Exhibit 1.1
4,000,000
Common Shares
GSI Lumonics Inc.
UNDERWRITING AGREEMENT
----------------------
April 11, 2000
CIBC World Markets Corp.
Chase Securities Inc.
▇▇▇▇▇▇▇ & Company, Inc.
c/o CIBC World Markets Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
On behalf of the Several
Underwriters named on
Schedule I attached hereto.
Ladies and Gentlemen:
GSI Lumonics Inc., a corporation organized and existing under the laws
of New Brunswick, Canada (the "Company"), proposes, subject to the terms and
conditions contained herein, to sell to you and the other underwriters named on
Schedule I to this Agreement (the "Underwriters"), for whom you are acting as
Representatives (the "Representatives"), an aggregate of 4,000,000 shares (the
"Firm Shares") of the Company's common shares (the "Common Shares"). All of the
Firm Shares are to be issued and sold by the Company. The respective amounts of
the Firm Shares to be purchased by each of the several Underwriters are set
forth opposite their names on Schedule I hereto. In addition, the Company and
the persons listed on Schedule II hereto (the "Selling Shareholders") propose to
grant to the Underwriters an option to purchase up to an aggregate of 600,000
additional Common Shares (the "Option Shares") from it and the Selling
Shareholders for the purpose of covering over-allotments in connection with the
sale of the Firm Shares. Of the 600,000 Option Shares, up to 296,612 are first
to be sold by the Company and then up to 303,388 are to be sold by the Selling
Shareholders. The Firm Shares and the Option Shares are together called the
"Shares."
The public offering price per share for the Shares and the purchase
price per share for the Shares to be paid by the several Underwriters shall be
agreed upon by the Company, acting on behalf of itself and the Selling
Shareholders, and the Representatives, acting on behalf of the several
Underwriters, and such agreement shall be set forth in a separate written
instrument substantially in the form of Exhibit A hereto (the "Price
Determination Agreement"). The Price Determination Agreement may take the form
of an exchange of any standard form of written telecommunication among the
Company, the Selling Shareholders and the Representatives and shall specify such
applicable information as is indicated in Exhibit A hereto. The offering of the
Shares will be governed by this Agreement, as supplemented by the Price
Determination Agreement. From and after the date of the execution and delivery
of the Price
Determination Agreement, this Agreement shall be deemed to incorporate, and,
unless the context otherwise indicates, all references contained herein to "this
Agreement" and to the phrase "herein" shall be deemed to include, the Price
Determination Agreement.
1. Sale and Purchase of the Shares.
-------------------------------
On the basis of the representations, warranties and agreements
contained in, and subject to the terms and conditions of, this Agreement:
(a) The Company agrees to sell to each of the Underwriters, and each
of the Underwriters agrees, severally and not jointly, to purchase from
the Company, the number of Firm Shares set forth opposite the name of
such Underwriter under the column "Number of Firm Shares to be Purchased
from the Company" on Schedule I to this Agreement, subject to adjustment
in accordance with Section 11 hereof. The purchase price for the Firm
Shares (the "Initial Price") shall be as set out in the Price
Determination Agreement.
(b) The Company and the Selling Shareholders grant to the several
Underwriters an option to purchase, severally and not jointly, all or any
part of the Option Shares at the Initial Price. The number of Option
Shares to be purchased by each Underwriter shall be the same percentage
(adjusted by the Representatives to eliminate fractions) of the total
number of Option Shares to be purchased by the Underwriter as such
Underwriter is purchasing of the Firm Shares. Such option may be
exercised only to cover over-allotments in the sales of the Firm Shares
by the Underwriters and may be exercised in whole or in part at any time
on or before 12:00 noon, New York City time, on the business day before
the Firm Shares Closing Date (as defined below), and from time to time
thereafter within 30 days after the date of this Agreement, in each case
upon written, facsimile or telegraphic notice, or verbal or telephonic
notice confirmed by written, facsimile or telegraphic notice, by the
Representatives to the Company no later than 12:00 noon, New York City
time, on the business day before the Firm Shares Closing Date or at least
two business days before the Option Shares Closing Date (as defined
below), as the case may be, setting forth the number of Option Shares to
be purchased and the time and date (if other than the Firm Shares Closing
Date) of such purchase. Such option, if exercised in part, shall first
be satisfied by purchase of Option Shares to be sold by the Company and
then by purchase of Option Shares to be sold by the Selling Shareholders,
on a pro rata basis.
(c) The Company understands that the Underwriters, other than
▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc. ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), propose to make a public offering
of Shares in the United States and CIBC World Markets Inc. ("CIBC Inc."),
the Canadian affiliate of CIBC World Markets Corp. and ▇▇▇▇▇▇▇ ▇▇▇▇▇,
propose to make a public offering of Shares in Canada, as set out in the
Prospectus (defined below), all as soon as the Representatives deem
advisable after this Agreement has been executed and delivered.
-2-
CIBC Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ shall offer Shares directly in Canada only as
permitted by the Canadian Securities Laws (as hereinafter defined).
2. Delivery and Payment. Delivery by the Company to the
--------------------
Representatives for the respective accounts of the Underwriters, and payment of
the purchase price by certified or official bank check or checks payable in New
York Clearing House (same day) funds or immediately available funds by wire
transfer drawn to the order of the Company for the shares purchased from the
Company, against delivery of the respective certificates therefor to the
Representatives, shall take place at the offices of CIBC World Markets Corp.,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other location as
agreed to by the Company and the Representatives, at 10:00 a.m., New York City
time, on the fifth business day following the date of this Agreement, or at such
time on such other date, not later than 10 business days after the date of this
Agreement, as shall be agreed upon by the Company and the Representatives (such
time and date of delivery and payment are called the "Firm Shares Closing
Date").
In the event the option with respect to the Option Shares is exercised
in whole or on one or more occasions in part, delivery by the Company and the
Selling Shareholders of the Option Shares to the Representatives for the
respective accounts of the Underwriters and payment of the purchase price
thereof in immediately available funds by wire transfer or by certified or
official bank check or checks payable in New York Clearing House (same day)
funds or immediately available funds by wire transfer to the Company and to the
Selling Shareholders for the shares purchased from the Selling Shareholders
shall take place at the offices specified above of CIBC World Markets Corp., or
such other location as agreed to by the Company and the Representatives, at the
time and on the date (which may be the same date as, but in no event shall be
earlier than, the Firm Shares Closing Date) specified in the notice referred to
in Section 1(b) (such time and date of delivery and payment are called the
"Option Shares Closing Date"). The Firm Shares Closing Date and the Option
Shares Closing Date are called, individually, a "Closing Date" and, together,
the "Closing Dates."
Certificates evidencing the Shares shall be registered in such names
and shall be in such denominations as the Representatives shall request, in the
case of the Firm Shares, at least two full business days before the Firm Shares
Closing Date or, in the case of Option Shares, on the day of notice of exercise
of the option as described in Section l(b) and shall be made available to the
Representatives for checking and packaging, at such place as is designated by
the Representatives, on the full business day before the Firm Shares Closing
Date (or the Option Shares Closing Date in the case of the Option Shares).
3. Registration Statement and Prospectus; Public Offering. The
------------------------------------------------------
Company has prepared and filed in conformity with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and the published
rules and regulations thereunder (the "Rules") adopted by the Securities and
Exchange Commission (the "Commission") a Registration Statement (as hereinafter
defined) on Form S-3 (No. 333-32966), including a preliminary prospectus
relating to the Shares, and such amendments thereof as may have been required to
the
-3-
date of this Agreement. Copies of such Registration Statement (including all
amendments thereof) and of the related U.S. Preliminary Prospectus (as
hereinafter defined) have heretofore been delivered by the Company to you. The
term "U.S. Preliminary Prospectus" means any preliminary prospectus (as
described in Rule 430 of the Rules) included at any time as a part of the
Registration Statement or filed with the Commission by the Company with the
consent of the Representatives pursuant to Rule 424(a) of the Rules. The term
"Registration Statement" as used in this Agreement means the initial
registration statement (including all exhibits, financial schedules and
information deemed to be a part of the Registration Statement through
incorporation by reference or otherwise), as amended at the time and on the date
it becomes effective (the "Effective Date") including the information (if any)
deemed to be part thereof at the time of effectiveness pursuant to Rule 430A of
the Rules. If the Company has filed an abbreviated registration statement to
register additional Shares pursuant to Rule 462(b) under the Rules (the "462(b)
Registration Statement") then any reference herein to the Registration Statement
shall also be deemed to include such 462(b) Registration Statement. The term
"U.S. Prospectus" as used in this Agreement means the prospectus in the form
included in the Registration Statement at the time of effectiveness; or, if Rule
430A of the Rules is relied on, the term U.S. Prospectus shall also include the
final prospectus filed with the Commission pursuant to Rule 424(b) of the Rules.
The Company also has prepared and filed with the Canadian securities regulatory
authorities in all the provinces of Canada (the "Qualifying Provinces") a
preliminary short form prospectus relating to the Shares (in the English and
French languages, as applicable, including any documents incorporated therein by
reference, the "Canadian Preliminary Prospectus") and has obtained from the
Ontario Securities Commission (the "OSC") a mutual reliance review system
decision document, evidencing that receipts of securities regulatory authorities
in each of the Qualifying Provinces have been issued in respect of the Canadian
Preliminary Prospectus.
In addition, the Company (a) has prepared and filed with the Canadian
securities regulatory authorities in all of the Qualifying Provinces, a final
short form prospectus relating to the Shares (in the English and French
languages, as applicable, including any documents incorporated therein by
reference, the "Canadian Final Prospectus") omitting the PREP Information (as
hereinafter defined) in accordance with the rules and procedures established
pursuant to the Canadian Securities Administrators' National Policy No. 44
(incorporated by reference into Rule 44-1C (In the Matter of Rules for Shelf
Prospectus Offerings and for Pricing Offerings after the Prospectus is
Receipted)) for the pricing of securities after the final receipt for a
prospectus has been obtained (the "PREP Procedures") and (b) will prepare and
file, promptly after the execution and delivery of this Agreement, (i) with the
Canadian securities regulatory authorities in all of the Qualifying Provinces,
in accordance with the PREP Procedures, a supplemented prospectus setting forth
the PREP Information (in the English and French languages, as applicable,
including any documents incorporated therein by reference, the "Canadian
Supplemented Prospectus"). The information, if any, included in the Canadian
Supplemented Prospectus that is omitted from the Canadian Final Prospectus for
which a final receipt has been obtained from the OSC, but that is deemed under
the PREP Procedures to be incorporated by reference into the Canadian Final
Prospectus as of the date of the Canadian Supplemented Prospectus is referred to
herein as the "PREP Information". The Canadian Final
-4-
Prospectus for which a final receipt has been obtained from the OSC is herein
referred to as the "Canadian Prospectus," except that, if, after the execution
of this Agreement, a Canadian Supplemented Prospectus containing the PREP
Information is thereafter filed with the Canadian securities regulatory
authorities in all of the Qualifying Provinces, the term "Canadian Prospectus"
shall refer to such Canadian Supplemented Prospectus, including the documents
incorporated by reference therein. The U.S. Prospectus and the Canadian
Prospectus in the respective forms used to confirm sales of Shares are
hereinafter collectively referred to as the "Prospectus".
