1
Exhibit 1
3,000,000 CLASS A SUBORDINATE VOTING SHARES
GILDAN ACTIVEWEAR INC.
UNDERWRITING AGREEMENT
________, 1999
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.
The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, LLC
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Securities, Inc.
as Representatives of the
several Underwriters named
in Schedule I annexed hereto
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇
Ladies and Gentlemen:
Gildan Activewear Inc., a corporation incorporated under the laws of Canada
(the "Company"), hereby confirms its agreements with you as follows:
1. UNDERWRITERS. The term "Underwriters", as used herein, refers
collectively to you and the other underwriters named in Schedule I hereto, for
whom you are acting as representatives. Except as may be expressly set forth
below, any reference to you in this Agreement shall be solely in your capacity
as representatives of the Underwriters, and the Company shall be entitled to act
and rely upon any statement, request, notice, consent, waiver or agreement
purportedly on behalf of any Underwriter made or given by Bear, ▇▇▇▇▇▇▇ & Co.
Inc. ("Bear, ▇▇▇▇▇▇▇").
2. DESCRIPTION OF SHARES. The Company proposes, subject to the terms and
conditions stated herein, to issue and sell to the several Underwriters an
aggregate of 3,000,000 of the Company's Class A Subordinate Voting Shares (the
"Class A Shares"). The 3,000,000 Class A Shares to be issued and sold by the
Company are referred to herein as the "Firm Shares". The Company also proposes,
subject to the terms and conditions stated herein, to grant to the Underwriters
the option to purchase from the Company, for the sole purpose of covering
over-allotments, if any, in connection with the sale of the Firm Shares, an
aggregate of up to an additional 450,000 Class A Shares (the "Additional
Shares"). The Firm Shares and the Additional Shares are hereinafter referred to
collectively as the "Shares". The Shares are more fully described in the
Registration Statement referred to below. The issuance and sale by the Company
of the Shares to the Underwriters pursuant hereto is herein referred to as the
"Offering".
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3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, each of the Underwriters that:
(a) The Company meets the requirements for the use of a registration
statement on Form F-1 under the United States Securities Act of 1933, as
amended (the "Act"), and has prepared and filed with the United States
Securities and Exchange Commission (the "Commission"), pursuant to the Act
and the rules and regulations promulgated by the Commission thereunder (the
"Regulations"), a registration statement on Form F-1 (File No. 333-74609)
relating to the Shares and may have filed one or more amendments thereto,
including, in each case, a preliminary prospectus relating to the offering
of the Shares. The Company next proposes to file with the Commission a
further amendment to the registration statement, including therein a final
prospectus, necessary to permit the registration statement to become
effective or, if no amendment is required for that purpose, then promptly
following the effectiveness of the registration statement, the Company
proposes to file with the Commission, in accordance with Rules 430A and
424(b)(1) or Rule 424(b)(4) of the Regulations, a final prospectus with
respect to the offerings of the Shares, the final prospectus so filed in
either case to include all Rule 430A Information (as hereinafter defined)
and to conform, in content and form, to the last printer's proof thereof
furnished to and approved by you immediately prior to such filing, which
approval shall not be unreasonably withheld. As used in this Agreement,
(i) "Effective Date" means the date that the registration statement
hereinabove referred to, or the most recent post-effective amendment
thereto, if any, is declared effective by the Commission, (ii)
"Registration Statement" means such registration statement as last amended
prior to the time the same was declared effective by the Commission,
including all exhibits and schedules thereto and all Rule 430A Information
deemed to be included therein at the Effective Date pursuant to Rule 430A
of the Regulations, (iii) "Rule 430A Information" means information with
respect to the Shares and the public offerings thereof permitted, pursuant
to the provisions of paragraph (a) of Rule 430A of the Regulations, to be
omitted from the form of prospectus included in the Registration Statement
at the time it is declared effective by the Commission, (iv) "U.S.
Prospectus" means the form of final prospectus relating to the Shares first
filed with the Commission pursuant to Rule 424(b) of the Regulations or, if
no filing pursuant to Rule 424(b) is required, the form of final prospectus
for public offering of the Shares in the United States included in the
Registration Statement at the Effective Date, and (v) "U.S. Preliminary
Prospectus" means any preliminary prospectus for public offering of the
Shares in the United States (as described in Rule 430 of the Regulations)
with respect to the Shares that omits Rule 430A Information.
(b) The Registration Statement conforms and on the Effective Date
will conform, and the U.S. Prospectus on the date thereof and on the date
first filed with the Commission pursuant to Rule 424(b) of the Regulations
(if required) will conform, in all material respects with the applicable
requirements of the Act and the Regulations. On the Effective Date, the
date the U.S. Prospectus is first filed with the Commission pursuant to
Rule 424(b) of the Regulations (if required), at all times subsequent
thereto to and including the Closing Date (as defined in Section 5(a)(ii)
hereof) and, if later, the Additional Closing Date (as defined in Section
5(b)(ii) hereof), when any post-effective
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amendment to the Registration Statement becomes effective or any
supplement to the U.S. Prospectus is filed with the Commission, and during
such longer period as the U.S. Prospectus may be required to be delivered
under the Act in connection with sales of Shares by the Underwriters or a
dealer, the Registration Statement and the U.S. Prospectus (as amended or
supplemented if the Company shall have filed with the Commission an
amendment or supplement thereto) did not and will not contain an untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements made therein
(in the case of the U.S. Prospectus, in light of the circumstances under
which they were made) not misleading. No order preventing or suspending
the use of any U.S. Preliminary Prospectus has been issued by the
Commission, and when any U.S. Preliminary Prospectus was first filed with
the Commission (whether filed as part of the Registration Statement or an
amendment thereof or pursuant to Rule 424(a) of the Regulations) and when
any amendment thereof or supplement thereto was first filed with the
Commission, such U.S. Preliminary Prospectus and any amendments thereof and
supplements thereto conformed in all material respects with the applicable
requirements of the Act and the Regulations thereunder and did not contain
an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. No representation and warranty, however, is made in this
subsection 3(b) by the Company with respect to written information
contained in or omitted from the Registration Statement, the U.S.
Prospectus, any U.S. Preliminary Prospectus, or any amendment or supplement
in reliance upon and in conformity with written information with respect to
the Underwriters and the plan of distribution of the Shares furnished to
the Company on behalf of any Underwriter by Bear, ▇▇▇▇▇▇▇ expressly for use
in connection with the preparation thereof.
(c) The Canadian preliminary prospectus of the Company dated March
17, 1999 in its English and French language versions relating to the Shares
has been filed with the appropriate securities commission or similar
regulatory authority (each, a "Securities Regulator") in each of the
provinces of Canada (the "Qualifying Provinces") and a Canadian amended
preliminary prospectus of the Company dated [____], 1999 in its English and
French language versions relating to the Shares has been filed with the
Securities Regulators in each of the Qualifying Provinces. The Canadian
preliminary prospectus and the Canadian amended preliminary prospectus are
collectively referred to as the "Canadian Preliminary Prospectus". The
Company has elected to file the Canadian Preliminary Prospectus with the
Quebec Securities Commission as the principal regulator (the "Principal
Regulator"), in accordance with the proposed mutual reliance review system
set forth in the Proposed National Policy 43-201--Mutual Reliance Review
System for Prospectus and Initial AIFs which was published for comment on
June 19, 1998 and as principal jurisdiction pursuant to National Policy
Statement Number 1 of the Canadian Securities Administrators. The Company
has also elected to rely upon the rules and procedures established pursuant
to National Policy Statement Number 44 of the Canadian Securities
Administrators for the pricing of securities in certain prospectus
offerings after a final receipt has been obtained for the prospectus (the
"PREP Procedures"). The Company has also prepared and filed with the
Securities Regulators in each of the Qualifying Provinces the Canadian
final prospectus of the Company dated [_____, 1999], in its English and
French language versions relating to the Shares (the "Canadian
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Prospectus"), omitting the PREP Information (as hereinafter defined). The
Company will prepare and file, as soon as possible and in any event within
two full business days (as defined in Section 20 hereof) after the
execution and delivery of this Agreement, with the Securities Regulators in
each of the Qualifying Provinces, as hereinafter provided, in accordance
with the PREP Procedures, a supplemented prospectus, in its English and
French language versions, setting forth the PREP Information (the "PREP
Prospectus Supplement") and will obtain an acceptance therefor as soon as
possible thereafter. The information, if any, included in the PREP
Prospectus Supplement that is omitted from the Canadian Prospectus for
which a final mutual reliance review system decision document has been
issued by the Principal Regulator but that is deemed under the PREP
Procedures to be incorporated by reference into the prospectus as of the
date of the PREP Prospectus Supplement is referred to herein as the "PREP
Information". After the filing of the PREP Prospectus Supplement, the term
"Canadian Prospectus" shall include such PREP Prospectus Supplement.
(d) No order preventing or suspending the use of the Canadian
Preliminary Prospectus has been issued by a Securities Regulator and none
of the Securities Regulators has instituted or threatened to institute any
proceedings with respect to such an order. The Canadian Preliminary
Prospectus, at the time of filing thereof, (i) conformed in all material
respects to the requirements of applicable securities laws in each of the
Qualifying Provinces and the respective regulations thereunder and the
published policy statements of the Securities Regulator in each of the
Qualifying Provinces (collectively, the "Canadian Securities Laws"), (ii)
did not contain a misrepresentation, (iii) constituted full, true and plain
disclosure of all material facts relating to the Company and each of its
Subsidiaries (as hereinafter defined), taken as a whole, and to the Shares
and (iv) did not omit to state a fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances in which they were made. This representation and warranty
shall not apply to any statement or information furnished in writing by an
Underwriter to the Company relating solely to the Underwriters for
exclusive use in the Canadian Preliminary Prospectus or the Canadian
Prospectus. As used in this Agreement, the terms "misrepresentation,"
"material fact" and "material change," with respect to the Canadian
Preliminary Prospectus and the Canadian Prospectus, shall have the meanings
ascribed thereto in the applicable Canadian Securities Laws.
(e) The Canadian Prospectus and any subsequent amendment to the
Canadian Prospectus and any other document required to be filed in order to
qualify the Shares for distribution in the Qualifying Provinces in their
English and French language versions (collectively, the "Supplementary
Material") do and will, as of the applicable filing date, conform in all
material respects to the applicable requirements of the Canadian Securities
Laws. The Canadian Prospectus and any Supplementary Material, at the time
of filing thereof, do not, and will not, contain a misrepresentation, do
and will constitute full, true and plain disclosure of all material facts
relating to the Company and each of its Subsidiaries, taken as a whole, and
to the Shares and do not, and will not, omit to state a fact required to be
stated therein or necessary to make the statements therein not misleading
in light of the circumstances in which they were made. This representation
and warranty shall not apply to any statement or information furnished in
writing by an Underwriter to the Company relating solely to the
Underwriters and expressly for use in
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any amendment to the Canadian Prospectus or any other document required to
be filed in order to qualify the Shares for distribution in the Qualifying
Provinces.
(f) Each contract, agreement, instrument, lease, license or other
item required to be described in the Registration Statement, the U.S.
Prospectus or the Canadian Prospectus or filed as an exhibit to the
Registration Statement or with the appropriate Securities Regulator has
been so described or filed, as the case may be.
(g) KPMG LLP, Chartered Accountants ("KPMG"), whose separate reports
appear in the U.S. Prospectus and the Canadian Prospectus and ▇▇▇▇▇▇▇,
▇▇▇▇▇ and ▇▇▇▇▇▇▇▇, Chartered Accountants ("▇▇▇▇▇▇▇, ▇▇▇▇▇") who audited
the Company's consolidated financial statements for fiscal 1995 are
independent certified public accounting firms with respect to the Company,
and in each case as required by and within the meaning of the Act, the
Regulations, the CANADA BUSINESS CORPORATIONS ACT (the "CBCA") and the
Canadian Securities Laws. The consolidated financial statements and
schedules (including the related notes) of the Company and its Subsidiaries
(the "Company Financials") included in the Registration Statement or any
U.S. Preliminary Prospectus or Canadian Preliminary Prospectus, the
Canadian Prospectus or to be included in the U.S. Prospectus or the PREP
Prospectus Supplement (collectively, the "Offering Documents") present
fairly in all material respects the consolidated financial position,
results of operations, retained earnings and cash flows of the Company, its
Subsidiaries and their predecessors and the other information purported to
be shown therein at the respective dates and for the respective periods to
which they apply. The Company Financials have been prepared in accordance
with generally accepted accounting principles as in effect in Canada
("Canadian GAAP") consistently applied throughout the periods involved, and
are, in all material respects, in accordance with the books and records of
the Company, its Subsidiaries and their predecessors, as the case may be.
The Company Financials have been reconciled as required under Item 18 of
Form 20-F and Regulation S-X under the Act to United States generally
accepted accounting principles ("U.S. GAAP") consistently applied
throughout the periods involved. The "pro forma" financial information
included, or to be included in the Offering Documents, presents fairly in
all material respects the information purported to be shown therein at the
respective dates thereof and for the respective periods covered thereby and
all adjustments have been properly applied. The assumptions in such pro
forma financial information are reasonable. No other financial statements
are required by Form F-1, Canadian Securities Laws or otherwise to be
included in the Offering Documents other than those included therein and
those whose omission in the Offering Documents has been authorized by
Canadian Securities Regulators. The selected consolidated financial
information and statistical data set forth under the captions "Summary
Consolidated Financial Data" and "Selected Consolidated Financial Data" in
the Offering Documents have been prepared on a basis consistent with the
Company Financials.
