Corporation’s Covenants. The Corporation hereby covenants to the Underwriter and its permitted assigns, and acknowledges that it is relying on such covenants in purchasing the Units, that the Corporation shall: (a) prior to the Closing Time, allow the Underwriter (and its counsel, consultants and other representatives) to conduct all due diligence investigations which the Underwriter may reasonably require or consider necessary in order to fulfill the Underwriter’s obligations as a registrant to complete the Offering as provided herein. The Corporation will provide to the Underwriter (and its counsel and consultants) reasonable access to the Corporation’s properties (if any), senior management personnel and corporate, financial and other records, for the purposes of conducting such due diligence. Without limiting the scope of the due diligence inquiry the Underwriter (or its counsel and consultants) may conduct, the Corporation shall also make available its directors, senior management, counsel and auditors to answer any questions which the Underwriter may have and to participate in one or more due diligence sessions to be held prior to Closing; (b) duly execute the Subscription Agreements which have been duly completed by the Substituted Purchasers and duly, punctually and faithfully perform all the obligations to be performed by it under this Agreement and the Subscription Agreements; (c) use its commercially reasonable efforts to fulfil or cause to be fulfilled, at or prior to the Closing Date, each of the conditions required to be fulfilled by it set out in Section 7; (d) file or cause to be filed all documents, applications, forms or undertakings required to be filed by the Corporation and taken in connection with the purchase and sale of the Units and, so that the distribution of the Units may lawfully occur without the necessity of filing a prospectus in Canada or similar document in any other jurisdiction; (e) file or cause to be filed all documents, applications, forms or undertakings with the TSXV and any other applicable regulating authority in connection with the Offering to ensure the Common Shares and the Common Shares underlying the Warrants are conditionally approved for listing on the TSXV at Closing; (f) during the period commencing with the date hereof and ending on the Closing Date, promptly inform the Underwriter of the full particulars of any request of any Securities Commission or other securities commission or similar regulatory authority for any information, or the receipt by the Corporation of any communication from any Securities Commission or other securities regulatory authority, or any other competent authority relating to the Corporation or which may be relevant to the distribution of the Units; (g) promptly comply, to the reasonable satisfaction of the Underwriter and the Underwriter’s Counsel, with the Applicable Securities Laws with respect to any material adverse change, change, occurrence or event of the nature referred to in paragraph 2(e) above; (h) apply the net proceeds from the Offering in accordance with the description set forth in the press release of the Corporation dated April 20, 2007; and (i) shall not offer, issue or sell, announce any offer, issuance or sale of, or negotiate or enter into any agreement to issue or sell, directly or indirectly, any Common Shares (including securities convertible or exchangeable into Common Shares) for a period of 180 days from the Closing Date, other than (i) pursuant to the Offering, (ii) upon exercise of any convertible securities, options or warrants of the Corporation outstanding on the date hereof, (iii) the grant or exercise of options pursuant to the Corporation’s existing stock option plan, and (iv) as a result of the acquisition of shares or assets of a Person acting at arm’s length with the Corporation within the meaning of the Income Tax Act (Canada) without the prior written consent of the Underwriter which shall not be unreasonably withheld or delayed.
Appears in 2 contracts
Samples: Underwriting Agreement (Sonic Environmental Solutions Inc/Can), Underwriting Agreement (Sonic Technology Solutions Inc.)
Corporation’s Covenants. The Corporation hereby covenants to the Underwriter Underwriters and its to the Purchasers and their permitted assigns, and acknowledges that it each of them is relying on such covenants in purchasing the UnitsSpecial Warrants, that the Corporation shall:
(a) prior to the Closing TimeTime and at all times until a Final Receipt is issued, allow the Underwriter Underwriters (and its counsel, consultants their counsel and other representativesconsultants) to conduct all due diligence investigations which the Underwriter Underwriters may reasonably require or consider which may be considered necessary in order to fulfill or appropriate by the Underwriter’s obligations as a registrant to complete the Offering as provided hereinUnderwriters. The Corporation will provide to the Underwriter Underwriters (and its counsel and consultantstheir counsel) reasonable access to the Corporation’s properties (if any), senior management personnel and corporate, financial and other records, for the purposes of conducting such due diligence. Without limiting the scope of the due diligence inquiry that the Underwriter Underwriters (or its counsel and consultantstheir counsel) may conduct, the Corporation shall also make available its directors, senior management, the Chairman of the Audit Committee of the Board of Directors, the auditors and counsel and auditors to answer any questions which the Underwriter Underwriters may have and to participate in one or more due diligence sessions to be held prior to ClosingClosing and, prior to filing each of the Preliminary Prospectus and Final Prospectus and to use its commercial best efforts to arrange for the auditors of the Corporation to participate in any such due diligence session;
(b) duly execute the Subscription Agreements which have been duly completed by the Substituted Purchasers subject to the terms thereof, and duly, duly and punctually and faithfully perform all the obligations to be performed by it under this Agreement and the Subscription Agreements;
(c) use its commercially reasonable commercial best efforts to fulfil or cause to be fulfilled, at or prior to the Closing Date, each of the conditions required to be fulfilled by it set out in Section 7section 7 hereof;
(d) use its commercial best efforts to obtain the necessary approval of the TSXV for the Offering and the listing of the Underlying Securities on such terms as are customary;
(e) file with the Canadian Securities Regulators and the TSXV all forms, notices and certificates required to be filed by the Corporation pursuant to the Canadian Securities Laws and the policies of the TSXV in the time required by the Canadian Securities Laws and the policies of the TSXV, including, for greater certainty, Form 45-106F1 of NI 45-106 and any other forms, notices and certificates set forth in the opinions delivered to the Underwriters pursuant to the closing conditions set forth in section 7 hereof, as are required to be filed by the Corporation;
(f) ensure that the Underlying Shares, upon issuance, shall be duly issued as fully paid and non-assessable Common Shares, and shall have the attributes corresponding in all material respects to the description thereof set forth in this Agreement and the Subscription Agreements;
(g) fulfil all legal requirements to permit the creation, issuance, offering and sale of the Special Warrants and the Underlying Securities, all as contemplated in this Agreement and file or cause to be filed all documents, applications, forms or undertakings required to be filed by the Corporation and take or cause to be taken all action required to be taken by the Corporation in connection with the purchase and sale of the Units andSpecial Warrants and the issuance of the Qualified Securities, so that the distribution of the Units Qualified Securities may lawfully occur without the necessity of filing a prospectus registration statement in Canada the United States or similar document in any other jurisdiction;
(eh) file or cause to be filed all documentsuntil the date of the completion of the distribution of the Qualified Securities, applications, forms or undertakings with the TSXV and any other applicable regulating authority in connection with the Offering use commercial best efforts to ensure the Common Shares and the Common Shares underlying the Warrants are conditionally approved for listing on the TSXV Prospectus complies at Closingall times with Canadian Securities Laws;
(fi) during the period commencing with from the date hereof and ending on until the Closing Datedate of the completion of the distribution of the Qualified Securities, promptly inform the Underwriter Underwriters of the full particulars of any request of any Securities Commission or other securities commission or similar regulatory authority Regulator for any information, or the receipt by the Corporation of any communication from any Securities Commission or other securities regulatory authority, Regulator or any other competent authority relating to the Corporation or which may be relevant to the distribution of the UnitsQualified Securities;
(g) promptly comply, to the reasonable satisfaction of the Underwriter and the Underwriter’s Counsel, with the Applicable Securities Laws with respect to any material adverse change, change, occurrence or event of the nature referred to in paragraph 2(e) above;
(hj) apply the net proceeds from the Offering to fund the Acquisition;
(k) comply with each of the covenants of the Corporation set out in the Subscription Agreements;
(l) advise the Underwriters, promptly after receiving notice thereof, of the time when the Preliminary Prospectus, the Final Prospectus and any Supplementary Material have been filed and receipts therefor have been obtained pursuant to NP 11-202 and will provide evidence reasonably satisfactory to the Underwriters of each such filing and copies of such receipts;
(m) advise the Underwriters, promptly after receiving notice or obtaining knowledge thereof, of:
(i) the issuance by any Canadian Securities Regulator of any order suspending or preventing the use of the Prospectus or any Supplementary Material;
(ii) the institution, threatening or contemplation of any proceeding for any such purposes;
(iii) any order, ruling, or determination having the effect of suspending the sale or ceasing the trading in any securities of the Corporation (including the Special Warrants or the Underlying Securities) having been issued by any Canadian Securities Regulator or the institution, threatening or contemplation of any proceeding for any such purposes; or
(iv) any requests made by any Canadian Securities Regulators to amend or supplement the Prospectus or to provide additional information, and will use its commercial best efforts to prevent the issuance of any order referred to in (i) above and, if any such order is issued, to obtain the withdrawal thereof as quickly as possible;
(n) except to the extent the Corporation participates in a merger or business combination transaction which is in the best interest of the Corporation and following which the Corporation is not a “reporting issuer”, use its commercial best efforts to maintain its status as a “reporting issuer” (or the equivalent thereof) not in default of the requirements of Canadian Securities Laws of each of the Canadian jurisdictions in which it is currently a reporting issuer, which have such a concept to the date which is two years following the Closing Date; and
(o) except to the extent the Corporation participates in a merger or business combination transaction which is in the best interest of the Corporation and following which the Corporation is not listed on the TSXV or the TSX, use its commercial best efforts to maintain the listing of:
(i) the Common Shares on the TSXV or the TSX or such other recognized stock exchange or quotation system as Canaccord Genuity, on behalf of the Underwriters, may approve, acting reasonably, to the date that is two years following the Closing Date; and
(ii) the Convertible Debentures and the Warrants on the TSXV or the TSX or such other recognized stock exchange or quotation system as Canaccord Genuity, on behalf of the Underwriters, may approve, acting reasonably, until the Maturity Date or Expiry Date, as applicable. The Corporation further hereby covenants to the Underwriters and to the Purchasers and their permitted assigns, and acknowledges that each of them is relying on such covenants in purchasing the Special Warrants, that following the Closing:
(p) the Corporation shall qualify the distribution of the Qualified Securities in the Qualifying Provinces to holders of the Special Warrants and file the Preliminary Prospectus in each of the Qualifying Provinces as soon as possible following the Closing Date and the Final Prospectus promptly following receipt and settlement of comments from the Canadian Securities Regulators;
(q) the Corporation shall use its commercial best efforts to: satisfy all comments with respect to the Preliminary Prospectus; prepare and file the Final Prospectus under Canadian Securities Laws; obtain the Final Receipt (in accordance with the description set forth procedures of prospectus review in multiple jurisdictions provided for under NP 11-202), and take all other steps and proceedings that may be necessary to be taken by the Corporation in order to qualify the Qualified Securities for distribution in each of the Qualifying Provinces under Canadian Securities Laws, as soon as practicable following the Closing Date and, in any event, prior to the Qualification Deadline;
(r) the Corporation shall allow the Underwriters to participate in the press release preparation of the Prospectus and any Supplementary Material that the Corporation is required to file under Canadian Securities Laws relating to the Offering;