The Company and the Selling Shareholders understand that the
Underwriters propose to make a public offering of the Shares, as set forth in
and pursuant to the U.S. Prospectus, as soon after the Effective Date and the
date of this Agreement as the Representatives deem advisable. The Company and
the Selling Shareholders hereby confirm that the Underwriters and dealers have
been authorized to distribute or cause to be distributed each U.S. Preliminary
Prospectus and Canadian Preliminary Prospectus and are authorized to distribute
the U.S. Prospectus, the Canadian Final Prospectus and the Canadian Supplemented
Prospectus, as from time to time amended or supplemented if the Company
furnishes amendments or supplements thereto to the Underwriters in each case in
accordance with the rules and regulations governing the distribution in the
United States and Canada.
4. Covenants, Representations and Warranties of the Company. The
--------------------------------------------------------
Company covenants, represents and warrants to each Underwriter as follows:
(a) The Company shall, as soon as possible, comply with the PREP
Procedures and file with the securities regulatory authorities in each of
the Qualifying Provinces the Canadian Supplemented Prospectus relating to
the Shares and otherwise fulfill and comply with, to the satisfaction of
the Representatives, all applicable securities laws in each of the
Qualifying Provinces and the respective regulations and rules under such
laws together with applicable published policy statements of the Canadian
Securities Administrators and the securities regulatory authorities in
the Qualifying Provinces (the "Canadian Securities Laws") required to be
fulfilled or complied with by the Company to enable the Shares to be
lawfully distributed in the Qualifying Provinces through investment
dealers or brokers registered as such in the Qualifying Provinces. These
requirements shall be fulfilled in each of the Qualifying Provinces not
later than 5:00 p.m. (Toronto Time) on the next business day following
the date hereof, or by such later date or dates as may be determined by
the Representatives in their sole discretion.
(b) On the Effective Date, the Registration Statement (in such form
as at the Effective Date) complied, and on the date of the U.S.
Prospectus, the date any post-effective amendment to the Registration
Statement becomes effective, the date any supplement or amendment to the
U.S. Prospectus is filed with the Commission and each Closing Date, the
Registration Statement and the U.S. Prospectus (and any amendment thereof
or supplement thereto) will comply, in all material respects, with
-5-
the applicable provisions of the Securities Act and the Rules and the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
rules and regulations of the Commission thereunder. The Registration
Statement did not, as of the Effective Date, contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; and on the Effective Date and the other dates referred to
above neither the Registration Statement nor the U.S. Prospectus nor any
amendment thereof or supplement thereto will contain any untrue statement
of a material fact or will omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading. When any related preliminary prospectus was first filed with
the Commission (whether filed as part of the Registration Statement or
any amendment thereto or pursuant to Rule 424(a) of the Rules) and when
any amendment thereof or supplement thereto was first filed with the
Commission, such preliminary prospectus as amended or supplemented
complied in all material respects with the applicable provisions of the
Securities Act and the Rules and did not contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading. Notwithstanding the foregoing, none of the representations
and warranties in this paragraph 4(b) shall apply to statements in, or
omissions from, the Registration Statement or the Prospectus made in
reliance upon, and in conformity with, information herein or otherwise
furnished in writing by the Representatives on behalf of the several
Underwriters expressly for use in the Registration Statement or the
Prospectus. With respect to the preceding sentence, the Company
acknowledges that the only information furnished in writing by the
Representatives on behalf of the several Underwriters for use in the
Registration Statement or the Prospectus are the sections with respect to
"Underwriting" in the U.S. Prospectus and in the Canadian Prospectus
(other than the information therein with respect to the Company's $13.1
million credit facility) and information about orders and delivery on the
inside covers thereof.
(c) The Registration Statement is effective under the Securities
Act; and no stop order preventing or suspending the effectiveness of the
Registration Statement or suspending or preventing the use of the U.S.
Prospectus has been issued; and no proceedings for that purpose have been
instituted or, to the Company's knowledge after due inquiry are
threatened under the Securities Act. Any required filing of the U.S.
Prospectus and any supplement thereto pursuant to Rule 424(b) of the
Rules has been or will be made in the manner and within the time period
required by such Rule 424(b).
(d) The documents incorporated by reference in the Registration
Statement and the U.S. Prospectus, at the time they were filed with the
Commission, complied in all material respects with the requirements of
the Exchange Act and, when read together and with the other information
in the Registration Statement and the U.S. Prospectus, do not contain an
untrue statement of a material fact or omit to state a
-6-
material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading.
(e) The financial statements of the Company (including all notes and
schedules thereto) included or incorporated by reference in the
Registration Statement, the U.S. Prospectus and the Canadian Prospectus
present fairly, in all material respects, the financial position, the
results of operations, the statements of cash flows and the statements of
stockholders' equity and the other information purported to be shown
therein of the Company at the respective dates and for the respective
periods to which they apply in conformity with U.S. generally accepted
accounting principles in the case of the U.S. Prospectus and Canadian
generally accepted accounting principles in the case of the Canadian
Prospectus, consistently applied throughout the periods involved, except
as indicated therein. The summary and selected financial data included
in the U.S. Prospectus and the Canadian Prospectus present fairly the
information shown therein as at the respective dates and for the
respective periods specified; and the summary and selected financial data
have been presented on a basis consistent with the consolidated financial
statements so set forth in or incorporated by reference in the U.S.
Prospectus and the Canadian Prospectus and other financial information.
(f) Ernst & Young LLP and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, whose reports are
filed with the Commission as a part of the Registration Statement, are
and, during the periods covered by their reports, were independent public
auditors as required by the Securities Act and the Rules.
(g) The Company and each of its subsidiaries other than those
subsidiaries that, in aggregate, total less than 10% of consolidated
revenues and individually are less than 2% of consolidated revenues (the
"Subsidiaries") is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation.
The Company does not control directly or indirectly any entities, other
than the Subsidiaries. The Company and each Subsidiary is duly qualified
to do business and is in good standing as a foreign corporation in each
jurisdiction in which the nature of the business conducted by it or
location of the assets or properties owned, leased or licensed by it
requires such qualification, except for such jurisdictions where the
failure to so qualify would not have a material adverse effect on the
assets or properties, business, results of operations or financial
condition of the Company and each of its subsidiaries, taken as a whole
(a "Material Adverse Effect"). The Company and each of its Subsidiaries
has all requisite corporate power and authority, and all necessary
authorizations, approvals, consents, orders, licenses, certificates and
permits of and from all governmental or regulatory bodies or any other
person or entity (collectively, the "Permits"), to own, lease and license
its assets and properties and conduct its business, all of which are
valid and in full force and effect, as described in the Registration
Statement and the Prospectus, except where the lack of such Permits,
individually or in the aggregate, would not have a Material Adverse
-7-
Effect. The Company and each of its Subsidiaries has fulfilled and
performed in all material respects all of its material obligations with
respect to such Permits; and no event has occurred that could reasonably
be expected to result in revocation or termination thereof or results in
any other material impairment of the rights of the Company or any
Subsidiaries, as the case may be thereunder. Except as may be required
under the Securities Act, Canadian Securities Laws and state and foreign
Blue Sky laws, no other Permits are required on the part of the Company
or any Subsidiary to enter into, deliver and perform this Agreement and
to issue and sell the Shares.
(h) The Company and each of its Subsidiaries owns or possesses
adequate and enforceable rights to use all patents, trademarks, trademark
applications, trade names, service marks, copyrights, copyright
applications, licenses, know-how and other similar rights and proprietary
knowledge (collectively, "Intangibles") described in the Prospectus as
being owned by it necessary for the conduct of its business. Except as
expressly set forth in the Registration Statement and the Prospectus or
as otherwise disclosed in writing to the Underwriters, neither the
Company nor any of its Subsidiaries has received any notice of, or is
aware of, any infringement of or conflict with asserted rights of others
with respect to any Intangibles.
(i) The Company and each of its Subsidiaries has good and marketable
title in fee simple to all items of real property and good and marketable
title to all personal property described in the Prospectus as being owned
by it subject to defects that would not result in a Material Adverse
Effect. Any real property and buildings described in the Prospectus as
being held under lease by the Company and each of its Subsidiaries is
held by it under valid, existing and enforceable leases, free and clear
of all liens, encumbrances, claims, security interests and defects,
except such as are described in the Registration Statement and the
Prospectus or would not have a Material Adverse Effect.
(j) Except as expressly set forth in the Registration Statement and
the Prospectus, there are no litigation or governmental proceedings to
which the Company or its Subsidiaries is subject or which is pending or,
to the knowledge of the Company, threatened, against the Company or any
of its Subsidiaries, which, individually or in the aggregate, might
reasonably be expected to have a Material Adverse Effect, adversely
affect the consummation of this Agreement or which is required to be
disclosed in the Registration Statement and the Prospectus that is not so
disclosed.
(k) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
described therein (a) there has not been any material adverse change with
regard to the assets or properties, business, results of operations or
financial condition of the Company; (b) neither the Company nor its
Subsidiaries has sustained any loss or interference with its assets,
businesses or properties (whether owned or leased) from fire, explosion,
earthquake,
-8-
flood or other calamity, whether or not covered by insurance, or from any
labor dispute or any court or legislative or other governmental action,
order or decree which would have a Material Adverse Effect; and (c) since
the date of the latest balance sheet included in the Registration
Statement and the Prospectus, except as reflected therein, neither the
Company nor its Subsidiaries has (i) issued any securities or incurred
any liability or obligation, direct or contingent, for borrowed money,
except such options or shares issued in the ordinary course of business
under existing stock option or similar plans since the date referred to
in the Prospectus, liabilities or obligations incurred in the ordinary
course of business, (ii) entered into any material transaction not in the
ordinary course of business or (iii) declared or paid any dividend or
made any distribution on any shares of its stock or redeemed, purchased
or otherwise acquired or agreed to redeem, purchase or otherwise acquire
any shares of its stock.
(l) There is no document, contract or other agreement of a character
required to be described in the Registration Statement or Prospectus or
to be filed as an exhibit to the Registration Statement which is not
described or filed as required by the Securities Act, the Rules or
Canadian Securities Laws. Each description of a contract, document or
other agreement in the Registration Statement and the Prospectus
accurately reflects in all material respects the terms of the underlying
document, contract or agreement. Each agreement described in the
Registration Statement and Prospectus or listed in the Exhibits to the
Registration Statement or incorporated by reference to which the Company
or a Subsidiary is a party, subject to customary exceptions, is in full
force and effect and is valid and enforceable by and against the Company
or a Subsidiary, as the case may be, in accordance with its terms.
Neither the Company nor any Subsidiary, if such Subsidiary is a party,
nor to the Company's knowledge, any other party is in default in the
observance or performance of any term or obligation to be performed by it
under any such agreement, and no event has occurred which with notice or
lapse of time or both would constitute such a default, in any such case
which default or event, individually or in the aggregate, would have a
Material Adverse Effect. No default exists, and no event has occurred
which with notice or lapse of time or both would constitute a default, in
the due performance and observance of any term, covenant or condition, by
the Company or any Subsidiary, if such Subsidiary is a party thereto, of
any other agreement or instrument to which the Company or such Subsidiary
is a party or by which the Company, any Subsidiary or their respective
properties or business may be bound or affected which default or event,
individually or in the aggregate, would have a Material Adverse Effect.
(m) Neither the Company nor any of its Subsidiaries is in violation
of any term or provision of its charter or by-laws or of any franchise,
license, permit, judgment, decree, order, statute, rule or regulation,
where the consequences of such violation, individually or in the
aggregate, would have a Material Adverse Effect.