(h) Subsequent to the respective dates as of which information is
given in the Registration Statement, except as set forth in the
Registration Statement or as may be set forth in the U.S. Prospectus and
the Canadian Prospectus and any Supplementary Material, there has not been
any material adverse change in the business, properties, operations,
condition (financial or other) or results of operations of the Company and
its
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Subsidiaries taken as a whole, whether or not arising from transactions in
the ordinary course of business, and since the date of the latest balance
sheet of the Company included in the Registration Statement, and except as
described in the Registration Statement or as may be described in the U.S.
Prospectus and the Canadian Prospectus and any Supplementary Material, (i)
neither the Company nor any of its Subsidiaries (A) has incurred or
undertaken any liabilities or obligations, direct or contingent, that are,
individually or in the aggregate, material to the Company and its
Subsidiaries taken as a whole, or (B) entered into any transaction not in
the ordinary course of business that is material to the Company and its
Subsidiaries taken as a whole; and (ii) the Company has not declared or
paid any dividend on or made any distribution of or with respect to any
shares of its share capital or redeemed, purchased or otherwise acquired or
agreed to redeem, purchase or otherwise acquire any shares of its or its
Subsidiaries' share capital. As used in this Agreement, the term
"subsidiary" means any corporation, partnership, joint venture,
association, company, business trust or other entity in which the Company
directly or indirectly (i) beneficially owns or controls a majority of the
outstanding voting securities having by the terms thereof ordinary voting
power to elect a majority of the board of directors (or other body
fulfilling a substantially similar function) of such entity (irrespective
of whether or not at the time any class or classes of such voting
securities shall have or might have voting power by reason of the happening
of any contingency) or (ii) has the authority or ability to control the
policies of such entity (including, but without limitation thereto, any
partnership of which the Company or a Subsidiary is a general partner or
owns or has the right to obtain a majority of limited partnership interests
and any joint venture in which the Company or a Subsidiary has liability
similar to the liability of a general partner of a partnership or owns or
has the right to obtain a majority of the joint venture interests).
(i) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and to
issue, sell and deliver the Shares in accordance with the terms and
conditions hereof. The Agreement has been duly and validly authorized by
all necessary corporate action, executed and delivered by the Company and
is a legal and binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws affecting creditors' rights and remedies generally, and
subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding at law or in
equity), and except insofar as rights to indemnification and contribution
contained therein may be limited by federal, provincial or state securities
laws or related public policy.
(j) The Company's execution and delivery of, and its performance of
its obligations under, this Agreement and the consummation of the
transactions contemplated hereby and the compliance by the Company with the
terms hereof do not and will not (i) result in a breach of any of the terms
and provisions of, or constitute a default under (or an event that with
notice or lapse of time, or both, would constitute a default under) or
require approval or consent under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the
Company or any of its Subsidiaries pursuant to the terms of (A) any
agreement, contract, indenture, mortgage,
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lease, license, arrangement or understanding to which the Company or any of
its Subsidiaries is a party, or to which any of their respective properties
is subject, that is material to the Company and the Subsidiaries taken as a
whole (hereafter, collectively, "Material Contracts") (except for those
breaches or defaults for which consent or approval has been obtained by the
Company prior to the date hereof or (B) any governmental franchise, license
or permit heretofore issued to the Company or any of its Subsidiaries that
is material to the Company and its Subsidiaries taken as a whole
(hereafter, collectively, "Material Permits"), (ii) violate any provision
of the certificate of incorporation, certificates of amendment, by-laws or
similar governing instruments of the Company or any of its Subsidiaries
listed on Schedule II hereto (the "Subsidiaries") or (iii) violate any
judgment, decree, order, statute, rule or regulation of any court or any
public, governmental or regulatory agency or body having jurisdiction over
the Company or any Subsidiary or any of its respective properties or
assets, except for those violations, that, individually or in the
aggregate, would not be reasonably likely to have a material adverse effect
on the business, properties, operations, assets, liabilities, net worth,
condition (financial or other), results of operations or prospects of the
Company and its Subsidiaries taken as a whole (hereafter, a "Material
Adverse Effect").
(k) Assuming compliance by the Underwriters with their undertakings
under Section 4 hereof, no consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any court
or any public, governmental or regulatory agency or body, domestic or
foreign, having jurisdiction over the Company or any of its Subsidiaries or
any of their respective properties or assets is required for the Company's
execution and delivery of, and its performance of its obligations under,
this Agreement, and the consummation of the transactions contemplated
hereby, except the registration or qualification of the Shares under the
Act, the United States Securities Exchange Act of 1934, as amended (the
"Exchange Act") and Canadian Securities Laws, the authorization of the
Shares for listing on the American Stock Exchange (the "AMEX"), The
Montreal Exchange (the "ME") and The Toronto Stock Exchange (the "TSE") and
such filings and registrations as may be required under state securities or
"Blue Sky" laws in connection with the purchase and distribution of the
Shares by the Underwriters. No consent of any party to any Material
Contract to which the Company or any of its Subsidiaries is a party, or to
which any of their respective properties or assets is subject, is required
for the Company's execution and delivery of, and its performance of its
obligations under, this Agreement as contemplated hereby (except for those
consents already obtained or which shall be obtained prior to the Closing).
(l) Assuming all of the transactions contemplated by the Offering
have occurred (i) all of the outstanding shares of the share capital of the
Company, and all of the outstanding shares of the share capital (or similar
interests) of each of its Subsidiaries, have been duly and validly
authorized and issued, are fully paid and non-assessable and were not
issued in violation of or subject to any pre-emptive rights, (ii) the
outstanding Class A Shares and the Company's outstanding Class B Multiple
Voting Shares (the "Class B Shares") have been duly authorized and validly
issued by the Company and are fully paid and non-assessable, (iii) the
Class A Shares of the Company to be outstanding on the Closing Date (as
hereinafter defined), including the Shares, have been duly authorized and,
when issued (and, in the case of the Shares, delivered and sold in
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accordance with the terms of this Agreement) will be validly issued, fully
paid and non-assessable, and will not have been issued in violation of or
be subject to any pre-emptive rights, (iv) upon delivery of and payment for
the Shares in accordance with this Agreement, the Underwriters will receive
good and valid title to those of the Class A Shares to be purchased by them
from the Company, free and clear of all liens, encumbrances, security
interests, hypothecs, claims, community property rights, restrictions on
transfer or other defects in title or any other adverse claims, (v) the
Company has, as of the date hereof, and will have, as of the Closing Date
and the Additional Closing Date (as hereinafter defined), if any, an
authorized and outstanding capitalization as set forth in the Registration
Statement and as shall be set forth in the U.S. Prospectus and the PREP
Prospectus Supplement, both on an historical basis and as adjusted to give
effect to the offering of the Class A Shares and (vi) the Company's share
capital conforms to the description thereof set forth in the Registration
Statement and as shall be set forth in the U.S. Prospectus and the PREP
Prospectus Supplement. The Company owns directly or indirectly such
percentage of the outstanding share capital (or similar interests) of each
of its Subsidiaries as is set forth opposite the name of such Subsidiary in
Schedule II hereto, free and clear of all claims, liens, security
interests, hypothecs, pledges, charges, encumbrances, shareholders'
agreements and voting trusts, except as otherwise described in said
Schedule II.
(m) There is no commitment, plan or arrangement to issue, and no
outstanding option, warrant or other right calling for the issuance of,
any shares of share capital (or similar interests) of the Company or of
any of its Subsidiaries or any security or other instrument that by its
terms is convertible into, exchangeable for or evidencing the right to
purchase share capital (or similar interests) of the Company or such
Subsidiary, except as described in the Registration Statement and as
shall be described in the U.S. Prospectus and the PREP Prospectus
Supplement.
(n) The Company has no Subsidiaries other than those listed in
Schedule II hereto. Each of the Company and its Subsidiaries has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation. Each of
the Company and the Subsidiaries is duly qualified and in good standing
as a foreign corporation in each jurisdiction in which the character or
location of its properties (owned, leased or licensed) or the nature or
conduct of its business makes such qualification necessary, except for
those failures to be so qualified or in good standing that will not in
the aggregate be reasonably likely to have a Material Adverse Effect.
Each of the Company and the Subsidiaries has all requisite corporate
power and authority, and all necessary consents, approvals,
authorizations, orders, registrations, filings, qualifications, licenses
and permits of and from all public, regulatory or governmental agencies
and bodies, domestic or foreign, to own, lease and operate its properties
and conduct its business as now being conducted and as described in the
Registration Statement and the Canadian Prospectus and as shall be
described in the U.S. Prospectus (except for those the absence of which,
individually or in the aggregate, would not be reasonably likely to have
a Material Adverse Effect), and no such consent, approval, authorization,
order, registration, qualification, license or permit contains a
materially burdensome restriction that is not adequately disclosed in the
Offering Documents. Neither the Company nor any Subsidiary has received
any written notice of
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proceedings relating to revocation or modification of any such consents,
approvals, authorizations, orders, registrations, filings, qualifications,
licenses or permits (except for those the revocation or modification of
which would not be reasonably likely to have a Material Adverse Effect).
(o) Neither the Company nor any of its Subsidiaries, nor to the
knowledge of the Company, any other party, is in violation or breach of,
or in default under (nor has an event occurred that with notice, lapse of
time or both, would constitute a default under), any Material Contract,
and each Material Contract is in full force and effect, and is the legal,
valid and binding obligation of the Company or such Subsidiary, as the
case may be, and (subject to applicable bankruptcy, insolvency, and other
laws affecting the enforceability of creditors' rights generally) is
enforceable as to the Company or such Subsidiary, as the case may be, in
accordance with its terms. Neither the Company nor any Subsidiary is in
violation of its certificate of incorporation, certificates of amendment,
by-laws or similar governing instrument.
(p) There is no litigation, arbitration, claim, governmental or
other proceeding or investigation pending or, to the best knowledge of
the Company, threatened with respect to the Company or any of its
Subsidiaries, or any of their respective operations, businesses,
properties or assets, except as described in the Registration Statement
and as shall be described in the U.S. Prospectus and the Canadian
Prospectus, that, individually or in the aggregate, would be reasonably
likely to have a Material Adverse Effect. To the best knowledge of the
Company, neither the Company nor any Subsidiary is, or, with the giving
of notice or lapse of time or both would be, in violation of or in
non-compliance with the requirements of any Material Permit or the
provisions of any law, rule, regulation, order, judgment or decree,
including, without limitation, all applicable federal, provincial, state
and local laws and regulations relating to (i) zoning or land use and
(ii) employee or occupational safety, discrimination in hiring, promotion
or pay of employees, employee hours and wages or employee benefits,
except for such violations or failures of compliance that, individually
or in the aggregate, would not be reasonably likely to have a Material
Adverse Effect.
(q) Except as generally described in the Registration Statement and
as shall be described in the U.S. Prospectus and the Canadian Prospectus,
the Company and each of its Subsidiaries have (i) good and marketable
title to all real (immovable) and personal (movable) properties owned by
them, free and clear of all liens, security interests, hypothecs,
pledges, charges, encumbrances and mortgages, and (ii) valid, subsisting
and enforceable leases for all real (immovable) and personal (movable)
properties leased by them, in each case, subject to such exceptions as,
individually or in the aggregate, do not have and are not reasonably
likely to have a Material Adverse Effect. No real (immovable) property
owned, leased, licensed or used by the Company or by a Subsidiary lies in
an area that is, or to the best knowledge of the Company will be, subject
to zoning, use or building code restrictions that would prohibit, and no
state of facts relating to the actions or inaction of another person or
entity or his, her or its ownership, leasing, licensing or use of any
real (immovable) or personal (movable) property exists that would
prevent, the continued effective ownership, leasing, licensing or use of
such real (immovable) property in the business of the Company or such
Subsidiary as presently
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conducted or as the U.S. Prospectus and the Canadian Prospectus indicate
are contemplated to be conducted, subject to such exceptions as,
individually or in the aggregate, do not have and are not reasonably likely
to have a Material Adverse Effect.
(r) The Company, directly or through one or more of its Subsidiaries,
owns or has the right under license to use all patents, patent rights,
licenses, inventions, copyrights, trademarks, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), service marks and trade
names (collectively, "Intellectual Property") necessary to conduct its
business as now conducted and proposed to be conducted as disclosed in the
Registration Statement and as shall be disclosed in the U.S. Prospectus and
the Canadian Prospectus. Neither the Company nor any of its Subsidiaries
has received any written notice of infringement of or conflict with (and
none of them knows of any such infringement of or conflict with) the
asserted rights of others with respect to any Intellectual Property. To
the best knowledge of the Company, there is no infringement by others of
any Intellectual Property of the Company or any of its Subsidiaries that
has had or may in the future be reasonably likely to have a Material
Adverse Effect.
