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UNDERWRITING AGREEMENT
Exhibit 1.1
February __, 2000
FLEETBOSTON XXXXXXXXX XXXXXXXX INC.
U.S. BANCORP XXXXX XXXXXXX INC.
As Representatives of the several Underwriters
c/o FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
INTRODUCTORY. Delano Technology Corporation, an Ontario corporation (the
"Company), proposes to issue and sell to the several underwriters named in
SCHEDULE A (the "Underwriters") an aggregate of 5,000,000 shares (the "Firm
Shares") of its common shares ("Common Shares"). In addition, the Company has
granted to the Underwriters an option to purchase up to an additional 750,000
Common Shares (the "Option Shares") as provided in Section 2. The Firm Shares
and, if and to the extent such option is exercised, the Option Shares are
collectively called the "Shares." FleetBoston Xxxxxxxxx Xxxxxxxx Inc. and U.S.
Bancorp Xxxxx Xxxxxxx Inc. have agreed to act as representatives of the several
Underwriters (in such capacity, the "Representatives") in connection with the
offering and sale of the Shares.
The Company has prepared and filed with the United States Securities and
Exchange Commission (the "Commission") a registration statement on Form F-1
(File No. 333-94505) that contains a form of prospectus to be used in connection
with the public offering and sale of the Shares. Such registration statement, as
amended, including the financial statements, exhibits and schedules thereto, in
the form in which it was declared effective by the Commission under the United
States Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (collectively, the "Securities Act"), including any
information deemed to be a part thereof at the time of effectiveness pursuant to
Rule 430A or Rule 434 under the Securities Act, is called the "Registration
Statement." Any registration statement filed by the Company pursuant to Rule
462(b) under the Securities Act is called the "Rule 462(b) Registration
Statement," and from and after the date and time of filing of the Rule 462(b)
Registration Statement the term "Registration Statement" shall include the Rule
462(b) Registration Statement. Such prospectus, in the form first used by the
Underwriters to confirm sales of the Shares, is called the "U.S. Prospectus."
All references in this Agreement to the Registration Statement, the Rule 462(b)
Registration Statement, a preliminary prospectus or the U.S. Prospectus, or any
amendments or supplements to any of the foregoing, shall include any copy
thereof filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System ("XXXXX").
The Company has prepared and filed with the Alberta Securities Commission
and the Ontario Securities Commission in accordance with the securities laws
applicable in the Provinces of Alberta and Ontario as interpreted and applied by
the Alberta Securities Commission and the Ontario Securities Commission,
respectively (collectively, the "Canadian Securities Laws"), a prospectus dated
February 7, 2000 to be used in connection with the public offering and sale of
the Shares in
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Canada, as well as with additional Common Shares issuable upon exercise of
special warrants issued previously by the Company. Such prospectus, in the form
so filed, including the financial statements included therein, is called the
"Canadian Prospectus." The Canadian Prospectus and the U.S. Prospectus together
are called the "Prospectuses," and each of them is called a "Prospectus."
The Company hereby confirms its agreements with the Underwriters as
follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents, warrants and covenants to each Underwriter as follows:
(a) Compliance with Registration Requirements.
(i) The Registration Statement and any Rule 462(b) Registration
Statement have been declared effective by the Commission under the Securities
Act. The Company has complied to the Commission's satisfaction with all requests
of the Commission for additional or supplemental information. No stop order
suspending the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement is in effect and no proceedings for such purpose have
been instituted or are pending or, to the best knowledge of the Company, are
contemplated or threatened by the Commission. Each preliminary prospectus and
the U.S. Prospectus when filed complied in all material respects with the
Securities Act and was identical to the copy thereof delivered to the
Underwriters for use in connection with the offer and sale of the Shares, except
as may be permitted by Regulation S-T under the Securities Act if filed by
electronic transmission pursuant to XXXXX. Each of the Registration Statement,
any Rule 462(b) Registration Statement and any post-effective amendment thereto,
at the time it became effective and at all subsequent times, complied and will
comply in all material respects with the Securities Act and did not and will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. Each Prospectus, as amended or supplemented, as of its date and at
all subsequent times, did not and will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The representations and warranties set forth in the two
immediately preceding sentences do not apply to statements in or omissions from
the Registration Statement, any Rule 462(b) Registration Statement, or any post-
effective amendment thereto, or either Prospectus, or any amendments or
supplements thereto, made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by the
Representatives expressly for use therein. There are no contracts or other
documents required to be described in either Prospectus or to be filed as
exhibits to the Registration Statement that have not been described or filed as
required.
(ii) A receipt has been obtained in respect of the Canadian
Prospectus from the Alberta Securities Commission and the Ontario Securities
Commission. No other authorization, permit, approval, order or consent of or
filing with any government, governmental agency or body or court of Canada or
the Provinces of Alberta or Ontario is required for the execution and
performance of this Agreement by the Company, including its valid authorization,
issuance, sale and delivery of the Shares as contemplated hereby. The Canadian
Prospectus complies in all material respects with the applicable requirements of
the Canadian Securities Laws.
(b) Offering Materials Furnished to Underwriters. The Company has
delivered to the Representatives three complete conformed copies of the
Registration Statement and of each consent and certificate of experts filed as a
part thereof, and conformed copies of the Registration Statement (without
exhibits), and preliminary prospectuses and each Prospectus, as amended or
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supplemented, in such quantities and at such places as the Representatives have
reasonably requested for each of the Underwriters.
(c) Distribution of Offering Material By the Company. The Company has not
distributed and will not distribute, prior to the later of the Second Closing
Date (as defined below) and the completion of the Underwriters' distribution of
the Shares, any offering material in connection with the offering and sale of
the Shares other than a preliminary prospectus, the Prospectuses and the
Registration Statement.
(d) The Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of, the Company,
enforceable in accordance with its terms, except as rights to indemnification
hereunder may be limited by applicable law and except as the enforcement hereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors or by
general equitable principles.
(e) Authorization of the Shares. The Shares to be purchased by the
Underwriters from the Company have been duly authorized for issuance and sale
pursuant to this Agreement and, when issued and delivered by the Company
pursuant to this Agreement, will be validly issued, fully paid and
nonassessable.
(f) No Applicable Registration or Other Similar Rights. There are no
persons with registration or other similar rights to have any equity or debt
securities registered for sale under the Registration Statement or included in
the offering contemplated by this Agreement, except for such rights as have been
duly waived.
(g) No Material Adverse Change. Subsequent to the respective dates as of
which information is given in each Prospectus, and except as set forth or
contemplated in each Prospectus: (i) there has been no material adverse change,
or any development that could reasonably be expected to result in a material
adverse change, in the condition, financial or otherwise, or in the earnings,
business, operations or prospects, whether or not arising from transactions in
the ordinary course of business, of the Company and its subsidiaries Delano
Technology Europe Limited and Delano Technology Inc. (the "Subsidiaries"),
considered as one entity (any such change or effect, where the context so
requires, is called a "Material Adverse Change" or a "Material Adverse Effect");
(ii) the Company and the Subsidiaries, considered as one entity, have not
incurred any material liability or obligation, indirect, direct or contingent,
not in the ordinary course of business nor entered into any material transaction
or agreement not in the ordinary course of business; (iii) there has been no
dividend or distribution of any kind declared, paid or made by the Company or
either Subsidiary, except for dividends paid to the Company, on any class of
capital stock; and (iv) there has been no repurchase or redemption by the
Company or either Subsidiary of any class of capital stock.
(h) Independent Accountants. KPMG LLP, who have expressed their opinion
with respect to the consolidated financial statements (which term as used in
this Agreement includes the related notes thereto) filed with the Commission as
a part of the Registration Statement and included in the
U.S. Prospectus, are independent public or certified public accountants as
required by the Securities Act.
(i) Preparation of the Financial Statements. The consolidated financial
statements included in each Prospectus present fairly the consolidated financial
position of the Company and the Subsidiaries as of and at the dates indicated
and the results of their operations and cash flows for the periods specified.
Such consolidated financial statements included in the U.S. Prospectus have been
prepared in conformity with generally accepted accounting principles as applied
in the United
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States ("U.S. GAAP"), which principles have been applied on a consistent basis
throughout the periods involved except as may be expressly stated in the related
notes thereto. No other financial statements or supporting schedules are
required to be included in the Registration Statement. The financial data set
forth in the U.S. Prospectus under the captions "Summary--Summary Consolidated
Financial Data," "Selected Consolidated Financial Data" and "Capitalization"
fairly present the information set forth therein on a basis consistent with that
of the audited financial statements contained in the Registration Statement. The
consolidated financial statements included in the Canadian Prospectus have been
prepared in conformity with generally accepted accounting principles as applied
in Canadian ("Canadian GAAP"), which principles have been applied on a
consistent basis throughout the periods involved except as may be expressly
stated in the related notes thereto. No other financial statements are required
to be included in the Canadian Prospectus. The financial data set forth in the
Canadian Prospectus under the captions "Prospectus Summary--Summary Consolidated
Financial Data," "Selected Consolidated Financial Data" and "Capitalization"
fairly present the information set forth therein on a basis consistent with that
of the audited financial statements contained in the Canadian Prospectus.
(j) Company's Accounting System. The Company and the Subsidiaries maintain
a system of accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with Canadian GAAP and U.S.
GAAP and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(k) Subsidiaries of the Company. The Company does not own or control,
directly or indirectly, any corporation, association or other entity other than
the Subsidiaries.
(l) Incorporation and Good Standing of the Company and the Subsidiaries.
Each of the Company and the Subsidiaries has been duly organized and is validly
existing as a corporation in good standing under the laws of the jurisdiction in
which it is organized with full corporate power and authority to own its
properties and conduct its business as described in each Prospectus, and is duly
qualified to do business as a foreign corporation, and is in good standing,
under the laws of each jurisdiction that requires such qualification.
(m) Capitalization of the Subsidiaries. All the outstanding shares of
capital stock of the Subsidiaries have been duly and validly authorized and
issued and are fully paid and nonassessable, and, except as otherwise set forth
in each Prospectus, all outstanding shares of capital stock of the Subsidiaries
are owned by the Company, except such as would not have a Material Adverse
Effect, free and clear of any security interests, claims, liens or encumbrances.
