Photowatt Technologies Inc. 10,937,500 Common Shares Underwriting Agreement
March •, 2007
BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.
UBS Securities LLC
as the “Managing Underwriters”
UBS Securities LLC
as the “Managing Underwriters”
c/o BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.
1 First Canadian Place , 4th Floor
Toronto, Ontario M5X 1H3
1 First Canadian Place , 4th Floor
Toronto, Ontario M5X 1H3
- and -
UBS Securities LLC
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Photowatt Technologies Inc., a Canadian corporation (the “Company”) and wholly owned
subsidiary of ATS Automation Tooling Systems Inc., an Ontario corporation (the “Parent”),
proposes to issue and sell to the underwriters named in Schedule A annexed hereto (the
“Underwriters”), for whom you are acting as representatives, an aggregate of 10,937,500
common shares (the “Firm Shares”) of the Company (the “Common Shares”). In
addition, solely for the purpose of covering over-allotments, the Company proposes to grant to the
Underwriters the option to purchase from the Company up to an additional 1,640,625 Common Shares
(the “Additional Shares”). The Firm Shares and the Additional Shares are hereinafter
collectively sometimes referred to as the “Shares.” The Shares are described in the Prospectuses
(as defined below) which are referred to below.
The Company understands that the Underwriters propose to make a public offering of the Shares
in the United States and in each of the provinces and territories of Canada, either directly or
through their respective U.S. or Canadian broker-dealer affiliates, upon the terms set forth in the
Prospectuses as soon as the Underwriters deem advisable after this Agreement has been executed and
delivered.
The Company hereby acknowledges that, in connection with the proposed offering of the Shares,
it has requested BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc. and UBS Financial Services Inc. (“BMO/UBS FinSvc”)
to administer a directed share program (the “Directed Share Program”) under which up to
546,875 Firm Shares, or 5% of the Firm Shares to be purchased by the Underwriters (the
“Reserved Shares”), shall be reserved for sale by BMO/UBS FinSvc at the initial public
offering price to the Company’s officers, directors, employees and consultants and other persons
having a relationship with the Company as designated by the Company (the “Directed Share
Participants”) as part of the distribution of the Shares by the Underwriters, subject to the
terms of this Agreement, the applicable rules, regulations and interpretations of the National
Association of Securities Dealers, Inc. (the “NASD”) and all other applicable laws, rules
and regulations. The number of Shares available for sale to the general public will be
reduced to the extent that Directed Share Participants purchase Reserved Shares. The Underwriters
may offer any Reserved Shares not purchased by Directed Share Participants by •, 2007 to the
general public on the same basis as the other Shares being issued and sold hereunder. The Company
has supplied BMO/UBS FinSvc with the names, addresses and telephone numbers of the individuals or
other entities which the Company has designated to be participants in the Directed Share Program.
It is understood that any number of those so designated to participate in the Directed Share
Program may decline to do so.
The Company has prepared and filed, in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations thereunder (collectively, the “Securities
Act”), with the Securities and Exchange Commission (the “Commission”) a registration
statement on Form F-1 (File No. 333-137044) under the Securities Act, including a U.S. prospectus,
relating to the Shares.
Except where the context otherwise requires, “Registration Statement,” as used herein,
means the registration statement, as amended at the time of such registration statement’s
effectiveness for purposes of Section 11 of the Securities Act, as such section applies to the
respective Underwriters (the “Effective Time”), including (i) all documents filed as a part
thereof, (ii) any information contained in a prospectus filed with the Commission pursuant to Rule
424(b) under the Securities Act, to the extent such information is deemed, pursuant to Rule 430A or
Rule 430C under the Securities Act, to be part of the registration statement at the Effective Time,
and (iii) any registration statement filed to register the offer and sale of Shares pursuant to
Rule 462(b) under the Securities Act.
The Company has furnished to you, for use by the Underwriters and by dealers in connection
with the offering of the Shares, copies of the U.S. preliminary prospectus, dated February 28,
2007, relating to the Shares. Except where the context otherwise requires, “U.S. Preliminary
Prospectus,” as used herein, means such preliminary prospectus, in the form so furnished.
Except where the context otherwise requires, “U.S. Preliminary Final Prospectus,” as
used herein, means the final prospectus included in the Registration Statement at the time it
became effective under the Securities Act in the form furnished by the Company to you for use by
the Underwriters and by dealers in connection with the offering of the Shares.
Except where the context otherwise requires, “U.S. Prospectus,” as used herein, means
the prospectus, relating to the Shares filed by the Company with the Commission pursuant to Rule
424(b) under the Securities Act on or before the second business day after the date hereof (or such
earlier time as may be required under the Securities Act), in the form furnished by the Company to
you for use by the Underwriters and by dealers in connection with the offering of the Shares.
“Permitted Free Writing Prospectuses,” as used herein, means the documents listed on
Schedule B attached hereto and each “road show” (as defined in Rule 433 under the
Securities Act), if any, related to the offering of the Shares contemplated hereby that is a
“written communication” (as defined in Rule 405 under the Securities Act) (each such road
show, an
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“Electronic Road Show”). The Underwriters have not offered or sold and will not offer or
sell, without the Company’s consent, any Shares by means of any “free writing prospectus”
(as defined in Rule 405 under the Securities Act) that is required to be filed by the Underwriters
with the Commission pursuant to Rule 433 under the Securities Act, other than a Permitted Free
Writing Prospectus.
“Disclosure Package,” as used herein, means the U.S. Preliminary Final Prospectus
together with any combination of one or more of the Permitted Free Writing Prospectuses, if any.
The Company has prepared and filed with the Ontario Securities Commission in the province of
Ontario (the “Reviewing Authority”) and with the securities regulatory authorities (the
“Qualifying Authorities,” and together with the Reviewing Authority, the “Canadian
Authorities”) in each of the other provinces and territories of Canada (together with Ontario,
the “Qualifying Provinces”) a preliminary PREP prospectus relating to the Shares (in the
English and French languages, as applicable, the “Preliminary PREP Prospectus”) pursuant to
National Policy 43-201 – Mutual Reliance Review System for Prospectuses and Annual Information
Forms. The Company has also filed the Preliminary PREP Prospectus with the Canadian Authorities
pursuant to National Instrument 44-103 – Post-Receipt Pricing (the “PREP Procedures”). The
Reviewing Authority has issued a preliminary Mutual Reliance Review System (“MRRS”)
decision document for the Preliminary PREP Prospectus.
In addition, the Company (A) has prepared and filed with the Canadian Authorities, a final
PREP prospectus relating to the Shares (in the English and French languages, as applicable, the
“Final PREP Prospectus”) which omits the PREP Information (as hereinafter defined) in
accordance with the PREP Procedures, and (B) will prepare and file, promptly after the execution
and delivery of this Agreement, with the Canadian Authorities, in accordance with the PREP
Procedures, a supplemented PREP prospectus setting forth the PREP Information (in the English and
French languages, as applicable, the “Supplemented PREP Prospectus”). The information
included in the Supplemented PREP Prospectus that is omitted from the Final PREP Prospectus and
which is deemed under the PREP Procedures to be incorporated by reference in the Final PREP
Prospectus as of the date of the Supplemented PREP Prospectus is referred to herein as the “PREP
Information.”
The Preliminary PREP Prospectus is herein called the “Canadian Preliminary Prospectus”. The
Final PREP Prospectus for which a final MRRS decision document has been received from the Reviewing
Authority on behalf of itself and the other Qualifying Authorities, including the PREP information
incorporated by reference therein, is herein referred to as the “Canadian Prospectus”, except that,
if, after the execution of this Agreement, a Supplemented PREP Prospectus containing the PREP
Information is thereafter filed with the Canadian Authorities, the term “Canadian
Prospectus” shall refer to such Supplemented PREP Prospectus. Canadian securities laws (the
“Canadian Securities Laws”) means, collectively, the applicable securities laws of each of
the Qualifying Provinces and the respective regulations and rules made under those securities laws
together with all applicable policy statements, blanket orders and rulings of the Canadian
Authorities, as applicable, and the securities legislation and policies of each other relevant
jurisdiction. Any references in this Agreement to the Canadian Preliminary
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Prospectus or the Canadian Prospectus, or any amendments or supplements to any of the foregoing,
shall be deemed to include any copy thereof filed with the Canadian Authorities pursuant to the
System for Electronic Document Analysis and Retrieval (SEDAR).
As used herein, “Preliminary Prospectuses” shall mean, collectively, the Canadian
Preliminary Prospectus and the U.S. Preliminary Prospectus, “Preliminary Final
Prospectuses” shall mean, collectively, the Final PREP Prospectus and the U.S Preliminary Final
Prospectus, and “Prospectuses” shall mean, collectively, the Canadian Prospectus and the
U.S. Prospectus.
As used in this Agreement, “business day” shall mean a day on which either the Nasdaq
Global Market (“Nasdaq”) or the Toronto Stock Exchange (the “TSX”) is open for
trading. The terms “herein,” “hereof,” “hereto,” “hereinafter” and similar terms, as used in this
Agreement, shall in each case refer to this Agreement as a whole and not to any particular section,
paragraph, sentence or other subdivision of this Agreement. The term “or,” as used herein, is not
exclusive.
The Company has prepared and filed, in accordance with Section 12 of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder (collectively, the “Exchange
Act”), a registration statement (as amended, the “Exchange Act Registration Statement”)
on Form 8-A (File No. •) under the Exchange Act to register, under Section 12(b) of the Exchange
Act, the class of securities consisting of the Common Shares.
The Company, the Parent and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the Company agrees to issue and sell to the
respective Underwriters and each of the Underwriters, severally and not jointly, agrees to purchase
from the Company the number of Firm Shares set forth opposite the name of such Underwriter in
Schedule A attached hereto, subject to adjustment in accordance with Section 10 hereof, in
each case at the applicable U.S. or Canadian purchase price per Share set forth in Schedule
B hereto. The Company is advised by you that the Underwriters intend (i) to make a public
offering of their respective portions of the Firm Shares as soon after the effectiveness of this
Agreement as in your judgment is advisable, and (ii) initially to offer the Firm Shares upon the
terms set forth in the Prospectuses. You may from time to time increase or decrease the public
offering price after the initial public offering to such extent as you may determine.
In addition, the Company hereby grants to the several Underwriters the option (the
“Over-Allotment Option”) to purchase, and upon the basis of the representations and
warranties and subject to the terms and conditions herein set forth, the Underwriters shall have
the right to purchase, severally and not jointly, from the Company, all or a portion of the
Additional Shares as may be necessary to cover over-allotments made in connection with the offering
of the Firm Shares, at the same purchase price per share to be paid by the Underwriters to the
Company for the Firm Shares. The Over-Allotment Option may be exercised by the Managing
Underwriters on behalf of the several Underwriters at any time and from time to time on or before
the thirtieth day following the date of the Prospectuses, by written notice to the Company. Such
notice shall set forth the aggregate number of Additional Shares as to which the
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Over-Allotment Option is being exercised and the date and time when the Additional Shares are to be
delivered (any such date and time being herein referred to as an “additional time of
purchase”); provided, however, that no additional time of purchase shall be
earlier than the “time of purchase” (as defined below) nor earlier than the second business day
after the date on which the Over-Allotment Option shall have been exercised nor later than the
tenth business day after the date on which the Over-Allotment Option shall have been exercised.
The number of Additional Shares to be sold to each Underwriter shall be the number which bears the
same proportion to the aggregate number of Additional Shares being purchased as the number of Firm
Shares set forth opposite the name of such Underwriter on Schedule A hereto bears to the
total number of Firm Shares (subject, in each case, to such adjustment as the Managing Underwriters
may determine to eliminate fractional shares), subject to adjustment in accordance with Section 10
hereof.
2. Payment and Delivery. Payment of the purchase price for the Firm Shares shall be
made to the Company by one or more wire transfers against delivery of the certificates for the
Firm Shares to the Underwriters for the respective accounts of the Underwriters. Such payment and
delivery shall be made at 8:45
A.M., New York City time, on March •, 2007 (unless another time shall be agreed to by the Managing
Underwriters and the Company or unless postponed in accordance with the provisions of Section 10
hereof). The time at which such payment and delivery are to be made is hereinafter sometimes
called the “time of purchase.” At the time of purchase, the Company will deliver to the
Managing Underwriters a certificate evidencing the Firm Shares in definitive form to be registered as
directed by the Managing Underwriters.
Payment of the purchase price for the Additional Shares shall be made to the Company at the
additional time of purchase in the same manner as the payment for the Firm Shares. At the additional time of purchase,
the Company will deliver to the Managing Underwriters a certificate evidencing the Additional Shares in definitive
form to be registered as directed by the Managing Underwriters.
Deliveries of the documents described in Section 8 hereof with respect to the purchase of the
Shares shall be made at the offices of Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP at ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, at the time of purchase or additional time of purchase, as the case may be.
