Exhibit 10.1.1
EXECUTION COPY
Dated as of November 20, 2003
MDC Corporation Inc.
00 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
ATTENTION: MR. XXXXX XXXXX,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Custom Direct Income Fund
00 Xxxxxxxxxx Xxxxxx Xxxx
Xxxxx 0000
Xxx 000, XX Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
ATTENTION: XX. XXXX X. XXXXXXXX
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Dear Sirs:
The undersigned, CIBC World Markets Inc. ("CIBC WORLD MARKETS") and TD
Securities Inc., Scotia Capital Inc., BMO Xxxxxxx Xxxxx Inc., National Bank
Financial Inc. and Xxxxxxxxx XxXxxxxx & Partners (individually, an
"UNDERWRITER" and collectively, the "UNDERWRITERS"), understand that MDC
Corporation Inc. (the "CORPORATION") proposes to issue and sell to the
Underwriters 3,400,000 adjustable rate exchangeable securities (the
"UNDERWRITTEN SECURITIES"). The Purchased Securities (as hereinafter defined)
shall have the attributes described in the Prospectus (as hereinafter defined).
Subject to the terms and conditions set out below, the Underwriters agree to
purchase severally and not jointly in the respective percentages set out in
paragraph 15(a), and by its acceptance hereof, the Corporation agrees to issue
and sell to the Underwriters, at the Closing Time (as hereinafter defined), all
but not less than all of the Underwritten Securities for an aggregate purchase
price of $29,750,000 ($8.75 per Underwritten Security) payable at the Closing
Time.
In addition, the Corporation hereby grants to the Underwriters a
one-time, unassignable right (the "UNDERWRITERS' Option") to purchase,
severally and not jointly, up to an additional 503,451 adjustable rate
exchangeable securities (the "OPTIONAL SECURITIES") on the same basis as the
purchase of the Underwritten Securities. If CIBC World Markets, on behalf of
the Underwriters, elects to exercise such right, CIBC World Markets shall
notify the Corporation in writing not later than 30 days after the Closing
Date, which notice shall specify the number of Optional Securities to be
purchased by the Underwriters and the date on which such Optional Securities
are to be purchased. Such date may be the same as the Closing Date but not
earlier than the Closing Date nor later than five Business Days after the date
of such notice but in any event, not later than 30 days after the Closing Date.
Optional Securities may be purchased solely for the purpose of covering
over-allotments made in connection with the offering of the Underwritten
Securities and for market stabilization purposes. If any Optional Securities
are purchased, each Underwriter agrees, severally and not jointly, to purchase
the number of Optional Securities (subject to such adjustments to eliminate
fractional securities as CIBC World Markets may determine) that bears the same
proportion to the total number of Optional Securities to be purchased as the
number of Underwritten Securities set out in paragraph 15(a) opposite the name
of such Underwriter bears to the total number of Underwritten Securities.
The Underwritten Securities and the Optional Securities are
hereinafter collectively referred to as the "PURCHASED SECURITIES".
DEFINED TERMS
"AFFILIATE", "COMPANY", "DISTRIBUTION", "MATERIAL FACT", "MATERIAL
CHANGE", "MISREPRESENTATION", "PERSON", "SECURITY" and "SUBSIDIARY"
have the respective meanings ascribed to such terms in the Securities
Act (Ontario);
"AGREEMENT" means this agreement relating to the sale of the Purchased
Securities by the Corporation and the purchase of the Purchased
Securities by the Underwriters;
"AIF" means the initial annual information form of the Corporation
dated April 15, 2003;
"ARTICLES" means the articles of amalgamation of the Corporation dated
January 1, 1999, as amended;
"AUDITORS" means BDO Dunwoody LLP, auditors of the Corporation and the
Fund;
"BUSINESS DAY" means a day which is not: (i) a Saturday or Sunday or
(ii) a statutory or civic holiday in the City of Toronto;
"CANADIAN SECURITIES LAWS" means all applicable securities laws in
each of the Qualifying Jurisdictions and the respective regulations
and rules under such laws together with applicable published policy
statements of the Canadian Securities Administrators and of the
securities regulatory authorities in the Qualifying Jurisdictions;
"CIBC WORLD MARKETS" means CIBC World Markets Inc.;
"CLOSING" means the closing of the purchase and sale of the
Underwritten Securities and the Optional Securities, as applicable;
"CLOSING DATE" means December 8, 2003 or such other date as the
Corporation and the Underwriters may agree upon in writing, provided
that in no event shall such date be later than December 31, 2003, and
the Optional Closing Date, as applicable;
"CLOSING TIME" means 8:00 a.m. (Toronto time) on the Closing Date and
the Optional Closing Date, as applicable, or such other time as the
Corporation and the Underwriters may agree upon in writing;
"CLASS A SUBORDINATE SHARES" means the Class A Subordinate Voting
Shares in the capital of the Corporation;
"CORPORATION" has the meaning ascribed to such term in the first
paragraph of this Agreement;
"COUNSEL TO THE CORPORATION" means Torys LLP and with respect to the
laws of the Qualifying Jurisdictions other than Ontario, local counsel
retained by Torys LLP or the Corporation;
"COUNSEL TO THE FUND" means Torys LLP and with respect to the laws of
the Qualifying Jurisdictions other than Ontario, local counsel
retained by Torys LLP or the Fund;
"COUNSEL TO THE UNDERWRITERS" means Lang Xxxxxxxx LLP;
"CREDIT FACILITY" means the credit arrangements entered into as of May
29, 2003 between Custom Direct LLC and certain lenders pursuant to
which Custom Direct LLC was provided with a senior secured credit
facility in the aggregate principal amount of up to US$42.5 million
comprised of a term facility in the aggregate principal amount of
US$37.5 million and a revolving credit facility in the aggregate
principal amount of up to US$5.0 million;
"DIRECTORS" means the directors of the Corporation;
"DOCUMENTS INCORPORATED BY REFERENCE" means the AIF, the management
information circular dated April 15, 2003 in connection with the
Corporation's annual meeting of shareholders held on May 29, 2003
(excluding those portions that, pursuant to National Instrument 44-101
of the Canadian Securities Administrators, are not required to be
incorporated by reference into the Final Prospectus), the Financial
Information, the material change reports dated April 3, 2003, June 4,
2003, June 10, 2003, July 25, 2003 and August 5, 2003 and all other
documents deemed to be incorporated by reference into the Final
Prospectus by the Canadian Securities Laws;
"EXCHANGE AGREEMENT" means the exchange agreement dated May 29, 2003
among the Fund, the Corporation and certain other parties pursuant to
which the Corporation and Xxxxxx Xxxxxx Canada Inc. may exchange their
common and preferred shares of Custom Direct, Inc. for units of the
Fund upon the Fund meeting certain EBITDA and distribution targets;
"FINAL PROSPECTUS" means both the English language version and the
French language version of the final short form prospectus of the
Corporation relating to the offering of the Purchased Securities,
together with the Documents Incorporated by Reference;
"FINANCIAL INFORMATION" means, collectively: (a) the Corporation's
audited comparative consolidated financial statements and the notes
thereto for the financial year ended December 31, 2002, together with
the auditors' report thereon, (b) management's discussion and analysis
of financial condition and results of operations of the Corporation
for the year ended December 31, 2002, (c) the Corporation's interim
unaudited comparative consolidation financial statements, and the
notes thereto for the nine months ended September 30, 2003; (d)
management's discussion and analysis of financial condition and
results of operations of the Corporation for the nine months ended
September 30, 2003; and (e) the pro forma consolidated financial
statements of the Corporation for the year ended December 31, 2002 and
for the nine months ended September 30, 2003;
"FUND" means Custom Direct Income Fund;
"INDEMNIFIED PERSONS" means every director, officer, employee and/or
agent of each of the Underwriters;
"LOSSES" means losses, claims, costs, damages, expenses or
liabilities, other than loss of profits;
"MATERIAL" means, in relation to the Corporation, material to the
Corporation together with its subsidiaries, considered as a whole;
"MATERIAL SUBSIDIARIES" mean Maxxcom Inc., Metaca Corporation, Xxxxxx
Xxxxxx USA, Accent Marketing, Xxxxxx Xxxxxxx, Colle XxXxx, Xxxxxxx
Xxxxxx, MF&P and Xxxxxxxx Xxxxxx;
"OPTION CLOSING DATE" means a date specified in the notice given by
CIBC World Markets to the Corporation, which will not be earlier than
the Closing Date nor later than five Business Days after the date of
that notice, or any earlier or later date as may be agreed to in
writing by the Corporation and the Underwriters, each acting
reasonably, that will in any event not be later than 30 days after the
Closing Date;
"OPTIONAL SECURITIES" has the meaning ascribed to such term in the
second paragraph of this Agreement;
"PLEDGE AGREEMENT" means the pledge agreement to be dated as of the
Closing Date between the Corporation and the Trustee relating to the
pledge by the Corporation of the common and preferred shares of Custom
Direct, Inc.;
"PRELIMINARY PROSPECTUS" means both the English language version and
the French language version of the preliminary short form prospectus
of the Corporation relating to the offering of the Purchased
Securities, together with the Documents Incorporated by Reference;
"PROSPECTUS" means, collectively, the Preliminary Prospectus, the
Final Prospectus, any Prospectus Amendment, together with the
Documents Incorporated by Reference;
"PROSPECTUS AMENDMENT" means any amendment or supplement to the
Preliminary Prospectus or to the Final Prospectus;
"PURCHASED SECURITIES" means, collectively, the Underwritten
Securities and the Optional Securities;
"QUALIFYING JURISDICTIONS" means each of the provinces of Canada;
"QUEBEC COUNSEL TO THE CORPORATION" means Gowlings LLP;
"QUEBEC COUNSEL TO THE FUND" means Gowlings LLP;
"TRANSFER AGENT" means CIBC Mellon Trust Company in its capacity as
transfer agent and registrar of the Purchased Securities;
"TRUST INDENTURE" means the trust indenture relating to the issuance
of the Purchased Securities to be dated as of the Closing Date between
the Corporation and the Trustee;
"TRUSTEE" means CIBC Mellon Trust Company, the trustee under the Trust
Indenture;
"TSX" means the Toronto Stock Exchange;
"UNDERWRITER" and "UNDERWRITERS" have the respective meanings ascribed
to such terms in the first paragraph of this Agreement; and
"UNDERWRITERS' OPTION" has the meaning ascribed to such term in the
second paragraph of this Agreement;
"UNDERWRITING FEE" means the fee payable by the Corporation to the
Underwriters pursuant to paragraph 6 of this Agreement; and
"UNDERWRITTEN SECURITIES" has the meaning ascribed to such term in the
first paragraph of this Agreement.