(s) To the Company's best knowledge, neither the Company or any of
its Subsidiaries, nor any director, officer or employee of the Company or
any such Subsidiary has, directly or indirectly, used any corporate funds
for unlawful contributions, gifts, entertainment, or other unlawful
expenses relating to political activity; made any unlawful payment to
foreign or domestic government officials or employees or to foreign or
domestic political parties or campaigns from corporate funds; violated any
provision of the United States Foreign Corrupt Practices Act of 1977, as
amended or any provision of the Corruption of Foreign Public Officials Act
(Canada); or made any bribe, rebate, payoff, influence payment, kickback,
or other unlawful payment.
(t) Except as set forth in the Offering Documents, no person or
entity has the right, by contract or otherwise, to require registration
under the Act or qualification for sale under the Canadian Securities Laws
of shares of the share capital or other securities of the Company or any of
its Subsidiaries solely because of the filing or effectiveness of the
Registration Statement, of the filing of the Canadian Prospectus with, or
issuance of receipts by, the Securities Regulators in connection with the
Canadian Prospectus and the consummation of the transactions contemplated
by this Agreement.
(u) Neither the Company nor any of its officers, directors or
affiliates (as defined in the Regulations or the Canadian Securities Laws)
will take, directly or indirectly, prior to the completion or termination
of the offerings of the Shares contemplated by this Agreement, any action
designed to stabilize or manipulate the price of the Class A Shares, or
that might reasonably be expected to cause or result in stabilization or
manipulation of the price of the Class A Shares.
(v) Neither the Company nor any of its Subsidiaries is, or intends to
conduct its business in such a manner that it would become, and after
giving effect to the offering and sale of the Shares and the application of
the proceeds thereof as described in the U.S. Prospectus and the Canadian
Prospectus, neither the Company nor any Subsidiary will be,
- 11 -
11
an "investment company" or a company "controlled" by an "investment
company" as such terms are defined in the United States Investment Company
Act of 1940, as amended (the "Investment Company Act").
(w) Except as may be set forth in the U.S. Prospectus and the Canadian
Prospectus, the Company has not incurred any liability for a fee,
commission or other compensation on account of the employment of a broker
or finder in connection with the transactions contemplated by this
Agreement. In the event any person, firm or corporation acting or
purporting to be acting for the Company establishes a claim for any
commission or brokerage or finder's fee from the Underwriters, the Company
covenants to indemnify and hold harmless the Underwriters with respect
thereto and with respect to all costs reasonably incurred in the defense
thereof.
(x) The Company and each of its Subsidiaries maintain systems of
internal accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with management's general
or specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with Canadian GAAP
and to maintain accountability for assets; (iii) the access to the
respective assets of the Company and each such Subsidiary, as the case may
be, 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.
(y) No labor dispute with the employees of the Company or any of its
Subsidiaries exists or, to the best knowledge of the Company, is imminent
that, individually or in the aggregate, is or is reasonably likely to have
a Material Adverse Effect, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its principal
suppliers or contractors that reasonably can be expected to have a Material
Adverse Effect.
(z) Each of the Company and the Subsidiaries has (A) filed all
necessary federal, provincial, state and local income tax returns, (B)
filed all other necessary foreign or other income or franchise tax returns
except insofar as the failure to file such returns which, individually or
in the aggregate, would not (1) be reasonably likely to have or could not
result in a Material Adverse Effect, (2) materially impair the Company's
ability to perform the obligations contemplated in this Agreement or (3)
materially affect the consummation of the transactions contemplated in this
Agreement and the Offering Documents; and the Company has no knowledge of
any necessary foreign or other income or franchise tax returns that the
Company has not filed, (C) otherwise paid all taxes due and governmental
charges, penalties, interest and fines due and payable by it and which are
due and owing or are claimed by any governmental authority to be due and
owing subject to the exception of (B) hereof and (D) made adequate
provision for taxes payable for any completed fiscal period for which tax
returns are not yet required. There are no agreements, waivers or other
arrangements providing for an extension of time with respect to the filing
of any tax return or payment of any tax, governmental charge or deficiency
by the Company or the Subsidiaries and there are no actions, suits,
proceedings, investigations or claims pending, or to the best of the
Company's knowledge, threatened
- 12 -
12
against the Company or the Subsidiaries in respect of taxes, governmental
charges or assessments or any matters under discussion with any
governmental authority relating to taxes, governmental charges or
assessments asserted by any such authority which would be reasonably likely
to have a Material Adverse Effect.
(aa) The Shares do not constitute "foreign property" under the
INCOME TAX ACT (Canada).
(bb) No Subsidiary of the Company is currently prohibited, directly
or indirectly, from paying any dividends to the Company, from making any
other distribution on such Subsidiary's share capital, 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 or
any other Subsidiary of the Company, except as described in or contemplated
by the Offering Documents.
(cc) Montreal Trust Company at its principal offices in Montreal,
Qu#bec and Toronto, Ontario (the "Transfer Agent") has been duly appointed
transfer agent and registrar for the Class A Shares of the Company in
Canada and Bank of Nova Scotia Trust Company of New York at its principal
office in New York, New York (the "U.S. Transfer Agent") has been duly
appointed co-transfer agent and co-registrar for the Class A Shares of the
Company in the United States.
(dd) Neither the Company nor any Subsidiary nor any of their
properties or assets has any immunity from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid
of execution, execution or otherwise) under the laws of Canada or any
province thereof, subject to the FOREIGN EXTRATERRITORIAL MEASURES ACT
(Canada).
(ee) Each of the Company and its Subsidiaries is insured against
such losses and risks and in such amounts as are customary in the
businesses in which the Company and its Subsidiaries are engaged. Neither
the Company nor any of its Subsidiaries has any reason to believe that it
will not be able to renew its existing insurance coverage from similar
insurers as may be necessary to continue its business.
(ff) Except as disclosed in the Registration Statement and the
Canadian Prospectus and as shall be disclosed in the U.S. Prospectus, there
are no business relationships or related party transactions of the nature
described in Item 404 of Regulation S-K of the Commission involving the
Company or any other persons referred to in such Item 404, except for such
transactions that would be considered immaterial under such Item 404.
(gg) Except as would not, singly or in the aggregate, be reasonably
likely to result in a Material Adverse Effect, (A) neither the Company nor
any of its Subsidiaries is in violation of any federal, provincial, state,
local or foreign statute, law, rule, regulation, ordinance, code, policy or
rule of common law or any judicial or administrative interpretation
thereof, including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface
- 13 -
13
strata) or wildlife, including, without limitation, laws and regulations
relating to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and its Subsidiaries have all permits,
authorizations and approvals required under any applicable Environmental
Laws and are each in compliance with their requirements, (C) to the best
knowledge of the Company there are no pending or threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
Subsidiaries and (D) to the best knowledge of the Company there are no
events or circumstances that might reasonably be expected to form the basis
of an order for clean-up or remediation, or an action, suit or proceeding
by any private party or governmental body or agency, against or affecting
the Company or any of its Subsidiaries relating to Hazardous Materials or
any Environmental Laws.
(hh) The statistical and market-related data included in the
Offering Documents are based on or derived from sources which the Company
believes to be reliable in all material respects or represent the Company's
good faith estimates that are made on the basis of data derived from such
sources.
(ii) The Class A Shares currently outstanding are listed on the ME,
the TSE and the AMEX. The Shares to be sold hereunder have been
conditionally approved for listing on the ME, the TSE and the AMEX, subject
to compliance only with customary listing conditions. The definitive form
of certificates for the Class A Shares are in due and proper form under the
laws governing the Company and in compliance with the requirements of the
ME, the TSE and the AMEX.
4. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS.
The Underwriters represent and warrant to, and agree with, the Company
that:
(a) During the course of the distribution of the Shares to the
public by or through the Underwriters, the Underwriters will offer the
Shares for sale to the public and will sell the Shares only in those
jurisdictions where they may be lawfully offered for sale or sold. Each
agreement of the Underwriters establishing a banking or selling or other
group in respect of the distribution of the Shares in the Qualifying
Provinces shall contain a similar covenant by each selling firm. The
members of any such group are sometimes hereinafter collectively referred
to as the "Selling Firms".
(b) The Underwriters will distribute the Shares in a manner which
complies in all material respects with the Act, the Regulations and the
Canadian Securities Laws.
(c) The Underwriters will not solicit offers to purchase and sell
the Shares so as to require registration thereof or filing of a prospectus
or similar document with respect thereto under the laws of any jurisdiction
(the "Other Jurisdictions") other than the United
- 14 -
14
States or the Qualifying Provinces.
(d) The Underwriters shall offer the Shares directly in Canada and
in the United States, only as permitted by the Act, the Regulations and the
Canadian Securities Laws, upon the terms and conditions set forth in the
Offering Documents or any amendment to the Offering Documents and this
Agreement and will require any other Selling Firm engaged by them in
connection with the distribution of the Shares to agree to so distribute.
(e) Offers may be made or accepted by the Underwriters in the Other
Jurisdictions outside Canada and the United States in compliance with the
Act, the Regulations and the Canadian Securities Laws and with all
applicable securities laws of such Other Jurisdictions, only under
circumstances that will not require any filings by the Company or approvals
from any regulatory authorities.
(f) The Underwriters shall:
(i) use all commercially reasonable efforts to complete the
distribution of the Shares in the Qualifying Provinces and the United
States on, or as soon as possible after, the Closing Date or the
Additional Closing Date, as the case may be, and in any event not
later than 5 business days after, and
(ii) notify the Company when, in their opinion, the
Underwriters have ceased distribution of the Shares and provide a
breakdown of the number of Shares distributed in each of the
Qualifying Provinces where such breakdown is required for the purpose
of calculating fees payable to securities regulatory authorities or
otherwise and a statement as to the distribution of the Shares for the
purpose of assisting in the listing of the Shares on the AMEX, the ME
and the TSE.
(g) For purposes of this Section 4, the Underwriters shall be
entitled to assume that the Shares are qualified or registered for
distribution by duly registered investment dealers and brokers: (a) in any
of the Qualifying Provinces where (i) a receipt or similar document for the
Canadian Prospectus shall have been obtained from the Principal Regulator
for and on behalf of the Securities Regulators following the filing of the
Canadian Prospectus and (ii) following the filing of the PREP Prospectus
Supplement in such Qualifying Province, only after issuance by such
Qualifying Province of a notice of acceptance or receipt therefor, and (b)
in the United States following the Effective Time, subject to applicable
state securities or blue sky laws.
(h) Bear, ▇▇▇▇▇▇▇, on behalf of the Underwriters, will advise the
Company by written notice of the date of termination of the period of
distribution of the Shares forthwith after termination and of the amount of
Shares sold (i) in the Qualifying Provinces in which a filing fee for a
prospectus is based on the proceeds realized in the Qualifying Provinces,
and (ii) in Quebec.
5. PURCHASE, SALE AND DELIVERY OF THE SHARES.
- 15 -
15
(a)(i) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein
set forth, the Company agrees to issue and sell to each of the Underwriters
an aggregate of 3,000,000 Class A Shares, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I
hereto, plus any additional number of Shares which such Underwriter may
become obligated to purchase pursuant to the provisions of Section 13
hereof, all at a purchase price of US [$____] per Share or Cdn [$____] per
Share (the "Purchase Price"). Subject to Section 13, the aggregate number
of Firm Shares to be purchased from the Company by each Underwriter (as
adjusted by Bear, ▇▇▇▇▇▇▇ to eliminate fractions) shall be determined by
multiplying the aggregate number of Firm Shares to be sold by the Company,
as set forth above by a fraction (A) the numerator of which is the total
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto and (B) the denominator of which is the total number of
Firm Shares.
(ii) Delivery of the Firm Shares and payment of the Purchase Price
therefor shall be made at the offices of Bear, ▇▇▇▇▇▇▇ at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other location in the New
York City metropolitan area as Bear, ▇▇▇▇▇▇▇ shall determine and
advise the Company upon at least two full business days' notice in
writing. Such delivery and payment shall be made at 10:00 A.M., New
York City time, on the fifth full business day following the
determination of the Purchase Price, or at such other time as may be
agreed upon by Bear, ▇▇▇▇▇▇▇ and the Company. The time and date of
such delivery and payment are herein called the "Closing Date".
Delivery of the Firm Shares shall be made to or upon the order of
Bear, ▇▇▇▇▇▇▇, for the respective accounts of the Underwriters,
against payment to the Company of the aggregate Purchase Price for the
Firm Shares sold by the Company, by wire transfer of same day funds,
in U.S. Dollars with respect to Shares sold in the United States and
in Canadian dollars with respect to Shares sold in Canada, to the
account of the Company designated in writing to Bear, ▇▇▇▇▇▇▇ at least
two full business days prior to the Closing Date.
(iii) Certificates for the Firm Shares shall be registered in such
name or names and in such authorized denominations as Bear, ▇▇▇▇▇▇▇
may request in writing at least two full business days prior to the
Closing Date, provided that, if so specified by Bear, ▇▇▇▇▇▇▇, the
Firm Shares may be represented by a global certificate registered in
the name of Cede & Co. ("Cede"), as nominee of the Depositary Trust
Company. Bear, ▇▇▇▇▇▇▇ shall be permitted to examine and package such
certificates for delivery at least one full business day prior to the
Closing Date, unless the Firm Shares are to be represented by a global
certificate.