3. Representations and Warranties of the Company. The Company represents and warrants
to, and agrees with, each of the Underwriters that:
(a) the Registration Statement has heretofore become effective under the Securities Act
or, with respect to any Rule 462(b) Registration Statement to be filed, will be filed with
the Commission and become effective under the Securities Act no later than 10:00 P.M., New
York City time, on the date of determination of the public offering price for the Shares; no
stop order of the Commission preventing or suspending the use of the U.S. Preliminary
Prospectus, the U.S. Preliminary Final Prospectus or any Permitted Free Writing Prospectus,
or the effectiveness of the Registration Statement, has been issued, and no proceedings for
such purpose have been instituted or, to the Company’s
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knowledge, are contemplated by the Commission; the Exchange Act Registration Statement
has become effective as provided in Section 12 of the Exchange Act;
(b) the Registration Statement complied when it became effective, complies as of the
date hereof and, as amended or supplemented, at the time of purchase, each additional time
of purchase, if any, and at all times during which a prospectus is required by the
Securities Act to be delivered (whether physically or through compliance with Rule 172 under
the Securities Act or any similar rule) in connection with any sale of Shares, will comply,
in all material respects, with the requirements of the Securities Act; the Registration
Statement did not, as of the Effective Time, contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to make the
statements therein not misleading; the U.S. Preliminary Final Prospectus complied, at the
time it was filed with the Commission, and complies as of the date hereof, in all material
respects with the requirements of the Securities Act; at no time during the period that
begins on the earlier of the date of such U.S. Preliminary Final Prospectus and the date
such U.S. Preliminary Final Prospectus was filed with the Commission and ends at the time of
purchase did or will the U.S. Preliminary Final Prospectus, as then amended or supplemented,
together with the pricing terms included in Schedule B and any combination of one or
more of the then issued Permitted Free Writing Prospectuses, if any, include an untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading; the U.S. Prospectus will comply, as of its date, the date that it is filed with
the Commission, the time of purchase, each additional time of purchase, if any, and at all
times during which a prospectus is required by the Securities Act to be delivered (whether
physically or through compliance with Rule 172 under the Securities Act or any similar rule)
in connection with any sale of Shares, in all material respects, with the requirements of
the Securities Act (including, without limitation, Section 10(a) of the Securities Act); at
no time during the period that begins on the earlier of the date of the U.S. Prospectus and
the date the U.S. Prospectus is filed with the Commission and ends at the later of the time
of purchase, the latest additional time of purchase, if any, and the end of the period
during which a prospectus is required by the Securities Act to be delivered (whether
physically or through compliance with Rule 172 under the Securities Act or any similar rule)
in connection with any sale of Shares did or will the U.S. Prospectus, as then amended or
supplemented, include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; no Permitted Free Writing Prospectus includes,
included or will include any information that conflicts with the information then contained
in the Registration Statement; provided, however, that the Company makes no representation
or warranty in this Section 3(b) with respect to any statement contained in the Registration
Statement, the U.S. Preliminary Final Prospectus, the U.S. Prospectus or any Permitted Free
Writing Prospectus in reliance upon and in conformity with information furnished in writing
by or on behalf of any Underwriter through you to the Company expressly for use in the
Registration Statement, such U.S. Preliminary Final Prospectus, the U.S. Prospectus or such
Permitted Free Writing Prospectus;
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(c) prior to the execution of this Agreement, the Company has not, directly or
indirectly, offered or sold any Shares by means of any “prospectus” (within the meaning of
the Securities Act) or used any “prospectus” (within the meaning of the Securities Act) in
connection with the offer or sale of the Shares, in each case other than the Preliminary
Prospectuses, the Preliminary Final Prospectuses and the Permitted Free Writing
Prospectuses, if any; the Company has not, directly or indirectly, prepared, used or
referred to any Permitted Free Writing Prospectus except in compliance with Rules 164 and
433 under the Securities Act; assuming that such Permitted Free Writing Prospectus is
accompanied or preceded by the U.S. Preliminary Prospectus, the Preliminary Final
Prospectuses or the U.S. Prospectus, as the case may be, and that such Permitted Free
Writing Prospectus is so sent or given after the Registration Statement was filed with the
Commission (and after such Permitted Free Writing Prospectus was, if required pursuant to
Rule 433(d) under the Securities Act, filed with the Commission), any Permitted Free Writing
Prospectus will satisfy the provisions of Rule 164 and Rule 433 (without reliance on
subsections (b), (c) and (d) of Rule 164); each of the U.S. Preliminary Prospectus and the
U.S. Preliminary Final Prospectus is a prospectus that, other than by reason of Rule 433
under the Securities Act, satisfies the requirements of Section 10 of the Securities Act,
including a price range where required by rule; neither the Company nor the Underwriters are
disqualified, by reason of subsection (f) or (g) of Rule 164 under the Securities Act, from
using, in connection with the offer and sale of the Shares, “free writing prospectuses” (as
defined in Rule 405 under the Securities Act) pursuant to Rules 164 and 433 under the
Securities Act; the Company is not an “ineligible issuer” (as defined in Rule 405 under the
Securities Act) as of the eligibility determination date for purposes of Rules 164 and 433
under the Securities Act with respect to the offering of the Shares contemplated by the
Registration Statement; and the parties hereto agree and understand that the content of any
and all “road shows” (as defined in Rule 433 under the Securities Act) related to the
offering of the Shares contemplated hereby is solely the property of the Company; the
Company has caused there to be made available at least one version of a “bona fide
electronic road show” (as defined in Rule 433 under the Securities Act) in a manner that,
pursuant to Rule 433(d)(8)(ii) under the Securities Act, causes the Company not to be
required, pursuant to Rule 433(d) under the Securities Act, to file, with the Commission,
any Electronic Road Show;
(d) the Company is eligible to use the PREP Procedures. A receipt has been obtained
from the Reviewing Authority on behalf of itself and the other Qualifying Authorities in
respect of the Final PREP Prospectus and no order suspending the distribution of the Shares
has been issued by the Reviewing Authority or any of the Qualifying Authorities. At the
time the Registration Statement became effective under the Securities Act and at all times
subsequent thereto up to and including the time of purchase (and if any Additional Shares
are purchased, at the additional time of purchase), the Canadian Prospectus complied and
will comply in all material respects with the securities laws applicable in the Province of
Ontario as interpreted and applied by the Reviewing Authority (including the PREP
Procedures); and the Canadian Prospectus and any amendment or supplement thereto constituted
and will constitute full, true and plain disclosure of all material facts relating to the
Company and the Shares, and did not and will not include an untrue statement of material
fact or omit to state a material fact
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necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The representations and warranties in this
subsection shall not apply to statements in or omissions from the Canadian Prospectus or any
supplement or amendment thereto in reliance upon and in conformity with information
furnished in writing by or on behalf of any Underwriter through you to the Company expressly
for use in the Canadian Prospectus or any supplement or amendment thereto;
(e) each Canadian Preliminary Prospectus and the Canadian Prospectus complied when
filed in all material respects with the applicable securities legislation of the Province of
Ontario and the other Qualifying Provinces and each Canadian Preliminary Prospectus and the
Canadian Prospectus delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed with SEDAR;
(f) as of the date of this Agreement, there have been no material changes in the
Company’s authorized and outstanding capitalization from that set forth in the sections of
the Registration Statement, the Preliminary Final Prospectuses and the Prospectuses entitled
“Capitalization” and “Description of Share Capital” (and any similar sections or
information, if any, contained in any Permitted Free Writing Prospectus), and, as of the
time of purchase and any additional time of purchase, as the case may be, there have been no
material changes in the Company’s authorized and outstanding capitalization from that set
forth in the sections of the Registration Statement, the Preliminary Final Prospectuses, and
the Prospectuses, entitled “Capitalization” and “Description of Share Capital” (and any
similar sections or information, if any, contained in any Permitted Free Writing
Prospectus); all of the issued and outstanding shares, including the Common Shares, of the
Company have been duly authorized and validly issued and are fully paid and non-assessable,
have been issued in compliance with all applicable securities laws and were not issued in
violation of any preemptive right, resale right, right of first refusal or similar right.
Except as disclosed in the Registration Statement, the Preliminary Final Prospectuses, the
Prospectuses and the Permitted Free Writing Prospectuses, if any, there are no agreements,
arrangements or understandings among or between any shareholder of the Company with respect
to the Company or the voting or disposition of the Company’s shares that will survive the
sale of the Shares pursuant to this Agreement; the Shares are duly listed, and admitted and
authorized for trading, subject to official notice of issuance and evidence of satisfactory
distribution on the Nasdaq and have been conditionally approved for listing on the TSX
subject only to compliance with minimum distribution requirements and the Company providing
the TSX certain required routine documentation;
(g) the Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of Canada, with full corporate power and authority to own,
lease and operate its properties and conduct its business as described in the Registration
Statement, the Preliminary Final Prospectuses, the Prospectuses and the Permitted Free
Writing Prospectuses, if any, to execute and deliver this Agreement and to issue, sell and
deliver the Shares as contemplated herein;
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(h) the Company is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the failure to be so
qualified and in good standing would not, individually or in the aggregate, either (i) have
a material adverse effect on the business, properties, financial condition, results of
operations or prospects of the Company and the Subsidiaries (as defined below) taken as a
whole, (ii) prevent or materially interfere with consummation of the transactions
contemplated hereby, including the reorganization (the “Reorganization”) of the
Company as described in the Prospectuses under the section entitled “Our Relationship with
ATS”, or (iii) prevent the Common Shares from being accepted for listing on, or result in
the delisting of the Common Shares from, the TSX or Nasdaq (the occurrence of any such
effect or any such prevention or interference or any such result described in the foregoing
clauses (i), (ii) and (iii) being herein referred to as a “Material Adverse
Effect”);
(i) the Company has no subsidiaries (as defined under the Securities Act) other than
the subsidiaries identified as such on Schedule C attached hereto (collectively, the
“Subsidiaries”); the Company owns all of the issued and outstanding capital stock of
each of the Subsidiaries; other than the capital stock of the Subsidiaries, the Company does
not own, directly or indirectly, any shares of stock or any other equity interests or
long-term debt securities of any corporation, firm, partnership, joint venture, association
or other entity; complete and correct copies of the charters and the by-laws or equivalent
organizational documents of the Company and each Subsidiary, as the case may be, and all
amendments thereto have been delivered to the Underwriters, and no changes therein will be
made on or after the date hereof through and including the time of purchase or, if later,
any additional time of purchase; each Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction of its
incorporation, with full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration Statement, the
Preliminary Final Prospectuses, the Prospectuses and the Permitted Free Writing
Prospectuses, if any; each Subsidiary is duly qualified to do business as a foreign
corporation and is in good standing as a foreign corporation, partnership or limited
liability company in each jurisdiction where the ownership or leasing of its properties or
the conduct of its business requires such qualification, except where the failure to be so
qualified and in good standing would not, individually or in the aggregate, have a Material
Adverse Effect; all of the issued and outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully paid and
non-assessable, have been issued in compliance with all applicable securities laws, were not
issued in violation of any preemptive right, resale right, right of first refusal or similar
right and are owned by the Company subject to no security interest, other encumbrance or
adverse claims; and, except as disclosed in the Registration Statement, the Preliminary
Final Prospectuses, the Prospectuses or the Free Writing Prospectuses, if any, no options,
warrants or other rights to purchase, agreements or other obligations to issue or other
rights to convert any obligation into shares of capital stock or ownership interests in the
Subsidiaries are outstanding;
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(j) the Shares to be sold by the Company pursuant hereto have been duly and validly
authorized and, when issued and delivered against payment therefor as provided herein, will
be duly and validly issued, fully paid and non-assessable and free of statutory and
contractual preemptive rights, resale rights, rights of first refusal and similar rights;
and the Shares to be sold by the Company pursuant hereto, when issued and delivered against
payment therefor as provided herein, will be free of any restriction upon the voting or
transfer thereof pursuant to the Company’s charter or by-laws or any agreement or other
instrument to which the Company is a party;
(k) the share capital of the Company, including the Shares, conforms in all material
respects to each description thereof, if any, contained in the Registration Statement, the
Preliminary Final Prospectuses, the Prospectuses and the Permitted Free Writing
Prospectuses, if any, and the certificates for the Shares have been approved by the Company
and comply with all applicable laws and the rules of the TSX;
(l) all necessary corporate action has been taken by the Company to authorize the
execution and delivery of this Agreement and the transactions contemplated hereby, and this
Agreement has been duly authorized, executed and delivered by the Company;
(m) there are no contracts or documents which are required to be filed as exhibits to
the Registration Statement or with the Canadian Authorities in connection with the offering
of the Shares which have not been so filed as required;
(n) the Company is a reporting issuer under the securities laws of each province of
