EXHIBIT 3.1
THIS IS AN ENGLISH TRANSLATION OF THE UNDERWRITING AGREEMENT
Underwriting Agreement
Montreal, Quebec
December 10, 2002
Societe generale de
financement du Quebec
SGF Rexfor Inc.
Dofor Inc.
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Suite 1700
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Domtar Inc.
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Ladies and Gentlemen:
We understand that Dofor Inc., a corporation organized under the laws of
Quebec (the "Selling Shareholder"), proposes to sell to the underwriters named
in Schedule I hereto (the "Underwriters") 18,170,249 common shares (the "Common
Shares") of Domtar Inc. (the "Company"). The Company also proposes to issue
18,170,249 common share purchase warrants (the "Warrants") to purchase
18,170,249 common shares of the Company at a price of $17.55 per common share
or, at the election of such holder, the U.S. dollar equivalent of such exercise
price per common share calculated as specified in the Warrant Agreement (as
hereinafter defined) at any time on or prior to the first anniversary of the
Closing Date (as hereinafter defined). The Warrants shall be issued pursuant to,
and the exercise thereof shall be governed by, the provisions of the warrant
agreement (the "Warrant Agreement"), to be entered into between the Company and
Computershare Trust Company of Canada, as warrant agent (the "Warrant Agent"),
and in accordance with the description thereof in the Canadian Preliminary
Prospectus (as hereinafter defined) and U.S. Preliminary Prospectus (as
hereinafter defined). The Company will issue, or cause to be delivered, to the
holders of Warrants upon the due exercise thereof that number of common shares
of the Company to which such holder is entitled. The Selling Shareholder also
covenants with the Underwriters that, no later than the Closing Time (as
hereinafter defined), it shall enter into the Delivery Agreement (as defined
herein) pursuant to which it shall irrevocably pledge in favour of the Company
18,170,249 common shares of the Company (the "Underlying Common Shares") and
deliver the certificates evidencing the Underlying Common Shares to the Warrant
Agent, acting as delivery agent, for delivery upon due exercise of the Warrants.
The Common Shares and the Warrants shall be sold together by the Underwriters as
units (hereinafter referred to as the "Securities"), each Security representing
one Common Share and one Warrant. Each Security shall be separated into one
Common Share and one Warrant at, or after the Closing Time, but no later than 60
days thereafter, as may be agreed upon by the Selling Shareholder and the
Underwriters.
The Company shall, under the applicable laws of the Qualifying Provinces
(as hereinafter defined), (i) as soon as possible and in any event by 4:30 p.m.
(Montreal time) on December 10, 2002, have prepared and filed, and (ii) as soon
as possible and in any event by 10:00 a.m. (Montreal time) on December 11, 2002,
have obtained an MRRS Decision Document dated the date of filing issued by the
Reviewing Authority
(as hereinafter defined), in its capacity as principal regulator pursuant to NP
43-201 evidencing that a receipt has been issued by the securities regulatory
authorities (the "Qualifying Authorities") in each province and territory of
Canada (the "Qualifying Provinces") in respect of, in each case, a preliminary
short form prospectus of the Company relating to the Securities, including the
documents incorporated by reference in the English and French languages, as
applicable (the "Canadian Preliminary Prospectus"), and other related documents
in respect of the proposed distribution of the Securities. The Company has
identified the Commission des valeurs mobilieres du Quebec (the "Reviewing
Authority") as its principal regulator in respect of the proposed distribution
of the Securities. The Company shall also, immediately after the filing of the
Canadian Preliminary Prospectus, but in any event no later than 4:30 p.m.
(Montreal time) on December 10, 2002, prepare and file pursuant to the
multi-jurisdictional disclosure system with the United States Securities and
Exchange Commission (the "Commission") a registration statement on Form F-10
covering the registration of the Common Shares and Warrants comprising the
Securities under the United States Securities Act of 1933, as amended, and the
applicable rules and regulations thereunder adopted by the Commission (the
"Act"), including the Canadian Preliminary Prospectus in the English language
(with such deletions therefrom and additions thereto as are permitted or
required by Form F-10 and the applicable rules and regulations of the
Commission) (the "U.S. Preliminary Prospectus"). Such registration statement on
Form F-10, including the exhibits thereto and the documents incorporated by
reference therein, as amended at the time it becomes effective, is herein called
the "Registration Statement".
The Company shall, under the applicable laws of the Qualifying Provinces,
(i) as soon as possible after any comments of the Qualifying Authorities have
been satisfied and in any event by 4:30 p.m. (Montreal time) on December 18,
2002 (or in any case, by such later date or dates as may be determined by the
Underwriters in their sole discretion), have prepared and filed, and (ii) as
soon as possible and in any event by 5:30 p.m. (Montreal time) on December 18,
2002, have obtained an MRRS Decision Document dated the date of filing issued by
the Reviewing Authority, in its capacity as principal regulator, pursuant to NP
43-201 evidencing that a receipt has been issued by the Qualifying Authorities
in each Qualifying Province in respect of, in each case, a final short form
prospectus of the Company relating to the Securities, including the documents
incorporated by reference in the English and French languages, as applicable
(the "Canadian Final Prospectus"), and other related documents in respect of the
proposed distribution of the Securities. The Company shall also, immediately
after the filing of the Canadian Final Prospectus but no later than 5:30 p.m.
(Montreal time) on December 18, 2002 (or in any case, by such later date or
dates as may be determined by the Underwriters in their sole discretion),
prepare and file pursuant to the multi-jurisdictional disclosure system with the
Commission, an amendment to the Registration Statement, including the Canadian
Final Prospectus in the English language (with such deletions therefrom and
additions thereto as are permitted or required by Form F-10 and the applicable
rules and regulations of the Commission) and shall use its best efforts to cause
the Registration Statement to become effective under the Act.
The Company shall also prepare and file with the Commission an Appointment
of Agent for Service of Process and Undertaking for the Company on Form F-X in
conjunction with the initial filing of the Registration Statement (the "Company
Form F-X"). The Company shall also cause to be prepared and filed an Appointment
of Agent for Service of Process and Undertaking for the Warrant Agent on Form
F-X in conjunction with the initial filing of the Registration Statement (the
"Trustee Form F-X", and together with the Company Form F-X, the "Form F-X").
Any reference herein to the Canadian Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to Canadian
Securities Laws which were filed under Canadian Securities Laws on or before the
date of such prospectus; any reference herein to the Registration Statement, the
U.S. Preliminary Prospectus or the U.S. Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to Item 4
of Form F-10 which were filed under the Exchange Act (as hereinafter defined) on
or before the Effective Time of the Registration Statement or the date of the
U.S. Preliminary Prospectus or the U.S. Prospectus, as the case may be; and any
reference herein to the terms "amend", "amendment" or "supplement" with respect
to any of the foregoing, as the case may be, shall be deemed to refer to and
include all documents deemed to be incorporated by reference therein, the filing
of any document under Canadian Securities Laws or the Exchange Act that are
filed after the date of the
prospectuses or after their respective Effective Time, as the case may be,
deemed to be incorporated therein by reference. Certain terms used herein are
defined in Section 20 hereof.
1. Representations and Warranties. The Company represents and warrants to,
and agrees with, each Underwriter as set forth below in this Section 1.
(a) The Company meets the general eligibility requirements for use of a
short form prospectus under National Instrument 44-101, for use of a
shelf prospectus under National Instrument 44-102 and for use of
Form F-10 under the Act. At the time the Registration Statement
becomes effective, an MRRS Decision Document will have been obtained
from the Reviewing Authority evidencing the issuance by the
Qualifying Authorities of a receipt for the Canadian Final
Prospectus and no order suspending the distribution of the
Securities will have been issued by any Qualifying Authority, any
stock exchange in Canada or any court and no proceedings for that
purpose will have been instituted or will be pending or, to the
knowledge of the Company, will be contemplated by any Qualifying
Authority, and any request on the part of any Qualifying Authority
for additional information will have been complied with. At the time
the Warrant Registration Statement becomes effective, an MRRS
Decision Document will have been obtained from the Reviewing
Authority evidencing the issuance by the Qualifying Authorities of a
receipt for the Canadian Warrant Prospectus and no order suspending
the distribution of the Underlying Common Shares will have been
issued by any Qualifying Authority, any stock exchange in Canada or
any court and no proceedings for that purpose will have been
instituted or will be pending or, to the knowledge of the Company,
will be contemplated by any Qualifying Authority, and any request on
the part of any Qualifying Authority for additional information will
have been complied with. As of the Closing Time, the Registration
Statement, the Warrant Registration Statement and any post-effective
amendment thereto, each in the form delivered or to be delivered to
the Underwriters, will have become effective under the Act in such
form; no stop order suspending the effectiveness of the Registration
Statement or the Warrant Registration Statement will have been
issued under the Act and no proceedings for that purpose will have
been instituted or will be pending, or to the knowledge of the
Company, will be contemplated by the Commission; and any request on
the part of the Commission for additional information, if any, will
have been complied with.
(b) (A) Each of the Canadian Preliminary Prospectus, Canadian Final
Prospectus, the Canadian Preliminary Warrant Prospectus and the
Canadian Final Warrant Prospectus, when filed, complied and will, on
the Closing Date, comply in all material respects with Canadian
Securities Laws, as interpreted and applied by the Qualifying
Authorities; (B) at the respective time that the Reviewing Authority
will have issued an MRRS Decision Document for the Canadian
Prospectus or for the Canadian Warrant Prospectus, no other document
with respect to such Prospectus was required to be filed with the
Qualifying Authorities by or on behalf of the Company; (C) the U.S.
Prospectus included in the Registration Statement and the U.S.
Warrant Prospectus included in the Warrant Registration Statement,
at the time each will have become effective, will conform to the
Canadian Prospectus or the Canadian Warrant Prospectus, as the case
may be, in each case except for such deletions therefrom and
additions thereto as are permitted or required by Form F-10 and the
applicable rules and regulations of the Commission; (D) each of the
Registration Statement, the Warrant Registration Statement and any
amendments or supplements thereto, when it will have become
effective, and the Form F-X, the Warrant Form F-X and any amendments
or supplements thereto, as of their respective filing dates, and on
the Closing Date, will comply in all material respects with the
requirements of the Act; (E) neither the Registration Statement or
the Warrant Registration Statement nor any amendment or supplement
thereto, when it will have become effective and on the Closing Date,
contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order
to make the statements therein not misleading; and (F) each of the
Canadian Prospectus, U.S. Prospectus, Canadian Warrant Prospectus,
U.S. Preliminary Warrant Prospectus, U.S. Warrant Prospectus and any
Supplementary Material, together with any amendment or supplement
thereto, on its date or on the Closing Date, will constitute full,
true and plain disclosure of all material
facts relating to the Company and its subsidiaries considered as one
enterprise and the Securities and the Underlying Common Shares, as
the case may be, and did not and will not include a
misrepresentation, and did not and will not include any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
provided, however, that for clauses (E) and (F) above, the Company
makes no representations or warranties as to the information
contained in or omitted from the Registration Statement, the
Canadian Prospectus, the U.S. Prospectus, the Warrant Registration
Statement, the Canadian Warrant Prospectus, the U.S. Warrant
Prospectus or any Supplementary Material (or any amendment or
supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of
(x) the Selling Shareholder and (y) any Underwriter specifically for
inclusion in such material (or any amendment or supplement thereto).
(c) Each document filed or to be filed with the Qualifying Authorities
and incorporated by reference in the Canadian Prospectus or in the
Canadian Warrant Prospectus complied or will comply when so filed in
all material respects with applicable Canadian Securities Laws and
none of such documents contained or will contain any untrue
statement of a material fact or omitted or will omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were or are made, not misleading; and the documents incorporated or
deemed to be incorporated by reference in the Registration
Statement, the U.S. Prospectus, the Warrant Registration Statement
and the U.S. Warrant Prospectus, at the time they were or hereafter
are filed with the Commission, complied and will comply in all
material respects with the applicable requirements of the Exchange
Act.
(d) There are no reports or other information that, in accordance with
the requirements of the Qualifying Authorities, must be made
publicly available in connection with the offering of the Securities
that have not been made publicly available as required; there are no
documents required to be filed with the Qualifying Authorities in
connection with the Canadian Prospectus or the Canadian Warrant
Prospectus that have not been filed as required; there are no
contracts, documents or other materials required to be described or
referred to in the Registration Statement, the Canadian Prospectus,
the U.S. Prospectus, the Warrant Registration Statement, the
Canadian Warrant Prospectus or the U.S. Warrant Prospectus which
would have to be filed or incorporated by reference as exhibits to
the Registration Statement or the Warrant Registration Statement, as
the case may be, that are not described, referred to or filed or
incorporated by reference as required and, in the case of those
documents filed, delivered to the Underwriters.
(e) Each of the Company and its subsidiaries (the term "subsidiary" as
used hereinafter, includes entities in which the Company has,
directly or indirectly, a greater than 50% equity interest), (i) has
been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction in which it is
chartered or organized with full corporate power and authority to
own or lease, as the case may be, and to operate its properties and
conduct its business as described in the Canadian Prospectus and the
U.S. Prospectus and (ii) is duly qualified to do business as an
extra-provincial corporation or a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification, other than, with respect to clause (ii), where the
failure to be so qualified or in good standing would not have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business (a "Material Adverse
Effect").
(f) Norampac Inc. ("Norampac") (i) has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the jurisdiction in which it is chartered or organized with full
corporate power and authority to own or lease, as the case may be,
and to operate its properties and conduct its business as described
in the Canadian Prospectus and the U.S. Prospectus and (ii) is duly
qualified to do business as an extra-provincial corporation or a
foreign corporation and is in good standing under the laws of each
jurisdiction which requires
such qualification, other than, with respect to clause (ii), where
the failure to be so qualified or in good standing would not have a
Material Adverse Effect.
(g) All the outstanding shares of capital stock of each subsidiary and
of Norampac have been duly and validly authorized and issued and are
fully paid and non-assessable, and, except as otherwise set forth in
the Canadian Prospectus and the U.S. Prospectus, all outstanding
shares of capital stock of the subsidiaries and, with respect to
Norampac, the shares of capital stock thereof owned by the Company,
are owned by the Company either directly or through wholly owned
subsidiaries free and clear of any perfected security interest or
any other security interests, claims, liens or encumbrances, other
than where such security interests, claims, liens or encumbrances
would not have a Material Adverse Effect.
(h) The Company's authorized share capital is as set forth in the
Canadian Prospectus and the U.S. Prospectus; and the Securities, the
Common Shares, the Warrants and the capital stock of the Company
conform in all material respects to the description thereof
contained in the Canadian Prospectus and the U.S. Prospectus and
such description conforms in all material respects to the rights set
forth in the Warrant Agreement and the Warrants certificate defining
the same.
(i) The outstanding common shares of the Company have been duly and
validly authorized and issued; and except as set forth in the
Canadian Prospectus and the U.S. Prospectus, no options, warrants
or other rights to purchase, agreements or other obligations to
issue, or rights to convert any obligations into or exchange any
securities for, shares of capital stock of or ownership interests
in the Company are outstanding;
(j) The Common Shares, the Warrants, the Underlying Common Shares and
the Underlying Company Common Shares have been duly and validly
authorized and the Warrants, when issued and delivered to the
Underwriters pursuant to this Agreement, and any Underlying Company
Common Shares, if and when such Underlying Company Common Shares
are issued and delivered pursuant to the Warrant Agreement, will be
validly issued; and the certificates for the Common Shares, the
Warrants and the Underlying Common Shares are in valid and
sufficient form.
(k) The holders of the outstanding shares of capital stock of the
Company are not entitled to any preemptive or other rights to
subscribe for shares of capital stock of the Company and the sale
of the Common Shares, the issuance of the Warrants, the sale of the
Underlying Common Shares and the issuance and/or delivery of any
Underlying Company Common Shares will not be subject to any
preemptive or other rights to subscribe for any securities of the
Company.
(l) (A) All of the outstanding common shares of the Company, including
the Common Shares, are duly listed, and admitted and authorized for
trading, on the Toronto Stock Exchange and the New York Stock
Exchange, and (B) application has been made to list the Warrants on
the Toronto Stock Exchange.
(m) Other than the written information set forth in paragraphs (b) and
(c) of Section 9 of this Agreement furnished to the Company by or on
behalf, respectively, of the Selling Shareholder or the Underwriters
for inclusion in the Canadian Prospectus and the U.S. Prospectus, as
to which the Company makes no representation or warranty, the
statements in the Canadian Prospectus and the U.S. Prospectus under
the headings "Description of Share Capital", "Plan of Distribution",
"Details of the Offering", "Certain Income Tax Considerations",
"Statutory Rights of Withdrawal and Rescission" and "Eligibility for
Investment" and insofar as such statements summarize legal matters,
agreements, documents or proceedings discussed therein, are accurate
and fair summaries of such legal matters, agreements, documents or
proceedings.
(n) This Agreement has been duly authorized, executed and delivered by
the Company; and the execution, delivery and performance by the
Company of this Agreement and the consummation of the transactions
contemplated herein have been duly authorized by and on behalf of
the Company and this Agreement constitutes a legal, valid and
binding obligation of the Company,
enforceable against the Company in accordance with its terms, except
as enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and except as limited by the application of
equitable principles when equitable remedies are sought and subject
to the fact that rights of indemnity and contribution may be limited
by applicable law.
(o) As of the Closing Time, the Warrant Agreement shall have been duly
authorized, executed and delivered by the Company; and the
execution, delivery and performance by the Company of the Warrant
Agreement and the consummation of the transactions contemplated
therein shall have been duly authorized by and on behalf of the
Company and the Warrant Agreement shall constitute a legal, valid
and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as enforcement hereof
may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the rights of creditors generally and
except as limited by the application of equitable principles when
equitable remedies are sought and subject to the fact that rights of
indemnity and contribution may be limited by applicable law.
(p) As of the Closing Time, the Delivery Agreement shall have been duly
authorized, executed and delivered by the Company; and the
execution, delivery and performance by the Company of the Delivery
Agreement and the consummation of the transactions contemplated
therein shall have been duly authorized by and on behalf of the
Company and the Delivery Agreement shall constitute a legal, valid
and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as enforcement hereof
may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the rights of creditors generally and
except as limited by the application of equitable principles when
equitable remedies are sought and subject to the fact that rights of
indemnity and contribution may be limited by applicable law.
(q) The Company is not and, after giving effect to the offering and sale
of the Securities, will not be an "investment company" (as defined
in the Investment Company Act of 1940, as amended) under the
Investment Company Act of 1940, as amended.
(r) No consent, approval, authorization, filing with or order of any
court or governmental agency or body or any arbitrator of any kind
having jurisdiction over the Company or any of its subsidiaries is
required in connection with the transactions contemplated herein,
except such as have been or will be obtained or made no later than
the Closing Date under the Act and Canadian Securities Laws and
such as may be required under the blue sky laws of any jurisdiction
in connection with the purchase and distribution of the Securities
by the Underwriters in the manner contemplated herein and in the
Canadian Prospectus and the U.S. Prospectus.
(s) Neither the sale and delivery of the Common Shares or the Underlying
Common Shares, the issuance, sale and delivery of the Warrants or
any Underlying Company Common Shares, or the purchase for
cancellation by the Company of any common shares in the event the
Selling Shareholder fails to deliver the Underlying Common Shares,
nor the consummation of any other of the transactions herein
contemplated nor the fulfilment of the terms hereof will conflict
with, result in a breach or violation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or
any of its subsidiaries or, in the case of clause (i), Norampac,
pursuant to (i) the charter or by-laws or other constating documents
of the Company or any of its subsidiaries or Norampac, (ii) the
terms of any indenture, contract, lease, mortgage, deed of trust,
note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Company or any of its
subsidiaries is a party or bound or to which its or their property
is subject, or (iii) any statute, law, rule, regulation, judgment,
order or decree applicable to the Company or any of its subsidiaries
of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the
Company or any of its subsidiaries or any of its or their
properties, except with respect to clauses (ii) and (iii),
for any such breach, violation or imposition which would not, either
individually or in the aggregate, have a Material Adverse Effect.
(t) Except for two shareholders holding in the aggregate less than 5,000
common shares of the Company who have registration rights pursuant
to a registration rights agreement dated July 31, 2000 between the
Company and certain of its shareholders, no holders of securities of
the Company have rights to require the Company to file a
registration statement under the Act or a prospectus under Canadian
Securities Laws with respect to any securities of the Company or to
require the Company to include such securities with the Securities
registered pursuant to the Registration Statement or qualified under
the Canadian Prospectus.
(u) The consolidated historical financial statements, including any U.S.
GAAP (as defined below) reconciliation, and schedules of each of the
Company and its consolidated subsidiaries and of the Acquired ▇▇▇▇▇
included or incorporated by reference into the Registration
Statement, the Canadian Prospectus and the U.S. Prospectus, present
fairly in all material respects the financial condition, results of
operations and cash flows of the Company and its subsidiaries on a
consolidated basis and of the Acquired ▇▇▇▇▇, respectively, as of
the dates and for the periods indicated, comply as to form with the
applicable accounting requirements of the Act and Canadian
Securities Laws and, in the case of the Company and its consolidated
subsidiaries, have been prepared in conformity with Canadian
generally accepted accounting principles ("Canadian GAAP") and have
been reconciled to U.S. generally accepted accounting principles
("U.S. GAAP") in accordance with Item 18 of Form 20-F under the
Exchange Act and, in the case of the Acquired ▇▇▇▇▇, have been
prepared in conformity with U.S. GAAP and have been reconciled to
Canadian GAAP in accordance with the provisions of Canadian
Securities Laws, in each case applied on a consistent basis
throughout the periods involved (except as otherwise noted therein).
The unaudited pro forma consolidated statements of earnings included
in the Canadian Prospectus and the U.S. Prospectus and the
Registration Statement include assumptions that provide a reasonable
basis for presenting the significant effects directly attributable
to the transactions and events described therein, the related pro
forma adjustments give appropriate effect to those assumptions, and
the pro forma adjustments reflect the proper application of those
adjustments to the historical financial statement amounts in the
unaudited pro forma consolidated statements of earnings included in
the Canadian Prospectus and the U.S. Prospectus and the Registration
Statement. The unaudited pro forma consolidated statements of
earnings included in the Canadian Prospectus and the U.S. Prospectus
and the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of Canadian
Securities Laws and Form F-10 under the Act and the pro forma
adjustments have been properly applied to the historical amounts in
the compilation of those statements.
(v) No action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator, involving the Company
or any of its subsidiaries, its property or property of its
subsidiaries is pending or, to the knowledge of the Company,
threatened that (i) could reasonably be expected to have a Material
Adverse Effect on the performance of this Agreement or the
consummation of any of the transactions contemplated hereby or (ii)
could reasonably be expected to have a Material Adverse Effect,
except as set forth in or contemplated in the Canadian Prospectus
and the U.S. Prospectus.
(w) The Company and its subsidiaries own or lease all such properties as
are necessary to the conduct of the operations of the Company and
its subsidiaries taken as a whole as presently conducted and as
described in the Canadian Prospectus and the U.S. Prospectus.
(x) Neither the Company nor any subsidiary is in violation or default of
(i) any provision of its charter or by-laws or other incorporating
documents, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which it
is a party or bound or to which its property is subject, or (iii)
any statute, law, rule, regulation, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having
jurisdiction over the Company or such subsidiary or any of its or
their properties, as applicable, which violation or default would,
in the case of clauses (ii) and (iii) above, either individually or
in the aggregate with all other violations and defaults referred to
in this paragraph (if any), have a Material Adverse Effect.
(y) Each of PricewaterhouseCoopers LLP and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, a general partnership, who have certified certain
consolidated financial statements of the Company and its
consolidated subsidiaries and delivered their report with respect to
the audited consolidated financial statements and schedules included
or incorporated by reference in the Canadian Prospectus and the U.S.
Prospectus, are, and during the periods covered by its reports were,
independent chartered accountants with respect to the Company within
the meaning of the Canada Business Corporations Act, the Code of
Ethics of the Ordre des comptables agrees du Quebec and the Act.
(z) There are no transfer taxes or other similar fees or charges under
the federal laws of Canada or the United States or the laws of any
state or province, or any political subdivision thereof, required to
be paid in connection with the execution and delivery of this
Agreement or the issuance, sale or delivery by the Company of the
Warrants or any Underlying Company Common Shares.
(aa) The Company has filed all foreign, federal, state, provincial and
local tax returns that are required to be filed or has requested
extensions thereof (except in any case in which the failure so to
file would not have a Material Adverse Effect), except as set forth
in or contemplated in the Canadian Prospectus and the U.S.
Prospectus, and has paid all taxes required to be paid by it and any
other assessment, fine or penalty levied against it, to the extent
that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in
good faith or as would not have a Material Adverse Effect, except as
set forth in or contemplated in the Canadian Prospectus and the U.S.
Prospectus.
(bb) Except as set forth in or contemplated in the Canadian Prospectus
and the U.S. Prospectus, no labor dispute with the employees of the
Company or any of its subsidiaries exists or, to the knowledge of
the Company, is threatened or imminent, and the Company is not aware
of any existing or imminent labor dispute by the employees of any of
its subsidiaries, or to the knowledge of the Company, its
subsidiaries' principal suppliers, contractors or customers, that
could have a Material Adverse Effect.
(cc) The Company and each of its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses
in which they are engaged; the Company and its subsidiaries are in
compliance with the terms of such policies and instruments in all
material respects; and there are no material claims by the Company
or any of its subsidiaries under any such policy or instrument as to
which any insurance company is denying liability or defending under
a reservation of rights clause, except as set forth in or
contemplated in the Canadian Prospectus and the U.S. Prospectus.
(dd) Other than Domtar Funding Limited Liability Company, no subsidiary
of the Company is currently prohibited, directly or indirectly, from
paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to
the Company any loans or advances to such subsidiary from the
Company or from transferring any of such subsidiary's property or
assets to the Company or any other subsidiary of the Company, except
as described in or contemplated by the Canadian Prospectus and the
U.S. Prospectus.
(ee) The Company and its subsidiaries possess all licenses, certificates,
permits and other authorizations issued by the appropriate federal,
state, provincial or foreign regulatory authorities necessary to
conduct their respective businesses, and neither the Company nor any
such subsidiary has received any notice of proceedings relating to
the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the
subject of an
unfavorable decision, ruling or finding, would have a Material
Adverse Effect, except as set forth in or contemplated in the
Canadian Prospectus and the U.S. Prospectus.
(ff) The Company has not taken, directly or indirectly, any action
designed to or that would constitute or that might reasonably be
expected to cause or result in, under Canadian Securities Laws, the
Exchange Act or otherwise, stabilization or manipulation of the
price of any security of the Company to facilitate the sale or
resale of the Securities, the Common Shares or the Warrants.
(gg) The Company and its subsidiaries (i) are in compliance with any and
all applicable foreign, Canadian federal, provincial and local, and
U.S. federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous
or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received and are in compliance
with all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses
as presently conducted and as described in the Canadian Prospectus
and the U.S. Prospectus, and (iii) except as set forth in or
contemplated in the Canadian Prospectus or the U.S. Prospectus, have
not received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous
or toxic substances or wastes, pollutants or contaminants, except
where such non-compliance with Environmental Laws, failure to
receive required permits, licenses or other approvals, or liability
would not, individually or in the aggregate, have a Material Adverse
Effect. Except as set forth in the Canadian Prospectus or the U.S.
Prospectus, neither the Company nor any of its subsidiaries has been
named as a "potentially responsible party" under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended, except in instances where (A) the Company has made adequate
provision for such event in the reserves on its balance sheet or (B)
being so named would not, individually or in the aggregate, have a
Material Adverse Effect.
(hh) In the ordinary course of its business, the Company periodically
reviews the effect of Environmental Laws on the business, operations
and properties of the Company and its subsidiaries, in the course of
which it identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or
compliance with Environmental Laws, or any permit, license or
approval, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such
review, the Company has reasonably concluded that such associated
costs and liabilities would not, singly or in the aggregate, have a
Material Adverse Effect, except as set forth in or contemplated in
the Canadian Prospectus and the U.S. Prospectus.
(ii) The subsidiaries listed on Annex A attached hereto are the only
Significant Subsidiaries of the Company.
(jj) The Company and its subsidiaries own, possess, are licensed to use
or have other sufficient legal rights to use all patents, patent
applications, trade and service marks, trade and service ▇▇▇▇
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property
(collectively, the "Intellectual Property") necessary for the
conduct of the Company's business as presently conducted and as
described in the Canadian Prospectus and the U.S. Prospectus.
Except as set forth in the Canadian Prospectus and the U.S.
Prospectus, (a) there are no rights of third parties to any such
Intellectual Property owned by the Company and its subsidiaries;
(b) to the knowledge of the Company, there is no material
infringement by third parties of any such Intellectual Property
owned by the Company and its subsidiaries; (c) there is no pending
or, to the knowledge of the Company, threatened action, suit,
proceeding or claim by others challenging the Company's rights in
or to any such Intellectual Property, and the Company is unaware of
any facts which would form a reasonable basis for any such claim;
(d) there is no pending or, to the knowledge of the Company,
threatened action, suit, proceeding or claim by others challenging
the validity or scope of any such Intellectual Property, and the
Company is unaware of any facts which would form a reasonable basis
for any such
claim; and (e) there is no pending or, to the knowledge of the
Company, threatened action, suit, proceeding or claim by others
that the Company infringes or otherwise violates any Intellectual
Property or other proprietary rights of others, and the Company is
unaware of any other fact which would form a reasonable basis for
any such claim.
(kk) The Company is a reporting issuer not in default of any requirements
under Canadian Securities Laws.
(ll) Neither the Company nor any of its subsidiaries nor any of its or
their properties or assets has any immunity from the jurisdiction
of any court or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of
execution or otherwise) under the federal laws of Canada or the
laws of the Province of Quebec.
(mm) Computershare Trust Company of Canada at its principal offices in the
cities of Montreal and Toronto has been duly appointed as the
registrar and transfer agent in respect of the common shares of the
Company and warrant agent in respect of the Warrants and The Bank of
New York at its principal office in the City of New York has been duly
appointed as co-transfer agent in respect of the common shares of the
Company.
(nn) The Company is not aware of any defects in title to its material
properties or its material assets and facilities which are used in
the production and marketing of pulp and paper, lumber and wood
products and corrugated products that would, singly or in the
aggregate, have a Material Adverse Effect.
Any certificate signed by any officer of the Company and delivered to the
Representatives or counsel for the Underwriters in connection with the offering
of the Securities shall be deemed a representation and warranty by the Company,
as to matters covered thereby, to each Underwriter.
2. Representations and Warranties of the Selling Shareholder. Each of the
Selling Shareholder, SGF and SGF Rexfor, acting solidarily, represents and
warrants to, and agrees with, each Underwriter as set forth below in this
Section 2.
(a) Each of SGF and SGF Rexfor has been duly organized and is validly
existing under the laws of the Province of Quebec with full
corporate power and authority to own or lease and to operate its
properties and conduct its business as described in the Canadian
Prospectus and the U.S. Prospectus.
(b) The Selling Shareholder has been duly organized, is validly existing
under the laws of the Province of Quebec and its sole business is to
hold the Common Shares and the Underlying Common Shares. The Selling
Shareholder has full power and authority to sell the Common Shares
and deliver the Underlying Common Shares pursuant to this Agreement
and has no outstanding indebtedness or liabilities of any kind.
(c) The Selling Shareholder is not selling the Common Shares to be sold
by it hereunder based on information that it, SGF or SGF Rexfor
holds that has not otherwise been made publicly available, which, if
such information was made publicly available, could reasonably have
a material impact on the price or value of the Securities.
(d) This Agreement has been duly authorized, executed and delivered by
each of the Selling Shareholder, SGF and SGF Rexfor and the
consummation of the transactions contemplated herein have been duly
authorized by and on behalf of such Selling Shareholder, SGF or SGF
Rexfor and this Agreement constitutes a legal, valid and binding
obligation of such Selling Shareholder, SGF or SGF Rexfor
enforceable against each of the Selling Shareholder, SGF or SGF
Rexfor in accordance with its terms, except as enforcement hereof
may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the rights of creditors generally and
except as limited by the application of equitable principles when
equitable remedies are sought and subject to the fact that rights of
indemnity and contribution may be limited by applicable law.
(e) As of the Closing Time, the Delivery Agreement shall have been duly
authorized, executed and delivered by each of the Selling
Shareholder, SGF and SGF Rexfor of and the consummation of the
transactions contemplated herein shall have been duly authorized by
and on behalf of such Selling Shareholder, SGF and SGF Rexfor and
the Delivery Agreement shall constitute a legal, valid and binding
obligation of such Selling Shareholder, SGF and SGF Rexfor,
enforceable against each of the Selling Shareholder, SGF and SGF
Rexfor in accordance with its terms, except as enforcement hereof
may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the rights of creditors generally and
except as limited by the application of equitable principles when
equitable remedies are sought and subject to the fact that rights of
indemnity and contribution may be limited by applicable law.
(f) Neither the sale and delivery of the Common Shares or the
Underlying Common Shares, nor the consummation of any other of the
transactions herein contemplated nor the fulfilment of the terms
hereof will conflict with, result in a breach or violation or
imposition of any lien, charge or encumbrance upon any property or
assets of either the Selling Shareholder, SGF or SGF Rexfor
pursuant to (i) the charter or by-laws or other constating
documents of either the Selling Shareholder, SGF or SGF Rexfor,
(ii) the terms of any indenture, contract, lease, hypothec, deed of
trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which either the
Selling Shareholder, SGF or SGF Rexfor is a party or bound or to
which its or their property is subject, or (iii) any statute, law,
rule, regulation, judgment, order or decree applicable to either
the Selling Shareholder, SGF or SGF Rexfor of any court, regulatory
body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over either the Selling Shareholder,
SGF or SGF Rexfor or any of their respective properties.
(g) No consent, approval, authorization, filing with or order of any
court or governmental agency or body or any arbitrator of any kind
having jurisdiction over either the Selling Shareholder, SGF or SGF
Rexfor or any of its subsidiaries is required in connection with the
transactions contemplated herein, except such as have been obtained
or made under the Act and Canadian Securities Laws and such as may
be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities by
the Underwriters in the manner contemplated herein and in the
Canadian Prospectus and the U.S. Prospectus and the Canadian Warrant
Prospectus and the U.S. Warrant Prospectus.
(h) (A) The Selling Shareholder has, and on the Closing Date, will have,
valid marketable title to the Common Shares and the Underlying
Common Shares, free and clear of any hypothec, lien, charge, claim,
encumbrance, pledge, security interest, defect or other restriction
on transfer of any kind, except for a right of first refusal in
favour of Caisse de depot et placement du Quebec pursuant to a
protocole d'entente between it, SGF and the Selling Shareholder
dated June 14, 1985 (the "Voting Agreement"), which right has been
waived in connection with the sale of the Common Shares and the
Underlying Common Shares contemplated in this Agreement from the
date hereof until December 31, 2003; (B) the Selling Shareholder has
the full right, power and authority to sell, assign, transfer and
deliver the Common Shares to the Underwriters hereunder and to
deliver the Underlying Common Shares to the Warrant Agent for the
account of the Warrant holders and the Company; (C) upon delivery of
the Common Shares and payment of the purchase price therefor as
herein contemplated, the Underwriters will obtain good and
marketable title to the Common Shares, free and clear of any
hypothec, lien, charge, claim, encumbrance, pledge, security
interest, defect or other restriction on transfer of any kind; (D)
upon delivery of the Underlying Common Shares and payment of the
exercice price therefor by the holders of Warrants, such holders
will obtain good and marketable title to the Underlying Common
Shares, free and clear of any hypothec, lien, charge, claim,
encumbrance, pledge, security interest, defect or other restriction
on transfer of any kind; and (E) as of the date hereof, the Common
Shares and the Underlying Common Shares are represented by the share
certificates listed on Schedule II.
(i) The Selling Shareholder, SGF or SGF Rexfor each have not and will
not take, directly or indirectly, any action designed to or that
would constitute or that might reasonably be expected to cause or
result in, under the Exchange Act or otherwise, stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities, Common Shares or
the Warrants.
(j) Other than as contemplated by this Agreement, there is no broker,
finder or other party that is entitled to receive from either the
Selling Shareholder, SGF or SGF Rexfor any brokerage or finder's
fee or other fee or commission as a result of any of the
transactions contemplated by this Agreement, and in the event that
any such person acting or representing acting for and on behalf of
either the Selling Shareholder, SGF or SGF Rexfor would be entitled
to receive any such fee from the Underwriters by operation of law,
the Selling Shareholder, SGF and SGF Rexfor each agree to indemnify
and hold harmless each Underwriter from such fee and as well as
from any costs and expenses reasonably incurred in respect thereof.
(k) The information relating to the Selling Shareholder, SGF Rexfor and
SGF submitted in writing and contained in the Canadian Prospectus,
the Canadian Warrant Prospectus, the U.S. Prospectus and the U.S.
Warrant Prospectus is, on its date or, on the Closing Date, true and
correct and contains no misrepresentation and constitutes full, true
and plain disclosure of all material facts relating thereto and did
not include any misrepresentation, and did not and will not include
any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light
of the circumstances in which they were made, not misleading.
Neither the Registration Statement, the Warrant Registration
Statement nor any amendment or supplement thereto as of their
respective Effective Times and as of the Closing Date, will contain
an untrue statement of a material fact relating to such Selling
Shareholder, SGF Rexfor or SGF or omit to state a material fact
relating thereto required to be stated therein or necessary in order
to make the statements therein not misleading.
Any certificate signed by any officer of the Selling Shareholder, SGF
Rexfor or SGF and delivered to the Representatives or counsel for the
Underwriters in connection with the offering of the Securities shall be deemed a
representation and warranty by the Selling Shareholder, as to matters covered
thereby, to each Underwriter.
3. Purchase and Sale.
(a) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, (i) the Selling
Shareholder agrees to sell the Common Shares and (ii) the Company
agrees to issue the Warrants to the Underwriters, and the
Underwriters agree, jointly and not solidarily, to purchase all, but
not less than all, of the Securities, in the respective amounts set
forth opposite each Underwriter's name in Schedule I hereto, at a
purchase price of $16.50 per Security (the "Purchase Price") to the
Selling Shareholder in the manner payable described in Section 4.
Further, subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Selling
Shareholder agrees to deposit the Underlying Common Shares with the
Warrant Agent.
(b) In consideration for the Underwriters' agreement to purchase the
Securities, and in consideration for their services hereunder, the
Selling Shareholder shall pay to the Representatives, for the
account of the Underwriters, a fee of $0.66 per Security for the
Securities (the "Underwriting Fee").
4. Delivery and Payment.
(a) Delivery of and payment for the Securities hereof shall be made at
8:00 AM, eastern standard time, on December 23, 2002, or at such
time on such later date not more than three Business Days after the
foregoing date as the Underwriters shall designate, which date and
time may be postponed by agreement between the Underwriters, the
Selling Shareholder and the Company or as provided in Section 10
hereof (such date and time of delivery and payment for the
Securities being herein called the "Closing Date").
(b) Delivery of the Common Shares shall be made to the Representatives
for the respective accounts of the Underwriters against payment
through the Representatives of the purchase price of the Securities
to the Selling Shareholder or upon the order of the Selling
Shareholder by certified check, bank draft, wire transfer, or
through the facilities of The Depository Trust Company and/or The
Canadian Depository for Securities Ltd., at the option of the
Representatives, payable in same-day funds to an account specified
by the Selling Shareholder. It is understood that each Underwriter
has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price
for, the Securities which it has agreed to purchase. The
Representatives, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of
the purchase price for the Securities to be purchased by any
Underwriter whose funds have not been received by the Closing Time,
but such payment shall not relieve such Underwriter from its
obligations hereunder.
(c) At the Closing Time, delivery of the Common Shares by the Selling
Shareholder shall be made through the facilities of The Depository
Trust Company and/or The Canadian Depository for Securities Ltd.,
or, in the event not practicable, the Selling Shareholder shall duly
and validly deliver to the Underwriters one or more definitive share
certificate(s) representing the Common Shares to be sold by it
hereunder, endorsed in such name or names as the Representatives
will the Selling Shareholder in writing not less than 24 hours prior
to such Closing Time. The Company and the Selling Shareholder shall,
prior to the Closing Time, make all necessary arrangements for the
exchange of such definitive certificate(s), at the principal offices
of Computershare Trust Company of Canada in the city of Montreal for
one or more global share certificates representing such number of
Common Shares to be sold by the Selling Shareholder hereunder
registered in the name of The Canadian Depository for Securities
Ltd. or The Depository Trust Company or such other names as shall be
designated by the Underwriters not less than 24 hours prior to the
Closing Time. The Selling Shareholder shall pay all fees and
expenses payable to Computershare Trust Company of Canada in
connection with the preparation, delivery, certification and
exchange of the definitive share certificates contemplated by this
paragraph and the fees and expenses payable to or incurred by
Computershare Trust Company of Canada in connection with the initial
or additional transfers as may be required in the course of the
distribution of the Securities. At the Closing Time, the Selling
Shareholder shall duly and validly deliver to the Warrant Agent one
or more definitive share certificate(s) representing the Underlying
Common Shares for further delivery to the holders of Warrants upon
the due exercise thereof and to give effect to the pledge of the
Underlying Common Shares in accordance with the Delivery Agreement.
For greater certainty, the Company shall not be entitled to receive
any portion of the purchase price of any Securities to be paid by
the Underwriters hereunder.
(d) At the Closing Time, delivery of the Warrants by the Company shall
be made through the facilities of The Depository Trust Company
and/or The Canadian Depository for Securities Ltd., or, in the event
not practicable, the Company shall duly and validly deliver to the
Underwriters one or more definitive certificate(s) representing the
Warrants to be issued by it hereunder and pursuant to the Warrant
Agreement, endorsed in such name or names as the Representatives
will notify the Company in writing not less than 24 hours prior to
such Closing Time.
(e) Concurrently with the payment by the Representatives of the purchase
price for the Securities, the Selling Shareholder shall pay to the
Underwriters the Underwriting Fee with respect to the Securities,
through and as requested by the Representatives, by certified
cheque, bank draft, wire transfer, or through the facilities of The
Depository Trust Company and/or The Canadian Depository for
Securities Ltd., at the option of the Representatives, payable in
same-day funds to an account specified by the Representatives.
5. Offering by Underwriters. It is understood that the Underwriters
propose to offer the Securities for sale to the public as set forth in the
Canadian Prospectus and U.S. Prospectus.
6. Agreements.
(a) Prior to the filing of the Canadian Preliminary Prospectus, the
Canadian Prospectus, Canadian Preliminary Warrant Prospectus, the
Canadian Warrant Prospectus, the Company shall permit the
Underwriters to participate fully in the preparation of such
prospectuses and shall allow the Underwriters to conduct all due
diligence investigation which they reasonably require in order to
fulfil their obligations as underwriters under the Canadian
Securities Laws and in order to enable them responsibly to execute
the certificates in the Canadian Preliminary Prospectus and Canadian
Prospectus required to be executed by them.
(b) Contemporaneously with, or immediately prior to, the filing of the
Canadian Preliminary Prospectus, the Canadian Final Prospectus, the
Canadian Preliminary Warrant Prospectus or the Canadian Final
Warrant Prospectus, as the case may be, the Company shall deliver to
the Underwriters and, except for the "long-form" comfort letter
listed in item (v) below, to the Selling Shareholder, without
charge, in Montreal: (i) a copy of the Canadian Preliminary
Prospectus, the Canadian Final Prospectus, the Canadian Preliminary
Warrant Prospectus or the Canadian Final Warrant Prospectus as the
case may be, including all documents incorporated by reference, in
each of the English and French language signed and certified as
required by the Canadian Securities Laws in the Qualifying
Provinces; (ii) a copy of any other document filed by the Company
under the Canadian Securities Laws; (iii) opinions of ▇▇▇▇▇▇
▇▇▇▇▇▇▇, Quebec counsel to the Company, dated, in the case of the
Canadian Preliminary Prospectus, as of the date of the Canadian
Preliminary Prospectus and, in the case of the Canadian Final
Prospectus, as of the date of the Canadian Final Prospectus, in form
and substance satisfactory to the Underwriters, addressed to the
Company, its U.S. counsel, the Selling Shareholder, its counsel, the
Underwriters and their counsel, to the effect that the French
language version of the Preliminary Canadian Prospectus or the
Canadian Final Prospectus, as the case may be, including all
documents incorporated by reference (other than the management proxy
circular dated March 27, 2002), except for the unaudited financial
statements and audited financial statements of the Company, the
schedules and notes thereto and the related auditors' report on such
statements as well as the other financial information forming part
of the management's discussion and analysis of financial condition
and result of operations included in the documents incorporated by
reference (collectively, "Financial Information") as to which no
opinion need be expressed by such counsel, is in all material
respects a complete and accurate translation of the English language
version thereof; (iv) opinions of PricewaterhouseCoopers LLP and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ dated, in the case of the Canadian
Preliminary Prospectus, as of the date of the Canadian Preliminary
Prospectus and, in the case of the Canadian Final Prospectus, as of
the date of the Canadian Final Prospectus, in form and substance
satisfactory to the Underwriters, addressed to the Underwriters, the
Company and their respective Canadian counsel, to the effect that
the French language version of the Financial Information contained
in the Preliminary Canadian Prospectus or the Canadian Final
Prospectus, as the case may be is, in all material respects, a
complete and proper translation of the English language version
thereof; (v) a "long-form" comfort letter of PricewaterhouseCoopers
LLP and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, dated as of the date of the
Canadian Prospectus (with the requisite procedures to be completed
by such auditors no later than two Business Days prior to the date
of the Canadian Prospectus), addressed to the Underwriters and the
directors of the Company, in form and substance satisfactory to the
Underwriters, with respect to certain financial and accounting
information relating to the Company in the Canadian Prospectus,
including all documents incorporated by reference into the Canadian
Prospectus and the auditors' comfort letters adressed to the
Qualifying Authorities in the Qualifying Provinces; and (vi)
opinions of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, General Counsel for the Company, dated,
in the case of the Canadian Preliminary Prospectus, as of the date
of the Canadian Preliminary Prospectus and, in the case of the
Canadian Final Prospectus, as of the date of the Canadian Final
Prospectus, in form and substance satisfactory to the Underwriters,
addressed to the Company, the Underwriters and their Canadian
counsel, to the effect that the French language version of the
Preliminary Canadian Prospectus or the Canadian
Final Prospectus, as the case may be, only with respect to the
management proxy circular dated March 27, 2002 incorporated by
reference therein is, in all material respects, a complete and
proper translation of the English language version thereof. The
deliveries set forth in (i) and (ii) above shall also constitute the
Company's consent to the Underwriters' use of the Canadian
Prospectus for the distribution of the Securities in the Qualifying
Provinces in compliance with the provisions of this Agreement and
the Canadian Securities Laws.
(c) The Company will notify the Underwriters and the Selling Shareholder
promptly, and confirm the notice in writing, (i) when any amendment
to the Registration Statement or the Warrant Registration Statement,
shall have been filed with the Commission or shall have become
effective, and when any amended Canadian Prospectus, U.S.
Prospectus, Canadian Warrant Prospectus or U.S. Warrant Prospectus
or any Supplementary Material shall have been filed, in which case
the Company shall deliver to the Underwriters all signed and
certified copies of such amendment in English and French language
along with all documents similar to those referred to in Section
6(b)(i), (ii), (iii) and (iv); (ii) of the receipt of any comments
from any Qualifying Authority or the Commission; (iii) of any
request by any Qualifying Authority to amend or supplement the
Canadian Prospectus or the Canadian Warrant Prospectus or for
additional information or of any request by the Commission to amend
the Registration Statement or the Warrant Registration Statement or
to amend or supplement the U.S. Prospectus or the U.S. Warrant
Prospectus or for additional information; (iv) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or the Warrant Registration Statement or of
any order from any Qualifying Authority preventing or suspending the
use of the Canadian Prospectus or the Canadian Warrant Prospectus;
or of the prevention or suspension of the qualification of the
Securities or the Underlying Common Shares for offer or sale in any
jurisdiction, or of the institution or threatening of any proceeding
for that purpose; and (v) of the issuance by any Qualifying
Authority or any stock exchange or any court of any order having the
effect of ceasing or suspending the distribution of the Securities
or the trading in the common shares or Warrants of the Company, or
of the institution or threatening of any proceeding for any such
purpose. The Company will use its best efforts to prevent the
issuance of any such stop order or of any order preventing or
suspending such use or such order ceasing or suspending the
distribution of the Securities or the Underlying Common Shares or
the trading in the common shares or Warrants of the Company and, if
any such order is issued, to obtain as soon as possible the
withdrawal thereof.
(d) The Company will give the Underwriters and the Selling Shareholder
notice of its intention to file or prepare any amendment to the
Registration Statement, the Warrant Registration Statement, any
amendment or supplement to the Canadian Prospectus or the Canadian
Warrant Prospectus or any amendment, supplement or revision to any
of the prospectuses included in the Registration Statement or the
Warrant Registration Statement and any Supplementary Material, or
any documents incorporated therein, whether pursuant to the Act, the
Exchange Act, Canadian Securities Laws or otherwise, will furnish
the Underwriters with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the case may
be, and will not file or use any such document to which the
Underwriters or counsel for the Underwriters shall object.
(e) As soon as practicable, the Company will make generally available to
its security holders and to the Underwriters an earnings statement
or statements of the Company and its subsidiaries which will satisfy
the provisions of Section 11(a) of the Act and Rule 158 under the
Act.
(f) The Company and the Selling Shareholder will furnish to the
Underwriters and counsel for the Underwriters, without charge,
signed copies of the Registration Statements (including any
exhibits thereto) and so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Act, as many
commercial copies of each Canadian Preliminary Prospectus and the
U.S. Preliminary Prospectus and the Canadian Final Prospectus and
the U.S. Prospectus and any amendment or supplement thereto as the
Underwriters may reasonably request, including any
amendment pursuant to Section 6(m). The Company will deliver to the
Warrant Agent as many commercial copies of the U.S. Warrant
Prospectus as the Warrant Agent requests to allow the Warrant Agent
to deliver a commercial copy of the U.S. Warrant Prospectus to each
holder of the Warrants who exercises such Warrants. The Company
will deliver to the Selling Shareholder commercial copies of the
Canadian Prospectus and the U.S. Prospectus in such quantities as
the Selling Shareholder shall reasonably request.
(g) The Company will arrange, if necessary, for the qualification of the
Securities and the Underlying Common Shares for sale under the laws
of such jurisdictions as the Underwriters may designate and will
maintain such qualifications in effect so long as required for the
distribution of the Securities or the Underlying Common Shares;
provided that in no event shall the Company be obligated to qualify
to do business in any jurisdiction where it is not now so qualified
or to take any action that would subject it to service of process in
suits, other than those arising out of the offering or sale of the
Securities, in any jurisdiction where it is not now so subject. The
Company will also supply the Underwriters with such information as
is necessary for the determination of the legality of the Securities
for investment under the laws of such jurisdictions as the
Underwriters may request.
(h) The Company will not, without the prior written consent of the
Representatives, which consent shall not be unreasonably withheld,
offer, sell, contract to sell, pledge, or otherwise dispose of (or
enter into any transaction which is designed to, or might reasonably
be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement
or otherwise) by the Company or any affiliate of the Company or any
person in privity with the Company or any affiliate of the Company),
directly or indirectly, including: (i) the filing (or participation
in the filing) of (A) any preliminary prospectus or prospectus under
Canadian Securities Laws, (B) any registration statement with the
Commission, and (C) any offering memorandum or other offering
document, and (ii) establish or increase a put equivalent position
or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act, in respect of any other
common shares of the Company or any securities convertible into, or
exercisable, or exchangeable for, common shares of the Company; or
publicly announce an intention to effect any such transaction, for a
period from the date of this Agreement until 90 days after the
Closing Date (the "Lock-Up Period"), provided, however, that the
Company may (i) issue and sell common shares pursuant to the
Executive Stock Option and Share Purchase Plan, and any employee
stock ownership plan or dividend reinvestment plan of the Company in
effect at the Execution Time; (ii) issue common shares issuable upon
the conversion of securities or the exercise of warrants outstanding
at the Execution Time; (iii) issue common shares as consideration in
a merger, acquisition or other business combination transaction; and
(iv) issue any Underlying Company Common Shares. The Company will
not, without the prior written consent of the Representatives,
offer, purchase, contract to purchase, or otherwise acquire Warrants
for so long as any Warrants shall remain outstanding.
(i) Each of the Selling Shareholder, SGF and SGF Rexfor undertakes, for
itself and on behalf of any wholly owned subsidiary, not, without
the prior written consent of the Representatives, to offer, sell,
contract to sell, hypothecate, pledge, or otherwise dispose of (or
enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash
settlement or otherwise) by such person or any entity controlled
directly or indirectly by it), directly or indirectly, including:
(i) the filing (or participation in the filing) of (A) any
preliminary prospectus or prospectus under Canadian Securities
Laws, (B) any registration statement with the Commission, and (C)
any offering memorandum or other offering document, and (ii)
establish or increase a put equivalent position or liquidate or
decrease a call equivalent position within the meaning of Section
16 of the Exchange Act, in respect of any common shares of the
Company or any securities convertible into, or exercisable, or
exchangeable for, common shares of the Company; or publicly
announce an intention to effect any such transaction (collectively,
"Restricted Activities"), for the duration of the Lock-Up Period,
provided, however, that the Selling Shareholder may sell any
Underlying
Common Shares or other common shares of the Company pursuant to the
exercice of any outstanding Warrants. If the number of Underlying
Common Shares to be released by the Warrant Agent upon the
termination of the Warrant Agreement represents 20% or more of the
total number of Underlying Common Shares hereunder (the "Trigger
Amount"), SGF, SGF Rexfor and the Selling Shareholder will not,
without the prior written consent of the Company, engage in any of
the Restricted Activities with respect to any such Underlying
Common Shares until the earlier of (x) the date which is fifteen
(15) months after the termination of the Warrant Agreement and (y)
the date at which the Selling Shareholder, SGF Rexfor or SGF shall
own, directly or indirectly, less than the Trigger Amount. SGF, SGF
Rexfor and the Selling Shareholder will not, without the prior
written consent of the Representatives, offer, purchase, contract
to purchase, or otherwise acquire, directly or indirectly, Warrants
for so long as any Warrants shall remain outstanding.
(j) The Company will not take, directly or indirectly, any action
designed to or that would constitute or that might reasonably be
expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(k) The Selling Shareholder agrees to pay the costs and expenses
relating to the following matters: (i) the preparation, printing or
reproduction and filing with the Qualifying Authorities and the
Commission, as the case may be, of the Registration Statement
(including financial statements and exhibits thereto), the Form F-X,
the Warrant Registration Statement (including financial statements
and exhibits thereto), the Warrant Form F-X, the Canadian
Preliminary Prospectus, the U.S. Preliminary Prospectus, the
Canadian Final Prospectus, the U.S. Prospectus, the Canadian
Preliminary Warrant Prospectus, the U.S. Preliminary Warrant
Prospectus, the Canadian Final Warrant Prospectus, the U.S. Warrant
Prospectus and each amendment or supplement to any of them; (ii) the
printing (or reproduction) and delivery (including postage, air
freight charges and charges for counting and packaging) of such
copies of such documents, and all amendments or supplements to any
of them, as may, in each case, be reasonably requested for use in
connection with the offering and sale of the Securities and the
Underlying Common Shares; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the
Securities and the Underlying Common Shares, including any stamp or
transfer taxes in connection with the original issuance and sale of
the Warrants; (iv) the printing (or reproduction) and delivery of
this Agreement, any blue sky memorandum and all other agreements or
documents printed (or reproduced) and delivered in connection with
the offering of the Securities; (v) the listing of the Warrants on
the Toronto Stock Exchange; (vi) any registration or qualification
of the Securities for offer and sale under the securities or blue
sky laws of the several States (including filing fees and the
reasonable fees and expenses of counsel for the Underwriters
relating to such registration and qualification); (vii) any filings
required to be made with the National Association of Securities
Dealers, Inc. ("NASD") (including filing fees and the reasonable
fees and expenses of counsel for the Underwriters relating to such
filings); (viii) the fees and expenses of the Company's accountants,
the fees and expenses of the Company's financial advisors, and the
fees and expenses of counsel (including local and special counsel)
for the Company; and (ix) all other costs and expenses incident to
the performance by the Selling Shareholder and the Company of their
respective obligations hereunder.
(l) For a period of three years after the Closing Date, the Company
shall furnish to the Representatives, the Selling Shareholder and,
upon request, to each Underwriter, copies of all reports filed with
the Commission on Forms 40-F, 20-F and 6-K, as applicable, or such
similar forms as may be designated by the Commission, annual
information forms, management proxy circulars and such other
documents as shall be furnished by the Company to its shareholders
generally (collectively, the "Filings"), except for all such
Filings filed by the Company with the Commission in electronic
format on the Electronic Data Gathering, Analysis and Retrieval
system.
(m) During the period from the date of this Agreement to the completion
of the distribution of the Securities or the Underlying Common
Shares, the Company and the Selling Shareholder (solely with respect
to any fact or change that relates to such Selling Shareholder or any
of the statements or information relating thereto or to the
Securities to be sold by such Selling Shareholder contained in the
Canadian Prospectus, the Canadian Warrant Prospectus, the U.S.
Prospectus, the U.S. Warrant Prospectus, or any Supplementary
Material) shall: (i) promptly notify the Underwriters in writing of
(A) any material change (actual, anticipated, contemplated or
threatened, financial or otherwise) in the business, affairs,
operations, assets, liabilities (contingent or otherwise) or capital
of the Company and its subsidiaries taken as a whole; (B) any
material fact that has arisen or been discovered and would have been
required to have been stated in the Canadian Prospectus and U.S.
Prospectus had the fact arisen or been discovered on, or prior to,
the date of such Canadian Prospectus and U.S. Prospectus; (C) any
event occurs as a result of which the Canadian Prospectus or the U.S.
Prospectus as then supplemented would include any untrue statement of
a material fact or omit to state any material fact necessary to make
the statements therein in the light of the circumstances under which
they were made not misleading, or if it shall be necessary to amend
the Registration Statement or the Warrant Registration Statement or
supplement the Canadian Prospectus, the Canadian Warrant Prospectus,
the U.S. Prospectus or the U.S. Warrant Prospectus to comply with the
Act, the Exchange Act, or Canadian Securities Laws or the respective
rules thereunder; and (D) any change in any material fact (which for
the purposes of this Agreement shall be deemed to include the
disclosure of any previously undisclosed material fact) contained in
the Canadian Prospectus, the Canadian Warrant Prospectus, the U.S.
Prospectus and the U.S. Warrant Prospectus, including all documents
incorporated by reference, which fact or change is, or may be, of
such a nature as to render any statement in the Canadian Prospectus,
the Canadian Warrant Prospectus, the U.S. Prospectus or the U.S.
Warrant Prospectus misleading or untrue or which would result in any
of such document not complying (to the extent that such compliance is
required) with the Canadian Securities Laws, the Act or the Exchange
Act, (ii) promptly, and in any event within any applicable time
limitation, comply, to the satisfaction of the Underwriters, with all
applicable filings and other requirements under the Canadian
Securities Laws, the Act and the Exchange Act and as a result of such
fact or change, and (iii) supply any amended Canadian Prospectus,
U.S. Prospectus, Canadian Warrant Prospectus or U.S. Warrant
Prospectus to the Underwriters in such quantities as the Underwriters
may reasonably request. The Company and the Selling Shareholder shall
in good faith discuss with the Underwriters any fact or change in
circumstances (actual, anticipated, contemplated or threatened,
financial or otherwise) which is of such a nature that there is
reasonable doubt whether written notice need be given under this
paragraph.
(n) The Company will, as soon as possible and in any event no later than
three Business Days following the date of this Agreement, under the
applicable laws of the Province of Quebec or, in the event the
Company fails to obtain the Resale Exemption by such date, under the
applicable laws of the Qualifying Provinces, prepare, file and
obtain a receipt or an MRRS Decision Document issued by the
Reviewing Authority pursuant to the Securities Act (Quebec) and the
regulations thereunder or NP 43-201, as applicable (such decision
document evidencing that a receipt has been issued by the Qualifying
Authorities in each Qualifying Province) in respect of, a
preliminary shelf prospectus of the Company relating to the
Underlying Common Shares and the Underlying Company Common Shares,
in a form acceptable to the Underwriters acting reasonably,
established in accordance with National Instrument 44-102, including
the documents incorporated by reference (in the English and French
languages, as applicable, the "Canadian Preliminary Warrant
Prospectus") and other related documents in respect of the proposed
distribution of the Underlying Common Shares and the Underlying
Company Common Shares. The Company shall also, concurrently with the
filing of the Canadian Preliminary Warrant Prospectus, prepare and
file pursuant to the multi-jurisdictional disclosure system with the
Commission a registration statement on Form F-10 covering the
registration of the Underlying Common Shares and the Underlying
Company Common Shares under the Act, including the
Canadian Preliminary Warrant Prospectus (with such deletions
therefrom and additions thereto as are permitted or required by Form
F-10 and the applicable rules and regulations of the Commission)
(the "U.S. Preliminary Warrant Prospectus"). Such registration
statement on Form F-10, including the exhibits thereto and the
documents incorporated by reference therein, as amended at the time
it becomes effective and in the event of any post-effective
amendments, as of the date the effectiveness of such amendment, is
herein called the "Warrant Registration Statement." The Company will
use its reasonable best efforts to maintain the effectiveness of the
Warrant Registration Statement or another registration statement
providing for the registration of the continuous offering of the
Underlying Common Shares and the Underlying Company Common Shares
until the earlier of the expiration date of the Warrants and the
date upon which all such Warrants have been exercised. The Company
shall supply any amended Canadian Prospectus, U.S. Prospectus,
Canadian Warrant Prospectus or U.S. Warrant Prospectus to the
Underwriters in such quantities as the Underwriters may reasonably
request. The prospectus included in the Warrant Registration
Statement at the time it becomes effective, including the documents
incorporated by reference therein, is herein called the "U.S.
Warrant Prospectus".
(o) The Company shall, as soon as possible after any comments of the
Qualifying Authorities have been satisfied and in any event no later
than 5:00 p.m. (Montreal time) on the Business Day before the
Closing Date, under the applicable laws of the Province of Quebec
or, in the event the Company fails to obtain the Resale Exemption by
such date, under the applicable laws of the Qualifying Provinces,
prepare, file and obtain a receipt or an MRRS decision document
issued by the Reviewing Authority pursuant to the Securities Act
(Quebec) and the regulations thereunder or NP 43-201, as applicable
(such decision document evidencing that a receipt has been issued by
the Qualifying Authorities in each Qualifying Province), in respect
of, a final shelf prospectus of the Company relating to the
Underlying Common Shares and the Underlying Company Common Shares in
a form acceptable to the Underwriters acting reasonably, including
the documents incorporated by reference in the English and French
languages, as applicable (the "Canadian Final Warrant Prospectus"),
and other related documents in respect of the proposed distribution
of the Underlying Common Shares and the Underlying Company Common
Shares. The Company shall also, concurrently with the filing of the
Canadian Final Warrant Prospectus, prepare and file pursuant to the
multi-jurisdictional disclosure system with the Commission, an
amendment to the Warrant Registration Statement, including the
Canadian Final Warrant Prospectus in the English language (with such
deletions therefrom and additions thereto as are permitted or
required by Form F-10 and the applicable rules and regulations of
the Commission), and the Company shall cause the Warrant
Registration Statement to become effective by the Commission
pursuant to the Act. The Company will also prepare and file with the
Commission an Appointment of Agent for Service of Process and
Undertaking on Form F-X in conjunction with the filing of the
Warrant Registration Statement (the "Warrant Form F-X").
(p) After the Closing Time, the Underwriters shall (i) use their best
efforts to complete the distribution of the Securities as promptly
as possible; and (ii) give prompt written notice to the Company
when, in the opinion of the Underwriters, they have completed
distribution of the Securities, including the total proceeds
realized in each of the Qualifying Provinces and in any other
jurisdiction.
(q) The Company, during the period when the U.S. Prospectus or the U.S.
Warrant Prospectus, as applicable, is required to be delivered under
the Act or the Exchange Act in respect of the offer and sale of the
Securities or the Underlying Common Shares, will file all documents
required to be filed by the Company with the Commission pursuant to
the Exchange Act within the time periods required by the such Act
and the rules and regulations of the Commission thereunder.
(r) The Company agrees to: (A) enter into the Warrant Agreement and
appoint Computershare Trust Company of Canada as Warrant Agent
thereunder, and (B) enter into the Delivery Agreement with the
Selling Shareholder, SGF, SGF Rexfor and the Warrant Agent.
(s) The Selling Shareholder agrees to enter into the Delivery Agreement
with the Company and the Warrant Agent and to deposit the Underlying
Common Shares with the Warrant Agent for the account of the Warrant
holders and the Company.
(t) The Company agrees to apply for listing of the Warrants on the
Toronto Stock Exchange.
(u) The Underwriters hereby covenant with each of the Selling
Shareholder and the Company, and acknowledges that each of the
Selling Shareholder and the Company are relying on such covenants in
entering into this Agreement, that:
(i) the Underwriters will offer the Common Shares and Warrants as
units for sale to the public and will sell the Securities only in
those jurisdictions in Canada where they may be lawfully offered
for sale and then only at a price not exceeding the price per
Securities set out in the cover page of the Prospectus. The
Underwriters shall cause a similar undertaking to be contained in
any agreement entered into by members of any banking or selling
group established in connection with the offering of Securities
contemplated hereby;
(ii) the Underwriters agree that they have and will distribute the
Securities in a manner which complies with Canadian Securities
Laws; and
(iii) the Underwriters will advise the Company by written notice of
the date of termination of the period of offering of the
Securities;
Notwithstanding the foregoing, an Underwriter will not be liable to the
Selling Shareholder and to the Company under this Section with respect to a
default by another Underwriter under this Section.
7. Conditions to the Obligations of the Underwriters. The obligations of
the Underwriters to purchase the Securities shall be subject to the accuracy of
the representations and warranties on the part of the Company and the Selling
Shareholder contained herein as of the Execution Time and the Closing Date, to
the accuracy of the statements of the Company made in any certificates pursuant
to the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) As of the Closing Time, the Canadian Prospectus and the Canadian
Warrant Prospectus shall have each been filed with the Qualifying
Authorities and an MRRS Decision Documents shall have been obtained
from the Reviewing Authority evidencing issuance by the Qualifying
Authorities of a receipt in respect of each of the Canadian
Prospectus and the Canadian Warrant Prospectus; and no order having
the effect of ceasing or suspending the distribution of or the
trading in the Common Shares, the Warrants or the Underlying Common
Shares or any other securities of the Company shall have been issued
by any Qualifying Authority or any stock exchange and no proceedings
for that purpose shall have been instituted or threatened by any
Qualifying Authority or any stock exchange and any request for
additional information shall have been complied with.
(b) The Registration Statement and the Warrant Registration Statement,
and any amendment thereto, shall have each been filed with the
Commission and shall have each become effective under the Act on the
Business Day prior to the Closing Date and no stop order suspending
the effectiveness of either of the Registration Statement or the
Warrant Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or
threatened by the Commission and any request for additional
information shall have been complied with.
(c) The Company shall have requested and caused ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Canadian
counsel for the Company, to have furnished to the Underwriters their
opinion, dated the Closing Date and addressed to the Company, its
U.S. counsel, the Selling Shareholder, its counsel, the Underwriters
and their counsel, to the effect that:
(i) each of the Company and Norampac has been incorporated and is
existing under the Canada Business Corporations Act and is
registered under an Act respecting the legal publicity of sole
proprietorships, partnerships and legal persons (Quebec) and
the Company has all the requisite corporate power and authority
to own or lease its property
and assets and to conduct its business as described in the
Canadian Warrant Prospectus, the Canadian Prospectus;
(ii) the Company's authorized share capital is as set forth under
the heading "Description of Share Capital" in the Canadian
Prospectus;
(iii) the Agreement has been duly authorized, executed and delivered
by the Company and constitutes a legal, valid and binding
obligation of the Company enforceable against it in accordance
with its terms;
(iv) the Warrants have been duly and validly authorized, and, when
issued and delivered to and paid for by the Underwriters
pursuant to this Agreement, will be validly issued, fully paid
and non-assessable;
(v) each of the Company and Norampac is duly qualified to carry on
business as an extra-provincial corporation or a foreign
corporation in the provinces of Canada and is in good standing
under the laws of each jurisdiction which requires such
qualification other than where the failure to be so qualified or
in good standing would not have a Material Adverse Effect;
(vi) the Toronto Stock Exchange has conditionally approved the
listing of the Warrants, subject to the Company fulfilling all
of the requirements of the Toronto Stock Exchange; and the
Common Shares and the Underlying Common Shares are duly listed
on the Toronto Stock Exchange and the New York Stock Exchange;
(vii) the statements included (i) in the Canadian Prospectus and the
Canadian Warrant Prospectus under the headings "Eligibility for
Investment", "Statutory Rights of Withdrawal and Rescission",
"Certain Income Tax Considerations -- Canadian Federal Income Tax
Considerations", "Description of Share Capital", "Details of the
Offering" and "Plan of Distribution"; and (ii) in the
Registration Statement under "Indemnification" insofar as such
statements summarize legal matters, agreements, documents or
proceedings discussed therein, are accurate and fair summaries of
such legal matters, agreements, documents or proceedings;
(viii) to such counsel's knowledge, after due inquiry, no order having
the effect of ceasing or suspending the distribution or trading
of the Common Shares, Warrants or the Underlying Common Shares
has been issued by the Qualifying Authorities, the Toronto Stock
Exchange or any court and no proceedings for that purpose have
been instituted or threatened;
(ix) the Canadian Prospectus and the Canadian Warrant Prospectus
(including the documents incorporated by reference but excluding
the financial statements and other financial information
contained or incorporated by reference therein, as to which such
counsel need express no opinion) each comply as to form with the
applicable requirements of Canadian Securities Laws as
interpreted by the Qualifying Authorities;
(x) an MRRS Decision Document for each of the Canadian Prospectus
and the Canadian Warrant Prospectus has been obtained from the
Reviewing Authority and the Reviewing Authority has not revoked
such MRRS Decision Document; there are no other documents,
reports or other information that in accordance with the
requirements of the Qualifying Authorities must be filed or made
publicly available in connection with the offering of the
Securities and the Underlying Common Shares; and no other
consent, approval, authorization, filing with or order of any
court or governmental agency authority or body or any arbitrator
of Canada or any province thereof is required in connection with
the transactions contemplated herein, except such as have been
obtained or made under Canadian Securities Laws in connection
with the purchase and distribution of the Securities by the
Underwriters in the manner contemplated in this Agreement and in
the Canadian Prospectus and such other approvals (specified in
such counsel's opinion) as have been obtained;
(xi) the Company is eligible to use a short form prospectus under
44-101 and the shelf prospectus procedure under 44-102;
(xii) the Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this
Agreement, the Warrant Agreement and the Delivery Agreement;
(xiii) the Warrant Agreement has been duly authorized, executed and
delivered by the Company and constitutes a legal, valid and
binding obligation of the Company enforceable against it in
accordance with its terms;
(xiv) the Delivery Agreement has been duly authorized, executed and
delivered by the Company and constitutes a legal, valid and
binding obligation of the Company enforceable against it in
accordance with its terms;
(xv) the Common Shares and the Underlying Common Shares have been
duly authorized and validly issued and are outstanding as fully
paid and non-assessable;
(xvi) The Company has duly reserved for issuance the Underlying
Company Common Shares and such common shares, when issued,
delivered and paid for by the holders of Warrants will be validly
issued as fully paid an non-assessable;
(xvii) the issue, sale and delivery by Company of the Underlying
Company Common Shares and the sale and delivery by the Selling
Shareholder of the Underlying Common Shares is exempt from the
prospectus and registration requirements of the securities laws
of the Qualifying Provinces provided that no commission or other
remuneration is paid or given to others in respect of such
issuance and delivery, except for ministerial, administrative or
professional services, or for services performed by a registered
dealer, subject to customary qualifications;
(xviii) the first trade of the Underlying Common Shares and the
Underlying Company Common Shares following their issue, sale and
delivery by the Company is not subject to the prospectus
requirements of the securities laws of the Qualifying Provinces
subject to customary qualifications and restrictions under
applicable securities legislation;
(xix) Computershare Trust Company has been duly appointed as the
registrar and transfer agent in Canada in respect of the Common
Shares and warrant agent in respect of the Warrants and Bank of
New York has been duly appointed as the co-transfer agent in the
United States in respect of the Common Shares;
(xx) the form of definitive certificate representing the Warrants has
been duly approved and adopted by the Company and complies with
the provisions of the Canada Business Corporations Act;
(xxi) for the purposes of the Income Tax Act (Canada), the Common
Shares and Warrants included in the Securities, as of the date
hereof, are qualified investments under the Income Tax Act
(Canada) and the Regulations thereunder for a trust governed by a
registered retirement savings plan, registered retirement income
fund, a deferred profit sharing plan or a registered educations
savings plan;
(xxii) as of the date hereof, the Common Shares and the Warrants
included in the Securities will not constitute "foreign property"
for the purposes of Part XI of the Income Tax Act (Canada);
(xxiii) neither the execution and delivery of this Agreement, the
Warrant Agreement or the Delivery Agreement, the issue and sale
of the Warrants, the issue of the Underlying Company Common
Shares, nor the consummation of any other of the transactions
herein contemplated nor the fulfilment of the terms hereof will
conflict with, result in a breach or violation of or constitutes
or will constitute a default under or results or will result in
the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or its subsidiaries
pursuant to, (i) the articles or by-laws of the Company or
its subsidiaries, (ii) the terms such material agreements as are
set out in a schedule to such counsel's opinion that is
acceptable to the Underwriters' counsel, or (iii) any statute,
law, rule, regulation, judgment, order or decree of Canada that
such counsel would normally expect to apply to the Company or its
subsidiaries in connection with transactions of this nature, or
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority of Canada that such counsel would
normally expect to have jurisdiction over the Company or its
subsidiaries, or any of its or their properties, in connection
with transactions of this nature;
(xxiv) no stamp duty, registration or documentary taxes, duties or
similar charges are payable under the laws of the Province of
Quebec or the federal laws of Canada applicable therein in
connection with the creation, issuance and delivery to the
Underwriters of the Securities or the authorization, execution
and delivery of this Agreement, the Warrant Agreement or the
Delivery Agreement;
(xxv) the Company is a reporting issuer in each of the Qualifying
Provinces (where such notion exists), and is not included in a
list of defaulting reporting issuers maintained pursuant to the
applicable securities laws of each such jurisdiction;
(xxvi) the Securities and the Underlying Common Shares are eligible
investments as described under the heading "Eligibility for
Investment" in the Canadian Prospectus; and
(xxvii) each of the Canadian Preliminary Prospectus, the Canadian
Prospectus, the Canadian Preliminary Warrant Prospectus and the
Canadian Warrant Prospectus, in both the French and English
language versions thereof, and the filing thereof under the
securities laws of all the Qualifying Provinces, have been duly
approved by the Board of Directors of the Company and each of the
Canadian Preliminary Prospectus, the Canadian Prospectus, the
Canadian Preliminary Warrant Prospectus and the Canadian Warrant
Prospectus, in both the French and English language versions
thereof, has been duly executed pursuant to such approval in the
name of the Company by duly authorized directors and officers of
the Company.
In addition to rendering the opinions set forth above, such counsel shall
also include a statement to the effect that such counsel has participated in the
preparation of the Canadian Prospectus and in conferences with certain officers
and other representatives of and counsel for the Company, representatives of the
independent accountants for the Company and representatives of and counsel for
the Underwriters in connection with the preparation of the Canadian Prospectus
at which the contents of the Canadian Prospectus and the Canadian Warrant
Prospectus and related matters were discussed and although such counsel has not
independently verified, and (except as to those matters and to the extent set
forth in the opinions referred to in subsection (vii) of this paragraph 7(c)) is
not passing upon and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Canadian Prospectus
or any amendment or supplement thereto, on the basis of such participation, such
counsel has no reason to believe that (i) as of its date, the Canadian
Prospectus or the Canadian Warrant Prospectus, as amended or supplemented, (ii)
as of the date of its issue, any amendment or supplement to the Canadian
Prospectus or the Canadian Warrant Prospectus, and (iii) on the Closing Date,
the Canadian Prospectus or the Canadian Warrant Prospectus, as amended or
supplemented as of such date, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading (other than the financial statements and related schedules and
notes thereto and other financial information included or incorporated by
reference therein, as to which such counsel need express no opinion).
In rendering such opinion, such counsel may rely (i) as to matters
involving the application of laws of any jurisdiction other than the Province of
Quebec or the federal laws of Canada, to the extent they deem proper and
specified in such opinion, upon the opinion of other counsel of good standing
whom they believe to be reliable and who are satisfactory to counsel for the
Underwriters and (ii) as to matters of fact, to the extent they seem proper, on
certificates of responsible officers of the Company and public officials.
References to the Canadian Prospectus in this paragraph (c) include any
amendments thereto at the Closing Date.
(d) The Company shall have requested and caused Debevoise & ▇▇▇▇▇▇▇▇,
U.S. counsel for the Company, to have furnished to the Underwriters
their opinion, dated the Closing Date, and addressed to the
Underwriters and the Selling Shareholder, to the effect that:
(i) each of Domtar Industries Inc., Domtar A.W. Corp., Domtar Maine
Corp., Ris Paper Company, Inc. and ▇.▇. ▇▇▇▇ Paper, Inc.
(individually a "U.S. Subsidiary" and collectively the "U.S.
Subsidiaries") (i) is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation and (ii) has full corporate power and authority
to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the U.S.
Prospectus;
(ii) all the outstanding shares of capital stock of each of Domtar
A.W. Corp., and Domtar Maine Corp. have been duly and validly
authorized and issued and are fully paid and non-assessable;
(iii) the statements included in the U.S. Prospectus under the
heading "Certain Income Tax Considerations -- United States
Federal Income Tax Considerations", insofar as such statements
purport to summarize certain United States Federal income tax
consequences of the purchase, ownership and disposition of the
Warrants and Common Shares by certain U.S. holders, provide a
fair summary of such consequences under current law.
(iv) the Company meets the general eligibility requirements for use
of Form F-10 under the Act; the Registration Statement and the
Warrant Registration Statement have each become effective under
the Act; the Form F-X and the Warrant Form F-X were filed with
the Commission prior to the effectiveness of the Registration
Statement or the Warrant Registration Statement, respectively; to
the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or the Warrant
Registration Statement has been issued and no proceedings for
that purpose have been instituted or threatened; and, assuming
that the Canadian Prospectus and the Canadian Warrant Prospectus
comply as to form in all material respects and has been prepared
in accordance with the requirements of all applicable Canadian
Securities Laws as interpreted and applied by the Reviewing
Authority, including without limitation (A) that there are no
documents, reports or other information that in accordance with
the requirements of the Qualifying Authorities must be filed or
made publicly available in connection with the offering of the
Securities and (B) that, other than a form of this Agreement,
there were no publicly available documents filed with the
Reviewing Authority or any other Canadian regulatory authority,
(x) the Registration Statement and the U.S. Prospectus and the
Warrant Registration Statement and the U.S. Warrant Prospectus
(other than the financial statements and related schedules and
notes thereto and other financial information contained or
incorporated by reference therein, as to which such counsel need
express no opinion) and the Form F-X and the Warrant Form F-X,
comply as to form in all material respects with the applicable
requirements of the Act and the rules thereunder and (y) there is
no document required to be filed as an exhibit to the
Registration Statement or the Warrant Registration Statement by
the Act which has not been so filed;
(v) the Company is not and, after giving effect to the offering and
sale of the Securities, will not be required to be registered as
an "investment company" (as defined in the Investment Company Act
of 1940, as amended) under the Investment Company Act of 1940, as
amended;
(vi) no consent, approval, authorization, filing with or order of any
court or governmental agency or body or any arbitrator of the
State of New York or the United States is required in connection
with the authorization, execution and delivery by the Company of
this Agreement, the Warrant Agreement or the Delivery Agreement
and the performance
by the Company of its obligations thereunder, or for the
offering, issuance, sale or delivery of the Securities, except
such as have been obtained under the Act or such as may be
required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities
by the Underwriters in the manner contemplated in this Agreement
and in the U.S. Prospectus and such other approvals (specified in
such opinion) as have been obtained;
(vii) assuming the authorization, execution and delivery of this
Agreement, the Warrant Agreement and the Delivery Agreement by
the Company under the laws of the Province of Quebec and the
applicable federal laws of Canada and assuming this Agreement,
the Warrant Agreement and the Delivery Agreement are each a valid
and binding agreement of the Company under the laws of the
Province of Quebec and the applicable federal laws of Canada,
under the laws of the State of New York relating to submission to
jurisdiction, the Company has validly appointed CT Corporation
System in Section 13 of this Agreement for the purposes described
in this Agreement; and
(viii) the execution and delivery by the Company of this Agreement,
the Warrant Agreement, the Delivery Agreement, the performance by
the Company of its obligations thereunder, the sale of the Common
Shares and the issue and delivery of the Warrants do not result
in a breach or violation of or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or its
subsidiaries pursuant to (i) the charter or by-laws of the U.S.
Subsidiaries, (ii) the terms of such material agreements as are
set out in a schedule to such counsel's opinion that is
acceptable to the Underwriters' counsel or (iii) any United
States federal or New York State statute, law, rule, regulation
or, to the knowledge of such counsel, any judgment, order or
decree applicable to the Company or its subsidiaries of any
United States federal or New York State court, regulatory body,
administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or its
subsidiaries or any of its or their properties in the United
States.
In addition to rendering the opinions set forth above, such counsel shall
also include a statement to the effect that such counsel has participated in the
preparation of the Registration Statement and the U.S. Prospectus and in
conferences with certain officers and other representatives of and counsel for
the Company, representatives of the independent accountants for the Company and
representatives of and counsel for the Underwriters in connection with the
preparation of the U.S. Prospectus and the Registration Statement at which the
contents of the U.S. Prospectus and the Registration Statement and related
matters were discussed and although such counsel has not independently verified,
and (except as to those matters and to the extent set forth in the opinions
referred to in subsection (iii) of this paragraph 7(d))) is not passing upon and
does not assume any responsibility for, the accuracy, completeness or fairness
of the statements contained in the Registration Statement or the U.S. Prospectus
or any amendment or supplement thereto, on the basis of such participation, such
counsel has no reason to believe (a) that the Registration Statement (other than
the financial statements and related schedules and notes thereto and other
financial information included or incorporated by reference therein, as to which
such counsel need express no belief) as of the Effective Time contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or (b) that, (i) as of its date, the U.S. Prospectus, as amended or
supplemented, (ii) as of the date of its issue, any amendment or supplement to
the U.S. Prospectus and (iii) on the Closing Date, the U.S. Prospectus, as
amended or supplemented as of such date, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading (other than the financial statements and
related schedules and notes thereto and other financial information included or
incorporated by reference therein, as to which such counsel need express no
belief).
In rendering such opinion, such counsel may rely (i) as to matters
involving the application of laws of any jurisdiction other than the State of
New York, State of Delaware or the Federal laws of the United States, to the
extent they deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the
Underwriters and (ii) as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and public officials.
References to the Canadian Prospectus and the U.S. Prospectus in this paragraph
(d) include any supplements thereto at the Closing Date.
(e) The Underwriters shall have received the opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
General Counsel for the Company, dated the Closing Date, and
addressed to the Underwriters and the Selling Shareholder, to the
effect that:
(i) the holders of outstanding shares of capital stock of the
Company are not entitled to preemptive or other rights to
subscribe for the Securities and the sale of the Common Shares
and the issuance and delivery of the Warrants will not be
subject to any preemptive or other rights to subscribe for any
securities of the Company; and, except as set forth in the
Canadian Prospectus and the U.S. Prospectus, no options,
warrants or other rights to purchase, agreements or other
obligations to issue, or rights to convert any obligations into
or exchange any securities for, shares of capital stock of or
ownership interests in the Company are outstanding;
(ii) all the outstanding shares of capital stock of Domtar
Industries Inc. have been duly and validly authorized and
issued and are fully paid and non assessable; and except as
otherwise set forth in the Canadian Prospectus and the U.S.
Prospectus, all outstanding shares of capital stock of each
Significant Subsidiary and 50% of the outstanding shares of
capital stock of Norampac are owned by the Company either
directly or through wholly owned subsidiaries free and clear of
any perfected security interest and, to the knowledge of such
counsel, after due inquiry, any other security interest, claim,
lien or encumbrance, other than where such security interests,
claims, liens or encumbrances would not have a Material Adverse
Effect; and
(iii) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries or its or
their property that (i) is of a character required to be
disclosed in the Canadian Prospectus, the Canadian Warrant
Prospectus, the U.S. Prospectus and the U.S. Warrant Prospectus
which is not adequately disclosed in the Canadian Prospectus,
the Canadian Warrant Prospectus, the U.S. Prospectus and the
U.S. Warrant Prospectus, (ii) could reasonably be expected to
have a material adverse effect on the Company's ability to
perform its obligations under this Agreement or to consummate
the transactions contemplated hereby or (iii) except as set
forth in or contemplated in the Canadian Prospectus and the
U.S. Prospectus, could reasonably be expected to have a
Material Adverse Effect;
(iv) to the knowledge of such counsel, after due inquiry, the Company
and its subsidiaries (i) are in compliance with all
Environmental Laws and (ii) have received and are in compliance
with all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective
businesses as presently conducted and as described in the
Canadian Prospectus, except where such non-compliance with
Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms
and conditions of such permits, licenses or approvals would not,
individually or in the aggregate, have a Material Adverse
Effect;
(v) no holders of the outstanding shares of capital stock of the
Company have rights to require the Company to file a prospectus
under Canadian Securities Laws with respect to any securities of
the Company or to require the Company to include such securities
with the Securities qualified under the Canadian Prospectus;
(vi) neither the execution and delivery of this Agreement, the sale
of the Common Shares, the issuance and delivery of the Warrants
and the issuance or delivery of the Underlying Common Shares or
any other common shares of the Company upon exercise of the
Warrants, nor the consummation of any other of the transactions
herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in
a breach or violation of or constitutes or will constitute a
default under or results or will result in the creation or
imposition of any lien, charge or encumbrance upon any property
or bond, debenture or other evidence of indebtedness or any
indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Company or its
subsidiaries is a party or bound or to which its or their
property is subject; and
(vii) the French language translation of the management proxy
circular dated March 27, 2002 which is incorporated by
reference in the Canadian Preliminary Prospectus and the
Canadian Prospectus is in all material respects a complete and
proper translation of the English language version thereof.
In addition to rendering the opinions set forth above, such counsel shall
also include a statement to the effect that such counsel has participated in the
preparation of the Canadian Prospectus and in conferences with certain officers
and other representatives of and counsel for the Company, representatives of the
independent accountants for the Company and representatives of and counsel for
the Underwriters in connection with the preparation of the Canadian Prospectus
at which the contents of the Canadian Prospectus and related matters were
discussed and although such counsel has not independently verified, and is not
passing upon and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Canadian Prospectus
or any amendment or supplement thereto, on the basis of such participation, such
counsel has no reason to believe that, (i) as of its date, the Canadian
Prospectus, as amended or supplemented, (ii) as of the date of its issue, any
amendment or supplement to the Canadian Prospectus and (iii) on the Closing
Date, the Canadian Prospectus, as amended or supplemented as of such date,
included or includes an untrue statement of a material fact or omitted or omits
to state a material fact necessary to ▇▇▇▇ the statements therein, in light of
the circumstances under which they were made, not misleading (other than the
financial statements and related schedules and notes thereto and other financial
information included or incorporated by reference therein, as to which such
counsel need express no belief).
In rendering such opinion, such counsel may rely (i) as to matters
involving the application of laws of any jurisdiction other than the Province of
Quebec or the Federal laws of Canada, to the extent he deems proper and
specified in such opinion, upon the opinion of other counsel of good standing
whom he believes to be reliable and who are satisfactory to counsel for the
Underwriters and (ii) as to matters of fact, to the extent he deems proper, on
certificates of responsible officers of the Company and public officials.
References to the Canadian Prospectus in this paragraph (e) include any
supplements thereto at the Closing Date.
(f) The Underwriters shall have received the opinion of Fasken
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, counsel for the Selling Shareholder, SGF
Rexfor and SGF, dated the Closing Date, and addressed to the
Underwriters, to the effect that the Agreement has been duly
authorized and executed by or on behalf of each of the Selling
Shareholder and SGF. The Agreement constitutes a legal, valid and
binding obligation of each of the Selling Shareholder, SGF and SGF
Rexfor and, enforceable against each of them in accordance with its
terms, except as enforcement hereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
the rights of creditors generally (including the provisions of the
Quebec Civil Code) and except as limited by the application of
equitable principles when equitable remedies are sought and subject
to the fact that rights of indemnity and contribution may be
limited by applicable law.
(g) The Underwriters shall have received the opinion of Me ▇▇▇▇ ▇▇▇▇▇▇,
Vice-President, Legal Affairs and Corporate Secretary of SGF, dated
the Closing Date, and addressed to the Underwriters, to the effect
that:
(i) each of SGF Rexfor and the Selling Shareholder has been
incorporated and is existing under part IA of the Companies Act
(Quebec) and has all the requisite corporate power to own or
lease its property and assets and to conduct its business in
its current form. SGF is validly existing pursuant to An Act
respecting Societe Generale de Financement du Quebec (Quebec);
(ii) each of SGF Rexfor and the Selling Shareholder is in good
standing under An Act respecting the legal publicity of sole
proprietorships, partnerships and legal persons (Quebec). SGF
is not required to register pursuant to such act;
(iii) all of the issued and outstanding shares of the Selling
Shareholder are registered in the name of SGF Rexfor and all
of the issued and outstanding shares of SGF Rexfor are
registered in the name of SGF;
(iv) the Selling Shareholder has valid marketable title to the
Common Shares and the Underlying Common Shares, free and clear
of any hypothec, lien, charge, claim, encumbrance, pledge,
security interest, defect or other restriction on transfer of
any kind (other than pursuant to the Delivery Agreement) and
such Common Shares and Underlying Common Shares shall be sold
and delivered by the Selling Shareholder free and clear of any
hypothec, lien, charge, claim, encumbrance, pledge, security
interest, defect or other restriction on transfer of any kind;
(v) the Agreement, the Delivery Agreement and the transactions
contemplated therein have been duly authorized, executed and
delivered and all necessary corporate actions have been taken by
each of the Selling Shareholder, SGF and SGF Rexfor;
(vi) the execution and delivery by each of the Selling Shareholder,
SGF and SGF Rexfor of the Agreement and the compliance by each
of them with the provisions thereof and the consummation of the
transactions contemplated therein does not conflict with,
result in a breach or violation of or constitutes or will
constitute a default under or results or will result in the
creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Selling Shareholder, SGF and SGF
Rexfor pursuant to: (i) the constating documents, by-laws or
resolutions of the directors or shareholders of each of the
Selling Shareholder, SGF and SGF Rexfor, (ii) any material
agreements of the Selling Shareholder or the Voting Agreement,
or (iii) any law, judgment or decree applicable to the Selling
Shareholder; and
(vii) the waiver referred to in paragraph 2(h)(A) hereof was
executed in writing by the parties to the Voting Agreement, in
accordance with section 17 thereof.
(h) The Underwriters shall have received from Shearman & Sterling, U.S.
counsel for the Underwriters, such opinion or opinions, dated the
Closing Date and addressed to the Underwriters, with respect to the
sale of the Securities, the Registration Statement, the U.S.
Prospectus, the Warrant Registration Statement and the U.S. Warrant
Prospectus (together with any supplement thereto) and other related
matters as the Underwriters may reasonably require, and the Company
shall have furnished to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters.
(i) The Underwriters shall have received from Osler, ▇▇▇▇▇▇ & Harcourt
LLP, Canadian counsel for the Underwriters, such opinion or
opinions, dated the Closing Date and addressed to the Underwriters,
with respect to the issuance and sale of the Securities, the
Canadian Prospectus (together with any supplement thereto) and other
related matters the Underwriters may reasonably require and the
Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(j) The Company shall have furnished to the Underwriters and the Selling
Shareholder a certificate of the Company, signed by the President
and Chief Executive Officer and the Senior Vice President and Chief
Financial Officer of the Company, dated the Closing Date, to the
effect that:
(i) the signers of such certificate have carefully examined the
Registration Statement, the Warrant Registration Statement, the
Canadian Prospectus, the Canadian Warrant Prospectus, the U.S.
Prospectus and the U.S. Warrant Prospectus, any amendments
thereto and this Agreement;
(ii) the representations and warranties of the Company in this
Agreement are true and correct on and as of the Closing Date
with the same effect as if made on the Closing Date and the
Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or
prior to the Closing Date;
(iii) no stop order suspending the effectiveness of the Registration
Statement or stop order preventing or suspending the use of any
prospectus relating to the Securities has been issued and no
proceedings for that purpose have been instituted or, to the
Company's knowledge, threatened by any Qualifying Authority,
stock exchange or the Commission; and
(iv) since the date of the most recent financial statements included
in the Canadian Prospectus and the U.S. Prospectus, there has
been no material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Canadian
Prospectus and the U.S. Prospectus.
(k) The Selling Shareholder shall have furnished to the Underwriters a
certificate of the Selling Shareholder, signed by the President and
the Vice-President, Legal Affairs and Corporate Secretary of the
Selling Shareholder, dated the Closing Date, to the effect that:
(i) the signers of such certificate have carefully examined the
Registration Statement, the Canadian Prospectus and U.S.
Prospectus, any amendments to the Canadian Prospectus and U.S.
Prospectus and this Agreement; and
(ii) the representations and warranties of the Selling Shareholder
in this Agreement are true and correct on and as of the Closing
Date with the same effect as if made on the Closing Date and
the Selling Shareholder has complied with all the agreements
and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date.
(l) The Company shall have requested and caused each of
PricewaterhouseCoopers LLP and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, a
general partnership, independent chartered accountants of the
Company to have furnished to the Underwriters, at the Execution
Time, at the Effective Time and on the Closing Date, letters, dated
respectively as of the Execution Time, at the Effective Time and on
the Closing Date, in form and substance satisfactory to the
Underwriters and their counsel, together with signed or reproduced
copies of such letter for each of the Underwriters containing
statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in
the Registration Statement, the Canadian Prospectus and the U.S.
Prospectus.
(m) The Underwriters and the Selling Shareholder shall have received on
the Closing Date an opinion of PricewaterhouseCoopers LLP and ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, a general partnership, dated as of the Closing
Date, to the effect that the French language version of the audited
consolidated financial statements for the fiscal years ended December
31, 2001, 2000 and 1999; the unaudited consolidated statements of
earnings for the nine month periods ended September 30, 2002 and
September 30, 2001 (including Management's Discussion and Analysis
relating thereto); and the sections of the Company's Annual
Information Form dated May 1, 2002 entitled "Selected Consolidated
Financial Information" and "Management's Discussion and Analysis of
Annual Results of Operations" is in all material respects a complete
and proper translation of the English language version thereof and,
(i) the financial statements of the Company, (ii) the Item 18
reconciliation with United States generally accepted accounting
principles; and (iii) the Unaudited Pro Forma Consolidated Statements
of Earnings and is in all material respects a complete and proper
translation thereof.
(n) The Representatives, on behalf of the Underwriters, shall have
received copies of the Warrant Agreement and the Delivery Agreement
duly executed by the respective parties thereto.
(o) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive
of any amendment thereof), the Canadian Prospectus and the U.S.
Prospectus (each, exclusive of any supplement thereto), there shall
not have been (i) any change or decrease specified in the letter or
letters referred to in paragraph (l) of this Section 7 or (ii) any
change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), earnings, business
or properties of the Company and its subsidiaries taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Canadian
Prospectus and the U.S. Prospectus (each, exclusive of any
supplement thereto) the effect of which, in any case referred to, in
clause (i) or (ii) above, is, in the sole judgment of the
Underwriters, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Registration Statement (exclusive
of any amendment thereof), the Canadian Prospectus and the U.S.
Prospectus (each, exclusive of any supplement thereto).
(p) Prior to the Closing Date, the Company shall have furnished to the
Representatives such further information, certificates and documents
as the Underwriters may reasonably request.
(q) The Company shall have furnished to the Underwriters on or prior to
the Closing Date satisfactory evidence of its due and valid
authorization of CT Corporation System as its agent to receive
service of process to Section 13 hereof, and satisfactory evidence
from CT Corporation System accepting its appointment as such agent.
(r) (A) The Common Shares and the Underlying Common Shares shall be
listed and admitted and authorized for trading on the New York
Stock Exchange and (B) the Warrants shall have been conditionally
approved for listing on the Toronto Stock Exchange, and
satisfactory evidence of such actions shall have been provided to
the Underwriters.
(s) (A) The Company shall have obtained from the Qualifying Authorities
exemptive relief from any applicable issuer bid requirements
provided for in Canadian Securities Laws relating to the purchase
for cancellation by the Company of any common shares in the event
the Selling Shareholder fails to deliver the Underlying Common
Shares; and (B) the Company shall have obtained from the Qualifying
Authorities exemptive relief (the "Resale Exemption") from any
applicable prospectus filing and delivery, and dealer registration,
requirements or resale restrictions provided for in Canadian
Securities Laws that would be applicable to the distribution by the
Company of any Underlying Common Shares, unless the Company shall
have previously obtained a final receipt from the Reviewing
Authority with respect to the Canadian Warrant Final Prospectus.
If any of the conditions specified in this Section 7 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Underwriters and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Underwriters. Notice of such
cancellation shall be given to the Company in writing or by telephone or
facsimile confirmed in writing.
The documents required to be delivered by this Section 7 shall be delivered
at the office of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ on the Closing Date.
8. Reimbursement of Underwriters' Expenses. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Underwriters set forth in Section 7 hereof is not satisfied, because of
any termination pursuant to Section 11 hereof or because of any refusal,
inability or failure on the part of the Selling Shareholder, SGF or SGF Rexfor
to perform any agreement herein or comply with any provision hereof other than
by reason of a default by any of the Underwriters, the Selling Shareholder, SGF
and SGF Rexfor, acting solidarily, will reimburse the Underwriters through the
Representatives on demand for all out-of-pocket expenses (including reasonable
fees and disbursements of
counsel to the Underwriters) that shall have been incurred by them in connection
with the proposed sale of the Securities.
9. Indemnification and Contribution
(a) The Company agrees to indemnify and hold harmless each Underwriter,
the Selling Shareholder, SGF Rexfor and SGF and their respective
directors, officers, employees, agents and affiliates and each
person who controls any Underwriter or the Selling Shareholder, SGF
Rexfor and SGF within the meaning of either the Act or the Exchange
Act against any and all losses, claims, damages or liabilities,
joint or solidary, to which they or any of them may become subject
under the Act, Canadian Securities Laws, the Exchange Act or other
Canadian federal or provincial, United States federal or state
statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) (i) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement for the registration of the Securities or the
Underlying Common Shares, as originally filed or in any amendment
thereof, or in any Canadian Preliminary Prospectus, U.S. Preliminary
Prospectus, the Canadian Final Prospectus or the U.S. Prospectus, or
in any amendment thereof or supplement thereto, or arise out of or
are based upon 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, (ii) any misrepresentation or
alleged misrepresentation contained in any Canadian Preliminary
Prospectus or the Canadian Final Prospectus; and (iii) any breach by
the Company of its representations, warranties, covenants or
obligations to be complied with under this Agreement, and agrees to
reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability
or action; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement
or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter or the
Selling Shareholder specifically for inclusion therein; provided
further, that with respect to any untrue statement or omission of
material fact made in any Canadian Preliminary Prospectus, U.S.
Preliminary Prospectus, the Canadian Final Prospectus, or the U.S.
Prospectus, the indemnity agreement contained in this Section 9(a)
shall not inure to the benefit of any Underwriter from whom the
person asserting any such loss, claim, damage or liability purchased
the securities concerned, to the extent that any such loss, claim,
damage or liability of such Underwriter occurs under the
circumstance where it shall have been determined by a court of
competent jurisdiction by final and nonappealable judgment that (w)
the Company had previously furnished copies of the Canadian
Prospectus or the U.S. Prospectus to the Underwriters, (x) delivery
of the Canadian Prospectus or the U.S. Prospectus was required by
the Act to be made to such person, (y) the untrue statement or
omission of a material fact contained in the Canadian Preliminary
Prospectus or the U.S. Preliminary Prospectus was corrected in the
Canadian Final Prospectus or the U.S. Prospectus and (z) there was
not sent or given to such person, at or prior to the written
confirmation of the sale of such securities to such person, a copy
of the Canadian Final Prospectus or the U.S. Prospectus. This
indemnity agreement will be in addition to any liability which the
Company may otherwise have.
(b) The Selling Shareholder, SGF and SGF Rexfor agree, acting
solidarily, to indemnify and hold harmless each Underwriter, the
Company, and their respective directors, officers, employees, agents
and affiliates and each person who controls any Underwriter or the
Company within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or
solidary, to which they or any of them may become subject under the
Act, Canadian Securities Laws, the Exchange Act or other Canadian
federal or provincial, United States federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon: (i) any untrue statement or alleged untrue
statement of a material fact contained in any
information provided in writing by the Selling Shareholder, SGF
Rexfor or SGF for inclusion in the Registration Statement for the
registration of the Securities as originally filed or in any
amendment thereof, or in any Canadian Preliminary Prospectus, U.S.
Preliminary Prospectus, Canadian Preliminary Warrant Prospectus,
U.S. Preliminary Warrant Prospectus, the Canadian Final Prospectus,
the Canadian Warrant Prospectus, the U.S. Prospectus or the U.S.
Warrant Prospectus, or in any amendment thereof or supplement
thereto, or arise out of or are based upon 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,
(ii) any misrepresentation or alleged misrepresentation contained in
any information provided in writing by the Selling Shareholder, SGF
Rexfor or SGF for inclusion in the Canadian Preliminary Prospectus
or the Canadian Final Prospectus, and (iii) any breach by the
Selling Shareholder, SGF or SGF Rexfor of its representations,
warranties, covenants or obligations to be complied with under this
Agreement, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that with
respect to any untrue statement or omission of material fact made in
any Canadian Preliminary Prospectus, U.S. Preliminary Prospectus,
Canadian Preliminary Warrant Prospectus, U.S. Preliminary Warrant
Prospectus, the Canadian Final Prospectus, the Canadian Final
Warrant Prospectus, the U.S. Prospectus or the U.S. Warrant
Prospectus, the indemnity agreement contained in this Section 9(b)
shall not inure to the benefit of any Underwriter from whom the
person asserting any such loss, claim, damage or liability purchased
the securities concerned, to the extent that any such loss, claim,
damage or liability of such Underwriter occurs under the
circumstance where it shall have been determined by a court of
competent jurisdiction by final and nonappealable judgment that (w)
the Company had previously furnished copies of the Canadian
Prospectus or the U.S. Prospectus to the Representatives, (x)
delivery of the Canadian Prospectus or the U.S. Prospectus was
required by the Act to be made to such person, (y) the untrue
statement or omission of a material fact contained in the Canadian
Preliminary Prospectus, Canadian Preliminary Warrant Prospectus, the
U.S. Preliminary Prospectus or the U.S. Preliminary Warrant
Prospectus was corrected in the Canadian Final Prospectus or the
U.S. Prospectus and (z) there was not sent or given to such person,
at or prior to the written confirmation of the sale of such
securities to such person, a copy of the Canadian Final Prospectus,
the Canadian Warrant Prospectus, the U.S. Prospectus or the U.S.
Warrant Prospectus. This indemnity agreement will be in addition to
any liability which the Selling Shareholder may otherwise have. The
Company and the Underwriters acknowledge that the information
included in the first and second paragraphs under the heading
"Selling Shareholder" contained in any Canadian Preliminary
Prospectus, U.S. Preliminary Prospectus, Canadian Prospectus and
U.S. Prospectus constitute the only information furnished in writing
by or on behalf of the Selling Shareholder, SGF or SGF Rexfor for
inclusion in any Preliminary Canadian Prospectus, U.S. Preliminary
Prospectus, Canadian Prospectus or U.S. Prospectus.
(c) Each Underwriter jointly and not solidarily agrees to indemnify and
hold harmless the Company, the Selling Shareholder, their respective
directors, each of their officers who signs the Registration
Statement or the Canadian Prospectus, and each person who controls
the Company of the Selling Shareholder within the meaning of either
the Act or the Exchange Act, to the same extent as the foregoing
indemnity from the Company to each Underwriter, including to
reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability
or action, but only with reference to written information relating
to such Underwriter furnished to the Company by or on behalf of such
Underwriter through the Representatives specifically for inclusion
in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any
Underwriter may otherwise have. The Company and the Selling
Shareholder acknowledge that (i) the statements set forth in the
last paragraph of the cover page regarding delivery of the
Securities and, under the heading "Plan of Distribution", and (ii)
the paragraphs related to stabilization, syndicate covering
transactions and penalty bids
contained in any Canadian Preliminary Prospectus, U.S. Preliminary
Prospectus, Canadian Prospectus and U.S. Prospectus constitute the
only information furnished in writing by or on behalf of the
Underwriters for inclusion in any Preliminary Canadian Prospectus,
U.S. Preliminary Prospectus, Canadian Prospectus or U.S. Prospectus.
(d) Promptly after receipt by an indemnified party under this Section 9
of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9, notify the indemnifying
party in writing of the commencement thereof; but the failure so to
notify the indemnifying party (i) will not relieve it from liability
under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above.
The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party
shall not thereafter be responsible for the fees and expenses of any
separate counsel retained by the indemnified party or parties except
as set forth below); provided, however, that such counsel shall be
satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the
indemnified party in an action, the indemnified party shall have the
right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and
expenses of such separate counsel if (i) the use of counsel chosen
by the indemnifying party to represent the indemnified party would
present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both
the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying
party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of the institution of
such action or (iv) the indemnifying party shall authorize the
indemnified party to employ separate counsel at the expense of the
indemnifying party. It is understood, however, that the Company
shall, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be
liable for the fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for all
such Underwriters and controlling persons, which firm shall be
designated in writing by the Representatives. An indemnifying party
will not, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified
parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(e) In the event that the indemnity provided in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party
for any reason, the Company, the Selling Shareholder and the
Underwriters, jointly and not solidarily, agree to contribute to the
aggregate losses, claims, damages and liabilities (including legal
or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which
the Company, the Selling Shareholder and one or more of the
Underwriters may be subject in such proportion as is appropriate to
reflect: (i) as between the Selling Shareholder, SGF Rexfor and SGF
and the Underwriters, the relative benefits received by the Selling
Shareholder, SGF Rexfor and SGF on the one hand and by the
Underwriters on the other hand from the offering of the Securities;
(ii) as between the Company and the Selling Shareholder, SGF Rexfor
and SGF, the relative fault of the Company on the one hand and the
Selling Shareholder, SGF Rexfor and SGF on the other
hand; and (iii) as between the Company and the Underwriters, on the
relative fault of the Company on the one hand and the Underwriters
on the other hand; provided, however, that in no case shall any
Underwriter (except as may be provided in any agreement among
Underwriters relating to the offering of the Securities) be
responsible for any amount in excess of the underwriting discount or
commission applicable to the Securities purchased by such
Underwriter hereunder. If the allocation provided for in item (i) in
the immediately preceding sentence is unavailable for any reason,
the Selling Shareholder on the one hand and the Underwriters on the
other hand, jointly and not solidarily, shall contribute in such
proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of such Selling Shareholder on
the one hand and of the Underwriters on the other hand in connection
with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. Benefits
received by the Selling Shareholder shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses)
received by it, and benefits received by the Underwriters shall be
deemed to be equal to the total underwriting discounts and
commissions, in each case as set forth on the cover page of the
Canadian Prospectus and the U.S. Prospectus. Relative fault shall be
determined by reference to, among other things, whether any untrue
or any alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to information
provided, with respect to item (ii) above, by the Company on the one
hand or the Selling Shareholder on the other, with respect to item
(iii) above, by the Company on the one hand or the Underwriters on
the other, and with respect to item (i) above, in the event
applicable, by the Selling Shareholder on the one hand and the
Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct
or prevent such untrue statement or omission. The Company, the
Selling Shareholder and the Underwriters agree that it would not be
just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take
account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (e), no person
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) or misrepresentation under Canadian
Securities Laws shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation or
misrepresentation. For purposes of this Section 9, each person who
controls an Underwriter within the meaning of either the Act or the
Exchange Act and each director, officer, employee and agent of an
Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, each officer of the
Company who shall have signed the Registration Statement or the
Canadian Prospectus and each director of the Company shall have the
same rights to contribution as the Company, subject in each case to
the applicable terms and conditions of this paragraph (e).
10. Default by an Underwriter. If any one or more Underwriters shall fail
to purchase and pay for any of the Securities agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated jointly and not
solidarily to take up and pay for (in the respective proportions which the
amount of Securities set forth opposite their names in Schedule I hereto bears
to the aggregate amount of Securities set forth opposite the names of all the
remaining Underwriters) the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the event
that the aggregate amount of Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase shall exceed 12.5% of the aggregate
amount of Securities set forth in Schedule I hereto, the remaining Underwriters
shall have the right to purchase all, but shall not be under any obligation to
purchase any, of the Securities, and if such nondefaulting Underwriters do not
purchase all the Securities, this Agreement will terminate without liability to
any nondefaulting Underwriter or the Company. In the event of a default by any
Underwriter as set forth in this Section 10, the Closing Date shall be postponed
for such period, not exceeding five Business Days, as the Representatives shall
determine in order that the required changes in the Registration Statement, the
Canadian Prospectus or the U.S. Prospectus, or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any
defaulting Underwriter of its liability, if any, to the Company and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
11. Termination.
(a) This Agreement shall be subject to termination by any Underwriter
(with respect to itself only) in the absolute discretion of such
Underwriter, by notice given to the Company and the Selling
Shareholder at any time prior to the Closing Time in accordance with
paragraph 11(c), if, at any time prior to such Closing Time:
(i) any enquiry, action, suit, investigation or other proceeding
whether formal or informal is instituted, threatened or
announced or any order is made by any federal, provincial or
other governmental authority in relation to the Selling
Shareholder or the Company, which, in the reasonable opinion of
the Underwriters or any of them, operates to prevent or
restrict the distribution or trading of the Securities;
(ii) there should occur any material change or a change in any
material fact such as is contemplated in paragraph 6(o), which
results or, in the opinion of the Underwriters or any one of
them, would be expected to have a significant adverse effect on
the market price or value of the Securities;
(iii) (A) trading in any of the Company's common shares shall have
been suspended by the Commission, the Reviewing Authority, or
the Toronto Stock Exchange or the New York Stock Exchange or
trading in securities generally on the Toronto Stock Exchange
or the New York Stock Exchange shall have been suspended or
limited or minimum prices shall have been established on any
such Exchanges, (B) a banking moratorium shall have been
declared either by U.S. Federal, New York State or Canadian
federal authorities, (C) a change or development involving a
prospective change in Canadian taxation affecting the
Securities or the transfer thereof or the imposition of
exchange controls by the United States or Canada, (D) there
should develop, occur or come into effect or existence any
event, action, state, condition or major financial occurrence
of national or international consequence or any law or
regulation which in the opinion of the Underwriters or any one
of them seriously adversely affects, involves, or will
seriously adversely affect, or involve, the financial markets
or the business, operations or affairs of the Company and its
subsidiaries taken as a whole.
(b) The Selling Shareholder and the Company each agrees that all terms
and conditions of this Agreement shall be construed as conditions
and complied with so far as they relate to acts to be performed or
caused to be performed by them, that they will use their best
efforts to cause such conditions to be complied with, and that any
breach or failure by the Selling Shareholder or the Company to
comply with any such conditions shall entitle any of the
Underwriters to terminate their obligations to purchase the
Securities by notice to that effect given to the Selling Shareholder
and the Company at or prior to the Closing Time, unless otherwise
expressly provided in this Agreement. The Underwriters may waive, in
whole or in part, or extend the time for compliance with, any terms
and conditions without prejudice to its rights in respect of any
other of such terms and conditions or any other or subsequent breach
or non-compliance, provided that any such waiver or extension shall
be binding upon the Underwriters only if such waiver or extension is
in writing and signed by the Representatives.
(c) The rights of termination contained in paragraphs 11(a) and (b) may
be exercised by any of the Underwriters and are in addition to any
other rights or remedies any of the Underwriters may have in respect
of any default, act or failure to act or non-compliance by the
Selling Shareholder or the Company in respect of any of the matters
contemplated by this Agreement or otherwise. In the event of any
such termination, there shall be no further liability on the part of
the Underwriters to the Selling Shareholder and the Company or on
the part of the Selling Shareholder and the Company to the
Underwriters except in respect of any liability which may have
arisen or may arise after such termination under paragraphs 8 and 9.
A notice of termination
given by an Underwriter under paragraphs 11(a) and (b) shall not be
binding upon any other Underwriter.
12. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers and of the Underwriters set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of any Underwriter or the Company or any of the officers,
directors, employees, agents or controlling persons referred to in Section 9
hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 8, 9, 13, 14 and 15 hereof shall survive the termination
or cancellation of this Agreement.
13. Agent for Service. The Company has appointed CT Corporation System,
New York, New York, as its authorized agent (the "Authorized Agent") upon whom
process may be served in any action arising out of or based on this Agreement or
the transactions contemplated thereby which may be instituted in any New York
Court expressly consents to the jurisdiction of any such court in respect of any
such action, and waives any other requirements of or objections to personal
jurisdiction with respect thereto. Such appointment shall be irrevocable. The
Company represents and warrants that the Authorized Agent has agreed to act as
such agent for service of process and agrees to take any and all action,
including the filing of any and all documents and instruments, that may be
necessary to continue such appointment in full force and effect as aforesaid.
Service of process upon the Authorized Agent and written notice of such service
to the Company shall be deemed, in every respect, effective service of process
upon the Company.
14. Authority of Representatives. The Representatives are hereby
authorized by each of the other Underwriters to act on its behalf and the
Selling Shareholder and the Company shall be entitled to and shall act on any
notice given in accordance with paragraph 14 or agreement entered into by or on
behalf of the Underwriters by the Representatives, each of which represents and
warrants that it has irrevocable authority to bind the Underwriters, except in
respect of: (i) any consent to a settlement pursuant to paragraph 9(d) which
consent shall be given by the Indemnified Party, and (ii) a notice of
termination pursuant to paragraph 11 which notice may be given by any of the
Underwriters. The Representatives shall consult with the other Underwriters
concerning any matter in respect of which they act as representatives of the
Underwriters.
15. Notices. All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Underwriters, will be mailed, delivered or
telefaxed to National Bank Financial Inc., to the attention of ▇▇▇▇ St-▇▇▇▇▇▇,
Managing Director (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇), at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇; if sent to the Company, will be mailed, delivered or
telefaxed to Domtar Inc., ▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇
▇▇▇, (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to it at (▇▇▇) ▇▇▇-▇▇▇▇, attention
of the General Counsel; or, if sent to the Selling Shareholder, will be mailed,
delivered or telefaxed to Societe generale de financement du Quebec, to the
attention of Vice President, Legal Affairs, (fax no. (▇▇▇) ▇▇▇-▇▇▇▇), at ▇▇▇, ▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇.
16. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers,
directors, employees, agents and controlling persons referred to in Section 9
hereof, and no other person will have any right or obligation hereunder.
17. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the Province of Quebec and the federal laws
applicable therein applicable to contracts made and to be performed within the
Province of Quebec.
18. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
19. Headings. The section headings used herein are for convenience only
and shall not affect the construction hereof.
20. Definitions. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
'$" shall mean Canadian dollars except as otherwise stated.
"Acquired ▇▇▇▇▇" shall mean that portion of Georgia-Pacific
Corporation's pulp and paper businesses acquired by Domtar Inc. on August
7, 2001.
"Act" has the meaning provided in the second paragraph of this
Agreement.
"Agreement" shall mean this underwriting agreement dated December 10,
2002.
"Authorized Agent" has the meaning provided in Section 13 hereof.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City or Montreal,
Canada.
"Canadian Final Prospectus" has the meaning provided in the third
paragraph of this Agreement.
"Canadian Final Warrant Prospectus" has the meaning provided in
paragraph (o) of Section 6 hereof.
"Canadian GAAP" has the meaning provided in paragraph (u) of Section 1
hereof.
"Canadian Preliminary Prospectus" has the meaning provided in the
second paragraph of this Agreement.
"Canadian Preliminary Warrant Prospectus" has the meaning provided in
paragraph (n) of Section 6 hereof.
"Canadian Prospectus" shall mean the Canadian Preliminary Prospectus,
the Canadian Final Prospectus, and any amendment or supplement thereto.
"Canadian Warrant Prospectus" shall mean the Canadian Preliminary
Warrant Prospectus, and the Canadian Final Warrant Prospectus, and any
amendment or supplement thereto.
"Canadian Securities Laws" means all applicable securities laws in each
of the Qualifying Provinces and the respective rules or regulations made
thereunder together with applicable published policy statements, blanket
orders and applicable notices of the securities regulatory authorities in
such provinces.
"Closing Date" has the meaning provided in Section 4 hereof.
"Closing Time" shall mean 8:00 a.m. on the Closing Date or such other
time as the Underwriters may agree.
"Commission" has the meaning provided in the second paragraph of this
Agreement.
"Common Shares" has the meaning provided in the first paragraph of this
Agreement.
"Company" has the meaning provided in the first paragraph of this
Agreement.
"Company Form F-X" has the meaning provided in the fourth paragraph of
this Agreement.
"Delivery Agreement" shall mean that certain delivery agreement, dated
as of the Closing Date, by and between the Company, the Selling
Shareholder, SGF, SGF Rexfor and the Warrant Agent.
"Effective Time" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto became or
becomes effective.
"Environmental Laws" has the meaning provided in paragraph (gg) of
Section 1 hereof.
"Exchange Act" shall mean the United States Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder adopted by the
Commission.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Filings" has the meaning provided in paragraph (l) of Section 6
hereof.
"Financial Information" has the meaning provided in paragraph (b) of
Section 6 hereof.
"Form F-X" has the meaning provided in the fourth paragraph of this
Agreement.
"Intellectual Property" has the meaning provided in paragraph (jj) of
Section 1 hereof.
"Lock-Up Period" has the meaning provided in paragraph (h) of Section 6
hereof.
"Losses" has the meaning provided in paragraph (e) of Section 9 hereof.
"Material Adverse Effect" has the meaning provided in paragraph (e) of
Section 1 hereof.
"MRRS Decision Document" shall mean a decision document issued under
the mutual reliance review system pursuant to NP-43-201.
"NP 43-201" shall mean National Policy No. 43-201.
"NASD" has the meaning provided in paragraph (k) of Section 6 hereof.
"Norampac" has the meaning provided in paragraph (f) of Section 1
hereof.
"preliminary prospectus" shall mean each prospectus relating to the
Securities (i) used in the United States (A) before the time such
registration statement on Form F-10 becomes effective or (B) after such
effectiveness and prior to the execution and delivery of this Agreement or
(ii) filed in Canada, both in the English and French languages, as
applicable, (A) before a receipt for the Canadian Final Prospectus has been
obtained from the Reviewing Authority or (B) after such receipt has been
obtained and prior to the execution and delivery of this Agreement.
"Prospectus" shall mean collectively the Canadian Prospectus and the
Canadian Warrant Prospectus.
"Purchase Price" has the meaning provided in paragraph (a) of Section 3
of this Agreement.
"Qualifying Authorities" has the meaning provided in the second
paragraph of this Agreement.
"Qualifying Provinces" has the meaning provided in the second paragraph
of this Agreement.
"Registration Statement" has the meaning provided in the second
paragraph of this Agreement.
"Representatives" shall mean collectively National Bank Financial Inc.,
CIBC World Markets Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Canada Inc.
"Resale Exemption" has the meaning provided in paragraph (s) of Section
7 hereof.
"Restricted Activities" has the meaning provided in paragraph 6(h).
"Reviewing Authority" has the meaning provided in the second paragraph
of this Agreement.
"Securities" has the meaning provided in the first paragraph of this
Agreement.
"Selling Shareholder" has the meaning provided in the first paragraph
of this Agreement.
"SGF" shall mean Societe generale de financement du Quebec.
"SGF Rexfor" shall mean SGF Rexfor Inc.
"Significant Subsidiary" shall have the meaning set forth under Rule
1-02 of Regulation S-X under the Act.
"subsidiary" has the meaning provided in paragraph (e) of Section 1
hereof.
"Supplementary Material" shall mean any amendment to the Canadian
Prospectus or Registration Statement, any amended or supplemental
prospectus or auxiliary material, information, evidence, return, report,
application, statement or document that may be filed by or on behalf of the
Company under the Canadian Securities Laws, the Act or the Exchange Act
prior to the Closing Date or, where such documents are deemed to be
incorporated by reference into the Canadian Prospectus, Registration
Statement or U.S. Prospectus, prior to the expiry of the period of
distribution of the Securities.
"Trigger Amount" has the meaning provided in paragraph 6(i) hereof.
"Trustee Form F-X" has the meaning provided in the fourth paragraph of
this Agreement.
"Underlying Common Shares" has the meaning provided in the first
paragraph of this Agreement.
"Underlying Company Common Shares" shall mean the common shares of the
Company to be issued and/or delivered to the Warrant Agent in the event the
Selling Shareholder fails to deliver the Underlying Common Shares.
"Underwriters" has the meaning provided in the first paragraph of this
Agreement.
"Underwriting Fee" has the meaning provided in paragraph (b) of Section
3 hereof.
"U.S. GAAP" has the meaning provided in paragraph (u) of Section 1
hereof.
"U.S. Preliminary Prospectus" has the meaning provided in the second
paragraph of this Agreement.
"U.S. Preliminary Warrant Prospectus" has the meaning provided in
paragraph (n) of Section 6 hereof.
"U.S. Prospectus" shall mean the U.S. Preliminary Prospectus until such
time as the Registration Statement becomes effective, then the U.S.
Prospectus shall mean the prospectus included in the Registration Statement
at the time it becomes effective, including any documents incorporated by
reference.
"U.S. Subsidiaries" has the meaning provided in paragraph (d) of
Section 7 hereof.
"U.S. Warrant Prospectus" has the meaning provided in paragraph (n) of
Section 6 hereof.
"Voting Agreement" has the meaning provided in paragraph 2(h) hereof.
"Warrant Agent" has the meaning provided in the first paragraph of this
Agreement.
"Warrant Agreement" has the meaning provided in the first paragraph of
this Agreement.
"Warrant Form F-X" has the meaning provided in paragraph (o) of Section
6 hereof.
"Warrant Registration Statement" has the meaning provided in paragraph
(n) of Section 6 hereof.
"Warrants" has the meaning provided in the first paragraph of this
Agreement.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the
Company, the Selling Shareholder, SGF Rexfor, SGF and the Underwriters.
Very truly yours,
NATIONAL BANK FINANCIAL INC.
By: /s/ ▇▇▇▇ ST-▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ St-Michel
Title:
CIBC WORLD MARKETS INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CANADA INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title:
BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title:
SCOTIA CAPITAL INC.
By: /s/ PIERRE LE FEVRE
------------------------------------
Name: Pierre Le Fevre
Title:
UBS ▇▇▇▇▇▇▇ WARBURG INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
DESJARDINS SECURITIES INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title:
TD SECURITIES INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title:
The foregoing Agreement is hereby confirmed and accepted as of the date
first above written.
DOMTAR INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
DOFOR INC.
By: /s/ ANDRE L'ECUYER
------------------------------------
Name: Andre L'Ecuyer
Title:
By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title:
SGF REXFOR INC.
By: /s/ ANDRE L'ECUYER
------------------------------------
Name: Andre L'Ecuyer
Title:
By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title:
SOCIETE GENERALE DE FINANCEMENT DU
QUEBEC
By: /s/ ANDRE L'ECUYER
------------------------------------
Name: Andre L'Ecuyer
Title:
By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title:
SCHEDULE I
NUMBER OF
SECURITIES TO BE
PURCHASED
----------------------------
COMMON
UNDERWRITERS SHARES WARRANTS
------------ ------------ ------------
National Bank Financial Inc................................. 4,270,008.52 4,270,008.52
CIBC World Markets Inc...................................... 4,270,008.52 4,270,008.52
▇▇▇▇▇▇▇ ▇▇▇▇▇ Canada Inc.................................... 3,088,942.33 3,088,942.33
BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc....................................... 1,817,024.90 1,817,024.90
Scotia Capital Inc.......................................... 1,817,024.90 1,817,024.90
UBS ▇▇▇▇▇▇▇ Warburg Inc..................................... 1,453,619.92 1,453,619.92
Desjardins Securities Inc................................... 726,809.96 726,809.96
TD Securities Inc........................................... 726,809.96 726,809.96
------------ ------------
TOTAL.................................................. 18,170,249 18,170,249
============ ============
SCHEDULE II
COMMON SHARES
share certificate no. 355542 (8,200 shares)
share certificate no. 354555 (5,616,923 shares)
share certificate no. 333964 (6,100,000 shares)
share certificate no. 343804 (600,375 shares)
part of share certificate no. 291070 (5,844,751 shares)
UNDERLYING COMMON SHARES
share certificate no. 249437 (5,494,000 shares)
share certificate no. 236520 (1,019,500 shares)
share certificate no. 221297 (298,000 shares)
share certificate no. 221295 (1,000,000 shares)
share certificate no. 221294 (5,000 shares)
share certificate no. 221293 (100,000 shares)
share certificate no. 221292 (100,000 shares)
share certificate no. 221291 (10,000 shares)
share certificate no. 221290 (100,000 shares)
share certificate no. 183761 (600,000 shares)
share certificate no. 183760 (881,000 shares)
share certificate no. 183759 (600,000 shares)
share certificate no. 183758 (600,000 shares)
share certificate no. 183757 (600,000 shares)
share certificate no. 183756 (600,000 shares)
part of share certificate no. 291070 (6,162,749 shares)
ANNEX A
SIGNIFICANT SUBSIDIARIES
NAME
Domtar A.W. Corp
Domtar Maine Corp
Domtar Industries Inc.
Ris Paper Company, Inc.
▇.▇. ▇▇▇▇ Paper Inc.