(n) No Prohibition on Subsidiaries from Paying Dividends or Making Other
Distributions. Neither Subsidiary is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such Subsidiary's capital stock, from repaying to the Company
any loans or advances to such Subsidiary from the Company or from transferring
any of such Subsidiary's property or assets to the Company, except as described
in or contemplated by each Prospectus.
(o) Capitalization and Other Capital Stock Matters. The authorized, issued
and outstanding capital stock of the Company is as set forth in the each
Prospectus under the caption "Capitalization" on the basis set forth therein,
other than for subsequent issuances, if any, pursuant to employee benefit plans
described in each Prospectus or upon exercise of outstanding options,
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warrants or special warrants described in each Prospectus. The Common Shares,
including the Shares, conform in all material respects to the description
thereof contained in each Prospectus. All of the issued and outstanding Common
Shares have been duly authorized and validly issued, are fully paid and
nonassessable, and have been issued in compliance with federal and state
securities laws. None of the outstanding Common Shares were issued in violation
of any preemptive rights, rights of first refusal or other similar rights to
subscribe for or purchase securities of the Company. There are no authorized or
outstanding options, warrants, preemptive rights, rights of first refusal or
other rights to purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any capital stock of the Company or either
Subsidiary other than those accurately described in each Prospectus. The
description of the Company's stock option and stock purchase plans, and the
options or other rights granted thereunder, set forth in each Prospectus
accurately and fairly presents the information required by the Securities Act or
the Canadian Securities Laws, as applicable, to be shown with respect to such
plans, options and rights.
(p) Stock Exchange Listing. The Shares have been approved for inclusion on
the Nasdaq National Market, subject only to official notice of issuance.
(q) No Consents, Approvals or Authorizations Required. No consent,
approval, authorization, filing with or order of any court or governmental
agency or regulatory body is required in connection with the transactions
contemplated herein, except such as have been obtained or made under the
Securities Act and the Canadian Securities Laws and such as may be required (i)
under the blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Shares by the Underwriters in the manner contemplated here
and in each Prospectus and (ii) by the National Association of Securities
Dealers, Inc. (the "NASD").
(r) Non-Contravention of Existing Instruments Agreements. Neither the
issue and sale of the Shares nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach or violation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or either Subsidiary
pursuant to, (i) the articles or by-laws of the Company or either Subsidiary,
(ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition, covenant or
instrument to which the Company or either Subsidiary is a party or bound or to
which its or their property is subject or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or either
Subsidiary of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the Company, either
Subsidiary or any of their respective properties.
(s) No Defaults or Violations. Neither the Company nor either Subsidiary
is in violation or default of (i) any provision of its articles or by-laws, (ii)
the terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition, covenant or
instrument to which it is a party or bound or to which its property is subject
or (iii) any statute, law, rule, regulation, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or either Subsidiary or any
of their respective properties, as applicable, except any such violation or
default that would not, singly or in the aggregate, result in a Material Adverse
Change or except as otherwise disclosed in each Prospectus.
(t) No Actions, Suits or Proceedings. Except as otherwise disclosed in
each Prospectus, no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company,
either Subsidiary or their respective properties is pending or, to the best
knowledge of the Company, threatened that (i) could reasonably be expected to
have a
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Material Adverse Effect on the performance of this Agreement or the consummation
of any of the transactions contemplated hereby or (ii) could reasonably be
expected to result in a Material Adverse Effect.
(u) All Necessary Permits, Etc. Except as otherwise disclosed in each
Prospectus, the Company and the Subsidiaries possess such valid and current
certificates, authorizations or permits issued by the appropriate state, federal
or foreign regulatory agencies or bodies necessary to conduct their respective
businesses, and neither the Company nor either Subsidiary has received any
notice of proceedings relating to the revocation or modification of, or
non-compliance with, any such certificate, authorization or permit that, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, could reasonably be expected to result in a Material Adverse Change.
(v) Title to Properties. Except as otherwise disclosed in each Prospectus,
each of the Company and the Subsidiaries has good and marketable title to all
the properties and assets reflected as owned in the consolidated financial
statements referred to in Section 1(i) above, in each case free and clear of any
security interests, mortgages, liens, encumbrances, equities, claims and other
defects, except such as do not materially and adversely affect the value of such
property and do not materially interfere with the use made or proposed to be
made of such property by the Company and the Subsidiaries. The real property,
improvements, equipment and personal property held under lease by the Company
and the Subsidiaries are held under valid and enforceable leases, with such
exceptions as are not material and do not materially interfere with the use made
or proposed to be made of such real property, improvements, equipment or
personal property by the Company and the Subsidiaries.
(w) Tax Law Compliance. The Company and the Subsidiaries have filed all
necessary federal, provincial and foreign income and franchise tax returns (in
Canada, the United States and otherwise) and have paid all taxes required to be
paid by either of them and, if due and payable, any related or similar
assessment, fine or penalty levied against either of them, except where the
failure to file such returns or pay such taxes has not had and will not have a
Material Adverse Effect. The Company has made adequate charges, accruals and
reserves in the applicable financial statements referred to in Section 1(i)
above in respect of all federal, provincial and foreign income and franchise
taxes for all periods as to which the tax liability of the Company or either
Subsidiary has not been finally determined. The Company is not aware of any tax
deficiency that has been or might be asserted or threatened against the Company
that could result in a Material Adverse Change.
(x) Intellectual Property Rights. Each of the Company and the Subsidiaries
owns or possesses adequate rights to use all patents, patent rights or licenses,
inventions, collaborative research agreements, trade secrets, know-how,
trademarks, service marks, trade names and copyrights that are necessary to
conduct its businesses as described in the Registration Statement and each
Prospectus. The expiration of any patents, patent rights, trade secrets,
trademarks, service marks, trade names or copyrights would not result in a
Material Adverse Change that is not otherwise disclosed in each Prospectus. The
Company has not received any notice of, and has no knowledge of, any
infringement of or conflict with asserted rights of the Company by others with
respect to any patent, patent rights, inventions, trade secrets, know-how,
trademarks, service marks, trade names or copyrights. The Company has not
received any notice of, and has no knowledge of, any infringement of or conflict
with asserted rights of others with respect to any patent, patent rights,
inventions, trade secrets, know-how, trademarks, service marks, trade names or
copyrights that, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, might have a Material Adverse Change. To the
Company's knowledge, there is no claim being made against the Company regarding
patents, patent rights or licenses, inventions, collaborative research, trade
secrets, know-how, trademarks, service marks, trade names or copyrights. The
Company and the
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Subsidiaries do not in the conduct of their businesses as now or proposed to be
conducted as described in the Prospectuses infringe or conflict with any right
or patent of any third party, or any discovery, invention, product or process
that is the subject of a patent application filed by any third party, known to
the Company or either Subsidiary, which such infringement or conflict is
reasonably likely to result in a Material Adverse Change.
(y) Year 2000 Preparedness. There are no issues related to the
preparedness of the Company and the Subsidiaries for the Year 2000 that are of a
character required to be described or referred to in the Registration Statement
or the U.S. Prospectus by the Securities Act that have not been accurately
described in the Registration Statement or the U.S. Prospectus or that are of a
character required to be described or referred to in the Canadian Prospectus by
the Canadian Securities Laws that have not been accurately described in the
Canadian Prospectus. The Company has inquired of material vendors as to their
preparedness for the Year 2000 and has disclosed in the Registration Statement
and each Prospectus any issues that might reasonably be expected to result in
any Material Adverse Change.
(z) No Transfer Taxes or Other Fees. There are no transfer taxes or other
similar fees or charges under federal law or the laws of any province, or any
political subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance and sale of the Shares
as contemplated by this Agreement.
(aa) Company Not an "Investment Company." The Company has been advised of
the requirements under the United States Investment Company Act of 1940, as
amended, and the rules and regulations promulgated thereunder (the "Investment
Company Act"). The Company is not, and after receipt of payment for the Shares
will not be, an "investment company" or an entity "controlled" by an "investment
company" within the meaning of the Investment Company Act and will conduct its
business in a manner so that it will not become subject to the Investment
Company Act.
(bb) Insurance. The Company and the Subsidiaries are insured by
recognized, financially sound and reputable institutions with policies in such
amounts and with such deductibles and covering such risks as are generally
deemed adequate and customary for their businesses, including policies covering
real and personal property owned or leased by the Company and the Subsidiaries
against theft, damage, destruction, acts of vandalism and earthquakes, general
liability and directors' and officers' liability. The Company has no reason to
believe that it or either Subsidiary will not be able (i) to renew its existing
insurance coverage as and when such policies expire or (ii) to obtain comparable
coverage from similar institutions as may be necessary or appropriate to conduct
its business as now conducted and at a cost that would not result in a Material
Adverse Change. Neither the Company nor either Subsidiary has been denied any
insurance coverage that it has sought or for which it has applied.
(cc) Labor Matters. To the best of Company's knowledge, no labor
disturbance by the employees of the Company or either Subsidiary exists or is
imminent; and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal customers that might be
expected to result in a Material Adverse Change.
(dd) No Price Stabilization or Manipulation. The Company has not taken and
will not take, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of the
price of the Common Shares to facilitate the sale or resale of the Shares.
(ee) Lock-Up Agreements. Each officer and director of the Company and each
holder of record of Common Shares has agreed to sign an agreement substantially
in the form of EXHIBIT A
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hereto (the "Lock-up Agreements"). The Company has provided to counsel for the
Underwriters a complete and accurate list of all securityholders of the Company
and the number and type of securities held by each securityholder. The Company
has provided to counsel for the Underwriters true, accurate and complete copies
of all of the Lock-up Agreements presently in effect or effected hereby. The
Company hereby represents and warrants that it will not release any of its
officers, directors or other shareholders from any Lock-up Agreements currently
existing or hereafter effected without the prior written consent of FleetBoston
Xxxxxxxxx Xxxxxxxx Inc.
(ff) Related Party Transactions. There are no business relationships or
related-party transactions involving the Company, either Subsidiary or any other
person (i) required by the Securities Act to be described in the U.S. Prospectus
that have not been described as required or (ii) required by the Canadian
Securities Laws to be described in the Canadian Prospectus that have not been
described as required.
(gg) No Unlawful Contributions or Other Payments. Neither the Company nor
either Subsidiary, nor to the knowledge of the Company any employee or agent of
the Company or either Subsidiary, has made any contribution or other payment to
any official of, or candidate for, any federal, state or foreign office in
violation of any law or of the character required to be disclosed in either
Prospectus.