Canada that recognizes the concept of reporting issuer and is not on the list of defaulting
reporting issuers maintained by the Canadian Authorities that maintain such a list;
(o) Computershare Investor Services Inc., located in Toronto, Ontario, is the duly
appointed registrar and transfer agent of the Company with respect to its Common Shares in
Canada, and Computershare Trust Company, N.A., located in Denver, Colorado is the duly
appointed U.S. registrar and transfer agent of the Company with respect to its Common Shares
in the United States;
(p) the Company is and, upon completion of the transactions described herein, will be,
a “foreign private issuer” within the meaning of Rule 3b-4 under the Exchange Act;
(q) neither the Company nor any of the Subsidiaries is (A) in violation of its charter
or by-laws, (B) in breach or violation of or in default under, nor has any event occurred
which, with notice, lapse of time or both, would result in any breach, or constitute a
default under or give the holder of any indebtedness (or a person acting on such holder’s
behalf) the right to require the repurchase, redemption or repayment of all or a part of
such indebtedness under any indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any license, lease, contract or other
agreement or instrument to which it is a party or by which it or any of its properties
10
may be bound or affected, (C) in violation of any federal, state, local or foreign law,
regulation or rule, (D) in violation of any rule or regulation of any self-regulatory
organization or other non-governmental regulatory authority (including, without limitation,
the rules and regulations of the TSX or Nasdaq), or (E) in violation of any decree, judgment
or order applicable to it or any of its properties, except with respect to (B) through (E),
where such breach or violation would not, individually or in the aggregate, have a Material
Adverse Effect;
(r) the execution, delivery and performance of this Agreement, the issuance and sale of
the Shares to be sold by the Company pursuant hereto, and the consummation of the
transactions contemplated hereby will not conflict with, result in any breach or violation
of or constitute a default under (nor constitute any event which, with notice, lapse of time
or both, would result in any breach or violation of, constitute a default under or give the
holder of any indebtedness (or a person acting on such holder’s behalf) the right to require
the repurchase, redemption or repayment of all or a part of such indebtedness under) (or
result in the creation or imposition of a lien, charge or encumbrance on any property or
assets of the Company or any Subsidiary pursuant to) (A) the charter or by-laws of the
Company or any of the Subsidiaries, (B) any indenture, mortgage, deed of trust, bank loan or
credit agreement or other evidence of indebtedness, or any license, lease, contract or other
agreement or instrument to which the Company or any of the Subsidiaries is a party or by
which any of them or any of their respective properties may be bound or affected, (C) any
federal, state, local or foreign law, regulation or rule, (D) any rule or regulation of any
self-regulatory organization or other non-governmental regulatory authority (including,
without limitation, the rules and regulations of the TSX or Nasdaq), or (E) any decree,
judgment or order applicable to the Company or any of the Subsidiaries or any of their
respective properties, except with respect to (B), where such breach, default or violation
would not, individually or in the aggregate, have a Material Adverse Effect;
(s) no approval, authorization, consent or order of or filing with any federal, state,
provincial, local or foreign governmental or regulatory commission, board, body, authority
or agency, or of or with any self-regulatory organization or other non-governmental
regulatory authority (including, without limitation, the TSX and Nasdaq), or approval of the
shareholders of the Company, is required to be obtained or made by the Company in connection
with the issuance and sale of the Shares to be sold by the Company pursuant hereto or the
consummation of the transactions contemplated hereby, other than those associated with (i)
the registration of the Shares under the Securities Act and the Exchange Act, which has been
effected (or, with respect to any Rule 462(b) Registration Statement to be filed hereunder,
will be effected in accordance herewith), (ii) any necessary qualification or notification
under the securities or blue sky laws of the various jurisdictions in which the Shares are
being offered by the Underwriters, (iii) the by-laws or Conduct Rules of the NASD, (iv) the
listing of the Shares on the TSX or Nasdaq, or (v) the completion of the Reorganization;
(t) except as described in the Registration Statement, the Preliminary Final
Prospectuses, the Prospectuses or the Free Writing Prospectuses, if any, (i) no person has
11
the right, contractual or otherwise, to cause the Company to issue or sell to it any
Common Shares or shares of any other share capital or other equity interests of the Company,
(ii) no person has any preemptive rights, resale rights, rights of first refusal or other
rights to purchase any Common Shares or shares of any other share capital of or other equity
interests in the Company, (iii) no person has the right, contractual or otherwise, to cause
the Company to allow such person to act as an underwriter or as a financial advisor to the
Company in connection with the offer and sale of the Shares, (iv) no person has the right,
contractual or otherwise, to cause the Company to register under the Securities Act any
Common Shares or shares of any other capital stock of or other equity interests in the
Company, or to include any such shares or interests in the Registration Statement or the
offering contemplated thereby, and (v) no person has any right to require the Company to
qualify the sale of any securities under the Canadian Prospectus or to require the Company
to file any other prospectus with any of the Canadian Authorities;
(u) each of the Company and the Subsidiaries has all necessary licenses,
authorizations, consents and approvals and has made all necessary filings required under any
applicable law, regulation or rule, and has obtained all necessary licenses, authorizations,
consents and approvals from other persons, in order to conduct their respective businesses
as described in the Registration Statement, the Preliminary Final, Prospectuses, the
Prospectuses or the Permitted Free Writing Prospectus, if any, except where failure to have
these or do so, as applicable, would not, individually or in the aggregate, have a Material
Adverse Effect; neither the Company nor any of the Subsidiaries is in violation of, or in
default under, or has received notice of any proceedings relating to revocation or
modification of, any such license, authorization, consent or approval or any federal, state,
local or foreign law, regulation or rule or any decree, order or judgment applicable to the
Company or any of the Subsidiaries, except where such violation, default, revocation or
modification would not, individually or in the aggregate, have a Material Adverse Effect;
(v) except as disclosed in the Registration Statement, the Preliminary Final
Prospectuses, the Prospectuses or the Free Writing Prospectuses, if any, there are no
actions, suits, claims, investigations or proceedings pending or, to the Company’s
knowledge, threatened or contemplated to which the Company or any of the Subsidiaries or any
of their respective directors or officers is or would be a party or of which any of their
respective properties is or would be subject at law or in equity, before or by any federal,
state, local or foreign governmental or regulatory commission, board, body, authority or
agency, or before or by any self-regulatory organization or other non-governmental
regulatory authority (including, without limitation, the TSX and Nasdaq), except any such
action, suit, claim, investigation or proceeding which, if resolved adversely to the Company
or any Subsidiary, would not, individually or in the aggregate, have a Material Adverse
Effect;
(w) KPMG LLP, whose report on the combined financial statements of the Company and the
Subsidiaries is included in the Registration Statement, the Preliminary Final Prospectuses,
the Prospectuses and the Permitted Free Writing Prospectuses, if any,
12
are independent registered public accountants as required by the Securities Act, the
rules of the Public Company Accounting Oversight Board, and Canadian Securities Laws. There
has not been any disagreement (as defined in section 4.11 of National Instrument 51-102)
between the Company and KPMG LLP;
(x) the combined financial statements included in the Registration Statement, the
Preliminary Final Prospectuses, the Prospectuses and the Permitted Free Writing
Prospectuses, if any, together with the related notes and schedules, present fairly, in all
material respects, the combined financial position of the Company and the Subsidiaries as of
the dates indicated and the combined results of operations, cash flows and changes in
shareholders’ equity of the Company for the periods specified and have been prepared in
compliance with Canadian generally accepted accounting principles applied on a consistent
basis during the periods involved and have been reconciled to U.S. generally accepted
accounting principles in accordance with Item 18 of Form 20-F under the Exchange Act; the
other financial and statistical data included in the Registration Statement, the Preliminary
Final Prospectuses, the Prospectuses and the Permitted Free Writing Prospectuses, if any,
are accurately and fairly presented, in all material respects, and prepared on a basis
consistent with the financial statements and books and records of the Company; there are no
financial statements (historical or pro forma) that are required to be included in the
Registration Statement, the Preliminary Final Prospectuses, the Prospectuses or any
Permitted Free Writing Prospectuses, if any, that are not included as required; the Company
and the Subsidiaries do not have any material liabilities or obligations, direct or
contingent (including any off-balance sheet obligations) that are required to be disclosed
in the Registration Statement but that are not described in the Registration Statement, the
Preliminary Final Prospectuses, the Prospectuses or the Permitted Free Writing Prospectuses,
if any, and all disclosures contained in the Registration Statement, the Preliminary Final
Prospectuses, the Prospectuses, and the Permitted Free Writing Prospectuses, if any, of
“non-GAAP financial measures” (as such term is defined by the rules and regulations of the
Commission) comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K under
the Securities Act, to the extent applicable;
(y) subsequent to the respective dates as of which information is given in the
Registration Statement, the Preliminary Final Prospectuses, the Prospectuses and the
Permitted Free Writing Prospectuses, if any, in each case excluding any amendments or
supplements to the foregoing made after the execution of this Agreement, there has not been
(i) any material adverse change, or any development involving a prospective material adverse
change, in the business, properties, financial condition or results of operations of the
Company and the Subsidiaries taken as a whole, (ii) any transaction entered into by the
Company or any Subsidiary which is material to the Company and the Subsidiaries taken as a
whole, (iii) any obligation or liability, direct or contingent (including any off-balance
sheet obligations), incurred by the Company or any Subsidiary, which is material to the
Company and the Subsidiaries taken as a whole, (iv) any material change in the share capital
or outstanding indebtedness of the Company or any Subsidiaries, or (v) any dividend or
distribution of any kind declared, paid or made on the capital stock of the Company or any
Subsidiary, in each case except as described
13
in the Registration Statement, the Preliminary Final Prospectuses, the Prospectuses or
the Permitted Free Writing Prospectuses, if any;
(z) the Company has obtained for the benefit of the Underwriters the agreement (a
“Lock-Up Agreement”), in the form set forth as Exhibit A-1 hereto, of each
of its directors and “officers” (within the meaning of Rule 16a-1(f) under the Exchange Act)
and the Parent;
(aa) neither the Company nor any Subsidiary is, and at no time during which a
prospectus is required by the Securities Act to be delivered (whether physically or through
compliance with Rule 172 under the Securities Act or any similar rule) in connection with
any sale of Shares will it be, and, immediately after giving effect to the offering and sale
of the Shares, will it be, an “investment company” or an entity “controlled” by an
“investment company,” as such terms are defined in the Investment Company Act of 1940, as
amended (the “Investment Company Act”), or a “passive foreign investment company” or
a “controlled foreign corporation,” as such terms are defined in the Internal Revenue Code
of 1986, as amended;
(bb) except as would not, individually or in the aggregate, have a Material Adverse
Effect, the Company and each of the Subsidiaries have good and marketable title to all
property (real and personal) described in the Registration Statement, the Preliminary Final
Prospectuses, the Prospectuses and the Permitted Free Writing Prospectuses, if any, as being
owned by any of them, free and clear of all liens, claims, security interests or other
encumbrances; and all the property described in the Registration Statement, the Preliminary
Final Prospectuses, the Prospectuses and the Permitted Free Writing Prospectuses, if any, as
being held under lease by the Company or a Subsidiary is held thereby under valid,
subsisting and enforceable leases;
(cc) except as disclosed in the Registration Statement, the Preliminary Final
Prospectuses, the Prospectuses and the Permitted Free Writing Prospectuses, if any, the
Company and the Subsidiaries own, or have obtained valid and enforceable licenses for, or
other rights to use, the inventions, patent applications, patents, trademarks (both
registered and unregistered), tradenames, service names, copyrights, trade secrets and other
proprietary information described in the Registration Statement, the Preliminary Final
Prospectuses, the Prospectuses and the Permitted Free Writing Prospectuses, if any, as being
owned or licensed by them or which are necessary for the conduct of their respective
businesses as currently conducted or as proposed to be conducted (including the
commercialization of products or services described in the Registration Statement, the
Preliminary Final Prospectuses, the Prospectuses and the Permitted Free Writing
Prospectuses, if any, as under development), except where the failure to own, license or
have such rights would not, individually or in the aggregate, result in a Material Adverse
Effect (collectively, “Intellectual Property”): (i) there are no third parties who
have or, to the Company’s knowledge, will be able to establish rights to any Intellectual
Property, except for, and to the extent of, the ownership rights of the owners of the
Intellectual Property which the Registration Statement (excluding the exhibits thereto), the
Preliminary Final Prospectuses and the Prospectuses disclose is licensed to the Company;
14
(ii) to the Company’s knowledge, there is no infringement by third parties of any
Intellectual Property; (iii) there is no pending or, to the Company’s knowledge, threatened
action, suit, proceeding or claim by others challenging the Company’s rights in or to any
Intellectual Property, and the Company is unaware of any facts which could form a reasonable
basis for any such action, suit, proceeding or claim; (iv) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the
validity, enforceability or scope of any Intellectual Property, and the Company is unaware
of any facts which could form a reasonable basis for any such action, suit, proceeding or
claim; (v) there is no pending or, to the Company’s knowledge, threatened action, suit,
proceeding or claim by others that the Company or any Subsidiary infringes or otherwise
violates, or would, upon the commercialization of any product or service described in the
Registration Statement, the Preliminary Final Prospectuses, the Prospectuses and the
