Exhibit 1.1
IMAGICTV INC.
(incorporated under the Canada Business Corporations Act)
Common Shares
PURCHASE AGREEMENT
Dated: , 2000
Table of Contents
Page
Section 1. Representations and Warranties......................................................................4
(a) Representations and Warranties by the Company..............................................4
(i) Compliance with Registration Requirements.........................................4
(ii) Compliance with Canadian Prospectus Requirements..................................5
(iii) Independent Accountants...........................................................6
(iv) Financial Statements..............................................................6
(v) No Material Adverse Change in Business............................................6
(vi) Good Standing of the Company......................................................6
(vii) Subsidiaries......................................................................7
(viii) Capitalization 7
(ix) Authorization of Agreement........................................................7
(x) Authorization and Description of Securities.......................................7
(xi) Absence of Defaults and Conflicts.................................................8
(xii) Absence of Labor Dispute..........................................................8
(xiii) Absence of Proceedings............................................................8
(xiv) Accuracy of Exhibits..............................................................9
(xv) Possession of Intellectual Property...............................................9
(xvi) Absence of Further Requirements...................................................9
(xvii) Possession of Licenses and Permits...............................................10
(xviii) Title to Property10
(xix) Investment Company Act...........................................................10
(xx) Environmental Laws...............................................................10
(xxi) Registration Rights..............................................................11
(xxii) Taxes 11
(xxiii) Insurance 11
(xxiv) Compliance with Laws.............................................................11
(xxv) Adequate Accounting..............................................................11
(xxvi) Principal Shareholders...........................................................12
(xxvii) Non-Arm's Length Transactions....................................................12
(xxviii) Stamp Tax 12
(xxix) Registrar and Transfer Agent.....................................................12
(b) Officer's Certificates....................................................................12
Section 2. Sale and Delivery to Underwriters; Closing.........................................................12
(a) Initial Securities........................................................................12
(b) Option Securities.........................................................................13
(c) Payment...................................................................................13
(d) Denominations; Registration...............................................................14
(e) Sub-underwriter Notification..............................................................14
Section 3. Covenants of the Company...........................................................................14
(a) Compliance with Securities Regulations and Commission Requests............................14
(b) Filing of Amendments......................................................................15
(c) Delivery of Registration Statement........................................................15
(d) Delivery of Prospectuses..................................................................15
i
(e) Continued Compliance with Securities Laws.................................................16
(f) Blue Sky Qualifications...................................................................16
(g) Rule 158..................................................................................16
(h) Use of Proceeds...........................................................................16
(i) Listing...................................................................................17
(j) Restriction on Sale of Securities.........................................................17
(k) Reporting Requirements....................................................................17
(l) PREP Procedures and Rule 424(b)...........................................................17
(m) Translation Opinions......................................................................17
(n) Translation Opinions--Financial Statements................................................18
(o) Compliance with NASD Rules................................................................18
(p) Compliance with Rule 463..................................................................18
Section 4. Payment of Expenses................................................................................18
(a) Expenses..................................................................................18
(b) Termination of Agreement..................................................................19
Section 5. Conditions of Underwriters' Obligations............................................................19
(a) Effectiveness of Registration Statement...................................................19
(b) Opinion of Canadian Counsel for Company...................................................20
(c) Opinion of U.S. Counsel for Company.......................................................20
(d) Opinion of U.S. Regulatory Counsel for Company............................................20
(e) Opinion of European Regulatory Counsel for Company........................................20
(f) Opinion of Canadian Counsel for Underwriters and the Sub-underwriter......................20
(g) Opinion of U.S. Counsel for Underwriters and the Sub-underwriter..........................21
(h) Officers' Certificate.....................................................................21
(i) Accountants' Comfort Letter...............................................................21
(j) Bring-down Comfort Letter.................................................................22
(k) Approval of Listing.......................................................................22
(l) No Objection..............................................................................22
(m) Lock-up Agreements........................................................................22
(n) Recapitalization..........................................................................22
(o) Conditions to Purchase of Option Securities...............................................22
(p) Additional Documents......................................................................23
(q) Termination of Agreement..................................................................24
Section 6. Indemnification....................................................................................24
(a) Indemnification of Underwriters and the Sub-underwriter...................................24
(b) Indemnification of Company, Directors and Officers........................................25
(c) Actions against Parties; Notification.....................................................25
(d) Settlement without Consent if Failure to Reimburse........................................26
(e) Indemnification for Reserved Securities...................................................26
(f) Underwriters and Sub-underwriter as Trustees..............................................26
(g) Company as Trustee........................................................................27
Section 7. Contribution.......................................................................................27
Section 8. Representations, Warranties and Agreements to Survive Delivery.....................................28
Section 9. Termination of Agreement...........................................................................28
(a) Termination; General......................................................................28
(b) Liabilities...............................................................................29
ii
Section 10. Default by One or More of the Underwriters.........................................................29
Section 11. Agent for Service; Submission to Jurisdiction; Waiver of Immunities................................30
Section 12. Notices 30
Section 13. Parties 30
Section 14. GOVERNING LAW AND TIME.............................................................................31
Section 15. Effect of Headings.................................................................................31
Section 16. Waiver of Conditions...............................................................................31
SCHEDULES
Schedule A - List of Underwriters......................................................................Sch A-1
Schedule B - Pricing Information.......................................................................Sch B-1
Schedule C - List of Persons and Entities Subject to Lock-up...........................................Sch C-1
Schedule D - List of Subsidiaries......................................................................Sch D-1
EXHIBITS
Exhibit A - Form of Opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Company's Canadian Counsel...............................A-1
Exhibit B - Form of Opinion of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Company's
Canadian Counsel..................................................................................B-1
Exhibit C - Form of Opinion of Company's U.S. Counsel......................................................C-1
Exhibit D - Form of Opinion of Goldberg, Godles, Wiener & ▇▇▇▇▇▇, Company's U.S. Regulatory Counsel........D-1
Exhibit E - Form of Opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, Company's European Regulatory Counsel...........E-1
Exhibit F - Form of Lock-up Letter.........................................................................F-1
ANNEXES
Annex A - Form of Accountants' Comfort Letter.......................................................Annex A-1
iii
IMAGICTV INC.
(incorporated under the Canada Business Corporations Act)
Common Shares
(No Par Value Per Share)
PURCHASE AGREEMENT
------------------
, 2000
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
Chase Securities Inc.
CIBC World Markets Inc.
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
ImagicTV Inc., a company incorporated under the Canada Business
Corporations Act (the "Company"), confirms its agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), ▇▇▇▇▇
Securities Inc. and CIBC World Markets Inc. (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 the Company's common shares, no par value per share
("Common Shares"), set forth in Schedule A hereto, 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
additional Common Shares to cover over-allotments, if any. The aforesaid
Common Shares (the "Initial Securities") to be purchased by the Underwriters and
all or any part of the 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 and
territories of Canada upon the terms set forth in the U.S. Prospectus (as
defined below) and the Canadian Prospectus (as defined below) as soon as the
Underwriters deem advisable after this Agreement has been executed and
delivered. The Company also understands that the Underwriters may offer the
Securities outside the United States and Canada, subject to applicable law.
