EXHIBIT 3.1
▇▇▇▇▇▇▇ Bros. Auctioneers Incorporated
(amalgamated under the Canada Business Corporation Act)
1,739,130 Common Shares
UNDERWRITING AGREEMENT
Dated: January o, 2004
TABLE OF CONTENTS
UNDERWRITING AGREEMENT....................................................................................1
SECTION 1. Representations and Warranties...............................................3
(a) Representations and Warranties by the Company...........................................3
(i) Compliance with Registration Requirements....................................4
(ii) Incorporated Documents.......................................................4
(iii) Independent Accountants......................................................5
(iv) Financial Statements.........................................................5
(v) No Material Adverse Change in Business.......................................5
(vi) Good Standing of the Company.................................................6
(vii) Capitalization...............................................................6
(viii) Authorization of Agreement...................................................7
(ix) Description of Securities....................................................7
(x) Absence of Defaults and Conflicts............................................7
(xi) Absence of Labor Dispute.....................................................8
(xii) Absence of Proceedings.......................................................8
(xiii) Possession of Intellectual Property..........................................8
(xiv) Absence of Further Requirements..............................................8
(xv) Possession of Licenses and Permits...........................................9
(xvi) Title to Property............................................................9
(xvii) Investment Company Act.......................................................9
(xviii) Environmental Laws...........................................................9
(xix) No Stabilization or Manipulation............................................10
(xx) Registration Rights.........................................................10
(xxi) Listing.....................................................................10
(xxii) Other Reports and Information...............................................10
(xxiii) Taxes.......................................................................10
(xxiv) Insurance...................................................................11
(xxv) Compliance with Laws........................................................11
(xxvi) No Broker...................................................................11
(xxvii) Non-Arm's Length Transactions...............................................11
(xxviii) Internal Controls...........................................................11
(xxix) Stamp Tax...................................................................11
(xxx) French Language Documents...................................................12
(b) Representations and Warranties by ▇▇. ▇▇▇▇▇▇▇ and the Selling Shareholder..............12
(i) Accurate Disclosure.........................................................12
(ii) Authorization of Agreements.................................................12
(iii) Options.....................................................................13
(iv) Absence of Further Requirements.............................................13
(v) Delivery of Securities......................................................13
(vi) Brokers.....................................................................13
(vii) Title to Securities.........................................................13
(viii) Absence of Tax Deficiency...................................................14
(ix) No Material Adverse Change in Business......................................14
i
(x) Distribution of Documents and Absence of Price Manipulation.................14
(xi) Absence of Proceedings......................................................14
(xii) Taxes.......................................................................15
(c) Officer's Certificates.................................................................15
SECTION 2. Sale and Delivery to Underwriters; Closing..................................15
(a) Initial Securities.....................................................................15
(b) Option Securities......................................................................15
(c) Payment................................................................................15
(d) Denominations; Registration............................................................16
SECTION 3. Covenants...................................................................16
(a) Covenants of the Company...............................................................16
(i) Fulfillment of Conditions...................................................16
(ii) Compliance with Securities Regulations and Commission Requests..............17
(iii) Filing of Amendments........................................................17
(iv) Issuance of Press Releases..................................................17
(v) Delivery of Filed Documents.................................................17
(vi) Delivery of Prospectuses....................................................18
(vii) Continued Compliance with Securities Laws...................................18
(viii) Blue Sky Qualifications.....................................................18
(ix) Rule 158....................................................................18
(x) Absence of Price Manipulation...............................................19
(xi) Restriction on Sale of Securities...........................................19
(xii) Listing.....................................................................19
(xiii) Reporting Requirements......................................................19
(xiv) PREP Procedures.............................................................19
(xv) Translation Opinions........................................................20
(xvi) Translation Opinions - Financial Statements.................................20
(xvii) Lock-Up Agreements..........................................................20
(b) Covenants of ▇▇. ▇▇▇▇▇▇▇ and the Selling Shareholder...................................20
(i) Restriction on Sale of Securities...........................................20
(ii) Absence of Price Manipulation...............................................21
(iii) Form W-8....................................................................21
SECTION 4. Payment of Expenses.........................................................21
(a) Expenses...............................................................................21
(b) Termination of Agreement...............................................................22
SECTION 5. Conditions of Underwriters' Obligations.....................................22
(a) Effectiveness of Registration Statement................................................22
(b) Opinion of Canadian Counsel to the Company, ▇▇. ▇▇▇▇▇▇▇ and the Selling Shareholder....22
(c) Opinion of U.S. Counsel to the Company, ▇▇. ▇▇▇▇▇▇▇ and the Selling Shareholder........22
(d) Opinion of Canadian Counsel to Underwriters............................................23
(e) Opinion of U.S. Counsel to Underwriters................................................23
(f) Certificates Relating to Dutch Subsidiaries............................................23
(g) Officers' Certificate..................................................................23
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(h) ▇▇. ▇▇▇▇▇▇▇'▇ Certificate..............................................................24
(i) Selling Shareholder's Certificate......................................................24
(j) Accountant's Comfort Letter............................................................24
(k) Bring-down Comfort Letter..............................................................24
(l) No Objection...........................................................................24
(m) Lock-up Agreements.....................................................................24
(n) No Trading Suspension; Approval of Listing.............................................24
(o) Conditions to Purchase of Option Securities............................................25
(i) Opinion of Canadian Counsel to the Company, ▇▇. ▇▇▇▇▇▇▇ and the
Selling Shareholder...........................................................25
(ii) Opinion of U.S. Counsel to the Company, ▇▇. ▇▇▇▇▇▇▇ and the Selling Shareholder.25
(iii) Opinion of Canadian Counsel to the Underwriters.................................25
(iv) Opinion of U.S. Counsel to the Underwriters.....................................25
(v) Certificates Relating to Dutch Subsidiaries.....................................25
(vi) Officer's Certificate...........................................................25
(vii) ▇▇. ▇▇▇▇▇▇▇'▇ Certificate.......................................................25
(viii) Selling Shareholder's Certificate...............................................26
(ix) Bring-down Comfort Letter.......................................................26
(p) Additional Documents...................................................................26
(q) Termination of Agreement...............................................................26
SECTION 6. Indemnification.................................................................26
(a) Indemnification of Underwriters, ▇▇. ▇▇▇▇▇▇▇ and Selling Shareholder by Company........26
(b) Indemnification of Underwriters and Company by ▇▇. ▇▇▇▇▇▇▇ and the
Selling Shareholder..................................................................27
(c) Indemnification of ▇▇. ▇▇▇▇▇▇▇, the Selling Shareholder and Company by Underwriters....28
(d) Actions Against Parties; Notification..................................................28
(e) Contribution...........................................................................29
SECTION 7. Representations, Warranties and Agreements to Survive Delivery..................30
SECTION 8. Termination of Agreement........................................................30
(a) Termination; General...................................................................30
(b) Liabilities............................................................................31
SECTION 9. Default by One or More of the Underwriters......................................31
SECTION 10. Agent for Service; Submission to Jurisdiction; Waiver of Immunities.............32
SECTION 11. Notices.........................................................................32
SECTION 12. Parties.........................................................................32
SECTION 13. GOVERNING LAW AND TIME..........................................................33
SECTION 14. Counterparts....................................................................33
SECTION 15. Severability....................................................................33
SECTION 16. Amendment or Modification.......................................................33
SECTION 17. Effect of Headings..............................................................33
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SCHEDULES
Schedule A - List of Underwriters.................................................Sch A-1
Schedule B - Pricing Information..................................................Sch B-1
Schedule C - List of Significant Subsidiaries.....................................Sch C-1
Schedule D - List of Persons and Entities Subject to Lock-up......................Sch D-1
EXHIBITS
Exhibit A - Form of Opinion of Canadian Counsel to the Company and the
Selling Shareholder......................................................A-1
Exhibit B - Form of Opinion of U.S. Counsel to the Company and the
Selling Shareholder .....................................................B-1
Exhibit C - Form of Lock-up Letter ...................................................C-1
iv
▇▇▇▇▇▇▇ Bros. Auctioneers Incorporated
(amalgamated under the Canada Business Corporations Act)
1,739,130 Common Shares
UNDERWRITING AGREEMENT
January o, 2004
▇▇▇▇▇▇▇ ▇▇▇▇▇ Ltd.
CIBC World Markets Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
Scotia Capital Inc.
c/o Raymond ▇▇▇▇▇ Ltd.
2300 - ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Ladies and Gentlemen:
Each of ▇▇▇▇▇▇▇ Bros. Auctioneers Incorporated, a company amalgamated
under the Canada Business Corporations Act (the "Company"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
("▇▇. ▇▇▇▇▇▇▇") and Warm Springs Investments Ltd., a corporation organized under
the laws of British Columbia and controlled by ▇▇. ▇▇▇▇▇▇▇ (the "Selling
Shareholder"), confirm their agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ Ltd. ("▇▇▇▇▇▇▇
▇▇▇▇▇"), and each of the other Underwriters named in Schedule A hereto
(collectively, the "Underwriters", which term shall also include any underwriter
substituted as hereinafter provided in Section 9 hereof), with respect to the
sale by the Selling Shareholder and the purchase by the Underwriters, acting
severally and not jointly, of the respective numbers of Common Shares, without
par value, of the Company ("Common Shares") set forth in said Schedule A and
with respect to the grant by the Selling Shareholder to the Underwriters, acting
severally and not jointly, of the option described in Section 2(b) hereof to
purchase all or any part of 260,870 additional Common Shares to cover
over-allotments, if any. The aforesaid 1,739,130 Common Shares (the "Initial
Securities") to be purchased by the Underwriters and all or any part of the
260,870 Common Shares subject to the option described in Section 2(b) hereof
(the "Option Securities") are hereinafter called, collectively, the
"Securities".
The Company, ▇▇. ▇▇▇▇▇▇▇ and the Selling Shareholder understand that
the Underwriters propose to make a public offering of the Securities in the
United States and in each of the provinces
2
of Canada upon the terms set forth in the U.S. Prospectus (as defined below) and
the Canadian Prospectus (as defined below) as soon as the Underwriters deem
advisable after this Agreement has been executed and delivered. The Securities
will be offered in the United States and Canada through the Underwriters either
directly or through their respective U.S. or Canadian registered broker-dealer
affiliates.
The Company has prepared and filed with the British Columbia Securities
Commission in the province of British Columbia (the "Reviewing Authority") and
with the securities regulatory authorities (the "Qualifying Authorities") in
each of the other provinces of Canada (together with British Columbia, the
"Qualifying Provinces") a preliminary short form base PREP prospectus relating
to the Securities (in the English and French languages, as applicable, and
including the documents incorporated by reference therein, the "Canadian
Preliminary Prospectus") in accordance with the securities laws of the
Qualifying Provinces and the rules, regulations, blanket rulings, instruments,
orders and notices made thereunder and the local, uniform and national policies
published by the securities regulatory authorities therein (collectively, as
applied and interpreted by the securities regulatory authority in each
Qualifying Province, "Canadian Securities Laws"). The Company has filed the
Canadian Preliminary Prospectus with the Reviewing Authority and the Qualifying
Authorities pursuant to National Policy 43-201 - Mutual Reliance Review-System
for Prospectuses and Annual Information Forms and its related memorandum of
understanding, and the Reviewing Authority is acting as principal regulator. The
Company has also filed the Canadian Preliminary Prospectus with the Reviewing
Authority and the Qualifying Authorities pursuant to National Instrument 44-103
- Post-Receipt Pricing (the "PREP Procedures"). The Reviewing Authority has
issued a preliminary Mutual Reliance Review System Decision Document for the
Canadian Preliminary Prospectus. The Company has also prepared and filed with
the United States Securities and Exchange Commission (the "SEC") a registration
statement on Form F-10 (File No. 333-111948) covering the registration of the
Securities under the Securities Act of 1933, as amended (the "1933 Act"),
including the Canadian Preliminary Prospectus (with such deletions therefrom and
additions thereto as are permitted or required by Form F-10 and the applicable
rules and regulations of the SEC) (the "U.S. Preliminary Prospectus").
In addition, the Company (A) has prepared and filed (1) with the
Reviewing Authority and Qualifying Authorities, a final short form base PREP
prospectus relating to the Securities (in the English and French languages, as
applicable, and including the documents incorporated by reference therein, the
"Base PREP Prospectus") which omits the PREP Information (as hereinafter
defined) in accordance with the PREP Procedures and (2) with the SEC, an
amendment to such registration statement on Form F-10, including the Base PREP
Prospectus (with such deletions therefrom and additions thereto as are permitted
or required by Form F-10 and the applicable rules and regulations of the SEC),
and (B) will prepare and file, promptly after the execution and delivery of this
Agreement, (1) with the Reviewing Authority and the Qualifying Authorities, in
accordance with the PREP Procedures, a supplemented PREP prospectus setting
forth the PREP Information (in the English and French languages, as applicable,
and including the documents incorporated by reference therein, the "Supplemented
PREP Prospectus"), and (2) with the SEC, in accordance with General Instruction
II.L. of Form F-10, the Supplemented PREP Prospectus (with such deletions
therefrom and additions thereto as are permitted or required by Form F-10 and
the applicable rules and regulations of the SEC) (the "U.S. Supplemented
Prospectus"). The information included in the
3
Supplemented PREP Prospectus that is omitted from the Base PREP Prospectus and
which is deemed under the PREP Procedures to be incorporated by reference in the
Base PREP Prospectus as of the date of the Supplemented PREP Prospectus is
referred to herein as the "PREP Information".
Each prospectus relating to the Securities (A) used in the United
States (1) before the time the registration statement on Form F-10 became
effective or (2) after such effectiveness and prior to the execution and
delivery of this Agreement or (B) used in Canada (1) before a final Mutual
Reliance Review System Decision Document for the Base PREP Prospectus had been
received from the Reviewing Authority on behalf of itself and the Qualifying
Authorities or (2) after such final Mutual Reliance Review System Decision
Document has been received and prior to the execution and delivery of this
Agreement, in each case, including the documents incorporated by reference
therein, that omits the PREP Information, is herein called a "preliminary
prospectus".
