LABOPHARM INC. (incorporated under Part IA of the Companies Act (Québec)) 11,000,000 Common Shares PURCHASE AGREEMENT
EXHIBIT 3.1
(incorporated under Part IA of the Companies Act (Québec))
11,000,000 Common Shares
Dated: April 27, 2006
(incorporated under Part IA of the Companies Act (Québec))
11,000,000 Common Shares
(Without Par Value)
April 27, 2006
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
BANC OF AMERICA SECURITIES LLC
as Representatives of the several Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
BANC OF AMERICA SECURITIES LLC
as Representatives of the several Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Labopharm inc., a company incorporated under Part IA of the Companies Act (Québec) (the
“Company”), confirms its agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated (“Xxxxxxx Xxxxx”), Banc of America Securities LLC (“Banc of America”) and each of the
other Underwriters named in Schedule A hereto (collectively, the “Underwriters,” which term shall
also include any underwriter substituted as hereinafter provided in Section 10 hereof), for whom
Xxxxxxx Xxxxx and Banc of America are acting as representatives (in such capacity, the
“Representatives”), with respect to (i) the sale by the Company, and the purchase by the
Underwriters, acting severally and not jointly, of the respective numbers of common shares, without
par value, of the Company (“Common Shares”) set forth in Schedule A hereto and (ii) the grant by
the Company to the Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of 1,650,000 additional Common Shares to cover
overallotments, if any. The aforesaid 11,000,000 Common Shares (the “Initial Securities”) to be
purchased by the Underwriters and all or any part of the 1,650,000 Common Shares subject to the
option described in Section 2(b) hereof (the “Option Securities”) are hereinafter called,
collectively, the “Securities.”
The Company understands that the Underwriters propose to make a public offering of the
Securities in the United States and in each of the provinces and territories of Canada upon the
terms set forth in the U.S. Prospectus (as defined below) and the Canadian Prospectus (as defined
below) as soon as the Representatives deem advisable after this Agreement has been executed and
delivered.
The Company has prepared and filed with the securities regulatory authorities (the “Qualifying
Authorities”) in each of the provinces and territories of Canada (the “Qualifying Jurisdictions”) a
preliminary short form base PREP prospectus dated April 18, 2006, relating to 10,000,000 Common Shares to be purchased by the Underwriters and all or any part of 1,500,000 Common Shares subject to the option described in Section 2(b) hereof (collectively, the “Preliminary Securities”) (in
the
English and French languages, as applicable, the “Canadian Preliminary Prospectus”). The
Company has selected the Autorité des Marchés Financiers (the “Reviewing Authority”) as its
principal regulator in respect of the offering of the Securities. The Canadian Preliminary
Prospectus has been filed with the Qualifying Authorities pursuant to National Instrument 44-101 -
Short Form Prospectus Distributions, National Policy 43-201 — Mutual Reliance Review System for
Prospectuses and Annual Information Forms and National Instrument 44-103 — Post-Receipt Pricing for
the pricing of securities after the final receipt for a prospectus has been obtained (the “PREP
Procedures”). The Reviewing Authority has issued a preliminary Mutual Reliance Review System
(“MRRS”) decision document on behalf of itself and the Qualifying Authorities evidencing a receipt
by each of the Qualifying Authorities for 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. 333-133351)
covering the registration of the Preliminary Securities
(the “First Registration Statement”) under the Securities Act of 1933, as amended (the “1933 Act”), including the Canadian Preliminary
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) (the “U.S. Preliminary
Prospectus”).
In addition, the Company (A) has prepared and filed (1) with the Qualifying Authorities, a
final short form base PREP prospectus relating to the Preliminary Securities, including the documents
incorporated by reference, dated April 27, 2006 (in the English and French languages, as applicable, the
“Final PREP Prospectus”), which omits the PREP Information (as hereinafter defined) in accordance
with the PREP Procedures and has obtained from the Reviewing Authority a final MRRS decision
document dated April 27, 2006 for such Final PREP Prospectus evidencing receipts for the Final PREP
Prospectus issued by each of the Qualifying Authorities and (2) with the Commission, an amendment
to the First Registration Statement, including the Final PREP 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) omitting the PREP Information, and (B) will prepare and file,
promptly, and in any event within 2 business days, after the execution and delivery of this
Agreement, (1) with the Qualifying Authorities, in accordance with the PREP Procedures, a
supplemented PREP prospectus covering the Securities setting forth the PREP Information (in the English and French
languages, as applicable, the “Supplemental PREP
Prospectus”), and (2) with the Commission, a registration
statement on Form F-10 (File
No. 333- ) covering the registration
of 1,000,000 additional Common Shares to be purchased by the Underwriters
and all or any portion of the 150,000 Common Shares subject to the
option described in Section 2(b) hereof (the “Second
Registration Statement”) under the Securities Act, including the
Supplemental PREP 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) in
accordance with General Instruction II.L of Form F-10, the Supplemental PREP 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) (such
Supplemental PREP Prospectus being referred to herein as the “U.S. Supplemental Prospectus”). The
information included in the Supplemental PREP Prospectus that is omitted from the Final PREP
Prospectus for which a receipt has been obtained from the Reviewing Authority on behalf of the
Qualifying Authorities and which is deemed under the PREP Procedures to be incorporated by
reference into the Final PREP Prospectus as of the date of the Supplemental PREP Prospectus is
referred to herein as the “PREP Information.”
Each
prospectus relating to the Preliminary Securities (A) used in the United States before the time
the Second Registration Statement on Form F-10 became effective or (B) used in Canada (1) before a an MRRS decision
document evidencing receipts for the Final PREP Prospectus had been obtained from the Reviewing
Authority on behalf of itself and the Qualifying Authorities or (2) after such MRRS decision
document has been obtained and prior to the execution and delivery of this Agreement, in each case,
including the documents incorporated by reference therein, that omits the PREP Information, is
herein called a “preliminary prospectus.” The First
Registration Statement, including the
exhibits thereto and the documents incorporated by reference therein, as amended at the time it
became effective, and the Second Registration Statement, including the
exhibits thereto and the documents incorporated by reference therein,
at the time it became effective, are herein collectively called the
“Registration Statements.” The prospectus included in the
First Registration Statement at the time it became effective, including the documents incorporated by
reference therein, is herein called the “U.S. Prospectus,” except that
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upon the
effectiveness of the Second Registration Statement, the term
“U.S. Prospectus” shall refer to the U.S.
Supplemental Prospectus, including the documents incorporated by reference therein.
The Final PREP Prospectus for which an MRRS decision document evidencing final receipts has
been issued by the Reviewing Authority on behalf of the Qualifying Authorities, including the
documents incorporated by reference therein, is herein referred to as the “Canadian Prospectus,”
except that, when, after the execution of this Agreement, a Supplemental PREP Prospectus containing
the PREP Information is thereafter filed with the Qualifying Authorities, the term “Canadian
Prospectus” shall refer to such Supplemental PREP Prospectus, including the documents incorporated
by reference therein. Any amendment to the Canadian Prospectus, any amended or supplemental
prospectus or 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 Closing Time (as hereinafter defined) or, where such document
is deemed to be incorporated by reference into the Final PREP Prospectus, prior to the expiry of
the period of distribution of the Securities, is referred to herein collectively as the
“Supplementary Material.”
The Company understands that a portion of the Securities may be offered and sold in a public
offering in the Qualifying Jurisdictions conducted through Xxxxxxx Xxxxx Canada Inc., an affiliate
of Xxxxxxx Xxxxx, and Banc of America Securities Canada Co., an affiliate of Banc of America (the
“Sub-underwriters”), pursuant to the Canadian Prospectus. Each of the Sub-underwriters, subject to
the terms and conditions set forth herein, agrees and covenants with the Company to use reasonable
efforts to sell the Securities in the Qualifying Jurisdictions. Any Securities so sold will be
purchased by the Sub-underwriters from Xxxxxxx Xxxxx or Bank of America, as the case may be, at the
Closing Time (as hereinafter defined) at a price equal to the purchase price as set forth in
Schedule B hereto or such purchase price less an amount to be mutually agreed upon among the
Sub-underwriters, Xxxxxxx Xxxxx and Banc of America, which amount shall not be greater than the
underwriting commission as set forth in Schedule B hereto.
The
Company has also prepared and filed with the Commission appointments of agent for
service of process upon the Company on Form F-X in conjunction with the filing of the Registration
Statements (the “Form F-X”).
For
purposes of this Agreement, all references to the Registration Statements, the U.S.
Preliminary Prospectus, the U.S. Supplemental Prospectus or the U.S. 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”). For purposes
of this Agreement, all references to the Canadian Preliminary Prospectus, the Final PREP
Prospectus, the Supplemental PREP Prospectus or the Canadian Prospectus or any amendment or
supplement to any of the foregoing shall include the copy filed with the Qualifying Authorities
pursuant to the System for Electronic Document Analysis and Retrieval (“SEDAR”).
All references in this Agreement to financial statements and schedules and other information
which is “contained,” “included” or
“stated” in the Registration Statements, the U.S. Preliminary
Prospectus, the U.S. Supplemental Prospectus or the U.S. Prospectus (or other references of like
import) shall be deemed to mean and include all such financial statements and schedules and other
information which is incorporated by reference in or otherwise deemed
by the general rules and regulations of the Commission under the 1933
Act (the “1933 Act Regulations”) to be a part of or
included in the Registration Statements, the U.S. Preliminary Prospectus, the
U.S. Supplemental Prospectus or the U.S. Prospectus, as the case may be.
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SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents and warrants to
each Underwriter and each Sub-underwriter as of the date hereof, as of the Applicable Time referred
to in Section 1(a)(i) hereof, as of the Closing Time referred to in Section 2(c) hereof, and as of
each Date of Delivery (if any) referred to in Section 2(b) hereof, and agrees with each Underwriter
and each Sub-underwriter, as follows:
(i) Compliance with Registration Requirements. The Company is a reporting
issuer (or equivalent thereof) in each Qualifying Jurisdiction and is not in default under
the securities laws of any Qualifying Jurisdiction. The Company is qualified to file a
prospectus in the form of a short form prospectus in each Qualifying Jurisdiction pursuant
to the requirements of National Instrument 44-101 — Short Form Prospectus Distributions and
is eligible to use the PREP Procedures. The Company meets the general eligibility
requirements for use of Form F-10 under the 1933 Act. A MRRS decision document evidencing
final receipts has been obtained from the Reviewing Authority on behalf of the Qualifying
Authorities in respect of the Final PREP Prospectus, and no order suspending the
distribution of or trading in the Securities has been issued by any of the Qualifying
Authorities. Each Registration Statement has become effective under the 1933 Act, and no
stop order suspending the effectiveness of the Registration Statements has been issued under
the 1933 Act and no proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and any request on the
part of the Commission for additional information has been complied with.
At
the time the Registration Statements became effective under the 1933 Act and at all
times subsequent thereto up to and including the Closing Time (as defined in Section 2(c))
(and, if any Option Securities are purchased, at the Date of Delivery (as defined in Section
2(b)): (A) the Canadian Prospectus complied and will comply in all material respects with
the securities laws applicable in the Qualifying Jurisdictions and the respective rules and
regulations under such laws together with applicable published policy statements (including,
without limitation, the PREP Procedures) and applicable notices of securities regulatory
authorities in such Qualifying Jurisdictions (“Canadian Securities Laws”); (B) the U.S.
Prospectus conformed and will conform to the Canadian 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; (C) the Registration Statements and any amendments
or supplements thereto complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations;
(D) neither of the Registration
Statements nor any amendment or supplement thereto contained or will contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and (E) each of the Canadian
Prospectus, any Supplementary Material or any amendment or supplement thereto, together with
each document incorporated therein by reference, constituted and will constitute full, true
and plain disclosure of all material facts relating to the Company and its subsidiaries,
taken as a whole, and does not and will not contain a misrepresentation, as defined under
Canadian Securities Laws, and the Securities, and each of the U.S. Prospectus, the Canadian
Prospectus and any Supplementary Material or any amendment or supplement thereto, together
with each document incorporated therein by reference, did not and 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 under which they were made, not
misleading.
As of the Applicable Time (as defined below), neither (x) any Issuer General Use Free
Writing Prospectus (as defined below) issued at or prior to the Applicable Time and the
Statutory Prospectus (as defined below) as of the Applicable Time and the information
included on
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Schedule C hereto, all considered together (collectively, the “General Disclosure
Package”), nor (y) any individual Issuer Limited Use Free Writing Prospectus, when
considered together with the General Disclosure Package, included any untrue statement of a
material fact or omitted to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading.
As used in this subsection and elsewhere in this Agreement:
“Applicable
Time” means 8:30 am (Eastern time) on April 28, 2006 or such other
time as agreed by the Company and Xxxxxxx Xxxxx and Banc of America.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined
in Rule 433 of the 1933 Act Regulations (“Rule 433”), relating to the Securities that (i) is
required to be filed with the Commission by the Company, (ii) is a “road show that is a
written communication” within the meaning of Rule 433(d)(8)(i) whether or not required to be
filed with the Commission or (iii) is exempt from filing pursuant to Rule 433(d)(5)(i)
because it contains a description of the Securities or of the offering that does not reflect
the final terms, in each case in the form filed or required to be filed with the Commission
or, if not required to be filed, in the form required to be retained in the Company’s
records pursuant to Rule 433(g).
“Issuer General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is intended for general distribution to prospective investors (other than a Bona Fide
Electronic Road Show (as defined below)), as evidenced by its being specified in Schedule D
hereto.
“Issuer Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is not an Issuer General Use Free Writing Prospectus.
“Statutory Prospectus” as of any time means the prospectus relating to the Securities
that is included in the Registration Statements immediately prior to that time, including any
document incorporated by reference therein.
The Company has made available a “bona fide electronic road show,” as defined in Rule
433, in compliance with Rule 433(d)(8)(ii) (the “Bona Fide Electronic Road Show”) such that
no filing of any “road show” (as defined in Rule 433(h)) is required in connection with the
offering of the Securities.
Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Securities or until any earlier
date that the issuer notified or notifies Xxxxxxx Xxxxx and Banc of America as described in
Section 3(e), did not, does not and will not include any information that conflicted,
conflicts or will conflict with the information contained in the
Registration Statements, the
U.S. Prospectus or the Canadian Prospectus, including any document incorporated by reference
therein, and any preliminary or other prospectus deemed to be a part thereof that has not
been superseded or modified.
The representations and warranties in this subsection shall not apply to statements in
or omissions from the Registration Statements, the U.S. Prospectus, the Canadian Prospectus,
any Supplementary Material or any Issuer Free Writing Prospectus made in reliance upon and
in conformity with written information furnished to the Company by any Underwriter or
Sub-underwriter through Xxxxxxx Xxxxx or Banc of America expressly for use therein.
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Each preliminary prospectus (including the prospectus filed as part of the First Registration
Statement as originally filed or as part of any amendment thereto) complied when so filed in
all material respects with the 1933 Act Regulations and each such prospectus and the U.S.
Prospectus delivered to the Underwriters and the Sub-underwriters for use in connection with
this offering was identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation S-T. Each copy
of the Preliminary Prospectus, the Final PREP Prospectus and the Supplemental PREP
Prospectus provided to the Underwriters by the Company was, or will be, identical to the
version thereof filed electronically by the Company with the Qualifying Authorities on
SEDAR.
At the time of filing each Registration Statement and at the date hereof, the Company
was not, is not and will not be an “ineligible issuer,” as defined in Rule 405 of the 1933 Act
Regulations.
(ii) Incorporation of Documents by Reference. Each document filed or to be
filed with the Qualifying Authorities and incorporated or deemed to be incorporated by
reference in the Canadian Prospectus complied or will comply when so filed and at the
Closing Time (and, if any Option Securities are purchased, at any Date of Delivery) in all
material respects with Canadian Securities Laws, and will not contain a misrepresentation as
defined under Canadian Securities Laws, and none of such documents contained or will contain
at the time of its filing any untrue statement of a material fact or omitted or will omit at
the time of its filing to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they were or are
made, not misleading.
The documents incorporated or deemed to be incorporated by reference in the
Registration Statements and the U.S. 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 Securities Exchange Act of 1934 (the “1934 Act”) and the rules and regulations of the
Commission under the 1934 Act (the “1934 Act Regulations”), and, when read together with the
other information in the U.S. Prospectus, at the time the Registration Statements became
effective, at the time the U.S. Prospectus was issued and at the Closing Time (and, if any
Option Securities are purchased, at the Date of Delivery) did not and will not contain an
untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(iii) Independent Accountants. Ernst & Young LLP, who has audited the
consolidated financial statements of the Company included or incorporated by reference in
the U.S. Prospectus and the Canadian Prospectus, are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations and are independent with respect to
the Company within the meaning of the Xxxxxxxx-Xxxxx Act (as hereinafter defined) for the
periods required under the general instruction (III. B.) of Form F-10, the Companies Act
(Québec) and applicable Canadian Securities Laws.
(iv) Financial Statements. The Company’s consolidated financial statements
included or incorporated by reference in the Registration Statements, the General Disclosure
Package, the U.S. Prospectus and the Canadian Prospectus, together with the related
schedules and notes, present fairly the consolidated financial position, results of
operations and cash flows of the Company and its consolidated subsidiaries at the dates
indicated and the consolidated statements of earnings (loss), shareholders’ equity and cash
flows of the Company and its consolidated subsidiaries for the periods specified. Said
financial statements have been prepared in accordance with generally accepted accounting
principles in Canada (“Canadian GAAP”) applied on a consistent basis throughout the periods
involved and have been reconciled to
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generally accepted accounting principles in the United States of America (“U.S. GAAP”)
in accordance with Item 18 of Form 20-F under the 1934 Act. The supporting schedules, if
any, present fairly in accordance with Canadian GAAP and as reconciled to U.S. GAAP the
information required to be stated therein. The selected consolidated financial data, the
summary consolidated financial data and all operating data included or incorporated by
reference in the Registration Statements, the General Disclosure Package, the U.S. Prospectus
and the Canadian Prospectus present fairly the information shown therein and the selected
consolidated financial data and the summary consolidated financial data have been compiled
on a basis consistent with that of the audited consolidated financial statements included in
the Registration Statements, the General Disclosure Package, the U.S. Prospectus and the
Canadian Prospectus. All disclosures contained in the Registration Statements, the General
Disclosure Package, the U.S. Prospectus or the Canadian Prospectus, or incorporated by
reference therein, regarding “non-GAAP financial measures” (as such term is defined by the
rules and regulations of the Commission) comply with Regulation G of the 1934 Act and Item
10 of Regulation S-K of the 1933 Act, to the extent applicable.
(v) No Material Adverse Change in Business. Since the respective dates as of
which information is given in the Registration Statements, the General Disclosure Package,
the U.S. Prospectus, the Canadian Prospectus or the Supplementary Material, except as
otherwise stated therein, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a “Material Adverse Effect”), (B) there have been no
transactions entered into by the Company or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of its share
capital.
(vi) Good Standing of the Company. The Company has been duly incorporated and
is validly existing as a company in good standing under the laws of the Province of Québec
and has all the necessary corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the U.S. Prospectus and the Canadian
Prospectus and to enter into and perform its obligations under this Agreement; and the
Company is duly qualified as a foreign corporation to transact business and is in good
standing in each other 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 so to qualify or to be in good standing would not result in a Material Adverse
Effect.
(vii) Good Standing of Subsidiaries. Each “significant subsidiary” of the
Company (as such term is defined in Rule 1-02 of Regulation S-X under the 1934 Act) (each a
“Subsidiary” and, collectively, the “Subsidiaries”) is listed on Schedule E to this
Agreement. Each Subsidiary has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own, lease and operate its properties and to conduct
its business as described in the U.S. Prospectus and the Canadian Prospectus and is duly
qualified as a foreign corporation 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 so to qualify or to
be in good standing would not result in a Material Adverse Effect. All of the issued and
outstanding shares in the capital of each Subsidiary have been duly authorized and validly
issued and are fully paid and non-assessable and are owned by the Company, directly or
through subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or
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equity; none of the outstanding shares in the capital of each of the Subsidiaries was
issued in violation of preemptive or other similar rights of any shareholder of such
Subsidiary. The only subsidiaries of the Company are the subsidiaries listed on Schedule E
to this Agreement.
(viii) Capitalization. The authorized, issued and outstanding share capital of
the Company is as set forth in the U.S. Prospectus and the Canadian Prospectus under the
caption “Description of Share Capital” and in the column entitled “Actual” under the caption
“Capitalization” (except for subsequent issuances, if any, pursuant to this Agreement,
pursuant to reservations, agreements or employee benefit plans referred to in the U.S.
Prospectus and the Canadian Prospectus or pursuant to the exercise of convertible securities
or options referred to in the U.S. Prospectus and the Canadian Prospectus). All of the
issued and outstanding shares in the capital of the Company have been duly authorized and
validly issued and are fully paid and non-assessable and have been issued in compliance with
all U.S. and Canadian securities laws; none of the outstanding shares in the capital of the
Company was issued in violation of the preemptive or other similar rights of any
securityholder of the Company. Except as disclosed in the U.S. Prospectus and the Canadian
Prospectus, the Company does not have any options or warrants to purchase, or any preemptive
rights or other rights to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell, any of its share capital
or any such options, rights, convertible securities or obligations. The description of the
Company’s employee benefit plans, and the options or other rights granted thereunder, as set
forth in the U.S. Prospectus and the Canadian Prospectus, accurately and fairly presents the
information required to be disclosed with respect to such plans, options and rights. Except
as disclosed in the U.S. Prospectus and the Canadian Prospectus, to the knowledge of the
Company, there are no agreements, arrangements or understandings among or between any
shareholders of the Company with respect to the Company or the voting or disposition of the
Company’s share capital that will survive the sale of the Securities pursuant to this
Agreement.
(ix) Authorization of Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.
(x) Authorization and Description of Securities. The Securities to be
purchased by the Underwriters from the Company have been duly authorized for issuance and
sale to the Underwriters pursuant to this Agreement and, when issued and delivered by the
Company pursuant to this Agreement against payment of the consideration set forth herein,
will be validly issued and fully paid and non-assessable; the Common Shares conform to all
statements relating thereto contained in the U.S. Prospectus and the Canadian Prospectus and
such description conforms to the rights set forth in the instruments defining the same; no
holder of the Securities will be subject to personal liability by reason of being such a
holder; and the issuance of the Securities is not subject to the preemptive or other similar
rights of any securityholder of the Company.