The Company and the Underwriters agree that up to shares of the Initial
Securities to be purchased by the Underwriters (the "Reserved Securities") shall
be reserved for sale by the Underwriters and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Canada Inc., an
affiliate of ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Sub-underwriter") to certain of the Company's
directors and officers and certain of their family members, and to certain
consultants, employees and business associates of the Company, as part of the
distribution of the Securities by the Underwriters, subject to the terms of this
Agreement, the applicable rules, regulations and interpretations of the National
Association of Securities Dealers, Inc. (the "NASD") and all other applicable
laws, rules and regulations. To the extent that such Reserved Securities are
not orally confirmed for purchase by such directors or officers or certain of
their family members, or such consultants, employees or business associates by
the end of the first business day after the date of this Agreement, such
Reserved Securities may be offered to the public as part of the public offering
contemplated hereby.
The Company has prepared and filed with the U.S. Securities and Exchange
Commission (the "Commission") a registration statement on Form F-1 (No. 333-
48452) covering the registration of the Securities under the U.S. Securities Act
of 1933, as amended (the "1933 Act"), including the related U.S. Preliminary
Prospectus (as defined below). Promptly after execution and delivery of this
Agreement, the Company will either (i) prepare and file a prospectus in
accordance with the provisions of Rule 430A ("Rule 430A") of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations")
and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or
(ii) if the Company has elected to rely upon Rule 434 ("Rule 434") of the 1933
Act Regulations, prepare and file a term sheet (a "Term Sheet") in accordance
with the provisions of Rule 434 and Rule 424(b). The information included in
any such prospectus or in such Term Sheet, as the case may be, that was omitted
from such registration statement at the time it became effective but that is
deemed to be part of such registration statement at the time it became effective
(i) pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information" or (ii) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." Each prospectus used in the United States or outside
the United States and Canada before such registration statement became
effective, and any prospectus that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used in the United States or
outside the United States and Canada after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a "U.S. Preliminary
Prospectus." Such registration statement, including the exhibits thereto and
schedules thereto at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final prospectus in
the form first furnished to the Underwriters for use in connection with the
offering of the Securities in the United States and outside the United States
and Canada is herein called the "U.S. Prospectus." If Rule 434 is relied on,
the term "U.S. Prospectus" shall refer to the preliminary prospectus dated
October 24, 2000 together with the Term Sheet and all references in this
Agreement to the date of the U.S. Prospectus shall mean the date of the
applicable Term Sheet. For purposes of this Agreement, all references to the
Registration Statement, any U.S. Preliminary Prospectus, the U.S. Prospectus or
any Term Sheet or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
2
The Company has also prepared and filed with the Ontario Securities
Commission (the "Reviewing Authority") and the securities regulatory authorities
(the "Qualifying Authorities") in each of the provinces and territories of
Canada (the "Qualifying Provinces and Territories") a preliminary long-form
prospectus relating to the Securities (in the English and French languages, as
applicable) covering the distribution of the Securities under applicable
Canadian securities legislation. The Reviewing Authority has been assigned to
the Company as the designated jurisdiction regulating the offering of the
Securities. In addition, the Company (A) has prepared and filed with the
Reviewing Authority and the Qualifying Authorities a final long-form prospectus
relating to the Securities (in the English and French languages, as applicable,
the "Final PREP Prospectus") omitting the PREP Information (as hereinafter
defined) in accordance with the rules and procedures established pursuant to
Canadian National Policy Statement No. 44 and similar procedures under the
securities legislation of the Province of Quebec, as amended by proposed
National Instrument 44-103 entitled "Post Receipt Pricing" for the pricing of
securities after the final receipt for a prospectus has been obtained (the "PREP
Procedures"), and (B) will prepare and file, promptly after the execution and
delivery of this Agreement, with the Reviewing Authority and the Qualifying
Authorities, in accordance with the PREP Procedures, a supplemental prospectus
setting forth the PREP Information (in the English and French languages, as
applicable, the "Supplemental PREP 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 deemed under the
PREP Procedures to be incorporated by reference into the Final PREP Prospectus
as of the date of the Supplemental PREP Prospectus is referred to herein as the
"PREP Information." Each prospectus, in the English and French languages, as
applicable, relating to the Securities used in Canada (1) before a receipt for
the Final PREP Prospectus had been obtained from the Reviewing Authority on
behalf of itself and the Qualifying Authorities or (2) after such receipt had
been obtained and prior to the execution and delivery of this Agreement, that
omits the PREP Information, is referred to herein as the "Canadian Preliminary
Prospectus." The Final PREP Prospectus for which a receipt has been obtained
from the Reviewing Authority on behalf of itself and the Qualifying Authorities
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. Any amendment to the Canadian Prospectus, any amended or
supplemental prospectus or auxiliary material, information, evidence, return,
report, application, statement or document that may be filed by or on behalf of
the Company under the securities laws of the Province of Ontario or the
Qualifying Provinces and Territories prior to the Closing Time (as hereinafter
defined) or, where such document is deemed to be incorporated by reference in
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." For the purposes of this Agreement, all references to the Canadian
Preliminary Prospectus, Final PREP Prospectus, Supplemental PREP Prospectus and
Canadian Prospectus shall be deemed to include the copy thereof filed with the
Reviewing Authority and the Qualifying Authorities pursuant to the System for
Electronic Document Analysis and Retrieval ("SEDAR"). Each U.S. Preliminary
Prospectus and Canadian Preliminary Prospectus is herein called a "preliminary
prospectus," and the U.S. Prospectus and the Canadian Prospectus, collectively,
are herein called the "Prospectuses."
3
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 and Territories conducted through the Sub-underwriter and CIBC World
Markets Inc. and that any other offers and sales of the Securities in Canada
shall be made by other underwriters or their affiliates which are duly qualified
and authorized to sell the Securities in Canada pursuant to the Canadian
Prospectus. The Sub-underwriter, subject to the terms and conditions set forth
herein, agrees and covenants with the Company to use reasonable efforts to sell
the Securities in the Province of Ontario and the Qualifying Provinces and
Territories. Any Securities so sold will be purchased by the Sub-underwriter
from ▇▇▇▇▇▇▇ ▇▇▇▇▇ at the Closing Time 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-underwriter and ▇▇▇▇▇▇▇ ▇▇▇▇▇, which amount
shall not be greater than the underwriting commission as set forth in Schedule B
hereto.
SECTION 1. Representations and Warranties.
------------------------------------------
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter and the 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 the Sub-underwriter, as follows:
(i) Compliance with Registration Requirements. Each of the
----------------------------------------------
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) 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 respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and 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
not misleading and the U.S. Prospectus, any U.S. Preliminary Prospectus and
any supplement thereto or prospectus wrapper prepared in connection
therewith, at their respective times of issuance and at the Closing Time,
complied and will comply in all material respects with any applicable laws
or regulations of foreign jurisdictions in which the U.S. Prospectus and
such U.S. Preliminary Prospectus, as amended or supplemented, if
applicable, are distributed in connection with the offer and sale of
Reserved Securities. Neither the U.S. Prospectus nor any amendments or
supplements thereto including any prospectus wrapper, at the time the U.S.
Prospectus or any such amendment or supplement was issued and at the
Closing Time (and, if any Option Securities are purchased, at the Date of
Delivery), included or will include an untrue statement of a material fact
or omitted or will omit to state a material fact necessary in order to make
the statements therein, in the light of the
4
circumstances under which they were made, not misleading. If Rule 434 is
used, the Company will comply with the requirements of Rule 434 and the
U.S. Prospectus shall not be "materially different," as such term is used
in Rule 434, from the prospectus included in the Registration Statement at
the time it became effective. The representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or U.S. Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter or the Sub-underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use
in the Registration Statement (or any amendment thereto) or U.S. Prospectus
(or any amendment or supplement thereto).