(b)(i) The Company hereby grants to the Underwriters an option (the
"Option") to purchase from the Company the Additional Shares at the
Purchase Price, for the sole purpose of covering over-allotments, if any,
in the offering of the Firm Shares by the Underwriters. The Option shall
be exercisable by the
- 16 -
16
Underwriters in whole or in part at any time or from time to time, but
in no event after the expiration of 30 days from the date of the U.S.
Prospectus, for the purchase of all or part of the Additional Shares,
such exercise to be made by notice, given by Bear, ▇▇▇▇▇▇▇ to the
Company in the manner specified in Section 16 hereof, which notice
shall set forth the aggregate number of Additional Shares with respect
to which the Option is being exercised, the denominations and the name
or names in which certificates evidencing the Additional Shares so
purchased are to be registered, and the date and time of delivery of
such Additional Shares, which date may be at or subsequent to the
Closing Date and shall not be less than two nor more than ten days
after such notice. Subject to Section 13, the aggregate number of
Additional Shares so purchased from the Company by each Underwriter
(as adjusted by Bear, ▇▇▇▇▇▇▇ to eliminate fractions) shall be
determined by multiplying the aggregate number of such Additional
Shares to be sold by the Company by a fraction (A) the numerator of
which is the total number of Firm Shares set forth opposite the name
of such Underwriter in Schedule I hereto and (B) the denominator of
which is the total number of Firm Shares.
(ii) Delivery of the Additional Shares so purchased and payment
of the Purchase Price therefor shall be made at the offices of Bear,
▇▇▇▇▇▇▇ at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other
location in the New York City metropolitan area as Bear, ▇▇▇▇▇▇▇ shall
determine and advise the Company upon at least two full business days'
notice in writing. Such delivery and payment shall be made at 10:00
A.M., New York City time, on the date designated in such notice or at
such other time and date as may be agreed upon by Bear, ▇▇▇▇▇▇▇ and
the Company. The time and date of such delivery and payment are
herein called the "Additional Closing Date". Delivery of the
Additional Shares shall be made to or upon the order of Bear, ▇▇▇▇▇▇▇,
for the respective accounts of the Underwriters, against payment to
the Company of the aggregate Purchase Price for the Additional Shares
sold by the Company by wire transfer of same day funds, in U.S.
Dollars with respect to Shares sold in the United States and in
Canadian dollars with respect to Shares sold in Canada, to the account
of the Company designated in writing to Bear, ▇▇▇▇▇▇▇ at least two
full business days prior to the Additional Closing Date.
(iii) Certificates for the Additional Shares purchased by the
Underwriters, when so delivered, shall be registered in such name or
names and in such authorized denominations as Bear, ▇▇▇▇▇▇▇ shall have
requested in the notice of exercise of the Option, provided that, if
so specified therein, such Additional Shares may be represented by a
global certificate registered in the name of Cede, as nominee for the
Depository Trust Company. Bear, ▇▇▇▇▇▇▇ shall be permitted to examine
and package such certificates for delivery at least one full business
day prior to the Additional Closing Date, unless the Additional Shares
are to be represented by a global certificate.
(c) The Underwriters shall not be obligated to purchase any Firm
Shares from the Company except upon tender to the Underwriters by the
Company of all of the Firm Shares and the Underwriters shall not be
obligated to purchase any Additional Shares from
- 17 -
17
the Company except upon tender to the Underwriters by the Company of all of
the Additional Shares specified in the notice of exercise of the Option.
The Company shall not be obligated to sell or deliver any Firm Shares or
any Additional Shares, as the case may be, except upon tender of payment by
the Underwriters for all the Firm Shares or all the Additional Shares
specified in the notice of exercise of the Option, as the case may be,
agreed to be purchased by the Underwriters hereunder.
6. OFFERING. The Company has been advised by you that the Underwriters
propose to make a public offering of their respective portions of the Shares in
Canada, the United States and the Other Jurisdictions, if any, as soon after the
Registration Statement and this Agreement have become effective and, with
respect to the Offering in the Qualifying Provinces, after receipt of a mutual
reliance review system decision document for the Canadian Prospectus by the
Principal Regulator, for and on behalf of the Securities Regulators in each of
the Qualifying Provinces, and as in your judgment is advisable. The Company has
been further advised by you that the Shares are to be offered to the public
initially at a price of US [$____] per share or Cdn [$____] per share and to
certain dealers selected by you at a price that represents a concession not in
excess of US [$____] per share or Cdn [$____] per share, and that any
Underwriter may allow, and such dealers may reallow, a further concession, not
in excess of US [$____] per share or Cdn [$____] per share, to any Underwriter
or to certain other dealers, and that with respect to sales in the United States
after the initial offering of the Shares, the public offering price and such
concessions may be changed by you.
7. COVENANTS OF THE COMPANY. The Company covenants and agrees with each
Underwriter that:
(a) The Company shall use its best efforts to cause the
Registration Statement to become effective as promptly as possible and to
maintain it in effect for the duration of the distribution period as
contemplated herein. If the Registration Statement has become or becomes
effective pursuant to Rule 430A of the Regulations, or filing of the U.S.
Prospectus with the Commission is otherwise required under Rule 424(b) of
the Regulations, the Company shall file the U.S. Prospectus, properly
completed, with the Commission pursuant to Rule 424(b) of the Regulations
within the time period therein prescribed and shall provide evidence
satisfactory to you of such timely filing. The Company shall promptly
advise you (and, if requested, confirm such advice in writing), (i) when
the Registration Statement or any post-effective amendment thereto has
become effective, (ii) when the Principal Regulator, for and on behalf of
the Securities Regulators shall have issued acceptances, receipts or other
clearances for the Canadian Prospectus, (iii) of the initiation or
threatening of any proceedings for, or receipt by the Company of any notice
with respect to, the suspension of the qualification of the Shares for sale
in any jurisdiction or the issuance by the Commission of any order
suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto, (iv) of receipt by the Company or any
representative of or attorney for the Company of any other communications
from the Commission relating to the Company, the Registration Statement,
any U.S. Preliminary Prospectus, the U.S. Prospectus or the transactions
contemplated by this Agreement and (v) of the issuance by any Securities
Regulators of an order preventing or suspending the use of the Canadian
Prospectus, any amendment thereto or the transactions contemplated by this
Agreement or threat of any investigation
- 18 -
18
or proceeding for such purpose. The Company shall make every reasonable
effort to prevent the issuance of any such order and, if any such order is
issued, to obtain its lifting as soon as possible. The Company shall not
file any amendment to the Registration Statement or any amendment of or
supplement to the U.S. Prospectus or the Canadian Prospectus (other than
the PREP Prospectus Supplement) before or after the Effective Date to which
you shall reasonably object after being timely furnished in advance a copy
thereof unless the Company shall conclude, upon the advice of counsel, that
any such amendment must be filed at a time prior to obtaining such consent.
(b) The Company shall, (a) as soon as practicable and no later
than the second business day after the date hereof: cause the PREP
Prospectus Supplement, in its English and French language versions, and any
documentation supplemental thereto required to be filed under the Canadian
Securities Laws, in each case in form and substance satisfactory to the
Underwriters and their counsel, acting reasonably, and with such signatures
as may be required by the Canadian Securities Laws; and (b) as soon as
practicable following receipt of acceptances or other clearances from the
Securities Regulators in each of the Qualifying Provinces for the PREP
Prospectus Supplement, and in any event no later than the business day
following such receipt cause commercial copies of the PREP Prospectus
Supplement (in its English and French language versions) to be delivered to
the Underwriters, without charge, in such numbers and in such cities as the
Underwriters may reasonably request by instructions given by you to the
printer of the PREP Prospectus Supplement. The Company shall also cause to
be delivered in a similar fashion commercial copies of any Supplementary
Material (in their English and French language versions) referred to in
Section 7(c) required under Canadian Securities Laws to be delivered, on
request or otherwise, to purchasers of the Shares in the Qualifying
Provinces. Such delivery and the prior delivery of copies of the Canadian
Prospectus shall constitute or did constitute, as the case may be, the
consent of the Company to the use by the Underwriters and any member of any
banking or selling group established in connection with the distribution of
the Shares of the Canadian Prospectus and any Supplementary Material, as
the case may be, in accordance with the Canadian Securities Laws.
(c) The Company shall prepare and file any Supplementary Material
required to be filed by the Company under the Canadian Securities Laws or
the rules of the ME, the TSE or the AMEX, and any amendment to the Canadian
Prospectus comprised in such Supplementary Material shall be in form and
substance satisfactory to the Underwriters and their counsel, acting
reasonably, and a copy thereof (signed if required) shall be promptly
delivered by the Company to the Underwriters, and the Company shall deliver
to the Underwriters, concurrently with the delivery of any Supplementary
Material, with respect to such Supplementary Material, opinions and
certificates similar to those referred to in Sections 9(i) and 9(j), if a
French language version of such Supplementary Materials is required to be
filed, and a letter similar to that referred to in Section 9(h), if any
financial or accounting data is contained in such Supplementary Material.
(d) Within the time during which the U.S. Prospectus or Canadian
Prospectus is required to be delivered under the Act, the Company shall
comply with all requirements imposed upon it by the Act, as now or
hereafter amended, by the Regulations, as from
- 19 -
19
time to time in force and by Canadian Securities Laws, so far as necessary
to permit the continuance of sales of or dealings in the Shares as
contemplated by the provisions hereof and by the U.S Prospectus and the
Canadian Prospectus. If, during such period, any event shall occur as a
result of which the U.S. Prospectus or Canadian Prospectus as then amended
or supplemented includes any untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary to
make the statements made therein, in the light of the circumstances under
which they were made, not misleading, or if it shall be necessary at any
time to amend the Registration Statement or supplement the U.S. Prospectus
or Canadian Prospectus to comply with the Act, the Regulations and the
Canadian Securities Laws, the Company shall notify you promptly and prepare
and file with the Commission or the Securities Regulators an appropriate
post-effective amendment to the Registration Statement or supplement to the
U.S. Prospectus or Canadian Prospectus (in form and substance reasonably
satisfactory to you) that will correct such statement or omission and shall
use its best efforts to have any such post-effective amendment or
supplement to the Registration Statement or the Canadian Prospectus
declared effective as soon as possible.
(e) The Company shall promptly deliver to you two manually-signed
copies of the Registration Statement, including exhibits and all amendments
thereto, the Canadian Preliminary Prospectus and the Canadian Prospectus,
and to those persons (including your counsel) whom you identify to the
Company, such number of conformed copies of the Registration Statement,
with exhibits, each U.S. Preliminary Prospectus, each Canadian Preliminary
Prospectus, the U.S. Prospectus, the Canadian Prospectus and all amendments
of and supplements to such documents, if any, as you may reasonably
request. The delivery of the Registration Statement, including exhibits and
all amendments thereto, the U.S. Preliminary Prospectus, the U.S.
Prospectus, the Canadian Preliminary Prospectus and the Canadian Prospectus
and any Supplementary Material shall constitute the Company's consent to
the use by the Underwriters and any member of any banking or selling or
other group established in connection with the distribution of the Shares
of such documents in connection with the distribution of the Shares in the
United States or in Canada in compliance with the provisions of this
Agreement.
(f) The Company shall cooperate with the Underwriters, Weil,
Gotshal & ▇▇▇▇▇▇ LLP ("▇▇▇▇, Gotshal") and Stikeman, ▇▇▇▇▇▇▇ ("Stikeman")
(collectively, "Underwriters' Counsel") in connection with their efforts to
qualify or register the Shares for sale under the state securities (or
"Blue Sky") laws as you shall reasonably request, shall execute such
applications and documents and furnish such information as reasonably may
be required for such purpose and shall comply with such laws so as to
continue such registrations and qualifications in effect for so long as may
be required to complete the distribution of the Shares as contemplated
herein; provided, however, that in connection therewith the Company shall
not be required to (i) qualify as a foreign corporation in any jurisdiction
in which it is not so qualified as of the date hereof, (ii) file a consent
to service of process in any jurisdiction in any action other than one
arising out of the offering or sale of the Shares in such jurisdiction or
(iii) become subject to service of process in suits or taxation in any
jurisdiction in which it is not now so subject.
(g) As soon as possible and in any event by the times and dates
specified in this
- 20 -
20
Subsection 7(g), the Company shall fulfill, to the satisfaction of counsel
to the Underwriters, all requirements which, under the Canadian Securities
Laws, must be fulfilled in order to qualify the Shares for distribution in
each of the Qualifying Provinces by the Underwriters and other investment
dealers or brokers registered in such Qualifying Provinces. Such
requirements shall be fulfilled by 5:00 p.m. (Montreal time) on the day
which is 10 days after the filing of the Canadian Prospectus, or by such
other time and/or on such later date or dates as regards any of the
Qualifying Provinces as the Company and the Underwriters may agree in
writing. Such qualification shall be maintained until the completion of
the distribution of the Shares as contemplated herein or in the event that
the Shares have, for any reason, ceased to so qualify, such qualification
shall be re-obtained.