TERMS AND CONDITIONS
1. FILING PROSPECTUS
The Corporation has prepared and filed the Preliminary Prospectus and
other related documents relating to the proposed distribution of the Purchased
Securities in each of the Qualifying Jurisdictions and has obtained a
preliminary MRRS decision document (as such term is defined in National
Instrument 43-201 of the Canadian Securities Administrators) under the Canadian
Securities Laws. The Corporation shall, as soon as possible after any comments
of the securities regulatory authorities in the Qualifying Jurisdictions have
been resolved and in any event not later than 5:00 p.m. (Toronto time) on
December 1, 2003 (or by such later date or dates as may be determined by the
Underwriters in their sole discretion), have prepared, filed and obtained a
final MRRS decision document (as such term is defined in National Instrument
43-201 of the Canadian Securities Administrators) under the Canadian Securities
Laws for the Final Prospectus and other related documents relating to the
proposed distribution of the Purchased Securities and shall have fulfilled and
complied with, to the reasonable satisfaction of the Underwriters, the Canadian
Securities Laws required to be fulfilled or complied with by the Corporation to
enable the Purchased Securities to be lawfully distributed or distributed to
the public, as the case may be, in the Qualifying Jurisdictions through the
Underwriters or any other investment dealers or brokers registered as such in
the Qualifying Jurisdictions. The Corporation shall fulfill and comply with the
Canadian Securities Laws required to be fulfilled or complied with by the
Corporation to permit the issuance and sale of the Purchased Securities in the
Qualifying Jurisdictions as freely tradeable Purchased Securities.
2. DUE DILIGENCE
Prior to the filing of the Preliminary Prospectus and the Final
Prospectus, the Corporation and the Fund shall have allowed the Underwriters to
participate fully in the preparation of the Prospectus and shall have allowed
the Underwriters to conduct all due diligence investigations which they
reasonably require to fulfill their obligations as underwriters and in order to
enable them to execute the certificates required to be executed by them in the
Prospectus.
3. RESTRICTIONS ON SALE OUTSIDE THE QUALIFYING JURISDICTIONS
The Underwriters severally agree not to distribute the Purchased
Securities in such manner as to require registration of the Purchased
Securities or the filing of a prospectus or any similar document under the laws
of any jurisdiction outside the Qualifying Jurisdictions and to distribute the
Purchased Securities only in the Qualifying Jurisdictions and in accordance
with all applicable laws.
Any agreements between the Underwriters and the members of any banking
or selling group will contain similar restrictions to those contained in this
paragraph 3.
4.
(A) DELIVERIES ON FILING
In connection with the filings of the Preliminary Prospectus or Final
Prospectus, as the case may be, under the Canadian Securities Laws, the
Corporation shall as soon as practicable deliver to the Underwriters:
(i) a copy of the Preliminary Prospectus or Final
Prospectus, as applicable, including all Documents
Incorporated by Reference, in the English language
signed and certified by the Corporation and the Fund
as required by the Canadian Securities Laws
applicable in the Qualifying Jurisdictions;
(ii) a copy of the Preliminary Prospectus or Final
Prospectus, as applicable, including all Documents
Incorporated by Reference, in the French language
signed and certified by the Corporation and the Fund
as required by the Canadian Securities Laws
applicable in the Province of Quebec;
(iii) a copy of any other document required to be filed by
the Corporation or the Fund in compliance with the
Canadian Securities Laws;
(iv) opinions of Quebec Counsel to the Corporation and
Quebec Counsel to the Fund addressed to the
Underwriters, the Corporation, the Fund, Counsel to
the Corporation, Counsel to the Fund and Counsel to
the Underwriters, in form and substance satisfactory
to the Underwriters, acting reasonably, dated as of
the date of the Final Prospectus, to the effect that
the French language version of each of the
Preliminary Prospectus and the Final Prospectus,
respectively, including all Documents Incorporated
by Reference, except for the financial information
included in the Preliminary Prospectus and the Final
Prospectus, respectively, and in the Documents
Incorporated by Reference, as to which no opinion
need be expressed, is in all material respects a
reasonable and proper translation of the English
language version thereof and that such English and
French language versions are not susceptible to any
materially different interpretation with respect to
any material matter contained therein;
(v) opinions of the Auditors of the Corporation and the
Fund addressed to the Underwriters, the Corporation,
the Fund, Counsel to the Underwriters, Counsel to
the Corporation and Counsel to the Fund, in form and
substance satisfactory to the Underwriters, acting
reasonably, dated as of the date of the Final
Prospectus, to the effect that the French language
version of any financial information included in the
Preliminary Prospectus and the Final Prospectus
respectively, and in the Documents Incorporated by
Reference is in all material respects a complete and
proper translation of the English language version
thereof and that such English and French language
versions are not susceptible to any materially
different interpretation with respect to any
material matter contained therein;
(vi) a "long-form" comfort letter of the Auditors of the
Corporation and the Fund dated as of the date of the
Final Prospectus (with the requisite procedures to
be completed by such Auditors of the Corporation
within two Business Days of the date of the Final
Prospectus) addressed to the Underwriters, the Fund,
and the Corporation, in form and substance
satisfactory to the Underwriters, acting reasonably,
with respect to certain financial and accounting
information relating to the Corporation and the Fund
and other numerical data in the Final Prospectus,
including all Documents Incorporated by Reference,
which letter shall be in addition to the auditors'
reports incorporated by reference into or included
in the Prospectus, and the auditors' comfort letters
addressed to the securities regulatory authorities
in the Qualifying Jurisdictions; and
(vii) on or before the date of the Final Prospectus
evidence satisfactory to the Underwriters and
Counsel to the Underwriters, acting reasonably, that
the Purchased Securities have been conditionally
approved for listing on the TSX, subject to
satisfaction of certain usual conditions set out
therein.
(B) PROSPECTUS AMENDMENTS
When the Corporation is required to prepare a Prospectus Amendment,
the Corporation shall also prepare and deliver promptly to the Underwriters and
the Fund a signed copy of such Prospectus Amendment in the English and French
language along with all Documents Incorporated by Reference which have not been
previously delivered. The Prospectus Amendment shall be in form and substance
satisfactory to the Underwriters and their counsel, acting reasonably.
Concurrently with the delivery of any Prospectus Amendment, the Corporation
shall deliver to the Underwriters, with respect to such Prospectus Amendment,
documents similar to those referred to in clauses 4(a)(iii), (iv), (v), and, to
the extent in need of revision or supplement, (vi) and (vii).
(C) REPRESENTATIONS AS TO THE PROSPECTUS BY THE CORPORATION
Delivery of the Preliminary Prospectus, Final Prospectus and any
Prospectus Amendment shall constitute a representation and warranty by the
Corporation to the Underwriters that as at the date of delivery:
(i) all information and statements (except information
and statements relating solely to or furnished by
the Underwriters or the Fund) contained therein are
true and correct and contain no misrepresentations
and constitute full, true and plain disclosure of
all material facts relating to the Corporation, its
subsidiaries and the Purchased Securities;
(ii) no material fact or information has been omitted
from such disclosure (except that no representations
or warranty is given regarding facts or information
relating solely to or furnished by the Underwriters
or the Fund) which is required to be stated in such
disclosure or is necessary to make the statements or
information contained in such disclosure not
misleading in light of the circumstances under which
they were made; and
(iii) such documents comply fully with the requirements of
the Canadian Securities Laws.
Such deliveries shall also constitute the consent of the Corporation
to the Underwriters' use of such document, for the distribution of the
Purchased Securities in compliance with the provisions of this Agreement and
the Canadian Securities Laws.
(D) REPRESENTATIONS AS TO THE PROSPECTUS BY THE FUND
Delivery of the Preliminary Prospectus, Final Prospectus and any
Prospectus Amendment shall constitute a representation and warranty by the Fund
to the Underwriters that as at the date of delivery:
(i) all information and statements (except information
and statements relating solely to or furnished by
the Underwriters or any of them or the Corporation
or relating to any period up to and including May
29, 2003) contained therein are true and correct and
contain no misrepresentations and constitute full,
true and plain disclosure of all material facts
relating to the Fund, its subsidiaries and the units
of the Fund for any period after May 29, 2003; and
(ii) no material fact or information has been omitted
from such disclosure (except that no representations
or warranty is given regarding facts or information
relating solely to or furnished by the Underwriters
or any of them or the Corporation or relating to any
period up to and including May 29, 2003) which is
required to be stated in such disclosure or is
necessary to make the statements or information
contained in such disclosure not misleading in light
of the circumstances under which they were made.
Such deliveries shall also constitute the consent of the Fund to the
Underwriters' use of such document, for the distribution of the Purchased
Securities in compliance with the provisions of this Agreement and the Canadian
Securities Laws.
(E) COMMERCIAL COPIES
The Corporation shall deliver, without charge to the Underwriters,
commercial copies of the Preliminary Prospectus, Final Prospectus and any
Prospectus Amendment in the English and French languages in such numbers and
cities as the Underwriters may reasonably request. Such delivery shall be
effected as soon as possible and, in any event, with respect to the Final
Prospectus on or before 9:00 a.m. on the second Business Day after receipt of
the Final MRRS decision document referred to in paragraph 1.
(F) NOTICE OF TERMINATION OF DISTRIBUTION
The Underwriters shall after the Closing Date:
(i) complete and use their commercially reasonable
efforts to cause members of their selling group (if
any) to complete the distribution of the Purchased
Securities as soon as reasonably practicable; and
(ii) give prompt written notice to the Corporation and to
the Fund when, in the opinion of the Underwriters,
they have completed distribution of the Purchased
Securities and of the total proceeds realized in
each of the Qualifying Jurisdictions and provide to
the Corporation a breakdown of the number of
Purchased Securities distributed in each of the
Qualifying Jurisdictions where that breakdown is
required by Canadian Securities Laws for the purpose
of calculating fees payable under Canadian
Securities Laws.
5.
(A) MATERIAL CHANGE TO THE CORPORATION DURING DISTRIBUTION
During the period from the date hereof to the completion of
distribution of the Purchased Securities, the Corporation shall promptly notify
the Underwriters in writing of:
(i) the full particulars of any material change (actual,
anticipated, contemplated, proposed or threatened,
financial or otherwise) in the business, affairs,
prospects, operations, assets, liabilities
(contingent or otherwise), capital or control of the
Corporation or any of its subsidiaries;
(ii) any material fact which has arisen or been
discovered and would have been required to have been
stated in the Prospectus had the fact arisen or been
discovered on, or prior to, the date of the
Prospectus; and
(iii) any change in any material fact (which for the
purposes of this Agreement shall be deemed to
include the disclosure of any previously undisclosed
material fact);
which fact or change is, or may be, of such a nature as to render any statement
in the Prospectus misleading or untrue in any material respect or which would
result in a misrepresentation therein or which would result in the Prospectus
not complying with the Canadian Securities Laws or which would reasonably be
expected to have a significant effect on the market price or value of, or
prevent or restrict the trading of the securities of the Corporation or the
Fund.
(B) MATERIAL CHANGE TO THE FUND DURING DISTRIBUTION
During the period from the date hereof to the completion of
distribution of the Purchased Securities, the Fund shall promptly notify the
Underwriters in writing of:
(i) the full particulars of any material change (actual,
anticipated, contemplated, proposed or threatened,
financial or otherwise) in the business, affairs,
prospects, operations, assets, liabilities
(contingent or otherwise), capital or control of the
Fund or any of its subsidiaries;
(ii) any material fact which has arisen or been
discovered and would have been required to have been
stated in the Prospectus had the fact arisen or been
discovered on, or prior to, the date of the
Prospectus; and
(iii) any change in any material fact (which for the
purposes of this Agreement shall be deemed to
include the disclosure of any previously undisclosed
material fact);
which fact or change is, or may be, of such a nature as to render any statement
in the Prospectus relating to the Fund for any period after May 29, 2003
misleading or untrue in any material respect or which would result in a
misrepresentation therein or which would reasonably be expected to have a
significant effect on the market price or value of, or prevent or restrict the
trading of the securities of the Fund.
(C) PROSPECTUS AMENDMENT
The Corporation shall promptly, and in any event within any applicable
time limitation, comply, to the reasonable satisfaction of the Underwriters,
with all applicable filings and other requirements under the Canadian
Securities Laws as a result of such fact or change, provided that the
Corporation shall not file any Prospectus Amendment or other document without
first obtaining the approval of the Underwriters and the Fund, after
consultation with the Underwriters and the Fund with respect to the form and
content thereof, which approval will not be unreasonably withheld.
The Corporation and the Fund shall cooperate in all respects with the
Underwriters to allow and assist the Underwriters to participate fully in the
preparation of any Prospectus Amendment and shall allow the Underwriters to
conduct any and all "due diligence" investigations which in the opinion of the
Underwriters are required in order to enable the Underwriters to responsibly
execute any certificates required to be executed by the Underwriters in any
Prospectus Amendment. The Corporation shall in good faith discuss with the
Underwriters and the Fund any fact or change in circumstances (actual or
anticipated) relating to the Corporation, the Fund and/or any of their
respective subsidiaries which is of such a nature that there is reasonable
doubt whether written notice need be given under this paragraph 5.
(D) CHANGE IN CANADIAN SECURITIES LAWS
If during the period of distribution of the Purchased Securities,
there shall be any change in the Canadian Securities Laws which, in the opinion
of the Underwriters, requires the filing of a Prospectus Amendment, the
Corporation shall, to the satisfaction of the Underwriters and the Fund, each
acting reasonably, promptly prepare and file such Prospectus Amendment with the
appropriate securities regulatory authority in each of the Qualifying
Jurisdictions where such filing is required.
6. SERVICES PROVIDED BY UNDERWRITERS
The Purchased Securities will be distributed in the Qualifying
Jurisdictions in compliance with the Canadian Securities Laws. In return for
their services in acting as financial advisors to the Corporation, in assisting
in the preparation of the Prospectus, participating in the managing, banking,
selling or other groups for the sale of the Purchased Securities and in
distributing the Purchased Securities, both directly and to other registered
dealers or brokers, and in performing administrative work in connection with
the distribution of the Purchased Securities, the Corporation agrees to pay to
the Underwriters, out of the Corporation's general funds, an Underwriting Fee
equal to 5% of the sale price of the Purchased Securities. The Underwriting Fee
shall be payable to the Underwriters in the manner provided for in paragraph 7.
7.
(A) DELIVERY OF PURCHASE PRICE AND UNDERWRITING FEE
The Closing shall be completed at the Closing Time at the offices of
Torys LLP in Toronto, or at such other place in Toronto as the Underwriters and
the Corporation may agree upon. At the Closing Time, the Corporation shall
deliver to CIBC World Markets for the respective accounts of the Underwriters,
the Underwritten Securities and the Optional Securities, if any, through the
facilities of The Canadian Depository for Securities Limited registered in the
name of CDS & Co. or its nominee or as otherwise directed by the Underwriters
against payment by the Underwriters to the Corporation of the purchase price of
the Underwritten Securities and the Optional Securities, if any, in lawful
money of Canada by wire transfer, together with a receipt signed by CIBC World
Markets on behalf of itself and the other Underwriters for such certificate.
The Corporation shall contemporaneously pay to the Underwriters the
Underwriting Fee in respect of the Underwritten Securities and the Optional
Securities, if any, payable by bank draft, by certified cheque or in such other
manner as the parties may determine to CIBC World Markets on behalf of the
Underwriters against the delivery of a receipt for such fee signed by CIBC
World Markets on behalf of itself and the other Underwriters.
(B) TRANSFER AGENT FEES
The Corporation shall pay all fees and expenses payable to or incurred
by the Transfer Agent in connection with the preparation, delivery, and
certification of the Purchased Securities and the fees and expenses payable to
the Transfer Agent in connection with any transfers of the Purchased Securities
as may be required in the course of the distribution of the Purchased
Securities and all fees payable to The Canadian Depository for Securities
Limited.
8. REPRESENTATIONS AND WARRANTIES
(A) REPRESENTATIONS AND WARRANTIES OF THE CORPORATION
The Corporation represents and warrants to the Underwriters that:
(i) the Corporation is amalgamated and existing under
the laws of Ontario and has all requisite power and
authority to carry on its activities as now
conducted and as currently proposed to be conducted
and to own and lease its properties and assets and
to carry out the provisions of this Agreement, the
Trust Indenture and the Pledge Agreement, if any;
(ii) each of the Material Subsidiaries is incorporated
and is existing under the laws of its jurisdiction
of incorporation or organization and each has all
requisite power and authority to carry on its
activities as now conducted and as currently
proposed to be conducted and to own and lease it
properties and assets;
(iii) the execution and delivery of this Agreement, the
Trust Indenture and the Pledge Agreement, if any,
the grant of the Underwriters' Option, the
fulfillment of the terms hereof by the Corporation,
and the issue, sale and delivery of the Purchased
Securities to the Underwriters as contemplated
hereby do not and will not result in a breach of,
and do not and will not create a state of facts
which, after notice or lapse of time or both, will
result in a breach by the Corporation of: (A) any
statute, rule or regulation applicable to the
Corporation or any of the Material Subsidiaries
including, without limitation, the Canadian
Securities Laws and the by-laws, rules and
regulations of the TSX; (B) the Articles or by-laws
of any of the Corporation and the Material
Subsidiaries or any resolutions of the directors or
shareholders thereof which are in effect at the date
hereof, (C) any mortgage, note, indenture, agreement
or other instrument to which the Corporation or any
Material Subsidiary is a party or by which the
Corporation or any Material Subsidiary is bound; (D)
any judgment, decree or order binding upon the
Corporation or any of the Material Subsidiaries or
the property or assets of the Corporation or any of
the Material Subsidiaries, except where such
conflict or breach would not have a material adverse
effect on the Corporation or such Material
Subsidiary, as the case may be and will not give
rise to any lien, charge or encumbrance of any kind
whatsoever, in or with respect to the properties or
assets now owned or acquired at or prior to the
Closing Time by the Corporation or any of its
subsidiaries or the acceleration of or the maturity
of any debt under any material indenture, mortgage,
lease, agreement or instrument binding or affecting
any of them or any of their properties, in any case,
other than those which terminate on the Closing Date
or in respect of which waivers or consents have been
received or will be received prior to the Closing
Time or those which would not result in a material
adverse change to the Corporation;
(iv) the Corporation does not directly, or indirectly
through one or more intermediaries control, or is
not controlled by, or is not under common control
with, the Fund;
(v) the Corporation is not, and is not controlled by, an
"investment company" required to be registered under
the United States Investment Company Act of 1940, as
amended;
(vi) at the Closing Time, the Corporation will be the
registered and beneficial owner of all of the issued
and outstanding Class B common shares of Custom
Direct, Inc. and all of the issued and outstanding
Series B preferred shares of Custom Direct, Inc.,
all of which shares are validly issued and
outstanding as fully paid and non-assessable shares
of Custom Direct, Inc.;
(vii) the Corporation is, or will be at the Closing Time,
the registered and beneficial owner of 3.903449098
Class B common shares and 3.903449884 Series B
preferred shares in the capital of Custom Direct,
Inc., which shares represent all of the issued and
outstanding Class B common shares and all of the
issued and outstanding Series B preferred shares and
20% of the issued and outstanding common shares of
Custom Direct, Inc. and 20% of the issued and
outstanding preferred shares of Custom Direct, Inc.;
(viii) each of the Corporation and the Material
Subsidiaries has conducted and is conducting the
activities of the Corporation and such Material
Subsidiaries in compliance in all respects with all
applicable laws, conditions, requirements, orders,
permits, rules and regulations of each jurisdiction
in which its activities are carried on except to the
extent such non-compliance would not have a material
adverse effect on the Corporation or any Material
Subsidiary and each of the Corporation and each
Material Subsidiary is duly licensed, registered or
qualified in all jurisdictions in which it owns,
licenses or operates its property or carries on
activities to the extent required to enable the
activities of the Corporation and the Material
Subsidiaries to be carried on as now conducted or as
proposed to be conducted, except to the extent that
the lack of such license, registration or
qualification would not have a material adverse
affect on the Corporation and all such licences,
registrations and qualifications are valid and
subsisting in good standing;
(ix) there is no action, proceeding or investigation
(whether or not purportedly on behalf of the
Corporation or any of its subsidiaries) pending or,
to the knowledge of the Corporation, threatened
against or affecting the Corporation or any of its
subsidiaries, at law or in equity or before any
federal, provincial, state, municipal or other
governmental department, commission, board or
agency, domestic or foreign, which could materially
adversely affect the Corporation and the Material
Subsidiaries considered as a whole or which
questions the validity of the issuance of the
Purchased Securities or any action taken or to be
taken by the Corporation pursuant to or in
connection with this Agreement or which would
prevent or restrict the trading of any securities of
the Corporation or the units of the Fund;
(x) there is no person or company acting or purporting
to act for the Corporation entitled to any brokerage
or finder's fee in connection with this Agreement,
except as provided herein or as referred to in the
Prospectus, and in the event any person or company
acting or purporting to act for the Corporation
establishes a claim for any such fee from the
Underwriters, the Corporation covenants to indemnify
and hold harmless the Underwriters with respect
thereto and with respect to all costs reasonably
incurred in the defence thereof;
(xi) this Agreement has been duly authorized, executed
and delivered by the Corporation and, assuming the
due execution and delivery hereof by the
Underwriters, this Agreement constitutes, and the
Trust Indenture and Pledge Agreement, if any, when
executed and delivered, will constitute legal, valid
and binding obligations of the Corporation
enforceable in accordance with its terms, provided
that enforceability may be limited by bankruptcy,
insolvency and other similar laws affecting
creditors' rights generally, that specific
performance, injunctive relief and other equitable
remedies may only be granted in the discretion of a
court of competent jurisdiction and that rights of
indemnity and/or contribution set out in this
Agreement may be limited by applicable law;
(xii) the issuance of the Purchased Securities by the
Corporation to the Underwriters has been duly
authorized by all necessary action on the part of
the Corporation and at the Closing Time such
Purchased Securities will be validly created, issued
and sold to the Underwriters;
(xiii) except those that would not have a material adverse
effect on the Corporation, neither the Corporation
nor any Material Subsidiary is in breach of,
conflict with, or default under, and no event or
omission has occurred which after notice or lapse of
time or both, would constitute a breach of, conflict
with, or default under, or would result in the
acceleration or maturity of any indebtedness or
other material liabilities or obligations under any,
mortgage, hypothec, note, indenture, contract,
agreement (written or oral), instrument, lease,
licence or other document to which it is a party or
is subject or by which it is bound;
(xiv) except as disclosed in the Prospectus, the
Corporation and its subsidiaries do not have any
contingent liabilities in excess of the liabilities
that are either reflected or reserved against in the
Corporation's financial statements which are
material to the Corporation;
(xv) the Auditors of the Corporation are independent
chartered accountants as required under the Canadian
Securities Laws, and there has not been any
disagreement (within the meaning of National Policy
Statement 31) since January 1, 2002 with the
Auditors of the Corporation;
(xvi) the Financial Information has been prepared in
accordance with Canadian generally accepted
accounting principles and presents fairly, in all
material respects, the financial condition and the
results of operations, and cash flow of the
Corporation as of the dates and for the periods
referred to therein. The financial information
relating to the Fund in the Prospectus for any
period prior to May 29, 2003 has been prepared in
accordance with Canadian generally accepted
accounting principles and presents fairly, in all
material respects, the financial condition and the
results of operations, and cash flow of each of
Custom Direct, Inc. and of the Fund as at and for
the periods referred to therein but only to the
extent that such financial information is given as
of a date or for a period prior to May 29, 2003;
(xvii) the Corporation shall use the net proceeds from the
sale of the Purchased Securities as set out in the
Preliminary Prospectus;
(xviii) other than the Material Subsidiaries, the
Corporation has no subsidiaries which account
individually for more than 10% of the consolidated
revenue or assets of the Corporation (net of
minority interests);
(xix) the Corporation is eligible to file a short form
prospectus and no securities commission, stock
exchange or other regulatory authority has issued
any order preventing or suspending the use of the
Prospectus;
(xx) other than as disclosed in the Financial
Information, there are no off-balance sheet
transactions, arrangements, obligations (including
contingent obligations) or other relationships of
the Corporation with unconsolidated entities or
other persons that may have a material current or
future effect on the financial condition, changes in
financial condition, results of operations,
earnings, liquidity, capital expenditures, capital
resources, or significant components of revenues or
expenses of the Corporation;
(xxi) the Corporation and each of its subsidiaries
maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with
management's general or specific authorization; (ii)
transactions are recorded as necessary to permit the
preparation of financial statements in conformity
with Canadian generally accepted accounting
principles and to maintain book value for assets;
(iii) access to its assets is permitted only in
accordance with management's general or specific
authorization; (iv) the recorded accountability for
assets is compared with existing assets at
reasonable intervals and appropriate action is taken
with respect to differences; and (v) material
information relating to the Corporation is made
known to those within the Corporation responsible
for the preparation of the financial statements
during the period in which the financial statements
have been prepared;
(xxii) all income tax returns of the Corporation and the
Material Subsidiaries required by law to be filed in
any jurisdiction have been filed and all taxes shown
on such returns or otherwise assessed which are due
and payable have been paid, except tax assessments
against which appeals have been or will be promptly
taken and as to which adequate reserves have been
provided. All other tax returns of the Corporation
and its subsidiaries required to be filed pursuant
to any applicable law have been filed, and all taxes
shown on such returns or otherwise assessed which
are due and payable have been paid, except for such
taxes, if any, as are being contested in good faith
and as to which adequate reserves have been
provided. The Corporation has made instalments of
taxes as and when required. Except where such
failure to withhold, remit or report would not have
a material adverse effect on the Corporation, the
Corporation has duly and timely withheld from any
amount paid or credited by it to or for the account
or benefit of any person, including, without
limitation, any employee, officer, director, or
non-resident person, the amount of all taxes and
other deductions required by applicable law to be
withheld and has duly and timely remitted the
withheld amount to the appropriate taxing or other
authority and has duly and timely issued tax
reporting slips or returns in respect of any amount
so paid or credited by it as required by applicable
law;
(xxiii) except where it would not have a material adverse
effect on the Corporation, the Corporation and each
of the Material Subsidiaries have satisfied all
obligations under, and there are no outstanding
defaults or violations with respect to, and no
taxes, penalties, or fees are owing or exigible
under or in respect of, any employee benefit,
incentive, pension, retirement, stock option, stock
purchase, stock appreciation, health, welfare,
medical, dental, disability, life insurance and
similar plans, arrangements or practices relating to
the current or former employees, officers or
directors of the Corporation and the Material
Subsidiaries maintained, sponsored or funded by
them, whether written or oral, funded or unfunded,
insured or self-insured, registered or unregistered
and other than as disclosed in the Prospectus all
contributions or premiums required to be paid
thereunder have been made in a timely fashion and
any such plan or arrangement which is a funded plan
or arrangement is fully funded on an ongoing and
termination basis;
(xxiv) the Corporation and its Material Subsidiaries have
good and marketable title to the property and assets
owned by them and hold a valid leasehold interest in
all property leased by them, in each case, free and
clear of all mortgages, charges and other
encumbrances other than those disclosed in the
Prospectus or those which would not individually or
in the aggregate have a material adverse effect on
the Corporation;
(xxv) the Corporation and its Material Subsidiaries
maintain insurance policies with reputable insurers
against risks of loss of or damage to its
properties, assets and business of such types as are
customary in the case of entities engaged in the
same or similar businesses to the full insurable
value of their properties and assets and the
Corporation and the Material Subsidiaries are not in
default with respect to any provisions of such
policies and have not failed to give any notice or
to present any claim under any such policy in a due
and timely fashion;
(xxvi) the Corporation and each of the Material
Subsidiaries is the absolute owner and, other than
as disclosed in the Prospectus, has the right to
use, or is the licensee, sub-licensee or franchisee,
as the case may be, of all material intellectual
property used by it in its business. No event has
occurred during the registration or filing of, or
during any other proceeding relating to, such
intellectual property that would make invalid or
unenforceable, or negate the right to use any
intellectual property of the Corporation or the
Material Subsidiaries. The conduct of the business
of the Corporation and the Material Subsidiaries and
the use of their intellectual property does not
infringe, and neither the Corporation nor any of the
Material Subsidiaries has received any notice,
complaint, threat or claim alleging infringement of,
any patent, trade xxxx, trade name, copyright,
industrial design, trade secret or proprietary right
of any other person, the infringement of which or
the determination of any alleged infringement
against the Corporation or the Material Subsidiaries
would have a material adverse effect on the
Corporation, and, to the knowledge of the
Corporation, the conduct of the business of the
Corporation and the Material Subsidiaries does not
include any activity which may constitute passing
off;
(xxvii) except as disclosed in the Prospectus, since the
date of the Corporation's most recently completed
financial year end:
(A) there has not been any material change
(actual, anticipated, contemplated, proposed
or threatened, whether financial or
otherwise) in the condition of the
Corporation;
(B) there has not been any material change in
the capital stock or long-term or short-term
debt of the Corporation and its
subsidiaries, taken as a whole; and
(C) there has been no transaction out of the
ordinary course of business that is material
to the Corporation and its subsidiaries,
taken as a whole;
(xxviii) the minute books and corporate records of the
Corporation and its Material Subsidiaries made
available to Counsel to the Underwriters, or its
local agent counsel in connection with due diligence
investigations of the Corporation for the periods
from their respective dates of incorporation,
continuance or amalgamation, as the case may be, to
the date of examination thereof are the original
minute books and records of the Corporation and the
Material Subsidiaries and contain copies (final or
draft) of all proceedings (or certified copies
thereof) of the shareholders, the board of directors
and all committees of the board of directors of the
Corporation and the Material Subsidiaries and there
have been no other meetings, resolutions or
proceedings of the shareholders, board of directors
or any committee of the board of directors of the
Corporation or the Material Subsidiaries to the date
of review of such corporate records and minute books
not reflected in such minute books and other
corporate records; and
(xxix) no person, firm or corporation has any agreement or
option or right or privilege capable of becoming an
agreement for the purchase from the Corporation of
any of the Class B common shares or Series B
preferred shares of Custom Direct, Inc. or any units
of the Fund issuable pursuant to the Exchange
Agreement and the Corporation will not sell, or
enter into any agreement to sell, any Class B common
shares or Series B preferred shares of Custom
Direct, Inc. or any units of the Fund issuable
pursuant to the Exchange Agreement.
In this paragraph 8(a), the "KNOWLEDGE OF THE CORPORATION" means the
knowledge of the President and Chief Executive Officer, the Chief Financial
Officer and the Senior Vice-President, Finance of the Corporation after having
undertaken due inquiry to confirm the accuracy of the subject representation
and warranty.
(B) REPRESENTATIONS AND WARRANTIES OF THE FUND
The Fund represents and warrants to the Underwriters that:
(i) the Fund has been created and is existing as a trust
under the laws of the Province of Ontario and the
trustees have been appointed as trustees of the
Fund;
(ii) the Fund can carry out its affairs as described in
the Prospectus in compliance with the terms and
provisions of the Declaration of Trust (as defined
therein);
(iii) the execution, delivery and performance by the
trustees of the Fund (or their authorized attorney)
of this Agreement and the issuance and delivery of
the units of the Fund to the Corporation pursuant to
the Exchange Agreement:
(A) has been duly authorized by all necessary
action on the part of the Fund;
(B) does not require the consent, approval,
authorization, registration or
qualification of or with any governmental
authority, stock exchange, securities
commission or other securities regulatory
authority or other third party, except: (i)
those which have been obtained; (ii) those
as may be required (and will be obtained
prior to the Closing Time) under Canadian
Securities Laws and applicable U.S.
securities laws; or (iii) those which have
not been obtained and would not be material
to the Fund or to Custom Direct, Inc.;
(C) does not (or will not with the giving of
notice, the lapse of time or the happening
of any other event or condition) result in
a breach or a violation of, or conflict
with or result in a default under, or allow
any other person to exercise any rights
under, any of the terms or provisions of
the constating documents or by-laws or
resolutions of the trustees (or any
committee thereof), or securityholders of
the Fund, or any judgment, decree, order or
award of any court, governmental body or
arbitrator having jurisdiction over the
Fund, or any agreement, license or permit
to which the Fund is a party or by which
Custom Direct, Inc. may be affected except,
in each case, any breach, violation,
conflict, default or right that would not
be material to the Fund or to Custom
Direct, Inc.; and
(D) will not result in the violation of any
applicable law;
(iv) this Agreement has been duly executed and delivered
by or on behalf of the trustees of the Fund and
constitutes legal, valid and binding obligations of
the Fund, enforceable in accordance with its
respective terms provided that enforceability may be
limited by bankruptcy, insolvency and other similar
laws affecting creditors' rights generally, that
specific performance, injunctive relief and other
equitable remedies may only be granted in the
discretion of a court of competent jurisdiction and
that rights of indemnity and/or contribution set out
in this Agreement may be limited by applicable law;
(v) other than as set out in the Prospectus, to the
knowledge of the Fund, there is no agreement in
force or effect which in any manner affects or will
affect the voting or control of any of the
securities of the Fund or its subsidiaries;
(vi) the Fund is the registered and beneficial owner of
all of the issued and outstanding common shares of
Custom Direct Canada and holds those securities free
and clear of any liens, charges or encumbrances;
Custom Direct Canada Inc. is the registered and
beneficial owner of all of the issued and
outstanding Class A common shares of Custom Direct,
Inc. representing 80% of the issued and outstanding
common shares of Custom Direct, Inc. and holds those
securities free and clear of any liens, charges or
encumbrances other than as provided for under the
Credit Facility as described in the Prospectus;
Custom Direct ULC is the registered and beneficial
owner of all of the issued and outstanding Series A
preferred shares of Custom Direct, Inc. representing
80% of the issued and outstanding preferred shares
of Custom Direct, Inc. and holds those securities
free and clear of any liens, charges or encumbrances
other than as provided for under the Credit
Facility; Custom Direct, Inc. is the registered and
beneficial owner of all of the issued and
outstanding common shares of Custom Direct ULC and
holds those securities free and clear of any liens,
charges or encumbrances other than as provided for
under the Credit Facility; the Fund is the holder of
US$78.2 million principal amount of Custom Direct
ULC Notes and holds those securities free and clear
of any liens, charges or encumbrances; Custom
Direct, Inc. is the registered and beneficial owner
of all of the issued and outstanding membership
interests of Custom Direct LLC and holds those
securities free and clear of any liens, charges or
encumbrances other than as provided for under the
Credit Facility; and Custom Direct LLC is the
registered and beneficial owner of all of the issued
and outstanding shares in the capital of Unique
Checks, Inc. free and clear of any liens, charges or
encumbrances other than as provided for under the
Credit Facility;
(vii) other than as set out in the Prospectus, the Fund
does not, directly or indirectly, hold any shares,
other securities, options or rights to subscribe for
shares or other securities of any corporation,
partnership or other entity;
(viii) the Fund is authorized to issue an unlimited number
of units of the Fund, of which, as of the date of
this Agreement, 15,613,804 units of the Fund are
issued and outstanding as fully paid units of the
Fund and up to 3,903,451 additional units of the
Funds have been reserved for issuance pursuant to
the Exchange Agreement;
(ix) CIBC Mellon Trust Company has been duly appointed as
the registrar and transfer agent of the Fund with
respect to the units of the Fund;
(x) except as contemplated by this Agreement, the
Exchange Agreement or as disclosed in the
Prospectus, no person has any written or oral
agreement, option, understanding or commitment, or
any right or privilege capable of becoming such (i)
under which the Fund is, or may become, obligated to
issue any of its securities or (ii) for the purchase
of any security (including debt) of the Fund;
(xi) except as disclosed in the Prospectus, there is no
material action, suit, proceeding or investigation,
at law or in equity, by any person, nor any
arbitration, administrative or other proceeding by
or before any governmental entity pending, or, to
the best of the knowledge of the Fund threatened
against or affecting the Fund, any of its
subsidiaries or any of their respective properties,
rights or assets;
(xii) the units of the Fund, including the units to be
issued pursuant to the Exchange Agreement, are
listed on the TSX;
(xiii) the units of the Fund to be issued pursuant to the
Exchange Agreement have been, or prior to the date
of issuance will be, duly created and, when issued,
delivered and paid for in full, will be validly
issued and fully paid units of the Fund, and will
not have been issued in violation of or subject to
any pre-emptive rights or contractual rights to
purchase securities issued by the Fund;
(xiv) the financial information relating to the Fund in
the Prospectus for any period on or after May 29,
2003 has been prepared in accordance with Canadian
generally accepted accounting principles and
presents fairly, in all material respects, the
financial condition and the results of operations,
and cash flow of each of Custom Direct, Inc. and of
the Fund as at the dates and for the periods
referred to therein but only to the extent that such
financial information is at or for a period after
May 29, 2003;
(xv) the Auditors of the Fund are independent chartered
accountants as required under Canadian Securities
Laws and, there has not been any reportable
disagreement (within the meaning of National Policy
Statement No. 31 of the Canadian Securities
Administrators) with the Auditors of the Fund; and
(xvi) except as disclosed in the Prospectus, none of the
trustees, officers or employees of the Fund, any
person who owns, directly or indirectly, more than
10% of any class of securities of the Fund or
securities of any person exchangeable for more than
10% of any class of securities of the Fund, or any
associate or affiliate of any of the foregoing, had
or has any material interest, direct or indirect, in
any material transaction or any proposed material
transaction with Custom Direct, Inc. or with the
Fund which materially affects, is material to or
will materially affect Custom Direct, Inc. or the
Fund.
In this paragraph 8(b), the "KNOWLEDGE OF THE FUND" means the
knowledge of the senior officers of Custom Direct, Inc. after having undertaken
due inquiry to confirm the accuracy of the subject representation and warranty.
9. CONDITIONS TO THE PURCHASE OF THE UNDERWRITTEN SECURITIES OR THE
OPTIONAL SECURITIES, AS APPLICABLE
The obligation of the Underwriters to purchase the Underwritten
Securities or the Optional Securities, as applicable, on the Closing Date shall
be subject to the accuracy of the representations and warranties of the
Corporation and the Fund, contained herein both as of the date hereof and as of
the Closing Date, the performance by the Corporation and the Fund of their
obligations hereunder and the following additional conditions:
(i) the Underwriters shall have received at the Closing
Time favourable legal opinions addressed to the
Underwriters and Counsel to the Underwriters, dated
the Closing Date from Counsel to the Corporation and
Counsel to the Fund substantially in the form of
Schedule 9(i), provided that for the legal opinions
referred to therein which concern matters of law of
provinces other than Ontario, such opinions will be
provided by local counsel where they deem such
reliance proper, and in providing such opinion,
counsel may rely as to matters of fact, on
certificates of the Corporation's officers, the
Transfer Agent, the Auditors of the Corporation and
the Fund and public and stock exchange officials;
(ii) the Underwriters shall have received at the Closing
Time a legal opinion dated the Closing Date from
Counsel to the Underwriters with respect to
transactions referred to in and contemplated by this
Agreement, as the Underwriters may reasonably
request; provided that Counsel to the Underwriters
shall be entitled to rely on the opinions of local
counsel as to matters governed by the laws of
jurisdictions other than the laws of Canada and the
Provinces of Ontario and British Columbia and as to
matters of fact, on certificates of the
Corporation's officers, the Transfer Agent, the
Auditors of the Corporation and the Fund and public
and stock exchange officials, and provided further
that Counsel to the Underwriters shall be entitled
to rely upon the opinion of Counsel to the
Corporation and the Fund with respect to the matters
in Schedule 9(i);
(iii) the Underwriters shall have received at the Closing
Time a letter dated the Closing Date from the
Auditors of the Corporation and the Fund addressed
to the Underwriters, in form and substance
satisfactory to the Underwriters, acting reasonably,
confirming the continued accuracy of the comfort
letter to be delivered to the Underwriters pursuant
to paragraph 4(a)(vi) with such changes as may be
necessary to bring the information in such letter
forward to within two Business Days of the Closing
Date, which changes shall be acceptable to the
Underwriters in their discretion;
(iv) the Underwriters shall have received at the Closing
Time certificates dated the Closing Date, signed by
an appropriate officer of the Corporation, addressed
to the Underwriters and their counsel, with respect
to the Articles and the by-laws of the Corporation,
the authorizing resolutions relating to this
Agreement, the Trust Indenture, the Pledge
Agreement, if any, the Prospectus and the incumbency
and specimen signatures of signing officers;
(v) the Underwriters shall have received at the Closing
Time a certificate or certificates dated the Closing
Date, and signed on behalf of the Corporation by the
Chief Executive Officer and the Chief Financial
Officer or any two senior officers of the
Corporation acceptable to the Underwriters and
addressed to the Underwriters certifying for and on
behalf of the Corporation, after having made due
enquiry and after having carefully examined the
Prospectus, that:
(A) the Corporation has duly complied with all
covenants and satisfied all the terms and
conditions in this Agreement on its part to
be performed or satisfied at or prior to the
Closing Time;
(B) to the knowledge of such officers, no order,
ruling or determination having the effect of
suspending the sale or ceasing, suspending
or restricting the trading of the Purchased
Securities or the units of the Fund, or any
other securities of the Corporation or the
Fund in any of the Qualifying Jurisdictions
has been issued or made by any stock
exchange, securities commission or
regulatory authority and is continuing in
effect and no proceedings, investigations or
enquiries for that purpose have been
instituted or are pending or are
contemplated or threatened under any of the
Canadian Securities Laws or by any other
regulatory authority;
(C) since the respective dates as of which
information is given in the Final
Prospectus, as amended by any Prospectus
Amendment, except as set forth in and
contemplated by the Final Prospectus as so
amended, to the date of such certificate,
there has been no material change (actual or
anticipated) in any of the business,
affairs, prospects, operations, assets and
liabilities (contingent or otherwise) of the
Corporation together with the Material
Subsidiaries considered as a whole or in the
capital of the Corporation, other than as
disclosed in the Final Prospectus or any
Prospectus Amendment, as the case may be;
(D) all necessary consents, approvals and
authorizations, including those which have
been obtained or which may be required under
the securities laws of each of the
Qualifying Jurisdictions, which are required
for the consummation by the Corporation of
the transactions contemplated by this
Agreement have been obtained;
(E) the TSX has approved the listing of the
Purchased Securities on the TSX subject only
to such usual conditions and to the filing
of usual documents in accordance with the
requirements of the TSX;
(F) the representations and warranties of the
Corporation contained in this Agreement are
true and correct as of the Closing Time on
the Closing Date, with the same force and
effect as if made at and as of the Closing
Time after giving effect to the transactions
contemplated by this Agreement;
(G) all information and statements contained in
the Prospectus relating to (i) the Fund for
all periods up to and including May 29,
2003, and (ii) the Corporation are, as at
the Closing Time, true and correct in all
material respects, contain no
misrepresentation and constitute full, true
and plain disclosure of all material facts
relating to (i) the Fund for all periods up
to and including May 29, 2003, and (ii) the
Corporation, the Purchased Securities and
the units of the Fund, and no material fact
has been omitted therefrom (except that no
certification shall be given regarding the
facts or information relating solely to or
furnished by the Underwriters or, in respect
of any period after May 29, 2003, the Fund)
which is required to be stated or which is
necessary to make any statements or
information contained therein not misleading
in light of the circumstances in which they
were made;
(vi) the Underwriters shall have received at the Closing
Time a certificate or certificates dated the Closing
Date, and signed on behalf of the Fund by any two
trustees and addressed to the Underwriters
certifying for and on behalf of the Fund, after
having made due enquiry and after having carefully
examined the Prospectus, that:
(A) the Fund has duly complied with all
covenants and satisfied all the terms and
conditions in this Agreement on its part to
be performed or satisfied at or prior to the
Closing Time;
(B) to the knowledge of such trustees, no order,
ruling or determination having the effect of
suspending the sale or ceasing, suspending
or restricting the trading of the units of
the Fund, or any other securities of the
Fund in any of the Qualifying Jurisdictions
has been issued or made by any stock
exchange, securities commission or
regulatory authority and is continuing in
effect and no proceedings, investigations or
enquiries for that purpose have been
instituted or are pending or are
contemplated or threatened under any of the
Canadian Securities Laws or by any other
regulatory authority;
(C) since the respective dates as of which
information is given in the Final
Prospectus, as amended by any Prospectus
Amendment, except as set forth in and
contemplated by the Final Prospectus as so
amended, to the date of such certificate,
there has been no material change (actual or
anticipated) in any of the business,
affairs, prospects, operations, assets and
liabilities (contingent or otherwise) of the
Fund together with the its subsidiaries
considered as a whole or in the capital of
the Fund, other than as disclosed in the
Final Prospectus or any Prospectus
Amendment, as the case may be;
(D) all necessary consents, approvals and
authorizations, including those which have
been obtained or which may be required under
the securities laws of each of the
Qualifying Jurisdictions, which are required
for the consummation by the Fund of the
transactions contemplated by the Exchange
Agreement have been obtained;
(E) the representations and warranties of the
Fund contained in this Agreement are true
and correct as of the Closing Time on the
Closing Date, with the same force and effect
as if made at and as of the Closing Time
after giving effect to the transactions
contemplated by this Agreement;
(F) all information and statements contained in
the Prospectus relating to the Fund for any
period after May 29, 2003 are, as at the
Closing Time, true and correct in all
material respects, contain no
misrepresentation and constitute full, true
and plain disclosure of all material facts
relating to the Fund for any period after
May 29, 2003 and the units of the Fund, and
no material fact has been omitted therefrom
(except that no certification shall be given
regarding the facts or information relating
solely to or furnished by the Underwriters
or any of them or the Corporation or
relating to any period up to and including
May 29, 2003) which is required to be stated
or which is necessary to make any statements
or information contained therein not
misleading in light of the circumstances in
which they were made;
(vii) the Underwriters shall have received such other
instruments and closing documents as they may
reasonably require;
(viii) the Corporation's existing lenders shall have
granted all necessary consents and discharges of
security to permit the completion of the
transactions contemplated by this Agreement, the
Trust Indenture and the Pledge Agreement, if any,
free and clear of liens and charges, with respect to
the Corporation and its subsidiaries;
(ix) each of the Trust Indenture and the Pledge
Agreement, if any, shall have been executed and
delivered by the Corporation and the Trustee, in
form and content acceptable to the Underwriters;
(x) the Underwriters, Custom Direct, Inc. and holders of
Purchased Securities shall have received an
indemnity agreement from the Corporation in respect
of US withholding taxes in form and content
acceptable to the Underwriters, acting reasonably,
provided that in the case of the indemnity agreement
in favour of the holders of Purchased Securities,
such indemnity agreement shall be contained in the
Trust Indenture; and
(xi) the Corporation will have filed a material change
report on November 20, 2003 in respect of the
restructuring of the offering as an offering of
3,400,000 Underwritten Securities, together with the
Underwriters' Option.
10. TERMINATION RIGHTS
(A) LITIGATION
If, prior to the Closing Time, any inquiry, action, suit,
investigation or other proceeding is instituted or announced by any person or
company or any order is made by any domestic or foreign federal, provincial,
state other governmental authority securities commission, stock exchange or
self regulatory organization in relation to the Corporation or the Fund, which,
in the reasonable opinion of the Underwriters or any of them, after
consultation with the Corporation, operates to prevent or restrict the
distribution or trading of the Purchased Securities or the units of the Fund,
any of the Underwriters shall be entitled, at its option, but subject to
paragraph 10(e) to terminate its obligations under this Agreement by notice to
that effect given to the Corporation at any time prior to the Closing Time.
(B) MATERIAL CHANGE
If, prior to the Closing Time, there should occur any material change
or a change in any material fact such as is contemplated in paragraphs 5(a) and
5(b) which results or, in the reasonable opinion of the Underwriters or any of
them, would reasonably be expected to have a significant adverse effect on the
market price or value of the Purchased Securities or the units of the Fund any
of the Underwriters shall be entitled, at its option, but subject to paragraph
10(e) to terminate its obligations under this Agreement by written notice to
that effect given to the Corporation at any time prior to the Closing Time.
(C) DISASTER OUT
If, prior to the Closing Time, there should develop, occur or come
into effect any occurrence of national or international consequence, any acts
of terrorism or hostilities or escalation thereof or other calamity or causes,
or any event, action, condition, law, governmental regulation, enquiry or other
occurrence of any nature whatsoever (including whether national or
international) which, in the reasonable opinion of any of the Underwriters,
seriously adversely affects, or may seriously affect, the Canadian or United
States financial markets or the business, operations or affairs of the
Corporation together with the Material Subsidiaries considered as a whole, or
the business, operations or affairs of the Fund together with its subsidiaries
considered as a whole, any of the Underwriters shall be entitled at its option,
but subject to paragraph 10(e), to terminate its obligation under this
Agreement by written notice to that effect given to the Corporation at any time
prior to the Closing Time.
(D) CONDITIONS
The Corporation agrees that all material terms and conditions of this
Agreement shall be construed as conditions and complied with so far as the same
relate to acts to be performed or caused to be performed by it or the Fund,
that it will use its commercially reasonable efforts to cause such conditions
to be complied with, and that any breach or failure by the Corporation or the
Fund to comply with any of such conditions shall entitle any of the
Underwriters, at its option, to terminate its obligations to purchase the
Purchased Securities by notice to that effect given to the Corporation at or
prior to the Closing Time unless otherwise expressly provided in this
Agreement. The Underwriters may waive, in whole or in part, or extend the time
for compliance with, any terms and conditions without prejudice to their rights
in respect of any other of such terms and conditions or any other or subsequent
breach or non-compliance, provided that any such waiver or extension shall be
binding upon the Underwriters only if such waiver or extension is in writing
and signed by all of the Underwriters.
(E) EXERCISE OF TERMINATION RIGHTS
The rights of termination contained in paragraphs 10(a), (b), (c) and
(d) may be exercised by any one or more of the Underwriters; and such rights of
termination are in addition to any other rights or remedies any of the
Underwriters may have in respect of any default, act or failure to act or
non-compliance by the Corporation or the Fund in respect of any of the matters
contemplated by this Agreement or otherwise. In the event of any such
termination, there shall be no further liability on the part of the
Underwriters to the Corporation or the Fund, as the case may be, or on the part
of the Corporation or the Fund, as the case may be, to the Underwriters except
in respect of any liability which may arisen or may arise after such
termination under paragraph 11, 12, 14, 15 and 26. A notice of termination
given by an Underwriter under paragraph 10(a), (b), (c) or (d) shall not be
binding upon any other Underwriter.
11. INDEMNITIES
(A) INDEMNITY BY THE CORPORATION
To the extent permitted by law, the Corporation agrees to protect,
hold harmless and indemnify each of the Underwriters and each and every one of
the Indemnified Persons from and against all Losses, which any such Underwriter
or any of them may be subject to or suffer or incur, whether under the
provisions of any statute or otherwise, and which are caused or incurred by or
arise directly or indirectly by reason of or in consequence of:
(i) any information or statement (except any information
or statement furnished by or relating solely to the
Underwriters or any of them or the Fund) contained
in the Prospectus or in any certificate of the
Corporation delivered under this Agreement which at
the time and in light of the circumstances under
which it was made contains or is alleged to contain
a misrepresentation;
(ii) any omission or alleged omission to state in the
Prospectus or any certificate of the Corporation
delivered under this Agreement or pursuant to this
Agreement any material fact or information (except
facts or information furnished by or relating solely
to the Underwriters or any of them or the Fund),
required to be stated in such document or necessary
to make any statement in such document not
misleading in light of the circumstances under which
it was made;
(iii) any order made or enquiry, investigation or
proceedings commenced or threatened by any
securities commission or other competent authority
based upon any untrue statement or omission, or
alleged untrue statement or alleged omission or any
misrepresentation or alleged misrepresentation
(except a statement or omission or alleged statement
or omission furnished by or relating solely to the
Underwriters or any of them or the Fund) in the
Prospectus or based upon any failure to comply with
Canadian Securities Laws (other than any failure or
alleged failure to comply by the Underwriters or the
Fund), preventing or restricting the trading in or
the sale or distribution of the Purchased Securities
in any of the Qualifying Jurisdictions;
(iv) any breach of a representation or warranty made in
this Agreement by the Corporation or the failure of
the Corporation to comply with any of its
obligations hereunder; or
(v) the Corporation not complying with any requirement
of any Canadian Securities Laws.
(B) INDEMNITY BY THE FUND
To the extent permitted by law, the Fund agrees to protect, hold
harmless and indemnify each of the Underwriters and each and every one of the
Indemnified Persons from and against all Losses, which any such Underwriter or
any of them may be subject to or suffer or incur, whether under the provisions
of any statute or otherwise, and which are caused or incurred by or arise
directly or indirectly by reason of or in consequence of:
(i) any information or statement (except any information
or statement furnished by or relating solely to the
Underwriters or any of them or the Corporation or
relating to any period up to and including May 29,
2003) contained in the Prospectus or in any
certificate of the Fund delivered under this
Agreement which at the time and in light of the
circumstances under which it was made contains or is
alleged to contain a misrepresentation;
(ii) any omission or alleged omission to state in the
Prospectus or any certificate of the Fund delivered
under this Agreement or pursuant to this Agreement
any material fact or information (except facts or
information furnished by or relating solely to the
Underwriters or any of them or the Corporation or
relating to any period up to and including May 29,
2003), required to be stated in such document or
necessary to make any statement in such document not
misleading in light of the circumstances under which
it was made;
(iii) any order made or enquiry, investigation or
proceedings commenced or threatened by any
securities commission or other competent authority
based upon any untrue statement or omission, or
alleged untrue statement or alleged omission or any
misrepresentation or alleged misrepresentation
(except a statement or omission or alleged statement
or omission furnished by or relating solely to the
Underwriters or any of them or the Corporation or
relating to any period up to and including May 29,
2003) in the Prospectus or based upon any failure to
comply with Canadian Securities Laws (other than any
failure or alleged failure to comply by the
Underwriters or any of them or the Corporation),
preventing or restricting the trading in or the sale
or distribution of the units of the Fund issuable
pursuant to the Exchange Agreement in any of the
Qualifying Jurisdictions;
(iv) any breach of a representation or warranty made in
this Agreement by the Fund or the failure of the
Fund to comply with any of its obligations
hereunder; or
(v) the Fund not complying with any requirement of any
Canadian Securities Laws.
Notwithstanding the provisions of paragraph 11(b), the Fund shall have no
responsibility to indemnify any Underwriter or Indemnified Person with respect
to any claim relating to information, statements or omissions that do not
relate to the Fund and to any period after May 29, 2003.
(C) NOTIFICATION OF CLAIMS
If any matter or thing contemplated by this paragraph 11 (any such
matter or thing being referred to as a "CLAIM") is asserted against any one or
more of the Indemnified Persons, such Indemnified Person will notify the
Corporation or the Fund, as the case may be, as soon as reasonably practicable
in writing of the nature of such Claim and the Corporation or the Fund, as the
case may be, shall be entitled to (but not required) to assume the defence on
behalf of the Indemnified Party of any suit brought to enforce such Claim;
provided, however, that the defence shall be conducted through legal counsel
acceptable to the Indemnified Person, acting reasonably, that no settlement of
any such Claim may be made by the Corporation or the Fund, as the case may be,
or the Indemnified Person without the prior written consent of the other party
and neither the Corporation nor the Fund, as the case may be, shall be liable
for any settlement of any such Claim unless it has consented in writing to such
settlement, such consent not to be unreasonably withheld.
(D) RETAINING COUNSEL
In any such Claim, the Indemnified Person shall have the right to
retain other counsel to act on his or its behalf, provided that the fees and
disbursements of such counsel shall be paid by the Indemnified Person unless:
(i) the Corporation or the Fund, as the case may be, and the Indemnified Person
shall have mutually agreed to the retention of other counsel, or (ii) the named
parties to any such Claim (including any added third or impeded party) include
both the Indemnified Person on the one hand and the Corporation or the Fund, as
the case may be, on the other hand and the representation of both parties by
the same counsel would be inappropriate due to the actual or potential
differing interests between them. Notwithstanding the foregoing, neither the
Corporation nor the Fund, as the case may be, shall be liable for any
settlement of any Claim unless it has consented in writing to such settlement,
such consent not to be unreasonably withheld.
(E) NO DELIVERY
The rights of indemnity contained in this paragraph 11 will not enure
to the benefit of the Underwriters if the Corporation and Fund have complied
with the provisions of Sections 4 and 5 and the person asserting any Claim
contemplated by this paragraph 11 was not provided with a copy of any
Prospectus or Prospectus Amendment which corrects any untrue statement or
information, misrepresentation (for the purposes of Canadian Securities Laws or
any of them) or omission which is the basis of such Claim and which is required
under Canadian Securities Laws to be delivered to that person by the
Underwriters or members of their banking or selling group (if any).
12. CONTRIBUTION
(A) RIGHT OF CONTRIBUTION OF THE CORPORATION
In order to provide for a just and equitable contribution in
circumstances in which the indemnity provided in paragraph 11(a) would
otherwise be available in accordance with its terms but is, for any reason,
held to be unavailable to or unenforceable by the Underwriters or enforceable
otherwise than in accordance with its terms, the Corporation, and the
Underwriters, severally, shall contribute to the aggregate of all claims,
expenses, costs and liabilities and all Losses of a nature contemplated in
paragraph 11(a) or 11(b) in such proportions so that the Underwriters are
responsible for the portion represented by the percentage that the aggregate
fee payable by the Corporation to the Underwriters pursuant to paragraph 6
bears to the aggregate offering price of the Purchased Securities and the
Corporation is responsible for the balance, whether or not they have been sued
together or sued separately. The Underwriters shall not in any event be liable
to contribute, in the aggregate, any amount in excess of such aggregate fee or
any portion of such fee actually received. However, no party who has engaged in
any fraud, fraudulent misrepresentation or gross negligence shall be entitled
to claim contribution from any person or company who has not engaged in such
fraud, fraudulent misrepresentation or gross negligence.
(B) RIGHT OF CONTRIBUTION OF THE CORPORATION IN ADDITION TO OTHER
RIGHTS
The rights to contribution provided in this paragraph 12 shall be in
addition to and not in derogation of any other right to contribution which the
Underwriters or the Corporation may have by statute or otherwise at law.
(C) CALCULATION OF CONTRIBUTION OF THE CORPORATION
In the event that the Corporation may be held to be entitled to
contribution from the Underwriters under the provisions of any statute or at
law, the Corporation shall be limited to contribution in an amount not
exceeding the lesser of:
(A) the portion of the full amount of the loss
or liability giving rise to such
contribution for which the Underwriters are
responsible, as determined in paragraph
12(a); and
(B) the amount of the aggregate fee actually
received by the Underwriters from the
Corporation under this Agreement.
(D) NOTICE TO THE CORPORATION
If any of the Underwriters has reason to believe that a claim for
contribution may arise, it shall give the Corporation notice of such claim in
writing, as soon as reasonably practicable, but failure to notify the
Corporation shall not relieve the Corporation of any obligation which it may
have to the Underwriters under this paragraph 12 except to the extent by which
the Corporation is prejudiced by such failure.
(E) RIGHT OF CONTRIBUTION IN FAVOUR OF OTHERS
With respect to paragraph 11 and this paragraph 12, the Corporation
acknowledges and agrees that the Underwriters are contracting on their own
behalf and as agents and trustees for each Indemnified Person.
13. SEVERABILITY
If any provision of this Agreement shall be adjudged by a competent
authority to be invalid or for any reason unenforceable in whole or in part,
such invalidity or unenforceability shall not affect the validity,
enforceability or operation of any other provision of this Agreement and such
void or unenforceable provision shall be severable from this Agreement.
14. EXPENSES
Whether or not the sale of the Purchased Securities shall be
completed, all expenses of or incidental to the creation, issue, delivery and
sale of the Purchased Securities and all expenses of or incidental to all other
matters in connection with the transactions set out in this Agreement, shall be
borne by the Corporation including, without limitation, (i) expenses payable in
connection with the qualification of the Purchased Securities for distribution
or distribution to the public, (ii) all costs incurred in connection with the
preparation, translation and printing of the Prospectus, (iii) all costs of any
certificates representing the Purchased Securities; (iv) all costs incurred to
list the Purchased Securities on the TSX and (v) all fees and disbursements of
the Auditors of the Corporation and the Fund and Counsel to the Corporation and
the Fund, Quebec Counsel to the Corporation and the Fund and all other local
counsel to the Corporation. The Underwriters shall pay $100,000 of the
reasonable fees, expenses and disbursements of Counsel to the Underwriters and
the Corporation shall pay the reasonable fees, expenses and disbursements
exceeding $100,000. In addition, if Closing does not occur, other than by
reason of a failure of any Underwriter to comply with the provisions hereof,
the Corporation shall reimburse the Underwriters for all of their reasonable
"out of pocket" expenses including all fees and disbursements of Counsel to the
Underwriters; otherwise, such expenses shall be for the account of the
Underwriters.
15.
(A) OBLIGATION OF UNDERWRITERS TO PURCHASE
The obligation of the Underwriters to purchase the Underwritten
Securities or the Optional Securities, as the case may be, shall be several and
not joint or joint and several and shall be limited as regards each Underwriter
to the percentage of the Underwritten Securities or the Optional Securities, as
the case may be, set out opposite the name of such Underwriters respectively
below:
CIBC World Markets Inc. 32.0%
TD Securities Inc. 22.5%
Scotia Capital Inc. 18.0%
BMO Xxxxxxx Xxxxx Inc. 10.0%
National Bank Financial Inc. 10.0%
Xxxxxxxxx XxXxxxxx & Partners 7.5%
----------
100%
If an Underwriter (a "REFUSING UNDERWRITER") does not complete the
purchase and sale of the Underwritten Securities or the Optional Securities, as
the case may be, that Underwriter has agreed to purchase under this Agreement
(other than in accordance with paragraph 10) the ("DEFAULTED SECURITIES"), CIBC
World Markets may delay the closing date for not more than five (5) days and
the remaining Underwriters (the "CONTINUING UNDERWRITERS") will be entitled, at
their option, to purchase all but not less than all of the Defaulted Securities
pro rata according to the number of Underwritten Securities or Optional
Securities, as the case may be, to have been acquired by the Continuing
Underwriters under this Agreement or in any proportion agreed upon, in writing,
by the Continuing Underwriters. If no such arrangement has been made and the
number of Defaulted Securities to be purchased by the Refusing Underwriter(s)
does not exceed 10% of the Underwritten Securities or the Optional Securities,
as the case may be, the Continuing Underwriters will be obligated to purchase
the Defaulted Securities on the terms set out in this Agreement in proportion
to their obligations under this Agreement. If the number of Defaulted
Securities to be purchased by Refusing Underwriters exceeds 10% of the
Underwritten Securities or the Optional Securities, as the case may be, the
Continuing Underwriters will not be obligated to purchase the Defaulted
Securities and, if the Continuing Underwriters do not elect to purchase the
Defaulted Securities:
(a) the Continuing Underwriters will not be obligated to purchase
any of the Underwritten Securities or the Optional
Securities, as the case may be;
(b) the Corporation will not be obliged to sell less than all of
the Purchased Securities; and
(c) the Corporation will be entitled to terminate its obligations
under this Agreement arising from its acceptance of this
offer, in which event there will be no further liability on
the part of the Corporation or the Continuing Underwriters,
except pursuant to the provisions of paragraphs 11, 12, 14
and 26.
(B) PURCHASE BY OTHER UNDERWRITERS
The number of Underwritten Securities or Optional Securities, as the
case may be, which the remaining Underwriters wish to purchase pursuant to
paragraph 15 shall be divided pro rata among the Underwriters desiring to
purchase such Underwritten Securities or Optional Securities, as the case may
be, in proportion to the percentage of Underwritten Securities or Optional
Securities, as the case may be, which such remaining Underwriters have agreed
to purchase as set forth in paragraph 15(a).
(C) RIGHTS TO PURCHASE OF THE OTHER UNDERWRITERS
If one or more but not all of the Underwriters shall exercise their
right of termination under paragraph 10, the remaining Underwriters shall have
the right, but shall not be obligated, to purchase all of the percentage of the
Underwritten Securities or the Optional Securities, as the case may be, which
would otherwise have been purchased by such Underwriters which have so
exercised their right of termination. The number of such Underwritten
Securities or Optional Securities, as the case may be, which the remaining
Underwriters wish, but are not obligated, to purchase shall be divided pro rata
among the Underwriters desiring to purchase such Underwritten Securities or
Optional Securities, as the case may be, in proportion to the percentage of
Underwritten Securities or Optional Securities, as the case may be, which such
remaining Underwriters have agreed to purchase as set forth in paragraph 15(a).
(D) CORPORATION NOT OBLIGED TO SELL LESS THAN ALL
Nothing in this paragraph 15 shall oblige the Corporation to sell to
the Underwriters less than all of the Purchased Securities.
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations, warranties, obligations and agreement of the
Corporation and the Fund contained in this Agreement and in any certificate
delivered pursuant to the this Agreement or in connection with purchase and
sale of the Purchased Securities shall survive the purchase of the Purchased
Securities and shall continue in full force and effect unaffected during such
period by any subsequent disposition of the Purchased Securities by the
Underwriters or the termination of the Underwriters' obligations and shall not
be limited or prejudiced by any investigation made by or on behalf of the
Underwriters in connection with the preparation of the Prospectus or the
distribution of the Purchased Securities.
17. TIME OF THE ESSENCE
Time shall be of the essence of this Agreement.
18. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario and the laws of Canada applicable in the
Province of Ontario.
19. FUNDS
Unless otherwise indicated, all funds referred to in this Agreement
shall be in Canadian dollars.
20. NOTICE
Unless herein otherwise expressly provided, any notice, request,
direction, consent, waiver, extension, agreement or other communication that is
required to or may be given or made hereunder shall be in writing and either
personally delivered to a responsible officer of the addressee or sent by
telecopy to:
If to the Corporation, addressed and sent to:
MDC Corporation Inc.
00 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx Xxxxx
Fax: (000) 000-0000
If to the Fund, addressed and sent to:
Custom Direct Income Fund
00 Xxxxxxxxxx Xxxxxx Xxxx
Xxxxx 0000
Xxx 000, XX Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxx X. Xxxxxxxx
Fax: (000) 000-0000
In the case of the Corporation and the Fund, with a copy (for
informational purposes only and not constituting formal notice) to:
Torys LLP
00 Xxxxxxxxxx Xxxxxx West
Box 270, Suite 0000
Xxxxxxx-Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Karrin Powys-Lybbe
Fax: (000) 000-0000
If to CIBC World Markets Inc., addressed and sent to:
BCE Place
000 Xxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxx X. XxXxxxxx
Fax: (000) 000-0000
If to TD Securities Inc., addressed and sent to:
00 Xxxxxxxxxx Xxxxxx Xxxx
0xx Xxxxx, TD Tower
Toronto, Ontario
M5K 1A2
Attention: Xxxxxx Xxxxxx
Fax: (000) 000-0000
If to Scotia Capital Inc., addressed and sent to:
Scotia Plaza
00 Xxxx Xxxxxx Xxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx X. Xxxxxxxx
Fax: (000) 000-0000
If to BMO Xxxxxxx Xxxxx Inc., addressed and sent to:
1 First Canadian Place
P.O. Box 150, 4th Floor
Toronto, Ontario
M5X 1H3
Attention: Xxxxxxx X. Xxxxxxx
Fax: (000) 000-0000
If to National Bank Financial Inc., addressed and sent to:
The Exchange Tower
000 Xxxx Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxx X. Xxxxx
Fax: (000) 000-0000
If to Xxxxxxxxx XxXxxxxx & Partners, addressed and sent to:
000 Xxxx Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxx Xxxxxxxx
Fax: (000) 000-0000
If to any Underwriter, with a copy (for informational purposes only
and not constituting formal notice) to:
Lang Xxxxxxxx LLP
BCE Place
000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxxx Xxxxx
Fax: (000) 000-0000
or to such other address as any of the parties may designate by notice
given to the others.
Each notice shall be personally delivered to the addressee or sent by
facsimile transmission to the addressee and (i) a notice which is personally
delivered shall, if delivered on a Business Day, be deemed to be given and
received on that day and, in any other case, be deemed to be given and received
on the first Business Day following the day on which it is delivered; and (ii)
a notice which is sent by facsimile transmission shall be deemed to be given
and received on the Business Day sent if transmitted prior to 2:00 p.m. on that
day or the next Business Day following the day on which it is sent if
transmitted on a day other than a Business Day or after 2:00 p.m. on a Business
Day.
21. AUTHORITY OF CIBC WORLD MARKETS INC.
CIBC World Markets is hereby authorized by each of the other
Underwriters to act on its behalf and the Corporation shall be entitled to and
shall act on any notice given in accordance with paragraph 20 or agreement
entered into by or on behalf of the Underwriters by CIBC World Markets which
represents and warrants that it has irrevocable authority to bind the
Underwriters, except in respect of any consent to a settlement pursuant to
paragraph 11(c) which consent shall be given by the Indemnified Person, a
notice of termination pursuant to paragraph 10 which notice may be given
(subject to paragraph 10(d) by any of the Underwriters, or any waiver pursuant
to paragraph 10(d), which waiver must be signed by all of the Underwriters).
CIBC World Markets shall consult with the other Underwriters concerning any
matter in respect of which it acts as representative of the Underwriters.
22. COUNTERPARTS
This Agreement may be executed by any one or more of the parties to
this Agreement by facsimile or in any number of counterparts, each of which
shall be deemed to be an original, and all such counterparts together shall
constitute one and the same instrument.
23. STANDSTILL
The Fund shall not, without the prior written consent of CIBC World
Markets, authorize, issue or sell or agree to issue or sell units of the Fund
or securities convertible into or exchangeable or exercisable for units of the
Fund at any time prior to 90 days after the Closing Date.
Other than to effect the pledge arrangement set out in the Prospectus
under "Pledge of Custom Direct Shares", during the period commencing the date
of this Agreement and ending on the day which is 90 days following the Closing,
the Corporation and Xxxxxx Xxxxxx Canada Inc. will not, directly or indirectly,
without the prior written consent of CIBC World Markets (which consent will not
be unreasonably withheld or delayed), offer, sell, contract to sell, grant any
option to purchase, transfer, assign, pledge, encumber or otherwise dispose of
or pledge or encumber any of its securities of Custom Direct, Inc. or any of
its units of the Fund, or announce any intention to effect the foregoing,
provided that Xxxxxx Xxxxxx Canada Inc. may transfer its securities of Custom
Direct, Inc. to the Corporation prior to the Closing Date.
24. FUND NOT TO HOLD PURCHASED SECURITIES
The Fund agrees for the benefit of the Corporation that at no time
will it or any subsidiary in which the Fund or Custom Direct, Inc. has a 50% or
greater interest (which, for greater certainty, includes Custom Direct Canada
Inc. and Custom Direct ULC) acquire or hold, directly or indirectly, any of the
Purchased Securities.
25. ENTIRE AGREEMENT
This Agreement shall constitute the entire agreement between the
parties with respect to the subject matter of this Agreement and shall not be
changed, modified or rescinded, except in writing signed by the parties. The
provisions of this Agreement supersede all contemporaneous oral agreements and
all prior oral and written quotations, communications, agreements and
understandings of the parties with respect to the subject matter of this
Agreement.
26. UNDERWRITING AGREEMENT DATED MAY 15, 2003
In addition, the parties hereto hereby confirm and agree that the
underwriting agreement dated May 15, 2003 among the Corporation, Xxxxxx Xxxxxx
Canada Inc., the Fund and the Underwriters continues in full force and effect
in accordance with its terms.
If the foregoing is in accordance with your understanding and is
agreed to by you, please signify your acceptance by executing the enclosed
copies of this letter where indicated below and returning the same to CIBC
World Markets upon which this letter as so accepted shall constitute an
agreement among us.
CIBC WORLD MARKETS INC.
By: _________________________________
Name: Xxxxxx X. XxXxxxxx
Title: Managing Director
TD SECURITIES INC.
By: _________________________________
Name: Xxxxxx Xxxxxx
Title: Managing Director
SCOTIA CAPITAL INC.
By: _________________________________
Name: Xxxxx X. Xxxxxxxx
Title: Managing Director
BMO XXXXXXX XXXXX INC.
By: _________________________________
Name: Xxxxxxx X. Xxxxxxx
Title: Vice-President
NATIONAL BANK FINANCIAL INC.
By: _________________________________
Name: Xxx X. Xxxxx
Title: Managing Director
XXXXXXXXX XXXXXXXX & PARTNERS
By: _________________________________
Name: Xxxx Xxxxxxxx
Title: Partner
The foregoing is accepted and agreed to as of the date first above written.
MDC CORPORATION INC.
By: _________________________________
Name:
Title:
CUSTOM DIRECT INCOME FUND,
BY ITS ATTORNEY, CUSTOM DIRECT CANADA INC.
By: _________________________________
Name:
Title:
SCHEDULE 9(I)
FORM OF OPINION