Permitted Free Writing Prospectuses, if any, as under development, infringe or violate, any
patent, trademark, tradename, service name, copyright, trade secret or other proprietary
rights of others, and the Company is unaware of any facts which could form a reasonable
basis for any such action, suit, proceeding or claim; (vi) the Company and the Subsidiaries
have complied with the terms of each agreement pursuant to which Intellectual Property has
been licensed to the Company or any Subsidiary, and all such agreements are in full force
and effect; (vii) to the Company’s knowledge, there is no patent or patent application that
contains claims that interfere with the issued or pending claims of any of the Intellectual
Property; and (viii) to the Company’s knowledge, there is no prior art that is material to
the patentability of any patent application or issued patent within the Intellectual
Property that has not been disclosed to the U.S. Patent and Trademark Office or the Canadian
Intellectual Property Office, as applicable;
(dd) neither the Company nor any of the Subsidiaries is engaged in any unfair labor
practice, within the meaning of applicable French, Canadian or United States labor laws;
except for matters which would not, individually or in the aggregate, result in a Material
Adverse Effect, (i) there is (A) no unfair labour practice complaint pending or, to the
Company’s knowledge, threatened against the Company or any of the Subsidiaries before the
National Labor Relations Board, the Canada Industrial Relations Board or the Ontario Labor
Relations Board, as applicable, and no grievance or arbitration proceeding arising out of or
under collective bargaining agreements is pending or, to the Company’s knowledge,
threatened, (B) no strike, labor dispute, slowdown or stoppage pending or, to the Company’s
knowledge, threatened against the Company or any of the Subsidiaries, and (C) no union
representation dispute currently existing concerning the employees of the Company or any of
the Subsidiaries, (ii) to the Company’s knowledge, no union organizing activities are
currently taking place concerning the employees of the Company or any of the Subsidiaries,
and (iii) there has been no violation of any federal, state, local or foreign law relating
to discrimination in the hiring, promotion or pay of employees, any applicable wage or hour
laws or any provision of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”) or the rules and regulations promulgated thereunder concerning the
employees of the Company or any of the Subsidiaries;
15
(ee) the Company and the Subsidiaries and their respective properties, assets and
operations are in compliance with, and the Company and each of the Subsidiaries hold all
permits, authorizations and approvals required under, Environmental Laws (as defined below),
except to the extent that failure to so comply or to hold such permits, authorizations or
approvals would not, individually or in the aggregate, result in a Material Adverse Effect;
except as disclosed in the Registration Statement, the Preliminary Final Prospectuses, the
Prospectuses or the Permitted Free Writing Prospectuses, if any, there are no past, present
or, to the Company’s knowledge, reasonably anticipated future events, conditions,
circumstances, activities, practices, actions, omissions or plans that could reasonably be
expected to give rise to any material costs or liabilities to the Company or any Subsidiary
under, or to interfere with or prevent compliance by the Company or any Subsidiary with,
Environmental Laws; except as would not, individually or in the aggregate, result in a
Material Adverse Effect, neither the Company nor any of the Subsidiaries (i) is the subject
of any investigation, (ii) has received any notice or claim, (iii) is a party to or affected
by any pending or, to the Company’s knowledge, threatened action, suit or proceeding, (iv)
is bound by any judgment, decree or order, or (v) has entered into any agreement, in each
case relating to any alleged violation of any Environmental Law or any actual or alleged
release or threatened release or cleanup at any location of any Hazardous Materials (as
defined below) (as used herein, “Environmental Law” means any federal, state, local
or foreign law, statute, ordinance, rule, regulation, order, decree, judgment, injunction,
permit, license, authorization or other binding requirement, or common law, relating to
health, safety or the protection, cleanup or restoration of the environment or natural
resources, including those relating to the distribution, processing, generation, treatment,
storage, disposal, transportation, other handling or release or threatened release of
Hazardous Materials, and “Hazardous Materials” means any material (including,
without limitation, pollutants, contaminants, hazardous or toxic substances or wastes) that
is regulated by or may give rise to liability under any Environmental Law); the Company has
taken all such actions as may be necessary to make available to it the environmental
indemnity contained in Section 7.4.6 of the Solar France Share Purchase Agreement, dated as
of April 17, 1997, among Matrix Solar Technologies, Inc. (now Photowatt Technologies USA
Inc.) and the persons named in Annex 1 thereto;
(ff) in the ordinary course of their business, the Company and each of the Subsidiaries
conduct periodic reviews of the effect of the Environmental Laws on their respective
businesses, operations and properties, in the course of which they identify and evaluate
associated costs and liabilities (including, without limitation, any capital or operating
expenditures required for cleanup, closure of properties or compliance with the
Environmental Laws or any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties);
(gg) all United States, Canadian and foreign tax returns required to be filed by the
Company or any of the Subsidiaries have been timely filed, and all taxes and other
assessments of a similar nature (whether imposed directly or through withholding) including
any interest, additions to tax or penalties applicable thereto due or claimed to
16
be due from such entities have been timely paid, other than those being contested in
good faith and for which adequate reserves have been provided;
(hh) there are no transfer taxes or other similar fees or charges under Canadian or
U.S. federal law or the laws of any state, province or any political subdivision thereof,
required to be paid in connection with the execution and delivery of this Agreement or the
issuance by the Company or sale by the Company of the Shares;
(ii) no stamp duty, registration or documentary taxes, duties or similar charges are
payable under the federal laws of Canada or the laws of any province in connection with the
creation, issuance, sale and delivery to the Underwriters of the Shares or the
authorization, execution, delivery and performance of this Agreement or the resale of Shares
by an Underwriter to U.S. residents;
(jj) the Company and each of the Subsidiaries maintain insurance covering their
respective properties, operations, personnel and businesses as the Company reasonably deems
adequate; such insurance insures against such losses and risks to an extent which is
adequate in accordance with customary industry practice to protect the Company and the
Subsidiaries and their respective businesses; all such insurance is fully in force on the
date hereof and will be fully in force at the time of purchase and each additional time of
purchase, if any; and neither the Company nor any Subsidiary has reason to believe that it
will not be able to renew any such insurance as and when such insurance expires;
(kk) except as disclosed in the Registration Statement, the Preliminary Final
Prospectuses, the Prospectuses or the Permitted Free Writing Prospectuses, if any, neither
the Company nor any Subsidiary has sent or received any communication regarding termination
of, or intent not to renew, any of the contracts or agreements referred to or described in
the Registration Statement, the Preliminary Final Prospectuses, the Prospectuses or any
Permitted Free Writing Prospectus, or referred to or described in, or filed as an exhibit
to, the Registration Statement or the Prospectuses, and no such termination or non-renewal
has been threatened by the Company or any Subsidiary or, to the Company’s knowledge, any
other party to any such contract or agreement, except where such termination or non-renewal
would not, individually or in the aggregate, have a Material Adverse Effect;
(ll) the Company and each of the 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 authorization, (ii) transactions are
recorded as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for assets, (iii)
access to assets is permitted only in accordance with management’s general or specific
authorization, and (iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect to any
differences. Since the end of the Company’s most recent audited fiscal year, there has been
(i) no material weakness in the Company’s internal control over
17
financial reporting (whether or not remediated), and (ii) no change in the Company’s
internal control over financial reporting that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control over financial reporting;
(mm) the Company has established “disclosure controls and procedures” (as such term is
defined in Rule 13a-15 and 15d-15 under the Exchange Act and Multilateral Investment 52-109
– Certification of Disclosure in Issuers’ Annual and Interim Filings); such disclosure
controls and procedures are designed to ensure that material information relating to the
Company, including its consolidated Subsidiaries, is made known to the Company’s Chief
Executive Officer and its Chief Financial Officer by others within those entities;
(nn) the Company has taken all necessary actions to provide reasonable assurance that,
upon the filing of the Registration Statement, the Company and the Subsidiaries will be in
compliance in all material respects with the applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act
of 2002 and the rules and regulations of the Commission promulgated thereunder, as well as
the rules and regulations of Nasdaq and the TSX;
(oo) except as described in the Registration Statement, the Preliminary Final
Prospectuses, the Prospectuses and any Permitted Free Writing Prospectuses, there are no
business relationships, related-party transactions, off-balance sheet transactions or any
other non-arm’s length transactions involving the Company or any of its Subsidiaries;
(pp) each “forward-looking statement” (within the meaning of Section 27A of the
Securities Act or Section 21E of the Exchange Act) contained in the Registration Statement,
the Preliminary Final Prospectuses, the Prospectuses and any Permitted Free Writing
Prospectuses, has been made on a reasonable basis and in good faith;
(qq) all statistical or market-related data included in the Registration Statement, the
Preliminary Final Prospectuses, the Prospectuses and the Permitted Free Writing
Prospectuses, if any, are based on or derived from sources that the Company reasonably
believes to be reliable and accurate;
(rr) the statements set forth in Registration Statement, the Preliminary Final
Prospectuses and the Prospectuses under the headings “Certain Canadian Federal Income Tax
Considerations”, “Business – Legal and Regulatory Matters”, “Certain U.S. Federal Income Tax
Considerations”, “Underwriting” and “Description of Share Capital”, in the Canadian
Preliminary Prospectus and the Canadian Prospectus under “Eligibility for Investment” and
“Statutory Rights of Withdrawal and Rescission”, and in the Registration Statement under
“Part II – Indemnification of Directors and Officers”, insofar as such statements summarize
legal matters, agreements, documents or proceedings discussed therein, are, in all material
respects accurate, complete and fair summaries of such legal matters, agreements, documents
or proceedings;
(ss) neither the Company nor any of the Subsidiaries has nor, to the Company’s
knowledge, has any employee or agent of the Company or any Subsidiary made any
18
payment of funds of the Company or any Subsidiary or received or retained any funds in
violation of any law, rule or regulation (including, without limitation, the Foreign Corrupt
Practices Act of 1977), which payment, receipt or retention of funds is of a character
required to be disclosed in the Registration Statement, the Preliminary Final Prospectuses,
the Prospectuses and the Permitted Free Writing Prospectuses, if any;
(tt) the operations of the Company and the Subsidiaries are and have been conducted at
all times in compliance with applicable financial recordkeeping and reporting requirements
of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the “Money Laundering Laws”); and no action, suit
or proceeding by or before any court or governmental agency, authority or body or any
arbitrator or non-governmental authority involving the Company or any of the Subsidiaries
with respect to the Money Laundering Laws is pending or, to the Company’s knowledge,
threatened;
(uu) no Subsidiary is currently prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on such Subsidiary’s capital
stock, from repaying to the Company any loans or advances to such Subsidiary from the
Company or from transferring any of such Subsidiary’s property or assets to the Company or
any other Subsidiary of the Company;
(vv) except pursuant to this Agreement, neither the Company nor any of the Subsidiaries
has incurred any liability for any finder’s or broker’s fee or agent’s commission in
connection with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby or by the Registration Statement and the Prospectuses;
(ww) neither the Company nor any of the Subsidiaries nor, to the Company’s knowledge,
any of their respective directors, officers, affiliates or controlling persons has taken,
directly or indirectly, any action designed, or which has constituted or might reasonably be
expected, to cause or result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares in violation of
applicable securities laws;
(xx) the Registration Statement, the Preliminary Final Prospectuses, the Prospectuses
and any amendments or supplements thereto will comply, with any applicable laws or
regulations of foreign jurisdictions in which the Registration Statement, the Preliminary
Final Prospectuses and the Prospectuses, as amended or supplemented, if applicable, are
distributed in connection with the Directed Share Program;
(yy) no consent, approval, authorization or order of, or filing with, any governmental
or regulatory commission, board, body, authority or agency, other than
19
those heretofore obtained or made, is required in connection with the offering of the
Reserved Shares in any jurisdiction where the Reserved Shares are being offered;
(zz) the Company has not offered, or caused the Underwriters to offer, Shares to any
person pursuant to the Directed Share Program with the specific intent to unlawfully
influence (i) a customer or supplier of the Company or any of the Subsidiaries to alter the
customer’s or supplier’s level or type of business with the Company or any of the
Subsidiaries, or (ii) a trade journalist or publication to write or publish favorable
information about the Company or any of the Subsidiaries or any of their respective products
or services;
(aaa) to the Company’s knowledge, there are no affiliations or associations between (i)
any member of the NASD, and (ii) the Company or any of the Company’s officers, directors or
5% or greater security holders or any beneficial owner of the Company’s unregistered equity
securities that were acquired at any time on or after the 180th day immediately preceding
the date the Registration Statement was initially filed with the Commission, except as
disclosed in the Registration Statement (excluding the exhibits thereto), the Preliminary
Final Prospectuses and the Prospectuses; and
(bbb) the Company has taken all actions and obtained all consents and approvals
required to complete the Reorganization.
In addition, any certificate signed by any officer of the Company or any of the Subsidiaries
and delivered to the Underwriters or counsel for the Underwriters in connection with the offering
of the Shares shall be deemed to be a representation and warranty by the Company or such
Subsidiary, as the case may be, as to matters covered thereby, to each Underwriter.
4. Representations and Warranties of the Parent. The Parent represents and warrants
to, and agrees with, each of the Underwriters that:
(a) the execution and delivery by the Parent of, and the compliance by the Parent with,
this Agreement and the Reorganization agreements listed under the heading “Material
Contracts” in the Canadian Prospectus (the “Reorganization Agreements”) and the
consummation of the transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or constitute a
default under, (i) the charter or by-laws or other organizational instruments of the Parent
or any of its subsidiaries (other than the Company and its Subsidiaries), (ii) any
indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which
the Parent or any of its subsidiaries (other than the Company and its Subsidiaries) is a
party or by which the Parent or any of its subsidiaries (other than the Company and its
Subsidiaries) is bound or to which any of the property or assets of the Parent or any of its
subsidiaries (other than the Company and its Subsidiaries) is subject, (iii) any federal,
state, local or foreign law, regulation or rule, (iv) any rule or regulation of any
self-regulatory organization or other non-governmental regulatory authority (including,
without limitation, the rules and regulations of the TSX), or (v) any decree, judgment or
order applicable to the Parent or any of its properties; except, in respect to (ii) above,
for
20
such conflicts, breaches, violations or defaults that would not, individually or in the
aggregate, (a) affect the ability of the Parent to consummate the transactions contemplated
by the Reorganization or (b) reasonably be expected to result in a Material Adverse Effect;
(b) the Parent has not, prior to the execution of this Agreement, offered or sold any
Shares by means of any “prospectus” (within the meaning of the Securities Act), or used any
“prospectus” (within the meaning of the Securities Act) in connection with the offer or sale
of the Shares, in each case other than the Preliminary Prospectuses, the Preliminary Final
Prospectuses or the Permitted Free Writing Prospectuses, if any;
(c) the Reorganization and the Reorganization Agreements have been duly authorized by
the Parent and constitute valid and binding obligations of the Parent, enforceable against
the Parent in accordance with their terms, except to the extent that enforcement thereof may
be limited by (i) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting creditors’ rights
generally and (ii) to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law);
(d) this Agreement has been duly authorized, executed and delivered by or on behalf of
the Parent, and is a legal, valid and binding agreement of the Parent enforceable in
accordance with its terms;
(e) the Parent has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the Province of Ontario;
(f) to the best knowledge of the Parent and its subsidiaries (other than the Company
and its Subsidiaries) the representations and warranties of the Company contained in Section
3 of this Agreement are true and correct;
(g) no action, approval, authorization, consent or order of or filing with any federal,
state, local or foreign governmental or regulatory commission, board, body, authority or
agency, or order of or filing with any self-regulatory organization or other
non-governmental regulatory authority (including, without limitation, the TSX and Nasdaq),
is required in connection with the consummation by the Parent of the transactions
contemplated hereby other than the completion of the Reorganization;
(h) neither the Parent nor any of its affiliates has taken, directly or indirectly, any
action designed to, or which has constituted or might reasonably be expected to cause or
result in the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares in violation of applicable securities laws;
(i) there are no affiliations or associations between any member of the NASD and the
Parent, except as disclosed in the Registration Statement (excluding the exhibits thereto),
the Preliminary Final Prospectuses and the Prospectuses;
21
(j) there are no legal or governmental proceedings pending or, to the knowledge of the
Parent, threatened to which the Parent is a party or to which any of the properties of the
Parent is subject other than proceedings that would not have a material adverse effect on
the power or ability of the Parent to perform its obligations under this Agreement or to
consummate the transactions contemplated by the Registration Statement and the Prospectuses;
and
(k) the Parent has taken all actions and obtained all consents and approvals required
to complete the Reorganization.
In addition, any certificate signed by the Parent and delivered to the Underwriters or counsel
for the Underwriters in connection with the offering of the Shares shall be deemed to be a
representation and warranty by the Parent, as to matters covered thereby, to each Underwriter.
5. Certain Covenants of the Company. The Company hereby agrees:
(a) to furnish such information as may be required and otherwise to cooperate in
qualifying the Shares for offering and sale under the securities or blue sky laws of such
states or other jurisdictions as the Underwriters may designate and to maintain such
qualifications in effect so long as the Underwriters may request for the distribution of the
Shares; provided, however, that the Company shall not be required to qualify
as a foreign corporation or to consent to the service of process under the laws of any such
jurisdiction (except service of process with respect to the offering and sale of the
Shares); and to promptly advise the Underwriters of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Shares for offer or
sale in any jurisdiction or the initiation or threatening of any proceeding for such
purpose;
(b) to make available to the Underwriters in New York City, as soon as practicable
after this Agreement becomes effective, and thereafter from time to time to furnish to the
Underwriters, as many copies of the U.S. Preliminary Prospectuses, the U.S. Preliminary
Final Prospectus or the U.S. Prospectus as the Underwriters may request for the purposes
contemplated by the Securities Act;
(c) to make available to the Underwriters, as soon as practicable after this Agreement
becomes effective, and thereafter from time to time to furnish to the Underwriters, as many
copies of the Canadian Preliminary Prospectus (and each amendment thereto) and the Canadian
Prospectus as the Underwriters may request without charge for the purposes contemplated
under Canadian Securities Laws;
(d) if, at the time this Agreement is executed and delivered, it is necessary or
appropriate for a post-effective amendment to the Registration Statement or a Rule 462(b)
Registration Statement to be filed with the Commission and become effective before the
Shares may be sold or an amendment or supplement to the Canadian Prospectus be filed with
the Reviewing Authority, the Company will use its best efforts to cause such post-effective
amendment, such Registration Statement or such Canadian
22
Prospectus to be filed and become effective, as applicable, and will pay any applicable
fees in accordance with the Securities Act, as soon as possible; and the Company will advise
the Underwriters promptly and, if requested by the Underwriters, will confirm such advice in
writing, (i) when such post-effective amendment or such Registration Statement has become
effective, (ii) if Rule 430A under the Securities Act is used, when the U.S. Prospectus is
filed with the Commission pursuant to Rule 424(b) under the Securities Act (which the
Company agrees to file in a timely manner in accordance with such Rules) and (iii) when the
Canadian Supplemented PREP Prospectus, in the English and French languages in compliance in
all respects with National Instrument 44-103, is filed with the Canadian Authorities, (which
shall be filed not later than 5:00 P.M., New York City time on March •, 2007);
(e) to advise the Underwriters promptly, confirming such advice in writing, of any
request by the Commission or any Canadian Authorities for amendments or supplements to the
Registration Statement, any Exchange Act Registration Statement, the Preliminary Prospectus,
the Preliminary Final Prospectus, the U.S. Prospectus, or the Canadian Prospectus, as
applicable, or for additional information with respect thereto, or of notice of institution
of proceedings for, or the entry of, a stop order suspending the effectiveness of the
Registration Statement and, if the Commission should enter a stop order suspending the
effectiveness of the Registration Statement or any Canadian Authorities issue an order
similarly affecting the status of any Canadian Prospectus, to use its best efforts to obtain
the lifting or removal of such order or similar request as soon as possible; to advise the
Underwriters promptly of any proposal to amend or supplement the Registration Statement, any
Exchange Act Registration Statement, the Preliminary Prospectus, the Preliminary Final
Prospectus, the U.S. Prospectus, or the Canadian Prospectus, and to provide the Underwriters
and Underwriters’ counsel with copies of any such documents for review and comment a
reasonable amount of time prior to any proposed filing and to file no such amendment or
supplement to which the Underwriters shall reasonably object in writing;
(f) subject to Section 5(e) hereof, to file promptly all reports and documents and any
preliminary or definitive proxy or information statement required to be filed by the Company
with the Commission, in order to comply with the Exchange Act, or with the Canadian
Authorities, in order to comply with applicable Canadian Securities Laws, and for so long as
a prospectus is required by the Securities Act to be delivered (whether physically or
through compliance with Rule 172 under the Securities Act or any similar rule) in connection
with any sale of Shares;
(g) to advise the Underwriters promptly of the happening of any event within the period
during which a prospectus is required by the Securities Act or Canadian Securities Laws to
be delivered (whether physically or through compliance with Rule 172 under the Securities
Act or any similar rule) in connection with any sale of Shares, which event could require
the making of any change in the Prospectuses then being used so that the Prospectuses would
not include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under
which they are made, not misleading, and to advise the Underwriters
23
promptly if, during such period, it shall become necessary to amend or supplement the
Prospectuses to cause the Prospectuses to comply with the requirements of the Securities
Act, and, in each case, during such time, subject to Section 5(e) hereof, to prepare and
furnish, at the Company’s expense, to the Underwriters promptly such amendments or
supplements to such Prospectuses as may be necessary to reflect any such change or to effect
such compliance;
(h) to make generally available to its security holders, and to deliver to the
Underwriters, an earnings statement of the Company (which will satisfy the provisions of
Section 11(a) of the Securities Act) covering a period of twelve months beginning after the
time of purchase, as soon as is reasonably practicable after the termination of such
twelve-month period; provided that the obligation to deliver such earnings statement to the
Underwriters may be satisfied by the Company filing such document with the Commission on its
Electronic Data Gathering, Analysis and Retrieval System (▇▇▇▇▇).
(i) to furnish one copy for each Managing Underwriter and one copy for underwriters’
counsel of the Registration Statement, as initially filed with the Commission, and all
amendments thereto (including all exhibits thereto and documents incorporated by reference
therein) and sufficient copies of the foregoing (other than exhibits) for distribution of a
copy to each of the other Underwriters;
(j) to furnish to the Underwriters, upon their request, as early as practicable prior
to the time of purchase and any additional time of purchase, as the case may be, but not
later than two business days prior thereto, a copy of the latest available unaudited interim
and monthly combined financial statements, if any, of the Company and the Subsidiaries which
have been read by the Company’s independent registered public accountants, as stated in
their letter to be furnished pursuant to Section 8(e) hereof;
(k) to apply the net proceeds to the Company from the sale of the Shares in the manner
set forth under the caption “Use of Proceeds” in the Registration Statement, the Preliminary
Final Prospectuses and the Prospectuses and to file such reports with the Commission with
respect to the sale of the Shares and the application of the proceeds therefrom as may be
required by Rule 463 under the Securities Act;
(l) to pay all costs, expenses, fees and taxes in connection with (i) the preparation
and filing of the Registration Statement, the Preliminary Prospectus, the U.S. Prospectus,
the Canadian Prospectus, each Permitted Free Writing Prospectus and any amendments or
supplements thereto, and the printing and furnishing of copies of each thereof to the
Underwriters and to dealers (including costs of mailing and shipment), (ii) the
registration, issue, sale and delivery of the Shares including any stock or transfer taxes
and stamp or similar duties payable upon the sale, issuance or delivery of the Shares to the
Underwriters, (iii) the producing, word processing and/or printing of this Agreement, any
agreement among the Underwriters, any dealer agreements, any powers of attorney and any
closing documents (including compilations thereof) and the reproduction and/or printing and
furnishing of copies of each thereof to the Underwriters and (except closing documents) to
dealers (including costs of mailing and shipment), (iv)
24
the qualification of the Shares for offering and sale under state, provincial or
foreign laws and the determination of their eligibility for investment under state,
provincial or foreign law (including the legal fees and filing fees and other disbursements
of counsel for the Underwriters) and the printing and furnishing of copies of any blue sky
surveys or legal investment surveys to the Underwriters and to dealers, (v) any listing of
the Shares on any securities exchange or qualification of the Shares for quotation on the
TSX and Nasdaq, and any registration thereof under the Exchange Act, (vi) any filing for
review of the public offering of the Shares by the NASD, including the reasonable legal fees
and filing fees and other disbursements of counsel to the Underwriters relating to NASD
matters, (vii) the fees and disbursements of any transfer agent or registrar for the Shares,
(viii) the costs and expenses of the Company relating to presentations or meetings
undertaken in connection with the marketing of the offering and sale of the Shares to
prospective investors and the Underwriters’ sales forces, including, without limitation,
expenses associated with the production of road show slides and graphics, fees and expenses
of any consultants engaged in connection with the road show presentations, travel, lodging
and other expenses incurred by the officers of the Company and any such consultants, and the
cost of any aircraft chartered in connection with the road show, (ix) the costs and expenses
of qualifying the Shares for inclusion in the book-entry settlement system of the DTC and
CDS, (x) the preparation and filing of the Exchange Act Registration Statement, including
any amendments thereto, (xi) the offer and sale of the Reserved Shares, including all costs
and expenses of BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc., UBS Financial Services Inc. and the Underwriters,
including the reasonable fees and disbursement of counsel for the Underwriters, and (xii)
the performance of the Company’s other obligations hereunder;
(m) to comply with Rule 433(d) under the Securities Act (without reliance on Rule
164(b) under the Securities Act) and with Rule 433(g) under the Securities Act;
(n) beginning on the date hereof and ending on, and including, the date that is 180
days after the date of the Prospectuses (the “Lock-Up Period”), without the prior
written consent of the Managing Underwriters, not to (i) issue, sell, offer to sell,
contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise
dispose of or agree to dispose of, directly or indirectly, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position within the meaning
of Section 16 of the Exchange Act and the rules and regulations of the Commission
promulgated thereunder, with respect to, any Common Shares or any other securities of the
Company that are substantially similar to Common Shares, or any securities convertible into
or exchangeable or exercisable for, or any warrants or other rights to purchase, the
foregoing, (ii) file or cause to become effective a registration statement under the
Securities Act relating to the offer and sale of any Common Shares or any other securities
of the Company that are substantially similar to the Common Shares, or any securities
convertible into or exchangeable or exercisable for, or any warrants or other rights to
purchase, the foregoing, (iii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of the Common
Shares or any other securities of the Company that are substantially similar to the Common
Shares, or any securities convertible into or exchangeable or exercisable for,
25
or any warrants or other rights to purchase, the foregoing, whether any such
transaction is to be settled by delivery of the Common Shares or such other securities, in
cash or otherwise or (iv) publicly announce an intention to effect any transaction specified
in clause (i), (ii) or (iii), except, in each case, for (A) the registration of the offer
and sale of the Shares as contemplated by this Agreement, (B) issuances of the Common Shares
upon the exercise of any rights, options or warrants disclosed as outstanding in the
Registration Statement (excluding the exhibits thereto), the Preliminary Final Prospectuses
and the Prospectuses, (C) the issuance of stock options and restricted stock units not
exercisable during the Lock-Up Period pursuant to employee or executive compensation
arrangements described in the Registration Statement (excluding the exhibits thereto), the
Preliminary Final Prospectuses and the Prospectuses, or (D) the filing of registration
statements on Form S-8; provided, however, that if (a) during the period
that begins on the date that is fifteen (15) calendar days plus three (3) business days
before the last day of the Lock-Up Period and ends on the last day of the Lock-Up Period,
the Company issues an earnings release or material news or a material event relating to the
Company occurs; or (b) prior to the expiration of the Lock-Up Period, the Company announces
that it will release earnings results during the sixteen (16) day period beginning on the
last day of the Lock-Up Period, then the restrictions imposed by this Section 5(n) shall
continue to apply until the expiration of the date that is fifteen (15) calendar days plus
three (3) business days after the date on which the issuance of the earnings release or the
material news or material event occurs;
(o) prior to the time of purchase or any additional time of purchase, as the case may
be, to issue no press release or other communication directly or indirectly and hold no
press conferences with respect to the Company or any Subsidiary, the financial condition,
results of operations, business, properties, assets, or liabilities of the Company or any
Subsidiary, or the offering of the Shares, without the Managing Underwriters’ prior consent,
which shall not be unreasonably withheld;
(p) not, at any time at or after the execution of this Agreement, to, directly or
indirectly, offer or sell any Shares by means of any “prospectus” (within the meaning of the
Securities Act), or use any “prospectus” (within the meaning of the Securities Act) in
connection with the offer or sale of the Shares, in each case, other than the Prospectuses
and the Permitted Free Writing Prospectuses;
(q) not to, and to cause the Subsidiaries not to, take, directly or indirectly, any
action designed, or which will constitute, or has constituted, or might reasonably be
expected to cause or result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares in violation of
applicable securities laws;
(r) to use commercially reasonable efforts to maintain the listing of the Common
Shares, including the Shares, on the TSX and Nasdaq;
(s) to cause each Directed Share Participant that purchases $100,000 worth of Reserved
Shares or more to execute a Lock-Up Agreement and otherwise to cause the
26
Reserved Shares to be restricted from sale, transfer, assignment, pledge or
hypothecation to such extent as may be required by the NASD and its rules, and to direct the
transfer agent to place stop transfer restrictions upon such Reserved Shares during the
Lock-Up Period or any such longer period of time as may be required by the NASD and its
rules; and to comply with all applicable securities and other laws, rules and regulations in
each jurisdiction in which the Reserved Shares are offered in connection with the Directed
Share Program;
(t) to maintain a U.S. and Canadian transfer agent and a registrar for the Common
Shares; and
(u) to take such actions as may be necessary to effect the Reorganization.
