EXHIBIT 1.1
HUB INTERNATIONAL LIMITED
5,000,000 COMMON SHARES
UNDERWRITING AGREEMENT
, 2002
J.P. MORGAN SECURITIES INC.
COCHRAN, CARONIA SECURITIES LLC STEPHENS INC.
BMO NESBITT BURNS CORP.
FERRIS, BAKER WATTS, INCORPORATED c/o J.P. Morgan Securities
Inc.
277 Park Avenue New York, NY 10172
Ladies and Gentlemen:
Hub International Limited, a corporation organized under the laws of
the Province of Ontario, Canada (the "COMPANY "), proposes to issue and sell to
the several Underwriters listed in Schedule I hereto (the "UNDERWRITERS "), for
whom you are acting as representatives (the "REPRESENTATIVES"), an aggregate of
5,000,000 common shares of the Company (the "UNDERWRITTEN SHARES") and, for the
sole purpose of covering over-allotments in connection with the sale of the
Underwritten Shares, at the option of the Underwriters, up to an additional
750,000 common shares of the Company (the "OPTION SHARES"). The Underwritten
Shares and the Option Shares are herein referred to as the "SHARES." The common
shares of the Company to be outstanding after giving effect to the sale of the
Shares are herein referred to as the "COMMON SHARES."
The Company hereby confirms the agreements made with respect to the
purchase of the Shares by the Underwriters (which term shall also include any
underwriter purchasing Shares pursuant to Section 3(b) hereof). You hereby
represent and warrant that you have been authorized by each of the other
Underwriters to enter into this Agreement on its behalf and to act for it in the
manner herein provided.
1. REGISTRATION STATEMENT. 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 "SECURITIES Act"), a
registration statement, including a prospectus, relating to the Shares. Copies
of such registration statement and of each amendment thereto, if any, including
the related preliminary prospectus (meeting the requirements of Rule 430A of the
rules and regulations of the Commission) heretofore filed by the Company with
the Commission have been delivered to you.
The term "REGISTRATION STATEMENT " as used in this agreement shall mean
such registration statement, all exhibits and financial statements, all
information omitted therefrom in reliance upon Rule 430A and contained in the
Prospectus referred to below, in the form in which it became effective, and any
registration statement filed pursuant to Rule 462(b) of the rules and
regulations of the Commission with respect to the Shares (a "RULE 462(B)
REGISTRATION STATEMENT "), and, in the event of any amendment thereto after the
effective date of such registration statement (the "EFFECTIVE DATE"), shall also
mean (from and after the effectiveness of such amendment) such registration
statement as so amended (including any Rule 462(b) registration statement). The
term "PROSPECTUS " as used in this Agreement shall mean the Prospectus in the
form first furnished to you by the Company and used to confirm sales of the
Shares.
The Registration Statement has been declared effective under the
Securities Act, and no post-effective amendment to the Registration Statement
has been filed as of the date of this Agreement. The Company has caused to be
delivered to you copies of each preliminary prospectus and has consented to the
use of such copies for the purposes permitted by the Securities Act.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company hereby represents and warrants as follows:
(i) no order preventing or suspending the use of the preliminary
prospectus, meeting the requirements of Rule 430A of the rules and
regulations of the Commission (the "PRELIMINARY PROSPECTUS "), has been
issued by the Commission, and such Preliminary Prospectus filed as part
of the Registration Statement, as amended, complied when so filed in
all material respects with the Securities 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 light of the circumstances under which they were made, not
misleading; provided that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information relating to any Underwriter furnished to
the Company in writing by such Underwriter through the Representatives
expressly for use therein;
(ii) the Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement has
been
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issued and no proceeding for that purpose has been instituted or, to
the knowledge of the Company, threatened by the Commission; and the
Registration Statement and Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with
the Securities Act and did not and will not, as of the applicable
effective date as to the Registration Statement and any amendment
thereto and as of the date of the Prospectus and any amendment or
supplement thereto, 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 the
Prospectus, as amended or supplemented, if applicable, at the Closing
Date (as hereinafter defined) or the Option Closing Date (as
hereinafter defined), as the case may be, will not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided
that the foregoing representations and warranties shall not apply to
any statements or omissions made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company
in writing by or on behalf of any Underwriter expressly for use in the
Registration Statement or the Prospectus or any such amendment thereof
or supplement thereto;
(iii) the Company has been duly incorporated and organized and is
validly existing as a corporation under the laws of the Province of
Ontario, Canada, has full corporate power and authority to own or
lease its properties and conduct its business as described in the
Registration Statement and the Prospectus and as being conducted as of
the date hereof, and is duly qualified as a foreign corporation or
extra-provincial corporation, as the case may be, and in good standing
in all jurisdictions in which the character of the property owned or
leased or the nature of the business transacted by it makes
qualification necessary (except where the failure to be so qualified
would not have a material adverse effect on the business, consolidated
financial position, shareholders' equity or results of operations of
the Company and its subsidiaries (as used herein, the term subsidiary
means a corporation, company or other entity more than 50% of whose
outstanding shares or securities (representing the right to vote for
the election of directors or other managing authority) are owned,
directly or indirectly, by the Company), taken as a whole ("MATERIAL
ADVERSE EFFECT")); the Company's head office and mind and management
is located in Chicago, Illinois and the residence of the majority of
the senior officers of the Company is outside of Canada; the Company's
registered office is located in Brampton, Ontario and the Company does
not carry on business in any other province or territory of Canada
other than through its subsidiaries;
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(iv) each of the Subsidiaries (as used herein, the term
"SUBSIDIARY" means a subsidiary listed on Schedule III hereto) has
been duly incorporated, has duly issued its shares of capital stock
and is validly existing as a corporation under the laws of its
jurisdiction of incorporation, with power and authority (corporate and
other) to own its properties and conduct its business as described in
the Prospectus, and has been duly qualified as a foreign corporation
or extra-provincial corporation, as the case may be, for the
transaction of business and is in good standing under the laws of each
jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, other than where the
failure to be so qualified or in good standing would not have a
Material Adverse Effect; and, except as disclosed in the Prospectus,
all the outstanding shares of capital stock of each Subsidiary have
been duly authorized and validly issued, are fully paid and non
assessable and are owned by the Company, directly or indirectly, free
and clear of all liens, encumbrances, security interests and claims;
(v) the consolidated financial statements, and the related notes
thereto, included in the Registration Statement and the Prospectus
present fairly the consolidated financial position of the Company as
of the dates indicated and the results of its operations and changes
in its cash flows for the periods specified; such financial statements
have been prepared in conformity with generally accepted accounting
principles in Canada ("CANADIAN GAAP") applied on a consistent basis
during the periods involved, together with a reconciliation, to United
States generally accepted accounting principles ("U.S. GAAP") in
accordance with Item 18 of Form 20-F under the Securities Exchange Act
of 1934, as amended (the "EXCHANGE ACT"); the financial data set forth
in the Prospectus under the captions "PROSPECTUS summary - Summary
consolidated financial data," "Unaudited pro forma consolidated
statement of earnings," "Selected historical consolidated financial
data" and "Capitalization" fairly present the information set forth
therein on a basis consistent with that of the audited or unaudited
financial statements contained in the Registration Statement and the
Prospectus;
(vi) the unaudited pro forma consolidated statement of earnings
of the Company and the related notes thereto included in the
Registration Statement and the Prospectus present fairly the
information contained therein, have been prepared in accordance with
the Commission's rules and guidelines and have been properly presented
on the bases described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and circumstances
referred to therein; no other pro forma financial information is
required to be included in the Registration Statement or the
Prospectus pursuant to Regulation S-X;
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(vii) other than its subsidiaries, the Company does not own,
directly or indirectly, any shares of stock or any other equity or
long-term debt securities of any corporation or have any equity or
other ownership interest in any firm, partnership, limited liability
company, joint venture, association or other entity, except as set
forth in the Prospectus or as reflected in the audited or unaudited
consolidated financial statements of the Company included in the
Registration Statement and Prospectus which would be material to the
Company's consolidated financial position.