The registration statement on Form F-10, including the exhibits thereto
and the documents incorporated by reference therein, as amended at the time it
became effective is herein called the "Registration Statement". The prospectus
included in the Registration Statement at the time it became effective,
including the documents incorporated by reference therein, is herein called the
"U.S. Prospectus", except that if a U.S. Supplemented Prospectus containing the
PREP Information is thereafter furnished to the Underwriters after the execution
of this Agreement (whether or not such prospectus is required to be filed
pursuant to the rules and regulations of the SEC under the 1933 Act (the "1933
Act Regulations")), the term "U.S. Prospectus" shall refer to such U.S.
Supplemented Prospectus, including the documents incorporated by reference
therein.
The Base PREP Prospectus for which a final Mutual Reliance Review
System Decision Document has been received from the Reviewing Authority on
behalf of itself and the Qualifying Authorities, including the documents
incorporated by reference therein, is herein referred to as the "Canadian
Prospectus", except that, if, after the execution of this Agreement, a
Supplemented PREP Prospectus containing the PREP Information is thereafter filed
with the Reviewing Authority and the Qualifying Authorities, the term "Canadian
Prospectus" shall refer to such Supplemented PREP Prospectus, including the
documents incorporated by reference therein. Any amendment to the Canadian
Prospectus, any amended or supplemental prospectus or auxiliary material,
information, evidence, return, report, application, statement or document that
may be filed by or on behalf of the Company under the securities laws of the
Qualifying Provinces prior to the Closing Time (as hereinafter defined) or,
where such document is deemed to be incorporated by reference into the Base PREP
Prospectus, prior to the expiry of the period of distribution of the Securities,
is referred to herein collectively as the "Supplementary Material".
The Company has also prepared and filed with the SEC an appointment of
agent for service of process upon the Company on Form F-X in conjunction with
the filing of the Registration Statement (the "Form F-X").
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(c)
4
hereof, and as of each Date of Delivery (if any) referred to in Section 2(b)
hereof, and agrees with each Underwriter, as follows:
(i) Compliance with Registration Requirements. The Company is
qualified to file a prospectus in the form of a short form prospectus
pursuant to the requirements of National Instrument 44-101-Short Form
Prospectus Distribution and the exemption order granted thereunder. The
Company meets the general eligibility requirements for use of Form F-10
under the 1933 Act. A final Mutual Reliance Review System Decision
Document has been received from the Reviewing Authority on behalf of
itself and the Qualifying Authorities in respect of the Base PREP
Prospectus and no order suspending the distribution of the Securities
has been issued by the Reviewing Authority or any of the Qualifying
Authorities. The Registration Statement has become effective under the
1933 Act and no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the SEC, and any
request on the part of the SEC for additional information has been
complied with. No order preventing or suspending the use of the
Canadian Prospectus has been issued by the Reviewing Authority or any
of the Qualifying Authorities.
At the time the Registration Statement became effective under
the 1933 Act and at all times subsequent thereto up to and including
the Closing Time (as defined in Section 2(c)) (and if any Option
Securities are purchased, at the Date of Delivery (as defined in
Section 2(b))): (A) the Canadian Prospectus complied and will comply in
all material respects with Canadian Securities Laws (including the PREP
Procedures); (B) the U.S. Prospectus conformed and will conform to the
Canadian Prospectus except for such deletions therefrom and additions
thereto as are permitted or required by Form F-10 and the applicable
rules and regulations of the SEC; (C) the Registration Statement and
any amendments or supplements thereto complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations; (D) neither the Registration Statement nor any
amendment or supplement thereto contained or will contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and (E) each of the U.S. Prospectus, the Canadian
Prospectus and any Supplementary Material or any amendment or
supplement thereto, constituted and will constitute full, true and
plain disclosure of all material facts relating to the Company and the
Securities, and each of the U.S. Prospectus, the Canadian Prospectus
and any Supplementary Material or any amendment or supplement thereto,
did not and will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, except that the representations and warranties
contained in clauses (D) and (E) above do not apply to statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by any Underwriter through ▇▇▇▇▇▇▇
▇▇▇▇▇ expressly for use in the Registration Statement, the U.S.
Prospectus, the Canadian Prospectus or any Supplementary Material.
(ii) Incorporated Documents. Each document filed or to be
filed with the Reviewing Authority and the Qualifying Authorities and
incorporated or deemed to be incorporated by
5
reference in the Canadian Prospectus complied or will comply when so
filed in all material respects with Canadian Securities Laws, and such
documents did not and will not include at the time of their filing an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were or are made, not misleading.
The documents incorporated or deemed to be incorporated by
reference in the Registration Statement and the U.S. Prospectus, at the
time they were or hereafter are filed with the SEC, complied or will
comply, as applicable, in all material respects with the requirements
of the Securities Exchange Act of 1934, as amended (the "1934 Act"),
and the rules and regulations of the SEC thereunder (the "1934 Act
Regulations"), and, when read together with the other information in
the U.S. Prospectus, at the time the Registration Statement became
effective, at the time the U.S. Prospectus was issued and at the
Closing Time (and, if any Option Securities are purchased, at the Date
of Delivery) did not and will not include an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances in which they were
made, not misleading.
(iii) Independent Accountants. The accountants who audited the
consolidated financial statements included or incorporated by reference
in the U.S. Prospectus and the Canadian Prospectus, are independent
public accountants as required by the 1933 Act and the 1933 Act
Regulations and the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and are independent with
respect to the Company within the meaning of the Canada Business
Corporations Act and applicable Canadian Securities Laws.
(iv) Financial Statements. The consolidated financial
statements included or incorporated by reference in the U.S. Prospectus
and the Canadian Prospectus, together with the related schedules, if
any, and notes, present fairly the financial position of the Company
and its consolidated subsidiaries at the dates indicated and the
results of operations and retained earnings and cash flows of the
Company and its consolidated subsidiaries for the periods specified;
such financial statements have been prepared in accordance with
generally accepted accounting principles in Canada ("Canadian GAAP")
applied on a consistent basis (except, in the case of interim financial
statements, for normal year-end adjustments) throughout the periods
involved and have been reconciled to generally accepted accounting
principles in the United States of America ("U.S. GAAP") in accordance
with Item 18 of Form 20-F under the 1934 Act. The summary consolidated
financial information included in the U.S. Prospectus and the Canadian
Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited consolidated
financial statements incorporated by reference into the U.S. Prospectus
and the Canadian Prospectus.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the U.S.
Prospectus, the Canadian Prospectus and the Supplementary Material,
except as otherwise stated therein, (A) there has been no material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not
6
arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the
Company or any of its subsidiaries, other than those in the ordinary
course of business, which are material with respect to the Company and
its subsidiaries considered as one enterprise, and (C) except for
regular quarterly dividends on the Common Shares in amounts per share
that are consistent with past practice, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its share capital.
(vi) Good Standing of the Company. The Company is a
corporation duly amalgamated, validly existing and in good standing
under the laws of Canada and has the corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the U.S. Prospectus and the Canadian Prospectus; is duly
qualified as a foreign corporation to transact business and is in good
standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify or to
be in good standing would not result in a Material Adverse Effect.
Attached hereto as Schedule C is a list of the Company's wholly-owned
or majority-owned subsidiaries which constitute a "significant
subsidiary" of the Company (as that term is defined under Rule 1-02 of
Regulation S-X under the 1934 Act) (each a "Significant Subsidiary"
and, collectively, the "Significant Subsidiaries"). Each Significant
Subsidiary is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation, has
the corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the U.S.
Prospectus and the Canadian Prospectus; and each Significant Subsidiary
is duly qualified as a foreign corporation to transact business and is
in good standing in each other jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property
or the conduct of business, except where the failure to so qualify or
to be in good standing would not result in a Material Adverse Effect.
(vii) Capitalization. The authorized, issued and outstanding
share capital of the Company is as set forth in the U.S. Prospectus and
the Canadian Prospectus under the caption "Description of Share
Capital" (except for any subsequent issuances pursuant to this
Agreement or pursuant to the exercise of convertible securities or
options referred to in the U.S. Prospectus and the Canadian
Prospectus). All of the issued and outstanding shares in the capital of
the Company, including the Securities to be purchased by the
Underwriters from the Selling Shareholder, have been duly authorized
and validly issued and are fully paid and non-assessable and have been
issued in compliance with the 1933 Act and the 1933 Act Regulations and
Canadian Securities Laws; none of the outstanding shares in the capital
of the Company, including the Securities to be purchased by the
Underwriters from the Selling Shareholder, were issued in violation of
the preemptive or other similar rights of any shareholder of the
Company. Except as disclosed in the U.S. Prospectus and the Canadian
Prospectus and the consolidated financial statements of the Company and
related notes thereto incorporated by reference in the U.S. Prospectus
and the Canadian Prospectus, the Company does not have any options or
warrants to purchase, or any pre-emptive rights or other rights to
subscribe for or to purchase any securities or obligations convertible
into, or any contracts or commitments to issue or sell, any of its
share capital or any such options,
7
rights, convertible securities or obligations, other than stock options
granted by the Company in the ordinary course pursuant to its stock
option plan subsequent to September 30, 2003. The description of the
Company's stock option and other stock plans or arrangements, and the
options or other rights granted thereunder, as set forth in the U.S.
Prospectus and the Canadian Prospectus, accurately and fairly presents
the information required to be disclosed with respect to such plans,
arrangements, options and rights. Except as disclosed in the U.S.
Prospectus and the Canadian Prospectus, to the knowledge of the
Company, there are no agreements, arrangements or understandings among
or between any shareholder of the Company with respect to the Company
or the voting or disposition of the Company's Common Shares that will
survive the sale of the Securities pursuant to this Agreement. All of
the issued and outstanding shares in the capital of each Significant
Subsidiary have been duly authorized and validly issued and are fully
paid and non-assessable and are owned by the Company, directly or
through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares in the capital of any of the Significant
Subsidiaries were issued in violation of the preemptive or other
similar rights of any shareholder of such Significant Subsidiary.
(viii) Authorization of Agreement. The Company has the
corporate power and authority to execute, deliver and perform its
obligations under this Agreement and this Agreement has been duly
authorized, executed and delivered by the Company.
(ix) Description of Securities. The Securities conform to all
statements relating thereto contained in the U.S. Prospectus and the
Canadian Prospectus and such description conforms to the rights set
forth in the instruments defining the same; no holder of the Securities
will be subject to personal liability solely by reason of being such a
holder.
(x) Absence of Defaults and Conflicts. Neither the Company nor
any of its subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease, license or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which it or any of its subsidiaries may be bound, or
to which any of the property or assets of the Company or any of its
subsidiaries is subject (collectively, "Agreements and Instruments")
except for such defaults that would not result in a Material Adverse
Effect. The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated herein and in the
U.S. Prospectus and the Canadian Prospectus and compliance by the
Company with its obligations hereunder have been duly authorized by all
necessary corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with
or constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults, Repayment Events or liens, charges or
encumbrances that would not result in a Material Adverse Effect), nor
will such action result in (i) any violation or conflict with the
provisions of the charter or by-laws of the Company or any subsidiary
or (ii) any violation or conflict with the provisions of any applicable
law, statute, rule, regulation, judgment, order, writ or
8
decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any subsidiary or
any of their assets, properties or operations, except in the case of
(ii), such violations or conflict as would not individually or in the
aggregate result in a Material Adverse Effect. As used herein, a
"Repayment Event" means any event or condition which gives the holder
of any note, debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Company or any subsidiary.
(xi) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any subsidiary exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
or any subsidiary's principal suppliers, customers or contractors,
which, in either case, may reasonably be expected to result in a
Material Adverse Effect.
(xii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency, governmental instrumentality or body, domestic or
foreign, now pending, or, to the knowledge of the Company, threatened,
against or affecting the Company or any subsidiary, which is required
to be disclosed in the U.S. Prospectus or the Canadian Prospectus, or
which might reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation
of the transactions contemplated in this Agreement or the performance
by the Company of its obligations hereunder; the aggregate of all
pending legal or governmental proceedings to which the Company or any
subsidiary is a party or of which any of their respective property or
assets is the subject which are not described in the U.S. Prospectus or
the Canadian Prospectus, including ordinary routine litigation
incidental to the business of the Company, could not reasonably be
expected to result in a Material Adverse Effect.
(xiii) Possession of Intellectual Property. The Company and
its subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights, know
how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the
business now operated by them, and neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with respect
to any Intellectual Property or of any facts or circumstances which
would render any Intellectual Property invalid or inadequate to protect
the interest of the Company or any of its subsidiaries therein, and
which infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy, singly or in
the aggregate, would result in a Material Adverse Effect.
(xiv) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, in connection with the offering or sale of
the Securities hereunder or
9
the consummation of the transactions contemplated by this Agreement,
except (A) such as have been already obtained or as may be required
under the 1933 Act or the 1933 Act Regulations or state securities laws
and (B) such as have been obtained, or as may be required, under
Canadian Securities Laws or the Canada Business Corporations Act, as
applicable.
(xv) Possession of Licenses and Permits. Except in each case
as would not individually or in the aggregate result in a Material
Adverse Effect, (A) the Company and its subsidiaries possess such
permits, certificates, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, provincial, state, local or foreign regulatory
agencies or bodies necessary to conduct the business now operated by
them; (B) the Company and its subsidiaries are in compliance with the
terms and conditions of all such Governmental Licenses;(C) all of the
Governmental Licenses are valid and in full force and effect; and (D)
neither the Company nor any of its subsidiaries has received any notice
of proceedings relating to the revocation or modification of any such
Governmental Licenses.
(xvi) Title to Property. The Company and its subsidiaries have
good and marketable title to all real property owned by the Company and
its subsidiaries and good title to all other properties owned by them
in each case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such
as (A) are described in the U.S. Prospectus and the Canadian Prospectus
or (B) do not, singly or in the aggregate, materially affect the value
of such property and do not interfere with the use made and proposed to
be made of such property by the Company or any of its subsidiaries; and
all of the leases and subleases material to the business of the Company
and its subsidiaries, considered as one enterprise, and under which the
Company or any of its subsidiaries holds properties described in the
U.S. Prospectus and the Canadian Prospectus, are in full force and
effect, and neither the Company nor any subsidiary has any notice of
any material claim of any sort that has been asserted by anyone adverse
to the rights of the Company or any subsidiary under any of the leases
or subleases mentioned above, or affecting or questioning the rights of
the Company or such subsidiary to the continued possession of the
leased or subleased, premises under any such lease or sublease.