-9-
(n) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the transactions
contemplated hereby (including, without limitation, the issuance and sale
by the Company of the Shares) will give rise to a right to terminate or
accelerate the due date of any payment due under, or conflict with or
result in the breach of any term or provision of, or constitute a default
(or an event which with notice or lapse of time or both would constitute
a default) under, or require any consent or waiver under, or result in
the execution or imposition of any lien, charge or encumbrance upon any
properties or assets of the Company or any Subsidiary pursuant to the
terms of, any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company or any Subsidiary is a party or by which
either the Company or any Subsidiary or any of their respective
properties or businesses is bound, or any franchise, license, permit,
judgment, decree, order, statute, rule or regulation applicable to the
Company or any Subsidiary or violate any provision of the charter or by-
laws of the Company or any Subsidiary, except for such consents or
waivers which have already been obtained and are in full force and effect
or which if not obtained would not have a Material Adverse Effect.
(o) The Company has authorized and outstanding capital stock as set
forth under the caption "Capitalization" in the Prospectus. The
certificates evidencing the Shares are in due and proper legal form and
have been duly authorized for issuance by the Company. All of the issued
and outstanding Common Shares have been duly and validly issued and are
fully paid and nonassessable. There are no statutory preemptive or other
similar rights to subscribe for or to purchase or acquire any Common
Shares of the Company or any Subsidiaries or any such rights pursuant to
their certificate of incorporation, articles or by-laws or any agreement
or instrument to or by which the Company or any of its Subsidiaries is a
party or bound. The Shares, when issued and sold pursuant to this
Agreement, will be duly and validly issued, fully paid and nonassessable;
and none of them will be issued in violation of any preemptive or other
similar right. Except as disclosed in the Registration Statement and the
Prospectus, there is no outstanding option, warrant or other right
calling for the issuance of, and there is no commitment, plan or
arrangement to issue, any shares of the Company or any Subsidiaries or
any security convertible into, or exercisable or exchangeable for, such
shares other than options or shares issued in the ordinary course of
business under existing stock option or similar plans since the date
referred to in the Prospectus. The Common Shares and the Shares conform
in all material respects to all statements in relation thereto contained
in the Registration Statement and the Prospectus. All outstanding shares
of capital stock of each Subsidiary have been duly authorized and validly
issued, and are fully paid and nonassessable and are owned directly by
the Company or by another wholly owned subsidiary of the Company, free
and clear of any security interests, liens, encumbrances, equities or
claims, other than those described in the Prospectus.
(p) No holder of any security of the Company has the right to have
any security owned by such holder included in the Registration Statement
or to demand
-10-
registration of any security owned by such holder during the period
ending 90 days after the date of this Agreement. Each director and
officer of the Company and Sumitomo Heavy Industries Ltd. have delivered
to the Representatives its or his written lock-up agreement in the form
attached to this Agreement ("Lock-Up Agreement").
(q) All necessary corporate action has been duly and validly taken
by the Company to authorize the execution, delivery and performance of
this Agreement and the issuance and sale of the Shares by the Company.
This Agreement has been duly and validly authorized, executed and
delivered by the Company and constitutes and will constitute the legal,
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles.
(r) Neither the Company nor any of its Subsidiaries are involved in
any labor dispute nor, to the knowledge of the Company, is any such
dispute threatened, which dispute would have a Material Adverse Effect.
The Company is not aware of any existing or imminent labor disturbance by
the employees of any of its principal suppliers or contractors which
would have a Material Adverse Effect. The Company is not aware of any
threatened or pending litigation between the Company or any of its
Subsidiaries and any of its executive officers which, if adversely
determined, could have a Material Adverse Effect and has not been
informed that such officers will not remain in the employment of the
Company.
(s) No material transaction has occurred between or among the
Company and any of its officers or directors or five percent shareholders
or any affiliate or affiliates of any such officer or director or five
percent shareholders that is required to be described in and is not
described in the Registration Statement and the Prospectus.
(t) The Company has not taken, nor will it take, directly or
indirectly, any action designed to or which would reasonably be expected
to cause or result in, or which has constituted or which would reasonably
be expected to constitute, the stabilization or manipulation of the price
of the Common Shares to facilitate the sale or resale of any of the
Shares.
(u) The Company and its Subsidiaries have filed all material
federal, state, provincial, local and foreign tax returns which are
required to be filed through the date hereof, or have received extensions
thereof, and have paid all taxes shown on such returns and all
assessments received by them to the extent that the same are material and
have become due other than those taxes and assessments that are currently
being challenged and for which a reserve has been taken. There are no tax
audits or investigations pending, which if adversely determined would
have a Material Adverse
-11-
Effect; nor are there any material proposed additional tax assessments
against the Company or any of its Subsidiaries.
(v) The Shares have been duly authorized for quotation on the
National Association of Securities Dealers Automated Quotation ("Nasdaq")
National Market System, subject to official Notice of Issuance and have
been approved for listing on The Toronto Stock Exchange.
(w) The books, records and accounts of the Company and its
Subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions in, and dispositions of, the assets of, and the results of
operations of, the Company and its Subsidiaries. The Company and each of
its Subsidiaries maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in accordance with U.S. and Canadian
generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance
with management's general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(x) The Company and its Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are customary in the businesses in which it or they are
engaged; all policies of insurance and fidelity or surety bonds insuring
the Company or any of its Subsidiaries or the Company's or its
Subsidiaries' respective businesses, assets, employees, officers and
directors are in full force and effect; the Company and each of its
Subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and neither the Company nor any
Subsidiary of the Company believes that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a Material Adverse
Effect.
(y) Each approval, consent, order, authorization, designation,
declaration or filing of, by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and
delivery by the Company of this Agreement and the consummation of the
transactions herein contemplated required to be obtained or performed by
the Company (except such additional steps as may be required by the
National Association of Securities Dealers, Inc. (the "NASD") or may be
necessary to qualify the Shares for public offering by the Underwriters
under the state securities or Blue Sky laws) has been obtained or made
and is in full force and effect.
-12-
(z) To the best of the knowledge of the Company, there are no
affiliations with the NASD among the Company's officers, directors or,
any five percent or greater stockholder of the Company, except as set
forth in the Registration Statement or otherwise disclosed in writing to
the Representatives.
(aa) (i) Each of the Company and its Subsidiaries is in compliance
with all rules, laws and regulations relating to the use, treatment,
storage and disposal of toxic substances and protection of health or the
environment ("Environmental Law") which are applicable to its business
except for non-compliance that would not have a Material Adverse Effect;
(ii) neither the Company nor any of its Subsidiaries has received any
notice from (x) any third party of an asserted claim under Environmental
Laws which would have a Material Adverse Effect, or (y) any governmental
authority of an asserted claim under Environmental Laws; (iii) each of
the Company and its Subsidiaries has received all permits, licenses or
other approvals required of it under applicable Environmental Laws to
conduct its business, except where the failure to obtain such permit,
license or approval would not have a Material Adverse Effect, and is in
compliance with all terms and conditions of any such permit, license or
approval; (iv) to the Company's knowledge, no facts currently exist that
will require the Company or any of its Subsidiaries to make future
material capital expenditures to comply with Environmental Laws; and (v)
no property which is or has been owned, leased or occupied by the Company
or its Subsidiaries has been designated as a Superfund site pursuant to
the Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended (42 U.S.C. Section 9601, et. seq.) ("CERCLA"), or
otherwise designated as a contaminated site under applicable state,
provincial or local law. Neither the Company nor any of its Subsidiaries
has been named as a "potentially responsible party" under CERCLA.
(bb) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its Subsidiaries, in the
course of which the Company identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws, or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to
third parties). On the basis of such review, the Company has in good
faith concluded that such associated costs and liabilities would not,
singly or in the aggregate, have a Material Adverse Effect.
(cc) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of proceeds thereof as described
in the Prospectus, will not be an "investment company" within the meaning
of the Investment Company Act of 1940, as amended (the "Investment
Company Act").
(dd) None of the Company, any of its Subsidiaries or any other
person acting on behalf of the Company or any of its Subsidiaries,
including, without
-13-
limitation, any director, officer, agent or employee of the Company or
any of its Subsidiaries has directly or indirectly, while acting on
behalf of the Company or any of its Subsidiaries (i) used any corporate
funds for unlawful contributions, gifts, entertainment or other unlawful
expenses relating to political activity; (ii) made any unlawful payment
to foreign or domestic government officials or employees or to foreign or
domestic political parties or campaigns from corporate funds; (iii)
violated any provision of the Foreign Corrupt Practices Act of 1977, as
amended; or (iv) made any other unlawful payment; except to the extent
that any such unlawful contribution, payment or act would not be
material.
(ee) The Company shall use the net proceeds of the offering of the
Shares to be sold by it pursuant to this Agreement in the manner
specified in the Prospectus under the caption "Use of Proceeds".
(ff) The Company is eligible to use the PREP Procedures and a
receipt has been obtained from the OSC in respect of the Canadian
Prospectus.
(gg) Filing of the Canadian Preliminary Prospectus, the Canadian
Final Prospectus and the Canadian Supplemented Prospectus shall
constitute a representation and warranty by the Company to the
Underwriters that as of the date of filing:
(i) all information and statements (except information
relating solely to the Underwriters) contained in the Canadian
Final Prospectus or the Canadian Supplemented Prospectus, as the
case may be, including the documents incorporated therein by
reference and any other management information circular,
financial statements or material change reports (other than
confidential material change reports) filed by the Company with
any securities regulatory authority in any of the Qualifying
Provinces after the date of the Canadian Prospectus and prior to
the termination of the distribution of the Shares (collectively,
the "Documents Incorporated by Reference"), are true and correct
and contain no misrepresentation and constitute full, true and
plain disclosure of all material facts relating to the Company
and the Shares;
(ii) no material fact or information has been omitted from
such disclosure (except facts or information relating solely to
the Underwriters) which is required to be stated in such
disclosure or is necessary to make the statements or information
contained in such disclosure not misleading in light of the
circumstances under which they were made; and
(iii) such documents comply fully with the requirements of
the Canadian Securities Laws.
Such filings shall also constitute the Company's consent to the
Underwriters' use of the Canadian Preliminary Prospectus, Canadian Final
Prospectus, the Documents
-14-
Incorporated by Reference and the Canadian Supplemented Prospectus in
connection with distribution of the Shares in the Qualifying Provinces in
compliance with the provisions of this Agreement and the Canadian
Securities Laws.
5. Covenants, Representations and Warranties of the Selling
--------------------------------------------------------
Shareholders. Each Selling Shareholder hereby severally covenants, represents
------------
and warrants to each Underwriter as follows:
(a) Such Selling Shareholder (i) has caused certificates or (ii) has
executed a Power of Attorney (as hereinafter defined) authorizing the
person named therein to exercise such number of options and cause the
certificates, for the number of Option Shares to be sold by such Selling
Shareholder hereunder to be delivered to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (the
"Custodian"), endorsed in blank or with blank stock powers duly executed,
with a signature appropriately guaranteed, such certificates to be held
in custody by the Custodian for delivery, pursuant to the provisions of
this Agreement and agreements dated March 2000 between the Custodian and
each Selling Shareholder (together, the "Custody Agreement").
(b) Such Selling Shareholder has granted an irrevocable power of
attorney (the "Power of Attorney") to the person named therein, on behalf
of such Selling Shareholder, to execute and deliver this Agreement and
any other document necessary or desirable in connection with the
transactions contemplated hereby and to deliver the Option Shares to be
sold by the Selling Shareholder pursuant hereto.