Each U.S. Preliminary Prospectus and the prospectus filed as part of
the Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each U.S.
Preliminary Prospectus and the U.S. Prospectus delivered to the
Underwriters for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(ii) Compliance with Canadian Prospectus Requirements. The Company is
-----------------------------------------------------
eligible to use the PREP Procedures by way of an exemption order issued by
the Reviewing Authority on , 2000. 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. 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), the Canadian Prospectus complied
and will comply in all material respects with the applicable securities
legislation of the Province of Ontario and the Qualifying Provinces and
Territories as interpreted and applied by the Reviewing Authority
(including the PREP Procedures); and each of the Canadian Prospectus, and
Supplementary Material or any amendment or supplement thereto, constituted
and will constitute full, true and plain disclosure of all material facts
relating to the Company and the Securities, and did not and will not
include an untrue statement of material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
representations and warranties in this subsection shall not apply to
statements in or omissions from the Canadian Prospectus or any
Supplementary Material made in reliance upon and in conformity with
information furnished to the Company in writing by any Underwriter or the
Sub-underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Canadian
Prospectus or any Supplementary Material (or any amendment or supplement
thereto).
Each Canadian Preliminary Prospectus and the Canadian Prospectus
complied when filed in all material respects with the applicable securities
legislation of the Province of Ontario and the Qualifying Provinces and
Territories and each Canadian Preliminary Prospectus and the Canadian
Prospectus delivered to the Underwriters for
5
use in connection with this offering were identical to the electronically
transmitted copies thereof filed with SEDAR.
(iii) Independent Accountants. The accountants who certified the
------------------------------
financial statements and supporting schedules included in the Prospectuses
are independent public accountants as required by the 1933 Act and the 1933
Act Regulations and within the meaning of the Canada Business Corporations
Act and applicable Canadian securities laws and regulations and policies
thereunder.
(iv) Financial Statements. The financial statements included
--------------------------
in the Registration Statement and the Prospectuses, together with the
related schedules and notes, present fairly the financial position of the
Company and its consolidated subsidiaries at the dates indicated and the
statements of operations, shareholders' equity and cash flows of the
Company and its consolidated subsidiaries for the periods specified; said
financial statements have been prepared in conformity with generally
accepted accounting principles in Canada ("Canadian GAAP") applied on a
consistent basis throughout the periods involved, except as may be set
forth in the Prospectuses, and have been reconciled to generally accepted
accounting principles in the United States ("U.S. GAAP") in accordance with
Item 18 of Form 20-F under the U.S. Securities Exchange Act of 1934, as
amended (the "1934 Act"). The supporting schedules, if any, included in the
Registration Statement present fairly in accordance with Canadian GAAP the
information required to be stated therein. The selected financial data and
the summary financial information included in the Prospectuses present
fairly the information shown therein and have been compiled on a basis
consistent with that of the audited and unaudited financial statements, as
the case may be, included in the Registration Statement.
(v) No Material Adverse Change in Business. Since the respective dates
-------------------------------------------
as of which information is given in the Registration Statement, the
Prospectuses 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 has been duly organized
----------------------------------
and is validly existing as a corporation in good standing under the laws of
Canada and has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectuses and
to enter into and perform its obligations under this Agreement; and the
Company is duly qualified as a foreign corporation to transact business and
is in good standing in each other jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property or
the
6
conduct of business, except where the failure to so qualify or be in good
standing would not result in a Material Adverse Effect.
(vii) Subsidiaries. The only subsidiaries of the Company are the
-------------------
subsidiaries listed on Schedule D hereto, which, considered in the
aggregate as a single subsidiary, do not constitute a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X.
(viii) Capitalization. The authorized, issued and outstanding share
----------------------
capital of the Company is as set forth in the Prospectuses in the column
entitled "Actual" under the caption "Capitalization" (except for subsequent
issuances, if any, pursuant to (A) this Agreement, (B) reservations,
agreements or employee benefit plans referred to in the Prospectuses, (C)
the exercise of convertible securities or options referred to in the
Prospectuses or (D) the reclassification of the Company's share capital and
share split referred to in the Prospectuses). 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 and have been
issued in compliance with all U.S. and Canadian securities laws; none of
the outstanding shares in the capital of the Company was issued in
violation of the preemptive or other similar rights of any security holder
of the Company. Except as disclosed in or contemplated by the Prospectuses
and the financial statements of the Company and related notes thereto
included in the Prospectuses, the Company does not have any options or
warrants to purchase, or any preemptive rights or other rights to subscribe
for or to purchase any securities or obligations convertible into, or any
contracts or commitments to issue or sell, any of its share capital or any
such options, rights, convertible securities or obligations except for
options granted subsequent to the date as of which the information is given
in the Prospectuses pursuant to the Company's employee stock option plans
disclosed in the Prospectuses. The description of the Company's stock
option plans and the options granted thereunder, as set forth in the
Prospectuses, accurately and fairly presents the information required to be
disclosed with respect to such plans and options. Except as disclosed in
the Prospectuses, to the knowledge of the Company, there are no agreements,
arrangements or understandings among or between any shareholder of the
Company with respect to the Company or the voting or disposition of the
Company's capital stock that will survive the sale of the Securities
pursuant to this Agreement.
(ix) 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, and is enforceable in accordance with its terms,
except as rights to indemnification contained herein may be limited by
applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(x) Authorization and Description of Securities. The Securities have
------------------------------------------------
been duly authorized for issuance and sale to the Underwriters pursuant to
this Agreement and,
7
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 Prospectuses and such descriptions
conform to the rights set forth in the instruments defining the same; no
holder of the Securities will be subject to personal liability 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 security holder of the
Company.
(xi) 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 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 subsidiary is subject (collectively,
"Agreements and Instruments") except for such defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein and in the Registration Statement (including the
issuance and sale of the Securities and the use of the proceeds from the
sale of the Securities as described in the Prospectuses 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 or any subsidiary pursuant to, the Agreements and
Instruments (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not result in a Material Adverse
Effect), nor will such action result in any violation of the provisions of
the charter document or by-laws of the Company or any subsidiary or any
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 subsidiary or any of
their assets, properties or operations. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note, debenture
or other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of all
or a portion of such indebtedness by the Company or any subsidiary.
(xii) Absence of Labor Dispute. No labor dispute with the employees
-------------------------------
of the Company or any subsidiary exists or, to the knowledge of the
Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any
subsidiary's principal suppliers, manufacturers, customers or contractors,
which, in either case, may reasonably be expected to result in a Material
Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit, proceeding,
------------------------------
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or
8
affecting the Company or any subsidiary, which is required to be disclosed
in the Prospectuses or the Supplementary Material (other than as disclosed
therein), or which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation of
the transactions contemplated in this Agreement or the performance by the
Company of its obligations hereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any subsidiary is a party
or of which any of their respective property or assets is the subject which
are not described in the Prospectuses or the Supplementary Material,
including ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or documents
---------------------------
which are required to be described in the Registration Statement or the
Prospectuses or to be filed as exhibits thereto which have not been so
described and filed as required.
(xv) Possession of Intellectual Property. The Company and its
----------------------------------------
subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, and neither the Company nor any of its subsidiaries
has received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any of its subsidiaries therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect; none of the technology employed by the Company or
any of its subsidiaries has been obtained or is being used by the Company
or any of its subsidiaries in violation of any contractual or fiduciary
obligation binding on the Company or its subsidiaries or any of their
respective directors, executive officers, employees or consultants or
otherwise in violation of the rights of any person.
(xvi) 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 (i) such as have been already
obtained or as may be required under the 1933 Act or the 1933 Act
Regulations or state securities laws, (ii) 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 and Territories and (iii) such as
have been obtained under the laws and regulations of jurisdictions outside
the United States and Canada in which the Reserved Securities are offered.
9
(xvii) Possession of Licenses and Permits. The Company and its
------------------------------------------
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, provincial, state, local or foreign regulatory
agencies or bodies necessary to conduct the business now operated by them;
the Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure so
to comply would not, singly or in the aggregate, have a Material Adverse
Effect; all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and effect would
not have a Material Adverse Effect; and 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 which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xviii) Title to Property. Neither the Company nor any of its
--------------------------
subsidiaries owns any real property; the Company and its subsidiaries have
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 Prospectuses or (b) would not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Company or any of
its subsidiaries; and all of the leases and subleases material to the
business of the Company and its subsidiaries, considered as one enterprise,
and under which the Company or any of its subsidiaries holds properties
described in the Prospectuses, are in full force and effect, and neither
the Company nor any subsidiary has any notice of any material claim of any
sort that has been asserted by anyone adverse to the rights of the Company
or any subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary to
the continued possession of the leased or subleased premises under any such
lease or sublease.
(xix) 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 Prospectuses
will not be, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
(xx) Environmental Laws. Except as described in the Prospectuses
------------------------
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
or civil law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, 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
10
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 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.
(xxi) Registration Rights. There are no persons with registration
--------------------------
rights or other similar rights to have any securities registered pursuant
to the Registration Statement or otherwise registered by the Company under
the ▇▇▇▇ ▇▇▇.
(xxii) Taxes. Each of the Company and its subsidiaries has filed all
-------------
necessary United States and Canadian federal, state, provincial, local and
foreign income, payroll, franchise, use 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 (except for such taxes, if any, as
are being, or will be, contested in good faith and as to which adequate
reserves have been provided), 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 any of its subsidiaries or any of its or their properties or
assets that would result in a Material Adverse Effect.
(xxiii) Insurance. Except as disclosed in the Prospectuses, each of
------------------
the Company and its subsidiaries is insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts
as are customary in the business in which it is engaged or proposes to
engage; neither the Company nor any of its subsidiaries has 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. Except as would not have a Material
----------------------------
Adverse Effect, the Company and its subsidiaries are in compliance with,
and conduct their businesses in conformity with, all applicable U.S. and
Canadian federal, state, provincial and local laws and all applicable
rules, regulations, judgments, orders, writs or decrees of the United
States or Canada, of any government instrumentality, agency body or court
thereof or therein or of The Toronto Stock Exchange (the "TSE") or the
Nasdaq National Market.
(xxv) Adequate Accounting. Each of the Company and its subsidiaries
--------------------------
maintains a system of internal accounting controls sufficient to provide
reasonable assurances that: (i) transactions are executed in accordance
with management's general or
11
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with Canadian GAAP
and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(xxvi) Principal Shareholders. Except as disclosed in writing to
------------------------------
the Underwriters, to the knowledge of the Company, after due inquiry, none
of the directors or officers of the Company listed under "Management" in
the Prospectuses, or shareholders of the Company listed under "Principal
Shareholders" in the Prospectuses, 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 Prospectuses, 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 and Territories.
(xxviii) Stamp Tax. No stamp duty, registration or documentary
--------------------
taxes, duties or similar charges (except for those paid, or that will be
paid, by the Company) are payable under the federal laws of Canada or the
laws of the Province of New Brunswick 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 .
(xxix) Registrar and Transfer Agent. CIBC Mellon Trust Company, at its
------------------------------------
principal offices in ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, and ▇▇▇▇▇ ▇▇▇▇▇▇ Shareholder
Services, LLC, at its principal offices in New York, New York, have been
duly appointed as the co-registrars and co-transfer agents in respect of
the Common Shares of the Company.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Underwriters or to counsel
for the Underwriters and the Sub-underwriter 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
12
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 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 the Underwriters 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 by the Underwriters, but shall not be later than
seven full business days (or in the case of any exercise of said option by
notice given after the Closing Time (as hereunder defined), earlier than two
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 the
Underwriters in their 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
Shearman & Sterling, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such
other place as shall be agreed upon by the Underwriters and the Company, at 9:00
A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day 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 the
Underwriters 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 for, 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 the Underwriters and
the Company, on each Date of Delivery as specified in the notice from the
Underwriters to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Underwriters for the respective accounts of the Underwriters of certificates
for the Securities to be purchased by them. It is understood that each
Underwriter has authorized the Underwriters, for its account, to accept delivery
of, receipt for, and make payment of the purchase price for, the Initial
Securities and the Option Securities, if any, which it has agreed to purchase.
Payment to the Company with respect to Securities the Underwriters have sold or
expect to sell in the United States shall be made in
13
U.S. dollars and payment to the Company with respect to Securities the
Underwriters have sold or expect to sell in Canada shall be made in Canadian
dollars , as set forth in Schedule B hereto. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not
as representative of the Underwriters or the Sub-underwriter, 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 the 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 the 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 the Underwriters may request in writing at least one
full business day before the Closing Time or the relevant Date of Delivery, as
the case may be. The certificates for 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. The Sub-underwriter shall notify
▇▇▇▇▇▇▇ ▇▇▇▇▇ 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 the Sub-underwriter
in the Province of Ontario and the Qualifying Provinces and Territories and,
subject to the completion of the purchase of the Securities by ▇▇▇▇▇▇▇ ▇▇▇▇▇
hereunder, ▇▇▇▇▇▇▇ ▇▇▇▇▇ agrees to sell to the 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 the Sub-underwriter and ▇▇▇▇▇▇▇ ▇▇▇▇▇,
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 the Sub-underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements
of the PREP Procedures and Rule 430A or Rule 434, as applicable, and will notify
the Underwriters immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall become effective,
or any supplement to the Prospectuses or any amended Prospectuses 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 for any amendment or supplement to 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 U.S. Preliminary Prospectus, or of
the suspension of the qualification of the Securities for offering or sale in
any jurisdiction, or of the initiation or threatening of any proceedings for any
of such purposes, 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
14
the Securities or the trading (during the period of the distribution of the
Securities) in the securities of the Company, or of the institution or, to the
knowledge of the Company, threatening of any proceedings for any such purpose.
The Company will promptly effect the filings necessary pursuant to Rule 424(b)
and will take such steps as it deems necessary to ascertain promptly whether the
form of prospectus transmitted for filing under Rule 424(b) was received for
filing by the Commission and, in the event that it was not, it will promptly
file such prospectus. The Company will make every reasonable effort to prevent
the issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Underwriters
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet, any
Supplementary Material or any amendment, supplement or revision to either the
Final PREP Prospectus or the prospectus included in the Registration Statement
at the time it became effective or to the Prospectuses, will furnish the
Underwriters with copies of any such documents a reasonable amount of time prior
to such proposed filing or use, as the case may be, and will not file or use any
such document to which the Underwriters or counsel for the Underwriters and the
Sub-underwriter shall object.
(c) Delivery of Registration Statement. The Company has furnished or
will deliver to each Underwriter and Sub-underwriter and to counsel for the
Underwriters and the Sub-underwriter, without charge, one signed copy of the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein) and
one signed copy of all consents and certificates of experts, and will also
deliver to each Underwriter, without charge, a conformed copy of the
Registration Statement as originally filed and of each amendment thereto
(without exhibits). The copies of the Registration Statement and each amendment
thereto furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except
to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter and the Sub-underwriter, without charge, one 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 Province of Ontario and the Qualifying Provinces and
Territories, and as many copies of each U.S. Preliminary Prospectus and Canadian
Preliminary Prospectus as such Underwriter and the Sub-underwriter reasonably
requested, and the Company hereby consents to the use of such copies for
purposes permitted by the 1933 Act and applicable Canadian securities laws. The
Company will furnish to each Underwriter and the Sub-underwriter, without
charge, during the period when the U.S. Prospectus is required to be delivered
under the 1933 Act or 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 and Territories, such number of copies
of the Prospectuses (as amended or supplemented) as such Underwriter or the Sub-
underwriter, as the case may be, may reasonably request. The U.S. Prospectus and
any amendments or supplements thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
The copies of the Canadian Preliminary Prospectus, the Final PREP Prospectus,
the Canadian Prospectus and any Supplementary Material and any amendment or
supplements thereto furnished to the
15
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Province of Ontario and the Qualifying Provinces and Territories
pursuant to SEDAR.
(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 Territories so as to permit
the completion of the distribution of the Securities as contemplated in this
Agreement and in the Prospectuses. 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 and the Sub-underwriter or
counsel for the Company, to amend the Registration Statement or amend or
supplement the Prospectuses in order that the Prospectuses will not include any
untrue statements of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend
the Registration Statement or amend or supplement the Prospectuses 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 and
Territories, the Company will promptly prepare and file with the Commission
and/or 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 Prospectuses
comply with such requirements, and the Company will furnish to the Underwriters
and the Sub-underwriter such number of copies of such amendment or supplement as
the Underwriters and the Sub-underwriter 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
(domestic or foreign) as the Underwriters may designate and to maintain such
qualifications in effect for a period of not less than one year from the later
of the effective date of the Registration Statement and any Rule 462(b)
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 and any Rule
462(b) 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 security
holders as soon as practicable an earnings statement for the purposes of, and to
provide the benefits contemplated by, the last paragraph of Section 11(a) of the
1933 Act.
(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 Prospectuses
under "Use of Proceeds".
16
(i) Listing. The Company has obtained the conditional approval of the
TSE for the listing of the Common Shares (including the Securities) and will use
its best efforts to satisfy any of the requirements of 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 Common Shares (including 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 of
companies that have securities, quotations for which are reported by the Nasdaq
National Market.
(j) Restriction on Sale of Securities. During a period of 180 days from
the date of the Prospectuses, the Company will not, without the prior written
consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase 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 or prospectus under the securities laws of the Province of
Ontario or the Qualifying Provinces and Territories 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 any 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 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 Prospectuses, (C) any Common Shares issued or options to purchase Common
Shares granted pursuant to employee benefit plans of the Company referred to in
the Prospectuses, (D) any Common Shares issued pursuant to any non-employee
director stock plan or dividend reinvestment plan and (E) any securities
issuable upon the conversion of a security of the Company outstanding on the
date hereof as described in the Prospectuses under "Recapitalization and
Description of Share Capital."
(k) Reporting Requirements. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934 Act or
under applicable Canadian securities legislation, will file all documents
required to be filed by the Company (i) 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, and (ii) with the Province of Ontario
and the Qualifying Provinces and Territories in accordance with applicable
Canadian securities legislation.
(l) PREP Procedures and Rule 424(b). 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 pursuant to Rule 424(b) 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) Translation Opinions. The Company shall cause ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to
deliver to the Underwriters and the Sub-underwriter an opinion, dated the date
of the filing of the French language versions of each of the Canadian
Preliminary Prospectus, the Final PREP Prospectus
17
and the Supplemental PREP Prospectus, to the effect that the French language
version of each such prospectus (other than the financial statements and the
financial information set forth under the caption "Capitalization" and the
caption "Management's Discussion and Analysis of Financial Condition and Results
of Operations" and other financial data contained therein or omitted therefrom)
is in all material respects a complete and proper translation of the English
versions thereof and is not susceptible of any materially different
interpretation with respect to any material matter contained therein. The
Company shall cause ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to deliver to the Underwriters and the
Sub-underwriter a similar opinion as to the French language translation of any
information contained in any Supplementary Material, in form and substance
satisfactory to the Underwriters and the Sub-underwriter, prior to the filing
thereof with the Reviewing Authority.
(n) Translation Opinions--Financial Statements. The Company shall cause
KPMG LLP to deliver to the Underwriters and the Sub-underwriter an opinion,
dated the date of the filing of the French language versions of each of the
Canadian Preliminary Prospectus, the Final PREP Prospectus and the Supplemental
PREP Prospectus, to the effect that the financial statements and other financial
information and data, including the financial information set forth under the
caption "Capitalization" and the caption "Management's Discussion and Analysis
of Financial Condition and Results of Operations" contained in the French
language version of each such prospectus is in all material respects a complete
and proper translation of the English versions thereof and is not susceptible of
any materially different interpretation with respect to any material matter
contained therein. The Company shall cause KPMG LLP to deliver to the
Underwriters and the Sub-underwriter a similar opinion as to the French language
translation of any information contained in any Supplementary Material, in form
and substance satisfactory to the Underwriters and the Sub-underwriter, prior to
the filing thereof with the Reviewing Authority.
(o) Compliance with NASD Rules. The Company hereby agrees that it will
ensure that the Reserved Securities will be restricted as required by the NASD
or the NASD rules from sale, transfer, assignment, pledge or hypothecation for a
period of three months following the date of this Agreement. The Underwriters
will notify the Company as to which persons will need to be so restricted. At
the request of the Underwriters, the Company will direct the transfer agent to
place a stop transfer restriction upon such securities for such period of time.
Should the Company release, or seek to release, from such restrictions any of
the Reserved Securities, the Company agrees to reimburse the Underwriters for
any reasonable expenses (including, without limitation, legal expenses) they
incur in connection with such release.
(p) Compliance with Rule 463. The Company will comply with the
requirements of Rule 463 of the 1933 Act Regulations.
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) as originally filed and of each amendment
thereto, the preliminary prospectuses, the U.S. Prospectus, the Final PREP
Prospectus, the Canadian Prospectus and the Supplementary Material and any
amendments or
18
supplements thereto, and the cost of furnishing copies thereof to the
Underwriters and the Sub-underwriter, (ii) the preparation, printing and
delivery to the Underwriters of this Agreement, any Agreement among Underwriters
and the Sub-underwriter 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 the Sub-underwriter, including any stock
or other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Securities to the Underwriters and the Sub-
underwriter, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Securities under
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 and the Sub-underwriter in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters and the Sub-
underwriter of copies of each preliminary prospectus, any Term Sheets and of the
U.S. Prospectus, the Final PREP Prospectus, the Canadian Prospectus and the
Supplementary Material and any amendments or supplements thereto, (vii) the
preparation, printing and delivery to the Underwriters of copies of the Blue Sky
Survey and any supplement thereto, (viii) the fees and expenses of any transfer
agent or registrar for the Securities, (ix) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the Underwriters and the Sub-
underwriter in connection with, the review by the NASD of the terms of the sale
of the Securities, (x) the fees and expenses incurred in connection with the
listing of the Securities on the TSE and the inclusion of the Securities in the
Nasdaq National Market and (xi) all costs and expenses of the Underwriters and
the Sub-underwriter, including the fees and disbursements of counsel for the
Underwriters and the Sub-underwriter, in connection with matters related to the
Reserved Securities which are designated by the Company for sale to certain of
the Company's directors and officers and certain of their family members, and to
certain consultants, employees and business associates of the Company.
(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-underwriter for
all of their out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Underwriters and the Sub-underwriter.
SECTION 5. Conditions of Underwriters' Obligations. The obligations
---------------------------------------------------
of the several Underwriters and the Sub-underwriter 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 or any
subsidiary 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,
including any Rule 462(b) Registration Statement, has become effective and
at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, any
securities regulatory authority or stock exchange in Canada or the United
States, and any
19
request on the part of the Reviewing Authority, the Qualifying Authorities
or the Commission for additional information shall have been complied with
to the reasonable satisfaction of counsel to the Underwriters and the Sub-
underwriter. A Supplemental PREP Prospectus containing the PREP Information
shall have been filed with the Reviewing Authority and with the Qualifying
Authorities in accordance with the PREP Procedures. A prospectus containing
the Rule 430A Information shall have been filed with the Commission in
accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with
the requirements of Rule 430A) or, if the Company has elected to rely upon
Rule 434, a Term Sheet shall have been filed with the Commission in
accordance with Rule 424(b).
(b) Opinion of Canadian Counsel for Company. At Closing Time, the
Underwriters shall have received the favorable opinions, dated as of
Closing Time, of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
each Canadian counsel for the Company, in form and substance satisfactory
to counsel for the Underwriters and the Sub-underwriter, together with
signed or reproduced copies of such opinions for each of the Underwriters
and the Sub-underwriter, to the effect set forth in Exhibit A and Exhibit B
hereto, respectively.
(c) Opinion of U.S. Counsel for Company. At Closing Time, the
Underwriters shall have received the favorable opinion, dated as of Closing
Time, of Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, U.S. counsel for the
Company, in form and substance satisfactory to counsel for the Underwriters
and the Sub-underwriter, together with signed or reproduced copies of such
opinion for each of the other Underwriters and the Sub-underwriter, to the
effect set forth in Exhibit C hereto.
(d) Opinion of U.S. Regulatory Counsel for Company. At Closing Time,
the Underwriters shall have received the favorable opinion, dated as of
Closing Time, of Gldberg, Godles, Wiener & ▇▇▇▇▇▇, U.S. regulatory counsel
for the Company, in form and substance satisfactory to counsel for the
Underwriters and the Sub-underwriter, together with signed or reproduced
copies of such opinion for each of the other Underwriters and the Sub-
underwriter, to the effect set forth in Exhibit D hereto.
(e) Opinion of European Regulatory Counsel for Company. At Closing
Time, the Underwriters shall have received the favorable opinion, dated as
of Closing Time, of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, European regulatory counsel for the
Company, in form and substance satisfactory to counsel for the Underwriters
and the Sub-underwriter, together with signed or reproduced copies of such
opinion for each of the other Underwriters and the Sub-underwriter, to the
effect set forth in Exhibit E hereto.
(f) Opinion of Canadian Counsel for Underwriters and the Sub-
underwriter. At Closing Time, the Underwriters shall have received the
favorable opinion, dated as of Closing Time, of Torys, Canadian counsel for
the Underwriters and the Sub-underwriter, together with signed or
reproduced copies of such letter for each of the other Underwriters and the
Sub-underwriter, with respect to the matters set forth in clauses [(i),
(ii), (v), (viii) (solely as to preemptive or other similar rights arising
by operation of law
20
or under the charter document or by-laws of the Company),(x), (xiv) (solely
as to the information in the Prospectus under "Recapitalization and
Description of Share Capital") and the penultimate paragraph] of Exhibit A
and Exhibit B hereto. In giving such opinion such counsel may rely, as to
all matters governed by laws 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
its subsidiaries and certificates of public officials.
(g) Opinion of U.S. Counsel for Underwriters and the Sub-underwriter.
At Closing Time, the Underwriters shall have received the favorable
opinion, dated as of Closing Time, of Shearman & Sterling, U.S. counsel for
the Underwriters and the Sub-underwriter, together with signed or
reproduced copies of such letter for each of the other Underwriters and the
Sub-underwriter, with respect to the matters set forth in clauses [(ii),
(iii), (vi), (viii) (solely as to the information in the Prospectuses under
"Recapitalization and Description of Share Capital") and the penultimate
paragraph] of Exhibit C hereto. In giving such opinion such counsel may
rely, as to all matters governed by laws other than the law of the State of
New York and the federal law of the United States, upon the opinions of
counsel satisfactory to the Underwriters. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and
its subsidiaries and certificates of public officials.
(h) 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 Prospectuses, 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, and the
Underwriters shall have received a certificate of the President or a Vice
President of the Company and of 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 such officers, 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 and no proceedings for that purpose
have been instituted or are pending or, to the knowledge of the Company,
are contemplated by any securities commission or securities regulatory
authority in Canada.
(i) Accountants' Comfort Letter. At the time of the execution of this
Agreement, the Underwriters shall have received from KPMG LLP a letter
dated such date, in form and substance satisfactory to the Underwriters,
together with signed or reproduced copies of such letter for each of the
other Underwriters and the Sub-
21
underwriter, 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
Registration Statement and the Prospectuses.
(j) Bring-down Comfort Letter. At Closing Time, the Underwriters shall
have received from KPMG 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 two business days prior to
Closing Time.
(k) Approval of Listing. At Closing Time, the Securities shall have
been conditionally approved for listing on the TSE, subject only to
official notice of issuance. At Closing Time, the Securities shall have
been approved for inclusion in the Nasdaq National Market, subject only to
official notice of issuance.
(l) No Objection. At the date of this Agreement, the NASD shall have
confirmed that it will not raise any objection with respect to the fairness
and reasonableness of the underwriting terms and arrangements.
(m) Lock-up Agreements. At the date of this Agreement, the
Underwriters shall have received an agreement substantially in the form of
Exhibit F hereto signed by the persons listed on Schedule C hereto.
(n) Recapitalization. At Closing Time, the Company shall have
completed the recapitalization referred to in the Prospectuses under
"Recapitalization and Description of Share Capital".
(o) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the Option Securities, the representations
and warranties of the Company contained herein and the statements in any
certificates furnished by the Company or any subsidiary of 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) Officers' Certificate. A certificate, dated such Date of Delivery,
--------------------------
of the President or a Vice President of the Company and of 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.
(ii) Opinion of Canadian Counsel for the Company. The favorable
------------------------------------------------
opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, each
Canadian counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters and the Sub-underwriter, 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.
22
(iii) Opinion of U.S. Counsel for the Company. The favorable opinion
----------------------------------------------
of Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, U.S. counsel for the Company,
in form and substance satisfactory to counsel for the Underwriters and the
Sub-underwriter, 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.
(iv) Opinion of U.S. Regulatory Counsel for the Company. The favorable
-------------------------------------------------------
opinion of Goldberg, Godles, Wiener & ▇▇▇▇▇▇, U.S. regulatory counsel for
the Company, in form and substance satisfactory to counsel for the
Underwriters and the Sub-underwriter, 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.
(v) Opinion of European Regulatory Counsel for the Company. The
-----------------------------------------------------------
favorable opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, European regulatory counsel for the
Company, in form and substance satisfactory to counsel for the Underwriters
and the Sub-underwriter, 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.
(vi) Opinion of Canadian Counsel for the Underwriters and the
-------------------------------------------------------------
Sub-underwriter. The favorable opinion of Torys, Canadian counsel for the
Underwriters and the Sub-underwriter, 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(f)
hereof.
(vii) Opinion of U.S. Counsel for the Underwriters and the
-----------------------------------------------------------
Sub-underwriter. The favorable opinion of Shearman & Sterling, U.S. counsel
for the Underwriters and the Sub-underwriter, 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(g)
hereof.
(viii) Bring-down Comfort Letter. A letter from KPMG LLP, in form and
---------------------------------
substance satisfactory to the Underwriters and dated such Date of Delivery,
substantially in the same form and substance as the letter furnished to the
Underwriters pursuant to Section 5(j) hereof, except that the "specified
date" in the letter furnished pursuant to this paragraph shall be a date
not more than four days prior to such Date of Delivery.
(p) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters and the Sub-underwriter shall have been furnished
with such documents 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
23
satisfactory in form and substance to the Underwriters and counsel for the
Underwriters and the Sub-underwriter.
(q) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option Securities
on a Date of Delivery which is after the Closing Time, the obligations of the
several Underwriters to purchase the relevant Option 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.
SECTION 6. Indemnification.
---------------------------
(a) Indemnification of Underwriters and the Sub-underwriter. The Company
agrees to indemnify and hold harmless each Underwriter and the Sub-underwriter
and each person, if any, who controls any Underwriter or the 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, arising out of (A) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
or the Canadian Prospectus (or, in each case, any amendment thereto),
including the PREP Information, the Rule 430A Information and the Rule 434
Information, if applicable, 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 (B) any untrue statement or alleged
untrue statement of a material fact included in any preliminary prospectus
or the Prospectuses 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, arising out of (A) the violation of any applicable
laws or regulations of foreign jurisdictions where Reserved Securities have
been offered and (B) any untrue statement or alleged untrue statement of a
material fact included in the supplement or prospectus wrapper material
distributed in such jurisdiction in connection with the reservation and
sale of the Reserved Securities to certain of the Company's directors and
officers and certain of their family members, and to certain consultants,
employees and business associates of the Company or the omission or alleged
omission therefrom of a material fact necessary to make the statements
therein, when considered in conjunction with the Prospectuses or
preliminary prospectuses, not misleading;
(iii) 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
24
omission, or any such alleged untrue statement or omission or in connection
with any violation of the nature referred to in Section 6(a)(ii)(A) hereof;
provided that (subject to Section 6(d) below) any such settlement is
effected with the written consent of the Company; and
(iv) against any and all expense whatsoever, as incurred (including the
fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇ ▇▇▇▇▇), 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 or
in connection with any violation of the nature referred to in Section
6(a)(ii)(A) hereof, to the extent that any such expense is not paid under
(i), (ii) or (iii) 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
Underwriter or the Sub-underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in
the Registration Statement (or any amendment thereto), including the PREP
Information and the Rule 430A Information or Rule 434 Information, if
applicable, or any preliminary prospectus or the Prospectuses or any
Supplementary Material (or any amendment or supplement thereto).
(b) Indemnification of Company, Directors and Officers. Each of the
Underwriters and the 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, the Rule 430A Information
and the Rule 434 Information, if applicable, or any preliminary prospectus, the
Prospectuses or any Supplementary Material (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter or the Sub-underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇
expressly for use in the Registration Statement (or any amendment thereto) or
such preliminary prospectus or the Prospectuses 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
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 by ▇▇▇▇▇▇▇ ▇▇▇▇▇, 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
25
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)(iii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(e) Indemnification for Reserved Securities. In connection with the offer
and sale of the Reserved Securities, the Company agrees, promptly upon a request
in writing, to indemnify and hold harmless the Underwriters and the Sub-
underwriter from and against any and all losses, liabilities, claims, damages
and expenses incurred by them as a result of the failure of certain of the
Company's directors and officers and certain of their family members, and of
certain consultants, employees and business associates of the Company to pay for
and accept delivery of Reserved Securities which, by the end of the first
business day following the date of this Agreement, were subject to a properly
confirmed agreement to purchase.
(f) Underwriters and Sub-underwriter as Trustees. The Company hereby
acknowledges and agrees that, with respect to the covenants of the Company under
Sections 6 and 7 hereof, each of the Underwriters and the Sub-underwriter is
contracting on its own behalf and as agents for its respective affiliates,
directors, officers, employees and agents, and such respective affiliates,
directors, officers, employees and agents and each person, if any, who controls
any Underwriter or the Sub-underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act (the "Beneficiaries"). In this regard,
each of the Underwriters and the Sub-underwriter shall act as trustees for their
respective Beneficiaries and accept these trusts and shall hold and enforce such
covenants on behalf of such Beneficiaries.
26
(g) Company as Trustee. The Underwriters and the Sub-underwriter hereby
acknowledge and agree that, with respect to the covenants of the Underwriters
and the Sub-underwriter under Sections 6 and 7 hereof, the Company is
contracting on its own behalf and as agent for its directors and 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 (the "Company Beneficiaries"). In
this regard, the Company shall act as trustee for the Company Beneficiaries and
accepts these trusts and shall hold and enforce such covenants on behalf of the
Company Beneficiaries.
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-underwriter 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-underwriter on the other hand in connection with the
statements or omissions, or in connection with any violation of the nature
referred to in Section 6(a)(ii)(A) hereof, 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-underwriter 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 commissions received by the
Underwriters, in each case as set forth on the cover of the U.S. Prospectus and
the Canadian Prospectus, or, if Rule 434 is used, the corresponding location on
the Term Sheet, 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-underwriter 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-
underwriter and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission or any
violation of the nature referred to in Section 6(a)(ii)(A) hereof.
The Company, the Underwriters and the Sub-underwriter agree that it would
not be just and equitable if contribution pursuant to this Section were
determined by pro rata allocation (even if the Underwriters and the Sub-
underwriter 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. The aggregate amount of losses, liabilities,
claims, damages and expenses incurred by an indemnified party and referred to
above in this Section shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in
27
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, 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 purchased 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, each person, if any, who controls an
Underwriter or the 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 are several in proportion to the number
of Initial Securities set forth opposite their respective names in Schedule A
hereto and not joint. The Sub-underwriter's obligation to contribute pursuant
to this Section 7 is several in proportion to the number of Initial Securities
it purchased from ▇▇▇▇▇▇▇ ▇▇▇▇▇.
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 or any of its subsidiaries submitted
pursuant hereto shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or the 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-underwriter.
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 Prospectuses, 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 or Canada or the 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 U.S., Canada or the
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
28
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,
the TSE or the Nasdaq National Market, or if trading generally on the American
Stock Exchange or the New York Stock Exchange 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 market or by order of the Commission, the National
Association of Securities Dealers, Inc., the Reviewing Authority, any Qualifying
Authority, any other securities commission or securities regulatory authority in
Canada or any other governmental authority, or (iv) if a banking moratorium has
been declared by either United States, 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.
SECTION 10. Default by One or More of the Underwriters. If one or more
--------------------------------------------------------
of the Underwriters or the Sub-underwriter 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"), the Underwriters
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting Underwriters or Sub-underwriter, 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, the Underwriters shall not have completed such arrangements
within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, the non-defaulting
Underwriters or Sub-underwriter 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-underwriter, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to
any Date of Delivery which occurs after Closing Time, the obligation of the
Underwriters or the Sub-underwriter 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 or Sub-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 or the Sub-underwriter to purchase and the Company to sell the
relevant Option Securities, as the case may be, either the Underwriters or the
29
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 or the Prospectuses or
in any other documents or arrangements. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section.
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 Corporate Trust Company (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 U.S. 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 President and Chief Executive 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 the Company or its respective 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 or the Sub-underwriter shall be directed to ▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated at 4 World Financial Center, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇▇ ▇▇▇▇▇; and notices to the Company shall be
directed to it at , attention of .
SECTION 13. Parties. This Agreement shall inure to the benefit of and be
---------------------
binding upon the Underwriters, the Sub-underwriter 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, the Sub-underwriter, 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, the Sub-underwriter 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
30
Underwriter or the 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. 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.
SECTION 16. Waiver of Conditions. It is understood that any Underwriter
----------------------------------
or the Sub-underwriter may waive in whole or in part, or extend the time for
compliance with, any of the terms or conditions of this Agreement without
prejudice to such Underwriter's or the Sub-underwriter's rights in respect of
any other of such terms and conditions or any other or subsequent breach or non-
compliance, provided that to be binding on such Underwriter or the Sub-
underwriter any such waiver or extension must be in writing.
31
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Underwriters, the Sub-underwriter and the Company in accordance with its
terms.
Very truly yours,
IMAGICTV INC.
By:
------------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
CHASE SECURITIES INC.
CIBC WORLD MARKETS INC.
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:
------------------------------------
Authorized Signatory
▇▇▇▇▇▇▇ ▇▇▇▇▇ CANADA INC.
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:
------------------------------------
Authorized Signatory
32
SCHEDULE A
Number of
Initial
Name of Underwriter Securities
--------------------- -------------------------------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated.........................
Chase Securities Inc.................
CIBC World Markets Inc...............
-----------------
Total................................
=================
Sch A-1
SCHEDULE B
IMAGICTV INC.
Common Shares
1. The initial public offering price per share for the Securities,
determined as provided in Section 2, shall be US$ per share for Securities
initially offered in the United States or outside the United States and Canada
or C$ (being based on the equivalent of the United States dollar price per share
based on the noon buying rate in The City of New York for cable transfers in
Canadian dollars as certified for customs purposes by the Federal Reserve Bank
of New York (the "Noon Buying Rate") on the date hereof) for Securities
initially offered in Canada.
2. The purchase price per share for the Securities sold or expected to
be sold in the United States or outside the United States and Canada to be paid
by the several Underwriters shall be US$, being an amount equal to the initial
public offering price set forth above; the several underwriters shall be
entitled to withhold US$ per share therefrom, representing the underwriting
commission as set forth in paragraph 3 below; the purchase price per share for
the Securities sold or expected to be sold in Canada to be paid by the several
Underwriters shall be C$, being an amount equal to the initial public offering
price in Canada set forth above; the several underwriters shall be entitled to
withhold C$ per share therefrom, representing the underwriting commission as set
forth in paragraph 3 below (being based on the equivalent of the corresponding
United States dollar amount based on the Noon Buying Rate on the date hereof);
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$ per share for Securities initially offered
in the United States or outside the United States and Canada or C$ (being based
on the equivalent of the Noon Buying Rate on the date hereof) for Securities
initially offered in Canada.
Sch B-1
SCHEDULE C
[List of Persons and Entities
Subject to Lock-up]
Sch C-1
SCHEDULE D
Name of Subsidiary % Ownership Jurisdiction of Incorporation
------------------ ----------- -----------------------------
iMagicTV (US), Inc. 100% Delaware
ImagicTV (UK) Limited 100% England
Sch ▇-▇
▇▇▇▇▇▇▇ ▇
, ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated,
CHASE SECURITIES INC.
CIBC WORLD MARKETS INC.
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Proposed Public Offering by ImagicTV Inc.
----------------------------------------------
Dear Sirs:
The undersigned is an officer, director and/or shareholder of record or
beneficially of common shares, no par value per share (the "Common Shares"), of
ImagicTV Inc., a company incorporated under the Canada Business Corporations Act
(the "Company"). The undersigned understands that ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇
Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), ▇▇▇▇▇ Securities
Inc. and CIBC World Markets Inc. propose to enter into a Purchase Agreement (the
"Purchase Agreement") with the Company providing for the public offering (the
"Offering") of the Common Shares. In recognition of the benefit that such an
Offering will confer upon the undersigned as an officer, director and/or
shareholder of record or beneficially of Common Shares, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees with each underwriter to be named in the
Purchase Agreement that, during a period of 180 days from the date of the
Purchase Agreement, the undersigned will not, without the prior written consent
of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly, (i) 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 for the sale of, or otherwise
dispose of or transfer any of the Company's Common Shares or any securities
convertible into or exchangeable or exercisable for Common Shares, whether now
owned or hereafter acquired by the undersigned or with respect to which the
undersigned has or hereafter acquires the power of disposition (other than, in
each case, Common Shares purchased pursuant to the reserved share program
described in the prospectus relating to the Offering or, after the date hereof,
in the open market), or file any registration statement under the Securities Act
of 1933, as amended, or prospectus under the securities laws of the Province of
Ontario or the Qualifying Provinces and Territories (as defined in the Purchase
Agreement) 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. As used herein, the
term "beneficially"
E-1
refers to any person who, directly or indirectly, through any contract,
arrangement, understanding, relationship or otherwise, has a direct or indirect
pecuniary interest (as those terms are defined in Rule 16a-1(a)(2) of the
Securities Exchange Act of 1934, as amended) in the Shares.
Notwithstanding the above, (A) the undersigned may offer, sell, assign
or otherwise transfer Common Shares to (i) members of the immediate family of
the undersigned, (ii) corporations, partnerships, limited liability companies or
other entities to the extent that such entities are wholly owned by the
undersigned, (iii) trusts for the benefit of the undersigned and/or members of
the immediate family of the undersigned, or (iv) a charitable organization
pursuant to a bona fide gift, solely to the extent that in clauses (i), (ii),
(iii) and (iv) the recipient of the Common Shares agrees in writing to be bound
by the terms of this letter agreement for the duration of the 180-day period
referred to above, (B) the undersigned may pledge Common Shares to a bank or
other financial institution but solely to the extent that such bank or financial
institution agrees in writing to be bound by the terms of this letter agreement
for the duration of the 180-day period referred to above and (C) the undersigned
may exercise options to purchase Common Shares, including pursuant to a
"cashless exercise" of stock options granted pursuant to the stock option plans
described in the Prospectuses (as defined in the Purchase Agreement).
The undersigned understands that whether the Offering actually occurs
depends on a number of factors, including market conditions. The undersigned
further understands that any Offering will only be made pursuant to the Purchase
Agreement, the terms of which are subject to negotiation between the Company and
the several underwriters named in the Purchase Agreement.
Very truly yours,
Signature:
---------------------------
Print Name:
--------------------------
E-2