(xvii) Investment Company Act. The Company is not an
"investment company" or an entity "controlled" by an "investment
company" as such terms are defined in the Investment Company Act of
1940, as amended (the "1940 Act").
(xviii) Environmental Laws. Except as described in the U.S.
Prospectus and the Canadian Prospectus and except as would not, singly
or in the aggregate, result in a Material Adverse Effect, to the
knowledge of the Company, after due inquiry (A) neither the Company nor
any of its subsidiaries is in violation of any federal, provincial,
state, local, municipal or foreign statute, law, rule, regulation,
ordinance, code, policy or rule of common law or civil law or any
judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment, relating
to pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without
limitation,
10
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 in compliance with
their requirements, (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Laws against
the Company or any of its subsidiaries and (D) 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.
(xix) No Stabilization or Manipulation. Neither the Company
nor, to its knowledge, any of its officers, directors or affiliates,
has taken or will take, directly or indirectly, any action designed to,
or that might be reasonably expected to, cause or result in
stabilization or manipulation of the price of the Common Shares.
(xx) Registration Rights. There are no persons with
registration rights or other similar rights to have any securities
registered or qualified for distribution pursuant to the Registration
Statement, the Canadian Prospectus or otherwise registered by the
Company under the 1933 Act or qualified for distribution under any
Canadian Securities Laws.
(xxi) Listing. The Common Shares are listed on the New York
Stock Exchange (the "NYSE") and have been conditionally approved for
listing on the Toronto Stock Exchange (the "TSX"), subject to the
Company fulfilling all of the requirements of the TSX on or before
April 14, 2004.
(xxii) Other Reports and Information. There are no reports or
information that in accordance with the requirements of the Reviewing
Authority or the Qualifying Authorities must be made publicly available
in connection with the offering of the Securities that have not been
made publicly available as required; no material change reports or
other documents have been filed on a confidential basis with the
Reviewing Authority or the Qualifying Authorities since December 31,
2002; there are no documents required to be filed with the Reviewing
Authority or the Qualifying Authorities in connection with the Canadian
Prospectus that have not been filed as required; there are no
contracts, documents or other materials required to be described or
referred to in the Registration Statement, the U.S. Prospectus or the
Canadian Prospectus or to be filed as exhibits to the Registration
Statement that are not described, referred to or filed as required.
(xxiii) Taxes. The Company and its subsidiaries have filed all
material United States and Canadian federal, state, provincial, local
and foreign income, payroll, franchise and other tax returns and have
paid all material taxes shown as due thereon or otherwise due with
respect to any of their properties or any transactions to which they
are a party, and there is
11
no tax deficiency that has been, or is reasonably likely to be,
asserted against the Company or any of its subsidiaries or any of their
properties or assets that would result in a Material Adverse Effect.
(xxiv) Insurance. Except as disclosed in the U.S. Prospectus
and the Canadian Prospectus, the Company and its subsidiaries are
insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are, to the knowledge of the
Company, customary in the businesses in which they engage or propose to
engage; the Company and its subsidiaries have no reason to believe that
it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost that
would not result in a Material Adverse Effect.
(xxv) Compliance with Laws. The Company and its subsidiaries
are in all material respects in compliance with, and conduct their
businesses in all material respects in conformity with, all applicable
U.S. and Canadian federal, state, provincial, local and foreign laws,
rules and regulations, including the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, and
all applicable ordinances, judgments, decrees, orders, units and
injunctions of any court or governmental agency or body or the rules
and regulations of the NYSE or the TSX. There has not been any
reportable disagreement within the meaning of National Policy Statement
No. 31 of the Canadian Securities Administrators with the auditors of
the Company.
(xxvi) No Broker. There is no broker, finder or other party
that is entitled to receive from the Company any brokerage or finder's
fee or other fee or commission as a result of any of the transactions
contemplated by this Agreement.
(xxvii) Non-Arm's Length Transactions. To the knowledge of the
Company, after due inquiry, except as disclosed in writing to the
Underwriters or in the U.S. Prospectus and the Canadian Prospectus,
neither the Company nor any subsidiary is a party to any contract,
agreement or understanding with any officer, director, employee or any
other person not dealing at arm's length with the Company or any
subsidiary which is required to be disclosed under the 1933 Act or
Canadian Securities Laws.
(xxviii) Internal Controls. The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles in Canada and to maintain
asset accountability; (iii) access to assets is permitted only in
accordance with management's general, or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xxix) Stamp Tax. No stamp duty, registration or documentary
taxes, duties or similar charges are payable under the federal laws of
Canada or the laws of the Province of British Columbia in connection
with the sale and delivery to the Underwriters of the Securities or
12
the authorization, execution, delivery and performance of this
Agreement or the resale of Securities by an Underwriter to U.S.
residents.
(xxx) French Language Documents. The French language version
of each of the Base PREP Prospectus and the Supplemented PREP
Prospectus, together with each document incorporated therein by
reference, including the financial statements and other financial data
contained therein, is in all material respects a complete and proper
translation of the English language versions thereof.
(b) Representations and Warranties by ▇▇. ▇▇▇▇▇▇▇ and the Selling
Shareholder. ▇▇. ▇▇▇▇▇▇▇, on behalf of himself and on behalf of the Selling
Shareholder, represents and warrants to each Underwriter as of the date hereof,
and as of the Closing Time referred to in Section 2(c) hereof, and, if the
Selling Shareholder is selling Option Securities on a Date of Delivery (as
defined in Section 2(b) hereof), as of each Date of Delivery, and acknowledges
that each Underwriter is relying upon such representations and warranties in
connection with its execution and delivery of this Agreement and the purchase of
the Securities, as the case may be, as follows:
(i) Accurate Disclosure. To the knowledge of ▇▇. ▇▇▇▇▇▇▇ and
the Selling Shareholder, the representations and warranties of the
Company contained in Section 1(a) hereof are true and correct; ▇▇.
▇▇▇▇▇▇▇, on behalf of himself and on behalf of the Selling Shareholder,
has reviewed and is familiar with the Registration Statement, the
Canadian Prospectus, the U.S. Prospectus and any Supplementary Material
and, to the knowledge of ▇▇. ▇▇▇▇▇▇▇ and the Selling Shareholder, (A)
neither the Registration Statement nor any amendment or supplement
thereto contained an untrue statement of a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and (B) each of the Canadian Prospectus, and Supplementary
Material or any amendment or supplement thereto constituted full, true
and plain disclosure of all material facts relating to the Company and
the Securities, and each of the U.S. Prospectus, the Canadian
Prospectus and any Supplementary Material or any amendment or
supplement thereto did not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading; and all information with respect to each of ▇▇.
▇▇▇▇▇▇▇ and the Selling Shareholder contained in the Registration
Statement, Canadian Prospectus, U.S. Prospectus or any Supplementary
Material or any amendment or supplement thereto complied in all
material respects with all applicable provisions of Canadian Securities
Laws and the 1933 Act and 1933 Act Regulations.
(ii) Authorization of Agreements. ▇▇. ▇▇▇▇▇▇▇ has the full
right, power and authority to enter into this Agreement personally and
on behalf of the Selling Shareholder and to sell, transfer and deliver
the Securities to be sold by the Selling Shareholder hereunder. The
execution and delivery of this Agreement and the sale and delivery of
the Securities to be sold by the Selling Shareholder and the
consummation of the transactions contemplated herein and compliance by
▇▇. ▇▇▇▇▇▇▇ and the Selling Shareholder with their respective
obligations hereunder do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a material breach of, or default under, or result in the
creation or imposition of any tax, lien, charge or encumbrance upon the
13
Securities to be sold by the Selling Shareholder or any property or
assets of either ▇▇. ▇▇▇▇▇▇▇ or the Selling Shareholder pursuant to,
any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, license, lease or other agreement or instrument to
which either ▇▇. ▇▇▇▇▇▇▇ or the Selling Shareholder is a party or by
which either ▇▇. ▇▇▇▇▇▇▇ or the Selling Shareholder may be bound, or to
which any of the property or assets of either ▇▇. ▇▇▇▇▇▇▇ or the
Selling Shareholder is subject, nor will such action result in any
material violation of the provisions of any applicable treaty, law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over either ▇▇. ▇▇▇▇▇▇▇ or the Selling Shareholder
or any of their respective properties.
(iii) Options. Except as created hereby, there are no
outstanding rights, warrants or options to acquire any of the
Securities to be sold by the Selling Shareholder.
(iv) Absence of Further Requirements. The execution and
delivery of this Agreement by each of ▇▇. ▇▇▇▇▇▇▇ and the Selling
Shareholder and the performance by each of ▇▇. ▇▇▇▇▇▇▇ and the Selling
Shareholder of the transactions contemplated herein do not and will not
require the filing with, or consent, license, order, approval,
authorization, registration or qualification of or decree of any court
or any governmental authority or agency, stock exchange (including, for
greater certainty, the NYSE and the TSX) or other third party (domestic
or foreign), except (i) such as have been obtained, and (ii) such as
may be required (and shall be obtained as provided in this Agreement)
under Canadian Securities Laws and the 1933 Act and 1933 Act
Regulations and such as may be required under U.S. state securities, or
"Blue Sky," laws.
(v) Delivery of Securities. To the knowledge of each of ▇▇.
▇▇▇▇▇▇▇ and the Selling Shareholder, the Securities to be sold by the
Selling Shareholder have been validly issued as fully paid and
non-assessable shares. Certificates for the Initial Securities and the
Option Securities, if applicable, to be sold by the Selling Shareholder
pursuant to this Agreement, in suitable form for transfer by delivery
or accompanied by duly executed instruments of transfer or assignment
in blank with signatures guaranteed, will be delivered to the New York
City office of the Depository Trust Company ("DTC") not later than
10:00 am (Eastern time) on the business day prior to the Closing Date
or the relevant Date of Delivery, as the case may be, for delivery to
the Underwriters pursuant to this Agreement.
(vi) Brokers. Other than as contemplated by this Agreement,
there is no person, firm or corporation which has been engaged by
either ▇▇. ▇▇▇▇▇▇▇ or the Selling Shareholder to act for either ▇▇.
▇▇▇▇▇▇▇ or the Selling Shareholder and which is entitled to any
brokerage or finder's fee in connection with this Agreement or any of
the transactions contemplated hereunder, and in the event any such
person, firm or corporation establishes a claim for any fee from the
Underwriters, ▇▇. ▇▇▇▇▇▇▇ and the Selling Shareholder each jointly and
severally covenant to indemnify and hold harmless the Underwriters with
respect thereto and with respect to all costs reasonably incurred in
the defense thereof.
(vii) Title to Securities. The Selling Shareholder now has,
and will at the Closing Time and, if any Option Securities are
purchased from the Selling Shareholder, on the Date
14
of Delivery, have, good and marketable title to the Initial Securities
and the Option Securities, if applicable, to be sold by the Selling
Shareholder hereunder, free and clear of any security interest,
mortgage, pledge, lien, charge, claim or encumbrance of any kind, other
than pursuant to this Agreement. Each of ▇▇. ▇▇▇▇▇▇▇ and the Selling
Shareholder, as applicable, has full legal right and power, and all
authorization and approvals required by law, to sell, transfer and
deliver such Securities to the Underwriters hereunder and to make the
representations, warranties and agreements made by ▇▇. ▇▇▇▇▇▇▇ and the
Selling Shareholder herein. Upon the delivery of such Securities and
payment of the purchase price therefor as herein contemplated, assuming
each such Underwriter has no notice of any adverse claim, each of the
Underwriters will receive good and marketable title to such Securities
purchased by it from the Selling Shareholder, free and clear of any
security interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind.
(viii) Absence of Tax Deficiency. At the Closing Time and on
any Date of Delivery, if applicable, all stock transfer or other taxes,
if any (other than income taxes), which are required to be paid in
connection with the sale and transfer of the Initial Securities and the
Option Securities, if applicable, to be sold by the Selling Shareholder
to the several Underwriters hereunder will have been fully paid or
provided for by either ▇▇. ▇▇▇▇▇▇▇ or the Selling Shareholder and all
laws imposing such taxes will have been fully complied with by ▇▇.
▇▇▇▇▇▇▇ and the Selling Shareholder.
(ix) No Material Adverse Change in Business. Neither ▇▇.
▇▇▇▇▇▇▇ nor the Selling Shareholder has any knowledge of any fact or
condition not set forth in the Canadian Prospectus and the U.S.
Prospectus which has had a Material Adverse Effect, and the sale of the
Securities proposed to be sold by the Selling Shareholder is not
prompted by any such knowledge.
(x) Distribution of Documents and Absence of Price
Manipulation. Other than as permitted by Canadian Securities Laws and
the 1933 Act and 1933 Act Regulations, neither ▇▇. ▇▇▇▇▇▇▇ nor the
Selling Shareholder has distributed or will distribute any preliminary
prospectus, the Canadian Prospectus, the U.S. Prospectus, the
Registration Statement, any Supplemental Material, or any other
offering material in connection with the offering or sale of the
Securities. Neither ▇▇. ▇▇▇▇▇▇▇ nor the Selling Shareholder has taken,
or will take, directly or indirectly, any action designed to or which
has constituted, or which might reasonably be expected to cause or
result in, under Canadian Securities Laws, Regulation M under the 1934
Act or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(xi) Absence of Proceedings. There is not pending or, to the
knowledge of each of ▇▇. ▇▇▇▇▇▇▇ and the Selling Shareholder,
threatened against either ▇▇. ▇▇▇▇▇▇▇ or the Selling Shareholder any
action, suit or proceeding which (A) questions the validity of this
Agreement or of any action taken or to be taken by either ▇▇. ▇▇▇▇▇▇▇
or the Selling Shareholder pursuant to or in connection with this
Agreement or (B) is required to be disclosed in the Registration
Statement, the Canadian Prospectus or the U.S. Prospectus.
15
(xii) Taxes. No stamp or other issuance or transfer taxes or
duties or withholding taxes are payable by or on behalf of the
Underwriters under the federal laws of Canada or the laws of the
Province of British Columbia in connection with (A) the sale and
delivery by the Selling Shareholder to or for the respective accounts
of the Underwriters of the Securities to be sold by the Selling
Shareholder; or (B) the sale and delivery outside Canada by the
Underwriters of the Securities to be sold by the Selling Shareholder to
the initial purchasers thereof.