6. Certain Covenants of the Parent. The Parent hereby agrees:
(a) not, at any time at or after the execution of this Agreement, to offer or sell any
Shares by means of any “prospectus” (within the meaning of the Securities Act), or use any
“prospectus” (within the meaning of the Securities Act) in connection with the offer or sale
of the Shares, in each case other than the Prospectuses;
(b) not to take, directly or indirectly, any action designed, or which will constitute,
or has constituted, or might reasonably be expected to cause or result in the stabilization
or manipulation of the price of any security of the Company to facilitate the sale or resale
of the Shares in violation of applicable securities laws;
(c) to advise the Underwriters promptly, and if requested by the Underwriters, confirm
such advice in writing, so long as a prospectus is required by the Securities Act or
Canadian Securities Laws to be delivered (whether physically or through compliance with Rule
172 under the Securities Act or any similar rule) in connection with any sale of Shares, of
(i) any change in information in the Registration Statement, the Preliminary Final
Prospectuses, the Prospectuses and the Permitted Free Writing Prospectuses, if any, relating
to the Parent, or (ii) any new material information relating to the Company or relating to
any matter stated in the Registration Statement, the Preliminary Final Prospectuses, the
Prospectuses and the Permitted Free Writing Prospectuses, if any, which comes to the
attention of the Parent; and
(d) to take such action as may be necessary to effect the Reorganization.
7. Reimbursement of Underwriters’ Expenses. If the Shares are not delivered for any
reason other than the termination of this Agreement pursuant to Section 9(2)(A), (C), (D) or (E)
hereof or the fifth paragraph of Section 10 hereof or the default by one or more of the
Underwriters in its or their respective obligations hereunder, the Company shall, in addition to
paying the amounts described in Section 5(l) hereof, reimburse the Underwriters for all of their
actual accountable out-of-pocket expenses to the extent incurred. In addition, if the Shares are
not delivered for any reason, the Company shall reimburse the Underwriters for the reasonable
27
fees and disbursements of their counsel in an amount not to exceed Cdn$1,000,000. The parties
hereto agree that the provisions of this Section 7 shall supersede any and all prior understandings
and agreements pertaining to the reimbursement of Underwriters’ expenses relating to the offering
of Shares contemplated by this Agreement if such offering is not completed.
8. Conditions of Underwriters’ Obligations. The several obligations of the
Underwriters hereunder are subject to the accuracy of the respective representations and warranties
on the part of the Company and the Parent on the date hereof, at the time of purchase and, if
applicable, at the additional time of purchase, the performance by the Company and the Parent of
each of their respective obligations hereunder and to the following additional conditions
precedent:
(a) The Company shall furnish to the Underwriters at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of Shearman & Sterling LLP,
United States counsel for the Company, addressed to the Underwriters, and dated the time of
purchase or the additional time of purchase, as the case may be, with executed copies for
each of the other Underwriters, and in form and substance satisfactory to the Managing
Underwriters, in the form set forth in Exhibit B hereto.
(b) The Company shall furnish to the Underwriters at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of Blake, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
LLP, Canadian counsel for the Company, addressed to the Underwriters, and dated the time of
purchase or the additional time of purchase, as the case may be, with executed copies for
each of the other Underwriters, and in form and substance satisfactory to the Managing
Underwriters, in the form set forth in Exhibit C hereto.
(c) The Company shall furnish to the Underwriters at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of Ernst & Young, Société
d’Avocats, addressed to the Underwriters, and dated the time of purchase or the additional
time of purchase, as the case may be, with executed copies for each of the other
Underwriters, and in form and substance satisfactory to Managing Underwriters, in the form
set forth in Exhibit D hereof.
(d) The Company shall furnish to the Underwriters at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, addressed to
the Underwriters, and dated the time of purchase or the additional time of purchase, as the
case may be, with executed copies for each of the other Underwriters, and in form and
substance satisfactory to the Managing Underwriters, in the form set forth in Exhibit
E hereto.
(e) The Underwriters shall have received from KPMG LLP, independent chartered
accountants for the Company, comfort letters dated, respectively, the date of this
Agreement, the date of the U.S. Prospectus, the time of purchase and, if applicable, the
additional time of purchase, and addressed to the Underwriters and their respective U.S. or
Canadian affiliates (with executed copies for each of the Underwriters) in the forms
satisfactory to the Managing Underwriters, which comfort letters shall cover,
28
without limitation, the various financial disclosures contained in the Registration
Statement, the Preliminary Final Prospectuses, the Prospectuses and the Permitted Free
Writing Prospectuses, if any.
(f) The Underwriters shall have received at the time of purchase and, if applicable, at
the additional time of purchase, the favorable opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ &
▇▇▇▇ LLP, special United States counsel for the Underwriters, dated the time of purchase or
the additional time of purchase, as the case may be, in form and substance reasonably
satisfactory to the Managing Underwriters.
(g) The Underwriters shall have received at the time of purchase and, if applicable, at
the additional time of purchase, the favorable opinion of Davies ▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
LLP, Canadian counsel for the Underwriters, dated the time of purchase or the additional
time of purchase, as the case may be, in form and substance reasonably satisfactory to the
Managing Underwriters.
(h) The Underwriters shall have received opinions of KPMG LLP, dated the date of the
Canadian Preliminary Prospectus, the date of the Canadian Prospectus, the date hereof, the
time of purchase and, if applicable, the additional time of purchase, respectively, in form
and substance satisfactory to the Underwriters, addressed to the Underwriters, the Company
and their respective counsel, to the effect that the French language version of the
Financial Information contained in each Canadian Preliminary Prospectus and the Canadian
Prospectus is, in all material respects, a complete and proper translation of the English
language version thereof.
(i) No Preliminary Prospectus, Prospectus or amendment or supplement to the foregoing
or to the Registration Statement shall have been filed to which the Underwriters shall have
reasonably objected in writing.
(j) The Registration Statement, the Exchange Act Registration Statement and any Rule
462(b) Registration Statement required to be filed, prior to the sale of the Shares, shall
have been filed and shall have become effective under the Securities Act. The U.S.
Prospectus shall have been filed with the Commission pursuant to Rule 424(b) under the
Securities Act at or before 5:30 P.M., New York City time, on the second full business day
after the date of this Agreement (or such earlier time as may be required under the
Securities Act). The Canadian Prospectus containing the PREP Information has been filed
with the Canadian Authorities in accordance with the PREP Procedures.
(k) Prior to and at the time of purchase, and, if applicable, the additional time of
purchase, (i) no stop order with respect to the effectiveness of the Registration Statement
shall have been issued and remain effective under the Securities Act or proceedings
initiated (and not revoked) under Section 8(d) or 8(e) of the Securities Act and no order
having the effect of ceasing or suspending the distribution of the Shares or the trading in
the securities of the Company or any other securities of the Company shall have been issued
or proceedings therefor initiated or, to the Company’s knowledge, threatened by any
securities commission, securities regulatory authority or stock
29
exchange in Canada or the United States; (ii) the Registration Statement and all
amendments thereto shall not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the statements therein
not misleading; (iii) none of the Preliminary Final Prospectuses, the Prospectuses or the
Permitted Free Writing Prospectuses, if any, and no amendment or supplement thereto, shall
include an untrue statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under which they are
made, not misleading; (iv) no Disclosure Package, and no amendment or supplement thereto,
shall include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under
which they are made, not misleading; and (v) none of the Permitted Free Writing
Prospectuses, if any, shall include an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading.
(l) The Company will, at the time of purchase and, if applicable, at the additional
time of purchase, deliver to the Underwriters a certificate of its Chief Executive Officer
and its Chief Financial Officer, dated the time of purchase or the additional time of
purchase, as the case may be, in the form attached as Exhibit F hereto.
(m) The Parent will, at the time of purchase and, if applicable, at the additional time
of purchase, deliver to the Underwriters a certificate signed by the Parent, dated the time
of purchase or the additional time of purchase, as the case may be, in the form attached as
Exhibit G hereto.
(n) You shall have received each of the signed Lock-Up Agreements referred to in
Section 3(z) and Section 5(s) hereof, and each such Lock-Up Agreement shall be in full force
and effect at the time of purchase and the additional time of purchase, as the case may be.
(o) The Company and the Parent shall have furnished to the Underwriters such other
documents and certificates as to the accuracy and completeness of any statement in the
Registration Statement, the Preliminary Final Prospectuses, the Prospectuses and the
Permitted Free Writing Prospectuses, if any, as of the time of purchase and, if applicable,
the additional time of purchase, as the Underwriters may reasonably request.
(p) The Shares shall have been conditionally approved for listing or quotation on the
TSX and Nasdaq, subject only to notice of issuance at or prior to the time of purchase or
the additional time of purchase and the satisfaction of standard listing conditions.
(q) The NASD shall not have raised any objection with respect to the fairness or
reasonableness of the underwriting, or other arrangements of the transactions, contemplated
hereby.
30
(r) The Reorganization shall have become effective.