(h) As soon as practicable, but in any event not later than
60 days after the end of the 12-month period beginning on the day after
the end of the fiscal quarter of the Company during which the effective
date of the Registration Statement occurs (120 days in the event that the
end of the such fiscal quarter is the end of the Company's fiscal year),
the Company will make generally available to its shareholders, in the
manner specified in Rule 158(b) of the Rules and Regulations, and to the
Representatives, an earnings statement which will be in the detail
required by, and will otherwise comply with, the provisions of
Section 11(a) of the Act and Rule 158(a) of the Rules and Regulations,
which statement need not be audited unless required by the Act or the
Rules and Regulations, covering a period of at least 12 consecutive
months after the effective date of the Registration Statement.
(i) For a period of three years following the date hereof, the
Company will furnish to its shareholders, as soon as practicable, annual
reports (including financial statements audited by independent certified
public accounting firms and prepared in accordance with Canadian GAAP and
reconciled as required under Item 18 of Form 20-F and Regulation S-X under
the Act to U.S. GAAP, if necessary) and unaudited quarterly reports of
earnings, and will deliver to the Representatives:
(A) concurrently with furnishing such quarterly reports to
its shareholders, statements of income of the Company for each
quarter in the form furnished to the Company's shareholders and
certified by the Company's principal financial or accounting officer;
(B) concurrently with furnishing such annual reports to its
shareholders, a balance sheet of the Company as at the end of the
preceding fiscal year, together with statements of operations,
shareholders' equity, and changes in financial position of the Company
for such fiscal year, accompanied by a copy of the report thereon of
independent certified public accounting firms and prepared in
accordance with Canadian GAAP and reconciled as required under Item 18
of Form 20-F and Regulation S-X under the Act to United States GAAP,
if necessary;
(C) as soon as they are available, copies of all information
(financial or other) mailed to all shareholders; and
- 21 -
21
(D) as soon as they are available, copies of all reports
and financial statements furnished to or filed with the Commission,
including, without limitation, all reports on Form 20-F and 6-K, or
such other similar forms as may be designated by the Commission, the
National Association of Securities Dealers, Inc. ("NASD") or any
securities exchange.
During such three-year period, if the Company has active Subsidiaries,
the foregoing financial statements will be on a consolidated basis to the
extent that the accounts of the Company and its Subsidiaries are
consolidated, and will be accompanied by similar financial statements for
any significant Subsidiary which is not so consolidated.
(j) The Company will maintain a transfer agent and, if necessary
under the jurisdiction of incorporation of the Company, a registrar (which
may be the same entity as the transfer agent) for its Class A Shares.
(k) During a period of 180 days from the date of this Agreement,
the Company shall not, without the prior written consent of Bear, ▇▇▇▇▇▇▇,
issue, sell, offer or agree to sell, contract to sell, announce its
intention to sell, pledge, hypothecate, grant any option for the sale of or
otherwise dispose of, directly or indirectly, or otherwise enter into a
swap or other derivative transaction with respect to, any shares of its
share capital (or any securities convertible into, exercisable for or
exchangeable for shares of its share capital) other than the Company's
issuance and sale of Shares in accordance with the Agreement and the
issuance of up to such number of Class A Shares (or options exercisable for
up to such number of shares) reserved for issuance pursuant to the
Company's Stock Option Plan as specified in the Offering Documents. In
addition, the Company has obtained and delivered to you a written
undertaking from (x) Harco Holdings Ltd. ("Harco") that, during the period
of 180 days from the date of the U.S. Prospectus, without the prior written
consent of Bear, ▇▇▇▇▇▇▇, such entity will not sell, offer to sell,
contract to sell, announce its intention to sell, pledge, hypothecate,
grant any option for the sale of or otherwise dispose of, directly or
indirectly, or file with the Commission a registration statement under the
Act, or file with any one of the Securities Regulators a prospectus
relating to, or otherwise enter into a swap or other derivative transaction
with respect to, any Class A Shares or Class B Shares (or any securities
convertible into, exercisable for or exchangeable for Class A Shares or
Class B Shares) of the Company, (y) Le Fonds de solidarite des travailleurs
du Quebec (F.T.Q.) (the "Fund") that, during the period of 180 days from
the date of the U.S. Prospectus, without the prior written consent of Bear
▇▇▇▇▇▇▇, such entity will not sell, offer to sell, contract to sell,
announce its intention to sell, pledge, hypothecate, grant any option for
the sale or otherwise dispose of, directly or indirectly, or file with the
Commission a registration statement under the Act, or file with any one of
the Securities Regulators a prospectus, relating to, or otherwise enter
into a swap or other derivative transaction with respect to, any Class A
Shares or Class B Shares (or any securities convertible or exercisable into
or exchangeable for any Class A Shares or Class B Shares) of the Company
and (z) during the period of 180 days from the date of the U.S. Prospectus,
the H. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Family Trust, the ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Family Trust, the
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Family Trust and the Tisch Family Trust (the "Trusts")
will not, without the prior written consent of Bear, ▇▇▇▇▇▇▇, sell, offer
to sell, contract to sell, announce its intention to sell, grant any option
for the sale of, or
- 22 -
22
otherwise dispose of, directly or indirectly, or file with the Commission a
registration statement under the Act, or file with any one of the
Securities Regulators a prospectus, relating to, or otherwise enter into a
swap or other derivative transaction with respect to, any shares of any
class of share capital of the Company (or any securities convertible into,
exercisable for or exchangeable for shares of any class of share capital of
the Company), it being understood and agreed, however, that the Trusts will
be entitled at all times to pledge, hypothecate, grant security interests
in or otherwise encumber any such shares.
(l) The Company shall apply the proceeds from the sale of the
Shares to be sold by it under this Agreement in the manner set forth under
"Use of Proceeds" in the U.S. Prospectus and Canadian Prospectus. The
Company shall take such steps as shall be necessary to ensure that neither
the Company nor any Subsidiary shall become an "investment company" or a
company "controlled" by an "investment company" within the meaning of such
terms under the Investment Company Act.
(m) The Class A Shares currently outstanding are listed on the
AMEX, the ME and the TSE and the Shares have been duly authorized for
listing on the AMEX, the ME and the TSE, subject only to official notice of
issuance. The Company shall use its best efforts promptly to cause the
Shares to be sold by the Company to be listed on the AMEX, the ME and the
TSE and shall take all actions necessary to comply with the rules and
regulations of the AMEX, the ME and the TSE in order to maintain the
listing of the Class A Shares on the AMEX, the ME and the TSE.
(n) The Company shall comply with all registration, filing and
reporting requirements of the Exchange Act and the rules and regulations
thereunder and the Canadian Securities Laws, which may from time to time be
applicable to the Company.
(o) The Company shall comply with all provisions of all
undertakings contained in Part II of the Registration Statement.
(p) Prior to the Closing Date and, if the Option is exercised,
until the Additional Closing Date, the Company shall issue no press release
or other communication or hold any press conference with respect to the
offerings of the Shares, or the financial condition, results of operations,
operations, business properties, assets, liabilities, or prospects of the
Company, without your prior consent, which shall not be unreasonably
withheld.
(q) The Company has obtained an advance income tax ruling dated
[____], 1999 for the ministere du Revenu du Quebec confirming the
eligibility of the Shares for inclusion in a stock savings plan under the
TAXATION ACT (Quebec) as set forth under the heading "Quebec Stock Savings
Plan" in the Canadian Prospectus.
8. PAYMENT OF EXPENSES. Whether or not the transactions contemplated by
this Agreement are consummated or this Agreement is terminated, and subject to
your compliance with the provisions hereof and subject to Section 14(d) hereof,
the Company agrees to pay all costs and expenses incident to the performance of
the obligations of the Company under this Agreement, including, without
limitation, those in connection with (i) preparing, printing,
- 23 -
23
duplicating, filing and distributing the Registration Statement (including all
amendments thereof and exhibits thereto), any U.S. Preliminary Prospectus, any
Canadian Preliminary Prospectus, the U.S. Prospectus, the Canadian Prospectus
and any supplements thereto, this Agreement and all related agreements, and all
other documents relating to the public offering of the Shares, (ii) the
issuance, transfer and delivery of the Shares to the Underwriters, including any
transfer or other taxes payable thereon, (iii) the registration and
qualification if any, of the Shares under the "Blue Sky" or state securities
laws and the preparation of a memorandum with respect thereto, or where
applicable the obtaining of exemptions therefrom, including the reasonable fees
and disbursements of Underwriters' Counsel and local counsel in connection
therewith, (iv) the listing of the Shares on the AMEX, the ME and the TSE, (v)
the review of the terms of the public offering of the Shares by the NASD and the
reasonable fees and disbursements of Underwriters' Counsel in connection
therewith, (vi) the printing of certificates representing the Shares, (vii) the
cost and charges of any transfer agent and registrar for the Shares, (viii) the
filing fees of the Commission, the Securities Regulators and the NASD relating
to the Shares and (ix) costs and expenses incident to any meetings with
perspective investors in the Shares (other than those incurred by the
Underwriters).
9. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Shares, as provided herein,
shall be subject to (i) the accuracy of the representations and warranties of
the Company herein contained, as of the date hereof, as of the Closing Date and,
with respect to the Additional Shares, the accuracy of the representations and
warranties of the Company as of the Additional Closing Date, (ii) the absence
from any certificates furnished pursuant to this Section 9 to you or to
Underwriters' Counsel of any qualification or limitation not previously approved
in writing by you, acting reasonably, (iii) the performance by the Company of
its obligations hereunder and (iv) the following additional conditions:
(a) The Registration Statement shall have become effective not
later than 1:00 P.M., New York City time, on the day immediately following
the date of this Agreement or at such later time and date as shall have
been consented to in writing by Bear, ▇▇▇▇▇▇▇. All post-effective
amendments to the Registration Statement shall have become effective. If
the Company shall have relied upon Rule 430A of the Regulations, the U.S.
Prospectus shall have been filed with the Commission in a timely fashion in
accordance with Section 7(a) hereof. All filings required by Rule 424 of
the Regulations shall have been made and no such filings shall have been
made without your consent, which shall not be unreasonably withheld. The
Canadian Prospectus shall have been filed with the Securities Regulators
and receipts obtained therefor no later than [___________, 1999] by the
Quebec and Ontario Securities Commissions and not later than [___________,
1999] for the Securities Regulators in the other Qualifying Provinces. The
Company shall have obtained from the Principal Regulator, for and on behalf
of the Securities Regulators, a mutual reliance system review decision
document for the Canadian Prospectus no later than 10 days after the filing
thereof. No stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereof shall have been issued by
the Commission or any state securities commission and no proceedings
therefor shall have been initiated or threatened by the Commission or any
state securities commission. No order having the effect of ceasing or
suspending the distribution of Shares or any other securities of the
Company shall have been issued by any of the Securities Regulators, and
- 24 -
24
no proceeding for that purpose shall have been instituted or threatened or,
to the knowledge of the Company, shall have been contemplated by any of the
Securities Regulators.
(b) At the Closing Date (and, with respect to the Additional
Shares, the Additional Closing Date), you shall have received the written
opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, United States counsel for the
Company, dated the date of its delivery, addressed to the Underwriters, to
the effect that:
(i) Gildan Activewear ▇▇▇▇▇▇, Inc. has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of New York.
(ii) Assuming the Shares being sold by the Company are
delivered and paid for in the State of New York, upon delivery of and
payment for the Shares to each Underwriter in accordance with this
Agreement, each Underwriter will acquire all of the rights of the
Company in the Shares and, assuming the Underwriters do not have
notice of any adverse claim to the Shares, will also acquire its
interest in such Shares free of any adverse claim.
(iii) No consent, approval, authorization, order,
registration, filing or qualification of or with any Federal or New
York governmental agency or body is required for the Company's
execution and delivery of, and its performance of its obligations
under, this Agreement and the consummation of the transactions
contemplated hereby, including, without limitation, of the issuance,
sale and delivery of the Shares, except for (A) such as may be
required under state securities or Blue Sky laws and the securities
laws of foreign jurisdictions in connection with the purchase and
distribution of the Shares by the Underwriters (as to which such
counsel need express no opinion) and (B) such as have been made or
obtained under the Act, the Exchange Act or the rules of the AMEX, the
ME or the TSE.
(iv) The Company's execution and delivery of, and its
performance of its obligations under, this Agreement and the
consummation of the transactions contemplated hereby, do not and will
not violate any Federal or New York statute or any rule or regulation
issued pursuant to any New York or Federal statute or any order known
to us issued by any Federal or New York court or governmental agency
or body, except for those violations or conflicts that, individually
or in the aggregate, would not be reasonably likely to have a Material
Adverse Effect.
(v) The statements in the U.S. Prospectus under the caption
"Shares Eligible for Future Sale", insofar as they purport to
constitute summaries of the terms of federal statutes and regulations
thereunder, constitute accurate summaries of the terms of such
statutes, rules and regulations in all material respects.
(vi) The statements made in the U.S. Prospectus under the
caption "Taxation--United States Federal Income Taxation", insofar
as they purport to
- ▇▇ -
▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ federal tax law and regulations
or legal conclusions with respect thereto, constitute accurate
summaries of the matters described therein in all material respects.
(vii) Based on oral advice of the Commission, the
Registration Statement has become effective under the Act, and such
counsel is not aware of any stop order suspending the effectiveness of
the Registration Statement and to such counsel's knowledge no
proceedings therefor have been initiated or threatened by the
Commission, and any filings on the part of the Company required by
Rule 424(b) of the Regulations have been made.
