Exhibit 1.1
Draft of November 1, 2001
Dynacare Inc.
5,000,000 Common Shares
UNDERWRITING AGREEMENT
[________], 2001
Draft of November 1, 2001
UNDERWRITING AGREEMENT
[________], 2001
UBS Warburg LLC
Banc of America Securities LLC
U.S. Bancorp Xxxxx Xxxxxxx Inc.
XxXxxxxx Investments Inc., a KeyCorp Company
As representatives of the several Underwriters
named in SCHEDULE A(i) hereto
c/o UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Dynacare Inc., a corporation organized under the laws of the
Province of Ontario, Canada (the "COMPANY") proposes to issue and sell to the
Underwriters named in SCHEDULE A(i) annexed hereto (collectively, the
"UNDERWRITERS"), for whom you are acting as representatives (collectively,
the "Representatives"), an aggregate of 2,700,000 common shares of the
Company (the "COMMON SHARES"), and AJLCO Realty Limited ("AJLCO") proposes to
sell to the Underwriters an aggregate of 294,448 Common Shares, JILCO
Holdings Ltd. ("JILCO" and together with AJLCO, the "Xxxxxx Group
Shareholders") proposes to sell to the Underwriters an aggregate of 705,552
Common Shares, Golder, Thoma, Xxxxxxx, Xxxxxx Fund V, L.P. ("GTCR") proposes
to sell to the Underwriters an aggregate of 1,297,733 Common Shares and GTCR
Associates V ("GTCR Associates," and collectively with the Xxxxxx Group
Shareholders and GTCR, the "Selling Shareholders") proposes to sell to the
Underwriters an aggregate 2,267 Common Shares (said Common Shares to be
issued and sold by the Company and to be sold by the Selling Shareholders
collectively, the "Firm Shares"). In addition, solely for the purpose of
covering over-allotments, the Company proposes to grant to the Underwriters
the option to purchase from the Company up to an additional 750,000 Common
Shares (the "ADDITIONAL SHARES"). The Firm Shares and the Additional Shares
are hereinafter collectively sometimes referred to as the "SHARES". The
Shares are described in the Prospectus which is referred to below. Certain
terms used herein are defined in Section 23 below.
The Company has prepared and filed, in accordance with the
provisions of the Securities Act of 1933, as amended, and the rules and
regulations thereunder (collectively, the "ACT"), with the Securities and
Exchange Commission (the "COMMISSION"), a registration statement on Form S-1
(File No. 333-72338), including a prospectus included therein, relating to the
Shares. The Company has furnished to you, for use by the Underwriters and by
dealers, copies of one or more Preliminary Prospectuses relating to the Shares.
Except where the context otherwise requires, the registration statement, as
amended when it became effective, including all documents (including exhibits)
filed (whether directly or incorporated by reference therein) as a
part thereof, and including any information contained in a prospectus
subsequently filed with the Commission pursuant to Rule 424(b) under the Act and
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430(A) under the Act and also including any registration
statement filed pursuant to Rule 462(b) under the Act is herein called the
"REGISTRATION STATEMENT", and the prospectus, in the form filed by the Company
with the Commission pursuant to Rule 424(b) under the Act on or before the
second business day after the date hereof (or such earlier time as may be
required under the Act) or, if no such filing is required, the form of final
prospectus included in the Registration Statement at the time the Registration
Statement became effective, is herein called the "PROSPECTUS".
The Company, the Selling Shareholders and the Underwriters
agree as follows:
1. SALE AND PURCHASE. Upon the basis of the representations
and warranties and subject to the terms and conditions herein set forth, the
Company agrees to sell to the respective Underwriters and each of the
Underwriters, severally, and not jointly, agrees to purchase from the Company
the aggregate number of Firm Shares set forth opposite the name of such
Underwriter in SCHEDULE A(i) annexed hereto, in each case at a purchase price of
U.S. $[___] per Share. In addition, upon the basis of the representations and
warranties and subject to the terms and conditions herein set forth, the Selling
Shareholders, severally and not jointly, agree to sell to the respective
Underwriters and each of the Underwriters, severally and not jointly, agrees to
purchase from the Company the aggregate number of Firm Shares set forth opposite
the name of such Selling Shareholder in SCHEDULE A(ii) annexed hereto, in each
case at a purchase price of U.S. $[___] per Share, which is the same purchase
price per Common Share at which the Company agrees to sell the Firm Shares being
sold by the Company pursuant to the preceding sentence of this Section 1. The
Company and the Selling Shareholders are advised by you that the Underwriters
intend (i) to make a public offering of their respective portions of the Firm
Shares as soon after the effective date of the Registration Statement (the
"EFFECTIVE DATE") as in your judgment is advisable and (ii) initially to offer
the Firm Shares upon the terms set forth in the Prospectus. You may from time to
time increase or decrease the public offering price after the initial public
offering to such extent as you may determine.
In addition, upon the basis of the representations and
warranties and subject to the terms and conditions herein set forth, the Company
hereby grants the Underwriters the option (the "OVER-ALLOTMENT OPTION") to
purchase, severally and not jointly, all or a portion of the Additional Shares
from the Company, at the same purchase price per share to be paid by the
Underwriters to the Company and the Selling Shareholders for the Firm Shares.
The Over-Allotment Option granted hereunder is for use by the Underwriters
solely in covering any over-allotments in connection with the sale and
distribution of the Firm Shares. The Over-Allotment Option may be exercised by
you on behalf of the several Underwriters at any time and from time to time on
or before the thirtieth (30th) calendar day following the date hereof, by
written notice to the Company. Such notice shall set forth the aggregate number
of Additional Shares as to which the Over-Allotment Option is being exercised
and the date and time when the Additional Shares are to be delivered (such date
and time being herein referred to as the "ADDITIONAL TIME OF PURCHASE");
PROVIDED, HOWEVER, that the additional time of purchase shall not be earlier
than the
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time of purchase (as defined below) nor, unless you and the Company otherwise
agree in writing, earlier than the second business day(1), or later than the
tenth business day, after the date of such notice. The number of Additional
Shares to be purchased by each Underwriter shall be the number which bears
the same proportion to the aggregate number of Additional Shares being
purchased as the number of Firm Shares set forth opposite the name of such
Underwriter on SCHEDULE A(i) annexed hereto bears to the total number of Firm
Shares (subject, in each case, to such adjustment as you may determine to
eliminate fractional shares).
2. PAYMENT AND DELIVERY. Payment of the purchase price for the
Firm Shares to be issued and sold by the Company and payment of the purchase
price for the Firm Shares to be sold by the Selling Shareholders shall be made
to the Company and, in the case of the Selling Shareholders, to the Custodian
(as defined below), by Federal Funds wire transfer in United States dollars
against delivery of the certificates for the Firm Shares to you through the
facilities of the Depository Trust Company ("DTC") for the respective accounts
of the Underwriters. Such payments and deliveries shall be made at 9:00 A.M.,
New York City time, on [________], 2001 (sometimes referred to herein as the
"CLOSING DATE") (unless another time shall be agreed to by you, the Company and
the Selling Shareholders or unless postponed in accordance with the provisions
of Section 11 hereof). The time at which such payment and delivery are actually
made is hereinafter sometimes called the "TIME OF PURCHASE". Certificates for
the Firm Shares shall be delivered to you in definitive form in such names and
in such denominations as you shall specify on the second business day preceding
the time of purchase. For the purpose of expediting the checking of the
certificates for the Firm Shares by you, the Company and the Selling
Shareholders agree to make such certificates available to you for such purpose
at least one full business day preceding the time of purchase.
Payment of the purchase price for the Additional Shares shall
be made at the additional time of purchase to the Company in the same manner and
at the same office as the payment to the Company for the Firm Shares to be sold
by the Company hereunder. Certificates for the Additional Shares shall be
delivered to you in definitive form in such names and in such denominations as
you shall specify no later than the second business day preceding the additional
time of purchase. For the purpose of expediting the checking of the certificates
for the Additional Shares by you, the Company agrees to make such certificates
available to you for such purpose at least one full business day preceding the
additional time of purchase.
The Company and each of the Selling Shareholders hereby agree
that they will pay any stamp or other issuance or transfer taxes or duties,
capital gains, income, withholding or other taxes, or other similar fees or
charges payable upon the sale or delivery of the Firm Shares, or otherwise in
connection with the performance of the Company's or the Selling Shareholders'
obligations hereunder. With respect to the Firm Shares to be sold by the Selling
Shareholders, the Selling Shareholders hereby agree that the Custodian is
authorized to deduct for such payment any such amounts from the proceeds to such
Selling Shareholder hereunder and to hold
-----------
(1) As used herein "business day" shall mean a day on which
the NASDAQ National Market System and The Toronto Stock Exchange are open for
trading.
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such amounts for the account of such Selling Shareholder with the Custodian
under the Custody Agreement (as defined below).
Deliveries of the documents described in Section 9 below with
respect to the purchase of the Shares shall be made at the offices of Xxxxx
Xxxxxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 9:00
a.m., New York time, on the date of the time of purchase or the additional time
of purchase, as the case may be.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each of the Underwriters that:
(a) The Company has not received, and has no notice of, any
order of the Commission preventing or suspending the use of the
Preliminary Prospectus, or instituting proceedings for that purpose,
and the Preliminary Prospectus, at the time of filing thereof,
conformed or will conform in all material respects to the requirements
of the Act and 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, in light of the
circumstances under which they were made, not misleading. When the
Registration Statement became or becomes effective, the Registration
Statement and the Prospectus complied or will comply in all material
respects with the provisions of the Act and the Registration Statement
did not or 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, and the
Prospectus does not or will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; any legal or
governmental proceedings, statutes, regulations, contracts, or other
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement have been so described or filed. The Prospectus,
the Preliminary Prospectus and any supplements thereto prepared in
connection therewith, at their respective times of issuance and at the
time of purchase or the additional time of purchase, complied and will
comply in all material respects with any applicable laws or regulations
of jurisdictions in which the Prospectus and the Preliminary
Prospectus, as amended or supplemented, if applicable, are distributed
in connection with the offer and sale of the Shares, PROVIDED, HOWEVER,
that the Company makes no representation or warranty with respect to
the Underwriters' Disclosure (as defined herein). The Company has not
distributed directly or indirectly any offering material in connection
with the offering or sale of the Shares other than the Registration
Statement, the Preliminary Prospectus, the Prospectus or any other
materials, if any, permitted by the Act.
(b) As of the date of this Agreement, the Company has an
authorized and outstanding capital stock as set forth under the heading
entitled "Actual" in the section of the Prospectus entitled
"Capitalization" and, as of the time of purchase and the additional
time of purchase, and assuming the receipt of the net proceeds from the
sale of the Shares, the Company shall have an authorized and
outstanding capital stock as set forth under the heading entitled "Pro
forma as adjusted" in the section of the Prospectus entitled
"Capitalization." All of the outstanding shares of capital stock of the
Company
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have been duly and validly authorized and issued and are fully paid and
non-assessable, have been issued in compliance with all federal and
state securities laws, the OBCA and applicable Canadian securities laws
and have not have been issued in violation of any preemptive right,
resale right, right of first refusal or similar right. The statements
set forth in the section of the Prospectus entitled "Description of
capital stock", insofar as such statements purport to summarize certain
provisions of the Shares and of the Company's Articles of Amalgamation
and By-laws, provide a fair and accurate summary of such provisions in
all material respects.
(c) The Company has been duly incorporated and organized and
is validly existing as a corporation and is in good standing under the
laws of the Province of Ontario, Canada, with full power and authority
(corporate and other) to own, lease and operate its properties and
conduct its business as described in the Registration Statement and the
Prospectus, except where the failure to do so could or would not have a
Material Adverse Effect (as defined herein).
(d) The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to so qualify in
any such jurisdiction would not individually or in the aggregate have a
material adverse effect on the business, prospects, properties,
condition (financial or otherwise) or results of operation of the
Company and its subsidiaries, taken as a whole (a "MATERIAL ADVERSE
EFFECT"). The Company does not have any subsidiaries (as defined in the
Act) other than the subsidiaries listed on SCHEDULE B(i) annexed hereto
(the "WHOLLY-OWNED SUBSIDIARIES") and SCHEDULE B(ii) annexed hereto
(the "JOINTLY-OWNED SUBSIDIARIES"). The Wholly-Owned Subsidiaries and
the Jointly-Owned Subsidiaries are hereinafter collectively sometimes
referred to as the "SUBSIDIARIES". Other than LabSouth Inc. and the
Jointly-Owned Subsidiaries, the Company owns 100% of the outstanding
capital stock of, or other ownership interest in, the Subsidiaries.
Other than the Subsidiaries, the Company does not own, directly or
indirectly, any shares of stock or any other equity or long-term debt
securities of any corporation or have any equity or other ownership
interest in any firm, partnership, limited liability company, joint
venture, association or other entity, except as set forth in the
Prospectus or as reflected in the audited consolidated financial
statements of the Company included in the Registration Statement and
the Prospectus. Complete and correct copies of the certificate of
incorporation and bylaws or other organizational documents of the
Company and the Subsidiaries and all amendments thereto have been
delivered to you, and except as described in the Prospectus and set
forth in the exhibits to the Registration Statement, no changes therein
will be made subsequent to the date hereof and prior to the time of
purchase or, if later, the additional time of purchase. Each of the
Subsidiaries has been duly organized and is validly existing as a
corporation or other entity in good standing under the laws of the
jurisdiction of its incorporation, with the requisite corporate power
and authority to own, lease and operate its properties and to conduct
its business, except where the failure to be so organized or existing
would not have a Material Adverse Effect. Each of the Subsidiaries is
duly qualified or licensed to do business as a foreign corporation or
other entity in good standing in each jurisdiction where the ownership
or leasing of its
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properties or the conduct of its business requires such qualification
or license, except where the failure to so qualify or be licensed would
not have a Material Adverse Effect. All of the outstanding capital
stock of each of the Subsidiaries or other ownership interest therein
owned, directly or indirectly, by the Company, has been duly authorized
and validly issued, is fully paid and non-assessable. All of the
outstanding stock of each of the Wholly-Owned Subsidiaries or other
ownership interest therein owned by the Company is subject to no
security interest, other encumbrance or adverse claims and other than
in respect of currency swap agreements described in the Prospectus.
None of the outstanding capital stock, or other ownership interest
therein, owned by the Company and/or one or more of the Wholly-Owned
Subsidiaries of each of the Jointly-Owned Subsidiaries is subject to
any security interest, other encumbrance or adverse claims. No options,
warrants or other rights to purchase, agreements or other obligations
to issue or rights to convert or exchange any obligation into shares of
capital stock or other ownership interests in any of the Subsidiaries
are outstanding.
(e) The statements set forth in the Prospectus relating to the
accreditation of certain laboratories either wholly or partially owned
by the Company and the Subsidiaries (collectively, the "LABORATORIES")
by the College of American Pathologists or other entities are true and
correct.
(f) None of the Company, any of the Subsidiaries or any of the
Laboratories is in violation of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company, any of the
Subsidiaries or any of the Laboratories or of any decree of any court
or governmental agency or body having jurisdiction over the Company,
any of the Subsidiaries or any of the Laboratories, which violation
could, individually or in the aggregate, have a Material Adverse
Effect.
(g) Neither the Company nor any of the Subsidiaries is in
breach of, or in default under (and no event has occurred which with
notice, lapse of time, or both would result in any breach of, or
constitute a default under), its charter or by-laws or other
organizational documents or in the performance or observance of any
obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, bank loan or credit agreement or
other evidence of indebtedness, or any lease, contract or other
agreement or instrument to which the Company, any of the Subsidiaries
or any of the Laboratories is a party or by which any of them or any of
their properties is bound, the effect of which could individually or in
the aggregate have a Material Adverse Effect. The execution, delivery
and performance of this Agreement and the issuance and sale of the
Shares contemplated hereby and by the Registration Statement will not
conflict with, or result in any breach of or constitute a default under
(nor constitute any event which with notice, lapse of time, or both
would result in any breach of, or constitute a default under), any
provisions of the charter or by-laws or other organizational documents
of the Company or any of the Subsidiaries or under any provision of any
license, permit, franchise, indenture, mortgage, deed of trust, bank
loan or credit agreement or other evidence of indebtedness, or any
lease, contract or other agreement or instrument to which the Company
or any of the Subsidiaries is a party or by which any of them or their
properties may be bound or affected, or under any federal, state,
provincial, local or
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foreign law, regulation or rule or any decree, judgment or order
applicable to the Company or any of the Subsidiaries.
(h) The Company has full corporate power and authority to
enter into this Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.
(i) The certificates for the Shares are in due and proper form
and conform to the requirements of the OBCA, the charter of the Company
and applicable requirements of The Toronto Stock Exchange (the "TSE").
(j) The Shares have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will
be, duly and validly issued, fully paid, non-assessable and free of any
preemptive rights, co-sale rights, rights of first refusal or other
rights to purchase any Common Shares.
(k) No approval, authorization, consent or order of or filing
with any federal, state, provincial, local or foreign governmental or
regulatory commission, board, body, authority or agency is required in
connection with the execution, delivery and performance by the Company
of this Agreement, and the issuance or sale of the Shares contemplated
hereby and by the Registration Statement and the Prospectus other than,
(i) registration of the Shares under the Act, the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder
(collectively, the "EXCHANGE ACT"), which has been or will be effected
by the Company and (ii) any necessary qualification under the
securities or blue sky laws of the various jurisdictions in which the
Shares are being offered by the Underwriters or under the rules and
regulations of the National Association of Securities Dealers, Inc.
("NASD") or the TSE.
(l) Except as set forth in the Registration Statement and the
Prospectus (i) no person has the right, contractual or otherwise, to
cause the Company to issue to it, or register pursuant to the Act, any
shares of capital stock or other equity interests and (ii) no person
has any preemptive rights, co-sale rights, rights of first refusal or
other rights to purchase any Common Shares. No person has the right,
contractual or otherwise, to cause the Company to register under the
Act any shares of capital stock or other equity interests as a result
of the filing or effectiveness of the Registration Statement or the
sale of the Shares as contemplated thereby either pursuant to the
registration rights agreement, as amended, filed as an exhibit to the
Registration Statement (the "REGISTRATION RIGHTS AGREEMENT") or
otherwise, other than any such rights represented by the Additional
Shares or any such rights that have been waived or as may result from
the vesting of stock options and issuance of shares upon the exercise
of stock options as described in the Registration Statement and the
Prospectus.
(m) Ernst & Young LLP, whose report on the consolidated
financial statements of the Company was filed with the Commission as
part of the Registration Statement and Prospectus, are independent
public accountants as required by the Act and are independent within
the meaning of the OBCA.
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(n) Each of the Company and each of the Subsidiaries has all
necessary licenses, permits, franchises, authorizations, consents,
certifications and approvals (including, without limitation, those
required by, and have satisfied all applicable hospital, and other
similar requirements that are imposed by, governmental, hospital,
health or similar regulatory bodies (collectively, the "HEALTH
AUTHORITIES")), and has made all necessary filings required under
any federal, state, provincial, local or foreign law, regulation or
rule, foreign and domestic, other than those that could or would
not, individually or in the aggregate, have a Material Adverse
Effect, and has obtained all necessary authorizations, consents and
approvals from other persons, in order to conduct its business and
none of the Company or any of the Subsidiaries is in violation of,
or in default under, any such license, permit, franchise,
authorization, consent, certification or approval, or has received
notice of any such violation or default, the effect of which could
or would, individually or in the aggregate, have a Material Adverse
Effect
(o) There are no private or governmental actions, suits,
claims, investigations or proceedings pending, threatened or, to the
knowledge of the Company, contemplated, to which the Company, any of
the Subsidiaries or any of their directors or officers is subject or of
which any of their properties is subject, whether at law, in equity or
before or by any federal, state, provincial, local or foreign
governmental or regulatory commission, board, body, authority or agency
(including any Health Authority), except as described in the Prospectus
or as could not, individually or in the aggregate, have a Material
Adverse Effect.
(p) The audited consolidated financial statements of the
Company included in the Registration Statement and the Prospectus
present fairly the consolidated financial position and results of
operations of the Company as of the dates and for the periods
indicated; such financial statements have been prepared in
conformity with generally accepted accounting principles in Canada
("CANADIAN GAAP") applied on a consistent basis during the periods
involved, together with a reconciliation, in accordance with the Act
and the Commission's rules and guidelines, to United States
generally accepted accounting principles ("U.S. GAAP"); the
financial statements included in the Registration Statement and
Prospectus comply in all material respects with the applicable
accounting requirements of Regulation S-X of the Act; there are no
financial statements (historical or pro forma) that are required to
be included in the Registration Statement or the Prospectus that are
not so included as required; the other financial and statistical
data set forth in the Registration Statement and the Prospectus are
accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company and
the Subsidiaries; and the selected financial data and the summary
financial information included in the Prospectus present fairly the
information shown therein and have been compiled on a basis
consistent with that of the unaudited or audited financial
statements, as the case may be, included in the Prospectus.
(q) Subsequent to the date of the latest audited consolidated
financial statements of the Company included in the Prospectuses and
except as set forth or contemplated in the Registration Statement and
the Prospectus, there has not been (i) any material adverse change, or
any development involving a prospective material adverse change, in the
business, prospects, properties, condition (financial or otherwise) or
results
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of operations of the Company and the Subsidiaries, taken as a whole,
(ii) any material change in the capital stock or other equity
interests, or outstanding indebtedness of the Company or any of the
Subsidiaries or (iii) any dividend or distribution of any kind
declared, paid or made on the capital stock or other equity interest of
the Company. Neither the Company nor any of the Subsidiaries has any
contingent obligations which are material to the Company and the
Subsidiaries, taken as a whole, and are not disclosed in the
Prospectus.
(r) The Company has obtained for the benefit of the
Underwriters the agreement (each, a "LOCK-UP AGREEMENT") from each of
its officers and directors and the Selling Shareholders, pursuant to
which each such officer, director and Selling Shareholder has agreed,
subject to any exceptions therein, not to (i) offer, sell, contract to
sell, pledge or otherwise dispose of, directly or indirectly, any
Common Shares or securities convertible into or exchangeable or
exercisable for any Common Shares, enter into a transaction which would
have the same effect, or enter into any swap, hedge or other
arrangement that transfers, in whole or in part, any of the economic
consequences of ownership of the Common Shares, whether any such
aforementioned transaction is to be settled by delivery of the Common
Shares or such other securities, in cash or otherwise, or publicly
disclose the intention to make any such offer, sale, pledge or
disposition, or to enter into any such transaction, swap, hedge or
other arrangement or (ii) make any demand for or exercise any right
with respect to, the registration of any Securities or any security
convertible into or exercisable or exchangeable for the Common Shares,
for a period of 180 days after the public offering date set forth on
the Prospectus (the "LOCK-UP PERIOD") without the prior written consent
of UBS Warburg LLC ("UBSW").
(s) Each of the Company and each Subsidiary has good and
marketable title to all property (real and personal) and assets owned
by it, in each case, free and clear of all liens, claims, security
interests, defects or other encumbrances that could or would materially
affect the value thereof or materially interfere with the use made or
to be made by them, except such as are described in the Prospectus. All
the property being held under lease by the Company, each of the
Subsidiaries and each of the Laboratories is held thereby under valid,
subsisting and enforceable leases with no exceptions that would
interfere with the use made or to be made therefrom by any of them, the
effect of which could or would, individually or in the aggregate, have
a Material Adverse Effect.
(t) Each of the Company and each Subsidiary is insured by
insurers of recognized financial responsibility against such losses and
risks and in such amount as are customary in the business in which it
is engaged. All policies of insurance insuring the Company, any of the
Subsidiaries, any of the Laboratories or any of their businesses,
assets, employees, officers and directors are in full force and effect,
and each of the Company, each Subsidiary and each Laboratory is in
compliance with the terms of such policies in all material respects.
There are no claims by the Company, any of the Subsidiaries or any
Laboratory under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation
of rights clause.
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(u) Except as otherwise disclosed in the Prospectus, the
Company has neither sent nor received any notice of termination of any
of the contracts or agreements specifically referred to or described in
(the effect of which could or would, individually or in the aggregate,
have a Material Adverse Effect), or filed as an exhibit to, the
Registration Statement and, where applicable, the Prospectus, and no
such termination has been threatened by the Company or, to the
Company's best knowledge, by any other party to any such contract or
agreement.
(v) All statistical and market-related data included in the
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
required.
(w) Neither the Company nor any of its affiliates has taken,
directly or indirectly, any action designed to or which has constituted
or which might reasonably be expected to cause or result, under the
Exchange Act, the rules of the TSE or otherwise, in stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Shares.
(x) Each of the Company and the Subsidiaries owns or lawfully
possesses, adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and
other intellectual property (collectively, "INTELLECTUAL PROPERTY
RIGHTS") necessary to conduct the business now operated by them, or
presently employed by them, and have not received any notice of
infringement of or conflict with asserted rights of others with respect
to any Intellectual Property Rights that, if determined adversely to
the Company, any of the Subsidiaries or any of the Laboratories, could,
individually or in the aggregate, have a Material Adverse Effect.
(y) Except as disclosed in the Prospectus, none of the Company
nor any of the Subsidiaries is in violation of any statute, any rule,
regulation, decision or order of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances, relating to the protection or
restoration of the environment or related to protection of human health
and safety (including, without limitation, occupational and workplace
health and safety) or human exposure to hazardous or toxic substances,
(collectively, "ENVIRONMENTAL LAWS"), owns or operates any real
property contaminated with any substance that is subject to any
Environmental Laws, is liable for any off-site disposal or
contamination pursuant to any Environmental Laws, or is subject to any
claim relating to any Environmental Laws, which violation,
contamination, liability or claim could, individually or in the
aggregate, have a Material Adverse Effect, and the Company is not aware
of any pending investigation which might lead to such a claim.
(z) Neither the Company nor any of the Subsidiaries has
sustained since the date of the latest audited financial statements
included in the Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, other than as disclosed in the
Prospectus.
10
(aa) Each of the Company and each Subsidiary has filed all
federal, state, provincial, local and foreign tax returns and tax forms
required to be filed. Such returns and forms are complete and correct
in all material respects, and all taxes shown by such returns or
otherwise assessed that are due or payable have been paid, except such
taxes as are being contested in good faith and as to which adequate
reserves have been provided. All payroll withholdings and remittances
required to be made by the Company and each of the Subsidiaries with
respect to employees have been made. The charges, accruals and reserves
on the books of the Company and each of the Subsidiaries in respect of
any tax liability for any year not finally determined are adequate to
meet any assessments or reassessments for additional taxes. There have
been no tax deficiencies asserted and, to the knowledge of the Company,
no tax deficiency might be reasonably asserted or threatened against
the Company or any of the Subsidiaries that could, individually or in
the aggregate, have a Material Adverse Effect.
(bb) The Company is not, and after the offering and sale of
the Shares, will not be, an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in
the United States Investment Company Act of 1940, as amended (the
"INVESTMENT COMPANY ACT").
(cc) Neither the Company nor any of the Subsidiaries has at
any time during the last five years (i) made any unlawful contribution
to any candidate for foreign office, or failed to disclose fully any
contribution in violation of law, or (ii) made any payment to any
federal or state governmental officer or official, or other person
charged with similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States or Canada or any
jurisdiction thereof.
(dd) The Shares have been approved for quotation on the
National Association of Securities Dealers Automated Quotation National
Market System ("NASDAQ") and for listing, subject to customary listing
conditions, on the TSE.
(ee) To the Company's best knowledge, after reasonable
investigation, there are no associations or affiliations with any NASD
member of any officer, director or security holder of the Company
required to be disclosed to the NASD pursuant to Rule 2710(b)(6) of the
Corporate Financing Rules of the NASD.
(ff) The Company is eligible to use a registration statement
on Form S-1 to register the Shares under the Act and, in particular,
the Company is not a "foreign private issuer," as that term is defined
in Rule 405 under the Act ("FOREIGN PRIVATE ISSUER").
(gg) Except as listed on SCHEDULES C(i) AND C(ii) annexed
hereto, the Company has no "significant subsidiary" as that term is
defined in Rule 405 under the Act (a "SIGNIFICANT SUBSIDIARY"), except
that the calculation shall be for the nine months ended September 30,
2001.
(hh) There are no stamp or other issuance or transfer taxes or
duties, no capital gains, income, withholding or other taxes, and no
other similar fees or charges
11
under U.S. federal law or the laws of any state, or any political
subdivision or taxing authority thereof, or Canadian federal law, or
the laws of any province, or any political subdivision or taxing
authority thereof, required to be paid in connection with the execution
and delivery of this Agreement or the issuance by the Company or sale
by the Company of the Shares to be sold by it.
In addition, any certificate signed by any officer of the
Company, delivered to the Representatives or counsel for the Underwriters in
connection with the offering of the Shares shall be deemed to be a
representation and warranty by the Company and not by such officer personally,
as to matters covered thereby, to each Underwriter.
4. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS.
Each Selling Shareholder, severally and not jointly, represents and warrants to
each of the Underwriters that:
(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder.
(b) The Custody Agreements signed by such Selling Shareholder
and the Company, as custodian (the Company in its capacity as custodian
being referred to herein as the "CUSTODIAN"), relating to the deposit
of the Firm Shares to be sold by such Selling Shareholder (the "CUSTODY
AGREEMENT"), and the Lock-Up Agreements of such Selling Shareholder,
have each been duly authorized, executed and delivered by such Selling
Shareholder and is a valid and binding agreement of such Selling
Shareholder, enforceable in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles. Such Selling Shareholder has duly executed and delivered a
Power of Attorney, in the form heretofore furnished to you (the "POWER
OF ATTORNEY"), appointing the persons indicated in SCHEDULE A(ii)
annexed hereto, and each of them, as such Selling Shareholder's
attorneys-in-fact (the "ATTORNEYS-IN-FACT") with authority to execute
and deliver this Agreement on behalf of such Selling Shareholder, to
determine the purchase price to be paid by the Underwriters to such
Selling Shareholder as provided in Section 1 hereof, to authorize the
delivery of the Firm Shares to be sold by such Selling Shareholder
hereunder and otherwise to act on behalf of such Selling Shareholder in
connection with the transactions contemplated by this Agreement and the
Custody Agreement.
(c) Such Selling Shareholder agrees that the Firm Shares to be
sold by such Selling Shareholder, which have been duly placed in
custody with the Custodian, are subject to the interests of the
Underwriters, that the arrangements made for such custody are to that
extent irrevocable, and that the obligations of such Selling
Shareholder hereunder shall not be terminated, except as provided in
this Agreement or in the Custody Agreement, by any act of such Selling
Shareholder, by operation of law, by death or incapacity of any
individual Selling Shareholder or, in the case of an estate or trust,
by the death or incapacity of any executor or trustee or the
termination of such estate or trust, or in the case of a partnership or
corporation, by the dissolution of such partnership or corporation, or
by the occurrence of any other event. If any individual Selling
12
Shareholder should die or become incapacitated, or if any of the other
events referred to in the immediately preceding sentence should occur,
or any other event should occur, before the delivery of the Firm Shares
to be sold by such Selling Shareholder hereunder, the documents
evidencing the Firm Shares to be sold by such Selling Shareholder then
on custody with the Custodian shall be delivered by the Custodian in
accordance with the terms and conditions of this Agreement as if such
death, incapacity or other event had not occurred, regardless of
whether or not the Custodian shall have received notice thereof; and
actions taken by the Attorneys-in-Fact pursuant to the Powers of
Attorney shall be as valid as if such death, incapacity, termination,
dissolution or other event had not occurred, regardless of whether or
not the Custodian, the Attorneys-in-Fact, or any of them, shall have
received notice of such death, incapacity, termination, dissolution or
other event.
(d) Such Selling Shareholder has the legal right and power,
and all authorizations and approvals required by law to enter into this
Agreement, its Custody Agreement and its Power of Attorney to sell,
transfer and deliver all of the Firm Shares which may be sold by such
Selling Shareholder pursuant to this Agreement and to comply with its
other obligations hereunder and thereunder.
(e) Such Selling Shareholder has, and at the time of purchase
and the additional time of purchase, as the case may be, will have,
good and valid title to the Firm Shares to be sold by such Selling
Shareholder under this Agreement, free and clear of all liens,
encumbrances, equities or claims; and, upon delivery of such Firm
Shares and payment therefor pursuant hereto, good and valid title to
such Firm Shares, free and clear of all liens, encumbrances, equities
or claims, will pass to the several Underwriters.
(f) No consent, approval, authorization or order of any court
or governmental agency or body or any other entity or person is
required for the consummation by such Selling Shareholder of the
transactions contemplated herein, the Custody Agreement or the Power of
Attorney, except such as may have been obtained under the Act and the
Exchange Act, the approval of the NASD with respect to fairness of the
underwriting arrangements relating to this Agreement and such as may be
required under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Firm Shares by the Underwriters
and such other approvals as have been obtained. The Firm Shares to be
sold by such Selling Shareholder hereunder are not subject to resale
restrictions under the securities law of any Canadian province that
would be violated by the transactions contemplated hereby.
(g) Neither the sale of the Firm Shares being sold by such
Selling Shareholder nor the consummation of any other of the
transactions herein and therein contemplated by such Selling
Shareholder or the fulfillment of the terms hereof, the Custody
Agreement or the Power of Attorney by such Selling Shareholder will
conflict with, result in a breach or violation of, or constitute a
default under the charter, by-laws and/or other organizational document
of each of such Selling Shareholder, any law or the terms of any
indenture or other agreement or instrument to which either of such
Selling Shareholder is a party or is bound (or to which any of the
property or assets of either of such Selling Shareholder is subject),
any judgment, order or decree applicable to either of
13
such Selling Shareholder or any court or regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over either of such Selling Shareholder.
(h) Other than the inclusion of the Firm Shares to be sold by
such Selling Shareholder, neither of such Selling Shareholder has,
whether pursuant to the Registration Rights Agreement or otherwise, any
registration or other similar rights to have any equity or debt
securities registered for sale by the Company under the Registration
Statement or included in the offering contemplated by this Agreement
that have not been waived.
(i) Such Selling Shareholder does not have, or has waived
prior to the date hereof, any preemptive right, co-sale right or right
of first refusal or other similar right to purchase any of the Shares
that are to be sold by the Company or any of the other Selling
Shareholders to the Underwriters pursuant to this Agreement; and such
Selling Shareholder does not own any warrants, options or similar
rights to acquire, and does not have any right or arrangement to
acquire, any capital stock, right, warrants, options or other
securities from the Company, other than those described in the
Prospectus.
(j) All information furnished by or on behalf of such Selling
Shareholder through the Company in writing expressly for use with
reference to such Selling Shareholder in the Registration Statement and
Prospectus is, and at the additional time of purchase will be, true,
correct and complete in all material respects, and does not, and at the
additional time of purchase will not, contain any untrue statement of a
material fact or omit to state any material fact necessary to make such
information not misleading. Such Selling Shareholder confirms as
accurate the number of shares of Common Shares set forth opposite such
Selling Shareholder's name in the Prospectus under the caption
"Principal and selling shareholders" (both prior to and after giving
effect to the sale of the Shares). The Underwriters acknowledge that
the only information provided by or on behalf of such Selling
Shareholder through the Company is set forth under the caption
"Principal and selling shareholders" (the "SELLING SHAREHOLDER'S
DISCLOSURE") and constitute the only information provided by or on
behalf of the Selling Shareholders for use in the Registration
Statement, the Preliminary Prospectus or the Prospectus.
(k) Such Selling Shareholder has not taken, directly or
indirectly, any action which is designed to or which has constituted or
which might be reasonably expected to cause or result under the
Exchange Act or the rules of the TSE or otherwise, in stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Shares.
(l) There are no stamp or other issuance or transfer taxes or
duties, no capital gains, income, withholding or other taxes, and no
other similar fees or charges under U.S. federal law or the laws of any
state, or any political subdivision or taxing authority thereof, or
Canadian federal law, or the laws of any province or any political
subdivision or taxing authority thereof, required to be paid in
connection with the execution and delivery of this Agreement, the
Custody Agreement or Power of Attorney,
14
or the sale by such Selling Shareholder of the Firm Shares to be sold
by such Selling Shareholder.
(m) Such Selling Shareholder has not distributed and will not
distribute, prior to the later of the additional time of purchase and
the completion of the Underwriters' distribution of the Shares, any
offering material in connection with the offering and sale of the
Shares by such Selling Shareholder other than the Preliminary
Prospectus, the Amended Preliminary Prospectus, the Prospectus or the
Registration Statement.
(n) Certificates in negotiable form for all the Firm Shares to
be sold by such Selling Shareholder under this Agreement have been
validly placed in custody with the Custodian for the purpose of
effecting delivery under this Agreement.
Any certificate signed by or on behalf of such Selling
Shareholder and delivered to the Representatives or to counsel for the
Underwriters in connection with the offering of the Shares shall be deemed to be
a representation and warranty by such Selling Shareholder, as to the matters
covered thereby, to each Underwriter.
5. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS. You, on
behalf of the several Underwriters, represent and warrant to the Company that
the information provided by you and set forth in the fifth, seventh, eighth,
ninth and tenth paragraphs under the caption "Underwriting" in the Prospectus
(the "UNDERWRITERS' DISCLOSURE") constitute the only information provided by or
on behalf of the Underwriters through you for use in the Registration Statement,
the Preliminary Prospectus or the Prospectus. You represent and warrant that you
have been authorized by each of the other Underwriters to enter into this
Agreement on behalf of each of the other Underwriters and to act for each of
them in the manner herein provided.