(c) Officer's Certificates. Any certificate signed by any officer of
the Company or by or on behalf of either ▇▇. ▇▇▇▇▇▇▇ or the Selling Shareholder
delivered to the Underwriters or to counsel for the Underwriters shall be deemed
a representation and warranty by the Company, ▇▇. ▇▇▇▇▇▇▇ or the Selling
Shareholder, as the case may be, to each Underwriter as to the matters covered
thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Selling Shareholder agrees to sell the Initial Securities to the
Underwriters, and each Underwriter, severally and not jointly, agrees to
purchase from the Selling Shareholder, at the price per share set forth in
Schedule B, the number of Initial Securities set forth in Schedule A opposite
the name of such Underwriter, plus any additional number of Initial Securities
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 9 hereof.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Selling Shareholder hereby grants an option to the Underwriters,
severally and not jointly, to purchase up to an additional 260,870 Common Shares
at the price per share set forth in Schedule B. The option hereby granted will
expire 30 days after the Closing Date and may be exercised in whole or in part
from time to time only for the purpose of covering over-allotments which may be
made in connection with the offering and distribution of the Initial Securities
upon notice by ▇▇▇▇▇▇▇ ▇▇▇▇▇, on behalf of the Underwriters, to the Company and
the Selling Shareholder setting forth the number of Option Securities as to
which the several Underwriters are then exercising the option and the time and
date of payment and delivery for such Option Securities. Any such time and date
of delivery (a "Date of Delivery") shall be determined by the Underwriters, but
shall not be earlier than two or later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Date, as
hereinafter defined. If the option is exercised as to all or any portion of the
Option Securities, each of the Underwriters, acting severally and not jointly,
will purchase that proportion of the total number of Option Securities then
being purchased which the number of Initial Securities set forth in Schedule A
opposite the name of such Underwriter bears to the total number of Initial
Securities, subject in each case to such adjustments as the Underwriters in
their discretion shall make to eliminate any sales or purchases of fractional
shares.
(c) Payment. Payment of the purchase price for the Initial Securities
shall be made at the Vancouver offices of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, or at such other
place as shall be agreed upon by ▇▇▇▇▇▇▇ ▇▇▇▇▇ on behalf of the Underwriters,
and the Selling Shareholder, at 9:00 A.M. (Eastern time) on the third (fourth,
if the pricing occurs after 4:30 P.M. (Eastern Time) on any given day) business
day
16
after the date hereof (unless postponed in accordance with the provisions of
Section 9, the "Closing Date"), or such other time not later than ten business
days after the date hereof as shall be agreed upon by ▇▇▇▇▇▇▇ ▇▇▇▇▇, on behalf
of the Underwriters, and the Selling Shareholder (such time and date of payment
and delivery being herein called the "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for such Option
Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by ▇▇▇▇▇▇▇ ▇▇▇▇▇, on behalf of the Underwriters, and the
Selling Shareholder, on each Date of Delivery as specified in the notice from
▇▇▇▇▇▇▇ ▇▇▇▇▇, on behalf of the Underwriters, to the Company and the Selling
Shareholder.
Delivery of the Initial Securities and the Option Securities on the
Closing Date or the Date of Delivery, as applicable, shall be made to the
Underwriters through the facilities of DTC for the respective accounts of the
various Underwriters. Payment shall be made to the Selling Shareholder by wire
transfer of immediately available (same day) funds to the bank account
designated by the Selling Shareholder not less than 24 hours prior to the
Closing Time or relevant Date of Delivery, against delivery to the Underwriters
for the respective accounts of the Underwriters of certificates for the
Securities to be purchased by them. It is understood that each Underwriter has
authorized ▇▇▇▇▇▇▇ ▇▇▇▇▇, for its account, to accept delivery of, receipt for,
and make payment of the purchase price for, the Initial Securities and the
Option Securities, if any, which it has agreed to purchase. Payment to the
Selling Shareholder shall be made in U.S. dollars, as set forth in Schedule B
hereto, or as may be agreed to by ▇▇▇▇▇▇▇ ▇▇▇▇▇, on behalf of the Underwriters,
and the Selling Shareholder. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as
representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Initial Securities or the Option
Securities, if any, to be purchased by any Underwriter whose funds have not been
received by the Closing Time, or the relevant Date of Delivery, as the case may
be, but such payment shall not relieve such Underwriter from its obligations
hereunder.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, will be in such denominations and
registered in such names as the Underwriters may request in writing at least two
full business days before the Closing Time or the relevant Date of Delivery, as
the case may be. The Initial Securities and the Option Securities, if any, will
be made available for examination by the Underwriters in the City of New York,
at the office of DTC or its designated custodian not later than 10:00 A.M.
(Eastern time) on the business day prior to the Closing Date or the relevant
Date of Delivery, as the case may be.
SECTION 3. Covenants.
(a) Covenants of the Company. The Company covenants and agrees with
each Underwriter as follows:
(i) Fulfillment of Conditions. The Company will use its
commercially reasonable best efforts to fulfill, at or prior to the
Closing Date or the Date of Delivery, if applicable, each of the
conditions set out in Section 5 hereof.
17
(ii) Compliance with Securities Regulations and Commission
Requests. The Company will comply with the requirements of the PREP
Procedures and General Instruction II.L. of Form F-10; and will notify
the Underwriters promptly, and confirm the notice in writing, (i) when
any post-effective amendment to the Registration Statement shall have
been filed with the SEC or shall have become effective, and when any
supplement to the U.S. Prospectus or the Canadian Prospectus or any
amended U.S. Prospectus or Canadian Prospectus or any Supplementary
Material shall have been filed, (ii) of the receipt of any comments
from the Reviewing Authority, any Qualifying Authority or the SEC,
(iii) of any request by the Reviewing Authority to amend or supplement
the Base PREP Prospectus or the Canadian Prospectus or for additional
information or of any request by the SEC to amend the Registration
Statement or to amend or supplement the U.S. Prospectus or for
additional information, (iv) of the issuance by the SEC of any stop
order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities
for offering or sale in any jurisdiction, or of the institution or, to
the knowledge of the Company, threatening of any proceedings for any
such purpose, and (v) of the issuance by the Reviewing Authority, any
Qualifying Authority or any stock exchange of any order having the
effect of ceasing or suspending the distribution of the Securities or
the trading in the securities of the Company, or of the institution or,
to the knowledge of the Company, threatening of any proceedings for any
such purpose. The Company will use every reasonable effort to prevent
the issuance of any such stop order or of any order preventing or
suspending such use or such order ceasing or suspending the
distribution of the Securities or the trading in the securities of the
Company and, if any such order is issued, to obtain the lifting thereof
at the earliest possible time.
(iii) Filing of Amendments. The Company will not at any time
file or make any amendment to the Registration Statement, any amendment
or supplement to the Base PREP Prospectus, or any amendment or
supplement to any part of the prospectus included in the Registration
Statement at the time it becomes effective, the U.S. Supplemented
Prospectus, the Supplemented PREP Prospectus or any Supplementary
Material, of which ▇▇▇▇▇▇▇ ▇▇▇▇▇, on behalf of the Underwriters, shall
not have previously been advised and furnished a copy or to which
▇▇▇▇▇▇▇ ▇▇▇▇▇, on behalf of the Underwriters, shall have objected,
acting reasonably.
(iv) Issuance of Press Releases. The Company will not, prior
to the Closing Time, issue any press release of which ▇▇▇▇▇▇▇ ▇▇▇▇▇, on
behalf of the Underwriters, shall not have previously been advised and
furnished a copy or to which ▇▇▇▇▇▇▇ ▇▇▇▇▇, on behalf of the
Underwriters, shall have objected, acting reasonably.
(v) Delivery of Filed Documents. The Company has furnished or
will deliver to each of the Underwriters, without charge, a copy of the
Canadian Preliminary Prospectus, the Base PREP Prospectus, the Canadian
Prospectus, and any Supplementary Material, approved, signed and
certified as required by Canadian Securities Laws and signed copies of
the Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by
reference therein) and signed copies of all consents and certificates
of experts and the Form F-X.
18
(vi) Delivery of Prospectuses. The Company has delivered, or
caused to be delivered to each Underwriter, without charge, as many
copies of each U.S. Preliminary Prospectus and Canadian Preliminary
Prospectus as such Underwriter has reasonably requested, and the
Company hereby consents to the use of such copies for the purposes
permitted by the 1933 Act and applicable Canadian Securities Laws. The
Company will deliver to each Underwriter, without charge, during the
period when the U.S. Prospectus is required to be delivered under the
1933 Act or the 1934 Act and during the period when the Canadian
Prospectus is required to be delivered under the securities laws of the
Qualifying Provinces, but no later than the second business day after
the date hereof, such number of copies of the U.S. Prospectus and
Canadian Prospectus, respectively (each as supplemented or amended) as
such Underwriter may reasonably request.
(vii) Continued Compliance with Securities Laws. The Company
will comply with the 1933 Act and the 1933 Act Regulations and Canadian
Securities Laws so as to permit the completion of the distribution of
the Securities as contemplated in this Agreement and in the U.S.
Prospectus and the Canadian Prospectus. If at any time when a
prospectus is required by the 1933 Act or Canadian Securities Laws to
be delivered in connection with sales of the Securities, any event
shall occur or condition shall exist as a result of which it is
necessary, in the opinion of counsel for the Underwriters or for the
Company, acting reasonably, to amend the Registration Statement or
amend or supplement the U.S. Prospectus or the Canadian Prospectus in
order that the U.S. Prospectus or the Canadian Prospectus will not
include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion
of such counsel, acting reasonably, at any such time to amend the
Registration Statement or amend or supplement the U.S. Prospectus or
the Canadian Prospectus in order to comply with the requirements of the
1933 Act or the 1933 Act Regulations or Canadian Securities Laws, the
Company will promptly prepare and file with the SEC and with the
Reviewing Authority and the Qualifying Authorities, subject to Section
3(a)(iii), such amendment or supplement as may be necessary to correct
such statement or omission or to make the Registration Statement or the
U.S. Prospectus or the Canadian Prospectus comply with such
requirements, and the Company will furnish to the Underwriters such
number of copies of such amendment or supplement as the Underwriters
may reasonably request.
(viii) Blue Sky Qualifications. The Company will use its
reasonable best efforts, in cooperation with the Underwriters, to
qualify the Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions as the
Underwriters may designate and to maintain such qualifications in
effect for a period of not less than one year from the effective date
of the Registration Statement; provided, however, that the Company
shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.
(ix) Rule 158. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as
19
practicable an earnings statement (which need not be audited but shall
be in reasonable detail) for the purposes of, and to provide the
benefits contemplated by, the last paragraph of Section 11(a) of the
1933 Act and the regulations thereunder.
(x) Absence of Price Manipulation. The Company will not at
anytime, directly or indirectly, take any action intended or which
might reasonably be expected, to cause or result in, or which will
constitute, stabilization of the price of the Common Shares to
facilitate the sale or resale of any of the Securities.
(xi) Restriction on Sale of Securities. During a period of 90
days from the date of the U.S. Prospectus and the Canadian Prospectus,
the Company will not, without the prior written consent of ▇▇▇▇▇▇▇
▇▇▇▇▇, (i) directly or indirectly, offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, lend
or otherwise transfer or dispose of any Common Shares or any securities
convertible into or exercisable or exchangeable for Common Shares or
file any registration statement under the 1933 Act with respect to any
of the foregoing or (ii) enter into any swap or any other agreement or
any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Shares,
whether any such swap or transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Shares or such other
securities, in cash or otherwise. The foregoing sentence shall not
apply to (A) any Common Shares issued or options to purchase Common
Shares granted pursuant to the Company's stock option plan referred to
in the U.S. Prospectus and the Canadian Prospectus, or (B) any Common
Shares issued by the Company upon the exercise of an option or warrant
or the conversion of a security outstanding on the date hereof and
referred to in the U.S. Prospectus and the Canadian Prospectus.
(xii) Listing. The Common Shares are listed for trading on the
NYSE, and no order by the NYSE ceasing or suspending trading in the
Common Shares or prohibiting the sale of the Securities or the trading
of any securities of the Company has been issued by the NYSE and is
pending and no proceedings for such purpose are pending or, to the
knowledge of the Company, threatened. The Company will file all
documents and notices with the NYSE as may be required in connection
with the offering of the Securities. The Company has obtained the
conditional approval of the TSX for the listing of the Common Shares
and will use its best efforts to satisfy any requirements of the TSX to
the listing thereof within the time specified in such approval.
(xiii) Reporting Requirements. The Company, during the period
when the U.S. Prospectus or the Canadian Prospectus is required to be
delivered under the 1933 Act or the 1934 Act or under applicable
Canadian Securities Laws, will file all documents required to be filed
by the Company with (i) the SEC pursuant to the 1934 Act within the
time periods required by the 1934 Act and the rules and regulations of
the SEC thereunder, and (ii) with the Qualifying Provinces in
accordance with applicable Canadian Securities Laws.
(xiv) PREP Procedures. The Company will take such steps as it
deems necessary to ascertain promptly whether the form of Supplemented
PREP Prospectus was received for filing by the Reviewing Authority and
the Qualifying Authorities and whether the U.S.
20
Supplemented Prospectus transmitted for filing pursuant to General
Instruction II.L. of Form F-10 was received for filing by the SEC and,
in the event that any such prospectuses were not received for filing,
it will promptly file any such prospectus not then received for filing.
(xv) Translation Opinions. The Company shall cause ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ to deliver to the Underwriters opinions, dated the date of the
filing of the French language versions of each of the Base PREP
Prospectus and the Supplemented PREP Prospectus, to the effect that the
French language version of each such prospectus, together with each
document incorporated therein by reference (other than the financial
statements and other financial data contained therein or omitted
therefrom), is in all material respects a complete and accurate
translation of the English language versions thereof. The Company shall
cause ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to deliver to the Underwriters similar opinions
as to the French language translation of any information contained in
any Supplementary Material, in form and substance reasonably
satisfactory to the Underwriters, prior to the filing thereof with the
Reviewing Authority.