(viii) The Company is not an "investment company" required to
be registered under the Investment Company Act, as amended.
(ix) The Class A Shares currently outstanding are listed on
the AMEX and the Shares to be issued and sold by the Company hereunder
have been duly authorized for listing on the AMEX, subject only to
official notice of issuance.
In addition, such counsel shall state that they have not independently
verified the accuracy, completeness or fairness of the statements made or
included in the Registration Statement or the U.S. Prospectus and take no
responsibility therefor, except as and to the extent set forth in
paragraphs (v) and (vi) above. Such counsel shall further state that in
the course of the preparation by the Company of the Registration Statement
and the U.S. Prospectus, they participated in conferences with certain
officers and employees of the Company, with representatives of KPMG, and
with other counsel to the Company. Based upon their examination of the
Registration Statement and the U.S. Prospectus, their investigations made
in connection with the preparation of the Registration Statement and the
U.S. Prospectus and their participation in the conferences referred to
above, such counsel shall state that (i) they are of the opinion that the
Registration Statement, as of its effective date, and the U.S. Prospectus,
as of the date hereof, complied as to form in all material respects with
the requirements of the Act and the applicable rules and regulations of the
Commission thereunder, except that in each case such counsel need express
no opinion with respect to the financial statements or other financial data
contained in the Registration Statement or the U.S. Prospectus and (ii)
they have no reason to believe that the Registration Statement, as of its
effective date, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading or that
the U.S. Prospectus contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that in each case such counsel need express no opinion
with respect to the financial statements or other financial data, Canadian
federal or provincial law matters and trade regulatory matters contained in
the Registration Statement or the U.S. Prospectus.
In rendering such opinion, such counsel may limit its opinions to the
laws of the State of New York and the federal laws of the United States of
America.
- 26 -
26
(c) At the Closing Date (and, with respect to the Additional
Shares, the Additional Closing Date), you shall have received the written
opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Canadian counsel for the Company, dated the date
of its delivery, in the form of Schedule III hereto. In rendering such
opinion, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ may rely as to matters involving the application of
laws other than the federal laws of Canada and the laws of the
jurisdictions in which they are admitted, to the extent they deem proper
and to the extent specified in such opinion, if at all, upon an opinion or
opinions (in form and substance reasonably satisfactory to Underwriters'
counsel) of other counsel reasonably acceptable to Underwriters' counsel,
familiar with the applicable laws.
(d) At the Closing Date (and, with respect to the Additional
Shares, the Additional Closing Date), you shall have received the written
opinion of ▇▇▇▇, Saint-Pierre, Canadian counsel for the Company, dated the
date of its delivery, addressed to the Underwriters, and in form and scope
satisfactory to Underwriters' Counsel and subject to reasonable
qualifications, reservations and limitations, to the effect that:
(i) The Company has been duly incorporated under the CBCA
and is a valid and subsisting company.
(ii) The Company has all requisite corporate power and
authority to carry on business in the Province of Quebec and to own,
lease or operate the assets now owned, leased or operated by the
Company and as described in the Offering Documents.
(iii) The Company is in good standing under the CBCA and has
filed with the Inspector General of Financial Institutions for the
Province of Quebec all necessary corporate reports and declarations.
(iv) The Company is duly qualified and in good standing as a
foreign corporation in each jurisdiction in which the character or
location of its properties (owned, leased or licensed) or the nature
or conduct of its business makes such qualification necessary, except
for those failures to be so qualified or in good standing that will
not in the aggregate be reasonably likely to have a Material Adverse
Effect.
(v) To the best of such counsel's knowledge, there is no
outstanding option, warrant or other right calling for the issuance of
any share of the share capital (or similar interests) of the Company
or of any of its Subsidiaries or any security or other instrument that
by its terms is convertible into, exercisable for or exchangeable for
shares of the share capital (or similar interests) of the Company or
any Subsidiary, except as described in the Offering Documents.
(vi) The authorized share capital of the Company is as set
forth in the U.S. Prospectus and the Canadian Prospectus under the
caption "Capitalization." All of the outstanding shares of such share
capital have been duly and validly authorized and issued, are
outstanding as fully paid and non-assessable and, to the best of such
counsel's knowledge, were not issued in violation of or subject to any
- 27 -
27
pre-emptive rights. Subject to and conditional upon the due filing of
all requisite documents and due compliance with all regulatory
requirements of any and all securities commissions, exchanges and
other regulatory bodies having jurisdiction with respect to the
offering and sale of Shares contemplated under the Offering Documents
(the "Regulatory Proviso"), the Class A Shares to be outstanding on
the Closing Date, including the Shares, have been duly authorized and
when issued (and, in the case of the Shares, delivered and sold in
accordance with the terms of this Agreement) will be validly issued,
and, upon the Company receiving consideration therefor, will be
outstanding as fully paid and non-assessable. The share capital of
the Company conforms in all material respects to the description
thereof contained in the Registration Statement, the U.S. Prospectus
and the Canadian Prospectus.
(vii) The Company's execution and delivery of, and its
performance of its obligations under, this Agreement, and the
consummation of the transactions contemplated hereby, do not and will
not (A) to the best of such counsel's knowledge conflict with or
result in a breach of any of the terms and provisions of, or
constitute a default under (or an event that with notice or lapse of
time, or both, would constitute a default under) or require approval
or consent under, or result in the creation or imposition of any
hypothec, prior claim, charge or encumbrance upon any property or
assets of the Company pursuant to the terms of any Material Contract
or any Material Permit, except for those conflicts, breaches or
defaults for which consent or approval has been obtained by the
Company prior to the date hereof, (B) violate or conflict with any
provision of its articles, by-laws or resolutions of its directors or
shareholders, or (C) to the best of such counsel's knowledge and
subject to the Regulatory Proviso, violate or conflict with any
judgment, decree, order, statute, rule or regulation of any court or
any public, governmental or regulatory agency or body having
jurisdiction over the Company or any of its properties or assets,
except, with respect to clauses (A) and (C) of this subparagraph
(vii), for those violations or conflicts that, individually or in the
aggregate, would not be reasonably likely to have a Material Adverse
Effect.
(viii) To the best of such counsel's knowledge, except as set
forth in the Offering Documents, no person or entity has the right, by
contract or otherwise, to require registration under the Act of shares
of share capital or other securities of the Company or any of its
Subsidiaries solely because of the filing or effectiveness of the
Registration Statement and the consummation of the transactions
contemplated by this Agreement.
(ix) To the best of such counsel's knowledge, there is no
litigation, arbitration or governmental or other action, suit,
proceeding or investigation before any court or before or by any
public, regulatory or governmental agency or body pending or
threatened against, or involving the properties or business of, the
Company or any of its Subsidiaries, that, if resolved against the
Company or such Subsidiary, individually or, to the extent involving
related claims or issues, in the aggregate, is of a character required
to be disclosed in the Offering Documents that has not been properly
disclosed therein; and to the best of such counsel's
- 28 -
28
knowledge, there is no contract or document concerning the Company or
any of its Subsidiaries of a character required to be described in the
Offering Documents or to be filed as an exhibit to the Registration
Statement, that is not so described or filed.
(e) At the Closing Date (and, with respect to the Additional
Shares, the Additional Closing Date), you shall have received the written
opinion of Sandler & ▇▇▇▇▇▇ Trade Advisory Services, regulatory and trade
counsel to the Company, dated the date of its delivery, addressed to the
Underwriters, and in form and scope satisfactory to Underwriters' Counsel,
to the effect that insofar as statements in the U.S. Prospectus and the
Canadian Prospectus purport to summarize the nature and status of or the
provisions of laws, rules, regulations, orders, judgments or decrees, or
the terms of the descriptions provided under the captions "Risk
Factors--The Effect of Changing International Trade Regulation on Our
Results of Operations is Uncertain," and "Business--Trade Regulatory
Environment," such statements are correct in all material respects and are
fair summaries of the matters referred to therein.
(f) At the Closing Date (and, with respect to the Additional
Shares, the Additional Closing Date), you shall have received the written
opinion of Barbados counsel for the Company, dated the date of its
delivery, addressed to the Underwriters, and in form and scope satisfactory
to Underwriters' Counsel, and subject to reasonable qualifications,
reservations and limitations to the effect that:
(i) Each of Gildan Activewear (Barbados) Inc. and Gildan
Activewear SRL has been duly incorporated under the laws of Barbados
and is a valid and subsisting company.
(ii) Each of Gildan Activewear (Barbados) Inc. and Gildan
Activewear SRL has all requisite corporate power and authority to
carry on business in Barbados and to own, lease or operate the assets
now owned, leased or operated by it.
(iii) Each of Gildan Activewear (Barbados) Inc. and Gildan
Activewear SRL is in good standing under the laws of Barbados.
(g) At the Closing Date (and, with respect to the Additional
Shares, the Additional Closing Date), you shall have received the written
opinion of Honduras counsel for the Company, dated the date of its
delivery, addressed to the Underwriters, and in form and scope satisfactory
to Underwriters' Counsel, and subject to reasonable qualifications,
reservations and limitations to the effect that:
(i) Each of Gildan Activewear El Progresso, S.A. and Gildan
Activewear San ▇▇▇▇, S.A. has been duly incorporated under the laws of
Honduras and is a valid and subsisting company.
(ii) Each of Gildan Activewear El Progresso, S.A. and Gildan
Activewear San ▇▇▇▇, S.A. has all requisite corporate power and
authority to carry on business in Honduras and to own, lease or
operate the assets now owned, leased or
- 29 -
29
operated by it.
(iii) Each of Gildan Activewear El Progresso, S.A. and Gildan
Activewear San ▇▇▇▇, S.A. is in good standing under the laws of
Honduras.
(h) At the Closing Date (and, with respect to the Additional
Shares, the Additional Closing Date), you shall have received the written
opinion of British Virgin Islands counsel for the Company, dated the date
of its delivery, addressed to the Underwriters, and in form and scope
satisfactory to Underwriters' Counsel, and subject to reasonable
qualifications, reservations and limitations to the effect that:
(i) Gildan Activewear (BVI) Inc. has been duly incorporated
under the laws of the British Virgin Islands and is a valid and
subsisting company.
(ii) Gildan Activewear (BVI) Inc. has all requisite
corporate power and authority to carry on business in the British
Virgin Islands and to own, lease or operate the assets now owned,
leased or operated by it.
(iii) Gildan Activewear (BVI) Inc. is in good standing under
the laws of the British Virgin Islands.
(i) At the Closing Date (and, with respect to the
Additional Shares, the Additional Closing Date), you shall have
received the written opinion of Florida counsel for the Company, dated
the date of its delivery, addressed to the Underwriters, and in form
and scope satisfactory to Underwriters' Counsel, and subject to
reasonable qualifications, reservations and limitations to the effect
that:
(i) Gildan Activewear Miami, Inc. has been duly
incorporated under the laws of the State of Florida and is a valid and
subsisting company.
(ii) Gildan Activewear Miami, Inc. has all requisite
corporate power and authority to carry on business in the State of
Florida and to own, lease or operate the assets now owned, leased or
operated by it.
(iii) Gildan Activewear Miami, Inc. is in good standing under
the laws of the State of Florida.
(j) At the Closing Date (and, with respect to the Additional
Shares, the Additional Closing Date), you shall have received a certificate
of the Company executed by each of the Chief Executive Officer and the
Chief Financial Officer of the Company, dated the date of its delivery, to
the effect that each such person has carefully examined the Offering
Documents and any amendments or supplements thereto and this Agreement and
that the conditions set forth in subsection (a) of this Section 9 have been
satisfied, that the representations and warranties of the Company set forth
in Section 3 hereof are true and correct as of such Closing Date or
Additional Closing Date, as the case may be, and the obligations of the
Company to be performed hereunder on or prior thereto have been duly
performed.