(xi) Absence of Defaults and Conflicts. Neither the Company nor any of its
subsidiaries is in violation of its charter or by-laws or in default in the performance or
observance of any obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement
or instrument to which the Company or any of its subsidiaries is a party or by which it or
any of them may be bound, or to which any of the property or assets of the Company or any
subsidiary is subject (collectively, “Agreements and Instruments”) except for such defaults
that would not result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement and the consummation of the transactions contemplated herein
and in the U.S. Prospectus and the Canadian Prospectus (including the issuance and sale of
the Securities and the use of the proceeds
8
from the sale of the Securities as described in the U.S. Prospectus and the Canadian
Prospectus under the caption “Use of Proceeds”) and compliance by the Company with its
obligations hereunder have been duly authorized by all necessary corporate action and do not
and will not, whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment 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 subsidiary pursuant to, the Agreements and
Instruments (except for such conflicts, breaches, defaults or Repayment Events or liens,
charges or encumbrances that would not result in a Material Adverse Effect), nor will such
action result in any violation of the provisions of the charter or by-laws of the Company or
any subsidiary or any applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality, court, domestic or foreign, or stock
exchange having jurisdiction over the Company or any subsidiary or any of their assets,
properties or operations. As used herein, a “Repayment Event” means any event or condition
which gives 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 subsidiary.
(xii) Absence of Labor Dispute. No labor dispute with the employees of the
Company or any subsidiary exists or, to the knowledge of the Company, is imminent, and the
Company is not aware of any existing or imminent labor disturbance by the employees of any
of its or any subsidiary’s principal suppliers, manufacturers, customers or contractors,
which, in either case, would result in a Material Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit, proceeding, inquiry
or investigation before or brought by any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Company, threatened, against or affecting
the Company or any subsidiary, which is required to be disclosed in the Registration
Statements, the U.S. Prospectus, the Canadian Prospectus or the Supplementary Material, or
which might result in a Material Adverse Effect, or which might materially and adversely
affect the properties or assets thereof or the consummation of the transactions contemplated
in this Agreement or the performance by the Company of its obligations hereunder; the
aggregate of all pending legal or governmental proceedings to which the Company or any
subsidiary is a party or of which any of their respective property or assets is the subject
which are not described in the Registration Statements, the U.S. Prospectus, the Canadian
Prospectus or the Supplementary Material, including ordinary routine litigation incidental
to the business, could not result in a Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or documents which are
required to be described in the Registration Statements, the U.S. Prospectus, the Canadian
Prospectus or the documents incorporated by reference therein or to be filed as exhibits
thereto which have not been so described and filed as required.
(xv) Absence of Further Requirements. No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any court or
governmental authority or agency is necessary or required for the performance by the Company
of its obligations hereunder, in connection with the offering, issuance or sale of the
Securities hereunder or the consummation of the transactions contemplated by this Agreement,
except (i) such as have been obtained or as may be required under the 1933 Act or the 1933
Act Regulations or state securities laws and (ii) such as have been obtained or as may be
required under Canadian Securities Laws.
9
(xvi) Absence of Manipulation. Neither the Company nor any affiliate of the
Company has taken, nor will the Company or any affiliate take, directly or indirectly, any
action which is designed to or which has constituted or which would be expected to cause or
result in stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(xvii) Title to Property. The Company and its subsidiaries do not own real
property. The Company and its subsidiaries have good title to all other properties owned by
them, in each case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are described in the
U.S. Prospectus and the Canadian Prospectus or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company or any of its subsidiaries; and all of
the leases and subleases material to the business of the Company and its subsidiaries,
considered as one enterprise, and under which the Company or any of its subsidiaries holds
properties described in the U.S. Prospectus and the Canadian Prospectus, are in full force
and effect, and neither the Company nor any subsidiary has any notice of any material claim
of any sort that has been asserted by anyone adverse to the rights of the Company or any
subsidiary under any of the leases or subleases mentioned above, or affecting or questioning
the rights of the Company or such subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease.
(xviii) Investment Company Act. The Company is not required, and upon the
issuance and sale of the Securities as herein contemplated and the application of the net
proceeds therefrom as described in the U.S. Prospectus and the Canadian Prospectus will not
be required, to register as an “investment company” under the Investment Company Act of
1940, as amended (the “1940 Act”).
(xix) Environmental Laws. Except as described in the U.S. Prospectus and the
Canadian Prospectus and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) 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 civil 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, asbestos-containing materials or mold (collectively, “Hazardous Materials”) or to
the manufacture, processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, “Environmental Laws”), (B) the Company and
its subsidiaries have all permits, authorizations and approvals required under any
applicable Environmental Laws and are each in compliance with their requirements, (C) 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 (D) there are no events or circumstances that would 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.
10
(xx) Registration Rights. There are no persons with registration rights or
other similar rights to have any securities registered or qualified for distribution
pursuant to the Registration Statements or the Canadian Prospectus or otherwise registered by
the Company under the 1933 Act or qualified for distribution under Canadian Securities Laws.
(xxi) Disclosure Controls. The Company and its subsidiaries maintain
disclosure controls and procedures as required by Rule 13a-15 or Rule 15d-15 under the 1934
Act and as contemplated by the certifications required under Form 52-109F1 and Form 52-109F2
under Multilateral Instrument 52-109 — Certification of Disclosures in Issuer’s Annual and
Interim Filings; such controls and procedures are effective to ensure that all material
information concerning the Company and its subsidiaries is made known, on a timely basis, to
the individuals responsible for the preparation of the Company’s filings with the Commission
and the Qualifying Authorities, and the Company has delivered to counsel for the
Underwriters copies of all descriptions of and all polices, manuals and other documents, if
any, promulgating such disclosure controls and procedures.
(xxii) Accounting Controls. The Company and each of its subsidiaries maintain
a system of internal accounting controls, which together are sufficient to provide
reasonable assurances that (A) transactions are executed in accordance with management’s
general or specific authorization; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with Canadian GAAP and as reconciled with
U.S. GAAP and to maintain accountability for assets; (C) access to assets is permitted only
in accordance with management’s general or specific authorization; and (D) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Except as described in the
U.S. Prospectus and the Canadian Prospectus, since the end of the Company’s most recent
audited fiscal year, there has been (1) no material weakness in the Company’s internal
control over financial reporting (whether or not remediated) and (2) 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.
(xxiii) Compliance with the Xxxxxxxx-Xxxxx Act. The Company has taken all
necessary actions to ensure that, upon the effectiveness of the Registration Statements, it
will be in compliance with all provisions of the Xxxxxxxx-Xxxxx Act of 2002 and all rules
and regulations promulgated thereunder or implementing the provisions thereof (the
“Xxxxxxxx-Xxxxx Act”) that are then in effect and which the Company is required to comply
with as of the effectiveness of the Registration Statements.
(xxiv) Payment of Taxes. All United States federal and Canadian federal income
tax returns of the Company and its subsidiaries required by law to be filed have been filed
and all taxes shown by such returns or otherwise assessed, which are due and payable, have
been paid, except assessments against which appeals have been or will be promptly taken and
as to which adequate reserves have been provided. The United States federal and the
Canadian federal income tax returns of the Company through the fiscal year ended December
31, 2005 have been settled and no assessment in connection therewith has been made against
the Company. The Company and its subsidiaries have filed all other tax returns that are
required to have been filed by them pursuant to applicable foreign, provincial, state, local
or other law except insofar as the failure to file such returns would not result in a
Material Adverse Effect, and have paid all taxes due pursuant to such returns or pursuant to
any assessment received by the Company and its subsidiaries, except for such taxes, if any,
as are being contested in good faith and as to which adequate reserves have been provided.
The charges, accruals and reserves on the books of the
11
Company in respect of any income and corporation tax liability for any years not
finally determined are adequate to meet any assessments or re-assessments for additional
income tax for any years not finally determined, except to the extent of any inadequacy that
would not result in a Material Adverse Effect. The statements set forth in the U.S.
Prospectus and the Canadian Prospectus under the captions “Certain Material Income Tax
Considerations — Certain Canadian Material Income Tax Considerations” and “Certain Material
Income Tax Considerations — U.S. Federal Income Tax Considerations” insofar as they purport
to describe the tax consequences to holders in respect of the payment of dividends and
distributions, and withholding taxes, duties and other similar taxes, are a fair and
accurate summary of such tax consequences.
(xxv) Insurance. The Company and its subsidiaries carry or are entitled to the
benefits of insurance, with financially sound and reputable insurers, in such amounts and
covering such risks as is generally maintained by companies of established repute engaged in
the same or similar business, and all such insurance is in full force and effect. The
Company has no reason to believe that it or any subsidiary will not be able (A) to renew its
existing insurance coverage as and when such policies expire or (B) 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 of the Company nor any subsidiary has been denied any insurance coverage, which it
has sought or for which it has applied.
(xxvi) Statistical and Market-Related Data. Any statistical and market-related
data included in the Registration Statements, the U.S. Prospectus or the Canadian Prospectus
are based on or derived from sources that the Company believes to be reliable and accurate,
and the Company has obtained the written consent to the use of such data from such sources,
to the extent any such consent is required.
(xxvii) 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 would result in a material
violation by such persons 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 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
and the Company and, to the knowledge of the Company, its affiliates have conducted their
businesses in material compliance with the FCPA.
(xxviii) Money Laundering Laws. The operations of the Company are and have
been conducted at all times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar 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 with respect to the Money Laundering Laws is pending
or, to the best knowledge of the Company, threatened.
(xxix) OFAC. Neither the Company nor, to the knowledge of the Company, any
director, officer, agent, employee, affiliate or person acting on behalf of the Company is
currently
12
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 the 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.
(xxx) Compliance with Laws. The Company and its subsidiaries, and to the
Company’s knowledge, others who perform services on behalf of the Company or its
subsidiaries in the performance of such services on behalf of the Company or its
subsidiaries, have been and are in compliance with, and conduct their businesses in
conformity with, all applicable U.S., Canadian and foreign federal, provincial, state and
local laws, rules and regulations, standards, and all applicable ordinances, judgments,
decrees, orders and injunctions of any court or governmental agency or body or the Toronto
Stock Exchange (the “TSX”), including without limitation all regulations promulgated by the
U.S. Food and Drug Administration (the “FDA”) or any other U.S., Canadian and foreign
federal, provincial, state, local agencies or bodies engaged in the regulation of clinical
trials, pharmaceuticals, or biohazardous substances or materials, except where the failure
to be in compliance or conformity would not, singly or in the aggregate, result in a
Material Adverse Effect; and neither the Company nor any of its subsidiaries has received
any notice citing action or inaction by the Company or any of its subsidiaries, or others
who perform services on behalf of the Company or its subsidiaries, that would constitute
non-compliance with any applicable U.S., Canadian or foreign federal, provincial, state or
local laws, rules, regulations, or standards; and to the knowledge of the Company, other
than as set forth in the U.S. Prospectus and Canadian Prospectus, no prospective change in
any applicable U.S., Canadian and foreign federal, provincial, state, or local laws, rules,
regulations or standards has been adopted which, when made effective, would have a Material
Adverse Effect.
(xxxi) Director or Officer Loans. There are no outstanding loans, advances
(except normal advances for business expense in the ordinary course of business) or
guarantees or indebtedness by the Company or any of its subsidiaries, to or for the benefit
of any of the officers or directors of the Company or any of their respective family
members.
(xxxii) Off-Balance Sheet Arrangements. There are no transactions,
arrangements or other relationships between and/or among the Company, any of its
subsidiaries, any of its affiliates (as such term is defined in Rule 405 of the 1933 Act
Regulations) and any unconsolidated entity, including, but not limited to, any structured
finance, special purpose or limited purpose entity that could materially affect the
Company’s liquidity or the availability of or requirements for its capital resources
required to be described in the U.S. Prospectus and the Canadian Prospectus which have not
been described as required.
(xxxiii) Prospectus Statements. The statements set forth in the U.S.
Prospectus and the Canadian Prospectus under the caption “Business” insofar as they purport
to describe the provisions of the agreements referred to therein and under the caption
“Business – Government Regulation” and “Business – Intellectual Property” insofar as they
purport to describe the provisions of the laws and regulations referred to therein, are
accurate descriptions or summaries in all material respects.
(xxxiv) Material Agreements. Each of the collaboration, manufacturing,
license, distribution, supply or other agreements material to the business of the Company
and its subsidiaries has been accurately described in the U.S. Prospectus and the Canadian
Prospectus (collectively, the “Material Agreements”). Neither the Company nor any of its
subsidiaries has sent or received any communication regarding termination of, or intent not
to renew, any of the
13
Material Agreements, and no such termination or non-renewal has been threatened by the
Company or any of its subsidiaries or, to the Company’s knowledge, any other party to any
such Material Agreement.
(xxxv) Possession of Licenses and Permits. The Company and its subsidiaries
possess such permits, licenses, approvals, consents and other authorizations (collectively,
“Governmental Licenses”) issued by the appropriate federal, provincial, state, local or
foreign regulatory agencies or bodies necessary to conduct the business now operated by them
as described in the U.S. Prospectus and the Canadian Prospectus, including without
limitation, all such registrations, approvals, certificates, authorizations and permits
required by the FDA or any other federal, provincial, state, local or foreign agencies or
bodies engaged in the regulation of clinical trials, pharmaceuticals, or biohazardous
substances or materials, except where the failure so to possess would not, singly or in the
aggregate, result in a Material Adverse Effect; the Company and its subsidiaries are in
compliance with the requirements of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, result in a Material Adverse Effect; all
of the Governmental Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be
in full force and effect would not, singly or in the aggregate, result in a Material Adverse
Effect; and neither the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation, suspension, modification, withdrawal, or termination
of any such Governmental Licenses, and there are no facts or circumstances, including
without limitation facts or circumstances relating to the revocation, suspension,
modification, withdrawal or termination of any Governmental Licenses held by others, known
to the Company, that could lead to the revocation, suspension, modification, withdrawal or
termination of any such Governmental Licenses, which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a Material Adverse
Effect. Neither the Company nor any of its subsidiaries has reason to believe that any
party granting any such Governmental Licenses is considering limiting, suspending,
modifying, withdrawing, or revoking the same in any material respect. Neither the Company
nor any of its subsidiaries has failed to submit to the FDA an Investigational New Drug
Application for a clinical trial it is conducting or sponsoring, except where such failure
would not, singly or in the aggregate, have a Material Adverse Effect; all such submissions
and any New Drug Application submission were in material compliance with applicable laws
when submitted and no material deficiencies have been asserted by the FDA with respect to
any such submissions, except any deficiencies which could not, singly or in the aggregate,
have a Material Adverse Effect.
(xxxvi) Tests and Preclinical and Clinical Studies. The Company and its
subsidiaries have operated and currently are in compliance with all applicable laws, rules
and regulations of the FDA, the Therapeutic Products Directorate (“TPD”), the European
Medicines Agency (“EMEA”), the European Commission’s Enterprise Directorate General and the
regulatory agencies within each Member State granting Marketing Authorization through the
Mutual Recognition Procedure or any other federal, provincial, state, local or foreign
governmental or quasi-governmental body exercising comparable authority, except where the
failure to so operate or be in compliance would not have a Material Adverse Effect. The
tests and preclinical and clinical studies conducted by the Company or any of its
subsidiaries or, to the Company’s knowledge, on behalf of the Company or any of its
subsidiaries pursuant to agreement with the Company or any of its subsidiaries, that are
described in the U.S. Prospectus and the Canadian Prospectus were and, if still pending, are
being, conducted in all material respects in accordance with the protocols submitted to the
FDA, TPD, EMEA, European Commission’s Enterprise Directorate General or any other
governmental or quasi-governmental body exercising comparable authority, procedures and
controls pursuant to, where applicable, accepted
14
professional and scientific standards and principles, and all applicable laws and
regulations; the descriptions of the tests and preclinical and clinical studies, and results
thereof, conducted by or, to the Company’s knowledge, on behalf of the Company or any of its
subsidiaries contained in the U.S. Prospectus and the Canadian Prospectus are accurate and
complete in all material respects; neither the Company nor any of its subsidiaries is aware
of any other trials, studies or tests, the results of which reasonably call into question
the results described or referred to in the U.S. Prospectus and the Canadian Prospectus; and
neither the Company nor any of its subsidiaries has received any written notice or
correspondence from the FDA, TPD, EMEA, European Commission’s Enterprise Directorate General
or any foreign, state or local governmental or quasi-governmental body exercising comparable
authority requiring the termination, suspension, material modification or clinical hold of
any tests or preclinical or clinical studies, or such written notice or correspondence from
any Institutional Review Board or comparable authority requiring the termination,
suspension, material modification or clinical hold of a clinical study, conducted by or on
behalf of the Company or any of its subsidiaries, which termination, suspension, material
modification or clinical hold would reasonably be expected to have a Material Adverse
Effect; and the Company has not received any written notices or correspondences from others
concerning the termination, suspension, material modification or clinical hold of any tests
or preclinical or clinical studies conducted by others on the existing products of the
Company or the products described in the U.S. Prospectus and Canadian Prospectus as being
under development, which termination, suspension, material modification or clinical hold
would reasonably be expected to have a Material Adverse Effect.
(xxxvii) Intellectual Property. Except as described in the U.S. Prospectus and
the Canadian Prospectus, (a) the Company and its subsidiaries own, possess or have adequate
rights to use the Company Intellectual Property (as defined below), (b) neither the Company
nor any of its subsidiaries has received any notice or claim from any person alleging that,
and neither is otherwise aware that, the conduct of the business of the Company and its
subsidiaries, in the manner in which it has been conducted and is contemplated to be
conducted, as described in the U.S. Prospectus and the Canadian Prospectus, constitutes or
would constitute of any infringement of, misappropriation of, or conflict with, any
Intellectual Property right of any third party, (c) no third party, including any academic
or governmental organization, possesses or has the right to obtain rights to the Company
Intellectual Property which, if exercised, could enable such party to develop products
competitive with those of the Company or any of its subsidiaries, and (d) neither the
Company nor any of its subsidiaries is obligated to pay a material royalty, grant a material
license, or provide other material consideration to any third party in connection with the
Company Intellectual Property. For purposes of this Agreement, “Intellectual Property”
means patents, patent rights, patent applications, licenses, inventions, copyrights, know
how (including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks and trade names,
and “Company Intellectual Property” means Intellectual Property that is necessary to carry
on the business now operated and as planned to be operated by the Company and its
subsidiaries as described in the U.S. Prospectus and the Canadian Prospectus. To the
knowledge of the Company, no third party is engaging in any activity that infringes,
misappropriates or otherwise violates the Company Intellectual Property owned by or licensed
to the Company or any of its subsidiaries, except as described in the U.S. Prospectus and
the Canadian Prospectus and except for such activities which, individually or in the
aggregate, would not have a Material Adverse Effect. With respect to each material
agreement governing all rights in and to any Company Intellectual Property licensed by or
licensed to the Company or any of its subsidiaries, (i) such agreement is valid and binding
and in full force and effect; (ii) neither the Company nor any of it subsidiaries has
received any notice of termination or cancellation under such agreement, received any notice
of breach or default under such agreement, which breach has not been cured, and granted to
any third party any rights,
15
adverse or otherwise, under such agreement that would constitute a material breach of
such agreement; and (iii) neither the Company or any of its subsidiaries or, to Company’s
knowledge, any other party to such agreement, is in breach or default thereof in any
material respect, and no event has occurred that, with notice or lapse of time, would
constitute such a material breach or default or permit termination, modification or
acceleration under such agreement.
(xxxviii) PTO Applications. The Company and its subsidiaries have properly
filed or caused to be filed with the United States Patent and Trademark Office (the “PTO”)
and applicable foreign and international patent authorities all pending or issued patent
applications owned by the Company (the “Company Patent Applications”), except for two (2)
U.S. patent applications owned by it that have lapsed and for which the Company has filed
with the PTO petitions to revive such applications. To the knowledge of the Company, the
Company and its subsidiaries have complied with the PTO’s duty of candor and disclosure,
have disclosed all material facts, printed publications and patent references to the PTO,
and have made no material misrepresentation in the Company Patent Applications filed in the
United States. To the knowledge of the Company, the Company and its subsidiaries have
disclosed all material facts, printed publications and patent references to those patent
offices so requiring and have made no material misrepresentation in the Company Patent
Applications filed outside the United States. Neither the Company nor its subsidiaries has
knowledge of any information which would preclude the patentability, validity or
enforceability of any patents and patent applications in the Company Intellectual Property.
Neither the Company nor its subsidiaries has knowledge of any information which would
preclude the Company , its subsidiaries or, as applicable, its licensors from having clear
title to the patents and patent applications in the Company Intellectual Property. Except
as disclosed in the U.S. Prospectus and the Canadian Prospectus, all assignments for all
patents and/or patent applications in the Company Intellectual Property have been properly
executed and recorded for each named inventor except to the extent that the failure to
execute and record an assignment would not have a Material Adverse Effect.
(xxxix) NASDAQ Listing; TSX Listing. The Common Shares have been approved for
quotation on the NASDAQ National Market of the Nasdaq Stock Market, Inc. (the “Nasdaq
National Market”). The Company has taken all necessary actions to ensure that, at such time
as the Common Shares are quoted on the Nasdaq National Market, it will be in compliance with
all applicable corporate governance requirements set forth in the Nasdaq Marketplace Rules
that are then in effect. The TSX has conditionally approved the
listing of the Securities, subject to fulfilling all of the requirements of the TSX.
(xl) NASD Matters; Affiliations. Neither the Company nor, to the Company’s
knowledge, the Company’s officers, directors, shareholders or any of its affiliates (within
the meaning of the National Association of Securities Dealers, Inc. (the “NASD”) Conduct
Rule 2720(b)(1)(a)), directly or indirectly controls, is controlled by, or is under common
control with, or is an associated person (within the meaning of Article I, Section 1(dd) of
the By-laws of the NASD) of, any member firm of the NASD. The Company is not a related or
connected issuer of any of the Underwriters or Sub-underwriters within the meaning of the
Canadian Securities Laws.
(xli) Foreign Status. The Company is a “foreign issuer” within the meaning of
Rule 902(e) under the 1933 Act and there is no “substantial U.S. market interest” in its
Common Shares within the meaning of Rule 902(j) under the 1933 Act.
(xlii) Principal Shareholders. To the knowledge of the Company, none of the
directors or executive officers or shareholders of the Company listed under “Principal
Shareholders” in the
16
U.S. Prospectus and the Canadian Prospectus is or has been during the past 10 years
subject to prior criminal or bankruptcy proceedings in the United States, Canada or
elsewhere.
(xliii) Non-Arm’s Length Transactions. To the knowledge of the Company, except
as disclosed in the U.S. Prospectus and the Canadian Prospectus, neither the Company nor any
of its subsidiaries is a party to any contract, agreement or understanding with any officer,
director, employee or any other person not dealing at arm’s length with the Company or any
such subsidiary which is required to be disclosed by applicable Canadian Securities Laws.
(b) Officer’s Certificates. Any certificate signed by any officer of the Company or any of
its subsidiaries delivered to the Representatives or to counsel for the Underwriters and the
Sub-underwriters shall be deemed a representation and warranty by the Company to each Underwriter
and each Sub-underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company agrees to sell to each
Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to
purchase from the Company, at the price per share set forth in Schedule B, the number of Initial
Securities set forth in Schedule A opposite the name of such Underwriter, plus any additional
number of Initial Securities which such Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof.
(b) Option Securities. In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company hereby grants an
option to the Underwriters, severally and not jointly, to purchase up
to an additional 1,650,000
Common Shares at the price per share set forth in Schedule B. The option hereby granted will
expire 30 days after the date hereof and may be exercised in whole or in part from time to time
only for the purpose of covering overallotments which may be made in connection with the offering
and distribution of the Initial Securities upon notice by Xxxxxxx Xxxxx to the Company setting
forth the number of Option Securities as to which the several Underwriters are then exercising the
option and the time and date of payment and delivery for such Option Securities. Any such time and
date of delivery (a “Date of Delivery”) shall be determined by Xxxxxxx Xxxxx, but shall not be
later than seven full business days after the exercise of said option, nor in any event prior to
the Closing Time, as hereinafter defined. If the option is exercised as to all or any portion of
the Option Securities, each of the Underwriters, acting severally and not jointly, will purchase
that proportion of the total number of Option Securities then being purchased which the number of
Initial Securities set forth in Schedule A opposite the name of such Underwriter bears to the total
number of Initial Securities, subject in each case to such adjustments as Xxxxxxx Xxxxx in its sole
discretion shall make to eliminate any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of certificates for, the Initial
Securities shall be made at the offices of Fasken Xxxxxxxxx DuMoulin LLP, Stock Exchange Tower,
Suite 3700, P.O. Box 242, 000 Xxxxx-Xxxxxxxx, Xxxxxxxx, Xxxxxx, Xxxxxx X0X 0X0, or at such other
place as shall be agreed upon by the Representatives and the Company, at 9:00 A.M. (Montreal time)
on the third (fourth, if the pricing occurs after 4:30 P.M. (Montreal time) on any given day)
business day after the date hereof (unless postponed in accordance with the provisions of Section
10), or such other time not later than ten business days after such date as shall be agreed upon by
the Representatives and the Company (such time and date of payment and delivery being herein called
“Closing Time”).
In addition, in the event that any or all of the Option Securities are purchased by the
Underwriters, payment of the purchase price for, and delivery of certificates for, such Option
Securities
17
shall be made at the above-mentioned offices, or at such other place as shall be agreed upon
by the Representatives and the Company, on each Date of Delivery as specified in the notice from
the Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately available funds to a bank
account designated by the Company against delivery to the Representatives for the respective
accounts of the Underwriters of certificates for the Securities to be purchased by them. It is
understood that each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the Initial Securities and
the Option Securities, if any, which it has agreed to purchase. Payment to the Company with
respect to the Securities the Underwriters have sold or expect to sell in the United States shall
be made in U.S. dollars and payment to the Company with respect to Securities the Underwriters have
sold or expect to sell in Canada shall be made in Canadian dollars, as set forth in Schedule B
hereto. Each of Xxxxxxx Xxxxx and Banc of America, individually and not as representative of the
Underwriters or the Sub-underwriters, may (but shall not be obligated to) make payment of the
purchase price for the Initial Securities or the Option Securities, if any, to be purchased by any
Underwriter or Sub-underwriter whose funds have not been received by the Closing Time or the
relevant Date of Delivery, as the case may be, but such payment shall not relieve such Underwriter
or Sub-underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial Securities and the Option
Securities, if any, shall be in such denominations and registered in such names as the
Representatives may request in writing at least one full business day before the Closing Time or
the relevant Date of Delivery, as the case may be. The certificates for the Initial Securities and
the Option Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Boston time) on the business day
prior to the Closing Time or the relevant Date of Delivery, as the case may be.
(e) Sub-underwriter Notification. The Sub-underwriters shall notify Xxxxxxx Xxxxx and Banc of
America at least 48 hours prior to the Closing Time (or Date of Delivery, as applicable) of the
number of the Securities to be sold by the Sub-underwriters in the Qualifying Jurisdictions and,
subject to the completion of the purchase of the Securities by Xxxxxxx Xxxxx and Banc of America
hereunder, Xxxxxxx Xxxxx agrees to sell to Xxxxxxx Xxxxx Canada Inc. and Xxxxxxx Xxxxx Canada Inc.
agree to purchase from Xxxxxxx Xxxxx, and Banc of America agrees to sell to Banc of America
Securities Canada Co. and Banc of America Securities Canada Co. agrees to purchase from Banc of
America , at a price equal to the purchase price set forth in Schedule B hereto or at such purchase
price less an amount to be mutually agreed upon among the Sub-underwriters, Xxxxxxx Xxxxx and Banc
of America, which amount shall not be greater than the underwriting commission as set forth in
Schedule B hereto, such number of the Securities at the Closing Time (or Date of Delivery as
applicable).
SECTION 3. Covenants of the Company. The Company covenants with each Underwriter and
each Sub-underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The Company, subject to
Section 3(b), will comply with the requirements of the PREP Procedures and General Instruction
II.L. of Form F-10; and will notify the Representatives immediately, and confirm the notice in
writing, (i) when any post-effective amendment to the Registration Statements shall have been filed
with the Commission or shall have become effective, or any supplement to the U.S. Prospectus or the
Canadian Prospectus or any amended U.S. Prospectus or Canadian Prospectus or any Supplementary
Material shall have been filed, (ii) of the receipt of any comment from any Qualifying Authority or
the Commission, (iii) of any request by any Qualifying Authority to amend or supplement the Final
PREP Prospectus or the Canadian Prospectus or any document incorporated by reference therein or for
18
additional
information or of any request by the Commission to amend the Registration Statements
or to amend or supplement the U.S. Prospectus or any document incorporated by reference therein or
for additional information, (iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statements or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of the Securities for offering or
sale in any jurisdiction, or of the institution or, to the knowledge of the Company, threatening of
any proceedings for any of such purposes or of any examination pursuant to Section 8(e) of the 1933
Act concerning the Registration Statements, (v) if the Company becomes the subject of a proceeding
under Section 8A of the 1933 Act in connection with the offering of the Securities, and (vi) of the
issuance by any Qualifying Authority or any stock exchange of any order having the effect of
ceasing or suspending the distribution of or trading in the Securities or the trading in any
securities of the Company, or of the institution or, to the knowledge of the Company, threatening
of any proceedings for any such purpose. The Company will make every reasonable effort to prevent
the issuance of any such stop order or of any order preventing or suspending such use or any such
order ceasing or suspending the distribution of or trading in the Securities or the trading in any
securities of the Company and, if any such order is issued, to obtain the lifting thereof at the
earliest possible time.
(b) Filing of Amendments and Exchange Act Documents. The Company will give the
Representatives notice of its intention to file or prepare any amendment to the Registration
Statements, any amendment or supplement to the Final PREP Prospectus, or any amendment, supplement
or revision to any of the prospectuses included in the Registration
Statements at the time they became
effective, the U.S. Supplemental Prospectus, the Supplemental PREP Prospectus or any Supplementary
Material, and will furnish the Representatives with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the case may be, and will not file or use
any such document to which the Representatives or counsel for the Underwriters and the
Sub-underwriters shall object. The Company has given the Representatives notice of any filings
made pursuant to the 1934 Act or 1934 Act Regulations within 48 hours prior to the Applicable Time;
the Company will give the Representatives notice of its intention to make any such filing from the
Applicable Time to the Closing Time and will furnish the Representatives with copies of any such
documents a reasonable amount of time prior to such proposed filing, as the case may be, and will
not file or use any such document to which the Representatives or counsel for the Underwriters and
the Sub-underwriters shall object.
(c) Delivery of Filed Documents. The Company has furnished or will deliver to the
Representatives and counsel for the Underwriters and the Sub-underwriters, without charge, a copy
of the Canadian Preliminary Prospectus (printed in English and French), the Final FREP Prospectus,
the Canadian Prospectus, and any Supplementary Material, approved, signed and certified as required
by Canadian Securities Laws and signed copies of the Registration
Statements as originally filed and
of each amendment thereto (including exhibits filed therewith or incorporated by reference therein
and documents incorporated or deemed to be incorporated by reference therein) and signed copies of
all consents and certificates of experts, and will also deliver to the Representatives, without
charge, a conformed copy of the Registration Statements as originally filed and of each amendment
thereto (without exhibits) for each of the Underwriters. The copies
of the Registration Statements
and each amendment thereto furnished to the Underwriters and the Sub-underwriters will be identical
to the electronically transmitted copies thereof filed with the Commission pursuant to XXXXX,
except to the extent permitted by Regulation S-T. The Company will also deliver to the
Representatives and counsel for the Underwriters and the Sub-underwriters copies of all
correspondence with the Qualifying Authorities relating to any proposed or requested exemptions
from the requirements of applicable securities laws.
(d) Delivery of Prospectuses. The Company has delivered to each Underwriter and each
Sub-underwriter, without charge, as many copies of each U.S. Preliminary Prospectus and Canadian
Preliminary Prospectus as such Underwriter and such Sub-underwriter have reasonably requested, and
the
19
Company hereby consents to the use of such copies for purposes permitted by the 1933 Act and
applicable Canadian Securities Laws. The Company will furnish to each Underwriter and each
Sub-underwriter, without charge, during the period when the U.S. Prospectus is required to be
delivered under the 1933 Act or 1934 Act and during the period when the Canadian Prospectus is
required to be delivered under Canadian Securities Laws, such number of copies of the U.S.
Prospectus and Canadian Prospectus (each as amended or supplemented) as such Underwriter and such
Sub-underwriter may reasonably request. The U.S. Prospectus and any amendments or supplements
thereto furnished to the Underwriters and the Sub-underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to XXXXX, except to
the extent permitted by Regulation S-T. Each of the English and French versions of the Canadian
Prospectus furnished to the Underwriters and the Sub-underwriters will be identical to the
corresponding versions thereof filed electronically by the Company with the Qualifying Authorities
on SEDAR.
(e) Continued Compliance with Securities Laws. The Company will comply with the 1933 Act and
the 1933 Act Regulations and the Canadian Securities Laws so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement and in the U.S. Prospectus and the
Canadian Prospectus. If at any time when a prospectus is required by the 1933 Act or applicable
Canadian Securities Laws to be delivered in connection with sales of the Securities, any event
shall occur or condition shall exist as a result of which it is necessary, in the reasonable
opinion of counsel for the Underwriters and the Sub-underwriters or for the Company, to amend the
Registration Statements or amend or supplement the U.S. Prospectus or the Canadian Prospectus in
order that the U.S. Prospectus or Canadian Prospectus contains full, true and plain disclosure of
all material facts relating to the Company and the Securities and contains no misrepresentation, as
defined under Canadian Securities Laws and will not include any untrue statements of a material
fact or omit to state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is delivered to a purchaser,
or if it shall be necessary, in the opinion of such counsel, at any such time to amend the
Registration Statements or amend or supplement the U.S. Prospectus or the Canadian Prospectus in
order to comply with the requirements of the 1933 Act or the 1933 Act Regulations or the Canadian
Securities Laws, the Company will promptly prepare and file with the Commission and the Qualifying
Authorities, subject to Section 3(b), such amendment or supplement as may be necessary to correct
such statement or omission or to make the Registration Statements or the U.S. Prospectus or the
Canadian Prospectus comply with such requirements, and the Company will furnish to the Underwriters
and the Sub-underwriters such number of copies of such amendment or supplement as the Underwriters
and the Sub-underwriters may reasonably request. If at any time following issuance of an Issuer
Free Writing Prospectus there occurred or occurs an event or development as a result of which such
Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the
Registration Statements relating to the Securities 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 will promptly notify Xxxxxxx Xxxxx and Banc of America and will promptly
amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or
correct such conflict, untrue statement or omission.
(f) Blue Sky Qualifications. The Company will use its best efforts, in cooperation with the
Underwriters, to qualify the Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions (domestic or foreign) as the Representatives may designate
and to maintain such qualifications in effect for a period of not less than one year from the later
of the effective date of each Registration Statement; provided, however, that the Company shall not
be obligated to file any general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject.
20
(g) Rule 158. The Company will timely file such reports pursuant to the 1934 Act as are
necessary in order to make generally available to its shareholders as soon as practicable an
earnings statement for the purposes of, and to provide to the Underwriters and the Sub-underwriters
the benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by it from the sale of
the Securities in the manner specified in the U.S. Prospectus and the Canadian Prospectus under
“Use of Proceeds.”
(i) Listing. The Company will use its best efforts to satisfy any requirements of the TSX to
the listing of the Securities within the time specified by the TSX. The Company will use its best
efforts to effect and maintain the quotation of the Securities on the Nasdaq National Market.
(j) Restriction on Sale of Securities. During a period of 90 days from the date of the U.S.
Prospectus and the Canadian Prospectus, the Company will not, without the prior written consent of
Xxxxxxx Xxxxx and Banc of America, (i) directly or indirectly, offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of any Common Share or any
securities convertible into or exercisable or exchangeable for Common Shares or file any
registration statement under the 1933 Act or file a prospectus under applicable Canadian Securities
Laws with respect to any of the foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the economic consequence
of ownership of the Common Shares, whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Shares or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) the Securities to be sold hereunder, (B)
any Common Shares issued by the Company upon the exercise of an option or warrant or the conversion
of a security outstanding on the date hereof and referred to in the U.S. Prospectus and Canadian
Prospectus, and (C) any Common Shares issued or options to purchase Common Shares granted pursuant
to plans of the Company referred to in the U.S. Prospectus and the Canadian Prospectus for
employees, officers and directors of and consultants to the Company. Notwithstanding the
foregoing, if (1) during the last 17 days of the 90-day restricted period the Company issues an
earnings release or material news or a material event relating to the Company occurs or (2) prior
to the expiration of the 90-day restricted 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 90-day restricted period, the restrictions imposed
in this clause (j) shall continue to apply until the expiration of the 18-day period beginning on
the issuance of the earnings release or the occurrence of the material news or material event.
(k) Reporting Requirements. The Company, during the period when the U.S. Prospectus or the
Canadian Prospectus is required to be delivered under the 1933 Act or the 1934 Act or under
applicable Canadian Securities Laws, will file all documents required to be filed with (i) the
Commission pursuant to the 1934 Act within the time periods required by the 1934 Act and the rules
and regulations of the Commission thereunder, and (ii) the Qualifying Authorities in accordance
with applicable Canadian Securities Laws.
(l) PREP Procedures. The Company will take such steps as it deems necessary to file the
Supplemental PREP Prospectus with the Qualifying Authorities promptly and in any event within two
business days of the execution and delivery of this Agreement and to ascertain promptly whether the
U.S. Supplemental Prospectus transmitted for filing pursuant to General Instruction II.L. of Form
F-10, to the extent applicable, was received for filing by the Commission and, in the event that any such prospectuses were
not received for filing, it will promptly file any such prospectus not then received for filing.
21
(m) Translation Opinions. The Company shall cause Fasken Xxxxxxxxx XxXxxxxx LLP to deliver to
the Underwriters and the Sub-underwriters customary opinions, dated the date of the filing of the
French language versions of each of the Final PREP Prospectus and the Supplemental PREP Prospectus,
to the effect that the French language version of each such prospectus (other than the financial
statements and other financial data contained therein) is in all material respects a complete and
proper translation of the English language versions thereof. The Company shall cause Fasken
Xxxxxxxxx DuMoulin LLP to deliver to the Underwriters and the Sub-underwriters similar opinions as
to the French language translation of any information contained in any Supplementary Material, in
form and substance satisfactory to the Underwriters and the Sub-underwriters, prior to the filing
thereof with the Qualifying Authorities.
(n) Translation Opinions — Financial Statements. The Company shall cause Ernst & Young LLP
to deliver to the Underwriters and the Sub-underwriters customary opinions, dated the date of the
filing of the French language versions of each of the Final PREP Prospectus and the Supplemental
PREP Prospectus, which when taken together are to the effect that the financial statements and
other financial data contained in the French language version of each such prospectus, together
with each document incorporated therein by reference, is in all material respects a complete and
proper translation of the English language versions thereof. The Company shall cause Ernst & Young
LLP to deliver to the Underwriters and the Sub-underwriters similar opinions as to the French
language translation of any information contained in any Supplementary Material, in form and
substance satisfactory to the Underwriters and the Sub-underwriters, prior to the filing thereof
with the Qualifying Authorities.
(o) Issuer Free Writing Prospectuses. The Company represents and agrees that, unless it
obtains the prior consent of the Representatives, and each of the Underwriter and the
Sub-underwriters represents and agrees that, unless it obtains the prior consent of the Company and
the Representatives, it has not made and will not make any offer relating to the Securities that
would constitute an “issuer free writing prospectus,” as defined in Rule 433, or that would
otherwise constitute a “free writing prospectus,” as defined in Rule 405, required to be filed with
the Commission. Any such free writing prospectus consented to by the Representatives or by the
Company and the Representatives, as the case may be, is hereinafter referred to as a “Permitted
Free Writing Prospectus.” The Company represents that it has treated or agrees that it will treat
each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule
433, and has complied and will comply with the requirements of Rule 433 applicable to any Permitted
Free Writing Prospectus, including timely filing with the Commission where required, legending and
record keeping.
(p) Passive Foreign Investment Corporation. On an annual basis, the Company shall make a
determination as to whether it was a “passive foreign investment company” within the meaning of
Section 1297(a) of the Internal Revenue Code of 1986, as amended (the “Code”) for the preceding
fiscal year, including any qualifications, and the Company shall promptly report such determination
in the next filing of an annual report with the SEC. If requested by a shareholder, the Company
shall provide such shareholder with the necessary information to make a “qualified electing fund”
election as defined under the Code; provided, however, that nothing in this Section 4(p) shall be
interpreted as an undertaking to qualify as a “passive foreign investment company.”
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay or cause to be paid all expenses incident to the
performance of its obligations under this Agreement, including (i) the preparation, translation,
printing and filing of the Registration Statements (including financial statements and exhibits and
the Form F-X) as originally filed and of each amendment thereto, the preliminary prospectuses, the
U.S. Prospectus, the Final PREP Prospectus, the Canadian Prospectus and any Supplementary Material
and any amendments
22
or supplements thereto, and the cost of printing and furnishing copies thereof to the
Underwriters and the Sub-underwriters, (ii) the preparation, printing and delivery to the
Underwriters and the Sub-underwriters of this Agreement, any Agreement among Underwriters and such
other documents as may be required in connection with the offering, purchase, sale, issuance or
delivery of the Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Underwriters and the Sub-underwriters, including any stock or other transfer
taxes and any stamp or other duties payable upon the sale, issuance or delivery of the Securities
to the Underwriters and the Sub-underwriters, (iv) the fees and disbursements of the Company’s
Canadian and U.S. counsel, accountants and other advisors, (v) the qualification of the Securities
under securities laws in accordance with the provisions of Section 3(f) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of the Blue Sky Survey and any supplement thereto,
(vi) the printing and delivery to the Underwriters and the Sub-underwriters of copies of each
preliminary prospectus, any Permitted Free Writing Prospectus and the U.S. Prospectus and the
Canadian Prospectus and any amendments or supplements thereto and any costs associated with
electronic delivery of any of the foregoing by the Underwriters and the Sub-underwriters to
investors, (vii) the preparation, printing and delivery to the Underwriters of copies of the Blue
Sky Survey and any supplement thereto, (viii) the fees and expenses of any transfer agent or
registrar for the Securities, (ix) the costs and expenses of the Company relating to investor
presentations on any “road show” undertaken in connection with the marketing of the Securities,
including without limitation expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the road show
presentations, travel and lodging expenses of the representatives and officers of the Company and
any such consultants, and 50% of the cost of aircraft chartered in connection with the road show,
(x) the filing fees incident to, and the reasonable fees and disbursements of counsel to the
Underwriters and the Sub-underwriters in connection with, the review by the National Association of
Securities Dealers, Inc. (the “NASD”) of the terms of the sale of the Securities, and (xi) the fees
and expenses incurred in connection with the listing of the Securities on the TSX and the inclusion
of the Securities in the Nasdaq National Market.
(b) Termination of Agreement. If this Agreement is terminated by the Representatives in
accordance with the provisions of Section 5, Section 9(a)(i) or Section 11 hereof, the Company
shall reimburse the Underwriters for all of their out-of-pocket expenses reasonably incurred,
including the reasonable fees and disbursements of U.S. and Canadian counsel for the Underwriters
and the Sub-underwriters.
SECTION 5. Conditions of Underwriters’ Obligations. The obligations of the several
Underwriters hereunder are subject to the accuracy of the representations and warranties of the
Company contained in Section 1 hereof or in certificates of any officer of the Company or any
subsidiary of the Company delivered pursuant to the provisions hereof, to the performance by the
Company of its covenants and other obligations hereunder, and to the following further conditions:
(a) Effectiveness
of Registration Statements. The Final PREP Prospectus has been filed with
the Qualifying Authorities and a MRRS decision document has been issued by the Reviewing Authority
on behalf of the Qualifying Authorities relating to the Final PREP Prospectus and each Registration
Statement has become effective, and at the Closing Time no stop order suspending the effectiveness
of either or both of the Registration Statements shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, no order having the effect of ceasing or suspending the
distribution of the Securities or the trading in the Securities or any other securities of the
Company shall have been issued or proceedings therefor initiated or threatened by any securities
commission, securities regulatory authority or stock exchange in Canada or the United States, and
any request on the part of any Qualifying Authority or the Commission for additional information
shall have been complied with to the reasonable satisfaction of counsel to the Underwriters and the
Sub-underwriters. A Supplemental PREP Prospectus and a U.S.
23
Supplemental Prospectus containing the PREP Information shall have been filed, respectively,
with the Qualifying Authorities in accordance with the PREP Procedures and with the Commission in
accordance with General Instruction II.L. of Form F-10.
(b) Opinion of Canadian Counsel for Company. At Closing Time, the Representatives shall have
received the favorable opinion, dated as of Closing Time, of Fasken Xxxxxxxxx XxXxxxxx LLP,
Canadian counsel for the Company, in form and substance satisfactory to counsel for the
Underwriters and the Sub-underwriters, together with signed or reproduced copies of such opinion
for each of the Underwriters and the Sub-underwriters to the effect set forth in Exhibit A. Such
counsel may also state that, insofar as such opinion involves factual matters, they have relied, to
the extent they deem proper, upon certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(c) Opinion of United States Counsel for Company. At Closing Time, the Representatives shall
have received the favorable opinion, dated as of Closing Time, of Xxxxxxx Procter LLP, United
States counsel for the Company, in form and substance satisfactory to counsel for the Underwriters
and the Sub-underwriters, together with signed or reproduced copies of such opinion for each of the
Underwriters and the Sub-underwriters to the effect set forth in Exhibit B. Such counsel may also
state that, insofar as such opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers of the Company and its subsidiaries and certificates of
public officials.
(d) Opinion of European Regulatory Counsel for Company. At Closing Time, the Representatives
shall have received the favorable opinion, dated as of Closing Time, of Xxxxxxxxxx Xxxxxxxxxxx
(Beachcroft LLP after May 1, 2006), European regulatory counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters and the Sub-underwriters, together with
signed or reproduced copies of such opinion for each of the Underwriters and the Sub-underwriters
to the effect set forth in Exhibit C.
(e) Opinion of United States Regulatory Counsel for Company. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing Time, of Xxxxx,
Xxxxxx & XxXxxxxx P.C., United States regulatory counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters and the Sub-underwriters, together with signed or
reproduced copies of such opinion for each of the Underwriters and the Sub-underwriters to the
effect set forth in Exhibit D.
(f) Opinion of Canadian Patent Counsel for Company. At Closing Time, the Representatives
shall have received the favorable opinion, dated as of Closing Time, of Torys LLP, Canadian patent
counsel for the Company, in form and substance satisfactory to counsel for the Underwriters and the
Sub-underwriters, together with signed or reproduced copies of such opinion for each of the
Underwriters and the Sub-underwriters to the effect set forth in Exhibit E.
(g) Opinion of United States Patent Counsel for Company. At Closing Time, the Representatives
shall have received the favorable opinion, dated as of Closing Time, of Xxxxxxx Procter LLP, United
States patent counsel for the Company, in form and substance satisfactory to counsel for the
Underwriters and the Sub-underwriters, together with signed or reproduced copies of such opinion
for each of the Underwriters and the Sub-underwriters to the effect set forth in Exhibit F.
(h) Opinion of European Patent Counsel for Company. At Closing Time, the Representatives
shall have received the favorable opinion, dated as of Closing Time, of Frohwitter, European patent
counsel for the Company, in form and substance satisfactory to counsel for the Underwriters and the
Sub-underwriters, together with signed or reproduced copies of such opinion for each of the
Underwriters and the Sub-underwriters to the effect set forth in Exhibit G.
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(i) Opinion of Barbados Counsel for Company. At Closing Time, the Representatives shall have
received the favorable opinion, dated as of Closing Time, of Xxxxxx Catford & Co., Barbados counsel
for the Company, in form and substance satisfactory to counsel for the Underwriters and the
Sub-underwriters, together with signed or reproduced copies of such opinion for each of the
Underwriters and the Sub-underwriters to the effect set forth in Exhibit H.
(j) Opinion of Cypriot Counsel for Company. At Closing Time, the Representatives shall have
received the favorable opinion, dated as of Closing Time, of Xx. X. Xxxxxxxxxxxxxx & Co., Cypriot
counsel for the Company, in form and substance satisfactory to counsel for the Underwriters and the
Sub-underwriters, together with signed or reproduced copies of such opinion for each of the
Underwriters and the Sub-underwriters to the effect set forth in Exhibit I.
(k) Opinion of Irish Counsel for Company. At Closing Time, the Representatives shall have
received the favorable opinion, dated as of Closing Time, of Xxxxxx X. Xxxxxxx Solicitors, Irish
counsel for the Company, in form and substance satisfactory to counsel for the Underwriters and the
Sub-underwriters, together with signed or reproduced copies of such opinion for each of the
Underwriters and the Sub-underwriters to the effect set forth in Exhibit J.
(l) Opinion of Canadian Counsel for the Underwriters and Sub-underwriters. At Closing Time,
the Representatives shall have received the favorable opinion, dated as of Closing Time, of
XxXxxxxx Xxxxxxxx LLP, Canadian counsel for the Underwriters and the Sub-underwriters, together
with signed or reproduced copies of such letter for each of the Underwriters and Sub-underwriters,
in form and substance satisfactory to the Representatives. In giving such opinion such counsel may
rely, as to all matters governed by the laws of jurisdictions other than the laws of the Provinces
of Ontario, British Columbia, Alberta and Québec, and the federal laws of Canada applicable
therein, upon the opinions of counsel satisfactory to the Representatives. Such counsel may also
state that, insofar as such opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers of the Company and its subsidiaries and certificates of
public officials.
(m) Opinion of United States Counsel for the Underwriters and Sub-underwriters. At Closing
Time, the Representatives shall have received the favorable opinion, dated as of Closing Time, of
Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, United States counsel for the Underwriters and the
Sub-underwriters, together with signed or reproduced copies of such letter for each of the
Underwriters and Sub-underwriters, in form and substance satisfactory to the Representatives. In
giving such opinion such counsel may rely, as to all matters governed by the laws of jurisdictions
other than the law of the State of New York and the federal law of the United States and the
General Corporation Law of the State of Delaware, upon the opinions of counsel satisfactory to the
Representatives. Such counsel may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon certificates of officers of the
Company and its subsidiaries and certificates of public officials.
(n) Translation Opinion — Financial Statements. At Closing Time, the Representatives shall
have received an opinion, dated as of Closing Time, of Ernst & Young LLP, together with signed or
reproduced copies of such letter for each of the Underwriters and the Sub-underwriters, with
respect to the translation in French of the Financial Statements and other financial information
contained in any Supplementary Material in a customary form and substance satisfactory to the
Representatives.
(o) Officers’ Certificate. At Closing Time, there shall not have been, since the date hereof
or since the respective dates as of which information is given in the U.S. Prospectus, the Canadian
Prospectus or the General Disclosure Package, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of
business, and the
25
Representatives shall have received a certificate of the President or a Vice President of the
Company and of the Chief Financial Officer of the Company, dated as of Closing Time, to the effect
that (i) there has been no such material adverse change, (ii) the representations and warranties in
Section 1(a) hereof are true and correct with the same force and effect as though expressly made at
and as of Closing Time, (iii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to Closing Time, (iv) no stop order
suspending the effectiveness of the Registration Statements has been issued and no proceedings for
that purpose have been instituted or are pending or, to their knowledge, contemplated by the
Commission and (v) no order having the effect of ceasing or suspending the distribution of the
Securities or the trading in the Securities or any other securities of the Company has been issued
and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by any Qualifying Authorities in Canada.
(p) Accountant’s Comfort Letters.
(i) At the time of the execution of this Agreement, the
Representatives shall have received from Ernst & Young LLP a letter dated such date, in form and
substance satisfactory to the Representatives, together with signed or reproduced copies of such
letter for each of the other Underwriters and the Sub-underwriters containing statements and
information of the type ordinarily included in accountants’ “comfort letters” to U.S. and Canadian
underwriters with respect to the financial statements and certain financial information relating to
the Company and its subsidiaries contained in the First Registration Statement, the U.S. Prospectus and the Final PREP Prospectus.
(ii) At the time of the
filing of the U.S. Supplemental Prospectus and the Supplemental PREP Prospectus with the Commission and the Qualifying Authorities, respectively, the Representatives shall have received from Ernst & Young LLP a letter dated such date, in form and substance satisfactory to the Representatives, together with signed or reproduced copies of such letter for each of the other Underwriters and the Sub-underwriters containing statements and information of the type ordinarily included in
accountants’ “comfort letters” to U.S. and Canadian underwriters with respect to the financial statements and certain financial information relating to the Company and its subsidiaries contained in the Registration Statements, the U.S. Prospectus and the Canadian Prospectus.
(q) Bring-down Comfort Letter. At Closing Time, the Representatives shall have received from
Ernst & Young LLP a letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (i) of this Section, except that the
“specified date” referred to shall be a date not more than three business days prior to Closing
Time.
(r) Approval of Listing. At Closing Time, the Securities shall have been conditionally
approved for listing on the TSX, subject only to satisfaction of customary listing conditions on or
before July 19, 2006. At Closing Time, the Securities shall have been approved for inclusion in
the Nasdaq National Market, subject only to official notice of issuance.
(s) No Objection. The NASD shall have confirmed that it has not raised any objection with
respect to the fairness and reasonableness of the underwriting terms and arrangements.
(t) Lock-up Agreements. At the date of this Agreement, the Representatives shall have
received an agreement substantially in the form of Exhibit K hereto signed by the persons listed on
Schedule F hereto.
(u) Conditions to Purchase of Option Securities. In the event that the Underwriters and the
Sub-underwriters exercise their option provided in Section 2(b) hereof to purchase all or any
portion of the Option Securities, the representations and warranties of the Company contained
herein and the statements in any certificates furnished by the Company and any subsidiary of the
Company shall be true and correct as of each Date of Delivery and, at the relevant Date of
Delivery, the Representatives shall have received:
(i) Officers’ Certificate. A certificate, dated such Date of Delivery, of the
President or a Vice President of the Company and of the chief financial or chief accounting
officer of the Company confirming that the certificate delivered at the Closing Time
pursuant to Section 5(h) hereof remains true and correct as of such Date of Delivery.
(ii) Opinion of Canadian Counsel for Company. The favorable opinion of Fasken
Xxxxxxxxx XxXxxxxx LLP, Canadian counsel for the Company, in form and substance
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satisfactory to counsel for the Underwriters and the Sub-underwriters, dated such Date
of Delivery, relating to the Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(b) hereof.
(iii) Opinion of United States Counsel for Company. The favorable opinion of
Xxxxxxx Procter LLP, United States counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters and the Sub-underwriters, dated such Date of
Delivery, relating to the Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(c) hereof.
(iv) Opinion of European Regulatory Counsel for Company. The favorable opinion
of Xxxxxxxxxx Xxxxxxxxxxx (Beachcroft LLP after May 1, 2006), European regulatory counsel
for the Company, in form and substance satisfactory to counsel for the Underwriters and the
Sub-underwriters, dated such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as the opinion required
by Section 5(d) hereof.
(v) Opinion of United States Regulatory Counsel for Company. The favorable
opinion of Xxxxx Xxxxxx XxXxxxxx P.C., United States regulatory counsel for the Company, in
form and substance satisfactory to counsel for the Underwriters and the Sub-underwriters,
dated such Date of Delivery, relating to the Option Securities to be purchased on such Date
of Delivery and otherwise to the same effect as the opinion required by Section 5(e) hereof.
(vi) Opinion of Canadian Patent Counsel for Company. The favorable opinion of
Torys LLP, Canadian patent counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters and the Sub-underwriters, dated such Date of Delivery, relating
to the Option Securities to be purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(f) hereof.
(vi) Opinion of United States Patent Counsel for Company. The favorable
opinion of Xxxxxxx Procter LLP, United States patent counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters and the Sub-underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased on such Date of Delivery
and otherwise to the same effect as the opinion required by Section 5(g) hereof.
(vi) Opinion of European Patent Counsel for Company. The favorable opinion of
Frohwitter, European patent counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters and the Sub-underwriters, dated such Date of Delivery, relating
to the Option Securities to be purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(h) hereof.
(vii) Opinion of Barbados Counsel for Company. The favorable opinion of Xxxxxx
Catford & Co., Barbados counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters and the Sub-underwriters, dated such Date of Delivery, relating
to the Option Securities to be purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(i) hereof.
(viii) Opinion of Cypriot Counsel for Company. The favorable opinion of Xx. X.
Xxxxxxxxxxxxxx & Co., Cypriot counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters and the Sub-underwriters, dated such Date of Delivery, relating
to
27
the Option Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(j) hereof.
(ix) Opinion of Irish Counsel for Company. The favorable opinion of Xxxxxx X.
Xxxxxxx Solicitors, Irish counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters and the Sub-underwriters, dated such Date of Delivery, relating
to the Option Securities to be purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(k) hereof.
(x) Opinion of Canadian Counsel for the Underwriters and Sub-underwriters. The
favorable opinion of XxXxxxxx Xxxxxxxx LLP, counsel for the Underwriters and the
Sub-underwriters, dated such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as the opinion required
by Section 5(l) hereof.
(xi) Opinion of United States Counsel for the Underwriters and
Sub-underwriters. The favorable opinion of Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP,
United States counsel for the Underwriters and Sub-underwriters, dated such Date of
Delivery, relating to the Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(m) hereof.
(xii) Bring-down Comfort Letter. A letter from Ernst & Young LLP, in form and
substance satisfactory to the Representatives and dated such Date of Delivery, substantially
in the same form and substance as the letter furnished to the Representatives pursuant to
Section 5(i) hereof, except that the “specified date” in the letter furnished pursuant to
this paragraph shall be a date not more than five days prior to such Date of Delivery.
(v) Additional Documents. At Closing Time and at each Date of Delivery counsel for the
Underwriters and the Sub-underwriters shall have been furnished with such documents and opinions as
they may require for the purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions, herein contained; and
all proceedings taken by the Company in connection with the issuance and sale of the Securities as
herein contemplated shall be satisfactory in form and substance to the Representatives and counsel
for the Underwriters and the Sub-underwriters.
(w) Termination of Agreement. If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement, or, in the case of any condition to
the purchase of Option Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters and Sub-underwriters to purchase the relevant Option
Securities, may be terminated by the Representatives by notice to the Company at any time at or
prior to Closing Time or such Date of Delivery, as the case may be, and such termination shall be
without liability of any party to any other party except as provided in Section 4 and except that
Sections 1, 6, 7 and 8 shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters and Sub-underwriters. The Company agrees to indemnify and
hold harmless each Underwriter and each Sub-underwriter and their respective affiliates, as such
term is defined in Rule 501(b) under the 1933 Act (each, an “Affiliate”), their respective selling
agents and each person, if any, who controls any Underwriter or Sub-underwriter within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
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(i) against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, arising out of any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statements (or any amendment thereto), including the PREP
Information 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 arising out of
any untrue statement or alleged untrue statement of a material fact included in any
preliminary prospectus, any Issuer Free Writing Prospectus or the U.S. Prospectus, the
Canadian Prospectus or any 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 any misrepresentation, as defined under Canadian Securities Laws, contained
therein;
(ii) against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or threatened, or
of any claim whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company;
(iii) against any and all expense whatsoever, as incurred (including the fees and
disbursements of Canadian and U.S. counsel chosen by Xxxxxxx Xxxxx and Banc of America),
reasonably incurred in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission, or any such alleged
untrue statement or omission, to the extent that any such expense is not paid under (i) or
(ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter or Sub-underwriter through Xxxxxxx Xxxxx or
Banc of America, which information relates solely to the Underwriters or the Sub-underwriters and
is intended expressly for use in the Registration Statements (or any amendment thereto), including
the PREP Information, or any preliminary prospectus, any Issuer Free Writing Prospectus or the U.S.
Prospectus or the Canadian Prospectus (or any amendment or supplement thereto).
(b) Indemnification of Company, Directors and Officer. Each Underwriter and each
Sub-underwriter severally agrees to indemnify and hold harmless the Company, its directors, each of
its officers who signed the Registration Statements or the Canadian Prospectus, and each person, if
any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act against any and all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the Registration
Statements (or any amendment thereto), including the PREP Information or any preliminary prospectus,
any Issuer Free Writing Prospectus or the U.S. Prospectus, the Canadian Prospectus or any
Supplementary Material (or any amendment or supplement thereto) in reliance upon and in conformity
with written information furnished to the Company by such Underwriter or Sub-underwriter through
Xxxxxxx Xxxxx and Banc of America expressly for use therein.
(c) Actions against Parties; Notification. Each indemnified party shall give notice as
promptly as reasonably practicable to each indemnifying party of any action commenced against it in
29
respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve it from any
liability which it may have otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 6(a) above, counsel to the indemnified parties shall be
selected by Xxxxxxx Xxxxx and Banc of America, and, in the case of parties indemnified pursuant to
Section 6(b) above, counsel to the indemnified parties shall be selected by the Company. An
indemnifying party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party. In no event shall
the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to
any local counsel) separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section 7 hereof (whether
or not the indemnified parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to act by or on behalf
of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature
contemplated by Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6 hereof is
for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of
any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying
party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and
expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate
to reflect the relative benefits received by the Company on the one hand and the Underwriters and
the Sub-underwriters on the other hand from the offering of the Securities pursuant to this
Agreement or (ii) if the allocation provided by clause (i) 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 of the Underwriters and
the Sub-underwriters on the other hand in connection with the statements or omissions which
resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the Underwriters and the
Sub-underwriters on the other hand in connection with the offering of the Securities pursuant to
this Agreement shall be deemed to be in the same respective proportions as the total net proceeds
from the offering of the Securities pursuant to this Agreement (before deducting expenses) received
by the Company and the total underwriting discount received by the Underwriters, in each case as
set forth on the cover of the U.S. Prospectus bear to the aggregate initial public offering price
of the Securities as set forth on the cover of the U.S. Prospectus.
30
The relative fault of the Company on the one hand and the Underwriters and the
Sub-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 or by the Underwriters and the
Sub-underwriters and the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company, the Underwriters and the Sub-underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even
if the Underwriters and the Sub-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
above in this Section 7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in investigating,
preparing or defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter and no Sub-underwriter shall
be required to contribute any amount in excess of the amount by which the total price at which the
Securities underwritten by it and distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter or Sub-underwriter has otherwise been required to pay
by reason of any such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
0000 Xxx) shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
For purposes of this Section 7, each person, if any, who controls an Underwriter or a
Sub-underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and
each Underwriter’s and each Sub-underwriter’s Affiliates and selling agents shall have the same
rights to contribution as such Underwriter and such Sub-underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statements or the Canadian
Prospectus, and each person, if any, who controls the Company within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the
Company. The Underwriters’ respective obligations to contribute pursuant to this Section 7 are
several in proportion to the number of Initial Securities set forth opposite their respective names
in Schedule A hereto and not joint. Each Sub-underwriter’s obligation to contribute pursuant to
this Section 7 is in proportion to the number of Initial Securities it purchased from Xxxxxxx Xxxxx
or Banc of America, as applicable.
SECTION 8. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in certificates of
officers of the Company or any of its subsidiaries submitted pursuant hereto, shall remain
operative and in full force and effect regardless of (i) any investigation made by or on behalf of
any Underwriter or Sub-underwriter or their respective Affiliates or selling agents, any person
controlling any Underwriter or Sub-underwriter, their respective officers or directors, or any
person controlling the Company and (ii) delivery of and payment for the Securities.
31
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this Agreement, by notice to the
Company, at any time at or prior to Closing Time (i) if there has been, since the time of execution
of this Agreement or since the respective dates as of which information is given in the U.S.
Prospectus, the Canadian Prospectus or General Disclosure Package, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse change in the
financial markets in the United States or Canada, or in the international financial markets, any
outbreak of hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in the United States, Canadian or international
political, financial or economic conditions, in each case the effect of which is such as to make
it, in the judgment of the Representatives, impracticable or inadvisable to market the Securities
or to enforce contracts for the sale of the Securities, or (iii) if trading in any securities of
the Company has been suspended or materially limited by the Commission, any Qualifying Authority,
any other securities commission or securities regulatory authority in Canada or the TSX or the
Nasdaq National Market, or if trading generally on the TSX, the American Stock Exchange, the New
York Stock Exchange or in the Nasdaq National Market has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been
required, by any of said exchanges or by such system or by order of the Commission, any Qualifying
Authority, any other securities commission or securities regulatory authority in Canada, the
National Association of Securities Dealers, Inc. or any other governmental authority, or (iv) a
material disruption has occurred in commercial banking or securities settlement or clearance
services in the United States or Canada or with respect to Clearstream or Euroclear systems in
Europe, or (v) if a banking moratorium has been declared by either United States federal, New York
state or Canadian federal authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section, such termination
shall be without liability of any party to any other party except as provided in Section 4 hereof,
and provided further that Sections 1, 6, 7 and 8 shall survive such termination and remain in full
force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at Closing Time or a Date of Delivery to purchase the Securities which it
or they are obligated to purchase under this Agreement (the “Defaulted Securities”), the
Representatives shall have the right, within 24 hours thereafter, to make arrangements for one or
more of the non-defaulting Underwriters or Sub-underwriters, or any other underwriters, to purchase
all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and
upon the terms herein set forth; if, however, the Representatives shall not have completed such
arrangements within such 24-hour period, then:
(i) if the number of Defaulted Securities does not exceed 10% of the number of
Securities to be purchased on such date, each of the non-defaulting Underwriters shall be
obligated, severally and not jointly, to purchase the full amount thereof in the proportions
that their respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(ii) if the number of Defaulted Securities exceeds 10% of the number of Securities to
be purchased on such date, this Agreement or, with respect to any Date of Delivery which
occurs after the Closing Time, the obligation of the Underwriters to purchase and of the
Company to sell the Option Securities to be purchased and sold on such Date of Delivery
shall terminate without liability on the part of any non-defaulting Underwriter or
Sub-underwriters.
