EXHIBIT 3.1
CREO INC.
5,000,000 Common Shares
UNDERWRITING AGREEMENT
March 1, 2004
March 1, 2004
Creo Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Dear Sirs/Mesdames:
RBC Dominion Securities Inc. ("RBC DS"), BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc., TD
Securities Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ Canada Inc., Dundee Securities Corporation,
▇▇▇▇▇▇▇ ▇▇▇▇▇ Ltd. and Sprott Securities Inc. (collectively, the "Underwriters")
understand that Creo Inc., a corporation incorporated under the laws of Canada
("Creo" or the "Company"), proposes to issue and sell a total of 5,000,000
common shares of the Company (the "Offered Shares"). The common shares of the
Company to be outstanding after giving effect to the sales contemplated hereby
are herein referred to as the "Common Shares."
The Underwriters are prepared to purchase the Offered Shares from the
Company, subject to the terms and conditions described herein. The obligation of
the Underwriters to purchase any Offered Shares shall, in addition to being
subject to the other terms and conditions described herein, be conditional on
the following steps having been taken within the time frames described below:
(a) Creo shall file a preliminary short form prospectus (in the
English and French languages, as applicable, together with the
documents incorporated therein by reference, the "Canadian
Preliminary Prospectus") qualifying the distribution of the
Offered Shares with the British Columbia Securities Commission
(the "Reviewing Authority") and the securities regulatory
authorities in each of the other provinces of Canada (together
with British Columbia, the "Qualifying Provinces"), and shall
obtain a Mutual Reliance Review System decision document
pursuant to National Policy 43-201 and its related memorandum
of understanding of the Canadian Securities Administrators
(the "MRRS") issued by the Reviewing Authority in its capacity
as principal regulator pursuant to the MRRS evidencing that a
receipt has been issued for the Canadian Preliminary
Prospectus by the securities regulatory authorities in each of
Qualifying Provinces (collectively, the "Canadian Securities
Commissions") by no later than 3:30 p.m. (Toronto time) on
March 1, 2004;
(b) Creo shall file with the United States Securities and Exchange
Commission (the "Commission"), in accordance with the
provisions of the United States Securities Act of 1933, as
amended and the rules and regulations thereunder
(collectively, the "Securities Act"), a registration statement
(the "Registration Statement") on Form F-10 covering the sale
of the Offered Shares under the Securities Act, which includes
the Canadian Preliminary Prospectus (with such additions and
deletions as are permitted or required by Form F-10 and the
applicable rules and regulations of the
Commission) (the "U.S. Preliminary Prospectus") by no later
than 3:35 p.m. (Toronto time) on March 1, 2004;
(c) Creo shall file with the Commission 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");
(d) Creo shall use its reasonable efforts to resolve all comments
on the Canadian Preliminary Prospectus that are received from
the Canadian Securities Commissions (as well as any comments
on the Registration Statement that are received from the
Commission) as soon as possible after receipt of such comments
and on a basis satisfactory to the Underwriters, acting
reasonably;
(e) The Company shall issue a press release announcing the
offering of the Offered Shares immediately upon the execution
of this Agreement and the filing of the Registration
Statement;
(f) Creo shall file a final short form prospectus (in the English
and French languages, as applicable, together with the
documents incorporated therein by reference, the "Canadian
Final Prospectus") qualifying the distribution of the Offered
Shares with the Reviewing Authority and the other Canadian
Securities Commissions, and shall obtain an MRRS decision
document issued by the Reviewing Authority, in its capacity as
principal regulator, pursuant to the MRRS evidencing that a
receipt has been issued for the Canadian Final Prospectus by
each of the Canadian Securities Commissions as soon as
possible and in any event by no later than 4:00 p.m. (Toronto
time) on March 8, 2004; and
(g) Creo shall file with the Commission, in accordance with the
provisions of the Securities Act, an amendment to the
Registration Statement which includes the Canadian Final
Prospectus (with such additions and deletions as are permitted
or required by Form F-10 and the applicable rules and
regulations of the Commission) (the "U.S. Final Prospectus")
by no later than 4:00 p.m. (Toronto time) on March 8, 2004 and
shall take reasonable steps necessary, if any, to cause the
Registration Statement to become effective as soon as
practicable thereafter.
For greater certainty, the parties agree that if Creo fails to meet the
deadlines specified above for any reason whatsoever (including, without
limitation, being unable to resolve any comments on the Canadian Preliminary
Prospectus from the Canadian Securities Commissions on a basis satisfactory to
the Underwriters, acting reasonably, within the time frames described above),
the Underwriters shall be entitled to terminate this Agreement.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to and agrees with each of the Underwriters that:
(a) The Company meets the general eligibility requirements for use
of Form F-10 under the Securities Act and is eligible to file
short form prospectuses under National Instrument 44-101 of
the Canadian Securities Administrators.
(b) None of the Canadian Securities Commissions, any stock
exchange in Canada or the United States or any other
regulatory authority or court has issued an order preventing
or
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suspending the use or effectiveness, as the case may be, of
any preliminary prospectus, the Canadian Prospectus or the
U.S. Prospectus (as defined below) or the Registration
Statement relating to the proposed offering of the Offered
Shares or preventing the distribution of the Offered Shares or
instituted proceedings for that purpose and no proceedings for
that purpose are pending or, to the knowledge of the Company,
are contemplated by any of the aforementioned parties, and any
request on the part of such parties for additional information
from the Company has been complied with.
(c) The Canadian Preliminary Prospectus and the Canadian Final
Prospectus (together, the "Canadian Prospectus") will be
prepared and filed in compliance in all material respects with
all applicable securities laws in each of the Qualifying
Provinces and the respective rules and regulations under such
laws, together with applicable published policy statements,
blanket orders and applicable notices of securities regulatory
authorities in such provinces (the "Canadian Securities Laws")
and, at the time of delivery of the Offered Shares to the
Underwriters, the Canadian Final Prospectus will comply in all
material respects with all Canadian Securities Laws and the
Company shall fulfill and comply with all necessary
requirements of Canadian Securities Laws in order to enable
the Offered Shares to be lawfully distributed in the
Qualifying Provinces through the Underwriters or any other
investment dealers or brokers registered as such in the
Qualifying Provinces and acting in accordance with the terms
of their registrations. Such requirements shall be fulfilled
by the Company in the Province of British Columbia and in all
of the other Qualifying Provinces not later than 4:00 p.m.
(Toronto time) on March 8, 2004, or such later date or dates
as may be agreed to in writing by the Underwriters.
(d) The Canadian Preliminary Prospectus and the Canadian Final
Prospectus shall as of their respective dates of filing and
shall as amended prior to the Closing Date (as defined in
Section 4 below) in accordance with Canadian Securities Laws,
as of the Closing Date constitute full, true and plain
disclosure of all material facts relating to the Company, its
subsidiaries and the Offered Shares, shall contain no untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances
under which they were made, not misleading. The documents
incorporated by reference in the Canadian Prospectus and the
U.S. Prospectus, when they were filed with the Reviewing
Authority and the Commission, were prepared in accordance with
the Canadian Securities Laws, and any further documents so
filed and incorporated by reference in the Canadian Prospectus
and the U.S. Prospectus prior to the termination of the
distribution of the Offered Shares, or any further amendment
or supplement thereto, when such documents are filed with the
Reviewing Authority and the Commission, will be prepared in
accordance with the Canadian Securities Laws.
(e) The U.S. Preliminary Prospectus and the U.S. Final Prospectus
(together, the "U.S. Prospectus") will conform to the Canadian
Preliminary Prospectus and Canadian Final Prospectus,
respectively, except for such deletions therefrom and
additions thereto as are permitted or required by Form F-10
and the applicable rules and regulations of the Commission. In
addition, as of their respective dates, the Registration
Statement, the Form F-X, the U.S. Preliminary Prospectus and
the U.S. Final Prospectus, as amended or supplemented, if
applicable, will comply in all material respects with the
Securities Act.
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(f) As of the date the Registration Statement is declared
effective, neither the Registration Statement nor any
amendment or supplement thereto will contain an untrue
statement of material fact or omit to state any material fact
required to be stated therein or necessary to make the
statements therein not misleading, neither the U.S.
Preliminary Prospectus nor the U.S. Final Prospectus, as of
their respective dates and, in the case of the U.S. Final
Prospectus, as of the Closing Date, 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, in the light of the circumstances under
which they were made, not misleading.
provided, however, that the representations and warranties contained in
clauses (c), (d), (e) and (f) above shall not apply to statements or
omissions in the Canadian Final Prospectus or the U.S. Final Prospectus
that are made in reliance upon and in conformity with information
relating to any Underwriter furnished in writing to the Company by such
Underwriter through RBC DS expressly for use in such documents.
(g) There are:
(i) no reports or information that in accordance with the
requirements of the Canadian Securities Laws must be
made publicly available in connection with the
offering of the Offered Shares that have not been
made publicly available as required. There are no
documents required to be filed with the Canadian
Securities Commissions in connection with the
Canadian Prospectus that have not been filed (or that
will not be filed prior to the Closing Date in
accordance with Canadian Securities Laws) as required
pursuant to Canadian Securities Laws and delivered to
the Underwriters; and
(ii) no contracts, documents or other materials required
to be described or referred to in the Canadian
Prospectus or the U.S. Prospectus or to be filed as
exhibits to the Registration Statement that will not
be described, referred to or filed as required and,
in the case of those documents filed, delivered to
the Underwriters.
(h) The consolidated audited and unaudited financial statements of
the Company that are included or incorporated by reference in
the Registration Statement, the Canadian Prospectus and the
U.S. Prospectus present fairly in all material respects the
consolidated financial position of the Company and its
subsidiaries as of the dates indicated and the consolidated
results of operations and the consolidated statements of cash
flow of the Company and its subsidiaries for the periods
specified (subject, in the case of interim financial
information, to year-end adjustments); and such financial
statements have been prepared in conformity with generally
accepted accounting principles in Canada, consistently applied
throughout the periods involved, and, excluding our financial
statements as at December 31, 2003 and for the three months
ended December 31, 2003 and December 31, 2002, have been
reconciled to generally accepted accounting principles in the
United States in accordance with Item 18 of Form 20-F. The
selected financial data included or incorporated by reference
in the Registration Statement, the Canadian Prospectus and the
U.S. Prospectus present fairly the information shown therein
and have been compiled on a basis consistent with that of the
audited and unaudited consolidated financial information
included or incorporated by reference in the Registration
Statement, the Canadian Prospectus and the U.S. Prospectus.