(xvi) Translation Opinions - Financial Statements. The Company
shall cause KPMG LLP to deliver to the Underwriters opinions, dated the
date of the filing of the French language versions of each of the Base
PREP Prospectus and the Supplemented PREP Prospectus, to the effect
that the financial statements and other financial data contained in the
French language version of each such prospectus, together with each
document incorporated therein by reference, is in all material respects
a complete and accurate translation of the English language versions
thereof. The Company shall cause KPMG LLP to deliver to the
Underwriters similar opinions as to the French language translation of
any information contained in any Supplementary Material, in form and
substance reasonably satisfactory to the Underwriters, prior to the
filing thereof with the Reviewing Authority.
(xvii) Lock-Up Agreements. The Company will use its best
efforts to ensure that those persons listed in Schedule D hereto enter
into agreements substantially in the form of Exhibit C hereto.
(b) Covenants of ▇▇. ▇▇▇▇▇▇▇ and the Selling Shareholder. ▇▇. ▇▇▇▇▇▇▇,
on behalf of himself and on behalf of the Selling Shareholder, covenants and
agrees with each of the Underwriters that:
(i) Restriction on Sale of Securities. During a period of 90
days from the date of the U.S. Prospectus and the Canadian Prospectus,
neither ▇▇. ▇▇▇▇▇▇▇ nor the Selling Shareholder will, without the prior
written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, (i) directly or indirectly, offer,
pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend or otherwise transfer or dispose of
any Common Shares or any securities convertible into or exercisable or
exchangeable for Common Shares or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of the
Common Shares, whether any such swap or
21
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Shares or such other securities, in cash or
otherwise.
(ii) Absence of Price Manipulation. Neither ▇▇. ▇▇▇▇▇▇▇ nor
the Selling Shareholder will at any time, directly or indirectly, take
any action intended, or which might reasonably be expected, to cause or
result in, or which will constitute, stabilization of the price of the
Common Shares to facilitate the sale or resale of any of the
Securities.
(iii) Form W-8. In order to document the Underwriters'
compliance with the reporting and withholding provisions of the Tax
Equity and Fiscal Responsibility Act of 1982 with respect to
transactions herein contemplated, the Selling Shareholder will deliver
to ▇▇▇▇▇▇▇ ▇▇▇▇▇, on behalf of the Underwriters prior to or at the
Closing Time a properly completed and executed United States Treasury
Department Form W-8 (or other applicable form or statement specified by
Treasury Department regulations in lieu thereof).
SECTION 4. Payment of Expenses.
(a) Expenses. The Selling Shareholder will pay all expenses incident to
the performance of the obligations of the Company, ▇▇. ▇▇▇▇▇▇▇ and the Selling
Shareholder under this Agreement, including (i) the preparation, printing and
filing of the Registration Statement (including financial statements and
exhibits and the Form F-X) and of each amendment thereto, the preliminary
prospectuses, the U.S. Prospectus, the Base PREP Prospectus, the Canadian
Prospectus and any Supplementary Material and any amendments or supplements
thereto or French translations thereof, and the cost of furnishing copies
thereof to the Underwriters, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, including
any stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities to the Underwriters, (iv) the fees
and disbursements of the Company's, ▇▇. ▇▇▇▇▇▇▇'▇ and Selling Shareholder's
counsel, accountants and other advisors, (v) the qualification of the Securities
under applicable securities laws in accordance with the provisions of Section
3(a)(vii) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the U.S. Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of commercial copies
of each preliminary prospectus, and of the U.S. Prospectus and the Canadian
Prospectus and any amendments or supplements thereto, (vii) the preparation,
printing and delivery to the Underwriters of commercial copies of the U.S. Blue
Sky Survey and any supplement thereto, (viii) the fees and expenses of any
transfer agent or registrar for the Securities, (ix) the filing fees incident to
the review by the National Association of Securities Dealers, Inc. (the "NASD")
of the terms of the sale of the Securities and (x) any fees or expenses payable
to the NYSE in connection with the transactions contemplated pursuant to this
Agreement. It is understood, however, that the Company may reimburse ▇▇.
▇▇▇▇▇▇▇, or the Selling Shareholder, as applicable, for a portion of the costs
incurred in connection with the transactions contemplated pursuant to this
Agreement as may be agreed to between the Company and ▇▇. ▇▇▇▇▇▇▇. Except as
provided in this Section 4(a) and Section 4(b) below, the Underwriters will pay
all of their own costs and expenses, including (without limitation) the fees of
their counsel. In addition, the Underwriters will pay all
22
costs and expenses related to the travel (e.g., airfare and land transportation)
by representatives of the Company and the Underwriters as part of the roadshow
process in connection with the offering of the Securities.
(b) Termination of Agreement. If this Agreement is terminated by the
Underwriters (i) in accordance with the provisions of Section 5(q) because of
any failure, refusal or inability on the part of the Company, ▇▇. ▇▇▇▇▇▇▇ or the
Selling Shareholder to fulfill any of the conditions of this Agreement, (ii) in
accordance with the provisions of Section 8(a)(i) hereof or (iii) in accordance
with the provisions of Section 5(q) because any condition set forth in Section
5(b), 5(c), 5(f), 5(g), 5(j), 5(k) or 5(m) is not fulfilled, ▇▇. ▇▇▇▇▇▇▇, or in
his discretion the Selling Shareholder, shall reimburse the Underwriters for all
of their out of pocket expenses, including the reasonable fees and disbursements
of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company, ▇▇. ▇▇▇▇▇▇▇ and the Selling
Shareholder contained in Section 1 hereof or in certificates of any officer of
the Company or any subsidiary of the Company, ▇▇. ▇▇▇▇▇▇▇ or the Selling
Shareholder delivered pursuant to the provisions hereof on the Closing Date and
each Date of Delivery (if any), to the performance by the Company, ▇▇. ▇▇▇▇▇▇▇
and the Selling Shareholder of their covenants and other obligations hereunder,
and to the following further conditions:
(a) Effectiveness of Registration Statement. The Base PREP Prospectus
has been filed with the Reviewing Authority and with the Qualifying Authorities
and a final Mutual Reliance Review System Decision Document obtained therefor
and the Registration Statement has become effective; and at the Closing Time no
stop order suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act or proceedings therefor initiated or threatened
by the SEC, no order having the effect of ceasing or suspending the distribution
of the Securities or the trading in the securities of the Company or any other
securities of the Company shall have been issued or proceedings therefor
initiated or threatened by any securities commission, securities regulatory
authority or stock exchange in Canada or the United States, and any request on
the part of the Reviewing Authority, any Qualifying Authority or the SEC for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters. A Supplemented PREP Prospectus and
a U.S. Supplemented Prospectus containing the PREP Information shall have been
filed, respectively, with the Reviewing Authority and with the Qualifying
Authorities in accordance with the PREP Procedures and with the SEC in
accordance with General Instruction II.L. of Form F-10.
(b) Opinion of Canadian Counsel to the Company, ▇▇. ▇▇▇▇▇▇▇ and the
Selling Shareholder. At the Closing Time, the Underwriters shall have received
the opinion, dated as of the Closing Date, of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, Canadian
counsel to the Company, ▇▇. ▇▇▇▇▇▇▇ and the Selling Shareholder, in form and
substance reasonably satisfactory the Underwriters, together with signed or
reproduced copies of such opinion for each of the Underwriters to the effect set
forth in Exhibit A hereto.
(c) Opinion of U.S. Counsel to the Company, ▇▇. ▇▇▇▇▇▇▇ and the Selling
Shareholder. At the Closing Time, the Underwriters shall have received the
opinion dated as of the Closing Date,
23
of ▇▇▇▇▇▇▇ Coie LLP, United States counsel to the Company, ▇▇. ▇▇▇▇▇▇▇ and the
Selling Shareholder, together with signed or reproduced copies of such opinion
for each of the other Underwriters, in form and substance reasonably
satisfactory to the Underwriters to the effect set forth in Exhibit B hereto.
(d) Opinion of Canadian Counsel to Underwriters. At the Closing Time,
the Underwriters shall have received the opinion, dated as of the Closing Date,
of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Gervais LLP, Canadian counsel to the Underwriters, together
with signed or reproduced copies of such opinion for each of the other
Underwriters, in form and substance reasonably satisfactory to the Underwriters.
In giving such opinion such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the laws of the Provinces of British Columbia,
Alberta, Ontario and Quebec and the federal laws of Canada applicable therein
upon the opinions of counsel satisfactory to the Underwriters. Such counsel may
also state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Company and its subsidiaries and certificates of public officials.
(e) Opinion of U.S. Counsel to Underwriters. At the Closing Time, the
Underwriters shall have received the opinion, dated as of the Closing Date, of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, United States counsel to the
Underwriters, together with signed or reproduced copies of such opinion for each
of the other Underwriters, in form and substance reasonably satisfactory to the
Underwriters. In giving such opinion such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the State of New
York and the federal law of the United States, upon the opinions of counsel
satisfactory to the Underwriters. Such counsel may also state that, insofar as
such opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(f) Certificates Relating to Dutch Subsidiary. At the Closing Time, the
Underwriters shall have received a certificate, dated the Closing Date, from De
Brauw Blackstone Westbroek, Dutch counsel to the Company, with respect to the
subsidiary listed in Schedule C as the Dutch Subsidiary and identified therein
as a "Significant Subsidiary," in form and substance reasonably satisfactory to
the Underwriters.
(g) Officers' Certificate. At the Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the U.S. Prospectus and the Canadian Prospectus, any
change resulting in a Material Adverse Effect, and the Underwriters shall have
received a certificate of each of the Chief Executive Officer of the Company and
the Chief Financial Officer of the Company, dated as of the Closing Time, to the
effect that (i) there has been no such change resulting in a Material Adverse
Effect, (ii) the representations and warranties in Section 1(a) hereof are true
and correct with the same force and effect as though expressly made at and as of
the Closing Time, (iii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior to
the Closing Time, (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are pending or, to the knowledge of the Company, are
contemplated by the SEC, and (v) no order having the effect of ceasing or
suspending the distribution of the Securities shall have been issued and no
proceedings for that purpose have been instituted or
24
are pending or, to the knowledge of the Company, are contemplated by any
securities commission or securities regulatory authority in Canada.
(h) ▇▇. ▇▇▇▇▇▇▇'▇ Certificate. At the Closing Time, the Underwriters
shall have received a certificate of ▇▇. ▇▇▇▇▇▇▇, dated as of the Closing Date,
to the effect that (i) to his knowledge, after due inquiry, he is not aware of
any change resulting in a Material Adverse Effect, (ii) the representations and
warranties in Section 1(b) hereof are true and correct with the same force and
effect as though expressly made at and as of the Closing Time, and (iii) he has
complied with all agreements and satisfied all conditions on his part to be
performed or satisfied at or prior to the Closing Time.
(i) Selling Shareholder's Certificate. At the Closing Time, the
Underwriters shall have received a certificate of the Selling Shareholder, dated
as of the Closing Date, to the effect that (i) to its knowledge, after due
investigation, it is not aware of any change resulting in a Material Adverse
Effect, (ii) the representations and warranties in Section 1(b) hereof are true
and correct with the same force and effect as though expressly made at and as of
the Closing Time, and (iii) it has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to the
Closing Time.
(j) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Underwriters shall have received from KPMG LLP, a letter dated
such date, in form and substance reasonably satisfactory to the Underwriters
together with signed or reproduced copies of such letter for each of the other
Underwriters, which has been prepared in accordance with SAS 72 and SAS 100, and
contains statements and information of the type ordinarily included in
accountants' "comfort letters" to U.S. underwriters with respect to the
financial statements and certain financial information contained in the U.S.
Prospectus and the Canadian Prospectus.
(k) Bring-down Comfort Letter. At the Closing Time, the Underwriters
shall have received from KPMG LLP, a letter, dated as of the Closing Date, to
the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (j) of this Section, except that the "specified date"
referred to shall be a date not more than three business days prior to the
Closing Date.
(l) No Objection. The NASD shall have confirmed that it has not raised
any objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(m) Lock-up Agreements. At the date of this Agreement, the Underwriters
shall have received an agreement substantially in the form set forth in Exhibit
C hereto, signed by the persons listed on Schedule D hereto.
(n) No Trading Suspension; Approval of Listing. At the Closing Time,
the Common Shares shall be listed for trading on the NYSE, and no order ceasing
or suspending trading in the Common Shares or prohibiting the sale of the
Securities or the trading of any securities of the Company shall have been
issued or be pending or, to the knowledge of the Company, threatened. At the
Closing Time, the Common Shares shall have been conditionally approved for
listing on the TSX.
25
(o) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company, ▇▇. ▇▇▇▇▇▇▇ and the Selling Shareholder contained herein and the
statements in any certificates furnished by the Company, ▇▇. ▇▇▇▇▇▇▇ or the
Selling Shareholder hereunder shall be true and correct as of each Date of
Delivery and, at the relevant Date of Delivery, the Underwriters shall have
received:
(i) Opinion of Canadian Counsel to the Company, ▇▇. ▇▇▇▇▇▇▇
and the Selling Shareholder. The opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP,
Canadian counsel to the Company, ▇▇. ▇▇▇▇▇▇▇ and the Selling
Shareholder, in form and substance reasonably satisfactory to counsel
for the Underwriters, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(b)
hereof.
(ii) Opinion of U.S. Counsel to the Company, ▇▇. ▇▇▇▇▇▇▇ and
the Selling Shareholder. The opinion of ▇▇▇▇▇▇▇ Coie LLP, U.S. counsel
to the Company, ▇▇. ▇▇▇▇▇▇▇ and the Selling Shareholder, in form and
substance reasonably satisfactory to counsel for the Underwriters,
dated such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(c) hereof.
(iii) Opinion of Canadian Counsel to the Underwriters . The
opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Gervais LLP, Canadian counsel to the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Section 5(d) hereof.
(iv) Opinion of U.S. Counsel to the Underwriters. The opinion
of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, U.S. counsel to the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Section 5(e) hereof.
(v) Certificates Relating to Dutch Subsidiaries. The
certificates of De Brauw Blackstone Westbroek, Dutch counsel to the
Company, in form and substance reasonably satisfactory to the
Underwriters, dated the Date of Delivery, relating to the Option
Securities to be purchased on the Date of Delivery and otherwise to the
same effect as the certificates required by Section 5(f) hereof.
(vi) Officer's Certificate. A certificate, dated such Date of
Delivery, of the Chief Executive Officer of the Company and the Chief
Financial Officer of the Company confirming that the certificate
delivered at the Closing Time pursuant to Section 5(g) hereof remains
true and correct as of such Date of Delivery.
(vii) ▇▇. ▇▇▇▇▇▇▇'▇ Certificate. A certificate, dated such
Date of Delivery, of ▇▇. ▇▇▇▇▇▇▇ confirming that the certificate
delivered at the Closing Time pursuant to Section 5(h) hereof remains
true and correct as of such Date of Delivery.
26
(viii) Selling Shareholder's Certificate. A certificate, dated
such Date of Delivery, of the Selling Shareholder confirming that the
certificate delivered at the Closing Time pursuant to Section 5(i)
hereof remains true and correct as of such Date of Delivery.
(ix) Bring-down Comfort Letter. A letter from KPMG LLP, in
form and substance reasonably satisfactory to the Underwriters and
dated such Date of Delivery, to the effect that they reaffirm the
statements made in the letter furnished to the Underwriters pursuant to
Section 5(k) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more than
three days prior to such Date of Delivery.
(p) Additional Documents. At the Closing Time, and at each Date of
Delivery, counsel for the Underwriters shall have been furnished with such
documents, including certificates as to tax matters, and opinions as they may
reasonably require for the purpose of enabling them to pass upon the sale of the
Securities as herein contemplated, or in order to evidence the accuracy of any
of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company, ▇▇.
▇▇▇▇▇▇▇ and the Selling Shareholder in connection with the sale of the
Securities as herein contemplated shall be satisfactory in form and substance to
the Underwriters and counsel for the Underwriters, acting reasonably.
(q) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or in the case of any condition to the purchase of Option Securities
on a Date of Delivery which is after the Closing Time, the obligations of the
several Underwriters to purchase the relevant Securities, may be terminated by
the Underwriters by notice to the Company and the Selling Shareholder at any
time at or prior to the Closing Time or such Date of Delivery, as the case may
be, and such termination shall be without liability of any party to any other
party except as provided in Section 4 and except that Sections [1], 6, [7 AND 8]
shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters, ▇▇. ▇▇▇▇▇▇▇ and Selling
Shareholder by Company. The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls such Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, ▇▇. ▇▇▇▇▇▇▇
and the Selling Shareholder and each person, if any, who controls the Selling
Shareholder within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act against any and all losses, claims, damages or liabilities, joint
or several (and actions in respect thereof), to which such Underwriter, ▇▇.
▇▇▇▇▇▇▇, such Selling Shareholder or such controlling person may become subject,
under the 1933 Act, Canadian Securities Laws or other federal, provincial or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or actions arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, the Canadian Prospectus or the U.S. Prospectus or
any preliminary prospectus, or any amendment 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 not misleading and will reimburse, as incurred, such Underwriter, ▇▇.
▇▇▇▇▇▇▇, such Selling Shareholder or such controlling person for any legal or
other expenses reasonably incurred by such Underwriter, ▇▇. ▇▇▇▇▇▇▇, such
Selling
27
Shareholder or such controlling person in connection with investigating,
defending or appearing as a third party witness in connection with any such
loss, claim, damage, liability or action; provided, however, that the Company
will not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in any of such
documents in reliance upon and in conformity with information furnished in
writing to the Company on behalf of such Underwriter, on behalf of ▇▇. ▇▇▇▇▇▇▇,
or on behalf of the Selling Shareholder expressly for use therein, and provided,
further, that such indemnity with respect to any preliminary prospectus shall
not inure to the benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter) from whom the person asserting any such loss,
claim, damage, liability or action purchased Securities which are the subject
thereof to the extent that any such loss, claim, damage, liability or action (i)
results from the fact that such Underwriter failed to send or give a copy of the
Canadian Prospectus or the U.S. Prospectus (as amended or supplemented), as
applicable, to such person at or prior to the confirmation of the sale of such
Securities to such person in any case where such delivery is required by the
1933 Act, the 1933 Act Regulations or Canadian Securities Laws and (ii) arises
out of or is based upon an untrue statement or omission of a material fact
contained in such preliminary prospectus that was corrected in the Canadian
Prospectus or the U.S. Prospectus (as amended and supplemented), as applicable,
unless such failure resulted from non-compliance by the Company with Sections
3(a)(iv) or 3(a)(v) hereof, and provided, however, that the Company will not be
liable to ▇▇. ▇▇▇▇▇▇▇ or the Selling Shareholder (or any person controlling the
Selling Shareholder) to the extent that any such loss, claim, damage, liability
or action is of the type referred to in clauses (i) and (ii) of this paragraph
(a). The indemnity agreement in this paragraph (a) shall be in addition to any
liability which the Company may otherwise have.
(b) Indemnification of Underwriters and Company by ▇▇. ▇▇▇▇▇▇▇ and the
Selling Shareholder. ▇▇. ▇▇▇▇▇▇▇ and the Selling Shareholder each jointly and
severally agrees to indemnify and hold harmless each Underwriter and each
person, if any, who controls such Underwriter within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act and the Company, each of its
directors, each of its officers who have signed the Registration Statement or
the Canadian Prospectus and each person who controls the Company within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any
and all losses, claims, damages or liabilities, joint or several (and actions in
respect thereof), to which such Underwriter, the Company or such controlling
person, director or officer may become subject, under the 1933 Act, Canadian
Securities Laws or other federal, provincial or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, the Canadian Prospectus or the U.S. Prospectus or any preliminary
prospectus, or any amendment 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 not misleading,
in each case to the extent, but only to the extent, that such untrue statement
of alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with information furnished in writing by either ▇▇.
▇▇▇▇▇▇▇ or the Selling Shareholder to the Company expressly for use therein; and
will reimburse, as incurred, such Underwriter, the Company or such controlling
person, director or officer for any legal or other expenses reasonably incurred
by such Underwriter, the Company or such controlling person, director or officer
in connection with
28
investigating, defending or appearing as a third party witness in connection
with any such loss, claim, damage, liability or action. The Underwriters and the
Company acknowledge that the statements with respect to ▇▇. ▇▇▇▇▇▇▇ and the
Selling Shareholder set forth under the heading "Principal and Selling
Shareholders" in the Canadian Prospectus and the U.S. Prospectus have been
furnished in writing by ▇▇. ▇▇▇▇▇▇▇ and the Selling Shareholder for inclusion in
the Canadian Prospectus and the U.S. Prospectus and constitute the only
information furnished in writing by or on behalf of either ▇▇. ▇▇▇▇▇▇▇ or the
Selling Shareholder for inclusion in the Canadian Prospectus and the U.S.
Prospectus. The indemnity agreement contained in this subsection (b) shall be in
addition to any liability which ▇▇. ▇▇▇▇▇▇▇ or the Selling Shareholder may
otherwise have.
(c) Indemnification of ▇▇. ▇▇▇▇▇▇▇, the Selling Shareholder and Company
by Underwriters. Each of the Underwriters agrees severally, but not jointly, to
indemnify and hold harmless ▇▇. ▇▇▇▇▇▇▇, the Selling Shareholder and each
person, if any, who controls the Selling Shareholder within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act, and the Company, each
of its directors, each of its officers who has signed the Registration Statement
or the Canadian Prospectus and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
against any and all losses, claims, damages or liabilities, joint or several
(and actions in respect thereof) to which ▇▇. ▇▇▇▇▇▇▇, the Selling Shareholder,
the Company or any such director, officer, or controlling person may become
subject, under the 1933 Act, Canadian Securities Laws or other federal,
provincial or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or actions arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement or the Canadian Prospectus or the
U.S. Prospectus or any preliminary prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or the alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
information furnished in writing by that Underwriter to the Company expressly
for use therein; and will reimburse, as incurred, all legal or other expenses
reasonably incurred by ▇▇. ▇▇▇▇▇▇▇, the Selling Shareholder, the Company or any
such director, officer or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action. ▇▇. ▇▇▇▇▇▇▇, the
Selling Shareholder and the Company acknowledge that the statements with respect
to the public offering of the Securities set forth under the heading
"Underwriting" in the U.S. Prospectus and the Canadian Prospectus have been
furnished by the Underwriters to the Company expressly for use therein and
constitute the only information furnished in writing by or on behalf of the
Underwriters for inclusion in the U.S. Prospectus or the Canadian Prospectus.
The indemnity agreement contained in this subsection (c) shall be in addition to
any liability which the Underwriters may otherwise have.
(d) Actions Against Parties; Notification. Promptly after receipt by an
indemnified party under this Section 6 of notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is to be made
against one or more indemnifying parties under this Section 6, notify such
indemnifying party or parties of the commencement thereof; but the omission so
to notify the indemnifying party shall not relieve it from any liability which
it may have to any indemnified party otherwise than under subsection (a), (b) or
(c) of this Section 6 or to the extent that the indemnifying party was not
adversely affected by such omission. In case any such action is
29
brought against an indemnified party and it notifies an indemnifying party or
parties of the commencement thereof, the indemnifying party or parties against
which a claim is to be made will be entitled to participate therein and, to the
extent that it or they may wish, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided, however, that if
the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party has reasonably concluded that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and otherwise to participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 6 for any legal or other expenses (other than the reasonable
costs of investigation) subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) the indemnified party has
employed such counsel in connection with the assumption of such different or
additional legal defenses in accordance with the proviso to the immediately
preceding sentence, (ii) the indemnifying party has not employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the action, or
(iii) the indemnifying party has authorized in writing the employment of counsel
for the indemnified party at the expense of the indemnifying party; provided, in
each case, that the indemnifying party shall not be liable for the fees and
expenses of more than one counsel for all indemnified parties and the
indemnifying party shall only be liable for reasonable fees and expenses.
(e) Contribution. If the indemnification provided for in this Section 6
is unavailable or insufficient to hold harmless an indemnified party under
paragraph (a), (b) or (c) above in respect of any losses, claims, damages,
expenses or liabilities (or actions in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) (i) in such proportion as is
appropriate to reflect the relative benefits received by each of the
contributing parties, on the one hand, and the party to be indemnified, on the
other hand, from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law and in all cases
where the Company is the indemnifying party, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of each of the contributing parities, on the
one hand, and the party to be indemnified, on the other hand in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. In any case
where ▇▇. ▇▇▇▇▇▇▇ or the Selling Shareholder is a contributing party and the
Underwriters are the indemnified party, the relative benefits received by ▇▇.
▇▇▇▇▇▇▇ or the Selling Shareholder, as applicable, on the one hand, and the
Underwriters, on the other, shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Securities of the Selling
Shareholder (before deducting expenses) bear to the total underwriting
commission received by the Underwriters in respect of such Securities hereunder,
in each case as set forth in the table on the cover page of the U.S. Prospectus.
Relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company, ▇▇. ▇▇▇▇▇▇▇ or the Selling Shareholder or by the
30
Underwriters, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this paragraph (e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
paragraph (e), the Underwriters shall not be required to contribute any amount
in excess of the underwriting commission applicable to the Securities purchased
by the Underwriters hereunder. The Underwriters' obligations to contribute
pursuant to this paragraph (e) are several in proportion to their respective
underwriting obligations, and not joint. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this paragraph (e), (i) each person, if any,
who controls an Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
Underwriter, (ii) each person, if any, who controls the Selling Shareholder
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Selling Shareholder, subject
to this paragraph (e), and (iii) each director of the Company, each officer of
the Company who has signed the Registration Statement or the Canadian
Prospectus, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company, subject to this paragraph (e). Any party
entitled to contribution will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect to which a claim
for contribution may be made against another party or parties under this
paragraph (e), notify such party or parties from whom contribution may be
sought, but the omission so to notify such party or parties shall not relieve
the party or parties from whom contribution may be sought from any other
obligation (x) it or they may have hereunder or otherwise than under this
paragraph (e) or (y) to the extent that such party or parties were not adversely
affected by such omission. The contribution agreement set forth above shall be
in addition to any liabilities which any indemnifying party may otherwise have.
SECTION 7. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement and in certificates of officers of the Company or any of its
subsidiaries, ▇▇. ▇▇▇▇▇▇▇ and the Selling Shareholder delivered pursuant hereto,
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter, or controlling person, or
by or on behalf of the Company, ▇▇. ▇▇▇▇▇▇▇ or the Selling Shareholder, and
shall survive delivery of the Securities to the Underwriters.
SECTION 8. Termination of Agreement.
(a) Termination; General. The Underwriters may terminate this
Agreement, by notice to the Company and the Selling Shareholder, at any time at
or prior to the Closing Time (i) if there has been, since the time of execution
of this Agreement or since the respective dates as of which information is given
in the U.S. Prospectus (exclusive of any supplement thereto) and the Canadian
Prospectus (exclusive of any supplement thereto), any change resulting in a
Material Adverse Effect, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or Canada, or any outbreak
of hostilities or escalation thereof or other calamity or crisis or any change
or development in each case involving a prospective material adverse change in
the financial
31
markets in the United States or Canada in each case the effect of which is such
as to make it, in the judgment of the Underwriters impracticable or inadvisable
to market the Securities or to enforce contracts for the sale of the Securities,
or (iii) if trading in any securities of the Company has been suspended or
materially limited by the SEC, the Reviewing Authority, any Qualifying
Authority, any other securities commission or securities regulatory authority in
Canada or the NYSE or the TSX, or if trading generally on the NYSE, the TSX, or
in the Nasdaq National Market has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such system or by
order of the SEC, the Reviewing Authority, any Qualifying Authority, any other
securities commission or securities regulatory authority in Canada, the National
Association of Securities Dealers, Inc. or any other governmental authority, or
a material disruption has occurred in commercial banking or securities
settlement or clearance services in the United States or Canada, or (iv) if a
banking moratorium has been declared by either United States federal, New York
state or Canadian federal authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Section
6 shall survive such termination and remain in full force and effect.
SECTION 9. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at the Closing Time or a Date of Delivery to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the Underwriters shall have the right,
within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters reasonably acceptable to
the Company and the Selling Shareholder, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Underwriters shall not have completed
such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased hereunder, the non-defaulting Underwriters
shall be obligated, each severally and not jointly, to purchase the full amount
thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Date of Delivery which occurs after the Closing Time, the obligation of the
Underwriters to purchase and of the Company to sell the Option Securities to be
purchased and sold on such Date of Delivery, shall terminate without liability
on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 9 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, or in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Selling Shareholder to sell the
32
relevant Option Securities, as the case may be, either the Underwriters or the
Selling Shareholder shall have the right to postpone the Closing Time or the
relevant Date of Delivery, as the case may be, for a period not exceeding seven
days in order to effect any required changes in the Registration Statement, the
U.S. Prospectus or the Canadian Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 9.
