AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 27, 2007
Registration No. 333-146174
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
FORM F-10
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
SIERRA WIRELESS, INC.
(Exact name of registrant as specified in its charter)
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CANADA
(Province or other jurisdiction of
incorporation or organization)
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3663
(Primary Standard Industrial
Classification Code Number)
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91-1876341
(I.R.S. Employer
Identification No.)
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13811 WIRELESS WAY
RICHMOND, BRITISH COLUMBIA
CANADA V6V 3A4
(604) 231-1100
(Address, including zip code, and telephone number, including area code, of
registrants principal executive offices)
MICHAEL C. PHILLIPS
DAVIS WRIGHT TREMAINE LLP
23RD FLOOR
1300 S.W. FIFTH AVENUE
PORTLAND, OREGON 97201
(503) 241-2300
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
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Robert Wooder
Trisha Robertson
Blake, Cassels &
Graydon LLP
Three Bentall Centre
Suite 2600 PO Box
49314 595 Burrard
Street
Vancouver, BC V7X 1L3
CANADA
(604) 631-3300
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David McLennan
Chief Financial Officer
Sierra Wireless, Inc.
13811 Wireless Way
Richmond, BC V6V 3A4
CANADA
(604) 231-1185
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Richard Balfour
Michael G. Urbani
McCarthy Tétrault LLP
Suite 1300 Pacific Centre
777 Dunsmuir St.
Vancouver, BC V7Y 1K2
CANADA
(604) 643-7100
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Walter A. Looney
Simpson Thacher &
Bartlett LLP
425 Lexington Avenue
New York, NY 10017
USA
(212) 455-2000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this
Registration Statement becomes effective.
PROVINCE OF BRITISH COLUMBIA, CANADA
(Principal jurisdiction regulating this offering)
It is proposed that this filing shall become effective (check appropriate box):
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A.
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þ
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Upon filing with the Commission, pursuant to Rule 467(a) (if in connection with an offering
being made contemporaneously in the United States and Canada).
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B.
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At some future date (check the appropriate box below)
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1.
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Pursuant to Rule 467(b) on ( ) at ( ) (designate a time not sooner than 7 calendar dates
after filing)
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2.
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Pursuant to Rule 467(b) on ( ) at ( ) (designate a time 7 calendar days or sooner after
filing) because the securities regulatory authority in the review jurisdiction has issued a
receipt or notification of clearance on ( )
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3.
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Pursuant to Rule 467(b) as soon as practicable after notification of the Commission by the
Registration or the Canadian securities regulatory authority of the review jurisdiction
that a receipt or notification of clearance has issued with respect hereto
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4.
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After the filing of the next amendment to this Form (if preliminary material is being filed).
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If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to the home jurisdictions shelf
prospectus offering procedures, check the following box.
o
PART I
Information required to
be delivered to offerees or purchasers
No securities regulatory
authority has expressed an opinion about these securities and it
is an offence to claim otherwise.
This short form prospectus
constitutes a public offering of these securities only in those
jurisdictions where they may be lawfully offered for sale and
therein only by persons permitted to sell such securities.
Information has been incorporated by reference in this
prospectus from documents filed with securities commissions or
similar authorities in Canada. Copies of the documents
incorporated herein by reference may be obtained on request
without charge from the corporate secretary of Sierra Wireless,
Inc., at 13811 Wireless Way, Richmond, British Columbia, V6V
3A4, telephone:
(604) 231-1100
and are also available electronically at
www.sedar.com
as
well as on the website of the U.S. Securities and Exchange
Commission at
www.sec.gov.
For the purposes of the
Province of Québec, this simplified prospectus contains
information to be completed by consulting the permanent
information record. A copy of the permanent information record
can be obtained without charge from the corporate secretary of
Sierra Wireless, Inc. at the above mentioned address and
telephone number and is also available electronically at
www.sedar.com
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This document is only being
and may only be distributed and directed at (i) persons
outside the United Kingdom; or (ii) persons in the United
Kingdom who are (a) a Qualified investor within
the meaning of Section 86(7) of the United Kingdom
Financial Services and Markets Act 2000 (FSMA) and
(b) within the categories of persons referred to in
Article 19 (Investment professionals) or article 49
(High net worth companies, unincorporated associations, etc.) of
the United Kingdom Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 (the Financial Promotion
Order) (all such persons together being referred to as
relevant persons). The securities being offered
hereunder are only available to, and any invitation, offer or
agreement to subscribe, purchase or otherwise acquire such
securities will be engaged in only with, relevant persons. Any
person who is not a relevant person should not act or rely on
this document or any of its contents. This document is not a
prospectus for the purposes of Section 85(1) of FSMA.
Accordingly, this document has not been approved as a prospectus
by the United Kingdom Financial Services Authority
(FSA) under Section 87A of FSMA and has not
been filed with the FSA pursuant to the United Kingdom
Prospectus Rules nor has it been approved by a person authorized
under the FSMA. See Underwriting.
SHORT FORM PROSPECTUS
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New
Issue
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September 27,
2007
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SIERRA WIRELESS, INC.
US$78,400,000
3,500,000 Common Shares
This is an offering by Sierra Wireless, Inc. (Sierra
Wireless or the Company) of
3,500,000 common shares (Common Shares of the Company
(the Offering). The Offering is being made
concurrently in Canada under the terms of this prospectus and in
the United States under the terms of a registration statement on
Form F-10
filed with the United States Securities and Exchange Commission
(the SEC). Common Shares are being offered in Canada
by CIBC World Markets Inc. and RBC Dominion Securities Inc., and
in the United States by CIBC World Markets Corp., Piper Jaffray
& Co. and RBC Capital Markets Corporation.
Our Common Shares are traded on the Nasdaq Global Market
(Nasdaq) under the symbol SWIR and on
the Toronto Stock Exchange (the TSX) under the
symbol SW. On September 18, 2007, the last
trading day prior to the announcement of the Offering, the
closing price of our Common Shares as reported on Nasdaq was
US$23.33 and on the TSX was CDN$23.67 per Common Share.
Investing in the Common Shares
involves risks. See Risk Factors
beginning on page 5.
This Offering is made by a foreign issuer that is permitted,
under a multijurisdictional disclosure system adopted by the
United States and Canada, to prepare this prospectus in
accordance with Canadian disclosure requirements. Prospective
investors should be aware that such requirements are different
from those of the United States.
Prospective investors should be aware that the acquisition of
the securities described herein may have tax consequences both
in the United States and in Canada. Such consequences for
investors who are resident in, or citizens of, the United States
may not be described fully herein.
The enforcement by investors of civil liabilities under the
United States federal securities laws may be affected adversely
by the fact that we are incorporated under the laws of Canada,
that some of our officers and directors are residents of Canada,
that some or all of the Underwriters or experts named in the
registration statement are residents of Canada, and that a
substantial portion of our assets and of such persons are
located outside the United States.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SEC OR ANY OTHER REGULATORY BODY NOR HAS THE SEC OR ANY OTHER
REGULATORY BODY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
Price: US$22.40 per Common
Share
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Net Proceeds to
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Price to Public
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Underwriters Fee
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the Company
(1)
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Per Common Share
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US$
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22.40
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US$
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0.8960
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US$
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21.5040
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Total
Offering
(2)
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US$
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78,400,000
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US$
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3,136,000
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US$
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75,264,000
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(1)
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After deducting the Underwriters fee equal to 4% of the
aggregate gross proceeds of the Offering, but before deducting
the expenses of this Offering estimated at US$1,500,000. We will
pay all costs and expenses of this Offering.
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(2)
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We have granted the Underwriters an option (the
Over-Allotment Option) to purchase up to an
aggregate of 525,000 additional Common Shares at the
offering price exercisable at any time, in whole or in part, for
a period expiring 30 days following the closing date of
this Offering. This prospectus qualifies the grant of the
Over-Allotment Option and the distribution of the Common Shares
issuable upon exercise of the Over-Allotment Option. If the
Over-Allotment Option is exercised in full, the total Price to
Public, Underwriters Fee and Net Proceeds to the Company
will be US$90,160,000, US$3,606,400 and US$86,553,600,
respectively.
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CIBC World Markets Inc., Piper Jaffray & Co. and RBC
Dominion Securities Inc. (the Underwriters), as
principals, conditionally offer the Common Shares subject to
prior sale if, as and when issued and delivered by us to, and
accepted by, the Underwriters in accordance with the conditions
contained in the Underwriting Agreement referred to under the
section titled Underwriting and subject to approval
of certain legal matters on our behalf by Blake,
Cassels & Graydon LLP, with respect to Canadian legal
matters, and by Davis Wright Tremaine LLP, with respect to
U.S. legal matters, and on behalf of the Underwriters by
McCarthy Tétrault LLP, with respect to Canadian legal
matters, and by Simpson Thacher & Bartlett LLP, with
respect to U.S. legal matters.
After the Underwriters
have made a bona fide effort to sell all of the Common Shares
offered under this prospectus at the public offering price fixed
in this prospectus, the Underwriters may decrease the offering
price or otherwise change the selling terms from time to time.
See Underwriting
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Maximum size or
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Exercise period/
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Exercise price or
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Underwriters Position
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number of securities held
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Acquisition date
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average acquisition price
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Over-Allotment Option
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up to 525,000 Common Shares
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until 30 days following Closing
Date
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$22.40 per Common Share
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Compensation option
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Any other option granted by issuer
or insider of issuer
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Total securities under option
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up to 525,000 Common Shares
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until 30 days following Closing
Date
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up to $11,760,000.00
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Other compensation securities
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Subscriptions will be received subject to rejection or allotment
in whole or in part and the right is reserved to close the
subscription books at any time without notice. We expect that
share certificates representing the Common Shares will be
available for delivery at closing, which is anticipated to be on
or about October 2, 2007 or such other date as may be
agreed upon by us and the Underwriters, but in any event, not
later than October 25, 2007.
The Underwriters may effect transactions which stabilize or
maintain the market price of our Common Shares at levels other
than those which might otherwise prevail in the open market in
accordance with applicable market stabilization rules. See
Underwriting.
RBC Dominion Securities Inc. is an affiliate of a Canadian
chartered bank that entered into a credit agreement with us as
borrower dated December 1, 2004 and amended by a letter
agreement dated December 4, 2006.
Consequently, we may
be considered a connected issuer of RBC Dominion
Securities Inc. within the meaning of applicable Canadian
securities laws.
See Relationship Between the Company
and A Certain Underwriter.
TABLE OF
CONTENTS
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3
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3
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5
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8
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9
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10
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11
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11
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17
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19
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19
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20
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21
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22
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22
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A-1
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C-1
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C-2
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You should rely only on the information contained or
incorporated by reference in this prospectus and on the other
information included in the registration statement of which this
prospectus forms a part. We have not authorized anyone to
provide you with different or additional information. If anyone
provides you with different or additional information, you
should not rely on it. We are not making an offer to sell or
seeking an offer to buy these securities in any jurisdiction
where the offer or sale is not permitted. You should assume that
the information contained in this prospectus is accurate only as
of the date on the front of this document and that information
contained in any document incorporated by reference is accurate
only as of the date of that document, regardless of the time of
delivery of this prospectus or of any sale of our Common Shares.
Our business, financial condition, results of operations and
prospects may have changed since those dates.
Market data and certain industry forecasts used in this
prospectus and the documents incorporated by reference in this
prospectus were obtained from market research, publicly
available information and industry publications. We believe that
these sources are generally reliable, but the accuracy and
completeness of this information is not guaranteed. We have not
independently verified this information, and we do not make any
representation as to the accuracy of this information.
We publish our financial statements in United States dollars in
accordance with generally accepted accounting principles in the
United States, or U.S. GAAP. In this prospectus, unless
otherwise indicated, all dollar amounts and references to
US$ or $ are to United States dollars
and references to CDN$ are to Canadian dollars. This
prospectus contains a translation of some Canadian dollar
amounts into United States dollars solely for your convenience.
See Exchange Rate Information. Unless otherwise
indicated, all information in this prospectus assumes that the
Underwriters Over-Allotment Option will not be exercised.
This prospectus contains forward-looking statements which
involve risks and uncertainties. See Forward-Looking
Statements.
In this prospectus, Sierra Wireless,
Company, we, us and
our each refers to Sierra Wireless, Inc. and its
consolidated subsidiaries unless the context requires otherwise.
Certain names used in this prospectus are our trademarks. This
prospectus also includes references to trademarks, product names
and company names of other companies.
2
The following table sets out, for each period indicated, the
exchange rate at the end of the period and the average of the
exchange rates on each day during the period for one
U.S. dollar expressed in Canadian dollars, based on the
noon exchange rate quoted by the Bank of Canada. As of
September 18, 2007 the rate was US$1.00 equals CDN$1.0236.
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Fiscal Year Ended December 31,
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Six Months Ended June 30,
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2004
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2005
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2006
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2006
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2007
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End of period
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1.2036
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1.1659
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1.1653
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1.1150
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1.0634
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Average for period
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1.3015
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1.2116
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1.1341
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1.1384
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1.1349
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We provide leading edge wireless wide area modem solutions for
the mobile computing, rugged mobile and machine-to-machine (M2M)
markets. We develop and market a range of products that include
wireless modems for mobile computers, embedded modules for
original equipment manufacturers, or OEMs, and high value fixed
and mobile wireless data solutions for industrial, commercial
and public safety applications. We also offer professional
services to OEM customers during their product development,
leveraging our expertise in wireless design and integration to
provide built-in wireless connectivity for notebook computers
and other mobile computing devices. Our products and solutions
connect people, their mobile computers and fixed terminals to
wireless voice and mobile broadband networks around the world.
We believe that wide area wireless for both mobile computing and
wireless M2M are rapidly growing markets. We believe that the
key growth enablers for these markets include the continued
deployment of mobile broadband networks around the world,
aggressive promotion of mobile broadband services by wireless
operators, attractive mobile broadband rate plans, growing
customer awareness of mobile broadband and compelling return on
investment rationale for users. Given our extensive experience
in wireless data, mobile computing and, as a result of our
acquisition of AirLink Communications, Inc.
(AirLink), M2M, we believe that we are well
positioned to benefit from the rapid growth in our key market
segments.
Our mobile computing products are used by businesses, consumers
and government organizations to enable high speed wireless
access to a wide range of applications, including the Internet,
e-mail,
corporate intranet, remote databases and corporate applications.
Our rugged mobile and M2M products are primarily used in the
public safety, oil and gas, utility and transaction processing
markets. We sell our products primarily through indirect
channels, including wireless operators, value added resellers
and OEMs.
Key factors that we expect will affect our revenue in the near
term are the timing of deployment of mobile broadband networks
by wireless operators, technology transitions in both CDMA EV-DO
and UMTS/HSPA, the relative competitive position our products
have within the wireless operators sales channels in any
given period, the rate of adoption by end-users, the timely
launch and ramp up of sales of our new products currently under
development, the level of success OEMs achieve with sales of
embedded solutions to end customers, our ability to secure
future design wins with both existing and new OEM customers, our
ability to compete effectively and our successful integration of
AirLink. We expect that product and price competition from other
wireless communications device manufacturers will continue to be
intense. As a result of these factors, we may experience
volatility in our results on a quarter to quarter basis.
We launched a considerable number of new products during 2006
and in the first half of 2007. Our rejuvenated product line,
expanded roster of sales channels, the addition of AirLink and
strong market growth underpin our expectation of solid revenue
growth and continued profitability in 2007. Specific product
development and business development initiatives during 2007
include:
AirCard
Products
PC Cards:
We are continuing to supply UMTS/HSDPA PC cards
to several wireless operators around the world including
AT&T in the US, Telstra in Australia, debitel in Germany,
Bouygues Telecom and Orange in
3
France, O2 and Orange in the UK, Swisscom Mobile and sunrise in
Switzerland, Telefonica in Spain, ONE in Austria and to several
other operators in the EMEA region.
We began shipping our new CDMA EV-DO ExpressCards, built for
notebook computers with ExpressCard expansion slots, with Sprint
in North America and Telecom New Zealand in the Asia-Pacific
region during the second quarter of 2007.
We introduced our PC cards and ExpressCards for HSUPA networks
during the first quarter of 2007. HSUPA AirCards offer
significant speed advantages over our current HSDPA AirCards
with a maximum theoretical downlink speed of up to 7.2 Mbps
and uplink speed of up to 2 Mbps. We expect to commence
commercial shipments of our first HSUPA PC Card products late in
the third quarter of 2007.
USB Wireless Modems:
Our USB wireless modems plug into
the USB ports of both notebook and desktop computers. Late in
the first quarter of 2007, we began commercial shipments of our
AirCard 875U for HSDPA networks to an operator in Latin America.
In the second quarter of 2007, we began commercial shipments of
our AirCard 595U for EV-DO Revision A networks to Sprint and our
AirCard 875U for HSDPA networks to AT&T and to O2 in the
UK. We also launched our AirCard 595U with Telecom New Zealand
and Telus. In the third quarter of 2007, we began commercial
shipments of our AirCard 595U to Verizon Wireless. We also
introduced our USB modems for HSUPA networks and expect to
commence commercial shipments late in the third quarter of 2007.
Form factor design is an important differentiator among USB
products. We expect that the timing of the introduction of new
USB form factors by ourselves and our competitors may lead to
volatility in our revenue, on a quarterly basis, as new form
factors enter the market at different times.
Continued success with our AirCard products will depend in part
on our ability to develop AirCard products that meet our
customers evolving design, schedule and price requirements.
Embedded
Modules
In late 2005, several leading notebook computer manufacturers
(PC OEM) commenced the integration of mobile
broadband capability inside their products. Similar to our other
OEM customers, the PC OEM customers award design wins for the
integration of wide area wireless embedded modules on a platform
by platform basis. We currently have embedded module design wins
with twelve PC OEM customers, including Lenovo, HP, Panasonic,
Fujitsu-Siemens Computers, ASUSTeK Computers, Dialogue
Technology Corp., Flipstart Labs and Itronix, a division of
General Dynamics. Our design wins span multiple generations of
both CDMA EV-DO and HSDPA/HSUPA technologies. Ten of our PC OEM
customers currently have commercially available products
featuring our embedded mobile broadband solutions. While we have
been successful securing many design wins, we are not guaranteed
future design wins. Our continued success in the PC OEM market
will continue to depend on end customer adoption as well as our
ability to develop products that meet our customers
design, schedule and price requirements.
We continue to have a solid position with our non-PC OEM
customers providing solutions for a variety of applications,
including design wins for fixed wireless terminal solutions. In
the first quarter of 2007, we announced that Cisco Systems
selected our embedded modules for their Integrated Service
Routers for enterprise disaster recovery and rapid deployment
applications. We also have design wins with Ericsson, Digi and
others for fixed wireless terminal and router solutions.
We introduced our MC8780/8781 embedded modules for HSUPA
networks during the first quarter of 2007 and expect to begin
commercial shipments in the third quarter of 2007.
Rugged
Mobile and M2M Products
Our rugged mobile products are sold to public safety and field
service organizations and are among our highest gross margin
products. We experienced a decline in sales of products in this
segment in 2006 as a result of not having 3G products to
offer to our customers. Late in the first quarter of 2007, we
began initial commercial shipments of both our MP 595 for
EV-DO Revision A (Rev A) networks and MP 875
for UMTS/HSDPA 3.6 Mbps networks. The MP 595 is now
certified for use on the Sprint Mobile Broadband Network and the
MP 875 is certified for use on AT&Ts Broadband
Connect network. We completed the acquisition of AirLink on
May 25, 2007. During
4
the second quarter of 2007, AirLink introduced the PinPoint X
and Raven X, a new line of intelligent modems. Both of these
products have been certified and are commercially available for
use on the Verizon Wireless and Bell Mobility EV-DO Rev
A networks.
With the launch of our new rugged mobile products, and the
addition of AirLinks high value fixed and mobile wireless
data solutions for industrial and public safety applications, we
expect the rugged mobile and M2M segments of our business to
grow and positively impact our financial results.
Additional
Information
Additional information relating to us may be found in the
documents incorporated by reference herein, all of which may be
found on SEDAR at
www.sedar.com
or the SECs website
at
www.sec.gov
in the case of documents filed with or
furnished to the SEC. See Documents Incorporated by
Reference.
Any investment in our Common Shares involves a high degree of
risk due to the nature of our business. The following risk
factors, as well as the risk factors set out in the documents
incorporated by reference in this prospectus and risks not
currently known to us, could materially adversely affect our
future business, operations and financial condition and results
and could cause them to differ materially from the estimates
described in our forward-looking statements. Before investing,
prospective purchasers should carefully consider, in light of
their own financial circumstances, the factors set out below or
incorporated by reference in this prospectus, as well as other
information included or incorporated by reference in this
prospectus (including subsequently filed documents incorporated
by reference). Prospective purchasers should note in particular
the risk factors set out at pages 62 to 68 of our Annual
Information Form and pages 15 to 19 of our Management
Discussion and Analysis for the six months ended June 30,
2007. See Documents Incorporated by Reference.
Risks
Relating to the Offering
Our
stock price has been volatile, is likely to continue to be
volatile and could decline substantially.
Our Common Shares have been, and are likely to continue to be,
highly volatile. For example, in the last 12 months, our
Common Shares traded on Nasdaq and the TSX have closed at a high
of $27.86 and CDN$29.10, respectively, and at a low of $11.42
and CDN$12.79, respectively. Our share price could fluctuate
significantly in the future for various reasons, including the
following:
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Quarterly variations in operating results;
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Changes in earnings estimates by analysts;
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Future announcements concerning us or our competitors;
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The introduction of new products or changes in product pricing
policies by us or our competitors;
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An acquisition or loss of significant customers, distributors
and suppliers;
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A failure to successfully achieve the desired benefits of the
acquisition of AirLink;
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Regulatory developments;
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Intellectual property developments;
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The commencement of material litigation against us or our
collaborators;
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Fluctuations in the economy or general market conditions; or
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The other risk factors set forth in this prospectus.
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In addition, stock markets in general, and the market for shares
of communications companies in particular, have experienced
extreme price and volume fluctuations in recent years that may
be unrelated to the operating performance of the affected
companies. These broad market fluctuations may cause the market
price for our Common Shares to
5
decline substantially. The market price of our Common Shares
could decline below its current price and may fluctuate
significantly in the future. These fluctuations may or may not
be related to our performance or prospects.
We may
be subject to class action litigation in the United States or
Canada, which may materially affect our stock
value.
In the past, investors have instituted securities class action
litigation against us, after a period of volatility in the
market price of our securities, alleging one or more violations
of U.S. securities laws. While we have successfully settled
or had such lawsuits dismissed in the past, if any of our
shareholders in the United States or Canada files such
litigation, we could incur substantial legal fees and our
managements attention and resources could be diverted from
operating our business in order to respond to the litigation.
U.S.
investors may not be able to enforce civil liabilities against
us.
We were formed under the federal laws of Canada. A significant
part of our assets are located outside the United States. In
addition, a majority of the members of our board of directors
and our officers are residents of countries other than the
United States. As a result, it may be impossible for
U.S. investors to affect service of process within the
United States upon us or these persons or to enforce against us
or these persons any judgments in civil and commercial matters,
including judgments under U.S. federal securities laws. In
addition, a Canadian court may not permit U.S. investors to
bring an original action in Canada or to enforce in Canada a
judgment of a court in the United States based upon civil
liability provisions of the U.S. federal securities laws.
No treaty exists between the United States and Canada for the
reciprocal enforcement of foreign court judgments.
The
Company may be a passive foreign investment company
under the U.S. Internal Revenue Code and if it is or becomes a
passive foreign investment company there may be
adverse U.S. tax consequences for investors in the United
States.
Potential investors that are U.S. taxpayers should be aware
that the U.S. Internal Revenue Service may determine that
the Company is a passive foreign investment company
under Section 1297(a) of the U.S. Internal Revenue
Code (a PFIC). If the Company is or becomes a PFIC,
any gain recognized on the sale or other taxable disposition of
the Common Shares and any excess distributions (as
specifically defined in the Internal Revenue Code) paid on the
Common Shares is taxed as ordinary income and must be ratably
allocated to each day in a U.S. taxpayers holding
period for the Common Shares. The amount of any such gain or
excess distribution allocated to prior years when the Company
was a PFIC generally will be subject to U.S. federal income
tax at the highest tax rate applicable to ordinary income in
each such prior year, and the U.S. taxpayer will be
required to pay interest on the resulting tax liability for each
prior year, calculated as if the tax liability had been due in
each prior year.
Alternatively, if a U.S. taxpayer makes a QEF
election, the taxpayer generally will be subject to
U.S. federal income tax on the U.S. taxpayers
pro rata share of the Companys net capital
gain and ordinary earnings (calculated under
U.S. federal income tax rules), regardless of whether such
amounts are actually distributed by the Company.
U.S. taxpayers should be aware that the Company does not
intend to satisfy recordkeeping requirements or to supply
U.S. taxpayers with required information under the QEF
rules in the event that the Company is a PFIC and a
U.S. taxpayer wishes to make a QEF election. Thus,
U.S. taxpayers should not expect to be able to make a QEF
election. As another alternative, a U.S. taxpayer may make
a mark-to-market election if the Common Shares are
marketable stock (as specifically defined in the
Internal Revenue Code). A U.S. taxpayer that makes a
mark-to-market election generally will include in gross income,
for each taxable year in which the Company is a PFIC, an amount
equal to the excess, if any, of (a) the fair market value
of the Common Shares as of the close of such taxable year over
(b) the U.S. taxpayers tax basis in such Common
Shares. See Certain Tax Considerations for
U.S. Shareholders.
The Company expects that it will not be a PFIC for the taxable
year ending December 31, 2007, and the Company expects that
it will not be a PFIC for each subsequent taxable year. The
determination of whether the Company will be a PFIC for a
taxable year depends, in part, on the application of complex
U.S. federal income tax rules, which are subject to
differing interpretations. In addition, whether the Company will
be a PFIC for the taxable year ending December 31, 2007,
and each subsequent taxable year, depends on the assets and
income of the Company over the course of each such taxable year
and, as a result, cannot be predicted with certainty as of the
date of this prospectus.
6
Accordingly, there can be no assurance that the Internal Revenue
Service will not challenge the determination made by the Company
concerning its PFIC status or that the Company will not be a
PFIC for any taxable year.
Laws
and provisions in our articles, by-laws and shareholder rights
plan could delay or deter a change in control.
Our articles and by-laws allow the issuance of preference
shares. Our board of directors may set the rights and
preferences of any series of preference shares in its sole
discretion without the approval of the holders of our Common
Shares. The rights and preferences of the preference shares may
be superior to those of the Common Shares. Accordingly, the
issuance of preference shares also could have the effect of
delaying or preventing a change of control of our company. There
are at present no preference shares outstanding.
In addition, under our governing statute, the
Canada Business
Corporations Act
(Canada), some business combinations,
including a merger or reorganization or the sale, lease or other
disposition of all or a substantial part of our assets, must be
approved by at least two-thirds of the votes cast by our
shareholders or, sometimes, holders of each class of shares. In
some cases shareholders may have a right to dissent from the
transaction, in which case we would be required to pay
dissenting shareholders the fair value of their Common Shares
provided they have followed the required procedures. The
requirement to make payments to dissenting shareholders may
deter a third party from making an offer to acquire the Company
in any of the transactions described above.
In addition, we have adopted a shareholder rights plan that
provides the potential for substantial dilution to an acquiror
unless either the acquiror makes a bid to all shareholders,
which is held open for at least 45 days and is accepted by
shareholders holding at least 50% of the outstanding Common
Shares, or the bid is otherwise approved by our board of
directors. This could discourage a potential acquiror from
making a take-over bid and make it more difficult for a third
party to acquire control of us.
Furthermore, all of our executive officers have contractual
rights under employment agreements to have their stock options
vest immediately and obtain up to 24 months in the case of
our Chief Executive Officer and at least 18 months
severance pay in the case of our other executive officers in the
event of their termination without cause within 12 months
following a change of control of the Company.
Limitations on the ability of third parties to acquire and hold
our Common Shares may be imposed by the
Competition Act
(Canada). This legislation permits the Commissioner of
Competition to review any acquisition of a significant interest
in our company. This legislation grants the Commissioner
jurisdiction to challenge such an acquisition before the
Competition Tribunal if the Commissioner believes that it would,
or would be likely to, result in a substantial lessening or
prevention of competition in any market in Canada. The
Investment Canada Act
(Canada) subjects an acquisition of
control of a company by a non-Canadian to government review if
the value of our assets as calculated pursuant to the
legislation exceeds a threshold amount. A reviewable acquisition
may not proceed unless the relevant minister is satisfied or is
deemed to be satisfied that there is likely to be a net benefit
to Canada from the transaction.
Each of these matters could delay or deter a change in control
that would be attractive to, and provide liquidity for,
shareholders, and could limit the price that investors may be
willing to pay in the future for our Common Shares.
You
will incur substantial and immediate dilution if you purchase
shares in this Offering.
The offering price of our Common Shares in this Offering will
significantly exceed the net tangible book value of our Common
Shares. Accordingly, if you purchase Common Shares in this
Offering, you will incur immediate and substantial dilution of
your investment. If outstanding options and warrants to
purchase, or rights to acquire, our Common Shares are exercised,
you will incur additional dilution.
We do
not currently anticipate paying any dividends in the foreseeable
future.
Since incorporation, we have not paid any dividends on our
Common Shares. We currently intend to retain our future
earnings, if any, to finance the growth of our business. We do
not currently anticipate that we will pay any dividends on our
Common Shares in the immediate or foreseeable future.
7
Management
has broad discretion as to the use of the proceeds from this
Offering.
We intend to use the proceeds from this Offering for general
corporate purposes, working capital and future acquisitions. Our
management will have broad discretion with respect to the use of
proceeds from this Offering. You will be relying on the judgment
of our management about these uses. If we do not allocate the
proceeds of this Offering effectively or use the proceeds
beneficially, our prospects, business, financial condition and
results of operations could be harmed. See Use of
Proceeds.
Future
sales or issuances of Common Shares could lower our share price,
dilute investors voting power and may reduce our earnings
per share.
We may sell additional Common Shares in subsequent offerings. We
may also issue additional Common Shares to finance future
acquisitions. We cannot predict the size of future issuances of
Common Shares or the effect, if any, that future issuances and
sales of Common Shares will have on the market price of our
Common Shares. Sales or issuances of substantial numbers of
Common Shares, or the perception that such sales could occur,
may adversely affect prevailing market prices for our Common
Shares. With any additional sale or issuance of Common Shares,
investors will suffer dilution to their voting power and we may
experience dilution in our earnings per share.
FORWARD-LOOKING
STATEMENTS
Certain statements in this prospectus, or incorporated by
reference herein, that are not based on historical facts,
constitute forward-looking statements or forward-looking
information within the meaning of applicable securities laws
(forward-looking statements). These forward-looking
statements are not promises or guarantees of future performance
but are only predictions that relate to future events,
conditions or circumstances or our future results, performance,
achievements or developments and are subject to substantial
known and unknown risks, assumptions, uncertainties and other
factors that could cause our actual results, performance,
achievements or developments in our business or in our industry
to differ materially from those expressed, anticipated or
implied by such forward-looking statements. Forward-looking
statements include all disclosure regarding possible events,
conditions, circumstances or results of operations that are
based on assumptions about future economic conditions, courses
of action and other future events. We caution you not to place
undue reliance upon any such forward-looking statements, which
speak only as of the date they are made. Forward-looking
statements include statements regarding the outlook for our
future operations, plans and timing for the introduction or
enhancement of our services and products, statements concerning
strategies, developments, statements about future market
conditions, supply conditions, end customer demand conditions,
channel inventory and sell through, revenue, gross margin,
operating expenses, profits, forecasts of future costs and
expenditures, the outcome of legal proceedings, and other
expectations, intentions and plans that are not historical fact.
Forward-looking statements include, without limitation:
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Information concerning possible or assumed future results of
operations, trends in financial results and business plans;
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Statements about our product development activities and
schedules;
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Statements about our expectations for regulatory approvals for
any of our product candidates;
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Statements about our potential or prospects for future product
sales and royalties;
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Statements about the level of our costs and operating expenses
relative to our revenues, and about the expected composition of
our revenues;
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Statements about our future capital requirements and the
sufficiency of our cash, cash equivalents, investments and other
sources of funds to meet these requirements;
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Statements about the outcome of contingencies such as legal
proceedings;
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Other statements about our plans, objectives, expectations and
intentions; and
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Other statements that are not historical fact.
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8
In some cases, you can identify forward-looking statements by
words such as may, estimates,
projects, anticipates,
believes, plans, expects,
intends or their negatives or other comparable
words, but the absence of those words does not necessarily mean
that a statement is not forward-looking. Forward-looking
statements are subject to known and unknown risks and
uncertainties and are based on potentially inaccurate
assumptions that could cause actual results to differ materially
from those expected or implied by the forward-looking
statements. Our actual results could differ materially from
those anticipated in the forward-looking statements for many
reasons, including but not limited to the factors described in
the section titled Risk Factors in this prospectus.
The risk factors and uncertainties that may affect our actual
results, performance, achievements or developments are many and
include, amongst others, our ability to develop, manufacture,
supply and market new products that we do not produce today that
meet the needs of customers and gain commercial acceptance, our
reliance on the deployment of next generation networks by major
wireless operators, the continuous commitment of our customers,
increased competition and other risks detailed herein under the
heading Risk Factors or included in the documents
incorporated by reference herein. Many of these factors and
uncertainties are beyond our control. Consequently, all
forward-looking statements in this prospectus, or the documents
incorporated by reference herein, are qualified by this
cautionary statement and there can be no assurance that actual
results, performance, achievements or developments anticipated
by us will be realized. Forward-looking statements are based on
managements current plans, estimates, projections, beliefs
and opinions and, except as required by applicable securities
laws, we do not undertake any obligation to update
forward-looking statements should the assumptions related to
these plans, estimates, projections, beliefs and opinions change.
Except as required by applicable securities laws, we undertake
no obligation to publicly update any forward-looking statements
to reflect circumstances or events after the date of this
prospectus, or to reflect the occurrence of unanticipated
events. You should review the factors and risks we describe in
the reports we file from time to time with the applicable
Canadian securities commissions or similar regulatory
authorities or the SEC after the date of this prospectus.
We estimate that the net proceeds from the sale of Common Shares
we are offering will be $73.8 million after deducting the
Underwriters fees and estimated offering expenses. We
estimate that the net proceeds will be approximately $85.1
million if the Over-Allotment Option is exercised in full.
Of the combined total of the net proceeds of this Offering and
the Companys existing cash and investments, the Company
intends to allocate approximately 40% of this amount to working
capital and general corporate purposes, with the balance being
allocated to potential future acquisitions. There may be
circumstances, however, where for sound business reasons, a
reallocation of funds may be necessary, and we reserve the right
to reallocate the proceeds of the Offering in these
circumstances.
9
The following table sets forth the capitalization of the Company
as at the dates indicated and as adjusted to give effect to the
Offering. The table should be read in conjunction with
(1) the audited annual consolidated financial statements of
the Company for the year ended December 31, 2006 and
Managements Discussion and Analysis thereon; and
(2) the unaudited interim consolidated financial statements
of the Company as at and for the three and six months ended
June 30, 2007 and Managements Discussion and Analysis
thereon; all of which are incorporated by reference in this
short form prospectus. There has been no material change in the
capitalization of the Company since June 30, 2007.
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As Adjusted
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June 30, 2007
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Assuming Full
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Exercise of the
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Actual
|
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|
Actual
|
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As Adjusted
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Over-Allotment
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December 31, 2006
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June 30, 2007
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June 30, 2007
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Option
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(audited)
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(unaudited)
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(unaudited)
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(unaudited)
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Cash and cash equivalents
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$
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46,438
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$
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71,227
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69,727
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69,727
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Short-term investments
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40,554
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18,826
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94,090
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105,380
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$
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86,992
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$
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90,053
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163,817
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|
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175,107
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Long-term liabilities, including
current portion
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$
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1,992
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$
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1,495
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1,495
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1,495
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Shareholders equity:
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Common shares
(authorized unlimited; outstanding, June 30,
2007 27,338,218, December 31, 2006
25,708,331; outstanding, as adjusted June 30,
2007 30,838,218; outstanding, as adjusted
June 30, 2007 assuming full exercise of the over-allotment
option 31,363,218) and additional paid in capital
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225,101
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247,351
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322,615
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333,905
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Warrants
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1,538
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1,538
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1,538
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1,538
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Deficit
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(73,061
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)
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(61,134
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)
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(61,134
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)
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(61,134
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Accumulated other comprehensive
loss
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(746
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)
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(729
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)
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(729
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(729
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Total shareholders equity
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152,832
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187,026
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262,290
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273,580
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Total capitalization
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$
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154,824
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$
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188,521
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263,785
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275,075
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Note:
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(1)
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Without giving effect to the issuance of any Common Shares which
have been allocated and reserved for issuance upon the exercise
of 2,006,910 outstanding stock options of the Company.
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10
DESCRIPTION
OF SHARE CAPITAL
Our authorized capital consists of an unlimited number of Common
Shares, of which, at September 18, 2007, 27,456,864 were
issued and outstanding, and an unlimited number of preference
shares, issuable in series, of which none are issued and
outstanding. Our board of directors is authorized to determine
the designation, rights and restrictions to be attached to the
preference shares upon issuance.
Holders of Common Shares are entitled to receive notice of any
meeting of shareholders and to attend and vote at those
meetings, except those meetings at which only the holders of
shares of another class or of a particular series are entitled
to vote. Each Common Share entitles its holder to one vote.
Subject to the rights of the holders of preference shares, the
holders of Common Shares are entitled to receive on a
proportionate basis such dividends as our board of directors may
declare out of funds legally available therefor. In the event of
the dissolution, liquidation, winding up or other distribution
of our assets, the holders of the Common Shares are entitled to
receive on a proportionate basis all of our assets remaining
after payment of all of our liabilities, subject to the rights
of holders of preference shares.
The Common Shares carry no pre-emptive or conversion rights
other than rights granted to holders of Common Shares under the
Shareholders Rights Plan implemented and ratified by our
shareholders on April 27, 2000 and re-adopted by our
shareholders on April 28, 2003 and April 25, 2006. The
Shareholder Rights Plan is designed to encourage the fair
treatment of our shareholders in connection with any take-over
offer for our outstanding Common Shares. The Shareholder Rights
Plan provides our board of directors and shareholders with
45 days, which is longer than provided by applicable laws,
to fully consider any unsolicited take-over bid without undue
pressure, in order to allow our board of directors, if
appropriate, to consider other alternatives to maximize
shareholder value and to allow additional time for competing
bids to emerge. If a bid is made to all shareholders, is held
open for at least 45 days and is accepted by shareholders
holding more than 50% of the outstanding Common Shares, or is
otherwise approved by our board of directors, then the
Shareholder Rights Plan will not affect the rights of
shareholders. Otherwise, all shareholders, except the parties
making a take-over bid, will be able to acquire a number of
additional Common Shares equal to 100% of their existing
outstanding holdings at half the market price. Thus, any party
making a take-over bid not permitted by the Shareholder Rights
Plan could suffer significant dilution. The Shareholder Rights
Plan will expire in accordance with its terms upon the
termination of our 2009 annual meeting of shareholders.
CERTAIN
TAX CONSIDERATIONS FOR U.S. SHAREHOLDERS
The following discussion generally summarizes certain material
Canadian and U.S. federal income tax consequences of the
acquisition, ownership and disposition of Common Shares
purchased pursuant to this prospectus by certain
U.S. purchasers. This discussion is not intended to be, nor
should it be construed to be, legal or tax advice to any
particular prospective purchaser. This discussion does not take
into account Canadian provincial or territorial tax laws,
U.S. state or local tax laws, or tax laws of jurisdictions
outside of Canada and the United States. The following is based
upon the tax laws of Canada and the United States as in effect
on the date of this prospectus, which are subject to change with
possible retroactive effect.
Prospective purchasers should
consult their own tax advisors with respect to their particular
circumstances.
Material
United States Federal Income Tax Considerations for United
States Holders
Circular
230 Disclosure
Any statement made in this prospectus regarding
U.S. federal tax matters is not intended or written to be
used, and cannot be used, by any taxpayer for purposes of
avoiding any tax penalties. Any such statement herein is written
in connection with the marketing or promotion of the transaction
to which the statement relates. Each taxpayer should seek advice
based on the taxpayers particular circumstances from an
independent tax advisor.
Introduction
The following is a general summary description of the material
U.S. federal income tax consequences of the acquisition,
ownership and disposition of Common Shares by U.S. Holders
(as defined below). This summary is
11
based on current provisions of the Internal Revenue Code of
1986, as amended (the Code), current
U.S. Treasury Regulations promulgated under the Code,
proposed or temporary Treasury Regulations promulgated under the
Code, the legislative history of the Code, the United
States-Canada Tax Convention of 1980, as amended by various
Protocols (the Treaty), judicial decisions, and
administrative rulings and pronouncements of the Internal
Revenue Service (the IRS), all as in effect on the
date of this prospectus and all of which are subject to change,
possibly on a retroactive basis.
This summary considers only U.S. Holders who will own
Common Shares as capital assets, that is, generally as
investments. For purposes of this discussion, a U.S. Holder
is: (i) an individual citizen or resident (as defined under
U.S. tax laws) of the United States; (ii) a
corporation, or other entity treated as a corporation for
U.S. federal income tax purposes, organized in or under the
laws of the United States or of any political subdivision
thereof; (iii) an estate, the income of which is subject to
U.S. federal income taxation regardless of the source; or
(iv) a trust, if (1) a court within the United States
is able to exercise primary jurisdiction over the administration
of the trust and one or more U.S. persons (within the
meaning of Section 7701(a)(30) of the Code) have the
authority to control all substantial decisions of the trust or
(2) the trust was in existence on August 20, 1996, and
has a valid election in effect under applicable
U.S. Treasury Regulations to be treated as a
U.S. person. If a partnership, including any entity that is
treated as a partnership for U.S. federal income tax
purposes, holds Common Shares, the treatment of a partner in the
partnership will generally depend upon the status of the partner
and the activities of the partnership. A prospective purchaser
of Common Shares that is a partnership, and the partners in such
partnership, should consult their tax advisors about the
U.S. federal income tax consequences of holding and
disposing of Common Shares.
This discussion does not address all aspects of
U.S. federal income taxation that may be relevant to any
particular holder based on the holders individual
circumstances. In particular, not addressed are the potential
application of the alternative minimum tax or the
U.S. federal income tax consequences to holders that are
subject to special treatment, including (by way of example
only): (i) broker-dealers in securities or currencies;
(ii) life insurance companies, regulated investment
companies or real estate investment trusts; (iii) banks,
thrifts or other financial institutions or financial
services entities; (iv) taxpayers who have elected
mark-to-market accounting; (v) tax-exempt entities;
(vi) taxpayers who hold Common Shares as a position in a
straddle, or as part of a synthetic
security or hedge, conversion
transaction or other integrated investment;
(vii) holders owning directly, indirectly or by attribution
at least ten percent of the voting power in the Company; and
(viii) U.S. Holders whose functional currency is not
the U.S. dollar.
The discussion contained herein is of a general nature only
and is not intended to constitute a complete analysis of the
U.S. tax consequences and should not be interpreted as
legal or tax advice to any U.S. Holder, as U.S. tax
consequences may vary depending upon the U.S. Holders
particular circumstances. Each U.S. Holder should obtain
advice from his, her or its own tax advisor as to the
U.S. federal, state, local, and
non-U.S. tax
consequences and tax reporting requirements resulting from
holding Common Shares.
Distributions
on Common Shares
Subject to application of the PFIC rules (discussed below), a
U.S. Holder that receives a distribution, including a
constructive distribution, with respect to Common Shares will be
required to include the amount of such distribution in gross
income as ordinary income (without reduction for any Canadian
income tax withheld from such distribution) to the extent, if
any, of the current or accumulated earnings and
profits of the Company. To the extent that a distribution
exceeds the current and accumulated earnings and
profits of the Company, such distribution will be treated
(1) first, as a tax-free return of capital to the extent of
the U.S. Holders adjusted basis in the Common Shares
and, (2) thereafter, as gain from the sale or exchange of
such shares. (See more detailed discussion at Disposition
of Common Shares below). The Company, however, does not
expect to keep earnings and profits in accordance with
U.S. federal income tax principles. Therefore,
U.S. holders should expect that a distribution will
generally be treated as a dividend.
For taxable years beginning before January 1, 2011, a
dividend paid by a
non-U.S. corporation
generally will be taxed at the preferential tax rates applicable
to long-term capital gains (generally, a maximum rate of 15%) if
(a) the corporation is a qualified foreign
corporation (QFC) (as defined below),
(b) the U.S. Holder receiving such dividend is an
individual, estate, or trust, and (c) such dividend is paid
on shares that have been held by such
12
U.S. Holder for at least 61 days (during which such
U.S. Holder is not protected from risk of loss) during the
121-day
period beginning 60 days before the ex-dividend
date (i.e., the first date that a purchaser of such shares
will not be entitled to receive such dividend). Such
preferential tax rates will not be available, however, if the
U.S. Holder receiving the dividend is obligated to make
related payments with respect to positions in substantially
similar or related property, or if the U.S. Holder elects
to treat the dividend as investment income pursuant
to Section 163(d)(4) of the Code. The Company generally
will be a QFC if it is eligible for the benefits of the Treaty
(which it believes that it is and will continue to be) and is
not a PFIC (as defined below) for the taxable year during which
the Company pays a dividend or for the preceding taxable year.
In addition, dividends paid with respect to stock of a foreign
corporation that is readily tradeable on an established
U.S. securities market (such as the Nasdaq Global Market)
are treated as paid by a QFC, provided the corporation is not a
PFIC for the taxable year during which the corporation pays the
dividends or for the preceding taxable year. Subject to
application of the PFIC rules (discussed below), if the Company
is not a QFC, a dividend paid by the Company to a
U.S. Holder, including a U.S. Holder that is an
individual, estate, or trust, generally will be taxed at
ordinary income tax rates (and not at the preferential tax rates
applicable to long-term capital gains). Certain dividends do not
qualify for the preferential rate, even if paid by a QFC, and
U.S. Holders should therefore consult their own tax
advisors regarding the application of these rules in light of
their particular circumstances.
The amount of a distribution paid in currency other than
U.S. dollars generally will be equal to the
U.S. dollar value of such distribution based on the
exchange rate applicable on the date of receipt. A
U.S. Holder that does not convert foreign currency received
as a distribution into U.S. dollars on the date of receipt
generally will have a tax basis in such
non-U.S. currency
equal to the U.S. dollar value of such
non-U.S. currency
on the date of receipt. Such a U.S. Holder generally will
recognize ordinary income or loss on the subsequent sale or
other taxable disposition of such
non-U.S. currency
(including an exchange for U.S. dollars).
Dividends paid on Common Shares generally will not be eligible
for the dividends-received deduction. The
availability of the dividends-received deduction is subject to
complex limitations that are beyond the scope of this
discussion, and a U.S. Holder that is a corporation should
consult his, her or its own financial advisor, legal counsel, or
accountant regarding the dividends-received deduction.
Disposition
of Common Shares
Subject to application of the PFIC rules (discussed below), a
U.S. Holder will recognize gain or loss on the sale or
other taxable disposition of Common Shares in an amount equal to
the difference, if any, between (a) the amount of cash plus
the fair market value of any property received and (b) such
U.S. Holders adjusted basis in the Common Shares sold
or otherwise disposed of. If the PFIC rules do not apply, any
such gain or loss generally will be capital gain or loss, which
will be long-term capital gain or loss if the Common Shares were
held for more than one year at the time of the sale or other
disposition.
Preferential tax rates apply to long-term capital gains of a
U.S. Holder that is an individual, estate, or trust. There
are currently no preferential tax rates for long-term capital
gains of a U.S. Holder that is a corporation. Deductions
for capital losses are subject to significant limitations. For a
U.S. Holder that is an individual, estate, or trust,
capital losses may be used to offset capital gains and up to
$3,000 of ordinary income in a taxable year. An unused capital
loss of a U.S. Holder that is an individual, estate, or
trust generally may be carried forward to subsequent taxable
years, until such net capital loss is exhausted. For a
U.S. Holder that is a corporation, capital losses may be
used to offset only capital gains, and an unused capital loss
generally may be carried back three years and carried forward
five years from the year in which the capital loss is recognized.
Foreign
Tax Credit
A U.S. Holder who pays (whether directly or through
withholding) Canadian or other foreign income tax with respect
to Common Shares generally will be entitled, at the election of
such U.S. Holder, to receive either a deduction or a credit
for the Canadian or other foreign income tax paid. Subject to
the limitations described below, a credit generally will reduce
a U.S. Holders U.S. federal income tax liability
on a dollar-for-dollar basis, whereas a deduction will reduce a
U.S. Holders income subject to U.S. federal
income tax. This election is made on a
year-by-year
basis and applies to all foreign taxes paid (whether directly or
through withholding) by a U.S. Holder during a year.
13
Complex limitations apply to the foreign tax credit, including
the general limitation that the credit cannot exceed that
portion of a U.S. Holders U.S. federal income
tax liability that such U.S. Holders foreign
source taxable income bears to such
U.S. Holders worldwide taxable income. In applying
this limitation, a U.S. Holders various items of
income and deduction must be classified, as either foreign
source or U.S. source. In addition, this
limitation is calculated separately with respect to
passive income and general category
income, i.e., income other than passive
income. Dividends paid by the Company generally will
constitute foreign source income and be classified
as passive income. Distributions with respect to
Common Shares in excess of the Companys current and
accumulated earnings and profits, as well as any gain recognized
on disposition of Common Shares, would generally not constitute
foreign source income (subject to application of the Treaty),
and a U.S. Holder would not be able to use the foreign tax
credit arising from any Canadian withholding tax imposed on such
distributions, or any Canadian income tax imposed on such gain,
unless the credit could be applied (subject to applicable
limitations) against U.S. federal income tax due on other
foreign source income in the appropriate category. In certain
circumstances, if a U.S. Holder has held stock for less
than a specified minimum period during which it is not protected
from risk of loss, or is obligated to make payments related to
the dividends, the U.S. Holder will not be allowed a
foreign tax credit for Canadian withholding taxes imposed on the
dividends paid with respect to such stock. The foreign tax
credit rules are complex, and each U.S. Holder should
consult his, her or its own financial advisor, legal counsel, or
accountant regarding their application to the
U.S. Holders particular circumstances.
Passive
Foreign Investment Company Status
For U.S. federal income tax purposes, a foreign corporation
generally will be classified as a passive foreign investment
company, or PFIC, for any taxable year during which either
(i) 75% or more of its gross income is passive income (as
defined for U.S. federal income tax purposes), such as
dividends, interest and royalties or (ii) on average for
such taxable year, 50% or more of its assets produce or are held
for the production of passive income. For purposes of applying
the foregoing tests, the assets and gross income of any
corporation in which the PFIC is considered to own 25% or more
of the shares (by value) will be proportionately attributed to
the PFIC.
Based on our current and projected income, assets and
activities, we believe that we will not be classified as a PFIC
currently or in the future. However, there can be no assurances
that we are not or will not become a PFIC because (i) the
determination of whether or not we are a PFIC will be based on
the composition of our income and assets, including goodwill,
and can be definitively made only after the end of each taxable
year; (ii) the value of our assets may vary significantly
following the Offering; (iii) we will own a substantial
amount of passive assets after the Offering; and (iv) the
application of the relevant rules is not entirely clear in all
respects.
If the Company is a PFIC for any taxable year during which a
U.S. Holder owns Common Shares, the U.S. Holder will
be subject to special U.S. federal income tax rules, set
forth in Sections 1291 to 1298 of the Code, with respect to
the Common Shares. If a U.S. Holder does not make a
qualified electing fund, or QEF,
election, or a mark-to-market election, then a
U.S. Holder of Common Shares would be required to report
any gain on the sale or other taxable disposition of any Common
Shares, and any excess distribution (generally,
distributions received in a taxable year that are greater than
125% of the average annual distributions received during the
shorter of the three preceding taxable years or the
U.S. Holders holding period for the Common Shares),
as ordinary income. The tax liability on such gain or income
from excess distributions is computed as if the items had been
earned ratably by the U.S. Holder over each day in the
U.S. Holders holding period for the Common Shares.
Income is subject to the highest ordinary income tax rate for
each taxable year in which the items were treated as having been
earned, other than the current year of the U.S. Holder and
years during which the corporation was not a PFIC, and the
U.S. Holder will be required to pay interest on the
resulting tax liability for each such prior year (which may be
nondeductible by certain U.S. Holders), calculated as if
such tax liability had been due in each such prior year. In
addition, dividends from the Company would not be eligible for
the preferential tax rate described above if the Company is a
PFIC in the taxable year in which such dividends are paid or in
the preceding taxable year.
A U.S. Holder who makes a QEF election generally would not
be subject to the special rules applicable to shareholders of
PFICs described above. Instead, the U.S. Holder would pay
tax on his, her or its pro rata share of the PFICs
ordinary earnings and net capital gains for each year the
U.S. Holder held the shares, regardless of whether such
income or gain was actually distributed. Alternatively, in
certain circumstances a U.S. Holder, again in lieu of being
subject to the rules discussed in the preceding paragraph, may
make an election under a mark-to-market
14
regime, provided that the PFIC stock held by the
U.S. Holder is marketable stock, i.e., stock
regularly traded on a qualified exchange. The Companys
Common Shares are listed on the Nasdaq Global Market, which is
treated as a qualified exchange under applicable
U.S. Treasury Regulations. No assurances can be given,
however, that the Common Shares will be regularly
traded for purposes of the mark-to-market election. Under
this election, the U.S. Holder would be required to
recognize as ordinary income each year an amount equal to the
excess of the fair market value over the adjusted basis of his
or her shares in the PFIC, calculated as of the close of such
year. If the adjusted basis of the shares were to exceed their
fair market value, and an election to have this regime apply
were in effect, the U.S. Holder would be entitled to deduct
the amount of such excess, but only to the extent of amounts
included in ordinary income in prior taxable years pursuant to
the election.
Both a QEF election and a mark-to-market election are subject to
complex and specific rules and requirements. In particular, a
QEF election requires that the PFIC agree to provide certain
information to shareholders and meet certain other requirements.
We make no representation that we will be willing or able to
provide this information or meet these requirements if we are
classified as a PFIC. Thus, U.S. Holders should not expect
to be able to make a QEF election. U.S. Holders are
strongly urged to consult their own tax advisors concerning the
QEF election and the mark-to-market election if we are
classified as a PFIC.
A U.S. Holder who beneficially owns shares of a PFIC must
file an annual return with the IRS on IRS Form 8621.
Information
Reporting and Backup Withholding
Payments in respect of Common Shares may be subject to
information reporting to the IRS and to a 28% U.S. backup
withholding tax. Backup withholding may apply unless the payee
(i) is a corporation or other exempt recipient and, if
required, demonstrates its status as such, or (ii) provides
a U.S. taxpayer identification number, or TIN, which, for
an individual, is usually his or her social security number,
certifies that the TIN provided is correct and that the holder
has not been notified by the IRS that it is subject to backup
withholding due to the underreporting of interest or dividends,
the IRS has not notified the payor that the TIN provided by the
payee is incorrect, and otherwise complies with the applicable
requirements of the backup withholding rules. Backup withholding
is not an additional tax; rather, any amounts withheld under the
backup withholding rules will be allowed as a refund or credit
against such payees U.S. federal income tax
liability, provided that the required information is furnished
to the IRS. A U.S. Holder that fails to provide a correct
TIN, when requested, may also be subject to penalties.
U.S. Holders should consult with their own tax advisors as
to the application of the U.S. information reporting and
backup withholding rules.
Canadian
Federal Income Tax Considerations for U.S. Residents
The following is a general summary of the principal Canadian
federal income tax considerations generally applicable to a
U.S. Resident (as defined below) who acquires Common Shares
(Common Shares) pursuant to this prospectus. As used
in this summary of Canadian federal income tax considerations,
the term U.S. Resident means a holder of Common
Shares who: (A) for the purposes of the
Income Tax Act
(Canada) (the Tax Act) and regulations
thereunder (the Regulations) (i) is not, has
not been and will not be or be deemed to be, resident in Canada
at any time while he or she holds or held Common Shares,
(ii) deals at arms length and is not affiliated with
the Company, (iii) holds the Common Shares as capital
property and (iv) does not use or hold (and has never used
or held) the Common Shares in carrying on a business in Canada;
and (B) for the purposes of the
Canada-United States
Income Tax Convention
(1980), (the Convention),
is at all relevant times a resident of the United States. Common
Shares will generally be considered to be capital property to a
U.S. Resident unless the shares are held as inventory in
the course of carrying on a business or in a transaction
considered to be an adventure in the nature of trade. Common
Shares held by certain financial institutions, as
defined in the Tax Act, will generally not be capital property
to such holders and will be subject to special
mark-to-market rules contained in the Tax Act. This
summary does not take into account these mark-to-market rules.
Holders which are financial institutions for the purposes of
these rules or which otherwise do not hold their Common Shares
as capital property should consult their own tax advisors.
Special rules, which are not discussed in this summary, may
apply to a holder that is an insurer carrying on business in
Canada or elsewhere.
15
This summary is of a general nature only and is not intended
to be, nor should it be construed to be, legal or tax advice to
any particular U.S. Resident. This summary is not
exhaustive of all Canadian federal income tax considerations
applicable to a U.S. Resident acquiring Common Shares
pursuant to this Offering. Accordingly, U.S. Residents are
urged to consult their own tax advisors with respect to their
particular circumstances.
This summary is based upon the current provisions of the Tax Act
and the Regulations, all specific proposals to amend the Tax Act
and the Regulations announced by the Minister of Finance
(Canada) prior to the date of this prospectus, our understanding
of the current published administrative policies and assessing
practices of the Canada Revenue Agency (CRA) and the
current provisions of the Convention. This summary does not take
into account or anticipate any other changes in law, whether by
judicial, regulatory, administrative, governmental or
legislative decision or action, nor does it take into account
any provincial, territorial or foreign tax legislation or
considerations.
Taxation
of Dividends on Common Shares
Under the Tax Act, dividends on Common Shares paid or credited
to a non-resident of Canada will normally be subject to Canadian
withholding tax at the rate of 25% of the gross amount of such
dividends. This withholding tax may be reduced pursuant to the
terms of the Convention. Under the Convention, the rate of
Canadian withholding tax which will apply on dividends paid by
the Company to a U.S. Resident that beneficially owns such
dividends is generally 15% unless the beneficial owner is a
company which owns at least 10% of the voting stock of the
Company at that time in which case the rate is reduced to 5%. In
addition, under the Convention and the administrative practices
of CRA, dividends may be exempt from Canadian withholding tax if
paid to certain U.S. Residents that have complied with
certain administrative conditions and that are qualifying
religious, scientific, literary, educational or charitable
tax-exempt organizations or that are qualifying trusts,
companies, organizations or arrangements operated exclusively to
administer or provide pension, retirement or employee benefits
that are exempt from tax in the United States.
Disposition
of Common Shares
A U.S. Resident will not be subject to tax under the Tax
Act in respect of any capital gain realized by such
U.S. Resident on a disposition of a Common Share unless
such Common Share constitutes taxable Canadian
property, as defined in the Tax Act, of the
U.S. Resident at the time of disposition. As long as the
Common Shares are then listed on a prescribed stock exchange,
which currently includes the Toronto Stock Exchange and the
Nasdaq Global Market, the Common Shares generally will not
constitute taxable Canadian property of a U.S. Resident
unless, at any time during the
60-month
period immediately preceding the disposition, the
U.S. Resident, persons with whom the U.S. Resident did
not deal at arms length, or the U.S. Resident
together with all such persons, owned or had an interest or an
option in respect of 25% or more of the issued shares of any
class or series of shares of our capital stock.
If the Common Shares are taxable Canadian property to a
U.S. Resident at the time of disposition, any capital gain
realized on the disposition or deemed disposition of such Common
Shares will, according to the Convention, generally not be
subject to Canadian federal income tax unless the value of the
Common Shares at the time of the disposition of such Common
Shares is derived principally from real property situated
in Canada within the meaning set out in the Convention. A
U.S. Resident whose Common Shares are taxable Canadian
property should consult his or her own advisors regarding filing
and other Canadian federal income tax considerations.
16
Subject to the terms and conditions stated in the underwriting
agreement dated September 19, 2007 (the Underwriting
Agreement), each Underwriter named below has agreed to
purchase, and we have agreed to sell to that Underwriter, the
number of Common Shares set forth opposite the
Underwriters name.
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Underwriter
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Number of Common Shares
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CIBC World Markets Inc.
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1,750,000
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Piper Jaffray & Co.
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875,000
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RBC Dominion Securities Inc.
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875,000
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Total
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3,500,000
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The offering price of the Common Shares was determined by
negotiation between the Company and the Underwriters. The
Underwriting Agreement provides that the obligations of the
Underwriters to purchase the Common Shares included in this
Offering are subject to approval of legal matters by counsel and
to other conditions. The Underwriters are obligated to purchase
all the Common Shares (other than those covered by the
Over-Allotment Option described below) if they purchase any of
the Common Shares.
The Underwriters propose to offer some of the Common Shares
directly to the public at the public offering price set forth on
the cover page of this prospectus and some of the Common Shares
to dealers at the public offering price less a concession not to
exceed US$0.448 per Common Share. The Underwriters may allow,
and dealers may reallow a concession not to exceed US$0.10 per
Common Share on sales to other dealers. After the initial
offering of the Common Shares to the public, the Underwriters
may change the public offering price and concessions.
We have granted to the Underwriters the Over-Allotment Option,
exercisable for 30 days from the date of the closing of
this Offering, to purchase up to 525,000 additional Common
Shares at the public offering price. The Underwriters may
exercise the Over-Allotment Option, in whole or in part, solely
for the purpose of covering over-allotments, if any, in
connection with this Offering. If the Over-Allotment Option is
exercised in full, the total offering price to the public, the
Underwriters fee and the net proceeds to the Company will
be $90,160,000, $3,606,400 and $86,553,600, respectively. Under
applicable securities laws, this prospectus also qualifies the
grant of the Over-Allotment Option and the distribution of the
additional Common Shares issuable on exercise of the
Over-Allotment Option.
We have agreed that, for a period of 90 days from the date
of the Underwriting Agreement, we will not, directly or
indirectly (except as disclosed in the financial statements
incorporated by reference into the Prospectus), (1) offer
for sale, sell, pledge or otherwise dispose of (or enter into
any transaction or device which is designed to, or could be
expected to, result in the disposition or purchase by any person
at any time in the future) any Common Shares or securities
convertible into or exchangeable for Common Shares or
substantially similar securities, or sell or grant options,
rights or warrants with respect to any Common Shares or
securities convertible into or exchangeable for Common Shares
(other than the Common Shares being sold in the Offering and
Common Shares issued in connection with acquisitions (provided
that Common Shares issued in connection with acquisitions are
not freely tradable during the 90 day period), pursuant to
employee benefit plans, qualified stock option plans or other
employee compensation plans existing on the date hereof or under
currently outstanding options, warrants or rights),
(2) enter into any swap or other derivatives transaction
that transfers to another, in whole or in part, any of the
economic benefits or risks of ownership of such Common Shares,
whether any such transaction described in clause (1) or
(2) above is to be settled by delivery of Common Shares or
other securities, in cash or otherwise, (3) file or cause
to be filed a registration statement, including any amendments,
with respect to the registration of any Common Shares or
securities convertible, exercisable or exchangeable into Common
Shares or any of our other securities (other than the Common
Shares being sold in the Offering and Common Shares issued
pursuant to employee benefit plans, qualified stock option plans
or other employee compensation plans existing on the date
hereof) or (4) publicly disclose the intention to do any of
the foregoing, in each case without the prior written consent of
the Underwriters, which consent shall not be unreasonably
withheld.
This Offering is being made concurrently in all of the provinces
of Canada and in the United States pursuant to the
multi-jurisdictional disclosure system implemented by the
securities regulatory authorities in the United States and
Canada. The Common Shares will be offered in the United States
by CIBC World Markets Corp., Piper
17
Jaffray & Co. and RBC Capital Markets Corporation, and
in Canada by CIBC World Markets Inc. and RBC Dominion Securities
Inc. Subject to applicable law, the Underwriters may offer the
Common Shares outside of Canada and the United States.
The outstanding Common Shares of the Company are listed for
trading on the TSX under the symbol SW and on the
Nasdaq Global Market under the symbol SWIR.
In connection with the Offering, the Underwriters may purchase
and sell Common Shares in the open market. These transactions
may include over-allotment, syndicate covering transactions and
stabilizing transactions. Over-allotment involves syndicate
sales of Common Shares in excess of the number of Common Shares
to be purchased by the Underwriters in the Offering, which
creates a syndicate short position. Covered short
sales are sales of Common Shares made in an amount up to the
number of Common Shares represented by the Over-Allotment
Option. In determining the source of Common Shares to close out
the covered syndicate short position, the Underwriters will
consider, among other things, the price of Common Shares
available for purchase in the open market as compared to the
price at which they may purchase Common Shares through the
Over-Allotment Option. Transactions to close out the covered
syndicate short position involve either purchases of the Common
Shares in the open market after the distribution has been
completed or the exercise of the Over-Allotment Option. The
Underwriters may also make naked short sales of
Common Shares in excess of the Over-Allotment Option. The
Underwriters must close out any naked short position by
purchasing Common Shares in the open market. A naked short
position is more likely to be created if the Underwriters are
concerned that there may be downward pressure on the price of
the Common Shares in the open market after pricing that could
adversely affect investors who purchase in the Offering.
Stabilizing transactions consist of bids for or purchases of
Common Shares in the open market while the Offering is in
progress.
Any of these activities may have the effect of preventing or
retarding a decline in the market price of the Common Shares.
They may also cause the price of the Common Shares to be higher
than the price that otherwise would exist in the open market in
the absence of these transactions. The Underwriters may conduct
these transactions in the over-the-counter market or otherwise.
If the Underwriters commence any of these transactions, they may
discontinue them at any time.
We estimate that our total expenses for this Offering will be
$1,500,000.
The Underwriters have performed investment banking and advisory
services for us from time to time for which they have received
customary fees and expenses. The Underwriters may, from time to
time, engage in transactions with and perform services for us in
the ordinary course of their business.
We have agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the United States
Securities Act of 1933, as amended, and applicable Canadian
securities legislation, or to contribute to payments the
Underwriters may be required to make because of any of those
liabilities.
The TSX has conditionally approved the listing of the Common
Shares as well as the Common Shares issuable upon exercise of
the Over-Allotment Option. Listing will be subject to the
Company fulfilling all of the requirements of the TSX on or
before December 18, 2007.
Notice to
Prospective Investors in the United Kingdom
With respect to the United Kingdom (the U.K.), this
prospectus is only being and may only be distributed to and
directed at (i) persons outside the U.K. or
(ii) persons in the U.K. who are (a) a Qualified
investor within the meaning of Section 86(7) of the
U.K. Financial Services and Markets Act 2000 as amended from
time to time (FSMA) and (b) within the
categories of persons referred to in Article 19 (Investment
professionals) or Article 49 (High net worth companies,
unincorporated associations, etc.) of the U.K. Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005
(Financial Promotion Order) (all such persons
together being referred to as relevant persons). The
Common Shares are only available to, and any invitation, offer
or agreement to subscribe, purchase or otherwise acquire such
Common Shares will be engaged in only with, relevant persons.
Any person who is not a relevant person should not act or rely
on this document or any of its contents. This prospectus is not
a prospectus for the purposes of Section 85(1) of FSMA.
Accordingly, this prospectus has not been approved as a
prospectus by the U.K.
18
Financial Services Authority (FSA) under
Section 87A of FSMA and has not been filed with the FSA
pursuant to the United Kingdom Prospectus Rules nor has it been
approved by a person authorized under the FSMA.
Notice to
Prospective Investors in France
Neither this prospectus nor any other offering material relating
to the Common Shares described in this prospectus has been
prepared in the context of a public offering in France within
the meaning of
Article L.411-1
of the
Code monétaire et financier
and Title I
of Book II of the
Règlement Général
of the
Autorité des Marches Financiers
and
therefore has not been submitted for clearance to the
Autorité des Marchés Financiers
. The Common
Shares have not been offered or sold and will not be offered or
sold, directly or indirectly, to the public in France. Neither
this prospectus nor any other offering material relating to the
Common Shares has been or will be:
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released, issued, distributed or caused to be released, issued
or distributed to the public in France; or
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used in connection with any offer for subscription or sale of
the Common Shares to the public in France.
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Such offers, sales and distributions will be made in France only:
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to providers of investment services relating to portfolio
management for the account of third parties (
personnes
fournissant le service dinvestissement de gestion de
portefeuille pour compte de tiers
)
and/or
to
qualified investors (
investisseurs qualifiés
), all
as defined in, and in accordance with,
Articles L.411-1,
L.411-2 and D.411-1 to D.411-3 of the French
Code
monétaire et financier
, on the condition that
(i) this prospectus shall not be circulated or reproduced
(in whole or in part) by such qualified investors,
(ii) such investors act for their own account and
(iii) they undertake not to transfer the Common Shares,
directly or indirectly, to the public in France, other than in
compliance with applicable laws and regulations pertaining to a
public offering (and in particular
Articles L.411-1,
L.411-2 and L.621-8 of the
Code monétaire et
financier
) and/or
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in a transaction that, in accordance with article
L.411-2-II-1°-or-2°-or 3° of the French
Code
monétaire et financier
and
article 211-2
of the
Règlement Général
of the
Autorité des Marchés Financiers
, does not
constitute a public offer (
appel public à
lépargne
).
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RELATIONSHIP
BETWEEN THE COMPANY AND A CERTAIN UNDERWRITER
RBC Dominion Securities Inc. is an affiliate of a Canadian
chartered bank (the Bank) that is a lender to us,
pursuant to a credit agreement dated December 1, 2004 and
amended by a letter agreement dated December 4, 2006 (the
Facility). Accordingly, we may be considered a
connected issuer of this Underwriter under
applicable Canadian securities legislation. As of the date
hereof, there are no amounts outstanding under the Facility. As
of the date hereof, we are in material compliance with the terms
and conditions of the Facility.
The decision to distribute the Common Shares offered hereby and
the determination of the terms of the Offering were made through
negotiations between us and the Underwriters. The Bank did not
have any involvement in such decision or determination but has
been advised of the Offering and the terms thereof. As a
consequence of the Offering, RBC Dominion Securities Inc. will
receive its share of the Underwriters fee payable by us to
the Underwriters.
Certain Canadian legal matters in connection with the Offering
will be passed upon on our behalf by Blake, Cassels &
Graydon LLP and on behalf of the Underwriters by McCarthy
Tétrault LLP. Certain U.S. legal matters in connection
with the Offering will be passed upon on our behalf by Davis
Wright Tremaine LLP and on behalf of the Underwriters by Simpson
Thacher & Bartlett LLP. As of the date hereof,
partners and associates of Blake, Cassels & Graydon
LLP and McCarthy Tétrault LLP own beneficially, directly
and indirectly, less than 1% of the Common Shares. A partner of
Blake, Cassels & Graydon LLP is a director of Sierra
Wireless (Asia-Pacific) Limited, a subsidiary of the Company. A
partner of Blake, Cassels & Graydon LLP is a director
of Sierra Wireless (UK) Limited, a subsidiary of the Company.
19
KPMG LLP, independent chartered accountants, have audited our
consolidated financial statements as at December 31, 2006
and 2005, and for each of the years in the three-year period
ended December 31, 2006 as set forth in their report, which
is incorporated by reference in this prospectus and elsewhere in
the registration statement. Our consolidated financial
statements are incorporated by reference in reliance on KPMG
LLPs report, given on their authority as experts in
accounting and auditing.
Perisho Tombor Ramirez Filler and Brown, Certified Public
Accountants, have audited the financial statements of AirLink
Communications, Inc. as at December 31, 2006 and 2005 and
for each of the years in the two-year period ended
December 31, 2006 as set forth in their report, which is
incorporated in the business acquisition report dated
July 30, 2007, which is incorporated by reference in this
prospectus and elsewhere in the registration statement. The
AirLink Communications, Inc. financial statements are
incorporated by reference in reliance on Perisho Tombor Ramirez
Filler and Browns report, given on their authority as
experts in accounting and auditing.
AUDITORS,
TRANSFER AGENT AND REGISTRAR
Our auditors are KPMG LLP, Chartered Accountants, 777 Dunsmuir,
Vancouver, BC V7Y 1K3.
The registrar and transfer agent for the Common Shares in Canada
is Computershare Trust Company of Canada, 510 Burrard
Street, Vancouver, British Columbia and in the United States is
Computershare Trust Company, Inc., 12039 West Alameda
Parkway,
Suite Z-2,
Lakewood, Colorado. These offices and the principal offices of
Computershare Trust Company of Canada in the city of
Toronto can effect transfers and make deliveries of certificates
for Common Shares.
DOCUMENTS
INCORPORATED BY REFERENCE
Information has been incorporated by reference in this
prospectus from documents filed with the securities commissions
or similar authorities in Canada and filed with, or furnished
to, the SEC in the United States.
Copies of the
documents incorporated herein by reference may be obtained on
request without charge from the Corporate Secretary, at Sierra
Wireless, Inc., 13811 Wireless Way, Richmond, British Columbia,
V6V 3A4. You may call us at
(604) 231-1100.
For the purpose of the Province of Québec, this short form
prospectus contains information to be completed by consulting
the permanent information record, a copy of which permanent
information record may also be obtained from the Corporate
Secretary at the address noted above. Copies of documents
incorporated by reference or forming part of the permanent
information record may also be obtained by accessing the Web
site located at
www.sedar.com
or the Web site located at
www.sec.gov
.
Information that is incorporated by reference is an important
part of this prospectus. We incorporate by reference the
documents listed below, which were filed with the securities
commission or similar authority in each of the provinces of
Canada where this short form prospectus is being filed and were
filed with, or furnished to, the SEC:
(a) our annual information form for the year ended
December 31, 2006, dated March 21, 2007;
(b) our audited consolidated financial statements as at
December 31, 2006 and 2005, and for each of the years in
the three-year period ended December 31, 2006, together
with the notes thereto and the auditors report thereon,
including management discussion and analysis for the three-year
period ended December 31, 2006;
(c) our unaudited consolidated financial statements as at
June 30, 2007 and for the three and six month periods ended
June 30, 2007 and 2006 together with the notes thereto,
including managements discussion and analysis for the
three and six month periods ended June 30, 2007 and 2006;
(d) the management information circular of the Company
dated March 21, 2007 prepared in connection with the
Companys annual and special meeting of shareholders held
on May 2, 2007;
(e) a business acquisition report dated July 30, 2007
pertaining to the acquisition of AirLink Communications, Inc.;
(f) a material change report dated January 31, 2007
pertaining to the Companys fourth quarter and fiscal year
2006 results;
20
(g) a material change report dated March 6, 2007
pertaining to the announcement of the acquisition of AirLink
Communications, Inc.;
(h) a material change report dated April 27, 2007
pertaining to the results for the first quarter of 2007;
(i) a material change report dated July 26, 2007
pertaining to the results for the second quarter of
2007; and
(j) a material change report dated September 20, 2007
pertaining to the announcement of the Offering.
Any documents of the type referred to above and any material
change report, excluding confidential reports, filed by us with
a securities commission or similar regulatory authority in
Canada and filed with, or furnished to, the SEC in the United
States after the date of this short form prospectus and prior to
the termination of any offering hereunder shall be deemed to be
incorporated by reference into this short form prospectus. This
prospectus incorporates by reference any other document required
to be incorporated by reference in a short form prospectus under
the applicable securities laws and filed by the Company between
the time the prospectus is receipted and the closing of the
Offering.
Any statement contained in this short form prospectus or in a
document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded, for
purposes of this short form prospectus, to the extent that a
statement contained in this short form prospectus or in any
other subsequently filed document that also is or is deemed to
be incorporated by reference herein modifies or supersedes such
statement. The modifying or superseding statement need not state
that it has modified or superseded a prior statement or include
any other information set forth in the document that it modifies
or supersedes. The making of a modifying or superseding
statement is not to be deemed an admission for any purposes that
the modified or superseded statement, when made, constituted a
misrepresentation, an untrue statement of a material fact or an
omission to state a material fact that is required to be stated
or that is necessary to make a statement not misleading in light
of circumstances in which it was made. Any statement so modified
or superseded shall not be deemed in its unmodified or
superseded form to constitute a part of this short form
prospectus.
ELIGIBILITY
FOR INVESTMENT
In the opinion of Blake, Cassels & Graydon LLP, our
Canadian counsel, based on legislation in effect on the date of
this prospectus, our Common Shares offered by this prospectus,
if issued on the date of this prospectus, would be
qualified investments under the
Income Tax Act
(Canada) (the Tax Act) and the regulations
thereunder for trusts governed by registered retirement savings
plans, registered retirement income funds, registered education
savings plan, and deferred profit sharing plans as defined in
the Tax Act.
PURCHASERS
STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION
Securities legislation in several of the provinces of Canada
provides purchasers with the right to withdraw from an agreement
to purchase securities. This right may be exercised within two
business days after receipt or deemed receipt of a prospectus
and any amendments thereto. In several of the provinces the
securities legislation further provides a purchaser with
remedies for rescission or, in some jurisdictions, damages if
the prospectus and any amendments thereto contain a
misrepresentation or is not delivered to the purchaser, provided
that the remedies for rescission or damages are exercised by the
purchaser within the time limit prescribed by the securities
legislation of the purchasers province. The purchaser
should refer to any applicable provisions of the securities
legislation of the purchasers province for the particulars
of these rights or consult with a legal adviser. Rights and
remedies may also be available to purchasers under
U.S. law; purchasers may wish to consult with a
U.S. lawyer for particulars of these rights.
21
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC under the United States Securities
Act of 1933, as amended, a registration statement on
Form F-10,
which, together with all amendments and supplements thereto, we
refer to as the Registration Statement with respect to the
Common Shares offered hereby. This prospectus, which forms a
part of the Registration Statement, does not contain all the
information set forth in the Registration Statement, certain
parts of which have been omitted in accordance with the rules
and regulations of the SEC. For further information with respect
to us, and the Common Shares offered hereby, reference is made
to the Registration Statement and to the schedules and exhibits
filed therewith. Statements contained in this prospectus as to
the contents of certain documents are not necessarily complete
and, in each instance, reference is made to the copy of the
document filed as an exhibit to the Registration Statement. Each
such statement is qualified in its entirety by such reference.
The Registration Statement can be found on the SECs
website,
www.sec.gov
, by clicking on and following the
instructions for Filings & Forms.
We are subject to the information requirements of the United
States Securities Exchange Act of 1934, as amended, (the
Exchange Act) and in accordance therewith file
periodic reports and other information with the SEC. Under a
multi-jurisdictional disclosure system adopted by the United
States, such reports and other information may be prepared in
accordance with the disclosure requirements of Canada, which
requirements are different from those of the United States. We
are exempt from the rules under the Exchange Act prescribing the
furnishing and content of proxy statements, and our officers,
directors and principal shareholders are exempt from the
reporting and short-swing profit recovery provisions contained
in Section 16 of the Exchange Act. Under the Exchange Act,
we are not required to publish financial statements as
frequently or as promptly as U.S. companies.
Any information filed with the SEC may be reviewed, printed and
downloaded from the SECs website (
www.sec.gov
) and
inspected and copied at prescribed rates at the public reference
room of the SEC at 100 F Street, N.E.,
Washington, D.C. 20549. Information on the operation of the
public reference facilities may be obtained by calling the SEC
at
1-800-SEC-0330.
The Common Shares are quoted on the Nasdaq Global Market and
reports and other information concerning us may be inspected at
the offices of the Nasdaq Stock Market at
1735 K Street, N.W., Washington, D.C.
20006-1500.
DOCUMENTS
FILED AS PART OF THE REGISTRATION STATEMENT
The following documents have been filed with the SEC as part of
the Registration Statement of which this prospectus forms a part:
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the documents referred to under the heading Documents
Incorporated by Reference;
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Consent of KPMG LLP;
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Consent of Perisho Tombor Ramirez Filler & Brown PC;
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Consent of Blake, Cassels & Graydon LLP;
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Consent of Davis Wright Tremaine LLP; and
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the underwriting agreement.
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22
We have read the short form prospectus of Sierra Wireless, Inc.
(the Company) dated September 27, 2007,
relating to the qualification for distribution of Common Shares
of the Company. We have complied with Canadian generally
accepted standards for an auditors involvement with
offering documents.
We consent to the incorporation by reference in the
above-mentioned prospectus of our report to the shareholders of
the Company on the consolidated balance sheets of the Company as
at December 31, 2006 and December 31, 2005, and the
consolidated statements of operations, shareholders equity
and cash flows for each of the years in the three-year period
ended December 31, 2006. Our report is dated
January 31, 2007, except as to notes 15(d)(i) and 19
which are as of March 6, 2007.
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Vancouver, Canada
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(Signed)
KPMG LLP
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September 27, 2007
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Chartered Accountants
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We have read the short form prospectus of Sierra Wireless, Inc.
(the Company) dated September 27, 2007,
relating to the qualification for distribution of Common Shares
of the Company. We have complied with United States generally
accepted auditing standards for an auditors involvement
with offering documents.
We consent to the incorporation by reference in the
above-mentioned prospectus of our report to the board of
directors and stockholders of AirLink Communications, Inc.
(AirLink) on the balance sheets of AirLink as at
December 31, 2006 and 2005 and the related statements of
income, stockholders equity (deficit) and cash flows for
each of the years in the two-year period ended December 31,
2006. Our report is dated May 14, 2007 and refers to a
change in the method for accounting for stock-based compensation.
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San Jose, California
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(Signed)
Perisho Tombor Ramirez
Filler & Brown PC
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September 27, 2007
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Certified Public Accountants
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A-1
CERTIFICATE
OF SIERRA WIRELESS, INC.
DATED: September 27, 2007
This short form prospectus, together with the documents
incorporated herein by reference, constitutes full, true and
plain disclosure of all material facts relating to the
securities offered by this short form prospectus as required by
the securities legislation of the provinces of British Columbia,
Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova
Scotia, Prince Edward Island and Newfoundland and Labrador. For
the purposes of the Province of Québec, this simplified
prospectus, together with the documents incorporated by
reference and as supplemented by the permanent information
record, contains no misrepresentation likely to affect the value
or the market price of the securities to be distributed.
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By: (Signed)
Jason Cohenour
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By: (Signed)
David McLennan
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Chief Executive Officer
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Chief Financial Officer
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ON BEHALF OF
THE BOARD OF DIRECTORS
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By: (Signed)
Charles Levine
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By: (Signed)
Paul Cataford
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Director
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Director
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C-1
CERTIFICATE
OF THE UNDERWRITERS
DATED: September 27, 2007
To the best of our knowledge, information and belief, this short
form prospectus, together with the documents incorporated herein
by reference, constitutes full, true and plain disclosure of all
material facts relating to the securities offered by this
prospectus as required by the securities legislation of the
provinces of British Columbia, Alberta, Saskatchewan, Manitoba,
Ontario, New Brunswick, Nova Scotia, Prince Edward Island and
Newfoundland and Labrador. For the purposes of the Province of
Québec, to our knowledge, this simplified prospectus,
together with the documents incorporated herein by reference and
as supplemented by the permanent information record, contains no
misrepresentation likely to affect the value or the market price
of the securities to be distributed.
CIBC World Markets Inc.
By: (Signed)
Kathy D.
Butler
RBC Dominion Securities
Inc.
By: (Signed)
Scott Davis
C-2
PART II
INFORMATION NOT REQUIRED TO BE DELIVERED TO OFFEREES OR PURCHASERS
Indemnification
Section 124 of the Canada Business Corporations Act, or the CBCA, provides:
1.
Indemnification.
A corporation may indemnify a director or officer of the corporation, a
former director or officer of the corporation or another individual who acts or acted at the
corporations request as a director or officer, or an individual acting in a similar capacity, of
another entity, against all costs, charges and expenses, including an amount paid to settle an
action or satisfy a judgment, reasonably incurred by the individual in respect of any civil,
criminal, administrative, investigative or other proceeding in which the individual is involved
because of that association with the corporation or other entity.
2.
Advance of Costs.
A corporation may advance moneys to a director, officer or other
individual for the costs, charges and expenses of a proceeding referred to in subsection (1). The
individual shall repay the moneys if the individual does not fulfill the conditions of subsection
(3).
3.
Limitation.
A corporation may not indemnify an individual under subsection (1) unless the
individual:
(a) acted honestly and in good faith with a view to the best interests of the
corporation, or, as the case may be, to the best interests of the other entity for which the
individual acted as director or officer or in a similar capacity at the corporations
request; and
(b in the case of a criminal or administrative action or proceeding that is enforced by
a monetary penalty, the individual had reasonable grounds for believing that the
individuals conduct was lawful.
4.
Indemnification in derivative actions.
A corporation may with the approval of a court,
indemnify an individual referred to in subsection (1), or advance moneys under subsection (2), in
respect of an action by or on behalf of the corporation or other entity to procure a judgment in
its favor, to which the individual is made a party because of the individuals association with the
corporation or other entity as described in subsection (1) against all costs, charges and expenses
reasonably incurred by the individual in connection with such action, if the individual fulfils the
conditions set out in subsection (3).
5.
Right to Indemnity.
Despite subsection (1), an individual referred to in that subsection
is entitled to indemnity from the corporation in respect of all costs, charges and expenses
reasonably incurred by the individual in connection with the defense of any civil, criminal,
administrative, investigative or other proceeding to which the individual is subject because of the
individuals association with the corporation or other entity as described in subsection (1), if
the individual seeking indemnity:
(a) was not judged by the court or other competent authority to have committed any
fault or omitted to do anything that the individual ought to have done; and
(b) fulfils the conditions set out in subsection (3).
6.
Insurance.
A corporation may purchase and maintain insurance for the benefit of an
individual referred to in subsection (1) against any liability incurred by the individual:
(a) in the individuals capacity as a director or officer of the corporation; or
(b) in the individuals capacity as a director or officer, or similar capacity, of
another entity, if the individual acts or acted in that capacity at the corporations
request.
7.
Application to court.
A corporation, an individual or an entity referred to in subsection
(1) may apply to a court for an order approving an indemnity under this section and the court may
so order and make any further order that it sees fit.
8.
Notice to Director.
An applicant under subsection (7) shall give the Director notice of
the application and the Director is entitled to appear and be heard in person or by counsel.
9.
Other notice.
On an application under subsection (7) the court may order notice to be
given to any interested person and the person is entitled to appear and be heard in person or by
counsel.
In accordance with the CBCA, the Bylaws of the Company provide that:
Subject to the provisions of the CBCA, the Company shall indemnify a director or officer, a
former director or officer, or a person who acts or acted at the Companys request as a director or
officer of a body corporate of which the Company is or was a shareholder or creditor, and his heirs
and legal representatives, against all costs, charges and expenses, including an amount paid to
settle an action or satisfy a judgment, reasonably incurred by him in respect of any civil,
criminal or administrative action or proceeding to which he is made a party by reason of being or
having been a director or officer of the Corporation or such body corporate, if (a) he acted
honestly and in good faith with a view to the best interests of the Corporation; and (b) in the
case of a criminal or administrative action or proceeding that is enforced by a monetary penalty,
he had reasonable grounds for believing that his conduct was lawful. The Company shall also
indemnify such person in such other circumstances as the CBCA or law permits or requires. Nothing
in the by-laws of the Company shall limit the right of any person entitled to indemnity to claim
indemnity apart from the provisions of the by-laws.
A policy of directors and officers liability insurance is maintained by the Company which insures
directors and officers for certain losses as a result of claims, other than those excluded by the
insurance policy, against the directors and officers of the Company in their capacity as directors
and officers and also reimburses the Company for payments made pursuant to the indemnity provisions
under the articles and the CBCA. The Company has also entered into indemnity agreements with its
directors and certain executive officers which require the Company to indemnify the director or
executive officer and his or her heirs or legal representatives against all costs, charges and
expenses actually and reasonably incurred by the indemnified person arising out of or relating to
any civil, criminal or administrative action or proceeding to which the indemnified person is or
was made a party or is or was threatened to be made a party, by reason of having been a director or
officer of the Company or any subsidiary of the Company, including without limitation any action
brought by the Company or any subsidiary of the Company. The Company is not required to indemnify
the indemnified person pursuant to the indemnity agreement if the indemnified person did not with
respect to the act or matter giving rise to the proposed indemnification:
- act honestly and in good faith with a view to the best interests of the Company or the
subsidiary of the Company, or
- in the case of a criminal or administrative action or proceeding that is enforced by a
monetary penalty, have reasonable grounds for believing that his or her conduct was lawful.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933 MAY BE
PERMITTED TO DIRECTORS, OFFICERS OR PERSONS CONTROLLING THE REGISTRANT PURSUANT TO THE FOREGOING
PROVISIONS, THE REGISTRANT HAS BEEN INFORMED THAT IN THE OPINION OF THE U.S. SECURITIES AND
EXCHANGE COMMISSION SUCH INDEMNIFICATION IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE ACT AND IS
THEREFORE UNENFORCEABLE.
EXHIBIT INDEX
Exhibits
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Exhibit No.
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Descriptions
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3.1
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Underwriting Agreement
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4.1
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Annual Information Form dated March 21, 2007, including Managements Discussion and
Analysis of Financial Condition and Results of Operations, which is contained in the
Registrants 2006 Annual Report on Form 40-F for the year ended December 31, 2006, filed on
March 29, 2007 with the Securities and Exchange Commission and is incorporated by reference
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4.2
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Audited comparative consolidated financial statements as at December 31, 2006 and 2005,
and for each of the years in the three year period ended December 31, 2006, together with
the notes thereto and the auditors report thereon included in Managements Discussion and
Analysis of Financial Condition and Results of Operations for the years so indicated, which
are contained in the Registrants 2006 Annual Report on Form 40-F for the year ended
December 31, 2006, filed on March 29, 2007 with the Securities and Exchange Commission and
are incorporated by reference
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4.3
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Management Information Circular dated March 21, 2007 relating to the Registrants
Annual and Special Meeting of shareholders held on May 2, 2007, except for any information
set out therein relating to the composition of the compensation committee of the board of
directors and its report on executive compensation and corporate governance and any
performance graph therein, which is contained in the Registrants Report on Form 6-K, filed
on March 29, 2007 with the Securities and Exchange Commission and is incorporated by
reference
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4.4
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Business Acquisition Report dated July 30, 2007, pertaining to the acquisition of
Airlink Communications, Inc., which is contained in the Registrants Report on Form 6-K,
filed on July 30, 2007 with the Securities and Exchange Commission and is incorporated by
reference
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4.5
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Material Change Report dated January 31, 2007, pertaining to the results of the fourth
quarter of 2006 and the fiscal year 2006, which is contained in the Registrants Report on
Form 6-K, filed on February 1, 2007 with the Securities and Exchange Commission and is
incorporated by reference
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4.6
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Material Change Report dated March 6, 2007, pertaining to the acquisition of Airlink
Communications, Inc., which is contained in the Registrants Report on Form 6-K, filed on
March 7, 2007 with the Securities and Exchange Commission and is incorporated by reference
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4.7
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Material Change Report dated April 27, 2007 pertaining to the results at March 31, 2007
and the three-month period ended March 31, 2007 and 2006, which is contained in the
Registrants report on Form 6-K , filed on May 7, 2007 with the Securities and Exchange
Commission and is incorporated by reference
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Exhibits
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Exhibit No.
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Descriptions
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4.8
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Material Change Report dated July 26, 2007, pertaining to the results at June 30, 2007
and for the six-month period ended June 30, 2007 and 2006, which is contained in the
Registrants Report on Form 6-K, filed on July 27, 2007 with the Securities and Exchange
Commission and is incorporated by reference
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4.9
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Registrants Report on
Form 6-K, filed on August 10, 2007 with the Securities and Exchange
Commission and is incorporated by reference
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4.10
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Material Change Report dated September 20, 2007, pertaining to the announcement
of the Offering, which is contained in the Registrants Report on Form 6-K, filed on
September 20, 2007, with the Securities and Exchange Commission and is incorporated by reference
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5.1
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Consent of KPMG LLP
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5.2
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Consent of Perisho Tombor Ramirez
Filler & Brown PC
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5.3
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Consent of Blake, Cassels & Graydon LLP
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5.4
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Consent of Davis Wright Tremaine LLP
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6.1
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Powers of Attorney (included on the signature pages of this registration statement)
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PART III
UNDERTAKING AND CONSENT TO SERVICE OF PROCESS
Item 1. Undertaking
The Registrant undertakes to make available, in person or by telephone, representatives to
respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so
by the Commission staff, information relating to the securities registered pursuant to Form F-10 or
to transactions in said securities.
Item 2. Consent of Service to Process
(a) The
Registrant has filed with the Commission a written irrevocable consent and power of attorney
on Form F-X.
(b) Any change to the name or address of the agent for service of the Registrant shall
be communicated promptly to the Commission by amendment to Form F-X referencing the file
number of the relevant registration statement.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant certifies that it has
reasonable grounds to believe that it meets all of the requirements for filing on Form F-10 and has
duly caused this Amendment to the registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Vancouver, Province of British Columbia,
Country of Canada, on this 27th day of September, 2007.
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SIERRA WIRELESS, INC.
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By:
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/s/ Jason W. Cohenour
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Name:
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Jason W. Cohenour
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Title:
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Chairman and Chief Executive Officer
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Pursuant to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities and on the dates indicated.
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Signature
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Capacity
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Date
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/s/ Jason W. Cohenour
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Chairman and Chief
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September 27, 2007
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Jason Cohenour
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Executive Officer
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/s/ David McLennan
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Chief Financial Officer
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September 27, 2007
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David McLennan
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(Principal Financial and
Accounting Officer)
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*
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Director
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September 27, 2007
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Peter Ciceri
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Director
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September 27, 2007
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Gregory Aasen
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*
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Director
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September 27, 2007
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Paul Cataford
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*
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Director
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September 27, 2007
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Charles Levine
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Director
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September 27, 2007
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David B. Sutcliffe
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Director
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September 27, 2007
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S. Jane Rowe
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Director
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September 27, 2007
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Kent Thextor
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*By:
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/s/ Jason W. Cohenour
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Jason W. Cohenour
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Attorney-in-fact
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Pursuant to the requirements of the Securities Act of 1933, the undersigned has signed this
registration statement solely in the capacity of the duly authorized representative of Sierra
Wireless, Inc. in the United States, in the City of Portland, State of Oregon, on this 27th day of
September, 2007.
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By:
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/s/ Michael C. Phillips
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Michael C. Phillips, Esq.
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DAVIS WRIGHT TREMAINE LLP
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EXHIBIT INDEX
Exhibits
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Exhibit No.
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Descriptions
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3.1
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Underwriting Agreement
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4.1
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Annual Information Form dated March 21, 2007, including Managements Discussion and
Analysis of Financial Condition and Results of Operations, which is contained in the
Registrants 2006 Annual Report on Form 40-F for the year ended December 31, 2006, filed on
March 29, 2007 with the Securities and Exchange Commission and is incorporated by reference
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4.2
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Audited comparative consolidated financial statements as at December 31, 2006 and 2005,
and for each of the years in the three year period ended December 31, 2006, together with
the notes thereto and the auditors report thereon included in Managements Discussion and
Analysis of Financial Condition and Results of Operations for the years so indicated, which
are contained in the Registrants 2006 Annual Report on Form 40-F for the year ended
December 31, 2006, filed on March 29, 2007 with the Securities and Exchange Commission and
are incorporated by reference
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4.3
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Management Information Circular dated March 21, 2007 relating to the Registrants
Annual and Special Meeting of shareholders held on May 2, 2007, except for any information
set out therein relating to the composition of the compensation committee of the board of
directors and its report on executive compensation and corporate governance and any
performance graph therein, which is contained in the Registrants Report on Form 6-K, filed
on March 29, 2007 with the Securities and Exchange Commission and is incorporated by
reference
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4.4
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Business Acquisition Report dated July 30, 2007, pertaining to the acquisition of
Airlink Communications, Inc., which is contained in the Registrants Report on Form 6-K,
filed on July 30, 2007 with the Securities and Exchange Commission and is incorporated by
reference
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4.5
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Material Change Report dated January 31, 2007, pertaining to the results of the fourth
quarter of 2006 and the fiscal year 2006, which is contained in the Registrants Report on
Form 6-K, filed on February 1, 2007 with the Securities and Exchange Commission and is
incorporated by reference
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4.6
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Material Change Report dated March 6, 2007, pertaining to the acquisition of Airlink
Communications, Inc., which is contained in the Registrants Report on Form 6-K, filed on
March 7, 2007 with the Securities and Exchange Commission and is incorporated by reference
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4.7
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Material Change Report dated April 27, 2007 pertaining to the results at March 31, 2007
and the three-month period ended March 31, 2007 and 2006, which is contained in the
Registrants report on Form 6-K , filed on May 7, 2007 with the Securities and Exchange
Commission and is incorporated by reference
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Exhibits
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Exhibit No.
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Descriptions
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4.8
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Material Change Report dated July 26, 2007, pertaining to the results at June 30, 2007
and for the six-month period ended June 30, 2007 and 2006, which is contained in the
registrants Report on Form 6-K, filed on July 27, 2007 with the Securities and Exchange
Commission and is incorporated by reference
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4.9
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Registrants Report on
Form 6-K, filed on August 10, 2007 with the Securities and Exchange
Commission and is incorporated by reference
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4.10
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Material Change Report dated September 20, 2007, pertaining to the announcement
of the Offering, which is contained in the Registrants Report on Form 6-K, filed on
September 20, 2007, with the Securities and Exchange Commission and is incorporated by reference
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5.1
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Consent of KPMG LLP
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5.2
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Consent of Perisho Tombor Ramirez
Filler & Brown PC
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5.3
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Consent of Blake, Cassels & Graydon LLP
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5.4
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Consent of Davis Wright Tremaine LLP
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6.1
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Powers of Attorney (included on the signature pages of this registration statement)
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Exhibit 3.1
3,500,000 Shares
SIERRA WIRELESS, INC.
Common Shares
UNDERWRITING AGREEMENT
September 19, 2007
CIBC World Markets Inc
.
RBC Dominion Securities Inc.
Piper Jaffray & Co.
c/o
CIBC World Markets Inc.
400 Burrard Street
Commerce Place
Vancouver, British Columbia V6C 3A6
Dear Sirs:
Sierra Wireless, Inc. (the
Company
), a corporation incorporated in Canada under the
Canada Business Corporations Act,
proposes to sell an aggregate of 3,500,000 common shares (the
Firm Shares
) in the capital of the Company (the
Common Shares
). In addition,
the Company proposes to grant to the Underwriters named in Schedule 1 hereto (the
Underwriters
) an option to purchase up to an additional 525,000 Common Shares on the
terms and for the purposes set forth in Section 2 (the
Option Shares
). The Firm Shares
and the Option Shares, if purchased, are hereinafter collectively called the
Shares
.
This is to confirm the agreement concerning the purchase of the Shares by the Underwriters.
1.
Representations, Warranties and Agreements of the Company and the Subsidiaries
. The
Company and each of the entities listed on Schedule 2 (each, a
Subsidiary
and
collectively, the
Subsidiaries
), jointly and severally, represent, warrant and agree
that:
(a) The Company has prepared and will file as soon as possible and, in any
event, by 2:00 p.m. (Vancouver time) on September 19, 2007 with the British Columbia
Securities Commission in the Province of British Columbia, Canada (the
Principal
Canadian Regulator
) and with the securities regulatory authorities (the
Canadian Securities Regulatory Authorities
) in the Provinces of Alberta,
Saskatchewan, Manitoba, Ontario, Quebec, Nova Scotia, New Brunswick, Prince Edward
Island and Newfoundland and Labrador, Canada (the
Canadian Qualifying
Jurisdictions
) a preliminary short form prospectus of even date herewith relating
to the Shares (in the English and French languages, as applicable, the
Canadian
Preliminary Prospectus
). The Company will file the Canadian Preliminary
Prospectus with the Principal Canadian Regulator and the Canadian Securities Regulatory
Authorities pursuant to National Policy 43-201 Mutual Reliance Review System for
Prospectuses and its
2
related memorandum of understanding, and the Principal Canadian Regulator will act
as principal regulator. The Company will obtain as soon as possible and, in any event,
by 5:00 p.m. (Vancouver time) on September 19, 2008 from the Principal Canadian
Regulator a preliminary Mutual Reliance Review System Decision Document (
MRRS
Decision Document
) for the Canadian Preliminary Prospectus. The Company has
prepared in conformity with the requirements of the United States Securities Act of
1933, as amended (the
Securities Act
), and the rules and regulations
thereunder, and will file as soon as possible and, in any event, by 1:30 p.m.
(Vancouver time) on September 19, 2007 with the United States Securities and Exchange
Commission (the
Commission
) a registration statement on Form F-10 of even
date herewith covering the registration of the Shares under the Securities Act (the
Registration Statement
), including the Canadian Preliminary Prospectus (with
such deletions therefrom and additions thereto as are permitted or required by Form
F-10 and the applicable rules and regulations (the
Rules and Regulations
) of
the Commission) (the
U.S. Preliminary Prospectus
).
(b) The Company (A) will prepare and file (1) as soon as possible after any
comments of the Canadian Securities Regulatory Authorities have been satisfied and, in
any event, by 2:00 p.m. (Vancouver time) on September 27, 2007 (or in any case, by such
later date or dates as may be determined by the Underwriters in their sole discretion),
with the Principal Canadian Regulator and the Canadian Securities Regulatory
Authorities, a final short form prospectus relating to the Shares (in the English and
French languages, as applicable, the
Canadian Final Prospectus
) and (2) with
the Commission, an amendment to the Registration Statement, including the Canadian
Final Prospectus (with such deletions therefrom and additions thereto as are permitted
or required by Form F-10 and the Rules and Regulations) (the
U.S. Final
Prospectus
), and (B) will (1) obtain, as soon as possible and in any event by 4:00
p.m. (Vancouver time) on September 27, 2007, a final MRRS Decision Document from the
Principal Canadian Regulator for the Canadian Final Prospectus, and (2) cause the
Registration Statement to become effective under the Securities Act as soon as possible
and in any event by 4:00 p.m. (Vancouver time) on September 27, 2007. The Canadian
Preliminary Prospectus and the Canadian Final Prospectus, including the documents
incorporated by reference therein, are referred to collectively herein as the
Canadian Prospectus
. The U.S. Preliminary Prospectus and the U.S. Final
Prospectus, including the documents incorporated by reference therein, are referred to
collectively herein as the
U.S. Prospectus
. Any amendment to the Canadian
Preliminary Prospectus or the Canadian Final Prospectus, any amended or supplemental
prospectus or auxiliary material, information, evidence, return, report, application,
statement or document that may be filed by or on behalf of the Company under the
securities laws of the Province of British Columbia or the Canadian Qualifying
Jurisdictions (collectively, the
Canadian Securities Laws
) prior to the
Second Delivery Date (as hereinafter defined) or, where such document is deemed to be
incorporated by reference into the Canadian Final Prospectus, prior to the expiry of
the period of distribution of the Shares, is referred to herein collectively as the
Supplementary Material
. The Canadian Prospectus and the U.S. Prospectus are
referred to collectively herein as the
Prospectus
.
3
(c) The Company is qualified to file a prospectus in the form of a short form
prospectus pursuant to the requirements of National Instrument 44-101-Short Form
Prospectus Distributions. The Company meets the general eligibility requirements for
use of Form F-10 under the Securities Act. No order suspending the distribution of the
Shares has been issued by the Principal Canadian Regulator or any of the Canadian
Securities Regulatory Authorities. The Commission has not issued any order preventing
or suspending the use of any U.S. Preliminary Prospectus, and any request on the part
of the Commission for additional information has been complied with.
(d) At the time the Registration Statement and any amendments or supplements
thereto become effective under the Securities Act and at all times subsequent thereto
up to and including the Second Delivery Date (as defined herein): (A) the Canadian
Prospectus will comply in all material respects with the Canadian Securities Laws; (B)
the U.S. Prospectus will conform to the Canadian Prospectus except for such deletions
therefrom and additions thereto as are permitted or required by Form F-10 and the Rules
and Regulations; (C) the Registration Statement and any amendments or supplements
thereto will comply in all material respects with the requirements of the Securities
Act and the Rules and Regulations; (D) neither the Registration Statement nor any
amendment or supplement thereto will contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make the
statements therein not misleading; and (E) each of the Canadian Prospectus, any
Supplementary Material and any amendment or supplement thereto, together with each
document incorporated therein by reference, will constitute full, true and plain
disclosure of all material facts relating to the Company and the Shares, and each of
the U.S. Prospectus, the Canadian Prospectus and any Supplementary Material or any
amendment or supplement thereto, together with each document incorporated therein by
reference, will not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that the
representations and warranties contained in clauses (D) and (E) above do not apply to
statements or omissions made in reliance upon and in conformity with information
relating solely to any Underwriter furnished in writing to the Company by any
Underwriter expressly for use in the Registration Statement, the U.S. Prospectus, the
Canadian Prospectus or any Supplementary Material.
(e) Each document filed or to be filed with the Principal Canadian Regulator and
the Canadian Securities Regulatory Authorities and incorporated or deemed to be
incorporated by reference in the Canadian Prospectus complied or will comply when so
filed and at the Delivery Date (as defined in Section 4 hereof) in all material
respects with the Canadian Securities Laws and none of such documents contained or will
contain at the time of its filing any untrue statement of a material fact or omitted or
will omit at the time of its filing 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.
4
(f) The most recent U.S. Prospectus, as of 9:00 a.m. (New York City time) on
September 28, 2007 (the
Applicable Time
), will not as of the Applicable Time
contain an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The Company has not prepared or used, and will not
prepare or use, any free writing prospectus (as defined in Rule 405 of the Rules and
Regulations) in connection with the offering or sale of the Shares.
(g) The documents incorporated or deemed to be incorporated by reference in the
Registration Statement and the U.S. Prospectus, at the time they were or hereafter are
filed with the Commission, complied and will comply in all material respects with the
requirements of the United States Securities Exchange Act of 1934, as amended (the
Exchange Act
), and the Rules and Regulations, and, when read together with
the other information in the U.S. Prospectus, at the time the Registration Statement
becomes effective, at the time the U.S. Prospectus was or will be issued and at a
Delivery Date did not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
(h) The Company and each of the Subsidiaries have been duly formed and are
validly existing and in good standing under the laws of their respective jurisdictions
of organization, are duly qualified to do business and are in good standing as foreign
entities in each jurisdiction in which their respective ownership or lease of property
or the conduct of their respective businesses requires such qualification except, with
respect to each Subsidiary, where the failure to be so qualified or in good standing
would not have a material adverse effect, and have all power and authority necessary to
own or hold their respective properties and to conduct the businesses in which they are
engaged; and Schedule 2 contains a complete list of each subsidiary of the Company that
is a Significant Subsidiary of the Company (as such term is defined in Rule 1-02 of
Regulation S-X (
Rule 1-02
) under the Securities Act of 1933, as amended, and
the other subsidiaries of the Company not included in Schedule 2 do not, when
considered in the aggregate as a single subsidiary, constitute a Significant
Subsidiary (as defined in Rule 1-02).
(i) The Company has an authorized capitalization as set forth under the heading
Description of Share Capital
in the Prospectus, and all of the issued shares in the
capital of the Company have been duly and validly authorized and issued, are fully paid
and non-assessable and conform to the description thereof contained in the Prospectus;
and all of the issued shares in the capital or shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and are fully paid and
non-assessable and are owned directly or indirectly by the Company, free and clear of
all liens, encumbrances, equities or claims. All of the Companys options, warrants or
other rights to purchase or exchange any securities for shares of the Companys capital
stock have been duly and validly authorized and issued, were issued in compliance with
federal, provincial and state securities laws (except where such non-compliance would
not have a material adverse effect on the Company), and conform to the descriptions
thereof contained in the Prospectus.
5
(j) The Shares to be sold by the Company under the Registration Statement and
Prospectus have been duly and validly authorized and, when issued and delivered against
payment therefor as provided herein, will be duly and validly issued, fully paid and
non-assessable and will conform to the description thereof contained in the Prospectus.
Upon payment for and delivery of such Shares pursuant to this Agreement, the
Underwriters will acquire good and valid title to such Shares, free and clear of all
liens, encumbrances, equities, preemptive rights, subscription rights, other rights to
purchase, voting or transfer restrictions and other claims.
(k) This Agreement has been duly authorized, executed and delivered by the
Company.
(l) The execution, delivery and performance of this Agreement by the Company and
the consummation of the transactions contemplated hereby will not conflict with or
result in a breach or violation of (i) any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of the Subsidiaries is a party or
by which the Company or any of the Subsidiaries is bound or to which any of the
properties or assets of the Company or any of the Subsidiaries is subject, or (ii) the
charter, by-laws or other organizational documents of the Company or any of the
Subsidiaries or (iii) any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of the
Subsidiaries or any of their properties or assets, in the case of (i) the effect of
which would have a material adverse effect or impair the ability of the Company to
consummate the transactions contemplated in the Registration Statement and Prospectus;
and except for the registration of the Shares under the Securities Act and such
consents, approvals, authorizations, registrations or qualifications as may be required
under the Exchange Act, the Canadian Securities Laws and applicable state or foreign
securities laws in connection with the purchase and distribution of the Shares by the
Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is required for the
execution, delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby.
(m) There are no contracts, agreements or understandings between the Company and
any person granting such person the right (other than rights which have been waived or
satisfied) to require the Company to file a registration statement under the Securities
Act or a prospectus under the Canadian Securities Laws with respect to any securities
of the Company owned or to be owned by such person or to require the Company to include
such securities in the securities registered pursuant to the Registration Statement or
qualified for distribution pursuant to the Canadian Prospectus or in any securities
being registered pursuant to any other registration statement filed by the Company
under the Securities Act or qualified for distribution pursuant to any other prospectus
filed by the Company under the Canadian Securities Laws.
6
(n) Except as described in the Prospectus and except in connection with the
acquisition of AirLink Communications, Inc., the Company has not sold or issued any
common shares during the six-month period preceding the date of the Prospectus,
including any sales pursuant to Rule 144A under, or Regulations D or S of, the
Securities Act, other than shares issued pursuant to employee benefit plans, qualified
share option plans or other employee compensation plans or pursuant to outstanding
options, rights or warrants.
(o) (i) Neither the Company nor any of the Subsidiaries has sustained, since the
date of the latest audited financial statements incorporated by reference in the
Prospectus, any material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, (ii) since such date, there has not been any
material change in the share capital or long-term debt of the Company or any of the
Subsidiaries or any material adverse change, or any development that in the Companys
reasonable judgment as of this date is reasonably likely to involve a prospective
material adverse change, in or affecting the general affairs, management, financial
position, shareholders equity or results of operations of the Company and the
Subsidiaries, otherwise than as set forth or contemplated in the Prospectus.
(p) The financial statements (including the related notes and supporting
schedules and any pro forma financial statements) incorporated by reference in the
Prospectus present fairly the financial condition and results of operations of the
entities purported to be shown thereby, at the dates and for the periods indicated, and
have been prepared in conformity with, United States generally accepted accounting
principles applied on a consistent basis throughout the periods involved.
(q) KPMG LLP, who has certified certain financial statements of the Company and
whose report is incorporated by reference in the Prospectus, are independent public
accountants as required by the Securities Act and the Rules and Regulations and
independent chartered accountants as required by Canadian Securities Laws; and Perisho
Tombor Ramirez Filler & Brown PC, who has audited certain financial statements of
AirLink Communications, Inc. and whose report is incorporated by reference in the
Prospectus, are in compliance with the independence rules related to non-registrants
under the Code of Professional Conduct of the American Institute of Certified Public
Accountants.
(r) The Company and each of the Subsidiaries own no real property and have good
and marketable title to all personal property reflected as owned by them, in each case
free and clear of all liens, encumbrances and defects except such as are described in
the Prospectus or such as do not materially affect the value of such personal property
and do not materially interfere with the use made and proposed to be made of such
personal property by the Company and the Subsidiaries; and all real property and
buildings held under lease by the Company and the Subsidiaries are held by them under
valid, subsisting and enforceable leases, with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and the Subsidiaries.
7
(s) The Company and each of the Subsidiaries carry, or are covered by, insurance
in such amounts and covering such risks as is adequate for the conduct of their
respective businesses and the value of their respective properties and as is customary
for companies engaged in similar businesses in similar industries.
(t) (i) To the best knowledge of the Company, the Company and each of the
Subsidiaries own or possess adequate rights to use all material patents, patent
applications, trademarks, service marks, trade names, trademark registrations, service
mark registrations, copyrights and licenses necessary for the conduct of their
respective businesses and except as previously disclosed in writing to the Underwriters
and/or their counsel, have no reason to believe that the conduct of their respective
businesses will conflict, in any material respect, with, and have not received any
notice of any claim of conflict with, any such rights of others and (ii) except as
disclosed to the Underwriters or as set forth in the Prospectus, neither the Company
nor any of its Subsidiaries has received notice that the Company or any Subsidiary is
infringing or otherwise violating any patents of others.
(u) There are no legal or governmental proceedings pending to which the Company
or any of the Subsidiaries is a party or of which any property or asset of the Company
or any of the Subsidiaries is the subject which, if determined adversely to the Company
or any of the Subsidiaries, might have a material adverse effect on the consolidated
financial position, shareholders equity, results of operations or business of the
Company and the Subsidiaries; and to the best of the Companys knowledge, no such
proceedings are threatened or contemplated by governmental authorities or threatened by
others.
(v) There are no contracts or other documents which are required to be described
in the Prospectus or filed as exhibits to the Registration Statement by the Securities
Act or by the Rules and Regulations or by the Canadian Securities Laws, as applicable,
which have not been described in the Prospectus or filed as exhibits to the
Registration Statement or incorporated therein by reference as permitted by the Rules
and Regulations.
(w) No relationship, direct or indirect, exists between or among the Company on
the one hand, and the directors, officers, shareholders, customers or suppliers of the
Company on the other hand, which is required to be described in the Prospectus which is
not so described. The Company has not, directly or indirectly, including through any
Subsidiary, extended or maintained credit, or arranged for the extension of credit, or
renewed any extension of credit, in the form of a personal loan to or for any of its
directors or executive officers.
(x) No labor disturbance by the employees of the Company exists nor, to the
knowledge of the Company, is imminent which might be expected to have a material
adverse effect on the consolidated financial position, shareholders equity, results of
operations, or business of the Company and the Subsidiaries.
8
(y) Each of the Subsidiaries of the Company that is incorporated under the laws
of any state in the United States, whose principal place of business is within the
United States and that employs employees resident in the United States is in compliance
in all material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations and
published interpretations thereunder (
ERISA
).
(z) The Company and each Subsidiary has filed all federal, state, provincial and
local income and franchise tax returns required to be filed through the date hereof and
has paid all taxes due thereon (in each case with such exceptions that would not have a
material adverse effect on the consolidated financial position, shareholders equity,
results of operations or business of the Company and the Subsidiaries), and no tax
deficiency has been determined adversely to the Company or any of the Subsidiaries
which has had (nor does the Company or any Subsidiary have any knowledge of any tax
deficiency which, if determined adversely to the Company or any of the Subsidiaries,
might have) a material adverse effect on the consolidated financial position,
shareholders equity, results of operations or business of the Company and the
Subsidiaries.
(aa) Since the date as of which information is given in the Prospectus through
the date hereof, and except as may otherwise be disclosed in the Prospectus and except
in connection with the acquisition of AirLink Communications, Inc., the Company has not
(i) issued or granted any securities other than the grant of stock options previously
disclosed in writing to the Underwriters and/or their counsel, or the issuance of
common shares on exercise thereof, (ii) incurred any liability or obligation, direct or
contingent, other than liabilities and obligations which were incurred in the ordinary
course of business, (iii) entered into any transaction not in the ordinary course of
business or (iv) declared or paid any dividend on its shares.
(bb) The Company (i) makes and keeps accurate books and records and (ii)
maintains internal accounting controls which provide reasonable assurance that (A)
transactions are executed in accordance with managements authorization, (B)
transactions are recorded as necessary to permit preparation of its financial
statements and to maintain accountability for its assets, (C) access to its assets is
permitted only in accordance with managements authorization and (D) the reported
accountability for its assets is compared with existing assets at reasonable intervals.
(cc) Neither the Company nor any of the Subsidiaries (i) is in violation of its
charter, by-laws or other organizational documents, (ii) is in default in any material
respect, and no event has occurred which, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any term, covenant
or condition contained in any material indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which it is a party or by which it is
bound or to which any of its properties or assets is subject or (iii) is in violation
in any material respect of any law, ordinance, governmental rule, regulation or court
decree to which it or its properties or assets may be subject or has failed to obtain
any license, permit,
certificate, franchise or other governmental authorization or permit material to
the ownership of its properties or assets or to the conduct of its business.
9
(dd) Neither the Company nor any of the Subsidiaries, nor any director, officer,
agent, employee or other person associated with or acting on behalf of the Company or
any of the Subsidiaries, has used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political activity; made any
direct or indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977; or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(ee) The Common Shares are listed on the Toronto Stock Exchange (the
TSX
) and the Nasdaq Global Market (
Nasdaq
). The Company has taken
no action designed to, or likely to have the effect of, delisting the Common Shares
from the TSX or Nasdaq, nor has the Company received any notification that the TSX or
Nasdaq is contemplating such delisting.
(ff) Computershare Trust Company of Canada has been duly appointed as registrar
and transfer agent for the Common Shares.
(gg) The Company has prepared and will forthwith file with the Commission an
appointment of agent for service of process upon the Company on Form F-X.
(hh) The Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15 under the Exchange Act, which (i)
are designed to ensure that material information relating to the Company, including its
Subsidiaries, is made known to the Companys principal executive officer and its
principal financial officer by others within those entities, particularly during the
periods in which the periodic reports required under the Exchange Act are being
prepared; (ii) have been evaluated for effectiveness as of the end of the most recent
fiscal year; and (iii) are effective in all material respects to perform the functions
for which they were established.
(ii) Based on the evaluation of its internal control over financial reporting,
the Company is not aware of (i) any significant deficiency or material weakness in the
design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the Companys ability to record, process, summarize and
report financial information; or (ii) any fraud, whether or not material, that involves
management or other employees who have a significant role in the Companys internal
control over financial reporting.
(jj) There are no material off-balance sheet arrangements (as defined in
Regulation S-K Item 303(a)(4)(ii)) that may have a material current or future effect on
the Companys financial condition, changes in financial condition, results of
operations, liquidity, capital expenditures or capital resources.
10
(kk) Except with respect to this Underwriting Agreement, there are no contracts,
agreements or understandings between the Company and any person that would give rise to
a valid claim against the Company or any Underwriter for a brokerage commission,
finders fee or the like payment in connection with this offering.
(ll) The statistical and market-related data included in the Prospectus and the
Registration Statement are based on or derived from sources which the Company believes
to be generally reliable.
(mm) The Companys Board of Directors has validly appointed an audit committee
whose composition satisfies the requirements of Rule 4350(d)(2) of the Rules of the
National Association of Securities Dealers, Inc. (the NASD Rules) and the Board of
Directors and/or the audit committee has adopted a charter that satisfies the
requirements of Rule 4350(d)(1) of the NASD Rules. The audit committee has reviewed
the adequacy of its charter within the past twelve months.
(nn) The Company is in compliance with all applicable provisions of the
Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection
therewith.
(oo) There has been no storage, disposal, generation, manufacture, refinement,
transportation, handling or treatment of toxic wastes, hazardous wastes or hazardous
substances by the Company or any of the Subsidiaries (or, to the knowledge of the
Company, any of their predecessors in interest) at, upon or from any of the properties
now or previously owned or leased by the Company or the Subsidiaries in violation of
any applicable law, ordinance, rule, regulation, order, judgment, decree or permit or
which would require remedial action under any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit, except for any violation or remedial
action which would not have, or could not be reasonably likely to have, singularly or
in the aggregate with all such violations and remedial actions, a material adverse
effect on the general affairs, management, financial position, shareholders equity or
results of operations of the Company and the Subsidiaries; there has been no material
spill, discharge, leak, emission, injection, escape, dumping or release of any kind
onto such property or into the environment surrounding such property of any toxic
wastes, solid wastes, hazardous wastes or hazardous substances due to or caused by the
Company or any of the Subsidiaries or with respect to which the Company or any of the
Subsidiaries have knowledge, except for any such spill, discharge, leak, emission,
injection, escape, dumping or release which would not have or would not be reasonably
likely to have, singularly or in the aggregate with all such spills, discharges, leaks,
emissions, injections, escapes, dumpings and releases, a material adverse effect on the
general affairs, management, financial position, shareholders equity or results of
operations of the Company and the Subsidiaries; and the terms hazardous wastes,
toxic wastes and hazardous substances shall have the meanings specified in any
applicable local, state, provincial, federal and foreign laws or regulations with
respect to environmental protection.
11
(pp) Neither the Company nor any Subsidiary is an investment company within
the meaning of such term under the Investment Company Act of 1940 and the rules and
regulations of the Commission thereunder.
(qq) The Company has not taken and will not take, directly or indirectly, any
action which is designed to or which has constituted or which might reasonably be
expected to cause or result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares.
2.
Purchase of the Shares by the Underwriters
. On the basis of the representations and
warranties contained in, and subject to the terms and conditions of, this Agreement, the Company
agrees to sell 3,500,000 Firm Shares to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of Firm Shares set opposite that
Underwriters name in Schedule 1 hereto. Each Underwriter shall be obligated to purchase from the
Company that number of Firm Shares which represents the same proportion of the number of Firm
Shares to be sold by the Company as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule 1 represents of the total number of shares of the Firm Shares to be
purchased by all of the Underwriters pursuant to this Agreement. The respective purchase
obligations of the Underwriters with respect to the Firm Shares shall be rounded between the
Underwriters to avoid fractional shares.
In addition, the Company grants to the Underwriters an option to purchase up to 525,000 Option
Shares. Such option is granted solely for the purpose of covering over-allotments in the sale of
Firm Shares and is exercisable as provided in Section 4 hereof. Option Shares shall be purchased
severally for the account of the Underwriters in proportion to the number of Firm Shares set
opposite the name of such Underwriters in Schedule 1 hereto. The price of both the Firm Shares and
any Option Shares shall be US$22.40 per share.
The Company shall not be obligated to deliver any of the Shares to be delivered on the First
Delivery Date or the Second Delivery Date (as hereinafter defined), as the case may be, except upon
payment for all the Shares to be purchased on such Delivery Date as provided herein.
3.
Offering of Shares by the Underwriters.
(a) The several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
(b) The Shares will be offered for sale to the public as permitted by applicable
securities laws by the Underwriters directly, through their duly registered broker-dealer
affiliates and through any other investment dealer or broker which is a member of any
banking, selling or other group which the Underwriters may organize in respect of the sale
of the Shares to the public.
(c) The Underwriters will cause each member of any banking, selling or other group,
which the Underwriters may organize to distribute the Shares to give an undertaking, in any
written agreement which the Underwriters may enter into with such members, which will be
expressed to be taken in trust for and for the benefit of the Company, to the effect that
such members shall comply with the applicable securities laws in the jurisdictions in
which they propose to sell or distribute the Shares to the public.
12
(d) The Underwriters severally covenant with the Company that each will (and will use
its reasonable best efforts to cause the members of any banking, selling or other group,
which the Underwriters may organize to distribute the Shares, to):
(i) conduct its activities in connection with arranging for the sale and
distribution of the Shares in compliance with the applicable securities laws;
(ii) not, directly or indirectly, sell or solicit offers to purchase the
Shares so as to require registration thereof of or the filing of a prospectus with
respect thereto under the laws of any jurisdiction other than the United States or
the Canadian Qualifying Jurisdictions; and
(iii) not make any representations or warranties with respect to the Company
or the Shares other than is set forth in the Registration Statement or the
Prospectus.
(e) The Underwriters shall after the last to occur of the First Delivery Date and the
Second Delivery Date:
(i) use their respective best endeavors to terminate, and to cause the
members of any banking or selling group formed by the Underwriters to terminate,
distribution to the public of the Shares as soon as practicable; and
(ii) give written notice as soon as practicable to the Company when, in the
opinion of the Underwriters, the Underwriters, and the members of any banking or
selling group formed by the Underwriters, have ceased distribution to the public of
the Shares and of the total proceeds realized in each of the Canadian Qualifying
Jurisdictions from such distribution where such information is required for the
purpose of calculating fees payable by the Company to the regulatory authorities of
such Canadian Qualifying Jurisdictions.
4.
Delivery of and Payment for the Shares
.
(a) Delivery of and payment for the Firm Shares shall be made at the office of
Blake Cassels & Graydon LLP, 595 Burrard Street, Suite 2600, Vancouver, British
Columbia, at 5:30 a.m., Vancouver time, on the third full business day following the
date the Registration Statement becomes effective under the Securities Act (the
Effective Date
) or at such other date or place as shall be determined by
agreement between the Underwriters and the Company, but in any event not later than
October 26, 2007. This date and time are sometimes referred to as the
First
Delivery Date
. On the First Delivery Date, the Company shall deliver or cause to
be delivered certificates representing the Firm Shares to the Underwriters for their
account against payment to or upon the order of the Company of the purchase price by
wire transfer of immediately available funds. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligation of each Underwriter hereunder. Upon delivery, the Firm
Shares shall be registered in such
13
names and in such denominations as the Underwriters shall request in writing not
less than two full business days prior to the First Delivery Date. For the purpose of
expediting the checking and packaging of the certificates for the Shares, the Company
shall make the certificates representing the Firm Shares available for inspection by
the Underwriters in Vancouver, B.C., not later than 5:00 p.m., Vancouver time on the
business day prior to the First Delivery Date.
(b) At any time on or before the thirtieth day after the First Delivery Date the
option granted in Section 2 may be exercised by written notice given to the Company by
the Underwriters. Such notice shall set forth the aggregate number of Option Shares as
to which the option is being exercised, the names in which the Option Shares are to be
registered, the denominations in which the Option Shares are to be issued and the date
and time, as determined by the Underwriters, when the Option Shares are to be
delivered;
provided, however
, that this date and time shall not be earlier than the
First Delivery Date nor earlier than the third business day after the date on which the
option shall have been exercised nor later than the fifth business day after the date
on which the option shall have been exercised. The date and time the Option Shares are
delivered are sometimes referred to as the
Second Delivery Date
and the First
Delivery Date and the Second Delivery Date are sometimes each referred to as a
Delivery Date
.
(c) Delivery of and payment for the Option Shares shall be made at the place
specified in the first sentence of the first paragraph of this Section 4 (or at such
other place as shall be determined by agreement between the Underwriters and the
Company) at 5:30 a.m., Vancouver time, on the Second Delivery Date. On the Second
Delivery Date, the Company shall deliver or cause to be delivered the certificates
representing the Option Shares to the Underwriters for their account against payment to
or upon the order of the Company of the purchase price by wire transfer of immediately
available funds. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of each
Underwriter hereunder. Upon delivery, the Option Shares shall be registered in such
names and in such denominations as the Underwriters shall request in the aforesaid
written notice. For the purpose of expediting the checking and packaging of the
certificates for the Option Shares, the Company shall make the certificates
representing the Option Shares available for inspection by the Underwriters in
Vancouver, B.C., not later than 5:00 p.m., Vancouver time, on the business day prior to
the Second Delivery Date.
5.
Further Agreements of the Company and the Subsidiaries
. The Company and each Subsidiary
agrees:
(a) to cause the Registration Statement to become effective as soon as possible
and in any event by 4:00 p.m. (Vancouver time) on September 27, 2007; make no further
amendment or any supplement to the Registration Statement or to the Prospectus except
as permitted herein; to advise the Underwriters, promptly after it receives notice
thereof, of the time when the Registration Statement, or any amendment thereto, has
been filed or becomes effective or any Supplementary Material has been filed and to
furnish the Underwriters with copies thereof; to advise the Underwriters, promptly
after it receives notice thereof, of the issuance by the Commission or any
14
Canadian Securities Regulatory Authority or stock exchange of any stop order or of
any order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, of the suspension of the qualification of the Shares for offering or sale
or of trading in the Common Shares in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the Commission
or any Canadian Securities Regulatory Authority for the amending or supplementing of
the Registration Statement or the Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus or suspending any such
qualification or trading in the Common Shares, to use promptly its best efforts to
obtain its withdrawal;
(b) To furnish promptly to the Underwriters and to counsel for the Underwriters
a signed copy of the Registration Statement as originally filed with the Commission and
a copy of the Canadian Prospectus as originally filed with the Canadian Securities
Regulatory Authorities, and each amendment thereto filed with the Commission or any
Canadian Securities Regulatory Authority, as applicable, including all consents and
exhibits filed therewith;
(c) To deliver promptly to the Underwriters in Vancouver, Toronto and New York
City and such other places as the Underwriters may reasonably request such number of
the following documents as the Underwriters shall reasonably request: (i) conformed
copies of the Registration Statement as originally filed with the Commission and each
amendment thereto (in each case excluding exhibits) and (ii) the Canadian Preliminary
Prospectus and the U.S. Preliminary Prospectus (not later than 7:30 a.m., Vancouver
time, of the day following execution and delivery of this Agreement) the Canadian Final
Prospectus and the U.S. Final Prospectus (not later than 7:30 a.m. Vancouver time, of
the day following the date of such prospectus) and any amended or supplemented
Prospectus (not later than 7:30 a.m., Vancouver time, of the day following the date of
such amendment or supplement); and, if the delivery of a prospectus is required at any
time after the Effective Time in connection with the offering or sale of the Shares (or
any other securities relating thereto) and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the circumstances
under which they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary to amend or supplement the Prospectus in
order to comply with the Securities Act or the Canadian Securities Laws, to notify the
Underwriters and, upon their request, to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the Underwriters may from
time to time reasonably request of an amended or supplemented Prospectus which will
correct such statement or omission or effect such compliance;
(d) To file promptly with the Commission and each Canadian Securities Regulatory
Authority any amendment to the Registration Statement or the Prospectus or any
supplement to the Prospectus that may, in the judgment of the Company or the
Underwriters, be required by the Securities Act or the Canadian Securities Laws or
requested by the Commission or any Canadian Securities Regulatory Authority;
15
(e) Prior to filing with the Commission or the Canadian Securities Regulatory
Authorities, as applicable, (i) any amendment to the Registration Statement or
supplement to the Prospectus or (ii) any Prospectus pursuant to Rule 424 of the Rules
and Regulations, to furnish a copy thereof to the Underwriters and counsel for the
Underwriters and obtain the consent of the Underwriters as to the content and form of
the filing;
(f) As soon as practicable after the Effective Date of the Registration
Statement, to make generally available to the Companys security holders and to deliver
to the Underwriters an earnings statement of the Company and the Subsidiaries (which
need not be audited) complying with Section 11(a) of the Securities Act and the Rules
and Regulations (including, at the option of the Company, Rule 158);
(g) Promptly from time to time to take such action as the Underwriters may
reasonably request to qualify the Shares for offering and sale under the securities
laws of such jurisdictions as the Underwriters may request and to comply with such laws
so as to permit the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of the Shares provided that
the Company shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction in which it is not presently
qualified;
(h) For a period of 90 days from the date of the Canadian Final Prospectus and
the U.S. Final Prospectus, not to, directly or indirectly (except as disclosed in the
financial statements incorporated by reference into the Prospectus), (1) offer for
sale, sell, pledge or otherwise dispose of (or enter into any transaction or device
which is designed to, or could be expected to, result in the disposition or purchase by
any person at any time in the future) any Common Shares or securities convertible into
or exchangeable for Common Shares or substantially similar securities, or sell or grant
options, rights or warrants with respect to any Common Shares or securities convertible
into or exchangeable for Common Shares (other than the Shares and Common Shares or
securities convertible into or exchangeable for Common Shares issued in connection with
an acquisition (provided that Common Shares issued in connection with acquisitions are
not freely tradable during the 90 day period) or pursuant to employee benefit plans,
qualified stock option plans or other employee compensation plans existing on the date
hereof or under currently outstanding options, warrants or rights), (2) enter into any
swap or other derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such Common Shares, whether any
such transaction described in clause (1) or (2) above is to be settled by delivery of
Common Shares or other securities, in cash or otherwise, (3) file or cause to be filed
a registration statement, including any amendments, with respect to the registration of
any Common Shares or securities convertible, exercisable or exchangeable into Common
Shares or any other securities of the Company, other than a registration statement on
Form S-8, or (4) publicly disclose the intention to do any of the foregoing, in each
case without the prior written consent of the Underwriters, which consent shall not be
unreasonably withheld;
16
(i) Prior to the First Delivery Date, to apply for the conditional listing of
the Common Shares to be issued and sold by the Company hereunder on the TSX and Nasdaq
and to use its best efforts to complete that listing, subject only to official notice
of issuance and the filing of all required documentation, prior to the First Delivery
Date;
(j) To apply the net proceeds from the sale of the Shares being sold by the
Company as set forth in the Prospectus;
(k) To take such steps as shall be necessary to ensure that neither the Company
nor any Subsidiary shall become an investment company within the meaning of such term
under the Investment Company Act of 1940 and the rules and regulations of the
Commission thereunder;
(l) To cause Blake, Cassels & Graydon LLP to deliver to the Underwriters
opinions, dated and delivered the date of the filing of the French language versions of
each of the Canadian Preliminary Prospectus and the Canadian Final Prospectus, to the
effect that, except for certain financial information described in the letter of KPMG
LLP (as described below), the French language versions of each such prospectus,
together with each of the documents incorporated by reference therein, is in all
material respects a complete and accurate translation of the English versions thereof;
to cause KPMG LLP to deliver to the Underwriters a letter, dated the date of the filing
of the French language versions of each of the Canadian Preliminary Prospectus and the
Canadian Final Prospectus, to the effect that the financial statements and other
financial information in the French language version of each such prospectus, together
with each of the documents incorporated by reference therein, is in all material
respects a complete and proper translation of such information contained in the English
versions thereof; and to cause Blake, Cassels & Graydon LLP and KPMG LLP to deliver to
the Underwriters similar opinions as to the French language translation of any
information contained in any amendment to the Canadian Prospectus, in form and
substance satisfactory to the Underwriters, prior to the filing thereof with the
Authorité des Marché Financiers; and
(m) To comply, in all material respects, with all effective applicable
provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated
in connection therewith.
6.
Expenses
. The Company agrees to pay (a) the costs incident to the authorization,
issuance, sale and delivery of the Shares and any taxes payable in that connection; (b) the costs
incident to the preparation, printing and filing under the Securities Act and the Canadian
Securities Laws of the Registration Statement, the Canadian Prospectus and any amendments and
exhibits thereto; (c) the costs of distributing the Registration Statement as originally filed and
each amendment thereto and any post-effective amendments thereof (including, in each case,
exhibits), any Preliminary Prospectus, the Prospectus and any amendment or supplement to the
Prospectus, all as provided in this Agreement; (d) the costs of printing and distributing this
Agreement and any other related documents in connection with the offering, purchase, sale and
delivery of the Shares, including the costs of distributing the terms of agreement relating to the
organization of the
17
underwriting syndicate and selling group to the members thereof by mail, facsimile or other
means of communication; (e) the filing fees incident to securing any required review by the
National Association of Securities Dealers, Inc. of the terms of sale of the Shares; (f) any
applicable listing or other fees; (g) the fees and expenses of qualifying the Shares under the
securities laws of the several jurisdictions as provided in Section 5(h); and (h) all other costs
and expenses incident to the performance of the obligations of the Company under this Agreement;
provided that, except as provided in this Section 6 and in Sections 8 and 11 the Underwriters shall
pay their own costs and expenses, including the costs and expenses of their counsel, any transfer
taxes on the Shares which they may sell and the expenses of advertising any offering of the Shares
made by the Underwriters.
7.
Conditions of Underwriters Obligations
. The respective obligations of the Underwriters
hereunder are subject to the accuracy, when made and on each Delivery Date, of the representations
and warranties of the Company contained herein, to the performance by the Company of its
obligations hereunder, and to each of the following additional terms and conditions:
(a) The Canadian Final Prospectus shall have been filed with each of the
Canadian Securities Regulatory Authorities, a final MRRS Decision Document with respect
to the Canadian Final Prospectus shall have been obtained and the Registration
Statement shall have become effective, and the Underwriters shall have received notice
thereof, not later than the date and time set forth in Section 1(b) or such later date
and time as shall be consented to in writing by the Underwriters; no stop order
suspending the effectiveness of the Registration Statement or any part thereof shall
have been issued, no order having the effect of ceasing or suspending the distribution
of the Shares or trading in the Common Shares shall have been issued and no proceeding
for any such purpose shall have been initiated or threatened by the Commission, any
Canadian Securities Regulatory Authority or any stock exchange; and any request of the
Commission or any Canadian Securities Regulatory Authority for inclusion of additional
information in the Registration Statement or the Prospectus or otherwise shall have
been complied with.
(b) No Underwriter shall have discovered and disclosed to the Company on or
prior to such Delivery Date that the Registration Statement, the Prospectus or any
amendment or supplement thereto contains any untrue statement of material fact or omits
to state any material fact which is required to be stated therein or is necessary to
make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Shares, the Registration
Statement and the Prospectus and all other legal matters relating to this Agreement and
the transactions contemplated hereby, shall be satisfactory in all material respects to
counsel for the Underwriters, acting reasonably, and the Company shall have furnished
to such counsel all documents and information that they may reasonably request to
enable them to pass upon such matters.
18
(d) Blake, Cassels & Graydon LLP (with respect to clauses (i) to (iv) and (vii)
to (xviii) below or, where applicable, Canadian legal matters contemplated in such
clauses) and Davis Wright Tremaine LLP (with respect to clauses (i), (ii), (iv) to
(viii),
(x), (xi), (xvii) and (xviii) below or, where applicable, U.S. legal matters
contemplated in such clauses) shall have furnished to the Underwriters their written
opinion, as counsel to the Company, addressed to the Underwriters and dated such
Delivery Date, in form and substance satisfactory to the Underwriters and their
counsel, to the effect that:
(i) The Company and each of the Subsidiaries have been duly formed and are
validly existing and in good standing under the laws of their respective
jurisdictions of organization, are qualified to do business and are in good standing
as foreign corporations in each jurisdiction in which their respective ownership or
lease of property or the conduct of their respective businesses requires such
qualification except where the failure to be so qualified would not have a material
adverse effect and have all power and authority necessary to own or hold their
respective properties and conduct the businesses in which they are engaged.
(ii) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of the Company (including the Shares being
delivered on such Delivery Date) have been duly and validly authorized and issued,
are fully paid and non-assessable and conform to the description thereof contained
in the Prospectus; and all of the issued shares in the capital or shares of capital
stock of each Subsidiary of the Company have been duly and validly authorized and
issued and are fully paid, non-assessable and the Company is directly or indirectly
the registered owner of such shares.
(iii) Other than as set forth in the Prospectus, there are no preemptive or
other rights to subscribe for or to purchase, nor any restriction upon the voting or
transfer of, any of the Common Shares pursuant to the Companys Articles of
Incorporation or by-laws or any agreement or other instrument known to such counsel.
(iv) To such counsels knowledge and other than as set forth in the
Prospectus, there are no legal or governmental proceedings pending to which the
Company or any of the Subsidiaries is a party which, if determined adversely to the
Company or any of the Subsidiaries, would have a material adverse effect on the
consolidated financial position, shareholders equity, results of operations, or
business of the Company and the Subsidiaries; and, to such counsels knowledge, no
such proceedings are threatened in writing, except as previously disclosed to the
Underwriters and/or their counsel.
(v) The Registration Statement was declared effective under the Securities
Act as of the date and time specified in such opinion and to such counsels
knowledge no stop order suspending the effectiveness of the Registration Statement
has been issued and, to the knowledge of such counsel, no proceeding for that
purpose is pending or threatened by the Commission.
19
(vi) The Registration Statement, as of the Effective Date, and the U.S.
Prospectus, as of its date, and any further amendments or supplements thereto, as of
their respective dates, made by the Company prior to such Delivery Date (other
than the financial statements and other financial data contained therein, as to
which such counsel need express no opinion) complied as to form in all material
respects with the requirements of the Securities Act and the Rules and Regulations.
(vii) The statements contained in the U.S. Prospectus under the caption
Certain Tax Considerations for U.S. Shareholders
, insofar as they describe federal
statutes, rules and regulations and legal conclusions with respect thereto,
constitute a fair summary thereof, subject to the qualifications contained in such
statements.
(viii) To such counsels knowledge, there are no contracts or other documents
which are required to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and Regulations which
have not been described or filed as exhibits to the Registration Statement or
incorporated therein by reference as permitted by the Rules and Regulations.
(ix) This Agreement has been duly authorized, executed and, to the extent
delivery is a matter governed by the laws of Province of British Columbia, delivered
by the Company.
(x) The issuance and sale of the Shares being delivered on such Delivery Date
by the Company and the compliance by the Company with all of the provisions of this
Agreement and the consummation of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any of the terms or provisions
of, or constitute a default under, any material indenture, mortgage, deed of trust,
loan agreement or other material agreement or instrument known to such counsel to
which the Company or any of the Subsidiaries is a party or by which the Company or
any of the Subsidiaries is bound or to which any of the properties or assets of the
Company or any of the Subsidiaries is subject, nor will such actions result in any
violation of the provisions of the charter, by-laws or other organizational
documents of the Company or any of the Subsidiaries or any applicable law of Canada
or the U.S., and, except for the registration of the Shares under the Securities Act
and such consents, approvals, authorizations, registrations or qualifications as may
be required under the Exchange Act, the Canadian Securities Laws and applicable
state securities laws in connection with the purchase and distribution of the Shares
by the Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is required for the
execution, delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby.
(xi) There are no contracts, agreements or understandings between the Company
and any person granting such person the right (other than rights which have been
waived or satisfied) to require the Company to file a registration statement under
the Securities Act or a prospectus under the Canadian Securities Laws with respect
to any securities of the Company owned or to be owned by such person or to require
the Company to include such securities in the securities registered pursuant to the
Registration Statement or qualified for distribution pursuant to the Canadian
20
Prospectus or in any securities being registered pursuant to any other
registration statement filed by the Company under the Securities Act or qualified
for distribution pursuant to any other prospectus filed by the Company under the
Canadian Securities Laws.
(xii) The form of certificate used to evidence the Common Shares has been
duly approved and adopted by the Company and complies with all applicable Canadian
statutory requirements and with any applicable requirements of the constating
documents of the Company.
(xiii) The Canadian Prospectus, as of the Effective Date, and any amendment
or supplement thereto as of the date thereof made by the Company prior to such
Delivery Date (other than the financial statements and other financial data included
therein or omitted therefrom, as to which such counsel need express no opinion)
complied as to form in all material respects with the requirements of the Canadian
Securities Laws.
(xiv) The information in the Canadian Prospectus under the captions
Eligibility for Investment, and Certain Tax Considerations for U.S. Holders
Canadian Federal Income Tax Considerations for U.S. Residents, to the extent that
it constitutes matters of law or legal conclusions, has been reviewed by such
counsel and fairly presents the information disclosed therein.
(xv) All necessary documents have been filed, all necessary proceedings have
been taken and all necessary authorizations, approvals, permits, consents and orders
have been obtained under the Canadian Securities Laws to permit the Shares to be
issued, offered, sold and delivered in the Canadian Qualifying Jurisdictions by or
through persons registered under such laws; and no other consent, approval,
authorization, license, order, registration, qualification or decree of or with any
government, governmental instrumentality, authority or agency or court of Canada or
of any Canadian Qualifying Jurisdiction is required to be obtained by the Company
for such issuance, offering, sale or delivery of the Shares or the consummation by
the Company of the transactions contemplated by this Agreement, except such as have
been obtained.
(xvi) All laws of the Province of Québec relating to the use of the French
language will have been complied with in connection with the sale of the Shares to
purchasers in the Province of Québec provided that such purchasers receive copies of
the Canadian Prospectus in the French language alone, in the English and French
languages simultaneously or, in the case of purchasers having specifically so
requested in writing, in the English language alone and that such purchasers receive
forms of order and confirmation drawn solely in the French language or in a
bilingual format (on the assumption that no documents other than the Canadian
Prospectus and the forms of order and confirmation constitute the contract for
purchase of the Shares).
21
(xvii) Neither the Company nor any Subsidiary is an investment company as
defined in the Investment Company Act
(xviii) This Agreement has been duly authorized, executed and delivered by
Sierra Wireless AirLink Solutions, Inc. and Sierra Wireless America, Inc.
In rendering such opinion, such counsel, in the case of Blake, Cassels Graydon
LLP, may (i) state that its opinion is limited to matters governed by the laws of
British Columbia, Alberta, Ontario and Quebec and the federal laws of Canada having
application there; and (ii) rely (to the extent such counsel deems proper and
specifies in its opinion), as to matters involving the application of the laws of
the other Canadian Qualifying Jurisdictions, the State of Delaware, the State of
California, England and Wales, and Hong Kong and upon the opinion of other counsel
of good standing, provided that such other counsel is satisfactory to counsel for
the Underwriters and furnishes a copy of its opinion to the Underwriters and, in the
case of Davis Wright Tremaine LLP, may state that its opinion is limited to matters
governed by the federal laws of the United States of America and the laws of State
of Delaware and the State of California. Such counsel shall also have furnished to
the Underwriters a written statement, addressed to the Underwriters and dated such
Delivery Date, in form and substance satisfactory to the Underwriters, to the effect
that (x) such counsel has acted as counsel to the Company on a regular basis (except
that, with respect to intellectual property matters, the Company is represented by
other outside counsel), and has acted as counsel to the Company in connection with
previous financing transactions and has acted as counsel to the Company in
connection with the preparation of the Registration Statement and the Prospectus,
and (y) based on the foregoing, no facts have come to the attention of such counsel
which lead it to believe that the Registration Statement, as of the Effective Date,
contained any untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary in order to make the statements
therein not misleading, or that the Prospectus contains any untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The foregoing opinion and statement may
be qualified by a statement to the effect that such counsel does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement, the Prospectus, including the financial
statements incorporated by reference therein except for the statements made in the
U.S. Prospectus under the captions Description of Share Capital, and Certain Tax
Considerations for U.S. Holders and in the Canadian Prospectus under the caption
Eligibility for Investment and Purchasers Statutory Rights, insofar as such
statements relate to the Shares and concern legal matters.
(e) Thelen Reid & Priest shall have furnished to the Underwriters their written
opinion, as patent counsel to the Company, addressed to the Underwriters and dated such
Delivery Date, in form and substance reasonably satisfactory to the Underwriters and
their counsel, to the effect that:
22
(i) To the best of its knowledge, the statements contained in the Prospectus,
insofar as they constitute facts pertaining to its representation and involve
matters of US law, are accurate statements or summaries of the matters therein set
forth.
(ii) To the best of its knowledge, the issued patents described in [Exhibits]
hereto were validly and properly issued.
(iii) To the best of its knowledge, except as described in the Prospectus and
except for ex parte prosecution of patent applications and potential interferences
or re-examination proceedings initiated by the Company between patents of the
Company and patents of others, there are no legal or governmental proceedings,
pending or threatened, relating to the patents or patent applications of the
Company.
(iv) To the best of its knowledge, except as described in the Prospectus and
except for potential interferences or re-examination proceedings initiated by the
Company between patents of the Company and patents of others, there are no legal or
governmental proceedings, pending or threatened, against the Company with respect to
the patents or patent applications of others.
(v) To the best of its knowledge, it and the Company have properly filed and
have prosecuted in a timely manner, or are so prosecuting, each of the Companys
pending patent applications and granted patents.
(vi) In prosecution of the United States patents and patent applications
listed in [Exhibits], it has complied and is continuing to comply and, to the best
of its knowledge, the Company has complied and is continuing to comply, in each case
on an ongoing basis with the requirements of the United States Patent and Trademark
Office as set forth in 37 C.F.R. § 1.56.
(vii) To the best of its knowledge, the Company has clear title to or has
rights in the issued patents and pending patent applications described in [Exhibit]
hereto.
(viii) None of the issued patents described in [Exhibit] hereto has been
revoked.
(ix) To its knowledge, based upon the information provided to it by the
Company, the Company is not infringing or otherwise violating any patents of others.
(f) The Underwriters shall have received from Simpson Thacher & Bartlett LLP,
U.S. counsel for the Underwriters, such opinion or opinions, dated such Delivery Date,
with respect to the Registration Statement, the Prospectus and other related matters of
U.S. law as the Underwriters may reasonably require, and the Company shall have
furnished to such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(g) At the time the Canadian Final Prospectus is filed, the Underwriters shall
have received:
23
(i) from KPMG LLP a letter, in form and substance satisfactory to the
Underwriters, addressed to the Underwriters and dated the date of the Canadian final
Prospectus (A) confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X of
the Commission, (B) stating, as of the date of the Canadian Final Prospectus (or,
with respect to matters involving changes or developments since the respective dates
as of which specified financial information is given in the most recent Canadian
Preliminary Prospectus and U.S. Preliminary Prospectus, as of a date not more than
two days prior to the date of the Canadian Final Prospectus), the conclusions and
findings of such firm with respect to the financial information and other matters
ordinarily covered by accountants comfort letters to underwriters in connection
with registered public offerings; and
(ii) from Perisho, Tombor, Ramirez, Filler and Brown PC a letter, in form and
substance satisfactory to the Underwriters, addressed to the Underwriters and dated
the date of the Canadian Final Prospectus (A) confirming they are in compliance with
the independence rules related to non-registrants under the Code of Professional
Conduct of the American Institute of Certified Public Accountants, and (B) stating,
as of the date of the Canadian Final Prospectus (or, with respect to matters
involving changes or developments since the respective dates as of which specified
financial information is given in the most recent Canadian Preliminary Prospectus
and U.S. Preliminary Prospectus, as of a date not more than two days prior to the
date of the Canadian Final Prospectus), the conclusions and findings of such firm
with respect to the financial information and other matters ordinarily covered by
accountants comfort letters to underwriters in connection with registered public
offerings.
(h) With respect to the letters of KPMG LLP and Perisho, Tombor, Ramirez, Filler
and Brown PC referred to in the preceding paragraph and delivered to the Underwriters
on the date of the Canadian Final Prospectus (the
initial letter
), the
Company shall have furnished to the Underwriters a letter (the
bring-down
letter
) of such accountants, addressed to the Underwriters and dated such Delivery
Date (i) confirming the matters set forth in clause (A) in subparagraphs (i) and (ii)
in the preceding paragraph, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the respective dates as
of which specified financial information is given in the Prospectus, as of a date not
more than two days prior to the date of the bring-down letter), the conclusions and
findings of such firm with respect to the financial information and other matters
covered by the initial letter and (iii) confirming in all material respects the
conclusions and findings set forth in the initial letter, except that the bring-down
letter shall relate to the Canadian Final Prospectus and the U.S. Final Prospectus.
(i) The Company shall have furnished to the Underwriters a certificate, dated
such Delivery Date, of its Chairman of the Board, its President or a Vice President and
its chief financial officer stating that:
24
(i) The representations, warranties and agreements of the Company in Section
1 are true and correct as of such Delivery Date; the Company has complied with all
its agreements contained herein; and the conditions set forth in Sections 7(a) and
7(l) have been fulfilled; and
(ii) They have carefully examined the Registration Statement and the
Prospectus and, in their opinion (A) the Registration Statement and the Prospectus,
as of the Effective Date, did not include any untrue statement of a material fact
and did not omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and (B) since the Effective
Date of the Registration Statement, no event has occurred which should have been set
forth in a supplement or amendment to the Registration Statement or the Prospectus.
(j) (i) Neither the Company nor any of the Subsidiaries shall have sustained
since the date of the latest audited financial statements included in the Prospectus
any material loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor dispute or court
or governmental action, order or decree, otherwise than as set forth or contemplated in
the Prospectus or (ii) since such date there shall not have been any material change in
the share capital, long-term debt or intellectual property of the Company or any of the
Subsidiaries or any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management, financial
position, shareholders equity or results of operations of the Company and the
Subsidiaries, otherwise than as set forth or contemplated in the Prospectus, the effect
of which, in any such case described in clause (i) or (ii), is, in the judgment of the
Underwriters, so material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Shares being delivered on such
Delivery Date on the terms and in the manner contemplated in the Prospectus.
(k) Subsequent to the execution and delivery of this Agreement there shall not
have occurred any of the following: (i) trading in securities generally on the New York
Stock Exchange, the American Stock Exchange or the TSX or in the over-the-counter
market, or trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or minimum prices shall have been
established on any such exchange or such market by the Commission, by such exchange or
by any other regulatory body or governmental authority having jurisdiction, (ii) a
banking moratorium shall have been declared by Federal, state, Canadian federal or
provincial authorities, (iii) the United States or Canada shall have become engaged in
major hostilities, there shall have been an escalation in major hostilities involving
the United States or Canada or there shall have been a declaration of a national
emergency or war by the United States or Canada or (iv) there shall have occurred such
a material adverse change in general economic, political or financial conditions (or
the effect of international conditions on the financial markets in the United States
shall be such) as to make it, in the reasonable judgment of a majority in interest of
the several Underwriters, impracticable or inadvisable to proceed with the public
offering or delivery of the Shares being delivered on such Delivery Date on the terms
and in the manner contemplated in the Prospectus.
25
(l) Nasdaq and the TSX shall have conditionally approved the Shares to be issued
and sold by the Company hereunder for listing, subject only to official notice of
issuance and the filing of all required documentation.
All opinions, letters, evidence and certificates mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Underwriters.
8.
Indemnification and Contribution
(a) The Company and the Subsidiaries, jointly and severally, shall indemnify and
hold harmless each Underwriter, its officers and employees and each person, if any, who
controls any Underwriter within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action relating
to purchases and sales of Shares), to which that Underwriter, officer, employee or
controlling person may become subject, under the Securities Act, the Canadian
Securities Laws or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, the Registration Statement
or the Prospectus, or in any amendment or supplement thereto, (ii) the omission or
alleged omission to state in any Preliminary Prospectus, the Registration Statement,
the Prospectus, or in any amendment or supplement thereto, any material fact required
to be stated therein or necessary to make the statements therein not misleading or
(iii) any act or failure to act or any alleged act or failure to act by any Underwriter
in connection with, or relating in any manner to, the Shares or the offering
contemplated hereby, and which is included as part of or referred to in any loss,
claim, damage, liability or action arising out of or based upon matters covered by
clause (i) or (ii) above (
provided
that the Company and the Subsidiaries shall not be
liable in the case of any matter covered by this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction that such loss,
claim, damage, liability or action resulted directly from any such act or failure to
act undertaken or omitted to be taken by such Underwriter through its gross negligence,
contravention of law or willful misconduct), and shall reimburse each Underwriter and
each such officer, employee and controlling person promptly upon demand for any legal
or other expenses reasonably incurred by that Underwriter, officer, employee or
controlling person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred;
provided, however
, that the Company and the Subsidiaries shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or action
arises out of, or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, the Registration
Statement, the Prospectus, or in any such amendment or supplement thereto, or in any
such amendment or supplement, in reliance upon and in conformity with the written
information concerning such Underwriter furnished to the Company by any Underwriter
specifically for inclusion therein, which information consists solely of the
information specified in Section 8(e). The foregoing indemnity agreement is in
addition to any liability which the Company or any Subsidiary may
otherwise have to any Underwriter or to any officer, employee or controlling
person of that Underwriter.
26
(b) Each Underwriter, severally and not jointly, shall indemnify and hold
harmless the Company, its officers and employees, each of its directors, and each
person, if any, who controls the Company within the meaning of the Securities Act, from
and against any loss, claim, damage or liability, joint or several, or any action in
respect thereof, to which the Company or any such director, officer or controlling
person may become subject, under the Securities Act, the Canadian Securities Laws, or
otherwise, insofar as such loss, claim, damage, liability or action arises out of, or
is based upon, (i) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement, the Prospectus, or
in any amendment or supplement thereto or (ii) the omission or alleged omission to
state in any Preliminary Prospectus, the Registration Statement or the Prospectus, or
in any amendment or supplement thereto, any material fact required to be stated therein
or necessary to make the statements therein not misleading, but in each case only to
the extent that the untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
concerning such Underwriter furnished to the Company through the Underwriters by or on
behalf of that Underwriter specifically for inclusion therein and described in Section
8(e), and shall reimburse the Company and any such director, officer or controlling
person for any legal or other expenses reasonably incurred by the Company or any such
director, officer or controlling person in connection with investigating or defending
or preparing to defend against any such loss, claim, damage, liability or action as
such expenses are incurred. The foregoing indemnity agreement is in addition to any
liability which any Underwriter may otherwise have to the Company or any such director,
officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of any claim or the commencement of any action, the indemnified party shall, if
a claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the claim or the commencement of
that action;
provided, however
, that the failure to notify the indemnifying party shall
not relieve it from any liability which it may have under this Section 8 except to the
extent it has been materially prejudiced by such failure and,
provided further,
that
the failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 8. If any
such claim or action shall be brought against an indemnified party, and it shall notify
the indemnifying party thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably satisfactory
to the indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the indemnifying
party shall not be liable to the indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation;
provided, however
, that
the Underwriters shall have the right to employ counsel to represent jointly the
27
Underwriters and their respective officers, employees and controlling persons who
may be subject to liability arising out of any claim in respect of which indemnity may
be sought by the Underwriters against the Company or any Subsidiary under this Section
8 if, in the reasonable judgment of the Underwriters, it is advisable for the
Underwriters to be represented by separate counsel, and in that event the fees and
expenses of such separate counsel shall be paid by the Company or the Subsidiaries.
Any indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the employment
thereof has been specifically authorized by the indemnifying party in writing, (ii)
such indemnified party shall have been advised by such counsel that there may be one or
more legal defenses available to it which are different from or additional to those
available to the indemnifying party and in the reasonable judgment of such counsel it
is advisable for such indemnified party to employ separate counsel or (iii) the
indemnifying party has failed to assume the defense of such action and employ counsel
reasonably satisfactory to the indemnified party, in which case, if such indemnified
party notifies the indemnifying party in writing that it elects to employ separate
counsel at the expense of the indemnifying party, the indemnifying party shall not have
the right to assume the defense of such action on behalf of such indemnified party (but
for clarification, will continue to have the right to employ counsel to assume the
defense for such action, on its own behalf), it being understood, however, that the
indemnifying party shall not, 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 reasonable fees and
expenses of more than one separate firm of attorneys at any time for all such
indemnified parties, which firm shall be designated in writing by the Underwriters, if
the indemnified parties under this Section 8 consist of any Underwriter or any of their
respective officers, employees or controlling persons, or by the Company, if the
indemnified parties under this Section 8 consist of the Company or any of the Companys
directors, officers, employees or controlling persons. No indemnifying party shall (i)
without the prior written consent of the indemnified parties (which consent shall not
be unreasonably withheld), 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, or (ii) be liable for any settlement of any such action effected without
its written consent (which consent shall not be unreasonably withheld), but if settled
with the written consent of the indemnifying party or if there be a final judgment of
the plaintiff in any such action, the indemnifying party agrees to indemnify and hold
harmless any indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for any reason
be unavailable to or insufficient to hold harmless an indemnified party under Section
8(a) or 8(b) in respect of any loss, claim, damage or liability, or any action in
respect thereof, referred to therein, then each indemnifying party shall, in lieu of
indemnifying
28
such indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability, or action in
respect thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company and the Subsidiaries on the one hand and the
Underwriters on the other from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Subsidiaries on the one hand
and the Underwriters on the other with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect thereof, as
well as any other relevant equitable considerations. The relative benefits received by
the Company and the Subsidiaries on the one hand and the Underwriters on the other with
respect to such offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Shares purchased under this Agreement (before
deducting expenses) received by the Company and the Subsidiaries, on the one hand, and
the total underwriting discounts and commissions received by the Underwriters with
respect to the Shares purchased under this Agreement, on the other hand, bear to the
total gross proceeds from the offering of the Shares under this Agreement, in each case
as set forth in the table on the cover page of the Prospectus. The relative fault
shall be determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates to
information supplied by the Company, the Subsidiaries or the Underwriters, the intent
of the parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. For purposes of the preceding two
sentences, the net proceeds deemed to be received by the Company shall be deemed to be
also for the benefit of the Subsidiaries and information supplied by the Company shall
also be deemed to have been supplied by the Subsidiaries. The Company, the
Subsidiaries and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this Section 8(d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such purpose) or by
any other method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified party
as a result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 8(d) shall be deemed to include, for purposes of this
Section 8(d), any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8(d), no Underwriter shall be required
to contribute any amount in excess of the amount by which the total price at which the
Shares underwritten by it and distributed to the public was offered to the public
exceeds the amount of any damages which such Underwriter has otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 8(e) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The Underwriters
obligations to contribute as provided in this Section 8(d) are several in proportion to
their respective underwriting obligations and not joint.
29
(e) The Underwriters severally confirm and the Company acknowledges that the
statements with respect to the public offering of the Shares by the Underwriters set
forth on the cover page of, the legend concerning over-allotments on the inside front
cover page of and the concession and reallowance figures appearing under the caption
Underwriting in the Prospectus are correct and constitute the only information
concerning such Underwriters furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement, the Prospectus,
or in any amendment or supplement thereto.
9.
Defaulting Underwriters
(a) If, on either Delivery Date, any Underwriter defaults in the performance of
its obligations under this Agreement, the non-defaulting Underwriter shall be obligated
to purchase the Shares which the defaulting Underwriter agreed but failed to purchase
on such Delivery Date provided, however, that the non-defaulting Underwriter shall not
be obligated to purchase any of the Shares on such Delivery Date if the total number of
Shares which the defaulting Underwriter agreed but failed to purchase on such date
exceeds 9.09% of the total number of Shares to be purchased on such Delivery Date, and
the non-defaulting Underwriter shall not be obligated to purchase more than 110% of the
number of Shares which it agreed to purchase on such Delivery Date pursuant to the
terms of Section 2. If the foregoing maximums are exceeded, the non-defaulting
Underwriter shall have the right, but shall not be obligated, to purchase all the
Shares to be purchased on such Delivery Date. If the non-defaulting Underwriter does
not elect to purchase the Shares which the defaulting Underwriter agreed but failed to
purchase on such Delivery Date, this Agreement (or, with respect to the Second Delivery
Date, the obligation of the Underwriters to purchase, and of the Company to sell, the
Option Shares) shall terminate without liability on the part of any non-defaulting
Underwriter or the Company, except that the Company will continue to be liable for the
payment of expenses to the extent set forth in Sections 6 and 11. As used in this
Agreement, the term Underwriter includes, for all purposes of this Agreement unless
the context requires otherwise, any party not listed in Schedule 1 hereto who, pursuant
to this Section 9, purchases Firm Shares which a defaulting Underwriter agreed but
failed to purchase.
(b) Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If other
underwriters are obligated or agree to purchase the Shares of a defaulting or
withdrawing Underwriter, either the Underwriters or the Company may postpone the
Delivery Date for up to seven full business days in order to effect any changes that in
the opinion of counsel for the Company or counsel for the Underwriters may be necessary
in the Registration Statement, the Prospectus or in any other document or arrangement.
10.
Termination
. The obligations of the Underwriters hereunder may be terminated by the
Underwriters by notice given to and received by the Company prior to delivery of and payment for
the Firm Shares if, prior to that time, any of the events described in Sections 7(j) or
7(k), shall have occurred or if the Underwriters shall decline to purchase the Shares for any
reason permitted under this Agreement.
30
11.
Reimbursement of Underwriters Expenses
. If (a) the Company shall fail to tender the
Shares for delivery to the Underwriters for any reason permitted under this Agreement, or (b) the
Underwriters shall decline to purchase the Shares for any reason permitted under this Agreement
(including the termination of this Agreement pursuant to Section 10), the Company shall reimburse
the Underwriters for the reasonable out-of-pocket expenses (including fees and expenses of counsel)
incurred by them in connection with this Agreement and the proposed purchase of the Shares, and
upon demand the Company shall pay the full amount thereof to the Underwriters. If this Agreement
is terminated pursuant to Section 9 by reason of the default of one of the Underwriters, the
Company shall not be obligated to reimburse any defaulting Underwriter on account of those
expenses.
12.
No Fiduciary Duty
. The Company acknowledges and agrees that in connection with this
offering, sale of the Common Shares or any other services the Underwriters may be deemed to be
providing hereunder, notwithstanding any preexisting relationship, advisory or otherwise, between
the parties or any oral representations or assurances previously or subsequently made by the
Underwriters: (i) no fiduciary or agency relationship between the Company and any other person, on
the one hand, and the Underwriters, on the other, exists; (ii) the Underwriters are not acting as
advisors, expert or otherwise, to the Company, including, without limitation, with respect to the
determination of the public offering price of the Common Shares, and such relationship between the
Company, on the one hand, and the Underwriters, on the other, is entirely and solely commercial,
based on arms-length negotiations; (iii) any duties and obligations that the Underwriters may have
to the Company shall be limited to those duties and obligations specifically stated herein; and
(iv) the Underwriters and their respective affiliates may have interests that differ from those of
the Company. The Company hereby waive any claims that the Company may have against the
Underwriters with respect to any breach of fiduciary duty in connection with this offering.
13.
Notices, etc
. All statements, requests, notices and agreements hereunder shall be in
writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission to CIBC World Markets Inc., 12
th
Floor, 400 Burrard
Street, Commerce Place, Vancouver, British Columbia, V6C 3A6, Attention: Kathy Butler,
Fax: 604 891-6330;
(b) if to the Company or to the Subsidiaries, shall be delivered or sent by mail
or facsimile transmission to the address of the Company set forth in the Registration
Statement, Attention: Chief Financial Officer, Fax: 604 231-1103.
Any such statements, requests, notices or agreements shall take effect at the time of receipt
thereof.
14.
Persons Entitled to Benefit of Agreement
. This Agreement shall inure to the benefit of
and be binding upon the Underwriters, the Company and their respective personal representatives (if
applicable) and successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (A) the representations, warranties,
31
indemnities and agreements of the Company contained in this Agreement shall also be deemed to
be for the benefit of the officers and employees of each Underwriter and the person or persons, if
any, who control any Underwriter within the meaning of Section 15 of the Securities Act and (B) the
indemnity agreement of the Underwriters contained in Section 8(b) of this Agreement shall be deemed
to be for the benefit of directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Company within the meaning of Section 15 of
the Securities Act. Nothing in this Agreement is intended or shall be construed to give any
person, other than the persons referred to in this Section 14, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision contained herein.
15.
Survival
. The respective indemnities, representations, warranties and agreements of
the Company, the Subsidiaries and the Underwriters contained in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement, shall survive the delivery of and payment
for the Shares and shall remain in full force and effect, regardless of any investigation made by
or on behalf of any of them or any person controlling any of them.
16.
Agreement between Underwriters
. Each of the Underwriters agrees with the other that it
will be liable for its proportionate share, based on the proportion that is the number of shares
set forth opposite such Underwriters name in Schedule 1 to the total number of shares to be
purchased by the Underwriters hereunder, of any losses, damages, liabilities or expenses
(collectively, the
Losses
), joint or several, paid or incurred by any Underwriter to any
person other than an Underwriter as a result of the offering of shares contemplated herein, whether
such losses arise under applicable securities laws or otherwise, and including, without limitation,
those losses arising out of or based upon (i) any information or statement in any Preliminary
Prospectus or the Prospectus or any other selling or advertising material approved and used by the
Underwriter in connection with the sale of the Shares being a misrepresentation (as defined in the
Securities Act (British Columbia) or untrue, false or misleading; and (ii) any legal or other
expenses reasonably incurred by the Underwriter or any of them in connection with investigating or
defending any claim or action in respect of such losses.
17.
Definition of the Term Business Day
.
For purposes of this Agreement,
business
day
means any day on which the New York Stock Exchange, Inc. is open for trading.
18.
Governing Law
. This Agreement shall be governed by and construed in accordance with
the laws of the Province of British Columbia and the federal laws of Canada applicable therein.
19.
Consent to Jurisdiction
. Each party irrevocably agrees that any legal suit, action or
proceeding arising out of or based upon this Agreement or the transactions contemplated hereby
(
Related Proceedings
) may be instituted in the courts of the Province of British Columbia
(collectively, the
Specified Courts
), and irrevocably submits to the non-exclusive
jurisdiction of such courts in any such suit, action or proceeding. The parties further agree that
service of any process, summons, notice or document by mail to such partys address set forth above
shall be effective service of process for any lawsuit, action or other proceeding brought in any
such court. The parties hereby irrevocably and unconditionally waive any objection to the laying
of venue of any lawsuit, action or other proceeding in the Specified Courts, and hereby further
irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any such lawsuit,
action or other proceeding brought in any such court has been brought in an inconvenient forum.
32
20.
Counterparts
. This Agreement may be executed in one or more counterparts and, if
executed in more than one counterpart, the executed counterparts shall each be deemed to be an
original but all such counterparts shall together constitute one and the same instrument.
21.
Headings
. The headings herein are inserted for convenience of reference only and are
not intended to be part of, or to affect the meaning or interpretation of, this Agreement.
33
If the foregoing correctly sets forth the agreement among the Company, the Subsidiaries and
the Underwriters, please indicate your acceptance in the space provided for that purpose below.
|
|
|
|
|
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Sierra Wireless, Inc.
|
|
|
By:
|
"David McLennan"
|
|
|
|
Name:
|
David McLennan
|
|
|
|
Title:
|
Chief Financial Officer
|
|
|
|
Sierra Wireless America, Inc.
|
|
|
By:
|
"David McLennan"
|
|
|
|
Name:
|
David McLennan
|
|
|
|
Title:
|
Director
|
|
|
|
Sierra Wireless AirLink Solutions Inc.
|
|
|
By:
|
"David McLennan"
|
|
|
|
Name:
|
David McLennan
|
|
|
|
Title:
|
Director
|
|
|
|
Sierra Wireless (UK) Limited
|
|
|
By:
|
"Jocelyn Chang"
|
|
|
|
Name:
|
Jocelyn Chang
|
|
|
|
Title:
|
Director
|
|
|
|
sierra wireless (asia-pacific) limited
|
|
|
By:
|
"Jocelyn Chang"
|
|
|
|
Name:
|
Jocelyn Chang
|
|
|
|
Title:
|
Director
|
|
34
The foregoing Agreement is confirmed and accepted as of the date first written above.
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|
|
|
CIBC
World Markets Inc.
|
|
|
By:
|
"Kathy Butler"
|
|
|
|
Name:
|
Kathy D. Butler
|
|
|
|
Title:
|
Managing Director
|
|
|
|
RBC Dominion Securities Inc.
|
|
|
By:
|
"Scott Davis"
|
|
|
|
Name:
|
Scott Davis
|
|
|
|
Title:
|
Director
|
|
|
|
Piper Jaffray & Co.
|
|
|
By:
|
"Christie L. Christina"
|
|
|
|
Name:
|
Christie L. Christina
|
|
|
|
Title:
|
Managing Director
|
|
SCHEDULE 1
|
|
|
|
|
Underwriters
|
|
Shares
|
|
CIBC World Markets Inc.
|
|
|
1,750,000
|
|
Piper Jaffray & Co.
|
|
|
875,000
|
|
RBC Dominion Securities Inc.
|
|
|
875,000
|
|
|
|
|
|
|
Total
|
|
|
3,500,000
|
|
SCHEDULE 2
Subsidiaries
1. Sierra Wireless America, Inc., a Delaware corporation
2. Sierra Wireless AirLink Solutions Inc., a California corporation
3. Sierra Wireless (UK) Limited, an England and Wales corporation
4. Sierra Wireless (Asia-Pacific) Limited, a Hong Kong corporation