32
No action taken pursuant to this Section shall relieve any defaulting Underwriter from
liability in respect of its default.
In the event of any such default which does not result in a termination of this Agreement or,
in the case of a Date of Delivery which is after the Closing Time, which does not result in a
termination of the obligation of the Underwriters to purchase and the Company to sell the relevant
Option Securities, as the case may be, either the (i) Representatives or (ii) the Company shall
have the right to postpone Closing Time or the relevant Date of Delivery, as the case may be, for a
period not exceeding seven days in order to effect any required changes in the Registration
Statements, U.S. Prospectus or Canadian Prospectus or in any other documents or arrangements. As
used herein, the term “Underwriter” includes any person substituted for an Underwriter under this
Section 10.
SECTION 11. Agent for Service; Submission to Jurisdiction; Waiver of Immunities. By
the execution and delivery of this Agreement, the Company (i) acknowledges that it has, by separate
written instrument, irrevocably designated and appointed CT Corporation Systems (or any successor)
(together with any successor, the “Agent for Service”), as its authorized agent upon which process
may be served in any suit or proceeding arising out of or relating to this Agreement or the
Securities, that may be instituted in any U.S. federal or state court in the State of New York, or
brought under federal or state securities laws, and acknowledges that the Agent for Service has
accepted such designation, (ii) submits to the jurisdiction of any New York state or U.S. federal
court located in the Borough of Manhattan, the City of New York, New York, in any suit or
proceeding arising out of or related to this Agreement, and (iii) agrees that service of process
upon the Agent for Service (or any successor) and written notice of said service to the Company
(mailed or delivered to CT Corporation Systems at 000 0xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
10011), shall be deemed in every respect effective service of process upon the Company in any such
suit or proceeding. The Company further agrees to take any and all action, including the execution
and filing of any and all such documents and instruments, as may be necessary to continue such
designation and appointment of the Agent for Service in full force and effect so long as any of the
Securities shall be outstanding. To the extent that the Company has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether through service of
notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with
respect to itself or its property, it hereby irrevocably waives such immunity in respect of its
obligations under the above-referenced documents, to the extent permitted by law.
SECTION 12. Tax Disclosure. Notwithstanding any other provision of this Agreement,
immediately upon commencement of discussions with respect to the transactions contemplated hereby,
the Company (and each employee, representative or other agent of the Company) may disclose to any
and all persons, without limitation of any kind, the tax treatment and tax structure of the
transactions contemplated by this Agreement and all materials of any kind (including opinions or
other tax analyses) that are provided to the Company relating to such tax treatment and tax
structure. For purposes of the foregoing, the term “tax treatment” is the purported or claimed
United States federal income tax treatment of the transactions contemplated hereby, and the term
“tax structure” includes any fact that may be relevant to understanding the purported or claimed
United States federal income tax treatment of the transactions contemplated hereby.
SECTION 13. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by any standard form
of telecommunication. Notices to the Underwriters shall be directed to the Representatives at 4
World Financial Center, New York, New York 10080, attention of Xxxx Xxxxxx, Co-Head of Equity
Capital Markets, Americas, Managing Director, with a copy to XxXxxxxx Xxxxxxxx LLP, Suite 2500,
1000 de La Gauchetière Street West, Montréal, Québec, Canada H3B 0A2, attention of Xxxxxxx Xxxx and
to Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
attention of Xxxxx X.
33
Redlick; and notices to the Company shall be directed to it at Labopharm inc., 000
Xxxxxx-Xxxxxxxx Xxxx., Xxxxx, Xxxxxx, Xxxxxx X0X 0X0, attention of Xxxxxx Xxxxxxxxx, Chief
Financial Officer, with a copy to Fasken Xxxxxxxxx XxXxxxxx LLP, Stock Exchange Tower, Suite 3700,
P.O. Box 242, 000 Xxxxx-Xxxxxxxx, Xxxxxxxx, Xxxxxx, Xxxxxx X0X 0X0, attention of Xxxxx-Xxxxxxxx
Xxxxx and to Xxxxxxx Procter LLP, Exchange Place, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
attention of Xxxxxxxx X. Xxxxxxxxxx.
SECTION 14. No Advisory or Fiduciary Relationship. The Company acknowledges and
agrees that (a) the purchase and sale of the Securities pursuant to this Agreement, including the
determination of the public offering price of the Securities and any related discounts and
commissions, is an arm’s-length commercial transaction between the Company, on the one hand, and
the several Underwriters and Sub-underwriters, on the other hand, (b) in connection with the
offering contemplated hereby and the process leading to such transaction each of the Underwriters
and the Sub-underwriters 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 or Sub-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 of whether such Underwriter or Sub-underwriter has advised or is currently
advising the Company on other matters) and no Underwriter or Sub-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, the Sub-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 and the Sub-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 respective legal, accounting, regulatory and tax advisors to the
extent it deemed appropriate.
SECTION 15. Parties. This Agreement shall each inure to the benefit of and be binding
upon the Underwriters, the Sub-underwriters and the Company and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Underwriters, the Sub-underwriters and the Company and
their respective successors and the controlling persons and officers and directors referred to in
Sections 6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the
Underwriters, the Sub-underwriters and the Company and their respective successors, and said
controlling persons and officers and directors and their heirs and legal representatives, and for
the benefit of no other person, firm or corporation. No purchaser of Securities from any
Underwriter or Sub-underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 17. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS OTHERWISE
SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 18. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same Agreement.
34
SECTION 19. Effect of Headings. The Section headings herein are for convenience only
and shall not affect the construction hereof.
SECTION 20. Judgment Currency. In respect of any judgment or order given or made for
any amount due hereunder that is expressed and paid in a currency (the “Judgment Currency”) other
than United States or Canadian dollars, the Company will indemnify each Underwriter and each
Sub-underwriter against any loss incurred by such Underwriter or such Sub-underwriter as a result
of any variation as between (i) the rate of exchange at which the United States or Canadian dollar
amount is converted into the Judgment Currency for the purpose of such judgment or order and (ii)
the rate of exchange at which an Underwriter or a Sub-underwriter is able to purchase United States
or Canadian dollars with the amount of Judgment Currency actually received by such Underwriter or
such Sub-underwriter. The foregoing indemnity shall constitute a separate and independent
obligation of the Company and shall continue in full force and effect notwithstanding any such
judgment or order as aforesaid. The term “rate of exchange” shall include any premiums and costs
of exchange payable in connection with the purchase of or conversion into United States or Canadian
dollars.
35
If the foregoing is in accordance with your understanding of our agreement, please sign and
return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts,
will become a binding agreement among the Underwriters, the Sub-underwriters and the Company in
accordance with its terms.
Very truly yours, | ||||
LABOPHARM, INC. | ||||
By | ||||
Title: |
CONFIRMED AND ACCEPTED, |
as of the date first above written: |
XXXXXXX XXXXX & CO. |
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX |
INCORPORATED |
BANC OF AMERICA SECURITIES LLC |
and |
XXXXXXX XXXXX CANADA INC. |
BANC OF AMERICA SECURITIES CANADA CO. |
as Sub-underwriters |
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX |
INCORPORATED |
By
|
||||
Authorized Signatory | ||||
By: BANC OF AMERICA SECURITIES LLC | ||||
By
|
||||
Authorized Signatory |
For themselves and as Representatives of the other Underwriters named in Schedule A hereto and the
Sub-underwriters.
36
SCHEDULE A
Number of | ||||
Name of Underwriter | Initial Securities | |||
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated |
4,400,000 | |||
Banc of America Securities LLC |
3,850,000 | |||
Canaccord Capital Corporation |
1,375,000 | |||
Leerink Xxxxx & Co., Inc |
825,000 | |||
Dundee Securities Corporation |
275,000 | |||
Orion Securities Inc |
137,500 | |||
Westwind Partners Inc |
137,500 | |||
Total |
11,000,000 | |||
Sch A-1
SCHEDULE B
1. The public offering price per share for the Securities, determined as provided in said Section
2, shall be Cdn$8.99 for
Securities initially offered in Canada or US$8.00 (based on the
equivalent of the Canadian dollar price per share based on the noon buying rate in The City of New
York for cable transfers in Canadian dollars as certified for customs purposes by the Federal
Reserve Bank of New York (the “Noon Buying Rate”) on the date hereof) for Securities initially
offered in the United States.
2. The purchase price per share for the Securities sold or expected to be sold in Canada to be paid
by the several Underwriters shall be
Cdn$8.4508, being an amount equal to the public offering
price set forth above less
Cdn$0.5392 per share; provided that the purchase price per share for
any Option Securities purchased upon the exercise of the overallotment option described in Section
2(b) shall be reduced by an amount per share equal to any dividends or distributions declared by
the Company and payable on the Initial Securities but not payable on the Option Securities. The
purchase price per share for the Securities sold or expected to be sold in the United States to be
paid by the several Underwriters shall be
US$7.52, being an amount equal to the offering price
in the United States set forth above less
US$0.48 per share; provided that the purchase price
per share for any Option Securities purchased upon the exercise of the overallotment option
described in Section 2(b) shall be reduced by an amount per share equal to any dividends or
distributions declared by the Company and payable on the Initial Securities but not payable on the
Option Securities.
Sch B-1
SCHEDULE C
Price per share: | Cdn$8.99 US$8.00 |
Offering size: | 11,000,000 shares or 12,650,000 shares if the Underwriters exercise their over-allotment option in full |
Sch X-0
XXXXXXXX X
Xxxx
Xxx X-0
SCHEDULE E
List of Subsidiaries
Labopharm Europe Limited
Labopharm (Barbados) Ltd.
Labopharm Cyprus Limited
Labopharm USA, Inc.
Labopharm (Barbados) Ltd.
Labopharm Cyprus Limited
Labopharm USA, Inc.
Sch E-1
SCHEDULE F
Xxxxx X. Xxxxxx-Xxxxx
Xxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxx
Xxxxx Xxxxxxx
Xxxxxxx X. XxxXxx
Xxxxxx Xxxxxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxxx Xxxxx
Xxxxx Xxxxx
Xxxxx X. Xxxxxxxx
Xxxxxxx X. Xxx
Xxxxx X. Xxxxx
Xxxxxx Xxxxx
Fonds de solidarité des travailleurs du Québec
Xxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxx
Xxxxx Xxxxxxx
Xxxxxxx X. XxxXxx
Xxxxxx Xxxxxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxxx Xxxxx
Xxxxx Xxxxx
Xxxxx X. Xxxxxxxx
Xxxxxxx X. Xxx
Xxxxx X. Xxxxx
Xxxxxx Xxxxx
Fonds de solidarité des travailleurs du Québec
Sch F-1
Exhibit A
FORM OF OPINION OF COMPANY’S CANADIAN COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(b)
TO BE DELIVERED PURSUANT TO SECTION 5(b)
l, 2006
Canaccord Capital Corporation X.X. Xxx 000 Xxxxx 0000, 000 Xxx Xxxxxx Xxxxxxx, XX X0X 0X0 |
||
XxXxxxxx Xxxxxxxx llp Suite 2500 1000 de la Gauchetière Street West Montréal, QC H3B 0A2 |
Leerink Xxxxx & Co. 590 Madison Avenue 31st Floor New York, NY, USA 10022 |
|
Xxxxxx Xxxxx & co. Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated 000 Xxxxx Xxxxxx 0 Xxxxx Xxxxxxxxx Xxxxxx Xxx Xxxx, XX, XXX 00000 |
Dundee Securities Corporation 00 Xxxxx Xx. Xxxx Xxxxx 000 Xxxxxxx, XX X0X 0X0 |
|
Banc of America Securities llc 0 Xxxx 00xx Xxxxxx, 00xx xxxxx Xxx Xxxx, XX, XXX 00000 |
Orion Securities Inc. BCE Place 000 Xxx Xxxxxx, Xxxxx 0000 Xxxxxxx, XX X0X 0X0 |
|
Westwind Partners Inc. 00 Xxxx Xxxxxx, 00xx Xxxxx Xxxxx 000 Xxxxxxx, XX X0X 0X0 |
Dear Sirs, Mesdames:
Re: | Labopharm Inc. Public offering of Common Shares pursuant to a Short Form Supplemented PREP Prospectus dated April 28, 2006 |
We have acted as legal counsel to Labopharm Inc. (the “Company”) in connection with the public
offering of l common shares of share capital of the Company (the “Common Shares”) to be
issued and sold by the Company to Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, Banc of America Securities LLC, Canaccord Capital Corporation, Leerink Xxxxx & Co.,
Inc., Dundee Securities Corporation, Orion Securities Inc. and Westwind Partners Inc.
(collectively the “Underwriters”), at a price of Cdn$8,99 per Common Share, as well as an
over-allotment option granted by the
Company to the Underwriters (the “Over-Allotment Option”), exercisable at any time until 30 days
following the date of closing, to purchase, at the offering price, up to an additional l
Common Shares (the “Optioned Shares”) (the Common Shares and the Optioned Shares hereinafter
collectively referred to as the “Offered Shares”), the whole pursuant to a purchase agreement dated
April 27, 2006 between the Company and the Underwriters (the “Purchase Agreement”).
In connection therewith, we have considered such documents, including the preliminary short form
base PREP prospectus dated April 18, 2006 (the “Preliminary Prospectus”), the final short form base
PREP prospectus dated April 27, 2006 (the “Final PREP Prospectus”), the supplemented PREP
prospectus dated April 28, 2006 (the “Supplemented PREP Prospectus” or, upon filing, the “Canadian
Prospectus”) and the Purchase Agreement and such information and questions of law as we have
considered necessary or appropriate for the basis of the opinions hereinafter expressed. We have
also relied, as to certain matters of fact, on information obtained from public officials, officers
of the Company and other resources believed by us to be responsible.
In our examination of such documents and information, we have assumed the capacity of all
individuals, the genuineness of all signatures, the authenticity of all documents submitted to us
as originals of such documents and the conformity to original documents of all documents submitted
to us as copies, certified copies or facsimiles thereof. Moreover, we have assumed that the minute
books of the Company reviewed by us are complete and accurate in all respects.
Except as specifically stated herein, all terms used herein which are defined in the Purchase
Agreement are used herein with the meanings therein defined.
Based upon the foregoing and subject to the qualifications set forth below, we are of the opinion
that:
1. | The Company has been incorporated and is validly existing as a corporation under the laws of the Province of Québec. The Company is registered under An Act respecting the legal publicity of sole proprietorships, partnerships and legal persons (Quebec) and is not in default to file an annual declaration pursuant thereto. | |
2. | The Company has the corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Canadian Prospectus and to enter into and perform its obligations under the Purchase Agreement. | |
3. | The Company is duly qualified to carry on business as an extra-provincial corporation in each of the provinces of Canada where it carries on business and is in good standing under the laws of each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except for such jurisdictions where the failure to so qualify or to be in good standing would not, individually or in the aggregate, result in a Material Adverse Effect. | |
4. | The authorized, issued and outstanding share capital of the Company conform to the descriptions thereof set forth in the Canadian Prospectus. All of the outstanding Common Shares have been duly authorized and validly issued, are fully paid and non-assessable and, to our best knowledge, have been issued in compliance with the registration and qualification requirements of Canadian Securities Laws. | |
5. | The Securities to be purchased by the Underwriters from the Company have been duly authorized for issuance and sale pursuant to the Purchase Agreement and, when issued and delivered by the Company pursuant to the Purchase Agreement against payment of the consideration set forth therein, will be validly issued, fully paid and non-assessable. |
6. | No shareholder of the Company or any other person has any preemptive right, right of first refusal or other similar right to subscribe for or purchase securities of the Company arising by operation of the charter or by-laws of the Company or the Companies Act of Québec. | |
7. | The Purchase Agreement has been duly authorized, executed and delivered by the Company. | |
8. | The form of certificate representing the Securities has been duly approved and adopted by the Company and complies with the provisions of the Companies Act (Quebec), the charter and by-laws of the Company and the requirements of the Toronto Stock Exchange. | |
9. | To our best knowledge, there are no legal or governmental actions, suits or proceedings pending or threatened which are required to be disclosed in the Canadian Prospectus, other than those disclosed therein. | |
10. | The statements in the Canadian Prospectus under the captions “Our Business – Legal Proceedings”, “Related Party Transactions”, “Description of Share Capital”, “Certain Material Income Tax Considerations – Certain Canadian Material Income Tax Considerations”, “Eligibility for Investment” and “Purchasers’ Statutory Rights”, insofar as such statements constitute matters of law, summaries of legal matters, the Company’s charter or by-law provisions, documents or legal proceedings, or legal conclusions, have been reviewed by us and fairly present and summarize, in all material respects, the matters referred to therein. | |
11. | The filing of the Registration Statements, the U.S. Preliminary Prospectus and the U.S. Supplemented Prospectus with the Commission and the filing of the Canadian Prospectus with the Qualifying Authorities, in each case, have been duly authorized by and on behalf of the Company; and the Registration Statements and the Canadian Prospectus have been duly executed pursuant to such authorization by and on behalf of the Company. | |
12. | No consent, approval, authorization or other order of, or registration or filing with, any court or other governmental authority or agency in Canada, is required for the Company’s execution, delivery and performance of the Purchase Agreement and consummation of the transactions contemplated thereby and by the Canadian Prospectus, except as required under applicable Canadian Securities Laws. | |
13. | The execution and delivery of the Purchase Agreement by the Company and the performance by the Company of its obligations thereunder (other than performance by the Company of its obligations under the indemnification section of the Purchase Agreement, as to which no opinion need be rendered) (i) have been duly authorized by all necessary corporate action on the part of the Company; (ii) will not result in any violation of the provisions of the charter or by-laws of the Company; (iii) will not constitute a Repayment Event under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant to any material Agreements and Instruments identified in Schedule A of this opinion; or (iv) to our best knowledge, will not result in any violation of any law, administrative regulation or administrative or court decree in Canada applicable to the Company. | |
14. | Except as disclosed in the Canadian Prospectus, to our best knowledge, there are no persons with registration or other similar rights to have any equity or debt securities registered for sale under the Canadian Prospectus or included in the offering contemplated by the Purchase Agreement, except for such rights as have been duly waived. |
15. | The Company is eligible to use the PREP Procedures and meets the general eligibility requirements for use of a short form prospectus under National Instrument 44-101 Short Form Prospectus Distributions; the Canadian Prospectus including the documents incorporated by reference therein, and each amendment or supplement to the Canadian Prospectus, as of its issue date (other than the financial statements included or incorporated by reference therein, as to which no opinion need be rendered) complies as to form in all material respects with the applicable requirements of Canadian Securities Laws, including the PREP Procedures, as interpreted by the Qualifying Authorities. | |
16. | Each document filed pursuant to Canadian Securities Laws (other than the financial statements included or incorporated by reference therein, as to which no opinion need be rendered) and incorporated by reference in the Canadian Prospectus complied when so filed as to form in all material respects with Canadian Securities Law. | |
17. | An MRRS Decision Document for the Final PREP Prospectus has been obtained from the Reviewing Authority on its own behalf and on behalf of the Qualifying Authorities and the Reviewing Authority has not revoked such MRRS Decision Document; there are no other documents, reports or other information that in accordance with the requirements of the Qualifying Authorities must be filed or made publicly available in connection with the offering of the Securities; and to our best knowledge, no order having the effect of ceasing or suspending the distribution of the Securities has been issued by any Qualifying Authorities and no proceedings for such purpose have been instituted or are pending or are contemplated or threatened. | |
18. | The Supplemented PREP Prospectus has been filed with the Qualifying Authorities in the manner and within the time period required by the PREP Procedures. | |
19. | The Company is a reporting issuer in the Province of Québec and those Qualifying Jurisdictions where the concept of a reporting issuer exists and is not on the list of defaulting issuers maintained by the Reviewing Authority or the relevant Qualifying Authority. | |
20. | The Company has the corporate power to submit to the jurisdiction of the courts of the State of New York or the courts of the United States having jurisdiction in the State of New York in respect of any legal actions or proceedings arising out of the Purchase Agreement. | |
21. | A court of competent jurisdiction in the Province of Québec would uphold the choice of the law of the State of New York (“New York Law”) as the law governing the Purchase Agreement as a valid choice of law, provided that the outcome of the application of the provisions of New York Law sought to be applied is not manifestly inconsistent with public order, as understood in international relations, as that term is applied by a court of competent jurisdiction in the Province of Québec and provided that there are no rules of law in force in Quebec which are applicable by reason of their particular object. We are not aware of any reason under the laws of the Province of Québec and the laws of Canada applicable therein for avoiding the choice of New York Law to govern the Purchase Agreement. In a motion to enforce a final and conclusive judgment in personam of any federal or state court in the State of New York (a “New York Court”) that is not impeachable as void or voidable under New York law, a court of competent jurisdiction in the Province of Québec would give effect to the appointment by the Company of CT Corporation System as its agent to receive service of process in the United States under the Registration Statement and the Purchase Agreement and to the provisions in the Purchase Agreement whereby the Company submits to the non-exclusive jurisdiction of a New York Court, assuming that the appointment of the agent for service of process and the submission to jurisdiction are valid under New York law. |
22. | If the Purchase Agreement is sought to be enforced in the Province of Québec in accordance with the laws applicable thereto as chosen by the parties, namely New York Law, a court of competent jurisdiction in the Province of Québec would, subject to the preceding paragraph, give effect to the choice of New York Law, and upon appropriate evidence as to such law being adduced, would apply such law, provided that the application of the provisions of the Purchase Agreement, or of applicable New York Law is not manifestly inconsistent with public order as understood in international relations, as that term is applied by a court of competent jurisdiction in the Province of Québec and is not contrary to any rule of law in force in the Province of Québec which is applicable by reason of its particular object; provided that the provisions of the laws of the State of New York of a fiscal, expropriatory or penal nature will not be applied; and provided that, in matters of procedure, the laws of the Province of Québec will be applied, and provided that a court of competent jurisdiction in the Province of Québec will retain discretion to decline to hear such action if it is not the proper forum to hear such an action, or if concurrent proceedings are being brought elsewhere. | |
23. | We are not aware of any reason under the laws of the Province of Québec or the laws of Canada applicable therein for avoiding enforcement of the Purchase Agreement based on public order as understood in international relations, as that term is applied by a court of competent jurisdiction in the Province of Québec or based on any rule of law in force in the Province of Québec which is applicable by reason of its particular object (other than the enforcement of the indemnity and contribution provisions of the Purchase Agreement, as to which we need express no opinion). | |
24. | The laws of the Province of Québec and the laws of Canada applicable therein permit a motion to be brought in a court of competent jurisdiction in the Province of Québec to enforce a final, conclusive and enforceable judgment in personam for a sum certain rendered by a New York Court respecting the enforcement of the Purchase Agreement if the judgment is neither subject to ordinary remedy (such as appeal and judicial review) nor impeachable as void or voidable under the internal laws of the State of New York unless: |
(a) | the New York Court rendering such judgment does not have jurisdiction over the judgment debtor (although submission by the Company to the jurisdiction of the New York Courts and election of domicile in New York will be sufficient for that purpose); | |
(b) | such judgment was rendered in contravention of the fundamental principles of procedure; | |
(c) | there were proceedings pending in the Province of Québec or judgment was rendered in the Province of Québec or in a third country meeting the necessary conditions for recognition in the Province of Québec between the same parties, based on the same facts and having the same object; | |
(d) | the outcome of such judgment is manifestly inconsistent with public order as understood in international relations, as that term is applied by a court of competent jurisdiction in the Province of Québec; | |
(e) | such judgment enforces obligations arising from the taxation laws of a foreign country, unless there is reciprocity, or arising from other laws of a public nature, such as penal or expropriation laws; | |
(f) | the action to enforce such judgment is not commenced in the Province of Québec within the applicable prescriptive period; or |
(g) | the foreign judgment is contrary to an order made by the Attorney General of Canada under the Foreign Extraterritorial Measures Act (Canada) or by the Competition Tribunal under the Competition Act (Canada) in respect of certain judgments (as defined therein). |
If the judgment of the New York Court is rendered by default, the plaintiff must prove that the act of procedure initiating the proceedings was duly served on the defendant (in accordance with the laws of the place where such judgment was rendered, i.e. New York Law), and a court of competent jurisdiction in the Province of Québec may refuse recognition or enforcement of the judgment if the defendant proves that, owing to the circumstances, it was unable to learn of the act of procedure or it was not given sufficient time to offer its defense. | ||
In any such motion brought before a court of competent jurisdiction in the Province of Québec, the court will confine itself to verifying whether the judgment of the New York Court meets the foregoing requirements without entering into any examination of the merits of the judgment. | ||
Under the Currency Act (Canada), a court of competent jurisdiction in the Province of Québec may only render judgment for a sum of money in Canadian currency, and in enforcing a foreign judgment for a sum of money in a foreign currency, a court of competent jurisdiction in the Province of Québec will render its decision in the Canadian currency equivalent of such foreign currency calculated at the rate of exchange prevailing on the date the judgment became enforceable at the place where it was rendered. | ||
We are not aware of any reasons under the present laws of the Province of Québec and the laws of Canada applicable therein for avoiding recognition of judgments of a New York Court under the Purchase Agreement based upon public order as understood in international relations, as that term is applied by a court of competent jurisdiction in the Province of Québec, provided that no opinion is expressed with respect to the enforcement of any judgment premised on the indemnity and contribution provisions of the Purchase Agreement. | ||
25. | No goods and services tax under the federal laws of Canada will be payable by the Company in respect of any consideration received by an Underwriter for the performance of its services as contemplated by this Agreement, provided that such consideration is in respect of services performed by an Underwriter wholly outside of Canada. | |
26. | The laws of the Province of Québec relating to the use of the French language (other than verbal communications) have been complied with in connection with the sale of Securities of the Company to purchasers in the Province of Québec if such purchasers have received a copy of the Canadian Prospectus and forms of order and confirmation in the French language (on the assumption that the Canadian Prospectus together with the forms of order and confirmation constitute the entire contract for the purchase of such Securities), provided that the Canadian Prospectus and forms of order and confirmation in the English language may be delivered without delivery of the French language versions thereof to purchasers in the Province of Québec who have expressly requested the same in writing. | |
27. | The French language version of each of the Canadian Preliminary Prospectus, the Final PREP Prospectus, and the Supplemented PREP Prospectus are in all material respects complete and proper translations of the English language versions thereof and that the English and French language versions are not susceptible of any materially different interpretation with respect to any material contained therein (other than the financial statements included or incorporated by reference therein, as to which no opinion need to be rendered). |
28. | National Bank Trust has been duly appointed as the registrar and transfer agent in Canada and Computershare Trust Company, Inc. has been duly appointed as the co-transfer agent in the United States in respect of the Common Shares. | |
29. | The Securities have been conditionally approved for listing on the Toronto Stock Exchange. | |
30. | To our best knowledge, the Company is not in violation of its charter or by laws or any law, administrative regulation or administrative or court decree in Canada applicable to the Company or is in default in the performance or observance of any obligation, agreement, covenant or condition contained in any material Agreements and Instruments identified on Schedule A of this opinion, except in each such case for such violations or defaults as would not, individually or in the aggregate, result in a Material Adverse Effect. | |
31. | No stamp duty, registration or documentary taxes, duties or similar charges are payable under the laws of the Province of Québec or the federal laws of Canada applicable therein in connection with the creation, issuance and delivery to the Underwriters of the Securities, the resale and delivery of such Securities by the Underwriters in the United States or the Qualifying Jurisdictions, or the authorization, execution and delivery of the Purchase Agreement. Except as disclosed in the Canadian Prospectus, under current Canadian federal or provincial laws and regulations, all dividends and other distributions declared and payable on the Securities may be paid by the Company to the holder thereof in United States dollars or Canadian Dollars that may be converted into foreign currency and freely transferred out of Canada and all such payments made to holders thereof or therein who are non-residents of Canada will not be subject to income, withholding or other taxes under Canadian federal or Québec provincial laws and regulations thereof or therein and will otherwise be free and clear of any other tax, duty, withholding or deduction in Canada and without the necessity of obtaining any Canadian federal or Québec provincial governmental authorization. |
Any reference to “our best knowledge” refers solely to the actual knowledge of each of the lawyers’
of our firm who actively participated in the preparation of the Canadian Prospectus, after
consultation with such other lawyers of our firm who have rendered legal services to the Company as
each such lawyers considered appropriate.
The opinions expressed herein, other than those expressed in paragraphs 17 and 19, are limited to
the laws of the province of Québec and the federal laws of Canada applicable therein, as such laws
exist and are construed as at the date hereof, and the opinions expressed in paragraphs 17 and 19
are limited to the laws of the Qualifying Jurisdictions and the federal laws of Canada applicable
therein, as of the date hereof. With respect to the opinions expressed in paragraphs 17 and 19
relating to matters governed by the laws of jurisdictions other than the provinces of British
Columbia, Alberta, Ontario and Québec, we have relied exclusively upon the opinion of XxxXxxxxxx
Xxxxxx & Xxxxxxx LLP for Saskatchewan, Aikins, Macaulay, & Thorvaldson LLP for Manitoba and
Xxxxxxx XxXxxxxx Stirling Scales LLP for New Brunswick, Nova Scotia, Xxxxxx Xxxxxx Island and
Newfoundland and Labrador (collectively, the “Local Counsel Opinions”), each of even date herewith
addressed to you as well as to us, a copy of the said opinions having been delivered to you. To
the extent that the Local Counsel Opinions are stated to be based on any assumption or to be given
in reliance on the certificate or other document or to be subject to any limitations,
qualifications or exceptions, the opinions expressed herein in reliance of such opinion are based
on the same assumptions or given in reliance on the same certificates or documents and are subject
to the same limitations, qualifications or exceptions.
This opinion is furnished by us as counsel to the Company pursuant to the Purchase Agreement and is
solely for the benefit of the aforementioned addressees and may not be relied upon by, and may not
be
distributed to, and other person or for any other purpose without our prior written consent, it
being understood that Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP and XxXxxxxx Xxxxxxxx LLP may rely
on this opinion for the purpose of rendering their legal opinion pursuant to the Purchase
Agreement.
Yours truly,
SCHEDULE A
MATERIAL AGREEMENTS AND INSTRUMENTS
l, 2006
Xxxxxxx Xxxxx & co.
|
Canaccord Capital Corporation | |
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
|
X.X. Xxx 000 | |
Xxxxxxxxxxxx
|
Xxxxx 0000, 000 Xxx Xxxxxx | |
000 Xxxxx Xxxxxx
|
Xxxxxxx, XX X0X 0X0 | |
0 Xxxxx Xxxxxxxxx Xxxxxx |
||
Xxx Xxxx, XX, XXX 00000 |
||
Banc of America Securities llc
|
Leerink Xxxxx & Co. | |
0 Xxxx 00xx Xxxxxx, 47th floor
|
000 Xxxxxxx Xxxxxx | |
Xxx Xxxx, XX, XXX 00000
|
00xx Xxxxx | |
Xxx Xxxx, XX, XXX 00000 | ||
Dundee Securities Corporation | ||
00 Xxxxx Xx. Xxxx | ||
Xxxxx 000 | ||
Xxxxxxx, XX X0X 0X0 | ||
Orion Securities Inc. | ||
BCE Place | ||
000 Xxx Xxxxxx, Xxxxx 0000 | ||
Xxxxxxx, XX X0X 0X0 | ||
Westwind Partners Inc. | ||
00 Xxxx Xxxxxx, 00xx Xxxxx | ||
Xxxxx 000 | ||
Xxxxxxx, XX X0X 0X0 |
Dear Sirs, Mesdames:
Re: | Labopharm Inc. Public offering of Common Shares pursuant to a Short Form Supplemented PREP Prospectus dated April 28, 2006 |
We have acted as legal counsel to Labopharm Inc. (the “Company”) in connection with the public
offering of l common shares of share capital of the Company (the “Common Shares”) to be
issued and sold by the Company to Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, Banc of America Securities LLC, Canaccord Capital Corporation, Leerink Xxxxx & Co.,
Inc., Dundee Securities Corporation, Orion Securities Inc. and Westwind Partners Inc.
(collectively the “Underwriters”), at a price of l per Common Share, as well as an
over-allotment option granted by the Company to the Underwriters (the “Over-Allotment Option”),
exercisable at any time until 30 days following the date of closing, to purchase, at the offering
price, up to an additional l Common Shares (the “Optioned Shares”) (the Common Shares and
the Optioned Shares hereinafter collectively referred to as the “Offered Shares”), the whole
pursuant to a purchase agreement dated April 27, 2006 between the Company and the Underwriters (the
“Purchase Agreement”).
In connection therewith, we have considered such documents, including the preliminary short form
base PREP prospectus dated April 18, 2006 (the “Preliminary Prospectus”), the final short form base
PREP prospectus dated April 27, 2006 (the “Final PREP Prospectus”), the supplemented PREP
prospectus dated April 28, 2006 (the “Supplemented PREP Prospectus” or, upon filing, the “Canadian
Prospectus”) and the Purchase Agreement and such information and questions of law as we have
considered necessary or appropriate for the basis of the opinions hereinafter expressed. We have
also relied, as to certain matters of fact, on information obtained from public officials, officers
of the Company and other resources believed by us to be responsible.
In our examination of such documents and information, we have assumed the capacity of all
individuals, the genuineness of all signatures, the authenticity of all documents submitted to us
as originals of such documents and the conformity to original documents of all documents submitted
to us as copies, certified copies or facsimiles thereof. Moreover, we have assumed that the minute
books of the Company reviewed by us are complete and accurate in all respects.
Capitalized terms that are defined in the Purchase Agreement and not otherwise defined in this
letter are used in this opinion letter as they are defined in the Purchase Agreement.
Reference is made to the Canadian Prospectus and to the Final PREP Prospectus immediately prior to
8:30 am (Eastern time) on April 28, 2006 (the “Applicable Time”).
As Canadian counsel to the Company, we reviewed the Canadian Prospectus, and participated in
discussions with your representatives, those of counsel for the Underwriters, and those of the
Company and its independent public accountants, at which the contents of the Canadian Prospectus
was discussed. Between the Applicable Time and the time of the delivery of this letter, we
participated in further discussions with your representatives, those of counsel for the
Underwriters, and those of the Company and its accountants, and we reviewed certain certificates of
officers of the Company and public officials and letters from the Company’s independent public
accountants delivered to you today.
The purpose of our engagement was not to establish or to confirm factual matters set forth in the
Canadian Prospectus, and we have not undertaken any obligation to verify independently any of the
factual matters set forth in the Canadian Prospectus. Moreover, many of the determinations
required to be made in the preparation of the Canadian Prospectus involves matters of a non-legal
nature.
Subject to the foregoing, we confirm to you that: (i) on the basis of the information that we
gained in the course of performing the services referred to above, nothing came to our attention
that caused us to believe that (a) the Canadian Prospectus, as of its effective date, contained an
untrue statement of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading, and (b) the Final PREP Prospectus, as supplemented by the PREP
Information, as of the Applicable Time, contained an untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, and (ii) nothing came to our attention in the course of
the procedures described in the second sentence of the sixth paragraph of this letter that caused
us to believe that the Canadian Prospectus, as of the date and time of delivery of this letter,
contains any untrue statement of a material fact or omits to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were made, not
misleading; provided, however, that we do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Canadian Prospectus, and we do not
express any belief as to the financial statements and related notes, financial statement schedules
or financial, statistical (but only to the extent such statistical data are derived from financial
data) or accounting data contained in the Canadian Prospectus, nor do we express any belief as to
any statements as to regulatory matters included in the
Regulatory Portion (as defined in Exhibit C and Exhibit D to the Purchase Agreement) of the
Canadian Prospectus. In the first two sentences of this paragraph, “attention” refers to the
actual knowledge of each of the lawyers of our firm who actively participated in the preparation of
the Canadian Prospectus, after consultation with such other lawyers of our firm who have rendered
legal services to the Company as each such lawyers considered appropriate; and “believe” refers to
the actual, subjective, good faith belief of each of those lawyers.
We are not representing the Company in any pending litigation in which it is a named defendant that
challenges the validity or enforceability of, or seeks to enjoin the performance of, the Purchase
Agreement.
This letter is being furnished by us solely for the benefit of the several Underwriters as
underwriters in connection with the issuance to you of the Common Shares, and it may not be relied
on for any other purpose by you or anyone else.
Yours truly,
Exhibit B
FORM OF OPINION OF COMPANY’S UNITED STATES COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(c)
, 2006
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
BANC OF AMERICA SECURITIES LLC
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
BANC OF AMERICA SECURITIES LLC
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
as Representatives of the Several Underwriters
Re: Labopharm inc.
Ladies and Gentlemen:
We have acted as special U.S. counsel for Labopharm inc., a Québec corporation (the “Company”) in
connection with the sale to the Underwriters (as defined below) by
the Company of 11,000,000 common
shares, without par value (the “Common Shares”), of the Company. We are furnishing this opinion
letter to you pursuant to Section 5(c) of the Purchase Agreement,
dated as of April 27, 2006
(the “Purchase Agreement”), among the Company and the Underwriters listed on Schedule A to the
Purchase Agreement, for whom you are acting as Representatives (the “Underwriters”). Capitalized
terms that are defined in the Purchase Agreement and not otherwise defined in this opinion letter
are used in this opinion letter as they are defined in the Purchase Agreement.
Reference
is made to (i) the Company’s registration statement on Form
F-10 (File No. 333-133351) filed by
the Company with the Securities and Exchange Commission (the
“Commission”) on April 18, 2006, as
amended, in the form which it became effective on April 27, 2006
(the “First Registration Statement”), and (ii) the
Company's registration statement on Form F-10 (File No.
333- )
filed by the Company with the Commission on April 28, 2006, in the
form which it became effective on April 28, 2006 (the “Second Registration
Statement”). The U.S. Supplemental Prospectus containing the
PREP Information included in the Second Registration Statement is herein called the “U.S.
Prospectus.”
We have made such investigation of law as we have deemed appropriate to give the opinions below.
We have examined the agreements set forth on Exhibit A (the
“Identified Agreements”). We have relied, without independent verification, as to matters of fact material to the opinions
set forth below, on certificates of public officials and on representations made in the Purchase
Agreement, and certificates and other inquiries of officers of the Company.
For purposes of this opinion letter, we have assumed that the Purchase Agreement has been duly
authorized, executed and delivered by the Company under the applicable laws of the Province of
Québec,
B-1
and that the Company’s performance of its obligations under the Purchase Agreement has been duly
authorized by the Company under the applicable laws of the Province of Québec.
Our opinion rendered in paragraph 1 below as to the due execution and delivery of the Purchase
Agreement by the Company is limited to the extent to which such matters are governed by New York
law.
We note
that the Loan Agreement (as defined in Exhibit A) provides that it is
to be governed by, and construed and enforced in accordance with, the
laws of the State of California, excluding the conflict of laws
principles that would cause the application of laws of any other
jurisdiction. With your permission and without independent
investigation, the opinion rendered in clause (c) of
paragraph 2 below is given as though the Loan Agreement were
governed by the internal laws of the Commonwealth of Massachusetts.
We express no opinion as to whether such assumption is reasonable or
correct.
In connection with our opinion in numbered paragraph 3 below, we have relied exclusively on the
letter, dated April 25, 2006, from Xxxx X. Xxxxxxx, of Nasdaq to
Xx. Xxxxxx Xxxxxxxxx, Chief Financial Officer; of the
Company, a copy of which has been made available to your counsel.
Our opinion expressed in paragraph 8 below as to the valid existence and good standing of Labopharm
USA, Inc. is based solely on a review of a Certificate of Good Standing and Legal Existence
relating to the Company issued by the State of Delaware, dated
May 2, 2006 (the “Delaware
Certificate”), and such opinion is limited accordingly and is rendered as of the date of the
Delaware Certificate.
In rendering the opinion set forth in paragraph 10 below, we have assumed the completeness and
accuracy of, and are relying upon, the statements set forth in a certificate of the Secretary of
the Company and of Labopharm USA, Inc., without making any independent verification or inquiry with
respect to the completeness or accuracy of such statements, other than a review of the copies of
the certificate of incorporation and relevant minute books and stock record books of the Company
and Labopharm USA, Inc. in our possession, and we are not in a position to verify the accuracy or
completeness of these materials. In rendering the opinions set forth in paragraph 10 below, we
have assumed that all purchasers of outstanding shares of capital stock of Labopharm USA, Inc. have
paid for such shares in full.
The
opinions set forth below are limited to Massachusetts law, New York law, the Delaware General Corporation Law and
the federal law of the United States. Without limiting the generality of the foregoing, we express
no opinion with respect to (i) state securities or “Blue Sky” laws, or (ii) state or federal
antifraud laws.
Based upon the foregoing, and subject to the additional qualifications set forth below, we are of
the opinion that:
1. | Assuming the due authorization, execution and delivery of the Purchase Agreement by the Company under the applicable laws of the Province of Québec, the Purchase Agreement has been duly executed and delivered by the Company. | |
2. | The execution and delivery by the Company of the Purchase Agreement and its issuance and sale of the Common Shares pursuant the Purchase Agreement do not and the performance by the Company of its obligations under the Purchase Agreement will not: (a) require any consent, approval, license or exemption by, order or authorization of, or filing, recording or registration by the Company with, any New York or federal governmental authority, except such as have been made or obtained under the Securities Act of 1933, as amended (the “Securities Act”), and except as may be required under the securities or Blue Sky laws of any foreign jurisdiction or of any state or other jurisdiction of the United States, as to which we express no opinion, (b) violate any State of New York or federal statute, rule or regulationor (c) result in a breach of, or constitute a default under, any of the Identified Agreements. | |
3. | The Common Shares to be delivered in accordance with the provisions of the Purchase Agreement have been approved for listing, subject to notice of issuance, on Nasdaq. | |
4. | The statements in the U.S. Prospectus under the captions “Certain Material Income Tax Considerations – U.S. Federal Income Tax Considerations,” insofar as such statements contain descriptions of federal income tax laws, rules or regulations are correct in all material respects. |
B-2
5. | The Company is not, and after giving effect to the issuance of the Common Shares and the application of the proceeds as described in the U.S. Prospectus, will not be, an “investment company,” as that term is defined in the Investment Company Act of 1940, as amended. | |
6. | Under the laws of the State of New York relating to submission to jurisdiction the Company has, pursuant to Section 11 of the Purchase Agreement, validly submitted to the non-exclusive jurisdiction of any New York state or U.S. federal court located in the Borough of Manhattan, The City of New York, New York, in any proceeding arising out of or related to the Purchase Agreement. However, the preceding sentence notwithstanding, we advise you that forum selection clauses in contracts are not necessarily binding on the court(s) in the forum selected if such court finds that the (a) the adoption of the clause in the contract was the result of fraud or overreaching, (b) the party opposing the clause will be effectively deprived of its opportunity to participate in the proceeding due to the grave inconvenience or unfairness of the selected forum, (c) the fundamental unfairness of the chosen law may deprive the plaintiff of a remedy, or (d) the clause contravenes a strong public policy of the forum state. | |
7. | The Company has validly appointed CT Corporation Systems as its authorized agent for the purposes described in the Purchase Agreement. | |
8. | Labopharm USA, Inc. is validly existing as a corporation in good standing under the laws of the State of Delaware. | |
9. | Labopharm USA, Inc. has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the U.S. Prospectus and the Canadian Prospectus. | |
10. | All of the issued and outstanding capital stock of Labopharm USA, Inc. has been duly authorized and validly issued, is fully paid and non-assessable and is owned of record by the Company. | |
11. | The Company meets the general eligibility requirements for use of Form F-10 under the Securities Act. |
Except to the extent set forth in paragraph 6 and 7 above, we express no opinion as to the
enforceability of the Purchase Agreement.
Our opinions set forth above are subject to and limited by the effect of any applicable bankruptcy,
insolvency, moratorium, fraudulent transfer, reorganization and other similar laws of general
application affecting the rights or remedies of creditors and to general principles of equity
(including, without limitation, concepts of materiality, reasonableness, good faith, fair dealing
and unconscionability), regardless of whether considered in a proceeding in equity or at law.