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(i) KPMG LLP, who have reported upon the audited financial
statements of the Company included or incorporated by
reference in the Registration Statement, the Canadian
Prospectus and the U.S. Prospectus, are, and during the
periods covered by its reports were, independent with respect
to the Company within the meaning of the Canada Business
Corporations Act and applicable Canadian Securities Laws, and
are independent as required by the Securities Act.
(j) The Company has been duly incorporated, is validly existing as
a corporation in good standing under the Canada Business
Corporations Act, has the corporate power and authority to own
its property and to conduct its business as described in the
Registration Statement, the Canadian Prospectus and the U.S.
Prospectus and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries,
taken as a whole.
(k) The subsidiaries set forth on Schedule I hereto (the "Material
Subsidiaries") are the only subsidiaries of the Company that
are material to the business, affairs, operations, assets,
liabilities (contingent or otherwise) or capital of the
Company and its subsidiaries, taken as a whole; each of the
Material Subsidiaries has been duly incorporated, amalgamated,
continued, organized or formed, is validly existing as a
corporation or company under the laws of the jurisdiction of
its incorporation, amalgamation, continuation, organization or
formation, has the corporate power and authority to own its
property and to conduct its business as described in the
Canadian Prospectus and the U.S. Prospectus and is duly
qualified to transact business in each jurisdiction in which
the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent
that the failure to be so qualified would not have a material
adverse effect on the business, affairs, operations, assets,
liabilities (contingent or otherwise) or capital of the
Company and its subsidiaries, taken as a whole (a "Material
Adverse Effect"); each of the Material Subsidiaries is in good
standing (where such concept exists) under the laws of the
jurisdiction of its incorporation or formation and is in good
standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that such failure to be so
qualified or be in good standing would not have a Material
Adverse Effect; all of the issued shares of capital stock of
each Material Subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and
non-assessable and are beneficially owned directly or
indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
(l) 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.
(m) The authorized and issued capital of the Company conforms in
all material respects to the description thereof contained in
the Canadian Prospectus and the U.S. Prospectus (except for
subsequent issuances, if any, pursuant to this Agreement or
pursuant to the 1996 Stock Option Plan (Amended) referred to
in the U.S. Preliminary Prospectus and Canadian Preliminary
Prospectus).
(n) The Common Shares outstanding prior to the issuance of the
Offered Shares have been duly authorized and are validly
issued, fully paid and non-assessable; there are no
outstanding
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securities convertible into or exchangeable for, or warrants,
rights or options to purchase from the Company, or obligations
of the Company to issue, Common Shares or any other class of
shares of the Company, except as disclosed in the Canadian
Prospectus and the U.S. Prospectus or except pursuant to
existing employee share compensation arrangements.
(o) The Offered Shares have been duly authorized for issuance and
sale to the Underwriters pursuant to this Agreement and, when
issued, paid for and delivered in accordance with the terms of
this Agreement, will be validly allotted and issued as fully
paid and non-assessable shares, and the issuance of such
Offered Shares will not be subject to any preemptive or
similar rights.
(p) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this
Agreement and the issue and sale of the Offered Shares will
not contravene:
(i) any provision of law binding on the Company or any of
its subsidiaries;
(ii) the articles of incorporation or by-laws of the
Company or similar constating documents of any
subsidiary;
(iii) any agreement or other instrument binding upon the
Company or any of its Material Subsidiaries; or
(iv) any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the
Company or any subsidiary,
other than, in the case of clauses (i), (iii) and (iv), any
contravention that would not have a Material Adverse Effect
and that would not have a material adverse effect on the
ability of the Company to perform its obligations under this
Agreement.
(q) No approval, consent, authorization, order or license of, or
qualification with any government, governmental body or agency
or court of (i) any province of Canada; (ii) the federal
government of Canada; (iii) the federal government of the
United States; or (iv) the various states of the United States
in which the Offered Shares are to be offered for sale or
sold, or of any political subdivision of any thereof, is
required for the performance by the Company of its obligations
under this Agreement, except such as have already been
received and may be required by the Toronto Stock Exchange,
the Nasdaq National Market, the securities or "Blue Sky" laws
of the various states of the United States and the Canadian
Securities Laws in connection with the offer and sale of the
Offered Shares.
(r) There has not occurred any material adverse change, or any
development involving a prospective material adverse change,
in the condition, financial or otherwise, or in the ownership
of the Company or in the earnings, business or operations of
the Company and its subsidiaries, taken as a whole, from the
date of the latest audited financial statements incorporated
by reference in the Canadian Prospectus except as set forth in
the Canadian Prospectus and the U.S. Prospectus (exclusive of
any amendments or supplements thereto subsequent to the date
of this Agreement).
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(s) The Company and each of its subsidiaries maintain 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 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;
(t) There are no legal or governmental proceedings pending or, to
the knowledge of the Company, threatened to which the Company
or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is
subject that are required to be described in the Registration
Statement, the Canadian Prospectus or the U.S. Prospectus and
are not so described.
(u) The Company is not and, after giving effect to the offering
and sale of the Offered Shares and the application of the
proceeds thereof as described in the Canadian Prospectus and
the U.S. Prospectus, will not be required to register as an
"investment company" as such term is defined in the Investment
Company Act of 1940, as amended.
(v) The Company and each of its subsidiaries:
(i) are in compliance with any and all applicable
foreign, federal, provincial, state and local laws
and regulations relating to the protection of human
health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or
contaminants ("Environmental Laws");
(ii) have received all permits, licenses or other
approvals required of them under applicable
Environmental Laws to conduct their respective
businesses; and
(iii) are in compliance with all terms and conditions of
any such permit, license or approval,
except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singly or in
the aggregate, have a Material Adverse Effect.
(w) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital
or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on
operating activities and any potential liabilities to third
parties) which would, singly or in the aggregate, have a
Material Adverse Effect.
(x) There are no contracts, agreements or understandings between
the Company and any person granting such person the right to
require the Company to file a registration statement under the
Securities Act or a prospectus under the Canadian Securities
Laws with respect to any securities of the Company or to
require the Company to include such securities with the
Offered Shares registered pursuant to the Registration
Statement.
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(y) The Company and its subsidiaries own, possess or have obtained
all material governmental licenses, permits, certificates,
consents, orders, approvals and other authorizations necessary
to own or lease, as the case may be, and to operate their
properties and to carry on their businesses as presently
conducted except, in each case, where the failure to do so
would not have a Material Adverse Effect; and neither the
Company nor any of its subsidiaries has received any notice of
proceedings relating to revocation or modification of any such
licenses, permits, certificates, consents, orders, approvals
or authorizations except for any proceedings which would not
have a Material Adverse Effect.
(z) The Company and its subsidiaries own or possess adequate
patents, patent rights, inventions, copyrights, know-how
(including trade secrets and other unpatented or unpatentable
proprietary or confidential information, systems or
procedures), patent licenses, trademarks, service marks and
trade names (collectively, "Intellectual Property") necessary
to carry on their businesses as presently conducted except
where such failure to own or possess such Intellectual
Property would not have a Material Adverse Effect; and neither
the Company nor any of its subsidiaries has received any
notice of or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any
Intellectual Property as to which an unfavourable decision,
ruling or finding is reasonably probable that in the
aggregate, if the subject of an unfavorable decision, ruling
or finding, would have a Material Adverse Effect.
(aa) After due and reasonable inquiry and to the best of the
Company's knowledge:
(i) the business of the Company and its subsidiaries,
including processes used by, products made or sold
by, and research and development conducted by the
Company and its subsidiaries, does not conflict with,
infringe upon, misappropriate or otherwise violate
the intellectual property rights of any third party;
and
(ii) the Company is not aware of any fact or circumstance
which would render any Intellectual Property or any
technology or intellectual property license granted
to the Company or its subsidiaries by a third party
invalid, unenforceable or liable to cancellation or
termination, except where such conflict,
infringement, misappropriation, violation,
invalidity, unenforceability, cancellation or
termination would not have a Material Adverse Effect.
(bb) Neither the Company nor any of its subsidiaries is involved in
any labour dispute nor, to the knowledge of the Company, is
any such dispute threatened, in each case which would have a
Material Adverse Effect.
(cc) The Company and its subsidiaries have good title to the items
of real and personal property which are referred to in the
Registration Statement, the Canadian Prospectus and the U.S.
Prospectus as being owned by them, and have valid and
enforceable leasehold interests in the items of real and
personal property referred to in the Registration Statement,
the Canadian Prospectus and the U.S. Prospectus as being
leased by them, in each case free and clear of all liens,
encumbrances, claims, security interests and defects, other
than pursuant to the credit facility between the Company and
Royal Bank of Canada dated April 1, 2002, as amended, and
other than those which do not
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interfere with the use made or intended to be made of such
property by the Company or do not and will not have a Material
Adverse Effect.
(dd) None of the Company or any of its subsidiaries is in violation
of its charter documents or by-laws or default in the
observance or performance of any term or obligation to be
performed by it under any agreement, lease, contract,
mortgage, loan agreement, note, indenture or other instrument
or obligation to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries
or any of their respective properties is bound and which
breach or default, individually or in the aggregate, if not
cured or otherwise corrected within the respective period
specified for such cure or correction, would have a Material
Adverse Effect.
(ee) Computershare Trust Company of Canada, at its principal
offices in the cities of Vancouver and Toronto, has been duly
appointed as the registrar and transfer agent in respect of
the Common Shares.
(ff) There is and has been no failure on the part of the Company
and any of the Company's directors or officers, in their
capacities as such, to comply with any provision applicable to
the Company of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules
and regulations promulgated in connection therewith, including
Section 402 related to loans and Sections 302 and 902 related
to certifications.
(gg) The Company has not taken and will not take, directly or
indirectly, any action designed to, or that might be
reasonably expected to, cause or result in stabilization or
manipulation of the price of the Offered Shares.
(hh) The Company is a reporting issuer under the Canadian
Securities Laws and is in compliance with its obligations
under Section 85 of the Securities Act (British Columbia) and
under Sections 144, 145 and 149 of the Rules thereunder and
under similar provisions in the Canadian Securities Laws of
the other Qualifying Provinces.
(ii) Prior to the filing of the Canadian Final Prospectus and the
U.S. Final Prospectus, the Offered Shares will have been
conditionally approved for listing on the Toronto Stock
Exchange and the Nasdaq National Market.