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(k) At the time this Agreement is executed and at the Closing Date
(and, with respect to the Additional Shares, the Additional Closing Date),
you shall have received a letter, from KPMG, dated the date of its
delivery, addressed to the Underwriters and in form and substance
reasonably satisfactory to you, to the effect that: (i) they are
independent certified public accountants with respect to the Company within
the meaning of the Act and the Regulations; (ii) in their opinion, the
Company Financials included in the Offering Documents comply as to form in
all material respects with the applicable accounting requirements of the
Act and the applicable published rules and regulations thereunder and
Canadian Securities Laws; (iii) on the basis of procedures (but not an
audit made in accordance with generally accepted auditing standards)
consisting of a reading of the latest available unaudited interim
consolidated financial statements of the Company and its Subsidiaries, a
reading of the minutes of meetings and consents of the shareholders and
boards of directors of the Company and the Subsidiaries and the committees
of such boards subsequent to [January 3, 1999], inquiries of certain
officials of the Company and its Subsidiaries who have responsibility for
financial and accounting matters of such companies with respect to
transactions and events subsequent to [January 3, 1999], and other
specified procedures and inquiries to a date not more than five days prior
to the date of such letter, nothing has come to their attention that would
cause them to believe that: (A) the unaudited historical consolidated
financial statements of the Company, its Subsidiaries and their
predecessors included in the Offering Documents do not comply as to form in
all material respects with the applicable accounting requirements of the
Act and the published rules and regulations thereunder or that any material
modification should be made to such unaudited consolidated financial
statements for them to be in conformity with Canadian GAAP; (B) with
respect to the period subsequent to [January 3, 1999] there were, as of the
date of the most recent available monthly consolidated financial data of
the Company and the Subsidiaries, if any, and as of a specified date not
more than five days prior to the date of such letter, any changes in the
share capital or increases in long-term indebtedness of the Company or any
decrease in shareholders' equity of the Company, in each case as compared
with the amounts shown in the most recent balance sheet included in the
Offering Documents, except for changes or decreases that the Offering
Documents disclose have occurred or may occur; or (C) that during the
period from [January 3, 1999] to the date of the most recent available
monthly consolidated financial data of the Company and its Subsidiaries, if
any, and to a specified date not more than five days prior to the date of
such letter, there was any decrease, as compared with the corresponding
period in the prior fiscal year, in total revenues, or total or per share
net income, except for decreases that the U.S. Prospectus and the Canadian
Prospectus disclose have occurred or may occur; and (iv) stating that they
have compared specific Canadian and U.S. dollar amounts, numbers of shares,
percentages of revenues and earnings and other financial information
pertaining to the Company and its Subsidiaries set forth in the U.S.
Prospectus and the Canadian Prospectus, which have been specified by you
prior to the date of this Agreement, to the extent that such dollar
amounts, numbers, percentages and information may be derived from the
general accounting and financial records that are subject to the internal
control structure policies and procedures of the Company's and its
Subsidiaries' accounting systems or that have been derived directly from
such accounting records by analysis or computation, and excluding any
questions requiring an interpretation by legal counsel, with the results
obtained from the application of specified
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readings, inquiries, and other appropriate procedures specified by you
(which procedures do not constitute an examination in accordance with
generally accepted auditing standards) set forth in such letter, and found
them to be in agreement.
(l) On the Closing Date you shall have received an opinion of
KPMG, addressed to the Underwriters to the effect that the French language
version of the Capitalization, Selected Financial Data, Management's
Discussion and Analysis of Financial Condition and Results of Operations,
Auditor's Report, Consolidated Balance Sheets, Consolidated Statements of
Earnings (Loss) and Retained Earnings (Deficit), Consolidated Statements of
Changes in Financial Position and Notes to Combined Financial Statements in
the Canadian Prospectus (the "Financial Information") is in all material
respects a complete and proper translation of the English language version
thereof.
(m) On the Closing Date, you shall have received the written
opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Canadian counsel for the Company, addressed to
the Underwriters to the effect that the French language version of the
Canadian Prospectus (exclusive of the Financial Information, as to which
such counsel express no opinion) is in all material respects a complete and
proper translation of the English language version thereof, and such
version is not susceptible to any materially different interpretation with
respect to any material matter contained therein.
(n) All proceedings taken in connection with the sale of the
Shares as contemplated by this Agreement shall be reasonably satisfactory
in form and substance to you and to Underwriters' Counsel, and you shall
have received from each of Weil, Gotshal and Stikeman a written opinion,
dated as of the Closing Date and addressed to the Underwriters, with
respect to the sale of the Firm Shares, and dated as of the Additional
Closing Date with respect to the sale of the Additional Shares, and with
respect to such other matters as you reasonably may require, and the
Company shall have furnished to Underwriters' Counsel such documents as
Underwriters' Counsel may request for the purpose of enabling Underwriters'
Counsel to pass upon such matters.
(o) The NASD, upon review of the terms of the underwriting
arrangements for the public offering of the Shares, shall have raised no
objections thereto.
(p) The Shares shall have been listed on the AMEX, the ME and the
TSE, subject to official notice of issuance.
(q) At the time this Agreement is executed, the Company shall have
furnished to you the written undertakings referred to in the last sentence
of Section 7(k) hereof, in form and substance satisfactory to Underwriters'
Counsel.
(r) Prior to the Closing Date, and with respect to the Additional
Shares, the Additional Closing Date, the Company shall have furnished to
you such further information, certificates and documents as you may
reasonably request.
If any of the conditions specified in this Section 9 shall not have been
fulfilled when and as required by this Agreement, or if any of the certificates,
opinions, written
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32
statements, or letters furnished to you or to Underwriters' Counsel pursuant to
this Section 9 shall not be in all material respects reasonably satisfactory in
form and substance to you and to Underwriters' Counsel, all obligations of the
Underwriters hereunder not theretofore discharged may be canceled by you at, or
at any time prior to, the Closing Date and with respect to the Additional
Shares, the Additional Closing Date. Notice of such cancellation shall be given
to the Company in writing, or by telephone or telephonic facsimile, confirmed in
writing.
10. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each Underwriter,
and each of their respective directors, officers, employees and agents and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act, against any and all losses
(excluding loss of profits), liabilities, claims, damages and expenses
whatsoever (including but not limited to attorneys' fees and any and all
expenses reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation, provided that such
settlement was effected with the Company's written consent in accordance with
Section 10(c) hereof), joint or several, to which they or any of them may become
subject under the Act, the Exchange Act, Canadian Securities Laws or otherwise,
insofar as such losses, liabilities, claims, damages or expenses (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the U.S. Preliminary Prospectus, the U.S. Prospectus, the Canadian Preliminary
Prospectus or the Canadian Prospectus or in any supplement thereto or amendment
thereof, or arise out of or are 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 (in the case of the U.S. Prospectus, in light of the
circumstances under which they were made) not misleading; provided, however,
that notwithstanding the provisions of this paragraph (a), the Company shall not
be liable under this subsection 10(a) to any Underwriter in any such case (i) to
the extent but only to the extent that any such loss, liability, claim, damage
or expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made in the Registration
Statement, U.S. Prospectus or Canadian Prospectus in reliance upon and in
conformity with written information furnished to the Company by or on your
behalf expressly for use therein and (ii) provided that the foregoing indemnity
agreement with respect to any of the Preliminary Prospectuses shall not inure to
the benefit of any Underwriter from whom the person asserting any such losses,
claims, costs, damages or liabilities purchased Shares, or any person
controlling such Underwriter or if a copy of any of the Prospectuses (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, cost, damage or liability. This indemnity will be in
addition to any liability that the Company may otherwise have to any Underwriter
or to any controlling person of such Underwriter, including under this
Agreement.
(b) Each Underwriter, severally and not jointly, agrees to indemnify and
hold harmless the Company, each of the directors of the Company, each of the
officers of the Company who shall have signed the Registration Statement or the
Canadian Prospectus, and each
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33
other person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, against any losses,
liabilities, claims, damages and expenses whatsoever (including but not limited
to attorneys' fees and any and all expenses reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation, provided that such settlement was effected with such
Underwriter's written consent in accordance with Section 10(c) hereof), joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or the U.S. Prospectus, any U.S. Preliminary Prospectus,
the Canadian Prospectus or the Canadian Preliminary Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are 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 (in the case of the
U.S. Prospectus, in light of the circumstances under which they were made) not
misleading, in each case to the extent, but only to the extent, that any such
loss, liability, claim, damage or expense arises out of or is based upon any
such 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 you or on your behalf with respect to such
Underwriter expressly for use therein; provided, however, that in no case shall
such Underwriter be liable or responsible for any amount in excess of the
underwriting discount applicable to the Shares purchased by such Underwriter
hereunder. This indemnity will be in addition to any liability that the
Underwriter may otherwise have, including under this Agreement. The Company
acknowledges that the statements set forth in the last paragraph of the cover
page of the U.S. Prospectus and the Canadian Prospectus and the first, fourth,
seventh and eighth paragraphs set forth under the caption "Underwriting" in the
U.S. Prospectus and the Canadian Prospectus constitute the only information
furnished in writing by or on behalf of any Underwriter expressly for use in the
Registration Statement, any related U.S. Preliminary Prospectus, the U.S.
Prospectus, the Canadian Preliminary Prospectus and the Canadian Prospectus.
(c) Promptly after receipt by an indemnified party under subsection 10(a)
or (b) above of notice of the assertion of any claim, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom indemnification is
to be sought in writing of the commencement thereof (but the failure so to
notify an indemnifying party shall not relieve it from any liability that it may
have under this Section 10 except to the extent that it has been prejudiced in
any material respect by such failure or from any liability that it may have
otherwise). In case any such action is brought against any indemnified party,
and it notifies an indemnifying party of the commencement thereof, the
indemnifying parties shall be entitled (but not required) to participate
therein, and to the extent they may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume severally with the other indemnifying parties the
defense thereof with counsel reasonably acceptable to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been authorized in
writing by the indemnifying parties in connection with the defense of such
action, (ii) the indemnifying parties shall not have employed counsel to take
charge of the defense
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34
of such action within a reasonable time after notice of commencement of the
action, or (iii) the named parties to such suit include both indemnified and
indemnifying parties and such indemnified party or parties shall have been
advised in writing by counsel that there may be defenses available to it or them
that are different from or additional to those available to one or all of the
indemnifying parties and in conflict therewith (in which case the indemnifying
parties shall not have the right to direct the defense of such action on behalf
of the indemnified party or parties with respect to such different defenses), in
any of which events such fees and expenses shall be borne by the indemnifying
parties. The indemnifying party under subsection 10(a) or (b) above shall only
be liable for the legal expenses of one counsel for all indemnified parties in
each jurisdiction in which any claim or action is brought; provided, however,
that the indemnifying party shall be liable for separate counsel for any
indemnified party in a jurisdiction, if counsel to the indemnified parties shall
have reasonably concluded and advised the indemnifying party in writing that
there may be defenses available to such indemnified party that are different
from or additional to those available to one or more of the other indemnified
parties and in conflict therewith and that separate counsel for such indemnified
party is prudent under the circumstances. Anything in this subsection to the
contrary notwithstanding, an indemnifying party shall not be liable for any
settlement compromise or consent to entry of any judgement of any claim or
action effected without its written consent; provided, however, that such
written consent was not unreasonably withheld.
11. CONTRIBUTION. In order to provide for contribution in circumstances in
which the indemnification provided for in Section 10(a) hereof is for any reason
held to be unavailable or is insufficient to hold harmless a party indemnified
thereunder, the Company, on the one hand, and the Underwriters, on the other
hand, shall contribute to the aggregate losses, claims, damages, liabilities and
expenses of the nature contemplated by such indemnification provisions
(including any investigation, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the case of losses,
claims, damages, liabilities and expenses suffered by the Company, any
contribution received by the Company from persons, other than one or more of the
Underwriters, who may also be liable for contribution, including persons who
control the Company within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act, officers of the Company who signed the Registration
Statement and directors of the Company) to which the Company, on the one hand,
and one or more of the Underwriters, on the other hand, may be subject, in such
proportions as are appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Underwriters, on the other hand, from the
offering of the Shares or, if such allocation is not permitted by applicable law
or indemnification is not available as a result of the indemnifying party not
having received notice as provided in Section 10 hereof, in such proportion as
is appropriate to reflect not only the relative benefits referred to above but
also the relative fault of the Company, on the one hand, and the Underwriters,
on the other hand, in connection with the statements or omissions that resulted
in such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the
Company, on the one hand, and the Underwriters, on the other hand, shall be
deemed to be in the same proportion as (x) the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting expenses)
received by the Company and (y) the underwriting discounts received by the
Underwriters, respectively, in each case as set forth in the table on the cover
page of the U.S. Prospectus and the Canadian Prospectus. The relative fault of
the Company, on the one hand, and of the Underwriters, on the other hand, shall
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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 hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 11 were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to above. The
Underwriters' obligations in this Section 11 to contribute are several and not
joint. Notwithstanding the provisions of this Section 11, (i) in no case shall
any Underwriter be required to contribute any amount in excess of the amount by
which the underwriting discount applicable to the Shares underwritten by it and
distributed to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or such omission or alleged omission, and (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 11,
each person, if any, who controls any Underwriter within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act shall have the same rights to
contribution as such Underwriter and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to clauses (i) and (ii) of
this Section 11. Any party entitled to contribution shall, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties under this Section 11, notify such party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 11 or otherwise. No party
shall be liable for contribution with respect to any action or claim settled
without its written consent; provided, however, that such written consent was
not unreasonably withheld.
12. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All representations and
warranties, covenants and agreements of the Underwriters and the Company
contained in this Agreement, including without limitation the agreements
contained in Sections 6, 7, and 8 hereof, the indemnity agreements contained in
Section 10 hereof and the contribution agreements contained in Section 11
hereof, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Underwriters or any controlling person
of any Underwriter or by or on behalf of the Company, any of its officers and
directors, and shall survive delivery of the Shares to and payment for the
Shares by the Underwriters. The representations contained in Section 3 hereof
and the agreements contained in this Section 12 and Sections 6, 7, 8, 10, 11 and
14(d) hereof shall survive the termination of this Agreement including pursuant
to Section 13 or 14 hereof; provided, however, that if this Agreement is
terminated pursuant to Section 13 or 14 hereof or if for any reason the purchase
of the Shares by the Underwriters as contemplated hereunder is not consummated,
the agreements contained in Sections 6 and 7 hereof shall not survive.
