4,750,000 Shares Westport Innovations Inc. Common Shares, No Par Value UNDERWRITING AGREEMENT
Exhibit 99.1
4,750,000 Shares
Common Shares, No Par Value
December 9, 2009
XXXXXXXXX & COMPANY, INC.
As Representative of the several Underwriters
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
As Representative of the several Underwriters
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Introductory. Westport Innovations Inc., an Alberta corporation (the “Company”), proposes to
issue and sell to the several underwriters named in Schedule A (the “Underwriters”) an
aggregate of 4,750,000 of its common shares, no par value per share (the “Shares”). The
4,750,000 Shares to be sold by the Company are called the “Firm Shares.” In addition, the
Company has granted to the Underwriters an option to purchase up to an additional 712,500 Shares
as provided in Section 2. The additional 712,500 to be sold by the Company pursuant to such
option are collectively called the “Optional Shares.” The Firm Shares and, if and to the extent
such option is exercised, the Optional Shares are collectively called the “Offered Shares.”
Jefferies & Company, Inc. (“Jefferies”) has agreed to act as representative of the several
Underwriters (in such capacity, the “Representative”) in connection with the offering and sale of
the Offered Shares.
The Company has prepared and filed with the securities regulatory authorities (the “Canadian
Commissions”) in each of the provinces of Canada other than Quebec (the “Qualifying
Jurisdictions”), in accordance with Multilateral Instrument 11-102 Passport System and National
Policy 11-202 Process for Prospectus Reviews in Multiple Jurisdictions, a preliminary short form
base shelf prospectus dated July 20, 2009 (the “Canadian Preliminary Base Prospectus”) and a final
short form base shelf prospectus dated July 28, 2009 (the “Canadian Final Base Prospectus”), in
respect of up to Cdn.$200,000,000 aggregate principal amount of common shares, preferred shares,
subscription receipts, warrants, debt securities or units of the Company (collectively, the “Shelf
Securities”). The British Columbia Securities Commission (the “Reviewing Authority”) has issued a
receipt for each of the Canadian Preliminary Base Prospectus and the Canadian Final Base
Prospectus, which receipts evidence that receipts have been issued by the Ontario Securities
Commission and that the Company has satisfied the conditions in Multilateral Instrument 11-102 to
the deemed issuance of a receipt by the Canadian Commissions for each of the Canadian Preliminary
Base Prospectus and the Canadian Final Base Prospectus in each of the other Qualifying
Jurisdictions. The term “Canadian Base Prospectus” means the Canadian Final Base Prospectus,
including any documents incorporated therein by reference and the documents otherwise deemed to be
a part thereof or included therein pursuant to Canadian Securities Laws (as hereinafter defined),
at the time the Reviewing Authority issued a receipt with respect thereto in accordance with the
Canadian Securities Laws (as hereinafter defined), including National Instrument 44-101 Short Form
Prospectus Distributions and National Instrument 44-102 Shelf Distributions (together, the
“Canadian Shelf Procedures”). The Company has also prepared and filed with the Canadian
Commissions in accordance with the Canadian Shelf Procedures a preliminary prospectus supplement,
dated December 8, 2009, relating to the Offered Shares, which excluded certain pricing
information and other information specific to the offering and sale of the Offered Shares the
Company is permitted to exclude from such preliminary prospectus supplement under the Canadian
Shelf Procedures (the “Shelf Information”) (together with the Canadian Base Prospectus, and
including any documents incorporated therein by reference and the documents otherwise deemed to be
a part thereof or included therein pursuant to Canadian Securities Laws, the “Canadian Preliminary
Prospectus”).
The Company has prepared and filed with the United States Securities and Exchange Commission
(the “Commission”) a registration statement on Form F-10 (File No. 333-160709) covering the
registration of the Shelf Securities under the U.S. Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder (the “Securities Act”). Such registration statement,
including the Canadian Base Prospectus with such deletions therefrom and additions thereto as are
permitted or required by Form F-10 and the applicable rules and regulations of the Commission and
including exhibits to such registration statement and all documents incorporated by reference in
the prospectus contained therein, and including any amendments thereto filed prior to the date
hereof, each in the form heretofore delivered or to be delivered to the Representative, has become
effective in such form pursuant to Rule 467(a) under the Securities Act (the various parts of such
registration statement, including all exhibits thereto and the documents incorporated by reference
in the prospectus contained in the registration statement at the time the registration statement
became effective, each as amended at the time of the registration statement became effective and
including any post-effective amendment thereto, are hereinafter collectively called the
“Registration Statement”). The preliminary base prospectus filed as part of the Registration
Statement, including all documents incorporated therein by reference, contained in the Registration
Statement as initially filed with the Commission, is hereinafter called the “U.S. Preliminary Base
Prospectus”; the base prospectus filed as part of the Registration Statement, including all
documents incorporated therein by reference, contained in the Registration Statement on the date
hereof, is hereinafter called the “U.S. Base Prospectus”; the preliminary prospectus supplement
relating to the offering of the Offered Shares, including all documents incorporated therein by
reference, filed with the Commission pursuant to General Instruction II.L of Form F‑10 under the
Securities Act on December 8, 2009, together with the U.S. Base Prospectus, is hereinafter called
the “U.S. Preliminary Prospectus.”
In addition, the Company will prepare and file, as soon as possible and in any event within
two business days after the date of execution and delivery of this Agreement (i) with the Canadian
Commissions a final prospectus supplement relating to the Offered Shares, which includes the Shelf
Information omitted from the Canadian Preliminary Prospectus (together with the Canadian Base
Prospectus, and including any documents incorporated therein by reference and the documents
otherwise deemed to be a part thereof or included therein pursuant to Canadian Securities Laws (as
defined herein), the “Canadian Final Prospectus”), and (ii) with the Commission, pursuant to
General Instruction II.L of Form F-10, a final prospectus supplement relating to the offering of
the Offered Shares (including all documents incorporated therein by reference, together with the
U.S. Base Prospectus, the “U.S. Final Prospectus”).
The U.S. Preliminary Prospectus and the Canadian Preliminary Prospectus are referred to herein
as the “Preliminary Prospectus,” and the U.S. Final Prospectus and the Canadian Final Prospectus
are referred to herein as the “Final Prospectus.” Any amendment to the Canadian Final Prospectus,
any amended or supplemental prospectus, any management information
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circular, financial statement, management’s discussion and analysis, annual information form,
material change report, auxiliary material, information, evidence, return, report, application,
statement or document that may be filed by or on behalf of the Company under the securities laws of
the Qualifying Jurisdictions prior to the expiry of the period of distribution of the Offered
Shares, where such document is deemed to be incorporated by reference into the Canadian Final
Prospectus, is referred to herein collectively as the “Supplementary Material.” Any reference
herein to any “amendment” or “supplement” to the U.S. Preliminary Prospectus or the U.S. Final
Prospectus shall be deemed to refer to and include (i) the filing of any document with the
Reviewing Authority or the Commission after the date of the U.S. Preliminary Prospectus or the U.S.
Final Prospectus, as the case may be, which is incorporated therein by reference or is otherwise
deemed to be a part thereof or included therein by the rules and regulations of the Commission and
(ii) any such document so filed.
As used herein, “Applicable Time” is 8:30 a.m. (New York time) on December 9, 2009.
As used herein, “free writing prospectus” has the meaning set forth in Rule 405 under the
Securities Act, and “Time of Sale Prospectus” means the Preliminary Prospectus, as amended or
supplemented immediately prior to the Applicable Time, together with the information and the free
writing prospectuses, if any, identified in Schedule B hereto, and each “road show” (as
defined in Rule 433 under the Securities Act), if any, related to the offering of the Offered
Shares contemplated hereby that is a “written communication” (as defined in Rule 405 under the
Securities Act) (each such road show, a “Road Show”). As used herein, the terms “Registration
Statement,” “Preliminary Prospectus,” “Time of Sale Prospectus,” “Canadian Final Prospectus” and
“U.S. Final Prospectus” shall include the documents incorporated and deemed to be incorporated by
reference therein. All references in this Agreement to the Canadian Preliminary Base Prospectus,
the Canadian Base Prospectus, the Canadian Preliminary Prospectus and the Canadian Final
Prospectus, or any amendment or supplement to any of the foregoing (including any Supplementary
Material), shall be deemed to include the copy filed with the Canadian Commissions pursuant to the
System for Electronic Document Analysis and Retrieval (“SEDAR”). All references in this Agreement
to the Registration Statement, the U.S. Preliminary Base Prospectus, the U.S. Base Prospectus, the
U.S. Preliminary Prospectus and the U.S. Final Prospectus, or any amendment or supplement to any of
the foregoing, shall be deemed to include the copy filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval system (“XXXXX”). All references in this
Agreement to financial statements and schedules and other information which are “contained,”
“included” or “stated” in the Canadian Preliminary Base Prospectus, the Canadian Base Prospectus,
the Canadian Preliminary Prospectus or the Canadian Final Prospectus (and all other references of
like import) shall be deemed to mean and include all such financial statements and schedules and
other information which is or is deemed to be incorporated by reference in or otherwise deemed by
Canadian Securities Laws to be a part of or included in the Canadian Preliminary Base Prospectus,
the Canadian Base Prospectus, the Canadian Preliminary Prospectus or the Canadian Final Prospectus,
as the case may be. All references in this Agreement to financial statements and schedules and
other information which are “contained,” “included” or “stated” in the Registration Statement, the
U.S. Preliminary Base Prospectus, the U.S. Base Prospectus, the U.S. Preliminary Prospectus or the
U.S. Final Prospectus (and all other references of like import) shall be deemed to mean and include
all such financial statements and schedules and other information which is or is deemed to be
incorporated by reference in or otherwise deemed by the rules and regulations of the Commission to
be a part of or included in the Registration Statement, the U.S. Preliminary Base Prospectus, the
U.S. Base Prospectus, the U.S. Preliminary Prospectus or the U.S. Final Prospectus, as the case
may be. All references in this Agreement to amendments or supplements to the Registration
Statement, the U.S. Preliminary Base Prospectus, the U.S. Base Prospectus, the U.S. Preliminary
Prospectus or the U.S. Final Prospectus shall be deemed to mean
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and include the filing of any document under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) or otherwise that is or is deemed to be incorporated by reference in the
Registration Statement, the U.S. Preliminary Base Prospectus, the U.S. Base Prospectus, the U.S.
Preliminary Prospectus or the U.S. Final Prospectus, as the case may be.
The Company hereby confirms its agreements with the Underwriters as follows:
Section 1. Representations and Warranties.
The Company hereby represents and warrants to each Underwriter, as of the date of this
Agreement, as of the First Closing Date (as hereinafter defined) and as of each Option Closing Date
(as hereafter defined), if any, and covenants with each Underwriter, as follows:
(a) Forms F-10 and F-X. The Company is a “foreign private issuer” (as defined in Rule 405 under the Securities
Act) and is entitled to use Form F-10 under the Securities Act to register the offering of the
Offered Shares under the Securities Act. The Company has prepared and filed with the
Commission an appointment of agent for service of process upon the Company on Form F-X (the
“Form F-X”). The Registration Statement and the Form F-X conform, and any further amendments
to the Registration Statement or the Form F-X will conform, in all material respects to the
requirements of the Securities Act.
(b) Compliance with Canadian Regulations. The Company is eligible to use the Canadian Shelf Procedures. No order preventing or
suspending the use of the Canadian Base Prospectus or the Canadian Preliminary Prospectus or
preventing the distribution of the Offered Shares has been issued and no proceeding for that
purpose has been initiated or, to the knowledge of the Company, threatened, by any of the
Canadian Commissions; as of their respective dates, the Canadian Base Prospectus and the
Canadian Preliminary Prospectus complied, and the Canadian Final Prospectus (and any further
amendments or supplements thereto) will comply, in all material respects with all applicable
securities laws in the Qualifying Jurisdictions and the respective rules, regulations, blanket
rulings, orders and notices made thereunder and the local, uniform, national and multilateral
instruments and policies adopted by the Canadian Commissions in the Qualifying Jurisdictions
(collectively, the “Canadian Securities Laws”); and each of the Canadian Commissions in the
Qualifying Jurisdictions has issued or is deemed to have issued receipts for the Canadian
Preliminary Base Prospectus and the Canadian Base Prospectus. On the First Closing Date and
each Option Closing Date (as those terms are defined in Section 2), if any, (i) the Canadian
Final Prospectus will comply in all material respects with the Canadian Securities Laws; (ii)
the U.S. Final Prospectus will conform with the Canadian Final Prospectus except for such
deletions therefrom and additions thereto as are permitted or required by Form F-10 and the
applicable rules and regulations of the Commission; and (iii) the Canadian Final Prospectus and
the U.S. Final Prospectus or any amendment or supplement thereto constituted at the respective
dates thereof, and will constitute at the First Closing Date and each Option Closing Date,
full, true and plain disclosure of all material facts relating to the Offered Shares, and did
not at the respective dates thereof, and will not at the First Closing Date or any Option
Closing Date, contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the representations and warranties contained in clause
(iii) of this sentence shall not apply to any statements or omissions made in reliance upon and
in conformity with information provided in writing to the Company by the Underwriters expressly
for use therein, it being understood and agreed that the only such information furnished by the
Representative to the Company
4
consists of the information described in Section 8(b) below. To
its knowledge, the Company is not a “related issuer” or “connected issuer” (as those terms are
defined in National Instrument 33-105 Underwriting Conflicts of the Canadian Securities
Administrators) of any of the Underwriters.