2. AGREEMENTS TO SELL AND PURCHASE. The Company hereby agrees to sell the
Offered Shares to the Underwriters, and the Underwriters hereby agree to
purchase the Offered Shares from the Company at a purchase price of Cdn.$13.39
per Offered Share in the case of Offered Shares initially sold by the
Underwriters in Canadian dollars and U.S.$10.00 per Offered Share in the case of
Offered Shares sold by the Underwriters in U.S. dollars, all on the terms and
conditions described herein. Any Offered Shares not sold by the Underwriters as
of the Closing Date (as defined below) will be purchased from the Company at the
prices set out above in Canadian dollars or U.S. dollars at the sole discretion
of the Underwriters.
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The Company hereby agrees that it will not, without the prior written
consent of RBC DS, on behalf of the Underwriters (such consent not to be
unreasonably withheld), during the period commencing on the date hereof and
ending 90 days after the Closing Date (as defined below):
(a) 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, directly or indirectly, any
Common Shares or any securities convertible into or
exercisable or exchangeable for Common Shares or file any
registration statement under the Securities Act with respect
to any of the foregoing (other than a registration statement
filed in connection with any issuance permitted in clause (d)
below); or
(b) enter into any swap or other arrangement that transfers to
another, in whole or in part, directly or indirectly, any of
the economic consequences of ownership of the Common Shares or
such other securities,
whether any such transaction described in clause (a) or (b) above is to be
settled by delivery of Common Shares or such other securities, in cash or
otherwise. The foregoing provisions shall not apply to:
(c) the Offered Shares to be sold hereunder; and
(d) Common Shares issued pursuant to the Company's stock option
plan or any other employee or director equity compensation
plans.
3. TERMS OF PUBLIC OFFERING. The Company has been advised that the
Underwriters propose to begin soliciting offers to purchase the Offered Shares
as soon as possible after the Canadian Preliminary Prospectus has been filed
with the Reviewing Authority, the Registration Statement has been filed with the
Commission and the Company has issued a press release announcing the offering of
the Offered Shares. The Company is further advised by the Underwriters that the
Offered Shares are to be offered to the public in Canada, the United States and
other jurisdictions (provided any offers in jurisdictions other than Canada and
the United States will be made on a basis which is exempt from registration and
prospectus requirements under applicable laws), either directly through the
Underwriters or through members of a selling syndicate to be established by the
Underwriters. The Underwriters will comply in all material respects with all
applicable laws in connection with the offer and sale of the Offered Shares. The
Underwriters agree that any sales of Offered Shares in the United States will be
conducted through an affiliate of one or more of the Underwriters duly
registered to do so in the relevant jurisdiction in which such sales are being
made and in accordance with the applicable provisions of the National
Association of Securities Dealers, Inc.'s Conduct Rules 2730, 2740, 2420 and
2750 (commonly referred to as the "Papilsky Rules").
4. PAYMENT AND DELIVERY. Payment for the Offered Shares shall be made by
wire transfer of same day funds to an account designated by the Company as
follows:
(a) one wire transfer in Canadian funds representing the purchase
price net of the underwriting fee of Cdn. $0.5356 per Offered
Share for all Offered Shares sold by the Underwriters in
Canadian dollars; and
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(b) one wire transfer in U.S. funds representing the purchase
price net of the underwriting fee of U.S. $0.40 per Offered
Share for all Offered Shares sold by the Underwriters in U.S.
dollars.
In each case, the foregoing payments shall made against delivery of the Offered
Shares being purchased by the Underwriters, at 6:00 a.m. (Vancouver time), on
March 15, 2004, or at such other time on the same or such other date (not later
than 42 days after the date of the MRRS decision document issued by the
Reviewing Authority in respect of the Canadian Final Prospectus) as shall be
agreed to in writing between the Company and the Underwriters. The time and date
of such payment are referred to herein as the "Closing Date".
Certificates for the Offered Shares shall be in definitive form and
registered in such names and in such denominations as the Underwriters shall
request in writing not later than the business day prior to the Closing Date.
The certificates evidencing the Offered Shares shall be delivered to, or at the
direction of, RBC DS on the Closing Date for the respective accounts of the
Underwriters, with any transfer taxes payable in connection with the transfer of
the Offered Shares duly paid by the Company, against payment of the purchase
price therefor.
RBC DS shall give prompt written notice, on behalf of the Underwriters,
to the Company when, in the opinion of the Underwriters, they have ceased
distribution to the public of the Offered Shares. Such notice will also specify
the total proceeds realized in each of the provinces of Canada from such
distribution.
5. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Company to sell the Offered Shares to the Underwriters and the several
obligations of the Underwriters to purchase and pay for the Offered Shares on
the Closing Date are, in addition to the conditions described elsewhere in this
Agreement, subject to the following further conditions:
(a) The Registration Statement has become effective and no stop
order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act and
no proceedings for that purpose shall have been instituted or
shall be pending or, to the knowledge of the Underwriters or
the knowledge of the Company, shall be contemplated by the
Commission. In addition, no order having the effect of ceasing
or suspending the distribution of the Offered Shares or the
trading in the Common Shares or any other securities of the
Company shall have been issued by any securities commission,
securities regulatory authority or stock exchange in Canada or
the United States and no proceedings for that purpose shall
have been instituted or pending or, to the knowledge of the
Company, shall be contemplated by any securities commission,
securities regulatory authority or stock exchange in Canada or
the United States; and any request on the part of any Canadian
Securities Commission or the Commission for additional
information shall have been complied with.
(b) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date there shall not have occurred any
change, or any development involving a prospective change, in
the condition, financial or otherwise, or in the earnings,
business or operations of the Company and its subsidiaries,
taken as a whole, from that set forth in the Canadian
Preliminary Prospectus and the U.S. Preliminary Prospectus
(exclusive of
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any amendments or supplements thereto subsequent to the date
of this Agreement) that, in the reasonable judgment of the
Underwriters:
(i) is material and adverse and;
(ii) makes it, in the reasonable judgment of the
Underwriters, impracticable to market the Offered
Shares on the terms and in the manner contemplated in
the Canadian Prospectus or the U.S. Prospectus.
(c) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive
officer of the Company, in his or her capacity as such, to the
effect set forth in clause 5(b) above (without reference to
the Underwriters' judgment) and to the effect that the
representations and warranties of the Company contained in
this Agreement are true and correct as of the Closing Date and
that the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date. The officer
signing and delivering such certificate may rely upon the best
of his or her knowledge as to proceedings threatened.
(d) The Underwriters shall have received on the respective dates
of the Canadian Preliminary Prospectus and the Canadian Final
Prospectus an opinion of Quebec counsel to the Company, dated
the respective dates of the Canadian Preliminary Prospectus
and the Canadian Final Prospectus, to the effect that the
French language versions of each of the Canadian Preliminary
Prospectus and the Canadian Final Prospectus (including all
documents incorporated by reference therein), other than
certain financial information (the "Financial Information")
contained or incorporated by reference therein, are in all
material respects complete and proper translations of the
English language versions of each of the Canadian Preliminary
Prospectus and the Canadian Final Prospectus (including all
documents incorporated by reference therein).
(e) The Underwriters shall have received on the respective dates
of the Canadian Preliminary Prospectus and the Canadian Final
Prospectus an opinion of KPMG LLP dated on the respective
dates of the Canadian Preliminary Prospectus and the Canadian
Final Prospectus, to the effect that the French language
version of the Financial Information is, in all material
respects, a complete and proper translation of the English
language version thereof.
(f) The Underwriters shall have received on the Closing Date an
opinion of Quebec counsel to the Company, dated the Closing
Date, to the effect that the laws of the Province of Quebec
relating to the use of the French language (other than verbal
communications) will have been complied with in connection
with the sale of the Offered Shares to purchasers in the
Province of Quebec if such purchasers have received a copy of
the Canadian Prospectus and forms of order and confirmation in
the French language (on the assumption that the Canadian
Prospectus together with the forms of order and confirmation
constitute the entire contract for the purchase of such
Offered Shares), provided that the Canadian Prospectus and
forms of order and confirmation in the English language may be
delivered without delivery of the French language versions
thereof to purchasers in the Province of Quebec who have
expressly requested, in writing, that such English language
documents be delivered to them.
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(g) The Underwriters shall have received on the Closing Date an
opinion of each of ▇▇▇▇ Prince ▇▇▇▇▇ and Thorsteinssons, each
dated the Closing Date, substantially in the form of Schedule
II and Schedule III hereto, respectively. 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 and the federal laws of Canada applicable
therein, upon opinions of local counsel, who shall be counsel
satisfactory to counsel for the Underwriters, in which case
the opinion shall state that they believe that they and the
Underwriters are justified in relying upon such opinion. 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
certificates of public officials, provided that such
certificates have been delivered to the Underwriters. Such
opinion shall not state that it is to be governed or qualified
by, or that is otherwise subject to, any treatise, written
policy or other document relating to legal opinions. The
opinion letter referred to in this subparagraph (g) shall be
rendered to the Underwriters at the request of the Company and
shall so state therein.
(h) The Underwriters shall have received on the Closing Date an
opinion of, and a letter from, Cravath, Swaine & ▇▇▇▇▇ LLP,
special United States counsel for the Company, dated the
Closing Date, substantially in the forms attached as Schedule
IV hereto. The opinion and letter referred to in this
subparagraph (h) shall be rendered to the Underwriters at the
request of the Company and shall so state therein.
(i) The Underwriters shall have received on the Closing Date an
opinion, dated the Closing Date, of local counsel, who shall
be counsel satisfactory to counsel for the Underwriters, with
respect to, among other things, the incorporation, authorized
and issued capital and qualification to carry on business in
respect of Creo Americas, Inc., Creo IL Ltd., Creo Europe EMEA
S.A., Creo Asia Pacific Limited and Creo Japan Inc., all in
form and substance satisfactory to the Underwriters.
(j) The Underwriters shall have received on the Closing Date an
opinion, dated the Closing Date, of Osler, ▇▇▇▇▇▇ & Harcourt
LLP, Canadian counsel for the Underwriters, dated the Closing
Date, in form and substance satisfactory to the Underwriters.
(k) The Underwriters shall have received on the Closing Date an
opinion, dated the Closing Date, of Shearman & Sterling LLP,
United States counsel for the Underwriters, dated the Closing
Date, in form and substance satisfactory to the Underwriters.
