Exhibit 1.1
SUNOPTA INC.
4,500,000 Shares
Common Stock
(No par value per share)
Underwriting Agreement
January 31, 2007
Canaccord Adams Inc.
Canaccord Capital Corporation
BMO Capital Markets Corp.
BMO Nesbitt Burns Inc.
Desjardins Securities Inc.
Desjardins Securities International Inc.
National Bank Financial Inc.
NBF Securities (USA) Corp.
Octagon Capital Corporation
c/o Canaccord Adams Inc.
99 High Street, 11 th
Floor
Boston, Massachusetts 02110
Dear Sirs:
SunOpta Inc., a Canadian corporation
(the “ Company ”), proposes, subject to the
terms and conditions stated herein, to issue and sell to the
several underwriters named above or in Schedule I hereto
(collectively, the “ Underwriters ”) an
aggregate of 4,500,000 shares (the “ Firm Shares
”) and, at the election of the Underwriters, up to the lesser
of (i) the over-allocation position of the Underwriters
determined as at the closing of the offering of the Firm Shares;
and (ii) 675,000 additional shares (the “ Optional
Shares ”) of common stock, no par value per share, of the
Company (“ Common Stock ”). The Firm Shares and
the Optional Shares which the Underwriters elect to purchase
pursuant to Section 2 hereof are herein collectively called the
“ Shares .”
1.
Representations and Warranties .
(a)
Representations and Warranties of the Company . The
Company represents and warrants to, and agrees with, each of the
Underwriters that:
(i)
A registration statement on Form S-3 (File No. 333-137724) (the
“ Initial Registration
Statement ”) in respect of the
Shares has been filed with the Securities and Exchange Commission
(the “ Commission ”); the Initial
Registration Statement including any pre-effective amendments
thereto and any post-effective amendments thereto, each in the form
heretofore delivered to Canaccord Adams Inc. and, excluding
exhibits thereto, but including all documents incorporated by
reference in the prospectus contained therein, delivered to
Canaccord Adams Inc. and each of the other Underwriters, have been
declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the offering
(a “ Rule 462(b)
Registration Statement ”), filed pursuant to
Rule 462(b) under the Securities Act of 1933, as amended (the
“ Act
”), which
became effective upon filing, and other than (A) the
Company’s Form 8-K which was filed on November 13, 2006,
and (B) the Company’s Form 8-K which was filed on
January 5, 2007, no other document with respect to the Initial
Registration Statement or document incorporated by reference
therein has heretofore been filed with the Commission; and no stop
order suspending the effectiveness of the Initial
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Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that
purpose has been initiated or, to the Company’s knowledge,
threatened by the Commission (any preliminary prospectus included
in the Initial Registration Statement or filed with the Commission
pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act is hereinafter called a “
Preliminary Prospectus ”); the various parts of the
Initial Registration Statement and the Rule 462(b) Registration
Statement, if any, including all exhibits to the foregoing
(including any exhibits incorporated by reference) and
(i) including the information contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b) under
the Act in accordance with Section 5(a) hereof or the Rule 462(b)
Registration Statement, if any, at the time it became effective and
(ii) the documents incorporated by reference in the prospectus
contained in the Initial Registration Statement at the time such
part of the Initial Registration Statement became effective, each
as amended at the time such part of such Initial Registration
Statement became effective, are hereinafter collectively called the
“ Registration Statement ”; such final
prospectus, in the form first filed pursuant to Rule 424(b) under
the Act, is hereinafter called the “ Prospectus
”; the term “ Pricing Prospectus ” as used
herein means the Preliminary Prospectus that was included in the
Registration Statement immediately prior to the Applicable Time (as
defined in Section 1(b) hereof); any reference herein to “
Issuer Free Writing Prospectus ” refers to any
“issuer free writing prospectus” as defined in Rule 433
under the Act; and any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Act, as of the date of such
Preliminary Prospectus or Prospectus, as the case may
be;
(ii)
For the purposes of this Agreement, the “ Applicable Time ” is 4:30 pm (Eastern
Time) on the date of this Agreement; the Pricing Prospectus as
supplemented by the Issuer Free Writing Prospectuses, if any, and
other documents listed on Schedule III(a) hereto, taken
together (collectively, the “ Pricing Disclosure Package ”) as of the Applicable
Time, did not include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; and each Issuer Free Writing
Prospectus listed on Schedule III(a) or Schedule
III(b) hereto does not conflict with the information contained
in the Registration Statement, the Pricing Prospectus or the
Prospectus and each Issuer Free Writing Prospectus listed on
Schedule III(b) hereto, as supplemented by and taken
together with the Pricing Disclosure Package as of the Applicable
Time, did not include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; provided , however ,
that this representation and warranty shall not apply to any
statements or omissions made in the Pricing Prospectus or an Issuer
Free Writing Prospectus in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
through Canaccord Adams Inc. expressly for use therein;
(iii)
No order preventing or suspending the use of any Preliminary
Prospectus or any Issuer Free Writing Prospectus has been issued by
the Commission, and each Preliminary Prospectus, at the time of
filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the
Commission thereunder, 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
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were made, not misleading;
provided, however , that this representation and warranty
shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the
Company by an Underwriter through Canaccord Adams Inc. expressly
for use therein. The delivery to the Underwriters of the
preliminary short form prospectus (the “ Canadian
Preliminary Prospectus ”), the final short form
prospectus (the “ Canadian Final Prospectus ”
and, together with the Canadian Preliminary Prospectus, the
“ Canadian Prospectus ”) and any amendment to
the Canadian Preliminary Prospectus or the Canadian Final
Prospectus (a “ Canadian Amendment ”) shall
constitute the representation and warranty of the Company to the
Underwriters that: (i) each such document at the time of its
respective delivery fully complied with the requirements of the
securities laws (the “ Canadian Securities Laws
”) of the Provinces of British Columbia, Alberta, Manitoba
and Ontario (the “ Qualifying Provinces ”)
pursuant to which it was or is prepared, and, as applicable, filed,
and that all the information and statements contained therein are
at the respective dates of delivery thereof, true and correct,
contain no misrepresentation and, together with all documents
incorporated by reference therein, constitute full, true and plain
disclosure of all material facts relating to the Company and its
subsidiaries listed on Exhibit 21 to the Company’s Form 10-K
for the period ended December 31, 2005 (each referred to herein as
a “ subsidiary ” and collectively, as the
“ subsidiaries ”), taken together, and the
Shares as required by applicable Canadian Securities Laws; and (ii)
no material fact or information has been omitted from such
disclosure which is required to be stated in such disclosure or is
necessary to make the statements or information contained in such
disclosure not misleading in light of the circumstances under which
they were made;
(iv)
The documents incorporated by reference in any Preliminary
Prospectus, the Prospectus or the Canadian Prospectus, when they
became effective or were filed with the Commission or the
securities commissions or regulatory authorities in each of the
Qualifying Provinces (the “ Canadian Securities Commissions
”), as the
case may be, conformed in all material respects to the requirements
of the Securities Exchange Act of 1934, as amended (the
“ Exchange Act
”), and the
rules and regulations of the Commission thereunder and/or the
requirements of applicable Canadian Securities Laws, and, as of the
date of filing, none of such documents 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;
(v)
The Registration Statement and all Preliminary Prospectuses
conform, and the Prospectus and any further amendments or
supplements to the Registration Statement, any Preliminary
Prospectus or the Prospectus will conform, in all material respects
to the requirements of the Act and the rules and regulations of the
Commission thereunder; the Registration Statement, any Preliminary
Prospectus and the Prospectus do not and will not, as of the
applicable effective date as to the Registration Statement and any
amendment thereto, as of the applicable filing date as to any
Preliminary Prospectus, and as of the applicable filing date and
the applicable Time of Delivery (as hereinafter defined) as to the
Prospectus and any amendment or supplement thereto, contain an
untrue statement of a material fact or omit to state a material
fact, in the case of the Registration Statement or any amendment
thereto, required to be stated therein or necessary to make the
statements therein not misleading and, in the case of any
Preliminary Prospectus or the Prospectus or any supplement thereto,
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided , however , that this representation and
warranty shall not apply to any
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statements or omissions made in
reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter through Canaccord Adams
Inc. expressly for use therein;
(vi)
There are no contracts or other documents required to be described
in the Registration Statement or to be filed as exhibits to the
Registration Statement by the Act or by the rules and regulations
thereunder which have not been described in, filed as exhibits to,
or incorporated by reference in the Registration Statement, as
required; the contracts so described in the Pricing Prospectus, the
Prospectus and in the Canadian Prospectus, to which the Company or
any of its subsidiaries is a party have been duly authorized,
executed and delivered by the Company or its subsidiaries,
constitute valid and binding agreements of the Company or its
subsidiaries and are enforceable against the Company or its
subsidiaries in accordance with their respective terms, except as
such enforceability may be limited by (i) applicable bankruptcy,
insolvency, moratorium, reorganization, fraudulent conveyance or
similar laws in effect which affect the enforcement of
creditors’ rights generally, (ii) general principles of
equity, whether considered in a proceeding at law or in equity and
(iii) state, provincial or federal securities laws or policies
relating to the non-enforceability of the indemnification
provisions contained therein, and, to the Company’s
knowledge, such contracts are enforceable in accordance with their
respective terms by the Company against the other parties thereto,
except as such enforceability may be limited by (x) applicable
bankruptcy, insolvency, moratorium, reorganization, fraudulent
conveyance or similar laws in effect which affect the enforcement
of creditors’ rights generally, (y) general principles of
equity, whether considered in a proceeding at law or in equity and
(z) state, provincial or federal securities laws or policies
relating to the non-enforceability of the indemnification
provisions contained therein, and such contracts are in full force
and effect on the date hereof; and neither the Company nor any of
its subsidiaries, nor, to the best of the Company’s
knowledge, any other party thereto, is in breach of or default
under any of such contracts, except for such breaches or defaults
that will not result in a material adverse change in the general
affairs, business, assets, management, financial position,
stockholders’ equity or results of operations of the Company
and its subsidiaries taken as a whole;
(vii)
Neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included or
incorporated by reference in the Pricing Prospectus and the
Canadian Prospectus any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental
action, order or decree, that is in each case material to the
Company and its subsidiaries taken as a whole, otherwise than as
set forth or contemplated in the Pricing Prospectus and the
Canadian Prospectus; and, since the respective dates as of which
information is given in the Registration Statement, the Pricing
Prospectus and the Canadian Prospectus, (i) there has not been any
change in the capital stock or long-term debt of the Company or any
of its subsidiaries or any material adverse change or any
development involving a prospective material adverse change, in or
affecting the general affairs, business, assets, management,
financial position, stockholders’ equity or results of
operations of the Company and its subsidiaries taken as a whole,
and (ii) the Company or its subsidiaries have not entered into
material transaction or incurred any material obligation outside of
the ordinary course of business, otherwise than as set forth in the
Pricing Prospectus and the Canadian Prospectus;
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(viii)
The Company and its subsidiaries have good and marketable title to
all real property and good and marketable title to all other
tangible properties and assets described in the Pricing Prospectus
and the Canadian Prospectus as owned by it, in each case free and
clear of all liens, charges, claims, encumbrances or restrictions,
except such as (i) are described in the Pricing Prospectus and the
Canadian Prospectus or (ii) do not 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 and its subsidiaries;
any real property and buildings held under lease by the Company and
its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do
not interfere with the use made and proposed to be made of such
property and buildings by the Company and its subsidiaries; the
Company and its subsidiaries own or lease all such properties as
are necessary to its operations as now conducted or as proposed to
be conducted;
(ix)
Each of the Company and its subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of its respective jurisdiction of organization, each with full
power and authority (corporate and otherwise) to own its properties
and conduct its business as described in the Pricing Prospectus and
the Canadian Prospectus, and each has been duly qualified as a
foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns
or leases properties or conducts any business so as to require such
qualification, except where the failure to be so qualified or in
good standing would not result in any material liability or
disability to the Company or such subsidiary;
(x)
The Company has an authorized capitalization as set forth in the
Pricing Prospectus, the Prospectus and the Canadian Prospectus, and
all the issued shares of capital stock of the Company have been
duly and validly authorized and issued, are fully paid and
non-assessable and conform to the descriptions thereof contained or
incorporated by reference in the Pricing Prospectus, the Prospectus
and the Canadian Prospectus; all of the issued shares of capital
stock of each subsidiary of the Company (i) have been duly and
validly authorized and issued, are fully paid and non-assessable
and (ii) except as disclosed in the Pricing Prospectus, the
Prospectus and the Canadian Prospectus, are owned directly by the
Company, free and clear of all liens, encumbrances, equities or
claims; except as disclosed in or contemplated by the Pricing
Prospectus, the Prospectus and the Canadian Prospectus and the
consolidated financial statements of the Company, and the related
notes thereto, contained or incorporated by reference in the
Pricing Prospectus, the Prospectus and the Canadian Prospectus,
neither the Company nor any subsidiary has outstanding any options
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, shares of its
capital stock or any such options, rights, convertible securities
or obligations; and the description of the Company’s stock
option and stock purchase plans and the options or other rights
granted and exercised thereunder set forth in the Pricing
Prospectus, the Prospectus and the Canadian Prospectus accurately
and fairly presents the information required by the Act and the
published rules and regulations of the Commission thereunder to be
shown with respect to such plans, options and rights;
(xi)
The unissued Shares to be issued and sold by the Company to the
Underwriters hereunder have been or, upon issuance thereof, will
have been and duly validly authorized and,
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when issued and delivered against
payment therefor as provided herein, will be duly and validly
issued and fully paid and non-assessable and will conform to the
description of the Common Stock contained or incorporated by
reference in the Pricing Prospectus, the Prospectus and the
Canadian Prospectus; no preemptive rights or other rights to
subscribe for or purchase exist with respect to the issuance and
sale of the Shares by the Company pursuant to this Agreement; no
stockholder of the Company has any right, which has not been
waived, to require the Company to register the sale of any shares
of capital stock owned by such stockholder under the Act or the
Canadian Securities Laws in the public offering contemplated by
this Agreement; and no further approval or authority of the
stockholders or the Board of Directors of the Company will be
required for the issuance and sale of the Shares to be sold by the
Company as contemplated herein;
(xii)
The Company has full corporate power and authority to enter into
this Agreement; and this Agreement has been duly authorized,
executed and delivered by the Company, constitutes a valid and
binding obligation of the Company and is enforceable against the
Company in accordance with its terms;
(xiii)
The issue and sale of the Shares by the Company and the compliance
by the Company with all of the provisions of this Agreement and the
consummation of the transactions herein contemplated will not
conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other
material agreement or material instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, nor
will any such actions result in any violation of the provisions of
the Certificate and Articles of Incorporation or By-laws of the
Company as currently in effect or any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of
the Shares or the consummation by the Company of the transactions
contemplated by this Agreement, except the registration under the
Act and qualification under the Canadian Securities Laws of the
Shares and such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue
Sky laws or the bylaws and rules of the National Association
of Securities Dealers, Inc. (“ NASD ”) in connection with
the purchase and distribution of the Shares by the
Underwriters;
(xiv)
Neither the Company nor any of its subsidiaries is in violation of
its Certificate of Incorporation or By-laws or, except where such
violation or default would not have a material adverse effect on
the Company and its subsidiaries taken as a whole, in default in
the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement
or instrument to which it is a party or by which it or any of its
properties may be bound. The Company is a reporting issuer,
or the equivalent thereof, under the Securities Laws of the
Provinces of British Columbia, Alberta, Saskatchewan, Manitoba and
Ontario (the “ Reporting Jurisdictions ”). The Company
is not currently in default of any requirement of the securities
laws of the Reporting Jurisdictions and the Company is not included
on a list of defaulting
6
reporting issuers maintained by any
of the securities commissions or similar regulatory authorities in
any of the Reporting Jurisdictions. In particular, without limiting
the generality of the foregoing, the Company is in compliance at
the date hereof with its obligations to make timely disclosure of
all material changes relating to it and no such disclosure has been
made on a confidential basis and there is no material change
relating to the Company which has occurred and with respect to
which the requisite material change report has not been filed. No
securities commissions or other regulatory authority has issued any
order having the effect of suspending or ceasing the trading of the
common shares of the Company. The Company is qualified to
file a prospectus in the form of a short form prospectus pursuant
to the provisions of National Instrument 44-101 - Short Form
Prospectus Distributions .
(xv)
The statements set forth in the Pricing Prospectus and the
Prospectus under the captions “Description of Equity
Securities,” “Description of Debt Securities” and
“Description of Warrants,” insofar as they purport to
constitute summaries of the terms of the equity or debt securities
described therein, and under the captions “Legal
Matters” and “Plan of Distribution,” insofar as
they purport to describe the provisions of the laws and documents
referred to therein, are accurate, complete and fair;
(xvi)
Except as disclosed in the Pricing Prospectus or the Prospectus,
there are no material legal or governmental actions, suits or
proceedings pending or, to the best of the Company’s
knowledge, threatened to which the Company or any of its
subsidiaries is or may be a party or of which property owned or
leased by the Company or any of its subsidiaries is or may be the
subject, or related to environmental or discrimination matters; no
labor disturbance by the employees of the Company or any of its
subsidiaries exists or, to the knowledge of the Company, is
imminent; and neither the Company nor any of its subsidiaries is a
party or subject to the provisions of any material injunction,
judgment, decree or order of any court, regulatory
body;
(xvii)
The Company and its subsidiaries possess all licenses,
certificates, authorizations or permits issued by the appropriate
governmental or regulatory agencies or authorities that are
necessary to enable them to own, lease and operate their respective
properties and to carry on their respective businesses as presently
conducted, except where the failure to do so would not,
individually or in the aggregate, have a material adverse effect on
the Company and its subsidiaries taken as a whole; and neither the
Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
license, certificate, authority or permit;
(xviii)
Except as disclosed in the Pricing Prospectus or the Prospectus,
the Company and its subsidiaries (i) are in compliance in all
material respects with any and all applicable foreign, federal,
state and local laws and regulations relating to the protection of
human health and safety, including, without limitation, those
relating to occupational safety and health, the environment or
hazardous or toxic substances or wastes, pollutants or
contaminants, including, without limitation, those relating to the
storage, handling or transportation of hazardous or toxic materials
(collectively, “ Environmental Laws ”) and (ii) are in
compliance with all terms and conditions of any such permit,
license or approval. The Company, in its reasonable judgment, has
concluded that any costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure
of
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properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities
to third parties) would not, singly or in the aggregate, reasonably
be expected to result in a material adverse change in the general
affairs, business, assets, management, financial position,
stockholders’ equity or results of operations of the Company
and its subsidiaries taken as a whole;
(xix)
PricewaterhouseCoopers LLP, who have audited certain financial
statements of the Company, are independent public accountants as
required by the Act and the rules and regulations of the Commission
thereunder and have been appointed by an Audit Committee comprised
entirely of independent directors of the Board of Directors of the
Company;
(xx)
The consolidated financial statements and schedules, if any, of the
Company, and the related notes thereto, included or incorporated by
reference in the Registration Statement, the Pricing Prospectus and
the Canadian Prospectus present fairly the financial position of
the Company as of the respective dates of such financial statements
and schedules, and the results of operations and cash flows of the
Company for the respective periods covered thereby; such
statements, schedules and related notes have been prepared in
accordance with generally accepted accounting principles in the
United States applied on a consistent basis as certified by the
independent public accountants named in paragraph (xix) above; no
other financial statements or schedules, if any, are required to be
included or incorporated by reference in the Registration Statement
and the Canadian Prospectus; and the selected financial data set
forth or incorporated by reference in the Pricing Prospectus under
the caption “Ratio of Earnings to Fixed Charges,” and
in the Pricing Prospectus and the Canadian Prospectus under the
captions “Management’s Discussion and Analysis of
Financial Conditions and Results of Operations,” and
“Selected Financial Data” fairly present the
information set forth therein on the basis stated in the
Registration Statement and the Canadian Prospectus;
(xxi)
The pro forma financial information, if any, set forth or
incorporated by reference in the Registration Statement and the
Pricing Prospectus reflects, subject to the limitations set forth
or incorporated by reference in the Registration Statement and the
Pricing Prospectus as to such pro forma financial information, the
results of operations of the Company and its consolidated
subsidiaries purported to be shown thereby for the periods
indicated and conforms to the requirements of Regulation S-X of the
rules and regulations of the Commission under the Act and
management of the Company believes (i) the assumptions
underlying the pro forma adjustments are reasonable, (ii) that
such adjustments have been properly applied to the historical
amounts in the compilation of such pro forma statements and notes
thereto, and (iii) that such statements and notes thereto
present fairly, with respect to the Company and its consolidated
subsidiaries, the pro forma financial position and results of
operations and the other information purported to be shown therein
at the respective dates or for the respective periods therein
specified;
(xxii)
The Company owns, or possesses and/or has been granted valid and
enforceable licenses for, all registered patents, patent
applications, trademarks, trademark applications, tradenames,
servicemarks and copyrights necessary to the conduct of its
business as such business is described in the Pricing Prospectus
and the Canadian Prospectus (collectively, the “
Registered Intellectual
Property ”). The Company has no
knowledge of any material infringement or misappropriation by third
parties of any of the Registered Intellectual Property,
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or any material inventions,
manufacturing processes, formulae, trade secrets, know-how,
unregistered trademarks, and other intangible property and assets
necessary to the conduct of its business as such business is
described in the Pricing Prospectus and the Canadian Prospectus
(collectively, the “ Other Intellectual Property
,” and together with the Registered Intellectual Property,
the “ Intellectual Property ”), nor is there any
pending or, to the knowledge of the Company, threatened action,
suit, proceeding or claim by others challenging the Company’s
rights of title or other interest in or to any Intellectual
Property and the Company does not know of any facts which would
form a reasonable basis for any such claim. There is no
pending or, to the best knowledge of the Company, threatened
action, suit, proceeding or claim by others challenging the
validity and scope of any Intellectual Property and the Company
does not know of any facts which would form a reasonable basis for
any such claim. There is no pending or, to the best knowledge
of the Company, threatened action, suit, proceeding or claim by
others that the Company or any of its products or processes or the
Intellectual Property infringe or otherwise violate any patent,
trademark, servicemark, copyright, trade secret or other
proprietary right of others and the Company is unaware of any facts
which would form a reasonable basis for any such claim. The
Company is not aware of any grounds for an interference proceeding
before the United States Patent and Trademark Office in relation to
any of the patents or patent applications currently owned by the
Company. There is no pending or, to the best knowledge of the
Company, threatened action, suit proceeding or claim by any current
or former employee, consultant or agent of the Company seeking
either ownership rights to any invention or other intellectual
property right or compensation from the Company for any invention
or other intellectual property right made by such employee,
consultant or agent in the course of his/her employment with the
Company or otherwise. There is no act or omission by the
Company or its agents or representatives of which the Company has
knowledge that may render any patent or patent application within
the Intellectual Property unpatentable, unenforceable or
invalid. Each of the Pricing Prospectus and the Canadian
Prospectus fairly and accurately describe in all material respects
the Company’s rights with respect to the Intellectual
Property;
(xxiii)
The Company and each of its subsidiaries have filed all necessary
federal, state and foreign income and franchise tax returns, each
of which has been true and correct in all material respects, and
have paid all taxes shown as due thereon; and the Company has no
knowledge of any material tax deficiency which has been or might be
asserted or threatened against the Company or any of its
subsidiaries;
(xxiv)
The Company is not an “investment company” or an
“affiliated person” of, or “promoter” or
“principal underwriter” for, an “investment
company”, as such terms are defined in the Investment Company
Act of 1940, as amended (the “ Investment Company Act ”);
(xxv)
Each of the Company and its subsidiaries maintains insurance of the
types and in the amounts which it deems adequate for its business,
including, but not limited to, insurance covering real and personal
property owned or leased by the Company and its subsidiaries
against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against, all of which insurance is in
full force and effect;
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(xxvi)
Neither the Company nor any of its subsidiaries has at any time
during the last five years (i) made any unlawful contribution to
any candidate for foreign office, or failed to disclose fully any
contribution in violation of law, or (ii) made any payment to any
foreign, federal or state governmental officer or official, or
other person charged with similar public or quasi-public duties,
other than payments required or permitted by the laws of the United
States, Canada, any other foreign government or any respective
jurisdiction thereof;
(xxvii)
The Company has not taken and will not take, directly or indirectly
through any of its directors, officers or controlling persons, any
action which is designed to or which has constituted or which might
reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares;
(xxviii) The
Common Stock of the Company has been registered pursuant to Section
12(g) of the Exchange Act and the Company is not required to take
any further action for the inclusion of the Shares on the Nasdaq
Stock Market. The issued and outstanding common shares of the
Company are listed and posted for trading on the Toronto Stock
Exchange, and no order ceasing or suspending trading in any
securities of the Company or the trading of any of the
Company’s issued securities has been issued and no
proceedings for such purpose are, to the knowledge of the Company,
pending or threatened.
(xxix)
There are no business relationships or related-party transactions
involving the Company or any subsidiary or any other person
required to be described in the Pricing Prospectus or the Canadian
Prospectus which have not been described as required;
(xxx)
The Company maintains a system of internal control over financial
reporting (as such term is defined in Rule 13a-15(f) under the
Exchange Act) that complies with the requirements of the Exchange
Act and has been designed by the Company’s principal
executive officer and principal financial officer, or under their
supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles. Except as disclosed in the
Pricing Prospectus and the Canadian Prospectus, the Company’s
internal control over financial reporting is effective and the
Company is not aware of any material weaknesses in its internal
control over financial reporting;
(xxxi)
Since the date of the latest audited financial statements included
or incorporated by reference in the Pricing Prospectus and the
Canadian Prospectus, there has been no change in the
Company’s internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect,
the Company’s internal control over financial
reporting;
(xxxii)
The principal executive officers (or their equivalents) and
principal financial officers (or their equivalents) of the Company
have duly made all certifications required by the Sarbanes-Oxley
Act of 2002 (the “ Sarbanes-Oxley Act ”) and any related
rules and regulations promulgated by the Commission and under
Multilateral Instrument 52-109 — Certification of Disclosure
in Issuers’ Annual and Interim Filings, and the statements
contained in any such certification are complete and correct as of
the respective dates thereof. The Company has established and
maintains and evaluates “disclosure controls and
procedures” (as such term is defined in Rule 13a-15(e) under
the Exchange Act); such disclosure controls and procedures are
designed to ensure that material information relating to the
Company is made
10
known to the Company’s
principal executive officer and principal financial officer by
others within those entities, and such disclosure controls and
procedures are effective to perform the functions for which they
were established;
(xxxiii) The
Company is in compliance in all material respects with all
applicable provisions of the Sarbanes-Oxley Act and all rules and
regulations promulgated thereunder that are then in effect, is
implementing the provisions thereof in accordance thereof, and is
actively taking steps to ensure that it will be in compliance with
other applicable provisions of the Sarbanes-Oxley Act not currently
in effect upon the effectiveness of such provisions;
(xxxiv) As the
time of filing of the Registration Statement, the Company was not,
and the Company on the date of this Agreement is not, an
“ineligible issuer” as defined in Rule 405 under the
Act;
(xxxv)
Without the prior consent of Canaccord Adams Inc., the Company has
not made and will not make any offer relating to the Shares that
would constitute a “free writing prospectus” as defined
in Rule 405 under the Act; and any free writing prospectus, the use
of which has been consented to by the Company and Canaccord Adams
Inc. is listed on Schedule III(a) or III(b)
hereto;
(xxxvi) The
Company has complied and will comply with the requirements of Rules
164 and 433 under the Act applicable to any Issuer Free Writing
Prospectus, including timely filing with the Commission or
retention where required and legending; and
(xxxvii) The
Company’s US subsidiaries and any “employee benefit
plan” (as defined under the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, “
ERISA ”)) established or
maintained by the Company’s US subsidiaries or their ERISA
Affiliates (as defined below) are in compliance in all material
respects with ERISA. “ ERISA Affiliate ” means, with respect
to any of the Company’s US subsidiaries, any member of any
group of organizations described in Sections 414(b),(c),(m) or (o)
of the Internal Revenue Code of 1986, as amended, and the
regulations and published interpretations thereunder (the
“ Code
”) of
which such subsidiary is a member. No “reportable
event” (as defined under ERISA) has occurred or is reasonably
expected to occur with respect to any “employee benefit
plan” established or maintained by the Company’s US
subsidiaries or any of their ERISA Affiliates. No
“employee benefit plan” established or maintained by
the Company’s US subsidiaries or any of their ERISA
Affiliates, if such “employee benefit plan” were
terminated, would have any “amount of unfunded benefit
liabilities” (as defined under ERISA). None of the
Company’s US subsidiaries nor any of their ERISA Affiliates
has incurred or reasonably expects to incur any liability under (i)
Title IV of ERISA with respect to termination of, or withdrawal
from, any “employee benefit plan” or (ii) Sections 412,
4971, 4975 or 4980B of the Code. Each “employee benefit
plan” established or maintained by the Company’s US
subsidiaries or any of their ERISA Affiliates that is intended to
be qualified under Section 401(a) of the Code is so qualified and
nothing has occurred, whether by action or failure to act, which
would cause the loss of such qualification.
(xxxviii) The
Company has not filed any confidential material change reports
under the Canadian Securities Laws.
11
(xxxix)
To the best of the Company’s knowledge, information and
belief, none of the directors or officers of the Company or any of
its Subsidiaries (or such shareholders’ respective
principals) is or has ever been subject to prior regulatory,
criminal or bankruptcy proceedings in Canada or
elsewhere.
2.
Shares Subject to Sale . On the basis of the
representations, warranties and agreements contained herein, and
subject to the terms and conditions of this Agreement:
(a)
The Company agrees to sell to each of the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase
from the Company at the First Time of Delivery, at a purchase price
per share of $10.40, the number of Firm Shares (to be adjusted by
Canaccord Adams Inc. so as to eliminate fractional shares)
determined in each case by multiplying the aggregate number of
Shares to be sold by the Company by a fraction, the numerator of
which is the aggregate number of Firm Shares to be purchased by
such Underwriter as set forth opposite the name of such Underwriter
in Schedule I hereto and the denominator of which is the
aggregate number of Firm Shares to be purchased by all of the
Underwriters from the Company hereunder.
(b)
In the event and to the extent that the Underwriters shall exercise
the election to purchase Optional Shares as provided below, the
Company agrees to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from
the Company, at the Second Time of Delivery, at the purchase price
per share set forth in clause (a) of this Section 2, that number of
Optional Shares determined by multiplying the number of Optional
Shares as to which such election shall have been exercised (to be
adjusted by Canaccord Adams Inc. so as to eliminate fractional
shares) by a fraction, the numerator of which is the maximum number
of Optional Shares which such Underwriter is entitled to purchase
as set forth opposite the name of such Underwriter in Schedule
I hereto and the denominator of which is the maximum number of
Optional Shares that all of the Underwriters are entitled to
purchase hereunder.
(c)
The Company hereby grants, severally and not jointly, to the
Underwriters the right to purchase at their election up to the
lesser of (i) the over-allocation position of the Underwriters
determined as at the closing of the offering of the Firm Shares;
and (ii) 675,000 Optional Shares, at the purchase price per
share set forth in clause (a) of this Section 2, for the sole
purpose of covering sales of shares in excess of the number of Firm
Shares. Any such election to purchase Optional Shares shall
be made in proportion to the maximum number of Optional Shares to
be sold by the Company. Any such election to purchase
Optional Shares may be exercised only by written notice (the
“ Election
Notice ”) from Canaccord Adams
Inc. to the Company, given within a period of 30 calendar days
after the date of the First Time of Delivery (as such term is
defined in Section 4 below) and setting forth the aggregate
number of Optional Shares to be purchased and the date on which
such Optional Shares are to be delivered, as determined by
Canaccord Adams Inc. but in no event earlier than the First Time of
Delivery or, unless Canaccord Adams Inc. and the Company otherwise
agree in writing, earlier than two or later than ten business days
after the date of such notice.
3.
Offering . Upon the authorization by Canaccord Adams Inc. of
the release of the Firm Shares, the several Underwriters propose to
offer the Firm Shares for sale upon the terms and conditions set
forth in the Prospectus.
12
4.
Closing . Certificates in definitive form for the Shares to
be purchased by each Underwriter hereunder, and in such
denominations and registered in such names as Canaccord Adams Inc.
may request upon at least forty-eight hours’ prior notice to
the Company, shall be delivered by or on behalf of the Company to
Canaccord Adams Inc. for the account of such Underwriter, against
payment by such Underwriter or on its behalf of the purchase price
therefor by wire transfer of same day funds to the account
specified by the Company, as their interests may appear, all at the
office of Canaccord Adams Inc., 99 High Street, Boston,
Massachusetts 02110. The time and date of such delivery and
payment shall be, with respect to the Firm Shares, 9:30 a.m.,
Boston time, on February 13, 2007 or such other time and date as
Canaccord Adams Inc. and the Company may agree upon in writing,
and, with respect to the Optional Shares, 9:30 a.m., Boston time,
on the date specified by Canaccord Adams Inc. in the Election
Notice, or at such other time and date as Canaccord Adams Inc. and
the Company may agree upon in writing. Such time and date for
delivery of the Firm Shares is herein called the “
First Time of Delivery
,” such
time and date for delivery of the Optional Shares, if not the First
Time of Delivery, is herein called the “ Second Time of Delivery ,” and each such time
and date for delivery is herein called a “
Time of Delivery .” Such
certificates will be made available for checking and packaging at
least twenty-four hours prior to each Time of Delivery at such
location as Canaccord Adams Inc. may reasonably specify. If
the Underwriters so elect, delivery of the Shares may be made by
credit through full fast transfer to the accounts at the Depository
Trust Company designated by Canaccord Adams Inc.
5.
Covenants of the Company . The Company agrees with each of
the Underwriters:
(a)
To prepare the Prospectus in a form approved by the Underwriters,
acting reasonably, and to file such Prospectus pursuant to Rule
424(b) under the Act not later than Commission’s close of
business on the first business day following the execution and
delivery of this Agreement, or, if applicable, such earlier time as
may be required by the rules and regulations of the Commission
under the Act, to make no further amendment or any supplement to
the Registration Statement, the Pricing Prospectus or Prospectus
which shall be reasonably disapproved by Canaccord Adams Inc.
promptly giving reasonable notice thereof; to advise Canaccord
Adams Inc., promptly after it receives notice thereof, of the time
when the Registration Statement, or any amendment thereto, has been
filed or becomes effective or any supplement to the Pricing
Prospectus or the Prospectus or any amended Pricing Prospectus or
Prospectus has been filed and to furnish Canaccord Adams Inc.
copies thereof; to advise Canaccord Adams Inc., promptly after it
receives notice thereof, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use
of
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