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5,000,000 Shares
CHANGEPOINT CORPORATION
Common Shares
UNDERWRITING AGREEMENT
_______, 2000
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
U.S. BANCORP PIPER JAFFRAY INC.
CIBC WORLD MARKETS CORP.
DLJdirect INC.
As representatives of the
several Underwriters
named in Schedule I hereto
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Dear Sirs:
Changepoint Corporation, a corporation organized under the laws of the
Province of Ontario, Canada (the "COMPANY"), proposes to issue and sell
5,000,000 of its common shares (the "FIRM SHARES") to the several underwriters
named in Schedule I hereto (the "UNDERWRITERS"). The Company also proposes to
issue and sell to the several Underwriters not more than an additional 750,000
of its common shares (the "ADDITIONAL SHARES") if requested by the Underwriters
as provided in Section 2 hereof. The Firm Shares and the Additional Shares are
hereinafter referred to collectively as the "SHARES". The common shares of the
Company to be outstanding after giving effect to the sales contemplated hereby
are hereinafter referred to as the "COMMON SHARES".
SECTION 1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has
prepared and filed with the Securities and Exchange Commission (the
"COMMISSION") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "ACT"), a registration statement on Form F-1 (File No.
333-31918), including a prospectus, relating to the Shares. The registration
statement, as amended at the time it became effective, including the information
(if any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Act, is hereinafter referred to as
the "REGISTRATION STATEMENT"; and the prospectus in the form first used to
confirm sales of Shares is hereinafter referred to as the "PROSPECTUS". If the
Company has filed or is required pursuant to the terms hereof to file a
registration statement pursuant to Rule
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462(b) under the Act registering additional Common Shares (a "RULE 462(b)
REGISTRATION STATEMENT"), then, unless otherwise specified, any reference herein
to the term "Registration Statement" shall be deemed to include such Rule 462(b)
Registration Statement.
SECTION 2. AGREEMENTS TO SELL AND PURCHASE AND LOCK-UP AGREEMENTS. On
the basis of the representations and warranties contained in this Agreement, and
subject to its terms and conditions, the Company agrees to issue and sell, and
each Underwriter agrees, severally and not jointly, to purchase from the Company
at a price per Share of US $______ less a commission of seven percent (7%) per
share (the "PURCHASE PRICE") the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule I hereto.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to issue
and sell the Additional Shares and the Underwriters shall have the right to
purchase, severally and not jointly, up to 750,000 Additional Shares from the
Company at the Purchase Price. Additional Shares may be purchased solely for the
purpose of covering over-allotments made in connection with the offering of the
Firm Shares. The Underwriters may exercise their right to purchase Additional
Shares in whole or in part from time to time by giving written notice thereof to
the Company within 30 days after the date of this Agreement. You shall give any
such notice on behalf of the Underwriters and such notice shall specify the
aggregate number of Additional Shares to be purchased pursuant to such exercise
and the date for payment and delivery thereof, which date shall be a business
day (i) no earlier than two business days after such notice has been given (and,
in any event, no earlier than the Closing Date (as hereinafter defined)) and
(ii) no later than ten business days after such notice has been given. If any
Additional Shares are to be purchased, each Underwriter, severally and not
jointly, agrees to purchase from the Company the number of Additional Shares
(subject to such adjustments to eliminate fractional shares as you may
determine) which bears the same proportion to the total number of Additional
Shares to be purchased from the Company as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I bears to the total number of
Firm Shares.
The Underwriters have agreed to reserve up to 500,000 Firm Shares of
the Company for sale to employees and to other individuals or companies who have
commercial arrangements or personal relationships with the Company (the
"Participants"), as set forth in the Prospectus under the heading "Underwriting"
(the "Directed Share Program"). The Company may offer up to 150,000 of the Firm
Shares reserved for the Directed Share Program directly to employees who reside
in Canada. In accordance with applicable Canadian securities laws, the
Underwriters shall not be associated, in any manner whatsoever, with the
Directed Share Program to the extent it involves the offer and sale to
Participants who reside in Canada, and the Underwriters shall not receive a
commission on any Firm Shares sold pursuant to the Directed Share Program to
such Participants who reside in Canada. The Firm Shares to be sold by the
Underwriters or directly by the Company pursuant to the Directed Share Program
shall be referred to as the "Directed Shares". Any Directed Shares not confirmed
for purchase by any Participant, including any Participant who resides in
Canada, by the end of the business day on which this Agreement is executed will
be offered by the Underwriters to the public as set forth in the Prospectus.
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The Company hereby agrees not to (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 to purchase, accelerate the vesting
period of any option, change the exercise date of any right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any
Common Shares or any securities convertible into or exercisable or exchangeable
for Common Shares or (ii) enter into any swap or other arrangement that
transfers all or a portion of the economic consequences associated with the
ownership of any Common Shares (regardless of whether any of the transactions
described in clause (i) or (ii) is to be settled by the delivery of Common
Shares, or such other securities, in cash or otherwise), except to the
Underwriters pursuant to this Agreement, for a period of 180 days after the date
of the Prospectus without the prior written consent of Donaldson, Lufkin &
Jenrette Securities Corporation. Notwithstanding the foregoing, during such
period (i) the Company may grant stock options pursuant to the Company's
existing stock option plans which do not vest during the period of 180 days
after the date of the Prospectus, (ii) the Company may issue Common Shares upon
the exercise of an option or warrant or the conversion of a security outstanding
on the date hereof, (iii) the Company may issue Common Shares in connection with
employee subscriptions under the Company's Employee Share Purchase Plan, (iv)
the Company may issue Common Shares in connection with the Amalgamation
contemplated by the Prospectus, (v) the Company may issue Common Shares (or
securities convertible into, or exchangeable for, Common Shares) in connection
with the formation of a strategic alliance or in consideration for the
acquisition of all or substantially all of the assets or equity of a third
party; PROVIDED, that in connection with the issuance or issuance and sale
permitted under this subclause (v), the Company agrees (i) to obtain from each
person receiving Common Shares (or securities convertible into,or exchangeable
for, Common Shares) a letter substantially consistent with the letter described
in the last sentence of this paragraph and (ii) not to grant any rights
exercisable during the period of 180 days after the date of the Prospectus with
respect to the registration under the Act of any Common Shares (or securities
convertible into, or exchangeable for, Common Shares) issued in connection with
such transaction. The Company also agrees not to file any registration statement
with respect to any Common Shares or any securities convertible into or
exercisable or exchangeable for Common Shares, other than registration
statements on Form S-8 for the Common Shares underlying options of the Company
as referred to in the Prospectus and the Common Shares issuable in connection
with the Company's Employee Share Purchase Plan, and registration statements on
Forms F-4 or S-4 in connection with a transaction described in subclause (v),
above for a period of 180 days after the date of the Prospectus without the
prior written consent of Donaldson, Lufkin & Jenrette Securities Corporation.
The Company shall, prior to or concurrently with the execution of this
Agreement, deliver an agreement executed by (i) each of the directors and
officers of the Company and (ii) each shareholder and optionholder listed on
Annex I hereto to the effect that such person will not, during the period
commencing on the date such person signs such agreement and ending 180 days
after the date of the Prospectus, without the prior written consent of
Donaldson, Lufkin & Jenrette Securities Corporation, (A) engage in any of the
transactions described in the first sentence of this paragraph or (B) make any
demand for, or exercise any right with respect to, the registration of any
Common Shares or any securities convertible into or exercisable or exchangeable
for Common Shares.
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SECTION 3. TERMS OF PUBLIC OFFERING. The Company is advised by you
that the Underwriters propose (i) to make a public offering of their respective
portions of the Shares as soon after the execution and delivery of this
Agreement as in your judgment is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
SECTION 4. DELIVERY AND PAYMENT. The Shares shall be represented by
definitive certificates and shall be issued in such authorized denominations and
registered in such names as Donaldson, Lufkin & Jenrette Securities Corporation
shall request no later than two business days prior to the Closing Date or the
applicable Option Closing Date (as defined below), as the case may be. The
Company shall deliver the Shares, with any transfer taxes thereon in connection
with the sale of the Shares by the Company to the Underwriters duly paid by the
Company, to Donaldson, Lufkin & Jenrette Securities Corporation through the
facilities of The Depository Trust Company ("DTC"), for the respective accounts
of the several Underwriters, against payment to the Company of the Purchase
Price therefore by wire transfer of Federal or other funds immediately available
in New York City. The certificates representing the Shares shall be made
available for inspection not later than 9:30 A.M., New York City time, on the
business day prior to the Closing Date or the applicable Option Closing Date, as
the case may be, at the office of DTC or its designated custodian (the
"DESIGNATED OFFICE"). The time and date of delivery and payment for the Firm
Shares shall be 9:00 A.M., New York City time, on ________, 2000 or such other
time on the same or such other date as Donaldson, Lufkin & Jenrette Securities
Corporation and the Company shall agree in writing. The time and date of
delivery for the Firm Shares are hereinafter referred to as the "CLOSING DATE".
The time and date of delivery and payment for any Additional Shares to be
purchased by the Underwriters shall be 9:00 A.M., New York City time, on the
date specified in the applicable exercise notice given by you pursuant to
Section 2 or such other time on the same or such other date as Donaldson, Lufkin
& Jenrette Securities Corporation and the Company shall agree in writing. The
time and date of delivery for any Additional Shares are hereinafter referred to
as an "OPTION CLOSING DATE".
The documents to be delivered on the Closing Date or any Option Closing
Date on behalf of the parties hereto pursuant to Section 8 of this Agreement
shall be delivered at the offices of Goodwin, Procter & Hoar LLP, Exchange
Place, Boston, Massachusetts 02109 and the Shares shall be delivered at the
Designated Office, all on the Closing Date or such Option Closing Date, as the
case may be.
SECTION 5. AGREEMENTS OF THE COMPANY. The Company agrees with you:
(a) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or for
additional information, (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the suspension
of qualification of the Shares for offering or sale in any jurisdiction, or the
initiation of any proceeding for such purposes, (iii) when any amendment to the
Registration Statement becomes effective, (iv) if the Company is required to
file a Rule 462(b) Registration Statement after the effectiveness of this
Agreement, when the Rule 462(b) Registration Statement has become effective and
(v) of the happening of any event during the period referred to in Section 5(d)
below which makes any statement of a material fact made in the Registration
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Statement or the Prospectus untrue or which requires any additions to or changes
in the Registration Statement or the Prospectus in order to make the statements
therein not misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, the Company will use
its best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) To furnish to you six (6) conformed copies of the Registration
Statement as first filed with the Commission and of each amendment to it,
including all exhibits, and to furnish to you and each Underwriter designated by
you such number of conformed copies of the Registration Statement as so filed
and of each amendment to it, without exhibits, as you may reasonably request.
(c) To prepare the Prospectus, the form and substance of which shall
be satisfactory to you, and to file the Prospectus in such form with the
Commission within the applicable period specified in Rule 424(b) under the Act;
during the period specified in Section 5(d) below, not to file any further
amendment to the Registration Statement and not to make any amendment or
supplement to the Prospectus of which you shall not previously have been advised
or to which you shall reasonably object after being so advised; and, during such
period, to prepare and file with the Commission, promptly upon your reasonable
request, any amendment to the Registration Statement or amendment or supplement
to the Prospectus which may be necessary or advisable in connection with the
distribution of the Shares by you, and to use its best efforts to cause any such
amendment to the Registration Statement to become promptly effective.
(d) Prior to 10:00 A.M., New York City time, on the first business day
after the date of this Agreement and from time to time thereafter for such
period as in the reasonable opinion of counsel for the Underwriters a prospectus
is required by law to be delivered in connection with sales by an Underwriter or
a dealer, to furnish in New York City to each Underwriter and any dealer as many
copies of the Prospectus (and of any amendment or supplement to the Prospectus)
as such Underwriter or dealer may reasonably request.
(e) If during the period specified in Section 5(d), any event shall
occur or condition shall exist as a result of which, in the reasonable opinion
of counsel for the Underwriters, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if, in the reasonable opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Prospectus to comply with applicable law,
forthwith to prepare and file with the Commission an appropriate amendment or
supplement to the Prospectus so that the statements in the Prospectus, as so
amended or supplemented, will not in the light of the circumstances when it is
so delivered, be misleading, or so that the Prospectus will comply with
applicable law, and to furnish to each Underwriter and to any dealer as many
copies thereof as such Underwriter or dealer may reasonably request.
(f) Prior to any public offering of the Shares, to cooperate with you
and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters and
by dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request, to continue such registration or qualification in effect so
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long as required for distribution of the Shares and to file such consents to
service of process or other documents as may be necessary in order to effect
such registration or qualification; PROVIDED, HOWEVER, that the Company shall
not be required in connection therewith to qualify as a foreign corporation in
any jurisdiction in which it is not now so qualified or to take any action that
would subject it to general consent to service of process or taxation other than
as to matters and transactions relating to the Prospectus, the Registration
Statement, any preliminary prospectus or the offering or sale of the Shares, in
any jurisdiction in which it is not now so subject.
(g) To mail and make generally available to its shareholders as soon
as practicable an earnings statement covering a period of at least twelve months
beginning after the effective date of the Registration Statement that shall
satisfy the provisions of Section 11(a) of the Act and the rules and regulations
thereunder (including Rule 158), which need not be audited, and to advise you in
writing when such statement has been so made available.
(h) During the period of three years after the date of this Agreement,
to furnish to you as soon as available copies of all reports or other
communications furnished to the record holders of Common Shares or furnished to
or filed with the Commission or any national securities exchange on which any
class of securities of the Company is listed and such other publicly available
information concerning the Company and its subsidiaries as you may reasonably
request.
(i) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of its obligations under this Agreement,
including: (i) the fees, disbursements and expenses of the Company's counsel and
the Company's accountants in connection with the registration and delivery of
the Shares under the Act and all other fees and expenses in connection with the
preparation, printing, filing and distribution of the Registration Statement
(including financial statements and exhibits), any preliminary prospectus, the
Prospectus and all amendments and supplements to any of the foregoing, including
the mailing and delivering of copies thereof to the Underwriters and dealers in
the quantities specified herein, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon, (iii) all costs of printing or producing this
Agreement and any other agreements or documents in connection with the offering,
purchase, sale or delivery of the Shares, (iv) all expenses in connection with
the registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the several states and all costs of printing or
producing any Preliminary and Supplemental Blue Sky Memoranda in connection
therewith (including the filing fees and fees and disbursements of counsel for
the Underwriters in connection with such registration or qualification and
memoranda relating thereto), (v) the filing fees and disbursements of counsel
for the Underwriters in connection with the review and clearance of the offering
of the Shares by the National Association of Securities Dealers, Inc., (vi) all
reasonable costs and expenses of the Underwriters, including fees and
disbursements of counsel for the Underwriters, incident to the offer and sale of
Directed Shares by the Underwriters or by the Company pursuant to the Directed
Share Program, (vii) all fees and expenses in connection with the preparation
and filing of the registration statement on Form 8-A relating to the Common
Shares and all costs and expenses incident to the listing of the Shares on
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the Nasdaq National Market, (viii) the cost of printing certificates
representing the Shares, (ix) the costs and charges of any transfer agent,
registrar and/or depositary, and (x) all other costs and expenses incident to
the performance of the obligations of the Company hereunder for which
provision is not otherwise made in this Section. It is understood that except
as provided in this Section, the Underwriters will pay all of their own costs
and expenses, including fees and disbursements of their counsel and any stock
transfer taxes on resale of any of the Shares held by them.
(j) To use its best efforts to list for quotation the Shares on the
Nasdaq National Market and to maintain the listing of the Shares on the Nasdaq
National Market for a period of three years after the date of this Agreement.
(k) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Company prior to
the Closing Date or any Option Closing Date, as the case may be, and to satisfy
all conditions precedent to the delivery of the Shares.
(l) If the Registration Statement at the time of the effectiveness of
this Agreement does not cover all of the Shares, to file a Rule 462(b)
Registration Statement with the Commission registering the Shares not so covered
in compliance with Rule 462(b) by 10:00 P.M., New York City time, on the date of
this Agreement and to pay to the Commission the filing fee for such Rule 462(b)
Registration Statement at the time of the filing thereof or to give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the Act.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective (other than any
Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement); any Rule 462(b) Registration Statement filed
after the effectiveness of this Agreement will become effective no later than
10:00 P.M., New York City time, on the date of this Agreement; and no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the Commission.
(b) (i) The Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness of
this Agreement), when it became effective, did not contain and, as amended, if
applicable, will not contain any 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, (ii) the Registration Statement (other than
any Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement) and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the Act,
(iii) if the Company is required to file a Rule 462(b) Registration Statement
after the effectiveness of this Agreement, such Rule 462(b) Registration
Statement and any amendments thereto, when they become effective (A) will not
contain any 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 (B) will comply in all material respects with the
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Act and (iv) the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in the Registration Statement or the Prospectus based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
(c) Each preliminary 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 Act, complied when so filed in all material
respects with the Act, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and warranties
set forth in this paragraph do not apply to statements or omissions in any
preliminary prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein.
(d) Each of the Company and its subsidiaries has been duly amalgamated
or incorporated, as the case may be, is validly existing as a corporation in
good standing under the laws of its jurisdiction of organization and has the
corporate power and authority to carry on its business as described in the
Prospectus and to own, lease and operate its properties, and each is duly
qualified and is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on the
business, prospects, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole (a "Material Adverse Effect").
(e) There are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or liens granted or issued by
the Company or any of its subsidiaries relating to or entitling any person to
purchase or otherwise to acquire any shares of the capital stock of the Company
or any of its subsidiaries, except as otherwise disclosed in the Registration
Statement or in connection with option grants by the Company pursuant to its
stock option plans or shares issued by the Company in connection with its
Employee Share Purchase Plan.
(f) All of the outstanding share capital of the Company has been duly
authorized and validly issued and is fully paid, non-assessable and not subject
to any preemptive or similar rights; and the Shares have been duly authorized
and, when issued and delivered to the Underwriters against payment therefor as
provided by this Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be subject to any
preemptive or similar rights.
(g) All of the outstanding shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly issued and are
fully paid and non-assessable, and are owned by the Company (except that the
Company owns a 20% interest in Brokercom
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Inc.), directly or indirectly through one or more subsidiaries, free and clear
of any material security interest, claim, lien, encumbrance or material adverse
interest of any nature.
(h) The authorized share capital of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(i) Neither the Company nor any of its subsidiaries is in violation of
its respective charter or by-laws or in default in the performance of any
obligation, agreement, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is material to
the Company and its subsidiaries, taken as a whole, to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound.
(j) The execution, delivery and performance of this Agreement by the
Company, the compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby will not (i) require any
consent, approval, authorization or other order of, or qualification with, any
court or governmental body or agency (except such as may be required under the
securities or Blue Sky laws of the various states), (ii) conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the charter or by-laws of the Company or any of its subsidiaries or any
indenture, loan agreement, mortgage, lease or other agreement or instrument that
is material to the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective property is bound, (iii) violate or
conflict with any applicable law or any rule, regulation, judgment, order or
decree of any court or any governmental body or agency having jurisdiction over
the Company, any of its subsidiaries or their respective property or (iv) result
in the suspension, termination or revocation of any Authorization (as defined
below) of the Company or any of its subsidiaries or any other impairment of the
rights of the holder of any such Authorization.
(k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is or could be a
party or to which any of their respective property is or could be subject that
are required to be described in the Registration Statement or the Prospectus and
are not so described; nor are there any statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement that
are not so described or filed as required.
(l) Neither the Company nor any of its subsidiaries has violated any
federal, state, provincial, foreign or local law, regulation, code, rule of
common law, or judicial or administrative order, consent, decree or judgment
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("ENVIRONMENTAL LAWS"), any provisions of the Employee Retirement Income
Security Act of 1974, as amended, or any provisions of the Foreign Corrupt
Practices Act, or the rules and regulations promulgated thereunder, except for
such violations which, singly or in the aggregate, would not have a Material
Adverse Effect.
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(m) Each of the Company and its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other approvals
(each, an "AUTHORIZATION") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a Material Adverse Effect. Each such
Authorization is valid and in full force and effect and each of the Company and
its subsidiaries is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such Authorization or results or, after notice
or lapse of time or both, would result in any other impairment of the rights of
the holder of any such Authorization; and such Authorizations contain no
restrictions that are burdensome to the Company or any of its subsidiaries;
except where such failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence of any such
restriction would not, singly or in the aggregate, have a Material Adverse
Effect.
(n) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with Environmental
Laws or any Authorization, any related constraints on operating activities and
any potential liabilities to third parties) which would, singly or in the
aggregate, have a Material Adverse Effect.
(o) This Agreement has been duly authorized, executed and delivered by
the Company.
(p) KPMG LLP are independent public accountants with respect to the
Company and its subsidiaries as required by the Act.
(q) The consolidated financial statements included in the Registration
Statement and the Prospectus (and any amendment or supplement thereto), together
with related schedules, if any, and notes, present fairly, in all material
respects, the consolidated financial position, results of operations and changes
in financial position of the Company and its subsidiaries on the basis stated
therein at the respective dates or for the respective periods to which they
apply; such statements and related schedules, if any, and notes have been
prepared in accordance with generally accepted accounting principles of the
United States consistently applied throughout the periods involved, except as
disclosed therein; the supporting schedules, if any, included in the
Registration Statement present fairly in accordance with generally accepted
accounting principles of the United States the information required to be stated
therein; and the other financial and statistical information and data set forth
in the Registration Statement and the Prospectus (and any amendment or
supplement thereto) are, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Company.
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(r) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described in
the Prospectus, will not be, an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended.
(s) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company to
file a registration statement under the Act with respect to any securities of
the Company or to require the Company to include such securities with the Shares
registered pursuant to the Registration Statement, except as disclosed in the
Prospectus (all of which rights have been waived in writing by the holder of
such right).
(t) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there has not occurred any material adverse change or any development involving
a prospective material adverse change in the condition, financial or otherwise,
or the earnings, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there has not been any material adverse
change or any development involving a prospective material adverse change in the
capital stock or in the long-term debt of the Company or any of its subsidiaries
and (iii) neither the Company nor any of its subsidiaries has incurred any
material liability or obligation, direct or contingent.
(u) Intentionally omitted.
(v) Each certificate signed by any officer of the Company and
delivered on the Closing Date or the Option Closing Date to the Underwriters or
counsel for the Underwriters shall be deemed to be a representation and warranty
by the Company to the Underwriters as to the matters covered thereby.
(w) The Company or its subsidiaries have good and marketable title to
all property described in the Registration Statement and Prospectus as being
owned by the Company or its subsidiaries, free and clear of all liens, claims,
security interest or other encumbrances except such as are described in the
Registration Statement and the Prospectus, or as would not have a Material
Adverse Effect.
(x) No labor dispute with the employees of the Company or any of its
subsidiaries exists or, to the knowledge of the Company, is imminent that might
have a Material Adverse Effect.
(y) The Company and each of its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the conduct
of their respective businesses and the value of their respective properties.
(z) The property held under lease by the Company or any of its
subsidiaries is held by the Company or such of its subsidiaries under valid,
subsisting and enforceable leases with only
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such exceptions with respect to any particular lease as do not interfere in any
material respect with the conduct of the business of the Company and its
subsidiaries, taken as a whole.
(aa) The Company or any of its subsidiaries owns or has all necessary
rights to or can acquire on reasonable terms all patents, patent rights,
trademarks, service marks, tradenames, trademark registrations, service mark
registrations, copyrights, licenses, inventions, trade secrets and other rights
currently employed by them in connection with the business of the Company and
its subsidiaries as currently carried on and as described in the Registration
Statement and Prospectus, except where the failure to so own or possess or
otherwise be able to acquire such right would not have a Material Adverse
Effect.
(bb) Except as stated in the Registration Statement and Prospectus, to
the knowledge of the Company, no name which the Company or any of its
subsidiaries uses and no other aspect of the business of the Company or any of
its subsidiaries will involve or give rise to any infringement of, or license or
similar fees for, any patents, patent applications, trademarks, service marks,
tradenames, trademark registrations, service mark registrations, copyrights,
licenses, inventions, trade secrets or similar rights of others material to the
business or prospects of the Company and its subsidiaries, taken as whole, and
neither the Company nor any of its subsidiaries has received any notice alleging
any such infringement or fee, except for such allegations which, if true, would
not have a Material Adverse Effect.
(cc) The Securities have been conditionally approved for quotation on
the Nasdaq National Market and, on the date the Registration Statement became or
becomes effective, the Company's Registration Statement on Form 8-A or other
applicable form under the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"), became or will become effective.
(dd) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles of the
United States 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.
(ee) Except as disclosed in the Registration Statement and Prospectus,
under current laws and regulations of Canada and any political subdivision
thereof, all dividends and other distributions declared and payable on the
Shares may be paid by the Company to the holder thereof in United States dollars
or Canadian dollars that may be converted into foreign currency and freely
transferred out of Canada and the statements under the caption "Tax
Considerations" in the Prospectus are true and correct in all material respects.
SECTION 7. INDEMNIFICATION. (a) The Company agrees to indemnify and
hold harmless each Underwriter, its directors, its officers and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages, liabilities and judgments (including, without limitation, any
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legal or other expenses incurred in connection with investigating or defending
any matter, including any action, that could give rise to any such losses,
claims, damages, liabilities or judgments) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), the Prospectus (or any amendment or
supplement thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or judgments are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished in writing to the Company by
such Underwriter through you expressly for use therein; PROVIDED, HOWEVER, that
the foregoing indemnity agreement with respect to any preliminary prospectus
shall not inure to the benefit of any Underwriter who failed to deliver a
Prospectus, as then amended or supplemented, (so long as the Prospectus and any
amendments or supplements thereto was provided by the Company to the several
Underwriters in the requisite quantity and on a timely basis to permit proper
delivery on or prior to the Closing Date) to the person asserting any losses,
claims, damages, liabilities or judgments caused by any untrue statement or
alleged untrue statement of a material fact contained in such preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if such material misstatement or omission or alleged
material misstatement or omission was cured in the Prospectus, as so amended or
supplemented, and such Prospectus was required by law to be delivered at or
prior to the written confirmation of sale to such person.
(b) The Company agrees to indemnify and hold harmless each
Underwriter, its directors, its officers and each person, if any, who controls
any Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages, liabilities
and judgments (including, without limitation, any legal or other expenses
incurred in connection with investigating or defending any matter, including any
action, that could give rise to any such losses, claims, damages, liabilities or
judgments) arising out of or based upon (i) the failure of a Participant to pay
for and accept delivery of Directed Shares that the Participant agreed to
purchase; or (ii) any alleged act or failure to act by the Underwriters in
connection with, or relating in any manner to, the Directed Share Program, other
than any loss, claim, damage, liability or action that are finally judicially
determined to have resulted from the bad faith, gross negligence or willful
misconduct of the Underwriters.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the
same extent as the foregoing indemnity from the Company to such Underwriter but
only with reference to information relating to such Underwriter furnished in
writing to the Company by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus.
(d) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 7(a), 7(b) or 7(c)
(the "indemnified party"), the
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indemnified party shall promptly notify the person against whom such indemnity
may be sought (the "indemnifying party") in writing and the indemnifying party
shall assume the defense of such action, including the employment of counsel
reasonably satisfactory to the indemnified party and the payment of all fees and
expenses of such counsel, as incurred (except that in the case of any action in
respect of which indemnity may be sought pursuant to either (X) both Sections
7(a) and 7(c), or (Y) both Sections 7(b) and 7(c), the Underwriter shall not be
required to assume the defense of such action pursuant to this Section 7(d), but
may employ separate counsel and participate in the defense thereof, but the fees
and expenses of such counsel, except as provided below, shall be at the expense
of such Underwriter). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the indemnified
party unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all indemnified parties and all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be designated
in writing by Donaldson, Lufkin & Jenrette Securities Corporation, in the case
of parties indemnified pursuant to Section 7(a) or Section 7(b), and by the
Company, in the case of parties indemnified pursuant to Section 7(c). The
indemnifying party shall indemnify and hold harmless the indemnified party from
and against any and all losses, claims, damages, liabilities and judgments by
reason of any settlement of any action (i) effected with its written consent or
(ii) effected without its written consent if the settlement is entered into more
than twenty business days after the indemnifying party shall have received a
request from the indemnified party for reimbursement for the fees and expenses
of counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the indemnifying
party shall have failed to comply with such reimbursement request. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action 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 the indemnified party.
(e) To the extent the indemnification provided for in this Section 7
is unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or
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judgments referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities and judgments (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Shares or (ii) if the
allocation provided by clause 7(e)(i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause 7(e)(i) above but also the relative fault of the Company
on the one hand and the Underwriters on the other hand in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other hand shall be deemed to be in the same
proportion as the total net proceeds from the offering (after deducting
underwriting discounts and commissions, but before deducting expenses) received
by the Company, and the total underwriting discounts and commissions received by
the Underwriters, bear to the total price to the public of the Shares, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault of the Company on the one hand and the Underwriters on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7(e) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 7(e) are several in proportion to the respective number
of Shares purchased by each of the Underwriters hereunder and not joint.
(f) The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
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SECTION 8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters to purchase the Firm Shares under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained in
this Agreement shall be true and correct on the Closing Date with the same force
and effect as if made on and as of the Closing Date.
(b) If the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., New York City
time, on the date of this Agreement; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or contemplated by the Commission.
(c) You shall have received on the Closing Date a certificate dated
the Closing Date, signed by Gerald Smith and John Anhang, in their respective
capacities as Chief Executive Officer and Chief Financial Officer of the
Company, confirming the matters set forth in Sections 6(t), 8(a) and 8(b) and
that the Company has complied with all of the agreements and satisfied all of
the conditions herein contained and required to be complied with or satisfied by
the Company on or prior to the Closing Date.
(d) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the earnings,
business, management or operations of the Company and its subsidiaries, taken as
a whole, (ii) there shall not have been any change or any development involving
a prospective change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause 8(d)(i),
8(d)(ii) or 8(d)(iii), in your judgment, is material and adverse and, in your
judgment, makes it impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Skadden, Arps, Slate, Meagher & Flom LLP counsel for the Company, to the
effect that:
(i) Assuming the due authorization, execution and delivery of
the Underwriting Agreement by the Company under the laws of Canada, and
insofar as execution and delivery are matters governed by New York law,
the Underwriting Agreement has been duly executed and delivered by the
Company.
(ii) The statements made in the Prospectus under "Tax
Considerations - United States Federal Income Tax Considerations",
insofar as such statements purport to
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describe the provisions of the laws referred to therein, fairly
summarize the information disclosed therein in all material respects;
and the statements in the Prospectus under the caption "Underwriting",
insofar as such statements constitute summaries of the Underwriting
Agreement fairly summarize the matters stated therein.
(iii) Based upon such counsel's review of those laws, rules
and regulations of the State of New York and the United States of
America which, in its experience, are normally applicable to
transactions of the type provided for in this Agreement (including
transactions such as the issuance and sale by the Company of the
Shares) (collectively, "Requirements of Law"), but without having made
any special investigation concerning any other laws, rules or
regulations, no consent, approval, authorization, filing with or order
of any court or governmental agency or body under the laws of the State
of New York or the federal laws of the United States of America is
required on the part of the Company in connection with the transactions
contemplated by this Agreement (other than such actions as may be
required by the rules and regulations of the National Association of
Securities Dealers, Inc. or state securities or Blue Sky laws, as to
which we do not express any opinion) in connection with the purchase
and distribution of the Shares by the Underwriters in the manner
contemplated by this Agreement and in the Prospectus, and, so far as is
known to such counsel, neither the issue and sale of the Shares, nor
the consummation of any other transactions contemplated by this
Agreement, nor the fulfillment of the terms of this Agreement will
conflict with, or result in a breach or violation of or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company or its subsidiaries pursuant to (a) the Requirements of Law
(assuming compliance with applicable state securities and Blue Sky
laws), (b) any indenture, loan, agreement, mortgage, deed of trust or
other instrument filed as an exhibit to the Registration Statement or
specifically identified to such counsel by the Company pursuant to an
attached schedule (each, a "Material Agreement") (except that such
counsel need not express any opinion with respect to the calculation of
any financial covenants, ratios or tests or any aspect of the financial
condition or results of operations of the Company or any of its
subsidiaries which are required by any such agreement or instrument),
or (c) any material judgment, order or decree of any court, regulatory
body, administrative agency, governmental body, arbitrator or other
authority located in the United States having jurisdiction over the
Company or its subsidiaries, or any of their respective properties or
assets (collectively, "Orders") specifically identified to such counsel
by the Company pursuant to an attached certificate as being Orders to
which it is subject; except that such counsel need not express any
opinion in this paragraph with respect to the disclosure requirements
of the United States federal securities laws or the securities laws of
the State of New York. In rendering the opinions expressed in this
paragraph, such counsel may assume that with respect to any Material
Agreement which by its terms purports to be governed by the laws of any
jurisdiction other than the State of New York, its opinions are based
solely upon its understanding of the plain language of such Material
Agreements, and it need not express any opinion with respect to the
interpretation of any such Material Agreement.
(iv) Such counsel does not know of any legal or governmental
proceedings pending that are required to be described in the
Registration Statement or the Prospectus
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by the Act and the Rules and Regulations and that are not described as
required; and such counsel does not know of any contracts or other
documents of a character required to be filed as an exhibit thereto,
which are not filed as required. Such counsel's opinion in this
paragraph shall be based upon its review of documents made available
to it by the Company and inquiries of officers of the Company, without
further independent investigation.
(v) The Company is not, nor upon the consummation of the
transactions contemplated by this Agreement will be, subject to
registration or regulation as an "investment company," as such term is
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act") or required to seek an exemptive order under
the Investment Company Act permitting such registration pursuant to
Section 7(d) thereunder.
(vi) To the best of such counsel's knowledge after due
inquiry, there are no contracts, agreements or understandings between
the Company and any person granting such person the right to require
the Company to file a registration statement under the Act with respect
to securities of the Company or to require the Company to include such
securities with the Shares registered pursuant to the Registration
Statement other than such rights as have been duly waived. Such
counsel's opinion in this paragraph shall be based upon its review of
documents made available to it by the Company and inquiries of officers
of the Company, without further independent investigation.
(vii) The Registration Statement, as of its effective date,
and the Prospectus, as of its date (other than the financial statements
and notes thereto and other financial and statistical data included
therein or excluded therefrom, as to which such counsel need not
express any opinion), appear on their face to be appropriately
responsive in all material respects with the requirements of the Act,
and the Rules and Regulations applicable to registration statements on
Form F-1, except that such counsel does not assume any responsibility
for the accuracy, completeness or fairness of the statements contained
in the Registration Statement and the Prospectus. The Form 8-A appears
on its face to be appropriately responsive in all material respects
with the requirements of the Exchange Act and the rules and regulations
thereunder applicable to such form.
Such counsel shall also state that it has been orally advised by
a member of the staff of the Commission that the Registration Statement
became effective under the Act, and the Form 8-A became effective under
the Exchange Act, each at _____ p.m., Eastern Standard Time, on ______
___, 2000. The filing of the Prospectus pursuant to Rule 424(b) of the
Rules and Regulations has been made in the manner and within the time
period required by Rule 424(b). Such counsel shall also state that it
has been orally advised by a member of the staff of the Commission that
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 are contemplated under the Act and such
counsel does not otherwise know that any such stop order has been
issued or that any proceedings for such purpose have been issued or are
pending or contemplated.
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Such counsel shall also state that it has participated in
conferences with officers and other representatives of the Company,
Canadian counsel for the Company, representatives of the independent
auditors for the Company, and representatives of and counsel for the
Underwriters, at which conferences the contents of the Registration
Statement and the Prospectus were discussed and, although such counsel
is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus, and has made no independent
check or verification thereof (except to the extent set forth in
Section 8(e)(ii) hereof), on the basis of the foregoing, no facts have
come to such counsel's attention that have led it to believe that the
Registration Statement, at the time it became effective, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus, as of its date or on
the date hereof, contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that such counsel
need not express any opinion or belief with respect to the financial
statements and notes and other financial and statistical data included
therein or excluded therefrom.
The opinion of Skadden, Arps, Slate, Meagher & Flom LLP described in Section
8(e) above shall be rendered to you at the request of the Company and shall so
state therein.
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Goldman, Spring, Schwartz & Kichler, Toronto, Ontario counsel for the
Company, to the effect that:
(i) Each of the Company and its subsidiaries has been duly
organized, is validly existing under the laws of its jurisdiction of
organization and has the corporate power and authority to carry on its
business as described in the Prospectus and to own, lease and operate
its properties.
(ii) Each of the Company and its subsidiaries is duly
qualified or registered business in each jurisdiction in which the
nature of its business or its ownership or leasing of property requires
such qualification or registration, except where the failure to be so
qualified or registered would not have a material adverse effect on the
business, prospects, financial condition or results of operations of
the Company and its subsidiaries, taken as a whole.
(iii) All the outstanding share capital of the Company has
been duly authorized and validly issued and is fully paid and
non-assessable.
(iv) The Shares have been duly authorized and, when issued and
delivered to the Underwriters against payment therefor as provided by
this Agreement, will be validly issued, fully paid and non-assessable,
and the issuance of such Shares will not be subject to any preemptive
or similar rights.
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(v) All of the outstanding shares of capital stock of each of
the Company's subsidiaries have been duly authorized and validly issued
and are fully paid and non-assessable, and the Company is the
registered holder, of such Shares.
(vi) This Agreement has been duly authorized by the Company.
This Agreement has been duly executed by the Company as a matter of
corporate law in compliance with the laws of its jurisdiction of
incorporation, namely, Ontario, and the provisions of its articles of
incorporation and its bylaws.
(vii) The authorized share capital of the Company conforms as
to legal matters to the description thereof contained in the
Prospectus.
(viii) The statements under the caption "Description of Share
Capital" in the Prospectus insofar as such statements constitute a
summary of the legal matters, documents or proceedings referred to
therein, fairly present the information with respect to such legal
matters, documents and proceedings. The statements in the Prospectus
under "Tax Consideration-Canadian Federal Income Tax Considerations,"
insofar as such statements purport to describe the provisions of the
laws referred to therein, fairly summarize the information disclosed
therein in all material respects.
(x) The execution, delivery and performance of this Agreement
by the Company, the compliance by the Company with all the provisions
hereof and the consummation of the transactions contemplated hereby
will not (A) require any consent, approval, authorization or other
order of, or qualification with, any court or governmental body or
agency in the Province of Ontario or Canada (B) conflict with or
constitute a breach of any of the terms or provisions of, or a default
under, the charter or by-laws of the Company or any of its subsidiaries
or any agreement of the Company and its subsidiaries filed as an
exhibit to the Registration Statement, or (C) violate or conflict with
any applicable law or any rule, regulation, judgment, order or decree
of any court or any governmental body or agency in the Province of
Ontario or Canada having jurisdiction over the Company, any of its
subsidiaries or their respective property.
(xi) Such counsel does not know of any legal or governmental
proceedings pending or threatened to which the Company or any of its
subsidiaries is or could be a party or to which any of their respective
property is or could be subject that are not disclosed in the
Registration Statement or the Prospectus. Such counsel's opinion in the
paragraph shall be based upon its review of documents made available to
it by the Company and inquiries of officers of the Company, without
further independent investigation.
(xiii) Such counsel does not know of any contracts, agreements
or understandings between the Company and any person granting such
person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company
or to require the Company to include such securities with the Shares
registered pursuant to the Registration Statement other than as set
forth in the Registration Statement. Such counsel's opinion in the
paragraph shall be based upon its
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review of documents made available to it by the Company and inquiries
of officers of the Company, without further independent investigation.
(xiv) Such counsel has participated in certain conferences
with officers and other representatives of the Corporation,
representatives of the Corporation's auditors and representatives of
the Underwriters and their counsel at which the contents of the
Registration Statement and the Prospectus and related matters were
discussed and, although such counsel has made no independent
investigation or verification of and is not passing upon and does not
assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement or the
Prospectus (other than such conclusions of law as to which an opinion
has been separately delivered to the Underwriters) and, as under the
Securities Act (Ontario) the determination of materiality or whether a
fact is material is a factual and not a legal matter requiring
expertise on the effect which information would have on market prices
or values of the Securities, accordingly such counsel has relied as to
materiality, to a large extent, on the opinions of officers and other
representatives of the Corporation; on the basis of and relying upon
and subject to the foregoing, no facts have come to such counsel's
attention, in its capacity as counsel for the Corporation in connection
with the transactions contemplated by the Registration Statement and
the Prospectus, that have led such counsel to believe that the
Registration Statement (other than the financial statements (and the
notes thereto and the reports thereon), financial statement schedules
or any other financial, accounting or statistical data included therein
or derived therefrom, as to which we do not comment) as of the time it
became effective, contained any untrue statement of a material fact
within the meaning of the Securities Act (Ontario) or omitted to state
any material fact necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading within the
meaning of the Securities Act (Ontario), or that the Prospectus (other
than financial statements (and notes thereto and the reports thereon),
financial statement schedules or any other financial, accounting or
statistical data included therein or derived therefrom, as to which we
do not comment) as of its date and the date hereof contained or contain
any untrue statement of a material fact within the meaning of the
Securities Act (Ontario) or omitted or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances in which they were made, not misleading within the
meaning of the Securities Act (Ontario).
(xv) The choice of the laws of the State of New York as the
governing law of the Underwriting Agreement, provided that such choice
is bona fide, legal and not contrary to public policy, is a valid and
effective choice of law. Services of process effected in the manner set
forth in Section 10 of the Underwriting Agreement, assuming its
validity under New York law, will be effective, insofar as Ontario law
is concerned, to confer valid personal jurisdiction over the Company,
provided that the courts of the Province of Ontario will not enforce a
foreign judgment given in proceedings that were obtained by fraud or
contrary to the rules of natural justice. In an action brought before a
court of competent jurisdiction in the Province of Ontario, the laws of
the State of New York would, to the extent specifically pleaded and
proved as a fact by expert evidence, be recognized and applied by such
court to all issues which under conflict of laws rules in effect in the
Province of Ontario are characterized to be contract issues, except
that any
21
<PAGE>
such court (i) will apply those laws of the Province of Ontario as
such court characterizes as procedural and will not apply those laws
of the State of New York as such court characterizes as procedural;
(ii) will not apply those laws of the State New York which an Ontario
court would characterize as revenue, expropriatory, penal or similar
laws; and (iii) will not apply those laws of the State of New York,
the application of which an Ontario court would characterize as
inconsistent with "public policy", as such term is applied by the
courts of the Province of Ontario. The court of the Province of Ontario
will enforce a foreign judgment given by a court of competent
jurisdiction provided that the judgment is final and for a sum certain
in money, was not given in proceedings that were contrary to the rules
of natural justice or obtained by fraud and is not contrary to the
public policy of Ontario or Canada. The public policy of Ontario or
Canada may require or permit an Ontario court to review the measure of
damages and to treat any award of punitive damages as unrecoverable.
The courts of the Province of Ontario will regard a judgment given by
the courts of any jurisdiction to which the defendant has agreed to
submit or in which the defendant has appointed an agent for service as
a judgment given by a court of competent jurisdiction.
(xviii) No stamp or other issue or transfer taxes or duties are
payable by or on behalf of the Underwriters to the Canadian government
or to the provincial government of Ontario in connection with (a) the
issuance, sale and delivery by the Company to or the respective
accounts of the Underwriters of the Shares or (b) the sale and
delivery outside Canada by the Underwriters of the Shares in the
manner contemplated in this Agreement.
(xix) The offering, sale and delivery of Shares in Alberta,
British Columbia, Manitoba, Ontario and Quebec (the "Offering
Provinces"), as contemplated in the Offering Memorandum, are exempt
from the prospectus requirements of the applicable securities laws of
the Offering Provinces. No consents, approvals, registrations or
filings are required under the securities laws of the Offering
Provinces in connection with such offering, sale and delivery other
than the execution and filing by or on behalf of the Company or its
agent, within prescribed time periods, of a report in prescribed form
prepared and executed in accordance with the securities legislation of
the applicable Offering Province, and in the case of British Columbia
a prescribed form of acknowledgement of the Canadian Purchaser,
together with the prescribed fee and two copies of the Offering
Memorandum.
The opinion of Goldman, Spring & Kichler, Toronto, Ontario described in
Section 8(f) above shall be rendered to you at the request of the Company and
shall so state therein.
(g) You shall have received on the Closing Date an opinions, dated the
Closing Date, of Goodman, Philps & Vineberg, Toronto, Ontario and Goodwin,
Procter & Hoar LLP, counsel for the Underwriters in form and substance
reasonably satisfactory to you.
In giving such opinions with respect to the matters covered by Section
8(e)(ix) Skadden, Arps, Slate, Meagher & Flom LLP, Goldman, Spring & Kichler,
Toronto, Ontario, Goodman, Philips & Vineberg, Toronto, Ontario and Goodwin,
Procter & Hoar LLP may state that their opinion and belief are based upon their
participation in the preparation of the Registration
22
<PAGE>
Statement and Prospectus and any amendments or supplements thereto and review
and discussion of the contents thereof, but are without independent check or
verification except as specified.
(h) You shall have received, on each of the date hereof and the
Closing Date, a letter dated the date hereof or the Closing Date, as the case
may be, in form and substance satisfactory to you, from KPMG LLP, independent
public accountants, containing the information and statements 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 Prospectus.
(i) The Company shall have delivered to you the agreements specified
in Section 2 hereof which agreements shall be in full force and effect on the
Closing Date.
(j) The Shares shall have been duly listed for quotation on the Nasdaq
National Market.
(k) The Company shall not have failed on or prior to the Closing Date
to perform or comply with any of the agreements herein contained and required to
be performed or complied with by the Company on or prior to the Closing Date.
The several obligations of the Underwriters to purchase any Additional
Shares hereunder are subject to the delivery to you on the applicable Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of such
Additional Shares and other matters related to the issuance of such Additional
Shares.
SECTION 9. EFFECTIVENESS OF AGREEMENT AND TERMINATION. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by written notice to the Company if any of the following has
occurred: (i) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or the Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Company on any exchange or in the
over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, (v) the declaration of a banking moratorium by
either federal or New York State authorities or
23
<PAGE>
(vi) the taking of any action by any federal, state or local government or
agency in respect of its monetary or fiscal affairs which in your opinion has a
material adverse effect on the financial markets in the United States.
If on the Closing Date or on an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Shares or Additional Shares, as the case may be, which it has or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the total number of Firm Shares or Additional Shares, as the
case may be, to be purchased on such date by all Underwriters, each
non-defaulting Underwriter shall be obligated severally, in the proportion which
the number of Firm Shares set forth opposite its name in Schedule I bears to the
total number of Firm Shares which all the non-defaulting Underwriters have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; PROVIDED that in no event shall the number of Firm Shares or Additional
Shares, as the case may be, which any Underwriter has agreed to purchase
pursuant to Section 2 hereof be increased pursuant to this Section 9 by an
amount in excess of one-ninth of such number of Firm Shares or Additional
Shares, as the case may be, without the written consent of such Underwriter. If
on the Closing Date any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of Firm
Shares to be purchased by all Underwriters and arrangements satisfactory to you
and the Company for purchase of such Firm Shares are not made within 48 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter and the Company. In any such case which does
not result in termination of this Agreement, either you or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected. If, on an Option Closing Date, any Underwriter or Underwriters shall
fail or refuse to purchase Additional Shares and the aggregate number of
Additional Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Additional Shares to be purchased on such
date, the non-defaulting Underwriters shall have the option to (i) terminate
their obligation hereunder to purchase such Additional Shares or (ii) purchase
not less than the number of Additional Shares that such non-defaulting
Underwriters would have been obligated to purchase on such date in the absence
of such default. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of any such
Underwriter under this Agreement.
SECTION 10. MISCELLANEOUS. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company, to
Changepoint Corporation, 1595 Sixteenth Avenue, Suite 700, Richmond Hill,
Ontario, Canada L4B 3N9 and (ii) if to any Underwriter or to you, to you c/o
Donaldson, Lufkin & Jenrette Securities Corporation, 277 Park Avenue, New York,
New York 10172, Attention: Syndicate Department, or in any case to such other
address as the person to be notified may have requested in writing.
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<PAGE>
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company and the several Underwriters set
forth in or made pursuant to this Agreement shall remain operative and in full
force and effect, and will survive delivery of and payment for the Shares,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, the officers or directors of any
Underwriter, any person controlling any Underwriter, the Company, the officers
or directors of the Company or any person controlling the Company, (ii)
acceptance of the Shares and payment for them hereunder and (iii) termination of
this Agreement.
If for any reason the Shares are not delivered by or on behalf of the
Company as provided herein (other than as a result of any termination of this
Agreement pursuant to Section 9), the Company agrees to reimburse the several
Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) incurred by them. Notwithstanding any termination of
this Agreement, the Company shall be liable for all expenses which it has agreed
to pay pursuant to Section 5(i) hereof. The Company also agrees to reimburse the
several Underwriters, their directors and officers and any persons controlling
any of the Underwriters for any and all fees and expenses (including, without
limitation, the fees disbursements of counsel) incurred by them in connection
with enforcing their rights hereunder (including, without limitation, pursuant
to Section 7 hereof).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the
Underwriters, the Underwriters' directors and officers, any controlling persons
referred to herein, the Company's directors and the Company's officers who sign
the Registration Statement and their respective successors and assigns, all as
and to the extent provided in this Agreement, and no other person shall acquire
or have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Shares from any of the
several Underwriters merely because of such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York. The Company hereby submits to the non-exclusive
jurisdiction of the Federal and state courts in the Borough of Manhattan in the
City of New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby. The Company has appointed CT
Corporation System, 111 Eighth Avenue, New York, NY 10011, as its authorized
agent in the Borough of Manhattan in the City of New York upon which process may
be served in any such suit of proceeding, and agrees that service of process
upon such agent, and written notice of said service to the Company by the person
serving the same to the address provided above in this Section 10, 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
as may be necessary to maintain such designation and appointment of such agent
in full force and effect for a period of five years from the date of this
Agreement.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
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Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
CHANGEPOINT CORPORATION
By:______________________________________
Gerald W. Smith
President and Chief Executive Officer
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
U.S. BANCORP PIPER JAFFRAY INC.
CIBC WORLD MARKETS CORP.
DLJdirect INC.
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:________________________________
Name:___________________________
Title:__________________________
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<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Underwriters Number of Firm Shares
to be Purchased
<S> <C>
DONALDSON, LUFKIN & JENRETTE SECURITIES
CORPORATION
U.S. BANCORP PIPER JAFFRAY INC.
CIBC WORLD MARKETS CORP.
DLJdirect INC.
[OTHERS]
Total
</TABLE>
27
<PAGE>
ANNEX I
[TO BE PROVIDED BY THE COMPANY]
28