6. CERTAIN COVENANTS OF THE COMPANY. The Company hereby
covenants and agrees with each Underwriter as follows:
(a) to furnish such information as may be required and
otherwise to cooperate in qualifying the Shares for offering and sale
under the securities or blue sky laws of such states as you may
designate and to maintain such qualifications in effect so long as
required for the distribution of the Shares; PROVIDED, HOWEVER, that
the Company shall not be required to register or qualify as a foreign
corporation or to consent to the service of process under the laws of
any such state (except service of process with respect to the offering
and sale of the Shares); and to promptly advise you of the receipt of
any notification with respect to the suspension of the qualification of
the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose;
(b) to make available to the Underwriters in New York City, as
soon as practicable after the Registration Statement becomes effective
as many copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendments or
supplements thereto after the Effective Date) as the Underwriters may
request for the purposes contemplated by the Act; in case any
Underwriter is required to deliver a prospectus beyond the nine-month
period referred to
15
in Section 10(a)(3) of the Act in connection with the sale of the
Shares, the Company will prepare promptly upon request and at its cost
such amendment or amendments to the Registration Statement and such
prospectuses as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Act;
(c) to advise you promptly and (if requested by you) to
confirm such advice in writing, (i) if and when any registration
statement is filed pursuant to Rule 462(b) under the Act with respect
to Common Shares, (ii) when the Registration Statement has become
effective and when any post-effective amendment thereto becomes
effective, and (iii) when the Prospectus is filed with the Commission
pursuant to Rule 424(b) under the Act (which the Company agrees to file
not later than the Commission's close of business on the second
business day following the execution and delivery of this Agreement,
or, if applicable, such earlier time as may be required by Rule
430A(a)(3) under the Act);
(d) to advise you promptly, and to confirm such advice in
writing, of any request by the Commission for amendments or supplements
to the Registration Statement or Prospectus or for additional
information with respect thereto, or of notice of institution of
proceedings for, or the entry of a stop order or cease trading order
suspending the effectiveness of the Registration Statement or the
ability to sell or trade the Shares and, if the Commission should enter
a stop order or cease trading order suspending the effectiveness of the
Registration Statement or the ability to sell or trade the Shares, to
use its best efforts to obtain the lifting or removal of such order as
soon as possible; to advise you promptly of any proposal to amend or
supplement the Registration Statement or Prospectus and to file no such
amendment or supplement to which you shall object in writing;
(e) to file promptly (i) all reports and other documents
required to be filed by the Company with the Commission in order to
comply with the Exchange Act, and (ii) all reports and other documents
required to be filed by the Company to comply with Ontario Securities
Laws and with the TSE to procure and ensure the continued listing of
the Shares thereon subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus is required in connection with the
offering or sale of the shares, and to promptly notify you of such
filing;
(f) to file a Rule 462(b) Registration Statement, if required,
with the Commission in compliance with Rule 462(b) by 10:00 P.M.,
Washington, D.C. time, on the date of this Agreement, and the Company
shall at the time of filing either pay to the Commission the filing fee
for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under
the Act;
(g) to furnish to you and, upon request, to each of the other
Underwriters for a period of three years from the date of this
Agreement (i) copies of any reports or other communications which the
Company shall send to its shareholders or shall from time to time
publish or publicly disseminate, (ii) copies of all annual, quarterly
and current reports filed with the Commission on Forms 10-K, 10-Q, 8-K
and 14A (proxy statement), or, if the Company becomes, after the date
hereof, a Foreign Private Issuer,
16
on Forms 20-F and 6-K, or such other similar or additional form as may
be designated by the Commission, (iii) copies of all interim and annual
financial statements, press releases and material change reports,
annual reports, Annual Information Forms and management information
circulars filed with the OSC, (iv) copies of documents or reports filed
with any Canadian or United States national securities exchange on
which any class of securities of the Company is listed and (v) such
other information as you may reasonably request regarding the Company
or any of the Subsidiaries as soon as such communications, documents or
information becomes available;
(h) to advise the Underwriters promptly of the occurrence of
any event known to the Company within the time during which a
prospectus relating to the Shares is required to be delivered under the
Act which would require the making of any change in the Prospectus
being used so that such Prospectus would not include an untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they are made, not misleading, and, during such time, to prepare
(affording the Underwriters with the opportunity to participate in the
preparation), file (subject to Section 6(d) hereof) and furnish
promptly to the Underwriters, at the Company's expense, such amendments
or supplements to such Prospectus as may be necessary to reflect any
such change and to furnish you a copy of such proposed amendment or
supplement a reasonable time before the proposed filing of any such
amendment or supplement with the Commission and will not file or use
any such document to which the Underwriters or counsel for the
Underwriters shall object;
(i) to make generally available to its security holders, and
to deliver to you, as soon as reasonably practicable an earnings
statement of the Company (which will satisfy the provisions of Section
11(a) of the Act) covering a period of twelve months beginning after
the effective date of the Registration Statement (as defined in Rule
158(c) of the Act) and ending not later than fifteen (15) months
thereafter;
(j) to furnish to its shareholders as soon as reasonably
practicable after the end of each fiscal year an annual report
(including a consolidated balance sheet and statements of income,
shareholders' equity and of cash flow of the Company for such fiscal
year (i) prepared in conformity with Canadian GAAP, together with a
reconciliation of net income and shareholders' equity to U.S. GAAP, or
(ii) if the Company ceases to be a Foreign Private Issuer or is
otherwise required by or pursuant to the Act, the Exchange Act or the
rules and regulations to prepare its consolidated financial statements
in conformity with U.S. GAAP, or otherwise elects to comply with such
rules and regulations, prepared in conformity with U.S. GAAP,
accompanied by a copy of the certificate or report thereon of
independent certified public accountants nationally recognized in both
the United States and Canada);
(k) to furnish to you such number of conformed copies of the
Registration Statement as initially filed with the Commission and of
all amendments thereto (including all exhibits thereto) as you shall
reasonably request, within the time periods specified herein;
17
(l) to furnish to you as early as practicable prior to the
time of purchase and the additional time of purchase, as the case may
be, but not later than two (2) business days prior thereto, a copy of
the latest available quarterly (if available) unaudited interim
consolidated financial statements, if any, of the Company, which have
been read by the Company's independent certified public accountants, as
stated in their letter to be furnished pursuant to Section 9(f) hereof;
(m) to apply the net proceeds from the sale of the Shares
being sold by the Company in the manner set forth under the caption
"Use of Proceeds" in the Prospectus;
(n) the Company covenants and agrees with the Underwriters and
the Selling Shareholders that the Company (A) will pay the following:
all costs, expenses, fees and taxes in connection with (i) the
preparation and filing of the Registration Statement, the Preliminary
Prospectus, the Prospectus and any amendments or supplements to any of
those documents, and the printing and furnishing of copies of each
thereof to the Underwriters and to dealers (including costs of mailing
and shipment), (ii) the registration, issue, sale and delivery of the
Shares, (iii) the producing, word processing and/or printing of this
Agreement, any agreement among Underwriters, any dealer agreements, any
selling agreements, any Powers of Attorney and any closing documents
(including bound compilations thereof) and the reproduction and/or
printing and furnishing of copies of each thereof to the Underwriters
and their counsel and (except closing documents) to dealers (including
costs of mailing and shipment) and any other documents in connection
with the offering, purchase, sale and delivery of the Shares, (iv) the
qualification of the Shares for offering and sale under U.S. state
laws, and the determination of their eligibility for investment under
U.S. state laws as aforesaid (including the reasonable legal fees and
filing fees and other disbursements of U.S. counsel for the
Underwriters) and the printing and furnishing of copies of any blue sky
surveys or legal investment surveys to the Underwriters and to dealers,
(v) qualification of the Shares for quotation on the NASDAQ National
Market System and the TSE and any other securities exchange and the
registration thereof under the Exchange Act, (vi) the review of the
public offering of the Shares by the NASD, including the associated
filing fees and the reasonable fees and disbursements of counsel for
the Underwriters, and (B) will pay or cause to be paid: (i) the cost of
preparing stock certificates; (ii) the cost and charges of any transfer
agent or registrar; (iii) the fees and expenses of the
Attorneys-in-Fact and the Custodian; and (iv) all other costs and
expenses incident to the performance of its obligations hereunder which
are not otherwise specifically provided for in this Section 6(n); and
(v) all costs and expenses incident to the performance of the Selling
Shareholders' obligations hereunder which are not otherwise
specifically provided for in this Section 6(n), including (y) any fees
and expenses of counsel for the Selling Shareholders and (z) all
expenses and taxes incident to the sale and delivery of the Firm Shares
to be sold by the Selling Shareholders to the Underwriters hereunder,
but excluding the underwriting discounts or commissions payable with
respect to any purchase by the Underwriters of any Firm Shares to be
sold by the Selling Shareholders pursuant to the terms of this
Agreement;
18
(o) to furnish to you, before filing with the Commission
subsequent to the effective date of the Registration Statement and
during the period referred to in paragraph (h) above, a copy of any
document proposed to be filed pursuant to Section 13, 14 or 15(d) of
the Exchange Act or pursuant to the Ontario Securities Laws;
(p) not to (i) offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, any Common Shares or
securities convertible into or exchangeable or exercisable for any
Common Shares, enter into a transaction which would have the same
effect, or enter into any swap, hedge or other arrangement that
transfers, in whole or in part, any of the economic consequences of
ownership of the Common Shares, whether any such aforementioned
transaction is to be settled by delivery of the Common Shares or such
other securities, in cash or otherwise, or publicly disclose the
intention to make any such offer, sale, pledge or disposition, or to
enter into any such transaction, swap, hedge or other arrangement or
(ii) make any demand for or exercise any right with respect to, the
registration of any Common Shares or any security convertible into of
exercisable or exchangeable for the Common Shares, during the Lock-Up
Period without the prior written consent of UBSW, except for, (x) the
registration of the Shares and the sales to the Underwriters pursuant
to this Agreement, (y) issuances of Common Shares upon the exercise of
outstanding options or warrants as disclosed in the Registration
Statement and the Prospectus to persons who have entered into Lock-Up
Agreements with the Underwriters (which Lock-Up Agreements are
applicable to such Common Shares) and (z) the issuance of employee
stock options not exercisable during the Lock-up Period pursuant to
stock option plans described in the Registration Statement and the
Prospectus;
(q) to use its best efforts to cause the Common Shares to be
listed for quotation on NASDAQ National Market System and the TSE on or
before the time of purchase;
7. CERTAIN COVENANTS OF THE SELLING SHAREHOLDERS. Each Selling
Shareholder hereby severally, and not jointly, covenants and agrees with each
Underwriter as follows:
(a) To comply with the terms of the Lock-Up Agreements
executed by such Selling Shareholder.
(b) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, to deliver to the Representatives, prior to the time of
purchase, a properly completed and executed United States Treasury
Department Form W-8 (if such Selling Shareholder is a non-United States
person) or Form W-9 (if such Selling Shareholder is a United States
person), or other applicable form or statement specified by Treasury
Department regulations in lieu thereof.
(c) Such Selling Shareholder will not take, directly or
indirectly, any action designed to or which might reasonably be
expected to cause or result, under the Exchange Act, the rules of the
TSE or otherwise, in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares.
19
(d) To the extent not deposited into custody on or prior to
the date hereof, to duly deposit, prior to the date of purchase, with
the Custodian, pursuant to and under the Custody Agreement executed by
each of such Selling Shareholder, the Firm Shares to be sold by such
Selling Shareholder pursuant to this Agreement.
8. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. The Company agrees
that if the Shares are not delivered for any reason other than the termination
of this Agreement pursuant to subsections (ii), (iii) or (iv) of the second
paragraph of Section 10 hereof or the last paragraph of Section 11 hereof or the
default by one or more of the Underwriters in its or their respective
obligations hereunder, it shall, in addition to paying the amounts described in
Section 6(o) hereof, reimburse the Underwriters for all of the out-of-pocket
expenses incurred by the Underwriters, including the fees and disbursements of
their counsel.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and each of the Selling
Shareholders on the date hereof, and at the time of purchase as if made at the
time of purchase (and the several obligations of the Underwriters at the
additional time of purchase are subject to the accuracy of the representations
and warranties of the Selling Shareholders and the Company on the date hereof,
at the time of purchase and at the additional time of purchase, as the case may
be, as if made at such time), the timely performance by the Company and each of
the Selling Shareholders of their obligations hereunder and to the following
additional conditions precedent:
(a) The Company shall furnish to you at the time of purchase
and at the additional time of purchase an opinion of Xxxxxxx and Xxxx
LLP, Canadian counsel for the Company, addressed to the Underwriters,
and dated the time of purchase or the additional time of purchase, as
the case may be, with reproduced copies for each of the Underwriters
and in form reasonably satisfactory to Xxxxx Xxxxxxxxxx LLP, United
States counsel for the Underwriters and McCarthy, Tetrault, Canadian
counsel for the Underwriters, stating that:
(i) the Company has been duly incorporated and
organized and is validly existing as a corporation under the
laws of the Province of Ontario, Canada, with the requisite
corporate power and authority to own, lease and operate its
properties and conduct its business as described in the
Registration Statement and the Prospectus, to execute and
deliver and perform its obligations under this Agreement and
to issue, sell and deliver the Shares as herein contemplated;
(ii) each of The Dynacare Health Group Inc., Dynacare
G.P. Inc., Dynacare Realty Inc., Dynacare Laboratories Limited
Partnership, Dynacare Gamma Laboratory Partnership and
Dynacare Xxxxxx Medical Laboratories (collectively, the
"Canadian Subsidiaries") has, in the case of The Dynacare
Health Group Inc., Dynacare G.P. Inc. and Dynacare Realty
Inc., been duly incorporated and is validly existing as a
corporation under the laws of its jurisdiction of
incorporation with the requisite corporate power and authority
to own, lease and operate its properties and to
20
conduct its business and, in the case of Dynacare Gamma
Laboratory Partnership, Dynacare Laboratories Limited
Partnership and Dynacare Xxxxxx Medical Laboratories, has been
duly established and is validly existing as a partnership
under the laws of the jurisdiction of its establishment with
requisite partnership power and authority to own, lease and
operate its properties and conduct its business;
(iii) the Company and each of the Canadian
Subsidiaries are duly registered or qualified to transact
business as an extra-provincial corporation or partnership and
are in good standing in each Canadian jurisdiction in which
the ownership or leasing of their properties or the conduct of
their business requires such registration or qualification,
except where the failure to so qualify would not individually
or in the aggregate have a Material Adverse Effect;
(iv) this Agreement has been duly authorized,
executed and delivered by the Company;
(v) the Shares to be issued and sold by the Company
have been duly authorized and all necessary corporate action
has been taken by the Company to approve the issuance and
sale, and, when issued and delivered to and paid for by the
Underwriters, will be validly issued, fully paid and
non-assessable;
(vi) the Company has authorized and outstanding
shares of capital stock as set forth in the Registration
Statement and the Prospectus; the outstanding shares of
capital stock of the Company, including, without limitation,
the Additional Shares, have been duly and validly authorized
and issued and are fully paid, non-assessable and free of any
preemptive rights, resale rights, rights of first refusal and
similar rights under the OBCA or under any contract, agreement
or instrument described in or filed as an exhibit to the
Registration Statement or otherwise known to such counsel; the
Shares to be sold by the Company, when issued will be free of
any preemptive rights, resale rights, rights of first refusal
and similar rights under the OBCA or under any contract,
agreement or instrument described in or filed as an exhibit to
the Registration Statement or otherwise known to such counsel;
the certificates for the Shares are in due and proper form and
conform in all material respects to the requirements the OBCA
and the TSE and the holders of the Shares will not be subject
to personal liability by reason of being such holders;
(vii) all of the outstanding shares of capital stock
of, or other ownership interest of the Company in each of the
Canadian Subsidiaries have been duly authorized and validly
issued, are fully paid and non-assessable. All of the
outstanding capital stock of or other ownership interest in,
each of the Canadian Subsidiaries is owned by the Company
subject to no recorded security interest, other encumbrance or
adverse claims and other than in respect of currency swap
agreements described in the Prospectus. None of the
outstanding capital stock or other ownership interest owned by
the Company or by any wholly-owned Canadian subsidiary of each
of the Canadian Subsidiaries is
21
subject to any recorded security interest, other encumbrance
or adverse claims, other than as would not have a Material
Adverse Effect and other than in respect of currency swap
agreements described in the Prospectus. To such counsel's
knowledge, no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to
convert any obligation into shares of capital stock or
ownership interests in any of the Canadian Subsidiaries are
outstanding;
(viii) to such counsel's knowledge, no cease trade
order or proceedings with respect thereto are pending or
threatened under the Ontario Securities Laws;
(ix) no approval, authorization, consent or order of
or filing with any Canadian federal, provincial or local
governmental or regulatory commission, board, body, authority
or agency is required in connection with the issuance or sale
of the Shares by the Company or the sale of Shares by any of
the Selling Shareholders and the consummation of the
transactions contemplated hereby and by the Prospectus;
(x) the execution, delivery and performance of this
Agreement by the Company and the transactions contemplated
hereby and by the Registration Statement do not conflict with,
or result in any breach of, or constitute a default under (nor
constitute any event which with notice, lapse of time, or
both, would result in any breach of, or constitute a default
under) (A) any provisions of the charter or by-laws or other
organizational documents of the Company or any of the Canadian
Subsidiaries, (B) any provision of any license, permit,
franchise, indenture, mortgage, deed of trust, bank loan or
credit agreement or other evidence of indebtedness, or any
lease, contract or other agreement or instrument of which we
have knowledge, which, in each case is governed by the laws of
Canada or any province thereof, to which the Company or any of
the Canadian Subsidiaries are affected that is described in
the Prospectus or filed as an exhibit to the Registration
Statement or is otherwise known by such counsel, (C) any
Canadian federal, provincial or local law, regulation or rule
or (D) any decree, judgment or order issued by any Canadian
authority or entity of which such counsel is aware that is
applicable to the Company or any of the Canadian Subsidiaries;
(xi) the capital stock of the Company, including the
Shares, conforms to the description thereof contained in the
Prospectus;
(xii) to such counsel's knowledge, there are no
private or governmental actions, suits, claims, investigations
or proceedings pending, threatened or contemplated to which
the Company, any of the Subsidiaries, any of their directors
or officers or any of their properties is subject, whether at
law, in equity or before or by any federal, state, provincial,
local or foreign governmental or regulatory commission, board,
body, authority or agency, except as described in the
Prospectus or as would not have a Material Adverse Effect;
22
(xiii) except as described in the Registration
Statement or Prospectus, no person has the right, pursuant to
the terms of any contract, agreement or other instrument
described in or filed as an exhibit to the Registration
Statement, to cause the Company to register under the Ontario
Securities Laws any shares of capital stock or other equity
interests as a result of the filing or effectiveness of the
Registration Statement or which is otherwise known to said
counsel or the sale of the Shares as contemplated hereby; and
to the knowledge of such counsel, except as described in the
Registration Statement or Prospectus, no person is entitled to
registration rights with respect to shares of capital stock or
other securities of the Company;
(xiv) the choice of law provisions set forth in
Section 14 and Section 15 hereof will be recognized by the
courts of the Province of Ontario; the Company can xxx and be
sued in its own name; under the laws of the Province of
Ontario, the submission of the Company to the non-exclusive
jurisdiction of federal and state courts in the Borough of
Manhattan in The City of New York (each a "NEW YORK COURT" and
collectively the "NEW YORK COURTS") is legal, valid and
binding; and any judgment obtained in a New York Court arising
out of or in relation to the obligations of the Company under
this Agreement or the transactions contemplated hereby will be
recognized in the Province of Ontario;
(xv) the statements set forth in the Prospectus under
the caption "Description of capital stock", insofar as they
purport to constitute a summary of the terms of the Common
Shares and the Company's charter and bylaws and under the
captions "Risk-Factors--We are subject to extensive, complex
and changing government regulation";
"Business--Regulation--Canada"; "Management--Limitation of
Liability and Indemnification of Officers and Directors";
"Material income tax considerations--Material Canadian Federal
Income Tax Considerations" and "Underwriting", insofar as they
purport to describe the provisions of the Canadian laws and
documents referred to therein provide a fair and complete
summary in all material respects;
(xvi) there are no stamp or other issuance or
transfer taxes or duties, no capital gains, income,
withholding or other taxes, and no other similar fees or
charges under Canadian federal law, or the laws of any
province or any political subdivision or taxing authority
thereof required to be paid in connection with the execution
and delivery of this Agreement or the issuance or sale by the
Company of the Shares;
(xvii) CIBC Mellon Trust Company has been duly
appointed as the registrar and transfer agent for the Common
Shares at its principal offices in Toronto, Ontario, and
ChaseMellon Shareholder Services, L.L.C. has been duly
appointed as registrar and transfer agent for the Common
Shares at its principal offices in New York, New York;
(xviii) all documents have been or will at the time
of purchase be filed and all requisite proceedings have been
or will at the time of purchase be
23
taken and all approvals, permits, consents and authorizations
of the appropriate regulatory authorities under the Ontario
Securities Laws have been obtained to permit the Shares to be
freely traded on the TSE;
(xix) the form of share certificate representing the
Common Shares of the Company complies with the requirements of
the OBCA and has been approved by the TSE as to form and
content;
(xx) the TSE has conditionally approved the listing
and posting for trading of the Shares, subject to the
fulfillment of the usual requirements of such exchange on or
before [________], 2001; and
(xxi) addressing any other matters as may be
requested by the Underwriters or their counsel acting
reasonably.
In addition, such counsel shall state that, in the course of
the preparation of the Prospectus, such counsel has participated in conferences
with certain officers and representatives of the Company, United States counsel
to the Company, representatives of the independent public accountants of the
Company and representatives of the Underwriters and their counsel, at which
conferences such counsel made inquiries of such officers, representatives and
accountants and discussed the contents of the Prospectus. Given the limitations
inherent in the role of outside counsel and the character of determinations
involved in the preparation of the Prospectus, such counsel may state that such
counsel is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the Prospectus
(other than as set forth in Section 9(a)(xvi) hereof) and any amendments or
supplements made thereof by the Company prior to each date of delivery of such
counsel's opinion. Subject to the foregoing, such counsel shall state that (A)
the Prospectus and any further amendments and supplements thereto made by the
Company prior to each date of such opinion comply as to form in all material
respects with the requirements of the Ontario Securities Laws; and (B) no facts
have come to the attention of such counsel which lead them to believe that, as
of its date, the Prospectus or any further amendment thereto made by the Company
prior to each date of such opinion contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made, or that, as of each date of such
opinion, the Prospectus or any further amendment or supplement thereto made by
the Company prior to such date contains an untrue statement of a material factor
omits to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading (it being
understood that in respect to both clause (A) and (B) of this paragraph such
counsel need not express any opinion with respect to the financial statements,
including the notes thereto, schedules and other financial data derived from
accounting records included in the Prospectus).
In rendering such opinion, such counsel may rely, in addition to other customary
matters, (A) as to matters involving the application of laws of any jurisdiction
other than any laws of Canada, federal or otherwise, to the extent they deem
proper and specified in such opinion, upon the opinion of other counsel of good
standing whom they believe to be reliable and who are
24
satisfactory to counsel for the Underwriters and (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of the
Company and public officials.
(b) The Company shall furnish to you at the time of purchase
and at the additional time of purchase, as the case may be, an opinion
of Weil, Gotshal & Xxxxxx LLP, United States counsel for the Company,
addressed to the Underwriters, and dated the time of purchase or the
additional time of purchase, as the case may be, with reproduced copies
for each of the Underwriters and in form reasonably satisfactory to
Xxxxx Xxxxxxxxxx LLP, United States counsel for the Underwriters,
stating that:
(i) each of certain Subsidiaries listed in SCHEDULE
C(i) to this Agreement (collectively, the "U.S. SUBSIDIARIES")
is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation with the
requisite corporate power and authority to own, lease and
operate its properties and to conduct its business;
(ii) each of the U.S. Subsidiaries is duly qualified
to do business (where applicable, as a foreign corporation) in
the U.S. jurisdictions specified in such opinion and is in
good standing in each such U.S. jurisdiction, except where the
failure to so qualify would not, individually or in the
aggregate, have a Material Adverse Effect;
(iii) to such counsel's knowledge, all of the
outstanding shares of capital stock of, or other ownership
interest of the Company in each of the U.S. Subsidiaries have
been duly authorized and validly issued, are fully paid and
non-assessable. To such counsel's knowledge, all of the
outstanding capital stock of or other ownership interest in
each of the U.S. Subsidiaries is owned by the Company subject
to no security interest, other encumbrance or adverse claims
other than in respect of currency swap agreements described in
the Prospectus. To such counsel's knowledge, no options,
warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligation
into shares of capital stock or ownership interests in any of
the U.S. Subsidiaries are outstanding;
(iv) the Registration Statement has become effective
under the Act and, to such counsel's knowledge, no stop order
proceedings with respect thereto are pending or threatened
under the Act and any required filing of the Prospectus, and
any supplement thereto pursuant to Rule 424 under the Act has
been made in the manner and within the time period required by
such Rule 424;
(v) no approval, authorization, consent or order of
or filing with any U.S. federal or New York state or local
governmental or regulatory commission, board, body, authority
or agency is required in connection with the execution,
delivery and performance of this Agreement, the issuance or
sale of the Shares and the consummation of the transactions
contemplated hereby and by the Registration Statement and the
Prospectus, other than those that have been obtained under the
Act, the Exchange Act, the rules and regulations of the NASD
25
and other than any necessary qualification under the state
securities or blue sky laws of the various jurisdictions in
which the Shares are being offered by the Underwriters;
(vi) the execution, delivery and performance of this
Agreement by the Company and the transactions contemplated
hereby and by the Registration Statement and the Prospectus do
not and will not conflict with, or result in any breach of, or
constitute a default under (nor constitute any event which
with notice, lapse of time, or both, would result in any
breach of, or constitute a default under) (A) any provisions
of the charter or by-laws or other organizational documents of
any of the U.S. Subsidiaries, (B) any provision of any
license, permit, franchise, indenture, mortgage, deed of
trust, bank loan or credit agreement or other evidence of
indebtedness, or any lease, contract or other agreement or
instrument to which the Company or any of the U.S.
Subsidiaries is a party or by which their respective
properties may be bound or affected that is governed by the
laws of any jurisdiction of the United States and that is
described in or filed as an exhibit to the Registration
Statement or is otherwise known by such counsel, (C) any U.S.
Federal, New York State or local law, U.S. Federal or New York
State regulation or rule, except that no opinion need be given
with respect to this clause (C) regarding U.S. federal or
state securities laws, or (D) any decree, judgment or order of
which such counsel is aware that is applicable to the Company
or any of the U.S. Subsidiaries;
(vii) to such counsel's knowledge, there are no
contracts, licenses, agreements, leases or documents of a
character which are required to be filed as exhibits to the
Registration Statement or to be described in the Prospectus
which have not been so filed or described, and they do not
know of any amendment to the Registration Statement required
to be filed;
(viii) to such counsel's knowledge, there are no
private or governmental actions, suits, claims, investigations
or proceedings pending, threatened or contemplated to which
the Company or any of the Subsidiaries or any of their
directors or officers is subject or of which any of their
properties is subject, whether at law or in equity in any
jurisdiction of the United States, or before or by any U.S.
federal, state or local governmental or regulatory commission,
board, body, authority or agency except as described in the
Prospectus or as would not have a Material Adverse Effect;
(ix) the Company is not, and after the offering and
sale of the Shares, will not be, an "investment company," or
an entity controlled by an "investment company," as such terms
are defined in the Investment Company Act;
(x) the statements set forth in the Prospectus under
the captions "Risk Factors--We are subject to extensive,
complex and changing government regulation"; "Material income
tax considerations--Material United States Federal Income Tax
Considerations", and "Underwriting", insofar as they purport
to
26
describe the provisions of the U.S. laws and documents
referred to therein, are accurate, complete and fair;
(xi) there are no stamp or other issuance or transfer
taxes or duties, no capital gains, income, withholding or
other taxes, and no other similar fees or charges under U.S.
federal law or the laws of New York, or any political
subdivision or taxing authority thereof required to be paid in
connection with the execution and delivery of this Agreement
or the issuance or sale by the Company of the Shares;
(xii) other than as covered by Section 9(b)(x)
hereof, the statements in the Registration Statement and
Prospectus, insofar as they are descriptions of contracts,
agreements or other legal documents governed by the laws of
any jurisdiction of the United States, or refer to statements
of U.S. law or legal conclusions, are accurate, complete and
fair;
(xiii) no person has the right, pursuant to the terms
of any contract, agreement or other instrument described in or
filed as an exhibit to the Registrations Statement, to cause
the Company to register under the Act or the Exchange Act any
shares of capital stock or other equity interests as a result
of the filing or effectiveness of the Registration Statement
or which is otherwise known to said counsel or the sale of the
Shares as contemplated hereby; and to the knowledge of such
counsel, except as described in the Registration Statement and
Prospectus, no person is entitled to registration rights with
respect to shares of capital stock or other securities of the
Company; and
(xiv) the Company is eligible to use a registration
statement on Form S-1 to register the Shares under the Act and
the Company is not a Foreign Private Issuer.
In addition, such counsel shall state that, in the course of
the preparation of the Registration Statement and the Prospectus, such counsel
has participated in conferences with certain officers and representatives of the
Company, Canadian counsel to the Company, representatives of the independent
public accountants of the Company and representatives of the Underwriters and
their counsel, at which conferences such counsel made inquiries of such
officers, representatives and accountants and discussed the contents of the
Registration Statement and the Prospectus. Given the limitations inherent in the
role of outside counsel and the character of determinations involved in the
preparation of the Registration Statement and the Prospectus, such counsel may
state that such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus (other than as set
forth in Sections 9(b)(x) and (xii) hereof) and any amendments or supplements
made thereof by the Company prior to each date of delivery of such counsel's
opinion. Subject to the foregoing, such counsel shall state that no facts have
come to the attention of such counsel which lead them to believe that, as of its
effective date, the Registration Statement or any further amendment thereto made
by the Company prior to each date of such opinion contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements
27
therein not misleading or that, as of its date, the Prospectus or any further
amendment or supplement thereto made by the Company prior to each date of such
opinion contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or that, as of each
date of such opinion, either the Registration Statement or the Prospectus or any
further amendment or supplement thereto made by the Company prior to such date
contains an untrue statement of a material factor omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (it being understood that such
counsel need not express any opinion with respect to the financial statements,
including the notes thereto, schedules and other financial data derived from
accounting records included in the Prospectus).
The opinions set forth in Sections 9(b) (i), (ii), (iii) and
(vi) may be rendered by local counsel of repute and approved by counsel to the
Underwriters.
(c) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, an opinion of XxXxxxxx
Xxxxxxxx, Canadian counsel for the Underwriters, dated the time of
purchase or the additional time of purchase, as the case may be, with
reproduced copies for each of the Underwriters with respect to this
Agreement and certain other matters of Canadian laws, as well as such
other related matters as you may reasonably request, and such counsel
shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters.
(d) You shall have received, at the time of purchase and at
the additional time of purchase, as the case may be, an opinion of
Xxxxxxx and Xxxx LLP, counsel for the Xxxxxx Group Shareholders, and an
opinion of [Xxxxxxxx & Xxxxx], counsel for each of GTCR and GTCR
Associates, each such opinion addressed to the Underwriters, and dated
the time of purchase or the additional time of purchase, as the case
may be, with reproduced copies for each of the Underwriters and in form
reasonably satisfactory to Xxxxx Xxxxxxxxxx LLP, United States counsel
for the Underwriters, stating, with respect to each such Selling
Shareholder on behalf of whom Xxxxxxx and Xxxx LLP and [Xxxxxxxx &
Xxxxx] is delivering such opinion, that:
(i) a Custody Agreement and a Power of Attorney have
been duly authorized, executed and delivered by such Selling
Shareholder and constitute valid and binding agreements of
such Selling Shareholder; and such Selling Shareholder has
full legal right and authority to sell, transfer and deliver
in the manner provided in this Agreement and the Custody
Agreement the Firm Shares being sold by such Selling
Shareholder hereunder;
(ii) this Agreement has been duly authorized,
executed and delivered by or on behalf of the Selling
Shareholders;
(iii) immediately prior to the time of purchase or
the additional time of purchase, as the case may be, the
Selling Shareholders had good and valid title to the Firm
Shares to be sold at such time by the Selling Shareholders
under
28
this Agreement, free and clear of all liens, encumbrances,
equities or claims, and the full right, power and authority to
sell, assign, transfer and deliver the Firm Shares to be sold
by the Selling Shareholders hereunder;
(iv) good and valid title to such Firm Shares, free
and clear of all liens, encumbrances, equities or claims has
been transferred to each of the several Underwriters;
(v) no consent, approval, authorization or order of,
or other action by or filing with, any court or
governmental agency or body is required for the Selling
Shareholders to authorize, execute and deliver (whether
directly or through the Power of Attorney) the Custody
Agreement, the Power of Attorney or this Agreement or for
the Selling Shareholders to consummate the transactions
contemplated herein and therein, except such as may have
been obtained under the Act or the Exchange Act and such as
may be required under the blue sky laws of any jurisdiction
in connection with the purchase and distribution of the
Firm Shares by the Underwriters and such other approvals
otherwise as specified in such opinion, as have been
obtained; and
(vi) none of the authorization, execution or delivery
of this Agreement, the Custody Agreement or the Power of
Attorney by or on behalf of the Selling Shareholders, the sale
of the Firm Shares being sold by the Selling Shareholders
hereunder and thereunder, the consummation of any other of the
transactions herein contemplated by the Selling Shareholders
or the compliance and fulfillment of the terms hereof and
thereof by the Selling Shareholders will conflict with, result
in a breach or violation of, or constitute a default under any
law or the charter, bylaws and/or other organizational
documents of the Selling Shareholders or the terms of any
indenture or other agreement or instrument known to such
counsel, after reasonably investigation, and to which the
Selling Shareholders are a party, or any judgment, order or
decree known to such counsel to be applicable to the Selling
Shareholders of any court, or governmental agency or body,
having jurisdiction over the Selling Shareholders.
(e) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, an opinion of Xxxxx
Xxxxxxxxxx LLP, United States counsel for the Underwriters, dated the
time of purchase or the additional time of purchase, as the case may
be, with respect to the Registration Statement, the Prospectus and such
other related matters as the Underwriters may require and such counsel
shall have received such papers and information as they may reasonably
request to enable them to pass on such matters.
(f) You shall have received from Ernst & Young LLP, letters
dated, respectively, the date of this Agreement (and delivered at a
time prior to the execution of this Agreement), the effective date of
any post-effective amendment to the Registration Statement filed
subsequent to the date of this Agreement and also the time of purchase
and additional time of purchase, as the case may be, and addressed to
the Underwriters
29
(with reproduced copies for each of the Underwriters) in the forms
heretofore approved by you.
(g) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, an opinion of Xxxxxxx
Xxxxxx & Green, P.C., special United States regulatory counsel for the
Company, addressed to the Underwriters, and dated the time of purchase
or the additional time of purchase, as the case may be, with reproduced
copies for each of the Underwriters and in form and substance
satisfactory to Xxxxx Xxxxxxxxxx LLP, United States counsel for the
Underwriters, stating that:
(i) to such counsel's knowledge, nothing has come to
its attention to suggest that the Company or any of its
subsidiaries incorporated under the laws of any jurisdiction
in the United States are not operating in compliance with all
licenses, approvals, certificates, or permits from U.S.
governmental and regulatory authorities that are necessary to
conduct its/their respective businesses as currently being
conducted and as described in the Prospectus. To such
counsel's knowledge, the Company has not received notice of
any proceeding, action, or proposed action relating to the
revocation or suspension of any such license, approval,
certificate, or permit; and
(ii) the statements set forth in the in the
Prospectus under the captions "Risk Factors--We are subject to
extensive, complex and changing government regulations" and
"Business--Regulation--United States", insofar as they purport
to describe the provisions of the U.S. laws referred to
therein, are accurate, complete and fair.
(h) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, an opinion of Xxxx
Xxxxxxxxx, Esq., internal counsel to Dynacare-Gamma Laboratory
Partnership (a subsidiary of the Company), which is operating as
Gamma-Dynacare Medical Laboratories ("GDML"), addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the
Underwriters and in form reasonably satisfactory to Xxxxx Xxxxxxxxxx
LLP, United States counsel for the Underwriters, stating that, to such
counsel's knowledge:
(i) GDML holds all licenses, approvals, certificates
and permits (collectively, "LICENSES") to allow it under the
laws and regulations of Canada and the Province of Ontario to
hold and operate its Laboratories and Specimen Collection
Centres, such Laboratories and Specimen Collection Centres
being all of the Laboratories and Specimen Collection Centres
operated by Dynacare Inc. and its affiliated entities in the
Province of Ontario;
(ii) GDML holds and operates all of its Laboratories
and Specimen Collection Centres in all material respects in
accordance with the terms of the Licenses and in accordance
with applicable legal requirements; and
30
(iii) GDML has not received notice of and has no
knowledge of any basis for any proceeding or action relating
to GDML for the revocation, suspension or termination of any
of the Licenses by any competent governmental authority.
(i) No amendment or supplement to the Registration Statement
or Prospectus shall be filed prior to the time the Registration
Statement becomes effective to which you object in writing.
(j) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) under the Act, at or before 5:30 P.M., New York
City time, on the second full business day after the date of this
Agreement); PROVIDED, HOWEVER, that the Company and you and any group
of Underwriters, including you, who have agreed hereunder to purchase
in the aggregate at least fifty percent (50%) of the Firm Shares may
from time to time agree on a later date.
(k) Prior to the time of purchase or the additional time of
purchase, as the case may be, (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued
under the Act or proceedings initiated under Section 8(d) or 8(e) of
the Act; (ii) no cease order with respect to the Company shall have
been issued by the OSC; (iii) the Registration Statement and all
amendments thereto, or modifications thereof, if any, shall 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; and (iii) the Prospectus and all amendments or
supplements thereto, or modifications thereof, if any, shall not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
are made, not misleading.
(l) Between the time of execution of this Agreement and the
time of purchase or the additional time of purchase, as the case may
be, (i) no material adverse change, or any development involving a
prospective material adverse change, financial or otherwise (other than
as specifically identified in the Registration Statement and
Prospectus), in the business, prospects, properties, condition
(financial or otherwise) or results of operations of the Company and
the Subsidiaries, taken as a whole, shall occur or become known and
(ii) no transaction which is materially adverse to the Company and the
Subsidiaries, taken as a whole, shall have been entered into by the
Company or any of the Subsidiaries.
(m) The Company will, at the time of purchase or additional
time of purchase, as the case may be, deliver to you a certificate of
its Chief Executive Officer and its Chief Financial Officer to the
effect that the representations and warranties of the Company as set
forth in this Agreement are true and correct as of each such date, that
the Company has performed such of their obligations under this
Agreement as are to be performed at or before the time of purchase and
at or before the additional time of purchase, as the case may be, and
the conditions set forth in paragraphs (j), (k), (l) and (m) of this
Section 9 have been met.
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(n) You shall have received signed Lock-Up Agreements, dated
on or prior to the date of this Agreement, referred to in Section 3(r)
hereof from each of the officers and directors of the Company and each
of the Selling Shareholders.
(o) The Company shall have furnished to you such other
documents and certificates as to the accuracy and completeness of any
statement in the Registration Statement and the Prospectus as of the
time of purchase and the additional time of purchase, as the case may
be, as you may reasonably request.
(p) The Shares shall have been approved for listing on NASDAQ
and the TSE, subject, in the case of NASDAQ, only to notice of issuance
at or prior to the time of purchase or the additional time of purchase,
and in the case of the TSE, to the fulfillment of the usual
requirements thereof on or prior to [________], 2001.
(q) You shall have received, at the additional time of
purchase, a certificate, signed by each Selling Shareholder or
responsible officers of each thereof, to the effect that (i) the
respective representations and warranties of such Selling Shareholder
in this Agreement are true and correct in all material respects on and
as of the time of purchase or the additional time of purchase, as the
case may be, to the same effect as if made at the time of purchase or
additional time of purchase, as the case may be, (ii) such Selling
Shareholder has complied with all agreements and made, executed,
delivered, performed and satisfied all of the covenants or conditions
required on the part of such Selling Shareholder to be made, executed,
delivered, performed and satisfied at or prior to the Closing Date, and
(iii) as to such other matters as you may reasonably request.
(r) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization", as that term
is defined by the Commission for purposes of Rule 436(g)(2) under the
Act, and (ii) no such organization shall have publicly announced that
it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities.
(s) To the extent not completed on or prior to the date of
this Agreement, each Selling Shareholder shall have duly deposited and
placed in custody with the Custodian, pursuant to and under the Custody
Agreement executed by such Selling Shareholder, the Firm Shares to be
sold such Selling Shareholder pursuant to the terms of this Agreement.
10. EFFECTIVE DATE OF AGREEMENT; TERMINATION. This Agreement
shall become effective when the parties hereto have executed and delivered this
Agreement.
The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of you or any group of
Underwriters (which may include you) which has agreed to purchase in the
aggregate at least fifty percent (50%) of the Shares, (i) if, since the time of
execution of this Agreement or the respective dates as of which information is
given in the Prospectus, there has been any change, or any development involving
32
a prospective change, financial or otherwise (other than as specifically
identified in the Prospectus), in the business, prospects, properties, condition
(financial or otherwise) or results of operations of the Company and the
Subsidiaries taken as a whole, which would, in your judgment or in the judgment
of such group of Underwriters, make it impracticable to market the Firm Shares
or the Additional Shares, or, (ii) if, at any time prior to the time of purchase
or, with respect to the purchase of any Additional Shares, the additional time
of purchase, as the case may be, trading in securities generally or, where
applicable, trading in securities of the Company in particular, on the New York
Stock Exchange, the American Stock Exchange, the Nasdaq National Market or the
TSE shall have been suspended or limitations or minimum prices shall have been
established on the New York Stock Exchange, the American Stock Exchange, the
Nasdaq National Market or the TSE, or (iii) if a banking moratorium shall have
been declared either by the United States or New York State, Canadian or Ontario
authorities, or (iv) if the United States or Canada shall have declared war in
accordance with its constitutional processes or there shall have occurred any
material outbreak or escalation of hostilities or other national or
international calamity or crisis of such magnitude in its effect on the
financial markets of the United States or Canada as, in your judgment or in the
judgment of such group of Underwriters, is so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Shares being delivered on such date on the terms and in the manner
contemplated in the Prospectus.
If you or any group of Underwriters elects to terminate this
Agreement as provided in this Section 10, the Company, the Selling Shareholders
and each other Underwriter shall be notified promptly by letter or telegram.
If the sale to the Underwriters of the Shares, as contemplated
by this Agreement, is not carried out by the Underwriters for any reason
permitted under this Agreement or if such sale is not carried out because the
Company or any of the Selling Shareholders shall be unable to comply with any of
the terms of this Agreement, the Company and the Selling Shareholders shall not
be under any obligation or liability under this Agreement (except to the extent
provided in Sections 6(p), 7 and 12 hereof), and the Underwriters shall be under
no obligation or liability to the Company or the Selling Shareholders under this
Agreement, the Custody Agreement or any other agreement (except to the extent
provided in Section 12 hereof) or to one another hereunder.
11. INCREASE IN UNDERWRITERS' COMMITMENTS. Subject to Sections
9 and 10, if any Underwriter shall default in its obligation to take up and pay
for the Shares to be purchased by it hereunder (otherwise than for a reason
sufficient to justify the termination of this Agreement under the provisions of
Section 10 hereof) and if the number of Shares which all Underwriters so
defaulting shall have agreed but failed to take up and pay for does not exceed
ten percent (10%) of the total number of Shares, the non-defaulting Underwriters
shall take up and pay for (in addition to the aggregate number of Shares they
are obligated to purchase pursuant to Section 1 hereof) the number of Shares
agreed to be purchased by all such defaulting Underwriters, as hereinafter
provided. Such Shares shall be taken up and paid for by such non-defaulting
Underwriter or Underwriters in such amount or amounts as you may designate with
the consent of each Underwriter so designated or, in the event no such
designation is made, such Shares shall be taken up and paid for by all
non-defaulting Underwriters pro rata in proportion to the aggregate number of
Shares set opposite the names of such non-defaulting Underwriters in SCHEDULE
A(i) annexed hereto.
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Without relieving any defaulting Underwriter from its
obligations hereunder, the Company and Selling Shareholders agree with the
non-defaulting Underwriters that it will not sell any Shares hereunder unless
all of the Shares are purchased by the Underwriters (or by substituted
Underwriters selected by you with the approval of the Company or selected by the
Company with your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase or additional time of purchase, as the case may
be, for a period not exceeding five (5) business days in order that any
necessary changes in the Registration Statement and Prospectus and other
documents may be effected.
The term "UNDERWRITER" as used in this Agreement shall refer
to and include any Underwriter substituted under this Section 11 with like
effect as if such substituted Underwriter had originally been named in SCHEDULE
A(i) annexed hereto.
If the aggregate number of Shares which the defaulting
Underwriter or Underwriters agreed to purchase exceeds ten percent (10%) of the
total number of Shares which all Underwriters agreed to purchase hereunder, and
if neither the non-defaulting Underwriters nor the Company shall make
arrangements within the five (5) business day period stated above for the
purchase of all the Shares which the defaulting Underwriter or Underwriters
agreed to purchase hereunder, this Agreement shall be terminated without further
act or deed and without any liability on the part of the Company or the Selling
Shareholders to any non-defaulting Underwriter and without any liability on the
part of any non-defaulting Underwriter to the Company or the Selling
Shareholders. Nothing in this paragraph, and no action taken hereunder, shall
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
12. INDEMNITY AND CONTRIBUTION.
(a) The Company will indemnify, defend and hold harmless each
Underwriter, its partners, directors and officers, and each person who
controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and the successors and assigns of all
of the foregoing persons from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation)
which, jointly or severally, any such Underwriter or any such person
may incur under the Act, the Exchange Act, the Ontario Securities Laws,
the common law or otherwise, insofar as such loss, damage, expense,
liability or claim (or actions in respect thereof) arises out of or is
based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment
thereof by the Company) or in the Prospectus (the term Prospectus for
the purpose of this Section 12 being deemed to include the Preliminary
Prospectus (as defined herein), the Amended Preliminary Prospectus (as
defined herein), the Prospectus (as defined herein) and the Prospectus
as amended or supplemented by the Company) or arises out of or is based
upon any omission or alleged omission to state a material fact required
to be stated in the Registration Statement or the
34
Prospectus or necessary to make the statements made therein not
misleading, except insofar as any such loss, damage, expense, liability
or claim arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact contained in and in conformity with
information furnished in writing by or on behalf of any Underwriter
through you to the Company expressly for use with reference to such
Underwriter in such Registration Statement or such Prospectus or arises
out of or is based upon any omission or alleged omission to state a
material fact in connection with such information required to be stated
in such Registration Statement or such Prospectus or necessary to make
such information not misleading or (ii) any untrue statement or alleged
untrue statement made by the Company in Section 3 of this Agreement or
the failure by the Company to perform when and as required any
agreement or covenant contained herein or (iii) any untrue statement or
alleged untrue statement of any material fact contained in any audio or
visual materials provided by the Company or based upon written
information furnished by or on behalf of the Company including, without
limitation, slides, videos, films, tape recordings, used in connection
with the marketing of the Shares; provided, however, that the
indemnification contained in this paragraph (a) with respect to any
Preliminary Prospectus or the Prospectus shall not inure to the benefit
of any Underwriter from whom the person asserting any such losses,
claims, damages or liabilities purchased Shares, or any person
controlling such Underwriters, if (i) a copy of the appropriate
Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given
by or on behalf of such Underwriter to such person, if required by law
so to have delivered, at or prior to the written confirmation of the
sale of the Shares to such person, (ii) such Prospectus (as to amended
or supplemented) would have cured the defect giving rise to such loss,
claim, damage or liability and (iii) the Company delivered the
appropriate Prospectus to the several Underwriters in requisite
quantity on a timely basis to permit such delivery or sending.
(b) Each Selling Shareholder will, severally, and not jointly,
indemnify, defend and hold harmless each Underwriter, its partners,
directors and officers, and each person who controls each Underwriter
within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing
persons, from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation) which, jointly or
severally, any such Underwriter or any such person may incur under the
Act, the Exchange Act, the common law or otherwise, insofar as such
loss, damage, expense, liability or claim (or actions in respect
thereof) arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact contained in and in conformity with
information furnished in writing by or on behalf of such Selling
Shareholder through the Company expressly for use with reference to
such Selling Shareholder in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment
thereof by the Company), the Preliminary Prospectus, the Amended
Preliminary Prospectus or the Prospectus. The Underwriters acknowledge
that such Selling Shareholder's Disclosure constitutes the only
information so furnished in writing by or on behalf of the several
Selling Shareholders through the Company to you for inclusion in the
Registration Statement, the Preliminary Prospectus, the Amended
Preliminary Prospectus or the Prospectus.
35
If any action, suit or proceeding (together, a "PROCEEDING")
is brought against an Underwriter or any such person in respect of which
indemnity may be sought against the Company and/or the Selling Shareholders
pursuant to the foregoing paragraphs (a) or (b), such Underwriter or such person
shall promptly notify the Company and/or the Selling Shareholders in writing of
the institution of such Proceeding and the Company and/or the Selling
Shareholders shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; PROVIDED, HOWEVER, that the omission to so
notify the Company and/or the Selling Shareholders shall not relieve the Company
and/or the Selling Shareholders from any liability which the Company and/or the
Selling Shareholders may have to any Underwriter or any such person or otherwise
only to the extent that such failure materially and irrevocably prejudices the
Company. Such Underwriter or such person shall have the right to employ its or
their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such Underwriter or of such person unless the
employment of such counsel shall have been authorized in writing by the Company
and/or the Selling Shareholders in connection with the defense of such
Proceeding or the Company and/or the Selling Shareholders shall not have, within
a reasonable period of time in light of the circumstances, employed counsel to
defend such Proceeding or such indemnified party or parties shall have
reasonably concluded based upon the advice of counsel that there may be defenses
available to it or them which are different from, additional to or in conflict
with those available to the Company and/or the Selling Shareholders (in which
case the Company and/or the Selling Shareholders shall not have the right to
direct the defense of such Proceeding on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
Company and/or the Selling Shareholders and paid as incurred (it being
understood, however, that the Company and/or the Selling Shareholders shall not
be liable for the expenses of more than one separate counsel (in addition to any
local counsel) in any one Proceeding or series of related Proceedings in the
same jurisdiction representing the indemnified parties who are parties to such
Proceeding). The Company and/or the Selling Shareholders shall not be liable for
any settlement of any such Proceeding effected without the written consent of
the Company and/or the Selling Shareholders but if settled with the written
consent of the Company and/or the Selling Shareholders, the Company and/or the
Selling Shareholders agree to indemnify and hold harmless any Underwriter and
any such person from and against any loss or liability by reason of such
settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, then the indemnifying party agrees that it shall be
liable for any settlement of any Proceeding effected without its written consent
if (i) such settlement is entered into more than sixty (60) days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement and (iii) such indemnified party
shall have given the indemnifying party at least thirty (30) days' prior notice
of its intention to settle. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened Proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such Proceeding and does not include an admission of fault, culpability or a
36
failure to act, by or on behalf of such indemnified party, such consent not to
be unreasonably withheld.
(c) Each Underwriter will severally, and not jointly,
indemnify, defend and hold harmless the Company, its directors and
officers, each person who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, and each
Selling Shareholder, and the successors and assigns of each foregoing
person from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation) which, jointly or
severally, the Company, the Selling Shareholders or any such person may
incur under the Act, the Exchange Act, the common law or otherwise,
insofar as such loss, damage, expense, liability or claim (or actions
in respect thereof) arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in and in
conformity with information furnished in writing by or on behalf of
such Underwriter through you to the Company expressly for use with
reference to such Underwriter in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment
thereof by the Company), the Preliminary Prospectus, the Amended
Preliminary Prospectus or the Prospectus. The Company and the Selling
Shareholders acknowledge that the Underwriters' Disclosure constitutes
the only information so furnished in writing by or on behalf of the
several Underwriters through you to the Company for inclusion in the
Registration Statement, the Preliminary Prospectus, the Amended
Preliminary Prospectus or the Prospectus.
If any Proceeding is brought against the Company, the Selling
Shareholders or any such person in respect of which indemnity may be sought
against any Underwriter pursuant to the foregoing paragraph (c), the Company,
the Selling Shareholders or such person shall promptly notify such Underwriter
in writing of the institution of such Proceeding and such Underwriter shall
assume the defense of such Proceeding, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of all fees and
expenses; PROVIDED, HOWEVER, that the omission to so notify such Underwriter
shall not relieve such Underwriter from any liability which such Underwriter may
have to the Company and/or the Selling Shareholders or any such person or
otherwise. The Company, the Selling Shareholders or such person shall have the
right to employ its own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of the Company, the Selling Shareholders or
such person unless the employment of such counsel shall have been authorized in
writing by such Underwriter in connection with the defense of such Proceeding or
such Underwriter shall not have, within a reasonable period of time in light of
the circumstances, employed counsel to have charge of the defense of such
Proceeding or such indemnified party or parties shall have reasonably concluded
that there may be defenses available to it or them which are different from,
additional to or in conflict with those available to such Underwriter (in which
case such Underwriter shall not have the right to direct the defense of such
Proceeding on behalf of the indemnified party or parties, but such Underwriter
may employ counsel and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such Underwriter), in any of
which events such fees and expenses shall be borne by such Underwriter and paid
as incurred (it being understood, however, that such Underwriter shall not be
liable for the expenses of more than one separate counsel (in addition to any
local counsel) in any one Proceeding or series of related Proceedings in the
same jurisdiction representing the indemnified parties who are parties to such
Proceeding). No Underwriter shall be liable for any settlement of
37
any such Proceeding effected without the written consent of such Underwriter but
if settled with the written consent of such Underwriter, such Underwriter agrees
to indemnify and hold harmless the Company, the Selling Shareholders and any
such person from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for any
settlement of any Proceeding effected without its written consent if (i) such
settlement is entered into more than sixty (60) days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
not have reimbursed the indemnified party in accordance with such request prior
to the date of such settlement and (iii) such indemnified party shall have given
the indemnifying party at least thirty (30) days' prior notice of its intention
to settle. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened Proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such Proceeding and does
not include an admission of fault, culpability or a failure to act, by or on
behalf of such indemnified party, such consent not to be unreasonably withheld.
(d) If the indemnification provided for in this Section 12 is
unavailable to an indemnified party under subsections (a), (b) or (c)
of this Section 12 in respect of any losses, damages, expenses,
liabilities or claims referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, damages, expenses, liabilities or
claims (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Shareholders on the
one hand and the Underwriters on the other hand from the offering of
the Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Selling
Shareholders on the one hand and of the Underwriters on the other in
connection with the statements or omissions which resulted in such
losses, damages, expenses, liabilities or claims (or actions in respect
thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Selling Shareholders
on the one hand and the Underwriters on the other shall be deemed to be
in the same respective proportions as the total proceeds from the
offering of the Shares purchased under this Agreement (net of
underwriting discounts and commissions but before deducting expenses)
received by the Company and the Selling Shareholders bear to the total
underwriting discounts and commissions received by the Underwriters,
with respect to the Shares purchased under this Agreement, in each case
as set forth in the table on the cover page of the Prospectus. The
relative fault of the Company and the Selling Shareholders on the one
hand and of the Underwriters on the other shall be determined by
reference to, among other things, whether the untrue statement or
alleged untrue statement of a material fact or omission or alleged
omission relates to information supplied by the Company and the Selling
Shareholders or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The
38
amount paid or payable by a party as a result of the losses, damages,
expenses, liabilities and claims referred to in this subsection shall
be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating, preparing to
defend or defending any Proceeding.
(e) The Company, the Selling Shareholders and the Underwriters
agree that it would not be just and equitable if contribution pursuant
to this Section 12 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in subsection (d) above. Notwithstanding the
provisions of this Section 12, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price
at which the Shares underwritten by such Underwriter and distributed to
the public were offered to the public exceeds the amount of any damage
which such Underwriter has otherwise been required to pay by reason of
such untrue statement or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant
to this Section 12 are several in proportion to their respective
underwriting obligations and not joint.
(f) The indemnity and contribution agreements contained in
this Section 12 and the covenants, warranties and representations of
the Company and the Selling Shareholders contained in this Agreement
shall remain in full force and effect regardless of any investigation
made by or on behalf of any Underwriter, its partners, directors or
officers or any person (including each partner, officer or director of
such person) who controls any Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, or by or on behalf of
the Company its directors or officers, any person who controls the
Company within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act or the Selling Shareholders and shall survive any
termination of this Agreement or the issuance and delivery of the
Shares. The Company, the Selling Shareholders and each Underwriter
agree promptly to notify each other of the commencement of any
Proceeding against it and, in the case of the Company, against any of
the Company's officers or directors in connection with the issuance and
sale of the Shares, or in connection with the Registration Statement or
Prospectus.
(g) Notwithstanding any other provision of this Section 12,
the total liability of each Selling Shareholder for indemnification or
contribution under this Section 12 and the covenants, representations
and warranties contained in Section 4 and Section 7 shall not exceed an
amount equal to the number of Shares sold by such Selling Shareholder
hereunder multiplied by the purchase price per share set forth in
Section 2 hereof.
13. NOTICES. Except as otherwise herein provided, all
statements, requests, notices and agreements shall be in writing and sent by
mail, telex, facsimile or telegram and, if to the Underwriters, shall be
sufficient in all respects if delivered or sent to UBS Warburg LLC, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, USA, Attention: Syndicate Department, if
39
to the Company, shall be sufficient in all respects if delivered or sent to the
Company at the offices of the Company, if to the Xxxxxx Group Shareholders,
shall be sufficient in all respects if delivered or sent to them at [________]
, Attention: [________], and if to GTCR or GTCR Associates, shall be
sufficient in all respects if delivered or sent to them at [________],
Attention: [________].
14. GOVERNING LAW; CONSTRUCTION. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("CLAIM"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
15. SUBMISSION TO JURISDICTION. Except as set forth below, no
Claim may be commenced, prosecuted or continued in any court other than the
courts of the State of New York located in the City and County of New York or in
the United States District Court for the Southern District of New York, which
courts shall have exclusive jurisdiction over the adjudication of such matters,
and the Company and the Selling Shareholders each consents to the non-exclusive
jurisdiction of such courts and personal service with respect thereto. The
Company and the Selling Shareholders each hereby consents to personal
jurisdiction, service and venue in any court in which any Claim arising out of
or in any way relating to this Agreement is brought by any third party against
UBSW or any indemnified party. Each of the Underwriters, the Company and the
Selling Shareholders (on their respective behalfs and, to the extent permitted
by applicable law, on behalf of their respective shareholders and affiliates)
waives all right to trial by jury in any action, proceeding or counterclaim
(whether based upon contract, tort or otherwise) in any way arising out of or
relating to this Agreement. The Company and the Selling Shareholders agree that
a final judgment in any such action, proceeding or counterclaim brought in any
such court shall be conclusive and binding upon the Company and the Selling
Shareholders, as the case may be, and may be enforced in any other courts in the
jurisdiction of which the Company is or may be subject, by suit upon such
judgment.
By execution and delivery of this Agreement, each of the
Company and each of the Selling Shareholders acknowledges that it has, by
separate written instrument, appointed and designated, without power of
revocation, Weil, Gotshal & Xxxxxx LLP, with offices on the date hereof located
at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (and any successor entity) as its
authorized agent (the "AUTHORIZED AGENT") to accept and acknowledge on its
behalf service of any and all process which may be served in any Claim in any
way relating to or arising out of this Agreement or the transactions
contemplated hereby brought in such New York State or Federal court sitting in
The City of New York. Such service may be made by delivering a copy of such
process to each of the Company and such Selling Shareholder in care of the
Authorized Agent at the address specified above for the Authorized Agent and
obtaining a receipt therefor, and the Company hereby irrevocably authorizes and
directs the Authorized Agent to accept such service on its behalf. Each of the
Company and each of the Selling Shareholders represents and warrants that the
Authorized Agent has agreed to act as said agent for service of process, and
agrees that service of process in such manner upon the Authorized Agent shall be
deemed to the dullest extent permitted by applicable law, in every respect
effective service of process upon each of the Company and such Selling
Shareholder in any Claim. Each of the Company and each of the Selling
Shareholders further agree 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
40
designation and appointment of the Authorized Agent in full force and effect.
Nothing herein contained shall, however, in any manner limit the rights of the
Underwriters to serve process in any other manner permitted by applicable law or
obtain jurisdiction over the Company or any of the Selling Shareholders or bring
suits, actions or proceedings against the Company or any of the Selling
Shareholders in such other jurisdictions, and in such manner as may be permitted
by applicable law.
16. WAIVER OF IMMUNITY. The Company and each of the Selling
Shareholders irrevocably waive, to the fullest extent permitted by applicable
law, with respect to itself and its revenues and assets (irrespective of their
use or intended use), all immunity on the grounds of sovereignty or other
similar grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief by
way of injunction or order for specific performance or for recovery of property,
(iv) attachment of the Company's or each Selling Shareholder's assets (whether
before or after judgment) and (v) execution or enforcement of any judgment to
which the Company or any of the Selling Shareholders or its revenues or assets
might otherwise be entitled in any suit, action or proceeding in the courts of
any jurisdiction and irrevocably agrees, to the extent permitted by applicable
law, that neither the Company nor any of the Selling Shareholders will claim any
such immunity in any suit, action or proceeding.
17. JUDGMENT CURRENCY. The Company and each Selling
Shareholder that is not a United States person (as that term is defined under
Regulation S under the Act) hereby covenant and agree that the following
provisions shall apply to conversion of currency in the case of this Agreement:
(a) If for the purpose of obtaining judgment in, or enforcing
the judgment of, any court in any country other than the United States,
it becomes necessary to convert into any other currency (the "JUDGMENT
CURRENCY") an amount due in United States Dollars, then the conversion
shall be made at the rate of exchange prevailing on the Business Day
before the day which judgment is given or the order of enforcement is
made, as the case may be. The term "RATE(S) OF EXCHANGE" shall mean the
rate at which the Purchasers are able or would have been able on the
relevant date to purchase at such money center bank in the City of New
York as you designate at such time, United States Dollars with judgment
currency above and includes any premiums and costs of exchange payable.
(b) The Company and, where applicable, such Selling
Shareholder hereby agree to indemnify the Underwriters and each other
indemnified party related to any Underwriter against any loss incurred
by any of them as a result of any judgment or order being given or made
for any amount due under this Agreement and such judgment or order
being expressed and paid in the judgment currency and as a result of
any variation as between (i) the rate of exchange at which the United
States Dollar amount is converted into the judgment currency for the
purpose of such judgment or order and (ii) the spot rate of exchange in
the City of New York at which the Company on the date of payment of
judgment or order is able to purchase United States Dollars with the
amount of the judgment currency actually paid by the Company. The
foregoing indemnity shall continue in full force and effect
notwithstanding any such judgment or order as aforesaid. The term "SPOT
RATE OF EXCHANGE" shall include any premiums and
41
costs of exchange payable in connection with the purchase of, or
conversion into, United States Dollars.
(c) All calculations under this Agreement based on amounts
which are initially in Canadian Dollars will be converted into United
States Dollars based on the rate of exchange in effect on the date of
calculation and vice versa.
18. PARTIES AT INTEREST. The Agreement herein set forth has
been and is made solely for the benefit of the Underwriters, the Company and the
Selling Shareholders and, to the extent provided in Section 12 and Section 17
hereof, the controlling persons, partners, directors, officers and any other
persons referred to in such section, and their respective successors, assigns,
heirs, personal representatives and executors and administrators. No other
person, partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
19. COUNTERPARTS. This Agreement may be signed by the parties
in one or more counterparts which together shall constitute one and the same
agreement among the parties.
20. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon the Underwriters, the Company and each Selling Shareholder and their
successors and assigns and any successor or assign of any substantial portion of
the Company's, the Selling Shareholders' and any of the Underwriters' respective
businesses and/or assets.
21. TIME OF ESSENCE. Time shall be of the essence of this
Agreement.
22. MISCELLANEOUS. UBSW, an indirect, wholly-owned subsidiary
of UBS AG, is not a bank and is separate from any affiliated bank, including any
U.S. branch or agency of UBS AG. Because UBSW is a separately incorporated
entity, it is solely responsible for its own contractual obligations and
commitments, including obligations with respect to sales and purchases of
securities. Securities sold, offered or recommended by UBSW are not deposits,
are not insured by the Federal Deposit Insurance Corporation, are not guaranteed
by a branch or agency, and are not otherwise an obligation or responsibility of
a branch or agency.
A lending affiliate of UBSW may have lending relationships
with issuers of securities underwritten or privately placed by UBSW. To the
extent required under the securities laws, prospectuses and other disclosure
documents for securities underwritten or privately placed by UBSW will disclose
the existence of any such lending relationships and whether the proceeds of the
issue will be used to repay debts owed to affiliates of UBSW.
23. DEFINITIONS.
"Amended Preliminary Prospectus" means any amendment to the
Preliminary Prospectus.
"Final Prospectus" means the prospectus included in the
registration statement on Form S-1 at the Effective Date (including the
documents incorporated by reference therein including any Supplemented
Prospectus) relating to the offering of the Shares in the United States.
42
"OBCA" means the Business Corporations Act (Ontario).
"Ontario Securities Laws" means the securities laws, rules and
regulations applicable in Ontario as interpreted and applied by the OSC
(including, without limitation, by way of rulings, orders and waivers).
"OSC" means the Ontario Securities Commission.
"Preliminary Prospectus" means the prospectus, dated
[________], 2001, including any supplement thereto, used before the Effective
Date (including any documents incorporated by reference therein) relating to the
offering of the Shares.
"Prospectus Amendment" means any amendment to the Preliminary
Prospectus or the Final Prospectus.
"Supplemented Prospectus" means the Supplemented Prospectus
(with such deletions therefrom and additions thereto as are permitted or
required by Form S-1 and the applicable rules and regulations of the Commission)
used in the United States relating to the offering of the Shares in the United
States.
43
If the foregoing correctly sets forth the understanding among
the Company, the Selling Shareholders and the Underwriters, please so indicate
in the space provided on the following pages for the purpose, whereupon this
letter and your acceptance shall constitute a binding agreement among the
Company, the Selling Shareholders and the Underwriters, severally.
Very truly yours,
DYNACARE INC.
By:
-------------------------------
Name:
Title:
AJLCO Realty Limited
By:
------------------------------
Name:
Title:
JILCO Holdings Ltd.
By:
------------------------------
Name:
Title:
Golder, Thoma, Xxxxxxx, Xxxxxx Fund
V, L.P.
By:
------------------------------
Name:
Title:
GTCR Associates V
By:
------------------------------
Name:
Title:
Accepted and agreed to as of the
date first above written, on behalf of
themselves and the other several Underwriters
named in SCHEDULE A(i)
UBS WARBURG LLC
BANC OF AMERICA SECURITIES LLC
U.S. BANCORP XXXXX XXXXXXX INC.
McDonald Investments Inc., a KeyCorp Company
By: UBS WARBURG LLC
By:
-----------------------------------------------
Name:
Title:
By:
-----------------------------------------------
Name:
Title:
SCHEDULE A(i)
-------------
Number of
Number of Additional
Underwriter Firm Shares Shares
----------- ----------- ------
UBS Warburg LLC......................................
Banc of America Securities LLC.......................
U.S. Bancorp Xxxxx Xxxxxxx Inc.......................
McDonald Investments Inc., a KeyCorp Company.........
--------- -------
Total.................................. 5,000,000 750,000
========= =======
SCHEDULE A(ii)
--------------
Number of
Selling Shareholders Firm Shares
-------------------- -----------
AJLCO Realty Limited(1)...................................... 294,448
JILCO Holdings Ltd(2)........................................ 705,552
Golder, Thoma, Xxxxxxx, Xxxxxx Fund V, L.P.(3)............... 1,297,733
GTCR Associates V(4)......................................... 2,267
Total.................................. 2,300,000
---------
(1) This person has appointed [_______] as its Attorney-in-Fact.
(2) This person has appointed [_______] as its Attorney-in-Fact.
(3) This person has appointed [_______] as its Attorney-in-Fact.
(4) This person has appointed [_______] as its Attorney-in-Fact.
SCHEDULE B(i)
-------------
DYNACARE WHOLLY-OWNED SUBSIDIARIES
I. Canadian Subsidiaries
3024539 Nova Scotia Company
3033331 Nova Scotia Company
563911 Ontario Limited
591893 Alberta Ltd.
896988 Ontario Limited
900747 Ontario Limited
925893 Ontario Limited
949235 Ontario Limited
942489 Ontario Limited
Amherstview Medical Centre Developments Inc.
Dynacare Canada Inc.
Dynacare Xxxxxx Medical Laboratories (Northern Alberta) Inc.
Dynacare Gamma Institutional Laboratory Services Limited
Dynacare G.P. Inc.
Dynacare G.P. Limited
Dynacare International Inc.
Dynacare Laboratories Limited Partnership
Dynacare Realty Inc.
Dynacare X-Ray Services Limited
ExecMed Health Services Inc.
Gamma-Dynacare Leasing Corporation
GDML Leaseco Inc.
Xxxx Xxxxx Equities Limited
L.R.C. Management Services Inc.
Med+Care Partnership
Stockwin Corporation Limited
The Dynacare Health Group Inc.
1004679 Ontario Limited
794475 Ontario Inc.
829318 Ontario Limited
854512 Ontario Limited
908001 Ontario Limited
912536 Ontario Limited
942487 Ontario Limited
942491 Ontario Limited
942492 Ontario Limited
958069 Ontario Limited
977681 Ontario Limited
978550 Ontario Limited
978551 Ontario Limited
D.H.G. Place du Centre Clinique Ltee.
Dynacare Alberta Inc.
Dynacare International Inc.
Dynacare Xxxxxx Medical Laboratories Inc.
Parmed Laboratories Limited
St. Joseph's Health Centre Rehabilitation Clinic Inc.
Toronto Argyro Medical Laboratories Ltd.
Ultra-Med Development Inc.
II. U.S. Subsidiaries
S.V.L. Inc.
Clinical Laboratories Cheyenne
Dynacare Acquisition Inc.
Dynacare, California Holdings Inc.
Dynacare California Shareholder Inc.
Dynacare California Unitholder Inc.
Dynacare Delaware Financing, LLC
Dynacare Financing GP
Dynacare Laboratories Inc.
Dynacare Laboratories Investments Inc.
Dynacare Laboratory Holdings Inc.
Dynacare Laboratory Management Limited
Dynacare Louisiana Inc.
Dynacare Louisiana, L.L.C.
Dynacare Mississippi Inc.
Dynacare Northwest Inc.
Dynacare Southwest Laboratories, Inc.
Dynacare Southwest Laboratories Inc.
Dynacare Texas LP, Inc.
Dynacare Texas Shareholder, Inc.
Dynacare Texas Laboratories, Inc.
LabSouth, Inc.
Dynacare U.S. Financing LLC
Dynacare/WPAHS, LLC
HT/DL LP
SW/DL LP
SCHEDULE B(ii)
--------------
DYNACARE INC. JOINTLY-OWNED SUBSIDIARIES
I. Canadian Partnerships/Joint Ventures/Co-Tenancies
Davisville Medical/Dental Centre Limited Partnership
Dynacare-Gamma Laboratory Partnership
Dynacare Xxxxxx Medical Laboratories
London/CMTS Partnership
London East Medical Centre
Pembroke Co-Tenancy - P.22
X.X. Xxxxxxxx & Associates Ltd.
SD Laboratory Services - P.20
II. U.S. Partnerships/Joint Ventures/Co-Tenancies
DL/UHS, Inc.
HH/DL, L.P.
DL/Xxxxx, L.L.C.
HHD GenPar, Inc.
UHS/DL, L.P.
United/Dynacare LLC
SCHEDULE C(i)
-------------
Dynacare Northwest Inc.
United Dynacare LLC
Labsouth, Inc.
SCHEDULE C(ii)
--------------
Dynacare Gamma Laboratory Partnership
Dynacare Xxxxxx Medical Laboratories