(c) Compliance With Registration Requirements. The Registration Statement has become effective pursuant to Rule 467(a) under the
Securities Act. The Company has complied to the Commission’s satisfaction with all requests of
the Commission for additional or supplemental information. No stop order suspending the
effectiveness of the Registration Statement is in effect and no proceedings for such purpose
have been instituted or are pending or, to the knowledge of the Company, are contemplated or
threatened by the Commission.
The U.S. Preliminary Prospectus and the U.S. Final Prospectus when filed complied and will
comply in all material respects with the Securities Act and were identical to the copies
thereof delivered to the Underwriters for use in connection with the offer and sale of the
Offered Shares. Each of the Registration Statement and any post-effective amendment thereto,
at the time it became effective, at the Applicable Time and at the First Closing Date and each
Option Closing Date, complied and will comply in all material respects with the Securities Act
and did not and will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading. As of the Applicable Time, the Time of Sale Prospectus did not, and at the time of
each sale of the Offered Shares and at the First Closing Date (as defined in Section 2), the
Time of Sale Prospectus, as then amended or supplemented by the Company, if applicable, will
not, contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which they were made,
not misleading. The U.S. Final Prospectus, as amended or supplemented, as of its date and at
the First Closing Date and each Option Closing Date, did not and will not contain any untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading. The representations and warranties set forth in the three immediately preceding
sentences do not apply to the omission of Shelf Information in accordance with the Shelf
Procedures or statements in or omissions from the Registration Statement or any post-effective
amendment thereto, or the U.S. Final Prospectus or the Time of Sale Prospectus, or any
amendments or supplements thereto, made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by the Representative expressly
for use therein, it being understood and agreed that the only such information furnished by the
Representative to the Company consists of the information described in Section 8(b) below.
There are no contracts or other documents required to be described in the Time of Sale
Prospectus or the U.S. Final Prospectus or to be filed as exhibits to the Registration
Statement which have not been described or filed as required.
The Company is not an “ineligible issuer” in connection with the offering of the Offered
Shares pursuant to Rules 164, 405 and 433 under the Securities Act. Any free writing
prospectus that the Company is required to file pursuant to Rule 433(d) under the
Securities Act has been, or will be, filed with the Commission in accordance with the
requirements of the Securities Act. Each free writing prospectus that the Company has filed,
or is required to file, pursuant to Rule 433(d) under the Securities Act or that was prepared
by or on behalf of or used or referred to by the Company complies or will comply in all
material respects with the requirements of Rule 433 under the Securities Act including timely
filing with the Commission or retention where required and legending, and each such free
writing
5
prospectus, as of its issue date and at all subsequent times through the completion of
the public offer and sale of the Offered Shares did not, does not and will not include any
information that conflicted, conflicts or will conflict with the information contained in the
Registration Statement, the Final Prospectus or the Preliminary Prospectus. Except for the
free writing prospectuses, if any, identified in Schedule B hereto, and electronic road
shows, if any, furnished to you before first use, the Company has not prepared, used or
referred to, and will not, without your prior consent, prepare, use or refer to, any free
writing prospectus.
The documents incorporated or deemed to be incorporated by reference in the Preliminary
Prospectus, when they were filed with the Canadian Commissions or the Commission, as
applicable, conformed in all material respects to the requirements of the Canadian Securities
Laws and the Securities Act, as applicable; and any further documents to be incorporated by
reference in the Final Prospectus prior to the completion of the distribution of the Offered
Shares, when such documents are so filed, will conform in all material respects to the
applicable requirements of the Canadian Securities Laws and the Securities Act, as applicable,
and will not contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(d) Reports and Documents, etc. There are no reports or information that in accordance with the requirements of the
Canadian Securities Laws must be made publicly available in connection with the offering of the
Offered Shares that have not been made publicly available as required. There are no documents
required to be filed with the Canadian Commissions in the Qualifying Jurisdictions in
connection with the Canadian Preliminary Prospectus or the Canadian Final Prospectus that have
not been filed as required pursuant to Canadian Securities Laws (other than those required to
be filed after the date hereof pursuant to the Canadian Shelf Procedures). There are no
contracts or other documents required to be described in the Canadian Base Prospectus and the
Canadian Preliminary Prospectus which have not been described or filed as required pursuant to
Canadian securities Laws.
(e) Offering Materials Furnished to Underwriters. The Company has delivered to the Representative one complete manually signed copy of
the Registration Statement, each amendment thereto and each consent and certificate of experts
filed as a part thereof, and conformed copies of the Registration Statement and each amendment
thereto (without exhibits), the Preliminary Prospectus, the Time of Sale Prospectus and the
Final Prospectus, as amended or supplemented, and any free writing prospectus reviewed and
consented to by the Representative, in such quantities and at such places as the Representative
has reasonably requested for each of the Underwriters.
(f) Distribution of Offering Material By the Company. The Company has not distributed and will not distribute, prior to the later of (i) the
expiration or termination of the option granted to the several Underwriters in Section 2 and
(ii) the completion of the Underwriters’ distribution of the Offered Shares, any offering
material in connection with the offering and sale of the Offered Shares other than the
Preliminary Prospectus, the Time of Sale Prospectus, the Final Prospectus, any free writing
prospectus reviewed and consented to by the Representative or the Registration Statement.
(g) The Underwriting Agreement. This Agreement has been duly authorized, executed and delivered by, and is a valid and
binding agreement of, the Company, enforceable in accordance with its terms, except as rights
to indemnification hereunder may be limited by applicable law and except as the enforcement
hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors or by general equitable
principles.
6
(h) Authorization of the Offered Shares. The Offered Shares have been duly authorized for issuance and sale pursuant to this
Agreement and, when issued and delivered by the Company pursuant to this Agreement, will be
validly issued, fully paid and nonassessable, and the issuance and sale of the Offered Shares
is not subject to any preemptive rights, rights of first refusal or other similar rights to
subscribe for or purchase the Offered Shares created by law or the Company.
(i) No Applicable Registration or Other Similar Rights. There are no persons with registration or other similar rights to have any equity or
debt securities registered or qualified for sale under the Registration Statement or the Final
Prospectus or included in the offering contemplated by this Agreement.
(j) No Material Adverse Change. Except as otherwise disclosed in the Time of Sale Prospectus, subsequent to the
respective dates as of which information is given in the Time of Sale Prospectus: (i) there
has been no material adverse change, or any development that could reasonably be expected to
result in a material adverse change, in the condition, financial or otherwise, or in the
earnings, business, operations or prospects, whether or not arising from transactions in the
ordinary course of business, of the Company and its Subsidiaries (as defined below), considered
as one entity (any such change is called a “Material Adverse Change”); (ii) the Company and its
Subsidiaries, considered as one entity, have not incurred any material liability or obligation,
indirect, direct or contingent, not in the ordinary course of business nor entered into any
material transaction or agreement not in the ordinary course of business; and (iii) there has
been no dividend or distribution of any kind declared, paid or made by the Company or, except
for dividends paid to the Company or other Subsidiaries, any of its Subsidiaries on any class
of share capital or repurchase or redemption by the Company or any of its Subsidiaries of any
class of share capital.
(k) Independent Accountants. KPMG LLP, who have delivered their report with respect to the financial statements
(which term as used in this Agreement includes the related notes thereto)
and supporting schedules filed with the Commission as a part of the Registration Statement
and included in the Preliminary Prospectus, the Time of Sale Prospectus and the Final
Prospectus (each, an “Applicable Prospectus” and collectively, the “Applicable Prospectuses”),
are (i) independent public, certified public or chartered accountants as required by the
Securities Act, the Exchange Act and applicable Canadian Securities Laws, (ii) in compliance
with the applicable requirements relating to the qualification of accountants under Rule 2-01
of Regulation S-X and (iii) a registered public accounting firm as defined by the Public
Company Accounting Oversight Board (the “PCAOB”) whose registration has not been suspended or
revoked and who has not requested such registration to be withdrawn. There has not been any
“reportable event” (as that term is defined in National Instrument 51-102 Continuous Disclosure
Obligations of the Canadian Securities Administrators) with KPMG LLP or any other prior auditor
of the Company or any of its Subsidiaries.
(l) Preparation of the Financial Statements. The financial statements filed with the Commission as a part of the Registration
Statement or included or incorporated by reference in the Preliminary Prospectus, the Time of
Sale Prospectus and the Final Prospectus present fairly, in all material respects, the
consolidated financial position of the Company and its Subsidiaries as of and at the dates
indicated and the results of their operations and cash flows for the periods specified. The
supporting schedules included in the Registration Statement
7
present fairly, in all material respects, the information required to be stated therein. Such financial statements and
supporting schedules have been prepared in conformity with generally accepted accounting
principles as applied in Canada applied on a consistent basis throughout the periods involved,
except as may be expressly stated in the related notes thereto. The consolidated financial
statements, including the notes thereto, included in the Registration Statement, the Time of
Sale Prospectus and the Final Prospectus have been reconciled to generally accepted accounting
principles in the United States in accordance with Item 18 of Form 20-F under the Exchange Act.
No other financial statements or supporting schedules are required by the Securities Act or
Canadian Securities Laws to be included in the Registration Statement or the Final Prospectus.
The financial data set forth in the Prospectus under the captions “Prospectus Summary—Summary
Selected Financial Data,” “Selected Financial Data” and “Capitalization” fairly present, in all
material respects, the information set forth therein on a basis consistent with that of the
audited financial statements contained in the Registration Statement and the Final Prospectus.
To the knowledge of the Company, no person who has been suspended or barred from being
associated with a registered public accounting firm, or who has failed to comply with any
sanction pursuant to Rule 5300 promulgated by the PCAOB, has participated in or otherwise aided
the preparation of, or audited, the financial statements, supporting schedules or other
financial data filed with the Commission as a part of the Registration Statement and included
in any Applicable Prospectus.
(m) Company’s Accounting System. Each of the Company and its Subsidiaries makes and keeps accurate books and records and
maintains a system of internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management’s general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles as applied in Canada and
to maintain accountability for assets; (iii) access to assets is permitted only in accordance
with management’s general or specific authorization; and (iv)
the recorded accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. No material weakness
has been identified in the Company’s internal control over financial reporting (whether or not
remediated) and, except as set forth in each Applicable Prospectus, since March 31, 2009, there
has been no change in the Company’s internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting.
(n) Incorporation and Good Standing of the Company and its Subsidiaries. Each of the Company and its subsidiaries listed on Schedule C-1
(collectively, the “Subsidiaries”), has been duly incorporated or organized, as the case may
be, and is validly existing as a corporation, partnership or limited liability company, as
applicable, in good standing under the laws of the jurisdiction of its incorporation or
organization and has the power and authority (corporate or other) to own, lease and operate its
properties and to conduct its business as described in each Applicable Prospectus and, in the
case of the Company, to enter into and perform its obligations under this Agreement. Each of
the Company and its Subsidiaries is duly qualified as a corporation, foreign corporation,
extra-provincial corporation, partnership or limited liability company, as applicable, to
transact business and is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the conduct of business,
except where the failure to be so qualified and in good standing would not, individually or in
the aggregate, result in a Material Adverse Change. All of the issued and outstanding capital shares or other equity or ownership interests of each Subsidiary have been duly authorized and
validly
8
issued, are fully paid and nonassessable and, except as set forth in each Applicable
Prospectus, are owned by the Company, directly or through Subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance or adverse claim. The Company does not
own or control, directly or indirectly, any corporation, association or other entity other than
as disclosed on Schedule C-1 and C-2.
(o) Capitalization and Other Share Capital Matters. The authorized, issued and outstanding share capital of the Company is as set forth in
each Applicable Prospectus under the caption “Consolidated Capitalization” (other than for
subsequent issuances, if any, pursuant to employee benefit plans described in each Applicable
Prospectus or upon the exercise of outstanding options or warrants described in each Applicable
Prospectus). The Shares (including the Offered Shares) conform in all material respects to the
description thereof contained in each Applicable Prospectus. All of the issued and outstanding
Shares have been duly authorized and validly issued, are fully paid and nonassessable and have
been issued in compliance with all applicable U.S. and Canadian securities laws. None of the
outstanding Shares was issued in violation of any preemptive rights, rights of first refusal or
other similar rights to subscribe for or purchase securities of the Company created by law or
the Company. There are no authorized or outstanding options, warrants, preemptive rights,
rights of first refusal or other rights to purchase, or equity or debt securities convertible
into or exchangeable or exercisable for, any shares of the Company or any of its Subsidiaries
other than those accurately described in each Applicable Prospectus. The description of the
Company’s stock option, stock bonus and other stock plans or arrangements, and the options or
other rights granted thereunder, set forth in each Applicable Prospectus accurately and fairly
presents, in all material respects, the information required to be shown with respect to such
plans, arrangements, options and rights.