(hh) ERISA Compliance. Neither the Company nor either Subsidiary has
established or maintains any "employee benefit plan" (as defined under the
United States Employee Retirement Income Security Act of 1974, as amended, and
the regulations and published interpretations thereunder (collectively,
"ERISA")) (as defined below) that is required to be qualified under, or is
otherwise subject to the requirements of, ERISA.
Any certificate signed by an officer of the Company and delivered to
the Representatives or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
set forth therein.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) The Firm Shares. The Company agrees to issue and sell to the several
Underwriters the Firm Shares upon the terms herein set forth. On the basis of
the representations, warranties and agreements herein contained, and upon the
terms but subject to the conditions herein set forth, the Underwriters agree,
severally and not jointly, to purchase from the Company the respective numbers
of Firm Shares set forth opposite their names on SCHEDULE A. The purchase price
per Firm Share to be paid by the several Underwriters to the Company shall be
US$___ per share. As compensation to the Underwriters for their commitments
hereunder, the Company at the Closing Date (as defined below) will pay to
FleetBoston Xxxxxxxxx Xxxxxxxx Inc., for the accounts of the Underwriters, a
commission equal to US$____ per Firm Share.
(b) The First Closing Date. Delivery of the Firm Shares to be purchased by
the Underwriters and payment therefor shall be made by the Company and the
Representatives at 9 A.M., Toronto time, at the offices of Osler, Xxxxxx &
Harcourt (or at such other place as may be agreed upon between the
Representatives and the Company), (i) on the third full business day following
the first day that Shares are traded, (ii) if this Agreement is executed and
delivered after 4:30 P.M., Toronto time, the fourth full business day following
the day that this Agreement is executed and delivered or (iii) at such other
time and date not later that seven full business days following the first day
that Shares are traded as the Representatives and the Company may determine (or
at such time and date to which payment and delivery shall have been postponed
pursuant to Section 8 hereof), such time and date of payment and delivery being
herein called the "Closing Date"; provided, however,
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that if the Company has not made available to the Representatives copies of each
Prospectus within the time provided in Section 4(d) hereof, the Representatives
may, in their sole discretion, postpone the Closing Date until no later that two
full business days following delivery of copies of each Prospectus to the
Representatives.
(c) The Option Shares; the Second Closing Date. In addition, on the basis
of the representations, warranties and agreements herein contained, and upon the
terms but subject to the conditions herein set forth, the Company hereby grants
an option to the several Underwriters to purchase, severally and not jointly, up
to an aggregate of 750,000 Option Shares from the Company at the purchase price
per share to be paid by the Underwriters for the Firm Shares. The 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 option
granted hereunder may be exercised once and only once at any time upon written
notice by the Representatives to the Company, which notice may be given at any
time within 30 days from the date of this Agreement. Such notice shall set forth
the aggregate number of Option Shares as to which the option is being exercised
and the date and time when the Option Shares are to be delivered. The time and
date of delivery of the Option Shares, if subsequent to the First Closing Date,
is called the "Second Closing Date" and shall be determined by the
Representatives and shall not be earlier than three nor later than five full
business days after delivery of such notice of exercise. If any Option Shares
are to be purchased, each Underwriter agrees, severally and not jointly, to
purchase the number of Option Shares (subject to such adjustments to eliminate
fractional shares as the Representatives may determine) that bears the same
proportion to the total number of Option Shares to be purchased as the number of
Firm Shares set forth on SCHEDULE A opposite the name of such Underwriter bears
to the total number of Firm Shares. The Representatives may cancel the option at
any time prior to its expiration by giving written notice of such cancellation
to the Company. As compensation to the Underwriters for their commitments
hereunder, the Company at the Second Closing Date will pay to FleetBoston
Xxxxxxxxx Xxxxxxxx Inc., for the accounts of the Underwriters, a commission
equal to US$____ per Option Share.
(d) Public Offering of the Shares. The Representatives hereby advise the
Company that the Underwriters intend to offer for sale to the public, as
described in the Prospectuses, their respective portions of the Shares as soon
after this Agreement has been executed and the Registration Statement has been
declared effective as the Representatives, in their sole judgment, have
determined is advisable and practicable.
(e) Payment for the Shares. Payment for the Shares shall be made at the
First Closing Date (and, if applicable, at the Second Closing Date) by wire
transfer in immediately available funds to the order of the Company.
It is understood that the Representatives have been authorized, for
their own account and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase price for, the
Firm Shares and any Option Shares the Underwriters have agreed to purchase.
FleetBoston Xxxxxxxxx Xxxxxxxx Inc., individually and not as a Representative of
the Underwriters, may (but shall not be obligated to) make payment for any
Shares to be purchased by any Underwriter whose funds shall not have been
received by the Representatives by the First Closing Date or the Second Closing
Date, as the case may be, for the account of such Underwriter, but any such
payment shall not relieve such Underwriter from any of its obligations under
this Agreement.
(f) Delivery of the Shares. The Company shall deliver, or cause to be
delivered, a credit representing the Firm Shares to an account or accounts at
The Depository Trust Company, as designated by the Representatives for the
accounts of the Representatives and the several
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Underwriters at the First Closing Date, against the irrevocable release of a
wire transfer of immediately available funds for the amount of the purchase
price therefor. The Company shall also deliver, or cause to be delivered a
credit representing the Option Shares the Underwriters have agreed to purchase
at the First Closing Date (or the Second Closing Date, as the case may be), to
an account or accounts at The Depository Trust Company as designated by the
Representatives for the accounts of the Representatives and the several
Underwriters, against the irrevocable release of a wire transfer of immediately
available funds for the amount of the purchase price therefor. Time shall be of
the essence, and delivery at the time and place specified in this Agreement is a
further condition to the obligations of the Underwriters.
(g) Delivery of Prospectus to the Underwriters. Not later than 3 P.M.,
Toronto time, on the second business day following the date the Shares are
released by the Underwriters for sale to the public, the Company shall deliver
or cause to be delivered copies of each Prospectus in such quantities and at
such places as the Representatives shall request.
SECTION 3. COVENANTS OF THE COMPANY. The Company further covenants and
agrees with each Underwriter as follows:
(a) Registration Statement Matters. The Company will (i) use its best
efforts to cause a registration statement on Form 8-A (the "Form 8-A
Registration Statement") as required by the United States Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder
(collectively, the "Exchange Act") to become effective simultaneously with the
Registration Statement, (ii) use its best efforts to cause the Registration
Statement to become effective or, if the procedure in Rule 430A of the
Securities Act is followed, to prepare and timely file with the Commission under
Rule 424(b) under the Securities Act a U.S. Prospectus in a form approved by the
Representatives containing information previously omitted at the time of
effectiveness of the Registration Statement in reliance on Rule 430A of the
Securities Act and (iii) not file any amendment to the Registration Statement or
supplement to the U.S. Prospectus of which the Representatives shall not
previously have been advised and furnished with a copy or to which the
Representatives shall have reasonably objected in writing or which is not in
compliance with the Securities Act. If the Company elects to rely on Rule 462(b)
under the Securities Act, the Company shall file a Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b) under the
Securities Act prior to the time confirmations are sent or given, as specified
by Rule 462(b)(2) under the Securities Act, and shall pay the applicable fees in
accordance with Rule 111 under the Securities Act.
(b) Securities Act Compliance. The Company will advise the Representatives
promptly (i) when the Registration Statement or any post-effective amendment
thereto shall have become effective, (ii) of receipt of any comments from the
Commission, (iii) of any request of the Commission for amendment of the
Registration Statement or for supplement to the U.S. Prospectus or for any
additional information and (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the use of
the U.S. Prospectus or of the institution of any proceedings for that purpose.
The Company will use its best efforts to prevent the issuance of any such stop
order preventing or suspending the use of the U.S. Prospectus and to obtain as
soon as possible the lifting thereof, if issued.
(c) Blue Sky Compliance. The Company will cooperate with the
Representatives and counsel for the Underwriters in endeavoring to qualify the
Shares for sale under the securities laws of such jurisdictions (both national
and foreign) as the Representatives may reasonably have designated in writing
and will make such applications, file such documents, and furnish such
information as may be reasonably required for that purpose, provided the Company
shall not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction where it is
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not now so qualified or required to file such a consent or where it would become
subject to taxation as a foreign corporation. The Company will, from time to
time, prepare and file such statements, reports and other documents, as are or
may be required to continue such qualifications in effect for so long a period
as the Representatives may reasonably request for distribution of the Shares.
(d) Amendments and Supplements to the Prospectuses and Other Securities
Act Matters. The Company will comply with the Securities Act and the Exchange
Act so as to permit the completion of the distribution of the Shares as
contemplated in this Agreement and each Prospectus. If during the period in
which a prospectus is required by law to be delivered by an Underwriter or
dealer, any event shall occur as a result of which, in the judgment of the
Company or in the reasonable opinion of the Representatives or counsel for the
Underwriters, it becomes necessary to amend or supplement either Prospectus in
order to make the statements therein, in the light of the circumstances existing
at the time such Prospectus is delivered to a purchaser, not misleading, or, if
it is necessary at any time to amend or supplement such Prospectus to comply
with any law, the Company promptly will prepare and file with the Commission,
and furnish at its own expense to the Underwriters and to dealers, an
appropriate amendment to the Registration Statement or supplement to such
Prospectus so that such Prospectus as so amended or supplemented will not, in
the light of the circumstances when it is so delivered, be misleading, or so
that such Prospectus will comply with the law.
(e) Canadian Securities Laws Compliance. The Company will not file any
amendment or supplement to the Canadian Prospectus of which the Representatives
shall not previously have been advised and furnished with a copy or to which the
Representatives shall have reasonably objected in writing or which is not in
compliance with the Canadian Securities Laws. The Company will advise the
Representatives promptly of any request of the Alberta Securities Commission or
the Ontario Securities Commission for an amendment of or supplement to the
Canadian Prospectus or for any additional information or the issuance by the
Alberta Securities Commission or the Ontario Securities Commission of any order
suspending the use of the Canadian Prospectus or of the institution of any
proceedings for that purpose. The Company will use its best efforts to prevent
the issuance of any such order preventing or suspending the use of the Canadian
Prospectus and to obtain as soon as possible the lifting thereof, if issued. The
Company will comply with the Canadian Securities Laws so as to permit the
completion of the distribution of the Shares as contemplated in this Agreement
and each Prospectus.
(f) Copies of any Amendments and Supplements to the Prospectuses. The
Company agrees to furnish the Representatives, without charge, during the period
beginning on the date hereof and ending on the later of the First Closing Date
or such date, as in the opinion of counsel for the Underwriters, neither
Prospectus is required by law to be delivered in connection with sales by an
Underwriter or dealer (the "Prospectus Delivery Period"), as many copies of each
Prospectus and any amendments and supplements thereto as the Representatives may
reasonably request.
(g) Insurance. The Company shall (i) obtain directors' and officers'
liability insurance in the minimum amount of $10,000,000 that shall apply to the
offering contemplated hereby and (ii) cause FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
to be added as an additional insured to such policy in respect of the offering
contemplated hereby.
(h) Notice of Subsequent Events. If at any time during the ninety-day
period after the Registration Statement becomes effective, any rumor,
publication or event relating to or affecting the Company shall occur as a
result of which in your opinion the market price of the Company Shares has been
or is likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of either
Prospectus), the Company will, after written notice from you advising the
Company to the effect set forth above, forthwith prepare, consult
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with you concerning the substance of and disseminate a press release or other
public statement, reasonably satisfactory to you, responding to or commenting on
such rumor, publication or event.
(i) Use of Proceeds. The Company shall apply the net proceeds from the
sale of the Shares sold by it in the manner described under the caption "Use of
Proceeds" in each Prospectus.
(j) Transfer Agent. The Company shall engage and maintain, at its expense,
a registrar and transfer agent for the Common Shares.
(k) Earnings Statement. As soon as practicable, the Company will make
generally available to its security holders and to the Representatives an
earnings statement (which need not be audited) covering the twelve-month period
ending March 31, 2001 that satisfies the provisions of Section 11(a) of the
Securities Act.
(l) Periodic Reporting Obligations. During the Prospectus Delivery Period
the Company shall file, on a timely basis, with the Commission and the Nasdaq
National Market all reports and documents required to be filed under the
Exchange Act.
(m) Agreement Not to Offer or Sell Additional Securities. The Company will
not, without the prior written consent of FleetBoston Xxxxxxxxx Xxxxxxxx Inc.,
for a period of 180 days following the date of the U.S. Prospectus, offer, sell
or contract to sell, or otherwise dispose of or enter into any transaction that
is designed to, or could be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash settlement or
otherwise by the Company or any affiliate of the Company or any person in
privity with the Company or any affiliate of the Company) directly or
indirectly, or announce the offering of, any other Common Shares or any
securities convertible into, or exchangeable for, Common Shares; provided,
however, that the Company may (i) issue and sell the Firm Shares and the Option
Shares to the Underwriters, (ii) issue and sell Common Shares pursuant to any
director or employee stock option or purchase plan of the Company in effect at
the date of the U.S. Prospectus and described in the U.S. Prospectus, (iii)
issue options under its existing stock option and incentive plans, provided such
options do not vest prior to the expiration of the 180-day period commencing on
the date of the U.S. Prospectus (the "Lock-Up Period") and (iv) the Company may
issue Common Shares issuable upon the conversion of securities or the exercise
of warrants or special warrants outstanding at the date of the U.S. Prospectus
and described in the U.S. Prospectus.
(n) Future Reports to the Representatives. During the period of three
years hereafter the Company will furnish to the Representatives: (i) as soon as
practicable after the end of each fiscal year, copies of the Annual Report of
the Company containing the balance sheet of the Company as of the close of such
fiscal year and statements of income, shareholders' equity and cash flows for
the year then ended and the opinion thereon of the Company's independent public
or certified public accountants; (ii) as soon as practicable after the filing
thereof, copies of each proxy statement, Annual Report on Form 10-K, Annual
Report on Form 20-F, Annual Report on Form 40-F, Quarterly Report on Form 10-Q,
or Current Report on Form 8-K or Form 6-K, as applicable, or other report filed
by the Company with the Commission, the NASD or any securities exchange; and
(iii) as soon as available, copies of any report or communication of the Company
mailed generally to holders of its capital stock.
(o) Concurrent Canadian Private Placements. Concurrently with the Closing,
the Company will sell 900,000 Common Shares (the "Private Shares") to two
entities in Canada. The offering and sale of the Private Shares has been and
will be effected in accordance with Regulation S under the Securities Act and
therefore are exempt from registration under the Securities Act. The offering
and sale of the Private Shares has been and will be effected in accordance with
[Part ___] of the
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Securities Act (Ontario) and therefore will be exempt from the [prospectus
filing requirements] of the Securities Act (Ontario). No filing with any
government or governmental agency or body is required to be made under the
Securities Act, the Canadian Securities Laws or any other United States or
Canadian federal, provincial or state laws or regulations in connection with the
offering and sale of the Private Shares, except such as have been duly made.
SECTION 4. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Shares as
provided herein on the First Closing Date and, with respect to the Option
Shares, the Second Closing Date, shall be subject to the accuracy of the
representations and warranties on the part of the Company set forth in Section 1
hereof as of the date hereof and as of the First Closing Date as though then
made and, with respect to the Option Shares, as of the Second Closing Date as
though then made, to the timely performance by the Company of its covenants and
other obligations hereunder, and to each of the following additional conditions:
(a) Compliance with Registration Requirements; No Stop Order; No Objection
from the NASD. The Registration Statement shall have become effective prior to
the execution of this Agreement, or at such later date as shall be consented to
in writing by you; no stop order suspending the effectiveness thereof shall have
been issued and no proceedings for that purpose shall have been initiated or, to
the knowledge of the Company or any Underwriter, threatened by the Commission,
and any request of the Commission for additional information (to be included in
the Registration Statement or the U.S. Prospectus or otherwise) shall have been
complied with to the satisfaction of Underwriters' counsel; no order suspending
the effectiveness of the Canadian Prospectus shall have been issued and no
proceedings for that purpose shall have been initiated or, to the knowledge of
the Company or any Underwriter, threatened by the Alberta Securities Commission
or the Ontario Securities Commission, and any request of the Alberta Securities
Commission or the Ontario Securities Commission for additional information (to
be included in the Canadian Prospectus or otherwise) shall have been complied
with to the satisfaction of Underwriters' counsel; and the NASD shall have
raised no objection to the fairness and reasonableness of the underwriting terms
and arrangements.
(b) Corporate Proceedings. All corporate proceedings and other legal
matters in connection with this Agreement, the form of Registration Statement
and each Prospectus, and the registration, authorization, issue, sale and
delivery of the Shares, shall have been reasonably satisfactory to Underwriters'
counsel, and such counsel shall have been furnished with such papers and
information as they may reasonably have requested to enable them to pass upon
the matters referred to in this Section.
(c) No Material Adverse Change. Subsequent to the execution and delivery
of this Agreement and prior to the First Closing Date, or the Second Closing
Date, as the case may be, there shall not have been any Material Adverse Change
in the condition (financial or otherwise), earnings, operations, business or
business prospects of the Company and the Subsidiaries considered as one
enterprise from that set forth in the Registration Statement and each Prospectus
that, in your sole judgment, is material and adverse and makes it, in your sole
judgment, impracticable or inadvisable to proceed with the public offering of
the Shares as contemplated by the Prospectuses.
(d) Opinions of Counsel for the Company. You shall have received on the
First Closing Date, or the Second Closing Date, as the case may be, opinion of
Osler, Xxxxxx & Harcourt LLP, counsel for the Company, and Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, special U.S. counsel for the Company, substantially in the
form of EXHIBIT B and EXHIBIT C hereto, respectively, each dated the First
Closing Date, or the Second Closing Date, and addressed to the Underwriters,
with reproduced
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copies or signed counterparts thereof for each of the Underwriters. Counsel
rendering the opinion contained in EXHIBIT B may rely as to questions of law not
involving the federal laws of Canada or the laws of the Province of Ontario upon
opinions of local counsel. Both counsel may rely as to questions of fact upon
representations or certificates of officers of the Company, and of government
officials, in which case their opinion is to state that they are so relying and
that they have no knowledge of any material misstatement or inaccuracy in any
such opinion, representation or certificate. Copies of any opinion,
representation or certificate so relied upon by either counsel shall be
delivered to you, as Representatives of the Underwriters, and to Underwriters'
counsel.
(e) Opinion of Counsel for the Underwriters. You shall have received on
the First Closing Date or the Second Closing Date, as the case may be, an
opinion of Xxxxx, Xxxx & Xxxxx LLP, substantially in the form of EXHIBIT D
hereto. The Company shall have furnished to such counsel such documents as they
may have requested for the purpose of enabling them to pass upon such matters.
(f) Accountants' Comfort Letter. You shall have received on the First
Closing Date and on the Second Closing Date, as the case may be, a letter from
KPMG LLP addressed to the Underwriters, dated the First Closing Date or the
Second Closing Date, as the case may be, confirming that they are independent
certified public accountants with respect to the Company within the meaning of
the Securities Act and the applicable published Rules and Regulations and based
upon the procedures described in such letter delivered to you concurrently with
the execution of this Agreement (herein called the "Original Letter"), but
carried out to a date not more than four business days prior to the First
Closing Date or the Second Closing Date, as the case may be, (i) confirming, to
the extent true, that the statements and conclusions set forth in the Original
Letter are accurate as of the First Closing Date or the Second Closing Date, as
the case may be, and (ii) setting forth any revisions and additions to the
statements and conclusions set forth in the Original Letter that are necessary
to reflect any changes in the facts described in the Original Letter since the
date of such letter, or to reflect the availability of more recent financial
statements, data or information. The letter shall not disclose any change in the
condition (financial or otherwise), earnings, operations, business or business
prospects of the Company and the Subsidiaries considered as one enterprise from
that set forth in the Registration Statement and each Prospectus, that, in your
sole judgment, is material and adverse and that makes it, in your sole judgment,
impracticable or inadvisable to proceed with the public offering of the Shares
as contemplated by the Prospectuses. The Original Letter from KPMG LLP shall be
addressed to or for the use of the Underwriters in form and substance
satisfactory to the Underwriters and shall (i) represent, to the extent true,
that they are independent certified public accountants with respect to the
Company within the meaning of the Securities Act, (ii) set forth their opinion
with respect to their examination of the consolidated balance sheets of the
Company as of March 31, 1999 and December 31, 1999 and related consolidated
statements of operations, shareholders' equity and cash flows for the period
from May 7, 1998 (inception) to March 31, 1999 and the nine-months ended
December 31, 1999, and (iii) address other matters agreed upon by KPMG LLP and
you. In addition, you shall have received from KPMG LLP a letter addressed to
the Company and made available to you for the use of the Underwriters stating
that their review of the Company's system of internal accounting controls, to
the extent they deemed necessary in establishing the scope of their examination
of the Company's consolidated financial statements as of December 31, 1999, did
not disclose any weaknesses in internal controls that they considered to be
material weaknesses.
(g) Officers' Certificate. You shall have received on the First Closing
Date and the Second Closing Date, as the case may be, a certificate of the
Company, dated the First Closing Date or the Second Closing Date, as the case
may be, signed by the Chief Executive Officer and Chief Financial Officer of the
Company, to the effect that, and you shall be satisfied that:
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(i) The representations and warranties of the Company in this
Agreement are true and correct, as if made on and as of the First Closing
Date or the Second Closing Date, as the case may be, and the Company has
complied with all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the First Closing Date or
the Second Closing Date, as the case may be.
(ii) No stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or threatened under the Securities Act. No order
suspending the use of the Canadian Prospectus has been issued and no
proceedings for that purpose have been instituted or are pending or
threatened under the Canadian Securities Laws.
(iii) When the Registration Statement became effective and at all
times subsequent thereto up to the delivery of such certificate, the
Registration Statement and the U.S. Prospectus, and any amendments or
supplements thereto, contained all material information required to be
included therein by the Securities Act and in all material respects
conformed to the requirements of the Securities Act. When the receipt was
received for the Canadian Prospectus and at all times subsequent thereto
up to the delivery of such certificate, the Canadian Prospectus, and any
amendments or supplements thereto, contained all material information
required to be included therein by the Canadian Securities Laws and in all
material respects conformed to the requirements of the Canadian Securities
Laws. The Registration Statement and each Prospectus, and any amendments
or supplements thereto, did not and do not include any untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. Since
the effective date of the Registration Statement, there has occurred no
event required to be set forth in an amended or supplemented U.S.
Prospectus or Canadian Prospectus that has not been so set forth.
(iv) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectuses, and except as set
forth as contemplated in each Prospectus, there has not been (a) any
material adverse change in the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and
the Subsidiaries considered as one enterprise, (b) any transaction that is
material to the Company and the Subsidiaries considered as one enterprise,
except transactions entered into in the ordinary course of business, (c)
any obligation, direct or contingent, that is material to the Company and
the Subsidiaries considered as one enterprise, incurred by the Company or
either Subsidiary, except obligations incurred in the ordinary course of
business, (d) any change in the capital stock or outstanding indebtedness
of the Company or either Subsidiary that is material to the Company and
the Subsidiaries considered as one enterprise, (e) any dividend or
distribution of any kind declared, paid or made on the capital stock of
the Company or either Subsidiary, or (f) any loss or damage (whether or
not insured) to the property of the Company or either Subsidiary that has
been sustained or will have been sustained that has a material adverse
effect on the condition (financial or otherwise), earnings, operations,
business or business prospects of the Company and the Subsidiaries
considered as one enterprise.
(h) Lock-up Agreement from Certain Shareholders of the Company. The
Company shall have obtained and delivered to you an agreement substantially in
the form of EXHIBIT A hereto from each officer and director of the Company and
each holder of record of Common Shares.
(i) Stock Exchange Listing. The Shares shall have been approved for
inclusion on the Nasdaq National Market, subject only to official notice of
issuance.
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(j) Compliance with Prospectus Delivery Requirements. The Company shall
have complied with the provisions of Sections 2(g) and 3(e) hereof with respect
to the furnishing of copies of each Prospectus.
(k) Additional Documents. On or before each of the First Closing Date and
the Second Closing Date, as the case may be, the Representatives and counsel for
the Underwriters shall have received such information, documents and opinions as
they may reasonably require for the purposes of enabling them to pass upon the
issuance and sale of the Shares as contemplated herein, or in order to evidence
the accuracy of any of the representations and warranties, or the satisfaction
of any of the conditions or agreements, herein contained.
If any condition specified in this Section 4 is not satisfied when
and as required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company at any time on or prior to the First
Closing Date and, with respect to the Option Shares, at any time prior to the
Second Closing Date, which termination shall be without liability on the part of
any party to any other party, except that Section 5 (Payment of Expenses),
Section 6 (Reimbursement of Underwriters' Expenses), Section 7 (Indemnification
and Contribution) and Section 10 (Representations and Indemnities to Survive
Delivery) shall at all times be effective and shall survive such termination.
SECTION 5. PAYMENT OF EXPENSES. The Company agrees to pay all costs, fees
and expenses incurred in connection with the performance of its obligations
hereunder and in connection with the transactions contemplated hereby, including
(i) all expenses incident to the issuance and delivery of the Common Shares
(including all printing and engraving costs), (ii) all fees and expenses of the
registrar and transfer agent of the Common Shares, (iii) all necessary issue,
transfer and other stamp taxes in connection with the issuance and sale of the
Shares to the Underwriters, (iv) all fees and expenses of the Company's counsel,
independent public or certified public accountants and other advisors, (v) all
costs and expenses incurred in connection with the preparation, printing,
filing, shipping and distribution of the Registration Statement (including
financial statements, exhibits, schedules, consents and certificates of
experts), each preliminary prospectus and each Prospectus, and all amendments
and supplements thereto, and this Agreement, (vi) all filing fees, attorneys'
fees and expenses incurred by the Company or the Underwriters in connection with
qualifying or registering (or obtaining exemptions from the qualification or
registration of) all or any part of the Shares for offer and sale under the
state securities or blue sky laws of any jurisdiction of the United States or
the provincial securities laws of Canada or any other country, and, if requested
by the Representatives, preparing and printing a "Blue Sky Survey", an
"International Blue Sky Survey" or other memorandum, and any supplements
thereto, advising the Underwriters of such qualifications, registrations and
exemptions, (vii) the filing fees incident to, and the reasonable fees and
expenses of counsel for the Underwriters in connection with, the NASD review and
approval of the Underwriters' participation in the offering and distribution of
the Common Shares, (viii) the fees and expenses associated with including the
Common Shares on the Nasdaq National Market, (ix) all costs and expenses
incident to the preparation and undertaking of "road show" preparations
to be made to prospective investors, and (x) all other fees, costs and expenses
referred to in Item 13 of Part II of the Registration Statement; provided, that
in no event shall the Company be required to pay in excess of US$[25,000] in
respect of the fees and expenses of Underwriters' counsel. It is understood
that, except as provided in this Section and Section 6 and 7 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees
and disbursements of their counsel and any stock transfer taxes on resale of any
of the shares by them.
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If this Agreement is
terminated by the Representatives pursuant to Section 4, 7, 8 or 9, or if the
sale to the Underwriters of the Shares on the First Closing Date is not
consummated because of any refusal, inability or failure on the part
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of the Company to perform any agreement herein or to comply with any provision
hereof, the Company agrees to reimburse the Representatives and the other
Underwriters (or such Underwriters as have terminated this Agreement with
respect to themselves), severally, upon demand for all out-of-pocket expenses
that shall have been reasonably incurred by the Representatives and the
Underwriters in connection with the proposed purchase and the offering and sale
of the Shares, including fees and disbursements of counsel, printing expenses,
travel expenses, postage, facsimile and telephone charges.
SECTION 7. INDEMNIFICATION AND CONTRIBUTION.
(a) Indemnification of the Underwriters. The Company agrees to indemnify
and hold harmless each Underwriter, its officers and employees, and each person,
if any, who controls any Underwriter within the meaning of the Securities Act
and the Exchange Act against any loss, claim, damage, liability or expense, as
incurred, to which such Underwriter or such controlling person may become
subject, under the Securities Act, the Exchange Act, any Canadian Securities
Laws or any other United States or Canadian federal, state or provincial
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of the Company, which consent shall not be unreasonably withheld),
insofar as such loss, claim, damage, liability or expense (or actions in respect
thereof as contemplated below) arises out of or is based (i) upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereto, including any information
deemed to be a part thereof pursuant to Rule 430A or Rule 434 under the
Securities Act, or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not
misleading; or (ii) upon any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or either Prospectus (or
any amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading; or
(iii) in whole or in part upon any inaccuracy in the representations and
warranties of the Company contained herein; or (iv) in whole or in part upon any
failure of the Company to perform its obligations hereunder or under applicable
law; or (v) any act or failure to act or any alleged act or failure to act by
any Underwriter in connection with, or relating in any manner to, the Shares or
the offering contemplated hereby, and that is included as part of or referred to
in any loss, claim, damage, liability or action arising out of or based upon any
matter covered by clause (i), (ii), (iii) or (iv) above, provided that the
Company shall not be liable under this clause (v) to the extent that a court of
competent jurisdiction shall have determined by a final judgment that such loss,
claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter through
its bad faith or willful misconduct; and to reimburse each Underwriter and each
such controlling person for any and all expenses (including the fees and
disbursements of one counsel chosen by FleetBoston Xxxxxxxxx Xxxxxxxx Inc.) as
such expenses are reasonably incurred by such Underwriter or such controlling
person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action; provided,
however, that the foregoing indemnity agreement shall not apply to any loss,
claim, damage, liability or expense to the extent, but only to the extent,
arising out of or based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with
written information furnished to the Company by the Representatives expressly
for use in the Registration Statement, any preliminary prospectus or the
Prospectuses (or any amendment or supplement thereto); and provided, further,
that with respect to any preliminary prospectus, the foregoing indemnity
agreement shall not inure to the benefit of any Underwriter from whom the person
asserting any loss, claim, damage, liability or expense purchased Shares, or any
person controlling such Underwriter, if copies of the appropriate Prospectus
were timely delivered to the Underwriter pursuant to Section 2 and a copy of
such Prospectus (as then amended or supplemented if the Company shall have
furnished
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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 been delivered,
at or prior to the written confirmation of the sale of the Shares to such
person, and if such Prospectus (as so amended or supplemented) would have cured
the defect giving rise to such loss, claim, damage, liability or expense. The
indemnity agreement set forth in this Section 7(a) shall be in addition to any
liabilities that the Company may otherwise have.
(b) Indemnification of the Company and its Directors and Officers. Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act, against any loss, claim,
damage, liability or expense, as incurred, to which the Company, or any such
director, officer or controlling person may become subject, under the Securities
Act, the Exchange Act, any Canadian Securities Laws or any other United States
or Canadian federal, state or provincial statutory law or regulation, or at
common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of such Underwriter), insofar as
such loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue or alleged untrue
statement of a material fact contained in the Registration Statement, any
preliminary prospectus or either Prospectus (or any amendment or supplement
thereto), or arises out of or is based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in the Registration Statement, any preliminary
prospectus, either Prospectus (or any amendment or supplement thereto), in
reliance upon and in conformity with written information furnished to the
Company by the Representatives expressly for use therein; and to reimburse the
Company, or any such director, officer or controlling person for any legal and
other expense reasonably incurred by the Company, or any such director, officer
or controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action. The indemnity agreement set forth in this Section 7(b) shall be in
addition to any liabilities that each Underwriter may otherwise have.
(c) Information Provided by the Underwriters. The Company hereby
acknowledges that the only information that the Underwriters have furnished to
the Company expressly for use in the Registration Statement, any preliminary
prospectus or either Prospectus (or any amendment or supplement thereto) are the
statements set forth in the table in the second, third and last paragraphs under
the caption "Underwriting" in each Prospectus; and the Underwriters confirm that
such statements are correct.
(d) Notifications and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 7 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 7, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve it from any liability that
it may have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 7 or to the extent it is not
prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably
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concluded that a conflict may arise between the positions of the indemnifying
party and the indemnified party in conducting the defense of any such action or
that there may be legal defenses available to it and/or other indemnified
parties that are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of such indemnifying party's election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 7 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel (together with local
counsel), approved by the indemnifying party (FleetBoston Xxxxxxxxx Xxxxxxxx
Inc. in the case of Section 7(b) and Section 8), representing the indemnified
parties who are parties to such action), (ii) the indemnifying party shall not
have employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action, or (iii) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party, in each of
which cases the fees and expenses of counsel shall be at the expense of the
indemnifying party.
(e) Settlements. The indemnifying party under this Section 7 shall not be
liable for any settlement of any proceeding effected without its written
consent, which consent shall not be unreasonably withheld, but if settled with
such consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party against any loss, claim, damage,
liability or expense by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by Section 7(d) hereof, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or
consent includes (i) an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.
(f) Contribution. If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 7(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) then each
indemnifying party shall contribute to the aggregate amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Shares. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law then each indemnifying party shall contribute to such amount paid or payable
by such indemnified party in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company on the
one hand and the Underwriters on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, (or
actions or
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proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriter on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Company bears to the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth in the table on the cover page of
the U.S. Prospectus. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 7(f) 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 above in this Section 7(f). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) referred to above in this Section
7(f) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this subsection (f), (i) no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares purchased by
such Underwriter and (ii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this Section 7(f) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(g) Timing of Any Payments of Indemnification. Any losses, claims,
damages, liabilities or expenses for which an indemnified party is entitled to
indemnification or contribution under this Section 7 shall be paid by the
indemnifying party to the indemnified party as such losses, claims,
damages, liabilities or expenses are incurred, but in all cases, no later than
thirty days of invoice to the indemnifying party.
(h) Survival. The indemnity and contribution agreements contained in this
Section 7 and the representation and warranties of the Company set forth in this
Agreement shall remain operative and in full force and effect, regardless of (i)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Company, its directors or officers or any
persons controlling the Company, (ii) acceptance of any Shares and payment
therefor hereunder, and (iii) any termination of this Agreement. A successor to
any Underwriter, or to the Company, its directors or officers, or any person
controlling the Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 7.
(i) Acknowledgments of Parties. The parties to this Agreement hereby
acknowledge that they are sophisticated business persons who were represented by
counsel during the negotiations regarding the provisions hereof including the
provisions of this Section 7, and are fully informed regarding said provisions.
They further acknowledge that the provisions of this Section 7 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement and U.S. Prospectus as required by the Securities Act and
in the Canadian Prospectus as required by the Canadian Securities Laws.
SECTION 8. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the several Underwriters shall fail or refuse to purchase Shares that it
or they have agreed to purchase hereunder on such
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date, and the aggregate number of Common Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase does not
exceed ten percent of the aggregate number of the Shares to be purchased on such
date, the other Underwriters shall be obligated, severally, in the proportions
that the number of Firm Common Shares set forth opposite their respective names
on SCHEDULE A bears to the aggregate number of Firm Shares set forth opposite
the names of all such non-defaulting Underwriters, or in such other proportions
as may be specified by the Representatives with the consent of the
non-defaulting Underwriters, to purchase the Shares that such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date. If, on the First Closing Date or the Second Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
and the aggregate number of Shares with respect to which such default occurs
exceeds ten percent of the aggregate number of Shares to be purchased on such
date, and arrangements satisfactory to the Representatives and the Company for
the purchase of such Shares are not made within 48 hours after such default,
this Agreement shall terminate without liability of any party to any other party
except that the provisions of Section 4, and Section 7 shall at all times be
effective and shall survive such termination. In any such case either the
Representatives or the Company shall have the right to postpone the First
Closing Date or the Second Closing Date, as the case may be, but in no event for
longer than seven days in order that the required changes, if any, to the
Registration Statement and the Prospectuses or any other documents or
arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this Section
8. Any action taken under this Section 8 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
Each of the Underwriters, severally and not jointly, hereby represents and
warrants to, and agrees with, the other parties hereto that such Underwriter (a)
will not distribute the Shares in such a manner as to require the registration
of the Shares, or the filing of a prospectus with respect to the Shares, under
the laws of any jurisdiction outside of the United States, Alberta or Ontario,
(b) will only offer and sell the Shares in accordance with all applicable
Canadian and the United States laws and only in those jurisdictions where they
may lawfully be offered and sold, and (c) without limiting the foregoing, will
only distribute Shares in Canada in accordance with prospectus and registration
requirements of the Canadian Securities Laws or exemptions from these
requirements.
SECTION 9. TERMINATION OF THIS AGREEMENT. Prior to the First Closing Date,
this Agreement may be terminated by the Representatives by written notice given
to the Company if at any time (i) trading or quotation in any of the Company's
securities shall have been suspended or limited by the Commission or by the
Nasdaq Stock Market, or trading in securities generally on either the Nasdaq
Stock Market or the New York Stock Exchange shall have been suspended or
limited, or minimum or maximum prices shall have been generally established on
any of such stock exchanges by the Commission or the NASD; (ii) a general
banking moratorium shall have been declared by any of federal, New York,
Delaware or California or Canadian authorities; (iii) there shall have occurred
any outbreak or escalation of national or international hostilities or any
crisis or calamity, or any change in the United States or international
financial markets, or any substantial change or development involving a
prospective change in United States' or international political, financial or
economic conditions, as in the judgment of the Representatives is material and
adverse and makes it impracticable or inadvisable to market the Common Shares in
the manner and on the terms described in the Prospectuses or to enforce
contracts for the sale of securities; (iv) in the judgment of the
Representatives there shall have occurred any Material Adverse Change; or (v)
the Company shall have sustained a loss by strike, fire, flood, earthquake,
accident or other calamity of such character as in the judgment of the
Representatives may interfere materially with the conduct of the business and
operations of the Company regardless of whether or not such loss shall have been
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insured. Any termination pursuant to this Section 9 shall be without liability
on the part of (a) the Company to any Underwriter, except that the Company shall
be obligated to reimburse the expenses of the Representatives and the
Underwriters pursuant to Sections 5 and 6 hereof, (b) any Underwriter to the
Company, or (c) of any party hereto to any other party except that the
provisions of Section 7 shall at all times be effective and shall survive such
termination.
SECTION 10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company or any of its or their partners, officers or directors or any
controlling person, as the case may be, and will survive delivery of and payment
for the Shares sold hereunder and any termination of this Agreement.
SECTION 11. NOTICES. All communications hereunder shall be in writing and
shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Representatives: FLEETBOSTON XXXXXXXXX XXXXXXXX INC.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
If to the Company: DELANO TECHNOLOGY CORPORATION
00 Xxxx Xxxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxx
X0X 0X0 Xxxxxx
Facsimile: (000) 000-0000
Attention: General Counsel
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
SECTION 12. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute Underwriters pursuant
to Section 9 hereof, and to the benefit of the employees, officers and directors
and controlling persons referred to in Section 7, and to their respective
successors, and no other person will have any right or obligation hereunder. The
term "successors" shall not include any purchaser of the Shares as such from any
of the Underwriters merely by reason of such purchase.
SECTION 13. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability
of any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
SECTION 14. GOVERNING LAW PROVISIONS.
(a) Governing Law. This agreement shall be governed by and construed in
accordance with the internal laws of the state of New York applicable to
agreements made and to be performed in such state.
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(b) Consent to Jurisdiction. Any legal suit, action or proceeding arising
out of or based upon this Agreement or the transactions contemplated hereby may
be instituted in the federal courts of the United States of America located in
the City and County of San Francisco or the courts of the State of California in
each case located in the City and County of San Francisco (collectively, the
"Specified Courts"), and each party irrevocably submits to the jurisdiction of
such courts in any such suit, action or proceeding. Service of any process,
summons, notice or document by mail to such party's address set forth above
shall be effective service of process for any suit, action or other proceeding
brought in any such court. The parties irrevocably and unconditionally waive any
objection to the laying of venue of any suit, action or other proceeding in the
Specified Courts and irrevocably and unconditionally waive and agree not to
plead or claim in any such court that any such suit, action or other proceeding
brought in any such court has been brought in an inconvenient forum. Each party
not located in the United States irrevocably appoints CT Corporation System,
which currently maintains a San Francisco office at 00 Xxxxxxxxx Xxxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000, Xxxxxx Xxxxxx of America, as its agent to receive
service of process or other legal summons for purposes of any such suit, action
or proceeding that may be instituted in any state or federal court in the City
and County of San Francisco.
SECTION 15. GENERAL PROVISIONS. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The Section headings herein are for the convenience of the parties only and
shall not affect the construction or interpretation of this Agreement. The word
"including" as used herein shall not be construed so as to exclude any other
thing not referred to or described.
* * *
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
DELANO TECHNOLOGY CORPORATION
By: _____________________________________
President and Chief Executive Officer
The foregoing Underwriting Agreement is hereby confirmed and accepted by
the Representatives as of the date first above written.
FLEETBOSTON XXXXXXXXX XXXXXXXX INC.
U.S. BANCORP XXXXX XXXXXXX INC.
On their behalf and on behalf of each of the
several Underwriters named in SCHEDULE A hereto.
By: FLEETBOSTON XXXXXXXXX XXXXXXXX INC.
By:_________________________________
Authorized Signatory
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SCHEDULE A
NUMBER OF
FIRM SHARES
TO BE
UNDERWRITERS PURCHASED
-------------- -------------
FleetBoston Xxxxxxxxx Xxxxxxxx Inc. and
FleetBoston Xxxxxxxxx Xxxxxxxx International Limited..........
U.S. Bancorp Xxxxx Xxxxxxx Inc...................................
---------
Total ..................................................... 5,000,000
=========
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EXHIBIT A
LOCK-UP AGREEMENT
FLEETBOSTON XXXXXXXXX XXXXXXXX INC.
As Lead Representative of the Several Underwriters
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Re: Delano Technology Corporation (the "Company")
Ladies and Gentlemen:
The undersigned owns of record or beneficially certain common shares of
the Company ("Common Shares") or securities convertible into, or exchangeable or
exercisable for, Common Shares. The Company proposes to carry out a public
offering of Common Shares (the "Offering") for which FleetBoston Xxxxxxxxx
Xxxxxxxx Inc. will act as the lead representative of the underwriters. The
undersigned recognizes that the Offering will be of benefit to the undersigned
and will benefit the Company by, among other things, raising additional capital
for its operations. The undersigned acknowledges that FleetBoston Xxxxxxxxx
Xxxxxxxx Inc. and the other underwriters are relying on the representations and
agreements of the undersigned contained in this letter in carrying out the
Offering and in entering into underwriting arrangements with the Company with
respect to the Offering.
In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not offer to sell, contract to sell, or otherwise sell, dispose
of, loan, pledge or grant any rights with respect to (collectively, a
"Disposition") any Common Shares, any options or warrants to purchase any Common
Shares, or any securities convertible into or exchangeable for Common Shares
(collectively, "Securities") now owned or hereafter acquired directly by such
person or with respect to which such person has or hereafter acquires the power
of disposition, otherwise than (a) as a bona fide gift or gifts, provided that
the donee or donees thereof agree in writing to be bound by this restriction,
(b) as a distribution to partners or shareholders of such person, provided that
the distributees thereof agree in writing to be bound by the terms of this
restriction, (c) with respect to Dispositions of Common Shares acquired on the
open market, or (d) with the prior written consent of FleetBoston Xxxxxxxxx
Xxxxxxxx Inc., for a period commencing on the date hereof and continuing to a
date 180 days after the date on which the Registration Statement is declared
effective by the Securities and Exchange Commission (the "Lock-up Period"). The
foregoing restriction has been expressly agreed to preclude the holder of the
Securities from engaging in any hedging or other transaction that is designed to
or reasonably expected to lead to or result in a Disposition of Securities
during the Lock-up Period, even if such Securities would be disposed of by
someone other than such holder. Such prohibited hedging or other transactions
include, without limitation, any short sale (whether or not against the box) or
any purchase, sale or grant of any right (including, without limitation, any put
or call option) with respect to any Securities or with respect to any security
(other than a broad-based market basket or index) that included, relates to or
derives any significant part of its value from Securities. The undersigned also
agrees and consents to the entry of stop transfer instructions with the
Company's transfer agent and registrar against the transfer of Securities held
by the undersigned except in compliance with the foregoing restrictions.
This agreement is irrevocable and will be binding on the undersigned and
the respective successors, heirs, personal representatives, and assigns of the
undersigned. This letter agreement shall terminate and be of no further force
and effect upon a decision by FleetBoston Xxxxxxxxx Xxxxxxxx Inc. or the
Company not to proceed with the Offering.
Dated:________________________
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______________________________________
[Printed Name of Holder]
By:___________________________________
Printed Name of Person Signing
(and indicate capacity of person
signing if signing as custodian,
trustee, or on behalf of an entity)
A-2
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EXHIBIT B
MATTERS TO BE COVERED IN THE OPINION OF COMPANY COUNSEL
(i) The Company is a corporation incorporated and existing under the
laws of Ontario.
(ii) There are no restrictions on the corporate power and capacity of the
Company to own and lease property and assets and to carry on business.
(iii) The Company is qualified or registered as an extra-provincial
corporation in the jurisdictions named therein, which are the only jurisdictions
in which the Company owns or leases any material property or conducts any
material businesses. To such counsel's knowledge, the Company does not own or
control, directly or indirectly, any corporation, association or other entity
other than the Subsidiaries.
(iv) The authorized share capital of the Company as at December 31, 1999
consisted of, and as of the First Closing Date or the Second Closing Date, as
the case may be, consists of, an unlimited number of Class A special shares, and
unlimited number of Class B special shares, an unlimited number of Class C
special shares and an unlimited number of common shares. As at December 31,
1999, there were _____ Class A special shares, _____ Class B special shares,
_____ Common Shares and no Class C special shares issued and outstanding, and
all such issued shares have been validly issued and are outstanding as fully
paid and nonassessable shares of the Company.
(v) The Firm Shares or the Option Shares, as the case may be, have been
duly authorized and, upon issuance and delivery against payment therefor in
accordance with the terms hereof, will be validly issued and fully paid and
nonassessable.
(vi) There are no restrictions on the corporate power and capacity of the
Company to enter into this Agreement and to issue, sell and deliver to the
Underwriters the Shares to be issued and sold by it hereunder.
(vii) The execution and delivery of this Agreement have been duly
authorized by all necessary corporate action on the part of the Company and has
been duly executed and delivered by the Company.
(viii)A receipt has been obtained in respect of the Canadian Prospectus
from the Alberta Securities Commission and the Ontario Securities Commission,
and no other authorization, permit, approval, order or consent of or filing with
any government, governmental agency or body or court of Canada or the Provinces
of Alberta and Ontario is required (A) the valid authorization, issuance, sale
and delivery of the Shares, (B) the execution of this agreement, or (C) the
consummation by the Company of the transactions contemplated herein.
(ix) The Canadian Prospectus (other than the financial statements and
notes thereto and other financial and statistical data included therein or
excluded therefrom, as to which such counsel need express no opinion) appears on
its face to have been appropriately responsive in all material respects to the
requirements. of the Canadian Securities Laws.
(x) The information in each Prospectus under the captions "Description of
Share Capital--Common Shares," "--Preferred Shares" and "Enforceability of Civil
Liabilities" and in the Canadian Prospectus under the captions "Eligibility for
Investment," "Purchasers' Statutory Rights" and "Contractual Right of Action for
Rescission," in each case to the extent it constitutes matters of Ontario or
federal Canadian law or legal conclusions under Ontario or federal Canadian law,
has been reviewed by such counsel and is a fair summary of such matters and
conclusions. The
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statements in the U.S. Prospectus under the caption "Tax Considerations--
Canadian Federal Income Tax Considerations" and in the Canadian Prospectus under
the caption "Canadian Federal Income Tax Considerations" fairly describe the
principal Canadian federal income tax considerations applicable to a holder of
Shares who, within the meaning of the Income Tax Act (Canada), is a non-resident
of Canada and deals at arm's length with the Company. The form of certificates
evidencing the Common Shares and filed as an exhibit to the Registration
Statement complies with the provisions of the articles and bylaws of the Company
and the Business Corporations Act (Ontario).
(xi) To such counsel's knowledge, the description in the Registration
Statement and each Prospectus of the articles and bylaws of the Company and of
statutes are correct in all material respects.
(xii) The performance of this Agreement and the consummation of the
transactions herein contemplated (other than performance of the Company's
indemnification obligations hereunder, concerning which no opinion need be
expressed) will not (a) result in any violation of the Company's articles or
bylaws or (b) to such counsel's knowledge, result in a material breach or
violation of any of the terms and provisions of, or constitute a default under,
any agreement or instrument filed as an exhibit to the Registration Statement or
any applicable Ontario or federal Canadian statute, rule or regulation known to
such counsel or, to such counsel's knowledge, any order, writ or decree of any
Ontario or federal Canadian court, government or governmental agency or body
having jurisdiction over the Company or either Subsidiary, or over any of their
properties or operations.
(xiii)No consent, approval, authorization or order of or qualification
with any Ontario or federal Canadian court or governmental agency or body having
jurisdiction over the Company or either Subsidiary, or over any of their
properties or operations, is necessary under the laws of Ontario or the federal
laws of Canada applicable therein in connection with the consummation by the
Company of the transactions herein contemplated.
(xiv) To such counsel's knowledge, there are no material legal or
governmental proceedings pending or threatened against the Company or either
Subsidiary.
(xv) To such counsel's knowledge, the Company is not presently (a) in
material violation of its articles or bylaws or (b) in material breach of any
applicable Ontario or federal Canadian statute, rule or regulation known to such
counsel or, to such counsel's knowledge, any order, writ or decree of any
Ontario or federal Canadian court or governmental agency or body having
jurisdiction over the Company or over any of its properties or operations.
(xvi) To such counsel's knowledge, except as set forth in the Registration
Statement and each Prospectus, no holders of Company Shares or other securities
of the Company have registration rights with respect to securities of the
Company and, except as set forth in the Registration Statement and each
Prospectus, all holders of securities of the Company having rights known to such
counsel to registration of such shares of Company Shares or other securities,
because of the filing of the Registration Statement by the Company, have, with
respect to the offering contemplated thereby, waived such rights.
(xvii) To such counsel's knowledge, the Company has not received any
notice of infringement or conflict with asserted trademarks, trade names, patent
rights, copyrights, licenses, approvals, trade secrets and other intellectual
property rights of others, which infringement or conflict, if the subject of an
unfavorable decision, would result in a Material Adverse Effect.
(xviii) A court of competent jurisdiction in the Province of Ontario (an
"Ontario Court") would recognize the choice of the law of the State of New York
as a valid choice of law and would apply
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such law in any action seeking to enforce this Agreement; provided that,
(a) such choice of law is bona fide (in the sense that it was not made with a
view to avoiding the consequences of the laws of any other jurisdiction, (b)
such law is not contrary to public policy as that term is applied by the Ontario
Court ("Public Policy"), (c) in matters of procedure the laws of the Province of
Ontario will be applied, (d) the provisions of the law of the State of New York
or this Agreement relating to prescription or of a fiscal, expropriatory or
penal nature will not be applied and (e) provisions of the law of the State of
New York or this Agreement will not be applied if the application would be
contrary to Public Policy. However, we have no reason to believe that the choice
of the laws of New York in this context is contrary to Public Policy under the
laws of the Province of Ontario or the laws of federal Canada applicable
therein. An Ontario Court will retain discretion to decline to hear such action
if it is contrary to Public Policy for it to do so, or if it is not the proper
forum to hear such an action, or if concurrent proceedings are properly being
brought elsewhere.
(xix) An Ontario Court would give effect to the appointment by the Company
of CT Corporation System as its agent to receive service of process in the
United States of America under this Agreement and to the provisions in this
Agreement whereby the Company has submitted to the non- exclusive jurisdiction
of the Specified Courts. An Ontario Court may, however, reserve to itself an
inherent power to decline to hear such an action if it is contrary to Public
Policy for it to do so or it is not the proper forum to hear such action or
concurrent proceedings are being brought elsewhere.
(xx) A final and conclusive judgment for a sum certain obtained in a
Specified Court against the Company in connection with any action arising out of
or relating to this Agreement, which judgment is not impeachable as void or
voidable under the laws properly applied by the Specified Court would be
recognized and could be sued upon in an Ontario Court and such court would grant
a judgment which would be enforceable against the Company in the Province of
Ontario, provided that:
(A) the court rendering such judgment had jurisdiction over the
Company, as recognized by the Ontario Court (and submission by the Company
in this Agreement to the jurisdiction of the Specified Courts pursuant to
Section 14 will be sufficient for that purpose);
(B) such judgment was not obtained by fraud or in any manner
contrary to natural justice and the enforcement thereof would not be
inconsistent with Public Policy;
(C) such judgment was not rendered in contravention of any order
made by the Attorney General of Canada under the Foreign Extraterritorial
Measures Act (Canada);
(D) enforcement of such judgment does not constitute, directly or
indirectly, the enforcement of foreign revenue expropriatory or penal
laws; and
(E) there has been compliance with the Limitations Act (Ontario).
Where a foreign decision orders a debtor to pay a sum of money
expressed in foreign currency, the sum of money will be converted by an
Ontario Court into Canadian currency at the rate of exchange prevailing on
the date the judgment became enforceable at the place where it was
rendered. The determination of interest payable under a foreign judgment
is governed by the laws of the authority that rendered the decision until
its conversion. To the knowledge of Osler, Xxxxxx & Harcourt LLP, there is
no Public Policy reason under the laws of the Province of Ontario or the
federal laws of Canada applicable therein for avoiding the recognition of
judgments of a Specified Court enforcing the performance of this Agreement
pursuant to its terms in the case of a judgment awarding a sum of money as
compensatory damages.
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(xxi) No stamp or other issuance or transfer taxes or duties are payable
by or on behalf of the Underwriters to the Canadian government or to the
provincial government of Ontario in connection with (A) the issuance, sale and
delivery by the Company to or for the respective accounts of the Underwriters of
the Shares or (B) the sale and delivery outside Canada by the Underwriters of
the Shares in the manner contemplated in this Agreement.
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EXHIBIT C
MATTERS TO BE COVERED IN THE OPINION OF SPECIAL U.S. COUNSEL TO THE COMPANY
(i) To such counsel's knowledge, the Company does not own or control,
directly or indirectly, any corporation, association or other entity other than
the Subsidiaries.
(ii) To such counsel's knowledge, the Registration Statement has become
effective under the Securities Act, and the Form 8-A Registration Statement has
become effective under the Exchange Act. To such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or are pending or
threatened under the Securities Act. The Firm Shares or the Option Shares, as
the case may be, have been validly registered under the Securities Act and the
Exchange Act.
(iii) The Registration Statement, as of its effective date, and the U.S.
Prospectus, as of its date (other than the financial statements and notes
thereto and other financial and statistical data included therein or excluded
therefrom, as to which such counsel need express no opinion), appear on their
face to be appropriately responsive in all material respects with the
requirements of the Securities Act applicable to registration statements on Form
F-1, except that such counsel need not assume any responsibility in this
paragraph for the accuracy, completeness or fairness of the statements contained
in the Registration Statement or the U.S. Prospectus. The Form 8-A Registration
Statement appears on its face to be appropriately responsive in all material
respects with the requirements of the Exchange Act.
(iv) Such counsel does not know of any legal or governmental proceedings
pending, threatened or contemplated to which the Company or either of the
Subsidiaries is a party or of which any property of the Company or either of the
Subsidiaries is subject, which are material to the Company and the Subsidiaries
taken as a whole, that are required to be described in the Registration
Statement or the U.S. Prospectus and that are not described as required, and
such counsel does not know of any amendment to the Registration Statement
required to be filed or of any contracts or other documents of a character
required to be described in the Registration Statement or the U.S. Prospectus,
or to be filed as an exhibit thereto, which are not described or filed as
required.
(v) Based upon such counsel's review of those laws, rules and regulations
of the State of New York and the United States of America which, in such
counsel's experience, are normally applicable to transactions of the type
provided for in this Agreement (including transactions such as the issuance and
sale by the Company of the Shares) (collectively, "Requirements of Law"), but
without having made any special investigation concerning any other laws, rules
or regulations, no consent, approval, authorization, filing with or order of any
court or governmental agency or body under the laws of the State of New York or
the federal laws of the United States of America is required on the part of the
Company in connection with the transactions contemplated by this Agreement,
other than as have been obtained under the Securities Act and the Exchange Act
(and other than such actions as may be required by the rules and regulations of
the NASD or state securities or Blue Sky laws, as to which such counsel need not
express any opinion) in connection with the purchase and distribution of the
Shares by the Underwriters in the manner contemplated by this Agreement and in
the U.S. Prospectus, and, so far as is known to such counsel, neither the issue
and sale of the Shares, nor the consummation of any other transactions
contemplated by this Agreement, nor the fulfillment of the terms of this
Agreement will conflict with, or result in a breach or violation of or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or the Subsidiaries pursuant to any Requirements of Law (assuming
compliance with applicable state securities and blue Sky laws) or any material
judgment, order or decree of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority located in the United States
having jurisdiction over the Company or the Subsidiaries, or any of their
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respective properties or assets (collectively, "Orders") specifically
identified to such counsel by the Company pursuant to the certificate attached
to such opinion letter as being material Orders to which it is subject; except
that such counsel need not express any opinion in this paragraph with respect to
the disclosure requirements of the United States federal securities laws or the
securities laws of the State of New York.
(vi) The Company is not, nor upon the consummation of the transactions
contemplated by this Agreement will be, subject to registration or regulation as
an "investment company," as such term is defined in the Investment Company Act
or required to seek an exemptive order under the Investment Company Act
permitting such registration pursuant to Section 7(d) thereunder.
(vii) The statements made in the U.S. Prospectus under "Tax
Considerations--United States Federal Income Tax Considerations," insofar as
such statements purport to describe the provisions of the laws referred to
therein, fairly summarize the information disclosed therein in all material
respects.
In addition, such counsel shall state that such counsel has participated
in conferences with officials and other representatives of the Company, the
Representatives, Underwriters' counsel and the independent certified public
accountants of the Company, at which such conferences the contents of the
Registration Statement and the U.S. Prospectus and related matters were
discussed, and although they have not verified the accuracy or completeness of
the statements contained in the Registration Statement or the U.S. Prospectus,
nothing has come to the attention of such counsel that leads them to believe
that, at the time the Registration Statement became effective and at all times
subsequent thereto up to and on the First Closing Date or Second Closing Date,
as the case may be, the Registration Statement and any amendment or supplement
thereto (other than the financial statements and financial and statistical
information derived therefrom, as to which such counsel need express no comment)
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or at the First Closing Date or the Second Closing Date, as the
case may be, the Registration Statement, the U.S. Prospectus and any amendment
or supplement thereto (except as aforesaid) contained any 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.
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EXHIBIT D
MATTERS TO BE COVERED IN THE OPINION OF UNDERWRITERS' COUNSEL
(i) To our knowledge, the Registration Statement has become effective
under the Securities Act, no order suspending the effectiveness of the
Registration Statement has been issued by the Commission and no proceeding for
that purpose has been instituted or threatened by the Commission.
(ii) To our knowledge, the Form 8-A Registration Statement has become
effective under the Exchange Act, no order suspending the effectiveness of the
Form 8-A Registration Statement has been issued by the Commission and no
proceeding for that purpose has been instituted or threatened by the Commission.
Such counsel shall state that such counsel has reviewed the opinions
addressed to the Representatives from Osler, Xxxxxx & Harcourt and Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP, each dated the date hereof, and furnished to
you in accordance with the provisions of the Underwriting Agreement. Each such
opinion appears on its face to be appropriately responsive to the requirements
of the Underwriting Agreement.
In addition, such counsel shall state that such counsel has participated
in conferences with officials and other representatives of the Company, the
Company's counsel, the Representatives and the independent certified public
accountants of the Company, at which conferences the contents of the
Registration Statement and the U.S. Prospectus and related matters were
discussed, and although they have not verified the accuracy or completeness of
the statements contained in the Registration Statement or the U.S. Prospectus:
(a) The Registration Statement (except the financial statements and
other financial and statistical data included therein, as to which such
counsel need express no view), at the time it became effective, and the
U.S. Prospectus (except as aforesaid), as of its date, appeared on their
face to be appropriately responsive in all material respects to the
requirements of the Securities Act.
(b) No information has come to the attention of such counsel that
causes such counsel to believe that the Registration Statement (except the
financial statements and other financial and statistical data included
therein, as to which such counsel need express no view), at the time it
became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
(c) No information has come to the attention of such counsel that
causes such counsel to believe that the U.S. Prospectus (except the
financial statements and other financial and statistical data included
therein, as to which such counsel need express no view), as of its date or
the date of such opinion, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(d) The Form 8-A Registration Statement, at the time it became
effective, appeared on its face to be appropriately responsive in all
material respects to the requirements of the Exchange Act.
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