(l) The Underwriters shall have received, on each of the date of
the Canadian Final Prospectus and the Closing Date, a letter
dated the date of the Canadian Final Prospectus or the Closing
Date, as the case may be, in form and substance satisfactory
to the Underwriters, from KPMG LLP, independent chartered
accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and
certain financial and statistical information included or
incorporated by reference in the Registration Statement, the
Canadian Prospectus and the U.S. Prospectus; provided that the
letter delivered on the Closing Date shall use a "cut-off
date" not earlier than two days prior to the Closing Date.
(m) The Offered Shares shall have been approved for inclusion in
the Nasdaq National Market, subject only to official notice of
issuance thereof, and shall have been approved for
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listing by the Toronto Stock Exchange, subject only to
official notice of issuance thereof and customary post-closing
filing requirements.
(n) On or before the date of the Canadian Final Prospectus and the
U.S. Final Prospectus, the Company and Underwriters shall have
received all necessary approvals from the National Association
of Securities Dealers, Inc. in connection with the offering of
the Offered Shares as contemplated herein.
(o) On or before the Closing Date, the Underwriters and counsel
for the Underwriters shall have received from the Company such
further certificates, documents, opinions and other
information as they may have reasonably requested.
6. COVENANTS OF THE COMPANY. In further consideration of the agreements of
the Underwriters herein contained, the Company covenants with each Underwriter
as follows:
(a) To notify the Underwriters promptly, and confirm the notice in
writing:
(i) during the period from the date of this Agreement to
the completion of the distribution of the Offered
Shares of:
(A) any material change (actual, anticipated,
contemplated or threatened, financial or
otherwise) in the business, affairs,
operations, assets, liabilities (contingent
or otherwise) or capital of the Company and
its subsidiaries taken as a whole;
(B) any material fact which has arisen or been
discovered and would have been required to
have been stated in the Canadian Prospectus
or any amendment thereof had the fact arisen
or been discovered on, or prior to, the date
of the Canadian Prospectus or such
amendment; and
(C) any change in any material fact (which for
the purposes of this Agreement shall be
deemed to include the disclosure of any
previously undisclosed material fact)
contained in the Canadian Prospectus, which
fact or change is, or may be, of such a
nature as to render any statement in the
Canadian Prospectus misleading or untrue or
which would result in a misrepresentation in
the Canadian Prospectus or would result in
the Canadian Prospectus not complying with
the Canadian Securities Laws.
(ii) when any post-effective amendment to the Registration
Statement shall have been filed with the Commission
or shall have become effective, and when any
supplement to the U.S. Prospectus or Canadian
Prospectus or any amended U.S. Prospectus or Canadian
Prospectus shall have been filed;
(iii) of the receipt of any comments from the Canadian
Securities Commissions or the Commission;
(iv) of any request by any of the Canadian Securities
Commissions to amend the Canadian Prospectus or for
additional information or of any request by the
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Commission to amend the Registration Statement or to
amend or supplement the U.S. Prospectus or for
additional information;
(v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration
Statement or of any order preventing or suspending
the use of any prospectus, or of the suspension of
the qualification of the Offered Shares for offering
and sale in any jurisdiction, or of the institution
or, to the knowledge of the Company, threatening of
any proceedings for any of such purposes; and
(vi) of the issuance by any of the Canadian Securities
Commissions or any stock exchange of any order having
the effect of ceasing or suspending the distribution
of the Offered Shares or the trading in the Common
Shares, or of the institution or, to the knowledge of
the Company, threatening of any proceedings for any
such purpose.
The Company shall in good faith discuss with the Underwriters
any fact or change in circumstances (actual, anticipated,
contemplated, threatened, financial or otherwise) which is of
such a nature that there is reasonable doubt whether notice
need be given under clause (a) above.
The Company will use every reasonable commercial effort to
prevent the issuance of any stop order, any order preventing
or suspending the use of any prospectus or any order ceasing
or suspending the distribution of the Offered Shares or the
trading in the Common Shares and, if any such order is issued,
to obtain the lifting thereof at the earliest possible time.
(b) Not to file or to make at any time any amendment to the
Registration Statement, any amendment or supplement to the
Canadian Prospectus or the U.S. Prospectus, of which the
Underwriters shall not have previously been advised and
furnished a copy or to which the Underwriters shall have
reasonably objected promptly after reasonable notice thereof;
provided, however, that this provision shall not prohibit the
Company from complying in a timely manner with its timely
disclosure and other obligations under applicable securities
legislation and the requirements of any relevant stock
exchange arising out of any material change or change in
material information.
(c) To furnish to the Underwriters, without charge:
(i) three signed copies of the Registration Statement
(including all exhibits thereto, documents filed
therewith (including photocopies of the Company Form
F-X) and amendments thereof) and an additional
conformed copy of the Registration Statement (without
exhibits thereto) for delivery to each Underwriter;
(ii) at the time of signing thereof, the Canadian
Prospectus (and any supplements or amendments
thereto) printed in the English language signed on
behalf of the Company and its directors in the manner
required by the Canadian Securities Laws, together
with any documentation supplemental thereto required
to be filed under the applicable laws of any of the
Canadian provinces;
(iii) at the time of filing thereof with the Quebec
Securities Commission, the Canadian Prospectus (and
any supplements or amendments thereto) printed in
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the French language signed on behalf of the Company
and its directors in the manner required by the laws
of the Province of Quebec, together with any
documentation supplemental thereto required to be
filed under the applicable laws of any of the
Canadian provinces; and
(iv) at any time beginning on the date hereof and ending
at the end of the period described in sub-section (d)
below, at the place or places which the Underwriters
may reasonably request, the Underwriters' reasonable
requirements of the commercial copies of the signed
Canadian Preliminary Prospectus and Canadian Final
Prospectus and the U.S. Preliminary Prospectus and
U.S. Final Prospectus. Such deliveries shall be made
as soon as possible after the filing of such
documents and, in any event, within one business day
of such filing.
(d) If, at any time in the period after the first date of the
public offering of the Offered Shares during which, in the
opinion of counsel for the Underwriters, the U.S. Prospectus
or the Canadian Prospectus is required by law to be delivered
in connection with sales by an Underwriter or dealer, any
event shall occur or condition exist as a result of which it
is necessary 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, in the opinion of counsel for the
Underwriters, it is necessary to amend the Registration
Statement or amend or supplement the Canadian Prospectus or
the U.S. Prospectus to comply with the Canadian Securities
Laws, the Securities Act or the applicable rules and
regulations thereunder, forthwith to prepare, file with the
Commission or any Canadian Securities Commission and furnish
to the Underwriters and to the dealers (whose names and
addresses the Underwriters will furnish to the Company) to
which Offered Shares may have been sold by the Underwriters,
on behalf of the Underwriters and to any other dealers upon
request, either amendments or supplements to the U.S.
Prospectus or the Canadian Prospectus (to be effected, if
necessary, by the filing with the Commission of a
post-effective amendment to the Registration Statement) so
that the statements in the U.S. Prospectus or the Canadian
Prospectus as so amended or supplemented 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, in the light of the circumstances when the U.S.
Prospectus or Canadian Prospectus is delivered to a purchaser,
not misleading or so that the Registration Statement, U.S.
Prospectus or the Canadian Prospectus, as amended or
supplemented, will comply with applicable law. The expense of
complying with this Section 6(d) shall be borne by the Company
in respect of any amendment or supplement required during the
nine month period after the effectiveness of the Registration
Statement or the Canadian Prospectus, as the case may be, and
by the Underwriters thereafter.
(e) To use its reasonable best efforts to qualify the Offered
Shares for offer and sale under the securities or Blue Sky
laws of such United States jurisdictions as the Underwriters
shall reasonably request.
(f) For a period of three years after the Closing Date, to furnish
to the Underwriters and, upon request, to each Underwriter,
copies of all reports filed with the Commission on Forms 40-F,
20-F and 6-K, or such other similar forms as may be designated
by the
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Commission, annual information forms and such other documents,
reports and information as shall be furnished by the Company
to its shareholders or security holders generally.
(g) During the period when the U.S. Prospectus is required to be
delivered under the Securities Act:
(i) to file promptly all documents required to be filed
by the Company with the Commission pursuant to
Section 13 or 15(d) of the Securities and Exchange
Act of 1934, as amended (the "Exchange Act")
subsequent to the time the Registration Statement
becomes effective; and
(ii) in the event that any document is filed with any
Canadian Securities Commission subsequent to the time
the Registration Statement becomes effective that is
deemed to be incorporated by reference in the
Canadian Prospectus, if required by the Securities
Act, to file such document as an exhibit to the
Registration Statement by post-effective amendment or
otherwise in accordance with the Securities Act or
the Exchange Act.
(h) To make generally available to the Company's security holders
and to the Underwriters as soon as practicable an earnings
statement covering the twelve-month period ending December 31,
2004 that satisfies the provisions of Section 11(a) of the
Securities Act.
(i) To comply with the Securities Act and the Exchange Act and the
Canadian Securities Laws so as to permit the completion of the
distribution of the Offered Shares as contemplated in this
Agreement and in the Canadian Prospectus and in the U.S.
Prospectus.
(j) Not to issue any press release or other public announcement
between the date hereof and the Closing Date without first
consulting with RBC DS, on behalf of the Underwriters.
7. EXPENSES. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company agrees to
pay or cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including:
(a) the fees, disbursements and expenses of the Company's
Canadian, United States and other counsel and the Company's
accountants in connection with the registration and delivery
of the Offered Shares under the Securities Act and under the
Canadian Securities Laws and all other fees or expenses in
connection with the preparation and filing of the Registration
Statement, the related Form F-X, the Canadian Prospectus, the
U.S. Prospectus and any amendments thereto (the "Supplementary
Material"), including all printing costs associated therewith,
and the mailing and delivering of copies thereof to the
Underwriters and dealers;
(b) all costs and expenses related to the transfer and delivery of
the Offered Shares to the Underwriters, including any transfer
or other taxes payable thereon;
(c) the cost of printing or producing any Blue Sky or legal
investment memorandum in connection with the offer and sale of
the Offered Shares under state securities laws and all
expenses in connection with the qualification of the Offered
Shares for offer and sale under state
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securities laws as provided in Section 6(e) hereof, including
filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or legal
investment memorandum;
(d) all filing fees and disbursements of counsel to the
Underwriters incurred in connection with the review and
qualification of the terms of the sale of the Offered Shares
by the National Association of Securities Dealers, Inc.;
(e) all fees and expenses in connection with the preparation and
filing of the Registration Statement and all costs and
expenses incident to listing the Offered Shares on the Nasdaq
National Market and the Toronto Stock Exchange;
(f) the cost of printing certificates representing the Offered
Shares;
(g) the costs and charges of any transfer agent, registrar or
depositary;
(h) the costs and expenses of the Company in connection with the
marketing of the offering of the Offered Shares;
(i) all other costs and expenses incident to the performance of
the obligations of the Company hereunder for which provision
is not otherwise made in this Section; and
(j) in the event that the offering of Offered Shares contemplated
hereby is terminated as a result of a default by Creo or for
any other reason within the control of Creo, all costs and
expenses of the Underwriters, including fees and disbursements
of their counsel.