(p) Stock Exchange Listings. The Shares are registered pursuant to Section 12(b) of the Exchange Act and are listed
on the Nasdaq Global Market and the Toronto Stock Exchange (“TSX”), and the Company has taken
no action designed to, or likely to have the effect of, terminating the registration of the
Shares under the Exchange Act or delisting of the Shares from the Nasdaq Global Market or the
TSX, nor has the Company received any notification that the Commission, the Nasdaq Global
Market, the TSX or any Canadian Commission is contemplating terminating such registration or
listing. The Offered Shares have been approved for additional listing on the Nasdaq
Global Market, subject to official notice of issuance, and the TSX, subject to the satisfaction
by the Company of the conditions imposed by the TSX.
(q) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals
Required. Neither the Company nor any of its Subsidiaries is in violation of its charter or
by-laws, partnership agreement or operating agreement or similar organizational document, as
applicable, or is in default (or, with the giving of notice or lapse of time, would be in
default) (“Default”) under any indenture, mortgage, loan or credit agreement, note, contract,
franchise, lease or other instrument to which the Company or any of its Subsidiaries is a party
or by which it or any of them may be bound (including, without limitation, any credit
agreement, indenture, pledge agreement, security agreement or other instrument or agreement
evidencing, guaranteeing, securing or relating to indebtedness of the Company or any of its
Subsidiaries), or to which any of the property or assets of the Company or any of its
Subsidiaries is subject (each, an “Existing Instrument”), except for such Defaults as would
not, individually or in the aggregate, result in a Material Adverse Change. The Company’s
execution, delivery and performance of this Agreement, consummation of the transactions
contemplated hereby and by each Applicable Prospectus and the issuance and sale of the
9
Offered Shares (i) have been duly authorized by all necessary corporate action and will not result in
any violation of the provisions of the charter or by-laws, partnership agreement or operating
agreement or similar organizational document of the Company or any Subsidiary, as applicable,
(ii) will not conflict with or constitute a breach of, or Default or a Debt Repayment
Triggering Event (as defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of its Subsidiaries
pursuant to, or require the consent of any other party to, any Existing Instrument and (iii)
will not result in any violation of any law, administrative regulation or administrative or
court decree applicable to the Company or any Subsidiary. No consent, approval, authorization
or other order of, or registration or filing with, any court or other governmental or
regulatory authority or agency, is required for the Company’s execution, delivery and
performance of this Agreement and consummation of the transactions contemplated hereby and by
each Applicable Prospectus, except such as have been obtained or made or, as contemplated by
this Agreement, will be obtained or made, by the Company and are in full force and effect under
the Securities Act, applicable Canadian Securities Laws, applicable state securities or blue
sky laws and from the Financial Industry Regulatory Authority (“FINRA”). As used herein, a
“Debt Repayment Triggering Event” means any event or condition which gives, or with the giving
of notice or lapse of time would give, the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder’s behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or
any of its Subsidiaries.
(r) No Material Actions or Proceedings. There are no legal or governmental actions, suits or proceedings pending or, to the
Company’s knowledge, threatened (i) against or affecting the Company or any of its
Subsidiaries, (ii) which have as the subject thereof any officer or director (in his or her
capacity as such) of, or property owned or leased by, the Company or any of its Subsidiaries or
(iii) relating to environmental or discrimination matters, where in any such case (A) there is
a reasonable possibility that such action, suit or proceeding might be determined adversely to
the Company, such Subsidiary or such officer or director, (B) any such action, suit or
proceeding, if so determined adversely, would reasonably be expected to result in a Material
Adverse Change or materially and adversely affect the consummation of the transactions
contemplated by this Agreement or (C) any such action, suit or proceeding is or would be
material in the context of the sale of the Offered Shares. No material labor dispute with the
employees of the Company or any of its Subsidiaries, or with the employees of any principal
supplier, manufacturer, customer or contractor of the Company, exists or, to the best of the
Company’s knowledge, is threatened or imminent.
(s) Intellectual Property Rights. The Company and its Subsidiaries own or possess sufficient trademarks, trade names,
patent rights, copyrights, domain names, licenses, approvals, trade secrets and other similar
rights (collectively, “Intellectual Property Rights”) reasonably necessary to conduct their
businesses as now conducted. Neither the Company nor any of its Subsidiaries has received, or
has any reason to believe that it will receive, any notice of infringement or conflict with
asserted Intellectual Property Rights of others that would result in a Material Adverse Change.
The Company is not a party to or bound by any options, licenses or agreements with respect to
the Intellectual Property Rights of any other person or entity that are required to be set
forth in the Final Prospectus and are not described therein. (The Time of Sale Prospectus
contains in all material respects the same description of the matters set forth in the
preceding sentence contained in the Final Prospectus.) None of the technology employed by the
Company or any of its Subsidiaries has been obtained or is being used by the Company or any of
its Subsidiaries in violation of
10
any material contractual obligation binding on the Company or
any of its Subsidiaries or, to the Company’s knowledge, any of its or its Subsidiaries’
officers, directors or employees or otherwise in violation of the rights of any persons.
(t) All Necessary Permits, etc. Each of the Company and its Subsidiaries possesses such valid and current certificates,
authorizations or permits issued by the appropriate federal, provincial, state, local or
foreign regulatory agencies or bodies necessary to conduct its business, except where the
failure to possess such certificates, authorizations or permits would not, individually or in
the aggregate, result in a Material Adverse Change, and neither the Company nor any of its
Subsidiaries has received, or has any reason to believe that it will receive, any notice of
proceedings relating to the revocation or modification of, or non-compliance with, any such
certificate, authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, could result in a Material Adverse Change.
(u) Title to Properties. The Company and each of its Subsidiaries has good and marketable title to all of the
real and personal property and other assets reflected as owned in the
financial statements referred to in Section 1(l) above (or elsewhere in any Applicable
Prospectus), in each case free and clear of any security interests, mortgages, liens,
encumbrances, equities, adverse claims and other defects, except such as do not materially and
adversely affect the value of such property and do not materially interfere with the use made
or proposed to be made of such property by the Company or such Subsidiary. The real property,
improvements, equipment and personal property held under lease by the Company or any Subsidiary
are held under valid and enforceable leases, with such exceptions as are not material and do
not materially interfere with the use made or proposed to be made of such real property,
improvements, equipment or personal property by the Company or such Subsidiary.
(v) Tax Law Compliance. The Company and its consolidated Subsidiaries have filed all necessary United States
federal, Canadian federal and all other foreign, provincial, state, local or other income and
franchise tax returns or have properly requested extensions thereof and have paid all taxes
required to be paid by any of them and, if due and payable, any related or similar assessment,
fine or penalty levied against any of them except as may be being contested in good faith and
by appropriate proceedings, except for such failure to pay as would not, individually or in the
aggregate, result in a Material Adverse Change. The Company has made adequate charges,
accruals and reserves in the applicable financial statements referred to in Section 1(l) above
in respect of all United States federal, Canadian federal, state, provincial and foreign income
and franchise taxes for all periods as to which the tax liability of the Company or any of its
consolidated Subsidiaries has not been finally determined.
(w) Company Not an “Investment Company”; PFIC. The Company has been advised of the rules and requirements under the U.S. Investment
Company Act of 1940, as amended (the “Investment Company Act”). The Company is not, and will
not be, either at the time of receipt of payment for the Offered Shares or after the
application of the proceeds therefrom as described under “Use of Proceeds” in each Applicable
Prospectus, an “investment company” within the meaning of the Investment Company Act and will
conduct its business in a manner so that it will not become subject to the Investment Company
Act. For each taxable year, if any, that the Company qualifies as a “passive foreign
investment company” (a “PFIC”), as defined in Section 1297(a) of the Internal Revenue Code of
1986, as amended (the “Code”), in the case of a purchaser of Offered Shares that is a “United
States person,” as
11
defined in Section 7701(a)(30) of the Code, and that is making or has made
an effective “qualified electing fund” election, as defined in Section 1295 of the Code with
respect to the Company (a “QEF Election”), the Company will provide to such purchaser: (a) a
“PFIC Annual Information Statement” as described in Treasury Regulation Section 1.1295-1(g) (or
any successor Treasury Regulation), including all representations and statements required by
such PFIC Annual Information Statement, and (b) all additional information that such purchaser
is required to obtain in connection with making or maintaining a QEF Election. The Company
shall also take such other actions as may reasonably be necessary to facilitate and maintain a
QEF Election by any such purchaser. With regard to the PFIC Annual Information Statement, (i)
the Company must provide a PFIC Annual Information Statement described in Treasury Regulation
Section 1.1295-1(g)(1), and (ii) as permitted by Treasury Regulation Section 1.1293-1(a)(2)(A),
the Company will calculate and report the amount of each category of long-term capital gain
described in Section 1(h) of the Code that was recognized by the Company.
(x) Insurance. Each of the Company and its material Subsidiaries is insured by recognized, financially
sound and reputable institutions with policies in such amounts and with such deductibles and
covering such risks as are generally deemed adequate and customary for its business including,
but not limited to, policies covering real and personal property owned or leased by the Company
and its material Subsidiaries against theft, damage, destruction, acts of vandalism and
earthquakes and policies covering the Company and its material Subsidiaries for product
liability claims. The Company has no reason to believe that it or any Subsidiary will not be
able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to
obtain comparable coverage from similar institutions as may be necessary or appropriate to
conduct its business as now conducted and at a cost that would not result in a Material Adverse
Change. Neither the Company nor any material Subsidiary has been denied any insurance coverage
which it has sought or for which it has applied.
(y) No Price Stabilization or Manipulation; Compliance with Regulation M. The Company has not taken, directly or indirectly, any action designed to or that might
be reasonably expected to cause or result in stabilization or manipulation of the price of the
Shares or any other “reference security” (as defined in Rule 100 of Regulation M under the
Exchange Act (“Regulation M”)) whether to facilitate the sale or resale of the Offered Shares
or otherwise, and has taken no action which would directly or indirectly violate Regulation M.
(z) Related Party Transactions. There are no business relationships or related-party transactions involving the Company
or any of its Subsidiaries or any other person required to be described in each Applicable
Prospectus which have not been described as required. (The Time of Sale Prospectus contains in
all material respects the same description of the matters set forth in the preceding sentence
contained in the Final Prospectus.)
(aa) FINRA Matters. All of the information provided to the Underwriters or to counsel for the Underwriters
by the Company and, to the knowledge of the Company, its officers and directors and the holders
of any securities (debt or equity) or options to acquire any securities of the Company in
connection with letters, filings or other supplemental information provided to FINRA pursuant
to FINRA Rule 5110 or NASD Conduct Rule 2720 is true, complete and correct. The Company meets
the requirements for use of Form F-10 under the Securities Act set forth in FINRA Rule
5110(b)(7)(C)(ii), including that the Company (i) has been reporting with Canadian Commissions
for 36 months immediately prior to filing the U.S. Preliminary Prospectus, (ii) was in
compliance with all applicable requirements of such Canadian
12
Commissions at the time of the filing of the U.S. Preliminary Prospectus, (iii) is a foreign private issuer, and (iv) had a
total market value in excess of $360 million and a public float in excess of $75 million as of
any date within 60 days prior to filing the U.S. Preliminary Prospectus.
(bb) Parties to Lock-Up Agreements. Each of the Company’s directors and officers and each of the other persons and entities
listed in Exhibit A has executed and delivered to Jefferies a lock-up agreement in the
form of Exhibit B hereto. Exhibit A hereto contains a true, complete and
correct list of all directors and officers of the Company. If any additional persons shall
become directors or officers of the Company prior to the end of the Lock-up Period (as defined
below), the Company shall cause each such person, prior to or contemporaneously with their
appointment or election as a director or officer of the Company, to execute and deliver to
Jefferies an agreement in the form attached hereto as Exhibit B.
(cc) Statistical and Market-Related Data. The statistical, demographic and market-related data included in the Registration Statement
and each Applicable Prospectus are based on or derived from sources that the Company believes
to be reliable and accurate or represent the Company’s good faith estimates that are made on
the basis of data derived from such sources.
(dd) No Unlawful Contributions or Other Payments. Neither the Company nor any of its Subsidiaries nor, to the Company’s knowledge, any
employee or agent of the Company or any Subsidiary, has made any contribution or other payment
to any official of, or candidate for, any federal, provincial, state, local, municipal or
foreign office in violation of any law or of the character that is required to be disclosed in
the Registration Statement and each Applicable Prospectus.
(ee) Compliance with Environmental Laws. Except as described in each Applicable Prospectus and except as would not, singly or in
the aggregate, result in a Material Adverse Change, (i) neither the Company nor any of its
Subsidiaries is in violation of any federal, provincial, state, local, municipal or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial
or administrative interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without limitation, laws and regulations
relating to the release or threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products (collectively,
“Hazardous Materials”) or to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials (collectively, “Environmental
Laws”), (ii) the Company and its Subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are in compliance with their requirements,
(iii) there are no pending or threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or
proceedings relating to any Environmental Law against the Company or any of its Subsidiaries
and (iv) there are no events or circumstances that might reasonably be expected to form the
basis of an order for clean-up or remediation, or an action, suit or proceeding by any private
party or governmental body or agency, against or affecting the Company or any of its
Subsidiaries relating to Hazardous Materials or any Environmental Laws.
13
(ff) Brokers. Except as otherwise disclosed in the Time of Sale Prospectus and the Final Prospectus,
there is no broker, finder or other party that is entitled to receive from the Company any
brokerage or finder’s fee or other fee or commission as a result of any transactions
contemplated by this Agreement, other than the Underwriters.
(gg) No Outstanding Loans or Other Extensions of Credit. Since July 21, 2008, neither the Company nor any of its Subsidiaries has extended or
maintained credit, arranged for the extension of credit, or renewed any extension of credit, in
the form of a personal loan, to or for any director or executive officer (or equivalent
thereof) of the Company and/or such Subsidiary except for such extensions of credit as are
expressly permitted by Section 13(k) of the Exchange Act, and no loan made prior to such filing
remains outstanding.
(hh) Compliance with Laws. The Company has not been advised, and has no reason to believe, that it or any of its
Subsidiaries is not conducting business in compliance with all applicable laws, rules and
regulations of the jurisdictions in which it is conducting business, except where failure to be
so in compliance would not result in a Material Adverse Change.
(ii) Dividend Restrictions. Except (i) as disclosed in each Applicable Prospectus, (ii)
as may be restricted by applicable law, or (iii) as provided in the Amended and Restated Joint
Venture Agreement, among Cummins Inc., Westport Innovations Inc. and Cummins Westport Inc.
(“CWI”), dated as of January 1, 2004, no Subsidiary of the Company is prohibited or restricted,
directly or indirectly, from paying dividends to the Company, or from making any other
distribution with respect to such Subsidiary’s equity securities or from repaying to the
Company or any other Subsidiary of the Company any amounts that may from time to time become
due under any loans or advances to such Subsidiary from the Company or from transferring any
property or assets to the Company or to any other Subsidiary.
(jj) Foreign Corrupt Practices Act. Neither the Company nor any of its Subsidiaries nor,
to the knowledge of the Company, any director, officer, agent, employee, affiliate or other
person acting on behalf of the Company or any of its Subsidiaries is aware of or has taken any
action, directly or indirectly, that has resulted or would result in a violation of the Foreign
Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the
“FCPA”), including, without limitation, making use of the mails or any means or instrumentality
of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or
authorization of the payment of any money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any “foreign official” (as such term is
defined in the FCPA) or any foreign political party or official thereof or any candidate for
foreign political office, in contravention of the FCPA, except as would not result in a
Material Adverse Change; and the Company and its Subsidiaries and, to the knowledge of the
Company, the Company’s affiliates will monitor their respective businesses to ensure compliance
with the FCPA and, if violations of the FCPA are found, will take remedial action to remedy
such violations.
(kk) Money Laundering Laws. The operations of the Company and its Subsidiaries are, and
have been conducted at all times, in compliance with all material applicable financial
recordkeeping and reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, the Proceeds of Crime (Money Laundering), the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism (USA PATRIOT ACT) Act of 2001 and Terrorist Financing Act (Canada), the money
laundering statutes of all applicable jurisdictions, the rules and
14
regulations thereunder and any related or similar applicable rules, regulations or guidelines, issued, administered or
enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action,
suit or proceeding by or before any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its Subsidiaries with respect to the Money
Laundering Laws is pending or, to the knowledge of the Company, threatened.
(ll) OFAC. Neither the Company nor any of its Subsidiaries nor, to the knowledge of the
Company, any director, officer, agent, employee, affiliate or person acting on behalf of the
Company or any of its Subsidiaries is currently subject to any U.S. sanctions administered by
the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company
will not directly or indirectly use the proceeds of this offering, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any person currently subject to any
U.S. sanctions administered by OFAC.
(mm) Disclosure Controls and Procedures. The Company has established and maintains
“disclosure controls and procedures” and “internal control over financial reporting” within the
meaning of such terms under Multilateral Instrument 52-109 Certification of Disclosure in
Issuers’ Annual and Interim Filings of the Canadian Securities Administrators and Rule 13a-15
under the Exchange Act and is in compliance with the certification requirements thereof with
respect to the Company’s annual and interim filings with Canadian securities regulators. There
is, and has been, no failure on the part of the Company or any of the Company’s directors or
officers, in their capacities as such, to comply with any provision of the Xxxxxxxx-Xxxxx Act
of 2002 and the rules and regulations promulgated in connection therewith, including, but not
limited to, Section 402 related to loans and Sections 302 and 906 related to certifications.
(nn) Audit Committee. The audit committee of the Company is comprised and operates in
accordance with all material requirements of Multilateral Instrument 52-110 Audit Committees of
the Canadian Securities Administrators, and is in compliance with the audit committee
requirements of Rule 10A-3 of the Exchange Act.
(oo) Exchange Act Compliance. The documents incorporated or deemed to be incorporated by
reference in the U.S. Final Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the requirements of the
Exchange Act, and, when read together with the other information in the U.S. Prospectus, at the
time the Registration Statement and any amendments thereto become effective and at the First
Closing Date and the applicable Option Closing Date, as the case may be, will not contain an
untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not
misleading. The Company has filed with the Commission all reports required to be filed
pursuant to the reporting requirements of the Exchange Act.
With respect to the representations and warranties relating to CWI in xxxxxxxxxx (x), (x),
(x), (x), (x), (x), (x), (xx), (xx), (xx), (xx) and (ll) of Section 1, such
representations and warranties shall be deemed made pursuant to the knowledge of the
Company, which shall mean the knowledge of the executive officers of the Company after
reasonable inquiry.
15
Any certificate signed by any officer of the Company or any of its Subsidiaries and
delivered to the Representative or to counsel for the Underwriters, as contemplated by this
Agreement, shall be deemed a representation and warranty by the Company to each Underwriter as
to the matters covered thereby.
The Company acknowledges that the Underwriters and, for purposes of the opinions to be
delivered pursuant to Section 6 hereof, counsel to the Company and counsel to the Underwriters
will rely upon the accuracy and truthfulness of the foregoing representations and hereby
consents to such reliance.
Section 2. Purchase, Sale and Delivery of the Offered Shares.
(a) The Firm Shares. Upon the terms herein set forth, the Company agrees to issue and sell to the several
Underwriters an aggregate of 4,750,000 Firm Shares. On the basis of the representations,
warranties and agreements herein contained, and upon the terms but subject to the conditions
herein set forth, the Underwriters agree, severally and not jointly, to purchase from the
Company the respective number of Firm Shares set forth opposite their names on Schedule
A. The purchase price per Firm Share to be paid by the several Underwriters to the Company
shall be U.S.$10.50 per share (Cdn.$11.13 per share with respect to sales to Canadian investors in
Canadian dollars).
(b) The First Closing Date. Delivery of certificates for the Firm Shares to be purchased by the Underwriters and
payment therefor shall be made at the offices of Jefferies, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx (or such other place as may be agreed to by the Company and the Representative) at 8:00
a.m. New York time, on December 14, 2009 or such other time and date not later than 1:30 p.m.
New York time, on December 29, 2009 as the Representative shall designate by notice to the
Company (the time and date of such closing are called the “First Closing Date”). The Company
hereby acknowledges that circumstances under which the Representative may provide notice to
postpone the First Closing Date as originally scheduled include, but are in no way limited to,
any determination by the Company or the Representative to recirculate to the public copies of
an amended or supplemented U.S. Final Prospectus or a delay as contemplated by the provisions
of Section 10.
(c) The Optional Shares; Option Closing Date. In addition, on the basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein set forth, the Company
hereby grants an option to the several Underwriters to purchase, severally and not jointly, up
to an aggregate of 712,500 Optional Shares from the Company at the purchase price per share
to be paid by the Underwriters for the Firm Shares. The option granted hereunder may be
exercised at any time and from time to time in whole or in part
upon notice by the Representative to the Company, which notice may be given at any time
within 30 days from the date of this Agreement. Such notice shall set forth (i) the aggregate
number of Optional Shares as to which the Underwriters are exercising the option, (ii) the
names and denominations in which the certificates for the Optional Shares are to be registered
and (iii) the time, date and place at which such certificates will be delivered (which time and
date may be simultaneous with, but not earlier than, the First Closing Date; and in the event
that such time and date are simultaneous with the First Closing Date, the term “First Closing
Date” shall refer to the time and date of delivery of certificates for the Firm Shares and such
Optional Shares). Any such time and date of delivery, if subsequent to the First Closing Date,
is called an “Option Closing Date” and shall be determined by the Representative and shall not
be earlier than three nor later than
16
five full business days after the date of delivery of such notice of exercise. If any Optional Shares are to be purchased, each Underwriter agrees,
severally and not jointly, to purchase the number of Optional Shares (subject to such
adjustments to eliminate fractional shares as the Representative may determine) that bears the
same proportion to the total number of Optional Shares to be purchased as the number of Firm
Shares set forth on Schedule A opposite the name of such Underwriter bears to the total
number of Firm Shares. The Representative may cancel the option at any time prior to its
expiration by giving written notice of such cancellation to the Company.
(d) Public Offering of the Offered Shares. The Representative hereby advises the Company that the Underwriters intend to offer for
sale to the public, initially on the terms set forth in the Time of Sale Prospectus and each
Applicable Prospectus, their respective portions of the Offered Shares as soon after this
Agreement has been executed as the Representative, in its sole judgment, has determined is
advisable and practicable.
(e) Payment for the Offered Shares. Payment for the Offered Shares shall be made at the First Closing Date (and, if
applicable, at each Option Closing Date) by wire transfer of immediately available funds to the
order of the Company.
It is understood that the Representative has been authorized, for its own account and the
accounts of the several Underwriters, to accept delivery of and receipt for, and make payment
of the purchase price for, the Firm Shares and any Optional Shares the Underwriters have agreed
to purchase. Jefferies, individually and not as the Representative of the Underwriters, may
(but shall not be obligated to) make payment for any Offered Shares to be purchased by any
Underwriter whose funds shall not have been received by the Representative by the First Closing
Date or the applicable Option Closing Date, as the case may be, for the account of such
Underwriter, but any such payment shall not relieve such Underwriter from any of its
obligations under this Agreement.
(f) Delivery of the Offered Shares. The Company shall deliver, or cause to be delivered, to the Representative for the
accounts of the several Underwriters certificates for the Firm Shares at the First Closing
Date, against the irrevocable release of a wire transfer of immediately available funds for the
amount of the purchase price therefor. The Company shall also deliver, or cause to be
delivered, to the Representative for the accounts of the several
Underwriters, certificates for the Optional Shares the Underwriters have agreed to
purchase at the First Closing Date or the applicable Option Closing Date, as the case may be,
against the irrevocable release of a wire transfer of immediately available funds for the
amount of the purchase price therefor. The certificates for the Offered Shares shall be in
definitive form and registered in such names and denominations as the Representative shall have
requested at least two full business days prior to the First Closing Date (or the applicable
Option Closing Date, as the case may be) and shall be made available for inspection on the
business day preceding the First Closing Date (or the applicable Option Closing Date, as the
case may be) at a location in New York City as the Representative may designate. Time shall be
of the essence, and delivery at the time and place specified in this Agreement is a further
condition to the obligations of the Underwriters.
Section 3. Additional Covenants.
The Company further covenants and agrees with each Underwriter as follows:
17
(a) Delivery of Registration Statement, Time of Sale Prospectus and Prospectus. The Company shall furnish to you, without charge, one signed and [four] conformed
copies of the Registration Statement and any amendments thereto (including exhibits thereto),
and for delivery to each other Underwriter a conformed copy of the Registration Statement and
any amendments thereto (without exhibits thereto), and shall furnish to you in New York City,
without charge, prior to 10:00 a.m. New York City time on the business day next succeeding the
date of this Agreement and during the period mentioned in Section 3(e) or 3(f) below, as many
copies of the Time of Sale Prospectus, the Final Prospectus and any supplements and amendments
thereto or to the Registration Statement as you may reasonably request.
(b) Representative’s Review of Proposed Amendments and Supplements. Prior to amending or supplementing the Registration Statement, the Preliminary
Prospectus, the Time of Sale Prospectus or the Final Prospectus (including any amendment or
supplement through incorporation by reference of any document), the Company shall furnish to
the Representative for review, a reasonable amount of time prior to the proposed time of filing
or use thereof, a copy of each such proposed amendment or supplement, and the Company shall not
file or use any such proposed amendment or supplement without the Representative’s consent.
(c) Free Writing Prospectuses. The Company shall furnish to the Representative for review, a reasonable amount of time
prior to the proposed time of filing or use thereof, a copy of each proposed free writing
prospectus or any amendment or supplement thereto to be prepared by or on behalf of, used by,
or referred to by the Company and the Company shall not file, use or refer to any proposed free
writing prospectus or any amendment or supplement thereto without the Representative’s consent.
The Company shall furnish to each Underwriter, without charge, as many copies of any free
writing prospectus prepared by or on behalf of, or used by, the Company as such Underwriter may
reasonably request. If at any time when a prospectus is required by the Securities Act
(including, without limitation, pursuant to Rule 173(d) under the Securities Act) to be delivered in connection with sales of the Offered
Shares (but in any event at any time through and including the First Closing Date) there
occurred or occurs an event or development as a result of which any free writing prospectus
prepared by or on behalf of, used by, or referred to by the Company conflicted or would
conflict with the information contained in the Registration Statement or included or would
include an untrue statement of a material fact or omitted or would omit to state a material
fact necessary in order to make the statements therein, in the light of the circumstances
prevailing at that subsequent time, not misleading, the Company shall promptly amend or
supplement such free writing prospectus to eliminate or correct such conflict or so that the
statements in such free writing prospectus as so amended or supplemented will not include an
untrue statement of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances prevailing at such subsequent time,
not misleading, as the case may be; provided, however, that prior to amending or supplementing
any such free writing prospectus, the Company shall furnish to the Representative for review, a
reasonable amount of time prior to the proposed time of filing or use thereof, a copy of such
proposed amended or supplemented free writing prospectus and the Company shall not file, use or
refer to any such amended or supplemented free writing prospectus without the Representative’s
consent.
(d) Filing of Underwriter Free Writing Prospectuses. The Company shall not take any action that would result in an Underwriter or the
Company being required to file with the Commission pursuant to Rule 433(d) under the Securities
Act a free writing prospectus prepared by or on behalf of the Underwriter that the Underwriter
otherwise would not have been required to file thereunder.
18
(e) Amendments and Supplements to Time of Sale Prospectus. If the Time of Sale Prospectus is being used to solicit offers to buy the Offered Shares
at a time when the Final Prospectus is not yet available to prospective purchasers and any
event shall occur or condition exist as a result of which it is necessary to amend or
supplement the Time of Sale Prospectus so that the Time of Sale Prospectus does not include an
untrue statement of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances when delivered to a prospective
purchaser, not misleading, or if any event shall occur or condition exist as a result of which
the Time of Sale Prospectus conflicts with the information contained in the Registration
Statement, or if, in the opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Time of Sale Prospectus to comply with applicable law, including the Securities
Act, the Company shall (subject to Sections 3(b) and 3(c)) forthwith prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to any dealer upon request,
either amendments or supplements to the Time of Sale Prospectus so that the statements in the
Time of Sale Prospectus as so amended or supplemented will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances when delivered to a prospective purchaser, not
misleading or so that the Time of Sale Prospectus, as amended or supplemented, will no longer
conflict with the Registration Statement, or so that the Time of Sale Prospectus, as amended or
supplemented, will comply with applicable law including the Securities Act.
(f) Securities Act Compliance. The Company will prepare the Canadian Final Prospectus and the U.S. Final Prospectus in
a form approved by the Representative and (i) will file the Canadian Final Prospectus with the
Reviewing Authority in accordance with the Canadian Shelf Procedures not later than the
Reviewing Authority’s close of business on the second business day following the execution and
delivery of this Agreement, and (ii) will file such U.S. Final Prospectus with the Commission
pursuant to General Instruction II.L of Form F-10 not later than the Commission’s close of
business on the first business day following the day on which the filing of the Canadian Final
Prospectus is made with the Reviewing Authority. After the date of this Agreement, the Company
shall promptly advise the Representative in writing (i) of the receipt of any comments of, or
requests for additional or supplemental information or other communication from, any Canadian
Commission or the Commission with respect to the Canadian Final Prospectus or the Registration
Statement, (ii) of any request by any Canadian Commission to amend or supplement the Canadian
Final Prospectus or for additional information or of any request by the Commission to amend the
Registration Statement or to amend or supplement the U.S. Final Prospectus or for additional
information, (iii) of the time and date of any filing of any post-effective amendment to the
Registration Statement or any amendment or supplement to the Preliminary Prospectus, the Time
of Sale Prospectus, any free writing prospectus or the Final Prospectus, (iv) of the time and
date that any post-effective amendment to the Registration Statement becomes effective, (v) of
the issuance by the Commission or any Canadian Commission, as applicable, of any stop order
suspending the effectiveness of the Registration Statement or any post-effective amendment
thereto or any order directed at any document incorporated by reference in the Registration
Statement, the Final Prospectus or any amendment or supplement thereto or any order preventing
or suspending the use of the Preliminary Prospectus, the Time of Sale Prospectus, any free
writing prospectus, the Final Prospectus or any amendment or supplement thereto or any
post-effective amendment to the Registration Statement, or the suspension of the qualification
of the Offered Shares for sale in any jurisdiction, or of any proceedings to
19
remove, suspend or terminate from listing or quotation the Shares from any securities exchange upon which they are
listed for trading or included or designated for quotation, or of the threatening or initiation
of any proceedings for any of such purposes, and (vi) of the issuance by any Canadian
Commission of any order having the effect of ceasing or suspending the distribution of the
Offered Shares, or of the institution or, to the knowledge of the Company, threatening of any
proceedings for any such purpose. If the Commission or any Canadian Commission shall enter any
such stop order at any time, the Company will use its best efforts to obtain the lifting of
such order at the earliest possible moment.
(g) Amendments and Supplements to the Prospectus and Other Securities Act Matters. The Company will comply with the Securities Act, the Exchange Act and the Canadian
Securities Laws so as to permit the completion of the distribution of the Offered Shares as
contemplated in this Agreement and the Final Prospectus. If any event shall occur or condition
exist as a result of which it is necessary to amend or supplement the Final Prospectus so that
the Final Prospectus does not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of the
circumstances when the Final Prospectus is delivered to a purchaser, not misleading, or if in
the opinion of the Representative or counsel for the Underwriters it is otherwise necessary to
amend or supplement the Final Prospectus to comply with applicable law, including the
Securities Act and Canadian Securities Laws, the Company agrees (subject to Section 3(b) and
3(c)) to promptly prepare, file with the Commission and the Canadian Commissions and furnish at
its own expense to the Underwriters and to dealers, amendments or supplements to the Final
Prospectus so that the statements in the Final Prospectus as so
amended or supplemented will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the light of the
circumstances when the Final Prospectus is delivered to a purchaser, not misleading or so that
the Final Prospectus, as amended or supplemented, will comply with applicable law, including
the Securities Act and Canadian Securities Laws, as applicable. Neither the Representative’s
consent to, nor delivery of, any such amendment or supplement shall constitute a waiver of any
of the Company’s obligations under Sections 3(b) or (c).
(h) Blue Sky Compliance. The Company shall cooperate with the Representative and counsel for the Underwriters to
qualify or register the Offered Shares for sale under (or obtain exemptions from the
application of) the state securities or blue sky laws or Canadian provincial securities laws
(or foreign laws) of those jurisdictions designated by the Representative, shall comply with
such laws and shall continue such qualifications, registrations and exemptions in effect so
long as required for the distribution of the Offered Shares. The Company shall not be required
to qualify as a foreign corporation or to take any action that would subject it to general
service of process in any jurisdiction in which it is not presently qualified or where it would
be subject to taxation as a foreign corporation. The Company will advise the Representative
promptly of the suspension of the qualification or registration of (or any exemption relating
to) the Offered Shares for offering, sale or trading in any jurisdiction or any initiation or
threat of any proceeding for any such purpose, and in the event of the issuance of any order
suspending such qualification, registration or exemption, the Company shall use its best
efforts to obtain the withdrawal thereof at the earliest possible moment.
(i) Use of Proceeds. The Company shall apply the net proceeds from the sale of the Offered Shares sold by it
in the manner described under the caption “Use of Proceeds” in each Applicable Prospectus.
20
(j) Transfer Agent. The Company shall maintain, at its expense, a registrar and transfer agent for the
Shares both in Canada and the United States.
(k) Earnings Statement. As soon as practicable, but in any event no later than eighteen months after the date
of this Agreement, the Company will make generally available to its security holders and to the
Representative an earnings statement (which need not be audited) covering a period of at least
twelve months beginning with the first fiscal quarter of the Company commencing after the date
of this Agreement which shall satisfy the provisions of Section 11(a) of the Securities Act and
the rules and regulations of the Commission thereunder.
(l) Periodic Reporting Obligations. The Company shall file, on a timely basis, with the Commission and the Nasdaq Global
Market all reports and documents required to be filed under the Exchange
Act. Additionally, the Company shall report the use of proceeds from the issuance of the
Offered Shares as may be required under Rule 463 under the Securities Act, if applicable.
(m) Listing. The Company will use its commercially reasonable efforts to effect and maintain the
listing of the Offered Shares on the TSX and the Nasdaq Global Market and to maintain the
listing of the Shares on the TSX and the Nasdaq Global Market unless the shareholders of the
Company approve a transaction where such listing is terminated.
(n) Agreement Not to Offer or Sell Additional Shares. During the period commencing on and including the date hereof and ending on and including
the 90th day following the date of this Agreement (as the same may be extended as described
below, the “Lock-up Period”), the Company will not, without the prior written consent of
Jefferies (which consent may be withheld at the sole discretion of Jefferies), directly or
indirectly, sell (including, without limitation, any short sale), offer, contract or grant any
option to sell, pledge, transfer or establish an open “put equivalent position” within the
meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or transfer, or
announce the offering of, or file any registration statement under the Securities Act in
respect of, any Shares, options, rights or warrants to acquire Shares or securities
exchangeable or exercisable for or convertible into Shares (other than as contemplated by this
Agreement with respect to the Offered Shares) or publicly announce the intention to do any of
the foregoing; provided, however, that the Company may issue Shares, options to purchase Shares
or performance share units, or issue Shares upon exercise of options, pursuant to any stock
option, stock bonus or other stock plan or arrangement and may issue Shares upon exercise of
warrants outstanding on the date hereof, in each case as described in each Applicable
Prospectus. Notwithstanding the foregoing, if (i) during the last 17 days of the Lock-up
Period, the Company issues an earnings release or material news or a material event relating to
the Company occurs or (ii) prior to the expiration of the Lock-up Period, the Company announces
that it will release earnings results during the 16-day period beginning on the last day of the
Lock-up Period, then in each case the Lock-up Period will be extended until the expiration of
the 18-day period beginning on the date of the issuance of the earnings release or the
occurrence of the material news or material event, as applicable, unless Jefferies waives, in
writing, such extension (which waiver may be withheld at the sole discretion of Jefferies),
except that such extension will not apply if, (i) within three business days prior to the 15th
calendar day before the last day of the Lock-up Period, the Company delivers a certificate,
signed by the Chief Financial Officer or Chief Executive Officer of the Company, certifying on
behalf of the Company that (i) the Shares are “actively traded securities” (as defined in
Regulation M), (ii) the Company meets the applicable requirements of paragraph (a)(1) of Rule
139 under
21
the Securities Act in the manner contemplated by NASD Conduct Rule 2711(f)(4), and
(iii) the provisions of NASD Conduct Rule 2711(f)(4) are not applicable to any research reports
relating to the Company published or distributed by any of the Underwriters during the 15 days
before or after the last day of the Lock-up Period (before giving effect to such extension).
The Company will provide the Representative with prior notice of any such announcement that
gives rise to an extension of the Lock-up Period.
(o) Investment Limitation. The Company shall not invest or otherwise use the proceeds received by the Company from
its sale of the Offered Shares in such a manner as would require the
Company or any of its Subsidiaries to register as an investment company under the
Investment Company Act.
(p) No Stabilization or Manipulation; Compliance with Regulation M. The Company will not take, directly or indirectly, any action designed to or that might
be reasonably expected to cause or result in stabilization or manipulation of the price of the
Shares or any other reference security, whether to facilitate the sale or resale of the Offered
Shares or otherwise, and the Company will, and shall cause each of its affiliates to, comply
with all applicable provisions of Regulation M. If the limitations of Rule 102 of Regulation M
(“Rule 102”) do not apply with respect to the Offered Shares or any other reference security
pursuant to any exception set forth in Section (d) of Rule 102, then promptly upon notice from
the Representative (or, if later, at the time stated in the notice), the Company will, and
shall cause each of its affiliates to, comply with Rule 102 as though such exception were not
available but the other provisions of Rule 102 (as interpreted by the Commission) did apply.
(q) Existing Lock-Up Agreements. During the Lock-up Period, the Company will enforce all existing agreements between the
Company and any of its security holders that prohibit the sale, transfer, assignment, pledge or
hypothecation of any of the Company’s securities. In addition, the Company will direct the
transfer agent to place stop transfer restrictions upon any such securities of the Company that
are bound by such existing “lock-up” agreements for the duration of the periods contemplated in
such agreements, including, without limitation, “lock-up” agreements entered into by the
Company’s officers and directors pursuant to Section 6(j).
Jefferies, on behalf of the several Underwriters, may, in its sole discretion, waive in
writing the performance by the Company of any one or more of the foregoing covenants or extend the
time for their performance.
Section 4. Payment of Expenses. The Company agrees to pay all costs, fees and expenses incurred in connection with the
performance of its obligations hereunder and in connection with the transactions contemplated
hereby, including without limitation (i) all expenses incident to the issuance, delivery and
qualification of the Offered Shares in the United States and Canada (including all printing and
engraving costs), (ii) all fees and expenses of the registrar and transfer agent of the Shares,
(iii) all necessary issue, transfer and other stamp taxes in connection with the issuance and
sale of the Offered Shares to the Underwriters, (iv) all fees and expenses of the Company’s
counsel, independent public or certified public accountants and other advisors, (v) all costs
and expenses incurred in connection with the preparation, printing, filing, shipping and
distribution of the Registration Statement (including financial statements, exhibits,
schedules, consents and certificates of experts), the Time of Sale Prospectus, the Final
Prospectus, any free writing prospectus prepared by or on behalf of, used by, or referred to by
the Company, and the Preliminary Prospectus, all amendments and supplements thereto, and this
Agreement, (vi) all filing fees,
22
attorneys’ fees and expenses incurred by the Company or the
Underwriters in connection with qualifying or registering (or obtaining exemptions from the
qualification or registration of) all or any part of the Offered Shares for offer and sale
under the state securities or blue sky laws or the provincial securities
laws of Canada or any other country, and, if requested by the Representative, preparing
and printing a “Blue Sky Survey” or other memorandum and any supplements thereto, advising the
Underwriters of such qualifications, registrations and exemptions, (vii) the filing fees
incident to, and the reasonable fees and expenses of counsel for the Underwriters in connection
with, FINRA’s review, if any, and approval of the Underwriters’ participation in the offering
and distribution of the Offered Shares (provided, however, that expenses of counsel to the
Underwriters under subsections (vi) and (vii) shall not exceed U.S.$10,000 in the aggregate),
(viii) all travel expenses, including air fare and accommodation expenses, of representatives
of the Company in connection with any “road show” undertaken in connection with the marketing
of the offering of the Shares, and (ix) the fees and expenses associated with listing the
Offered Shares on the Nasdaq Global Market and the TSX. Except as provided in this Section 4,
Section 7, Section 8 and Section 9 hereof, the Underwriters shall pay their own expenses,
including the fees and disbursements of their counsel.
Section 5. Covenant of the Underwriters. Each Underwriter, severally and not jointly, covenants with the Company not to take any
action that would result in the Company being required to file with the Commission pursuant to
Rule 433(d) under the Securities Act a free writing prospectus prepared by or on behalf of such
Underwriter that otherwise would not be required to be filed by the Company thereunder, but for
the action of the Underwriter.
Section 6. Conditions to the Obligations of the Underwriters. The obligations of the several Underwriters to purchase and pay for the Offered Shares
as provided herein on the First Closing Date and, with respect to the Optional Shares, each
Option Closing Date shall be subject to the accuracy of the representations and warranties on
the part of the Company set forth in Section 1 hereof as of the date hereof and as of the First
Closing Date as though then made and, with respect to the Optional Shares, as of each Option
Closing Date as though then made, to the timely performance by the Company of its covenants and
other obligations hereunder, and to each of the following additional conditions:
(a) Accountants’ Comfort Letter. On the date hereof, the Representative shall have received from KPMG LLP, independent
public or certified public accountants for the Company, (i) a letter dated the date hereof
addressed to the Underwriters, in form and substance satisfactory to the Representative,
containing statements and information of the type ordinarily included in accountant’s “comfort
letters” to underwriters with respect to the audited and unaudited financial statements and
certain financial information contained in the Registration Statement, the Preliminary
Prospectus, and the Final Prospectus (and the Representative shall have received an additional
five conformed copies of such accountants’ letter for each of the several Underwriters), and
(ii) confirming that they are (A) independent public, certified public or chartered accountants
as required by the Securities Act, the Exchange Act and all Canadian Securities Laws and (B) in
compliance with the applicable requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X.
(b) Compliance with Registration Requirements; No Stop Order. For the period from and after effectiveness of this Agreement and prior to the First
Closing Date and, with respect to the Optional Shares, each Option Closing Date:
23
(i) no stop order suspending the effectiveness of the Registration Statement, or any
post-effective amendment to the Registration Statement, shall be in effect and no
proceedings for such purpose shall have been instituted or threatened by the Commission;
(ii) no order preventing or suspending the use of the Canadian Final Prospectus shall
have been issued and no proceeding for that purpose shall have been initiated or threatened
by any Canadian Commission or other securities regulatory authority in Canada;
(iii) no order having the effect of ceasing or suspending the distribution of the
Offered Shares or any other securities of the Company shall have been issued by any
securities regulatory authority or stock exchange in Canada or the United States and no
proceedings for that purpose shall have been instituted or shall be pending or, to the
knowledge of the Company, shall be contemplated by any such securities regulatory authority
or stock exchange;
(iv) a Canadian Final Prospectus shall have been filed with the Canadian Commissions
in accordance with the Canadian Shelf Procedures and a U.S. Final Prospectus shall have
been filed with the Commission in accordance with General Instruction II.L of Form F-10;
and
(v) all requests for additional information on the part of the Commission or any
Canadian Commission shall have been complied with.
(c) No Material Adverse Change. For the period from the date of this Agreement and to and including the First
Closing Date and, with respect to the Optional Shares, each Option Closing Date, in the
judgment of the Representative, there shall not have occurred any Material Adverse Change.
(d) Opinion of U.S. Counsel for the Company. On each of the First Closing Date and each Option Closing Date the Representative shall
have received the opinion of Xxxxxx & Whitney LLP, U.S. counsel for the Company, dated as of
such Closing Date, in form and substance satisfactory to counsel for the Underwriters (and the
Representative shall have received an additional four signed copies of such counsel’s legal
opinion for each of the several Underwriters).
(e) Opinion of Canadian Counsel for the Company. On each of the First Closing Date and each Option Closing Date the Representative shall
have received the opinion of:
(i) Xxxxxxx Xxxxx LLP, Canadian counsel for the Company;
(ii) Blake, Xxxxxxx & Xxxxxxx LLP, British Columbia counsel for the Company;
(iii) XxXxxxxxx Gauley LLP, Saskatchewan counsel for the Company,
(iv) Xxxxxx, XxxXxxxx & Xxxxxxxxxxx LLP, Manitoba counsel for the Company; and
(v) Stewart, McKelvey, Stirling & Scales, Atlantic counsel for the Company,
24
or such other firms as are acceptable to the Underwriters, each dated as of such Closing Date,
in form and substance satisfactory to counsel for the Underwriters (and the Representative
shall have received an additional four signed copies of each such counsel’s legal opinion for
each of the several Underwriters).
(f) Opinion of U.S. Counsel for the Underwriters. On each of the First Closing Date and each Option Closing Date the Representative shall
have received the opinion of Xxxxx Day, U.S. counsel for the Underwriters, in form and
substance satisfactory to the Underwriters, dated as of such Closing Date.
(g) Opinion of Canadian Counsel for the Underwriters. On each of the First Closing Date and each Option Closing Date the Representative shall
have received the opinion of XxXxxxxx Xxxxxxxx LLP, Canadian counsel for the Underwriters, in
form and substance satisfactory to the Underwriters, dated as of such Closing Date.
(h) Officers’ Certificate. On each of the First Closing Date and each Option Closing Date the Representative shall
have received a written certificate executed by the Chief Executive Officer or President of the
Company and the Chief Financial Officer of the Company, dated as of such Closing Date, to the
effect set forth in subsections (b)(ii)-(iv) and (c) of this Section 6, and further to the
effect that:
(i) for the period from and including the date of this Agreement to and including such
Closing Date, there has not occurred any Material Adverse Change;
(ii) the representations, warranties and covenants of the Company set forth in Section
1 of this Agreement are true and correct with the same force and effect as though expressly
made on and as of such Closing Date; and
(iii) the Company has complied with all the agreements hereunder and satisfied all the
conditions on its part to be performed or satisfied hereunder at or prior to such Closing
Date.
(i) Bring-down Comfort Letter. On each of the First Closing Date and each Option Closing Date the Representative shall
have received from KPMG LLP, independent public or certified public accountants for the
Company, a letter dated such date, in form and substance satisfactory to the Representative, to
the effect that they reaffirm the statements made in the letter furnished
by them pursuant to subsection (a) of this Section 6, except that the specified date
referred to therein for the carrying out of procedures shall be no more than three business
days prior to the First Closing Date or the applicable Option Closing Date, as the case may be
(and the Representative shall have received an additional four conformed copies of such
accountants’ letter for each of the several Underwriters).
(j) Lock-Up Agreement from Certain Securityholders of the Company. On or prior to the date hereof, the Company shall have furnished to the Representative
an agreement in the form of Exhibit B hereto from each of the persons listed on
Exhibit A hereto, and such agreement shall be in full force and effect on each of the
First Closing Date and each Option Closing Date.
(k) Additional Documents. On or before each of the First Closing Date and each Option Closing Date, the
Representative and counsel for the Underwriters shall have received such information, documents
and opinions as they may reasonably request for the purposes of
25
enabling them to pass upon the
issuance and sale of the Offered Shares as contemplated herein, or in order to evidence the
accuracy of any of the representations and warranties, or the satisfaction of any of the
conditions or agreements, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Offered Shares as contemplated herein and in
connection with the other transactions contemplated by this Agreement shall be satisfactory in
form and substance to the Representative and counsel for the Underwriters.
If any condition specified in this Section 6 is not satisfied when and as required to be
satisfied, this Agreement may be terminated by the Representative by notice to the Company at
any time on or prior to the First Closing Date and, with respect to the Optional Shares, at any
time on or prior to the applicable Option Closing Date, which termination shall be without
liability on the part of any party to any other party, except that Section 4, Section 6,
Section 8 and Section 9 shall at all times be effective and shall survive such termination.
Section 7. Reimbursement of Underwriters’ Expenses. If this Agreement is terminated by the Representative pursuant to Section 6, Section 10
or Section 11, or if the sale to the Underwriters of the Offered Shares on the First Closing
Date is not consummated because of any refusal, inability or failure on the part of the Company
to perform any agreement herein or to comply with any provision hereof, the Company agrees to
reimburse the Representative and the other Underwriters (or such Underwriters as have
terminated this Agreement with respect to themselves), severally, upon demand for all
out-of-pocket expenses that shall have been reasonably incurred by the Representative and the
Underwriters in connection with the proposed purchase and the offering and sale of the Offered
Shares, including but not limited to fees and disbursements of counsel, printing expenses,
travel expenses, postage, facsimile and telephone charges.
Section 8. Indemnification.
(a) Indemnification of the Underwriters. The Company agrees to indemnify and hold harmless each Underwriter, its officers and
employees and agents, and each person, if any, who controls any Underwriter within the meaning
of the Securities Act or the Exchange Act against any loss, claim, damage, liability or
expense, as incurred, to which such Underwriter or such officer, employee or controlling person
may become subject, under the Securities Act, the Exchange Act, any Canadian Securities Laws,
other federal, provincial or state statutory law or regulation, or the laws or regulations of
foreign jurisdictions in which Offered Shares have been offered or sold, or at common law or
otherwise (including in settlement of any litigation), insofar as such loss, claim, damage,
liability or expense (or actions in respect thereof as contemplated below) arises out of or is
based upon (i) any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement, or any amendment thereto, including any information deemed to be a
part thereof for purposes of Section 11 under the Securities Act, or the omission or alleged
omission therefrom of a material fact required to be stated therein or necessary to make the
statements therein not misleading; (ii) any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Prospectus, the Time of Sale Prospectus, any free
writing prospectus that the Company has used, referred to or filed, or is required to file,
pursuant to Rule 433(d) of the Securities Act, the Final Prospectus or Supplementary Material
(or any amendment or supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; or (iii) any act or failure to act or
26
any alleged act or failure to act by any Underwriter in connection with, or relating in any
manner to, the Offered Shares or the offering contemplated hereby, and which is included as
part of or referred to in any loss, claim, damage, liability or action arising out of or based
upon any matter covered by clause (i) or (ii) above, provided that the Company shall not be
liable under this clause (iii) to the extent that a court of competent jurisdiction shall have
determined by a final judgment that such loss, claim, damage, liability or action resulted
directly from any such acts or failures to act undertaken or omitted to be taken by such
Underwriter through its bad faith or willful misconduct; and to reimburse each Underwriter and
each such officer, employee and controlling person for any and all expenses (including the fees
and disbursements of counsel chosen by Jefferies) as such expenses are reasonably incurred by
such Underwriter or such officer, employee or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the foregoing indemnity agreement shall
not apply to any loss, claim, damage, liability or expense to the extent, but only to the
extent, arising out of or based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with written information
furnished to the Company by the Representative expressly for use in the Registration Statement,
the Preliminary Prospectus, the Time of Sale Prospectus, any such free writing prospectus, the
Final Prospectus or Supplementary Material (or any amendment or supplement thereto), it being
understood and agreed that the only such information furnished by the Representative to the
Company consists of the information described in subsection (b) below. The indemnity agreement
set forth in this Section 8(a) shall be in addition to any liabilities that the Company may
otherwise have.
(b) Indemnification of the Company, its Directors and Officers. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration Statement and
each person, if any, who controls the Company within the meaning of the Securities Act or the
Exchange Act, against any loss, claim, damage, liability
or expense, as incurred, to which the Company, or any such director, officer or
controlling person may become subject, under the Securities Act, the Exchange Act, any Canadian
Securities Laws or other federal, provincial or state statutory law or regulation, or at common
law or otherwise (including in settlement of any litigation, if such settlement is effected
with the written consent of such Underwriter), insofar as such loss, claim, damage, liability
or expense (or actions in respect thereof as contemplated below) arises out of or is based upon
(i) any untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereto, including any information deemed to be a part
thereof for purposes of Section 11 under the Securities Act, or the omission or alleged
omission therefrom of a material fact required to be stated therein or necessary to make the
statements therein not misleading, or (ii) any untrue statement or alleged untrue statement of
a material fact contained in the Preliminary Prospectus, the Time of Sale Prospectus, any free
writing prospectus that the Company has used, referred to or filed, or is required to file,
pursuant to Rule 433(d) of the Securities Act, the Final Prospectus or Supplementary Material
(or any amendment or supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, the Preliminary Prospectus, the Time of Sale
Prospectus, such free writing prospectus that the Company has used, referred to or filed, or is
required to file, pursuant to Rule 433(d) of the Securities Act, the Final Prospectus or
Supplementary Material (or such amendment or supplement thereto), in reliance upon and in
conformity with written
27
information furnished to the Company by the Representative expressly
for use therein; and to reimburse the Company, or any such director, officer or controlling
person for any and all expenses (including the fees and disbursements of counsel) as such
expenses are reasonably incurred by such director, officer or controlling person in connection
with investigating, defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action. The Company hereby acknowledges that the only information that
the Representative and the Underwriters have furnished to the Company expressly for use in the
Registration Statement, the Preliminary Prospectus, the Time of Sale Prospectus, any free
writing prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d)
of the Securities Act, the Final Prospectus or Supplementary Material (or any amendment or
supplement thereto) are the statements set forth in the table in the first paragraph and as set
forth in the first paragraph under the subheading “Commission and Expenses,” and the third
paragraph under the subheading “Price Stabilization, Short Positions and Penalty Bids,” under
the caption “Underwriting” in the Preliminary Prospectus and to be set forth in the Final
Prospectus. The indemnity agreement set forth in this Section 8(b) shall be in addition to any
liabilities that each Underwriter may otherwise have.
(c) Notifications and Other Indemnification Procedures. Promptly after receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect thereof is to be
made against an indemnifying party under this Section 8, notify the indemnifying party in
writing of the commencement thereof, but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party for contribution
or otherwise than under the indemnity agreement contained in this Section 8 or to the extent it
is not prejudiced as a proximate result of such failure. In case any such action is brought
against any indemnified party and such indemnified party seeks or intends to seek indemnity
from an indemnifying party, the indemnifying party will be entitled
to participate in, and, to the extent that it shall elect, jointly with all other
indemnifying parties similarly notified, by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified party; provided,
however, if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded that a conflict
may arise between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to select
separate counsel to assume such legal defenses and to otherwise participate in the defense of
such action on behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of such indemnifying party’s election so to assume
the defense of such action and approval by the indemnified party of counsel, the indemnifying
party will not be liable to such indemnified party under this Section 8 for any legal or other
expenses subsequently incurred by such indemnified party in connection with the defense thereof
unless (i) the indemnified party shall have employed separate counsel in accordance with the
proviso to the preceding sentence (it being understood, however, that the indemnifying party
shall not be liable for the fees and expenses of more than one separate counsel (together with
local counsel) representing the indemnified parties who are parties to such action), which
counsel (together with any local counsel) for the indemnified parties shall be selected by
Jefferies (in the case of counsel for the indemnified parties referred to in Section 8(a)
above) or by the Company (in the case of counsel for the indemnified parties referred to in
Section 8(b) above)), (ii) the indemnifying party shall not have employed counsel satisfactory
to the indemnified party to represent the indemnified party within a
28
reasonable time after notice of commencement of the action or (iii) the indemnifying party has authorized in writing
the employment of counsel for the indemnified party at the expense of the indemnifying party,
in each of which cases the fees and expenses of counsel shall be at the expense of the
indemnifying party and shall be paid as they are incurred.
(d) Settlements. The indemnifying party under this Section 8 shall not be liable for any settlement of
any proceeding effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified party for fees
and expenses of counsel as contemplated by Section 8(c) hereof, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity was or could have been sought hereunder by such indemnified
party, unless such settlement, compromise or consent includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of such action, suit
or proceeding.
Section 9. Contribution. If the indemnification provided for in Section 8 is for any reason held to be
unavailable to or otherwise insufficient to hold harmless an indemnified party in respect of
any losses, claims, damages, liabilities or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified
party, as incurred, as a result of any losses, claims, damages, liabilities or expenses
referred to therein (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company, on the one hand, and the Underwriters, on the other hand, from the
offering of the Offered Shares pursuant to this Agreement or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also the relative
fault of the Company, on the one hand, and the Underwriters, on the other hand, in connection
with the statements or omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and the Underwriters, on the other hand, in
connection with the offering of the Offered Shares pursuant to this Agreement shall be deemed
to be in the same respective proportions as the total net proceeds from the offering of the
Offered Shares pursuant to this Agreement (before deducting expenses) received by the Company,
and the total underwriting discounts and commissions received by the Underwriters, in each case
as set forth on the front cover page of the U.S. Final Prospectus bear to the aggregate initial
public offering price of the Offered Shares as set forth on such cover. The relative fault of
the Company, on the one hand, and the Underwriters, on the other hand, shall be determined by
reference to, among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates to information
supplied by the Company, on the one hand, or the Underwriters, on the other hand, and the
parties’ relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
29
The amount paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject to the
limitations set forth in Section 8(c), any legal or other fees or expenses reasonably incurred
by such party in connection with investigating or defending any action or claim. The
provisions set forth in Section 8(c) with respect to notice of commencement of any action shall
apply if a claim for contribution is to be made under this Section 9; provided, however, that
no additional notice shall be required with respect to any action for which notice has been
given under Section 8(c) for purposes of indemnification.
The Company and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, no Underwriter shall be required to
contribute any amount in excess of the underwriting discounts and commissions received by such
Underwriter in connection with the Offered Shares underwritten by it and distributed to the
public. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant to
this Section 9 are several, and not joint, in proportion to
their respective underwriting commitments as set forth opposite their respective names on
Schedule A. For purposes of this Section 9, each officer and employee of an
Underwriter and each person, if any, who controls an Underwriter within the meaning of the
Securities Act or the Exchange Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within the meaning of
the Securities Act and the Exchange Act shall have the same rights to contribution as the
Company.
Section 10. Default of One or More of the Several Underwriters. If, on the First Closing Date or the applicable Option Closing Date, as the case may
be, any one or more of the several Underwriters shall fail or refuse to purchase Offered Shares
that it or they have agreed to purchase hereunder on such date, and the aggregate number of
Offered Shares which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase does not exceed 10% of the aggregate number of the Offered Shares to be purchased
on such date, the Representative may make arrangements satisfactory to the Company for the
purchase of such Offered Shares by other persons, including any of the Underwriters, but if no
such arrangements are made by such Closing Date, the other Underwriters shall be obligated,
severally and not jointly, in the proportions that the number of Firm Shares set forth opposite
their respective names on Schedule A bears to the aggregate number of Firm Shares set
forth opposite the names of all such non-defaulting Underwriters, or in such other proportions
as may be specified by the Representative with the consent of the non-defaulting Underwriters,
to purchase the Offered Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date. If, on the First Closing Date or the applicable
Option Closing Date, as the case may be, any one or more of the Underwriters shall fail or
refuse to purchase Offered Shares and the aggregate number of Offered Shares with respect to
which such default occurs exceeds 10% of the aggregate number of Offered Shares to be purchased
on such date, and arrangements satisfactory to the Representative and the Company for the
purchase of such Offered Shares are not made within
30
48 hours after such default, this Agreement shall terminate without liability of any party to any other party except that the provisions of
Section 4, Section 7, Section 8 and Section 9 shall at all times be effective and shall survive
such termination. In any such case either the Representative or the Company shall have the
right to postpone the First Closing Date or the applicable Option Closing Date, as the case may
be, but in no event for longer than seven days in order that the required changes, if any, to
the Registration Statement and the U.S. Final Prospectus or any other documents or arrangements
may be effected.
As used in this Agreement, the term “Underwriter” shall be deemed to include any person
substituted for a defaulting Underwriter under this Section 10. Any action taken under this
Section 10 shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
Section 11. Termination of this Agreement. Prior to the purchase of the Firm Shares by the Underwriters on the First Closing Date
this Agreement may be terminated by the Representative by notice given to the Company if at any
time (i) trading or quotation in any of the Company’s securities shall have been suspended or
limited by the Commission, by the Nasdaq Global Market or by a Canadian securities regulatory
authority or by the TSX, or trading in securities generally on
any of the Nasdaq Stock Market, the New York Stock Exchange or the TSX shall have been
suspended or limited, or minimum or maximum prices shall have been generally established on any
of such stock exchanges by the Commission or FINRA; (ii) a general banking moratorium shall
have been declared by any United States federal, New York state or Canadian federal
authorities; (iii) there shall have occurred any outbreak or escalation of national or
international hostilities or any crisis or calamity, or any change in the United States,
Canadian or international financial markets, or any substantial change or development involving
a prospective substantial change in the United States’, Canada’s or international political,
financial or economic conditions, in each case as in the judgment of the Representative is
material and adverse and makes it impracticable to market the Offered Shares in the manner and
on the terms described in the Time of Sale Prospectus or the Applicable Prospectus or to
enforce contracts for the sale of securities; (iv) in the judgment of the Representative there
shall have occurred any Material Adverse Change; or (v) the Company shall have sustained a loss
by strike, fire, flood, earthquake, accident or other calamity of such character as in the
judgment of the Representative may interfere materially with the conduct of the business and
operations of the Company regardless
of whether or not such loss shall have been insured. Any
termination pursuant to this Section 11 shall be without liability on the part of (a) the
Company to any Underwriter, except that the Company shall be obligated to reimburse the
expenses of the Representative and the Underwriters pursuant to Sections 4 and 7 hereof, (b)
any Underwriter to the Company, or (c) any party hereto to any other party, except that the
provisions of Section 8 and Section 9 shall at all times be effective and shall survive such
termination.
Section 12. No Advisory or Fiduciary Relationship. The Company acknowledges and agrees
that (a) the purchase and sale of the Offered Shares pursuant to this Agreement, including the
determination of the public offering price of the Offered Shares and any related discounts and
commissions, is an arm’s-length commercial transaction between the Company, on the one hand,
and the several Underwriters, on the other hand, (b) in connection with the offering
contemplated hereby and the process leading to such transaction each Underwriter is and has
been acting solely as a principal and is not the agent or fiduciary of the Company or its
shareholders, creditors, employees or any other party, (c) no Underwriter has assumed or will
assume an advisory or fiduciary responsibility in favor of the Company with respect to the
offering contemplated hereby or the process leading thereto (irrespective
31
of whether such Underwriter has advised or is currently advising the Company on other matters) and no
Underwriter has any obligation to the Company with respect to the offering contemplated hereby
except the obligations expressly set forth in this Agreement, (d) the Underwriters and their
respective affiliates may be engaged in a broad range of transactions that involve interests
that differ from those of the Company, and (e) the Underwriters have not provided any legal,
accounting, regulatory or tax advice with respect to the offering contemplated hereby and the
Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it
deemed appropriate.
Section 13. Representations and Indemnities to Survive Delivery. The respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of its or their
partners, officers or directors or any controlling person, as the case may be, and, anything
herein to the contrary notwithstanding, will survive delivery of and payment for the
Offered Shares sold hereunder and any termination of this Agreement.
Section 14. Notices. All communications hereunder shall be in writing and shall be mailed, hand delivered or
telecopied and confirmed to the parties hereto as follows:
If to the Representative:
Xxxxxxxxx & Company, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
If to the Company:
Westport Innovations Inc.
0000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX, Xxxxxx X0X 0X0
Facsimile: (000) 000-0000
Attention: Chief Financial Officer
0000 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX, Xxxxxx X0X 0X0
Facsimile: (000) 000-0000
Attention: Chief Financial Officer
Any party hereto may change the address for receipt of communications by giving written notice
to the others.
Section 15. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto,
including any substitute Underwriters pursuant to Section 10 hereof, and to the benefit of the
employees, officers and directors and controlling persons referred to in Section 8 and Section
9, and in each case their respective successors and personal representatives, and no other
person will have any right or obligation hereunder. The term “successors” shall not include
any purchaser of the Offered Shares as such from any of the Underwriters merely by reason of
such purchase.
Section 16. Partial Unenforceability. The invalidity or unenforceability of any Section, paragraph or provision of this
Agreement shall not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph
32
or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes
(and only such minor changes) as are necessary to make it valid and enforceable.
Section 17. Governing Law Provisions. This Agreement shall be governed by and construed in accordance with the internal laws
of the State of New York applicable to agreements made and to be performed in such state. Any
legal suit, action or proceeding arising out of or based upon this Agreement
or the transactions contemplated hereby (“Related Proceedings”) may be instituted in the
federal courts of the United States of America located in the Borough of Manhattan in the City
of New York or the courts of the State of New York in each case located in the Borough of
Manhattan in the City of New York (collectively, the “Specified Courts”), and each party
irrevocably submits to the exclusive jurisdiction (except for proceedings instituted in regard
to the enforcement of a judgment of any such court (a “Related Judgment”), as to which such
jurisdiction is non-exclusive) of such courts in any such suit, action or proceeding. Service
of any process, summons, notice or document by mail to such party’s address set forth above
shall be effective service of process for any suit, action or other proceeding brought in any
such court. The parties irrevocably and unconditionally waive any objection to the laying of
venue of any suit, action or other proceeding in the Specified Courts and irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any such suit,
action or other proceeding brought in any such court has been brought in an inconvenient forum.
Each party not located in the United States irrevocably appoints CT Corporation System, which
currently maintains a New York City office at 000 0xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Xxxxxx
Xxxxxx of America, as its agent to receive service of process or other legal summons for
purposes of any such suit, action or proceeding that may be instituted in any state or federal
court in the Borough of Manhattan in the City of New York.
With respect to any Related Proceeding, each party irrevocably waives, to the fullest
extent permitted by applicable law, all immunity (whether on the basis of sovereignty or
otherwise) from jurisdiction, service of process, attachment (both before and after judgment)
and execution to which it might otherwise be entitled in the Specified Courts, and with respect
to any Related Judgment, each party waives any such immunity in the Specified Courts or any
other court of competent jurisdiction, and will not raise or claim or cause to be pleaded any
such immunity at or in respect of any such Related Proceeding or Related Judgment, including,
without limitation, any immunity pursuant to the United States Foreign Sovereign Immunities Act
of 1976, as amended.
Section 18. General Provisions. This Agreement constitutes the entire agreement of the parties to this Agreement and
supersedes all prior written or oral and all contemporaneous oral agreements, understandings
and negotiations with respect to the subject matter hereof. This Agreement may be executed in
two or more counterparts, each one of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument. This Agreement may not be
amended or modified unless in writing by all of the parties hereto, and no condition herein
(express or implied) may be waived unless waived in writing by each party whom the condition is
meant to benefit. The Section headings herein are for the convenience of the parties only and
shall not affect the construction or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated business person who was
adequately represented by counsel during negotiations regarding the provisions hereof,
including, without limitation, the indemnification provisions of Section 8
33
and the contribution provisions of Section 9, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 8 and 9 hereto fairly allocate the
risks in light of the ability of the parties to investigate the Company, its affairs and its
business in order to assure that adequate disclosure has been made in the Registration
Statement, the Preliminary Prospectus, the Time of Sale Prospectus, each free
writing prospectus and the Final Prospectus (or any amendments and supplements thereto),
as required by the Securities Act and the Exchange Act.
34
If the foregoing is in accordance with your understanding of our agreement, kindly sign and
return to the Company the enclosed copies hereof, whereupon this instrument, along with all
counterparts hereof, shall become a binding agreement in accordance with its terms.
Very truly yours, WESTPORT INNOVATIONS INC. |
||||
By: | /s/ Xxxxx Xxxxxx | |||
Name: | Xxxxx Xxxxxx | |||
Title: | Chief Executive Officer |
The foregoing Underwriting Agreement is hereby confirmed and accepted by the Representative in
New York, New York as of the date first above written.
XXXXXXXXX & COMPANY, INC.
Acting as Representative of the
several Underwriters named in
the attached Schedule A.
several Underwriters named in
the attached Schedule A.
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Managing Director
Title: Managing Director
2
SCHEDULE A
Number of | ||||
Firm Shares | ||||
Underwriters | to be Purchased | |||
Xxxxxxxxx & Company, Inc. |
2,493,750 | |||
Lazard Capital Markets LLC |
950,000 | |||
ThinkEquity LLC |
617,500 | |||
Xxxxx-Xxxxxx Capital Group LLC. |
427,500 | |||
Dundee Securities Corporation |
261,250 | |||
Total |
4,750,000 |
SCHEDULE B
Information and Free Writing Prospectuses included in the Time of Sale Prospectus
Price to Public: U.S.$10.50 per share (Cdn.$11.13 per share)
Price to Underwriters: U.S.$9.975 per share
Price to Underwriters: U.S.$9.975 per share
SCHEDULE C
Subsidiaries and Other Investments of the Company
Schedule X-0
Xxxxxxxx Xxxxxxxxxxx (Xxxx Xxxx) Ltd. — (Hong Kong, China)
Westport Innovations (Australia) Pty. Ltd. — (Victoria, Australia)
Westport Power Inc. — (British Columbia, Canada)
Westport Fuel Systems Inc. — (Delaware, U.S.A.)
Westport Germany GmbH — (Germany)
Cummins Westport Inc. — (Delaware, U.S.A.)
Westport Innovations (Australia) Pty. Ltd. — (Victoria, Australia)
Westport Power Inc. — (British Columbia, Canada)
Westport Fuel Systems Inc. — (Delaware, U.S.A.)
Westport Germany GmbH — (Germany)
Cummins Westport Inc. — (Delaware, U.S.A.)
Schedule C-2
BTIC Westport Inc. — (Beijing, China)
Juniper Engines Inc. — (British Columbia, Canada)
Cummins Westport (Canada) Inc. — (Ontario, Canada)
Clean Energy Fuels Corp. — (Delaware, U.S.A.)
Juniper Engines Inc. — (British Columbia, Canada)
Cummins Westport (Canada) Inc. — (Ontario, Canada)
Clean Energy Fuels Corp. — (Delaware, U.S.A.)
EXHIBIT A
LIST OF PERSONS EXECUTING LOCK-UPS
1. Xxxxxx Xxxxxxxx
2. Xxxxxx X. Xxxxxxxxxx
3. Xxxxx X. Xxxxxxx
4. Xxxxxx X. Xxxxx
5. Xxxxxx X. Xxxx
6. Xxxxxxxx Xxxxxxx
7. Xxxxx X. Xxxxxxxxxxxx
8. Xxxx X. Xxxxxxxx
9. J. Xxxxxxx Xxxxxxxxx
10. Xxxxx X. Xxxxxx
11. M.A. (Xxxx) Xxxxxx
12. X. Xxxxxxx Xxxxxxxx
13. Xxxxx Xxxx Xxx Xxxx
EXHIBIT B
___________ __, 2009
Xxxxxxxxx & Company, Inc.
As Representative of the Several Underwriters
Xxxxxxxxx & Company, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
As Representative of the Several Underwriters
Xxxxxxxxx & Company, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
RE: Westport Innovations Inc. (the “Company”)
Ladies & Gentlemen:
The undersigned is an officer and/or director and/or an owner of record or beneficially of certain
common shares, no par value per share, of the Company (“Shares”) or securities convertible into or
exchangeable or exercisable for Shares. The Company proposes to carry out a public offering of
Shares (the “Offering”) for which you will act as the representative of the underwriters. The
undersigned recognizes that the Offering will be of benefit to the undersigned and will benefit the
Company by, among other things, raising additional capital for its operations. The undersigned
acknowledges that you and the other underwriters are relying on the representations and agreements
of the undersigned contained in this letter agreement in carrying out the Offering and in entering
into underwriting arrangements with the Company with respect to the Offering.
In consideration of the foregoing, the undersigned hereby agrees that the undersigned will not (and
will cause any spouse or immediate family member of the spouse or the undersigned living in the
undersigned’s household over whose securities of the Company the undersigned exercises discretion
or control (each, a “Controlled Person”) not to), without the prior written consent of Xxxxxxxxx &
Company, Inc. (which consent may be withheld in its sole discretion), directly or indirectly, sell,
offer, contract or grant any option to sell (including without limitation any short sale), pledge,
transfer, establish an open “put equivalent position” within the meaning of Rule 16a-1(h) under the
Securities Exchange Act of 1934, as amended, (the “Exchange Act”) or otherwise dispose of any
Shares, options or warrants to acquire Shares, or securities exchangeable or exercisable for or
convertible into Shares currently or hereafter owned either of record or beneficially (as defined
in Rule 13d-3 under the Exchange Act) by the undersigned (or a Controlled Person), or publicly
announce an intention to do any of the foregoing, for a period commencing on the date hereof and
continuing through the close of trading on the date 90 days after the date of the U.S. Final
Prospectus (as defined in the Underwriting Agreement (the “Underwriting Agreement”) relating to the
Offering to which the Company is a party) (the “Lock-up Period”); provided, however, that after the
60th day following the date of the U.S. Final Prospectus, the undersigned (or a Controlled Person),
collectively with the other persons listed on Exhibit A to the Underwriting Agreement, may
sell or otherwise transfer up to 100,000 Shares in the aggregate; provided, further, that if (i)
during the last 17 days of the Lock-up Period, the Company issues an earnings release or material
news or a material event relating to the Company occurs or (ii) prior to the expiration of the
Lock-up Period, the Company announces that it will release earnings results or becomes aware that
material news or a material event will occur during the 16-day period beginning on the last day of
the Lock-up Period, then in each case the Lock-up Period will be extended until the expiration of
the 18-day period beginning on the date of the issuance of the earnings release or the occurrence
of the material news or material event, as applicable, unless Xxxxxxxxx & Company, Inc. waives, in
writing, such extension, except that such extension will not apply if, within three business days
prior to the 15th calendar day before the last day of the Lock-up Period, the Company delivers a
certificate, signed by the Chief Financial Officer or Chief Executive Officer of the Company,
certifying on behalf of the Company that (i)
B-1
the Shares are “actively traded securities” (as defined in Regulation M), (ii) the Company meets
the applicable requirements of paragraph (a)(1) of Rule 139 under the Securities Act in the manner
contemplated by NASD Conduct Rule 2711(f)(4), and (iii) the provisions of NASD Conduct Rule
2711(f)(4) are not applicable to any research reports relating to the Company published or
distributed by any of the Underwriters during the 15 days before or after the last day of the
Lock-up Period (before giving effect to such extension); provided, further, that the foregoing
restrictions shall not apply to the transfer of any or all of the Shares owned by the undersigned
(other than as limited by clause (b) below): (a) pursuant to a bona fide third party take-over bid
made to all holders of Shares or similar acquisition transaction in which all of the outstanding
Shares are acquired; (b) pursuant to the terms of a pledge of, or the granting of security interest
in, no more than 10% of the Shares beneficially owned by the undersigned on the date of the U.S.
Final Prospectus so long as the making of any such pledge or the granting of such security interest
(1) is not required to be reported in any public report or filing under the Exchange Act to be
filed with the Securities and Exchange Commission, or pursuant to applicable Canadian securities
laws, and (2) is not otherwise voluntarily reported in any public filing or report under the
Exchange Act, or pursuant to applicable Canadian securities laws, by the undersigned or by the
Company; or (c) on death, by will or intestate succession to an immediate family of the
undersigned. The undersigned hereby acknowledges and agrees that written notice of any extension
of the Lock-up Period pursuant to the preceding sentence will be delivered by Xxxxxxxxx & Company,
Inc. to the Company and that any such notice properly delivered will be deemed to have been given
to, and received by, the undersigned. The undersigned further agrees that, prior to engaging in any
transaction or taking any other action that is subject to the terms of this agreement during the
period from the date of this agreement to and including the 34th day following the expiration of
the initial Lock-Up Period, the undersigned will give notice thereof to the Company and will not
consummate such transaction or take any such action unless it has received written confirmation
from the Company that the Lock-Up Period (as may have been extended pursuant to this paragraph) has
expired or been otherwise waived, in writing, by Xxxxxxxxx & Company, Inc.
The undersigned also agrees and consents to the entry of stop transfer instructions with the
Company’s transfer agent and registrar against the transfer of Shares or securities convertible
into or exchangeable or exercisable for Shares held by the undersigned except in compliance with
the foregoing restrictions.
With respect to the Offering only, the undersigned waives any registration rights relating to
registration under the Securities Act of any Shares owned either of record or beneficially by the
undersigned, including any rights to receive notice of the Offering.
This agreement shall lapse and become null and void upon the earlier to occur of (i) the withdrawal
of the registration statement filed with the Securities and Exchange Commission and the Canadian
prospectus with respect to the Offering and (ii) termination of the Underwriting Agreement in
accordance with its terms prior to the sale of any Shares.
B-2
This agreement is irrevocable and will be binding on the undersigned and the respective successors,
heirs, personal representatives, and assigns of the undersigned.
By:
Signature
(and indicate capacity of person signing if
signing as custodian, trustee, or on behalf
of an entity)
signing as custodian, trustee, or on behalf
of an entity)
B-3