Internal Revenue Service Circular 230 Disclosure: Pursuant to Internal Revenue Service Circular
230, you are hereby notified that any discussion set forth herein with respect to United States
federal tax issues was not intended or written to be used, and such discussion cannot be used by
any taxpayer for the purpose of avoiding any penalties that may be imposed on the taxpayer under
the United States Internal Revenue Code. Such discussion was written to support the marketing of
the Common Shares. Taxpayers should seek advice based on the taxpayer’s particular circumstances
from an independent tax advisor.
B-3
This opinion letter is being furnished by us solely for the benefit of the several Underwriters as
underwriters in connection with the issuance to the Underwriters of the Common Shares, and neither
it nor the opinions it contains may be relied for any other purpose or by anyone else.
Very truly yours,
DRAFT
XXXXXXX
PROCTER LLP
B-4
EXHIBIT
A
Identified
Agreements
Senior
Loan and Security Agreement between Labopharm USA, Inc. and Hercules
Technology Growth Capital, Inc. dated June 28, 2005 (the
“Loan Agreement”).
Exclusive
License Agreement between Labopharm Europe Limited and Purdue Pharma
Products L.P. dated August 12, 2005.
X-0
XXXXXXX XXXXX & XX.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
BANC OF AMERICA SECURITIES LLC
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
BANC OF AMERICA SECURITIES LLC
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
as Representatives of the Several Underwriters
Re: Labopharm inc.
Ladies and Gentlemen:
Reference
is made to (i) the registration under the Securities Act of 1933, as amended (the “Securities
Act”), of 11,500,000 common shares, without par value (the “Common Shares”), of Labopharm inc.
(the “Company”) pursuant to a registration statement on Form F-10 (No. 333-133351) (the
“First Registration Statement”) in the form which it became
effective under the Securities Act on April 27, 2006, and
(ii) the registration under the Securities Act of 1,500,000
Common Shares of the Company pursuant to a registration statement on
Form F-10
(No. 333- ) on
Form F-10 in the form which it became effective on
April 28, 2006 (the “Second Registration Statement”
and together with the First Registration Statement, the
“Registration Statements”). The U.S. Supplemental
Prospectus containing the PREP Information included in the Second
Registration Statement is herein called the “U.S. Prospectus.”
Reference is also made to the preliminary prospectus included in the
First Registration Statement
immediately prior to 8:30 a.m. (Eastern time) on April 28, 2006, (the “Applicable
Time”), as supplemented by the information included on Schedule C to the Purchase Agreement and the
documents (if any) listed on Appendix A hereto (collectively, the “Pricing Disclosure Package”).
We are furnishing this letter to you pursuant to Section 5(c) of the Purchase Agreement, dated as
of April 27, 2006 (the “Purchase Agreement”), among the Company and the Underwriters listed on
Schedule A to the Purchase Agreement, for whom you are acting as Representatives. Capitalized
terms that are defined in the Purchase Agreement and not otherwise defined in this letter are used
in this opinion letter as they are defined in the Purchase Agreement.
As special U.S. counsel to the Company, we reviewed the Registration Statement, the U.S. Prospectus
and the Pricing Disclosure Package, and participated in discussions with your representatives,
those of counsel for the several Underwriters (the “Underwriters”), and those of the Company and
its independent public accountants, at which the contents of the Registration Statement, the U.S.
Prospectus and the Pricing Disclosure Package were discussed. Between the Applicable Time and the
time of the delivery of this letter, we participated in further discussions with your
representatives, those of counsel for the Underwriters, and those of the Company and its
accountants, and we reviewed certain certificates of officers of the Company and public officials
and letters from the Company’s independent public accountants delivered to you today.
The purpose of our engagement was not to establish or to confirm factual matters set forth in the
Registration Statement, the U.S. Prospectus and the Pricing Disclosure Package, and we have not
undertaken any obligation to verify independently any of the factual matters set forth in the
Registration Statement and U.S. Prospectus. Moreover, many of the determinations required to be
made in the preparation of the Registration Statement, the U.S. Prospectus and the Pricing
Disclosure Package involve matters of a non-legal nature.
B-2
Subject to the foregoing, we confirm to you that: (i) on the basis of the information that we
gained in the course of performing the services referred to above, nothing came to our attention
that caused us to believe that (a) either Registration
Statement, each as of its respective effective date, contained
an untrue statement of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (b) the Pricing Disclosure
Package, at the Applicable Time, contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein in light of the circumstances under
which they were made, not misleading, or (c) the U.S. Prospectus, as of its date, contained any
untrue statement of a material fact or omitted to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading, and
(ii) nothing came to our attention in the course of the procedures described in the second sentence
of the second paragraph of this letter that caused us to believe that the U.S. Prospectus, as of
the date and time of delivery of this letter, contains any untrue statement of a material fact or
omits to state any material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however, that we do not assume
any responsibility for the accuracy, completeness or fairness of the statements contained in the
Registration Statement, the Pricing Disclosure Package and the U.S. Prospectus, and we do not
express any belief as to the financial statements and related notes, financial statement schedules
or financial, statistical (but only to the extent such statistical data are derived from financial
data) or accounting data contained in the Registration Statement, the Pricing Disclosure Package
and the U.S. Prospectus. In the first two sentences of this paragraph, “attention” refers to the
actual knowledge of each of the lawyers of our firm who actively participated in the preparation of
the Registration Statements, the Pricing Disclosure Package and the U.S. Prospectus, after
consultation with such other lawyers of our firm who have rendered legal services to the Company as
each of such lawyers considered appropriate; and “believe” refers to the actual, subjective, good
faith belief of each of those lawyers.
Based solely upon oral telephonic advice from one or more members of the Commission’s staff, we
inform you that each Registration Statement has been declared effective under the Securities Act,
and that to the best of our knowledge no stop order suspending the
effectiveness of either Registration Statement has been issued under the Securities Act and no proceedings for that purpose
have been instituted or are pending or threatened by the Commission.
We are not representing the Company in any pending litigation in which it is a named defendant that
challenges the validity or enforceability of, or seeks to enjoin the performance of, the Purchase
Agreement.
Further,
we confirm to you that each Registration Statement, as of its
respective effective date, and the U.S.
Prospectus, as of the date of the U.S. Prospectus, appeared to us on their face to respond in all
material respects to the requirements of the form on which the registration statement was filed,
except that the foregoing statement does not address any requirement relating to financial
statements and related notes, financial statement schedules or financial or accounting data
contained in the Registration Statement or the U.S. Prospectus. In addition, we confirm to you
that each Form F-X, as of its respective date, appeared to us on its face to respond in all material respects
to the requirements of the form.
This letter is being furnished by us solely for the benefit of the several Underwriters as
underwriters in connection with the issuance to you of the Common Shares, and it may not be relied
on for any other purpose by you or anyone else.
Very truly yours,
X-0
Xxxxxxxx X
XXXX
X-0
Exhibit C
FORM OF OPINION OF COMPANY’S EUROPEAN REGULATORY COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(d)
As European regulatory counsel to the Company, we are familiar with the European Directive
2001/83/EC and related laws, the laws within each Member State of the European Union and European
Economic Area (the “EEA”) granting Marketing Authorization through the Mutual Recognition Procedure
and related government regulatory regulations and matters as applied generally to drugs of the
nature under development and clinical testing by the Company and have reviewed the Registration
Statements, the U.S. Prospectus and the Canadian Prospectus, including the documents incorporated by
reference therein, particularly the portions thereof under the captions “Risk Factors — Risks
Related to Our Business — We face uncertainties related to clinical trials that could result in
delays in regulatory approval,” “Risk Factors — Risks Related to Our Business — If we fail to
obtain regulatory approvals for our product candidates under development, we will not be able to
commercialize our products,” “Risk Factors — Risks Related to Our Business — Even if we obtain
marketing approval, there may be limits on the approval and our products will be subject to ongoing
regulatory review and regulatory requirements, and if we fail to comply with these requirements, we
could lose marketing approval and sales of any approved commercial products could be suspended,”
“Risk Factors — Risks Related to Our Business — If third-party manufacturers of our products fail
to devote sufficient time and resources to our concerns, or if their performance is substandard,
our product introductions may be delayed, our costs may rise, the commercialization of our products
could be delayed or presented, and this may result in higher costs or deprive us of potential
product revenues,” “Risk Factors — Risks Relating to Our Industry — Governments outside the
United States tend to impose strict price controls, which may adversely affect our revenues, if
any,” “Business — Once-Daily Tramadol — Europe,” “Business — Once-Daily Tramadol — Rest of the
world,” and “Business – Government Regulation” (other than the portion therein under the caption
“United States,” and the portion of the Annual Information Form under the caption [“Business –
Government Regulation”] (collectively, the “Regulatory Portion”)
Based solely on the foregoing and subject to the other qualifications set forth herein, we are
of the opinion that the statements in the Regulatory Portion, insofar as they constitute a summary
of matters of law or regulatory requirements referred to therein, have been reviewed by us and
fairly and accurately present and summarize, in all material respects, the matters referred to
therein. To our knowledge, based on the business of the Company as described in the Registration
Statements, the U.S. Prospectus and the Canadian Prospectus there is no provision in the laws cited
above and the regulations promulgated thereunder that would be material to an investor in the
Securities that is not summarized in the Regulatory Portion. In addition, we are not aware of any
lawsuit or regulatory proceeding, pending or threatened, brought by or before the European
Medicines Agency, the European Commission’s Enterprise Directorate General and the regulatory
agencies within each Member State of the EEA granting Marketing Authorization through the Mutual
Recognition Procedure or any other regulatory body with jurisdiction over the Company or any of its
subsidiaries. Whilst we are not aware of any such lawsuit or regulatory proceeding pending or
threatened before the aforementioned agencies, we have not conducted any specific due diligence
with respect to this. Further, based on the materials we have examined and our participation in
the preparation of the Registration Statements, the U.S. Prospectus and the Canadian Prospectus,
nothing has come to our attention which would lead us to believe that the statements made in the
Regulatory Portion of the Registration Statements, or any amendments thereto, at the time the
Registration Statements or such amendments became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the statements made in the Regulatory Portion of
U.S. Prospectus and the Canadian Prospectus, as of its date or at the Closing Time or any Date of
Delivery, as the case may be, contained an untrue statement of a material fact or omitted to state
a material fact necessary in order to
C-1
make the statements therein, in the light of the circumstances under which they were made, not
misleading.
C-2
Exhibit D
FORM OF OPINION OF COMPANY’S UNITED STATES REGULATORY COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(e)
As United States regulatory counsel to the Company, we are familiar with the United States
Federal Food, Drug, and Cosmetic Act (the “FDC Act”) and the regulations promulgated thereunder and
matters as applied generally to drugs of the nature under development and clinical testing by the
Company and have reviewed the Registration Statement, the U.S. Prospectus and the Canadian
Prospectus, including the documents incorporated by reference therein, particularly the portions
thereof under the captions “Risk Factors — Risks Related to Our Business — We depend heavily on
the success of our lead product candidate, our once-daily tramadol, and if the new drug
application, or NDA, for our once-daily tramadol is not approved on a timely basis or at all, it
would have a material adverse effect on our business, financial condition and results of
operations,” “Risk Factors — Risks Related to Our Business — If we fail to obtain regulatory
approvals for our product candidates under development, we will not be able to commercialize our
products,” “Risk Factors — Risks Related to Our Business — Even if we obtain marketing approval,
there may be limits on the approval and our products will be subject to ongoing regulatory review
and regulatory requirements, and if we fail to comply with these requirements, we could lose
marketing approval and sales of any approved commercial products could be suspended,” “Risk Factors
— Risks Related to Our Business — If third-party manufacturers of our products fail to devote
sufficient time and resources to our concerns, or if their performance is substandard, our product
introductions may be delayed, our costs may rise, the commercialization of our products could be
delayed or presented, and this may result in higher costs or deprive us of potential product
revenues,” “Business — Once-Daily Tramadol — United States,” and “Business – Government
Regulation” (other than the portions therein under the captions “European Economic Area” and “Other
Countries,” and the portion of the Annual Information Form under the caption [“Business –
Government Regulation”] (collectively, the “Regulatory Portion”).
Based solely on the foregoing and subject to the other qualifications set forth herein, we are
of the opinion that the statements in the Regulatory Portion, insofar as they constitute a summary
of matters of law or regulatory requirements referred to therein, have been reviewed by us and
fairly and accurately present and summarize, in all material respects, the matters of law or
regulatory requirements referred to therein. To our knowledge, based on the business of the
Company as described in the Registration Statement, the U.S. Prospectus and the Canadian Prospectus
there is no provision in the FDC Act and the regulations promulgated thereunder that would be
material to an investor in the Securities that is not summarized in the Regulatory Portion. In
addition, we are not aware of any lawsuit or regulatory proceeding, pending or threatened, brought
by or before the FDA with respect to the Company or its subsidiaries. Further, based on the
materials we have examined and our participation in the preparation of the Registration Statement,
the U.S. Prospectus and the Canadian Prospectus, nothing has come to our attention which would lead
us to believe that the statements made in the Regulatory Portion of the Registration Statement, or
any amendments thereto, at the time the Registration Statement or such amendments became effective,
contained an untrue statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or that the statements
made in the Regulatory Portion of U.S. Prospectus and the Canadian Prospectus, as of its date or at
the Closing Time or any Date of Delivery, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
D-1
Exhibit E
FORM OF OPINION OF COMPANY’S CANADIAN PATENT COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(f)
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
BANC OF AMERICA SECURITIES LLC
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
BANC OF AMERICA SECURITIES LLC
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
as Representatives of the Several Underwriters
Re: Labopharm inc.
Ladies and Gentlemen:
We have acted for Labopharm inc., a Québec corporation (the “Company”) in the preparation and
filing of the patent applications listed in Schedule “A” and Schedule “B” (together, the “Patent
Applications”) relating to a once-daily tramadol product (“Tramadol”). We are instructing foreign
counsel in the prosecution of the patent applications listed in Schedule “A”. Responsibility for
the patent applications listed in Schedule “B” (the “Transferred Patent Applications”) was
transferred to the Company on or around February 2005 and our opinion with respect to the
Transferred Patent Applications is restricted to the time period prior to February 2005. We had
conducted for the Company limited patent searches relating to Tramadol. We have not acted for the
Company in connection with its Contramid drug delivery technology or its polymeric nano-delivery
technology and offer no opinion on those technologies or the use of those technologies in relation
to Tramadol. This opinion is being furnished pursuant to Section 5(f) of the Purchaser Agreement,
dated April 27, 2006 (the “Purchase Agreement”), between Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated and Banc of America Securities LLC, as representatives of the
several Underwriters named in Schedule A to the Purchase Agreement, in connection with the sale by
the Company and purchase of ___Common Shares, without par value, of the Company (the “Shares”) by
the several Underwriters. All defined terms not defined herein shall have the meanings ascribed to
them in the Purchase Agreement.
The purpose of our engagement was not to establish or to confirm factual matters set forth in
the U.S. Prospectus, and we have not undertaken any obligation to verify independently any of the
factual matters set forth in the U.S. Prospectus. Moreover, many of the determinations required to
be made in the preparation of the U.S. Prospectus involves matters of a non-legal nature.
In the paragraph (ii) and (iv) below, “attention” refers to the conscious awareness of each of
the lawyers of our firm who actively participated in the preparation of the opinion and who
participated in the filing of the Patent Applications or in conducting the limited patent searches
referenced above; and “believe” refers to the actual, subjective, good faith belief of each of
those lawyers.
We are qualified to practice law in the Province of Ontario and express no opinions as to the
laws of any jurisdictions other than the laws of Canada.
E-1
Subject to the statement above with respect to the Transferred Patent Applications, we are
familiar with the efforts of the Company to file and maintain in good standing the Patent
Applications. In connection with this opinion, we have reviewed the following documents and
performed the following actions:
1. We have reviewed certain sections of the U.S. Prospectus, namely the statements under the
captions “Risk Factors — Claims by other companies that we infringe their intellectual proprietary
rights may result in liability for damages or stop our development and commercialization efforts,
including with respect to our once-daily tramadol product”, “Risk Factors — We may become involved
in lawsuits to protect or enforce our intellectual property rights that would be expensive and time
consuming”, and “Risk Factors — If we are unable to protect our intellectual property rights, our
competitors may develop and market products with similar features that may reduce demand for our
products and inhibit their effective commercialization” and the statements under the heading
“Business — Intellectual Property” (collectively, the “Intellectual Property Sections”).
2. In the course of preparing and filing the Patent Applications, we have reviewed all
records, documents, instruments and agreements in our possession relating to the Patent
Applications, including the results of the limited patent searches, referenced above. In
performing our review of such records, documents, instruments and agreements, we have assumed the
genuineness of all signatures on the copies of such records, documents, instruments and agreements
submitted to us as certified, conformed or photographic copies.
3. In the course of preparing and filing the Patent Applications, and conducting the limited
patent searches referenced above, we have had discussions with officers and representatives of the
Company.
On the basis of our review and discussions set forth above, but otherwise without independent
check or verification, we are of the opinion that:
(i) As of February 2005 the Company had filed patent applications in the U.S. and abroad
relating to Tramadol. Schedule A contains a complete list of the patent applications in relation
to Tramadol in respect of which we are instructing foreign counsel in the prosecution. Schedule B
contains a list of patent applications which were filed by us but for which the responsibility was
transferred to the Company on or around February 2005.
(ii) US patent application 60/564,606 and the PCT patent applications identified in Schedule B
were in good standing at the time that they were transferred to the Company. We have no reason to
believe that the patent applications which were filed in non-PCT member countries, and identified
in Schedule B, were not in good standing at the time that we transferred them, although we made no
enquiries in that regard. With respect to the Transferred Patent Applications, as of the date of
transfer, the Company had obtained or was in the course of obtaining assignments of all rights to
the inventions claimed in the Patent Applications from the inventors to the Company and the
Company’s rights to those inventions are subject to the Co-Ownership Agreement dated December 31,
2002 between the Company, Labopharm Barbados Limited and Labopharm Europe Limited. With respect to
Patent Applications that have been assigned to the Company prior to February 2005, we have no
reason to believe that such assignments are invalid.
(iii) We are not aware of any actions, suits, claims or proceedings that have been asserted in
a Court against the Company or threatened against the Company alleging infringement of the
intellectual property rights of any third party, although we have not made any specific enquiries
in this regard.
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(iv) We have no knowledge of the information contained in the Intellectual Property Section
relating to the Patent Applications and relating to Tramadol (the “Covered Material”), except
insofar as the Covered Material constitutes a summary of matters of Canadian law. On the basis of
our review and discussions set forth above, but otherwise without independent check or
verification, nothing has come to our attention which leads us to believe that the Covered Material
does not fairly present in all material respects the matters disclosed therein or omits to state a
material fact or facts necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
The foregoing opinion is rendered as of the date hereof, and we assume no obligation to update
such opinion to reflect any facts or circumstances which may hereinafter come to our attention or
any changes in the law which may hereafter occur. This letter is furnished solely for your
information in connection with the offering and sale of the Shares and may not be relied upon by
any other person.
Very truly yours,
E-3
Exhibit F
FORM OF OPINION OF COMPANY’S U.S. PATENT COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(g)
TO BE DELIVERED PURSUANT TO SECTION 5(g)
__, 2006
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
BANC OF AMERICA SECURITIES LLC
as Representatives of the several Underwriters
as Representatives of the several Underwriters
x/x
|
Xxxxxxx Xxxxx & Xx. | |
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated | ||
0 Xxxxx Xxxxxxxxx Xxxxxx | ||
Xxx Xxxx, Xxx Xxxx 00000 | ||
As Representatives of the Several Underwriters | ||
Re:
|
Labopharm, Inc. |
Ladies and Gentlemen:
This
letter is being furnished to you pursuant to Section 5(g) of the
Purchase Agreement,
dated as of April 27, 2006 (the “Purchase Agreement”), among Labopharm, Inc., a Québec
corporation (the “Company”), and the several Underwriters
listed on Schedule A to the Purchase
Agreement (the “Underwriters”), for which you are acting as Representatives. Capitalized terms
used herein and not otherwise defined herein shall have the respective meanings ascribed to them in
the Purchase Agreement.
We have acted as special patent counsel for the Company solely with respect to the
intellectual property matters described below (“Representation”). In such capacity, we have
reviewed U.S. Patent No. 6,607,748 (“the ‘748 patent”), and U.S. patent applications, U.S. Serial
Nos. 11/112,008 (“the ‘008 application”), 11/111,996 (“the ‘996 application”), and 10/958,662 (“the
‘662 application”) (collectively, the “Subject Patent Rights”). We have not filed and/or
prosecuted in any substantive manner any patent application (including the Subject Patent Rights)
on the Company’s behalf. In addition, we have conducted key word searches (as described in more
detail below) to try and identify third party U.S. patents that could affect the ability of the
Company to commercialize in the U.S. its once daily tramadol product with Contramid. We offer no
opinion as to intellectual property matters not expressly addressed in this letter.
F-1
Whenever our opinions herein are qualified by the phrase “to the best of our knowledge,” such
language means that our opinions are based upon the actual knowledge of attorneys presently within
our firm who have rendered substantive attention to the transaction to which this letter relates
and all knowledge that could have been gained upon the reasonable investigation of our files.
Unless specifically set forth herein, we have not undertaken, for purposes of this opinion, any
independent investigation to determine the existence or absence of facts that would contradict our
opinions and statements set forth herein, and no inference as to our knowledge of the existence or
absence of such facts should be drawn from the fact of our representation of the Company.
We express no opinion herein as to the laws of any jurisdiction other than the federal patent
laws of the United States of America.
In connection with this opinion, we have reviewed the following documents and performed the
following actions:
1. We have reviewed the statements in the Prospectus under the captions (i) “Risk
Factors” specifically (a) “Claims by other companies that we infringe their intellectual
property rights may result in liability for damages or stop our development and
commercialization efforts, including with respect to our once-daily tramadol product,”
(b) “We may become involved in lawsuits to protect or enforce our intellectual property
rights that would be expensive and time consuming,” and (c) “If we are unable to protect
our intellectual property rights, our competitors may develop and market products with
similar features that may reduce demand for our products and inhibit effective
commercialization of our products,” and (ii) “Business — Intellectual Property”
(collectively, the “Intellectual Property Sections”).
2. With respect to the Subject Patent Rights, we have reviewed the ‘748 patent, the
‘008 application, the ‘996 application, and the ‘662 application, their prosecution
files, and assignment documents relating thereto. In performing our review of such
records and documents, we have assumed the genuineness of all signatures on the copies
of such records, documents, instruments and agreements submitted to us as certified,
conformed or photographic copies.
3. With respect to our review of third party patents, we have reviewed excerpts
from the Company’s Drug Master File for Contramid and the Company’s New Drug Application
for its once daily tramadol product with Contramid. In addition, we conducted key word
searches of issued claims in a U.S. patent database using search strings approved by
intellectual property counsel for the Underwriters. We reviewed the claims and, where
we considered appropriate, the specifications, of the issued U.S. patents identified by
the searches. We have not reviewed any third party U.S. patent applications or PCT
patent applications, and, with one exception, have not reviewed the prosecution files of
any of the U.S. patents identified by the searches. We reviewed the prosecution file of
one U.S. patent identified by the searches in an attempt to better understand the scope
of the issued claims.
4. We have had discussions with officers and/or representatives of the Company
responsible for the development, protection and/or enforcement of intellectual property
rights owned by or licensed to the Company in order to review the status of the
Company’s patent matters discussed in this letter.
Based upon the foregoing, we are of the opinion that:
E-2
1. | To the best of our knowledge, the Company has exclusive ownership rights in and to the inventions described in the Subject Patent Rights subject to the rights the Company may have sold or licensed to Labopharm Europe Limited (“Labopharm Europe”) and Labopharm Barbados Limited (“Labopharm Barbados”) pursuant to (i) a Sale Agreement dated December 30, 2002 between the Company, Labopharm Europe and Labopharm Barbados (“Sale Agreement”) and (ii) an IP Rights Co-owners Cooperation Agreement dated December 30, 2002 between the Company, Labopharm Europe and Labopharm Barbados (“Cooperation Agreement”). To the best of our knowledge, all the inventions described in the Subject Patent Rights have been assigned by the named inventors to the Company, which assignments have been recorded, or filed for recordal, at the U.S. Patent and Trademark Office. With respect to the Subject Patent Rights that have been assigned by the named inventors to the Company, we are unaware of any fact that could form a basis for a finding that such assignments are invalid, or that any other entity other than the Company, Labopharm Barbados, and Labopharm Europe pursuant to the Sale Agreement and the Cooperation Agreement has an ownership interest in the Subject Patent Rights. | |
2. | To the best of our knowledge, the ‘748 patent has been duly maintained and is in full force and effect and has not been adjudged invalid or unenforceable in whole or in part; and the ‘748 patent is not the subject of any interference, reexamination, or reissue proceeding. | |
3. | To the best of our knowledge, the Company has not received any notice of any threatened or contemplated legal proceeding by third parties challenging the validity or scope of the ‘748 patent. | |
4. | Based solely on our review of the claims, and where we considered appropriate the specifications, of the issued U.S. patents identified in our searches, our review of the one prosecution file, and our understanding of the Company’s once daily tramadol product with Contramid, to the best of our knowledge, the operation of the business of the Company, as now conducted or proposed to be conducted as it relates to the once daily tramadol product with Contamid should not be found to infringe any third party U.S. patent we identified, except as described in the Prospectus. |
This letter is rendered only to you, as Representatives of the Underwriters, and is solely for
the benefit of the Underwriters in connection with the transactions contemplated by the
Purchase Agreement. This letter may not be relied upon by the Underwriters for any other
purpose, nor may this opinion be provided to, quoted to or relied upon by any other person or
entity.
Very truly yours, | ||
Xxxxxxx | Procter LLP |
F-3
Exhibit G
FORM OF OPINION OF COMPANY’S EUROPEAN PATENT COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(h)
TO BE DELIVERED PURSUANT TO SECTION 5(h)
XXXXXXX XXXXX & CO. | ||
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx | ||
Incorporated | ||
BANC OF AMERICA SECURITIES LLC | ||
x/x
|
Xxxxxxx Xxxxx & Xx. | |
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx | ||
Incorporated | ||
0 Xxxxx Xxxxxxxxx Xxxxxx | ||
Xxx Xxxx, Xxx Xxxx 00000 | ||
as Representatives of the Several Underwriters |
Re: Labopharm inc.
Ladies and Gentlemen:
This letter is being furnished to you pursuant to Section 5(h) of the Purchase Agreement,
dated as of April 27, 2006 (the “Purchase Agreement”), among Labopharm, inc., a Québec corporation
(the “Company”), and the several Underwriters named on Schedule A to the Purchase Agreement (the
“Underwriters”), for which you are acting as Representatives. Capitalized terms used herein and
not otherwise defined herein shall have the respective meanings ascribed to them in the Purchase
Agreement.
We have acted as special patent counsel for the Company solely with respect to identification
and monitoring of third party patents and patent applications within the European IP landscape
relating to the commercial development of its once daily tramadol product with Contramid
(“Representation”). We offer no opinion as to any other intellectual property matters, including
any statements contained in the prospectus forming a part of the registration statement, filed by
the Company with the Commission pursuant to the Securities Act on
April 18, 2006 and as amended on April 27, 2006 and the
prospectus forming a part of the registration statement, filed by the
Company with the Commission pursuant to the Securities Act on
April 28, 2006.
Whenever our opinions herein are qualified by the phrase “to the best of our knowledge”, such
language means that our opinions are based upon the actual knowledge of attorneys presently within
our firm and all knowledge that could have been gained upon the reasonable investigation of our
files. We express no opinion as to the laws of any jurisdiction other than those of Germany and the
European Patent Convention.
In connection with this opinion, we have reviewed the following documents and performed the
following actions:
1. We have reviewed the statements in the U.S. Prospectus and Canadian Prospectus under the
captions “Risk Factors—Risks Relating to Intellectual Property” (p. 10-11) and
“Business—Intellectual Property” (p. 46) (collectively, the “Intellectual Property Sections”).
2. We have reviewed all records, documents, instruments and agreements in our possession or
under our control relating to our Representation of the Company. In performing our review of such
records and documents, we have assumed the genuineness and accuracy of records, documents,
instruments and agreements submitted to us.
G-1
3. We have had discussions with officers and representatives of the Company responsible for
the development, protection and/or enforcement of Intellectual Property Rights owned by or licensed
to or from the Company in order to review the status of the Company’s patent matters.
Based upon the foregoing, we are of the opinion that:
1. To the best of our knowledge, and only to the extent of the Representation, the operation
of the business of the Company, as now conducted or as proposed to be conducted, does not conflict
with, infringe, misappropriate or otherwise violate the intellectual property rights of any third
party except as disclosed in the U.S. Prospectus and the Canadian Prospectus. To the best of our
knowledge, no actions, suits, claims or proceedings have been asserted or threatened against the
Company alleging any of the foregoing or seeking to challenge, deny or restrict the operation of
the business of the Company. Also to the best of our knowledge, no Court has issued any order,
judgment, decree or injunction restricting the operation of the business of the Company.
2. To the best of our knowledge, the statements and the information contained in the
Intellectual Property Sections, to the extent they relate to our Representation, do not contain an
untrue statement of a material fact, are accurate in all material respects, fairly represent the
matters disclosed therein and do not omit to state a material fact or facts necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading.
This letter is rendered only to you, as Representatives of the Underwriters, and is solely for
the benefit of the Underwriters in connection with the transactions contemplated by the Purchase
Agreement. This letter may not be relied upon by the Underwriters for any other purpose, nor may
this opinion be provided to, quoted to or relied upon by any other person or entity.
Best regards,
E-2
Exhibit H
FORM OF OPINION OF COMPANY’S BARBADOS COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(i)
TO BE DELIVERED PURSUANT TO SECTION 5(i)
Re: Labopharm (Barbados) Ltd.
We have acted as Legal Counsel for Labopharm (Barbados) Ltd. (“the Company”), a company
incorporated under the provisions of the Companies Act Chapter 308, Laws of Barbados and which has
been issued with a licence under the International Business Companies Act, Chapter 77, Laws of
Barbados and whose registered office is situate at
[ ], in the parish of [ ] in
Barbados, in connection with the public offering by Labopharm inc., the sole shareholder of the
Company, of its Common Shares on
[ ], 2006.
A JURISDICTION
This Opinion relates solely to the Laws of Barbados. We are under and assume no obligation to
inform any person regarding any future changes to those, or any other laws. Without limiting our
assumptions in paragraph D, we have made no investigation of the laws of any jurisdiction other
than Barbados. This opinion is given on the basis that the statements made in this opinion are
made by us without reference to any laws or judicial decisions or statements of any other
jurisdiction.
B DEFINITIONS
In this Opinion:
“Barbados” means the Independent Commonwealth Country of Barbados;
“Companies Act” means the Companies Act, Chapter 308 of the Laws of Barbados or any amendment
thereto;
“International Business Companies Act” means the International Business Companies Act, Chapter 77
of the Laws of Barbados or any amendment thereto.
C DOCUMENTS
For the purposes of giving this Opinion, we have examined and relied on the following documents:
1. A copy of the Certificate of Incorporation and Articles of Incorporation of the Company dated
16th day of December, 2002;
2. A copy of the International Business Company Licence issued to the Company valid until 31st
December, 2006;
3. By-Laws of the Company;
4. The results of the searches referred to in paragraph E.
D ASSUMPTIONS
For the purposes of giving this Opinion, we have assumed the following matters and have not made
any independent investigation of the same:
F-1
1. the authenticity of all signatures, seals, dates, duty stamps and markings;
2. the accuracy, authenticity, completeness and conformity to originals, of all documents
(including drafts, photocopies and facsimile copies) submitted to us and that no other relevant
corporate records have been withheld from us (whether deliberately or inadvertently).
E SEARCHES
We have relied on an inspection of the public records at our Corporate, Land and Supreme Court
Registries and have made no other searches or inquiries.
F OPINION
We are of the opinion based on the foregoing that:
1. STATUS
(a) The Company is a limited liability corporation duly incorporated and validly existing under the
Laws of Barbados.
(b) Based only on our searches, the Company has not taken any action nor have any other legal steps
been taken or legal proceedings been commenced against the Company seeking a reorganization,
moratorium, arrangement, adjustment or composition or for the appointment of a receiver,
liquidator, assignee or sequestrator (or similar official) in relation to any part of its property,
or for the winding up, dissolution or re-organization of the Company or of any or all of the
Company’s property.
(c) The Company has an issued share capital of one share which is registered in the name of
Labopharm inc. and we are not aware of any trust affecting said share.
2. POWER AND AUTHORITY
The Company has the corporate power and legal authority to own, lease and operate its properties
and to conduct its business.
3. LITIGATION
To our knowledge there are no actions, suits or proceedings pending or unsatisfied judgments
against the Company before any Court in Barbados.
G BENEFIT
This Opinion is addressed to you for your sole benefit. It is not to be relied upon by any other
person or for any other purpose nor is it to be quoted or referred to in any public document or
filed with any governmental agency or other person, except as required by applicable law or
regulation, without our prior written consent.
It may not be disclosed without our prior written consent, except to:
(a) your legal counsel;
F-2
(b) persons who in the ordinary course of your business have access to your papers and records
on the basis that they will make no further disclosure or where required in connection with any
legal proceedings; or
(c) regulatory authorities to whose jurisdiction you are or may become subject to.
This Opinion is given in respect of the Laws of the Jurisdiction of Barbados which are in force as
at the date hereof.
Yours faithfully,
F-3
Exhibit I
FORM OF OPINION OF COMPANY’S CYPRIOT COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(j)
TO BE DELIVERED PURSUANT TO SECTION 5(j)
RE: LABOPHARM CYPRUS LIMITED (the “Company”)
You have requested our opinion as Cyprus counsel to the Company in connection with the public
offering by Labopharm inc. of its Common Shares on l, 2006, Labopharm inc. being the 100%
shareholder of the Company.
In arriving at the opinions expressed below, we have examined and relied on the originals or
certified copies or copies otherwise identified to our satisfaction of such documents, instruments
and public records and we have investigated such matters of law, as we have deemed relevant or
necessary as the basis for such opinions.
We have (without any investigation or independent confirmation) relied upon, and assumed the
accuracy of, such certificates, corporate records and other documents with respect to factual
matters. In addition, we have assumed the genuineness and authenticity of all signatures, the
accuracy, completeness and authenticity of certificates of public officials,
Based on the foregoing, we are of the opinion that:
1. The Company has been duly incorporated under the laws of Cyprus and is validly existing
under the laws of Cyprus.
2. The Company has all necessary corporate power and authority to carry on its business and to
own its property and assets to conduct the business in which it is currently engaged.
3. All of the issued and outstanding shares of the Company are beneficially owned by and are
registered in the name of Labopharm Inc.
4. To our knowledge, after making due inquiry of the Company, there is no governmental action
or proceeding and no litigation pending or threatened against the Company.
5. The Company has not been and is not subject to any bankruptcy or winding-up procedure.
6. The Company’s personal property is not subject to any encumbrance or pledges on the assets
and there are no judgments, executions, tax judgments, tax assessments, potential or actual claims
and litigation against the Company.
We express no opinion other than as to the laws of Cyprus
We are furnishing this opinion to the addressees set forth above, solely for their respective
benefit and this opinion is not to be relied upon by any other person or used, circulated, quoted
or otherwise referred to for any other purpose without our prior consent.
This opinion is given as of the date hereof and is based upon laws as they exist and are construed
as of the date hereof. We assume no obligation to update or supplement this opinion to reflect arty
facts or circumstances which may come to our attention after the date hereof, or any changes in
laws which may
I-1
have occurred thereafter. This opinion is limited to the matters stated herein and no opinion or
belief is implied or may be inferred beyond the matters expressly stated herein.
G-2
Exhibit J
FORM OF OPINION OF COMPANY’S IRISH COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(j)
TO BE DELIVERED PURSUANT TO SECTION 5(j)
You have requested our opinion as Irish counsel to Labopharm Europe Limited (the “Company”) in
connection with the proposed public offering by Labopharm inc. of its Common Shares.
In arriving at the opinions expressed below, we have examined and relied on the following
documents:
(a) the searches carried out on our behalf on l, 2006 in the Irish Companies
Registration Office and in the office of the High Court and in the Sheriffs Office of the County of
Dublin, copies of which are attached hereto at Appendix A (the “Searches”);
(b) a copy of the Memorandum and Articles of Association of the Company filed in the Companies
Registration Office on 11th September 2002 copies of which are attached hereto at Appendix B (the
“Memorandum and Articles”); and
(c) the Statutory Books of the Company held by us (the “Statutory Books”).
We have (without any investigation or independent confirmation) relied upon, and assumed the
authenticity and accuracy of the above documents, the responses to such inquiries and such
certificates, corporate records and other documents with respect to factual matters. In addition,
we have assumed the genuineness and authenticity of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to the authentic original documents of all
documents submitted to us as copies, the accuracy, completeness and authenticity of certificates of
public officials, and the due authorization, execution and delivery of all documents by parties
other than the Company. We have also assumed that the Memorandum and Articles are correct and up
to date and that no resolution has been passed to amend same. Xxxxx Xxxxxx Xxxxx has certified to
us on the l, 2006 that the Memorandum and Articles of Association are current and up to date
and have not been revoked or amended in any way and remain in full force and effect as of such date
and that no resolution has been passed by Labopharm Inc to revoke, amend or substitute the said
Memorandum and Articles of Association.
Based on
the foregoing, we are of the opinion that:
1. The Company has been duly incorporated under the laws of Ireland and is validly existing
under the laws of Ireland.
2. The Company has all necessary corporate power and authority to carry on the following
business activities (“Business”):
(a) to hold any and all forms of intellectual property including patents, trademarks and
copyrighted material;
(b) to carry on all or any of the businesses of manufacturers, producers, importers,
exporters, buyers, sellers, (whether by wholesale or retail), distributors and suppliers of and
dealers in chemicals of all kinds whether for pharmaceutical, technical, electrical, photographic,
scientific or other purposes;
H-1
(c) to carry on business as chemists, druggists, drysalters, oil and colourmen, brewers’
chemists, spice merchants, soap and cosmetic manufacturers, drug grinders, growers of medicinal
herbs, oil pressers and wine and spirit merchants, either by wholesale or retail;
(d) to manufacture and deal in drugs, extracts, pills, lozenges, compressed tablets, capsules,
vegetable, mineral and animal products and all other pharmaceutical and medicinal preparations and
articles; and
(e) to manufacture and deal in all medicines and appliances used in veterinary practice and
all proprietary articles of all kinds, medicinal and surgical dressings and appliances, patent
medicines, chemical, electrical, scientific and photographic apparatus and materials.
and has the power to own assets and property for the purpose of conducting the Business or any part
thereof.
3. The Company has an issued share capital of one share which is registered in the name of
Labopharm Inc and we are not aware of any trust affecting such share.
4. Based only on the Searches, no order or resolution has been passed for the winding up of
the Company or any notice of appointment filed for the appointment of a receiver, examiner or a
liquidator to the Company as at the date hereof.
5. Based only on the Searches, there are no unsatisfied judgements, decrees, rules, orders,
registrations relating to real and chattel real estate, or lis pendens against the Company recorded
in the Judgments Office of the High Court or any outstanding petitions against the Company recorded
in the Central Office of the High Court.
6. Based only on the Searches, there are no unexecuted warrants outstanding in the Circuit
Court Office, or the Revenue Sheriff’s Office against the Company in the County of Dublin.
7. We are not actually aware (having made no specific inquiries other than the Searches) of
any governmental action or proceedings or any litigation pending or threatened against the Company.
We express no opinion other than as to the laws of Ireland. We are furnishing this opinion to the
addressees set forth above, solely for their respective benefit and this opinion is not to be
relied upon by any other person or used, circulated, quoted or otherwise referred to for any other
purpose without our prior consent.
This opinion is given as of the date hereof and is based upon laws as they exist and are construed
as of the date hereof. We assume no obligation to update or supplement this opinion to reflect any
facts or circumstances which may come to our attention after the date hereof, or any changes in
laws which may have occurred thereafter. This opinion is limited to the matters stated herein and
no opinion or belief is implied or may be inferred beyond the matters expressly stated herein.
This opinion is confined to and given on the basis of the laws of Ireland as currently applied by
the Irish Courts and relevant authorities.
H-2
Exhibit K
l, 2006
XXXXXXX XXXXX & CO. | ||
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx | ||
Incorporated and | ||
BANC OF AMERICA SECURITIES LLC | ||
as Representatives of the several Underwriters | ||
x/x
|
Xxxxxxx Xxxxx & Xx. | |
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx | ||
Incorporated | ||
0 Xxxxx Xxxxxxxxx Xxxxxx | ||
Xxx Xxxx, Xxx Xxxx 00000 | ||
Re: Proposed Public Offering by Labopharm inc. |
Dear Sirs:
The undersigned, a shareholder [and an officer and/or director] of Labopharm inc., a
corporation incorporated under Part IA of the Companies Act (Québec) (the “Company”), understands
that a Purchase Agreement (the “Purchase Agreement”) will be executed by the Company and Xxxxxxx
Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (“Xxxxxxx Xxxxx”) and Banc of
America Securities LLC (“Banc of America”) on behalf of the other Underwriters and the
Sub-underwriters named in Schedule A to the Purchase Agreement, providing for the public offering
(the “Public Offering”) of 10,000,000 Common Shares, without par value, of the Company (the “Common
Shares”), in the United States pursuant to the Company’s registration statement on Form F-10 (File
No. 333-l), as amended or supplemented, and in each of the provinces and territories of
Canada pursuant to the Company’s preliminary short form prospectus dated l, 2006, as
completed, amended or supplemented.
In recognition of the benefit that such an offering will confer upon the undersigned as a
shareholder [and an officer and/or director] of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned agrees
with each Underwriter and each Sub-underwriter that, during a period of 90 days from the date of
the Purchase Agreement, the undersigned will not, without the prior written consent of each of
Xxxxxxx Xxxxx and Banc of America, directly or indirectly, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant for the sale of, or otherwise dispose of or transfer any Common Shares or
any securities convertible into or exchangeable or exercisable for Common Shares, whether now owned
or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter
acquires the power of disposition, or file, or cause to be filed, any registration statement under
the Securities Act of 1933, as amended, with respect to any of the foregoing (collectively, the
“Lock-Up Securities”) or (ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of
the Lock-Up Securities, whether any such swap or transaction is to be settled by delivery of Common
Shares or other securities, in cash or otherwise; provided, however, that nothing herein shall
prohibit the undersigned from selling, in connection with the undersigned’s “cashless” exercise of
the option to purchase ___Common Shares granted to the undersigned on ___, 2001, Common
Shares for an aggregate price that is less than or equal to the aggregate exercise price of the
Common Shares being acquired by the undersigned upon exercise of such option.
Notwithstanding the foregoing, if:
(1) during the last 17 days of the 90-day lock-up period, the Company issues an earnings
release or material news or a material event relating to the Company occurs; or
(2) prior to the expiration of the 90-day 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 90-day lock-up period,
the restrictions imposed by this lock-up agreement shall continue to apply until the expiration of
the 18-day period beginning on the issuance of the earnings release or the occurrence of the
material news or material event, as applicable, unless Xxxxxxx Xxxxx and Banc of America each
waives, in writing, such extension.
The undersigned hereby acknowledges and agrees that written notice of any extension of the
90-day lock-up period pursuant to the previous paragraph will be delivered by Xxxxxxx Xxxxx or Banc
of America to the Company (in accordance with Section 13 of the Purchase Agreement) 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 lock-up agreement during the period from the
date of this lock-up agreement to and including the 34th day following the expiration of the
initial 90-day lock-up period, it 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 90-day lock-up period (as may have been extended pursuant to the previous
paragraph) has expired.
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 the Lock-Up Securities except in
compliance with the foregoing restrictions.
The undersigned understands that the Company and the Underwriters and the Sub-underwriter will
proceed with the Public Offering in reliance on this Lock-Up Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has full power and
authority to enter into this Lock-Up Letter Agreement and that, upon request, the undersigned will
execute any additional documents necessary or desirable in connection with the enforcement hereof.
Any obligations of the undersigned shall be binding upon the successors and assigns of the
undersigned.
Very truly yours, | ||||||
Signature: | ||||||
Print Name: | ||||||