SECTION 10. Agent for Service; Submission to Jurisdiction; Waiver of
Immunities. By the execution and delivery of this Agreement, the Company, ▇▇.
▇▇▇▇▇▇▇ and the Selling Shareholder (i) acknowledge that they have, by separate
written instrument, irrevocably designated and appointed ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, (the
"Agent for Service"), as their authorized agent upon which process may be served
in any suit or proceeding arising out of or relating to this Agreement or the
Securities, that may be instituted in any federal or state court in the State of
New York, or brought under U.S. federal or state securities laws, and
acknowledge that the Agent for Service has accepted such designation, (ii)
submit to the jurisdiction of any such court in any such suit or proceeding, and
(iii) agree that service of process upon the Agent for Service (or any
successor) and written notice of said service to the Company (mailed or
delivered to its Corporate Secretary at its principal office in Richmond,
British Columbia), to ▇▇. ▇▇▇▇▇▇▇ (at his address as set forth in Section 11
hereof), or to the Selling Shareholder (mailed or delivered to its President at
the address set forth in Section 11 hereof) shall be deemed in every respect
effective service of process upon the Company, ▇▇. ▇▇▇▇▇▇▇ and the Selling
Shareholder in any such suit or proceeding. The Company, ▇▇. ▇▇▇▇▇▇▇ and the
Selling Shareholder further agree to take any and all action, including the
execution and filing of any and all such documents and instruments, as may be
necessary to continue such designation and appointment of the Agent for Service
in full force and effect so long as any of the Securities shall be outstanding.
To the extent that the Company, ▇▇. ▇▇▇▇▇▇▇ and the Selling Shareholder
have or hereafter may acquire any immunity from jurisdiction of any court or
from any legal process (whether through service of notice, attachment prior to
judgment, attachment in aid of execution, execution or otherwise) with respect
to themselves or their respective property, they hereby irrevocably waive such
immunity in respect of their obligations under the above-referenced documents,
to the extent permitted by law.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Underwriters, c/o Raymond ▇▇▇▇▇, 2300 -
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇, Attention
of ▇▇▇ ▇▇▇▇▇▇; notices to the Company shall be directed to it at ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇, Attention of Corporate
SECRETARY; notices to ▇▇. ▇▇▇▇▇▇▇ shall be directed to ▇▇▇▇▇ ▇▇▇▇▇▇▇, c/o
Ritchie Bros. Auctioneers Incorporated, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇; and notices to the Selling Shareholder shall be
directed to Warm Springs Investments Ltd., c/o Ritchie Bros. Auctioneers
Incorporated, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇.
SECTION 12. Parties. This Agreement shall inure to the benefit of and
be binding upon the Underwriters, the Company and its successors, ▇▇. ▇▇▇▇▇▇▇
and his heirs and legal representatives
33
and the Selling Shareholder and its successors. Nothing expressed or mentioned
in this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters, the Company and its successors, ▇▇.
▇▇▇▇▇▇▇ and his heirs and legal representatives, the Selling Shareholder and its
successors and the controlling persons and officers and directors referred to in
Section 6 and their heirs and legal representatives, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the Underwriters, the
Company and its successors, ▇▇. ▇▇▇▇▇▇▇ and his heirs and legal representatives,
the Selling Shareholder and its successors and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, and all of
which together shall be deemed to be one and the same instrument.
SECTION 15. Severability. In case any provision in this Agreement shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 16. Amendment or Modification. This Agreement may not be
amended or otherwise modified or any provision hereof waived except by an
instrument in writing signed by or on behalf of the Underwriters, the Company,
▇▇. ▇▇▇▇▇▇▇ and the Selling Shareholder.
SECTION 17. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
34
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Underwriters, the Company, ▇▇. ▇▇▇▇▇▇▇ and the Selling Shareholder in
accordance with its terms.
Very truly yours,
▇▇▇▇▇▇▇ BROS. AUCTIONEERS INCORPORATED
By:
------------------------------------
Name:
Title:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
WARM SPRINGS INVESTMENTS LTD.
By:
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
CONFIRMED AND ACCEPTED,
as of the date first above written:
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ LTD. By: CIBC WORLD MARKETS INC.
By: By:
------------------------------- ------------------------------------
Name: Name:
Title: Title:
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & COMPANY, L.L.C. By: SCOTIA CAPITAL INC.
By: By:
------------------------------- ------------------------------------
Name: Name:
Title: Title:
SCHEDULE A
List of Underwriters
NUMBER OF
NAME OF UNDERWRITER INITIAL SECURITIES
------------------------------------------------------------ ------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ Ltd........................................... o
CIBC World Markets Inc...................................... o
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C. ............................ o
Scotia Capital Inc.......................................... o
---------
Total................................................ 1,739,130
=========
Sch A-1
SCHEDULE B
Pricing Information
▇▇▇▇▇▇▇ Bros. Auctioneers Incorporated
1,739,130 Common Shares
(without par value)
1. The public offering price per share for the Securities, determined as
provided in Section 2, shall be US$ o per share.
2. The purchase price per share to be paid by the several Underwriters
shall be US$ o , being an amount equal to the public offering price
set forth above less the underwriting commission as set forth in
paragraph 3 below.
3. The underwriting commission per share payable for the Securities to be
paid by the Selling Shareholder shall be US$ o per share.
Sch B-1
SCHEDULE C
List of Significant Subsidiaries
CANADIAN SUBSIDIARIES
▇▇▇▇▇▇▇ Bros. Holdings Ltd.
▇▇▇▇▇▇▇ Bros. Auctioneers (Canada) Ltd.
▇▇▇▇▇▇▇ Bros. Properties Ltd.
U.S. SUBSIDIARIES
▇▇▇▇▇▇▇ Bros. Holdings Inc.
▇▇▇▇▇▇▇ Bros. Auctioneers (America) Inc.
▇▇▇▇▇▇▇ Bros. Properties Inc.
DUTCH SUBSIDIARY
▇▇▇▇▇▇▇ Bros. Auctioneers B.V.
Sch C-1
SCHEDULE D
List of Persons and Entities Subject to Lock-up
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Sch D-1
EXHIBIT A
FORM OF OPINION OF CANADIAN COUNSEL
TO THE COMPANY, ▇▇. ▇▇▇▇▇▇▇ AND THE SELLING SHAREHOLDER
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
1. The Company has been duly amalgamated and is validly existing as a
corporation in good standing under the laws of Canada.
2. The Company has all necessary corporate power and capacity to own,
lease and operate its properties and to conduct its business as
described in the U.S. Prospectus and the Canadian Prospectus.
3. The Company is extra-provincially registered or otherwise qualified as
an extra-provincial or foreign corporation to transact business and is
in good standing in each jurisdiction in Canada in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect.
4. The Company and the Selling Shareholder each have all necessary power
and capacity to execute, deliver and perform their respective
obligations under the Underwriting Agreement and the Underwriting
Agreement has been duly authorized and, to the extent that execution
and delivery are matters governed by the laws of the Province of
British Columbia and the federal laws of Canada applicable therein, has
been duly executed and delivered by the Company, ▇▇. ▇▇▇▇▇▇▇ and the
Selling Shareholder.
5. The subsidiaries listed in Schedule C as Canadian Subsidiaries and
identified therein as "Significant Subsidiaries" (each a "Canadian
Subsidiary") have been duly incorporated, continued or organized and
are validly existing as corporations in good standing under the laws of
the jurisdiction of their incorporation, continuance or organization,
have all necessary corporate power and authority to own, lease and
operate their properties and to conduct their business as described in
the U.S. Prospectus and the Canadian Prospectus and are
extra-provincially registered or otherwise qualified as an
extra-provincial or foreign corporation to transact business and are in
good standing in each jurisdiction in Canada in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect; except as otherwise disclosed in the U.S.
Prospectus and the Canadian Prospectus, all of the issued and
outstanding shares in the capital of each Canadian Subsidiary (other
than ▇▇▇▇▇▇▇ Bros. Holdings Ltd., as to which such counsel need express
no opinion) has been duly authorized and validly issued and is fully
paid and non-assessable and, to the knowledge of such counsel, all of
such issued and outstanding shares are owned by the Company, directly
or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity and, to the
knowledge of such
A-1
counsel, none of the outstanding shares in the capital of any Canadian
Subsidiary was issued in violation of the preemptive or similar rights
of any securityholder of such Canadian subsidiary.
6. The authorized, issued and outstanding share capital of the Company is
as set forth in the U.S. Prospectus and the Canadian Prospectus under
the caption "Description of Share Capital" (except for subsequent
issuances, if any, pursuant to the exercise of convertible securities
or options or warrants referred to in the U.S. Prospectus and the
Canadian Prospectus). The issued and outstanding shares in the capital
or the Company have been duly authorized and validly issued and are
fully paid and non-assessable. The attributes of the Common Shares
conform in all material respects to the description thereof contained
in the Canadian Prospectus and the U.S. Prospectus. To the knowledge of
such counsel, none of the outstanding Common Shares have been issued in
violation of the pre-emptive rights of any shareholder of the Company.
7. The form of share certificate representing the Common Shares has been
duly approved by the Company and complies with all applicable statutory
requirements, with any applicable requirements of the charter and
by-laws of the Company, with the provisions of the Canada Business
Corporations Act relating thereto and the requirements of The Toronto
Stock Exchange for share certificates.
8. To the knowledge of such counsel, there is not pending or threatened
any action, suit, proceeding, inquiry, or investigation, to which the
Company or any Canadian Subsidiary is a party, or to which the property
of the Company or any Canadian Subsidiary is subject, before or brought
by any court or governmental agency or body, domestic or foreign, which
might reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely affect
the properties or assets of the Company or any Canadian Subsidiary or
the consummation of the transactions contemplated in the Underwriting
Agreement or the performance by the Company of its obligations
thereunder.
9. The Canadian Prospectus and the Supplementary Material in connection
with the offering of the Securities (including the PREP Information,
but excluding the financial statements and other financial data
included or incorporated therein or omitted therefrom, as to which such
counsel need not express any opinion) comply as to form in all material
respects to the requirements, including the PREP Procedures, of
Canadian Securities Laws.
10. The documents incorporated by reference in the Canadian Prospectus as
amended or supplemented (other than the financial statements and other
financial data included or incorporated or deemed to be incorporated
therein, as to which such counsel need not express any opinion), when
they were filed with the Reviewing Authority and the Qualifying
Authorities, complied as to form in all material respects to the formal
requirements of the securities laws, rules and regulations of the
Province of British Columbia as interpreted and applied by the
Reviewing Authority and of the Qualifying Provinces as interpreted and
applied by the relevant Qualifying Authority under published policy
statements.
A-2
11. Assuming the Company has complied with its disclosure obligations under
Canadian Securities Laws, and that there has been no material change
since the date of filing of the Canadian Prospectus, (i) the Canadian
Prospectus (including the documents incorporated by reference therein)
is the entire disclosure document required to offer the Securities in
the Qualifying Provinces, and (ii) the exhibits to the Registration
Statement include (A) all reports or information that in accordance
with the requirements of the Reviewing Authority are required to be
made publicly available in connection with the offering of the
Securities and (B) all publicly available disclosure documents filed in
connection with the offering of the Securities with the Reviewing
Authority or the Qualifying Authorities.
12. The information in the U.S. Prospectus and the Canadian Prospectus
under the captions "Income Tax Considerations for U.S. Shareholders -
Canadian Federal Income Tax Considerations" and "Description of Share
Capital" and in the Canadian Prospectus under the caption "Eligibility
for Investment", to the extent that it constitutes matters of law, or
summaries of legal matters, the Company's constating documents or legal
conclusions, has been reviewed by such counsel and is accurate in all
material respects. All other statements in the Canadian Prospectus
describing Canadian statutes, regulations, legal or governmental
proceedings or contracts or other documents to which the Company is a
party, to the extent that such statements constitute matters of law or
legal conclusions, such statements fairly present the information
disclosed therein and insofar as such statements purport to describe
the provisions of laws or documents referred to therein, such
statements are accurate in all material respects. The information in
the Registration Statement under "Part II - Information Not Required to
Be Delivered to Offerees or Purchasers - Indemnification" is accurate
in all material respects.
13. To the knowledge of such counsel, there are no Canadian statutes or
regulations that are required to be described in the Canadian
Prospectus that are not described as required.
14. To the knowledge of such counsel, neither the Company nor any Canadian
Subsidiary is in violation of its constituting documents or by-laws and
no default by the Company or any Canadian Subsidiary exists in the due
performance or observance of any material obligation, agreement,
covenant or condition in any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which the
Company or any Canadian Subsidiary is a party, except for defaults that
would not result in a Material Adverse Effect.
15. No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental
authority or agency in Canada is necessary or required to be made or
obtained by the Company or the Selling Shareholder in connection with
the due authorization, execution and delivery of this Agreement or for
the offering, sale or delivery of the Securities, except for such
filings of insider reports as may be required to be made by ▇▇. ▇▇▇▇▇▇▇
or the Selling Shareholder after the date of such opinion under
applicable Canadian Securities Laws.
16. The execution, delivery and performance of this Agreement by the
Company, ▇▇. ▇▇▇▇▇▇▇ and the Selling Shareholder and the consummation
of the transactions contemplated in this Agreement and in the
Registration Statement (including the sale of the Securities) by the
A-3
Company, ▇▇. ▇▇▇▇▇▇▇ and the Selling Shareholder and compliance by the
Company with its obligations under this Agreement do not and will not
(i) conflict with or result in any violation of the provisions of the
constating documents of the Company or any Canadian Subsidiary or of
the Selling Shareholder, or (ii) materially conflict with any
applicable law, statute, rule, regulation, judgment, order, writ or
decree, known to such counsel, of any government, government
instrumentality or court in Canada having jurisdiction over the Company
or any Canadian Subsidiary or of the Selling Shareholder or any of
their respective properties, assets or operations.
17. To the knowledge of such counsel, the sale of the Securities is not
subject to pre-emptive or other similar rights of any securityholder of
the Company.