(viii) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not
been any material adverse change in the share capital or long term
debt of the Company or any of the Subsidiaries or in the business,
properties, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole ("MATERIAL ADVERSE
CHANGE"), whether or not arising from transactions in the ordinary
course of business, other than as set forth in the Registration
Statement and the Prospectus, and since such dates, except in the
ordinary course of business, neither the Company nor any of the
Subsidiaries has entered into any material transaction not referred to
in the Registration Statement and the Prospectus;
(ix) this Agreement has been duly authorized, executed and
delivered by the Company;
(x) the Company has an authorized capitalization as set forth in
the Prospectus (except for subsequent issuances, if any, pursuant to
the share plans referred to in the Prospectus) and such authorized
share capital conforms as to legal matters to the description thereof
set forth under the heading "Description of share capital" in the
Prospectus; as of the date of this agreement, all of the outstanding
share capital of the Company has been duly authorized and validly
issued, is fully-paid and non-assessable, has been issued in
compliance with all federal and state securities laws, the Ontario
Business Corporations Act (the "OBCA") and applicable Canadian
securities laws; except as described in or expressly contemplated by
the Prospectus, there are no outstanding rights (including, without
limitation, pre-emptive rights), warrants or options to acquire, or
instruments convertible into or exchangeable for, any share capital or
other equity interest in the Company or any of its Subsidiaries, or
any contract, commitment, agreement, understanding or arrangement of
any kind relating to the issuance of any share capital of the Company
or any such subsidiary, any such convertible or exchangeable
securities or any such rights, warrants or options;
(xi) the Shares to be issued and sold by the Company have been
duly authorized, and, when issued and delivered to and paid for by the
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Underwriters as provided herein, will be duly and validly issued,
fully paid and non-assessable and are not subject to any pre-emptive
or similar rights; the Shares conform to the description set forth
under the heading "Description of share capital" in the Prospectus;
and no further approval or authority of the shareholders or the board
of directors of the Company will be required for the issuance and sale
of the Shares by the Company as contemplated herein;
(xii) neither the Company nor any of its Subsidiaries is, or with
the giving of notice or lapse of time or both would be, in violation
of or in default under, its articles or by-laws or any indenture,
mortgage, deed of trust, loan agreement or other material agreement or
material instrument to which it is a party or by which it or any of
its properties is bound, except for violations and defaults which
individually and in the aggregate would not result in a Material
Adverse Effect; the issue and sale of the Shares to be sold by the
Company hereunder and the performance by the Company of its
obligations under this Agreement and the consummation of the
transactions contemplated herein will not conflict with or result in a
breach 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 its
Subsidiaries is bound or to which any of the property or assets of the
Company or its Subsidiaries is subject, nor will any such action
result in any violation of the provisions of the articles or the
by-laws of the Company or its Subsidiaries or any applicable law or
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or its
Subsidiaries or any of their respective properties, except where such
conflict, breach, default or violation would not have a Material
Adverse Effect; no consent, approval, authorization, order, license,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Shares to be sold by the Company hereunder or the consummation by the
Company of the transactions contemplated by this Agreement, except
such consents, approvals, authorizations, orders, licenses,
registrations or qualifications as have been obtained and as may be
required under state securities or blue sky laws in connection with
the purchase and distribution of the Shares by the Underwriters;
provided that the foregoing representations and warranties do not
extend to compliance with the securities laws of any applicable
jurisdiction and the rules, regulations, orders, notices and policies
thereunder;
(xiii) other than as set forth or contemplated in the Prospectus,
there are no legal or governmental investigations, actions, suits or
proceedings pending or, to the knowledge of the Company, threatened
against or
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affecting the Company or its Subsidiaries or any of their respective
properties, or to which the Company or its Subsidiaries is or may be a
party or to which any property of the Company or its Subsidiaries is
or may be subject which, if determined adversely to the Company or its
Subsidiaries, would individually or in the aggregate have a Material
Adverse Effect, and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others; and there are no statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required;
(xiv) the Company and its Subsidiaries maintain a system of
accounting controls sufficient to provide reasonable assurances that:
(A) transactions are executed in accordance with management's general
or specific authorizations, (B) transactions are recorded as necessary
to permit preparation of financial statements in conformity with
Canadian GAAP, to permit reconciliation with U.S. GAAP and to maintain
accountability for assets, (C) access to assets is permitted only in
accordance with management's general or specific authorization, and
(D) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is
taken with respect to any differences;
(xv) except as in each case as would not have a Material Adverse
Effect (A) the Company and its Subsidiaries own, possess or have
obtained all licenses, permits, certificates, consents, orders,
approvals and other authorizations from, and have made all
declarations and filings with, all federal, state, local and other
governmental authorities (including foreign regulatory agencies), all
self-regulatory organizations and all courts and other tribunals,
domestic or foreign, necessary to own or lease, as the case may be,
and to operate their respective properties and to carry on their
respective businesses as conducted as of the date hereof, (B) neither
the Company nor any of its Subsidiaries has received any actual notice
of any proceeding relating to revocation or modification of any such
license, permit, certificate, consent, order, approval or other
authorization, except as described in the Registration Statement and
the Prospectus; and (C) the Company and its Subsidiaries are in
compliance with all laws and regulations required in the conduct of
their respective businesses as conducted as of the date hereof, in the
manner described in the Prospectus;
(xvi) neither the Company nor any of its Subsidiaries owns any
real property and all of the leases and subleases material to the
business of the Company and its Subsidiaries, and under which the
Company or its
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Subsidiaries hold properties described in the Prospectus, are in full
force and effect, and neither the Company nor its Subsidiaries has any
notice of any material claim of any sort that has been asserted by
anyone adverse to the rights of the Company or its Subsidiaries under
any of the leases or subleases mentioned above, or affecting or
questioning the rights of the Company or its Subsidiaries to the
continued possession of the leased or subleased premises under any
such lease or sublease;
(xvii) to the Company's knowledge, no relationship, direct or
indirect, exists between or among the Company on the one hand, and the
directors, officers, shareholders, customers or suppliers of the
Company on the other hand, which is required by the Securities Act to
be described in the Registration Statement and the Prospectus which is
not so described;
(xviii) except as described in the Prospectus, no person has the
right to require the Company to register any securities for offering
and sale under the Securities Act by reason of the filing of the
Registration Statement with the Commission or the issue and sale of
the Shares to be sold by the Company hereunder;
(xix) 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 required to register as an
"investment company", as such term is defined in the Investment
Company Act of 1940, as amended (the "INVESTMENT COMPANY ACT");
(xx) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company are independent public accountants
as required by the Securities Act and are independent within the
meaning of the OBCA;
(xxi) the Company and its Subsidiaries have filed all federal,
state, local and foreign tax returns which have been required to be
filed and have paid all taxes shown thereon and all assessments
received by them or any of them to the extent that such taxes have
become due and are not being contested in good faith, except where the
failure to file such returns or pay such taxes shown as due would not
result in a Material Adverse Effect, and, except as disclosed in the
Registration Statement and the Prospectus, there is no tax deficiency
which has been or, to the Company's knowledge, might be asserted or
threatened against the Company or any of its Subsidiaries that would
result in a Material Adverse Effect;
(xxii) the Company has not taken nor will it take, directly or
indirectly, any action designed to, or that might be reasonably
expected to,
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cause or result in stabilization or manipulation of the price of the
Common Shares;
(xxiii) the Company has not offered or sold any securities prior
to the filing of the Registration Statement that would be subject to
integration as defined by Rule 502 (a) under the Securities Act with
the offer or sale of the Shares;
(xxiv) (A) each employee benefit plan, within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), that is maintained, administered or contributed
to by the Company for employees or former employees of the Company and
its Subsidiaries has been maintained in compliance with its terms and
the requirements of any applicable statutes, orders, rules and
regulations, including but not limited to ERISA and the Internal
Revenue Code of 1986, as amended, ("CODE") except where the failure to
maintain such plans would not result in a Material Adverse Effect; (B)
no prohibited transaction, within the meaning of Section 406 of ERISA
or Section 4975 of the Code has occurred with respect to any such plan
excluding transactions effected pursuant to a statutory or
administrative exemption except where such occurrence would not result
in a Material Adverse Effect; (C) for each such plan which is subject
to the funding rules of Section 412 of the Code or Section 302 of
ERISA no "accumulated funding deficiency" as defined in Section 412 of
the Code has been incurred, whether or not waived, and the fair market
value of the assets of each such plan (excluding for these purposes
accrued but unpaid contributions) exceeded the present value of all
benefits accrued under such plan determined using reasonable actuarial
assumptions except where such incurrence or failure to maintain such
asset value, as the case may be, would not result in a Material
Adverse Effect; (D) neither the Company nor any of its affiliates is a
"service provider" or "fiduciary", as those terms are used for
purposes of Title I of ERISA, with respect to any employee benefit
plan subject to Title I of ERISA; and (E) no employee benefit plan
maintained or sponsored by the Company or any of its affiliates will
acquire or hold any of the Shares;
(xxv) prior to the Closing Date the Shares to be issued and sold
by the Company will be approved for listing on the New York Stock
Exchange subject to official notice of issuance, and the Shares will
be conditionally approved for listing on the Toronto Stock Exchange,
which Exchange shall have also accepted for filing notice of the
issuance of the Shares;
(xxvi) there are no stamp or other issuance or transfer taxes or
duties, no capital gains, income, withholding or other taxes, and no
other
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similar fees or charges under U.S. federal law or the laws of any
state, or any political subdivision or taxing authority thereof, or
Canadian federal law, or the laws of any province, or any political
subdivision or taxing authority thereof, required to be paid in
connection with the execution and delivery of this Agreement or the
issuance by the Company or sale by the Company of the Shares to be sold
by it; and
(xxvii) the Company, or any person acting on behalf of the Company,
has not and not, directly or indirectly, offer, sell or deliver the
Shares (x) in violation of the conditional listing conditions and other
requirements as contained in a letter dated April 22, 2002 from the
Toronto Stock Exchange conditionally approving the listing of the
Shares or (y) in Canada or to persons who are residents of Canada or
acting on the behalf of residents of Canada or to any person whom it
believes intends to reoffer, resell or deliver the Shares in Canada or
to any persons who are residents of Canada or acting on the behalf of
residents of Canada, or otherwise has solicited or will solicit such
persons or has done or will do any act in furtherance of the foregoing.
Without limiting the generality of the foregoing, other than filings
made with Canadian securities regulatory authorities, the Company, or
any person acting on behalf of the Company, has not and will not
publish, advertise or otherwise make any announcements in Canada
concerning the distribution of the Shares, and has not and will not
conduct road shows, seminars or similar activities in Canada relating
to the distribution of the Shares nor has it taken or will it take any
other action for the purpose of, or that could reasonably be expected
to have the effect of, preparing the market in Canada, or creating a
demand in Canada, for the Shares; provided that the foregoing
representations and warranties do not apply to actions by the
Underwriters or any person acting on their behalf.
3. PURCHASE OF THE SHARES BY THE UNDERWRITERS.
(a) On the basis of the representations and warranties and subject to
the terms and conditions herein set forth, the Company hereby agrees to issue
and sell the Underwritten Shares to the several Underwriters and each of the
Underwriters agrees to purchase from the Company the respective aggregate number
of Underwritten Shares set forth opposite its name in Schedule I. The price at
which such Underwritten Shares shall be sold by the Company and purchased by the
several Underwriters shall be $ per share, the "PURCHASE PRICE." In making this
Agreement, each Underwriter is contracting severally and not jointly; except as
provided in Sections 1(a) and 1(c), the agreement of each Underwriter is to
purchase only the respective number of shares of the Underwritten Shares
specified in Schedule I.
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(b) If for any reason one or more of the Underwriters shall fail or
refuse (otherwise than for a reason sufficient to justify the termination of
this Agreement under the provisions of Section 8 or 9 hereof) to purchase and
pay for the number of Shares agreed to be purchased by such Underwriter or
Underwriters, the non-defaulting Underwriters shall have the right within 24
hours after such default to purchase, or procure one or more other Underwriters
to purchase, in such proportions as may be agreed upon between you and such
purchasing Underwriter or Underwriters and upon the terms herein set forth, all
or any part of the Shares which such defaulting Underwriter or Underwriters
agreed to purchase. If the non-defaulting Underwriters fail to make such
arrangements with respect to all such shares and portion, the number of the
Shares which each non-defaulting Underwriter is otherwise obligated to purchase
under this Agreement shall be automatically increased on a pro rata basis to
absorb the remaining shares and portion which the defaulting Underwriter or
Underwriters agreed to purchase; provided, however, that the non-defaulting
Underwriters shall not be obligated to purchase the shares and portion which the
defaulting Underwriter or Underwriters agreed to purchase if the aggregate
number of such Shares exceeds 10% of the total number of Shares which all
Underwriters agreed to purchase hereunder. If the total number of Shares which
the defaulting Underwriter or Underwriters agreed to purchase shall not be
purchased or absorbed in accordance with the two preceding sentences, the
Company shall have the right, within 24 hours next succeeding the 24-hour period
above referred to, to make arrangements with other underwriters or purchasers
satisfactory to you for purchase of such shares and portion on the terms herein
set forth. In any such case, either you or the Company shall have the right to
postpone the Closing Date determined as provided in Section 5 hereof for not
more than seven business days after the date originally fixed as the Closing
Date pursuant to said Section 5 in order that any necessary changes in the
Registration Statement, the Prospectus or any other documents or arrangements
may be made. If neither the non-defaulting Underwriters nor the Company shall
make arrangements within the 24-hour periods stated above for the purchase of
all the Shares which the defaulting Underwriter or Underwriters agreed to
purchase hereunder, this Agreement shall be terminated without further act or
deed and without any liability on the part of the Company to any non-defaulting
Underwriter and without any liability on the part of any non-defaulting
Underwriter to the Company. Nothing in this paragraph (b), and no action taken
hereunder, shall relieve any defaulting Underwriter from liability in respect of
any default of such Underwriter under this Agreement.
(c) On the basis of the representations, warranties and covenants
herein contained, and subject to the terms and conditions herein set forth, the
Company grants an option to the several Underwriters to purchase, severally and
not jointly, up to 750,000 Option Shares at the Purchase Price. Said option may
be exercised only to cover over-allotments (if any) in the sale of the
Underwritten Shares by the Underwriters and may be exercised in whole or in part
at any time
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(but not more than once) on or before the thirtieth day after the date of this
Agreement upon written notice by you to the Company setting forth the aggregate
number of Option Shares as to which the several Underwriters are exercising the
option, the date and time when the Option is being exercised, and the date and
time when the Option Shares are to be delivered and paid for, which date shall
not be earlier than the Closing Date nor later than the tenth full Business Day
after the date of such notice. Delivery of certificates for Option Shares, and
payment therefor, shall be made as provided in Section 5 hereof. The number of
Option Shares to be purchased by each Underwriter shall be the same percentage
of the total number of Option Shares to be purchased by the several Underwriters
as such Underwriter is purchasing of the Underwritten Shares, as adjusted by you
in such manner as you deem advisable to avoid fractional shares.
4. OFFERING BY UNDERWRITERS.
The terms of the public offering by the Underwriters of the Shares to
be purchased by them shall be as set forth in the Prospectus, as soon after the
Registration Statement has become effective and the parties hereto have executed
and delivered this Agreement, as in the judgment of the Representatives is
advisable. The Underwriters may from time to time change the public offering
price after the closing of the public offering and increase or decrease the
concessions and discounts to dealers as they may determine.
Each Underwriter represents, warrants and covenants that, until the
initial distribution of the Shares has been completed, such Underwriter has not
and will not, directly or indirectly, offer, sell or deliver the Shares (a) in
violation of the conditional listing conditions and other requirements as
contained in a letter dated April 22, 2002 from the Toronto Stock Exchange
conditionally approving the listing of the Shares or (b) in Canada or to persons
who are residents of Canada or acting on the behalf of residents of Canada or to
any person whom it believes intends to reoffer, resell or deliver the Shares in
Canada or to any persons who are residents of Canada or acting on the behalf of
residents of Canada or otherwise has solicited or will solicit such persons or
done any act in furtherance of the foregoing. Each Underwriter acknowledges that
the Shares have not been and will not be qualified for sale under the securities
laws of Canada or any province or territory of Canada and may not be offered or
sold, directly or indirectly, in Canada, or to or for the benefit of any
resident of Canada, even in circumstances where a private placement exemption
from the prospectus requirements of Canadian securities laws is otherwise
available. Without limiting the generality of the foregoing, such Underwriter
has not and will not publish, advertise or otherwise make any announcements in
Canada concerning the distribution of the Shares, and has not and will not
conduct road shows, seminars or similar activities in Canada relating to the
distribution of the Shares nor has it taken or will take any other action for
the purpose of, or that could reasonably be expected to have the effect of,
preparing the market in Canada, or creating a demand in Canada, for
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the Shares. Each of the Underwriters represents, warrants and covenants with the
Company that it has caused or will cause every dealer or broker, whether a
member of a banking or selling group or otherwise, to which any of the Shares
are offered for sale or sold, to represent and agree that it will abide by the
restrictions in this Section 4.
On the Closing Date and on any later date on which Option Shares are
purchased, the Underwriters shall deliver to the Company a certificate, dated
the Closing Date or such later date, as the case may be, stating that the
Underwriters have not, to the best of their knowledge, sold any Underwritten
Shares or Option Shares, as the case may be, to any purchaser who is a resident
of Canada or who is acting on behalf of any resident of Canada, or who has a
current intention to reoffer, resell or deliver the Underwritten Shares or
Option Shares, as the case may be, to a resident of Canada or a person acting on
behalf of a resident of Canada.
5. DELIVERY OF AND PAYMENT FOR THE SHARES.
(a) Delivery of certificates for the Underwritten Shares and the
Option Shares (if the option granted by Section 3(c) hereof shall have been
exercised not later than 10:00 a.m., New York City time, on the date two
business days preceding the Closing Date), and payment therefor, shall be made
at the office of Davis Polk & Wardwell at 10:00 a.m., New York City time, on the
third business day after the date of this Agreement, or at such time on such
other day, not later than seven full business days after such fourth business
day, as shall be agreed upon in writing by the Company and you. The date and
hour of such delivery and payment (which may be postponed as provided in Section
3(b) hereof) are herein called the "CLOSING DATE."
(b) If the option granted by Section 3(c) hereof is exercised after
10:00 a.m. New York City time, on the date two business days preceding the
Closing Date, delivery of certificates for the shares of Option Shares, and
payment therefor, shall be made at the office of Davis Polk & Wardwell at 10:00
a.m. on the date specified in the notice described in Section 3(c) hereof or at
such time on the same or on such other date, as shall be designated in writing
by you. The date and hour of such delivery and payment are herein referred to as
the "OPTION CLOSING DATE."
(c) Payment for the Shares purchased from the Company shall be made
to the Company in Federal or other funds immediately available in New York City.
Such payment shall be made upon delivery of certificates for the Shares to you
for the respective accounts of the several Underwriters against receipt therefor
signed by you. Certificates for the Shares to be delivered to you shall be
registered in such name or names and shall be in such denominations as you may
request at least two business days before the Closing Date, in the case of
13
Underwritten Shares, and at least two business days prior to the Option Closing
Date, in the case of the Option Shares with any transfer taxes payable in
connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor. Such certificates will be made
available to the Underwriters for inspection, checking and packaging on the
business day prior to the Closing Date or the Option Closing Date, as the case
may be.
6. FURTHER AGREEMENTS OF THE COMPANY. The Company covenants and
agrees as follows:
(a) The Company will (i) prepare and timely file with the Commission
under Rule 424(b) a Prospectus containing information previously omitted at the
time of effectiveness of the Registration Statement in reliance on Rule 430A and
(ii) not file any pre-effective or post-effective amendment to the Registration
Statement or supplement to the Prospectus of which you shall not previously have
been advised and furnished with a copy or to which you shall have reasonably
objected in writing or which is not in compliance with the Securities Act or the
rules and regulations of the Commission.
(b) The Company will advise the Representatives promptly, (i) when any
amendment to the Registration Statement has been filed or becomes effective,
(ii) when any supplement to the Prospectus or any amended Prospectus has been
filed and to furnish the Representatives with copies thereof, (iii) of any
request by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for any additional information,
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus or the Prospectus or the
initiation or threatening of any proceeding for that purpose, and (v) of the
receipt by the Company of any notification with respect to any suspension of the
qualification of the Shares for offer and sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; and to use
commercially reasonable efforts to prevent the issuance of any such stop order,
or of any order preventing or suspending the use of any preliminary prospectus
or the Prospectus, or of any order suspending any such qualification of the
Shares, or notification of any such order thereof and, if issued, to obtain as
soon as possible the withdrawal thereof.
(c) The Company will (i) on or before the Closing Date, deliver to
you five copies of the Registration Statement as originally filed and of each
amendment thereto filed prior to and including the time the Registration
Statement becomes effective and, promptly upon the filing thereof, a copy of
each post-effective amendment, if any, to the Registration Statement (together
with, in each case, all exhibits thereto unless previously furnished to you),
(ii) as promptly as possible deliver to you and send to the several
Underwriters, at such office or
14
offices as you may designate, as many copies of the Prospectus as you may
reasonably request, and (iii) thereafter from time to time during the period in
which a prospectus is required by law to be delivered by an Underwriter or
dealer, likewise send to the Underwriters as many additional copies of the
Prospectus and as many copies of any supplement to the Prospectus and of any
amended prospectus, filed by the Company with the Commission, as you may
reasonably request for the purposes contemplated by the Securities Act.
(d) If, at any time during the period in which a prospectus is
required by law to be delivered by an Underwriter or dealer, any event relating
to or affecting the Company, or of which the Company shall be advised in writing
by you, shall occur as a result of which it is necessary, in the opinion of
counsel for the Company or of counsel for the Underwriters, to supplement or
amend the Prospectus in order to make the Prospectus not misleading in the light
of the circumstances existing at the time it is delivered to a purchaser of the
Shares, the Company will forthwith prepare and file with the Commission a
supplement to the Prospectus or an amended prospectus so that the Prospectus as
so supplemented or amended will not contain 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 existing at the time such
Prospectus is delivered to such purchaser, not misleading. The Company
authorizes the Underwriters and all dealers to whom any of the Shares may be
sold by the several Underwriters to use the Prospectus, as from time to time
amended or supplemented, in connection with the sale of the Shares for so long
as required by the Securities Act and in accordance with the applicable
provisions of the Securities Act and the applicable rules and regulations
thereunder, for such period; provided that if any Underwriter or dealer is
required to deliver a prospectus in connection with the sale of the Shares at
any time nine months or more after the date of the Prospectus, such supplements,
amendments, filing and delivery shall be at the expense of such Underwriter or
dealer.
(e) The Company will cooperate, when and as requested by you, in the
qualification of the Shares for offer and sale under the securities or blue sky
laws of such jurisdictions as you may designate and, during the period in which
a prospectus is required by law to be delivered by an Underwriter or dealer, in
keeping such qualifications in good standing under said securities or blue sky
laws; provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign corporation in
any jurisdiction in which it is not so qualified or where it would be subject to
taxation as a foreign corporation. The Company will, from time to time, prepare
and file such statements, reports, and other documents as are or may be required
to continue such qualifications in effect for so long a period as you may
reasonably request for distribution of the Shares.
15
(f) The Company agrees to make generally available to its security
holders and the Representatives as soon as practicable, an earnings statement
that satisfies the provisions of Section 11(a) of the Securities Act and Rule
158 of the Commission promulgated thereunder covering a period of at least
twelve months beginning with the first fiscal quarter of the Company occurring
after the "effective date" (as defined in Rule 158) of the Registration
Statement.
(g) The Company agrees to pay all costs and expenses incident to the
performance of its obligations under this Agreement, whether or not the
transactions contemplated in this Agreement are consummated or this Agreement is
terminated, including all costs and expenses incident to (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the preparation, printing and filing with the
Commission of the Registration Statement, any preliminary prospectus and the
Prospectus, including all printing costs associated therewith, (ii) the
furnishing to the Underwriters of copies of any preliminary prospectus and of
the several documents required by Section 6(c) to be so furnished, (iii) the
preparation, printing and filing of all supplements and amendments to the
Prospectus referred to in Section6(d), (iv)the listing of the Shares on the New
York Stock Exchange, (v) the making generally available to you of the reports
and information referred to in Section6(f), (vi) the transfer and delivery of
the Shares to the Underwriters, including any transfer or other taxes payable
thereon and the printing and issuance of share certificates, including any fees
of any transfer agent, registrar or depositary, (vii) the investor presentations
on any "road show" undertaken in connection with the marketing of the offering
of the Shares, including without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the
cost of any aircraft chartered in connection with the road show and (viii) 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 6.
Except as set forth in Sections 6(g) and 6(h), the underwriters pay all of their
own fees and expenses, including counsel fees and disbursements (excluding those
set forth in Section 6(h)).
(h) The Company agrees to reimburse you, for the account of the
several Underwriters, for blue sky fees and related disbursements (including
reasonable counsel fees and disbursements) paid by or for the account of the
Underwriters or their counsel in qualifying the Shares under state securities or
blue sky laws and in the review and qualification of the offering by the
National Association of Securities Dealers, Inc. (the "NASD").
(i) The Company hereby agrees that, without the prior written
consent of J.P. Morgan Securities Inc. on behalf of the Underwriters, the
Company will
16
not, (i) for a period of 180 days from the effective date of the Registration
Statement, directly or indirectly, offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase or otherwise transfer or dispose
of any Common Shares or any securities convertible into or exchangeable for
Common Shares or (ii) enter into any swap or other agreement that transfers all
or a portion of the economic consequences associated with the ownership of the
Common Shares or such other securities whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Shares or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the sale of any Common Shares to the Underwriters pursuant to the
Underwriting Agreement, (B) the issuance by the Company of Common Shares upon
the exercise of an option, a warrant or an award or the conversion of a security
outstanding on the date of the Prospectus of which the Underwriters have been
advised in writing, (C) the issuance by the Company of any option, restricted
share units, restricted shares, awards or Common Shares pursuant to the
Company's executive share purchase plan, the employee share purchase plan, the
equity incentive plan, 401(k) plans and the stock option plan, provided that any
Common Shares that may be issued under such plans are subject to the
restrictions set forth in clause (i) and (ii), and (D) the issuance by the
Company of Common Shares or other securities in connection with the acquisition
of any business, facilities or other assets, including the issuance of Common
Shares or other securities in connection with employment arrangements relating
to any such acquisition, provided that the Common Shares issued in connection
with any acquisition shall be subject to the restrictions set forth in clause
(i) and (ii).
(j) The Company agrees to use its best efforts to cause all
directors, officers, and the holders of Common Shares listed on Schedule II
hereto to (ii) agree that, without the prior written consent of J.P. Morgan
Securities Inc. on behalf of the Underwriters, such person or entity will not,
(A) for a period of 180 days from the effective date of the Registration
Statement, directly or indirectly, offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase or otherwise transfer or dispose
of any Common Shares or any securities convertible into or exchangeable for
Common Shares or (B) enter into any swap or other agreement that transfers all
or a portion of the economic consequences associated with the ownership of the
Common Shares or such other securities whether any such transaction described
above is to be settled by delivery of Common Shares or such other securities, in
cash or otherwise and (ii) agree to waive any rights held by such person or
entity to sell shares of Common Shares or any other security issued by the
Company pursuant to the Registration Statement and any rights to require the
Company to register under the Securities Act such Common Shares or other
securities issued by the Company and beneficially owned by them for a period of
180 days from the effective date of the
17
Registration Statement. The foregoing sentence shall not apply to (A)
acquisitions by any person other than the Company of Common Shares or other
securities acquired in open market transactions after completion of this
offering, (B) the pledge of Common Shares by an employee as security for
indebtedness incurred in connection with financing the purchase of such Common
Shares and any refinancings thereof, (C) transactions by directors, officers and
other employees of the Company relating to contributions of Common Shares to
registered retirement savings plans, and (D) in the case of Fairfax, its
affiliates and permitted assigns, the transfer of Common Shares among Fairfax,
its affiliates and permitted assigns, provided that each of such persons agrees
to the foregoing restrictions.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person (including each partner or officer thereof) who
controls any Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act from and against any and all losses, claims,
damages or liabilities, joint or several, to which such indemnified parties or
any of them may become subject under the Securities Act, the Exchange Act, or
the common law or otherwise, and the Company agrees to reimburse each such
Underwriter and controlling person for any reasonable legal or other expenses
(including, except as otherwise hereinafter provided, the reasonable legal fees
and other expenses incurred in connection with any suit, action or proceeding or
any claim asserted) incurred by the respective indemnified parties in connection
with defending against any such losses, claims, damages or liabilities or in
connection with any investigation or inquiry of, or other proceeding which may
be brought against, the respective indemnified parties, in each case arising out
of or based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (including the Prospectus
as part thereof and any Rule 462(b) registration statement) or any
post-effective amendment thereto (including any Rule 462(b) registration
statement), or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, or (ii)
any untrue statement or alleged untrue statement of a material fact contained in
any preliminary prospectus or the Prospectus (as amended or as supplemented if
the Company shall have filed with the Commission any amendment thereof or
supplement thereto) or the omission or alleged omission to state therein a
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 the indemnity agreements of the Company contained in this paragraph (a)
shall not apply to any such losses, claims, damages, liabilities or expenses if
such statement or omission was made in reliance upon and in conformity with
information furnished as herein stated or otherwise furnished in writing to the
Company by or on behalf of any Underwriter
18
expressly for use in any preliminary prospectus or the Registration Statement or
the Prospectus or any such amendment thereof or supplement thereto; provided
further, that with respect to any preliminary prospectus, the foregoing
indemnity agreement shall not inure to the benefit of any Underwriter from whom
the person asserting any loss, claim, damage, liability or expense purchased
Shares, or any person controlling such Underwriter, if copies of the Prospectus
were timely delivered to the Underwriter pursuant to Section 6 and a copy of the
Prospectus (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) was not sent or given by or on behalf of
such Underwriter to such person, if required by law so to have been delivered,
at or prior to the written confirmation of the sale of the Shares to such
person, and if such Prospectus (as so amended or supplemented) would have cured
the defect giving rise to such loss, claim, damage, liability or expense. The
indemnity agreements of the Company contained in this paragraph (a) and the
representations and warranties of the Company contained in Section 2 hereof
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified party and shall survive
the delivery of and payment for the Shares.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, the officers of the Company who sign the
Registration Statement, each of the directors of the Company, and each person
(including each partner or officer thereof) who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages or liabilities, joint or
several, to which such indemnified parties or any of them may become subject
under the Securities Act, the Exchange Act, or the common law or otherwise and
to reimburse each of them for any reasonable legal or other expenses (including,
except as otherwise hereinafter provided, the reasonable legal fees and other
expenses incurred in connection with any suit, action or proceeding or any claim
asserted) incurred by the respective indemnified parties in connection with
defending against any such losses, claims, damages or liabilities or in
connection with any investigation or inquiry of, or other proceeding which may
be brought against, the respective indemnified parties, in each case arising out
of or based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (including the Prospectus
as part thereof and any Rule 462(b) registration statement) or any
post-effective amendment thereto (including any Rule 462(b) registration
statement), or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the Prospectus (as
amended or as supplemented if the Company shall have filed with the Commission
any amendment thereof or supplement thereto) or the omission or alleged omission
to state therein a material
19
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, but only with
reference to information relating to such Underwriter furnished to the Company
in writing by or on behalf of such Underwriter expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto. The indemnity agreements of the Underwriters
contained in this paragraph (b) and the representations and warranties of the
Underwriters contained in this Agreement shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
indemnified party and shall survive the delivery of and payment for the shares.
(c) Each party indemnified under the provision of Sections 7(a) and
7(b) agrees that, upon the service of a summons or other initial legal process
upon it in any action or suit instituted against it or upon its receipt of
written notification of the commencement of any investigation or inquiry of, or
proceeding against, it in respect of which indemnity may be sought on account of
any indemnity agreement contained in such paragraphs, such person (the
"INDEMNIFIED PARTY") will promptly give written notice (the "NOTICE ") of such
service or notification to the party or parties from whom indemnification may be
sought hereunder (the "INDEMNIFYING PARTY"). No indemnification provided for in
such paragraphs shall be available to any party who shall fail to so give the
Notice if the party to whom such Notice was not given was unaware of the action,
suit, investigation, inquiry or proceeding to which the Notice would have
related and was prejudiced by the failure to give the Notice, but the omission
to so notify such Indemnifying Party or parties of any such service or
notification shall not relieve such Indemnifying Party or parties from any
liability which it or they may have to the Indemnified Party for contribution or
otherwise than on account of such indemnity agreement. Any Indemnifying Party
shall be entitled at its own expense to participate in the defense of any
action, suit or proceeding against, or investigation or inquiry of, an
Indemnified Party. Any Indemnifying Party shall be entitled, if it so elects
within a reasonable time after receipt of the Notice by giving written notice
(herein called the "NOTICE OF DEFENSE") to the Indemnified Party, to assume
(alone or in conjunction with any other Indemnifying Party or parties) the
entire defense of such action, suit, investigation, inquiry or proceeding, in
which event such defense shall be conducted, at the expense of the Indemnifying
Party or parties, by counsel chosen by such Indemnifying Party or parties and
reasonably satisfactory to the Indemnified Party or parties; provided, however,
that (i) if the Indemnified Party or parties reasonably determine that there may
be a conflict between the positions of the Indemnifying Party or parties and of
the Indemnified Party or parties in conducting the defense of such action, suit,
investigation, inquiry or proceeding or that there may be legal defenses
available to such Indemnified Party or parties different from or in addition to
those available to the Indemnifying Party or parties, then counsel for the
Indemnified Party or parties shall be entitled to conduct the defense to the
extent
20
reasonably determined by such counsel to be necessary to protect the interests
of the Indemnified Party or parties and (ii) in any event, the Indemnified Party
or parties shall be entitled to have counsel chosen by such Indemnified Party or
parties participate in, but not conduct, the defense and, provided further, that
it is understood that the Indemnifying Party shall not, in respect of the legal
expenses of any Indemnified Party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel). If, within a
reasonable time after receipt of the Notice, an Indemnifying Party gives a
Notice of Defense and the counsel chosen by the Indemnifying Party or parties is
reasonably satisfactory to the Indemnified Party or parties, the Indemnifying
Party or parties will not be liable under paragraphs (a) through (b) of this
Section 7 for any legal or other expenses subsequently incurred by the
Indemnified Party or parties in connection with the defense of the action, suit,
investigation, inquiry or proceeding, except that (A) the Indemnifying Party or
parties shall bear the legal and other expenses incurred in connection with the
conduct of the defense as referred to in clause (i) of the proviso to the
preceding sentence and (B) the Indemnifying Party or parties shall bear such
other expenses as it or they have authorized to be incurred by the Indemnified
Party or parties. If, within a reasonable time after receipt of the Notice, no
Notice of Defense has been given, the Indemnifying Party or parties shall be
responsible for any legal or other expenses incurred by the Indemnified Party or
parties in connection with the defense of the action, suit, investigation,
inquiry or proceeding.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an Indemnified Party under Sections
7(a) or 7(b), 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 the losses, claims, damages or liabilities
referred to in Sections 7(a) or 7(b), (i) in such proportion as is appropriate
to reflect the relative benefits received by each Indemnifying Party from the
offering of the Shares or (ii) if the allocation provided by clause (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 (i) above but also the
relative fault of each Indemnifying Party in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, or
actions in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Underwriters shall be deemed to be in the same respective proportions as the
total net proceeds from the offering of the Shares received by the Company and
the total underwriting commissions received by the Underwriters, as set forth in
the table on the cover page of the Prospectus, bear to the aggregate public
offering price of the Shares. Relative fault 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
21
supplied by each Indemnifying Party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this Section 7 were to be 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 into account
the equitable considerations referred to in the first sentence of this Section
7. The amount paid by an Indemnified Party as a result of the losses, claims,
damages or liabilities, or actions in respect thereof, referred to in the first
sentence of this Section 7 shall be deemed to include any legal or other
expenses reasonably incurred by such Indemnified Party in connection with
investigation, preparing to defend or defending against any action or claim
which is the subject of this Section 7. Notwithstanding the provisions of this
Section 7, no Underwriter shall be required to contribute any amount in excess
of the underwriting commissions applicable to the Shares purchased by such
Underwriter. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this Section 7 to contribute
are several in proportion to their respective underwriting obligations and not
joint.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect of which contribution may be sought, it will promptly give written
notice of such service to the party or parties from whom contribution may be
sought, but the omission so to notify such party or parties of any such service
shall not relieve the party from whom contribution may be sought from any
obligation it may have hereunder or otherwise (except as specifically provided
in Section 7(d) of this Section 7).
(e) An Indemnified Party or parties will not, without the prior
written consent of the Indemnifying Party or parties, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action,
suit or proceeding in respect of which indemnification may be sought hereunder
(whether or not the Indemnifying Party or parties or any person who controls the
Indemnifying Party or parties within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act is a party to such claim, action, suit or
proceeding) unless such settlement, compromise or consent includes an
unconditional release of the Indemnifying Party or parties and each such
controlling person from all liability arising out of such claim, action, suit or
proceeding.
8. TERMINATION. This Agreement may be terminated by you at any time
prior to the Closing Date by giving written notice to the Company if after the
22
date of this Agreement, trading in the Common Shares shall have been suspended,
or if there shall have occurred (i) an escalation of hostilities by the United
States or the declaration of war or a national emergency by the United States on
or after the date hereof, (ii) any escalation of hostilities or other national
or international calamity or crisis or change in economic or political
conditions if the effect of such escalation, calamity, crisis or change in
economic or political conditions in the financial markets of the United States,
in the Representatives' judgment, is material and adverse and would make the
offering or delivery of the Shares impracticable, (iii) trading generally shall
have been suspended or materially limited on the New York Stock Exchange, the
American Stock Exchange, The Nasdaq National Market, or the Toronto Stock
Exchange or limitations on prices (other than limitations on hours or numbers of
days of trading) for securities on such exchanges, (iv) the enactment,
publication, decree or other promulgation of any federal or state statute,
regulation, rule or order of, any court, legislative body, agency or other
governmental authority which in the Representatives' judgment materially and
adversely affects the business or operations of the Company, or (v) declaration
of a banking moratorium by either federal or New York State authorities. If this
Agreement shall be terminated pursuant to this Section 8, there shall be no
liability of the Company to the Underwriters and no liability of the
Underwriters to the Company.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS . The obligations of the
several Underwriters to purchase and pay for the Shares shall be subject to the
performance by the Company of all of the Company's obligations to be performed
hereunder at or prior to the Closing Date or to the Option Closing Date, as the
case may be, and to the following further conditions:
(a) The Registration Statement shall have become effective no later
than 4:00 p.m., New York City time, on the date hereof; no stop order suspending
the effectiveness thereof shall have been issued and no proceedings therefor
shall be pending or threatened by the Commission; the Prospectus shall have been
filed with the Commission pursuant to Rule 424(b) within the applicable time
period prescribed for such filing by the rules and regulations under the
Securities Act and in accordance with Section 6(a)(i) hereof; and all requests
of the Commission for inclusion of additional information in the Registration
Statement shall have been complied with to the satisfaction of the
Representatives.
(b) You shall have received from W. Kirk James, General Counsel of the
Company, Torys LLP, Ontario counsel for the Company, Hope Heinrich, British
Columbia counsel for the Company, Shearman & Sterling LLP, New York counsel for
the Company and , Illinois counsel for the Company their written
opinions, addressed to the Underwriters and dated the Closing Date, covering the
matters set forth in Annexes A, B, C, D and E attached hereto.
23
(c) The representations and warranties of the Company contained
herein are true and correct on and as of the Closing Date or the Option Closing
Date, as the case may be;
(d) Subsequent to the execution and delivery of this Agreement, (i) no
downgrading shall have occurred in the rating accorded any securities of the
Company or any of its subsidiaries by any "nationally recognized statistical
rating organization", as such term is defined by the Commission for purposes of
Rule 436(g)(2) under the Securities Act and (ii) no such organization shall have
publicly announced that it has its rating of any securities of the Company or
any of its Subsidiaries under surveillance or review with possible negative
implications.
(e) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have occurred any Material Adverse
Change, or any development involving a prospective Material Adverse Change.
(f) You shall have received on the Closing Date and on any later date
on which Option Shares are purchased a certificate, dated the Closing Date or
such Option Closing Date, as the case may be, and signed by two senior executive
officers of the Company, stating on behalf of the Company and not in a personal
capacity, that the respective signers of said certificate have carefully
examined the Registration Statement in the form in which it originally became
effective and the Prospectus contained therein and any supplements or amendments
thereto, and that the statements included in Sections 9(c), 9(d) and 9(e) are
true and correct and that the Company has complied with all of the agreements
and satisfied all of the conditions on its part to be performed or satisfied
hereunder on or before the Closing Date or the Option Closing Date, as the case
may be.
(g) The Underwriters shall have received, on each of the date hereof,
the Closing Date and the Option Closing Date, a letter dated the date hereof, or
the Closing Date or the Option Closing Date, as the case may be, in form and
substance satisfactory to the Underwriters, from PricewaterhouseCoopers LLP
confirming that they are independent public accountants with respect to the
Company within the meaning of the Securities Act and the applicable published
rules and regulations thereunder and containing statements and information of
the type ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial information
contained or incorporated by reference in the Registration Statement and the
Prospectus; provided that the letter delivered on the Closing Date or the Option
Closing Date, as the case may be, shall use a "cut-off date" not earlier than
three business days prior to the Closing Date or the Option Closing Date, as the
case may be.
(h) Prior to the Closing Date, the Shares to be issued and sold by
the Company shall have been duly approved for listing by the New York Stock
24
Exchange subject to official notice of issuance, and the Shares shall have been
conditionally approved for listing on The Toronto Stock Exchange, which Exchange
shall have also accepted for filing notice of the issuance of the Shares.
(i) On or prior to the Closing Date, you shall have received from all
directors, officers, and holders of Common Shares listed on Schedule II hereto,
the lock-up agreements referred to in Section 6(j) hereof.
(j) The Underwriters shall have received on the Closing Date an
opinion of Davis Polk & Wardwell, counsel for the Underwriters, dated the
Closing Date, covering those matters reasonably requested by the
Representatives, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters.
The several obligations of the Underwriters to purchase Option 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 the Option Shares
to be sold on such Option Closing Date and other matters related to the issuance
of such Option Shares.
The opinions of Torys LLP, Hope Heinrich, Shearman & Sterling LLP
and , respectively, referred to in Section 9(b) shall be rendered
to the Underwriters at the request of the Company, as the case may be, and shall
so state therein.
In case any of the conditions specified in this Section 9 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company, provided,
however, that (i) in the event of such termination, the Company agrees to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance of the obligations of the Company under this Agreement,
including all costs and expenses referred to in Sections 6(g) and 6(h) hereof,
and (ii) if this Agreement is terminated by you because of any refusal,
inability or failure on the part of the Company to perform any agreement herein,
to fulfill any of the conditions herein, or to comply with any provision hereof,
such that the conditions of this Section 9 are not met, other than by reason of
a default by any of the Underwriters, the Company will reimburse the
Underwriters severally upon demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the transactions contemplated hereby.
25
10. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure
to the benefit of the Company and the several Underwriters and, with respect to
the provisions of Section 7 hereof, the several parties (in addition to the
Company and the several Underwriters) indemnified under the provisions of said
Section 7, and their respective personal representatives, successors and
assigns. Nothing in this Agreement is intended or shall be construed to give to
any other person, firm or corporation any legal or equitable remedy or claim
under or in respect of this Agreement or any provision herein contained. The
term "successors and assigns" as herein used shall not include any purchaser, as
such purchaser, of any of the Shares from any of the several Underwriters.
11. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by fax and if to the Underwriters, shall be
mailed, faxed or delivered to J.P. Morgan Securities Inc., 277 Park Avenue, New
York, NY 10172; Attention: Equity Capital Markets. Notices to the Company, shall
be mailed, faxed or delivered to it at its office, 55 East Jackson Boulevard,
Chicago, IL 60604, Attention: W. Kirk James, Esq.; with a copy to Shearman &
Sterling, 199 Bay Street, Commerce Court West, Suite 4405, Toronto, Ontario,
Canada, M5L 1E8, Attention: Brice T. Voran.
12. MISCELLANEOUS . The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof, by or on behalf of the
Company or its directors or officers, and (c) delivery and payment for the
Shares under this Agreement; provided, however, that if this Agreement is
terminated prior to the Closing Date, the provisions of Sections 6(i) and 6(j)
hereof shall be of no further force or effect.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York without giving effect to the conflicts of laws
provisions thereof.
13. SUBMISSION TO JURISDICTION. By the execution and delivery of this
Agreement, the Company (i) acknowledges that it has, by separate written
instrument, irrevocably designated and appointed Hub U.S. Holdings, Inc. (or any
successor) (together with any successor, the "AGENT FOR SERVICE"), as its
authorized agent upon which process may be served in any suit or proceeding
arising out of or relating to this Agreement or the Shares, that may be
instituted in any federal or state court in the City, County and State of New
York (each, a
26
"SPECIFIED COURT "), or brought under federal or state securities laws, and
acknowledges that the Agent for Service has accepted such designation, (ii)
submits to the non-exclusive jurisdiction of any such court in any such suit or
proceeding, and (iii) agrees that service of process upon the Agent for Service
(or any successor) and written notice of said service to the Company (mailed or
delivered to its General Counsel at its principal office in Chicago, Illinois)
shall be deemed in every respect effective service of process upon the Company
in any such suit or proceeding. The Company further agrees to take any and all
action, including the execution and filing of any and all such documents and
instruments, as may be necessary to continue such designation and appointment of
the Agent for Service in full force and effect so long as any of the Shares
shall be outstanding.
To the extent that the Company has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, it
hereby irrevocably waives such immunity in respect of its obligations under the
above-referenced documents, to the extent permitted by law.
27
Please sign and return the enclosed duplicates of this letter,
whereupon this letter will become a binding agreement among the Company and the
several Underwriters in accordance with its terms.
Very truly yours
HUB INTERNATIONAL LIMITED
By:
---------------------------
Name:
Title:
28
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
J.P. MORGAN SECURITIES INC.
Cochran, Caronia Securities LLC
Stephens Inc.
BMO Nesbitt Burns Corp.
Ferris, Baker Watts, Incorporated.
By J.P. Morgan Securities Inc.
By:
------------------------------------
Name:
Title:
Acting on behalf of the several Underwriters, including themselves, named in
Schedule I hereto.
29
SCHEDULE I
UNDERWRITERS
NUMBER OF
UNDERWRITTEN
SHARES TO BE
UNDERWRITERS PURCHASED
- -------------------------------------------------------- ------------
J.P. Morgan Securities Inc..............................
Cochran, Caronia Securities LLC.........................
Stephens Inc. ..........................................
BMO Nesbitt Burns Corp..................................
Ferris, Baker Watts, Incorporated.......................
Total...................................................
SCHEDULE II
LIST OF DIRECTORS, OFFICERS AND
SHAREHOLDERS TO SIGN LOCK-UP AGREEMENTS
Martin P. Hughes
Richard A. Gulliver
Bruce D. Guthart
R. Craig Burton
W. Kirk James
Dennis J. Pauls
Peter L. Scavetta
Jean Martin
Anthony F. Griffiths
Paul Murray
Bradley P. Martin
Fairfax Financial Holdings Limited Zurich
Insurance Company
SCHEDULE III
Barton Insurance Brokers Ltd.
Burnham Insurance Group, Inc.
C.J. McCarthy Insurance Agency, Inc.
Kaye Group Inc.
Mack and Parker, Inc.
The Hub Group (Ontario) Inc.
ANNEX A
MATTERS TO BE COVERED IN THE OPINION OF
W. KIRK JAMES
GENERAL COUNSEL OF THE COMPANY
(i) Each of C.J. McCarthy Insurance Agency Inc. and Burnham Insurance
Group, Inc. has been duly incorporated and is validly existing as a corporation
in good standing under the laws of the jurisdiction of its incorporation and
each of C.J. McCarthy Insurance Agency Inc., Burnham Insurance Group, Inc., and
Kaye Group Inc., is duly qualified as a foreign corporation or extra-provincial
corporation, as the case may be, for the transaction of business and in good
standing in each state of the United States of America in which its ownership or
leasing of property requires such qualification (except where the failure to be
so qualified would not have a Material Adverse Effect), and has full corporate
power and authority to own or lease its properties and conduct its business as
described in the Registration Statement;
(ii) all the issued and outstanding shares of the Company and all the
issued and outstanding capital stock of C.J. McCarthy Insurance Agency Inc.,
Burnham Insurance Group, Inc., Mack and Parker, Inc. and Kaye Group Inc.
(collectively the "SUBSIDIARIES") has been duly authorized and validly issued
and is fully paid and nonassessable, and is owned by the Company free and clear
of all liens, encumbrances and security interests, and to the best of such
counsel's knowledge, no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligations into shares of capital stock or ownership interests in the
Subsidiaries are outstanding;
(iii) there are no pending legal or governmental investigations,
actions suits or proceedings pending or threatened, which, in the opinion of
such counsel, are material to the Company and its subsidiaries taken as a whole,
other than those described or referred to therein or filed as exhibits thereto,
and the descriptions thereof or references thereto are correct in all material
respects;
(iv) the issue and sale by the Company of the Shares sold by the
Company as contemplated by the Underwriting Agreement and the performance by the
Company of its obligations under such Agreement and the consummation of the
transactions contemplated herein will not conflict with, or result in a breach
of, the articles or bylaws of the Subsidiaries or any agreement or instrument
known to such counsel to which the Company or the Subsidiaries is a party or any
applicable law or regulation of the Province of Ontario or the federal laws of
Canada, or so far as is known to such counsel, any order, writ, injunction or
decree, of any jurisdiction, court or governmental instrumentality (provided
that
A-1
such counsel need not express any opinion regarding compliance with securities
laws);
(v) to such counsel's knowledge, none of the Subsidiaries is in
violation or default of (x) any provision of its charter or bylaws, (y) the
terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other material agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its property
is subject, and that is material to the Company and the subsidiaries, taken as a
whole, or (z) to such counsel's knowledge, any statute, law, rule, regulation,
(other than the securities laws of the province of Ontario and the rules,
regulations, orders, notices and policies thereunder) judgment, order or decree
of any court, regulatory body, administrative agency, governmental body,
arbitration or other authority, including self-regulatory organizations, having
jurisdiction over the Company or such Subsidiaries or any of its properties, as
applicable but excluding the Ontario securities regulatory authorities;
(vi) the Company and the Subsidiaries have obtained such licenses,
permits, consents, approvals and other authorizations from, and have made all
declarations and filings with, all federal, state, local and other governmental
authorities (including foreign regulatory agencies but excluding the Ontario
securities regulatory authorities), all self-regulatory organizations or bodies,
and all courts and other tribunals, domestic or foreign, necessary to own or
lease, as the case may be, and to operate their respective properties and to
carry on their respective businesses as conducted as of the date hereof; the
Company and its Subsidiaries are in compliance with the terms and conditions of
all such licenses, permits, certificates, consent, orders, approvals and
authorizations, except where the failure so to comply would not, singly or in
the aggregate, have a material adverse effect on the business, properties,
financial condition or results of operations of the Company and its
Subsidiaries, taken as a whole; all such licenses, permits, certificates,
consents, orders approvals and authorizations are valid and in full force and
effect, except when the invalidity of such authorizations or the failure of such
licenses, permits, certificates, consents, orders, approvals and authorizations
to be in full force and effect would not, singly or in the aggregate, have a
material adverse effect on the business, properties, financial condition or
results of operations of the Company and its Subsidiaries, taken as a whole; and
neither the Company nor its Subsidiaries has received any actual notice of
proceedings relating to the revocation or modification of any such license,
permit, certificate, consent, order, approval or other authorization which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse effect on the business, properties,
financial condition or results of operations of the Company and its
Subsidiaries, taken as a whole;
A-2
(vii) the statements in the Prospectus under "Certain relationships
and related transactions," insofar as such statements constitute summaries of
the legal matters, documents or proceedings referred to therein, fairly present
in all material respects the information described therein with respect to such
legal matters, documents or proceedings; and
(viii) except as described in the Prospectus, to such counsel's
knowledge no person has the right to require the Company to register any
securities for offering and sale under the Securities Act by reason of the
filing of the Registration Statement with the Commission or the issue and sale
of the Shares to be sold by the Company hereunder.
A-3
ANNEX B
MATTERS TO BE COVERED IN THE
OPINION OF TORY'S LLP
ONTARIO COUNSEL OF THE COMPANY
1. The Company is incorporated and existing under the OBCA, with the
requisite corporate power and capacity to own and lease its property and assets
and to carry on its business, as described in the Prospectus.
2. Each of the Ontario Subsidiaries is incorporated and existing under
the OBCA, with the requisite corporate power and capacity to own and lease its
properties and carry on its business as described in the Prospectus.
3. The Company is a reporting issuer in the Province of Ontario and is
not on the list of defaulting issuers maintained by the OSC pursuant to
subsection 72(9) of the OSA.
4. The Company has authorized capital as set forth in the Prospectus
under the heading "DESCRIPTION OF SHARE CAPITAL" and as at ____, 2002 had issued
and outstanding share capital as set forth in the Prospectus under the heading
"Description of share capital"; the Shares have been duly authorized and, when
issued and delivered in accordance with the terms of the Underwriting Agreement
and upon the Company receiving payment of the purchase price for the Shares,
will be validly issued, fully paid and non-assessable; and the Shares are not
subject to preemptive rights or similar rights under the OBCA or pursuant to the
articles or bylaws of the Company.
5. No prospectus is required nor are other documents required to be
filed, proceedings taken or approvals, permits, consents, orders or
authorizations of the OSC obtained under the securities laws of Ontario to
permit the issue and sale of the Shares outside of Canada in accordance with the
Underwriting Agreement; no restrictive legend need be borne on any certificate
evidencing any Share issued and sold by the Company outside of Canada in
accordance with the Underwriting Agreement to permit the issue and sale of such
Shares without the requirement of filing a prospectus under the OSA; after this
issuance and sale by the Company, the Shares issued and sold outside of Canada
in accordance with the Underwriting Agreement will not be subject to a statutory
hold period under the OSA and the first trade of such Shares will not be a
distribution subject to the prospectus requirements under the OSA unless, at the
time of the trade, the trade is a "control person distribution" as defined in
OSC Rule 14-501.
B-1
6. The Underwriting Agreement has been duly authorized, and assuming
all steps necessary for its execution and delivery have been taken under the
laws of New York, executed and delivered by the Company.
7. The statements set forth in the Prospectus under the caption
"Description of share capital," insofar as they purport to constitute a summary
of the terms of the share capital of the Company provide a fair summary in all
material respects.
8. The statements act forth in the Prospectus under the heading
"Certain United States and Canadian federal income tax considerations B Certain
Canadian federal income tax considerations" provide a fair summary of the
principal Canadian federal income tax considerations applicable to prospective
purchasers of the Shares who are described under such heading.
9. The laws of the Province of Ontario and the federal laws of Canada
applicable therein permit an action to be brought before a court of competent
jurisdiction in the Province of Ontario (an "ONTARIO COURT") on a final and
conclusive judgment in personam of a court of the City of New York or a federal
court sitting in the City of New York (a "NEW YORK COURT ") that is not
impeachable as void or voidable or otherwise ineffective under New York law and
for a sum certain if: (A) the New York Court rendering such judgment had
jurisdiction over the judgment debtor, as recognized by an Ontario Court; (B)
such judgment was not obtained by fraud or in a manner contrary to natural
justice or other rule of law, whether equitable, legal or statutory, and the
enforcement thereof would not be inconsistent with public policy, as such term
is understood under the laws of the Province of Ontario and the federal laws of
Canada applicable therein or contrary to any order made by the Attorney General
of Canada under the Foreign Extraterritorial Measures Act (Canada) or by the
Competition Tribunal under the Competition Act (Canada); (C) the enforcement of
such judgment does not constitute, directly or indirectly, the enforcement of
foreign revenue, expropriatory or penal laws; and (D) the action to enforce such
judgment is commenced within the applicable limitation period.
10. In an action on a final, conclusive and subsisting judgment in
personam of a New York Court that is not impeachable as void or voidable under
New York Law, an Ontario Court would give effect to the appointment by the
Company of Hub U.S. Holdings, Inc. as its agent to receive service of process in
the United States under the Underwriting Agreement and to the provisions in the
Underwriting Agreement whereby the Company has submitted to the non-exclusive
jurisdiction of a New York Court.
11. There are no stamp or other issuance or transfer taxes or duties,
no capital gains, income, withholding or other taxes, and no other similar fees
or charges under Canadian federal law, or the laws of Ontario or any political
B-2
subdivision or taxing authority thereof required to be paid in connection with
the execution and delivery of the Underwriting Agreement or the issuance or sale
by the Company of the Shares.
12. The TSX has conditionally approved the listing of the Shares.
B-3
ANNEX C
MATTERS TO BE COVERED IN THE OPINION OF
HOPE HEINRICH, BRITISH COLUMBIA
COUNSEL FOR THE COMPANY
We act as solicitors for Barton Insurance Brokers, Ltd and TOS Insurance
Services Ltd., (collectively the "CORPORATIONS ") which indirectly are wholly
owned by Hub and are directing this letter to you in connection with the issue
and sale to you of certain Common Shares of Hub.
As such solicitors, we have made such investigations and examined originals or
copies, certified or otherwise identified to our satisfaction, of such
certificates of public officials and of such other certificates, documents and
records as we have considered necessary or relevant for the purposes of the
opinions hereinafter expressed including:
(a) the prospectus prepared for Hub and dated the , 2002
(the "PROSPECTUS");
(b) the Memorandum and Articles and Certificate of Incorporation
of the Corporations;
(c) the audited financial statements of the Corporations for the
fiscal period ending December 31, 2001 (the "FINANCIAL STATEMENTS ").
For the purposes of this opinion, we have assumed with respect to all documents
examined by us, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals and the conformity to authentic original
documents of all documents submitted to us as certified, conformed, telecopied
or photostatic copies. We have also relied upon the documents so examined with
respect to the accuracy of the factual matters contained therein and have not
performed any independent check or verification of such factual matters.
The opinions hereinafter expressed are limited to the laws of the Province of
British Columbia and the federal laws of Canada applicable therein,
Based and relying on and subject to the foregoing, we are of the opinion that
each of the Corporations is incorporated and existing under the laws of the
Province of British Columbia with the requisite corporate power and capacity to
own and lease its property and assets and to carry on its business as described
in the Prospectus and that the issued and outstanding share capital set forth in
the
C-1
Financial Statements of the Corporation have been duly authored and validly
issued and are fully paid and non-assessable.
C-2
ANNEX D
MATTERS TO BE COVERED IN THE OPINION OF
SHEARMAN & STERLING U.S.
COUNSEL FOR THE COMPANY
(i) Kaye Group Inc. is duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation and has full corporate power and authority to own or lease its
properties and conduct its business as described in the Registration Statement;
(ii) the Registration Statement has become effective under the
Securities Act and, to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement or suspending or
preventing the use of the Prospectus is in effect and no proceedings for that
purpose have been instituted or are pending or contemplated by the Commission;
(iii) assuming the due authorization, execution and delivery of the
Underwriting Agreement by the Company under the laws of Ontario and the federal
laws of Canada applicable therein, the submission by the Company to the
nonexclusive jurisdiction of the courts of the State of New York pursuant to
Section 14 of the Underwriting Agreement is effective. We note that a court of
the State of New York or the United States of America siting in New York County
has the power to decline to hear an action based on the Underwriting Agreement
on the ground that the State of New York is an inconvenient forum;
(iv) the statements in the Prospectus under "Certain United States and
Canadian federal income tax considerations - Certain United States federal
income tax considerations," and "Shares eligible for future sale" in each case
insofar as such statements constitute summaries of legislation or rules and
regulations promulgated thereunder, referred to therein, fairly present in all
material respects the information called for with respect to such legislation or
rules and regulations promulgated thereunder, legal matters, documents or
proceedings;
(v) based upon our review of the New York State statutes, rules or
regulations and the relevant United States federal laws (the "REQUIREMENTS OF
LAW") which in our experience are normally applicable to transactions of the
type provided for in the Underwriting Agreement, but without having made any
special investigation concerning any other Requirements of Law, no consent,
approval or authorization is required for the Company's execution, delivery and
performance of the Underwriting Agreement and consummation of the transactions
contemplated thereby and by the Prospectus, except as required under the
D-1
Securities Act, applicable state securities laws or blue sky laws and from the
NASD;
(vi) the Shares have been duly approved for listing by the New York
Stock Exchange subject to official notice of issuance; and
(vii) the Company is not, and after giving effect to the issue and
sale of the Shares and the application of the proceeds thereof as described in
the Prospectus, will not be, required to register as an "investment company," as
such term is defined in the Investment Company Act.
Shearman & Sterling shall also confirm the following matters:
Such counsel has no reason to believe that (i) each of the
Registration Statement or the Prospectus (other than the financial statements
and financial schedules and other financial and statistical data included
therein, as to which such counsel need express no belief) appears on its face to
be appropriately responsive in all material respects to the requirements of the
Securities Act and the rules and regulations of the Commission thereunder, (ii)
the Registration Statement or the Prospectus included therein, and each
amendment or supplement thereto (other than the financial statements and
financial schedules and other financial and statistical data included in the
Registration Statement, as to which such counsel need express no belief), at the
time the Registration Statement became effective contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or (iii) the
Prospectus (other than the financial statements and financial schedules and
other financial and statistical data included in the Prospectus) as of its date
or at the Closing Date contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
D-2
ANNEX E
MATTERS TO BE COVERED IN THE OPINION OF ____
ILLINOIS COUNSEL FOR THE COMPANY
Mack & Parker, Inc. is duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, is duly qualified as a foreign corporation and in good standing
in each state of the United States of America in which 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, properties,
financial condition or results of operations of the Company and its
Subsidiaries, taken as a whole), and has full corporate power and authority to
own or lease its properties and conduct its business as described in the
Registration Statement.
E-1