(s) the delivery of the Final Prospectus and any Supplementary Material to the Underwriters by the Corporation in accordance with this Agreement will constitute the representation and warranty of the Corporation dated April 20to the Underwriters that (except for information and statements relating solely to the Underwriters and furnished by them specifically for use in the Final Prospectus), 2007at the respective times of delivery:
(i) the information and statements contained in each of the Final Prospectus and any Supplementary Material:
(A) are true and correct and contain no misrepresentation; and
(iB) shall not offerconstitute full, issue or sell, announce any offer, issuance or sale of, or negotiate or enter into any agreement to issue or sell, directly or indirectly, any Common Shares (including securities convertible or exchangeable into Common Shares) for a period true and plain disclosure of 180 days from the Closing Date, other than (i) pursuant all material facts relating to the Offering, Qualified Securities and the Corporation considered as a whole;
(ii) upon exercise of no material fact has been omitted from any convertible securities, options or warrants of the Corporation outstanding on Final Prospectus and any Supplementary Material that is required to be stated in the date hereof, document or is necessary to make the statements therein not misleading in the light of the circumstances in which they were made; and
(iii) the grant Final Prospectus and the Supplementary Material comply in all material respects with Canadian Securities Laws;
(t) the Corporation will deliver to the Underwriters, without charge, contemporaneously with, or exercise prior to the filing of, the Final Prospectus, unless otherwise indicated:
(i) a copy of options any document filed with, or delivered to, the Canadian Securities Regulators by the Corporation under Canadian Securities Laws with the Final Prospectus;
(ii) a certificate dated the date of the Final Prospectus, addressed to the Underwriters and signed by the Chief Executive Officer and Chief Financial Officer of the Corporation, certifying for and on behalf of the Corporation, and not in their personal capacities, after having made due inquiries, with respect to the following matters:
(A) the Corporation having complied with all of the covenants and satisfied all of the terms and conditions of this Agreement on its part to be complied with and satisfied at or prior to the date of the Final Prospectus;
(B) no order, ruling or determination having the effect of ceasing or suspending trading in any securities of the Corporation or prohibiting the issue of the Special Warrants or the Underlying Securities or any of the Corporation’s issued securities having been issued and no proceeding for such purpose being pending or, to the knowledge of such officers, threatened;
(C) the representations and warranties of the Corporation contained in this Agreement and in any certificates of Corporation delivered pursuant to or in connection with this Agreement being true and correct as at the date of the Final Prospectus, with the same force and effect as if made on and as at the date of the Final Prospectus, after giving effect to the transactions contemplated by this Agreement; and
(D) since the Closing Time, there having been no material adverse change, financial or otherwise, in the assets, liabilities (contingent or otherwise), capital, business or results of operations of the Corporation;
(u) the Corporation shall deliver opinions, comfort letters and other documents substantially similar to those referred to in this section 1 to Canaccord Genuity and the Underwriters’ counsel, as applicable, with respect to any Supplementary Material, contemporaneously with, or prior to the filing of, any Supplementary Material;
(v) until the earlier of the Qualification Date and the Qualification Deadline, the Corporation shall deliver to the Underwriters copies of all correspondence and other written communications between the Corporation and any Securities Regulators or other Governmental Authority relating to the Offering and the Acquisition and will generally keep the Underwriters apprised of the status of, including all developments relating to, the Offering, the Acquisition, and satisfaction of closing conditions for the Acquisition and the Release Conditions;
(w) the Corporation shall comply with and satisfy, in all material respects, all terms, conditions and covenants in the Offer to Purchase;
(x) the Corporation shall use its commercial best efforts to satisfy the Release Conditions prior to the Release Deadline, including seeking any extensions or waivers necessary to keep the Offer to Purchase in full force and effect until the Qualification Deadline as necessary;
(y) the Corporation shall use its commercial best efforts to enforce its rights against CryptoLogic and its affiliates under the Offer to Purchase;
(z) the Corporation shall notify Canaccord Genuity in writing of the receipt of all regulatory approvals required to complete the Acquisition;
(aa) as a condition precedent to the execution of the joint notice by Canaccord Genuity with the Corporation in respect of the Release Event pursuant to the Release Conditions, the Chief Executive Officer of the Corporation shall have delivered to Canaccord Genuity a certification that all conditions to the completion of the Acquisition by the Corporation’s existing stock option plan, on terms previously disclosed to or otherwise reasonably acceptable to Canaccord Genuity, have been satisfied or waived; and
(bb) in the event that the Release Event does not occur on or before the Release Deadline, the Corporation shall forthwith deliver a notice to each of the Special Warrant holders and the Agent and the Agent shall return, within three Business Days, to each such holder the applicable subscription amount, plus any interest earned thereon, less applicable withholding taxes, if any, and (iv) as a result of the acquisition of shares or assets of a Person acting at arm’s length with Special Warrants shall be cancelled. The Corporation shall be responsible for any shortfall in the Corporation within the meaning of the Income Tax Act (Canada) without the prior written consent of the Underwriter which shall not be unreasonably withheld or delayedaggregate subscription amount payable to Special Warrant holders.
Appears in 2 contracts
Samples: Underwriting Agreement (Amaya Gaming Group Inc.), Underwriting Agreement (Amaya Gaming Group Inc.)
Corporation’s Covenants. The Corporation hereby covenants to the Underwriter and its permitted assigns, and acknowledges that it is relying on such covenants in purchasing the Units, that the Corporation shallagrees:
(a) prior to that the Closing Time, allow the Underwriter (Debentures will be duly and its counsel, consultants validly authorized and other representatives) to conduct all due diligence investigations which the Underwriter may reasonably require or consider necessary in order to fulfill the Underwriter’s obligations as a registrant to complete the Offering as provided herein. The Corporation will provide to the Underwriter (and its counsel and consultants) reasonable access to the Corporation’s properties (if any), senior management personnel and corporate, financial and other records, for the purposes of conducting such due diligence. Without limiting the scope of the due diligence inquiry the Underwriter (or its counsel and consultants) may conduct, the Corporation shall also make available its directors, senior management, counsel and auditors to answer any questions which the Underwriter may have and to participate in one or more due diligence sessions to be held prior to Closingissued;
(b) duly the Common Shares issuable upon the conversion of the Debentures will be reserved for issuance at the Closing Time:
(c) as soon as reasonably possible, and in any event by the Closing Date, to take all such steps as may reasonably be necessary to enable the Debentures to be offered for sale and sold on a private placement basis to Subscribers in the Selling Jurisdictions through the Agent or any other investment dealers or brokers registered in any of the Selling Jurisdictions by way of the exemptions under Applicable Canadian Securities Laws of each of the Selling Jurisdictions, and not to take any action that would prevent the Corporation and the Agent from relying on the exemptions from the prospectus requirements of Applicable Canadian Securities Laws as contemplated by the Subscription Agreements;
(d) as soon as reasonably possible, and in any event by the Closing Date, to execute the Subscription Agreements which have been duly completed Shareholder Agreement and issue the Management Shares;
(e) as soon as reasonably possible, and in any event by the Substituted Purchasers Closing Date, to execute the Voting Agreement and issue the Deep Well Shares;
(f) as soon as reasonably possible, and in any event by the Closing Date, to cause the following person to be appointed to the following offices: Xxxxx Xxxxxxx - Executive Chairman and Chief Executive Officer;
(g) to duly, punctually and faithfully perform and comply with all the obligations to be performed by it it, and all of its covenants and agreements under and pursuant to this Agreement Agreement, the Subscription Agreements and the Subscription AgreementsIndenture;
(ch) use it will file all necessary forms and reports with the appropriate Securities Commissions and other regulatory authorities in connection with the issuance of the Debentures and the Agent’s Warrant;
(i) the Corporation will carry on its commercially reasonable efforts to fulfil business in a prudent manner in accordance with industry standards and good business practice and will keep or cause to be fulfilled, at or prior to the Closing Date, each kept proper books of the conditions required to be fulfilled by it set out accounts in Section 7accordance with applicable law;
(dj) file or cause to be filed all documents, applications, forms or undertakings required to be filed by the Corporation and taken in connection with will not, from the purchase and sale date hereof until the earlier of the Units and, so that the distribution conversion of all of the Units may lawfully occur without issued Debentures into Common Shares or Surge U.S. Shares or the necessity repayment of filing a prospectus all of the issued Debentures (including all interest payable thereon); approve, implement, adopt or authorize any stock option plan, performance warrant plan or other stock based compensation plan (collectively, the “Option Plan”) which allows for the issuance of Common Shares in Canada or similar document in any other jurisdictionan aggregate amount greater than 5% of the issued and outstanding Common Shares;
(ek) file or cause to be filed the Corporation will not, from the date hereof until the earlier of: (i) the conversion of all documents, applications, forms or undertakings with of the TSXV and any other applicable regulating authority in connection with the Offering to ensure the issued Debentures into Common Shares and or Surge U.S. Shares or the Common Shares underlying repayment of all of the Warrants are conditionally approved issued Debentures (including all interest payable thereon); or (ii) the date on which the Corporation completes an offering (or offerings) of securities to the public for listing on gross proceeds of at least an aggregate of $10,000,000, grant options or similar convertible securities issuable pursuant to the TSXV at ClosingOption Plan to the Management Group or to any director nominated by Surge U.S. pursuant to the Shareholder Agreement;
(fl) during immediately following the period commencing with the date hereof and ending Closing Time on the Closing Date, promptly inform the Underwriter it will file such discontinuances and undertakings, in such form as approved by Agent’s Counsel, acting reasonably, to cause all of the full particulars of any request of any Securities Commission or other securities commission or similar regulatory authority for any information, or the receipt by the Corporation of any communication from any Securities Commission or other securities regulatory authority, or any other competent authority relating Farmout Agreement Legal Claims to the Corporation or which may be relevant to the distribution of the Unitsdiscontinued;
(gm) promptly complyexcept for the issuance of the Management Shares, the Deep Well Shares, the grant of options pursuant to the reasonable satisfaction of the Underwriter Option Plan and the Underwriter’s Counselanticipated flow-through share financing, with the Applicable Securities Laws with respect to any material adverse changeCorporation will not, change, occurrence or event of the nature referred to in paragraph 2(e) above;
(h) apply the net proceeds from the Offering in accordance with date hereof until that date that is 120 days following the description set forth in the press release of the Corporation dated April 20, 2007; and
(i) shall not offer, issue or sell, announce any offer, issuance or sale of, or negotiate or enter into any agreement to issue or sellClosing Date, directly or indirectly, sell, or offer to sell, or announce the offering of, or enter into or make any agreement or understanding, or announce the making or entry into of any agreement or understanding, to issue, sell or exchange any Common Shares (including Shares, securities exchangeable or convertible or exchangeable into Common Shares) for a period of 180 days from the Closing Date, other than (i) pursuant to the Offering, (ii) upon exercise of any convertible securities, options or warrants of the Corporation outstanding on the date hereof, (iii) the grant or exercise of options pursuant to the Corporation’s existing stock option plan, and (iv) as a result of the acquisition of shares or assets of a Person acting at arm’s length with the Corporation within the meaning of the Income Tax Act (Canada) Shares without the prior written consent of the Underwriter which shall Agent, not to be unreasonably withheld or delayedwithheld.
Appears in 1 contract
Corporation’s Covenants. The Corporation hereby covenants to the Underwriter and its permitted assigns, and acknowledges that it is relying on such covenants in purchasing the Units, that the Corporation shallagrees:
(a) prior that the Offered Securities will be duly and validly authorized and issued pursuant to the Closing Time, allow the Underwriter (and its counsel, consultants and other representatives) to conduct all due diligence investigations which the Underwriter may reasonably require or consider necessary in order to fulfill the Underwriter’s obligations as a registrant to complete the Offering as provided herein. The Corporation will provide to the Underwriter (and its counsel and consultants) reasonable access to the Corporation’s properties (if any), senior management personnel and corporate, financial and other records, for the purposes of conducting such due diligence. Without limiting the scope terms of the due diligence inquiry the Underwriter (or its counsel and consultants) may conduct, the Corporation shall also make available its directors, senior management, counsel and auditors to answer any questions which the Underwriter may have and to participate in one or more due diligence sessions to be held prior to ClosingSubscription Agreements;
(b) duly execute the Common Shares issuable upon the conversion of the Debentures will be reserved for issuance at the Closing Time;
(c) as soon as reasonably possible, and in any event by the Closing Date, to take all such steps as may reasonably be necessary to enable the Offered Securities to be offered for sale and sold on a private placement basis to Subscribers in the Selling Jurisdictions through the Agent or any other investment dealers or brokers registered in any of the Selling Jurisdictions by way of the exemptions under Applicable Securities Laws of each of the Selling Jurisdictions, and not to take any action that would prevent the Corporation and the Agent from relying on the exemptions from the prospectus requirements of Applicable Securities Laws as contemplated by the Subscription Agreements which have been duly completed by the Substituted Purchasers and Agreements;
(d) to duly, punctually and faithfully perform and comply with all the obligations to be performed by it it, and all of its covenants and agreements under and pursuant to this Agreement Agreement, the Subscription Agreements and the Subscription Agreements;
(c) use its commercially reasonable efforts to fulfil or cause to be fulfilled, at or prior to the Closing Date, each of the conditions required to be fulfilled by it set out in Section 7;
(d) file or cause to be filed all documents, applications, forms or undertakings required to be filed by the Corporation and taken in connection with the purchase and sale of the Units and, so that the distribution of the Units may lawfully occur without the necessity of filing a prospectus in Canada or similar document in any other jurisdictionIndenture;
(e) it will file or cause to be filed all documents, applications, necessary forms or undertakings and reports with the TSXV appropriate Securities Commissions and any other applicable regulating authority regulatory authorities in connection with the Offering to ensure issuance of the Common Shares Offered Securities and the Common Shares underlying the Warrants are conditionally approved for listing on the TSXV at ClosingAgent’s Warrants;
(f) during the period commencing with the date hereof and ending on the Closing Date, promptly inform the Underwriter of the full particulars of any request of any Securities Commission or other securities commission or similar regulatory authority for any information, or the receipt by the Corporation will carry on its business in a prudent manner in accordance with industry standards and good business practice and will keep or cause to be kept proper books of any communication from any Securities Commission or other securities regulatory authority, or any other competent authority relating to the Corporation or which may be relevant to the distribution of the Unitsaccounts in accordance with applicable law;
(g) promptly complythe Corporation will not, to from the reasonable satisfaction date hereof until the earlier of the Underwriter and the Underwriter’s Counsel, with the Applicable Securities Laws with respect to any material adverse change, change, occurrence or event conversion of all of the nature referred to issued Debentures into Common Shares or the repayment of all of the issued Debentures (including all interest payable thereon); approve, implement, adopt or authorize any stock option plan, performance warrant plan or other stock based compensation plan (collectively, the “Option Plan”) which allows for the issuance of Common Shares in paragraph 2(e) abovean aggregate amount greater than 5% of the issued and outstanding Common Shares;
(h) apply the net proceeds Corporation will not, from the Offering in accordance with date hereof until the description set forth in earlier of: (i) the press release conversion of all of the issued Debentures into Common Shares or the repayment of all of the issued Debentures (including all interest payable thereon); or (ii) the date on which the Corporation dated April 20has completed an offering (or offerings) of securities to the public for gross proceeds of at least an aggregate of $10,000,000 (calculated from November 16, 2007; and2005), grant options or similar convertible securities issuable pursuant to the Option Plan to the Management Group or to any director nominated by Surge U.S. pursuant to the Shareholder Agreement;
(i) shall not offerthe Corporation will not, issue or sell, announce any offer, issuance or sale of, or negotiate or enter into any agreement to issue or sellfrom the date hereof until that date that is 90 days following the Closing Date, directly or indirectly, sell, or offer to sell, or announce the offering of, or enter into or make any agreement or understanding, or announce the making or entry into of any agreement or understanding, to issue, sell or exchange any Common Shares (including Shares, securities exchangeable or convertible or exchangeable into Common Shares) for a period of 180 days from the Closing Date, other than (i) pursuant to the Offering, (ii) upon exercise of any convertible securities, options or warrants of the Corporation outstanding on the date hereof, (iii) the grant or exercise of options pursuant to the Corporation’s existing stock option plan, and (iv) as a result of the acquisition of shares or assets of a Person acting at arm’s length with the Corporation within the meaning of the Income Tax Act (Canada) Shares without the prior written consent of the Underwriter which Agent, not to be unreasonably withheld, provided that the foregoing will not restrict the Corporation from granting options pursuant to a share option plan or issuing Common Shares on the exercise of outstanding securities of the Corporation;
(j) to keep proper books, records and accounts of all Qualifying Expenditures and all transactions affecting the Commitment Amount and the Qualifying Expenditures and upon reasonable notice and on a reasonable basis, to make such books, records and accounts available for inspection and review by the Agent;
(k) to incur, during the Expenditure Period, Qualifying Expenditures in such amount as enables the Corporation to renounce to the Subscribers for Flow-Through Shares, Qualifying Expenditures in an amount equal to the Commitment Amount;
(l) to renounce to the Subscribers for Flow-Through Shares, pursuant to subsections 66(12.6) and 66(12.66) of the Act and effective on or before December 31, 2005, Qualifying Expenditures incurred during the Expenditure Period in an amount equal to the Commitment Amount;
(m) to deliver to the Subscribers for Flow-Through Shares within the time period required by the Act and in any event, not later than March 31, 2006, a statement setting forth the aggregate amounts of such Qualifying Expenditures renounced to the Subscribers for Flow-Through Shares;
(n) that all Qualifying Expenditures renounced to the Subscribers for Flow-Through Shares pursuant to the Flow-Through Share Subscription Agreements will be Qualifying Expenditures incurred by the Corporation that, but for the renunciation to the Subscribers for Flow-Through Shares, the Corporation would be entitled to deduct in computing its income for the purposes of Part I of the Act;
(o) that the Corporation will not reduce the amount to be renounced to the Subscribers for Flow-Through Shares and, in the event the Minister of National Revenue reduces the amount renounced to the Subscribers for Flow-Through Shares pursuant to subsection 66(12.73) of the Act, the Corporation shall indemnify the Subscribers for Flow-Through Shares as to, and pay in full settlement thereof to the Subscribers for Flow-Through Shares, an amount equal to the amount of any tax payable under the Act (and under any corresponding provincial legislation) by the Subscribers for Flow-Through Shares as a consequence of such reduction;
(p) that if the Corporation does not renounce to the Subscribers for Flow-Through Shares Qualifying Expenditures equal to the Commitment Amount effective on or before December 31, 2005, the Corporation shall indemnify the Subscribers for Flow-Through Shares as to, and pay in full settlement thereof to the Subscribers for Flow-Through Shares, an amount equal to the amount of any tax payable under the Act (and under any corresponding provincial legislation) by the Subscribers for Flow-Through Shares as a consequence of such failure;
(q) that the Corporation will maintain its status as a Principal Business Corporation throughout the Expenditure Period;
(r) to file all prescribed forms required under the Act with respect to the issuance of the Flow-Through Shares as “flow-through shares” as defined in subsection 66(15) of the Act and that are necessary to renounce Qualifying Expenditures equal to the Commitment Amount to the Subscribers for Flow-Through Shares effective on or before December 31, 2005 and to provide the Subscribers for Flow-Through Shares with a copy of all such forms as are required to be provided thereto, all on a timely basis;
(s) that the Corporation will not be unreasonably withheld subject to the provisions of subsection 66(12.67) of the Act in a manner which impairs its ability to renounce Qualifying Expenditures to the Subscribers for Flow-Through Shares in an amount equal to the Commitment Amount; and
(t) that the Corporation will refrain from entering into transactions or delayedtaking deductions which would otherwise reduce its cumulative CEE to an extent it would preclude renunciation of Qualifying Expenditures in an amount equal to the Commitment Amount as contemplated herein and in the Subscription Agreements for Flow-Through Shares.
Appears in 1 contract
Corporation’s Covenants. The Corporation hereby makes the following covenants to the Underwriter Agents and its to the Purchasers and their permitted assigns, and acknowledges that it each of them is relying on such covenants in purchasing the Units, that the Corporation shallOffered Shares:
(a) prior Until the date on which the distribution of the Offered Shares is completed, the Corporation will promptly take, or cause to be taken, all additional steps and proceedings that may from time to time be required under Canadian Securities Laws to continue to qualify the distribution of the Offered Shares or, in the event that the Offered Shares or any of them, have, for any reason, ceased to so qualify, to so qualify again such securities, as applicable, for distribution. The Agents shall be entitled to assume that the Offered Shares are qualified for distribution in any Qualifying Jurisdiction where the Final Receipt shall have been obtained.
(b) The Corporation shall, concurrently with the execution of this Agreement, prepare and file in accordance with Canadian Securities Laws the Final Prospectus and any other required documents relating to the proposed distribution of the Offered Shares in the Qualifying Jurisdictions, and obtain, pursuant to the Passport System, the Final Receipt, and take all other steps and proceedings that may be necessary to be taken by the Corporation in order to qualify the Offered Shares for distribution in each of the Qualifying Jurisdictions under Canadian Securities Laws on or before 5:00 p.m. (Toronto time) on the Business Day following the date hereof or such later date as the Corporation and the Co-Lead Agents, on behalf of the Agents, may agree.
(c) Prior to and at all times until the Closing Time and any Option Closing Time, the Corporation will allow the Underwriter Agents (and its counsel, consultants their counsel and other representativesconsultants) to conduct all due diligence investigations which the Underwriter Agents may reasonably require or consider which may be considered necessary in order to fulfill or appropriate by the Underwriter’s obligations as a registrant to complete the Offering as provided hereinAgents. The Corporation will provide to the Underwriter Agents (and its counsel and consultantstheir counsel) reasonable access to the Corporation’s properties (if any)properties, senior management personnel and corporate, financial and other records, for the purposes of conducting such due diligence. Without limiting the scope of the due diligence inquiry the Underwriter Agents (or its counsel and consultantstheir counsel) may conduct, the Corporation shall also use its best efforts to make available its directors, senior management, auditors and counsel and auditors to answer any questions which the Underwriter Agents may have have, acting reasonably, and to participate in one or more due diligence sessions (such questions to be distributed reasonably in advance of each session) to be held prior to Closing;Closing and any Over-Allotment Closing and prior to filing each of the Preliminary Prospectus, the Amended and Restated Preliminary Prospectus and the Final Prospectus.
(bd) duly execute the Subscription Agreements which have been duly completed by the Substituted Purchasers and duly, punctually and faithfully perform all the obligations The Corporation covenants to be performed by it under this Agreement and the Subscription Agreements;
(c) use its commercially reasonable efforts to fulfil fulfill or cause to be fulfilled, at or prior to the initial Closing Date, each of the conditions required to be fulfilled by it set out in Section 7;8.
(de) The Corporation covenants to fulfill all legal requirements to permit the issuance, offering and sale of the Offered Shares, all as contemplated in this Agreement and to file or cause to be filed all documents, applications, forms or undertakings required to be filed by the Corporation and take or cause to be taken all action required to be taken by the Corporation in connection with the purchase and sale of the Units and, so that Offered Shares.
(f) Until the date of the completion of the distribution of the Units may lawfully occur without Offered Shares, the necessity of filing a prospectus in Canada or similar document in any other jurisdiction;
(e) file or cause Corporation covenants to be filed all documents, applications, forms or undertakings with the TSXV and any other applicable regulating authority in connection with the Offering use commercially reasonable efforts to ensure the Common Shares Preliminary Prospectus, the Amended and Restated Preliminary Prospectus, the Final Prospectus and the Common Shares underlying the Warrants are conditionally approved for listing on the TSXV U.S. Memorandum comply at Closing;all times with Applicable Securities Laws.
(fg) during During the period commencing with from the date hereof and ending on until the later of the Closing Date or the Option Closing Date, as applicable, and the completion of the distribution of the Offered Shares, the Corporation covenants to promptly inform the Underwriter Agents of the full particulars of any request of any Securities Commission or other securities commission or similar regulatory authority for any information, or the receipt by the Corporation of any communication from any Securities Commission or other securities regulatory authority, authority or any other competent authority relating to the Corporation or which may be relevant to the distribution issuance of the Units;
(g) promptly comply, to the reasonable satisfaction of the Underwriter and the Underwriter’s Counsel, with the Applicable Securities Laws with respect to any material adverse change, change, occurrence or event of the nature referred to in paragraph 2(e) above;Offered Shares.
(h) During the period from the date hereof until completion of the distribution of the Offered Shares, the Corporation covenants to promptly provide to the Agents and the Agents’ counsel, prior to the publication, filing or issuance thereof, any communication to the public, and will not publish those communications (unless otherwise required by Applicable Securities Laws) except with the prior approval of the Co-Lead Agents, on behalf of the Agents, acting reasonably and without delay.
(i) The Corporation covenants to apply the net proceeds from the Offering in accordance with the description set forth parameters described in the press release Prospectus.
(j) The Corporation covenants to advise the Agents, promptly after receiving notice thereof, of the time when the Final Prospectus and any Prospectus Amendment has been filed and receipts therefor have been obtained pursuant to the Passport System and will provide evidence satisfactory to the Agents, acting reasonably, of each such filing and copies of such receipts.
(k) The Corporation dated April 20covenants to advise the Agents, 2007; andpromptly after receiving notice or obtaining knowledge thereof, of:
(i) shall not offerthe issuance by any Securities Commission of any order suspending or preventing the use of the Preliminary Prospectus, issue the Amended and Restated Preliminary Prospectus, the Final Prospectus or sellany Prospectus Amendment or the institution, announce threatening or contemplation of any offerproceeding for any such purposes;
(ii) any order, issuance or sale ofruling, or negotiate determination having the effect of suspending the sale or enter into any agreement to issue or sell, directly or indirectly, any ceasing the trading in the Common Shares or any securities of the Corporation having been issued by any Securities Commission or the institution, threatening or contemplation of any proceeding for any such purposes; or
(including securities convertible iii) any requests made by any Securities Commission for amending or exchangeable into Common Sharessupplementing the Preliminary Prospectus, the Amended and Restated Preliminary Prospectus or the Final Prospectus or for additional information, and will use its commercially reasonable efforts to prevent the issuance of any order referred to in (i) above and, if any such order is issued, to obtain the withdrawal thereof as quickly as possible.
(l) The Corporation covenants that, for a period of 180 days from one year after the final Closing Date, other than the Corporation shall (i) pursuant not take any action which would be reasonably expected to result in the delisting or suspension of the Common Shares on or from the TSX and the Corporation shall use its commercially reasonable best efforts to comply with the rules and regulations thereof, and (ii) use its commercially reasonable best efforts to maintain its status as a “reporting issuer” (or the equivalent thereof) not in default of the requirements of Canadian Securities Laws.
(m) The Corporation shall allow the Agents to participate in the preparation of the Final Prospectus and any Prospectus Amendment that the Corporation is required to file under Applicable Securities Laws relating to the Offering.
(n) The Corporation covenants to deliver to the Agents, (ii) upon exercise without charge, contemporaneously with, or prior to the filing of, the Final Prospectus, unless otherwise indicated, a copy of any convertible securitiesdocument filed with, options or warrants of delivered to, the Securities Commissions by the Corporation outstanding on under Applicable Securities Laws with the date hereofFinal Prospectus.
(o) The Corporation shall deliver opinions, (iii) the grant or exercise of options pursuant comfort letters and other documents substantially similar to those referred to in Section 8, as applicable, to the Corporation’s existing stock option planAgents and the Agents’ legal counsel, and as applicable, with respect to any Prospectus Amendment, contemporaneously with, or prior to the filing of, any Prospectus Amendment.
(ivp) as a result The Corporation will make any offers or sales of Offered Shares in the acquisition of shares or assets of a Person acting at arm’s length United States in accordance with the Corporation within the meaning of the Income Tax Act (Canada) without the prior written consent of the Underwriter which shall not be unreasonably withheld or delayedSchedule “A”.
Appears in 1 contract
Corporation’s Covenants. The Corporation hereby covenants to the Underwriter Agent and its to the Purchasers and their permitted assigns, and acknowledges that it each of them is relying on such covenants in purchasing the Units, that the Corporation shall:
(a) prior to unless otherwise inconsistent with the fiduciary duties of the board of directors of the Corporation, for a period of 18 months after the Closing Time, allow the Underwriter (and Date it will use commercially reasonable efforts to maintain its counsel, consultants and other representatives) to conduct all due diligence investigations which the Underwriter may reasonably require or consider necessary in order to fulfill the Underwriter’s obligations status as a registrant to complete the Offering as provided herein. The Corporation will provide to the Underwriter (and its counsel and consultants) reasonable access to the Corporation’s properties (if any), senior management personnel and corporate, financial and other records, for the purposes of conducting such due diligence. Without limiting the scope “reporting issuer” under Securities Laws of the due diligence inquiry the Underwriter (or its counsel provinces of British Columbia, Alberta, Saskatchewan, New Brunswick and consultants) may conduct, the Corporation shall also make available its directors, senior management, counsel and auditors to answer Ontario not in default of any questions which the Underwriter may have and to participate in one or more due diligence sessions to be held prior to Closingrequirement of such Securities Laws;
(b) duly execute the Subscription Agreements which have been duly completed by the Substituted Purchasers and duly, punctually and faithfully perform all the obligations to be performed by it under this Agreement Unit Shares and the Subscription AgreementsWarrants (including those Unit Shares and Warrants underlying the Over-Allotment Units, if applicable) will be duly and validly created, authorized and issued on the payment therefor, and such Unit Shares and Warrants (including those Unit Shares and Warrants underlying the Over-Allotment Units, if applicable) will have the attributes set out in the U.S. Preliminary Prospectus, the U.S. Prospectus, the Registration Statement, and any Amendment, as applicable;
(c) as promptly as practicable following the Closing Date and the receipt by the Corporation of Selling Securityholder Forms, it will prepare and file the U.S. Preliminary Prospectus under the U.S. Securities Act in the United States;
(d) as soon as possible after any comments of the SEC have been satisfied, it will have caused the Registration Statement to be declared effective by the SEC and will prepare and file with the SEC, the U.S. Prospectus pursuant to Rule 424(b) under the U.S. Securities Act in the United States; and shall further ensure that no stop order suspending the effectiveness of the U.S. Prospectus, the Registration Statement or any post-effective amendment thereto or any Rule 462(b) Registration Statement, if any, is issued and no proceeding for that purpose is initiated or threatened by the SEC; the various parts of the Initial Registration Statement and the Rule 462(b) Registration Statement, if any, including all exhibits thereto and including the information contained in the form of final prospectus filed with the SEC pursuant to Rule 424(b) under the U.S. Securities Act in accordance with Section 5(a) hereof and deemed by virtue of Rule 430A under the U.S. Securities Act to be part of the Initial Registration Statement at the time it is declared effective, each as amended at the time such part of the Initial Registration Statement becomes effective or such part of the Rule 462(b) Registration Statement, if any, becomes effective, are hereinafter collectively called the “Registration Statement”; and such final prospectus, in the form first filed pursuant to Rule 424(b) under the U.S. Securities Act, is hereinafter called the “U.S. Prospectus”;
(e) The Corporation agrees to use commercially reasonable efforts, including instructing its counsel to deliver requested legal opinions, following the effectiveness of the Registration Statement to instruct the Transfer Agent for the Common Shares, Warrant Shares, Warrants, Broker Warrants and Broker Shares covered by the Registration Statement to remove any restrictive legends included on such Common Shares, Warrant Shares, Warrants, Broker Warrants or Broker Shares in connection with the initial sale or transfer thereof by the selling securityholders listed in the Registration Statement, and any costs related to the removal of the restrictive legends shall be borne by the Corporation (up to a maximum of $150 per legend removal request per securityholder);
(f) it shall fulfill to the satisfaction of the Agent all legal requirements to be fulfilled by it to enable the Unit Shares and the Warrants (including those Unit Shares and Warrants underlying the Over-Allotment Units, if applicable) to be offered for sale and sold in the Qualifying Jurisdictions by or through the Selling Firms who comply with all applicable Securities Laws in each of the Selling Jurisdictions;
(g) each of the Unit Shares, Warrants and Warrant Shares, including those issued pursuant to the Over-Allotment Option, and the Broker Warrants and the Broker Shares, upon effectiveness of the Registration Statement, will not carry any United States resale or transfer restrictions under applicable United States Securities Laws;
(h) it shall allow and assist the Agent to participate fully in the preparation of the U.S. Preliminary Prospectus, the U.S. Prospectus, the Registration Statement and any Amendment, as applicable, and shall allow the Agent to conduct all “due diligence” investigations which the Agent may reasonably require to fulfill the Agent’s obligations as Agent and to enable the Agent responsibly to execute any certificate required to be executed by the Agent and it shall comply with all requests for additional information on the part of the SEC or any Canadian Securities Commission to the reasonable satisfaction of the Agent;
(i) it will comply with the Securities Laws in each of the Qualifying Jurisdictions it will promptly inform the Agent in writing of the full particulars of any material change, actual, anticipated or threatened, in the operating or financial condition of the Corporation or of any change in any material fact contained or referred to in the U.S. Preliminary Prospectus, the U.S. Prospectus, the Registration Statement or any Amendment or Supplementary Material thereto, as applicable, and of the existence of any material fact which is, or may be, of such a nature as to render the U.S. Preliminary Prospectus, the U.S. Prospectus, the Registration Statement or any Amendment or Supplementary Material thereto, as applicable, untrue, false or misleading in a material respect or result in a misrepresentation. The Corporation shall, to the satisfaction of the Agent and its counsel, acting reasonably, promptly comply with all applicable filings and other requirements under the Securities Laws as a result of such change. The Corporation shall, in good faith, first discuss with the Agent any change in circumstances (actual or proposed, within the Corporation’s knowledge) which is of such a nature that there is reasonable doubt whether notice need be given to the Agent pursuant to this Section 2(i) and, in any event, prior to making any filing referred to in this Section 2(i). For greater certainty, it is understood and agreed that if the Agent determines, after consultation with the Corporation, that a material change or change in a material fact has occurred which makes untrue or misleading any statement of a material fact contained in the U.S. Preliminary Prospectus, the U.S. Prospectus, the Registration Statement or any Amendment or Supplementary Material thereto, or which may result in a misrepresentation, the Corporation will: i. prepare and file promptly any Amendment which in its opinion, acting reasonably, may be necessary or advisable after consultation with the Agent; and ii. contemporaneously with filing the Amendment under the Securities Laws, the Corporation will deliver to the Agent:
(A) an originally signed copy of the Amendment;
(B) an originally signed copy of all documents relating to the proposed distribution of the Units and filed with the Amendment under Securities Laws; and
(C) such other documents as the Agent shall reasonably require;
(j) it will advise the Agent, promptly after receiving notice thereof, of the time when the U.S. Preliminary Prospectus, the U.S. Prospectus, the Registration Statement and any Amendment or Supplementary Material has been filed and receipts have been obtained and will provide evidence satisfactory to the Agent of each filing and the issuance of receipts;
(k) it will advise the Agent, promptly after receiving notice or obtaining knowledge, of: i. the issuance by any Securities Commission of any order suspending or preventing the use of the U.S. Preliminary Prospectus, the U.S. Prospectus, theRegistration Statement or any Supplementary Material; ii. the suspension of the qualification of the Units, or, if applicable, the Over- Allotment Units for offering or sale in any of the Selling Jurisdictions; iii. the institution, threatening or contemplation of any proceeding for any of those purposes; or iv. any requests made by any Securities Commission for amending or supplementing the U.S. Preliminary Prospectus, the U.S. Prospectus or the Registration Statement or for additional information, and will use its commercially reasonable efforts to prevent the issuance of any such order and,if any such order is issued, to obtain the withdrawal of the order promptly;
(l) it will use commercially reasonable efforts to promptly do, make, execute, deliver or cause to be done, made, executed or delivered, all such acts, documents and things as the Agent may reasonably require from time to time for the purpose of giving effect to this Agreement, the Subscription Agreements and the transactions contemplated by the U.S. Preliminary Prospectus, the U.S. Prospectus and the Registration Statement and take all such steps as may be reasonably within their power to implement to their full extent the provisions of this Agreement, the Subscription Agreements and the transactions contemplated by the U.S. Preliminary Prospectus, the U.S. Prospectus and the Registration Statement;
(m) it is not an “ineligible issuer” as defined under Rule 405 under the U.S. Securities Act;
(n) it does not have any outstanding debt securities that are rated by any “nationally recognized statistical rating organization”, as that term is defined by the SEC for purposes of Rule 436(g)(2) under the Act or by the DBRS rating agency in Canada;
(o) it will ensure that a sufficient number of Common Shares are allotted and reserved for issuance upon the exercise of the Warrants, and the Broker Warrants;
(p) it will ensure that the Warrants are duly and validly created, authorized and issued on payment of the exercise price therefor and shall have attributes corresponding in all material respects to the description set forth in this Agreement;
(q) it will ensure that the Broker Warrants are duly and validly created, authorized and issued on payment of the exercise price therefor and shall have attributes corresponding in all material respects to the description set forth in this Agreement;
(r) it will ensure that the Warrant Shares issuable upon the exercise of the Warrants and the Broker Shares issuable upon the exercise of the Broker Warrants shall, upon issuance in accordance with their terms or the terms of the Warrant Indenture, as applicable, without limitation, including payment of the exercise price therefor, be duly issued as fully paid and non-assessable shares of the Corporation;
(s) it will make all necessary filings, obtain all necessary regulatory consents and approvals (if any) and the Corporation will pay all filing fees required to be paid in connection with the transactions contemplated in this Agreement;
(t) subject to compliance with applicable laws, any press release of the Corporation relating to the Offering will be provided in advance to the Agent and the Corporation will agree to the form and substance thereof with the Agent prior to the release thereof;
(u) it shall use commercially reasonable efforts to maintain the Registration Statement or post-effective amendment thereto effective under the U.S. Securities Act until the earlier of: (i) the date that all of the Unit Shares, Warrants and Warrant Shares registered pursuant to the Registration Statement have been sold pursuant to such Registration Statement or Rule 144 under the U.S. Securities Act , if available, or (ii) the date that is 48 months from the Closing Date;
(v) it will file promptly all reports and any definitive proxy or information statements required to be filed by the Corporation with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the U.S. Exchange Act subsequent to the date of the U.S. Prospectus and for so long as the delivery of the U.S. Prospectus is required in connection with the offering or sale of the Units and Over-Allotment Units or the terms of this Agreement;
(w) it will not for a period commencing the date that this Agreement is signed and for two years thereafter to remain a reporting issuer under Canadian Securities Laws in the Canadian Qualifying Jurisdictions, not in default of any requirement of such Canadian Securities Laws, provided that this covenant shall not prevent the Corporation from completing any transaction which would result in the Corporation ceasing to be a “reporting issuer” so long as the holders of Common Shares receive securities of an entity which is listed on a stock exchange in Canada or cash or the holders of the Common Shares have approved the transaction in accordance with the requirements of applicable corporate laws and the policies of the TSX;
(x) it will not take any action for a period commencing on the Closing Date and for two years thereafter which would reasonably be expected to result in the delisting or suspension of its Common Shares on or from the TSX or on or from any securities exchange, market or trading or quotation facility on which its Common Shares are then listed or quoted, provided that this covenant shall not prevent the Corporation from completing any transaction which would result in the Corporation ceasing to be listed on the TSX so long as the holders of Common Shares receive securities of an entity which is listed on a stock exchange in Canada or cash or the holders of the Common Shares have approved the transaction in accordance with the requirements of applicable corporate laws and the policies of the TSX;
(y) it will not, and will use its commercially reasonable efforts to ensure that each of the Corporation or the Subsidiaries or any of their respective officers, directors or employees, as the case may be, do not, bid for or purchase, for their own account or any account in which they have a beneficial interest, any Common Shares or any securities exchangeable or exercisable for or convertible into Common Shares after the date hereof until the Closing Date without the written consent of the Agent;
(z) it has not engaged in, nor will it engage in, any directed selling efforts (as defined in Regulation S) in connection with the offer and sale of the Units;
(aa) no forward looking statement (within the meaning of Section 27A of the U.S. Securities Act) included or incorporated by reference in the Registration Statement, the U.S. Preliminary Prospectus or the U.S. Prospectus, has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith;
(bb) it will duly execute and deliver the Subscription Agreements and the certificates representing the Warrants and the Broker Warrants, at the Closing Time, and comply with and satisfy all terms, conditions and covenants therein contained to be complied with or satisfied;
(cc) it will use commercially reasonable efforts to fulfil or cause to be fulfilled, at or prior to the Closing DateTime, each of the conditions required to be fulfilled by it set out in under Section 78;
(ddd) file or cause to be filed it will use the net proceeds of the Offering for working capital and general corporate purposes;
(ee) it will ensure that all documentsnecessary notices and filings will have been made before the Closing Time and that all necessary consents, applications, forms or undertakings required to be filed approvals and authorizations will have been obtained by the Corporation and taken in connection with from the purchase and sale of the Units and, so TSX to ensure that the distribution Unit Shares, Warrant Shares and Broker Shares will be listed on the TSX upon and at the time of the Units may lawfully occur without the necessity of filing a prospectus in Canada or similar document in any other jurisdiction;their issuance; and
(eff) file or cause it will ensure that all information (including, without limitation, financial information) and statements (except information and statements relating solely to be filed all documents, applications, forms or undertakings with the TSXV and any other applicable regulating authority in connection with the Offering to ensure the Common Shares and the Common Shares underlying the Warrants are conditionally approved for listing on the TSXV at Closing;
(fAgent) during the period commencing with the date hereof and ending on the Closing Date, promptly inform the Underwriter of the full particulars of any request of any Securities Commission or other securities commission or similar regulatory authority for any information, or the receipt by the Corporation of any communication from any Securities Commission or other securities regulatory authority, or any other competent authority relating to the Corporation or which may be relevant provided to the distribution of the Units;
(g) promptly comply, to the reasonable satisfaction of the Underwriter Agent and the Underwriter’s CounselPurchasers will be true and correct in all material respects at the time of delivery thereof and will not contain any misrepresentation and will constitute full, with the Applicable Securities Laws with respect to any true and plain disclosure of all material adverse change, change, occurrence or event of the nature referred to in paragraph 2(e) above;
(h) apply the net proceeds from the Offering in accordance with the description set forth in the press release of the Corporation dated April 20, 2007; and
(i) shall not offer, issue or sell, announce any offer, issuance or sale of, or negotiate or enter into any agreement to issue or sell, directly or indirectly, any Common Shares (including securities convertible or exchangeable into Common Shares) for a period of 180 days from the Closing Date, other than (i) pursuant to the Offering, (ii) upon exercise of any convertible securities, options or warrants of the Corporation outstanding on the date hereof, (iii) the grant or exercise of options pursuant facts relating to the Corporation’s existing stock option plan, and (iv) as a result that no material fact or information will be omitted therefrom which is required to be stated therein or is necessary to make the statements or information contained therein not misleading in light of the acquisition of shares or assets of a Person acting at arm’s length with the Corporation within the meaning of the Income Tax Act (Canada) without the prior written consent of the Underwriter circumstances under which shall not be unreasonably withheld or delayedthey were made.
Appears in 1 contract
Samples: Agency Agreement
Corporation’s Covenants. The Corporation hereby makes the following covenants to the Underwriter and its permitted assignsAgents, and acknowledges that it each of them is relying on such covenants in purchasing the Offered Units, that the Corporation shall:.
(a) prior The Corporation shall, concurrently with the execution and delivery of this Agreement by the parties hereto, file under Canadian Securities Laws the Amended and Restated Final Prospectus and any other required documents relating to the Closing Timeproposed distribution of the Offered Units in the Qualifying Jurisdictions, allow and obtain, pursuant to the Underwriter (Passport System, the Final Receipt, and its counsel, consultants take all other steps and other representatives) proceedings that may be necessary to conduct all due diligence investigations which be taken by the Underwriter may reasonably require or consider necessary Corporation in order to fulfill qualify the Underwriter’s obligations as a registrant to complete Offered Units for distribution in each of the Offering as provided herein. The Qualifying Jurisdictions under Canadian Securities Laws on or before 5:00 p.m. (Toronto time) on the Business Day following the date hereof.
(b) Until the earlier of the date on which the distribution of the Offered Units is completed or this Agreement is terminated, the Corporation will provide promptly take, or cause to be taken, all additional steps and proceedings that may from time to time be required under Canadian Securities Laws to continue to qualify the Underwriter (and its counsel and consultants) reasonable access to distribution of the Corporation’s properties (if any)Offered Units or, senior management personnel and corporatein the event that the Offered Units or any of them, financial and other recordshave, for any reason, ceased to so qualify, to so qualify again such securities, as applicable, for distribution.
(c) Provided the purposes of conducting such due diligence. Without limiting Agents have timely taken all action required by them hereunder and under Securities Laws to permit the scope of the due diligence inquiry the Underwriter (or its counsel and consultants) may conductCorporation to do so, the Corporation shall also make available its directors, senior management, counsel and auditors to answer any questions which the Underwriter may have and to participate in one or more due diligence sessions to be held prior to Closing;
(b) duly execute the Subscription Agreements which have been duly completed by the Substituted Purchasers and duly, punctually and faithfully perform all the obligations to be performed by it under this Agreement and the Subscription Agreements;
(c) use its commercially reasonable best efforts to fulfil or cause to be fulfilled, at or prior to the Closing Date, each of the conditions required to be fulfilled by it set out in Section 7;
(d) file or cause to be filed secure compliance with all documents, applications, forms or undertakings required to be filed by the Corporation and taken Securities Laws on a timely basis in connection with the purchase and sale of the Units and, so that the distribution of the Units may lawfully occur without Offered Units, including the necessity payment of all filing a prospectus in Canada or similar document in any other jurisdiction;
(e) file or cause fees required to be filed all documents, applications, forms or undertakings with the TSXV and any other applicable regulating authority paid by it in connection with the Offering to ensure the Common Shares and the Common Shares underlying the Warrants are conditionally approved for listing on the TSXV at Closing;
(f) during the period commencing with the date hereof and ending on the Closing Date, promptly inform the Underwriter of the full particulars of any request of any Securities Commission or other securities commission or similar regulatory authority for any information, or the receipt by the Corporation of any communication from any Securities Commission or other securities regulatory authority, or any other competent authority relating to the Corporation or which may be relevant to the distribution of the Units;
(g) promptly comply, to the reasonable satisfaction of the Underwriter and the Underwriter’s Counsel, with the Applicable Securities Laws with respect to any material adverse change, change, occurrence or event of the nature referred to in paragraph 2(e) above;
(h) apply the net proceeds from the Offering in accordance with the description set forth in the press release of the Corporation dated April 20, 2007; and
(i) shall not offer, issue or sell, announce any offer, issuance or sale of, or negotiate or enter into any agreement to issue or sell, directly or indirectly, any Common Shares (including securities convertible or exchangeable into Common Shares) for a period of 180 days from the Closing Date, other than (i) pursuant to the Offering, (ii) upon exercise of any convertible securities, options or warrants of the Corporation outstanding on the date hereof, (iii) the grant or exercise of options pursuant to the Corporation’s existing stock option plan, and (iv) as a result of the acquisition of shares or assets of a Person acting at arm’s length with the Corporation within the meaning of the Income Tax Act (Canada) without the prior written consent of the Underwriter which shall not be unreasonably withheld or delayedtherewith.
Appears in 1 contract
Samples: Agency Agreement
Corporation’s Covenants. The Corporation hereby covenants to the Underwriter and its permitted assignsSo long as this Agreement is in force, and acknowledges that it is relying on such covenants in purchasing the Units, that the Corporation shall:
(a) prior to the Closing Time, allow the Underwriter (and its counsel, consultants and other representatives) to conduct all due diligence investigations which the Underwriter may reasonably require or consider necessary in order to fulfill the Underwriter’s obligations except as a registrant to complete the Offering as provided herein. The Corporation will provide to the Underwriter (and its counsel and consultants) reasonable access to the Corporation’s properties (if any), senior management personnel and corporate, financial and other records, for the purposes of conducting such due diligence. Without limiting the scope of the due diligence inquiry the Underwriter (or its counsel and consultants) may conduct, the Corporation shall also make available its directors, senior management, counsel and auditors to answer any questions which the Underwriter may have and to participate in one or more due diligence sessions to be held prior to Closing;
(b) duly execute the Subscription Agreements which have been duly completed otherwise permitted by the Substituted Purchasers and duly, punctually and faithfully perform all the obligations to be performed by it under this Agreement and the Subscription Agreements;
(c) use its commercially reasonable efforts to fulfil or cause to be fulfilled, at or prior to the Closing Date, each of the conditions required to be fulfilled by it set out in Section 7;
(d) file or cause to be filed all documents, applications, forms or undertakings required to be filed by the Corporation and taken in connection with the purchase and sale of the Units and, so that the distribution of the Units may lawfully occur without the necessity of filing a prospectus in Canada or similar document in any other jurisdiction;
(e) file or cause to be filed all documents, applications, forms or undertakings with the TSXV and any other applicable regulating authority in connection with the Offering to ensure the Common Shares and the Common Shares underlying the Warrants are conditionally approved for listing on the TSXV at Closing;
(f) during the period commencing with the date hereof and ending on the Closing Date, promptly inform the Underwriter of the full particulars of any request of any Securities Commission or other securities commission or similar regulatory authority for any information, or the receipt by the Corporation of any communication from any Securities Commission or other securities regulatory authority, or any other competent authority relating to the Corporation or which may be relevant to the distribution of the Units;
(g) promptly comply, to the reasonable satisfaction of the Underwriter and the Underwriter’s Counsel, with the Applicable Securities Laws with respect to any material adverse change, change, occurrence or event of the nature referred to in paragraph 2(e) above;
(h) apply the net proceeds from the Offering in accordance with the description set forth in the press release of the Corporation dated April 20, 2007; and
(i) shall not offer, issue or sell, announce any offer, issuance or sale of, or negotiate or enter into any agreement to issue or sell, directly or indirectly, any Common Shares (including securities convertible or exchangeable into Common Shares) for a period of 180 days from the Closing Date, other than (i) pursuant to the Offering, (ii) upon exercise of any convertible securities, options or warrants of the Corporation outstanding on the date hereof, (iii) the grant or exercise of options pursuant to the Corporation’s existing stock option plan, and (iv) as a result of the acquisition of shares or assets of a Person acting at arm’s length with the Corporation within the meaning of the Income Tax Act (Canada) without the prior written consent of the Underwriter Purchaser, the Corporation covenants as follows:
(a) that it shall provide immediate notice to the Purchaser in the event that the Corporation is no longer in good standing with any Governmental Authority for any reason which would reasonably be expected to have a Material Adverse Effect;
(b) mergers and acquisitions, sale of the Facility, and asset sales (other than for the purpose of replacing equipment or otherwise in the ordinary course of business and in all other instances subject to permitted dispositions, as determined by the Purchaser acting reasonably), shall be permitted only with the prior written consent of the Purchaser, such consent not to be unreasonably withheld;
(c) the Corporation agrees to pay to the Purchaser in accordance with Section 2.2 hereof;
(d) the Corporation shall consistently apply the same yield improvement initiatives to the product produced in the Facility as across the Corporation’s other grow operations. The Corporation shall further ensure that the appropriate yield improvement initiatives, as well as all other applicable growing techniques and growing capacity, are in place to maximize the Corporation’s production and that may positively influence growing capacity of Flower and Shake on the Facility;
(e) the Corporation shall consistently use the same pricing methods in respect of the product produced in the Facility as across the Corporation’s other grow operations;
(f) the Corporation shall not take any action, or fail to perform the necessary action, to impede, jeopardize or otherwise place any risk on their ability to renew or maintain any Material Licenses, Permits or approvals required to operate the Corporation’s Business which would reasonably be expected to have a Material Adverse Effect;
(g) Xx. Xxxxxx X. Hellard, or his nominee, shall be the Executive Chairman of the Corporation while this Agreement is in effect;
(h) the Corporation shall pay or discharge, or cause to be paid or discharged, when the same become due and payable (i) all taxes imposed upon it or upon its income or profits or in respect of its Business or the Original Parcel and file all tax returns in respect thereof, (ii) all lawful claims for labour, materials and supplies in respect of the Original Parcel, (iii) all required payments under this Agreement, and (iv) all other obligations in respect of the Original Parcel; provided, however that it will not be required to pay or discharge or to cause to be paid or discharged any such amount so long as the validity or amount thereof is being contested in good faith by appropriate proceedings and an appropriate financial reserve satisfactory to the Purchaser has been established;
(i) the Corporation shall use the proceeds of the Equity Sum only for the purposes specified in Section 2.3 hereof and not for any other purpose or for any other person;
(j) the Corporation shall comply and, to the extent within its control, cause any other party that is acting under its authority to comply, in all material respects, with all Environmental Laws (including, but not limited to, obtaining any Permits) relating to the Original Parcel;
(k) the Corporation shall keep the Original Parcel in good working order and condition, normal wear and tear excepted, except to the extent that the failure to do so would not individually or in the aggregate be reasonably likely to cause a Material Adverse Effect;
(l) the Corporation shall permit the Purchaser, and its agents, consultants, officers and employees, at the expense of the Corporation, provided such expenses are reasonably incurred, and upon reasonable prior notice during normal business hours, from time to time to visit and inspect the Original Parcel and to examine and make abstracts from and copies of its physical and computer books of account and records as they pertain to the Original Parcel or the Corporation (including, without limitation, the Material Licences, and any plans and specifications, status of construction and project budgets with respect to the Original Parcel), (and where such information is not kept at the Original Parcel, but is in the possession or control of the Corporation at such other locations where such information is kept) as well as all data and computer data relating to the construction, managing, servicing, developing and marketing of the Original Parcel or the Corporation, which are in its possession and discuss its affairs, finances and accounts as they pertain to the Original Parcel, and be advised as to the same by the Corporation’s officers, consultants and legal counsel (with, prior to an Event of Default which is continuing, representatives of the Corporation present), all at such reasonable times as the Purchaser may desire;
(m) the Corporation shall permit the Purchaser, and its agents, consultants, officers and employees, for the purposes of monitoring compliance with the covenants and obligations of the Corporation hereunder, at their risk, to visit and inspect the Original Parcel to conduct tests, measurements and surveys in relation to the Original Parcel provided that such tests, measurements and surveys are conducted in accordance with prudent industry practice and Applicable Law and/or are required as a result of the reasonable concerns of the Purchaser as to noncompliance with such covenant and obligation, and to be advised as to the same by the officers, engineers and advisers of the Corporation (or such other persons as may be appropriate), all at such reasonable times and intervals as the Purchaser may desire upon reasonable prior notice and in the presence of the Corporation, if so desired. Such visits, inspections, measurements, reviews and tests etc. shall be at the cost of the Corporation, provided such expenses are reasonably incurred. Any such visit, inspection, examination, discussion or tests shall not be unreasonably withheld deemed to be supervision, charge, management, control or delayedoccupation by the Purchaser for purposes of any environmental or other liabilities;
(n) the Corporation shall maintain, or cause to be maintained adequate books, accounts and records: (i) in relation to the Original Parcel; and (ii) in accordance with GAAP consistently applied;
(o) the Corporation agrees that certified copies of each policy of insurance shall be delivered to the Purchaser [***] after the placing of the required insurance; and that at least [***] days prior to the expiry of any such policy of insurance a certified copy of the policy of insurance intended to replace such expiring policy will be furnished to the Purchaser, and:
(i) if the Corporation shall fail to take out or keep in force any such insurance referred to in Section 6.1(d), or should any such insurance not be approved by the Purchaser and should the Corporation not proceed to diligently rectify the situation [***] after written notice by the Purchaser to the Corporation, or if the Corporation shall fail to deliver to the Purchaser certified copies of such insurance policies (or renewal policies) in the manner described above, then the Purchaser shall have the right, without assuming any obligation in connection therewith, to effect such insurance at the sole cost of the Corporation and all costs and expenses incurred by the Purchaser in so doing shall be payable forthwith by the Corporation to the Purchaser, with interest thereon at the rate of [***]% per annum and shall be a charge upon the Original Parcel; and
(ii) nothing herein shall be deemed to hold the Purchaser responsible for failure to have insurance placed or for any loss growing out of any defects in any policy, or because of failure of an insurance company to pay for any loss or damage insured against;
(p) the Corporation shall give written notice to the Purchaser promptly after becoming aware, using reasonable diligence, thereof of:
(i) any litigation, dispute, arbitration or other proceeding to which a Corporation is a party, the result of which if determined adversely in the case of the Corporation would be a judgement or award in excess of Fifty Thousand ($50,000.00) Dollars, or that in the case of the Corporation could result in a Material Adverse Effect, and from time to time provide the Purchaser with all reasonable information requested by the Purchaser concerning the status of any such proceeding;
(ii) any Event of Default, together with an Officer’s Certificate specifying such Event of Default and detailing the steps being taken, if any, to cure same;
(iii) the incurrence or existence of any Encumbrance (other than a Permitted Encumbrance) on any collateral after Closing; or
(iv) the occurrence of an event of Force Majeure, describing in reasonable detail the effects of such event on the construction or operation of the Original Parcel, as the case may be, the action which the Corporation intends to take to remedy such event and the estimated date when the event of Force Majeure will be remedied and will cease to impair construction or operation of the Original Parcel, as the case may be;
(q) the Corporation shall from and after the occurrence of an Event of Default and for so long as it is subsisting, allow the Purchaser, subject to Permitted Encumbrances, to lawfully, peaceably and quietly enter into, have, hold, use, occupy, possess and enjoy the Original Parcel with their appurtenances without suit, hindrance, interruption or denial by it, or any other person whomsoever;
(r) the Corporation shall provide written notice to the Purchaser not less than 120 days before the Corporation makes any voluntary assignment into bankruptcy, makes a proposal to its creditors or files notice of its intention to do so, institutes any other proceeding under Applicable Law seeking to adjudicate it a bankrupt or an insolvent, or any other similar relief;
(s) the Corporation shall promptly upon having knowledge thereof, cure or cause to be cured any defects in the execution and delivery of any of the Royalty Documents or any of the other agreements, instruments or documents contemplated hereby and thereby or executed pursuant hereto and thereto or any defects in the validity or enforceability of any of the Royalty Documents and execute and deliver or cause to be executed and delivered all such agreements, instruments and other documents as the Purchaser may consider reasonably necessary or desirable for the foregoing purposes;
(t) prior to any advance made hereunder, the Corporation shall provide the Purchaser with a certificate from an Officer of the Corporation certifying that the contents of the Corporation’s Officer’s Certificate remain true and correct at the time of such advance;
(u) the Corporation shall issue 4,500,000 Shares at Closing to be valued at $2.44 per Share in the aggregate, of which:
(i) Xx. Xxxxxx X. Hellard acknowledges receipt of 1,000,000 Shares valued at $3.00 per Share in the aggregate; and
(ii) 3,500,000 Shares are to be issued to Xx. Xxxxxx X. Hellard on Closing and held in escrow by the Corporation’s counsel, pending receipt of additional advances of the Equity Sum made after January 15, 2018 in accordance with the following sentence. Upon receipt of any additional advance by the Corporation, Xx. Xxxxxx X. Hellard shall receive Shares having a corresponding value to the amount of such additional advance and such Shares shall be released from escrow at $2.29 per Share and the Corporation shall provide and Xx. Xxxxxx X. Hellard shall complete a share subscription for such Shares; provided that if on the date that is 2 years after Closing any Shares have not been released from escrow as a result of the Equity Sum not having been advanced to the Corporation in full, such Shares shall immediately be returned to the Corporation and cancelled;
(v) the Corporation, for so long as this Agreement is in effect, shall establish and maintain procedures that all cheques: (i) less than or equal to $[***] will require the approval of the President or the Chief Executive Officer and to be signed by same; (ii) greater than $[***] and less than or equal to $[***] in respect of operating expenses will require the approval of the President or the Chief Executive Officer and to be signed by same and one (1) executive member; (iii) greater than $[***] but less than or equal to $[***] will require the approval of the Executive Chairman and the President or Chief Executive Officer and to be signed by same and one (1) executive member; (iv) greater than $[***] and less than or equal to $[***] in respect of construction expenses will require the approval of the Executive Chairman and to be signed by same and one (1) executive member; and (v) in excess of $[***] will require the approval of the Board of Directors and to be signed by two (2) executive members; and
(w) the Corporation undertakes and covenants that at least [***] square feet of space within the Facility shall be used exclusively to grow Flower.
Appears in 1 contract
Samples: Investment and Royalty Agreement (Sundial Growers Inc.)
Corporation’s Covenants. The Corporation hereby covenants to the Underwriter Agent and its to the Purchasers and their permitted assigns, and acknowledges that it each of them is relying on such covenants in purchasing the Units, that the Corporation shall:
(a) prior to unless otherwise inconsistent with the fiduciary duties of the board of directors of the Corporation, for a period of 18 months after the Closing Time, allow the Underwriter (and Date it will use commercially reasonable efforts to maintain its counsel, consultants and other representatives) to conduct all due diligence investigations which the Underwriter may reasonably require or consider necessary in order to fulfill the Underwriter’s obligations status as a registrant to complete the Offering as provided herein. The Corporation will provide to the Underwriter (and its counsel and consultants) reasonable access to the Corporation’s properties (if any), senior management personnel and corporate, financial and other records, for the purposes of conducting such due diligence. Without limiting the scope “reporting issuer” under Securities Laws of the due diligence inquiry the Underwriter (or its counsel provinces of British Columbia, Alberta, Saskatchewan, New Brunswick and consultants) may conduct, the Corporation shall also make available its directors, senior management, counsel and auditors to answer Ontario not in default of any questions which the Underwriter may have and to participate in one or more due diligence sessions to be held prior to Closingrequirement of such Securities Laws;
(b) duly execute the Subscription Agreements which have been duly completed by the Substituted Purchasers and duly, punctually and faithfully perform all the obligations to be performed by it under this Agreement Unit Shares and the Subscription AgreementsWarrants (including those Unit Shares and Warrants underlying the Over-Allotment Units, if applicable) will be duly and validly created, authorized and issued on the payment therefor, and such Unit Shares and Warrants (including those Unit Shares and Warrants underlying the Over-Allotment Units, if applicable) will have the attributes set out in the U.S. Preliminary Prospectus, the U.S. Prospectus, the Registration Statement, and any Amendment, as applicable;
(c) as promptly as practicable following the Closing Date and the receipt by the Corporation of Selling Securityholder Forms, it will prepare and file the U.S. Preliminary Prospectus under the U.S. Securities Act in the United States;
(d) as soon as possible after any comments of the SEC have been satisfied, it will have caused the Registration Statement to be declared effective by the SEC and will prepare and file with the SEC, the U.S. Prospectus pursuant to Rule 424(b) under the U.S. Securities Act in the United States; and shall further ensure that no stop order suspending the effectiveness of the U.S. Prospectus, the Registration Statement or any post-effective amendment thereto or any Rule 462(b) Registration Statement, if any, is issued and no proceeding for that purpose is initiated or threatened by the SEC; the various parts of the Initial Registration Statement and the Rule 462(b) Registration Statement, if any, including all exhibits thereto and including the information contained in the form of final prospectus filed with the SEC pursuant to Rule 424(b) under the U.S. Securities Act in accordance with Section 5(a) hereof and deemed by virtue of Rule 430A under the U.S. Securities Act to be part of the Initial Registration Statement at the time it is declared effective, each as amended at the time such part of the Initial Registration Statement becomes effective or such part of the Rule 462(b) Registration Statement, if any, becomes effective, are hereinafter collectively called the “Registration Statement”; and such final prospectus, in the form first filed pursuant to Rule 424(b) under the U.S. Securities Act, is hereinafter called the “U.S. Prospectus”;
(e) The Corporation agrees to use commercially reasonable efforts, including instructing its counsel to deliver requested legal opinions, following the effectiveness of the Registration Statement to instruct the Transfer Agent for the Common Shares, Warrant Shares, Warrants, Broker Warrants and Broker Shares covered by the Registration Statement to remove any restrictive legends included on such Common Shares, Warrant Shares, Warrants, Broker Warrants or Broker Shares in connection with the initial sale or transfer thereof by the selling securityholders listed in the Registration Statement, and any costs related to the removal of the restrictive legends shall be borne by the Corporation (up to a maximum of $150 per legend removal request per securityholder);
(f) it shall fulfill to the satisfaction of the Agent all legal requirements to be fulfilled by it to enable the Unit Shares and the Warrants (including those Unit Shares and Warrants underlying the Over-Allotment Units, if applicable) to be offered for sale and sold in the Qualifying Jurisdictions by or through the Selling Firms who comply with all applicable Securities Laws in each of the Selling Jurisdictions;
(g) each of the Unit Shares, Warrants and Warrant Shares, including those issued pursuant to the Over-Allotment Option, and the Broker Warrants and the Broker Shares, upon effectiveness of the Registration Statement, will not carry any United States resale or transfer restrictions under applicable United States Securities Laws;
(h) it shall allow and assist the Agent to participate fully in the preparation of the U.S. Preliminary Prospectus, the U.S. Prospectus, the Registration Statement and any Amendment, as applicable, and shall allow the Agent to conduct all “due diligence” investigations which the Agent may reasonably require to fulfill the Agent’s obligations as Agent and to enable the Agent responsibly to execute any certificate required to be executed by the Agent and it shall comply with all requests for additional information on the part of the SEC or any Canadian Securities Commission to the reasonable satisfaction of the Agent;
(i) it will comply with the Securities Laws in each of the Qualifying Jurisdictions it will promptly inform the Agent in writing of the full particulars of any material change, actual, anticipated or threatened, in the operating or financial condition of the Corporation or of any change in any material fact contained or referred to in the U.S. Preliminary Prospectus, the U.S. Prospectus, the Registration Statement or any Amendment or Supplementary Material thereto, as applicable, and of the existence of any material fact which is, or may be, of such a nature as to render the U.S. Preliminary Prospectus, the U.S. Prospectus, the Registration Statement or any Amendment or Supplementary Material thereto, as applicable, untrue, false or misleading in a material respect or result in a misrepresentation. The Corporation shall, to the satisfaction of the Agent and its counsel, acting reasonably, promptly comply with all applicable filings and other requirements under the Securities Laws as a result of such change. The Corporation shall, in good faith, first discuss with the Agent any change in circumstances (actual or proposed, within the Corporation’s knowledge) which is of such a nature that there is reasonable doubt whether notice need be given to the Agent pursuant to this Section 2(i) and, in any event, prior to making any filing referred to in this Section 2(i). For greater certainty, it is understood and agreed that if the Agent determines, after consultation with the Corporation, that a material change or change in a material fact has occurred which makes untrue or misleading any statement of a material fact contained in the U.S. Preliminary Prospectus, the U.S. Prospectus, the Registration Statement or any Amendment or Supplementary Material thereto, or which may result in a misrepresentation, the Corporation will:
i. prepare and file promptly any Amendment which in its opinion, acting reasonably, may be necessary or advisable after consultation with the Agent; and
ii. contemporaneously with filing the Amendment under the Securities Laws, the Corporation will deliver to the Agent:
(A) an originally signed copy of the Amendment;
(B) an originally signed copy of all documents relating to the proposed distribution of the Units and filed with the Amendment under Securities Laws; and
(C) such other documents as the Agent shall reasonably require;
(j) it will advise the Agent, promptly after receiving notice thereof, of the time when the U.S. Preliminary Prospectus, the U.S. Prospectus, the Registration Statement and any Amendment or Supplementary Material has been filed and receipts have been obtained and will provide evidence satisfactory to the Agent of each filing and the issuance of receipts;
(k) it will advise the Agent, promptly after receiving notice or obtaining knowledge, of:
i. the issuance by any Securities Commission of any order suspending or preventing the use of the U.S. Preliminary Prospectus, the U.S. Prospectus, the Registration Statement or any Supplementary Material;
ii. the suspension of the qualification of the Units, or, if applicable, the Over-Allotment Units for offering or sale in any of the Selling Jurisdictions;
iii. the institution, threatening or contemplation of any proceeding for any of those purposes; or
iv. any requests made by any Securities Commission for amending or supplementing the U.S. Preliminary Prospectus, the U.S. Prospectus or the Registration Statement or for additional information, and will use its commercially reasonable efforts to prevent the issuance of any such order and, if any such order is issued, to obtain the withdrawal of the order promptly;
(l) it will use commercially reasonable efforts to promptly do, make, execute, deliver or cause to be done, made, executed or delivered, all such acts, documents and things as the Agent may reasonably require from time to time for the purpose of giving effect to this Agreement, the Subscription Agreements and the transactions contemplated by the U.S. Preliminary Prospectus, the U.S. Prospectus and the Registration Statement and take all such steps as may be reasonably within their power to implement to their full extent the provisions of this Agreement, the Subscription Agreements and the transactions contemplated by the U.S. Preliminary Prospectus, the U.S. Prospectus and the Registration Statement;
(m) it is not an “ineligible issuer” as defined under Rule 405 under the U.S. Securities Act;
(n) it does not have any outstanding debt securities that are rated by any “nationally recognized statistical rating organization”, as that term is defined by the SEC for purposes of Rule 436(g)(2) under the Act or by the DBRS rating agency in Canada;
(o) it will ensure that a sufficient number of Common Shares are allotted and reserved for issuance upon the exercise of the Warrants, and the Broker Warrants;
(p) it will ensure that the Warrants are duly and validly created, authorized and issued on payment of the exercise price therefor and shall have attributes corresponding in all material respects to the description set forth in this Agreement;
(q) it will ensure that the Broker Warrants are duly and validly created, authorized and issued on payment of the exercise price therefor and shall have attributes corresponding in all material respects to the description set forth in this Agreement;
(r) it will ensure that the Warrant Shares issuable upon the exercise of the Warrants and the Broker Shares issuable upon the exercise of the Broker Warrants shall, upon issuance in accordance with their terms or the terms of the Warrant Indenture, as applicable, without limitation, including payment of the exercise price therefor, be duly issued as fully paid and non-assessable shares of the Corporation;
(s) it will make all necessary filings, obtain all necessary regulatory consents and approvals (if any) and the Corporation will pay all filing fees required to be paid in connection with the transactions contemplated in this Agreement;
(t) subject to compliance with applicable laws, any press release of the Corporation relating to the Offering will be provided in advance to the Agent and the Corporation will agree to the form and substance thereof with the Agent prior to the release thereof;
(u) it shall use commercially reasonable efforts to maintain the Registration Statement or post-effective amendment thereto effective under the U.S. Securities Act until the earlier of: (i) the date that all of the Unit Shares, Warrants and Warrant Shares registered pursuant to the Registration Statement have been sold pursuant to such Registration Statement or Rule 144 under the U.S. Securities Act , if available, or (ii) the date that is 48 months from the Closing Date;
(v) it will file promptly all reports and any definitive proxy or information statements required to be filed by the Corporation with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the U.S. Exchange Act subsequent to the date of the U.S. Prospectus and for so long as the delivery of the U.S. Prospectus is required in connection with the offering or sale of the Units and Over-Allotment Units or the terms of this Agreement;
(w) it will not for a period commencing the date that this Agreement is signed and for two years thereafter to remain a reporting issuer under Canadian Securities Laws in the Canadian Qualifying Jurisdictions, not in default of any requirement of such Canadian Securities Laws, provided that this covenant shall not prevent the Corporation from completing any transaction which would result in the Corporation ceasing to be a “reporting issuer” so long as the holders of Common Shares receive securities of an entity which is listed on a stock exchange in Canada or cash or the holders of the Common Shares have approved the transaction in accordance with the requirements of applicable corporate laws and the policies of the TSX;
(x) it will not take any action for a period commencing on the Closing Date and for two years thereafter which would reasonably be expected to result in the delisting or suspension of its Common Shares on or from the TSX or on or from any securities exchange, market or trading or quotation facility on which its Common Shares are then listed or quoted, provided that this covenant shall not prevent the Corporation from completing any transaction which would result in the Corporation ceasing to be listed on the TSX so long as the holders of Common Shares receive securities of an entity which is listed on a stock exchange in Canada or cash or the holders of the Common Shares have approved the transaction in accordance with the requirements of applicable corporate laws and the policies of the TSX;
(y) it will not, and will use its commercially reasonable efforts to ensure that each of the Corporation or the Subsidiaries or any of their respective officers, directors or employees, as the case may be, do not, bid for or purchase, for their own account or any account in which they have a beneficial interest, any Common Shares or any securities exchangeable or exercisable for or convertible into Common Shares after the date hereof until the Closing Date without the written consent of the Agent;
(z) it has not engaged in, nor will it engage in, any directed selling efforts (as defined in Regulation S) in connection with the offer and sale of the Units;
(aa) no forward looking statement (within the meaning of Section 27A of the U.S. Securities Act) included or incorporated by reference in the Registration Statement, the U.S. Preliminary Prospectus or the U.S. Prospectus, has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith;
(bb) it will duly execute and deliver the Subscription Agreements and the certificates representing the Warrants and the Broker Warrants, at the Closing Time, and comply with and satisfy all terms, conditions and covenants therein contained to be complied with or satisfied;
(cc) it will use commercially reasonable efforts to fulfil or cause to be fulfilled, at or prior to the Closing DateTime, each of the conditions required to be fulfilled by it set out in under Section 78;
(ddd) file or cause to be filed it will use the net proceeds of the Offering for working capital and general corporate purposes;
(ee) it will ensure that all documentsnecessary notices and filings will have been made before the Closing Time and that all necessary consents, applications, forms or undertakings required to be filed approvals and authorizations will have been obtained by the Corporation and taken in connection with from the purchase and sale of the Units and, so TSX to ensure that the distribution Unit Shares, Warrant Shares and Broker Shares will be listed on the TSX upon and at the time of the Units may lawfully occur without the necessity of filing a prospectus in Canada or similar document in any other jurisdiction;their issuance; and
(eff) file or cause it will ensure that all information (including, without limitation, financial information) and statements (except information and statements relating solely to be filed all documents, applications, forms or undertakings with the TSXV and any other applicable regulating authority in connection with the Offering to ensure the Common Shares and the Common Shares underlying the Warrants are conditionally approved for listing on the TSXV at Closing;
(fAgent) during the period commencing with the date hereof and ending on the Closing Date, promptly inform the Underwriter of the full particulars of any request of any Securities Commission or other securities commission or similar regulatory authority for any information, or the receipt by the Corporation of any communication from any Securities Commission or other securities regulatory authority, or any other competent authority relating to the Corporation or which may be relevant provided to the distribution of the Units;
(g) promptly comply, to the reasonable satisfaction of the Underwriter Agent and the Underwriter’s CounselPurchasers will be true and correct in all material respects at the time of delivery thereof and will not contain any misrepresentation and will constitute full, with the Applicable Securities Laws with respect to any true and plain disclosure of all material adverse change, change, occurrence or event of the nature referred to in paragraph 2(e) above;
(h) apply the net proceeds from the Offering in accordance with the description set forth in the press release of the Corporation dated April 20, 2007; and
(i) shall not offer, issue or sell, announce any offer, issuance or sale of, or negotiate or enter into any agreement to issue or sell, directly or indirectly, any Common Shares (including securities convertible or exchangeable into Common Shares) for a period of 180 days from the Closing Date, other than (i) pursuant to the Offering, (ii) upon exercise of any convertible securities, options or warrants of the Corporation outstanding on the date hereof, (iii) the grant or exercise of options pursuant facts relating to the Corporation’s existing stock option plan, and (iv) as a result that no material fact or information will be omitted therefrom which is required to be stated therein or is necessary to make the statements or information contained therein not misleading in light of the acquisition of shares or assets of a Person acting at arm’s length with the Corporation within the meaning of the Income Tax Act (Canada) without the prior written consent of the Underwriter circumstances under which shall not be unreasonably withheld or delayedthey were made.
Appears in 1 contract
Corporation’s Covenants. The Corporation hereby covenants to the Underwriter and its permitted assigns, and acknowledges that it is relying on such covenants in purchasing the Units, that the Corporation shallwill:
(a) prior Agree that any certificate signed by an officer of the Corporation and delivered to the Closing Time, allow Underwriter shall be deemed a representation and warranty by the Corporation to the Underwriter as to the statements made therein.
(and its counsel, consultants and other representativesb) Promptly from time to conduct all due diligence investigations which time take such action as the Underwriter may reasonably require request to qualify the Bonds for offering and sale under the Blue Sky or consider other securities laws of such jurisdictions as the Underwriter may request and to comply with such laws so as to permit the continuance of sales and dealings in such jurisdictions for as long as may be necessary to complete the distribution, provided that in connection therewith the Corporation shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction.
(c) If, after the date of this Bond Purchase Agreement and until twenty-five (25) days after the “end of the underwriting period” as defined in Rule 15c2-12, any event shall occur that might or would cause the information contained in the Official Statement to contain any untrue statement of a material fact or to omit to state a material fact necessary in order to fulfill make the Underwriter’s obligations as a registrant to complete statements made therein, in the Offering as provided herein. The Corporation will provide to the Underwriter (and its counsel and consultants) reasonable access to the Corporation’s properties (if any), senior management personnel and corporate, financial and other records, for the purposes of conducting such due diligence. Without limiting the scope light of the due diligence inquiry the Underwriter (or its counsel and consultants) may conductcircumstances under which they were made, not misleading, the Corporation shall also make available its directorsso notify the Issuer and the Underwriter. If, senior management, counsel and auditors to answer any questions which in the reasonable opinion of the Underwriter may have or counsel for the Underwriter, such event requires the preparation and publication of an amendment of or a supplement to participate in one or more due diligence sessions the Official Statement, the Corporation will cause the Official Statement to be held prior amended or supplemented in form and substance satisfactory to Closing;
(b) duly execute the Subscription Agreements which have been duly completed Underwriter and the Issuer, and all expenses thereby incurred will be paid by the Substituted Purchasers Corporation if such amendment or supplement is prepared and duly, punctually and faithfully perform all furnished to the obligations to be performed by it under this Agreement and the Subscription Agreements;
(c) use its commercially reasonable efforts to fulfil or cause to be fulfilled, at Underwriter on or prior to the Closing Datetwenty-fifth day following the Closing. After the twenty-fifth day following the Closing, each of the conditions required to be fulfilled by it set out in Section 7;
(d) file or cause to be filed all documents, applications, forms or undertakings required to be filed by the Corporation shall not have any liability for expenses incurred in the preparation and taken publication of an amendment or supplement to the Official Statement, unless such amendment or supplement is necessitated by an event relating to the information contained in connection with the purchase and sale of the Units and, so that the distribution of the Units may lawfully occur without the necessity of filing a prospectus in Canada or similar document in any other jurisdiction;
(e) file or cause to be filed all documents, applications, forms or undertakings with the TSXV and any other applicable regulating authority in connection with the Offering to ensure the Common Shares and the Common Shares underlying the Warrants are conditionally approved for listing on the TSXV at Closing;
(f) during the period commencing with the date hereof and ending on the Closing Date, promptly inform the Underwriter of the full particulars of any request of any Securities Commission or other securities commission or similar regulatory authority for any information, or the receipt by the Corporation of any communication from any Securities Commission or other securities regulatory authority, or any other competent authority Official Statement relating to the Corporation or which may be relevant to any affiliate of any Corporation. For the distribution purposes of this Section 8(c), the Units;
(g) promptly comply, to the reasonable satisfaction of the Underwriter and the Underwriter’s Counsel, with the Applicable Securities Laws Corporation will furnish such information with respect to any material adverse change, change, occurrence or event itself and the refunding of the nature referred to in paragraph 2(e) above;
(h) apply the net proceeds from the Offering in accordance with the description set forth in the press release of the Corporation dated April 20, 2007; and
(i) shall not offer, issue or sell, announce any offer, issuance or sale of, or negotiate or enter into any agreement to issue or sell, directly or indirectly, any Common Shares (including securities convertible or exchangeable into Common Shares) for a period of 180 days from the Closing Date, other than (i) pursuant to the Offering, (ii) upon exercise of any convertible securities, options or warrants of the Corporation outstanding on the date hereof, (iii) the grant or exercise of options pursuant to the Corporation’s existing stock option plan, and (iv) Prior Bonds as a result of the acquisition of shares or assets of a Person acting at arm’s length with the Corporation within the meaning of the Income Tax Act (Canada) without the prior written consent of the Underwriter which shall not be unreasonably withheld or delayedreasonably may from time to time request.
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Corporation’s Covenants. The Corporation hereby covenants to the Underwriter Underwriters and its to the Purchasers and their permitted assigns, and acknowledges that it each of them is relying on such covenants in purchasing the UnitsSpecial Warrants, that the Corporation shall:
(a) prior to the Closing TimeTime and at all times until a receipt for a Final Prospectus is issued, allow the Underwriter Underwriters (and its counsel, consultants their counsel and other representativesconsultants) to conduct all due diligence investigations which the Underwriter Underwriters may reasonably require or consider which may be considered necessary in order to fulfill or appropriate by the Underwriter’s obligations as a registrant to complete the Offering as provided hereinUnderwriters. The Corporation will provide to the Underwriter Underwriters (and its counsel and consultantstheir counsel) reasonable access to the Corporation’s properties (if any)properties, senior management personnel and corporate, financial and other records, for the purposes of conducting such due diligence. Without limiting the scope of the due diligence inquiry the Underwriter Underwriters (or its counsel and consultantstheir counsel) may conduct, the Corporation shall also make available its directors, senior management, technical advisors, auditors and counsel and auditors to answer any questions which the Underwriter Underwriters may have and to participate in one or more due diligence sessions to be held prior to ClosingClosing and, prior to filing each of the Preliminary Prospectus and Final Prospectus and to use its commercially reasonable efforts to arrange for the auditors of the Corporation and the authors of the Toroparu Gold Copper Prospect Report to participate in such due diligence sessions and/or provide written responses in connection with any such due diligence session;
(b) duly execute the Subscription Agreements which have been duly completed by the Substituted Purchasers subject to the terms thereof, and duly, duly and punctually and faithfully perform all the obligations to be performed by it under this Agreement and the Subscription Agreements;
(c) use its commercially reasonable efforts to fulfil or cause to be fulfilled, at or prior to the Closing Date, each of the conditions required to be fulfilled by it set out in Section 7;
(d) use its commercially reasonable efforts to obtain the necessary approval of the TSXV for the Offering on such terms as are customary;
(e) fulfil all legal requirements to permit the creation, issuance, offering and sale of the Special Warrants and the creation and issuance of the Compensation Options and the Qualified Securities, all as contemplated in this Agreement and file or cause to be filed all documents, applications, forms or undertakings required to be filed by the Corporation and take or cause to be taken all action required to be taken by the Corporation in connection with the purchase and sale of the Units andSpecial Warrants and the issuance of the Compensation Options, so that the distribution of the Units such securities may lawfully occur without the necessity of filing a prospectus in Canada or a registration statement in the United States or similar document in any other jurisdiction;
(e) file or cause to be filed all documents, applications, forms or undertakings with the TSXV and any other applicable regulating authority in connection with the Offering to ensure the Common Shares and the Common Shares underlying the Warrants are conditionally approved for listing on the TSXV at Closing;
(f) during the period commencing with until the date hereof and ending on the Closing Date, promptly inform the Underwriter of the full particulars completion of any request of any Securities Commission or other securities commission or similar regulatory authority for any information, or the receipt by the Corporation of any communication from any Securities Commission or other securities regulatory authority, or any other competent authority relating to the Corporation or which may be relevant to the distribution of the UnitsQualified Securities, use commercially reasonable efforts to ensure the Preliminary Prospectus and the Final Prospectus comply at all times with applicable Canadian Securities Laws;
(g) promptly comply, to during the reasonable satisfaction period from the date hereof until the completion of the Underwriter and the Underwriter’s Counsel, with the Applicable Securities Laws with respect to any material adverse change, change, occurrence or event distribution of the nature referred to Qualified Securities, promptly inform the Underwriters in paragraph 2(e) above;
(h) apply the net proceeds from the Offering in accordance with the description set forth in the press release writing of the Corporation dated April 20, 2007; andfull particulars of:
(i) shall not offerany change (actual, issue anticipated, contemplated, proposed or sellthreatened, announce any offerfinancial or otherwise) in the business, issuance or sale offinancial condition, or negotiate or enter into any agreement to issue or sellaffairs, directly or indirectlyoperations, any Common Shares assets (including securities convertible the Material Properties), liabilities or exchangeable into Common Shares) for a period obligations (contingent or otherwise), prospects, capital or ownership of 180 days from the Closing DateCorporation, other than (i) pursuant to as the Offering, case may be;
(ii) upon exercise of any convertible securities, options or warrants change in any material fact disclosed in the Disclosure Documents;
(iii) any material fact in respect of the Corporation outstanding on the date hereof, (iii) the grant or exercise of options pursuant that had not been previously disclosed to the Corporation’s existing stock option planUnderwriters, and (iv) as which change or material fact is, or may be, of such a nature as: I. would result of in the acquisition of shares Disclosure Documents or assets of Preliminary Prospectus or Final Prospectus containing a Person acting at arm’s length with the Corporation within the meaning of the Income Tax Act (Canada) without the prior written consent of the Underwriter which shall not be unreasonably withheld or delayed.misrepresentation; or
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