18. To the knowledge of such counsel, after due inquiry, no order having
the effect of ceasing or suspending the distribution of the Securities
or the trading in the Common Shares has been issued by any securities
regulatory authority in the Qualifying Provinces and no proceedings for
that purpose have been instituted or are pending or contemplated.
19. The Toronto Stock Exchange has conditionally approved the listing of
the Common Shares.
20. The Company is a "reporting issuer" under the securities legislation of
the Province of British Columbia and is not in default under such
legislation with respect to the filing of financial statements or the
payment of prescribed fees and charges related to those filings.
21. To the knowledge of such counsel, there are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise
registered by the Company under the 1933 Act or qualified for
distribution under Canadian Securities Laws.
22. A court of competent jurisdiction in the Province of British Columbia
(a "British Columbia Court") would give effect to the choice of the law
of the State of New York ("New York law") as the governing law of
contract claims under the Underwriting Agreement, provided that such
choice of law is bona fide (in the sense that it was not made with a
view to avoiding the consequences of the laws of any other
jurisdiction) and provided that such choice of law is not contrary to
public policy, as that term is applied by a British Columbia Court
("Public Policy"). In such counsel's opinion, there is no reason under
the laws of the Province of British Columbia or the federal laws of
Canada applicable therein for a British Columbia Court not to give
effect to the choice of New York law to govern the Underwriting
Agreement, subject to the aforementioned provisos.
23. In an action on a final and conclusive judgment in personam of any
federal or state court in the State of New York (a "New York Court")
that is not impeachable as void or voidable under New York law, a
British Columbia Court would give effect to the appointment by the
Company of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ as its agent to receive service of process
in the United States of America under the Underwriting Agreement and to
the provisions in the Underwriting Agreement whereby the Company
submits to the non-exclusive jurisdiction of a New York Court.
A-4
24. If the Underwriting Agreement is sought to be enforced in the Province
of British Columbia in accordance with the laws applicable thereto as
chosen by the parties, namely New York law, a British Columbia Court
would, subject to paragraph 22 above, recognize the choice of New York
law and, upon appropriate evidence as to such law being adduced, apply
such law, provided that none of the provisions of the Underwriting
Agreement, or of applicable New York law, are contrary to Public
Policy, provided, however, that, in matters of procedure, the laws of
the Province of British Columbia will be applied, and a British
Columbia Court will retain discretion to decline to hear such action if
it is contrary to Public Policy for it to do so, or if it is not the
proper forum to hear such an action, or if concurrent proceedings are
being brought elsewhere.
25. The laws of the Province of British Columbia and the federal laws of
Canada applicable therein permit an action to be brought in a British
Columbia Court on a final and conclusive judgment in personam of a New
York Court that is subsisting and unsatisfied respecting the
enforcement of the Underwriting Agreement that is not impeachable as
void or voidable under New York law for a sum certain if: (A) the New
York Court that rendered such judgment had jurisdiction over the
judgment debtor, as recognized by a British Columbia Court; (B) such
judgment was not obtained by fraud or in a manner contrary to natural
justice and the enforcement thereof would not be inconsistent with
Public Policy or contrary to any order made by the Attorney-General of
Canada under the Foreign Extraterritorial Measures Act (Canada) or the
Competition Tribunal under the Competition Act (Canada); (C) the
enforcement of such judgment in the Province of British Columbia does
not constitute, directly or indirectly, the enforcement of foreign
revenue, expropriatory or penal laws; (D) in an action to enforce a
default judgment, the judgment does not contain a manifest error on its
face; (E) the enforcement of such judgment in the Province of British
Columbia does not result in giving foreign laws extra-territorial
effect; and (F) the action to enforce such judgment is commenced within
six years of the date of such judgment, except that a British Columbia
Court may stay an action to enforce a foreign judgment if an appeal is
pending or the time for appeal has not expired, provided that under the
Currency Act (Canada), a British Columbia Court may only give judgment
in Canadian dollars.
26. As of the Closing Time, all laws of the Province of Quebec relating to
the use of the French language will have been complied with in
connection with the offering and sale of the Securities to purchasers
in the Province of Quebec if such purchasers receive copies of the
French and English language versions of the Canadian Prospectus and
forms of order and confirmation in the French language or a bilingual
form or copies of the French language version of the Canadian
Prospectus and forms of order and confirmation in the French language
only or, in the case of individuals so requesting in writing, copies of
the English language version of the Canadian Prospectus and forms of
order and confirmation in the English language or in a bilingual form,
on the assumption that no documents other than the Canadian Prospectus
and the forms of order and confirmation constitute the contract for
purchase of the Securities.
27. The French language version of the Canadian Prospectus (except for the
financial information provided by KPMG LLP, Chartered Accountants) is
in all material respects a complete and accurate translation of the
English language version thereof.
A-5
28. No stamp or other issuance or transfer taxes or duties or withholding
taxes are payable by or on behalf of the Underwriters to the Government
of Canada or the Government of British Columbia or any political
subdivision thereof or any authority or agency thereof or therein
having power to tax in connection with (A) the sale and delivery of the
Securities by the Selling Shareholder to or for the respective accounts
of the Underwriters or (B) the sale and delivery outside Canada by the
Underwriters of the Securities in the manner contemplated in the
Underwriting Agreement.
29. Such counsel have participated in the preparation of the Registration
Statement, the U.S. Prospectus and the Canadian Prospectus and in
telephone conferences with officers and other representatives of the
Company, representatives of the independent chartered accountants for
the Company, and representatives of the Underwriters, at which the
contents of the Registration Statement, the U.S. Prospectus and the
Canadian Prospectus, and related matters were discussed and, although
such counsel are not passing upon and do not assume any responsibility
for the accuracy, completeness or fairness of the statements contained
in the Registration Statement, the U.S. Prospectus and the Canadian
Prospectus except as set forth in paragraphs 6 and 12 above, on the
basis of the foregoing no information has come to such counsel's
attention that causes them to believe that, (A) the Registration
Statement (except for the financial statements and other financial data
included or incorporated therein or omitted therefrom, as to which such
counsel need express no belief), at the time the Registration Statement
became effective under the 1933 Act, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or
(B) the U.S. Prospectus and the Canadian Prospectus as amended or
supplemented prior to the Closing Time (except for the financial
statements and other financial data included or incorporated therein or
omitted therefrom, as to which such counsel need express no belief), as
of the date of the U.S. Prospectus and the Canadian Prospectus or the
date hereof contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
In rendering such opinion, such counsel may rely (A) as to all matters
governed by the laws of jurisdictions other than the laws of the Provinces of
British Columbia, Alberta, Ontario and Quebec and the federal laws of Canada
applicable therein, upon opinions of local counsel, who shall be counsel
satisfactory to counsel for the Underwriters (which opinions shall be dated and
furnished to the Underwriters on the Closing Date, shall be satisfactory in form
and substance to counsel for the Underwriters and shall expressly state that the
Underwriters may rely on such opinions as if they were addressed to them),
provided that ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall state in their opinion that they believe
that they and the Underwriters are justified in relying upon such opinions, and
(B), as to matters of fact (but not as to legal conclusions), to the extent they
deem proper, on certificates of responsible officers of the Company, ▇▇.
▇▇▇▇▇▇▇, the Selling Shareholder and public officials. Such opinion shall not
state that it is to be governed or qualified by, or that it is otherwise subject
to, any treatise, written policy or other document relating to legal opinions.
A-6
EXHIBIT B
FORM OF OPINION OF U.S. COUNSEL
TO THE COMPANY, ▇▇. ▇▇▇▇▇▇▇ AND THE SELLING SHAREHOLDER
TO BE DELIVERED PURSUANT TO
SECTION 5(c)
1. The subsidiaries listed in Schedule C as U.S. Subsidiaries and
identified therein as "Significant Subsidiaries" (each a "U.S.
Subsidiary"), have been duly incorporated and are validly existing
under the laws of the jurisdiction of their incorporation, have
corporate power and authority to own, lease and operate their
properties and to conduct their business as described in the U.S.
Prospectus and are duly qualified as foreign corporation to transact
business and are in good standing in each jurisdiction set forth in a
schedule to such opinion, except where the failure so to qualify or to
be in good standing would not result in a Material Adverse Effect;
except as otherwise disclosed in the Registration Statement, all of the
issued and outstanding capital stock of each U.S. Subsidiary has been
duly authorized and validly issued, is fully paid and non-assessable
and, to the knowledge of such counsel, is owned by the Company,
directly or through subsidiaries, free and clear of any material
security interest, mortgage, pledge, lien, encumbrance, claim or
equity; to the knowledge of such counsel, none of the outstanding
shares of capital stock of any U.S. Subsidiary was issued in violation
of the preemptive or similar rights of any securityholder of such U.S.
Subsidiary.
2. The Registration Statement is effective under the 1933 Act pursuant to
Rule 467(a) and the Form F-X was filed with the SEC prior to the
effectiveness of the Registration Statement; any required filing of the
U.S. Prospectus or any supplement thereto pursuant to General
Instruction II.L. of Form F-10 has been made in the manner and within
the time period required by said General Instruction II.L.; and, to the
knowledge of such counsel, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for
that purpose have been instituted or are pending or threatened by the
SEC.
3. The Registration Statement, the U.S. Prospectus and each amendment or
supplement to the Registration Statement and U.S. Prospectus as of
their respective effective or issue dates (other than the financial
statements and schedules and other financial and statistical data
included or incorporated therein or omitted therefrom, as to which such
counsel need express no opinion) complied as to form in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations.
4. The Form F-X complies as to form in all material respects with the
applicable requirements of the 1933 Act and the 1933 Act Regulations.
5. The form of certificate used to evidence the Common Shares complies in
all material respects with the requirements of the NYSE.
B-1
6. The information in the U.S. Prospectus under the heading "Income Tax
Considerations - United States Federal Income Tax Considerations", to
the extent that it constitutes matters of law, summaries of legal
matters or legal conclusions, has been reviewed by such counsel and is
correct in all material respects.
7. To the knowledge of such counsel, none of the U.S. Subsidiaries is in
violation of its charter or by-laws.
8. No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental
authority or agency in the United States (other than under the 1933 Act
and the 1933 Act Regulations, which have been obtained, or as may be
required under the securities or blue sky laws of the various states or
by the NASD, as to which such counsel need not express any opinion) is
necessary or required in connection with the offering, sale or delivery
of the Securities.
9. To the knowledge of such counsel, there are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise
registered by the Company under the 1933 Act.
10. The Company is not an "investment company" or an entity "controlled" by
an "investment company", as such terms are defined in the 1940 Act.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of executive officers of the Company and public officials and on
the Company's representations and warranties in the Underwriting Agreement. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
B-2
EXHIBIT C
FORM OF LOCK-UP LETTER
January o, 2004
▇▇▇▇▇▇▇ ▇▇▇▇▇ Ltd.
CIBC World Markets Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
Scotia Capital Inc.
c/o Raymond ▇▇▇▇▇ Ltd.
2300 - ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Ladies and Gentlemen:
The undersigned shareholder, director or executive officer of ▇▇▇▇▇▇▇ Bros.
Auctioneers Incorporated, a company amalgamated under the Canada Business
Corporations Act (the "Company"), understands that an Underwriting Agreement
(the "Underwriting Agreement") will be executed by the Company, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, the Selling Shareholder named therein and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Ltd, CIBC World
Markets Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C. and Scotia Capital Inc.,
(collectively, the "Underwriters"), providing for the secondary public offering
(the "Offering") of 1,739,130 common shares of the Company held by the Selling
Shareholder ("Common Shares") in the United States pursuant to a registration
statement on Form F-10 and in each of the provinces of Canada pursuant to a
Canadian prospectus.
This Lock-Up Letter Agreement is being entered into in
accordance with Section 5(m) of the Underwriting Agreement at the request of the
Underwriters.
For good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the undersigned agrees with each
Underwriter that, without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Ltd., the
undersigned will not, directly or indirectly, (i) offer, pledge, sell (including
any sale pursuant to Rule 144 under the Securities Act of 1933, as amended),
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, announce any intention to sell, grant any option, right or
warrant for the sale of, or otherwise dispose of or transfer any Common Shares
(including, without limitation, Common Shares which may be deemed to be
beneficially owned by such shareholder in accordance with the rules and
regulations of the Securities and Exchange Commission or the securities
legislation of any province or territory of Canada and Common Shares that may be
issued upon exercise of any option or warrant) or any securities convertible
into or exchangeable or exercisable for Common Shares, whether now owned or
hereafter acquired by the undersigned or with respect to which the undersigned
has or hereafter acquires the power of disposition, or file a registration
statement or prospectus with respect to any
C-1
of the foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Shares, whether any such swap or
transaction is to be settled by delivery of Common Shares or other securities,
in cash or otherwise, for a period commencing the date of the Underwriting
Agreement and ending 90 days thereafter.
Notwithstanding anything else contained in this Lock-Up Letter
Agreement, this Lock-Up Letter Agreement shall not apply to the exercise of
options granted prior to the date hereof, or the subsequent sale of any
securities received upon the exercise of such previously granted options.
The undersigned understands that the Company, the Selling
Shareholder and the Underwriters will proceed with the Offering in reliance on
this Lock-Up Letter Agreement.
The undersigned hereby represents and warrants that the
undersigned has full power and authority to enter into this Lock-Up Letter
Agreement and that, upon request, the undersigned will execute any additional
documents necessary or desirable in connection with the enforcement hereof. Any
obligations of the undersigned shall be binding upon the successors and assigns
of the undersigned.
This Lock-Up Letter Agreement has been entered into on the
date first written above.
Very truly yours,
By:
------------------------------------
Name:
Title:
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Underwriters, the Company, ▇▇. ▇▇▇▇▇▇▇ and the Selling Shareholder in
accordance with its terms.
Very truly yours,
▇▇▇▇▇▇▇ BROS. AUCTIONEERS INCORPORATED
By:
------------------------------------
Name:
Title:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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WARM SPRINGS INVESTMENTS LTD.
By:
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
CONFIRMED AND ACCEPTED,
as of the date first above written:
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ LTD. By: CIBC WORLD MARKETS INC.
By: By:
--------------------------------- ------------------------------------
Name: Name:
Title: Title:
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & COMPANY, L.L.C. By: SCOTIA CAPITAL (USA) INC.
By: By:
--------------------------------- ------------------------------------
Name: Name:
Title: Title: