legal matters
referred to therein, fairly and accurately present in all material
respects the information called for with respect to such legal
matters and fairly and accurately summarize the matters referred to
therein in all material respects;
(ix) The Company is not an "investment company", as such term
is defined in the Investment Company Act;
(x) Such counsel does not know of any amendment to the
Registration Statement required to be filed or of any contracts or
other documents of a character required to be filed as exhibits to
the Registration Statement or required to be described in the
Registration Statement or the U.S. Prospectus which are not filed
or described as required; and
(xi) The Registration Statement and the U.S. Prospectus as of
their respective effective or issue dates and any further
amendments and supplements thereto made by the Company prior to
such Time of Delivery (other than the financial statements and
related schedules and other financial data included in or omitted
therefrom, as to which such counsel need express no opinion) appear
on their face to have complied, and as of the date of this
Agreement, to comply as to form in all material respects with the
requirements of the Act and the rules and regulations thereunder.
In addition to the matters set forth above, counsel rendering
the foregoing opinion shall also include a statement that, based on
the information reviewed by such counsel in the course of its
performance of services in connection with the registration of the
Shares, including such counsel's participation in conferences with
officers and other representatives of the Company, representatives
of the Chartered Accountants for the Company, representatives of
the Underwriters and counsel for the Underwriters at which the
contents of the Registration Statement and the Prospectuses were
discussed, but without independent verification of the
18
accuracy, completeness or fairness of the statements contained in
the Registration Statement, the U.S. Prospectus or any amendments
or supplements thereto, except for those statements referred to in
the opinion in subsection (viii) of this Section 8(c), and without
such counsel assuming any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectuses or any amendments or
supplements thereto, except for those statements referred to in the
opinion in subsection (viii) of this Section 8(c), they have no
reason to believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by the Company
prior to such Time of Delivery (other than the financial statements
and related schedules and other financial data included in or
omitted therefrom, as to which such counsel need express no
opinion) contained an 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 or that, as
of its date, the U.S. Prospectus or any further amendment or
supplement thereto made by the Company prior to such Time of
Delivery (other than the financial statements and related schedules
and other financial data included in or omitted therefrom, as to
which such counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or that,
as of such Time of Delivery, either the Registration Statement, as
amended prior to such Time of Delivery, or the U.S. Prospectus or
any further amendment or supplement thereto made by the Company
prior to such Time of Delivery (other than the financial statements
and related schedules and other financial data included in or
omitted therefrom, as to which such counsel need express no
opinion) contains an untrue statement of a material fact or omits
to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the federal laws of the
United States, the laws of the States of New York and Washington and the General
Corporate Law of the State of Delaware;
(d) Xxxxxxx XxXxxxxx Stirling Scales, Canadian counsel for the
Company, shall have furnished to you their written opinion (a draft of
such opinion is attached as Annex II(c) hereto), dated such Time of
Delivery, in form and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Nova
Scotia, with corporate power and authority to own its properties
and conduct its business as described in the Prospectuses;
(ii) The Company has an authorized capitalization as set
forth in the Prospectuses, and all of the issued shares of the
Company (including the Shares being delivered at such Time of
Delivery) have been duly and validly authorized and issued and are
fully paid and non-assessable; the holders of outstanding shares of
the Company are not entitled to preemptive or other rights to
acquire the Shares provided by the provisions of the memorandum or
articles of association of the Company, the laws of the province of
Nova Scotia, the federal laws of Canada applicable in such province
or, to the best of such counsel's knowledge, any documents,
instruments or agreements which have not been complied with; other
than pursuant to applicable securities laws, there are no
restrictions on
19
subsequent transfer of the Shares set forth in the provisions of
the memorandum or articles of association of the Company, the laws
of the province of Nova Scotia, the federal laws of Canada
applicable in such province or, to the best of such counsel's
knowledge, any documents, instruments or agreements; and the Shares
conform in all material respects to the description of the Stock
contained in the Prospectuses;
(iii) All Governmental Authorizations of and with any
Governmental Agency in Nova Scotia required for the Shares to be
duly and validly authorized and issued have been obtained or made
and are in full force and effect;
(iv) Each of the Company and each Material Subsidiary of the
Company incorporated under the laws of Canada or any province
thereof (collectively, the "Canadian Material Subsidiaries") has
been duly qualified as a foreign corporation for the transaction of
business, and is in good standing, under the laws of each
jurisdiction in Canada other than its jurisdiction of incorporation
in which it owns or leases properties or conducts any business so
as to require such qualification, or is subject to no material
liability or disability by reason of failure to be so qualified in
any such jurisdiction (such counsel being entitled to rely in
respect of the opinion in this clause upon opinions of local
counsel and in respect of matters of fact upon certificates of
officers of the Company, provided that such counsel shall state
that they believe that both you and they are justified in relying
upon such opinions and certificates);
(v) Each Canadian Material Subsidiary has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation; and
all of the issued shares of each such Canadian Material Subsidiary
have been duly and validly authorized and issued, are fully paid
and non-assessable; the Company is the sole registered owner of
such shares, free and clear of all liens, encumbrances, equities or
claims, other than liens, encumbrances, equities or claims created
under loan documentation relating to indebtedness of the Company
described in the Prospectuses (such counsel being entitled to rely
in respect of the opinion in this clause upon opinions of local
counsel and in respect of matters of fact upon certificates of
officers of the Company or its subsidiaries, provided that such
counsel shall state that they believe that both you and they are
justified in relying upon such opinions and certificates);
(vi) To the best of such counsel's knowledge, the Company and
each of its Canadian Material Subsidiaries have all licenses and