9. Effective Date of Agreement; Termination. This Agreement shall become effective
when the parties hereto have executed and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject to termination in the
absolute discretion of the Managing Underwriters, if (1) since the time of execution of this
Agreement there has been any change or any development involving a prospective change in the
business, properties, financial condition or results of operations of the Company and the
Subsidiaries taken as a whole, the effect of which change or development is, in the sole judgment
of the Managing Underwriters, so material and adverse as to make it impractical or inadvisable to
proceed with the public offering or the delivery of the Shares on the terms and in the manner
contemplated in the Registration Statement, the Preliminary Final Prospectuses, the Prospectuses
and the Permitted Free Writing Prospectuses, if any, or (2) since the time of execution of this
Agreement, there shall have occurred: (A) a suspension or material limitation in trading in
securities generally on the TSX, Nasdaq, New York Stock Exchange, or American Stock Exchange; (B) a
suspension or material limitation in trading in the Company’s or the Parent’s securities on the TSX
or Nasdaq; (C) a general moratorium on commercial banking activities declared by U.S. federal,
Canadian provincial or federal, or New York state authorities or a material disruption in
commercial banking or securities settlement or clearance services in the United States or Canada;
(D) an outbreak or escalation of hostilities or acts of terrorism involving the United States or
Canada or a declaration by the United States or Canada of a national emergency or war; or (E) any
other national or international calamity or crisis or any material adverse change in the financial,
political or economic conditions in the United States, Canada or elsewhere, if the effect of any
such event specified in clause (D) or (E), in the sole judgment of the Managing Underwriters, makes
it impractical or inadvisable to proceed with the public offering or the delivery of the Shares on
the terms and in the manner contemplated in the Registration Statement, the Preliminary Final
Prospectuses, the Prospectuses and the Permitted Free Writing Prospectuses, if any.
If the Managing Underwriters elect to terminate this Agreement as provided in this Section 9,
the Company, the Parent and each Underwriter shall be notified promptly in writing.
If the sale to the Underwriters of the Shares, as contemplated by this Agreement, is not
carried out by the Underwriters for any reason permitted under this Agreement, or if such sale is
not carried out because the Company or the Parent, as the case may be, shall be unable to comply
with any of the terms of this Agreement, the Company and the Parent shall not be under any
obligation or liability under this Agreement (except to the extent provided in Sections 7 and 11
hereof), and the Underwriters shall be under no obligation or liability to the Company or the
Parent under this Agreement (except to the extent provided in Section 11 hereof) or to one another
hereunder.
10. Increase in Underwriters’ Commitments. Subject to Sections 8 and 9 hereof, if any
Underwriter shall default in its obligation to take up and pay for the Firm Shares to be purchased
by it hereunder (otherwise than for a failure of a condition set forth in Section 8 hereof
31
or a reason sufficient to justify the termination of this Agreement under the provisions of
Section 9 hereof) and if the number of Firm Shares which all Underwriters so defaulting shall have
agreed but failed to take up and pay for does not exceed 10% of the total number of Firm Shares,
the non-defaulting Underwriters (including the Underwriters, if any, substituted in the manner set
forth below) shall take up and pay for (in addition to the aggregate number of Firm Shares they are
obligated to purchase pursuant to Section 1 hereof) the number of Firm Shares agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such Shares shall be taken
up and paid for by such non-defaulting Underwriters in such amount or amounts as the Underwriters
may designate with the consent of each Underwriter so designated or, in the event no such
designation is made, such Shares shall be taken up and paid for by all non-defaulting Underwriters
pro rata in proportion to the aggregate number of Firm Shares set forth opposite the names of such
non-defaulting Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its obligations hereunder, the Company
agrees with the non-defaulting Underwriters that it will not sell any Firm Shares hereunder unless
all of the Firm Shares are purchased by the Underwriters (or by substituted Underwriters selected
by the Underwriters with the approval of the Company or selected by the Company with the
Underwriters’ approval).
If a new Underwriter or Underwriters are substituted by the Underwriters or by the Company for
a defaulting Underwriter or Underwriters in accordance with the foregoing provision, the Company or
the Underwriters shall have the right to postpone the time of purchase for a period not exceeding
five business days in order that any necessary changes in the Registration Statement, the U.S.
Prospectus, the Canadian Prospectus or in any other documents may be effected.
The term “Underwriter” as used in this Agreement shall refer to and include any Underwriter
substituted under this Section 10 with like effect as if such substituted Underwriter had
originally been named in Schedule A hereto.
If the aggregate number of Firm Shares which the defaulting Underwriter or Underwriters agreed
to purchase exceeds 10% of the total number of Firm Shares which all Underwriters agreed to
purchase hereunder, and if neither the non-defaulting Underwriters nor the Company shall make
arrangements within the five business day period stated above for the purchase of all the Firm
Shares which the defaulting Underwriter or Underwriters agreed to purchase hereunder, this
Agreement shall terminate without further act or deed and without any liability on the part of the
Company or the Parent to any Underwriter and without any liability on the part of any
non-defaulting Underwriter to the Company or to the Parent. Nothing in this paragraph, and no
action taken hereunder, shall relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
11. Indemnity and Contribution.
(a) The Company and the Parent, jointly and severally, agree to indemnify, defend and
hold harmless each Underwriter, its partners, directors, officers and affiliates, and any
person who controls any Underwriter within the meaning of Section 15 of the
32
Securities Act or Section 20 of the Exchange Act, and the successors and assigns of all
of the foregoing persons, from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation) which, jointly or severally, any such
Underwriter or any such person may incur under the Securities Act, the Exchange Act,
Canadian Securities Laws, the common law or otherwise, insofar as such loss, damage,
expense, liability or claim arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration Statement (or in
the Registration Statement as amended by any post-effective amendment thereof by the
Company), the Preliminary Prospectuses, the Preliminary Final Prospectuses and the
Prospectuses or arises out of or is based upon any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading, except insofar as any such loss, damage, expense, liability or claim arises out
of or is based upon any untrue statement or alleged untrue statement of a material fact
contained in, and in conformity with information furnished in writing by any Underwriter
through the Managing Underwriters to the Company expressly for use in, the Registration
Statement, the Preliminary Prospectuses, the Preliminary Final Prospectuses and the
Prospectuses or arises out of or is based upon any omission or alleged omission to state a
material fact in the Registration Statement, the Preliminary Prospectuses, the Preliminary
Final Prospectuses and the Prospectuses in connection with such information, which material
fact was not contained in such information and which material fact was required to be stated
in such Registration Statement, the Preliminary Prospectuses, the Preliminary Final
Prospectuses or Prospectuses or was necessary to make such information not misleading, or
(ii) any untrue statement or alleged untrue statement of a material fact included in any
Prospectuses (the term Prospectuses for the purpose of this Section 11 being deemed to
include the Preliminary Prospectuses, the Preliminary Final Prospectuses, the Prospectuses
and any amendments or supplements to the foregoing), in any Permitted Free Writing
Prospectus, in any “issuer information” (as defined in Rule 433 under the Securities Act) of
the Company, which “issuer information” is required to be, or is, filed with the Commission,
or in any Prospectuses together with any combination of one or more of the Permitted Free
Writing Prospectuses, if any, or arises out of or is based upon any omission or alleged
omission to state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, except insofar as any
such loss, damage, expense, liability or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in, and in conformity
with information furnished in writing by any Underwriter through the Managing Underwriters
to the Company expressly for use in, such Prospectuses, Permitted Free Writing Prospectus or
issuer information or arises out of or is based upon any omission or alleged omission to
state a material fact in such Prospectuses or Permitted Free Writing Prospectus in
connection with such information, which material fact was not contained in such information
and which material fact was necessary in order to make the statements in such information,
in the light of the circumstances under which they were made, not misleading.
Without limitation of and in addition to its obligations under the other paragraphs of this
Section 11, the Company agrees to indemnify, defend and hold harmless each of BMO ▇▇▇▇▇▇▇
▇▇▇▇▇ Inc. and UBS Financial Services Inc. and their respective partners,
33
directors, officers and affiliates, and any person who controls either of them within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and the
successors and assigns of all of the foregoing persons, from and against any loss, damage,
expense, liability or claim (including the reasonable cost of investigation) which, jointly
or severally, any such person may incur under the Securities Act, the Exchange Act, Canadian
Securities Laws, the common law or otherwise, insofar as such loss, damage, expense,
liability or claim (1) arises out of or is based upon (a) any of the matters referred to in
clauses (i) and (ii) of the first paragraph of this Section 11(a), or (b) any untrue
statement or alleged untrue statement of a material fact contained in any material prepared
by or on behalf or with the consent of the Company for distribution to Directed Share
Participants in connection with the Directed Share Program or caused by 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; (2) is or was caused by the failure of any
Directed Share Participant to pay for and accept delivery of Reserved Shares that the
Directed Share Participant has agreed to purchase; or (3) otherwise arises out of or is
based upon the Directed Share Program, provided, however, that the Company shall not be
responsible under this clause (3) for any loss, damage, expense, liability or claim that is
finally judicially determined to have resulted from the gross negligence or willful
misconduct of BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc. and/or UBS Financial Services Inc. in conducting the
Directed Share Program. Section 11(d) shall apply equally to any Proceeding (as defined
below) brought against BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc. and/or UBS Financial Services Inc. or any such
person in respect of which indemnity may be sought against the Company pursuant to the
immediately preceding sentence, except that the Company shall be liable for the expenses of
one separate counsel (in addition to any local counsel) for BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc. and/or
UBS Financial Services Inc., as applicable, and any such person, separate and in addition to
counsel for the persons who may seek indemnification pursuant to the first paragraph of this
Section 11(a), in any such Proceeding.
(b) Each Underwriter severally agrees to indemnify, defend and hold harmless the
Company, the Parent, their directors and officers and any person who controls the Company or
the Parent within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing persons, from and
against any loss, damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, the Company, the Parent or any such person may
incur under the Securities Act, the Exchange Act, Canadian Securities Laws, the common law
or otherwise, insofar as such loss, damage, expense, liability or claim arises out of or is
based upon (i) any untrue statement or alleged untrue statement of a material fact contained
in, and in conformity with information furnished in writing by any Underwriter through the
Managing Underwriters to the Company expressly for use in, the Registration Statement (or in
the Registration Statement as amended by any post-effective amendment thereof by the
Company), the Preliminary Prospectuses, the Preliminary Final Prospectuses and the
Prospectuses, or arises out of or is based upon any omission or alleged omission to state a
material fact in such Registration Statement, Preliminary Prospectus, the Preliminary Final
Prospectuses or Prospectuses in connection with such information, which material fact was
not contained in such information and
34
which material fact was required to be stated in such Registration Statement, the
Preliminary Final Prospectuses, the Preliminary Prospectus, or Prospectus or was necessary
to make such information not misleading or (ii) any untrue statement or alleged untrue
statement of a material fact contained in, and in conformity with information furnished in
writing by any Underwriter through the Managing Underwriters to the Company expressly for
use in, a Prospectus or a Permitted Free Writing Prospectus, or arises out of or is based
upon any omission or alleged omission to state a material fact in such Prospectus or
Permitted Free Writing Prospectus in connection with such information, which material fact
was not contained in such information and which material fact was necessary in order to make
the statements in such information, in the light of the circumstances under which they were
made, not misleading.
(c) If any action, suit or proceeding (each, a “Proceeding”) is brought against
a person (an “indemnified party”) in respect of which indemnity may be sought
against the Company, the Parent or an Underwriter (as applicable, the “indemnifying
party”) pursuant to subsection (a) or (b), respectively, of this Section 11, such
indemnified party shall promptly notify such indemnifying party in writing of the
institution of such Proceeding and such indemnifying party shall assume the defense of such
Proceeding, including the employment of counsel reasonably satisfactory to such indemnified
party and payment of all fees and expenses; provided, however, that the
omission to so notify such indemnifying party shall not relieve such indemnifying party from
any liability which such indemnifying party may have to any indemnified party or otherwise.
The indemnified party or parties shall have the right to employ its or their own counsel in
any such case, but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless the employment of such counsel shall have been
authorized in writing by the indemnifying party (or, in the case such indemnifying party is
the Parent, by the Parent in connection with the defense of such Proceeding or the
indemnifying party shall not have, within a reasonable period of time in light of the
circumstances, employed counsel to defend such Proceeding or such indemnified party or
parties shall have reasonably concluded that there may be defenses available to it or them
which are different from, additional to or in conflict with those available to such
indemnifying party (in which case such indemnifying party shall not have the right to direct
the defense of such Proceeding on behalf of the indemnified party or parties), in any of
which events such fees and expenses shall be borne by such indemnifying party and paid as
incurred (it being understood, however, that such indemnifying party shall not be liable for
the expenses of more than one separate counsel (in addition to any local counsel) in any one
Proceeding or series of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). The indemnifying party shall not
be liable for any settlement of any Proceeding effected without its written consent (or, in
the case such indemnifying party is the Parent, without the written consent of the Parent)
but, if settled with its written consent (or, in the case such indemnifying party is the
Parent, with the written consent of the Parent), such indemnifying party agrees to indemnify
and hold harmless the indemnified party or parties from and against any loss or liability by
reason of such settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party (or, where such indemnifying
party is the Parent,
35
requested the Parent) to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this Section 11(c), then the indemnifying
party agrees that it shall be liable for any settlement of any Proceeding effected without
its written consent if (i) such settlement is entered into more than 60 business days after
receipt by such indemnifying party (or, where such indemnifying party is the Parent, receipt
by the Parent) of the aforesaid request, (ii) such indemnifying party shall not have fully
reimbursed the indemnified party in accordance with such request prior to the date of such
settlement, and (iii) such indemnified party shall have given the indemnifying party (or,
where such indemnifying party is the Parent, given the Parent) at least 30 days’ prior
notice of its intention to settle. No indemnifying party shall, without the prior written
consent of the indemnified party (or, where such indemnified party is the Parent, the prior
written consent of the Parent), effect any settlement of any pending or threatened
Proceeding in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability on claims
that are the subject matter of such Proceeding and does not include an admission of fault or
culpability or a failure to act by or on behalf of such indemnified party.