It is understood that, except as provided in this Section 7 or in
Section 8 hereof, the Underwriters will pay all of their own costs and expenses,
including the fees, disbursements and expenses of their counsel, transfer taxes
on resale of any of the Offered Shares by them and any advertising expenses
associated with any offers they may make.
8. INDEMNITY AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter, each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act and all directors, officers,
employees and agents of any Underwriter, from and against any
and all losses (except loss of profits), claims, damages and
liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact
included or incorporated by reference in the Registration
Statement or any amendment thereof or any omission or alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or caused by any untrue statement or alleged
untrue statement of a material fact included or incorporated
by reference in any preliminary prospectus, the Canadian
Prospectus, the U.S. Prospectus or any Supplementary Material
(as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto), or the
omission or alleged omission to state therein a material fact
necessary in order to make the
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statements therein, in light of the circumstances under which
they were made, not misleading, except insofar as such losses,
claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission
based upon information relating to any Underwriter furnished
to the Company in writing by any Underwriter through RBC DS
expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the directors of the
Company, the officers of the Company who sign the Registration
Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to such Underwriter, but
only with reference to information relating to any Underwriter
furnished to the Company in writing by such Underwriter
through RBC DS expressly for use in the Registration
Statement, any preliminary prospectus, the Canadian
Prospectus, the U.S. Prospectus or any Supplementary Material
or any amendment or supplement thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in
respect of which indemnity may be sought pursuant to paragraph
(a) or (b) of this Section 8, such person (the "indemnified
party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party, upon request of the indemnified
party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any
others the indemnifying party may designate in such proceeding
and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at
the expense of such indemnified party unless: (i) the
indemnifying party and the indemnified party shall have
mutually agreed in writing to the retention of such counsel;
or (ii) the named parties to any such proceeding include both
the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests
between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified
party in connection with any proceeding or related proceedings
in the same jurisdiction, be liable for the fees and expenses
of more than one separate firm (in addition to any local
counsel) for all such indemnified parties and that all such
fees and expenses shall be reimbursed as they are incurred.
Such firm shall be designated in writing by RBC DS in the case
of parties indemnified pursuant to Section 8(a), and by the
Company, in the case of parties indemnified pursuant to
Section 8(b). The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a
final judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party from and against any
loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of
this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without
its written consent if: (i) such settlement is entered into
more than 45 days after receipt by such indemnifying party of
the aforesaid request; (ii) such indemnifying party shall have
received notice of the terms of such settlement at least 30
days prior to such settlement being entered into; and (iii)
such indemnifying party shall not have reimbursed the
indemnified party in accordance
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with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have
been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such
indemnified party from all liability on claims that are the
subject matter of such proceeding. Notwithstanding the second
preceding sentence, if at any time an indemnified party shall
have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an
indemnifying party shall not be liable for any settlement
effected without its consent if such indemnifying party: (i)
reimburses such indemnified party in accordance with such
request to the extent it considers such request to be
reasonable; and (ii) provides written notice to the
indemnified party substantiating the unpaid balance as
unreasonable, in each case prior to the date of such
settlement.
(d) To the extent the indemnification provided for in paragraph
(a) or (b) of this Section 8 is unavailable to an indemnified
party or insufficient in respect of any losses, claims,
damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or
liabilities: (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other hand from the
offering of the Offered Shares; or (ii) if the allocation
provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) above but also
the relative fault of the Company on the one hand and of the
Underwriters 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. The relative benefits received by
the Company on the one hand and the Underwriters on the other
hand in connection with the offering of the Offered Shares
shall be deemed to be in the same respective proportions as
the net proceeds from the offering of the Offered Shares
(before deducting expenses) received by the Company and the
total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the
cover of the Canadian Prospectus and U.S. Prospectus, bear to
the aggregate Purchase Price of the Offered Shares. The
relative fault of the Company on the one hand and the
Underwriters on the other hand 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 by the Underwriters and
the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or
omission. For purposes of this paragraph (d), each person, if
any, who controls an Underwriter within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act,
and all directors, officers, employees and agents of any
Underwriter, shall have the same rights to contribution as
such Underwriter, and each director of the Company, each
officer of the Company who 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
Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Company. The
Underwriters' respective obligations to contribute pursuant to
this Section 8 are several in proportion to the respective
number of Offered Shares they have purchased hereunder, and
not joint.
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(e) The Company and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Section 8
were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or
by any other method of allocation that does not take account
of the equitable considerations referred to in paragraph (d)
of this Section 8. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages
and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the
limitations set forth above, 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 Section 8, no
Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the
Offered Shares underwritten by it and distributed to the
public were offered to the public exceeds the amount of any
damages that such Underwriter has otherwise been required to
pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 8
are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at
law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 8 and the representations, warranties and other
statements of the Company contained in this Agreement shall
remain operative and in full force and effect regardless of:
(i) any termination of this Agreement; (ii) any investigation
made by or on behalf of any Underwriter or any person
controlling any Underwriter, or the Company, its officers or
directors or any person controlling the Company; and (iii)
acceptance of and payment for any of the Offered Shares.
9. TERMINATION.
(a) If the Company does not comply in all material respects with
the conditions hereof, and such non-compliance does or, in the
opinion of any of the Underwriters, would reasonably be
expected to prevent, restrict or otherwise adversely affect
the distribution of the Offered Shares in accordance with the
terms hereof or, in the opinion of any of the Underwriters,
would reasonably be expected to impact adversely on the
investment quality or marketability of the Offered Shares in
any of the jurisdictions in which the Offered Shares may be
sold under the terms hereof, any Underwriter may terminate its
obligations hereunder by written notice to that effect given
to the Company on or prior to the time of closing on the
Closing Date (the "Closing Time") and in such event such
Underwriter's obligations shall be at an end. It is understood
that the Underwriters may waive in whole or in part
non-compliance with any of the conditions contained herein or
extend the time for compliance therewith without prejudice to
such rights in respect of any other condition or conditions or
any other or subsequent breach or non-compliance, provided
that any such waiver or extension shall be binding upon the
Underwriters only if the same is in writing.
(b) If, after the date hereof and prior to the Closing Time, there
shall occur any material adverse change (actual, anticipated,
contemplated or threatened, financial or otherwise) in the
business, affairs, operations, assets, liabilities (contingent
or otherwise), capital or control of the Company and its
subsidiaries taken as a whole (the "Condition of the
-21-
Company") or the Underwriters become aware of any undisclosed
material adverse information relating to the Company and its
subsidiaries taken as a whole, or other adverse material
development which, in the opinion of any of the Underwriters,
acting reasonably, would:
(i) have a material adverse effect on the value or market
price of the Offered Shares or the investment quality
or marketability of the Offered Shares or any other
securities of the Company, or
(ii) result in the purchasers of a material amount of the
Offered Shares exercising their right under applicable
legislation to withdraw from their purchase of Offered
Shares,
then each of the Underwriters shall be entitled, at its
option, to terminate its obligations under this Agreement by
written notice to that effect given to the Company at or prior
to the Closing Time.
(c) If at any time during the period commencing on the date hereof
and ending at the Closing Time there shall develop, occur or
come into effect or existence any event, action, state,
condition or major financial occurrence of national or
international consequence, including any act of terrorism, war
or like event, or any law or regulation, or there shall be an
escalation of hostilities involving the United States or
Canada, any of which in the opinion of any of the
Underwriters, acting reasonably, seriously adversely affects,
or involves, or would seriously adversely affect, or involve,
the Canadian, United States or international financial markets
or the Condition of the Company, each of the Underwriters
shall be entitled, at its option, to terminate its obligations
under this Agreement by written notice to that effect given to
the Company at or prior to the Closing Time.
(d) If after the date hereof and prior to the Closing Time, there
shall occur any change in any applicable securities laws,
rules, regulations or policies, or if any enquiry, action,
suit, investigation or other proceeding, whether formal or
informal, in relation to the Company or the distribution of
the Offered Shares should be announced, instituted or
threatened or any order under or pursuant to any laws or
regulations of Canada or of any of the Qualifying Provinces or
of the United States or of any of the states thereof or by any
relevant stock exchanges or any other regulatory or
governmental authority should be made or issued (except for
any such order based upon the activities or the alleged
activities of the Underwriters and not of the Company) which,
in the reasonable opinion of any of the Underwriters, operates
to prevent or restrict the trading or the distribution of the
Offered Shares or seriously adversely affects or will
seriously adversely affect the value or market price of the
Offered Shares or the investment quality or marketability of
the Offered Shares, each of the Underwriters shall be
entitled, at its option, to terminate its obligations under
this Agreement by written notice to that effect given to the
Company at or prior to the Closing Time.
(e) Any termination by any of the Underwriters pursuant to the
provisions hereof shall be effected by notice in writing
delivered or telecopied to Creo at its address as herein set
forth. The rights of termination contained in Sections (a),
(b), (c) or (d) above are in addition to any other rights or
remedies the Underwriters may have in respect of any default,
misrepresentation, act or failure to act of the Company in
respect of any matters contemplated by this Agreement. In the
event of any such termination, there shall be no
-22-
further liability on the part of the Company or the
Underwriters except for any liability provided for in Sections
7 and 8 hereof.
10. UNDERWRITERS' OBLIGATIONS The Underwriters' obligations to purchase the
Offered Shares in accordance with this Agreement shall be several and not joint
in that each of the Underwriters shall severally be obligated to purchase only
the percentage of the aggregate number of Offered Shares set opposite its name
as follows:
RBC Dominion Securities Inc. 42.11%
BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc. 15.79%
TD Securities Inc. 15.79%
▇▇▇▇▇▇▇ ▇▇▇▇▇ Canada Inc. 10.53%
Dundee Securities Corporation 5.26%
▇▇▇▇▇▇▇ ▇▇▇▇▇ Ltd. 5.26%
Sprott Securities Inc. 5.26%
If an Underwriter (a "Refusing Underwriter") does not complete the purchase and
sale of the Offered Shares which that Underwriter has agreed to purchase under
this Agreement (other than in accordance with Section 9) (the "Defaulted
Shares"), RBC DS may delay the Closing Date for not more than five days and the
remaining Underwriters (the "Continuing Underwriters") will be entitled, at
their option, to purchase all but not less than all of the Defaulted Shares pro
rata according to the number of Offered Shares to have been acquired by the
Continuing Underwriters under this Agreement or in any proportion agreed upon,
in writing, by the Continuing Underwriters. If no such arrangement has been made
and the number of Defaulted Shares to be purchased by the Refusing
Underwriter(s) does not exceed 10% of the Offered Shares, the Continuing
Underwriters will be obligated to purchase the Defaulted Shares on the terms set
out in this Agreement in proportion to their obligations under this Agreement.
If the number of Defaulted Shares to be purchased by Refusing Underwriters
exceeds 10% of the Offered Shares, the Continuing Underwriters will not be
obliged to purchase the Defaulted Shares and, if the Continuing Underwriters do
not elect to purchase the Defaulted Shares:
(a) the Continuing Underwriters will not be obliged to purchase
any of the Offered Shares;
(b) the Company will not be obliged to sell less than all of the
Offered Shares; and
(c) the Company will be entitled to terminate its obligations
under this Agreement arising from its acceptance of this offer
to purchase the Offered Shares, in which event there will be
no further liability on the part of the Company or the
Continuing Underwriters, except pursuant to the provisions of
Sections 7 and 8.
Nothing in this Agreement obliges the Company to sell under this
Agreement less than all the Offered Shares or will relieve from responsibility
to the Company under this Agreement any Underwriter that has defaulted in its
obligation to purchase its applicable percentage of the aggregate number of such
Offered Shares to be sold hereunder.
11. COUNTERPARTS. This Agreement may be signed in two or more counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
12. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Province of British Columbia and federal laws of
Canada applicable therein. All parties hereby attorn to the exclusive
jurisdiction of the courts of the Province of British Columbia to settle all
disputes which may arise hereunder or in connection herewith.
-23-
13. HEADINGS. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
14. NOTICES. All notices and other communications shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices shall, in the case of notice to Creo, be
addressed and sent to ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇,
Attention: General Counsel (with a copy to ▇▇▇▇ Prince ▇▇▇▇▇, Barristers &
Solicitors, Suite 1810, 1111 West Georgia Street, Vancouver, British Columbia,
V6E 4M3, Attention: ▇▇▇▇ ▇▇▇▇) and, in the case of notice to the Underwriters,
shall be addressed and sent to RBC Dominion Securities Inc., ▇▇▇▇ - ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇ (with a
copy to Osler, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇). Creo and the Underwriters may
change their respective addresses for notices by notice given in the manner
aforesaid.
15. REPRESENTATIVE OF UNDERWRITERS. The Underwriters agree that any
agreement, waiver, order, notice (other than a notice pursuant to Section 9),
direction, receipt or other action to be made, given or taken by the
Underwriters hereunder may be made or given by RBC DS on behalf of each of the
Underwriters.
16. TIME OF ESSENCE. Time shall be of the essence in this Agreement.
17. REPRESENTATIONS, WARRANTIES AND AGREEMENTS SURVIVE CLOSING. The
representations, warranties and agreements herein contained shall survive the
purchase by the Underwriters of the Offered Shares and shall continue in full
force and effect unaffected by any subsequent disposition of the Offered Shares.
-24-
If the foregoing is in accordance with your understanding, will you
please confirm your acceptance by signing below in the place indicated.
Yours truly,
RBC DOMINION SECURITIES INC.
By: ____________________________________
Authorized Signatory
BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ INC.
By: ____________________________________
Authorized Signatory
TD SECURITIES INC.
By: ____________________________________
Authorized Signatory
▇▇▇▇▇▇▇ ▇▇▇▇▇ CANADA INC.
By: ____________________________________
Authorized Signatory
DUNDEE SECURITIES CORPORATION
By: ____________________________________
Authorized Signatory
▇▇▇▇▇▇▇ ▇▇▇▇▇ LTD.
By: ____________________________________
Authorized Signatory
SPROTT SECURITIES INC.
By: ____________________________________
Authorized Signatory
CREO INC.
By: ____________________________________
Authorized Signatory
By: ____________________________________
Authorized Signatory
-25-
SCHEDULE I
LIST OF MATERIAL SUBSIDIARIES
NAME OF SUBSIDIARY JURISDICTION OF INCORPORATION
------------------ -----------------------------
Creo Americas, Inc. Washington, U.S.
Creo IL Ltd. Israel
Creo EMEA S.A. Belgium
Creo Asia Pacific Limited Hong Kong
Creo Japan Inc. Japan
SCHEDULE II
OPINION OF ▇▇▇▇ PRINCE ▇▇▇▇▇
o , 2004
RBC Dominion Securities Inc.
BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.
TD Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Canada Inc.
Dundee Securities Corporation
▇▇▇▇▇▇▇ ▇▇▇▇▇ Ltd.
▇▇▇▇▇▇ Securities Inc.
-and-
▇▇▇▇▇ ▇▇▇▇▇▇ & Harcourt LLP
Dear Sirs:
RE: CREO INC. - ISSUE OF o COMMON SHARES
We have acted as Canadian counsel to Creo Inc. (the "Company") in connection
with the issue by the Company and the purchase by RBC Dominion Securities Inc.,
BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc., TD Securities Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ Canada Inc., Dundee
Securities Corporation, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Ltd., and Sprott Securities Inc.
(collectively, the "Underwriters") of o common shares (the "Shares")
pursuant to an underwriting agreement (the "Underwriting Agreement") dated o
, 2004 among the Underwriters and the Company. This opinion is delivered to you
pursuant to Section 5(g) of the Underwriting Agreement. All capitalized terms
used but not defined herein shall have the meanings ascribed to such terms in
the Underwriting Agreement.
A. DOCUMENTATION
As such counsel, we have participated in the preparation of the following
documents and agreements:
(a) the executed Underwriting Agreement; and
(b) the preliminary short form prospectus of the Company dated o ,
2004 (the "Canadian Preliminary Prospectus") and the final short
form prospectus of the Company dated o , 2004 (both in the
English and French languages, together with the documents
incorporated therein by reference) (the "Canadian Final Prospectus")
as filed by the Company with the British Columbia Securities
Commission (the "Reviewing Authority") and the Canadian securities
regulatory authorities (the "Qualifying Authorities") of each of the
other provinces of Canada (together with British Columbia, the
"Qualifying Provinces") relating to the offering of the Shares (the
Canadian Final Prospectus together with the Canadian Preliminary
Prospectus are referred to herein as the "Canadian Prospectus").
We have made such investigations and examined originals or copies, certified or
otherwise identified to our satisfaction, of public and corporate records,
documents and certificates of governmental authorities and officers of the
Company as we have considered necessary or appropriate to enable us to express
the opinions hereinafter set forth, including:
(a) certificates, dated the date hereof, of officers of the Company as
to certain factual matters (the "Officers' Certificates");
(b) (1) the registration statement on Form F-10 (Registration No.
o ) filed by the Company under the United States Securities Act
of 1933, as amended (the "Securities Act"), with the United States
Securities and Exchange Commission (the "Commission") on o ,
2004; (2) Amendment No. 1 thereto filed by the Company under the
Securities Act with the Commission on o , 2004; and (3) copies
of the related prospectuses contained therein (the final prospectus
dated o , 2004, including the documents incorporated by
reference therein, in the form in which it was filed by the Company
with the Commission under the Securities Act, is hereinafter
referred to as the "U.S. Prospectus");
(c) the conditional approval letter of the Toronto Stock Exchange (the
"Exchange") dated o , 2004 (the "Approval Letter"), pursuant to
which the Exchange has accepted notice of the distribution of the
Shares and has approved the listing of the Shares subject to the
satisfaction of certain conditions (the "Listing Conditions")
specified in the Approval Letter;
(d) a specimen form of the certificate (the "Specimen Certificate") used
to evidence the Shares;
(e) a global share certificate (the "Share Certificate") representing
the Shares; and
(f) a certificate dated o , 2004 of the registrar and transfer
agent of the Company (the "Transfer Agent's Certificate"); and
(g) the Final Mutual Reliance Review System Decision Document dated
o , 2004 issued by the Reviewing Authority,
copies of which have been provided to you. We have also considered such
questions of law as we have deemed relevant to enable us to express the opinions
hereinafter set forth.
B. JURISDICTION
We are solicitors qualified to practise law only in the Province of British
Columbia, Canada and, except to the extent that we rely upon opinions of other
counsel as set out herein, we express no opinion as to any laws or any matters
governed by any laws other than the laws of the Province of British Columbia,
Canada and the federal laws of Canada applicable therein.
Insofar as the opinions expressed in paragraphs 2, 6, 11, 12, 16 and 17 below,
relate to matters governed by laws other than the laws of British Columbia or
the federal laws of Canada applicable therein, we have relied, with your
consent, solely upon opinions of local counsel in each applicable jurisdiction,
dated the date hereof, as to the laws of such jurisdiction, copies of which
opinions are attached hereto.
- 2 -
In expressing the opinions set forth in paragraphs 3, 5 and 12 below with
respect to the subsidiaries of the Company set out in Schedule "A" to this
opinion (each a "Material Subsidiary" and collectively the "Material
Subsidiaries"), we have relied, with your consent, solely upon opinions of
o , o and o , dated the date hereof, copies of which opinions
are attached hereto.
We have not independently considered the matters covered by the opinions of
local counsel on which we have relied to the extent necessary to enable us to
express the conclusions stated in such opinions and, accordingly, we do not
express any opinion on the matters contained in such opinions. We have assumed
that all appropriate investigations and inquiries, whether or not referred to
expressly in such opinions, were made and conducted and that no matters were
disclosed as a result of such investigations and inquiries which might have
required a qualification to any such opinions. Subject to this qualification, we
believe that both you and we are entitled to rely on such opinions. To the
extent that any of the opinions of local counsel upon which we have relied are
based upon any assumption, are given in reliance on any certificate or other
document or are made subject to any limitation, qualification or exception, our
opinions given in reliance thereon are based on the same assumptions, are given
in reliance on the same certificate or document and are subject to the same
limitations, qualifications or exceptions.
C. ASSUMPTIONS
For the purposes of the opinions set out herein we have assumed, with your
consent:
(a) the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to authentic, original
documents of all documents submitted to us as certified, conformed,
photostatic or facsimile copies and the authority of all corporate
and governmental signatories (other than officers and directors of
the Company).
(b) in rendering the opinion expressed in paragraph 8 below, we have
assumed that the Underwriting Agreement constitutes valid and
legally binding obligations of the several Underwriters, enforceable
against them in accordance with its terms, subject to the
qualifications set out in Section F below and that the Underwriting
Agreement has been unconditionally delivered by the signatories
thereto.
D. RELIANCES
In expressing the opinions set forth in paragraphs 2, 4, 5, 12 and 14 below we
have, with your consent, relied on the Officers' Certificates as to certain
factual matters.
In expressing the opinion set forth in paragraph 1 below, we have, with your
consent, relied solely on a certificate of compliance dated o , 2004 issued
by Industry Canada, a copy of which has been delivered to you.
In expressing the opinion set forth in paragraph 2 below, with respect to the
Company's status in British Columbia, we have relied solely upon a certificate
of good standing dated o , 2004 issued by the Registrar of Companies under
the Company Act (British Columbia), a copy of which has been delivered to you.
- 3 -
In expressing the opinion set forth in paragraph 4 below, with respect to the
number of issued and outstanding shares in the capital of the Company, we have,
with your consent, relied solely on the Transfer Agent's Certificate.
In expressing the opinion set forth in paragraph 6, we have, with your consent,
relied solely on certificates from each of the Qualifying Authorities as to the
reporting status of the Company. In expressing the opinion in paragraph 11 we
have, with your consent, for the purposes of determining how the Reviewing
Authority interprets and applies such law, rules and regulations, reviewed only
the written policies, blanket orders and rulings of the Reviewing Authority and
any other matters raised by the staff of the Reviewing Authority in connection
with the filing of the Canadian Final Prospectus.
In expressing the opinion in paragraph 15 below, we have relied solely on the
Approval Letter.
The knowledge referred to in paragraphs 5, 10, 12 and 14 below is derived solely
from the Officers' Certificates, and from a review of our own records maintained
in our Vancouver office and inquiries of our lawyers who we have determined, in
the ordinary course of their respective practices, to have knowledge of the
matters covered by those opinions. We have made no independent investigation to
verify the accuracy or completeness of our knowledge, and in particular, we have
not conducted searches in the public records of any court or any federal,
provincial or other governmental department, commission, board, agency or
instrumentality.
E. OPINIONS
Based on and subject to the foregoing, and subject to the qualifications
hereinafter expressed, we are of the opinion that:
1. The Company has been duly incorporated under the laws of Canada, is
validly existing, has been neither discontinued nor dissolved, has sent to
the Director appointed under the Canada Business Corporations Act the
annual returns required to be sent to the Director and has full corporate
power and capacity to own or lease, as the case may be, and to operate its
properties and assets and carry on its business.
2. The Company has been duly registered or qualified for the transaction of
business, and is otherwise in good standing, as an extra-provincial
corporation under the laws of each province of Canada in which it owns or
leases properties or conducts any business as to require such registration
or qualification, as the case may be, and where failure to do so would
have a material adverse effect on the financial position or business of
the Company.
3. Each Material Subsidiary has been duly incorporated or organized, as the
case may be, and validly exists under the laws of the jurisdiction in
which it is chartered or organized and has full corporate power and
capacity to own or lease, as the case may be, and to operate its
properties and assets and carry on its business.
4. The Company has an authorized capitalization as set forth in the Canadian
Prospectus, and as of o , 2004, there were o common shares and
no preference shares issued and outstanding. All of the issued and
outstanding shares in the capital of the Company have been duly and
validly authorized and issued as fully paid and non-assessable.
- 4 -
5. All the outstanding shares of capital stock of each Material Subsidiary
have been duly and validly authorized and issued and are fully paid and
non-assessable and all outstanding shares of capital stock of the Material
Subsidiaries are beneficially owned by the Company, directly or
indirectly, to our knowledge, free and clear of any perfected security
interest or any other security interest, claim, lien or encumbrance.
6. The Company is a reporting issuer in the Province of British Columbia, and
it is not in default of filing financial statements required under the
B.C. Act, or paying fees and charges prescribed by the Securities
Regulation, B.C. Reg. 196/97, related to those filings. The Company is
also a reporting issuer in those of the Qualifying Provinces where the
concept of a reporting issuer exists and is not on the list of defaulting
issuers maintained by the relevant Qualifying Authorities.
7. The Shares have been duly authorized and allotted for issuance and, when
issued, paid for and delivered in accordance with the terms of the
Underwriting Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be subject to any
pre-emptive or similar rights.
8. The Company has all necessary corporate power and capacity to issue the
Shares, to enter into the Underwriting Agreement and to carry out its
obligations thereunder and the Underwriting Agreement has been duly
authorized, executed and delivered by the Company and constitutes a valid
and binding agreement which is enforceable against the Company in
accordance with its terms.
9. The Specimen Certificate has been duly approved by the directors of the
Company and is in compliance with all legal requirements related thereto,
including the requirements of the Canada Business Corporations Act, and
the articles and by-laws of the Company and the requirements of the
Exchange, and the Share Certificates have been duly executed, issued and
delivered by the Company and countersigned by Computershare Trust Company
of Canada.
10. To our knowledge, no order ceasing or suspending the distribution of the
Shares has been issued by any Canadian securities regulatory authority and
no proceeding for that purpose has been initiated or threatened by any
Canadian securities regulatory authority.
11. All necessary documents have been filed, all requisite proceedings have
been taken and all approvals, permits, consents and authorizations of the
appropriate regulatory authorities have been obtained by the Company under
the securities laws of the Province of British Columbia and each of the
Qualifying Provinces to qualify the Shares for distribution to the public
in the Province of British Columbia and each of the Qualifying Provinces
through persons or companies who are registered in an appropriate category
of registration under the securities laws of the Province of British
Columbia and each of the Qualifying Provinces and who have complied with
the relevant provisions of such applicable laws.
12. To our knowledge, there are no legal or governmental proceedings pending
or threatened to which the Company or any of its Material Subsidiaries is
a party or to which any of the properties of the Company or any of its
Material Subsidiaries is subject that are required to be described in the
Canadian Prospectus and are not so described.
- 5 -
13. There are no reports or other information that in accordance with the
requirements of the Reviewing Authority must be made publicly available in
connection with the offering of the Shares that have not been made
publicly available as required.
14. The execution and delivery by the Company of, and the performance by the
Company of its obligations under, the Underwriting Agreement will not
contravene any provision of the Canada Business Corporations Act or of
applicable laws of British Columbia or the federal laws of Canada
applicable therein or conflict with or result in a breach or default under
the articles of incorporation or by-laws of the Company, or to our
knowledge, any judgment, order or decree of any Canadian federal body or
British Columbia governmental agency or court having jurisdiction over the
Company and no consent, approval, authorization or order of, or
qualification with, any Canadian federal or British Columbia governmental
body or agency is required for the performance by the Company of its
obligations under the Underwriting Agreement, except such as may be
required by the Exchange.
15. The Shares have been conditionally approved for listing on the Exchange
and, subject to the satisfaction of the Listing Conditions, no filing,
proceeding, approval, consent or authorization is required to be made,
taken or obtained from the Exchange in connection with the issuance or
sale of the Shares.
16. Subject to compliance with the prudent investment standards and general
investment provisions of the statutes referred to below, (and, where
applicable the regulations thereunder) and, in certain cases, subject to
the satisfaction of additional requirements relating to investment or
lending policies, procedures or goals, the Shares are, at the date hereof,
not precluded as investments under the following statutes:
(a) Insurance Companies Act (Canada);
(b) Trust and Loan Companies Act (Canada);
(c) Pension Benefits Standards Act, 1985 (Canada);
(d) Financial Institutions Act (British Columbia);
(e) Pension Benefits Standards Act (British Columbia);
(f) Loan and Trust Corporations Act (Alberta);
(g) Employment Pension Plans Act (Alberta);
(h) Insurance Act (Alberta);
(i) The Pension Benefits Act, 1992 (Saskatchewan);
(j) The Pension Benefits Act (Manitoba);
(k) The Insurance Act (Manitoba);
- 6 -
(l) Loan and Trust Corporations Act (Ontario);
(m) Pension Benefits Act (Ontario);
(n) The Trustee Act (Ontario); and
(o) Pension Benefits Act (Nova Scotia).
17. The Shares are, at the date hereof, investments in which:
(a) the provisions of an Act Respecting Trust Companies and Savings
Companies (Quebec) would not preclude investment, at the date of
original issue, by a trust or savings company, in each case as
defined under such Act (other than a trust company with respect to
funds (except deposits) which it administers for other persons),
subject to compliance with the prudent investment standards
contained in such Act and subject to the specific provisions of
Division VI of Chapter 15 of such Act applicable to a Quebec
company, including the adoption of and adherence to an investment
policy approved by its board of directors;
(b) the provisions of An Act Respecting Insurance (Quebec) would not
preclude investment, at the date of original issue, by an insurer,
as defined in such Act, incorporated under the laws of the Province
of Quebec, other than a guarantee fund corporation, subject to the
prudent investment criteria found in such Act; and
(c) the provisions of the Supplemental Pension Plans Act (Quebec) and
the regulations thereunder would not preclude the assets of a
pension plan registered thereunder from being invested, provided
that such investment complies with the prudent investment standards
of such Act and provided that where a written investment policy as
prescribed by such Act has been established and adopted by the
pension committee for such pension plan, the investment in the
shares of the Company, if selected by such pension committee or
delegate thereof, must, in addition, be made in conformity with the
aforesaid investment policy at the date of original issue,
subject, in each case, to the general investment provisions and
restrictions found in such legislation including, without limitation,
applicable quantitative limitations.
18. Computershare Trust Company of Canada has been duly appointed as transfer
agent and registrar for the Common Shares, to carry out such functions at
its principal transfer offices in Vancouver and Toronto.