concessions of and from all Governmental Agencies that are
necessary to own or lease their properties and conduct their
businesses as described in the Prospectuses; and, to the best of
such counsel's knowledge, the Company and each of its Canadian
Material Subsidiaries have all franchises, permits, authorizations,
approvals and orders and other licenses and concessions of and from
all Governmental Agencies that are necessary to own or lease their
other properties and conduct their businesses as described in the
Prospectuses except for such licenses, franchises, permits,
authorizations, approvals and orders the failure to obtain which
will not have a material adverse effect on the financial condition
or results of operations of the Company and its Canadian Material
Subsidiaries;
(vii) To such counsel's knowledge and other than as set forth
in the Prospectuses, there are no legal or governmental proceedings
pending to which
20
the Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a
material adverse effect on the current or future consolidated
financial position, shareholders' equity or results of operations
of the Company and its subsidiaries; and, to such counsel's
knowledge, except as disclosed in the Prospectuses no such
proceedings are threatened or contemplated by any Governmental
Agency or threatened by others;
(viii) This Agreement has been duly authorized, executed and
delivered by the Company;
(ix) The issue and sale of the Shares being delivered at such
Time of Delivery to be sold by the Company and compliance by the
Company with all of the provisions of this Agreement and the
consummation of the transactions herein and therein contemplated
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 known to such counsel 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, nor
will such action result in any violation of (A) the provisions of
the memorandum or articles of association of the Company or the
federal laws of Canada or the laws of the Provinces of Nova Scotia,
in each case which, in such counsel's experience, are normally
applicable to transactions of the type contemplated by this
Agreement or (B) any order or decree of any Canadian federal or
Nova Scotia court or Governmental Agency known to such counsel and
that is binding upon or effective against the Company or any of its
subsidiaries or any of their properties;
(x) The form of share certificate for the Shares has been
duly approved by the Company and complies with the provisions of
the memorandum and articles of association of the Company and the
laws of Nova Scotia;
(xi) No withholding tax imposed under the federal laws of
Canada or the laws of the Province of Nova Scotia will be payable
by the Underwriters in respect of the payment by the Company of the
commissions contemplated by this Agreement to an Underwriter,
provided the Underwriter deals at arm's length with the Company (as
such term is understood for purposes of the Income Tax Act
(Canada), and that such commissions are payable in respect of
services rendered by the Underwriter wholly outside of Canada that
are performed in the ordinary course of business carried on by the
Underwriter that includes the performance of such services for a
fee and any such amount is reasonable in the circumstances.
(xii) No goods and services tax imposed under the federal
laws of Canada will be payable by the Company in respect of the
payment of commissions as contemplated by this Agreement to an
Underwriter.
(xiii) No stamp duty, documentary taxes or similar taxes are
payable by the Company under the federal laws of Canada or the laws
of the Province of Nova Scotia in connection with the issuance,
sale and delivery of the Shares pursuant to this Agreement by the
Company or a Selling Shareholder, as the case may be.
(xiv) Insofar as matters of Nova Scotia law are concerned,
the Registration Statement and the filing of the Registration
Statement with the
21
Commission have been duly authorized by and on behalf of the
Company; and the Registration Statement has been duly executed
pursuant to such authorization by and on behalf of the Company;
(xv) The Company's agreement to the choice of law provisions
set forth in Section 15 hereof will be recognized by the courts of
Nova Scotia; the Company can xxx and be sued in its own name under
the laws of Nova Scotia; the irrevocable submission of the Company
to the exclusive jurisdiction of a New York Court, the waiver by
the Company of any objection to the venue of a proceeding of a New
York Court and the agreement of the Company that this Agreement
shall be governed by and construed in accordance with the laws of
the State of New York are legal, valid and binding; service of
process effected in the manner set forth in Section 15 hereof will
be effective, insofar as the law of Nova Scotia is concerned, to
confer valid personal jurisdiction over the Company; and judgment
obtained in a New York Court arising out of or in relation to the
obligations of the Company under this Agreement would be
enforceable against the Company in the courts of Nova Scotia.
(xvi) The indemnification and contribution provisions set
forth in Section 9 hereof do not contravene the public policy, as
such term is understood under the laws of the Province of Nova
Scotia and the federal laws of Canada applicable therein, or laws
of Nova Scotia;
(xvii) All dividends and other distributions declared and
payable on the shares of the Company to be paid in Canadian dollars
may under the current laws and regulations of Canada be converted
into foreign currency that may be freely transferred out of Canada,
without the necessity of obtaining any Governmental Authorization
in Canada;
(xviii) To the best of such counsel's knowledge, neither the
Company nor any of its Canadian Material Subsidiaries is in
violation of its memorandum or articles of association, certificate
or articles of incorporation, by-laws, or other organizational
documents or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in
any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which it is a party or by which it
or any of its properties may be bound;
(xix) Trust Company has been duly appointed the transfer
agent and registrar for the Shares at its principal offices in the
cities of [IDENTIFY PLACES OF APPOINTMENT];
(xx) All documents have been filed, all proceedings have been
taken and all legal requirements have been fulfilled by the Company
to qualify the Shares for distribution and sale to the public in
each of the Provinces of Canada, other than the Province of Quebec
through investment dealers or brokers registered under the
applicable laws of that province who have complied with the
relevant provisions of such applicable laws;
(xxi) The statements set forth in the Prospectuses under the
caption "Description of Share Capital", insofar as they purport to
constitute a summary of the terms of the Shares, under the caption
"Underwriting", insofar as they purport to describe the provisions
of the laws and documents referred to therein, and under the
caption "Income Tax Considerations -- Canadian Federal Income Tax",
insofar as they purport to describe the principal Canadian federal
income tax laws
22
under the Income Tax Act (Canada) and the consequences under such
laws to the persons described therein, are accurate, complete and
fair in all material respects; and
(xxii) The Shares are qualified investments under the
statutes specified under "Canadian Eligibility for Investment
Considerations" in the Prospectuses.
In addition to the matters set forth above, counsel rendering
the foregoing opinion shall also include a statement that, based on
the information reviewed by such counsel in the course of its
performance of services in connection with the registration of the
Shares, including such counsel's participation in conferences with
officers and other representatives of the Company, representatives
of the Chartered Accountants for the Company, representatives of
the Underwriters and counsel for the Underwriters at which the
contents of the Registration Statement and the Prospectuses were
discussed, but without independent verification of the accuracy,
completeness or fairness of the statements contained in the
Registration Statement, the Prospectuses or any amendments or
supplements thereto, except for those statements referred to in the
opinion in subsections (xxii) of this Section 8(d), and without
such counsel assuming any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectuses or any amendments or
supplements thereto, except for those statements referred to in the
opinion in subsections (xxii) of this Section 8(d), they have no
reason to believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by the Company
prior to such Time of Delivery (other than the financial statements
and related schedules and other financial data included in or
omitted therefrom, as to which such counsel need express no
opinion) contained an 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 or that, as
of its date, the Prospectuses or any further amendment or
supplement thereto made by the Company prior to such Time of
Delivery (other than the financial statements and related schedules
and other financial data included in or omitted therefrom, as to
which such counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or that,
as of such Time of Delivery, either the Registration Statement, as
amended prior to such Time of Delivery, or the Prospectuses or any
further amendment or supplement thereto made by the Company prior
to such Time of Delivery (other than the financial statements and
related schedules and other financial data included in or omitted
therefrom, as to which such counsel need express no opinion)
contains an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading;
Such counsel shall be entitled to rely, where applicable,
upon opinions of local counsel and, in respect of matters of fact,
upon certificates of officers of the Company provided that such
counsel shall state that they believe both you and they are
justified in relying upon such opinions and certificates.
(e) Osler, Xxxxxx & Harcourt LLP, Canadian counsel for the Underwriters,
shall have furnished to you such written opinion or opinions (a draft of such
opinion is attached as Annex II(d) hereto), dated such Time of Delivery, with
respect to the matters covered in paragraphs (i) through (xxii) of subsection
(d) of this Section 8 as well as such other related matters as you
23
may reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters, provided that such counsel shall be entitled to rely on the opinions of
local counsel as to matters governed by the laws of jurisdictions other than the
Provinces of Ontario, Alberta and Quebec and the federal laws of Canada
applicable therein, and as to matters of fact on certificates of officers of the
Company, and provided further that such counsel shall be entitled to rely upon
the opinion of Canadian counsel for the Company with respect to the matters
covered in paragraphs (i) through (xxii) of subsection (d) of this Section 8
other than paragraphs (xx) and (xxii) thereof;
(g) The respective counsel for each of the Selling Shareholders, as
indicated in Schedule II hereto, each shall have furnished to you their written
opinion (a draft of such opinion is attached as Annex II(e) hereto) with respect
to each of the Selling Shareholders for whom they are acting as counsel, dated
such Time of Delivery, in form and substance satisfactory to you, to the effect
that:
(i) A Power of Attorney and a Custody Agreement have been
duly executed and delivered by such Selling Shareholder and
constitute valid and binding agreements of such Selling Shareholder
in accordance with their terms;
(ii) This Agreement and the has been duly executed and
delivered by or on behalf of such Selling Shareholder; and the sale
of the Shares to be sold by such Selling Shareholder hereunder and
the compliance by such Selling Shareholder with all of the
provisions of this Agreement, the Power of Attorney and the Custody
Agreement and the consummation of the transactions herein
contemplated will not conflict with or result in a breach or
violation of any terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument set forth on a certificate from such
Selling Shareholder to such counsel which certifies all indentures,
mortgages, deeds of trust, loan agreements or other agreements or
instruments to which such Selling Shareholder is a party or by
which such Selling Shareholder is bound and that relate to such
Selling Shareholders' Shares (provided that such counsel shall
state that it is not aware of any facts that would cause it to
believe that such certificate is not accurate), or to which any of
the property or assets of such Selling Shareholder is subject, nor
will such action result in any violation of any federal laws of the
United States or the laws of the State in which such Selling
Shareholder resides, in each case which, in such counsel's
experience, are normally applicable to transactions of the type
contemplated by this Agreement and have jurisdiction over such
Selling Shareholder or the property thereof or any order, rule or
regulation known to such counsel of any court or governmental
agency or body having jurisdiction over such Selling Shareholder or
the property of such Selling Shareholder;
(iii) No Governmental Authorization of or with any
Governmental Agency in the State in which such Selling Shareholder
resides is required for the consummation of the transactions
contemplated by this Agreement in connection with the selling to
the Underwriters of the SHARES to be sold by such Selling
Shareholder hereunder, except such as have been obtained under the
Act and such as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of such
Shares by the Underwriters;
(iv) Good and valid title to such Shares, free and clear of
all liens, encumbrances, equities or claims, has been transferred
to each of the several Underwriters who have purchased such Shares
in good faith and without notice of
24
any such lien, encumbrance, equity or claim or any other adverse
claim within the meaning of the New York Uniform Commercial Code;
(v) The submission by such Selling Shareholder, pursuant to
Section 15 of this Agreement, to the exclusive jurisdiction of any
New York Court in any action arising out of or relating to this
Agreement or the transactions contemplated hereby is a valid and
irrevocable submission to the jurisdiction of such courts. Such
Selling Shareholder's agreement to the choice of law provisions set
forth in Section 15 hereof will be recognized by the courts of the
jurisdictions in which such Selling Shareholder is incorporated or
formed and is principally located; such Selling Shareholder can xxx
and be sued in its own name under the laws of the jurisdictions in
which such Selling Shareholder is incorporated or formed and is
principally located; the irrevocable submission of such Selling
Shareholder to the exclusive jurisdiction of a New York Court, the
waiver by such Selling Shareholder of any objection to the venue of
a proceeding of a New York court and the agreement of such Selling
Shareholder that this agreement of such Selling Shareholder shall
be governed by and construed in accordance with the laws of the
State of New York are legal, valid and binding; service of process
effected in the manner set forth in Section 14 hereof will be
effective, insofar as the law of the jurisdictions in which such
Selling Shareholder is incorporated or formed and is principally
located is concerned, to confer valid personal jurisdiction over
such Selling Shareholder; and judgment obtained in a New York court
arising out of or in relation to the obligations of such Selling
Shareholder under this Agreement would be enforceable against such
Selling Shareholder in the courts of the jurisdictions in which
such Selling Shareholder is incorporated or formed and is
principally located.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the federal laws of the
United States and the laws of the State of New York;
(h) Xxxxxxx Xxxxxxx, English counsel for the Company, shall have
furnished to you their written opinion (a draft of such opinion is
attached as Annex II(f) hereto), dated such Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) Each subsidiary of the Company incorporated under the
laws of England has been duly incorporated and is validly existing
as a company in good standing under the laws of England; and an
inspection of the Register of Members of each such subsidiary and
the minutes of meetings of the board of directors and shareholders
of each such subsidiary indicated that all of the issued shares of
each such subsidiary have been duly and validly authorized and
issued, are fully paid and, accordingly, no further contributions
in respect of such shares would be required from the holders
thereof by virtue of their being such holders, and the Company is
registered (directly or indirectly) as the holder of all of the
shares of such subsidiaries shown in such Register, free and clear
of all liens, encumbrances, equities or claims (such counsel being
entitled to rely in respect of matters of fact upon certificates of
officers of the Company or its subsidiaries, provided that such
counsel shall state that they believe that both you and they are
justified in relying upon such certificates);
(i) Xxxxxxx Baillie, Scottish counsel for the Company, shall have
furnished to you their written opinion (a draft of such opinion is
attached as Annex II(g) hereto), dated such Time of Delivery, in form
and substance satisfactory to you, to the effect that:
25
(i) Each subsidiary of the Company incorporated under the
laws of Scotland has been duly incorporated and is validly existing
as a company in good standing under the laws of Scotland; and an
inspection of the Register of Members of each such subsidiary and
the minutes of meetings of the board of directors and shareholders
of each such subsidiary indicated that all of the issued shares of
each such subsidiary have been duly and validly authorized and
issued, are fully paid and, accordingly, no further contributions
in respect of such shares would be required from the holders
thereof by virtue of their being such holders, and the Company is
registered as the holder of all of the shares of such subsidiaries
shown in such Register, free and clear of all liens, encumbrances,
equities or claims (such counsel being entitled to rely in respect
of matters of fact upon certificates of officers of the Company or
its subsidiaries, provided that such counsel shall state that they
believe that both you and they are justified in relying upon such
certificates);
(j) On the date of the Prospectuses at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, Ernst & Young LLP
shall have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the effect set
forth in Annex I hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex I(a) hereto and a draft of the
form of letter to be delivered on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery is
attached as Annex I(b) hereto);
(k) Neither the Company nor any of its subsidiaries shall have sustained
(i) since the date of the latest audited financial statements included 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, and (ii) since the respective dates
as of which information is given in the Prospectuses there shall not have been
any change in the share capital of the Company or any of its subsidiaries (other
than the issuance of stock options to purchase common shares pursuant to stock
option plans existing on the date of this Agreement and the issuance of common
shares upon the exercise of outstanding warrants or stock options issued prior
to the date hereof under existing stock option plans or the repurchase of common
shares by the Company pursuant to existing repurchase plans or rights exercised
in connection with the termination of employment with the Company), any net
increase in the consolidated long-term debt of the Company in excess of U.S.
$10,000,000, or any change, or any development involving a prospective change,
in or affecting the 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 Representatives so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Shares being delivered at such Time of Delivery on the terms and in the
manner contemplated in the Prospectuses;
(l) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities;
26
(m) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a suspension or material
limitation in trading in the Company's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities in New
York or Canada declared by the relevant authorities, or a material disruption in
commercial banking or securities settlement or clearance services in the United
States or Canada; (iv) a change or development involving a prospective change in
Canadian federal or provincial taxation affecting the Company, the Shares or the
transfer thereof; (v) the outbreak or escalation of hostilities involving the
United States or Canada or the declaration by the United States or Canada of a
national emergency or war; or (vi) the occurrence of any other calamity or
crisis or any adverse change in financial, political or economic conditions or
currency exchange rates or controls in the United States, Canada or elsewhere,
if the effect of any such event specified in clause (v) or (vi) in the judgment
of the Representatives makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares being delivered at such Time of
Delivery on the terms and in the manner contemplated in the Prospectuses;
(n) The Shares to be sold by the Company and the Selling Shareholders at
such Time of Delivery shall have been duly listed, subject to notice of
issuance, on the New York Stock Exchange;
(o) The Company has obtained and delivered to the Underwriters executed
copies of an agreement from each shareholder of the Company to the effect set
forth in Section 6(a)(v) hereof in form and substance satisfactory to you;
(p) The Company shall have complied with the provisions of Section
6(a)(iii) hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of this Agreement; and
(q) The Company and the Selling Shareholders shall have furnished or
caused to be furnished to you at such Time of Delivery certificates of officers
of the Company and of the Selling Shareholders, respectively, satisfactory to
you as to the accuracy of the representations and warranties of the Company and
the Selling Shareholders, respectively, herein at and as of such Time of
Delivery, as to the performance by the Company and the Selling Shareholders of
all of their respective obligations hereunder to be performed at or prior to
such Time of Delivery, and as to such other matters as you may reasonably
request, and the Company shall have furnished or caused to be furnished
certificates as to the matters set forth in subsections (a) and (i) of this
Section, and as to such other matters as you may reasonably request.
9. (a) The Company will indemnify and hold harmless each Underwriter and
the Independent Underwriter against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter or the Independent Underwriter, as
the case may be, may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectuses, or any amendment or supplement thereto, or arise
out of or are based upon 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, and will reimburse each Underwriter or the Independent
Underwriter, as the case may be, for any legal or other expenses reasonably
incurred by such Underwriter or the Independent Underwriter, as the case may be,
in connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon
27
an untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement or the
Prospectuses or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through Xxxxxxx, Xxxxx & Co. or by the Independent Underwriter expressly for use
therein.
(b) Each of the Selling Shareholders, severally and not jointly, will
indemnify and hold harmless each Underwriter and the Independent Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter or the Independent Underwriter, as the case may be, may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectuses, or any
amendment or supplement thereto, or arise out of or are based upon 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, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectuses or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by such Selling Shareholder expressly for use therein;
and will reimburse each Underwriter or the Independent Underwriter, as the case
may be, for any legal or other expenses reasonably incurred by such Underwriter
or the Independent Underwriter, as the case may be, in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that such Selling Shareholder shall not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectuses or any such amendment or supplement
in reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Xxxxxxx, Sachs & Co. or by the Independent
Underwriter expressly for use therein; and, provided further, that the liability
of a Selling Shareholder pursuant to this subsection 9(b) shall not exceed the
product of the number of Shares sold by such Selling Shareholder and the initial
public offering price of the Shares as set forth in the Prospectuses.
(c) Each Underwriter will indemnify and hold harmless the Company and
each Selling Shareholder against any losses, claims, damages or liabilities to
which the Company or such Selling Shareholder may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectuses, or any amendment or
supplement thereto, or arise out of or are based upon 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, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectuses or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through Xxxxxxx, Xxxxx & Co.
expressly for use therein; and will reimburse the Company and each Selling
Shareholder for any legal or other expenses reasonably incurred by the Company
or such Selling Shareholder in connection with investigating or defending any
such action or claim as such expenses are incurred.
28
(d) Promptly after receipt by an indemnified party under subsection (a),
(b) or (c) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against an indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (which shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party. Notwithstanding anything to the contrary, an indemnifying
party shall not be liable for the settlement of any claim or action effected
without its prior written consent, which consent shall not be unreasonably
withheld.
(e) If the indemnification provided for in this Section 9 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a),
(b) or (c) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Shareholders on the one hand and the
Underwriters and the Independent Underwriter on the other from the offering of
the Shares. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party failed
to give the notice required under subsection (d) above, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company and the Selling Shareholders on the
one hand and the Underwriters and the Independent Underwriter on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Selling Shareholders on the one hand and the Underwriters and
the Independent Underwriter on the other 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
Selling Shareholders 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 U.S.
Prospectus and, as applicable, to the fee payable to the Independent Underwriter
pursuant to the first sentence of Section 4(c) hereof. 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
29
alleged omission to state a material fact relates to information supplied by the
Company or the Selling Shareholders on the one hand or either the Underwriters
or the Independent Underwriter on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, each of the Selling Shareholders, the
Underwriters and the Independent Underwriter agree that it would not be just and
equitable if contributions pursuant to this subsection (e) were determined by
pro rata allocation (even if the Underwriters and the Independent Underwriter
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this subsection (e). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (e) shall be deemed to
include 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 subsection (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, and the Independent Underwriter shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Shares underwritten by the Underwriters and distributed to the public were
offered to the public, exceeds the amount of any damages which such Underwriter
or the Independent Underwriter, as the case may be, have otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (e) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(f) The obligations of the Company and the Selling Shareholders under
this Section 9 shall be in addition to any liability which the Company and the
respective Selling Shareholders may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
or the Independent Underwriter within the meaning of the Act; and the
obligations of the Underwriters under this Section 9 shall be in addition to any
liability which the respective Underwriters may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of the Company
and to each person, if any, who controls the Company or any Selling Shareholder
within the meaning of the Act; and the obligations of the Independent
Underwriter under this Section 9 shall be in addition to any liability which the
Independent Underwriter may otherwise have and shall extend, upon the same terms
and conditions, to each officer and director of the Company and to each person,
if any, who controls the Company or any Selling Shareholder within the meaning
of the Act.
10. (a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such Shares on the terms contained herein. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such Shares, then the Company and the Selling Shareholders shall be entitled to
a further period of thirty-six hours within which to procure another party or
other parties satisfactory to you to purchase such Shares on such terms. In the
event that, within the respective prescribed periods, you notify the Company and
the Selling Shareholders that you have so arranged for the purchase of such
Shares, or the Company and the Selling Shareholders notify you that they have so
arranged for the purchase of such Shares, you or the Company and the Selling
Shareholders shall have the right to postpone such Time of Delivery for a period
of not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectuses, or in any
other documents or arrangements, and
30
the Company agrees to file promptly any amendments to the Registration Statement
or the Prospectuses which in your opinion may thereby be made necessary. The
term "Underwriter" as used in this Agreement shall include any person
substituted under this Section with like effect as if such person had originally
been a party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Shareholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed one-eleventh of
the aggregate number of all of the Shares to be purchased at such Time of
Delivery, then the Company and the Selling Shareholders shall have the right to
require each non-defaulting Underwriter to purchase the number of Shares which
such Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed to purchase
hereunder) of the Shares of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Shareholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased exceeds one-eleventh of the
aggregate number of all of the Shares to be purchased at such Time of Delivery,
or if the Company and the Selling Shareholders shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to the Second Time of Delivery, the obligations of the
Underwriters to purchase and of the Company or the Selling Shareholders, as
applicable, to sell the Optional Shares) shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the Company or the
Selling Shareholders, except for the expenses to be borne by the Company and the
Selling Shareholders and the Underwriters as provided in Section 7 hereof and
the indemnity and contribution agreements in Section 9 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
11. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Shareholders and the several
Underwriters and the Independent Underwriter, as set forth in this Agreement or
made by or on behalf of them, respectively, pursuant to this Agreement, shall
remain in full force and effect, regardless of any investigation (or any
statement as to the results thereof) made by or on behalf of any Underwriter,
the Independent Underwriter or any controlling person of any Underwriter, the
Independent Underwriter or the Company, or any of the Selling Shareholders, or
any officer or director or controlling person of the Company, or any controlling
person of any Selling Shareholder, and shall survive delivery of and payment for
the Shares.
12. If this Agreement shall be terminated pursuant to Section 10 hereof,
neither the Company nor the Selling Shareholders shall then be under any
liability to any Underwriter or the Independent Underwriter except as provided
in the second sentence of Section 4(c) hereof and Sections 7 and 9 hereof; but,
if for any other reason any Shares are not delivered by or on behalf of the
Company and the Selling Shareholders as provided herein, the Company will
reimburse the Underwriters through you for all reasonable out-of-pocket expenses
approved in writing by you, including fees and disbursements of counsel
reasonably incurred by the Underwriters in making preparations for the purchase,
sale and delivery of the Shares not so delivered, but the Company and the
Selling Shareholders shall then be under no further liability
31
to any Underwriter or the Independent Underwriter in respect of the Shares not
so delivered except as provided in the second sentence of Section 4(c) hereof
and Sections 7 and 9 hereof.
13. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you as the
representatives; and in all dealings with any Selling Shareholder hereunder, you
and the Company shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of such Selling Shareholder made or given by any
or all of the Attorneys-in-Fact for such Selling Shareholder.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters or the Independent Underwriter shall be
delivered or sent by mail, telex or facsimile transmission to you as the
representatives in care of Xxxxxxx, Sachs & Co., 00 Xxx Xxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Registration Department; if to any Selling
Shareholder shall be delivered or sent by mail, telex or facsimile transmission
to counsel for such Selling Shareholder at its address set forth in Schedule II
hereto, with a copy to the Company; and if to the Company shall be delivered or
sent by mail, telex or facsimile transmission to the address of the Company set
forth in the Registration Statement, Attention: Secretary; provided, however,
that any notice to an Underwriter pursuant to Section 9(d) hereof shall be
delivered or sent by mail, telex or facsimile transmission to such Underwriter
at its address set forth in its Underwriters' Questionnaire or telex
constituting such Questionnaire, which address will be supplied to the Company
or the Selling Shareholders by you upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
14. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Independent Underwriter, the Company and the
Selling Shareholders and, to the extent provided in Sections 9 and 11 hereof,
the officers and directors of the Company and each person who controls the
Company, any Selling Shareholder, any Underwriter or the Independent
Underwriter, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Shares from any Underwriter
shall be deemed a successor or assign by reason merely of such purchase.
15. Each of the parties hereto irrevocably (i) agrees that any legal
suit, action or proceeding against the Company or the Selling Shareholder
brought by any Underwriter or by any person who controls any Underwriter arising
out of or based upon this Agreement or the transactions contemplated hereby may
be instituted in any New York court, (ii) waives, to the fullest extent it may
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any such proceeding and (iii) submits to the exclusive
jurisdiction of such courts in any such suit, action or proceeding. Each of the
Company and the Selling Shareholders has appointed [LAWCO OF OREGON, INC.], as
its authorized agent (the "Authorized Agent") upon whom process may be served in
any such action arising out of or based on this Agreement or the transactions
contemplated hereby which may be instituted in any New York Court by any
Underwriter or by any person who controls any Underwriter, expressly consents to
the jurisdiction of any such court in respect of any such action, and waives any
other requirements of or objections to personal jurisdiction with respect
thereto. Such appointment shall be irrevocable. Each of the Company and the
Selling Shareholders represents and warrants that the Authorized Agent has
agreed to act as such agent for service of process and agrees to take any and
all action, including the filing of any and all documents and instruments, that
may be necessary to continue such appointment in full force and effect as
aforesaid. Service of process upon the Authorized Agent and written notice of
such service to the
32
Company shall be deemed, in every respect, effective service of process upon the
Company and the Selling Shareholders as the case may be. A copy of any such
process shall also be delivered to the Company at [ADDRESS], Attention:
___________.
16. In respect of any judgment or order given or made for any amount due
hereunder that is expressed and paid in a currency (the "judgment currency")
other than United States dollars, the Company and the Selling Shareholders, as
the case may be, will indemnify each Underwriter against any loss incurred by
such Underwriter as a result of any variation as between (i) the rate of
exchange at which the United States dollar amount is converted into the judgment
currency for the purpose of such judgment or order and (ii) the rate of exchange
at which an Underwriter is able to purchase United States dollars with the
amount of the judgment currency actually received by such Underwriter within two
(2) New York Business Days following receipt of such judgment currency. The
foregoing indemnity shall constitute a separate and independent obligation of
the Company and the Selling Shareholders and shall continue in full force and
effect notwithstanding any such judgment or order as aforesaid. The term "rate
of exchange" shall include any premiums and costs of exchange payable in
connection with the purchase of or conversion into United States dollars.
17. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
18. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
19. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
20. The Company and the Selling Shareholders are authorized, subject to
applicable law, to disclose any and all aspects of this potential transaction
that are necessary to support any U.S. federal income tax benefits expected to
be claimed with respect to such transaction, and all materials of any kind
(including tax opinions and other tax analyses) related to those benefits,
without the Underwriters imposing any limitation of any kind.
If the foregoing is in accordance with your understanding, please sign
and return to us ten (10) counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters and the Independent Underwriter, this
letter and such acceptance hereof shall constitute a binding agreement among
each of the Underwriters, the Independent Underwriter, the Company and each of
the Selling Shareholders. It is understood that your acceptance of this letter
on behalf of each of the Underwriters is pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Company and the Selling Shareholders for examination upon request, but
without warranty on your part as to the authority of the signers thereof.
33
Any person executing and delivering this Agreement as Attorney-in-Fact
for a Selling Shareholder represents by so doing that he has been duly appointed
as Attorney-in-Fact by such Selling Shareholder pursuant to a validly existing
and binding Power of Attorney which authorizes such Attorney-in-Fact to take
such action.
Very truly yours,
Sparkling Spring Water Holdings Limited
By:.............................................
Name:
Title:
Xxxxxxx X. Xxxxxx
By:.............................................
Name:
Title:
As Attorney-in-Fact acting on behalf
of the Selling Shareholder named in
Schedule II to this Agreement.
Xxxxx Xxxxxx
By:.............................................
Name:
Title:
As Attorney-in-Fact acting on behalf
of the Selling Shareholder named in
Schedule II to this Agreement.
Accepted as of the date hereof at ........,
...............
Xxxxxxx, Xxxxx & Co.
UBS Warburg LLC
X.X. Xxxxxx Securities Inc.
TD Securities Inc.
By:.......................................................
(Xxxxxxx, Xxxxx & Co.)
On behalf of each of the Underwriters
Xxxxxxx, Sachs & Co.
in its capacity as the Independent Underwriter
By:.......................................................
(Xxxxxxx, Xxxxx & Co.)
34
SCHEDULE I
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM SHARES MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
----------- --------------- ------------------
Xxxxxxx, Sachs & Co..............................
UBS Warburg LLC
X.X. Xxxxxx Securities Inc.......................
TD Securities Inc................................
[NAMES OF OTHER UNDERWRITERS]..................
Total .........................................
------------ ------------
============ ============
35
SCHEDULE II
NUMBER OF OPTIONAL
TOTAL NUMBER OF SHARES TO BE
FIRM SHARES SOLD IF MAXIMUM
TO BE SOLD OPTION EXERCISED
--------------- ------------------
The Company............................................
The Selling Shareholder(s):
Xxxxxxx X. Xxxxxx(a)...........................
Xxxxx Xxxxxx(b)................................
Total...........................................
----------- -----------
=========== ===========
(a) This Selling Shareholder is represented by Xxxxxxx Coie LLP, 0000
X.X. Xxxxx Xxxxxx Xxxxxxxx, XX 00000 and has appointed [NAMES OF
ATTORNEYS-IN-FACT (NOT LESS THAN TWO)], and each of them, as the
Attorneys-in-Fact for such Selling Shareholder.
(b) This Selling Shareholder is represented by Xxxxxxx Coie LLP, 0000
X.X. Xxxxx Xxxxxx Xxxxxxxx, XX 00000 and has appointed [NAMES OF
ATTORNEYS-IN-FACT (NOT LESS THAN TWO)], and each of them, as the
Attorneys-in-Fact for such Selling Shareholder.
36
SCHEDULE III
MATERIAL SUBSIDIARIES
U.S. MATERIAL SUBSIDIARIES
CRYSTAL SPRING ACQUISITION, INC.
CULLYSPRING WATER CO., INC.
PURE WATER CORPORATION
SPRING WATER INCORPORATED
CANADIAN MATERIAL SUBSIDIARIES
SPARKLING SPRING WATER GROUP LIMITED
CANADIAN SPRINGS WATER COMPANY AB LIMITED
POLARIS WATER COMPANY INC.
PSW ACQUISITION, INC.
639540 B.C. LTD.
WHISTLER WATER INC.
ENGLISH SUBSIDIARY
NATURE SPRINGS WATER COMPANY LIMITED
SCOTTISH SUBSIDIARY
WATER AT WORK LIMITED
37
ANNEX I
Pursuant to Section 8(j) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Act and
the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included in the Prospectuses or the Registration Statement
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations thereunder, and with the requirements of Canadian Securities
Laws; and, if applicable, they have made a review in accordance with
standards established by the American Institute of Certified Public
Accountants and the Canadian Institute of Chartered Accountants of the
unaudited consolidated interim financial statements, selected financial
data, pro forma financial information, financial forecasts and/or
condensed financial statements derived from audited financial statements
of the Company for the periods specified in such letter, as indicated in
their reports thereon, copies of which have been separately furnished to
the representatives of the Underwriters (the "Representatives") and are
attached hereto;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
and the Canadian Institute of Chartered Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the Prospectuses
as indicated in their reports thereon copies of which have been
separately furnished to the Representatives and are attached hereto; and
on the basis of specified procedures including inquiries of officials of
the Company who have responsibility for financial and accounting matters
regarding whether the unaudited condensed consolidated financial
statements referred to in paragraph (vi)(A)(i) below comply as to form
in all material respects with the applicable accounting requirements of
the Act and the related published rules and regulations and with
Canadian Securities Laws; nothing came to their attention that caused
them to believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the related published
rules and regulations and with Canadian Securities Laws;
(iv) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the
Prospectuses agrees with the corresponding amounts (after restatements
where applicable) in the audited consolidated financial statements for
such five fiscal years;
(v) They have compared the information in the Prospectuses under
selected captions with the disclosure requirements of Regulation S-K and
of Canadian Securities Laws and on the basis of limited procedures
specified in such letter nothing came to their attention as a result of
the foregoing procedures that caused them to believe that this
information does not conform in all material respects with the
disclosure requirements of Items 8 and 11 of Form 20-F and of Regulation
S-K, and with those of Canadian Securities Laws;
1
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of
the minute books of the Company and its subsidiaries since the date of
the latest audited financial statements included in the Prospectuses,
inquiries of officials of the Company and its subsidiaries responsible
for financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) (i) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash
flows included in the Prospectuses do not comply as to form in all
material respects with the applicable accounting requirements of
the Act and the related published rules and regulations, and the
requirements of Canadian Securities Laws, or (ii) any material
modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectuses
for them to be in conformity with generally accepted accounting
principles in Canada or in the United States;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectuses do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any
such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included
in the Prospectuses;
(C) the unaudited financial statements which were not
included in the Prospectuses but from which were derived any
unaudited condensed financial statements referred to in clause (A)
and any unaudited income statement data and balance sheet items
included in the Prospectuses and referred to in clause (B) were not
determined on a basis substantially consistent with the basis for
the audited consolidated financial statements included in the
Prospectuses;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Prospectuses do not comply as to form in
all material respects with the applicable accounting requirements
of the Act and the published rules and regulations thereunder or
the requirements of Canadian Securities Laws, or the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated share capital (other than issuances of shares upon
exercise of options and stock appreciation rights, upon earn-outs
of performance shares and upon conversions of convertible
securities, in each case which were outstanding on the date of the
latest financial statements included in the Prospectuses) or any
increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current assets
or shareholders' equity or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in the
latest balance sheet included in the Prospectuses, except in each
case for changes, increases or decreases which the
2
Prospectuses disclose have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial
statements included in the Prospectuses to the specified date
referred to in clause (E) there were any decreases in consolidated
net revenues or operating profit or the total or per share amounts
of consolidated net income or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable
period of the preceding year and with any other period of
corresponding length specified by the Representatives, except in
each case for decreases or increases which the Prospectuses
disclose have occurred or may occur or which are described in such
letter; and
(vii) In addition to the examination referred to in their report(s)
included in the Prospectuses and the limited procedures, inspection of
minute books, inquiries and other procedures referred to in paragraphs
(iii) and (vi) above, they have carried out certain specified
procedures, not constituting an examination in accordance with generally
accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Representatives,
which are derived from the general accounting records of the Company and
its subsidiaries, which appear in the Prospectuses, or in Part II of, or
in exhibits and schedules to, the Registration Statement specified by
the Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records of the
Company and its subsidiaries and have found them to be in agreement.
3