(d) If the indemnification provided for in this Section 11 is unavailable to an
indemnified party under subsections (a) and (b) of this Section 11 or insufficient to hold
an indemnified party harmless in respect of any losses, damages, expenses, liabilities or
claims referred to therein, then each applicable indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such losses, damages,
expenses, liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Parent on the one hand and the
Underwriters on the other hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company and the Parent on the one hand and of the
Underwriters on the other in connection with the statements or omissions which resulted in
such losses, damages, expenses, liabilities or claims, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the Parent on
the one hand and the Underwriters on the other shall be deemed to be in the same respective
proportions as the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company and the Parent, and the
total underwriting discounts and commissions received by the Underwriters, bear to the
aggregate public offering price of the Shares. The relative fault of the Company and the
Parent on the one hand and of the Underwriters on the other shall be determined by reference
to, among other things, whether the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission relates to information supplied by the Company
or the Parent or by the Underwriters and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, damages, expenses, liabilities and
claims referred to in this subsection shall be deemed to
36
include any legal or other fees or expenses reasonably incurred by such party in
connection with investigating, preparing to defend or defending any Proceeding.
(e) The Company, the Parent and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 11 were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations referred to
in subsection (d) above. Notwithstanding the provisions of this Section 11, no Underwriter
shall be required to contribute any amount in excess of the amount by which the total price
at which the Shares underwritten by such Underwriter and distributed to the public were
offered to the public exceeds the amount of any damage which such Underwriter has otherwise
been required to pay by reason of such untrue statement or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(e) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The Underwriters’
obligations to contribute pursuant to this Section 11 are several in proportion to their
respective underwriting commitments and not joint.
(f) Notwithstanding the provisions of this Section 11, the Parent shall not be required
to indemnify the Underwriters or contribute any amount, in either case or collectively, that
exceeds the amount received by the Parent from the Company out of the net proceeds of the
Offering to repay amounts owing to the Parent under an inter-company loan, as described
under “Use of Proceeds” in the Prospectuses.
(g) The indemnity and contribution agreements contained in this Section 11 and the
covenants, warranties and representations of the Company and the Parent contained in this
Agreement shall remain in full force and effect regardless of any investigation made by or
on behalf of any Underwriter, its partners, directors or officers or any person (including
each partner, officer or director of such person) who controls any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, or by or on
behalf of the Company or the Parent, their respective directors or officers or any person
who controls the Company or the Parent within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, and shall survive any termination of this Agreement
or the issuance and delivery of the Shares to be sold by the Company pursuant hereto. The
Company, the Parent and each Underwriter agree promptly to notify each other of the
commencement of any Proceeding against it and, in the case of the Company or the Parent,
against any of their officers or directors in connection with the issuance and sale of the
Shares, or in connection with the Registration Statement, any Preliminary Prospectus, the
Prospectuses or any Permitted Free Writing Prospectus.
12. Information Furnished by the Underwriters. The statements set forth in the last
paragraph on the cover page of the U.S. Prospectus and the statements set forth in (i) the fourth
paragraph, (ii) the first paragraph in the section titled “Commissions,” (iii) the section titled
“Price Stabilization, Short Positions and Passive Market Making,” and (iv) the third and fourth
paragraphs in the section titled “Affiliations,” each under the caption “Underwriting” in the
37
Prospectuses, only insofar as such statements relate to the amount of selling concession and
reallowance or to over-allotment and stabilization activities that may be undertaken by the
Underwriters, constitute the only information furnished by or on behalf of the Underwriters, as
such information is referred to in Sections 3 and 11 hereof.
13. Notices. Except as otherwise herein provided, all statements, requests, notices
and agreements shall be in writing or by telegram or facsimile and, if to the Underwriters, shall
be sufficient in all respects if delivered or sent to BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc., 1 First Canadian
Place, 4th Floor, Toronto, Ontario, M5X 1H3, Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ and to UBS
Securities LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Ms. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and, if
to the Company, shall be sufficient in all respects if delivered or sent to the Company at the
offices of the Company at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Attention: ▇▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ and, if to the Parent, shall be sufficient in all respects if delivered or sent to the
Parent at ATS Automation Tooling Services Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇,
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
14. Governing Law. This Agreement and any claim, counterclaim or dispute of any
kind or nature whatsoever arising out of or in any way relating to this Agreement, directly or
indirectly, shall be governed by, and construed in accordance with, the laws of the State of New
York.
15. Judgment Currency. If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder into any currency other than United States dollars, the
parties hereto agree, to the fullest extent permitted by law, that the rate of exchange used shall
be the rate at which in accordance with normal banking procedures the Underwriters could purchase
United States dollars with such other currency in The City of New York on the business day
preceding that on which final judgment is given. The obligation of the Company and the Parent with
respect to any sum due from it to any Underwriter or any person controlling any Underwriter shall,
notwithstanding any judgment in a currency other than United States dollars, not be discharged
until the first business day following receipt by such Underwriter or controlling person of any sum
in such other currency, and only to the extent that such Underwriter or controlling person may in
accordance with normal banking procedures purchase United States dollars with such other currency.
If the United States dollars so purchased are less than the sum originally due to such Underwriter
or controlling person hereunder, the Company and the Parent agree as a separate obligation and
notwithstanding any such judgment, to indemnify such Underwriter or controlling person against such
loss. If the United States dollars so purchased are greater than the sum originally due to such
Underwriter or controlling person hereunder, such Underwriter or controlling person agrees to pay
to the Company and the Parent an amount equal to the excess of the dollars so purchased over the
sum originally due to such Underwriter or controlling person hereunder.
16. Submission to Jurisdiction; Appointment of Agent for Service.
(a) By the execution and delivery of this Agreement, each Underwriter, the Company and
the Parent (i) submits to the non-exclusive jurisdiction of any court of the State of New
York or the United States District Court for the Southern District of the
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ (each a “New York Court”) for the purpose of any suit,
action, counterclaim or other proceeding arising out of this Agreement, or any of the
agreements or transactions contemplated by this Agreement, the Registration Statement and
the Prospectuses (each, a “Legal Action”), (ii) agrees that all claims in respect of
any Legal Action may be heard and determined in any New York Court, (iii) waives, to the
fullest extent permitted by law, any immunity from jurisdiction of any New York Court or
from any legal process therein, and (iv) waives, to the fullest extent permitted by law, any
claim that such Legal Action is brought in an inconvenient forum. Each Underwriter, the
Company (on its behalf and, to the extent permitted by applicable law, on behalf of its
shareholder and affiliates) and the Parent (on its behalf and on behalf of its shareholders
and affiliates) each waive all right to trial by jury in any Legal Action (whether based
upon contract, tort or otherwise) in any way arising out of or relating to this Agreement.
(b) The Company, the Parent and each Underwriter agree that a non-appealable judgment
in any such Legal Action brought in any such court shall be conclusive and binding upon the
Company, the Parent, and the Underwriters, as applicable, and may be enforced in any other
court, the jurisdiction of which the Company, the Parent, and the Underwriters are or may be
subject to, by suit upon such judgment.
(c) The Company hereby irrevocably appoints Photowatt Technologies USA Inc., with
offices at ▇▇▇-▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, as its agent for service
of process in any Legal Action described in the preceding paragraph and agrees that service
of process in any such Legal Action may be made upon it at the office of such agent. The
Company waives, to the fullest extent permitted by law, any other requirements of or
objections to personal jurisdiction with respect thereto. The Company represents and
warrants that such agent has agreed to act as the Company’s agent for service of process,
and the Company agrees to take any and all action, including the filing of any and all
documents and instruments, that may be necessary to continue such appointment in full force
and effect.
(d) The Parent irrevocably appoints Matrix Solar Technologies, Inc., with offices at
▇▇▇-▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, as its agent for service of process in
any Legal Action described in Section 16(a) and agrees that service of process in any such
Legal Action may be made upon it at the office of such agent. The Parent waives, to the
fullest extent permitted by law, any other requirements of or objections to personal
jurisdiction with respect thereto. The Parent represents and warrants that such agent has
agreed to act as the Parent’s agent for service of process, and the Parent agrees to take
any and all action, including the filing of any and all documents and instruments, that may
be necessary to continue such appointment in full force and effect.
17. Parties at Interest. The Agreement herein set forth has been and is made solely
for the benefit of the Underwriters, the Company and the Parent, and to the extent provided in
Section 11 hereof, the controlling persons, partners, directors and officers referred to in such
Section, and their respective successors, assigns, heirs, personal representatives and executors
39
and administrators. Any affiliate of any Underwriter which is duly qualified and authorized
to sell the Shares in Canada pursuant to the Canadian Prospectus and offers and sells the Shares in
any of the Qualifying Provinces or any affiliate of any Underwriter that signs the Canadian
Prospectus shall be deemed a third party beneficiary of the representations and warranties of the
Company contained in Section 3, the representations and warranties of the Parent contained in
Section 4, the covenants of the Company and the Parent contained in Sections 5 and 6, the
indemnification and contribution obligations of the Company and the Parent contained in Section 11
and the officers’ certificates, legal opinions and other documents required to be delivered to the
Underwriters pursuant hereto, and each such affiliate shall have the right to enforce such
provisions of this Agreement to the same extent as if it were an Underwriter. No other person,
partnership, association or corporation (including a purchaser, as such purchaser, from any of the
Underwriters) shall acquire or have any right under or by virtue of this Agreement.
18. No Fiduciary Relationship. The Company and the Parent each hereby acknowledge
that the Underwriters are acting solely as underwriters in connection with the purchase and sale of
the Company’s securities. The Company and the Parent each further acknowledge that the
Underwriters are acting pursuant to a contractual relationship created solely by this Agreement
entered into on an arm’s length basis, and in no event do the parties intend that the Underwriters
act or be responsible as a fiduciary to the Company or the Parent, their respective management,
shareholders or creditors or any other person in connection with any activity that the Underwriters
may undertake or have undertaken in furtherance of the purchase and sale of the Company’s
securities, either before or after the date hereof. The Underwriters hereby expressly disclaim any
fiduciary or similar obligations to the Company or the Parent, either in connection with the
transactions contemplated by this Agreement or any matters leading up to such transactions, and the
Company and the Parent each hereby confirm their understanding and agreement to that effect. The
Company, the Parent and the Underwriters agree that they are each responsible for making their own
independent judgments with respect to any such transactions and that any opinions or views
expressed by the Underwriters to the Company or the Parent regarding such transactions, including,
but not limited to, any opinions or views with respect to the price or market for the Company’s
securities, do not constitute advice or recommendations to the Company or the Parent. The Company
and the Parent each hereby waive and release, to the fullest extent permitted by law, any claims
that the Company or the Parent may have against the Underwriters with respect to any breach or
alleged breach of any fiduciary or similar duty to the Company or the Parent in connection with the
transactions contemplated by this Agreement or any matters leading up to such transactions.
19. Counterparts. This Agreement may be signed by the parties in one or more
counterparts which together shall constitute one and the same agreement among the parties.
20. Construction. The section headings in this Agreement have been inserted as a
matter of convenience of reference and are not a part of this Agreement.
21. Successors and Assigns. This Agreement shall be binding upon the Underwriters,
the Company, the Parent and their successors and assigns and any successor or assign of any
substantial portion of the Company’s, the Parent’s and any of the Underwriters’ respective
businesses and/or assets.
40
22. Time. Time shall be of the essence in this Agreement.
[The Remainder of this Page Intentionally Left Blank; Signature Page Follows]
41
If the foregoing correctly sets forth the understanding among the Company, the Parent and the
several Underwriters, please so indicate in the space provided below for that purpose, whereupon
this Agreement and your acceptance shall constitute a binding agreement among the Company, the
Parent and the Underwriters, severally.
| Very truly yours, Photowatt Technologies Inc. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| ATS Automation Tooling Systems Inc. |
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| By: | ||||
| Name: | ||||
| Title: | ||||
Accepted and agreed to as of the date
first above written, on behalf of
themselves and the other several
Underwriters named in Schedule A
first above written, on behalf of
themselves and the other several
Underwriters named in Schedule A
| BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc. | ||||
By: |
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| Title: | ||||
By: |
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| Title: | ||||
| UBS Securities LLC | ||||
By: |
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| Title: | ||||
By: |
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| Title: | ||||