13. DEFAULT BY AN UNDERWRITER.
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(a) If any Underwriter or Underwriters shall default in its or their
obligation to purchase Firm Shares or Additional Shares hereunder, and if the
Firm Shares or Additional Shares with respect to which such default relates do
not (after giving effect to arrangements, if any, made pursuant to subsection
13(b) below) exceed in the aggregate 10% of the number of shares of Firm Shares
or Additional Shares, as the case may be, that all Underwriters have agreed to
purchase hereunder, then such Firm Shares or Additional Shares to which the
default relates shall be purchased by the non-defaulting Underwriters in
proportion to the respective proportions that the numbers of Firm Shares set
forth opposite their respective names in Schedule I hereto bear to the aggregate
number of Firm Shares set forth opposite the names of the non-defaulting
Underwriters.
(b) If such default relates to more than 10% of the Firm Shares or
Additional Shares, as the case may be, you may, in your discretion, arrange for
another party or parties (including any non-defaulting Underwriter or
Underwriters who so agree) to purchase such Firm Shares or Additional Shares, as
the case may be, to which such default relates on the terms contained herein.
If within five (5) calendar days after such a default you do not arrange for the
purchase of the Firm Shares or Additional Shares, as the case may be, to which
such default relates as provided in this Section 13, this Agreement (or, in the
case of a default with respect to the Additional Shares, the obligations of the
Underwriters to purchase and of the Company to sell the Additional Shares) shall
thereupon terminate, without liability on the part of the Company with respect
thereto (except in each case as provided in Sections 8, 10(a) and 11 hereof) or
the several non-defaulting Underwriters (except as provided in Sections 10(b)
and 11 hereof), but nothing in this Agreement shall relieve a defaulting
Underwriter or Underwriters of its or their liability, if any, to the other
several Underwriters and the Company for damages occasioned by its or their
default hereunder.
(c) If the Firm Shares or Additional Shares to which the default relates
are to be purchased by the non-defaulting Underwriters, or are to be purchased
by another party or parties as aforesaid, you or the Company shall have the
right to postpone the Closing Date or Additional Closing Date, as the case may
be, for a period not exceeding seven (7) business days, in order to effect
whatever changes may thereby be made necessary in the Registration Statement,
the U.S. Prospectus or the Canadian Prospectus or in any other documents and
arrangements, and the Company agrees to file promptly any amendment or
supplement to the Registration Statement, the U.S. Prospectus or the Canadian
Prospectus that, in the opinion of Underwriters' Counsel, may thereby be made
necessary or advisable. The term "Underwriter" as used in this Agreement shall
include any party substituted under this Section 13 with like effect as if it
had originally been a party to this Agreement with respect to such Firm Shares
and Additional Shares.
14. EFFECTIVE DATE OF THIS AGREEMENT; TERMINATION.
(a) This Agreement shall become effective upon the later of (i) when you
and the Company shall have received notification of the effectiveness of the
Registration Statement, (ii) you and the Company shall have received clearance
from each of the Qualifying Province Authorities for the Amended Final
Prospectus, or (iii) the execution and delivery of this Agreement by the parties
hereto. Until this Agreement becomes effective as aforesaid, this Agreement may
be terminated by the Company by notifying you or by you by notifying the Company
without any liability of any party to any party hereunder. Notwithstanding the
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foregoing, the provisions of this Section 14 and of Sections 10, 11 and 12
hereof shall at all times be in full force and effect.
(b) This Agreement and the obligations of the Underwriters hereunder may
be terminated by you by written notice to the Company at any time at or prior to
the Closing Date (and, with respect to the Additional Shares, the Additional
Closing Date), without liability (other than with respect to Sections 10 and 11)
on the part of any Underwriter to the Company if, on or prior to such date, (i)
the Company shall have failed, refused or been unable to perform in any material
respect any agreement on its part to be performed hereunder, (ii) any other
condition to the obligations of the Underwriters set forth in Section 9 hereof
is not fulfilled when and as required in any material respect, (iii) trading in
the Class A Shares or in securities generally on the New York Stock Exchange,
the AMEX, the ME or the TSE shall have been suspended or materially limited, or
minimum prices shall have been established on any such exchange or such market
by the Commission, or the Qualifying Province Authorities, or by any such
exchange or other regulatory body or governmental authority having jurisdiction,
(iv) a general banking moratorium shall have been declared by New York State,
United States or Canadian authorities, (v) there shall have occurred any
outbreak or escalation of armed hostilities involving the United States or
Canada on or after the date hereof, or if there has been a declaration by the
United States or Canada of a national emergency or war, the effect of which
shall be, in your reasonable judgment, to make it inadvisable or impracticable
to proceed with the sale and delivery of the Shares on the terms and in the
manner contemplated in the U.S. Prospectus and the Canadian Prospectus, (vi) any
domestic or international event or act or occurrence has materially disrupted or
in your opinion in the immediate future will materially disrupt the market for
the Company's Shares or for securities in general, (vii) in your reasonable
opinion any material adverse change shall have occurred since the respective
dates as of which information is given in the Registration Statement, the U.S.
Prospectus or the Canadian Prospectus affecting the business, prospects,
condition (financial or other) or results of operations of the Company and its
Subsidiaries taken as a whole, whether or not arising in the ordinary course of
business, other than as set forth in the U.S. Prospectus and the Canadian
Prospectus or contemplated thereby, or (viii) there shall have been such a
change in political, economic or financial conditions in the United States or
Canada such as, in your judgment, makes it inadvisable or impracticable to
proceed with the offering, sale and delivery of the Shares on the terms and in
the manner contemplated in the U.S. Prospectus and the Canadian Prospectus.
Your right to terminate this Agreement will not be waived or otherwise
relinquished by failure to give notice of termination prior to the time that the
event giving rise to the right to terminate shall have ceased to exist, provided
that notice is given prior to the Closing Date (and, with respect to the
Additional Shares, the Additional Closing Date).
(c) Any notice of termination pursuant to this Section 14 shall be in
writing.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to notification by you as provided in
subsection 14(a) or 14(b) hereof), or if the sale of the Shares provided for
herein is not consummated because any condition to the obligations of the
Underwriters set forth herein is not satisfied or because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or to comply with any provision hereof (other than by reason of a default of the
Underwriters), the Company agrees, subject to demand by you, to reimburse the
Underwriters for all reasonable out-of-pocket expenses (including the reasonable
fees and expenses of Underwriters' Counsel), incurred by the
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Underwriters in connection herewith.
15. JURISDICTION. The Company and the Underwriters agree that any legal
suit, action, or proceeding against the Company brought by the Underwriters, or
by each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, arising out of or
based upon this Agreement or the transactions contemplated hereby may be
instituted in any court of the State of New York or federal court sitting in the
State of New York ("New York Court"), and the Company waives any objection which
it may now or hereafter have to the laying of venue of any such proceeding and
irrevocably submits to the non-exclusive jurisdiction of such Specified Courts
in any such suit, action, or proceeding. The Company has appointed, or prior to
the Closing Date will appoint, CT Corporation System, New York as its authorized
agent (the "Authorized Agent") upon whom process may be served in any legal
suit, action, or proceeding arising out of or based upon this Agreement or the
transactions contemplated hereby which may be instituted in any New York Court
by the Underwriters or any controlling person of the Underwriters and expressly
accept the non-exclusive jurisdiction of any such New York Court in respect of
any such action. Such appointment shall be irrevocable. If for any reason, CT
Corporation System (or successor agent for this purpose) shall cease to act as
agent for service of process as provided above, the Company will promptly
appoint a successor agent for this purpose reasonably acceptable to you. The
Company represents and warrants that the Authorized Agent has agreed to act as
said agent for service of process, and the Company agrees to take any and all
action, including the filing of any and all documents and instruments, that may
be necessary to continue such appointment in full force and effect as aforesaid.
Service of process upon the Authorized Agent and written notice of such service
to the Company shall be deemed, in every respect, effective service of process
upon the Company. Nothing contained herein shall limit the right of the
Underwriters or any controlling person of the Underwriters to serve process in
any other manner permitted by law or bring an action based on this Agreement in
any competent court in Canada. A final non-appealable judgment in any suit or
proceeding based on this Agreement shall be conclusive and, to the extent
permitted under applicable laws, may be enforced in other jurisdictions by suit
on the judgment or in any other lawful manner. If the Company has or may
hereafter acquire immunity from jurisdiction or legal process with respect to
itself or its property, it hereby irrevocably waives to the fullest extent
permitted under applicable law such immunity in respect of its obligations
hereunder in any action which may be instituted in any New York Court or in any
competent court in Canada by the Underwriters or any controlling person of the
Underwriters.
In respect of any judgment or order given or made for any amount due
hereunder that is expressed and paid in a currency (the "judgment currency")
other than United States dollars, the Company will indemnify each Underwriter
against any loss incurred by such Underwriter as a result of any variation as
between (i) the rate of exchange at which the United States dollar amount is
converted into the judgment currency for the purpose of such judgment or order
and (ii) the rate of exchange at which an Underwriter is able to purchase United
States dollars with the amount of judgment currency actually received by such
Underwriter. The foregoing indemnity shall constitute a separate and
independent obligation of the Company and shall continue in full force and
effect notwithstanding any such judgment or order as aforesaid. The term "rate
of exchange" shall include any premiums and costs of exchange payable in
connection with the purchase of or conversion into United States dollars.
- 39 -
39
16. NOTICES. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to any one or
more of the Underwriters, shall be hand delivered or faxed to each such
Underwriter in care of Bear, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Finance Department (Fax No. ▇▇▇-▇▇▇-▇▇▇▇) with a copy to
Weil, Gotshal, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇; and if sent to the Company, shall be
hand delivered or faxed, to the Company, ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇, Attention: Chief Executive Officer (Fax
No. ▇▇▇-▇▇▇-▇▇▇▇) with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
17. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument.
18. PARTIES. This Agreement shall inure solely to the benefit of, and
shall be binding upon, each of the Underwriters and the Company, and the
controlling persons, directors, officers, employees and agents referred to in
Sections 10 and 11 hereof, and their respective successors and assigns, and no
other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any
provision herein contained. The term "successors and assigns" shall not include
a purchaser, in its capacity as such, of Shares from the Underwriters.
19. CONSTRUCTION. This Agreement shall be construed in accordance with
the laws of the State of New York.
20. DEFINITION OF BUSINESS DAY. For the purposes of this Agreement,
"business day" means any day on which the AMEX the ME and the TSE are all open
for trading.
21. ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS. This Agreement (including
the schedules) represents the entire understanding and agreement between the
parties hereto with respect to the subject matter hereof and can be amended,
supplemented or changed, and any provision hereof can be waived, only by written
instrument making specific reference to this Agreement signed by the party
against whom enforcement of any such amendment, supplement, modification or
waiver is sought. No action taken pursuant to this Agreement, including without
limitation, any investigation by or on behalf of any party, shall be deemed to
constitute a waiver by the party taking such action of compliance with any
representation, warranty, covenant or agreement contained herein. The waiver by
any party hereto of a breach of any provision of this Agreement shall not
operate or be construed as a further or continuing waiver of such breach or as a
waiver of any other or subsequent breach. No failure on the part of any party
to exercise, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
such right, power or remedy by such party preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. All remedies
hereunder are cumulative and are not exclusive of any other remedies provided by
law.
22. SEVERABILITY. In the event that any one or more of the provisions
contained in this Agreement shall be determined to be invalid, illegal or
unenforceable, in any respect for any reason, the validity, legality and
enforceability of any such provision or provisions in every other respect and
the remaining provisions of this Agreement shall not be in any way impaired.
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40
[remainder of page intentionally left blank]
- 41 -
41
If the foregoing correctly sets forth the complete agreement among the
Underwriters and the Company, please so indicate in the space provided below
for that purpose, whereupon this letter shall constitute a binding agreement
among us.
Very truly yours,
GILDAN ACTIVEWEAR INC.
By:
_______________________________
Name:
Title:
Accepted as of the date first
above written.
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ INC.
THE ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ COMPANY, LLC
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SECURITIES, INC.
as Representatives of the several
Underwriters named in Schedule I
annexed hereto.
By: BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By:
_______________________________
Name:
Title:
- 42 -
42
SCHEDULE I -- UNDERWRITERS
Number of Firm Shares
to be Purchased
Name of Underwriter from the Company
---------------------
Bear ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.
The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, LLC
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Securities, Inc.
Total: 3,000,000
=========
43
SCHEDULE II -- SUBSIDIARIES
JURISDICTION OF
NAME INCORPORATION 100% OWNED BY SECURITY INTERESTS
----- ----------------- --------------- ------------------
Gildan Activewear
(Barbados) Inc. Barbados Company
Gildan Activewear
(BVI) Inc. British Virgin Islands Company
Gildan Activewear El Gildan Activewear
Progresso, S.A. Honduras (Barbados) Inc.
Gildan Activewear
▇▇▇▇▇▇, Inc. New York Company
Gildan Activewear
Miami, Inc. Florida Company
Gildan
Gildan Activewear Activewear
San ▇▇▇#, S.A. Honduras (Barbados) Inc.
Gildan Activewear SRL Barbados Company
44
SCHEDULE III -- FORM OF OPINION OF ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
[insert Form of Opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇]