EXHIBIT 3.1
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RESEARCH IN MOTION LIMITED
(an Ontario Corporation)
9,000,000 Common Shares
PURCHASE AGREEMENT
Dated: January 14, 2004
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TABLE OF CONTENTS
PAGE
SECTION 1. Representations and Warranties............................................................ 3
(a) Representations and Warranties by the Company............................................. 3
(b) Officer's Certificates.................................................................... 9
SECTION 2. Sale and Delivery to Underwriters: Closing............................................... 9
(a) Initial Securities........................................................................ 9
(b) Option Securities......................................................................... 9
(c) Payment................................................................................... 9
(d) Denominations; Registration............................................................... 10
(e) Sub-underwriter Notification.............................................................. 10
SECTION 3. Covenants of the Company.................................................................. 10
(a) Compliance with Securities Regulations and Commission Requests............................ 10
(b) Filing of Amendments...................................................................... 10
(c) Delivery of Filed Documents............................................................... 10
(d) Delivery of Prospectuses.................................................................. 11
(e) Continued Compliance with Securities Laws................................................. 11
(f) Blue Sky Qualifications................................................................... 11
(g) Rule 158.................................................................................. 11
(h) Use of Proceeds........................................................................... 11
(i) Restriction on Sale of Securities......................................................... 11
(j) Listing................................................................................... 12
(k) Reporting Requirements.................................................................... 12
(l) PREP Procedures........................................................................... 12
(m) Lock-Up Agreements........................................................................ 12
SECTION 4. Payment of Expenses....................................................................... 12
(a) Expenses.................................................................................. 12
(b) Termination of Agreement.................................................................. 13
SECTION 5. Conditions of Underwriters' Obligations................................................... 13
(a) Effectiveness of Registration Statement................................................... 13
(b) Opinion of Canadian Counsel for Company................................................... 13
(c) Opinion of U.S. Counsel for Company....................................................... 13
(d) Opinion of Canadian Counsel for Underwriters and Sub-underwriters......................... 13
(e) Opinion of U.S. Counsel for Underwriters and the Sub-underwriters......................... 14
(f) Officers' Certificate..................................................................... 14
(g) Accountant's Comfort Letter............................................................... 14
(h) Bring-down Comfort Letter................................................................. 14
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TABLE OF CONTENTS
(continued)
PAGE
(i) No Objection.......................................................................... 14
(j) Lock-up Agreements.................................................................... 14
(k) Approval of Listing................................................................... 14
(l) Conditions to Purchase of Option Securities........................................... 14
(m) Additional Documents.................................................................. 15
(n) Termination of Agreement.............................................................. 15
SECTION 6. Indemnification....................................................................... 15
(a) Indemnification of Underwriters and Sub-underwriters.................................. 16
(b) Indemnification of Company, Directors and Officers.................................... 16
(c) Actions against Parties; Notification................................................. 16
(d) Settlement without Consent if Failure to Reimburse.................................... 17
SECTION 7. Contribution.......................................................................... 17
SECTION 8. Representations, Warranties and Agreements to Survive Delivery........................ 18
SECTION 9. Termination of Agreement.............................................................. 18
(a) Termination; General.................................................................. 18
(b) Liabilities........................................................................... 18
SECTION 10. Default by One or More of the Underwriters............................................ 19
SECTION 11. Agent for Service: Submission to Jurisdiction: Waiver of Immunities................. 19
SECTION 12. Notices............................................................................... 19
SECTION 13. Parties............................................................................... 20
SECTION 14. GOVERNING LAW AND TIME................................................................ 20
SECTION 15. Effect of Headings.................................................................... 20
SCHEDULES
Schedule A - List of Underwriters.................................................................. Sch A-1
Schedule B - Pricing Information................................................................... Sch B-1
Schedule C - List of Subsidiaries.................................................................. Sch C-1
Schedule D - List of Persons and Entities Subject to Lock-up....................................... Sch D-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Canadian Counsel.......................................... A-1
Exhibit B - Form of Opinion of Company's U.S. Counsel.............................................. B-1
Exhibit C - Form of Lock-up Letter................................................................. C-1
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RESEARCH IN MOTION LIMITED
(an Ontario Corporation)
9,000,000 Common Shares
PURCHASE AGREEMENT
January 14, 2004
▇▇▇▇▇▇ Brothers Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇▇, Sachs & Co.
UBS Securities LLC
Banc of America Securities LLC
BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.
CIBC World Markets Inc.
GMP Securities Ltd.
Canaccord Capital Corporation
National Bank Financial Inc.
Orion Securities Inc.
RBC Dominion Securities Inc.
Scotia Capital Inc.
▇▇ ▇▇▇▇▇ Securities Corporation
TD Securities Inc.
c/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
World Financial Center, North Tower
250 ▇▇▇▇▇ Street, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Research In Motion Limited, an Ontario corporation (the "Company"),
confirms its agreement with ▇▇▇▇▇▇ Brothers Inc. ("▇▇▇▇▇▇ Brothers") and ▇▇▇▇▇▇▇
Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), and each of the
other Underwriters named in Schedule A hereto (collectively, the "Underwriters",
which term shall also include any underwriter substituted as hereinafter
provided in Section 10 hereof), with respect to the issue and sale by the
Company and the purchase by the Underwriters, acting severally and not jointly,
of the respective numbers of Common Shares, without par value, of the Company
("Common Shares") set forth in said Schedule A and with respect to the grant by
the Company to the Underwriters, acting severally and not jointly, of the option
described in Section 2(b) hereof to purchase all or any part of 1,350,000
additional Common Shares to cover over-allotments, if any. The aforesaid
9,000,000 Common Shares (the "Initial Securities") to be purchased by the
Underwriters and all or any part of the 1,350,000 Common Shares subject to the
option described in Section 2(b) hereof (the "Option Securities") are
hereinafter called, collectively, the "Securities".
The Company understands that the Underwriters propose to make a public
offering of the Securities in the United States and in each of the
provinces of Canada (other than Quebec), and a private placement of the
Securities in certain jurisdictions in Europe as permitted by applicable law,
upon the terms set forth in the U.S. Prospectus and the Canadian Prospectus
(each as defined hereinafter) as soon as the Underwriters deem advisable after
this Agreement has been executed and delivered.
The Company has prepared and filed with the Ontario Securities Commission
(the "Reviewing Authority") and the provincial securities regulatory authorities
(the "Qualifying Authorities") in each of the provinces of Canada (other than
Quebec) (the "Qualifying Provinces") a preliminary short form prospectus
relating to the Securities (the "Canadian Preliminary Prospectus"). The
Reviewing Authority has been selected by the Company as the designated
jurisdiction regulating the offering of the Securities and the Canadian
Preliminary Prospectus has been filed with the Reviewing Authority and the
Qualifying Authorities pursuant to Canadian National Policy 43-201 "Mutual
Reliance Review System for Prospectuses and Annual Information Forms". The
Company has also prepared and filed with the U.S. Securities and Exchange
Commission (the "Commission") a registration statement on Form F-10 (File No.
333-111753) covering the registration of the Securities under the Securities Act
of 1933, as amended (the "1933 Act"), including the Canadian Preliminary
Prospectus (with such deletions therefrom and additions thereto as are permitted
or required by Form F-10 and the applicable rules and regulations of the
Commission) (the "U.S. Preliminary Prospectus").
In addition, the Company (A) has prepared and filed (1) with the Reviewing
Authority and the Qualifying Authorities, a final short form prospectus relating
to the Securities (the "Final PREP Prospectus") omitting the PREP Information
(as hereinafter defined) in accordance with the rules and procedures established
pursuant to National Instrument 44-103 - Post Receipt Pricing for the pricing of
securities after the final receipt for a prospectus has been obtained (the "PREP
Procedures"), and (2) with the Commission, an amendment to such registration
statement, including the Final PREP Prospectus (with such deletions therefrom
and additions thereto as are permitted or required by Form F-10 and the
applicable rules and regulations of the Commission) omitting the PREP
information, and (B) will prepare and file, promptly after the execution and
delivery of this Agreement, (1) with the Reviewing Authority and the Qualifying
Authorities, in accordance with the PREP Procedures, a supplemented prospectus
setting forth the PREP Information (the "Supplemental PREP Prospectus"), and (2)
with the Commission, in accordance with General Instruction II.L. of Form F-10,
the Supplemental PREP Prospectus (with such deletions therefrom and additions
thereto as are permitted or required by Form F-10 and the applicable rules and
regulations of the Commission) (the "U.S. Supplemental Prospectus"). The
information, if any, included in the Supplemental PREP Prospectus that is
omitted from the Final PREP Prospectus for which a receipt has been obtained
from the Reviewing Authority on behalf of itself and the Qualifying Authorities
but that is incorporated by reference into the Final PREP Prospectus under the
PREP Procedures as of the date of the Supplemental PREP Prospectus is referred
to herein as the "PREP Information".
Each prospectus relating to the Securities (A) used in the United States
(1) before the time such registration statement on Form F-10 became effective,
or (2) after such effectiveness and prior to the execution and delivery of this
Agreement or (B) used in Canada (1) before a receipt for the Final PREP
Prospectus has been obtained from the Reviewing Authority on behalf of itself
and the Qualifying Authorities or (2) after such receipt has been obtained and
prior to the execution and delivery of this Agreement, in each case, including
the documents incorporated by reference therein, that omits the PREP
Information, is herein called a "preliminary prospectus". Such registration
statement on Form F-10, including the exhibits thereto and the documents
incorporated by reference therein, as amended at the time it became effective
and including the PREP Information, is herein called the "Registration
Statement". The prospectus included in the Registration Statement at the time it
became effective, including the documents incorporated by reference therein, is
herein called the "U.S. Prospectus", except that if a U.S. Supplemental
Prospectus containing the PREP Information is thereafter furnished to the
Underwriters after the execution of this Agreement (whether or not such
prospectus is required to be filed pursuant to the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations")), the term "U.S.
Prospectus" shall refer to such U.S. Supplemental Prospectus, including the
documents incorporated by reference therein. The Final PREP Prospectus for which
a receipt has been obtained from the Reviewing Authority on behalf of itself and
the Qualifying Authorities, including the documents incorporated by reference
therein, is herein referred to as the "Canadian Prospectus", except that if,
after the execution of this Agreement, a Supplemental PREP Prospectus containing
the PREP Information is thereafter filed with the Reviewing Authority and the
Qualifying Authorities, the term "Canadian Prospectus" shall refer to such
Supplemental PREP Prospectus, including the documents incorporated by reference
therein. Any amendment to the Canadian Prospectus, any amended or supplemental
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prospectus or auxiliary material, information, evidence, return, report,
application, statement or document that may be filed by or on behalf of the
Company under the securities laws of the Province of Ontario or the Qualifying
Provinces prior to the Closing Time (as hereinafter defined) or, where such
document is deemed to be incorporated by reference into the Final PREP
Prospectus, prior to the expiry of the period of distribution of the Securities,
is referred to herein collectively as the "Supplementary Material".
The Company understands that a portion of the Securities may be offered and
sold in a public offering in the Province of Ontario and the Qualifying
Provinces conducted through ▇▇▇▇▇▇▇ ▇▇▇▇▇ Canada Inc., Goldmans Sachs Canada
Inc. and UBS Securities Canada Inc. (each a "Sub-underwriter"), pursuant to the
Canadian Prospectus. The Sub-underwriters, subject to the terms and conditions
set forth herein, agree and covenant with the Company to use reasonable efforts
to sell the Securities in the Province of Ontario and the Qualifying Provinces.
Any Securities so sold will be purchased by the Sub-underwriters from their
respective U.S. broker-dealer affiliates at the Closing Time (as hereinafter
defined) at a price equal to the purchase price as set forth in Schedule B
hereto or such purchase price less an amount to be mutually agreed upon by the
Sub-underwriters and their respective U.S. broker-dealer affiliates, which
amount shall not be greater than the underwriting commission as set forth in
Schedule B hereto.
The Company has also prepared and filed with the Commission an appointment
of agent for service of process upon the Company on Form F-X in conjunction with
the filing of the Registration Statement (the "Form F-X").
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents
and warrants to each Underwriter and Sub-underwriter as of the date hereof, as
of the Closing Time referred to in Section 2(c) hereof and as of each Date of
Delivery (if any) referred to in Section 2(b) hereof and agrees with each
Underwriter and Sub-underwriter as follows:
(i) Compliance with Registration Requirements. The Company meets the
general eligibility requirements for use of Form F-10 under the 1933 Act
and is eligible to use the PREP Procedures. A receipt has been obtained
from the Reviewing Authority on behalf of itself and the Qualifying
Authorities in respect of the Final PREP Prospectus and no order suspending
the distribution of the Securities has been issued by the Reviewing
Authority or any of the Qualifying Authorities. The Registration Statement
has become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement has been issued under the 1933
Act and no proceedings for that purpose have been instituted or are pending
or, to the knowledge of the Company, are contemplated by the Commission,
and any request on the part of the Commission for additional information
has been complied with.
At the time the Registration Statement became effective under the 1933
Act and at all times subsequent thereto up to and including the Closing
Time (and if any Option Securities are purchased, at the Date of Delivery):
(A) the Canadian Prospectus complied and will comply in all material
respects with the securities laws applicable in the Province of Ontario as
interpreted and applied by the Reviewing Authority (including the PREP
Procedures); (B) the U.S. Prospectus conformed and will conform to the
Canadian Prospectus except for such deletions therefrom and additions
thereto as are permitted or required by Form F-10 and the applicable rules
and regulations of the Commission; (C) the Registration Statement and any
amendments or supplements thereto complied and will comply in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations; (D) neither the Registration Statement nor any amendment or
supplement thereto contained or will contain an untrue statement of a
material fact or omitted or will omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; and (E) each of the U.S. Prospectus, the Canadian Prospectus,
any Supplementary Material or any amendment or supplement thereto, together
with each document incorporated therein by reference, constituted and will
constitute full, true and plain disclosure of all material facts relating
to the Company and the Securities, and did not and will not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties contained in clauses (D) and (E) above do
3
not apply to statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by any
Underwriter through ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ or the Sub-underwriters
expressly for use in the Registration Statement, the U.S. Prospectus, the
Canadian Prospectus or any Supplementary Material.
(ii) Incorporated Documents. Each document filed or to be filed with
the Reviewing Authority and the Qualifying Authorities and incorporated or
deemed to be incorporated by reference in the Canadian Prospectus complied
or will comply when so filed and at the Closing Time (and, if any Option
Securities are purchased, at any Date of Delivery (as hereinafter defined))
in all material respects with the securities laws applicable in the
Province of Ontario and the Qualifying Provinces as interpreted and applied
by the Reviewing Authority and the Qualifying Authorities, respectively,
and none of such documents contained or will contain at the time of its
filing any untrue statement of a material fact or omitted or will omit at
the time of its filing to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were or are made, not misleading.
The documents incorporated or deemed to be incorporated by reference
in the Registration Statement and the U.S. Prospectus, at the time they
were or hereafter are filed with the Commission, complied and will comply
in all material respects with the requirements of the Securities Exchange
Act of 1934, as amended (the "1934 Act"), and the rules and regulations of
the Commission thereunder (the "1934 Act Regulations"), and, when read
together with the other information in the U.S. Prospectus, at the time the
Registration Statement became effective, at the time the U.S. Prospectus
was issued and at the Closing Time (and, if any Option Securities are
purchased, at any Date of Delivery) did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were or are made, not misleading.
(iii) Independent Accountants. The accountants who audited the
financial statements included or incorporated by reference in the U.S.
Prospectus and the Canadian Prospectus, are independent public accountants
as required by the 1933 Act and the 1933 Act Regulations and are
independent with respect to the Company within the meaning of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, Business Corporations Act (Ontario) and
applicable Canadian securities laws and regulations and policies
thereunder.
(iv) Financial Statements. The financial statements included or
incorporated by reference in the U.S. Prospectus and the Canadian
Prospectus, together with the related schedules, if any, and notes, present
fairly the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the statements of operations and
retained earnings and cash flows of the Company and its consolidated
subsidiaries for the periods specified; such financial statements have been
prepared in conformity with generally accepted accounting principles in the
United States of America ("U.S. GAAP") applied on a consistent basis
throughout the periods involved. The selected financial data and the
summary financial data included or incorporated by reference in the U.S.
Prospectus and the Canadian Prospectus present fairly the information shown
therein and have been compiled on a basis consistent with that of the
audited financial statements included or incorporated by reference in the
U.S. Prospectus and the Canadian Prospectus.
(v) No Material Adverse Change in Business. Since the respective dates
as of which information is given in the U.S. Prospectus, the Canadian
Prospectus and the Supplementary Material, except as otherwise stated
therein, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business (a "Material
Adverse Effect"), (B) there have been no transactions entered into by the
Company or any of its subsidiaries, other than those in the ordinary course
of business, which are material with respect to the Company and its
subsidiaries considered as one enterprise and (C) there has been no
dividend or distribution of any kind declared, paid or made by the Company
on any class of its share capital.
(vi) Good Standing of the Company. The Company is a corporation duly
amalgamated, validly existing and in good standing under the laws of the
4
Province of Ontario and has the corporate power and authority under such
laws to own, lease and operate its properties and to conduct its business
as described in the U.S. Prospectus and the Canadian Prospectus; and the
Company is duly qualified or registered to transact business in any other
jurisdiction in which it carries on business, except where the failure to
so qualify or register would not result in a Material Adverse Effect.
Schedule C sets forth a list of all the Company's wholly-owned or
majority-owned subsidiaries (as that term is defined under the Business
Corporations Act (Ontario)). Other than Research In Motion Corporation,
1446491 Ontario Inc. and RIM Finance, LLC, none of the subsidiaries listed
therein has any material assets or any material liabilities or obligations,
whether contingent or otherwise, nor constitutes a "significant subsidiary"
of the Company as such term is defined in Rule 1-02 of Regulation S-X under
the ▇▇▇▇ ▇▇▇.
(vii) Capitalization. The authorized, issued and outstanding share
capital of the Company is as set forth in the U.S. Prospectus and the
Canadian Prospectus under the caption "Description of Share Capital"
(except for any subsequent issuances pursuant to this Agreement, pursuant
to reservations, agreements or employee benefit plans referred to in the
U.S. Prospectus and the Canadian Prospectus or pursuant to the exercise of
convertible securities or options referred to therein). All of the issued
and outstanding shares in the capital of the Company have been duly
authorized and validly issued and are fully paid and non-assessable; none
of the outstanding shares in the capital of the Company was issued in
violation of the preemptive or other similar rights of any shareholder of
the Company.
(viii) Authorization of Agreement. The Company has the corporate power
and authority to execute, deliver and perform its obligations under this
Agreement and this Agreement has been duly authorized, executed and
delivered by the Company.
(ix) Authorization and Description of Securities. The Securities have
been duly authorized for issuance and sale to the Underwriters pursuant to
this Agreement and, when issued and delivered by the Company pursuant to
this Agreement against payment of the consideration set forth herein, will
be validly issued and fully paid and non-assessable; the Common Shares
conform to all statements relating thereto contained in the U.S. Prospectus
and the Canadian Prospectus and such description conforms to the rights set
forth in the instruments defining the same; no holder of the Securities
will be subject to personal liability solely by reason of being such a
holder; and the issuance of the Securities is not subject to the preemptive
or other similar rights of any shareholder of the Company.
(x) Absence of Defaults and Conflicts. Neither the Company nor any of
its subsidiaries is in violation of its charter document or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease, license or other agreement
or instrument to which the Company or any of its subsidiaries is a party or
by which it or any of them may be bound, or to which any of the property or
assets of the Company or any of its subsidiaries is subject (collectively,
"Agreements and Instruments") except for such defaults that would not
result in a Material Adverse Effect. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein and in the U.S. Prospectus and the Canadian Prospectus
(including the authorization, issuance, sale and delivery of the Securities
and the use of the proceeds from the sale of the Securities as described in
the U.S. Prospectus and the Canadian Prospectus under the caption "Use of
Proceeds") and compliance by the Company with its obligations hereunder
have been duly authorized by all necessary corporate action and do not and
will not, whether with or without the giving of notice or passage of time
or both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company
pursuant to, the Agreements and Instruments (except for such conflicts,
breaches or defaults, Repayment Events or liens, charges or encumbrances
that would not result in a Material Adverse Effect), nor will such action
result in any violation or conflict with the provisions of the charter
document or by-laws of the Company or any existing applicable law, statute,
rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its assets, properties or
operations except for such violations or conflicts that would not, singly
or in the aggregate, result in a Material Adverse Effect. As used herein, a
"Repayment Event" means any event or condition which gives the holder of
any note, debenture or other evidence of indebtedness (or any person acting
5
on such holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any
subsidiary.
(xi) Absence of Labor Dispute. No labor dispute with the employees of
the Company exists or, to the knowledge of the Company, is imminent, and
the Company is not aware of any existing or imminent labor disturbance by
the employees of any of its principal suppliers, manufacturers, customers
or contractors, which, in either case, may reasonably be expected to result
in a Material Adverse Effect.
(xii) Absence of Proceedings. Except as disclosed in the U.S.
Prospectus and the Canadian Prospectus, there is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency, governmental instrumentality or body, domestic or
foreign, now pending, or, to the knowledge of the Company, threatened,
against or affecting the Company or any subsidiary, which is required to be
disclosed in the U.S. Prospectus, the Canadian Prospectus or the
Supplementary Material, or which, together with the proceedings disclosed
in the U.S. Prospectus and the Canadian Prospectus, might reasonably be
expected to result in a Material Adverse Effect, or which might materially
and adversely affect the consummation of the transactions contemplated in
this Agreement or the performance by the Company of its obligations
hereunder; the aggregate of all pending legal or governmental proceedings
to which the Company or any subsidiary is a party or of which any of their
respective property or assets is the subject which are not described in the
U.S. Prospectus, the Canadian Prospectus or the Supplementary Material,
including ordinary routine litigation incidental to the business of the
Company, could not reasonably be expected to result in a Material Adverse
Effect. The descriptions of all pending or threatened legal or governmental
proceedings included or incorporated by reference in the U.S. Prospectus
and the Canadian Prospectus to which the Company or any of its subsidiaries
is a party or to which any of its or their respective property or assets is
subject, insofar as they purport to summarize such proceedings, constitute
fair summaries of such proceedings.
(xiii) Possession of Intellectual Property. Except in each case as set
forth in the U.S. Prospectus and the Canadian Prospectus under the heading
"Risk Factors - Risks Relating to Intellectual Property", (1) the Company
and its subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, and (2) neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with respect to
any Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its subsidiaries therein, which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect. No such infringement, conflict,
invalidity or inadequacy is required to be disclosed in the U.S.
Prospectus, the Canadian Prospectus or the Supplementary Material that has
not been disclosed therein. The statements set forth in the U.S. Prospectus
and the Canadian Prospectus under the heading "Risk Factors - Risks
Relating to Intellectual Property", insofar as they purport to summarize
the risks and uncertainties relating to the Company's intellectual
property, constitute a fair summary of such risks and uncertainties.
(xiv) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale of
the Securities hereunder or the consummation of the transactions
contemplated by this Agreement, except (A) such as have been obtained, or
as may be required, under the 1933 Act or the 1933 Act Regulations or state
securities laws and (B) such as have been obtained, or as may be required,
under the securities laws and regulations of the Province of Ontario and
the Qualifying Provinces.
(xv) Possession of Licenses and Permits. Except in each case as would
not individually or in an aggregate have a Material Adverse Effect, (A) the
Company and its subsidiaries possess such permits, certificates, licenses,
6
approvals, consents and other authorizations (collectively, "Governmental
Licenses") issued by the appropriate federal, provincial, state, local or
foreign regulatory agencies or bodies necessary to conduct the business now
operated by them; (B) the Company and its subsidiaries are in compliance
with the terms and conditions of all such Governmental Licenses; (C) all of
the Governmental Licenses are valid and in full force and effect; and (D))
neither the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses.
(xvi) Title to Property. The Company and its subsidiaries have good
and marketable title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (A) are
described in the U.S. Prospectus or the Canadian Prospectus or (B) do not,
singly or in the aggregate, materially affect the value of such property
and do not materially interfere with the use made and proposed to be made
of such property by the Company or any of its subsidiaries; and all of the
leases and subleases material to the business of the Company and its
subsidiaries, considered as one enterprise, and under which the Company or
any of its subsidiaries holds properties described in the U.S. Prospectus
or the Canadian Prospectus, are in full force and effect, and neither the
Company nor any of its subsidiaries has any notice of any material claim of
any sort that has been asserted by anyone adverse to the rights of the
Company or any subsidiary under any of the leases or subleases mentioned
above, or affecting or questioning the rights of the Company or such
subsidiary to the continued possession of the leased or subleased premises
under any such lease or sublease.
(xvii) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the U.S.
Prospectus and the Canadian Prospectus will not be, an "investment company"
or an entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended (the "1940 Act").
(xviii) Environmental Laws. Except as described in the U.S.
Prospectus and the Canadian Prospectus and except as would not, singly or
in the aggregate, result in a Material Adverse Effect, (A) neither the
Company nor any of its subsidiaries is in violation of any federal,
provincial, state, local, municipal or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial
or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata)
or wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and its subsidiaries have all permits,
authorizations and approvals required under any applicable Environmental
Laws and are each in compliance with their requirements, (C) there are no
pending or, to the knowledge of the Company, threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
subsidiaries and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of its
subsidiaries relating to Hazardous Materials or any Environmental Laws.
(xix) No Stabilization or Manipulation. Neither the Company nor any of
its subsidiaries has taken, nor will they take, directly or indirectly, any
action designed to, or that might be reasonably expected to, cause or
result in stabilization or manipulation of the price of the Securities.
(xx) Registration Rights. Except as described in the U.S. Prospectus
and the Canadian Prospectus, there are no persons with registration rights
or other similar rights to have any securities registered or qualified for
7
distribution pursuant to the Registration Statement, the Canadian
Prospectus or otherwise registered by the Company under the 1933 Act or
qualified for distribution under any Canadian provincial securities
legislation or U.S. "blue sky" laws.
(xxi) Other Reports and Information. There are no reports or
information that in accordance with the requirements of the Reviewing
Authority or the Qualifying Authorities must be made publicly available in
connection with the offering of the Securities that have not been made
publicly available as required; no material change reports or other
documents have been filed on a confidential basis with the Reviewing
Authority or the Qualifying Authorities since December 31, 2002; there are
no documents required to be filed with the Reviewing Authority or the
Qualifying Authorities in connection with the Canadian Prospectus that have
not been filed as required; there are no contracts, documents or other
materials required to be described or referred to in the Registration
Statement, the U.S. Prospectus or the Canadian Prospectus or to be filed as
exhibits to the Registration Statement that are not described, referred to
or filed as required.
(xxii) Taxes. The Company has filed all necessary U.S. and Canadian
federal, state, provincial, local and foreign income, payroll, franchise
and other tax returns and has paid all taxes shown as due thereon or with
respect to any of its properties or any transactions to which it was a
party, and there is no tax deficiency that has been, or to the knowledge of
the Company is likely to be, asserted against the Company or its
subsidiaries or any of their properties or assets that would result in a
Material Adverse Effect.
(xxiii) Insurance. Except as disclosed in the U.S. Prospectus and the
Canadian Prospectus, or as otherwise would not have a Material Adverse
Effect, the Company is 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 is engaged or proposes to engage;
the Company has no reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not result in a Material Adverse Effect.
(xxiv) Compliance with Laws. The Company and its subsidiaries are in
all materials respects in compliance with, and conduct their businesses in
conformity with, all applicable U.S. and Canadian federal, state,
provincial, local and foreign laws, rules and regulations of any court or
governmental agency or body, the Toronto Stock Exchange (the "TSX") and the
Nasdaq National Market.
(xxv) No Broker. Other than as contemplated by this Agreement, there
is no broker, finder or other party that is entitled to receive from the
Company any brokerage or finder's fee or other fee or commission as a
result of any of the transactions contemplated by this Agreement.
(xxvi) Principal Shareholders. To the knowledge of the Company, after
due inquiry, none of the directors or officers or shareholders of the
Company listed under "Voting Securities and Principal Holders Thereof" in
the Management Information Circular of the Company dated May 30, 2003 is or
has ever been subject to prior criminal or bankruptcy proceedings in the
United States, Canada or elsewhere.
(xxvii) Non-Arm's Length Transactions. To the knowledge of the
Company, after due inquiry, except as disclosed in writing to the
Underwriters or in the U.S or Canadian Prospectus (which disclosure
incorporates by reference a description of employment, option and severance
agreements between the Company and its Chairman, President, Managing
Directors, Vice-Presidents and certain Managers), neither the Company nor
any of its subsidiaries is a party to any contract, agreement or
understanding with any officer, director, employee or any other person not
dealing at arm's length with the Company which is required to be disclosed
by applicable securities legislation of the Province of Ontario or the
Qualifying Provinces.
(xxviii) Stamp Tax. No stamp duty, registration or documentary taxes,
duties or similar charges are payable under the federal laws of Canada or
8
the laws of the Province of Ontario in connection with the creation,
issuance, sale and delivery to the Underwriters of the Securities or the
authorization, execution, delivery and performance of this Agreement or the
resale of Securities by an Underwriter to U.S. residents.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company delivered to the Underwriters or to counsel for the Underwriters and
Sub-underwriters shall be deemed a representation and warranty by the Company to
each Underwriter and the Sub-underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters: Closing.
(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at
the price per share set forth in Schedule B, the number of Initial Securities
set forth in Schedule A opposite the name of such Underwriter, plus any
additional number of Initial Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Option Securities. In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriters, severally and
not jointly, to purchase up to an additional 1,350,000 Common Shares at the
price per share set forth in Schedule B, less an amount per share equal to any
dividends or distributions declared by the Company and payable on the Initial
Securities but not payable on the Option Securities. The option hereby granted
will expire 30 days after the date hereof and may be exercised in whole or in
part from time to time only for the purpose of covering over-allotments which
may be made in connection with the offering and distribution of the Initial
Securities upon notice by ▇▇▇▇▇▇ Brothers and ▇▇▇▇▇▇▇ ▇▇▇▇▇ to the Company
setting forth the number of Option Securities as to which the several
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery (a "Date
of Delivery") shall be determined jointly by ▇▇▇▇▇▇ Brothers and ▇▇▇▇▇▇▇ ▇▇▇▇▇,
but shall not be later than seven full business days after the exercise of said
option, nor in any event prior to the Closing Time, as hereinafter defined. If
the option is exercised as to all or any portion of the Option Securities, each
of the Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of Option Securities then being purchased which
the number of Initial Securities set forth in Schedule A opposite the name of
such Underwriter bears to the total number of Initial Securities, subject in
each case to such adjustments as ▇▇▇▇▇▇ Brothers and ▇▇▇▇▇▇▇ ▇▇▇▇▇ in their
joint discretion shall make to eliminate any sales or purchases of fractional
shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for the Initial Securities shall be made at the offices of
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ Thomson Apps & Dellelce, LLP, Toronto, Ontario, or at such other
place as shall be agreed upon by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and the Company,
at 8:30 A.M. (Eastern time) on the third (fourth, if the pricing occurs after
4:30 P.M. (Eastern Time) on any given day) business day after the date hereof
(unless postponed in accordance with the provisions of Section 10), or such
other time not later than ten business days after such date as shall be agreed
upon by ▇▇▇▇▇▇ Brothers, Merrill Lynch and the Company (such time and date of
payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price, and delivery of
certificates for such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ and the Company, on each Date of Delivery as specified in the
joint notice from ▇▇▇▇▇▇ Brothers and ▇▇▇▇▇▇▇ ▇▇▇▇▇ to the Company.
Payment shall be made to the Company by wire transfer of immediately
available (same day) funds to a bank account designated by the Company not less
than 24 hours prior to the Closing Time or relevant Date of Delivery, against
delivery to ▇▇▇▇▇▇ Brothers and ▇▇▇▇▇▇▇ ▇▇▇▇▇ for the respective accounts of the
Underwriters of certificates for the Securities to be purchased by them. It is
understood that each Underwriter has authorized ▇▇▇▇▇▇ Brothers and ▇▇▇▇▇▇▇
▇▇▇▇▇, for its account, to accept delivery of and receipt for, and to make
payment of the purchase price for, the Initial Securities and the Option
Securities, if any, which it has agreed to purchase. Payment to the Company with
9
respect to Securities the Underwriters have sold or expect to sell shall be made
in U.S. dollars. Each of ▇▇▇▇▇▇ Brothers and ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not
as representative of the Underwriters or Sub-underwriters, may (but shall not be
obligated to) make payment of the purchase price for the Initial Securities or
the Option Securities, if any, to be purchased by any Underwriter or
Sub-underwriter whose funds have not been received by the Closing Time, or the
relevant Date of Delivery, as the case may be, but such payment shall not
relieve such Underwriter or Sub-Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as ▇▇▇▇▇▇ Brothers and ▇▇▇▇▇▇▇ ▇▇▇▇▇ may request in writing at
least 48 hours before the Closing Time or the relevant Date of Delivery, as the
case may be. The Initial Securities and the Option Securities, if any, will be
made available for examination and packaging by the Underwriters in The City of
New York not later than 10:00 A.M. (Eastern time) on the business day prior to
the Closing Time or the relevant Date of Delivery, as the case may be.
(e) Sub-underwriter Notification. Each Sub-underwriter shall notify that
Underwriter which is its respective U.S. broker-dealer affiliate at least 48
hours prior to the Closing Time (or Time of Delivery, as applicable) of the
number of the Securities to be sold by such Sub-underwriter in the Province of
Ontario and the Qualifying Provinces and, subject to the completion of the
purchase of the Securities by ▇▇▇▇▇▇▇ ▇▇▇▇▇ hereunder, such U.S. broker dealer
affiliate agrees to sell to such Sub-underwriter, and the Sub-underwriter agrees
to purchase from ▇▇▇▇▇▇▇ ▇▇▇▇▇, at a price equal to the purchase price set forth
in Schedule B hereto or at such purchase price less an amount to be mutually
agreed upon by such Sub-underwriter and such U.S. broker dealer affiliate, which
amount shall not be greater than the underwriting commission as set forth in
Schedule B hereto, such number of the Securities at the Closing Time (or Time of
Delivery as applicable).
SECTION 3. Covenants of the Company. The Company covenants with each Underwriter
and each Sub-underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company will comply with the requirements of the PREP Procedures and General
Instruction II.L. of Form F-10; and will notify the Underwriters and
Sub-underwriters promptly, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall have been filed
with the Commission or shall have become effective, and when any supplement to
the U.S. Prospectus or the Canadian Prospectus or any amended U.S. Prospectus or
Canadian Prospectus or any Supplementary Material shall have been filed, (ii) of
the receipt of any comments from the Reviewing Authority, any Qualifying
Authority or the Commission, (iii) of any request by the Reviewing Authority to
amend or supplement the Final PREP Prospectus or the Canadian Prospectus or for
additional information or of any request by the Commission to amend the
Registration Statement or to amend or supplement the U.S. Prospectus or for
additional information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the institution or, to the knowledge of the Company,
threatening of any proceedings for any such purpose, and (v) of the issuance by
the Reviewing Authority, any Qualifying Authority or any stock exchange of any
order having the effect of ceasing or suspending the distribution of the
Securities or the trading in the shares of the Company, or of the institution
or, to the knowledge of the Company, threatening of any proceedings for any such
purpose. The Company will use every reasonable effort to prevent the issuance of
any such stop order or of any order preventing or suspending such use or such
order ceasing or suspending the distribution of the Securities or the trading in
the shares of the Company and, if any such order is issued, to obtain the
lifting thereof at the earliest possible time.
(b) Filing of Amendments. The Company will not at any time file or make any
amendment to the Registration Statement, any amendment or supplement to the
Final PREP Prospectus, or any amendment or supplement to any prospectus included
in the Registration Statement at the time it becomes effective, the U.S.
Supplemental Prospectus, the Supplemental PREP Prospectus or any Supplementary
Material, of which the Underwriters shall not have previously been advised,
furnished a copy and offered the opportunity to comment or to which the
Underwriters shall have objected, acting reasonably.
(c) Delivery of Filed Documents. The Company has furnished or will deliver
to each of the Underwriters a copy of the Canadian Preliminary Prospectus, the
Final PREP Prospectus, the Canadian Prospectus, and any Supplementary Material,
approved, signed and certified as required by the securities laws of the
10
Province of Ontario and the Qualifying Provinces and conformed copies of the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein) and
signed copies of all consents and certificates of experts.
(d) Delivery of Prospectuses. The Company has delivered to each Underwriter
and each Sub-underwriter, without charge, as many copies of each U.S.
Preliminary Prospectus and Canadian Preliminary Prospectus as such Underwriter
and Sub-underwriter has reasonably requested, and the Company hereby consents to
the use of such copies for the purposes permitted by the 1933 Act and applicable
Canadian provincial securities laws. The Company will deliver to each
Underwriter and each Sub-underwriter, without charge, during the period when the
U.S. Prospectus is required to be delivered under the 1933 Act or the 1934 Act
and during the period when the Canadian Prospectus is required to be delivered
under the securities laws of the Province of Ontario and the Qualifying
Provinces, but no later than the first business day after the date hereof, such
number of copies of the U.S. Prospectus and Canadian Prospectus, respectively
(each as supplemented or amended) as such Underwriter and Sub-underwriter may
reasonably request.
(e) Continued Compliance with Securities Laws. The Company will comply with
the 1933 Act and the 1933 Act Regulations and the securities laws of the
Province of Ontario and the Qualifying Provinces and the regulations thereunder
so as to permit the completion of the distribution of the securities as
contemplated in this Agreement and in the U.S. Prospectus and the Canadian
Prospectus. If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the opinion of
counsel for the Underwriters or Sub-underwriters or for the Company, acting
reasonably, to amend the Registration Statement or amend or supplement the U.S.
Prospectus or the Canadian Prospectus in order that the U.S. Prospectus or the
Canadian Prospectus will not include any untrue statements of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances existing at the time it is delivered to a
purchaser, not misleading, or if it shall be necessary, in the opinion of such
counsel, acting reasonably, at any such time to amend the Registration Statement
or amend or supplement the U.S. Prospectus or the Canadian Prospectus in order
to comply with the requirements of the 1933 Act or the 1933 Act Regulations or
the securities laws of the Province of Ontario and the Qualifying Provinces, the
Company will promptly prepare and file with the Commission and with the
Reviewing Authority and the Qualifying Authorities, subject to Section 3(b),
such amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement or the U.S. Prospectus or the
Canadian Prospectus comply with such requirements, and the Company will furnish
to the Underwriters and the Sub-underwriters such number of copies of such
amendment or supplement as the Underwriters and the Sub-underwriters may
reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
as the Underwriters may designate and to maintain such qualifications in effect
for a period of not less than one year from the effective date of the
Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement (which need not be
audited) for the purposes of, and to provide the benefits contemplated by, the
last paragraph of Section 11(a) of the 1933 Act and the regulations thereunder.
(h) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the U.S. Prospectus
and the Canadian Prospectus under "Use of Proceeds".
(i) Restriction on Sale of Securities. During a period of 90 days from the
date of the U.S. Prospectus and the Canadian Prospectus, the Company will not,
without the prior written consent of ▇▇▇▇▇▇ Brothers and ▇▇▇▇▇▇▇ ▇▇▇▇▇, (i)
11
directly or indirectly, offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of any
Common Shares or any securities convertible into or exercisable or exchangeable
for Common Shares or file any registration statement under the 1933 Act with
respect to any of the foregoing, or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Shares, whether
any such swap or transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Shares or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) the Securities to be
sold hereunder, (B) any Common Shares issued or options to purchase Common
Shares granted pursuant to existing employee plans of the Company referred to in
the U.S. Prospectus and the Canadian Prospectus, (C) any Common Shares issued by
the Company upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof and referred to in the U.S. Prospectus
and the Canadian Prospectus, and (D) any Common Shares issued by the Company in
connection with any acquisition, merger or similar transaction, provided that
any such Common Shares issued under this clause (D) shall thereafter be subject
to the restrictions set forth in the previous sentence.
(j) Listing. The Company has obtained the conditional approval of the TSX
for the listing of the Securities and will use its best efforts to satisfy any
requirements of the TSX to the listing thereof within the time specified in such
approval. The Company will use its best efforts to effect and maintain the
quotation of the Securities on the Nasdaq National Market and will file with the
Nasdaq National Market all documents and notices required by the Nasdaq National
Market.
(k) Reporting Requirements. The Company, during the period when the U.S.
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed by the Company with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act and
the rules and regulations of the Commission thereunder.
(l) PREP Procedures. The Company will take such steps as it deems necessary
to ascertain promptly whether the form of Canadian Prospectus containing the
PREP Information was received for filing by the Reviewing Authority and the
Qualifying Authorities and whether the form of prospectus transmitted for filing
by ▇▇▇▇▇ pursuant to General Instruction II.L. of Form F-10 was received for
filing by the Commission and, in the event that any such prospectuses were not
received for filing, it will promptly file any such prospectus not then received
for filing.
(m) Lock-Up Agreements. The Company will use its best efforts to ensure
that those persons listed in Schedule D hereto comply with the conditions
contained in the agreements signed by such persons as required by Section 5(j)
hereto and substantially in the form of Exhibit C hereto.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the performance
of its obligations under this Agreement, including (i) the preparation, printing
and filing of the Registration Statement (including financial statements and
exhibits and the Form F-X) and of each amendment thereto, the preliminary
prospectuses, the U.S. Prospectus, the Final PREP Prospectus, the Canadian
Prospectus and any Supplementary Material and any amendments or supplements
thereto, and the cost of furnishing copies thereof to the Underwriters and
Sub-underwriters, (ii) the preparation, printing and delivery to the
Underwriters and the Sub-underwriters of this Agreement, any Agreement among
Underwriters and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Securities, (iii) the
preparation, issuance and delivery of the certificates for the Securities to the
Underwriters and Sub-underwriters, (iv) the fees and disbursements of the
Company's counsel, accountants and other advisors, (v) the qualification of the
Securities under applicable securities laws in accordance with the provisions of
Section 3(f) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection therewith, (vi) the
printing and delivery to the Underwriters and Sub-underwriters of commercial
copies of each preliminary prospectus, and of the U.S. Prospectus and the
Canadian Prospectus and any amendments or supplements thereto, (vii) the fees
and expenses of any transfer agent or registrar for the Securities, (viii) the
filing fees incident to, and the reasonable fees and disbursements of counsel to
the Underwriters and Sub-underwriters in connection with, the review by the
National Association of Securities Dealers, Inc. (the "NASD") of the terms of
the sale of the Securities, and (ix) the fees and expenses incurred in
12
connection with the listing of the Securities on the TSX and inclusion of the
Securities in the Nasdaq National Market. It is understood, however, that except
as provided in this Section 4(a) and Section 4(b) below, the Underwriters and
the Sub-underwriters will pay all of their own costs and expenses, including the
fees of their counsel.
(b) Termination of Agreement. If this Agreement is terminated by the
Underwriters in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the Underwriters and the Sub-underwriters
for all of their out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Underwriters and the Sub-underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company delivered pursuant to the
provisions hereof, to the performance by the Company of its covenants and other
obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Final PREP Prospectus has
been filed with the Reviewing Authority and with the Qualifying Authorities and
a receipt obtained therefor and the Registration Statement has become effective;
and at the Closing Time no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act or proceedings
therefor initiated or, to the Company's knowledge, threatened by the Commission,
no order having the effect of ceasing or suspending the distribution of the
Securities or the trading in the shares of the Company or any other securities
of the Company shall have been issued or proceedings therefor initiated or, to
the Company's knowledge, threatened by any securities commission, securities
regulatory authority or stock exchange in Canada or the United States, and any
request on the part of the Reviewing Authority, any Qualifying Authority or the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Underwriters and Sub-underwriters. A
Supplemental PREP Prospectus and a U.S. Supplemental Prospectus containing the
PREP Information shall have been filed, respectively, with the Reviewing
Authority and with the Qualifying Authorities in accordance with the PREP
Procedures and with the Commission in accordance with General Instruction II.L.
of Form F-l0.
(b) Opinion of Canadian Counsel for Company. At Closing Time, the
Underwriters shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ Thomson Apps & Dellelce, LLP, Canadian counsel for the
Company, in form and substance satisfactory to counsel for the Underwriters and
Sub-underwriters, together with signed or reproduced copies of such letter for
each of the Underwriters and Sub-underwriters to the effect set forth in Exhibit
A hereto and to such further effect as counsel to the Underwriters and
Sub-underwriters may reasonably request. In giving such opinion such counsel may
rely, as to all matters governed by the laws of jurisdictions other than the
laws of the Province of Ontario and the federal laws of Canada applicable
therein upon the opinions of counsel satisfactory to the Underwriters. Such
counsel may also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of officers
of the Company and certificates of public officials.
(c) Opinion of U.S. Counsel for Company. At Closing Time, the Underwriters
shall have received the favorable opinion dated as of the Closing Time, of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, U.S. counsel for the Company, together
with signed or reproduced copies of such opinion for each of the other
Underwriters and each of the Sub-underwriters, in form and substance
satisfactory to counsel for the Underwriters and Sub-underwriters to the effect
set forth in Exhibit B hereto and to such further effect as counsel to the
Underwriters and Sub-underwriter may reasonably request. In giving such opinion
such counsel may rely, as to all matters governed by the laws of jurisdictions
other than the law of the State of New York and the federal law of the United
States, upon the opinions of counsel satisfactory to the Underwriters. Such
counsel may also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of officers
of the Company and certificates of public officials.
(d) Opinion of Canadian Counsel for Underwriters and Sub-underwriters. At
Closing Time, the Underwriters shall have received the favorable opinion, dated
as of Closing Time, of Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, Canadian counsel for the
Underwriters and Sub-underwriters, together with signed or reproduced copies of
such letter for each of the other Underwriters, in form and substance
satisfactory to the Underwriters. In giving such opinion such counsel may rely,
13
as to all matters governed by the laws of jurisdictions other than the laws of
the Province of Ontario and the federal laws of Canada applicable therein upon
the opinions of counsel satisfactory to the Underwriters. Such counsel may also
state that, insofar as such opinion involves factual matters, they have relied,
to the extent they deem proper, upon certificates of officers of the Company and
certificates of public officials.
(e) Opinion of U.S. Counsel for Underwriters and the Sub-underwriters. At
Closing Time, the Underwriters shall have received the favorable opinion, dated
as of Closing Time, of Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, U.S. counsel for the
Underwriters and Sub-underwriters, together with signed or reproduced copies of
such letter for each of the other Underwriters, in form and substance
satisfactory to the Underwriters. In giving such opinion such counsel may rely,
as to all matters governed by the laws of jurisdictions other than the law of
the State of New York and the federal law of the United States, upon the
opinions of counsel satisfactory to the Underwriters. Such counsel may also
state that, insofar as such opinion involves factual matters, they have relied,
to the extent they deem proper, upon certificates of officers of the Company and
certificates of public officials.
(f) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the U.S. Prospectus and the Canadian Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company, whether or not arising in the
ordinary course of business, and the Underwriters shall have received a
certificate of either of the Co-Chief Executive Officers of the Company and the
Chief Financial Officer of the Company, dated as of Closing Time, to the effect
that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct with
the same force and effect as though expressly made at and as of Closing Time,
(iii) the Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to Closing Time, (iv) no
stop order suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are pending
or, to the knowledge of the Company, are contemplated by the Commission, and (v)
no order having the effect of ceasing or suspending the distribution of the
Securities shall have been issued by any securities commission or securities
regulatory authority in Canada.
(g) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Underwriters shall have received a letter from Ernst & Young LLP,
and a letter jointly from Zeifman & Company LLP and Ernst & Young LLP, dated
such date, in form and substance satisfactory to the Underwriters together with
signed or reproduced copies of such letter for each of the other Underwriters
and each of the Sub-underwriters containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the U.S. Prospectus and the Canadian Prospectus.
(h) Bring-down Comfort Letter. At Closing Time, the Underwriters shall have
received a letter from Ernst & Young LLP and a letter jointly from Zeifman &
Company LLP and Ernst & Young LLP, a letter, dated as of Closing Time, to the
effect that they reaffirm the statements made in the letter furnished pursuant
to subsection (g) of this Section, except that the specified date referred to
shall be a date not more than three business days prior to Closing Time.
(i) No Objection. The NASD shall have confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(j) Lock-up Agreements. At the date of this Agreement, the Underwriters
shall have received an agreement substantially in the form set forth in Exhibit
C hereto, signed by each of the persons listed on Schedule D hereto.
(k) Approval of Listing. At Closing Time, the Securities shall have been
conditionally approved for listing on the TSX, subject to the satisfaction of
standard listing conditions. At Closing Time, the Securities shall have been
approved for inclusion in the Nasdaq National Market, subject only to official
notice of issuance.
14
(l) Conditions to Purchase of Option Securities. In the event that the
Underwriters and Sub-underwriters exercise their option provided in Section 2(b)
hereof to purchase all or any portion of the Option Securities, the
representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company hereunder shall be true
and correct as of each Date of Delivery and, at the relevant Date of Delivery,
the Underwriters shall have received:
(i) Opinion of Canadian Counsel for Company. The favorable opinion of
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ Apps & Dellelce, LLP, Canadian counsel for the
Company, in form and substance satisfactory to counsel for the Underwriters
and Sub-underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(b) hereof.
(ii) Opinion of U.S. Counsel for Company. The favorable opinion of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, U.S. counsel for the Company, in
form and substance satisfactory to counsel for the Underwriters and
Sub-underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(c) hereof.
(iii) Opinion of Canadian Counsel for Underwriters and
Sub-underwriters. The favorable opinion of Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP,
Canadian counsel for the Underwriters and Sub-underwriters, dated such Date
of Delivery, relating to the Option Securities to be purchased on such Date
of Delivery and otherwise to the same effect as the opinion required by
Section 5(d) hereof.
(iv) Opinion of U.S. Counsel for Underwriters and Sub-underwriters.
The favorable opinion of Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, U.S. counsel
for the Underwriters and Sub-underwriters, dated such Date of Delivery,
relating to the Option Securities to be purchased on such Date of Delivery
and otherwise to the same effect as the opinion required by Section 5(e)
hereof.
(v) Officer's Certificate. A certificate, dated such Date of Delivery,
of either of the Co-Chief Executive Officers of the Company and the Chief
Financial Officer of the Company confirming that the certificate delivered
at Closing Time pursuant to Section 5(f) hereof remains true and correct as
of such Date of Delivery.
(vi) Bring-down Comfort Letter. A letter from Ernst & Young LLP and a
joint letter from Zeifman & Company LLP and Ernst & Young LLP, in form and
substance satisfactory to the Underwriters and dated such Date of Delivery,
substantially in the same form and substance as the letters furnished to
the Underwriters pursuant to Section 5(h) hereof, except that the
"specified date" in the letters furnished pursuant to this paragraph shall
be a date not more than five days prior to such Date of Delivery.
(m) Additional Documents. At Closing Time, and at each Date of Delivery,
counsel for the Underwriters and Sub-underwriters shall have been furnished with
such documents, including certificates as to tax matters, and opinions as they
may require for the purpose of enabling them to pass upon the issuance and sale
of the Securities as herein contemplated, or in order to evidence the accuracy
of any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be satisfactory in form and substance to the Underwriters and counsel for
the Underwriters and Sub-underwriters.
(n) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or in the case of any condition to the purchase of Option Securities
on a Date of Delivery which is after the Closing Time, the obligations of the
several Underwriters and Sub-underwriters to purchase such Securities, may be
terminated by the Underwriters by notice to the Company at any time at or prior
to Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any
such termination and remain in full force and effect.
15
SECTION 6. Indemnification.
(a) Indemnification of Underwriters and Sub-underwriters. The Company
agrees to indemnify and hold harmless each Underwriter and each Sub-underwriter
and each person, if any, who controls any Underwriter or any Sub-underwriter
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the PREP
Information, or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or alleged
untrue statement of a material fact included in any preliminary prospectus
or the U.S. Prospectus, the Canadian Prospectus or any Supplementary
Material (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred (including
the reasonable fees and disbursements of one counsel chosen by ▇▇▇▇▇▇
Brothers and ▇▇▇▇▇▇▇ ▇▇▇▇▇), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
such Underwriter through ▇▇▇▇▇▇ Brothers, Merrill Lynch or the Sub-underwriters
expressly for use in the Registration Statement (or any amendment thereto),
including the PREP Information, or any preliminary prospectus or the U.S.
Prospectus, the Canadian Prospectus or any Supplementary Material (or any
amendment or supplement thereto).
(b) Indemnification of Company, Directors and Officers. Each Underwriter
and Sub-underwriter severally agrees to indemnify and hold harmless the Company,
its directors, each of its officers who signed the Registration Statement or the
Canadian Prospectus, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto),
including the PREP Information, or any preliminary prospectus or the U.S.
Prospectus, the Canadian Prospectus or any Supplementary Material (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by any Underwriter or Sub-underwriter
through ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ or the Sub-underwriter expressly for use
in the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the U.S. Prospectus, the Canadian Prospectus or any Supplementary
Material (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
16
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected jointly by ▇▇▇▇▇▇ Brothers
and ▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in the case of parties indemnified pursuant to Section
6(b) above, counsel to the indemnified parties shall be selected by the Company.
An indemnifying party may participate at its own expense in the defense of any
such action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying parry shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6 hereof
is for any reason unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters and the Sub-underwriters on the other hand from the
offering of the Securities pursuant to this Agreement, or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand and of the
Underwriters and the Sub-underwriters on the other hand in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters and the Sub-underwriters on the other hand in connection with the
offering of the Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the Securities pursuant to this Agreement (before deducting expenses) received
by the Company and the total underwriting commission received by the
Underwriters and the Sub-underwriters, in each case as set forth on the cover of
the U.S. Prospectus, bear to the aggregate initial public offering price of the
Securities as set forth on such cover.
The relative fault of the Company on the one hand and the Underwriters and
the Sub-underwriters on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or by the Underwriters and the
Sub-underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters and Sub-underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters and Sub-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 in this Section 7. The aggregate amount of losses, liabilities, claims,
17
damages and expenses incurred by an indemnified party and referred to above in
this Section 7 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter and no
Sub-underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter or Sub-underwriter has otherwise been required to
pay by reason of any such untrue or alleged untrue statement or omission or
alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter or Sub-underwriter within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act shall have the same rights to contribution as such
Underwriter or Sub-underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement or the Canadian Prospectus,
and each person, if any, who controls the Company within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company. The Underwriters' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the number of
Initial Securities set forth opposite their respective names in Schedule A
hereto and not joint. Each of the Sub-underwriters obligations to contribute
pursuant to this Section 7 is in proportion to the number of Initial Securities
it purchased from that Underwriter which is its respective U.S. broker-dealer
affiliate.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company delivered pursuant hereto shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any Underwriter, any Sub-underwriter or controlling person, or
by or on behalf of the Company, and shall survive delivery of the Securities to
the Underwriters and the Sub-underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Underwriters may terminate this Agreement, by
notice to the Company, at any time at or prior to Closing Time (i) if there has
been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the U.S. Prospectus and the Canadian
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States, the
Canadian or international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial
or economic conditions, in each case the effect of which is such as to make it,
in the judgment of the Underwriters impracticable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission, the Reviewing Authority, any Qualifying Authority, any other
securities commission or securities regulatory authority in Canada or the TSX or
the Nasdaq National Market, or if trading generally on the New York Stock
Exchange, the TSX, or in the Nasdaq National Market has been suspended or
materially limited, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the Reviewing Authority, any
Qualifying Authority any other securities commission or securities regulatory
authority in Canada, the National Association of Securities Dealers, Inc. or any
other governmental authority, or (iv) if a banking moratorium has been declared
by either United States federal, New York state or Canadian federal authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7 and 8 shall survive such termination and remain in full force and effect.
18
SECTION 10. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at Closing Time or a Date of Delivery to purchase the
Securities which it or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), ▇▇▇▇▇▇ Brothers and ▇▇▇▇▇▇▇ ▇▇▇▇▇ shall have the right,
within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters or Sub-underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, ▇▇▇▇▇▇
Brothers and ▇▇▇▇▇▇▇ ▇▇▇▇▇ shall not have completed such arrangements within
such 24-hour period, then:
(i) If the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased hereunder, the non-defaulting
Underwriters or Sub-underwriters shall be obligated, each severally and not
jointly, to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters or Sub-underwriters, or
(ii) if the number of Defaulted Securities exceeds 10% of the number
of Securities to be purchased on such date, this Agreement or, with respect
to any Date of Delivery which occurs after Closing Time, the obligation of
the Underwriters to purchase and of the Company to sell the Option
Securities to be purchased and sold on such Date of Delivery, shall
terminate without liability on the part of any non-defaulting Underwriter
or Sub-underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, or in the case of a Date of Delivery which is after Closing
Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either ▇▇▇▇▇▇ Brothers and ▇▇▇▇▇▇▇ ▇▇▇▇▇ or the Company
shall have the right to postpone Closing Time or the relevant Date of Delivery,
as the case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement, the U.S. Prospectus or the
Canadian Prospectus or in any other documents or arrangements. As used herein,
the term "Underwriter" includes any person substituted for an Underwriter under
this Section 10.
SECTION 11. Agent for Service: Submission to Jurisdiction: Waiver of Immunities.
By the execution and delivery of this Agreement, the Company (i) acknowledges
that it has, by separate written instrument, irrevocably designated and
appointed Research In Motion Corporation (or any successor) (together with any
successor, the "Agent for Service"), as its authorized agent upon which process
may be served in any suit or proceeding arising out of or relating to this
Agreement or the Securities, that may be instituted in any federal or state
court in the State of New York, or brought under federal or state securities
laws, and acknowledges that the Agent for Service has accepted such designation,
(ii) submits to the jurisdiction of any such court in any such suit or
proceeding, and (iii) agrees that service of process upon the Agent for Service
(or any successor) and written notice of said service to the Company (mailed or
delivered to its Chief Financial Officer at its principal office in ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇), shall be deemed in every respect effective service of process
upon the Company in any such suit or proceeding. The Company further agrees to
take any and all action, including the execution and filing of any and all such
documents and instruments, as may be necessary to continue such designation and
appointment of the Agent for Service in full force and effect so long as any of
the Securities shall be outstanding.
To the extent that the Company has or hereafter may acquire any immunity
from jurisdiction of any court or from any legal process (whether through
service of notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise) with respect to itself or its property, it hereby
irrevocably waives such immunity in respect of its obligations under the
above-referenced documents, to the extent permitted by law.
SECTION 12. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Underwriters shall be
19
directed to the Underwriters at ▇▇▇▇▇▇ Brothers Inc., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, attention of ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated at ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., BCE Place, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, attention of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ and notices to
the Company shall be directed to it at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇, attention of President and Co-Chief Executive Officer.
SECTION 13. Parties. This Agreement shall inure to the benefit of and be binding
upon the Underwriters, the Sub-underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and Sub-underwriters and the Company and their respective
successors and the controlling persons and officers and directors referred to in
Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Underwriters
and Sub-underwriters and the Company and their respective successors, and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any Underwriter or Sub-underwriter shall be deemed
to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings herein and the
Table of Contents are for convenience only and shall not affect the construction
hereof.
20
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument along with all counterparts, will become a binding agreement between
the Underwriters, the Sub-underwriters and the Company in accordance with its
terms.
Very truly yours,
RESEARCH MOTION LIMITED
By:
--------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written
▇▇▇▇▇▇ Brothers Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇▇, Sachs & Co.
UBS Securities LLC
Banc of America Securities LLC
BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.
CIBC World Markets Inc.
GMP Securities Ltd.
Canaccord Capital Corporation
National Bank Financial Inc.
Orion Securities Inc.
RBC Dominion Securities Inc.
Scotia Capital Inc.
▇▇ ▇▇▇▇▇ Securities Corporation
TD Securities Inc.
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ Canada Inc.
▇▇▇▇▇▇▇ Sachs Canada Inc.
UBS Securities Canada Inc.
as Sub-underwriters
BY: ▇▇▇▇▇▇ BROTHERS INC.
By
-------------------------------------------------
Authorized Signatory
BY: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By
-------------------------------------------------
Authorized Signatory
21
SCHEDULE A
Number of
Name of Underwriter Initial
------------------- Securities
----------
▇▇▇▇▇▇ Brothers Inc..............................................................
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated...............................
▇▇▇▇▇▇▇, Sachs & Co..............................................................
UBS Securities LLC...............................................................
Banc of America Securities LLC...................................................
BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc............................................................
CIBC World Markets Inc...........................................................
GMP Securities Ltd...............................................................
Canaccord Capital Corporation
National Bank Financial Inc.
Orion Securities Inc.
RBC Dominion Securities Inc..
Scotia Capital Inc.
▇▇ ▇▇▇▇▇ Securities Corporation
TD Securities Inc
Total............................................................................
Sch A-1
SCHEDULE B
RESEARCH IN MOTION LIMITED
9,000,000
(without par value)
1. The initial public offering price per share for the Securities, determined
as provided in Section 2, shall be US$o per share for Securities initially
offered in the United States or Cdn$o.
2. The purchase price per share for the Securities to be paid by the several
Underwriters shall be US$o being an amount equal to the initial public
offering price set forth above less US$o per share, representing the
underwriting commission as set forth in paragraph 3 below; provided that
the purchase price per share for any Option Securities purchased upon the
exercise of the over-allotment option described in Section 2(b) shall be
reduced by an amount per share equal to any dividends or distributions
declared by the Company and payable on the Initial Securities but not
payable on the Option Securities.
3. The underwriting commission per share payable for the Securities to be paid
by the Company shall be US$o per share.
Sch B-1
SCHEDULE C
Research In Motion Limited
Research In Motion Corporation
1394464 Ontario Inc.
1394482 Ontario Inc.
1394483 Ontario Inc.
1394484 Ontario Inc.
1397199 Ontario Inc.
1411260 Ontario Inc.
1432706 Ontario Inc.
1432766 Ontario Inc.
1455122 Ontario Inc.
1465634 Ontario Inc.
1465654 Ontario Inc.
Research In Motion UK Limited
Softart Holdings Inc.
Softart Microsystems Inc.
1446491 Ontario Inc.
RIM Finance, LLC
RIM International Ltd.
Plazmic Inc.
Plazmic K.K.
3044019 Nova Scotia Company
RIM Finance Subco Inc.
RIM Finance, LP
2012244 Ontario Inc.
Arizan Corporation
TeamOn Systems Inc.
Research In Motion Australia Pty Limited
Research In Motion HK Limited
M-Stack Ltd
Research In Motion Deutschland GmbH
Research In Motion France S.A.S.
Research In Motion Italy S.r.L.
Sch C-1
SCHEDULE D
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Cork
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
Sch D-1
EXHIBIT A
FORM OF OPINION OF COMPANY'S CANADIAN COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
[▇▇▇▇▇▇▇▇▇ ▇▇▇▇ THOMSON APPS & DELLELCE, LLP LETTERHEAD]
A-1
EXHIBIT B
FORM OF OPINION OF COMPANY'S U.S. COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(c)
B-2
EXHIBIT C
FORM OF LOCK-UP LETTER
January 14, 2004
▇▇▇▇▇▇ Brothers Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
as Representatives of the several Underwriters and Sub-underwriters
to be named in the within-mentioned Purchase Agreement
c/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
World Financial Center, North Tower
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
The undersigned shareholder, director or senior officer of Research In
Motion Limited, an Ontario company (the "Company"), understands that a Purchase
Agreement (the "Purchase Agreement") will be executed by the Company and ▇▇▇▇▇▇
Brothers Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated as representatives of the several Underwriters and Sub-underwriters
to be named therein (the "Underwriters") and the Sub-underwriters, providing for
the public offering (the "Offering") of 9,000,000 common shares of the Company
("Common Shares") in the United States pursuant to the Company's registration
statement on Form F-10 (File No. 333-111753), as amended or supplemented, and in
certain provinces of Canada (not including Quebec) pursuant to the Company's
preliminary short form prospectus dated January 7, 2004, as completed, amended
or supplemented.
This Lock-Up Letter Agreement is being entered into in accordance with
Section 5(j) of the Purchase Agreement at the request of the Underwriters and
Sub-underwriters.
For good and valuable consideration, receipt and sufficiency of which is
hereby acknowledged, the undersigned agrees with the Underwriters and the
Sub-underwriters that, without the prior written consent of ▇▇▇▇▇▇ Brothers Inc.
and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, on
behalf of the Underwriters and the Sub-underwriters, [except with respect to
Common Shares that may be sold by the undersigned equal in value to Cdn$15
million to fund a charitable contribution to the Perimeter Institute and]1
[except with respect to Common Shares that may be sold by the undersigned equal
in value to Cdn$4 million to fund a charitable contribution to the University of
Waterloo and]2 except with respect to [an additional]3 25,000 Common Shares in
the aggregate, the undersigned will not, directly or indirectly, (i) offer,
pledge, sell (including any sale pursuant to Rule 144 under the Securities Act
of 1933, as amended), contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, announce any intention to sell, grant
any option, right or warrant for the sale of, or otherwise dispose of or
transfer any Common Shares (including, without limitation, Common Shares which
may be deemed to be beneficially owned by such shareholder in accordance with
the rules and regulations of the Securities and Exchange Commission or the
securities legislation of any province or territory of Canada and shares of
Common Stock which may be issued upon exercise of any option or warrant) or any
--------
1 ▇▇▇▇▇▇▇ Laziridis only.
2 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ only.
3 ▇▇▇▇▇▇▇ Laziridis and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ only.
C-1
securities convertible into or exchangeable or exercisable for Common Shares,
whether now owned or hereafter acquired by the undersigned or with respect to
which the undersigned has or hereafter acquires the power of disposition, or
file a registration statement or prospectus with respect to any of the foregoing
or (ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic consequence
of ownership of the Common Shares, whether any such swap or transaction is to be
settled by delivery of Common Shares or other securities, in cash or otherwise,
for a period commencing the date of the Purchase Agreement and ending 90 days
thereafter.
The undersigned understands that the Company and the Underwriters and the
Sub-underwriters will proceed with the Offering in reliance on this Lock-Up
Letter Agreement
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary or
desirable in connection with the enforcement hereof. Any obligations of the
undersigned shall be binding upon the successors and assigns of the undersigned.
This Lock-Up Letter Agreement has been entered into on the date first
written above.
Very truly yours,
By
------------------------------------
Name:
C-2