(c) This Agreement, the Custody Agreement, the Power of Attorney and
the Lock-Up Agreement have each been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder and, assuming due
authorization, execution and delivery by the other parties hereto or
thereto, constitutes the valid and legally binding agreement of such
Selling Shareholder, enforceable against such Selling Shareholder in
accordance with its terms. If a Selling Shareholder is an individual, he
or she is of the age of majority, of sound mind and does not have the
status of a bankrupt.
(d) The execution and delivery by such Selling Shareholder of this
Agreement and the performance by such Selling Shareholder of its
obligations under this Agreement (i) will not contravene any provision of
applicable law, statute, regulation or filing or any agreement or other
instrument binding upon such Selling Shareholder or any judgment, order
or decree of any governmental body, agency or court having jurisdiction
over such Selling Shareholder, (ii) does not require any consent,
approval, authorization or order of or registration or filing with any
court or governmental agency or body having jurisdiction over it, except
such as may be required by the Blue Sky laws of the various states in
connection with the offer and sale of the Shares which have been or will
be effected in accordance with this Agreement, (iii) does not and will
not violate any statute, law, regulation or filing or judgment,
injunction, order or decree applicable to such Selling Shareholder or
(iv)
-15-
will not result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of such Selling Shareholder
pursuant to the terms of any agreement or instrument to which such
Selling Shareholder is a party or by which such Selling Shareholder may
be bound or to which any of the property or assets of such Selling
Shareholder is subject in any case in such a manner as to impair the
ability of such Selling Shareholder to perform this Agreement.
(e) Such Selling Shareholder has (or upon exercise of such Selling
Shareholder's options will have) valid and marketable title to the Option
Shares to be sold by such Selling Shareholder free and clear of any lien,
claim, security interest or other encumbrance, including, without
limitation, any restriction on transfer other than restrictions on
transfer pursuant to the Lock-Up Agreement or securities laws (except
that there is no restriction on transfer under securities laws in the
case of the Option Shares in connection with this Offering).
(f) Such Selling Shareholder has full legal right, power and
authorization, and any approval required by law, to sell, assign,
transfer and deliver the Option Shares to be sold by such Selling
Shareholder in the manner provided by this Agreement.
(g) Upon delivery of and payment for the Option Shares to be sold by
such Selling Shareholder pursuant to this Agreement, the several
Underwriters will receive valid and marketable title to such Option
Shares free and clear of any lien, claim, security interest or other
encumbrance other than as created or permitted to exist by the
Underwriters.
(h) All information relating to such Selling Shareholder furnished
in writing by such Selling Shareholder expressly for use in the
Registration Statement and the Prospectus is, and on each Closing Date
will be, true, correct, and complete, and does not, and on each Closing
Date will not, contain any untrue statement of a material fact or omit to
state any material fact necessary to make such information not
misleading.
(i) Such Selling Shareholder has reviewed the Registration Statement
and Prospectus and, although such Selling Shareholder has not
independently verified the accuracy or completeness of all the
information contained therein, nothing has come to the attention of such
Selling Shareholder that causes such Selling Shareholder to believe that
(i) on the Effective Date, the Registration Statement contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein in order to make the statements made
therein not misleading and (ii) on the Effective Date, the Prospectus
contained and, on each Closing Date contains, any untrue statement of a
material fact or omitted or omits to state any material fact necessary in
order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
-16-
(j) The sale of Option Shares by such Selling Shareholder pursuant
to this Agreement is not prompted by such Selling Shareholder's knowledge
of any material information concerning the Company or any of its
Subsidiaries which is required to be but is not set forth in the
Prospectus.
(k) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed or that would reasonably be
expected to cause or result in stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the
Shares.
(l) The representations and warranties of such Selling Shareholder
in the Custody Agreement are true and correct.
6. Conditions of the Underwriters' Obligations. The obligations
-------------------------------------------
of the Underwriters under this Agreement are several and not joint. The
respective obligations of the Underwriters to purchase the Shares are subject to
each of the following terms and conditions:
(a) Notification that the Registration Statement has become
effective shall have been received by the Representatives and the U.S.
Prospectus shall have been timely filed with the Commission in accordance
with Section 7(a)(i) of this Agreement.
(b) No order preventing or suspending the use of any preliminary
prospectus, the U.S. Prospectus or the Canadian Prospectus shall have
been or shall be in effect and no order suspending the effectiveness of
the Registration Statement shall be in effect and no proceedings for such
purpose shall be pending before or threatened by the Commission, and any
requests for additional information on the part of the Commission (to be
included in the Registration Statement or the U.S. Prospectus or
otherwise) shall have been complied with to the satisfaction of the
Commission and the Representatives.
(c) The Underwriters shall be provided with evidence satisfactory to
them, acting reasonably, that the Shares have been approved for
designation upon notice of issuance on the Nasdaq National Market.
(d) The representations and warranties of the Company and the
Selling Shareholders contained in this Agreement and in the certificates
delivered pursuant to Section 6(e) and (f), if qualified by any
materiality qualifier whatsoever shall be true and correct, and otherwise
shall be true and correct in all material respects on and as of each
Closing Date as if made on such date. The Company and the Selling
Shareholders shall have performed all covenants and agreements and
satisfied all the conditions contained in this Agreement required to be
performed or satisfied by them at or before such Closing Date.
-17-
(e) The Representatives shall have received on each Closing Date a
certificate, addressed to the Representatives and dated such Closing
Date, executed by the chief executive or chief operating officer and the
chief financial officer or chief accounting officer of the Company on the
Company's behalf to the effect that (i) the signers of such certificate
have carefully examined the Registration Statement, the U.S. Prospectus,
the Canadian Prospectus and this Agreement and that the representations
and warranties of the Company in this Agreement are true and correct on
and as of such Closing Date with the same effect as if made on such
Closing Date and the Company has performed all covenants and agreements
and satisfied all conditions contained in this Agreement required to be
performed or satisfied by it at or prior to such Closing Date, and (ii)
no stop order suspending the effectiveness of the Registration Statement
has been issued and to the best of their knowledge, no proceedings for
that or any similar purpose have been instituted or are pending under the
Securities Act or under Canadian Securities Laws.
(f) The Representatives shall have received on each Closing Date a
certificate, addressed to the Representatives and dated such Closing
Date, of each Selling Shareholder, to the effect that the representations
and warranties of such Selling Shareholder in this Agreement are true and
correct on and as of such Closing Date with the same effect as if made on
such Closing Date and such Selling Shareholder has performed all
covenants and agreements and satisfied all conditions contained in this
Agreement required to be performed or satisfied by him at or prior to
such Closing Date.
(g) The Representatives shall have received, at the time this
Agreement is executed and on each Closing Date a signed letter from Ernst
& Young LLP addressed to the Representatives, and dated, respectively,
the date of this Agreement and each such Closing Date, in form and
substance reasonably satisfactory to the Representatives confirming that
they are independent accountants within the meaning of the Securities Act
and the Rules, that the response to Item 10 of the Registration Statement
is correct insofar as it relates to them and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated by
reference in the Registration Statement, the U.S. Prospectus and
the Canadian Prospectus and reported on by them comply as to form
in all material respects with the applicable accounting
requirements of the Securities Act and the Rules and Canadian
Securities Laws, as applicable;
(ii) on the basis of a reading of the amounts included in the
Registration Statement and the U.S. Prospectus or incorporated by
reference in the Canadian Prospectus under the headings "Summary
Consolidated Financial Data" and "Selected Consolidated Financial
Data," carrying out certain procedures (but not an examination in
accordance with generally accepted
-18-
auditing standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such
letter, a reading of the minutes of the meetings of the
stockholders and directors of the Company, and inquiries of
certain officials of the Company who have responsibility for
financial and accounting matters of the Company as to transactions
and events subsequent to the date of the latest audited financial
statements, except as disclosed in the Registration Statement and
the Prospectus, nothing came to their attention which caused them
to believe that:
(A) the amounts in "Summary Consolidated Financial Data,"
and "Selected Consolidated Financial Data" included in the
Registration Statement and the Prospectus do not agree with
the corresponding amounts in the audited and unaudited
financial statements from which such amounts were derived;
or
(B) with respect to the Company, there were, at a
specified date not more than three business days prior to
the date of the letter, any increases in the current
liabilities and long-term liabilities of the Company or any
decreases in net income or in working capital or the
stockholders' equity of the Company, as compared with the
amounts shown on the Company's audited balance sheet for
the fiscal year ended December 31, 1999 included in the
Registration Statement and U.S. Prospectus and incorporated
by reference in the Canadian Prospectus;
(iii) they have performed certain other procedures as may be
permitted under generally acceptable auditing standards as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company) set forth in the
Registration Statement and the Prospectus and reasonably specified
by the Representatives agrees with the accounting records of the
Company; and
(iv) based upon the procedures set forth in Sections 6(g)(ii)
and (iii) above and a reading of the amounts included in the
Registration Statement under the headings "Summary Consolidated
Financial Data" and "Selected Consolidated Financial Data"
included in the Registration Statement and the Prospectus and a
reading of the financial statements from which certain of such
data were derived, nothing has come to their attention that gives
them reason to believe that the "Summary Consolidated Financial"
and "Selected Consolidated Financial Data" included in the
Registration Statement and the Prospectus do not comply as to the
form in all material respects with the applicable accounting
requirements of the Securities Act, Canadian Securities
-19-
Laws and the Rules or that the information set forth therein is
not fairly stated in relation to the financial statements included
in the Registration Statement or the Prospectus from which certain
of such data were derived.
References to the Registration Statement and the Prospectus in
this Section 6(g) are to such documents as amended and
supplemented at the date of the letter.
(h) The Representatives shall have received on each Closing Date
from Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, U.S. counsel for the Company,
an opinion, addressed to the Representatives and dated such Closing Date,
and stating in effect that:
(i) Each of the Lock-Up Agreements, assuming it has been duly
executed by the Company's stockholders, directors and officers and
duly and validly delivered by such persons, constitutes the legal,
valid and binding obligation of each such person enforceable
against each such person in accordance with its terms, except as
the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights
generally (and the possible judicial application of foreign laws
or governmental action affecting the rights of creditors
generally) and except as enforceability is subject to the
application of general principles of equity (regardless of whether
considered in a proceeding in equity or at law), including,
without limitation, (a) the possible unavailability of specific
performance, injunctive relief or any other equitable remedy and
(b) concepts of materiality, reasonableness, good faith and fair
dealing.
(ii) No consent, approval, authorization or order of any New
York or United States Federal court or governmental agency or
regulatory body is required for the execution, delivery or
performance of this Agreement by the Company or the consummation
of the transactions contemplated hereby, except such as have been
obtained under the Securities Act and such as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the several
Underwriters.
(iii) The statements in the U.S. Prospectus under the caption
"Tax Considerations," excluding "Canadian Tax Considerations"
insofar as such statements constitute a summary of documents
referred to therein or matters of law, are fair summaries in all
material respects and accurately present the information called
for with respect to such documents and matters.
(iv) The Registration Statement, all preliminary prospectuses
and the U.S. Prospectus and each amendment or supplement thereto
(except for the
-20-
financial statements and schedules and other financial and
statistical data included therein, as to which such counsel need
express no opinion) comply as to form in all material respects
with the requirements of the Securities Act and the Rules.
(v) The Registration Statement is effective under the
Securities Act, and no stop order suspending the effectiveness of
the Registration Statement has been issued and to such counsel's
knowledge no proceedings for that purpose have been instituted or
are threatened, pending or contemplated. Any required filing of
the U.S. Prospectus and any supplement thereto pursuant to Rule
424(b) under the Securities Act has been made in the manner and
within the time period required by such Rule 424(b).
(vi) The Company is not an "investment company" or an entity
controlled by an "investment company" as such terms are defined in
the Investment Company Act of 1940.
To the extent deemed advisable by such counsel, they may rely as to
matters of fact on certificates of responsible officers of the Company and
public officials and on the opinions of other counsel satisfactory to the
Representatives as to matters which are governed by laws other than the laws of
the State of New York, the General Corporation Law of the State of Delaware and
the federal laws of the United States; provided that such counsel shall state
that in their opinion that the Underwriters and they are justified in relying on
such other opinions. Copies of such certificates and other opinions shall be
furnished to the Representatives and counsel for the Underwriters.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the Representatives and representatives of the
independent certified public accountants of the Company, at which conferences
the contents of the Registration Statement and the Prospectus and related
matters were discussed and, although such counsel is not passing upon and does
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus (except as
specified in the foregoing opinion), on the basis of the foregoing, no facts
have come to the attention of such counsel which cause such counsel to believe
that the Registration Statement at the time it became effective (except with
respect to the financial statements and notes and schedules thereto and other
financial data, as to which such counsel need express no belief) contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or that the Prospectus as amended or supplemented (except with respect to the
financial statements, notes and schedules thereto and other financial data, as
to which such counsel need make no statement) on the date thereof contained any
untrue statement of a material fact or
-21-
omitted 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.
(i) The Representatives shall have received on each Closing Date
from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Stirling Scales, each Canadian
counsel for the Company, an opinion, addressed to the Representatives and
dated such Closing Date, and stating in effect that:
(i) The Company has been duly continued and is validly existing
as a corporation under the laws of its jurisdiction of
continuance. The Company is duly qualified and in good standing
as a foreign corporation in each jurisdiction in which the
character or location of its assets or properties (owned, leased
or licensed) or the nature of its businesses makes such
qualification necessary, except for such jurisdictions where the
failure to so qualify, individually or in the aggregate, would not
have a Material Adverse Effect.
(ii) The Company has all requisite corporate power and
authority to own, lease and license its assets and properties and
conduct its business as now being conducted and as described in
the Registration Statement, the U.S. Prospectus and the Canadian
Prospectus and with respect to the Company to enter into, deliver
and perform this Agreement and to issue and sell the Shares other
than those required under the state and foreign Blue Sky laws.
(iii) The Company has authorized and issued capital stock as
set forth in the Registration Statement and the Prospectus under
the caption "Capitalization"; the certificates evidencing the
Shares are in due and proper legal form and have been duly
authorized for issuance by the Company; all of the outstanding
Common Shares of the Company have been duly and validly authorized
and issued and are fully paid and nonassessable and none of them
was issued in violation of any preemptive or other similar right.
The Shares when issued and sold pursuant to this Agreement will be
duly and validly issued, outstanding, fully paid and nonassessable
and none of them will have been issued in violation of any
preemptive or other similar right. To the best of such counsel's
knowledge, except as disclosed in the Registration Statement and
the Prospectus, there are no preemptive or other rights to
subscribe for or to purchase or any restriction upon the voting or
transfer of any securities of the Company pursuant to the
Company's Memorandum of Association, articles or by-laws or other
governing documents or any agreements or other instruments to
which the Company is a party or by which it is bound. To the best
of such counsel's knowledge, except as disclosed in the
Registration Statement and the Prospectus, there is no outstanding
option, warrant or other right calling for the issuance of, and no
commitment, plan or arrangement to issue, any shares of stock of
the Company or any security convertible into,
-22-
exercisable for, or exchangeable for stock of the Company other
than as may have been issued in the ordinary course since the date
thereof. The Common Shares conform in all material respects to the
descriptions thereof contained in the Registration Statement and
the Prospectus.
(iv) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and
performance of this Agreement and the issuance and sale of the
Shares. This Agreement has been duly and validly authorized,
executed and delivered by the Company, and this Agreement
constitutes the legal, valid and binding obligation of the
Company.
(v) To the best of such counsel's knowledge, neither the
execution, delivery and performance of this Agreement by the
Company nor the consummation of any of the transactions
contemplated hereby (including, without limitation, the issuance
and sale by the Company of the Shares) will give rise to a right
to terminate or accelerate the due date of any payment due under,
or conflict with or result in the breach of any term or provision
of, or constitute a default (or any event which with notice or
lapse of time, or both, would constitute a default) under, or
require consent or waiver under, or result in the execution or
imposition of any lien, charge, claim, security interest or
encumbrance upon any properties or assets of the Company or any of
the Subsidiaries pursuant to the terms of any indenture, mortgage,
deed of trust, note or other agreement or instrument of which such
counsel is aware and to which the Company or any of the
Subsidiaries is a party or by which either the Company or any of
the Subsidiaries or any of its respective properties or businesses
is bound, or any franchise, license, permit, judgment, decree,
order, statute, rule or regulation of which such counsel is aware
or violate any provision of the charter or by-laws of the Company.
(vi) To the best of such counsel's knowledge, no default
exists, and no event has occurred which with notice or lapse of
time, or both, would constitute a default, in the due performance
and observance of any term, covenant or condition by the Company
or any of the Subsidiaries of any indenture, mortgage, deed of
trust, note or any other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which it or
any of the Subsidiaries or any of their respective assets or
properties or businesses may be bound or affected, where the
consequences of such default, individually or in the aggregate,
would have a Material Adverse Effect.
(vii) To the best of such counsel's knowledge, the Company is
not in violation of any term or provision of its charter or by-
laws and is not in violation of any terms or provisions of any
franchise, license, permit, judgment, decree, order, statute, rule
or regulation, where the consequences of
-23-
such violation, individually or in the aggregate, would have a
Material Adverse Effect.
(viii) No consent, approval, authorization or order of any
court or governmental agency or regulatory body is required for
the execution, delivery or performance of this Agreement by the
Company or the consummation of the transactions contemplated
hereby, except such as have been obtained under the Canadian
Securities Laws in connection with the purchase and distribution
of the Shares by the several Underwriters.
(ix) To the best of such counsel's knowledge, there is no
litigation or governmental or other proceeding or investigation,
before any court or before or by any public body or board pending
or threatened against, or involving the assets, properties or
businesses of, the Company or any of the Subsidiaries which would
have a Material Adverse Effect.
(x) The statements in the U.S. Prospectus under the caption
"Tax Considerations," excluding "U.S. Tax Considerations" and in
the Canadian Prospectus under the caption "Certain Canadian
Federal Income Tax Considerations" insofar as such statements
constitute a summary of documents referred to therein or matters
of law, are fair summaries in all material respects and accurately
present the information called for with respect to such documents
and matters.
(xi) All of the documents incorporated by reference in the
Canadian Prospectus have been filed (in English and French, as
applicable) in each of the Qualifying Provinces.
(xii) The Canadian Supplemented Prospectus, Canadian Final
Prospectus and the Canadian Preliminary Prospectus and each
amendment or supplement thereto (except for the financial
statements and schedules and other financial and statistical data
included therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the Canadian Securities Laws.
(xiii) All necessary documents and proceedings have been filed
and taken and all other legal requirements have been fulfilled
under the laws of each of the provinces of Canada to qualify the
Shares to be offered and sold to the public in each province of
Canada by or through registrants, investment dealers or brokers
registered under applicable legislation of such provinces who have
complied with the relevant provisions of such legislation.
-24-
(xiv) Montreal Trust Company of Canada has been duly appointed
the registrar and transfer agent of the Shares at its principal
transfer office in the cities of Toronto.
(xv) The Shares have been approved for listing on The Toronto
Stock Exchange.
(xvi) The capital stock of the Company conforms in all
material respects to the description thereof contained in the
Prospectus under the caption "Description of Common Shares."
To the extent deemed advisable by such counsel, they may rely as to
matters of fact on certificates of responsible officers of the Company
and public officials and on the opinions of other counsel satisfactory to
the Representatives as to matters which are governed by laws other than
the laws of the Province of Ontario and the federal laws of Canada
provided that such counsel shall state that in their opinion the
Underwriters and they are justified in relying on such other opinions.
Copies of such certificates and other opinions shall be furnished to the
Representatives and counsel for the Underwriters.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of
the Company, representatives of the Representatives and representatives
of the independent certified public accountants of the Company, at which
conferences the contents of the Registration Statement and the Prospectus
and related matters were discussed and, although such counsel is not
passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and the Prospectus (except as specified in the foregoing
opinion), on the basis of the foregoing, no facts have come to the
attention of such counsel which cause such counsel to believe that the
Registration Statement at the time it became effective (except with
respect to the financial statements and notes and schedules thereto and
other financial data, as to which such counsel need express no belief)
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus as amended or
supplemented (except with respect to the financial statements, notes and
schedules thereto and other financial data, as to which such counsel need
make no statement) on the date thereof contained any untrue statement of
a material fact or omitted 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.
(j) The Representatives shall have received on each Closing Date
from counsel for the Company in the jurisdiction listed opposite the name
of each of the Subsidiaries listed on Schedule III (the "Material
Subsidiaries"), an opinion, addressed to the Representatives and dated
such Closing Date, and stating in effect that:
-25-
(i) Each Material Subsidiary has been duly organized and is
validly existing as a corporation under the laws of its
jurisdiction of incorporation. Each such Material Subsidiary is
duly qualified and in good standing as a foreign corporation in
each jurisdiction in which the character or location of its assets
or properties (owned, leased or licensed) or the nature of its
businesses makes such qualification necessary, except for such
jurisdictions where the failure to so qualify, individually or in
the aggregate, would not have a Material Adverse Effect.
(ii) Each such Material Subsidiary has all requisite corporate
power and authority to own, lease and license its assets and
properties and conduct its business as now being conducted.
(iii) The issued and outstanding shares of capital stock of
each such Material Subsidiary have been duly authorized and
validly issued, are fully paid and nonassessable and are owned by
the Company or by another wholly owned subsidiary of the Company,
free and clear of any perfected security interest or, to the
knowledge of such counsel, any other security interests, liens,
encumbrances, equities or claims, other than those described in
the Registration Statement or the Prospectus.
(iv) To the best of such counsel's knowledge, there is no
litigation or governmental or other proceeding or investigation,
before any court or before or by any public body or board pending
or threatened against, or involving the assets, properties or
businesses of, such Material Subsidiary which would have a
Material Adverse Effect.
To the extent deemed advisable by such counsel, they may rely as
to matters of fact on certificates of responsible officers of such
Material Subsidiary and public officials. Copies of such certificates
shall be furnished to the Representatives and counsel for the
Underwriters.
(k) The Representatives shall have received on each Option Shares
Closing Date from Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP an opinion,
addressed to the Representatives and dated such Closing Date, and stating
in effect that:
(i) Assuming that they have been duly and validly executed
and delivered by or on behalf of the Selling Shareholders, this
Agreement, the Custody Agreement, the Power of Attorney and the Lock-
Up Agreement each constitutes the legal, valid and binding obligation
of the Selling Shareholders enforceable against the Selling
Shareholders in accordance with its terms except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
-26-
enforcement of creditors' rights generally (and the possible judicial
application of foreign laws or governmental action affecting the
rights of creditors generally) and except as enforceability is
subject to the application of general principles of equity
(regardless of whether considered in a proceeding in equity or at
law), including, without limitation, (a) the possible unavailability
of specific performance, injunctive relief or any other equitable
remedy and (b) concepts of materiality, reasonableness, good faith
and fair dealing.