F. QUALIFICATIONS
The opinion set forth in paragraph 8 above is subject to the qualifications that
enforcement may be limited by:
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(a) applicable bankruptcy, insolvency, receivership, fraudulent preference,
fraudulent conveyance, reorganization, moratorium, arrangement, winding up
and other similar laws generally affecting the enforcement of the rights
of creditors or others;
(b) general principles of equity (whether or not enforcement is considered in
a proceeding in equity or at law), including the discretion exercisable by
the court with respect to equitable remedies such as specific performance
and injunction and the concepts of materiality, reasonableness, good faith
and fair dealing in the performance and enforcement of a contract required
of the party seeking its enforcement;
(c) the discretion exercisable by the court with respect to stays of
enforcement proceedings and execution of judgments;
(d) the effect of a vitiating factor such as mistake, misrepresentation,
fraud, duress or undue influence; and
(e) the costs of and incidental to proceedings authorized to be taken in court
or before a judge are under the discretion of the court or judge before
which such proceedings are brought and a court or judge has full power to
determine by whom and to what extent the costs of such proceedings shall
be paid.
As well, in expressing the opinion in paragraph 8 we have assumed that each such
agreement set out therein will be enforced by the court only to the extent that
the court determines that any provision which is unenforceable or invalid can be
severed without impairing the interpretation and application of the remainder of
such agreement.
We express no opinion as to the enforceability of the indemnification and
contribution provisions of Section 8 of the Underwriting Agreement.
This opinion is delivered to the addressees pursuant to the Company's request in
connection with the closing of the above referenced transaction and may be
relied upon by the addressees in connection therewith but not by any other
person or entity or by anyone for any other purpose, nor may it be copied or
quoted by persons other than the addressees, or distributed to persons other
than addressees without our prior written consent. Notwithstanding the
foregoing, ▇▇▇▇▇ ▇▇▇▇▇▇ & Harcourt LLP may rely on this opinion for purposes of
giving its opinions to the Underwriters in accordance with the requirements of
the Underwriting Agreement.
Yours very truly,
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SCHEDULE "A"
to the opinion of ▇▇▇▇ Prince ▇▇▇▇▇ dated o , 2004
Material Subsidiaries of Creo Inc.
Creo Americas, Inc.
Creo IL Ltd.
Creo EMEA S.A.
Creo Asia Pacific Limited
Creo Japan Inc.
SCHEDULE III
OPINION OF THORSTEINSSONS
LETTERHEAD OF THORSTEINSSONS
o , 2004
RBC Dominion Securities Inc. Osler, ▇▇▇▇▇▇ & Harcourt LLP
BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc. ▇▇▇ ▇▇
TD Securities Inc. ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. Toronto, Ontario
Dundee Securities Corporation M5X 1B8
▇▇▇▇▇▇▇ ▇▇▇▇▇ Ltd.
▇▇▇▇▇▇ Securities Inc.
Ladies and Gentlemen:
Re Creo Inc. (the "Company") - Sale of o common shares without par value
(the "Common Shares")
We have acted as special counsel for the Company with respect to Canadian
federal income-tax related matters in connection with the purchase by RBC
Dominion Securities Inc., BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc., TD Securities Inc., ▇▇▇▇▇▇▇
▇▇▇▇▇ Canada Inc., Dundee Securities Corporation, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Ltd. and Sprott
Securities Inc. (together, the "Underwriters") from the Company of the Common
Shares pursuant to an underwriting agreement (the "Underwriting Agreement")
dated o , 2003 among the Company and the Underwriters.
In that connection, it is our opinion that:
(i) the statements contained in the Company's prospectus dated o , 2003
under the heading "Certain Income Tax Considerations - Certain Canadian Federal
Income Tax Information for United States Residents", insofar as such statements
constitute summaries of the legal matters, documents or proceedings referred to
therein, fairly present the information called for with respect to such legal
matters, documents and procedures and fairly summarize the matters referred to
therein; and
(ii) the Common Shares are qualified investments under the Income Tax Act
(Canada) and the regulations thereunder (the "Tax Act") for trusts governed by
registered retirement savings plans, registered retirement income funds,
registered education savings plans and deferred profit sharing plans and would
not constitute foreign property for the purposes of the Tax Act.
Yours truly
SCHEDULE IV
CRAVATH, SWAINE & ▇▇▇▇▇ LLP OPINION
-, 2004
Creo Inc.
Shares of Common Stock
Ladies and Gentlemen:
We have acted as special United States counsel for Creo Inc.,
a corporation organized under the Canada Business Corporations Act (the
"Company"), in connection with the purchase by RBC Dominion Securities Inc., BMO
▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc., TD Securities Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ Canada Inc., Dundee
Securities Corporation, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Ltd. and Sprott Securities Inc.
(collectively, the "Underwriters"), from the Company of o common shares (the
"Shares") of common stock, no par value, of the Company, pursuant to an
underwriting agreement (the "Underwriting Agreement"), dated March o , 2004,
among the Company and the Underwriters.
In that connection, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of such documents,
corporate records and other instruments as we have deemed necessary or
appropriate for the purposes of this opinion, including: (a) the Registration
Statement on Form F-10 (Registration No. 333- o ) filed with the Securities
and Exchange Commission (the "Commission") on March o , 2004, and Amendment
No. 1 thereto filed with the Commission on March o , 2004, with respect to
the registration of the Shares under the Securities Act of 1933 (the "Securities
Act") (such Registration Statement, as amended by such Amendment, including the
final U.S. Prospectus dated March o , 2004, forming a part thereof (the
"U.S. Prospectus"), being hereinafter referred to as the "Registration
Statement"); (b) the U.S. Prospectus; (c) an appointment of agent for service of
process on the Company on Form F-X in conjunction with the filing of the
Registration Statement; and (d) the Underwriting Agreement.
Based on the foregoing, we are of opinion as follows:
1. The Registration Statement has become effective under
the Securities Act and the Form F-X was filed with the Commission prior
to the effectiveness of the Registration Statement; and, to our
knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and, to our knowledge, no
proceedings for that purpose have been instituted or are pending or are
contemplated under the Securities Act.
2. The statements made in the U.S. Prospectus under the
heading "Certain Income Tax Considerations-Certain United States
Federal Income Tax Considerations", to the extent that the foregoing
statements constitute matters of law or legal conclusions have been
reviewed by us and fairly present the information disclosed therein in
all material respects.
3. The execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Underwriting
Agreement will not contravene any provision of applicable United States
Federal or New York State law or, to the best of our knowledge, any
judgment, order or decree of any United States Federal or New York
State governmental body, agency or court having jurisdiction over the
Company, and no consent, approval, authorization or order of, or
qualification with, any United States Federal or New York State
governmental body or agency is required for the issue and sale of the
Shares or for the
performance by the Company of its obligations under the Underwriting
Agreement, except such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the
Shares.
4. The Company is not an "investment company" or a
company controlled by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
We are admitted to practice in the State of New York, and we
express no opinion as to any matters governed by any law other than the law of
the State of New York and the Federal law of the United States of America. We do
not purport to pass on any matter governed by the laws of Canada or any province
thereof.
At the request of the Company, we are furnishing this opinion
to you, as Representatives, solely for your benefit and the benefit of the
several Underwriters. This opinion may not be relied upon by any other person or
for any other purpose (including by any person that acquires the Shares from the
Underwriters). It may not be used, circulated, quoted or otherwise referred to
for any other purpose, provided that any person may disclose to any other person
the Federal income tax treatment and Federal income tax structure (and materials
relating thereto, including tax opinions, but in any event not including the
identity of the parties) of the transactions referred to in this opinion.
Very truly yours,
RBC Dominion Securities Inc.
BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.
TD Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Canada Inc.
Dundee Securities Corporation
▇▇▇▇▇▇▇ ▇▇▇▇▇ Ltd.
▇▇▇▇▇▇ Securities Inc.
In care of RBC Dominion Securities Inc.
2100 - ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇
- 2 -
SCHEDULE IV
CRAVATH, SWAINE & ▇▇▇▇▇ LLP STATEMENT
o , 2004
Creo Inc.
Shares of Common Stock
Ladies and Gentlemen:
We have acted as special United States counsel for Creo Inc.,
a corporation organized under the Canada Business Corporations Act (the
"Company"), in connection with the purchase by RBC Dominion Securities Inc., BMO
▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc., TD Securities Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ Canada Inc., Dundee
Securities Corporation, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Ltd. and Sprott Securities Inc.
(collectively, the "Underwriters"), from the Company of o common shares (the
"Shares") of common stock, no par value, of the Company, pursuant to an
underwriting agreement (the "Underwriting Agreement"), dated March o , 2004,
among the Company and the Underwriters.
In that capacity, we participated in conferences with certain
officers, of, and with the accountants and Canadian counsel for, the Company and
with representatives and counsel of the Underwriters concerning the preparation
of (a) the Registration Statement on Form F-10 (Registration No. 333- o )
filed with the Securities and Exchange Commission (the "Commission") on March
o , 2004, and Amendment No. 1 thereto filed with the Commission on March
o, 2004, with respect to the registration of the Shares under the Securities
Act of 1933 (the "Securities Act") (such Registration Statement, as amended by
such Amendment, including the final U.S. Prospectus dated March o , 2004,
forming a part thereof (the "U.S. Prospectus"), being hereinafter referred to as
the "Registration Statement"); and (b) the U.S. Prospectus. The documents
incorporated by reference in the Registration Statement and the U.S. Prospectus
were prepared and filed by the Company without our participation.
Although we have made certain inquiries and investigations in
connection with the preparation of the Registration Statement and the U.S.
Prospectus, the limitations inherent in the role of outside counsel are such
that we cannot and do not assume responsibility for the accuracy or completeness
of the statements made in the Registration Statement and U.S. Prospectus, except
insofar as such statements relate to us and except to the extent set forth in
paragraph 2 of our opinion to you dated the date hereof. Subject to the
foregoing, we confirm to you, on the basis of the information gained in the
course of the performance of the services rendered above, that the Registration
Statement, at the time the Registration Statement became effective, and the U.S.
Prospectus, as of the date hereof (in each case except for the financial
statements and related schedules and other information of an accounting or
financial nature included therein or omitted therefrom, as to which we do not
express any view), appeared or appears on its face to be appropriately
responsive in all material respects to the requirements of the Securities Act
and the applicable rules and regulations of the Commission thereunder.
Furthermore, subject to the foregoing, we hereby advise you that our work in
connection with this matter did not disclose any information that gave us reason
to believe that the Registration Statement, at the time the Registration
Statement became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the U.S. Prospectus, as of
its date and at the date hereof, includes an untrue statement of a material fact
or omits to state a material fact necessary to make the statements therein, in
the light of the circumstances in which they were made, not misleading (in each
case except for the financial statements and related schedules and other
information of an accounting or financial nature