(ii) To the extent that the laws of the State of New York or
the federal laws of the United States applies, all of the Selling
Shareholders' rights in the Option Shares to be sold by the Selling
Shareholders pursuant to this Agreement, have been transferred to the
Underwriters who have severally purchased such Option Shares pursuant
to this Agreement, free and clear of adverse claims, assuming for
purposes of this opinion that the Underwriters purchased the same in
good faith without notice of any adverse claims.
(iii) No consent, approval, authorization, license, certificate,
permit or order of any New York or United States federal court,
governmental or regulatory agency, authority or body is required in
connection with the performance of this Agreement by the Selling
Shareholders or the consummation of the transactions contemplated
hereby, including the delivery and sale of the Option Shares to be
delivered and sold by the Selling Shareholders, except such as may be
required under state securities or Blue Sky laws in connection with
the purchase and distribution of the Shares by the several
Underwriters.
To the extent deemed advisable by such counsel, they may rely as to
matters of fact on certificates of the Selling Shareholders and on the
opinions of other counsel satisfactory to the Representatives as to matters
which are governed by laws other than the laws of the State of New York,
the General Corporation Law of the State of Delaware or the federal laws of
the United States in the case of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ and the
laws of the Province of Ontario and the federal laws of Canada applicable
therein in the case of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇; provided that such counsel shall
state that in their opinion the Underwriters and they are justified in
relying on such other opinions. Copies of such certificates and other
opinions shall be furnished to the Representatives and counsel for the
Underwriters.
(l) All proceedings taken in connection with the sale of the Firm
Shares and the Option Shares as herein contemplated shall be reasonably
satisfactory in form and substance to the Representatives, and their
counsel and the Underwriters shall have received from Torys a favorable
opinion, addressed to the Representatives and dated such Closing Date, with
respect to the Shares, the Registration Statement and the Prospectus, and
such other related matters, as the Representatives may reasonably
-27-
request, and the Company shall have furnished to Torys such documents as
they may reasonably request for the purpose of enabling them to pass upon
such matters.
(m) The Representatives shall have received copies of the Lock-up
Agreements executed by each entity or person described in Section 4(p).
(n) The Company and the Selling Shareholders shall have furnished or
caused to be furnished to the Representatives such further certificates
or documents as the Representatives shall have reasonably requested.
7. Covenants of the Company.
------------------------
(a) The Company covenants and agrees as follows:
(i) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of execution
of this Agreement, and any amendments thereto, to become effective
as promptly as possible. The Company shall prepare the U.S.
Prospectus in a form approved by the Representatives (such
approval not to be unreasonably withheld) and file such U.S.
Prospectus pursuant to Rule 424(b) under the Securities Act not
later than the Commission's close of business on the second
business day following the execution and delivery of this
Agreement, or, if applicable, such earlier time as may be required
by Rule 430A(a)(3) under the Securities Act.
(ii) The Company shall promptly advise the Representatives in
writing (i) when any amendment to the Registration Statement shall
have become effective, (ii) of any request by the Commission for
any amendment of the Registration Statement or the U.S. Prospectus
or for any additional information, (iii) of the prevention or
suspension of the use of any preliminary prospectus or the U.S.
Prospectus or of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding known to it for that
purpose and (iv) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Shares
for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose. The Company shall not file any
amendment of the Registration Statement or supplement to the
Prospectus unless the Company has furnished the Representatives a
copy for its review prior to filing and shall not file any such
proposed amendment or supplement to which the Representatives
reasonably object. The Company shall use its best efforts to
prevent the issuance of any such stop order and, if issued, to
obtain as soon as possible the withdrawal thereof.
(iii) If, at any time within one year after the date hereof
when a prospectus relating to the Shares is required to be
delivered under the
-28-
Securities Act and the Rules, any event occurs as a result of
which the U.S. Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein in the
light of the circumstances under which they were made not
misleading, or if it shall be necessary to amend or supplement the
U.S. Prospectus to comply with the Securities Act or the Rules,
the Company promptly shall prepare and file with the Commission,
subject to the second sentence of paragraph (ii) of this Section
7(a), an amendment or supplement which shall correct such
statement or omission or an amendment which shall effect such
compliance.
(iv) The Company shall make generally available to its security
holders and to the Representatives as soon as practicable, but not
later than 45 days after the end of the 12-month period beginning
at the end of the fiscal quarter of the Company during which the
Effective Date occurs (or 90 days if such 12-month period
coincides with the Company's fiscal year), an earning statement
(which need not be audited) of the Company, covering such 12-month
period, which shall satisfy the provisions of Section 11(a) of the
Securities Act or Rule 158 of the Rules.
(v) The Company shall furnish to the Representatives and
counsel for the Underwriters, without charge, signed copies of the
Registration Statement (including all exhibits thereto and
amendments thereof) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) and all
amendments thereof and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Securities Act or the
Rules, as many copies of any preliminary prospectus and the
Prospectus and any amendments thereof and supplements thereto as
the Representatives may reasonably request.
(vi) The Company shall cooperate with the Representatives and
their counsel in endeavoring to qualify the Shares for offer and
sale to the extent required by law in connection with the offering
under the laws of such jurisdictions as the Representatives may
designate and shall maintain such qualifications in effect so long
as required for the distribution of the Shares; provided, however,
that the Company shall not be required in connection therewith, as
a condition thereof, to qualify as a foreign corporation or to
execute a general consent to service of process in any
jurisdiction or subject itself to taxation as doing business in
any jurisdiction.
(vii) Without the prior written consent of CIBC World Markets
Corp., for a period of 90 days after the date of this Agreement,
the Company shall not issue, sell or register with the Commission
(other than on Form S-8 or on any successor form), or otherwise
dispose of, directly or indirectly, any
-29-
equity securities of the Company (or any securities convertible
into, exercisable for or exchangeable for equity securities of the
Company), except for the issuance of the Shares pursuant to the
Registration Statement and the issuance of options and shares
pursuant to the Company's existing stock option plan or bonus plan
or shareholder rights plan as described in the Registration
Statement and the Prospectus. In the event that during this
period, (i) any shares are issued pursuant to the Company's
existing stock option plan or bonus plan or (ii) any registration
is effected on Form S-8 or on any successor form relating to
shares that are issuable during such 90 period, the Company shall
obtain the written agreement of such grantee or purchaser or
holder of such registered securities if it is a director or
executive officer of the Company, that, for a period of 90 days
after the date of this Agreement, such person will not, without
the prior written consent of CIBC World Markets Corp. which would
not be unreasonably withheld or delayed, offer for sale, sell,
distribute, grant any option for the sale of, or otherwise dispose
of, directly or indirectly, or exercise any registration rights
with respect to, any shares of Common Shares (or any securities
convertible into, exercisable for, or exchangeable for any shares
of Common Shares) owned by such person.
(viii) On or before completion of this offering, the Company
shall make all filings required under applicable securities laws
and by the Nasdaq National Market.
(ix) The Company will apply the net proceeds from the offering
of the Shares in the manner set forth under "Use of Proceeds" in
the Prospectus.
(x) To furnish to each of the Underwriters prior to or as soon
as possible following the filing of the Canadian Preliminary
Prospectus, the Canadian Final Prospectus and the Canadian
Supplemented Prospectus, as the case may be:
(A) a copy of the Canadian Preliminary Prospectus, the
Canadian Final Prospectus and the Canadian Supplemented
Prospectus in the English language signed and certified as
required by the Canadian Securities Laws applicable in the
Qualifying Provinces other than Quebec;
(B) a copy of the Canadian Preliminary Prospectus, the
Canadian Final Prospectus and the Canadian Supplemented
Prospectus in the French language signed and certified as
required by the Canadian Securities Laws applicable in Quebec;
(C) a copy of any other document required to be filed by the
Company in compliance with the Canadian Securities Laws;
-30-
(D) opinions of Quebec counsel to the Company addressed to the
Underwriters, the Company, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and Torys in form
and substance satisfactory to the Underwriters, acting
reasonably, dated in the case of the Canadian Preliminary
Prospectus, as of the date of the Canadian Preliminary
Prospectus, in the case of the Canadian Final Prospectus, as of
the date of the Canadian Final Prospectus, and, in the case of
the Canadian Supplemented Prospectus, as of the date of the
Canadian Supplemented Prospectus to the effect that the French
language version of the Canadian Preliminary Prospectus, the
Canadian Final Prospectus and the Canadian Supplemented
Prospectus, including in each case the Documents Incorporated by
Reference, as the case may be, except for the consolidated
financial statements of the Company included in the Prospectus,
together with the reports of Ernst & Young LLP on such financial
statements as at and for the periods included in the Prospectus
and including the notes with respect to such financial statements
and Management's Discussion and Analysis of Financial Condition
and Results of Operations included in the Prospectus (the
"Financial Information") as to which no opinion need be
expressed, is in all material respects a complete and accurate
translation of the English language version thereof, and that
such English and French language versions are not susceptible of
any materially different interpretation with respect to any
matter contained therein; and
(E) an opinion of Ernst & Young LLP addressed to the
Underwriters, the Company, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and Torys, dated in
the case of the Canadian Preliminary Prospectus, as of the date
of the Canadian Preliminary Prospectus, in the case of the
Canadian Final Prospectus, as of the date of the Canadian Final
Prospectus and, in the case of the Canadian Supplemented
Prospectus, as of the date of the Canadian Supplemented
Prospectus, to the effect that the French language version of the
Financial Information is in all material respects, a complete and
proper translation of the English language version thereof.
(xi) During the period from the date of this Agreement to the
completion of distribution of the Shares, to promptly notify, whether
directly or through public announcement, the Underwriters in writing of:
(A) any material change (actual, anticipated, contemplated or
threatened, financial or otherwise) known to it in the business,
affairs, operations, assets, liabilities (contingent or
otherwise) or capital of the Corporation and its Subsidiaries
taken as a whole; or
-31-
(B) any material fact which has arisen or been discovered and
would have been required to have been stated in the Prospectus
had the fact arisen or been discovered on, or prior to, the date
of such document; and
any change in any material fact (which for the purposes of this Agreement
shall be deemed to include the disclosure of any previously undisclosed
material fact) contained in the Canadian Prospectus or any Canadian
Prospectus Amendment, including all Documents Incorporated by Reference,
which fact or change is, or may be, of such a nature as to render any
statements in the Prospectus misleading or untrue or which would result
in a misrepresentation in the Prospectus or which would result in the
Prospectus not complying (to the extent that such compliance is required)
with the Canadian Securities Laws.
The Company shall promptly, and in any event within any applicable time
limitation, comply, to the reasonable satisfaction of the Underwriters,
with all applicable filings and other requirements under the Canadian
Securities Laws as a result of such fact or change. However, the Company
shall not file any amendment to the Canadian Prospectus (a "Canadian
Prospectus Amendment") or other document without first obtaining approval
from the Underwriters, after consultation with the Underwriters with
respect to the form and content thereof, which approval will not be
unreasonably withheld. The Company shall in good faith discuss with the
Underwriters any fact or change in circumstances (actual, anticipated,
contemplated or threatened, financial or otherwise) which is of such a
nature that there is reasonable doubt whether written notice need be
given under this paragraph.
(xii) If during the period of distribution to the public of the
Shares, there shall be any change in the Canadian Securities Laws which,
in the opinion of the Underwriters, requires the filing of a Canadian
Prospectus Amendment, the Company shall, to the satisfaction of the
Underwriters, acting reasonably, promptly prepare and file such Canadian
Prospectus Amendment with the appropriate securities regulatory authority
in each of the Qualifying Provinces where such filing is required.
(xiii) When the Company is required to prepare or prepares any
Canadian Prospectus Amendment, the Company shall also prepare and deliver
promptly to each of the Underwriters signed and certified copies of all
Canadian Prospectus Amendments in the English and French language which
have not been previously delivered. The Canadian Prospectus Amendments
shall be in form and substance satisfactory to the Underwriters acting
reasonably. Concurrently with the delivery of any Canadian Prospectus
Amendments, the Company shall deliver to each of the Underwriters, with
respect to such Canadian Prospectus Amendments, documents similar to
those
-32-
referred to in Sections 7(a)(xi)(C), (D) and (E). The Company shall
promptly furnish the Underwriters, without charge, with commercial copies
of the English and French language versions of such Canadian Prospectus
Amendment, in such quantities and at such cities as the Representatives
may from time to time reasonably request.
(xiv) To cause commercial copies of the Canadian Prospectus in the
English and French languages to be delivered to the Underwriters without
charge, in such numbers and in such cities as the Underwriters may
reasonably request by oral instructions to the printer of the Prospectus
given forthwith after the Underwriters have been advised that the Company
has complied with the Canadian Securities Laws with respect to the filing
thereof. Such delivery shall be effected as soon as possible and, in any
event, on or before a date one Business Day after compliance with the
Canadian Securities Laws with respect to the filing thereof.
(b) The Company agrees to pay, or reimburse if paid by the
Representatives, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses incident
to the performance of the obligations of the Company under this Agreement
including those relating to: (i) the preparation, printing, filing and
distribution of the Registration Statement including all exhibits thereto,
each preliminary prospectus, the Prospectus, all amendments and supplements
to the Registration Statement and the Prospectus if required during the one
year period after the date hereof, and the printing, filing and distribution
of this Agreement; (ii) the preparation and delivery of certificates for the
Shares to the Underwriters; (iii) the registration or qualification of the
Shares for offer and sale under the securities or Blue Sky laws of the
various jurisdictions referred to in Section 7(a)(vi), including the
reasonable fees and disbursements of counsel for the Underwriters in
connection with such registration and qualification and the preparation,
printing, distribution and shipment of preliminary and supplementary Blue Sky
memoranda (of not more than U.S.$5,000); (iv) the furnishing (including costs
of shipping and mailing) to the Representatives and to the Underwriters of
copies of each preliminary prospectus, the Prospectus and all amendments or
supplements to the Prospectus, and of the several documents required by this
Section to be so furnished, as may be reasonably requested for use in
connection with the offering and sale of the Shares by the Underwriters or by
dealers to whom Shares may be sold; (v) the filing fees of the NASD in
connection with its review of the terms of the public offering and reasonable
fees and disbursements of counsel for the Underwriters in connection with
such review; (vi) inclusion of the Shares for quotation on the Nasdaq
National Market; (vii) all transfer taxes, if any, with respect to the sale
and delivery of the Shares by the Company and the Selling Shareholders to the
Underwriters; and (viii) all costs and expenses incident to listing the
Shares on the Nasdaq National Market and The Toronto Stock Exchange. Subject
to the provisions of Section 10, the Underwriters agree to pay, whether or
not the transactions contemplated hereby are consummated or this Agreement is
terminated, all costs and expenses incident to the
-33-
performance of the obligations of the Underwriters under this Agreement
not payable by the Company pursuant to the preceding sentence, including,
without limitation, the fees and disbursements of counsel for the
Underwriters.
8. Indemnification.
----------------
(a) The Company, and each Selling Shareholder agrees, jointly and
severally, to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act or who
is an affiliate of a Representative against any and all losses, claims,
damages and liabilities, joint or several (including any reasonable
investigation, legal and other expenses incurred in connection with, and
any amount paid in settlement of, any action, suit or proceeding or any
claim asserted), to which they, or any of them, may become subject under
the Securities Act, the Exchange Act, Canadian Securities Laws or other
federal, provincial or state law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities arise
out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment thereof or
supplement thereto required within one year from the date hereof, or in
any Blue Sky application or other information or other documents executed
by the Company filed in any state or other jurisdiction to qualify any or
all of the Shares under the securities laws thereof (any such
application, document or information being hereinafter referred to as a
"Blue Sky Application") or arise out of or are based upon 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;
provided, however, that such indemnity shall not inure to the benefit of
any Underwriter (or any person controlling such Underwriter) on account
of any losses, claims, damages or liabilities arising from the sale of
the Shares to any person by such Underwriter if such untrue statement or
omission or alleged untrue statement or omission was made in such
preliminary prospectus, the Registration Statement or the Prospectus, or
such amendment or supplement thereto, or in any Blue Sky Application in
reliance upon and in conformity with information furnished in writing to
the Company by the Representatives on behalf of any Underwriter
specifically for use therein; provided, further, that with respect to any
such untrue statement or omission made in any preliminary prospectus, the
indemnity agreement contained in this Section 8(a) shall not inure to the
benefit of the Underwriter from whom the person asserting any such
losses, claims, damages or liabilities purchased the Shares concerned if
any such loss, claim, damage or liability of such Underwriter is a result
of the fact that both (A) a copy of the Prospectus was not sent or given
to such person at or prior to written confirmation of the sale of such
Share to such person and (B) the untrue statement or omission in the
preliminary prospectus was corrected in the Prospectus. Notwithstanding
the foregoing,
-34-
liability of any Selling Shareholder pursuant to the provisions of this
Section 8(a) shall be limited to an amount equal to the aggregate net
proceeds received by such Selling Shareholder from the sale of the Option
Shares sold by such Selling Shareholders hereunder. This indemnity
agreement will be in addition to any liability which the Company and
Selling Shareholders may otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, the Selling Shareholders and each person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, each director of the
Company, and each officer of the Company who signs the Registration
Statement, to the same extent as the foregoing indemnity from the
Company, and the Selling Shareholders to each Underwriter, but only
insofar as such losses, claims, damages or liabilities arise out of or
are based upon any untrue statement or omission or alleged untrue
statement or omission which was made in any preliminary prospectus, the
Registration Statement or the Prospectus, or any amendment thereof or
supplement thereto, contained in the sections with respect to
"Underwriting" in the U.S. Prospectus and in the Canadian Prospectus
(other than the information therein with respect to the Company's $13.1
million credit facility) and information about orders and delivery on the
inside covers thereof; provided however, that the obligation of each
Underwriter to indemnify the Company or the Selling Shareholders
(including any controlling person, director or officer thereof) shall be
limited to the net proceeds received by the Company or the Selling
Shareholder from such Underwriter.
(c) Any party that proposes to assert the right to be indemnified
under this Section 8 will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party or
parties under this Section 8, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a copy of all
papers served. No indemnification provided for in Section 8(a) or 8(b)
shall be available to any party who shall fail to give notice as provided
in this Section 8(c) if the party to whom notice was not given was
unaware of the proceeding to which such notice would have related and was
materially prejudiced by the failure to give such notice but the omission
so to notify such indemnifying party of any such action, suit or
proceeding shall not relieve it from any liability that it may have to
any indemnified party for contribution or otherwise than under this
Section 8. In case any such action, suit or proceeding shall be brought
against any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party,
and after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof and the approval by the
indemnified party of such counsel, the indemnifying parties shall not be
liable to such indemnified party for any legal or other expenses,
-35-
except as provided below and except for the reasonable costs of
investigation subsequently incurred by such indemnified party in
connection with the defense thereof. The indemnified party shall have the
right to employ its counsel in any such action, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless
(i) the employment of counsel by such indemnified party has been
authorized in writing by the indemnifying parties, (ii) the indemnified
party shall have been advised by counsel that there may be one or more
legal defenses available to it which are different from or in addition to
those available to the indemnifying party (in which case the indemnifying
parties shall not have the right to direct the defense of such action on
behalf of the indemnified party) or (iii) the indemnifying parties shall
not have employed counsel to assume the defense of such action within a
reasonable time after notice of the commencement thereof, in each of
which cases the fees and expenses of counsel shall be at the expense of
the indemnifying parties. In no event shall the indemnifying parties be
responsible for fees and expenses of more than one firm for all
indemnified parties. An indemnifying party shall not be liable for any
settlement of any action, suit, proceeding or claim effected without its
written consent, which consent shall not be unreasonably withheld or
delayed.
9. Contribution. In order to provide for just and equitable
------------
contribution in circumstances in which the indemnification provided for in
Section 8(a) or 8(b) is due in accordance with its terms but for any reason is
held to be unavailable to or insufficient to hold harmless an indemnified party
under Section 8(a) or 8(b), then each indemnifying party shall contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claims asserted,
but after deducting any contribution received by any person entitled hereunder
to contribution from any person who may be liable for contribution) to which the
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Selling Shareholders on
the one hand and the Underwriters on the other from the offering of the Shares
or, if such allocation is not permitted by applicable law or indemnification is
not available as a result of the indemnifying party not having received notice
as provided in Section 8 hereof, in such proportion as is appropriate to reflect
not only the relative benefits referred to above but also the relative fault of
the Company and the Selling Shareholders on the one hand and the Underwriters on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company, the
Selling Shareholders and the Underwriters shall be deemed to be in the same
proportion as (x) the total proceeds from the offering (net of underwriting
discounts but before deducting expenses) received by the Company or the Selling
Shareholders, as set forth in the table on the cover page of the Prospectus,
bear to (y) the underwriting discounts received by the Underwriters, as set
forth in the table on the cover page of the Prospectus. The relative fault of
the Company and the Selling Shareholders or the Underwriters shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact related to information supplied by the Company and
the Selling Shareholders or the Underwriters and the parties' relative intent,
knowledge, access
-36-
to information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 9 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 which does not
take account of the equitable considerations referred to above. Notwithstanding
the provisions of this Section 9, (i) in no case shall any Underwriter (except
as may be provided in the Agreement Among Underwriters) be liable or responsible
for any amount in excess of the underwriting discount applicable to the Shares
purchased by such Underwriter hereunder; (ii) the Company shall be liable and
responsible for any amount in excess of such underwriting discount; and (iii) in
no case shall any Selling Shareholders be liable and responsible for any amount
in excess of the aggregate net proceeds of the sale of Shares received by such
Selling Shareholders; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 9, each person, if
any, who controls an Underwriter within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act shall have the same rights
to contribution as such Underwriter, and each person, if any, who controls the
Company within the meaning of the Section 15 of the Securities Act or Section
20(a) of the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to clauses (i) and
(ii) in the immediately preceding sentence of this Section 9. Any party entitled
to contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this Section 9,
notify such party or parties from whom contribution may be sought, but the
omission so to notify such party or parties from whom contribution may be sought
shall not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have hereunder or otherwise than under this
Section 9. No party shall be liable for contribution with respect to any action,
suit, proceeding or claim settled without its written consent. The Underwriter's
obligations to contribute pursuant to this Section 9 are several in proportion
to their respective underwriting commitments and not joint.
10. Termination. This Agreement may be terminated with respect to
-----------
the Shares to be purchased on a Closing Date by the Representatives by notifying
the Company and the Selling Shareholders at any time:
(a) in the absolute discretion of the Representatives at or before
any Closing Date: (i) if on or prior to such date, any domestic or
international event or act or occurrence has materially disrupted, or in
the opinion of the Representatives will in the future materially disrupt,
the securities markets; (ii) if there has occurred any new outbreak or
material escalation of hostilities or other calamity or crisis the effect
of which on the financial markets of the United States or Canada is such
as to make it, in the judgment of the Representatives, inadvisable to
proceed with the offering; (iii) if there shall be such a material
adverse change in general financial, political or economic conditions or
the effect of international conditions on the financial markets
-37-
in the United States or Canada is such as to make it, in the judgment of
the Representatives, inadvisable or impracticable to market the Shares;
(iv) if trading in the Shares has been suspended by the Commission, the
Ontario Securities Commission or The Toronto Stock Exchange, or trading
generally on the New York Stock Exchange, Inc., the American Stock
Exchange, Inc., the Nasdaq National Market or The Toronto Stock Exchange
has been suspended or limited, or minimum or maximum ranges for prices
for securities shall have been fixed, or maximum ranges for prices for
securities have been required, by said exchanges or by order of the
Commission, the National Association of Securities Dealers, Inc., or any
other governmental or regulatory authority; (v) if a banking moratorium
has been declared by any state or federal authority; or (vi) if, in the
judgment of the Representatives, there has occurred since the date hereof
a Material Adverse Effect, or
(b) at or before any Closing Date, that any of the conditions
specified in Section 6 shall not have been fulfilled when and as required
by this Agreement.
If this Agreement is terminated pursuant to any of its provisions,
neither the Company nor the Selling Shareholders shall be under any liability to
any Underwriter, and no Underwriter shall be under any liability to the Company,
except that (y) if this Agreement is terminated by the Representatives or the
Underwriters because of any failure, refusal or inability on the part of the
Company or the Selling Shareholders to comply with the terms or to fulfill any
of the conditions of this Agreement, the Company or, if applicable, the
defaulting Selling Shareholders will reimburse the Underwriters for all
reasonable out-of-pocket expenses (including the reasonable fees and
disbursements of their counsel) incurred by them in connection with the proposed
purchase and sale of the Shares or in contemplation of performing their
obligations hereunder and (z) no Underwriter who shall have failed or refused to
purchase the Shares agreed to be purchased by it under this Agreement, without
some reason sufficient hereunder to justify cancellation or termination of its
obligations under this Agreement, shall be relieved of liability to the Company,
the Selling Shareholders or to the other Underwriters for damages occasioned by
its failure or refusal.
11. Substitution of Underwriters. If one or more of the
----------------------------
Underwriters shall fail (other than for a reason sufficient to justify the
cancellation or termination of this Agreement under Section 10) to purchase on
any Closing Date the Shares agreed to be purchased on such Closing Date by such
Underwriter or Underwriters, the Representatives may find one or more substitute
underwriters to purchase such Shares or make such other arrangements as the
Representatives may deem advisable or one or more of the remaining Underwriters
may agree to purchase such Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement. If no
such arrangements have been made by the close of business on the business day
following such Closing Date,
(a) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Shares that
all the Underwriters are obligated to purchase on such Closing Date, then
each of the nondefaulting
-38-
Underwriters shall be obligated to purchase such Shares on the terms
herein set forth in proportion to their respective obligations hereunder;
provided, that in no event shall the maximum number of Shares that any
Underwriter has agreed to purchase pursuant to Section 1 be increased
pursuant to this Section 11 by more than one-ninth of such number of
Shares without the written consent of such Underwriter, or
(b) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Shares that all
the Underwriters are obligated to purchase on such Closing Date, then the
Company shall be entitled to one additional business day within which it
may, but is not obligated to, find one or more substitute underwriters
reasonably satisfactory to the Representatives to purchase such Shares
upon the terms set forth in this Agreement.
In any such case, either the Representatives or the Company shall have
the right to postpone the applicable Closing Date for a period of not more than
five business days in order that necessary changes and arrangements (including
any necessary amendments or supplements to the Registration Statement or
Prospectus) may be effected by the Representatives and the Company. If the
number of Shares to be purchased on such Closing Date by such defaulting
Underwriter or Underwriters shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, and none of the
nondefaulting Underwriters or the Company shall make arrangements pursuant to
this Section 11 within the period stated for the purchase of the Shares that the
defaulting Underwriters agreed to purchase, this Agreement shall terminate with
respect to the Shares to be purchased on such Closing Date without liability on
the part of any nondefaulting Underwriter to the Company or the Selling
Shareholders and without liability on the part of the Company, except in both
cases as provided in Sections 7(b), 8, 9 and 10. The provisions of this
Section 11 shall not in any way affect the liability of any defaulting
Underwriter to the Company or the nondefaulting Underwriters arising out of such
default. A substitute underwriter hereunder shall become an Underwriter for all
purposes of this Agreement.
12. Miscellaneous. The respective agreements, representations,
-------------
warranties, indemnities and other statements of the Company or its officers, of
the Selling Shareholders and of the Underwriters set forth in or made pursuant
to this Agreement shall remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or the
Selling Shareholders or any of the officers, directors or controlling persons
referred to in Sections 8 and 9 hereof, and shall survive delivery of and
payment for the Shares. The provisions of Sections 7(b), 8, 9 and 10 shall
survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the
Underwriters, the Company and the Selling Shareholders and their respective
successors and assigns, and, to the extent expressed herein, for the benefit of
persons controlling any of the Underwriters, or the Company, and directors and
officers of the Company, and their respective successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement.
-39-
The term "successors and assigns" shall not include any purchaser of Shares from
any Underwriter merely because of such purchase.
All notices and communications hereunder shall be in writing and
mailed or delivered or by telephone or telegraph if subsequently confirmed in
writing, (a) if to the Representatives, c/o CIBC World Markets Corp., One World
Financial Center, New York, New York; 10281 Attention: ▇▇▇ ▇▇▇▇▇, with a copy to
Torys, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇; 10017, Attention: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, Esq. and (b) if to the Company, to its agent for service as such
agent's address appears on the cover page of the Registration Statement with a
copy to Milbank Tweed Hadley & ▇▇▇▇▇▇ LLP, 1 Chase Manhattan Plaza, New York,
New York, 10005, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq. and to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
Xerox Tower, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇ Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and (c) if to the Selling Shareholders to GSI Lumonics
Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ with a copy to Milbank Tweed Hadley & ▇▇▇▇▇▇ LLP, 1 Chase Manhattan
Plaza, New York, New York, 10005, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq. and to
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Xerox Tower, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇ Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to principles of conflict of
laws.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
-40-
Please confirm that the foregoing correctly sets forth the agreement
among us.
Very truly yours,
GSI LUMONICS INC.
By:
--------------------------
Name:
Title:
SELLING SHAREHOLDERS
By:
--------------------------
Title: Attorney-in-Fact
Confirmed:
CIBC WORLD MARKETS CORP.,
Acting severally on behalf of itself
and as representative of the several
Underwriters named in Schedule I annexed
hereto.
By: CIBC WORLD MARKETS CORP.
By:
--------------------------
Name:
Title:
-41-
SCHEDULE I
Name to be Purchased from the Company
--------------------------------- ------------------------------------------
CIBC World Markets Corp. .
Chase Securities Inc. .
▇▇▇▇▇▇▇ & Company, Inc. .
▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc. .
Banc of America Securities LLC .
Deutsche Bank Securities Inc. .
ING Barings LLC .
Prudential Securities .
Incorporated
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc. .
Dain Ramscher ▇▇▇▇▇▇▇ .
First Albany Corporation .
McDonald Investments Inc., a .
KeyCorp Company
▇▇▇▇▇▇/Hunter Incorporated .
Pennsylvania Merchant Group .
Preferred Capital Markets, Inc. .
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Incorporated .
---
Total .
===
SCHEDULE II
SELLING SHAREHOLDERS
Name Number of Firm Shares to be Sold
----------------------------- --------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 34,500
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 40,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 2,500
▇▇▇▇ ▇▇▇▇▇▇ 5,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 59,769
▇▇▇▇ ▇▇▇▇▇▇ 40,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 121,619
-------
Total 303,388
=======
SCHEDULE III
MATERIAL SUBSIDIARIES
GSI Lumonics Corporation (formerly Lumonics Corp.) (US)
General Scanning Inc. (US)
GSI Lumonics GmbH (formerly Lumonics GmbH) (Germany)
GSI Lumonics Limited (formerly Lumonics Limited) (UK)
GSI Lumonics Japan (formerly General Scanning Japan KK)
EXHIBIT A
GSI Lumonics Inc.
PRICE DETERMINATION AGREEMENT
-----------------------------
., 2000
CIBC World Markets Corp.
Chase Securities Inc.
▇▇▇▇▇▇▇ & Company, Inc.
c/o CIBC World Markets Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
On behalf of the Several
Underwriters named on
Schedule I attached hereto
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated April 11, 2000 (the
"Underwriting Agreement"), among GSI Lumonics Inc., a New Brunswick corporation
(the "Company"), the Selling Shareholders named therein and the several
Underwriters named in Schedule I thereto and hereto (the "Underwriters"), for
whom you are acting as Representatives (the "Representatives"). The
Underwriting Agreement provides for the purchase by the Underwriters from the
Company, subject to the terms and conditions set forth therein, of an aggregate
of 4,000,000 of the Company's common shares (the "Firm Shares") and for the
Company and the Selling Shareholders to grant to the Underwriters an option to
purchase up to an aggregate of 600,000 additional Common Shares (the "Option
Shares") from it and the Selling Shareholders as contemplated in the
Underwriting Agreement for the purposes of covering over-allotments in
connection with the sale of the Firm Shares. This Agreement is the Price
Determination Agreement referred to in the Underwriting Agreement.
Pursuant to second paragraph of the Underwriting Agreement, the undersigned
agree with the Representatives as follows:
The initial public offering price per share for the Firm Shares shall be
U.S.$..
The purchase price per share for the Firm Shares to be paid by the several
Underwriters to the Company on the Closing Date shall be U.S.$.; and the
underwriting discounts and commissions per share for the Firm Shares to be paid
by the Company to the several Underwriters on the Closing Date shall be U.S.$..
Any Option Shares shall
be sold for the same price per share and with the same underwriting discounts
and commissions per share as apply to the Firm Shares.
The price, commission and net proceeds for the Firm Shares to be sold in
Canada will be calculated in Canadian dollars at the approximate equivalent of
the U.S. dollar amount set out above, based on the prevailing U.S. dollar
exchange rates as of the date of pricing of the Offering.
The Company and the Selling Shareholders represent and warrant to each of
the Underwriters, and the Selling Shareholders represent and warrant to the
Company, that their representations and warranties set forth in Section 4 and
Section 5 of the Underwriting Agreement are accurate as though expressly made at
and as of the date hereof.
As contemplated by the Underwriting Agreement, attached as Schedule I is a
completed list of the several Underwriters, which shall be a part of this
Agreement and the Underwriting Agreement.
This agreement shall be governed by and construed in accordance with the
laws of the State of New York without regard to the conflict of laws principles
of such state.
If the foregoing is in accordance with your understanding of the agreement
among the Underwriters, the Company and the Selling Shareholders, please sign
and return to the Company a counterpart hereof; whereupon this instrument along
with all counterparts and together with the Underwriting Agreement shall be a
binding agreement among the Underwriters, the Company and the Selling
Shareholders in accordance with its terms and the terms of the Underwriting
Agreement.
Very truly yours,
GSI LUMONICS INC.
By:
-----------------------
Name:
Title:
SELLING SHAREHOLDERS
By:
-----------------------
Title: Attorney-in-Fact
Confirmed:
CIBC WORLD MARKETS CORP.,
Acting severally on behalf of itself
and as representative of the several
Underwriters named in Schedule I annexed
hereto.
By: CIBC WORLD MARKETS CORP.
By:
-----------------------
Name:
Title: