WARRANTIES, REPRESENTATIONS AND COVENANTS. 14.1 The Issuer warrants and represents to and covenants with the Agents that: (a) the Issuer is a valid and subsisting corporation duly incorporated and in good standing under the laws of the Province of British Columbia and has all requisite corporate power and authority to carry on its business, as now conducted and as presently proposed to be conducted and to own their respective assets; (b) the Issuer is duly registered and licensed to carry on business in the jurisdictions in which it carries on business or owns property where so required by the laws of that jurisdiction; (c) the authorized capital as at November 9, 2010, of the Issuer consists of an unlimited number of common shares without par value, of which as at November 9, 2010, 29,604,994 common shares are issued and outstanding as fully paid and non-assessable; (d) the Issuer will reserve or set aside sufficient shares in its treasury to issue the Shares, the FT Shares, the Warrant Shares and the Agents’ Shares, the Agents’ Warrant Shares and all such shares will be duly and validly issued as fully paid and non-assessable when issued in accordance with the agreements or instruments governing the same; (e) the Subscription Agreements and all other written or oral representations made by the Issuer to a Purchaser or potential Purchaser in connection with the Offering will be accurate in all material respects and will omit no fact, the omission of which will make such representations misleading or incorrect; (f) except as qualified by the disclosure in all prospectuses, filing statements, information circulars, financial statements, management discussion and analysis, press releases or material change reports filed with the Regulatory Authorities (collectively, the “Disclosure Record”), the Issuer is the beneficial owner of the properties, business and assets or the interests in the properties, business or assets referred to in the Disclosure Record and all agreements by which the Issuer holds an interest in a property, business or asset are in good standing according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated, and the Issuer does not own any material properties, business or assets not disclosed in the Disclosure Record; (g) the Issuer will, upon completion of the Offering and the transactions described in the Issuer’s September 7, 2010 news release, hold either freehold title, mining leases, mining claims or other conventional property, proprietary or contractual interests or rights, recognized in the jurisdiction in which a particular property is located, in respect of the ore bodies and minerals located in properties in which it has an interest under valid, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit it to explore the minerals relating thereto (the “Mining Rights”). The Mining Rights have been validly located and recorded in accordance with all applicable laws and are valid and subsisting, the Issuer has all necessary surface rights, access rights and other necessary rights and interests relating to the properties in which it has an interest granting it the right and ability to explore for minerals, ore and metals for development purposes as are appropriate in view of the rights and interest therein of it, with only such exceptions as do not materially interfere with the use made by it of the rights or interests so held, and, except as disclosed in the Disclosure Record, each of the material proprietary interests or rights and each of the documents, agreements and instruments and obligations relating thereto referred to above is currently in good standing in its name; (h) the Units, the Shares, the Warrants and the Warrants Shares offered and sold in the United States or to, or for the account or benefit of, U.S. Persons will be subject to resale restrictions under the U.S. Securities Act and the Securities will not be subject to a restricted period or statutory hold period under the Acts of each Offering Jurisdiction in Canada or to any resale restrictions under the policies of the Exchange which extends beyond four months and one day after issuance of the Securities, other than for Purchasers who become control persons; (i) the Disclosure Record does not contain any material misrepresentation nor does it omit any Material Fact relating to the Issuer; (j) the financial statements contained in the Disclosure Record filed with any of the Commissions and supplied by the Issuer to the Agents in connection with the Offering have all been prepared in accordance with Canadian generally accepted accounting principles, accurately, fairly and fully reflect the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the Issuer, as of the date thereof, and no adverse material changes in the financial position of the Issuer has taken place since the date thereof; (k) the Issuer has complied and will comply fully in all material respects with the requirements of all applicable corporate and Securities Laws and administrative policies and directions, including, without limitation, the Acts and the Business (l) there is not presently, and will not be until the completion of the Closing any Material Change or change in any Material Fact relating to the Issuer which has not been or will not be fully disclosed to the Agents; (m) the issue and sale of the Securities by the Issuer and the Agents does not and will not conflict with, or result in a breach of, any of the terms of the Issuer’s constating documents or any agreement or instrument to which the Issuer is a party; (n) the Issuer is not a party to any actions, suits or proceedings which could materially affect its business or financial condition, and to the best of the Issuer’s knowledge no such actions, suits or proceedings are contemplated or have been threatened which are not disclosed in the Disclosure Record; (o) neither the Issuer, nor to the best of the Issuer’s knowledge, any other party, is in default in the observance or performance of any term or obligation to be performed by it under any contract entered into by the Issuer which is material to the business of the Issuer and no event has occurred which with notice or lapse of time or both would directly or indirectly constitute such a default, in any such case which default or event would have a material adverse effect on the assets or properties, business, results of operations, prospects or condition (financial or otherwise) of the Issuer; (p) there are no judgments against the Issuer which are unsatisfied, nor is the Issuer subject to any consent decrees or injunctions; (q) this Agreement has been, or will be by the Closing, duly authorized by all necessary corporate action on the part of the Issuer, and the Issuer has full corporate power and authority to undertake the Offering, and this Agreement and the Subscription Agreements have been, or will be by the Closing, duly authorized, executed and delivered by the Issuer and this Agreement and the Subscription Agreements are legal, valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms subject to laws relating to creditors’ rights generally, the availability of equitable remedies and except as rights to indemnity and contribution may be limited by applicable law; (r) the Issuer is a reporting issuer in the Provinces of British Columbia and Alberta, the common shares of the Issuer are listed on the NEX Board of the Exchange, and the Issuer is not in default of any of the requirements of the Acts or any of the administrative policies or notices of the NEX Board of the Exchange or the Exchange; (s) other than the Exchange imposed halt on the Issuer’s Common Shares there is no order ceasing, halting or suspending trading in securities of the Issuer nor prohibiting the sale of such securities has been issued to and is outstanding against the Issuer or its directors, officers or promoters or to the best of the Issuer’s knowledge, against any other companies that have common directors, officers or promoters and to the best of the Issuer’s knowledge, no investigations or proceedings for such purposes are pending or threatened; (t) except as disclosed to the Agents in Schedule “C” with respect to outstanding options and convertible securities and as set out in the Disclosure Record or otherwise to any of the Regulatory Authorities, no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming such a right, agreement or option, for the issue or allotment of any unissued shares in the capital of the Issuer or any other security convertible into or exchangeable for any such shares, or to require the Issuer to purchase, redeem or otherwise acquire any of the issued and outstanding shares in its capital; (u) the Issuer has filed all federal, provincial, local and foreign tax returns which are required to be filed, or have requested extensions thereof, and have paid all taxes required to be paid by them and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for such assessments, fines and penalties which are currently being contested in good faith; (v) the Issuer shall establish on its books and records, as may be applicable, reserves which are adequate for the payment of all taxes not yet due and payable and there are no liens for taxes on the assets of the Issuer except for taxes not yet due, and there are no audits of any of the tax returns of the Issuer which are known by the Issuer’s management to be pending, and there are no claims which have been or may be asserted relating to any such tax returns which, if determined adversely, would result in the assertion by any governmental agency of any deficiency which would have a material adverse effect on the properties, business or assets of the Issuer; (w) any and all operations of the Issuer have been conducted in accordance with good industry practices and in material compliance with applicable laws, rules, regulations, orders and directions of government and other competent authorities; (x) the Issuer (i) is in material compliance with any and all applicable federal, provincial, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received all material permits, licenses or other approvals required of any of them under applicable Environmental Laws to conduct its business, and (iii) is in material compliance with all terms and conditions of any such permit, licences or approval; (y) since current management of the Issuer assumed management of the Issuer, the minute books and corporate records of the Issuer are true and correct in all material respects and contain all the resolutions of their respective directors and shareholders; (z) the Issuer will use its best efforts to remain a reporting issuer in British Columbia and Alberta for a minimum of two years after the Closing; (aa) the Issuer shall not take any action which would be reasonably expected to result in the delisting or suspension of the Shares on or from the Exchange or on or from any securities exchange, market or quoting facility on which the common shares are then listed or quoted and the Issuer shall comply, in all material respects, with the rules and regulations thereof; (bb) the Issuer has not withheld, and will not withhold from the Agents, any facts relating to the Issuer or to the offering of the FT Shares and the Units that would be considered material to a Purchaser; (cc) the Issuer proposes to use the gross proceeds of the sale of the FT Shares to incur exploration expenses on its exploration properties which are currently limited to the Provinces of Ontario and Quebec, that qualify as “Canadian exploration expenses” (“CEE”) as described in paragraph (f) of the definition thereof in subsection 66.1(6) of the Income Tax Act (Canada) (“ITA”); (dd) the Issuer will file all necessary forms and documents with the Canada Revenue Agency to meet its obligations under the Subscription Agreements for FT Shares; (ee) the Issuer will maintain proper accounting books and records relating to the CEE expenditures and will make such books and records available for inspection by the Agents upon reasonable request; (ff) the Issuer is a “principal business corporation” within the meaning prescribed in section 66(15) of the ITA; (gg) upon issuance pursuant to the Subscription Agreements, the FT Shares will be “flow-through shares” as defined in subsection 66(15) of the ITA and will not be “prescribed shares” for the purpose of section 6202.1 of the regulations to the ITA; (hh) other than the Agents, no person, firm or corporation acting or purporting to act at the request of the Issuer is entitled to any brokerage, agency or finder’s fee in connection with the Offering; and (ii) its warranties and representations in this section and in Appendix I to the Subscription Agreements for FT Shares are true and correct and will remain so as of the Closing. 14.2 Each of the Agents warrant and represent to, and covenant with, the Issuer that: (a) it is a valid and subsisting corporation under the law of the jurisdiction in which it was incorporated and has good and sufficient right and authority to enter into this Agreement and complete the transactions under this Agreement on the terms and conditions set forth herein; (b) it is a broker or dealer properly registered under the Acts and is a member in good standing with the Exchange; (c) it is acquiring the Agents’ Securities as principal for its own account and not for the benefit of any other person; (d) the Agents and any sub-agents retained by the Agents will be acquiring the Agents’ Warrants as principals for their own account and are “accredited investors” within the meaning of National Instrument 45-106; (e) it is not a U.S. Person, did not receive the offer to purchase the Agents’ Securities in the United States, did not execute or deliver this Agreement in the United States and is not acquiring the Agents’ Securities for the account or benefit of a U.S. Person or person in the United States; (f) in connection with the Offering, it will sell the FT Shares and the Units in compliance with the Acts and this Agreement and in a manner such that no prospectus, offering memorandum, or other disclosure document need be prepared and filed or delivered by the Issuer in connection with the Offering and such that the Issuer is not made subject to new continuous disclosure reporting requirements; and (g) its warranties and representations in this section are true and correct and will remain so as of the Closing, and, in the case of the warranties and representations in Sections 14.2(c) and 14.2(f), as of the acquisition of any Agents’ Warrants Shares. 14.3 Each of the Agents acknowledges that none of the Securities have been or will be registered under the U.S. Securities Act or the securities laws of any state, agrees that the Agents’ Warrants may not be exercised in the United States or by or on behalf of a U.S. Person, nor may any of the Agents’ Securities described in this paragraph be offered or sold in the United States unless an exemption from registration under the U.S. Securities Act and any applicable state securities law is available, and agrees that it will not engage in any Directed Selling Efforts (as defined in Schedule “A” with respect to the Agents’ Securities).

Appears in 1 contract

Samples: Agency Agreement

WARRANTIES, REPRESENTATIONS AND COVENANTS. 14.1 The Issuer warrants and represents to and covenants with the ~~Agents~~ Underwriters that: (a) the Issuer has no subsidiaries; (b) the Issuer is a valid and ~~subsisting~~ existing corporation duly ~~incorporated~~ incorporated, continued or amalgamated and in good standing under the laws of the ~~Province of British Columbia and has all requisite corporate power and authority to carry on its business~~jurisdiction in which it was incorporated, ~~as now conducted and as presently proposed to be conducted and to own their respective assets~~continued or amalgamated; (bc) the Issuer is duly registered and licensed to carry on business in the jurisdictions in which it carries on business or owns property where so required by the laws of that ~~jurisdiction; (c) the authorized capital as at November 9~~jurisdiction and is not otherwise precluded from carrying on business or owning property in such jurisdictions by any other commitment, 2010, of the Issuer consists of an unlimited number of common shares without par value, of which as at November 9, 2010, 29,604,994 common shares are issued and outstanding as fully paid and non-assessableagreement or document; (d) the Issuer ~~will reserve or set aside sufficient shares in~~ has full corporate power and capacity to carry on its ~~treasury~~ business as now carried on by it, to enter into this Agreement and the Subscription Agreements and to carry out its obligations thereunder, and to undertake the Private Placement and issue ~~the Shares,~~ the FT Shares, ~~the Warrant Shares~~ and the Agents’ Shares, the Agents’ Warrant Shares and all such shares will be duly and validly issued as fully paid and non-assessable when issued in accordance with the agreements or instruments governing the same; (e) the Subscription Agreements and all other written or oral representations made by the Issuer to a Purchaser or potential Purchaser in connection with the Offering will be accurate in all material respects and will omit no fact, the omission of which will make such representations misleading or incorrect; (f) except as qualified by the disclosure in all prospectuses, filing statements, information circulars, financial statements, management discussion and analysis, press releases or material change reports filed with the Regulatory Authorities (collectively, the “Disclosure Record”), the Issuer is the beneficial owner of the properties, business and assets or the interests in the properties, business or assets referred to in the Disclosure Record and all agreements by which the Issuer holds an interest in a property, business or asset are in good standing according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated, and the Issuer does not own any material properties, business or assets not disclosed in the Disclosure Record; (g) the Issuer will, upon completion of the Offering and the transactions described in the Issuer’s September 7, 2010 news release, hold either freehold title, mining leases, mining claims or other conventional property, proprietary or contractual interests or rights, recognized in the jurisdiction in which a particular property is located, in respect of the ore bodies and minerals located in properties in which it has an interest under valid, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit it to explore the minerals relating thereto (the “Mining Rights”). The Mining Rights have been validly located and recorded in accordance with all applicable laws and are valid and subsisting, the Issuer has all necessary surface rights, access rights and other necessary rights and interests relating to the properties in which it has an interest granting it the right and ability to explore for minerals, ore and metals for development purposes as are appropriate in view of the rights and interest therein of it, with only such exceptions as do not materially interfere with the use made by it of the rights or interests so held, and, except as disclosed in the Disclosure Record, each of the material proprietary interests or rights and each of the documents, agreements and instruments and obligations relating thereto referred to above is currently in good standing in its name; (h) the Units, the Shares, the Warrants and the Warrants Shares offered and sold in the United States or to, or for the account or benefit of, U.S. Persons will be subject to resale restrictions under the U.S. Securities Act and the Securities will not be subject to a restricted period or statutory hold period under the Acts of each Offering Jurisdiction in Canada or to any resale restrictions under the policies of the Exchange which extends beyond four months and one day after issuance of the Securities, other than for Purchasers who become control persons; (i) the Disclosure Record does not contain any material misrepresentation nor does it omit any Material Fact relating to the Issuer; (j) the financial statements contained in the Disclosure Record filed with any of the Commissions and supplied by the Issuer to the Agents in connection with the Offering have all been prepared in accordance with Canadian generally accepted accounting principles, accurately, fairly and fully reflect the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the Issuer, as of the date thereof, and no adverse material changes in the financial position of the Issuer has taken place since the date thereof; (k) the Issuer has complied and will comply fully in all material respects with the requirements of all applicable corporate and Securities Laws and administrative policies and directions, including, without limitation, the Acts and the Business (l) there is not presently, and will not be until the completion of the Closing any Material Change or change in any Material Fact relating to the Issuer which has not been or will not be fully disclosed to the Agents; (m) the issue and sale of the Securities by the Issuer and the Agents does not and will not conflict with, or result in a breach of, any of the terms of the Issuer’s constating documents or any agreement or instrument to which the Issuer is a party; (n) the Issuer is not a party to any actions, suits or proceedings which could materially affect its business or financial condition, and to the best of the Issuer’s knowledge no such actions, suits or proceedings are contemplated or have been threatened which are not disclosed in the Disclosure Record; (o) neither the Issuer, nor to the best of the Issuer’s knowledge, any other party, is in default in the observance or performance of any term or obligation to be performed by it under any contract entered into by the Issuer which is material to the business of the Issuer and no event has occurred which with notice or lapse of time or both would directly or indirectly constitute such a default, in any such case which default or event would have a material adverse effect on the assets or properties, business, results of operations, prospects or condition (financial or otherwise) of the Issuer; (p) there are no judgments against the Issuer which are unsatisfied, nor is the Issuer subject to any consent decrees or injunctions; (q) this Agreement has ~~been, or will be by the Closing,~~ been duly authorized by all necessary corporate action on the part of the Issuer~~, and the Issuer has full corporate power and authority to undertake the Offering, and~~ ; (e) this Agreement and the Subscription Agreements ~~have been, or~~ entered into with Purchasers will ~~be by the Closing, duly authorized, executed and delivered by the Issuer and this Agreement and the Subscription Agreements are legal,~~ constitute valid and binding obligations of the ~~Issuer,~~ Issuer in accordance with their terms and will be enforceable against the Issuer in accordance with their ~~terms subject to~~ terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws relating to ~~creditors’~~ or affecting the rights ~~generally, the availability~~ of ~~equitable remedies~~ creditors generally and except as limited by the application of equitable principles when equitable remedies are sought, and by the fact that rights to ~~indemnity~~ indemnity, contribution and ~~contribution~~ waiver, and the ability to sever unenforceable terms, may be limited by applicable law; (rf) all of the ~~Issuer is a reporting issuer in the Provinces of British Columbia and Alberta, the common shares~~ material transactions of the Issuer ~~are listed on the NEX Board~~ have been promptly and properly recorded or filed in its books or records and its minute books or records contain all records of the ~~Exchange~~meetings and proceedings of its directors and shareholders and other committees, ~~and the Issuer is not in default of any of the requirements of the Acts or any of the administrative policies or notices of the NEX Board of the Exchange or the Exchange~~if any, since inception; (sg) ~~other than~~ as of the ~~Exchange imposed halt on~~ date hereof, the ~~Issuer’s Common Shares there is no order ceasing, halting or suspending trading in securities~~ authorized capital of the Issuer ~~nor prohibiting the sale~~ consists of ~~such securities has been~~ an unlimited number of common shares, of which 353,344,960 common shares are issued to and is outstanding ~~against the Issuer or its directors, officers or promoters or to the best of the Issuer’s knowledge, against any other companies that have common directors, officers or promoters~~ as fully paid and to the best of the Issuer’s knowledge, no investigations or proceedings for such purposes are pending or threatened; (t) except as disclosed to the Agents in Schedule “C” with respect to outstanding options non-assessable and ~~convertible securities and as set out in the Disclosure Record or otherwise to any of the Regulatory Authorities,~~ no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming such a right, agreement or option, , (i) for the issue or allotment of any unissued shares in the capital of the Issuer or any other security convertible into or exchangeable for any such shares, or with the exception of 30,627,333 outstanding options and 8,452,199 outstanding share purchase warrants of the Issuer, as disclosed in its Disclosure Record; or (ii) to require the Issuer to purchase, redeem or otherwise acquire any of the issued and outstanding shares in its ~~capital~~capital other than as disclosed in its Disclosure Record; (uh) the only issued and outstanding convertible securities of the Issuer are those options and warrants referred to in subsection (g) of this Section 14.1; (i) by the Closing Time, the Issuer will have reserved or set aside sufficient shares in its treasury to issue the FT Shares and, upon receipt of the consideration therefor, all such shares will be duly and validly issued as fully paid and non-assessable; (j) upon issuance, the FT Shares shall have the same attributes as outlined in this Agreement and in the Subscription Agreements; (k) the Issuer is the legal and beneficial owner of and has good and marketable title to the properties, business and assets or the interests in the properties, business or assets referred to in the Disclosure Record, all agreements by which the Issuer holds an interest in a property, business or assets are in good standing according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated and all filings and work commitments required to maintain the properties in good standing have been properly recorded and filed in a timely manner with the appropriate regulatory body and there are no mortgages, liens, charges, encumbrances or any other interests in or on such properties other than as disclosed in the Disclosure Record or that are not material; (l) the Disclosure Record and all financial, marketing, sales and operational information provided to the Underwriters by the Issuer do not contain any misrepresentations (as such term is defined in the Applicable Legislation); (m) the Subscription Agreements and all other written or oral representations made by the Issuer to a Purchaser or potential Purchaser in connection with the Private Placement are accurate in all material respects and omit no fact, the omission of which will make such representations misleading or incorrect; (n) the financial statements filed with the Commissions by the Issuer or supplied by the Issuer to the Underwriters in connection with the Private Placement (together with the certifications required by National Instrument 52-109 Certification of Disclosure in Issuer's Annual and Interim Filings) have been prepared in accordance with Canadian generally accepted accounting principles or IFRS, as applicable, present fairly, fully and correctly, in all material respects, the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the Issuer and any subsidiary, as of the date thereof, and there have been no adverse material changes in the financial position of the Issuer since the date thereof, and other than in connection with the Alpha Arrangement, the business of the Issuer and its subsidiaries have been carried on in the usual and ordinary course consistent with past practice since the date thereof; (o) the auditors of the Issuer who audited the financial statements of the Issuer for the most recent financial year-end and who provided their audit report thereon are independent public accountants as required under Applicable Legislation and there has never been a reportable event (within the meaning of National Instrument 51-102) with the auditors of the Issuer; (p) the Issuer has ~~filed~~ complied and will comply fully with the requirements of all ~~federal~~applicable corporate and securities laws and administrative policies and directions and all orders from a Commission thereunder, ~~provincial~~including, ~~local~~ without limitation, the Applicable Legislation in relation to the issue and ~~foreign tax returns~~ trading of its securities and in all matters relating to the Private Placement; (q) the Issuer is in compliance with all applicable laws, regulations and statutes (including all environmental laws and regulations) in the jurisdictions in which ~~are required~~ it carries on business and which may materially affect the Issuer, has not received a notice of non-compliance, nor knows of, nor has reasonable grounds to ~~be filed~~know of, ~~or have requested extensions thereof~~any facts that could give rise to a notice of non-compliance with any such laws, regulations and statutes, and ~~have paid all taxes required~~ is not aware of any pending change or contemplated change to ~~be paid by them and~~ any ~~other assessment~~applicable law or regulation or governmental position that would materially affect the business of the Issuer or the business or legal environment under which the Issuer operates; (r) neither the Issuer nor Fission Energy Corp. (prior to April 26, ~~fine~~ 2013), has caused or ~~penalty levied against it~~permitted the release, to in any manner whatsoever, of any pollutants, contaminants, chemicals or industrial toxic or hazardous waste or substances (collectively, the ~~extent that~~ “Hazardous Substances”) on or from any of the ~~foregoing~~ Issuer's properties or assets nor has it received any notice that it is ~~due~~ potentially responsible for a clean-up site or corrective action under any applicable laws, statutes, ordinances, by-laws, regulations, or any orders, directions or decisions rendered by any government, ministry, department or administrative regulatory agency relating to the protection of the environment, occupational health and ~~payable,~~ safety or otherwise relating to dealing with Hazardous Substances except ~~for~~ where such ~~assessments, fines and penalties which are currently being contested in good faith~~release or notice would not reasonably be expected to have a material adverse effect on the Issuer; (vs) the Issuer ~~shall establish on its books~~ has all licences, permits, approvals, consents, certificates, registrations and ~~records, as may be applicable, reserves which are adequate~~ other authorizations (collectively the “Permits”) under all applicable laws and regulations necessary for the ~~payment~~ operation of ~~all taxes~~ the businesses carried on or proposed to be commenced by the Issuer except where the failure to have such Permits would not ~~yet due and payable and there are no liens for taxes~~ reasonably be expected to have a material adverse effect on the ~~assets~~ Issuer and each Permit is valid, subsisting and in good standing and the Issuer is not in material default or breach of any Permit, and to the best of the knowledge of the Issuer, other than as disclosed to the Underwriters in writing, no proceeding is pending or threatened to revoke or limit any Permit; (t) to the Issuer's knowledge, information and belief, none of the directors or officers of the Issuer ~~except for taxes not yet due~~is currently subject to regulatory, ~~and there are no audits of any of the tax returns of the Issuer which are known by the Issuer’s management to be pending, and there are no claims which have been~~ criminal or ~~may be asserted relating to any such tax returns~~ bankruptcy proceedings in Canada or elsewhere which, if determined adversely, would ~~result in~~ materially and adversely affect the ~~assertion by any governmental agency of any deficiency which would have a material adverse effect on the properties, business or assets~~ consummation of the ~~Issuer~~transactions contemplated in this Agreement; (u) all operations of the Issuer and its subsidiaries, and of Fission Energy Corp. prior to April 26, 2013, have been conducted and are currently conducted in all material respects in accordance with all applicable laws, including, but not limited to, all applicable material workers' compensation, and health, safety and workplace laws, regulations and policies; (v) there is not presently, and will not be until the Closing, any Material Change or change in any Material Fact relating to the Issuer which has not been or will not be fully disclosed to the public; (w) neither the Issuer nor, to the best of the Issuer's knowledge, any other person, is in default in the observance or performance of any material terms, covenant, obligation to be performed by the Issuer or such other person under any material instrument, document, agreement, or arrangement (including memorandums of understanding or joint venture agreements) to which the Issuer is a party or otherwise bound and all ~~operations~~ such material instruments, contracts, agreements, or arrangements (including memorandums of understanding or joint venture agreements) are in good standing and no event has occurred which with notice or lapse of time or both would constitute such a default by the Issuer or, to the best of the ~~Issuer have been conducted in accordance with good industry practices and in material compliance with applicable laws~~Issuer's knowledge, ~~rules, regulations, orders and directions of government and~~ any other ~~competent authorities~~party; (x) the ~~Issuer (i) is in material compliance with any~~ issuance and all applicable federal, provincial, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received all material permits, licenses or other approvals required of any of them under applicable Environmental Laws to conduct its business, and (iii) is in material compliance with all terms and conditions of any such permit, licences or approval; (y) since current management of the Issuer assumed management of the Issuer, the minute books and corporate records of the Issuer are true and correct in all material respects and contain all the resolutions of their respective directors and shareholders; (z) the Issuer will use its best efforts to remain a reporting issuer in British Columbia and Alberta for a minimum of two years after the Closing; (aa) the Issuer shall not take any action which would be reasonably expected to result in the delisting or suspension of the Shares on or from the Exchange or on or from any securities exchange, market or quoting facility on which the common shares are then listed or quoted and the Issuer shall comply, in all material respects, with the rules and regulations thereof; (bb) the Issuer has not withheld, and will not withhold from the Agents, any facts relating to the Issuer or to the offering of the FT Shares and the Units that would be considered material to a Purchaser; (cc) the Issuer proposes to use the gross proceeds of the sale of the FT Shares to incur exploration expenses on its exploration properties which are currently limited to the Provinces of Ontario and Quebec, that qualify as “Canadian exploration expenses” (“CEE”) as described in paragraph (f) of the definition thereof in subsection 66.1(6) of the Income Tax Act (Canada) (“ITA”); (dd) by the Issuer ~~will file all necessary forms~~ and ~~documents with~~ the ~~Canada Revenue Agency to meet its obligations under~~ Underwriters, the entering into of this Agreement and the entering into of the Subscription Agreements for FT Shares; (ee) the Issuer will maintain proper accounting books and records relating to the CEE expenditures and will make such books and records available for inspection by the Agents upon reasonable request; (ff) the Issuer is a “principal business corporation” within the meaning prescribed in section 66(15) of the ITA; (gg) upon issuance pursuant to the Subscription Agreements, the FT Shares will be “flow-through shares” as defined in subsection 66(15) of the ITA do not and will not ~~be “prescribed shares” for the purpose of section 6202.1 of the regulations~~ conflict with, and do not and will not result in a breach of, or constitute a default under (A) any law, statute, rule or regulation applicable to the ~~ITA; (hh) other than the Agents~~Issuer including, no person, firm or corporation acting or purporting to act at the request of the Issuer is entitled to any brokerage, agency or finder’s fee in connection with the Offering; and (ii) its warranties and representations in this section and in Appendix I to the Subscription Agreements for FT Shares are true and correct and will remain so as of the Closing. 14.2 Each of the Agents warrant and represent to, and covenant withwithout limitation, the Issuer that: (a) it is a valid and subsisting corporation under the law of the jurisdiction in which it was incorporated and has good and sufficient right and authority to enter into this Agreement and complete the transactions under this Agreement on the terms and conditions set forth hereinApplicable Legislation; (b) it is a broker or dealer properly registered under the Acts and is a member in good standing with the Exchange; (c) it is acquiring the Agents’ Securities as principal for its own account and not for the benefit of any other person; (d) the Agents and any sub-agents retained by the Agents will be acquiring the Agents’ Warrants as principals for their own account and are “accredited investors” within the meaning of National Instrument 45-106; (e) it is not a U.S. Person, did not receive the offer to purchase the Agents’ Securities in the United States, did not execute or deliver this Agreement in the United States and is not acquiring the Agents’ Securities for the account or benefit of a U.S. Person or person in the United States; (f) in connection with the Offering, it will sell the FT Shares and the Units in compliance with the Acts and this Agreement and in a manner such that no prospectus, offering memorandum, or other disclosure document need be prepared and filed or delivered by the Issuer in connection with the Offering and such that the Issuer is not made subject to new continuous disclosure reporting requirements; and (g) its warranties and representations in this section are true and correct and will remain so as of the Closing, and, in the case of the warranties and representations in Sections 14.2(c) and 14.2(f), as of the acquisition of any Agents’ Warrants Shares. 14.3 Each of the Agents acknowledges that none of the Securities have been or will be registered under the U.S. Securities Act or the securities laws of any state, agrees that the Agents’ Warrants may not be exercised in the United States or by or on behalf of a U.S. Person, nor may any of the Agents’ Securities described in this paragraph be offered or sold in the United States unless an exemption from registration under the U.S. Securities Act and any applicable state securities law is available, and agrees that it will not engage in any Directed Selling Efforts (as defined in Schedule “A” with respect to the Agents’ Securities).

Appears in 1 contract

Samples: Underwriting Agreement

WARRANTIES, REPRESENTATIONS AND COVENANTS. ~~14.1~~ 15.1 The Issuer warrants and represents to ~~and~~ arid covenants with the ~~Agents~~ Agent that: (a) the Issuer ~~is a~~ and its subsidiaries, if any, are valid and subsisting ~~corporation~~ corporations duly incorporated and in good standing under the ~~laws of the Province of British Columbia~~ jurisdiction in which they are incorporated, continued or amalgamated and ~~has~~ have all requisite corporate power and authority to carry on ~~its business~~their respective businesses, as now conducted and as presently proposed to be conducted and to own their respective assets; (b) the Issuer is and its subsidiaries, if any, are duly registered and licensed to carry on business in the jurisdictions in which ~~it carries~~ they carry on business or ~~owns~~ own property where so required by the laws of that jurisdiction; (c) the authorized capital ~~as at November 9, 2010,~~ of the Issuer consists of ~~an unlimited number of~~ 100,000,000 common shares without par ~~value, of~~ value o£ which ~~as at November 9, 2010, 29,604,994~~ 3,240,910 common shares are currently issued and outstanding as fully paid and non-assessable; (d) the Issuer will reserve or set aside sufficient shares in its treasury to issue the ~~Shares, the FT~~ Underlying Shares, the Warrant ~~Shares~~ Shares, and the ~~Agents’~~ Agent's Warrant Shares, ~~the Agents’ Warrant Shares~~ and all such shares will be duly and validly issued as fully paid and non-~~assessable when issued in accordance with the agreements or instruments governing the same~~assessable; (e) the ~~Subscription Agreements~~ Disclosure Documents are, or will be, upon their completion, true and correct in all material respects; (f) the Offering Memorandum, subscription form and all other written or oral representations made by the Issuer to a Purchaser or potential Purchaser in connection with the Offering will be accurate in all material respects and will omit no fact, the omission of which will make such representations misleading or incorrect; (fg) except as qualified by the disclosure in ~~all prospectuses, filing statements, information circulars, financial statements, management discussion~~ the Offering Memorandum and ~~analysis, press releases or material change reports filed with~~ the ~~Regulatory Authorities (collectively, the “~~Disclosure ~~Record”)~~Documents, the Issuer is the beneficial owner of the properties, business and assets or the interests in the properties, business or assets referred to in the Offering Memorandum and the Disclosure ~~Record~~ Documents and its public disclosure documents filed with the Regulatory Authorities under the Acts and all agreements by which the Issuer holds an interest in a property, business or ~~asset~~ assets are in good standing according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated, and the Issuer does not own any material properties, business or assets not disclosed in the Disclosure Record; (g) the Issuer will, upon completion of the Offering and the transactions described in the Issuer’s September 7, 2010 news release, hold either freehold title, mining leases, mining claims or other conventional property, proprietary or contractual interests or rights, recognized in the jurisdiction in which a particular property is located, in respect of the ore bodies and minerals located in properties in which it has an interest under valid, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit it to explore the minerals relating thereto (the “Mining Rights”). The Mining Rights have been validly located and recorded in accordance with all applicable laws and are valid and subsisting, the Issuer has all necessary surface rights, access rights and other necessary rights and interests relating to the properties in which it has an interest granting it the right and ability to explore for minerals, ore and metals for development purposes as are appropriate in view of the rights and interest therein of it, with only such exceptions as do not materially interfere with the use made by it of the rights or interests so held, and, except as disclosed in the Disclosure Record, each of the material proprietary interests or rights and each of the documents, agreements and instruments and obligations relating thereto referred to above is currently in good standing in its name; (h) the Units, the Shares, the Warrants and the Warrants Shares offered and sold in the United States or to, or for the account or benefit of, U.S. Persons will be subject to resale restrictions under the U.S. Securities Act and the Securities will not be subject to a restricted period or statutory hold period under the Acts of each Offering Jurisdiction in Canada or to any resale restrictions under the policies financial statements of the Exchange which extends beyond four months and one day after issuance of the Securities, other than for Purchasers who become control persons; (i) the Disclosure Record does not contain any material misrepresentation nor does it omit any Material Fact relating to the Issuer; (j) the financial statements Issuer contained in the Offering Memorandum and the Disclosure ~~Record~~ Documents filed with ~~any of~~ the Commissions and supplied by the Issuer to the ~~Agents~~ Agent in connection with the Offering and the Transaction have all been prepared in accordance with Canadian generally accepted accounting principles, ~~accurately, fairly and fully~~ accurately reflect the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the Issuer, and its subsidiaries, if any, as of the date thereof, and no adverse material changes in the financial position of the Issuer ~~has~~ have taken place since the date thereof, save in the ordinary course of the Issuer's business; (ki) except as disclosed to the Agent, the Issuer has complied and will comply fully ~~in all material respects~~ with the requirements of all applicable corporate and ~~Securities Laws~~ securities laws and administrative policies and directions, including, without limitation, the Acts and the ~~Business~~Company Act (British Columbia) in relation to the issue and trading of its securities and in all matters relating to the Offering and the Transaction; (lj) there is not presently, and will not be until the completion of the ~~Closing~~ Offering any Material Change or change in any Material Fact relating to the Issuer which has not been or will not be fully disclosed to the ~~Agents~~Agent; (mk) neither the issue and sale of the Securities by the Issuer and the ~~Agents does not and~~ Agent nor the completion of the Transaction will ~~not~~ conflict with, or result in a breach of, any of the terms of the Issuer~~’s constating~~ 's incorporating documents or any agreement or instrument to which the Issuer is a party; (nl) neither the Issuer nor any of its subsidiaries, if any, nor to the best of the knowledge of the Issuer the Target, is ~~not~~ a party to any actions, suits or proceedings which could materially affect its business or financial condition, and to the best of the Issuer’s 's knowledge no such actions, suits or proceedings are contemplated or have been threatened which are not disclosed in the Offering Memorandum and the Disclosure ~~Record~~Documents; (o) neither the Issuer, nor to the best of the Issuer’s knowledge, any other party, is in default in the observance or performance of any term or obligation to be performed by it under any contract entered into by the Issuer which is material to the business of the Issuer and no event has occurred which with notice or lapse of time or both would directly or indirectly constitute such a default, in any such case which default or event would have a material adverse effect on the assets or properties, business, results of operations, prospects or condition (financial or otherwise) of the Issuer; (pm) there are no ~~judgments~~ judgements against the Issuer which are unsatisfied, nor is the Issuer subject to any consent decrees or injunctions; (qn) this Agreement has ~~been, or will be by the Closing,~~ been duly authorized by all necessary corporate action on the part of the Issuer, and the Issuer has full corporate power and authority to undertake the ~~Offering,~~ Offering and the Transaction and this Agreement ~~and the Subscription Agreements have been, or will be by the Closing,~~ has been duly authorized, executed and delivered by the Issuer and this Agreement ~~and the Subscription Agreements are~~ is a legal, valid and binding ~~obligations~~ obligation of ~~the~~ the. Issuer, enforceable against the Issuer in accordance with ~~their~~ its terms subject to laws relating to creditors’ ' rights generally, the availability of equitable remedies and except as rights to indemnity and contribution may be limited by applicable law; (ro) to the best of the Issuer's knowledge, the Target is the beneficial owner of the properties, business and assets or the interests in the properties, business or assets as disclosed in the Offering Memorandum and the Disclosure Documents and as disclosed by the Target to the Issuer ~~is a reporting issuer in~~ and the ~~Provinces of British Columbia and Alberta, the common shares of the Issuer are listed on the NEX Board of the Exchange, and~~ Agent; (p) the Issuer is not in default of any of the requirements of the Acts or any of the administrative policies or notices of the ~~NEX Board of the Exchange or the~~ Exchange; (sq) ~~other than the Exchange imposed halt on the Issuer’s Common Shares there is~~ no order ceasing, halting (other than the halt trade in connection with the Transaction) or suspending trading in securities of the Issuer nor prohibiting the sale of such securities has been issued to and is outstanding against the Issuer or its directors, officers or promoters or ~~to the best of the Issuer’s knowledge,~~ against any other companies that have common directors, officers or promoters and ~~to the best of the Issuer’s knowledge,~~ no investigations or proceedings for such purposes are pending or threatened; (tr) except as disclosed ~~to the Agents in Schedule “C” with respect to outstanding options and convertible securities and as set out~~ in the Offering Memorandum and the Disclosure ~~Record or otherwise to any of the Regulatory Authorities~~Documents, no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming such a right, agreement or option, for the issue or allotment of any unissued shares in the capital of the Issuer or any other security convertible into or exchangeable for any such shares, or to require the Issuer or its subsidiaries, if any, to purchase, redeem or otherwise acquire any of the issued and outstanding shares in its capital; (us) the Issuer has filed all federal, provincial, local and foreign tax returns which are required to be filed, or ~~have~~ has requested extensions thereof, and ~~have~~ has paid all taxes required to be paid by them and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for such assessments, fines and penalties which are currently being contested in good faith; (vt) the Issuer ~~shall establish~~ has established on its books and ~~records, as may be applicable,~~ records reserves which are adequate for the payment of all taxes not yet due and payable and there are no liens for taxes on the assets of the Issuer or its subsidiaries, if any, except for taxes not yet due, and there are no audits of any of the tax returns of the Issuer which are known by the Issuer’s 's management to be pending, and there are no claims which have been or may be asserted relating to any such tax returns which, if determined adversely, would result in the assertion by any governmental agency of any deficiency which would have a material adverse effect on the properties, business or assets of the Issuer; (w) any and all operations of the Issuer have been conducted in accordance with good industry practices and in material compliance with applicable laws, rules, regulations, orders and directions of government and other competent authorities; (x) the Issuer (i) is in material compliance with any and all applicable federal, provincial, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received all material permits, licenses or other approvals required of any of them under applicable Environmental Laws to conduct its business, and (iii) is in material compliance with all terms and conditions of any such permit, licences or approval; (y) since current management of the Issuer assumed management of the Issuer, the minute books and corporate records of the Issuer are true and correct in all material respects and contain all the resolutions of their respective directors and shareholders; (z) the Issuer will use its best efforts to remain a reporting issuer in British Columbia and Alberta for a minimum of two years after the Closing; (aa) the Issuer shall not take any action which would be reasonably expected to result in the delisting or suspension of the Shares on or from the Exchange or on or from any securities exchange, market or quoting facility on which the common shares are then listed or quoted and the Issuer shall comply, in all material respects, with the rules and regulations thereof; (bb) the Issuer has not withheld, and will not withhold from the Agents, any facts relating to the Issuer or to the offering of the FT Shares and the Units that would be considered material to a Purchaser; (cc) the Issuer proposes to use the gross proceeds of the sale of the FT Shares to incur exploration expenses on its exploration properties which are currently limited to the Provinces of Ontario and Quebec, that qualify as “Canadian exploration expenses” (“CEE”) as described in paragraph (f) of the definition thereof in subsection 66.1(6) of the Income Tax Act (Canada) (“ITA”); (dd) the Issuer will file all necessary forms and documents with the Canada Revenue Agency to meet its obligations under the Subscription Agreements for FT Shares; (ee) the Issuer will maintain proper accounting books and records relating to the CEE expenditures and will make such books and records available for inspection by the Agents upon reasonable request; (ff) the Issuer is a “principal business corporation” within the meaning prescribed in section 66(15) of the ITA; (gg) upon issuance pursuant to the Subscription Agreements, the FT Shares will be “flow-through shares” as defined in subsection 66(15) of the ITA and will not be “prescribed shares” for the purpose of section 6202.1 of the regulations to the ITA; (hhu) other than the ~~Agents~~Agent, no person, firm or corporation acting or purporting to act at the request of the Issuer is entitled to any brokerage, agency or finder’s 's fee in connection with the ~~Offering~~transactions described herein; and (iiv) ~~its~~ the warranties and representations in this section ~~and in Appendix I to the Subscription Agreements for FT Shares~~ are true and correct and will remain so as of the Closing. ~~14.2 Each of the Agents warrant~~ 15.2 The Agent warrants and ~~represent to, and covenant with,~~ represents to the Issuer that: (a) it is a valid and subsisting corporation under the law of the jurisdiction in which it was ~~incorporated and has good and sufficient right and authority to enter into this Agreement and complete the transactions under this Agreement on the terms and conditions set forth herein~~incorporated; (b) it is a broker ~~or dealer properly~~ registered under the ~~Acts and is a member in good standing with the Exchange~~Acts; (c) it is ~~acquiring~~ a member in good standing of the ~~Agents’ Securities as principal for its own account and not for the benefit of any other person~~Exchange; (d) the Agents and any sub-agents retained by the Agents will be acquiring the Agents’ Warrants as principals for their own account and are “accredited investors” within the meaning of National Instrument 45-106; (e) it is not a U.S. Person, did not receive the offer to purchase the Agents’ Securities in the United States, did not execute or deliver this Agreement in the United States and is not acquiring the Agents’ Securities for the account or benefit of a U.S. Person or person in the United States; (f) in connection with the Offering, it will sell the ~~FT Shares and the Units~~ Special Warrants in compliance with the Acts and this Agreement and in a manner such that no prospectus, offering memorandum, or other disclosure document need be prepared and filed or delivered by the Issuer in connection with the Offering and such that the Issuer is not made subject to new continuous disclosure reporting requirementsActs; and (ge) ~~its warranties and representations in this section are true and correct and will remain so~~ it is qualified to serve as of the Closing, and, in the case of the warranties and representations in Sections 14.2(c) and 14.2(f), as of the acquisition of any Agents’ Warrants Shares. 14.3 Each of the Agents acknowledges that none of the Securities have been or will be registered under the U.S. Securities Act or the securities laws of any state, agrees that the Agents’ Warrants may not be exercised in the United States or by or on behalf of a U.S. Person, nor may any of the Agents’ Securities described in this paragraph be offered or sold in the United States unless an exemption from registration under the U.S. Securities Act and any applicable state securities law is available, and agrees that it will not engage in any Directed Selling Efforts (as defined in Schedule “A” with respect sponsor pursuant to the ~~Agents’ Securities)~~Policies and the Rules.

Appears in 1 contract

Samples: Agency and Sponsorship Agreement (Sonic Environmental Solutions Inc/Can)

WARRANTIES, REPRESENTATIONS AND COVENANTS. ~~14.1~~ 15.1 The Issuer ~~warrants~~ warrants, represents and ~~represents~~ covenants to and ~~covenants~~ with the Agents that: (a) the Issuer is duly amalgamated and a valid and subsisting ~~corporation~~ corporation, is a "reporting issuer" under the Acts, and (i) is in good standing with respect to the filing of annual returns under the Alberta Business Corporations Act; (ii) has the corporate power and capacity to enter into this Agreement and to carry out the transactions herein contemplated; (b) the Issuer carries on business in the Provinces of Alberta and British Columbia, and the State of Washington and does not carry on business in any other province or territory of Canada, any other State of the United States or in any other country, except through its Subsidiaries; (c) it has no Subsidiaries other than Minera Andes S.A. ("MASA") and NAD S.A. ("NAD"); (d) each of MASA and NAD are valid and subsisting corporations duly incorporated and in good standing under the laws of the Province of British Columbia and has all requisite corporate power and authority to carry on its business, as now conducted and as presently proposed to be conducted and to own their respective assetsArgentina; (be) MASA and NAD each carry on business in Argentina. and do not carry on business in any other country; (f) the Issuer is duly registered and licensed to carry on business in ~~the jurisdictions in which it carries on business or owns property where so required by the laws of that jurisdiction~~Alberta, British Columbia and Washington; (cg) MASA and NAD are duly registered and licensed to carry on business in Argentina; (h) the authorized and issued capital ~~as at November 9, 2010,~~ of the Issuer consists of an unlimited number of ~~common shares without par value~~Common Shares and an unlimited number of preferred shares, of which as at ~~November 9, 2010, 29,604,994 common shares~~ the date hereof 14,431,836 Common Shares are issued and outstanding, and the outstanding as Common Shares are fully paid and non-assessable; (d) the Issuer will reserve or set aside sufficient shares in its treasury to issue the Shares, the FT Shares, the Warrant Shares and the Agents’ Shares, the Agents’ Warrant Shares and all such shares will be duly and validly issued as fully paid and non-assessable when issued in accordance with the agreements or instruments governing the same; (e) the Subscription Agreements and all other written or oral representations made by the Issuer to a Purchaser or potential Purchaser in connection with the Offering will be accurate in all material respects and will omit no fact, the omission of which will make such representations misleading or incorrect; (f) except as qualified by the disclosure in all prospectuses, filing statements, information circulars, financial statements, management discussion and analysis, press releases or material change reports filed with the Regulatory Authorities (collectively, the “Disclosure Record”), the Issuer is the beneficial owner of the properties, business and assets or the interests in the properties, business or assets referred to in the Disclosure Record and all agreements by which the Issuer holds an interest in a property, business or asset are in good standing according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated, and the Issuer does not own any material properties, business or assets not disclosed in the Disclosure Record; (g) the Issuer will, upon completion of the Offering and the transactions described in the Issuer’s September 7, 2010 news release, hold either freehold title, mining leases, mining claims or other conventional property, proprietary or contractual interests or rights, recognized in the jurisdiction in which a particular property is located, in respect of the ore bodies and minerals located in properties in which it has an interest under valid, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit it to explore the minerals relating thereto (the “Mining Rights”). The Mining Rights have been validly located and recorded in accordance with all applicable laws and are valid and subsisting, the Issuer has all necessary surface rights, access rights and other necessary rights and interests relating to the properties in which it has an interest granting it the right and ability to explore for minerals, ore and metals for development purposes as are appropriate in view of the rights and interest therein of it, with only such exceptions as do not materially interfere with the use made by it of the rights or interests so held, and, except as disclosed in the Disclosure Record, each of the material proprietary interests or rights and each of the documents, agreements and instruments and obligations relating thereto referred to above is currently in good standing in its name; (h) the Units, the Shares, the Warrants and the Warrants Shares offered and sold in the United States or to, or for the account or benefit of, U.S. Persons will be subject to resale restrictions under the U.S. Securities Act and the Securities will not be subject to a restricted period or statutory hold period under the Acts of each Offering Jurisdiction in Canada or to any resale restrictions under the policies of the Exchange which extends beyond four months and one day after issuance of the Securities, other than for Purchasers who become control persons; (i) the ~~Disclosure Record does not contain any material misrepresentation nor does it omit any Material Fact relating to the Issuer~~authorized capital of MASA and NAD consists of 20 shares and 12 shares, respectively; (j) the ~~financial statements contained in the Disclosure Record filed with any~~ issued and outstanding capital of ~~the Commissions and supplied by~~ MASA is 20 shares, of which the Issuer to is the ~~Agents in connection with the Offering have all been prepared in accordance with Canadian generally accepted accounting principles, accurately, fairly~~ recorded and ~~fully reflect the financial position and all material liabilities (accrued, absolute, contingent or otherwise)~~ beneficial owner of ~~the Issuer, as of the date thereof, and no adverse material changes in the financial position of the Issuer has taken place since the date thereof~~19 shares; (k) the issued and outstanding capital of NAD is 12 shares, of which the Issuer ~~has complied~~ is the recorded and ~~will comply fully in all material respects with the requirements~~ beneficial owner of ~~all applicable corporate and Securities Laws and administrative policies and directions, including, without limitation, the Acts and the Business~~11 shares; (l) there is not presently, and will not be until the completion of the Closing any Material Change or change in any Material Fact relating to the Issuer which has not been or will not be fully disclosed to the Agents; (m) the issue and sale of the Securities by the Issuer and the Agents does not and will not conflict with, or result in a breach of, any of the terms of the Issuer’s constating documents or any agreement or instrument to which the Issuer is a party; (n) the Issuer is not a party to any actions, suits or proceedings which could materially affect its business or financial condition, and to the best of the Issuer’s knowledge no such actions, suits or proceedings are contemplated or have been threatened which are not except as disclosed in the ~~Disclosure Record; (o) neither the Issuer, nor to the best~~ financial statements of the Issuer’s knowledge, any other party, is in default in the observance or performance of any term or obligation to be performed by it under any contract entered into by the Issuer which is material to the business of the Issuer and no event has occurred which with notice or lapse of time or both would directly or indirectly constitute such a default, in any such case which default or event would have a material adverse effect on the assets or properties, business, results of operations, prospects or condition (financial or otherwise) of the Issuer; (p) there are no judgments against the Issuer which are unsatisfied, nor is the Issuer subject to any consent decrees or injunctions; (q) this Agreement has been, or will be by the Closing, duly authorized by all necessary corporate action on the part of the Issuer, and the Issuer has full corporate power and authority to undertake the Offering, and this Agreement and the Subscription Agreements have been, or will be by the Closing, duly authorized, executed and delivered by the Issuer and this Agreement and the Subscription Agreements are legal, valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms subject to laws relating to creditors’ rights generally, the availability of equitable remedies and except as rights to indemnity and contribution may be limited by applicable law; (r) the Issuer is a reporting issuer in the Provinces of British Columbia and Alberta, the common shares of the Issuer are listed on the NEX Board of the Exchange, and the Issuer is not in default of any of the requirements of the Acts or any of the administrative policies or notices of the NEX Board of the Exchange or the Exchange; (s) other than the Exchange imposed halt on the Issuer’s Common Shares there is no order ceasing, halting or suspending trading in securities of the Issuer nor prohibiting the sale of such securities has been issued to and is outstanding against the Issuer or its directors, officers or promoters or to the best of the Issuer’s knowledge, against any other companies that have common directors, officers or promoters and to the best of the Issuer’s knowledge, no investigations or proceedings for such purposes are pending or threatened; (t) except as disclosed Company most recently provided to the Agents ~~in Schedule “C” with respect to outstanding options and convertible securities and as set out in~~ (the ~~Disclosure Record or otherwise to any of the Regulatory Authorities~~"Financial Statements"), no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming such a right, agreement or option, to purchase any of the outstanding shares, or for the issue or allotment of any ~~unissued~~ shares in the capital of ~~the Issuer~~ MASA or NAD from treasury, or any other security convertible ~~into~~ or exchangeable for any such shares, ; (m) the Shares and the Warrant Shares will be duly and validly issued as fully-paid and non-assessable; (n) the Issuer will reserve or ~~to require~~ set aside sufficient Common Shares in the treasury of the Issuer to ~~purchase~~issue the Shares on exercise or deemed exercise of the Special Warrants, ~~redeem~~ and to issue Warrant Shares on exercise of the Warrants; (o) since its date of amalgamation: (i) the business of the Issuer and its Subsidiaries has been carried on in the usual and ordinary course and the Issuer has not entered into any transaction out of the usual and ordinary course of business; and (ii) there has not been any material adverse change in the position (financial, business or ~~otherwise acquire~~ otherwise) or condition of the Issuer; (p) neither the Issuer nor any of its Subsidiaries is subject to any material mortgage, lien, lease, agreement, instrument or any other restriction of any kind or character which would prevent the consummation of the transactions contemplated herein; (q) the Issuer or its Subsidiaries are the beneficial owner of the properties, business and assets or the interests in the properties, business or assets referred to in the Financial Statements, all agreements by which the Issuer or any of its Subsidiaries holds an interest in a property, business or assets (and, in particular, the Dxxxxxxxxx Agreement) are in good standing according to their terms, and the properties are in good standing under the laws of the jurisdictions in which they are situated; (r) neither the Issuer nor any of its Subsidiaries is party to any agreement, option, understanding or commitment, or any right or privilege capable of becoming an agreement, option, understanding or commitment, for the purchase of any of the ~~issued~~ businesses, properties or assets or interests in the businesses properties or assets referred to in the Financial Statements, except as may be disclosed in writing to the Agents; (s) neither the Issuer nor any of its Subsidiaries is party to any agreement for an amalgamation, merger, other form of business combination, or for the acquisition of any material assets, except as disclosed in writing to the Agents. (t) the Financial Statements, subscription form and ~~outstanding shares~~ all other written or oral representations made by the Issuer to an investor or potential investor in ~~its capital~~connection with the Private Placement will be accurate in all material respects and will omit no fact, the omission of which will make such written or oral representation misleading or incorrect; (u) the Financial Statements have been prepared in accordance with Canadian generally accepted accounting principles, accurately reflect the financial position of the Issuer ~~has filed all federal, provincial, local and foreign tax returns which are required to be filed, or have requested extensions~~ as at the date thereof, accurately reflect all material liabilities (accrued, absolute, contingent or otherwise), and ~~have paid all taxes required to be paid by them and any other assessment, fine or penalty levied against it, to~~ no adverse material changes in the ~~extent that any~~ financial position of the ~~foregoing is due and payable~~Issuer have taken place since the date thereof, ~~except for such assessments, fines and penalties which are currently being contested~~ save in ~~good faith~~the ordinary course of the Issuer's business; (v) the Issuer ~~shall establish on its books~~ has complied and ~~records, as may be applicable, reserves which are adequate for~~ will comply fully with the ~~payment~~ requirements of all ~~taxes not yet due~~ applicable corporate and ~~payable~~ securities laws and ~~there are no liens for taxes on~~ administrative policies and directions, including, without limitation, Applicable Legislation, the ~~assets of the Issuer except for taxes not yet due~~Securities Act (Nova Scotia), and ~~there are no audits~~ the Alberta Business Corporations Act in relation to the issue and trading of ~~any of the tax returns of the Issuer which are known by the Issuer’s management to be pending,~~ its securities and ~~there are no claims which have been or may be asserted~~ in all matters relating to ~~any such tax returns which~~the Private Placement, ~~if determined adversely, would result in~~ the ~~assertion by any governmental agency of any deficiency which would have a material adverse effect on~~ Distribution and the ~~properties, business or assets of the Issuer~~Prospectus; (w) ~~any~~ the issue and ~~all operations~~ sale of the Special Warrants by the Issuer ~~have been conducted~~ and the Agent does not and will not conflict with, and does not and will not result in ~~accordance with good industry practices and in material compliance with applicable laws~~a breach of, ~~rules, regulations, orders and directions~~ any of ~~government and other competent authorities~~the terms of its incorporating documents or any agreement or instrument to which the Issuer is a party; (x) there is not presently, and will not be until the ~~Issuer (i) is in material compliance with~~ closing of the Distribution, any ~~and all applicable federal, provincial, state and local laws and regulations~~ Material Change relating to the ~~protection of human health and safety, the environment~~ Issuer or ~~hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received all material permits, licenses or other approvals required of~~ change in any Material Fact relating to any of ~~them under applicable Environmental Laws~~ the Securities which has not been or will not be fully disclosed to ~~conduct its business, and (iii) is in material compliance with all terms and conditions of any such permit, licences or approval~~the Agents; (y) ~~since current management of~~ neither the Issuer ~~assumed management~~ nor any of its Subsidiaries is party to any actions, suits or proceedings which could materially affect their respective business or financial conditions, and to the best of the Issuer's knowledge no such actions, ~~the minute books and corporate records of the Issuer~~ suits or proceedings are ~~true and correct in all material respects and contain all the resolutions of their respective directors and shareholders~~contemplated or have been threatened; (z) there are no judgments against the Issuer ~~will use~~ or any of its ~~best efforts~~ Subsidiaries which are unsatisfied, nor are there any consent decrees or injunctions to ~~remain a reporting issuer in British Columbia and Alberta for a minimum~~ which the Issuer or any of ~~two years after the Closing~~its Subsidiaries is subject; (aa) the Issuer shall not take any action which would be reasonably expected to result in the delisting or suspension of the Shares on or from the Exchange or on or from any securities exchange, market or quoting facility on which the common shares are then listed or quoted and the Issuer shall comply, in all material respects, with the rules and regulations thereof; (bb) the Issuer has not withheld, and will not withhold from the Agents, any facts relating to the Issuer or to the offering of the FT Shares and the Units that would be considered material to a Purchaser; (cc) the Issuer proposes to use the gross proceeds of the sale of the FT Shares to incur exploration expenses on its exploration properties which are currently limited to the Provinces of Ontario and Quebec, that qualify as “Canadian exploration expenses” (“CEE”) as described in paragraph (f) of the definition thereof in subsection 66.1(6) of the Income Tax Act (Canada) (“ITA”); (dd) the Issuer will file all necessary forms and documents with the Canada Revenue Agency to meet its obligations under the Subscription Agreements for FT Shares; (ee) the Issuer will maintain proper accounting books and records relating to the CEE expenditures and will make such books and records available for inspection by the Agents upon reasonable request; (ff) the Issuer is a “principal business corporation” within the meaning prescribed in section 66(15) of the ITA; (gg) upon issuance pursuant to the Subscription Agreements, the FT Shares will be “flow-through shares” as defined in subsection 66(15) of the ITA and will not be “prescribed shares” for the purpose of section 6202.1 of the regulations to the ITA; (hh) other than the Agents, no person, firm or corporation acting or purporting to act at the request of the Issuer is entitled to any brokerage, agency or finder’s fee in connection with the Offering; and (ii) its warranties and representations in this section and in Appendix I to the Subscription Agreements for FT Shares are true and correct and will remain so as of the Closing. 14.2 Each of the Agents warrant and represent to, and covenant with, the Issuer that: (a) it is a valid and subsisting corporation under the law of the jurisdiction in which it was incorporated and has good and sufficient right full corporate power and authority to ~~enter into this Agreement~~ undertake the Private Placement, qualify the Prospectus and ~~complete~~ undertake the ~~transactions under this Agreement on the terms and conditions set forth herein~~Distribution; (b) it is a broker or dealer properly registered under the Acts and is a member in good standing with the Exchange; (c) it is acquiring the Agents’ Securities as principal for its own account and not for the benefit of any other person; (d) the Agents and any sub-agents retained by the Agents will be acquiring the Agents’ Warrants as principals for their own account and are “accredited investors” within the meaning of National Instrument 45-106; (e) it is not a U.S. Person, did not receive the offer to purchase the Agents’ Securities in the United States, did not execute or deliver this Agreement in the United States and is not acquiring the Agents’ Securities for the account or benefit of a U.S. Person or person in the United States; (f) in connection with the Offering, it will sell the FT Shares and the Units in compliance with the Acts and this Agreement and in a manner such that no prospectus, offering memorandum, or other disclosure document need be prepared and filed or delivered by the Issuer in connection with the Offering and such that the Issuer is not made subject to new continuous disclosure reporting requirements; and (g) its warranties and representations in this section are true and correct and will remain so as of the Closing, and, in the case of the warranties and representations in Sections 14.2(c) and 14.2(f), as of the acquisition of any Agents’ Warrants Shares. 14.3 Each of the Agents acknowledges that none of the Securities have been or will be registered under the U.S. Securities Act or the securities laws of any state, agrees that the Agents’ Warrants may not be exercised in the United States or by or on behalf of a U.S. Person, nor may any of the Agents’ Securities described in this paragraph be offered or sold in the United States unless an exemption from registration under the U.S. Securities Act and any applicable state securities law is available, and agrees that it will not engage in any Directed Selling Efforts (as defined in Schedule “A” with respect to the Agents’ Securities).

Appears in 1 contract

Samples: Agency Agreement (Minera Andes Inc /Wa)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 14.1 The Issuer warrants and represents to and covenants with the ~~Agents~~ Agent that: (a) all the representations, warranties and covenants of the Issuer set forth in the Subscription Agreements are true and correct and form an integral part of the warranties, representations and covenants of this section as if they were expressly stated herein; (b) the Issuer is a valid and subsisting corporation duly incorporated and in good standing under the laws of the ~~Province of British Columbia and has all requisite corporate power and authority to carry on its business, as now conducted and as presently proposed to be conducted and to own their respective assets~~jurisdiction in which it is incorporated; (bc) the Issuer is duly registered and ~~licensed~~ licenced to carry on business in the jurisdictions in which it carries on business or ~~owns~~ own property where so required by the laws of that ~~jurisdiction; (c) the authorized capital as at November 9~~jurisdiction and is not otherwise precluded from carrying on business or owning property in such jurisdictions by any other commitment, 2010, of the Issuer consists of an unlimited number of common shares without par value, of which as at November 9, 2010, 29,604,994 common shares are issued and outstanding as fully paid and non-assessableagreement or document; (d) the Issuer ~~will reserve or set aside sufficient shares in~~ has full corporate power and authority to carry on its ~~treasury~~ business as now carried on by it to ~~issue the Shares, the FT Shares, the Warrant Shares~~ enter into this Agreement and the Agents’ Shares, the Agents’ Warrant Shares and all such shares will be duly and validly issued as fully paid and non-assessable when issued in accordance with the agreements or instruments governing the same; (e) the Subscription Agreements and ~~all other written or oral representations made by the Issuer~~ to a Purchaser or potential Purchaser in connection with the Offering will be accurate in all material respects and will omit no fact, the omission of which will make such representations misleading or incorrect; (f) except as qualified by the disclosure in all prospectuses, filing statements, information circulars, financial statements, management discussion and analysis, press releases or material change reports filed with the Regulatory Authorities (collectively, the “Disclosure Record”), the Issuer is the beneficial owner of the properties, business and assets or the interests in the properties, business or assets referred to in the Disclosure Record and all agreements by which the Issuer holds an interest in a property, business or asset are in good standing according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated, and the Issuer does not own any material properties, business or assets not disclosed in the Disclosure Record; (g) the Issuer will, upon completion of the Offering and the transactions described in the Issuer’s September 7, 2010 news release, hold either freehold title, mining leases, mining claims or other conventional property, proprietary or contractual interests or rights, recognized in the jurisdiction in which a particular property is located, in respect of the ore bodies and minerals located in properties in which it has an interest under valid, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit it to explore the minerals relating thereto (the “Mining Rights”). The Mining Rights have been validly located and recorded in accordance with all applicable laws and are valid and subsisting, the Issuer has all necessary surface rights, access rights and other necessary rights and interests relating to the properties in which it has an interest granting it the right and ability to explore for minerals, ore and metals for development purposes as are appropriate in view of the rights and interest therein of it, with only such exceptions as do not materially interfere with the use made by it of the rights or interests so held, and, except as disclosed in the Disclosure Record, each of the material proprietary interests or rights and each of the documents, agreements and instruments and carry out its obligations relating thereto referred to above is currently in good standing in its name; (h) the Units, the Shares, the Warrants and the Warrants Shares offered and sold in the United States or to, or for the account or benefit of, U.S. Persons will be subject to resale restrictions under the U.S. Securities Act and the Securities will not be subject to a restricted period or statutory hold period under the Acts of each Offering Jurisdiction in Canada or to any resale restrictions under the policies of the Exchange which extends beyond four months and one day after issuance of the Securities, other than for Purchasers who become control persons; (i) the Disclosure Record does not contain any material misrepresentation nor does it omit any Material Fact relating to the Issuer; (j) the financial statements contained in the Disclosure Record filed with any of the Commissions and supplied by the Issuer to the Agents in connection with the Offering have all been prepared in accordance with Canadian generally accepted accounting principles, accurately, fairly and fully reflect the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the Issuer, as of the date thereof, and no adverse material changes in the financial position of the Issuer has taken place since the date thereof; (k) the Issuer has complied and will comply fully in all material respects with the requirements of all applicable corporate and Securities Laws and administrative policies and directions, including, without limitation, the Acts and the Business (l) there is not presently, and will not be until the completion of the Closing any Material Change or change in any Material Fact relating to the Issuer which has not been or will not be fully disclosed to the Agents; (m) the issue and sale of the Securities by the Issuer and the Agents does not and will not conflict with, or result in a breach of, any of the terms of the Issuer’s constating documents or any agreement or instrument to which the Issuer is a party; (n) the Issuer is not a party to any actions, suits or proceedings which could materially affect its business or financial condition, thereunder and to undertake the best of the Issuer’s knowledge no such actions, suits or proceedings are contemplated or have been threatened which are not disclosed in the Disclosure Record; (o) neither the Issuer, nor to the best of the Issuer’s knowledge, any other party, is in default in the observance or performance of any term or obligation to be performed by it under any contract entered into by the Issuer which is material to the business of the Issuer Private Placement and no event has occurred which with notice or lapse of time or both would directly or indirectly constitute such a default, in any such case which default or event would have a material adverse effect on the assets or properties, business, results of operations, prospects or condition (financial or otherwise) of the Issuer; (p) there are no judgments against the Issuer which are unsatisfied, nor is the Issuer subject to any consent decrees or injunctions; (q) this Agreement has been, or will be by the ~~Closing~~Closing Day, duly authorized by all necessary corporate action on the part of the Issuer~~, and the Issuer has full corporate power and authority to undertake the Offering, and~~ ; (e) this Agreement and the Subscription Agreements ~~have been, or~~ entered into with Purchasers will ~~be by the Closing, duly authorized, executed and delivered by the Issuer and this Agreement and the Subscription Agreements are legal,~~ constitute valid and binding obligations of the ~~Issuer,~~ Issuer in accordance with their terms and will be enforceable against the Issuer in accordance with their ~~terms subject to laws relating to creditors’ rights generally, the availability of equitable remedies and except as rights to indemnity and contribution may be limited by applicable law~~terms; (rf) all of the ~~Issuer is a reporting issuer in the Provinces of British Columbia and Alberta, the common shares~~ material transactions of the Issuer ~~are listed on the NEX Board~~ have been promptly and properly recorded or filed in its books or records and its minute books or records contain all records of the ~~Exchange~~meetings and proceedings of its directors, shareholders, and ~~the Issuer is not in default of any of the requirements of the Acts or any of the administrative policies or notices of the NEX Board of the Exchange or the Exchange~~other committees, if any, since inception; (sg) ~~other than~~ as of the ~~Exchange imposed halt on~~ date hereof, the ~~Issuer’s Common Shares there is no order ceasing, halting or suspending trading in securities~~ authorized capital of the Issuer ~~nor prohibiting the sale~~ consists of ~~such securities has been~~ an unlimited number of common shares, of which 44,035,875 common shares are issued to and is outstanding ~~against the Issuer or its directors, officers or promoters or to the best of the Issuer’s knowledge, against any other companies that have common directors, officers or promoters~~ as fully paid and to the best of the Issuer’s knowledge, no investigations or proceedings for such purposes are pending or threatened; (t) except as disclosed to the Agents in Schedule “C” with respect to outstanding options non-assessable and ~~convertible securities and as set out in the Disclosure Record or otherwise to any of the Regulatory Authorities,~~ no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming such a right, agreement or option, for the issue or allotment of any unissued shares in the capital of the Issuer or any other security convertible into or exchangeable for any such shares, or to require the Issuer to purchase, redeem or otherwise acquire any of the issued and outstanding shares in its ~~capital~~capital other than 8,294,062 warrants and 2,600,000 options; (uh) the Issuer ~~has filed all federal, provincial, local~~ will reserve or set aside sufficient shares in its treasury to issue the Flow-Through Shares which will be duly and ~~foreign tax returns which are required to be filed, or have requested extensions thereof,~~ validly issued as fully paid and have paid all taxes required to be paid by them and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for such assessments, fines and penalties which are currently being contested in good faithnon-assessable; (vi) except as qualified by the Disclosure Record, the Issuer ~~shall establish on its books~~ is the legal and ~~records~~beneficial owner of and has good and marketable title to the properties, ~~as may be applicable, reserves which are adequate for~~ business and assets or the payment of all taxes not yet due and payable and there are no liens for taxes on the assets of the Issuer except for taxes not yet due, and there are no audits of any of the tax returns of the Issuer which are known by the Issuer’s management to be pending, and there are no claims which have been or may be asserted relating to any such tax returns which, if determined adversely, would result interests in ~~the assertion by any governmental agency of any deficiency which would have a material adverse effect on~~ the properties, business or assets referred to in the Disclosure Record, all agreements by which the Issuer holds an interest in a property, business or assets are in good standing according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated and all filings and work commitments required to maintain the properties in good standing have been properly recorded and filed in a timely manner with the appropriate regulatory body and there are no mortgages, liens, charges, encumbrances or any other interests in or on such properties other than as disclosed in the Disclosure Record; (j) the information and statements set forth in the Disclosure Record, information on the Issuer’s website and all financial, marketing, sales and operational information provided to the Agent do not contain any Misrepresentation; (k) the Subscription Agreements and all other written or oral representations made by the Issuer to a Purchaser or potential Purchaser in connection with the Private Placement will be accurate in all material respects and will omit no fact, the omission of which will make such representations misleading or incorrect; (l) the financial statements filed with the Commissions or supplied by the Issuer to the Agent in connection with the Private Placement have been prepared in accordance with Canadian generally accepted accounting principles, present fairly, in all material respects, the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the Issuer, as of the date thereof, and there have been no adverse material changes in the financial position of the Issuer since the date thereof and the business of the Issuer has been carried on in the usual and ordinary course consistent with past practice since the date thereof; (m) the auditors of the Issuer who audited the financial statements of the Issuer for the most recent financial year-end and who provided their audit report thereon are independent public accountants as required under Applicable Legislation and there has never been a reportable event (within the meaning of National Instrument 51-102) with the present auditors of the Issuer; (wn) the Issuer has complied and will comply fully with the requirements of all applicable corporate and securities laws and administrative policies and directions, including, without limitation, the Applicable Legislation in relation to the issue and trading of its securities and in all matters relating to the Private Placement; (o) the Issuer is in material compliance with all applicable laws, regulations and statutes (including all environmental laws and regulations) in the jurisdictions in which it carries on business and which may materially affect the Issuer, has not received a notice of non-compliance, nor knows of, nor has reasonable grounds to know of, any facts that could give rise to a notice of non-compliance with any such laws, regulations and statutes, and is not aware of any pending change or contemplated change to any applicable law or regulation or governmental position that would materially affect the business of the Issuer or the business or legal environment under which the Issuer operates; (p) the Issuer has not caused or permitted the release, in any manner whatsoever, of any pollutants, contaminants, chemicals or industrial toxic or hazardous waste or substances (collectively, the “Hazardous Substances”) on or from any of its properties or assets nor has it received any notice that it is potentially responsible for a clean-up site or corrective action under any applicable laws, statutes, ordinances, by-laws, regulations, or any orders, directions or decisions rendered by any government, ministry, department or administrative regulatory agency relating to the protection of the environment, occupational health and safety or otherwise relating to dealing with Hazardous Substances; (q) all operations on the properties of the Issuer have been conducted and are currently conducted in all material respects in accordance with good ~~industry~~ engineering practices and in any applicable material ~~compliance with applicable~~ workers’ compensation, and health, safety and workplace laws, ~~rules, regulations, orders~~ regulations and ~~directions of government and other competent authorities~~policies; (xr) the Issuer has all material licences, permits, approvals, consents, certificates, registrations and other authorizations (icollectively the “Permits”) ~~is in material compliance with any and~~ under all applicable ~~federal, provincial, state and local~~ laws and regulations ~~relating~~ necessary for the operation of the businesses carried on or proposed to be commenced by the Issuer and each Permit is valid, subsisting and in good standing and the Issuer is not in default or breach of any Permit, and to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received all material permits, licenses or other approvals required of any of them under applicable Environmental Laws to conduct its business, and (iii) is in material compliance with all terms and conditions of any such permit, licences or approval; (y) since current management best of the ~~Issuer assumed management~~ knowledge of the Issuer, ~~the minute books and corporate records of the Issuer are true and correct in all material respects and contain all the resolutions of their respective directors and shareholders~~no proceeding is pending or threatened to revoke or limit any Permit; (zs) ~~the Issuer will use its best efforts to remain a reporting issuer in British Columbia and Alberta for a minimum of two years after the Closing; (aa) the Issuer shall~~ there is not take any action which would be reasonably expected to result in the delisting or suspension of the Shares on or from the Exchange or on or from any securities exchange, market or quoting facility on which the common shares are then listed or quoted and the Issuer shall comply, in all material respects, with the rules and regulations thereof; (bb) the Issuer has not withheldpresently, and will not ~~withhold from~~ be until the ~~Agents~~Closing, any ~~facts~~ Material Change or change in any Material Fact relating to the Issuer or which has not been disclosed to the ~~offering of the FT Shares and the Units that would be considered material to a Purchaser~~public; (cct) the ~~Issuer proposes to use the gross proceeds of the~~ issue and sale of the FT Flow-Through Shares to incur exploration expenses on its exploration properties which are currently limited to the Provinces of Ontario and Quebec, that qualify as “Canadian exploration expenses” (“CEE”) as described in paragraph (f) of the definition thereof in subsection 66.1(6) of the Income Tax Act (Canada) (“ITA”); (dd) by the Issuer ~~will file all necessary forms~~ and ~~documents with~~ the ~~Canada Revenue Agency to meet its obligations under~~ Agent, the entering into of this Agreement and the entering into of the Subscription Agreements for FT Shares; (ee) the Issuer will maintain proper accounting books and records relating to the CEE expenditures and will make such books and records available for inspection by the Agents upon reasonable request; (ff) the Issuer is a “principal business corporation” within the meaning prescribed in section 66(15) of the ITA; (gg) upon issuance pursuant to the Subscription Agreements, the FT Shares will be “flow-through shares” as defined in subsection 66(15) of the ITA do not and will not ~~be “prescribed shares” for the purpose of section 6202.1 of the regulations~~ conflict with, and do not and will not result in a breach of, or constitute a default under (A) any statute, rule or regulation applicable to the ~~ITA; (hh) other than the Agents~~Issuer including, no person, firm or corporation acting or purporting to act at the request of the Issuer is entitled to any brokerage, agency or finder’s fee in connection with the Offering; and (ii) its warranties and representations in this section and in Appendix I to the Subscription Agreements for FT Shares are true and correct and will remain so as of the Closing. 14.2 Each of the Agents warrant and represent to, and covenant withwithout limitation, the Issuer that: (a) it is a valid and subsisting corporation under the law of the jurisdiction in which it was incorporated and has good and sufficient right and authority to enter into this Agreement and complete the transactions under this Agreement on the terms and conditions set forth hereinApplicable Legislation; (b) it is a broker or dealer properly registered under the Acts and is a member in good standing with the Exchange; (c) it is acquiring the Agents’ Securities as principal for its own account and not for the benefit of any other person; (d) the Agents and any sub-agents retained by the Agents will be acquiring the Agents’ Warrants as principals for their own account and are “accredited investors” within the meaning of National Instrument 45-106; (e) it is not a U.S. Person, did not receive the offer to purchase the Agents’ Securities in the United States, did not execute or deliver this Agreement in the United States and is not acquiring the Agents’ Securities for the account or benefit of a U.S. Person or person in the United States; (f) in connection with the Offering, it will sell the FT Shares and the Units in compliance with the Acts and this Agreement and in a manner such that no prospectus, offering memorandum, or other disclosure document need be prepared and filed or delivered by the Issuer in connection with the Offering and such that the Issuer is not made subject to new continuous disclosure reporting requirements; and (g) its warranties and representations in this section are true and correct and will remain so as of the Closing, and, in the case of the warranties and representations in Sections 14.2(c) and 14.2(f), as of the acquisition of any Agents’ Warrants Shares. 14.3 Each of the Agents acknowledges that none of the Securities have been or will be registered under the U.S. Securities Act or the securities laws of any state, agrees that the Agents’ Warrants may not be exercised in the United States or by or on behalf of a U.S. Person, nor may any of the Agents’ Securities described in this paragraph be offered or sold in the United States unless an exemption from registration under the U.S. Securities Act and any applicable state securities law is available, and agrees that it will not engage in any Directed Selling Efforts (as defined in Schedule “A” with respect to the Agents’ Securities).

Appears in 1 contract

Samples: Agency Agreement

WARRANTIES, REPRESENTATIONS AND COVENANTS. ~~14.1~~ 16.1 The Issuer warrants and represents to and covenants with the ~~Agents~~ Agent that: (a) the Issuer ~~is a~~ and its subsidiaries are valid and subsisting ~~corporation~~ corporations duly incorporated and in good standing under the laws of the ~~Province of British Columbia and has all requisite corporate power and authority to carry on its business~~jurisdiction in which they are incorporated, ~~as now conducted and as presently proposed to be conducted and to own their respective assets~~continued or amalgamated; (b) the Issuer is and its subsidiaries are duly registered and licensed to carry on business in the jurisdictions in which ~~it carries~~ they carry on business or ~~owns~~ own property where so required by the laws of that ~~jurisdiction~~jurisdiction and are not otherwise precluded from carrying on business or owning property in such jurisdictions by any other commitment, agreement or document except where failure to do so would not have a Material Adverse Effect; (c) the ~~authorized capital~~ Issuer has full corporate power and authority to carry on its business as ~~at November 9~~now carried on by it and to undertake the Private Placement, ~~2010, of the Issuer consists of an unlimited number of common shares without par value, of which as at November 9, 2010, 29,604,994 common shares are issued~~ and ~~outstanding as fully paid and non-assessable; (d) the Issuer will reserve or set aside sufficient shares in its treasury to issue the Shares, the FT Shares, the Warrant Shares~~ this Agreement and the Agents’ Shares, the Agents’ Warrant Shares and all such shares will be duly and validly issued as fully paid and non-assessable when issued in accordance with the agreements or instruments governing the same; (e) the Subscription Agreements and all other written or oral representations made by the Issuer to a Purchaser or potential Purchaser in connection with the Offering will be accurate in all material respects and will omit no fact, the omission of which will make such representations misleading or incorrect; (f) except as qualified by the disclosure in all prospectuses, filing statements, information circulars, financial statements, management discussion and analysis, press releases or material change reports filed with the Regulatory Authorities (collectively, the “Disclosure Record”), the Issuer is the beneficial owner of the properties, business and assets or the interests in the properties, business or assets referred to in the Disclosure Record and all agreements by which the Issuer holds an interest in a property, business or asset are in good standing according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated, and the Issuer does not own any material properties, business or assets not disclosed in the Disclosure Record; (g) the Issuer will, upon completion of the Offering and the transactions described in the Issuer’s September 7, 2010 news release, hold either freehold title, mining leases, mining claims or other conventional property, proprietary or contractual interests or rights, recognized in the jurisdiction in which a particular property is located, in respect of the ore bodies and minerals located in properties in which it has an interest under valid, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit it to explore the minerals relating thereto (the “Mining Rights”). The Mining Rights have been validly located and recorded in accordance with all applicable laws and are valid and subsisting, the Issuer has all necessary surface rights, access rights and other necessary rights and interests relating to the properties in which it has an interest granting it the right and ability to explore for minerals, ore and metals for development purposes as are appropriate in view of the rights and interest therein of it, with only such exceptions as do not materially interfere with the use made by it of the rights or interests so held, and, except as disclosed in the Disclosure Record, each of the material proprietary interests or rights and each of the documents, agreements and instruments and obligations relating thereto referred to above is currently in good standing in its name; (h) the Units, the Shares, the Warrants and the Warrants Shares offered and sold in the United States or to, or for the account or benefit of, U.S. Persons will be subject to resale restrictions under the U.S. Securities Act and the Securities will not be subject to a restricted period or statutory hold period under the Acts of each Offering Jurisdiction in Canada or to any resale restrictions under the policies of the Exchange which extends beyond four months and one day after issuance of the Securities, other than for Purchasers who become control persons; (i) the Disclosure Record does not contain any material misrepresentation nor does it omit any Material Fact relating to the Issuer; (j) the financial statements contained in the Disclosure Record filed with any of the Commissions and supplied by the Issuer to the Agents in connection with the Offering have all been prepared in accordance with Canadian generally accepted accounting principles, accurately, fairly and fully reflect the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the Issuer, as of the date thereof, and no adverse material changes in the financial position of the Issuer has taken place since the date thereof; (k) the Issuer has complied and will comply fully in all material respects with the requirements of all applicable corporate and Securities Laws and administrative policies and directions, including, without limitation, the Acts and the Business (l) there is not presently, and will not be until the completion of the Closing any Material Change or change in any Material Fact relating to the Issuer which has not been or will not be fully disclosed to the Agents; (m) the issue and sale of the Securities by the Issuer and the Agents does not and will not conflict with, or result in a breach of, any of the terms of the Issuer’s constating documents or any agreement or instrument to which the Issuer is a party; (n) the Issuer is not a party to any actions, suits or proceedings which could materially affect its business or financial condition, and to the best of the Issuer’s knowledge no such actions, suits or proceedings are contemplated or have been threatened which are not disclosed in the Disclosure Record; (o) neither the Issuer, nor to the best of the Issuer’s knowledge, any other party, is in default in the observance or performance of any term or obligation to be performed by it under any contract entered into by the Issuer which is material to the business of the Issuer and no event has occurred which with notice or lapse of time or both would directly or indirectly constitute such a default, in any such case which default or event would have a material adverse effect on the assets or properties, business, results of operations, prospects or condition (financial or otherwise) of the Issuer; (p) there are no judgments against the Issuer which are unsatisfied, nor is the Issuer subject to any consent decrees or injunctions; (q) this Agreement has beenSenior Secured Note Indenture are, or will be by the Closing, duly authorized by all necessary corporate action on the part of the Issuer, and the Issuer has full corporate power and authority to undertake the Offering, and this Agreement and the Subscription Agreements have been, or will be by the Closing, duly authorized, executed and delivered by the Issuer and ~~this Agreement and the Subscription Agreements are~~ constitute legal, valid and binding ~~obligations~~ agreements of the ~~Issuer,~~ Issuer enforceable against the Issuer in accordance with their ~~terms~~ respective terms, subject to laws relating to creditors’ rights generally, the availability of equitable remedies and except as to rights to ~~indemnity~~ indemnify and contribution may be limited by applicable ~~law~~laws; (rd) all of the ~~Issuer is a reporting issuer in the Provinces of British Columbia and Alberta, the common shares~~ material transactions of the Issuer are ~~listed on the NEX Board~~ promptly and properly recorded or filed in its books or records and its minute books or records contain all records of the ~~Exchange~~meetings and proceedings of its directors, shareholders, and other committees, if such material transactions were required by Applicable Legislation or the ~~Issuer is not in default of any~~ Issuer’s constating documents to have been approved by directors or shareholders of the ~~requirements of the Acts or any of the administrative policies or notices of the NEX Board of the Exchange or the Exchange~~Issuer; (se) ~~other than~~ as of the ~~Exchange imposed halt on~~ date hereof, the ~~Issuer’s Common Shares there is no order ceasing, halting or suspending trading in securities~~ authorized capital of the Issuer ~~nor prohibiting the sale~~ consists of ~~such securities has been~~ an unlimited number of Common Shares of which [l] Common Shares are issued to and is outstanding ~~against the Issuer or its directors, officers or promoters or to the best of the Issuer’s knowledge, against any other companies that have common directors, officers or promoters~~ as fully paid and to the best of the Issuer’s knowledge, no investigations or proceedings for such purposes are pending or threatened; (t) except as disclosed to the Agents in Schedule “C” with respect to outstanding options non-assessable and ~~convertible securities and as set out in the Disclosure Record or otherwise to any of the Regulatory Authorities,~~ no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming such a right, agreement or option, for the issue or allotment of any unissued shares in the capital of the Issuer or its subsidiaries or any other security convertible into or exchangeable for any such shares, or to require the Issuer or its subsidiaries to purchase, redeem or otherwise acquire any of the issued and outstanding shares in its ~~capital~~capital other than as disclosed in the Disclosure Record; (uf) the Issuer will reserve or set aside sufficient shares in its treasury to issue the Note Shares and the Agent’s Warrant Shares and upon receipt of the consideration therefor all such shares will be duly and validly issued as fully paid and non-assessable; (g) except as qualified by the Disclosure Record, the Issuer or its subsidiaries is the legal and beneficial owner of and has good and marketable title to the properties, business and assets or the interests in the properties, business or assets referred to in the Disclosure Record, all agreements by which the Issuer holds an interest in a property, business or assets are in good standing according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated and all filings and work commitments required to maintain the properties in good standing have been properly recorded and filed in a timely manner with the appropriate regulatory body and there are no mortgages, liens, charges, encumbrances or any other interests in or on such properties other than as disclosed in the Disclosure Record except where failure to do so would not have a Material Adverse Effect; (h) the Disclosure Record and all financial, marketing, sales and operational information provided to the Agent do not contain any misrepresentations (as such term is defined in the Applicable Legislation) and the Disclosure Record contains an accurate list of recorded title to mining claims under the relevant laws described in the Disclosure Record (the “Properties”). The Properties are the only mineral properties in which the Issuer has an interest and are held under valid, subsisting and enforceable title documents sufficient to permit the Issuer to explore the minerals relating thereto, all such mining claims have been validly located and recorded in accordance with all applicable laws and are valid and subsisting, the Issuer has or is in the process of obtaining (and have no reason to believe they will not obtain in the ordinary course but cannot represent that they will obtain them) all necessary surface rights, access rights and other necessary rights and interests relating to the Properties granting the Issuer the right and ability to explore for minerals, ore and metals for development purposes as are appropriate in view of the rights and interest therein of the Issuer with only such exceptions as do not materially interfere with the use made by the Issuer of the rights or interests so held; (i) the financial statements filed with the Commissions or supplied by the Issuer to the Agent in connection with the Private Placement have been prepared in accordance with Canadian generally accepted accounting principles, present fairly, in all material respects, the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the Issuer, and its subsidiaries, as of the date thereof, and there have been no changes not disclosed in the Disclosure Record which would have a Material Adverse Effect in the financial position of the Issuer since the date thereof and the business of the Issuer has been carried on in the usual and ordinary course consistent with past practice since the date thereof; (j) the auditors of the Issuer who audited the financial statements of the Issuer for the most recent financial year-end and who provided their audit report thereon are independent public accountants as required under Applicable Legislation and there has never been a reportable disagreement (within the meaning of National Instrument 51-102 Continuous Disclosure Obligations) with the present auditors of the Issuer; (k) the Issuer has complied and will comply fully with the requirements of, the Applicable Legislation in relation to the issue and trading of its securities and in all matters relating to the Private Placement, and the issuer is not currently in default of any filings with the Commissions; (l) except where failure to do so would not have a Material Adverse Effect, to the knowledge of the Issuer, the Issuer is in compliance with all applicable laws, regulations and statutes (including all environmental laws and regulations) in the jurisdictions in which it carries on business and which may materially affect the Issuer, has not received a notice of non-compliance, nor knows of, nor has reasonable grounds to know of, any facts that could give rise to a notice of non-compliance with any such laws, regulations and statutes, and is not aware of any pending change or contemplated change to any applicable law or regulation or governmental position that would have a Material Adverse Effect on the business of the Issuer or the business or legal environment under which the Issuer operates; (m) to the best of its knowledge, the Issuer has not caused or permitted the release, in any manner whatsoever, of any pollutants, contaminants, chemicals or industrial toxic or hazardous waste or substances (collectively, the “Hazardous Substances”) on or from any of its Properties or assets which would have a Material Adverse Effect nor does the Issuer have any reason to believe that it is potentially responsible for a clean-up site or corrective action under any applicable laws, statutes, ordinances, by-laws, regulations, or any orders, directions or decisions rendered by any government, ministry, department or administrative regulatory agency relating to the protection of the environment, occupational health and safety or otherwise relating to dealing with Hazardous Substances; (n) there is not presently, and will not be until Closing, any Material Change or change in any Material Fact relating to the Issuer which has not been or will not be fully disclosed to the public in accordance with the Issuer’s obligations under applicable laws; (o) the issue and sale of the Securities by the Issuer and the Agent, as applicable, and the Issuer’s execution and delivery of the Senior Secured Note Indenture does not and will not conflict with, and does not and will not result in a breach of, or constitute a default under (A) any statute, rule or regulation applicable to the Issuer including, without limitation, the Applicable Legislation; (B) the constating documents, by-laws or resolutions of the Issuer which are in effect at the date hereof; (C) any agreement, debt instrument, mortgage, note, indenture, instrument, lease or other document to which the Issuer is a party or by which it is bound; or (D) any judgment, decree or order binding the Issuer or the Properties or assets of the Issuer; (p) except as disclosed on Schedule A, neither the Issuer nor any of its subsidiaries is a party to any actions, suits or proceedings which could have a material adverse effect on the Issuer’s business or financial condition, and to the best of the Issuer’s knowledge no such actions, suits or proceedings are contemplated or have been threatened; (q) there are no judgments against the Issuer or any of its subsidiaries which are unsatisfied, nor are there any consent decrees or injunctions to which the Issuer or any of its subsidiaries, if any, is subject; (r) the Issuer is a “reporting issuer” in each of the provinces of Canada and the Yukon Territory, and is a reporting company under the U.S. Exchange Act, and is not in default of any of the requirements of the Applicable Legislation or any of the administrative policies or notices of the Regulatory Authorities; (s) no order ceasing, halting or suspending trading in securities of the Issuer nor prohibiting the sale of such securities has been issued to and is outstanding against the Issuer or its directors, officers or promoters and, to the best of the Issuer’s knowledge, no investigations or proceedings for such purposes are pending or threatened; (t) the Issuer and its subsidiaries, have filed all federal, provincial, local and foreign tax returns which are required to be filed, or have requested extensions thereof, and have paid all taxes required to be paid by them and any other assessment, fine or penalty levied against itthem, or any amounts due and payable to any governmental authority, to the extent that any of the foregoing is due and ~~payable,~~ payable except ~~for such assessments, fines and penalties which are currently being contested in good faith~~where failure to do so would not have a Material Adverse Effect; (vu) the Issuer ~~shall establish~~ and its subsidiaries, have established on ~~its~~ their books and ~~records, as may be applicable,~~ records reserves which are adequate for the payment of all taxes not yet due and payable and there are no liens for taxes on the assets of the Issuer or its subsidiaries, if any, except for taxes not yet due, and there are no audits of any of the tax returns of the Issuer or its subsidiaries, which are known by the Issuer’s management to be pending, and there are no claims which have been or that to the Issuer’s knowledge may be asserted relating to any such tax returns which, if determined adversely, would result in the assertion by any governmental agency of any deficiency which would have a ~~material adverse effect~~ Material Adverse Effect on the ~~properties~~Properties, business or assets of the ~~Issuer~~Issuer or its subsidiaries; (wv) ~~any and all operations of~~ other than as disclosed in the Issuer have been conducted in accordance with good industry practices and in material compliance with applicable laws, rules, regulations, orders and directions of government and other competent authorities; (x) the Issuer (i) is in material compliance with any and all applicable federal, provincial, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received all material permits, licenses or other approvals required of any of them under applicable Environmental Laws to conduct its business, and (iii) is in material compliance with all terms and conditions of any such permit, licences or approval; (y) since current management of the Issuer assumed management financial statements of the Issuer, the ~~minute books and corporate records~~ Issuer does not have any loans or other indebtedness outstanding which has been made to any of its shareholders, officers, directors or employees, past or present, or any person not dealing at “arm’s length” (as such term is used in the ~~Issuer are true and correct in all material respects and contain all the resolutions of their respective directors and shareholders~~Income Tax Act (Canada)); (~~z) the Issuer will use its best efforts to remain a reporting issuer in British Columbia and Alberta for a minimum of two years after the Closing; (aa~~w) the Issuer shall not take any action which would be reasonably expected to result in the delisting or suspension of ~~the Shares~~ its common shares on or from either of the ~~Exchange~~ Exchanges or on or from any ~~securities~~ stock exchange, market or ~~quoting~~ trading or quotation facility on which ~~the common shares~~ its Common Shares are ~~then~~ listed or quoted and the Issuer shall comply, in all material respects, with the rules and regulations thereof; (bb) the Issuer has not withheld, and will not withhold from the Agents, any facts relating to the Issuer or to the offering of the FT Shares and the Units that would be considered material to a Purchaser; (cc) the Issuer proposes to use the gross proceeds of the sale of the FT Shares to incur exploration expenses on its exploration properties which are currently limited to the Provinces of Ontario and Quebec, that qualify as “Canadian exploration expenses” (“CEE”) as described in paragraph (f) of the definition thereof in subsection 66.1(6) of the Income Tax Act (Canada) (“ITA”); (dd) the Issuer will file all necessary forms and documents with the Canada Revenue Agency to meet its obligations under the Subscription Agreements for FT Shares; (ee) the Issuer will maintain proper accounting books and records relating to the CEE expenditures and will make such books and records available for inspection by the Agents upon reasonable request; (ff) the Issuer is a “principal business corporation” within the meaning prescribed in section 66(15) of the ITA; (gg) upon issuance pursuant to the Subscription Agreements, the FT Shares will be “flow-through shares” as defined in subsection 66(15) of the ITA and will not be “prescribed shares” for the purpose of section 6202.1 of the regulations to the ITA; (hhx) other than the ~~Agents~~Agent, no ~~person,~~ person or firm ~~or corporation~~ acting ~~or purporting to act~~ at the request of the Issuer is entitled to any brokerage, agency or finder’s fee in connection with the ~~Offering; and~~Private Placement; (iiy) ~~its~~ the Issuer has and will have filed and will file all documents that are required to be filed under the continuous disclosure and other applicable reporting provisions of the Applicable Legislation (including, without limitation, National Instrument 43-101), including annual and interim financial information and annual reports, press releases disclosing Material Changes and material change reports; (z) the Issuer is not in default of any material term, covenant or condition under or in respect of any judgement, order, material agreement or instrument to which it is a party or to which it or any of the properties or assets thereof are or may be subject, and no event has occurred and is continuing, and no circumstance exists which has not been waived, which constitutes an “Event of Default” or a default in respect of any commitment, material agreement, document or other instrument to which the Issuer is a party or by which it is otherwise bound entitling any other party thereto to accelerate the maturity of any amount owing thereunder or which could result in a Material Adverse Effect; (aa) the warranties and representations in this ~~section and in Appendix I to the Subscription Agreements for FT Shares~~ Section are true and correct and will remain so as of ~~the~~ Closing. 14.2 Each of the Agents warrant and represent to, and covenant with, the Issuer that: (a) it is a valid and subsisting corporation under the law of the jurisdiction in which it was incorporated and has good and sufficient right and authority to enter into this Agreement and complete the transactions under this Agreement on the terms and conditions set forth herein; (b) it is a broker or dealer properly registered under the Acts and is a member in good standing with the Exchange; (c) it is acquiring the Agents’ Securities as principal for its own account and not for the benefit of any other person; (dbb) the ~~Agents and any sub-agents retained by~~ Common Shares of the ~~Agents will be acquiring~~ Issuer are listed for trading on the Agents’ Warrants as principals for their own account and are “accredited investors” within the meaning of National Instrument 45-106; (e) it is not a U.S. Person, did not receive the offer to purchase the Agents’ Securities in the United States, did not execute or deliver this Agreement in the United States and is not acquiring the Agents’ Securities for the account or benefit of a U.S. Person or person in the United States; (f) in connection with the Offering, it will sell the FT Shares Exchanges and the ~~Units~~ Issuer is in compliance with the ~~Acts~~ rules and regulations of such bodies; (cc) the representations and warranties made by the Issuer in this Agreement and in ~~a manner such that no prospectus~~each other certificate, ~~offering memorandum,~~ agreement or other ~~disclosure~~ document ~~need be prepared and filed or~~ delivered by the Issuer ~~in connection with~~ or any of its representatives pursuant hereto and the ~~Offering and such that~~ other information furnished to the Agent by the Issuer is or any of its officers and directors did not contain at the time made ~~subject~~ or, if set forth herein, does not contain any untrue statement by the Issuer of a material fact or omit to ~~new continuous disclosure reporting requirements; and (g) its warranties and representations~~ state any material fact necessary to make the statements therein or herein, in ~~this section are true and correct and will remain so as~~ light of the ~~Closing~~circumstances under which they are made, and, in the case of the warranties and representations in Sections 14.2(c) and 14.2(f), as of the acquisition of any Agents’ Warrants Shares. 14.3 Each of the Agents acknowledges that none of the Securities have been or will be registered under the U.S. Securities Act or the securities laws of any state, agrees that the Agents’ Warrants may not be exercised in the United States or by or on behalf of a U.S. Person, nor may any of the Agents’ Securities described in this paragraph be offered or sold in the United States unless an exemption from registration under the U.S. Securities Act and any applicable state securities law is available, and agrees that it will not engage in any Directed Selling Efforts (as defined in Schedule “A” with respect to the Agents’ Securities).not

Appears in 1 contract

Samples: Agency Agreement (Vista Gold Corp)

WARRANTIES, REPRESENTATIONS AND COVENANTS. ~~14.1~~ 17.1 The Issuer warrants and represents to and covenants with the ~~Agents~~ Agent that: (a) the Issuer ~~is a~~ and its Subsidiaries are valid and subsisting ~~corporation~~ corporations duly incorporated and in good standing under the laws of the ~~Province of British Columbia and has all requisite corporate power and authority to carry on its business~~jurisdiction in which they are incorporated, ~~as now conducted and as presently proposed to be conducted and to own their respective assets~~continued or amalgamated; (b) the Issuer is and its Subsidiaries are duly registered and licensed to carry on business in the jurisdictions in which ~~it carries~~ they carry on business or ~~owns~~ own property where so required by the laws of that ~~jurisdiction~~jurisdiction and are not otherwise precluded from carrying on business or owning property in such jurisdictions by any other commitment, agreement or document except where failure to do so would not have a Material Adverse Effect; (c) the authorized capital as at November 9, 2010, of the Issuer consists of an unlimited number of common shares without par value, of which as at November 9, 2010, 29,604,994 common shares are issued and outstanding as fully paid and non-assessable; (d) the Issuer will reserve or set aside sufficient shares in its treasury to issue the Shares, the FT Shares, the Warrant Shares and the Agents’ Shares, the Agents’ Warrant Shares and all such shares will be duly and validly issued as fully paid and non-assessable when issued in accordance with the agreements or instruments governing the same; (e) the Subscription Agreements and all other written or oral representations made by the Issuer to a Purchaser or potential Purchaser in connection with the Offering will be accurate in all material respects and will omit no fact, the omission of which will make such representations misleading or incorrect; (f) except as qualified by the disclosure in all prospectuses, filing statements, information circulars, financial statements, management discussion and analysis, press releases or material change reports filed with the Regulatory Authorities (collectively, the “Disclosure Record”), the Issuer is the beneficial owner of the properties, business and assets or the interests in the properties, business or assets referred to in the Disclosure Record and all agreements by which the Issuer holds an interest in a property, business or asset are in good standing according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated, and the Issuer does not own any material properties, business or assets not disclosed in the Disclosure Record; (g) the Issuer will, upon completion of the Offering and the transactions described in the Issuer’s September 7, 2010 news release, hold either freehold title, mining leases, mining claims or other conventional property, proprietary or contractual interests or rights, recognized in the jurisdiction in which a particular property is located, in respect of the ore bodies and minerals located in properties in which it has an interest under valid, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit it to explore the minerals relating thereto (the “Mining Rights”). The Mining Rights have been validly located and recorded in accordance with all applicable laws and are valid and subsisting, the Issuer has ~~all necessary surface rights, access rights~~ full corporate power and ~~other necessary rights and interests relating~~ authority to ~~the properties in which it has an interest granting it the right and ability to explore for minerals, ore and metals for development purposes~~ carry on its business as ~~are appropriate in view of the rights and interest therein of it, with only such exceptions as do not materially interfere with the use made~~ now carried on by it of the rights or interests so held, and, except as disclosed in the Disclosure Record, each of the material proprietary interests or rights and each of the documents, agreements and instruments and obligations relating thereto referred to above is currently in good standing in its name; (h) the Units, the Shares, the Warrants and the Warrants Shares offered and sold in the United States or to, or for the account or benefit of, U.S. Persons will be subject to resale restrictions under the U.S. Securities Act and the Securities will not be subject to a restricted period or statutory hold period under the Acts of each Offering Jurisdiction in Canada or to any resale restrictions under the policies of the Exchange which extends beyond four months and one day after issuance of the Securities, other than for Purchasers who become control persons; (i) the Disclosure Record does not contain any material misrepresentation nor does it omit any Material Fact relating to the Issuer; (j) the financial statements contained in the Disclosure Record filed with any of the Commissions and supplied by the Issuer to the Agents in connection with the Offering have all been prepared in accordance with Canadian generally accepted accounting principles, accurately, fairly and fully reflect the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the Issuer, as of the date thereof, and no adverse material changes in the financial position of the Issuer has taken place since the date thereof; (k) the Issuer has complied and will comply fully in all material respects with the requirements of all applicable corporate and Securities Laws and administrative policies and directions, including, without limitation, the Acts and the Business (l) there is not presently, and will not be until the completion of the Closing any Material Change or change in any Material Fact relating to the Issuer which has not been or will not be fully disclosed to the Agents; (m) the issue and sale of the Securities by the Issuer and the Agents does not and will not conflict with, or result in a breach of, any of the terms of the Issuer’s constating documents or any agreement or instrument to which the Issuer is a party; (n) the Issuer is not a party to any actions, suits or proceedings which could materially affect its business or financial condition, and to undertake the best of the Issuer’s knowledge no such actions, suits or proceedings are contemplated or have been threatened which are not disclosed in the Disclosure Record; (o) neither the Issuer, nor to the best of the Issuer’s knowledge, any other party, is in default in the observance or performance of any term or obligation to be performed by it under any contract entered into by the Issuer which is material to the business of the Issuer Private Placement and no event has occurred which with notice or lapse of time or both would directly or indirectly constitute such a default, in any such case which default or event would have a material adverse effect on the assets or properties, business, results of operations, prospects or condition (financial or otherwise) of the Issuer; (p) there are no judgments against the Issuer which are unsatisfied, nor is the Issuer subject to any consent decrees or injunctions; (q) this Agreement has been, or will be by the Closing, duly authorized by all necessary corporate action on the part of the Issuer, and the Issuer has full corporate power and authority to undertake the Offering, and this Agreement and the Subscription Agreements have been, or will be by the Closing, duly authorized, executed and delivered by the Issuer and ~~this Agreement and the Subscription Agreements are~~ it constitutes a legal, valid and binding ~~obligations~~ agreement of the Issuer enforceable against the Issuer; (d) all of the material transactions of the Issuer have been promptly and properly recorded or filed in its books or records and its minute books or records contain all records of the meetings and proceedings of its directors, shareholders, and other committees, if such material transactions were required by Applicable Legislation or the Issuer’s constating documents to have been approved by directors or shareholders of the Issuer, enforceable against the Issuer in accordance with their terms subject to laws relating to creditors’ rights generally, the availability of equitable remedies and except as rights to indemnity and contribution may be limited by applicable law; (re) as of the ~~Issuer is a reporting issuer in the Provinces of British Columbia and Alberta~~date hereof, the ~~common shares~~ authorized capital of the Issuer consists of an unlimited number of common shares, of which 42,347,605 are ~~listed on the NEX Board of the Exchange,~~ issued and the Issuer is not in default of any of the requirements of the Acts or any of the administrative policies or notices of the NEX Board of the Exchange or the Exchange; (s) other than the Exchange imposed halt on the Issuer’s Common Shares there is no order ceasing, halting or suspending trading in securities of the Issuer nor prohibiting the sale of such securities has been issued to outstanding as fully paid and ~~is outstanding against the Issuer or its directors, officers or promoters or to the best of the Issuer’s knowledge, against any other companies that have common directors, officers or promoters~~ non-assessable and to the best of the Issuer’s knowledge, no investigations or proceedings for such purposes are pending or threatened; (t) except as disclosed to the Agents in Schedule “C” with respect to outstanding options and convertible securities and as set out in the Disclosure Record or otherwise to any of the Regulatory Authorities, no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming such a right, agreement or option, for the issue or allotment of any unissued shares in the capital of the Issuer or its subsidiaries or any other security convertible into or exchangeable for any such shares, or to require the Issuer or its subsidiaries to purchase, redeem or otherwise acquire any of the issued and outstanding shares in its ~~capital~~capital other than outstanding stock options and warrants, or pursuant to existing management or property acquisition agreements, all as disclosed in the Disclosure Record; (f) the Issuer will reserve or set aside sufficient shares in its treasury to issue the Warrant Shares and Agent’s Warrant Shares and upon receipt of the consideration therefor all such shares will be duly and validly issued as fully paid and non- assessable; (g) except as qualified by the Disclosure Record, the Issuer and each of its Subsidiaries is the legal and beneficial owner of and has good and marketable title to their respective properties, business and assets or the interests in the properties, business or assets referred to in the Disclosure Record, all agreements by which the Issuer or any of its Subsidiaries holds an interest in a property, business or assets are in good standing according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated and all filings and work commitments required to maintain the properties in good standing have been properly recorded and filed in a timely manner with the appropriate regulatory body and there are no mortgages, liens, charges, encumbrances or any other interests in or on such properties other than as disclosed in the Disclosure Record except where failure to do so would not have a Material Adverse Effect; (h) the Disclosure Record and all financial, marketing, sales and operational information provided to the Agent do not contain any misrepresentations (as such term is defined in the Applicable Legislation); (i) all written representations made by the Issuer to the Agent, a Purchaser or potential Purchaser in connection with the Private Placement will be accurate in all material respects and will omit no fact, the omission of which will make such representations misleading or incorrect; (j) the financial statements filed with the Commissions or supplied by the Issuer to the Agent in connection with the Private Placement have been prepared in accordance with Canadian generally accepted accounting principles, present fairly, in all material respects, the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the Issuer, and its Subsidiaries, as of the date thereof, and there have been no changes which would have a Material Adverse Effect in the financial position of the Issuer or its Subsidiaries since the date thereof and the business of the Issuer and its Subsidiaries has been carried on in the usual and ordinary course consistent with past practice since the date thereof; (k) the auditors of the Issuer who audited the financial statements of the Issuer for the most recent financial year-end and who provided their audit report thereon are independent public accountants as required under Applicable Legislation and there has never been a reportable disagreement (within the meaning of National Instrument 51-102 Continuous Disclosure Obligations) with the present auditors of the Issuer; (l) the Issuer has complied and will comply fully with the requirements of, the Applicable Legislation in relation to the issue and trading of its securities and in all matters relating to the Private Placement, and the issuer is not currently in default of any material filings with the Commissions; (m) except where failure to do so would not have a Material Adverse Effect, to the knowledge of the Issuer, the Issuer is in compliance with all applicable laws, regulations and statutes (including all environmental laws and regulations) in the jurisdictions in which it carries on business and which may materially affect the Issuer, has not received a notice of non-compliance, nor knows of, nor has reasonable grounds to know of, any facts that could give rise to a notice of non- compliance with any such laws, regulations and statutes, and is not aware of any pending change or contemplated change to any applicable law or regulation or governmental position that would materially affect the business of the Issuer or the business or legal environment under which the Issuer operates; (n) to the best of its knowledge, the Issuer has not caused or permitted the release, in any manner whatsoever, of any pollutants, contaminants, chemicals or industrial toxic or hazardous waste or substances (collectively, the “Hazardous Substances”) on or from any of its properties or assets which would have a Material Adverse Effect nor does the Issuer or any of its Subsidiaries have any reason to believe that it is potentially responsible for a clean-up site or corrective action under any applicable laws, statutes, ordinances, by-laws, regulations, or any orders, directions or decisions rendered by any government, ministry, department or administrative regulatory agency relating to the protection of the environment, occupational health and safety or otherwise relating to dealing with Hazardous Substances; (o) there is not presently, and will not be until Closing, any Material Change or change in any Material Fact relating to the Issuer which has not been or will not be fully disclosed to the public nor, to the best of its knowledge, is the Issuer aware of any action proposed to be taken by an insider (as that term is defined in the Securities Act (British Columbia)) which would cause a Material Adverse Effect; (p) the issue and sale of the Securities by the Issuer and the Agent does not and will not conflict with, and does not and will not result in a breach of, or constitute a default under (A) any statute, rule or regulation applicable to the Issuer including, without limitation, the Applicable Legislation; (B) the constating documents, articles or resolutions of the Issuer which are in effect at the date hereof; (C) any agreement, debt instrument, mortgage, indenture, instrument, lease or other document to which the Issuer or any of its Subsidiaries is a party or by which it is bound; or (D) any judgment, decree or order binding the Issuer or the property or assets of the Issuer or any of its Subsidiaries; (q) except as disclosed in the Disclosure Record, neither the Issuer nor any of its Subsidiaries is a party to any actions, suits or proceedings which could materially affect its business or financial condition, and to the best of the Issuer’s knowledge no such actions, suits or proceedings are contemplated or have been threatened; (r) there are no judgments against the Issuer or any of its Subsidiaries which are unsatisfied, nor are there any consent decrees or injunctions to which the Issuer or any of its subsidiaries, if any, is subject; (s) the Issuer is a “reporting issuer” in BC, Alberta and Ontario, and is not in default of any of the requirements of the Applicable Legislation or any of the administrative policies or notices of the Regulatory Authorities, the breach of which would constitute a Material Adverse Effect; (t) no order ceasing, halting or suspending trading in securities of the Issuer nor prohibiting the sale of such securities has been issued to and is outstanding against the Issuer or its directors, officers or promoters or against any other companies that have common directors, officers or promoters and, to the best of the Issuer’s knowledge, no investigations or proceedings for such purposes are pending or threatened; (u) the Issuer ~~has~~ and its Subsidiaries, if any, have filed all federal, provincial, local and foreign tax returns which are required to be filed, or have requested extensions thereof, and have paid all taxes required to be paid by them and any other assessment, fine or penalty levied against itthem, or any amounts due and payable to any governmental authority, to the extent that any of the foregoing is due and ~~payable,~~ payable except ~~for such assessments, fines and penalties which are currently being contested in good faith~~where failure to do so would not have a Material Adverse Effect; (v) the Issuer ~~shall establish~~ and its Subsidiaries, if any, have established on ~~its~~ their books and ~~records, as may be applicable,~~ records reserves which are adequate for the payment of all taxes not yet due and payable and there are no liens for taxes on the assets of the Issuer or its Subsidiaries, if any, except for taxes not yet due, and there are no audits of any of the tax returns of the Issuer or its Subsidiaries, if any, which are known by the Issuer’s management to be pending, and there are no claims which have been or that to the Issuer’s knowledge may be asserted relating to any such tax returns which, if determined adversely, would result in the assertion by any governmental agency of any deficiency which would have a ~~material adverse effect~~ Material Adverse Effect on the properties, business or assets of the ~~Issuer~~Issuer or its Subsidiaries, if any; (w) ~~any and all operations of~~ other than as disclosed in the Issuer have been conducted in accordance with good industry practices and in material compliance with applicable laws, rules, regulations, orders and directions of government and other competent authorities; (x) the Issuer (i) is in material compliance with any and all applicable federal, provincial, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received all material permits, licenses or other approvals required of any of them under applicable Environmental Laws to conduct its business, and (iii) is in material compliance with all terms and conditions of any such permit, licences or approval; (y) since current management of the Issuer assumed management financial statements of the Issuer, the ~~minute books and corporate records~~ Issuer does not have any loans or other indebtedness outstanding which has been made to any of its shareholders, officers, directors or employees, past or present, or any person not dealing at “arm’s length” (as such term is used in the ~~Issuer are true and correct in all material respects and contain all the resolutions of their respective directors and shareholders~~Income Tax Act (Canada)); (~~z) the Issuer will use its best efforts to remain a reporting issuer in British Columbia and Alberta for a minimum of two years after the Closing; (aa~~x) the Issuer shall not take any action which would be reasonably expected to result in the delisting or suspension of ~~the~~ its Common Shares on or from the Exchange or on or from any ~~securities~~ stock exchange, market or ~~quoting~~ trading or quotation facility on which ~~the common shares~~ its Common Shares are ~~then~~ listed or quoted and the Issuer shall comply, in all material respects, with the rules and regulations thereof; (bb) the Issuer has not withheld, and will not withhold from the Agents, any facts relating to the Issuer or to the offering of the FT Shares and the Units that would be considered material to a Purchaser; (cc) the Issuer proposes to use the gross proceeds of the sale of the FT Shares to incur exploration expenses on its exploration properties which are currently limited to the Provinces of Ontario and Quebec, that qualify as “Canadian exploration expenses” (“CEE”) as described in paragraph (f) of the definition thereof in subsection 66.1(6) of the Income Tax Act (Canada) (“ITA”); (dd) the Issuer will file all necessary forms and documents with the Canada Revenue Agency to meet its obligations under the Subscription Agreements for FT Shares; (ee) the Issuer will maintain proper accounting books and records relating to the CEE expenditures and will make such books and records available for inspection by the Agents upon reasonable request; (ff) the Issuer is a “principal business corporation” within the meaning prescribed in section 66(15) of the ITA; (gg) upon issuance pursuant to the Subscription Agreements, the FT Shares will be “flow-through shares” as defined in subsection 66(15) of the ITA and will not be “prescribed shares” for the purpose of section 6202.1 of the regulations to the ITA; (hhy) other than the ~~Agents~~Agent, no person, firm or corporation acting or purporting to act at the request of the Issuer is entitled to any brokerage, agency or finder’s fee in connection with the ~~Offering~~transactions described herein; (z) the Issuer has and will have filed all documents that are required to be filed under the continuous disclosure provisions of the Applicable Legislation other than the US Exchange Act, including annual and interim financial information and annual reports, press releases disclosing Material Changes and material change reports; (aa) the Issuer is not in default of any material term, covenant or condition under or in respect of any judgement, order, material agreement or instrument to which it is a party or to which it or any of the properties or assets thereof are or may be subject, and no event has occurred and is continuing, and no circumstance exists which has not been waived, which constitutes an “Event of Default” or a default in respect of any commitment, material agreement, document or other instrument to which the Issuer is a party or by which it is otherwise bound entitling any other party thereto to accelerate the maturity of any amount owing thereunder or which could result in a Material Adverse Effect; (bb) the Issuer and each of its subsidiaries maintains, and will maintain, a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with Canadian generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences (cc) the Common Shares of the Issuer are listed for trading on the Exchange and the Issuer is in compliance with the rules and regulations of such body, except as disclosed in connection with its ‘financial hardship’ application under 604(e) of the Exchange’s Company Manual.; and (iidd) ~~its~~ the warranties and representations in this ~~section and in Appendix I to the Subscription Agreements for FT Shares~~ Section are true and correct and will remain so as of ~~the~~ Closing. ~~14.2 Each of the Agents warrant~~ 17.2 The Agent warrants, represents and ~~represent to, and covenant with,~~ covenants to the Issuer that: (a) it ~~is a valid and subsisting corporation under~~ will offer the ~~law of the jurisdiction~~ Units in ~~which it was incorporated and has good and sufficient right and authority to enter into this Agreement and complete the transactions under this Agreement on~~ compliance with the terms and conditions ~~set forth herein~~of this Agreement, the Applicable Legislation and United States federal and state securities laws; (b) it ~~is a broker~~ will not make available to prospective Purchasers of Units any document or ~~dealer properly registered~~ material that would constitute an offering memorandum, preliminary prospectus or prospectus, as applicable, as defined under the ~~Acts~~ Applicable Legislation and is the United States federal and state securities laws nor will it conduct its activities so as to require the filing of a ~~member~~ prospectus or offering memorandum and will cause similar covenants to be contained in ~~good standing~~ any agreement with any selling firms in connection with the ~~Exchange~~Offering; (c) it ~~is acquiring~~ will not trade in Units or otherwise do any act in furtherance of a trade of Units outside of the ~~Agents’ Securities~~ Selling Jurisdictions, except as ~~principal for its own account and~~ contemplated in the Subscription Agreements, this Agreement or otherwise with the prior consent of the Issuer, not ~~for the benefit of any other person~~to be unreasonably withheld; (d) it will not advertise the ~~Agents~~ proposed sale of the Units in printed media of general and regular paid circulation, or broadcast over Internet, radio or television or otherwise conduct any ~~sub-agents retained~~ seminar or meeting concerning the offer or sale of the Units where attendees have been invited by ~~the Agents will be acquiring the Agents’ Warrants as principals for their own account and are “accredited investors” within the meaning of National Instrument 45-106~~general solicitation or general advertising; (e) it is will not ~~a U.S. Person, did not receive~~ solicit subscriptions for Units except in accordance with the ~~offer to purchase the Agents’ Securities in the United States, did not execute or deliver~~ terms and conditions of this ~~Agreement in the United States and is not acquiring the Agents’ Securities for the account or benefit of a U.S. Person or person in the United States~~Agreement; (f) ~~in connection with the Offering,~~ it will ~~sell~~ obtain from each Purchaser an executed subscription agreement and such forms as may be required by the ~~FT Shares and the Units in compliance with the Acts and this Agreement and in a manner such that no prospectus, offering memorandum,~~ Commissions or other ~~disclosure document need be prepared and filed~~ similar regulatory authority or ~~delivered~~ the Issuer as supplied by the Issuer ~~in connection with~~ to the ~~Offering and such that the Issuer is not made subject to new continuous disclosure reporting requirements~~Agent; and (g) ~~its warranties and representations~~ it will provide to the Issuer all necessary information in this section are true and correct and will remain so as of the Closing, and, in the case of the warranties and representations in Sections 14.2(c) and 14.2(f), as of the acquisition of any Agents’ Warrants Shares. 14.3 Each respect of the Agents ~~acknowledges that none~~ and the Purchasers to allow the Issuer to file, with the Commissions or other similar regulatory authority, if required, reports of the Securities have been or will be registered under the U.S. Securities Act or the securities laws of any state, agrees that the Agents’ Warrants may not be exercised in the United States or by or on behalf of a U.S. Person, nor may any trades of the ~~Agents’ Securities described~~ Units in this paragraph be offered or sold in the United States unless an exemption from registration under the U.S. Securities Act and any applicable state securities law is available, and agrees that it will not engage in any Directed Selling Efforts (as defined in Schedule “A” accordance with ~~respect to the Agents’ Securities)~~Applicable Legislation.

Appears in 1 contract

Samples: Agency Agreement (Silvermex Resources Inc)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 14.1 The Issuer warrants and represents to and covenants with the ~~Agents~~ Agent that: (a) the Issuer ~~is a~~ and its subsidiaries, if any, are or will be at the First Closing valid and subsisting ~~corporation~~ corporations duly incorporated and in good standing under the laws of the ~~Province of British Columbia and has all requisite corporate power and authority to carry on its business~~jurisdiction in which they are incorporated, ~~as now conducted and as presently proposed to be conducted and to own their respective assets~~continued or amalgamated; (b) the Issuer is and its subsidiaries, if any, are duly registered and ~~licensed~~ licenced to carry on business in the jurisdictions in which ~~it carries~~ they carry on business or ~~owns~~ own property where so required by the laws of that jurisdiction; (c) the authorized and issued capital ~~as at November 9, 2010,~~ of the Issuer ~~consists~~ are as disclosed to the Agent and the outstanding shares of ~~an unlimited number of common shares without par value, of which as at November 9, 2010, 29,604,994 common shares~~ the Issuer are ~~issued and outstanding as~~ fully paid and non-assessable; (d) the Issuer will reserve or set aside sufficient shares in its treasury to issue the Shares, the FT Warrant Shares, the Agent's Shares, the Agent's Warrant Shares, the Corporate Finance Shares and the ~~Agents’ Shares, the Agents’~~ Corporate Finance Warrant Shares and all such shares will be duly and validly issued as fully paid and non-~~assessable when issued in accordance with the agreements or instruments governing the same~~assessable; (e) except as otherwise disclosed to the ~~Subscription Agreements~~ Agent, the Issuer is the beneficial owner of the properties, business and assets or the interests in the properties, business or assets referred to in any materials provided to the Agent, all agreements by which the Issuer holds an interest in a property, business or assets are in good standing according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated; (f) the subscription form and all other written or oral representations made by the Issuer to a Purchaser or potential Purchaser in connection with the ~~Offering~~ Private Placement will be accurate in all material respects and will omit no fact, the omission of which will make such representations misleading or incorrect; (f) except as qualified by the disclosure in all prospectuses, filing statements, information circulars, financial statements, management discussion and analysis, press releases or material change reports filed with the Regulatory Authorities (collectively, the “Disclosure Record”), the Issuer is the beneficial owner of the properties, business and assets or the interests in the properties, business or assets referred to in the Disclosure Record and all agreements by which the Issuer holds an interest in a property, business or asset are in good standing according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated, and the Issuer does not own any material properties, business or assets not disclosed in the Disclosure Record; (g) the Issuer will, upon completion of the Offering and the transactions described in the Issuer’s September 7, 2010 news release, hold either freehold title, mining leases, mining claims or other conventional property, proprietary or contractual interests or rights, recognized in the jurisdiction in which a particular property is located, in respect of the ore bodies and minerals located in properties in which it has an interest under valid, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit it to explore the minerals relating thereto (the “Mining Rights”). The Mining Rights have been validly located and recorded in accordance with all applicable laws and are valid and subsisting, the Issuer has all necessary surface rights, access rights and other necessary rights and interests relating to the properties in which it has an interest granting it the right and ability to explore for minerals, ore and metals for development purposes as are appropriate in view of the rights and interest therein of it, with only such exceptions as do not materially interfere with the use made by it of the rights or interests so held, and, except as disclosed in the Disclosure Record, each of the material proprietary interests or rights and each of the documents, agreements and instruments and obligations relating thereto referred to above is currently in good standing in its name; (h) the Units, the Shares, the Warrants and the Warrants Shares offered and sold in the United States or to, or for the account or benefit of, U.S. Persons will be subject to resale restrictions under the U.S. Securities Act and the Securities will not be subject to a restricted period or statutory hold period under the Acts of each Offering Jurisdiction in Canada or to any resale restrictions under the policies of the Exchange which extends beyond four months and one day after issuance of the Securities, other than for Purchasers who become control persons; (i) the Disclosure Record does not contain any material misrepresentation nor does it omit any Material Fact relating to the Issuer; (j) the financial statements ~~contained in the Disclosure Record filed with any of the Commissions and~~ supplied by the Issuer to the ~~Agents~~ Agent in connection with the ~~Offering~~ Private Placement have ~~all~~ been prepared in accordance with ~~Canadian~~ U.S. generally accepted accounting principles, ~~accurately, fairly and fully~~ accurately reflect the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the Issuer, and its subsidiaries, if any, as of the date thereof, and no adverse material changes in the financial position of the Issuer ~~has~~ have taken place since the date thereof, save in the ordinary course of the Issuer's business; (kh) the Issuer has complied and will comply fully ~~in all material respects~~ with the requirements of all applicable corporate and ~~Securities Laws~~ securities laws and administrative policies and directions, including, without limitation, the ~~Acts~~ Applicable Legislation in relation to the issue and trading of its securities and in all matters relating to the ~~Business~~Private Placement; (li) there is not presently, and will not be until the ~~completion of the Closing~~ Final Closing, any Material Change or change in any Material Fact relating to the Issuer which has not been or will not be fully disclosed to the ~~Agents~~Agent; (mj) the issue and sale of the Securities by the Issuer and the ~~Agents~~ Agent does not and will not conflict with, or and does not and will not result in a breach of, any of the terms of ~~the Issuer’s constating~~ its incorporating documents or any agreement or instrument to which the Issuer is a party; (nk) neither the Issuer nor any of its subsidiaries is ~~not~~ a party to any actions, suits or proceedings which could materially affect its business or financial condition, and to the best of the Issuer’s 's knowledge no such actions, suits or proceedings are contemplated or have been threatened which are not disclosed in the Disclosure Record; (o) neither the Issuer, nor to the best of the Issuer’s knowledge, any other party, is in default in the observance or performance of any term or obligation to be performed by it under any contract entered into by the Issuer which is material to the business of the Issuer and no event has occurred which with notice or lapse of time or both would directly or indirectly constitute such a default, in any such case which default or event would have a material adverse effect on the assets or properties, business, results of operations, prospects or condition (financial or otherwise) of the Issuer; (pl) there are no judgments against the Issuer or any of its subsidiaries, if any, which are unsatisfied, nor ~~is the Issuer subject to~~ are there any consent decrees or ~~injunctions~~injunctions to which the Issuer or any of its subsidiaries, if any, is subject; (qm) this Agreement has ~~been,~~ been or will be by the First Closing, duly authorized by all necessary corporate action on the part of the Issuer, and the Issuer has full corporate power and authority to undertake the Offering, and this Agreement and the Subscription Agreements have been, or will be by the Closing, duly authorized, executed and delivered by the Issuer and this Agreement and the Subscription Agreements are legal, valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms subject to laws relating to creditors’ rights generally, the availability of equitable remedies and except as rights to indemnity and contribution may be limited by applicable lawPrivate Placement; (rn) the Issuer is a reporting issuer in the Provinces of British Columbia and Alberta, the common shares of the Issuer are listed on the NEX Board of the Exchange, and the Issuer is not in default of any of the requirements of the Acts or any of the administrative policies or notices of the NEX Board of the Exchange or the Exchange; (s) other than the Exchange imposed halt on the Issuer’s Common Shares there is no order ceasing, halting or suspending trading in securities of the Issuer nor prohibiting the sale of such securities has been issued to and is outstanding against the Issuer or its directors, officers or promoters or ~~to the best of the Issuer’s knowledge,~~ against any other companies that have common directors, officers or promoters and ~~to the best of the Issuer’s knowledge,~~ no investigations or proceedings for such purposes are pending or threatened; (to) except as disclosed to the ~~Agents in Schedule “C” with respect to outstanding options and convertible securities and as set out in the Disclosure Record~~ Agent or otherwise to ~~any of~~ the Regulatory Authorities, no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming such a right, agreement or option, for the issue or allotment of any unissued shares in the capital of the Issuer or its subsidiaries, if any, or any other security convertible into or exchangeable for any such shares, or to require the Issuer or its subsidiaries, if any, to purchase, redeem or otherwise acquire any of the issued and outstanding shares in its capital; (up) the Issuer ~~has~~ and its subsidiaries, if any, have filed all federal, provincial, local and foreign tax returns which are required to be filed, or have requested extensions thereof, and have paid all taxes required to be paid by them and any other assessment, fine or penalty levied against itthem, to the extent that any of the foregoing is due and payable, except for such assessments, fines and penalties which are currently being contested in good faith; (vq) the Issuer ~~shall establish~~ and its subsidiaries, if any, have established on ~~its~~ their books and ~~records, as may be applicable,~~ records reserves which are adequate for the payment of all taxes not yet due and payable and there are no liens for taxes on the assets of the Issuer or its subsidiaries, if any, except for taxes not yet due, and there are no audits of any of the tax returns of the Issuer or its subsidiaries, if any, which are known by the Issuer’s 's management to be pending, and there are no claims which have been or may be asserted relating to any such tax returns which, if determined adversely, would result in the assertion by any governmental agency of any deficiency which would have a material adverse effect on the properties, business or assets of the ~~Issuer~~Issuer or its subsidiaries, if any; (wr) ~~any~~ the Issuer owns or possesses adequate rights to use all material patents, trademarks, service marks, trade names, copyrights, trade secrets, information, proprietary rights and ~~all operations~~ other intellectual property necessary for the business of the Issuer ~~have been~~ now conducted ~~in accordance~~ and proposed to be conducted, without any conflict with ~~good industry practices and in material compliance with applicable laws, rules, regulations, orders and directions~~ or infringement of ~~government and other competent authorities; (x)~~ the rights of others. The Issuer has received no communication alleging that the Issuer ~~(i) is in material compliance with~~ has violated or, by conducting its business as proposed, would violate any ~~and all applicable federal~~of the patents, ~~provincial~~trademarks, ~~state and local laws and regulations relating to the protection of human health and safety~~service marks, ~~the environment~~ trade names, copyrights or ~~hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received all material permits, licenses~~ trade secrets or other ~~approvals required~~ proprietary rights of any other person or entity. Neither the execution or delivery of ~~them under applicable Environmental Laws to conduct its business, and (iii) is in material compliance with all terms and conditions~~ this Agreement nor the carrying on of ~~any such permit, licences or approval; (y) since current management~~ the business of the Issuer ~~assumed management~~ by the employees of the Issuer, nor the ~~minute books and corporate records~~ conduct of the business of the Issuer ~~are true and correct~~ will conflict with or result in ~~all material respects and contain all~~ a breach of the ~~resolutions~~ terms, conditions, or provisions of ~~their respective directors and shareholders~~or constitute a default under, any contract, covenant or instrument under which any of such employees is now obligated; (z) the Issuer will use its best efforts to remain a reporting issuer in British Columbia and Alberta for a minimum of two years after the Closing; (aa) the Issuer shall not take any action which would be reasonably expected to result in the delisting or suspension of the Shares on or from the Exchange or on or from any securities exchange, market or quoting facility on which the common shares are then listed or quoted and the Issuer shall comply, in all material respects, with the rules and regulations thereof; (bb) the Issuer has not withheld, and will not withhold from the Agents, any facts relating to the Issuer or to the offering of the FT Shares and the Units that would be considered material to a Purchaser; (cc) the Issuer proposes to use the gross proceeds of the sale of the FT Shares to incur exploration expenses on its exploration properties which are currently limited to the Provinces of Ontario and Quebec, that qualify as “Canadian exploration expenses” (“CEE”) as described in paragraph (f) of the definition thereof in subsection 66.1(6) of the Income Tax Act (Canada) (“ITA”); (dd) the Issuer will file all necessary forms and documents with the Canada Revenue Agency to meet its obligations under the Subscription Agreements for FT Shares; (ee) the Issuer will maintain proper accounting books and records relating to the CEE expenditures and will make such books and records available for inspection by the Agents upon reasonable request; (ff) the Issuer is a “principal business corporation” within the meaning prescribed in section 66(15) of the ITA; (gg) upon issuance pursuant to the Subscription Agreements, the FT Shares will be “flow-through shares” as defined in subsection 66(15) of the ITA and will not be “prescribed shares” for the purpose of section 6202.1 of the regulations to the ITA; (hhs) other than the ~~Agents~~Agent, no person, firm or corporation acting or purporting to act at the request of the Issuer is entitled to any brokerage, agency or finder’s 's fee in connection with the ~~Offering~~transactions described herein; (t) the Issuer has and will have filed all documents that are required to be filed under the continuous disclosure provisions of the Applicable Legislation, including annual and interim financial information and annual reports, press releases disclosing material changes and material change reports; and (iiu) ~~its~~ the warranties and representations in this ~~section and in Appendix I to the Subscription Agreements for FT Shares~~ Section are true and correct and will remain so as of the Final Closing. 14.2 ~~Each~~ The Issuer covenants with the Agent that the Issuer will not issue or announce the issuance of any common shares of the ~~Agents warrant~~ Issuer or any securities convertible into or exchangeable for or exercisable to acquire common shares of the Issuer during the period commencing on the Final Closing and ~~represent~~ continuing until the Prospectus Closing Date or for a period of 180 days, whichever is sooner, thereafter without the consent of both the Issuer and the Agent, such consent to not be unreasonably withheld, other than pursuant to: (a) presently outstanding rights, including options, warrants and ~~covenant with~~other convertible securities and including any such rights which have been granted or issued and as previously disclosed in writing to the Agent; (b) options or shares granted to officers, directors or employees of the Issuer or any subsidiary thereof pursuant to existing stock option and stock ownership plans or any stock option, stock ownership or bonus plans approved by shareholders at the upcoming annual general meeting of the Issuer; or (c) any merger, acquisition or strategic partnership transactions effected by the Issuer. 14.3 The Agent warrants and represents to the Issuer that: (a) it is a valid and subsisting corporation under the law of the jurisdiction in which it was ~~incorporated and has good and sufficient right and authority to enter into this Agreement and complete the transactions under this Agreement on the terms and conditions set forth herein~~incorporated; (b) it is a broker ~~or dealer properly~~ registered under the ~~Acts and is a member in good standing with the Exchange;~~Applicable Legislation; and (c) it is acquiring the Agents’ Securities as principal for its own account and not for the benefit of any other person; (d) the Agents and any sub-agents retained by the Agents will be acquiring the Agents’ Warrants as principals for their own account and are “accredited investors” within the meaning of National Instrument 45-106; (e) it is not a U.S. Person, did not receive the offer to purchase the Agents’ Securities in the United States, did not execute or deliver this Agreement in the United States and is not acquiring the Agents’ Securities for the account or benefit of a U.S. Person or person in the United States; (f) in connection with the Offering, it will sell ~~the FT Shares and~~ the Units in compliance with the ~~Acts~~ Applicable Legislation and ~~this Agreement and in a manner such~~ Regulation S. 14.4 The Issuer covenants that ~~no prospectus, offering memorandum, or other disclosure document need be prepared and filed or delivered by the Issuer in connection with the Offering and such that the Issuer is not made subject~~ it shall refuse to new continuous disclosure reporting requirements; and (g) its warranties and representations in this section are true and correct and will remain so as of the Closing, and, in the case of the warranties and representations in Sections 14.2(c) and 14.2(f), as of the acquisition of register any ~~Agents’ Warrants Shares. 14.3 Each of the Agents acknowledges that none~~ transfer of the Securities ~~have been or will be registered~~ not made in accordance with the provisions of Regulation S, pursuant to registration under the ~~U.S.~~ 1933 Act, or pursuant to an available exemption from registration; provided, however, that if the Securities ~~Act~~ are in bearer form or foreign law prevents the Issuer from refusing to register securities ~~laws~~ transfers, other reasonable procedures (such as a legend described in paragraph (b)(3)(iii)(B)(3) of section 903 of Regulation S) are implemented to prevent any ~~state, agrees that~~ transfer of the ~~Agents’ Warrants may~~ Securities not ~~be exercised~~ made in accordance with the ~~United States~~ provisions of the Regulation S. 14.5 Should the Agent (or ~~by or on behalf of a U.S. Person, nor may~~ any other distributor) sell any of the ~~Agents’~~ Securities ~~described in this paragraph be offered or sold in the United States unless an exemption from registration under the U.S. Securities Act and any applicable state securities law is available~~to another distributor, ~~and agrees that it will not engage in any Directed Selling Efforts~~ dealer (as such term is defined in ~~Schedule “A” with respect~~ section 2(a)(12) of the 1933 Act), or any person receiving a selling concession, fee or other remuneration, it shall send a confirmation or other notice to the ~~Agents’ Securities)~~purchaser stating that the purchaser is subject to the same restrictions on offers and sales that apply to a distributor.

Appears in 1 contract

Samples: Agency Agreement (Chemokine Therapeutics Corp)

WARRANTIES, REPRESENTATIONS AND COVENANTS. ~~14.1 The Issuer warrants~~ As an inducement for FSW to enter into this Agreement and ~~represents~~ to Purchase Accounts from Seller, and with full knowledge that the truth and accuracy of these warranties, representations and covenants ~~with~~ are being relied upon by FSW, regardless of any credit investigation, diligence or knowledge of FSW, each Seller warrants, represents and covenants as follows, which warranties, representations and covenants shall be deemed to be made at the ~~Agents that~~time each Account is purchased by FSW: ~~(a) the Issuer~~ 7.1 If Seller is a ~~valid~~ corporation or a limited liability company, it is duly organized under the laws of the state set forth in this Agreement, and ~~subsisting corporation duly incorporated~~ is and at all times hereinafter will be in good standing under the laws of ~~the Province of British Columbia~~ that state and is duly qualified and in good standing in every other state in which it is required to be registered or licensed. 7.2 The Seller has ~~all requisite corporate~~ full power and authority to ~~carry on~~ own or lease its ~~business, as now conducted~~ properties and to conduct its business as presently ~~proposed to be~~ conducted and to ~~own their respective assets~~execute, deliver and perform this Agreement, any assignment and any other documents related thereto to which it is a party and to consummate the transactions contemplated hereby and thereby; ~~(b) the Issuer is duly registered~~ 7.3 The execution and ~~licensed to carry on business in the jurisdictions in which it carries on business or owns property where so required~~ delivery of this Agreement by the ~~laws of that jurisdiction; (c)~~ Seller and the ~~authorized capital as at November 9, 2010,~~ consummation of the Issuer consists of an unlimited number of common shares without par value, of which as at November 9, 2010, 29,604,994 common shares are issued and outstanding as fully paid and non-assessable; (d) the Issuer will reserve or set aside sufficient shares in its treasury to issue the Shares, the FT Shares, the Warrant Shares and the Agents’ Shares, the Agents’ Warrant Shares and all such shares will be duly and validly issued as fully paid and non-assessable when issued in accordance with the agreements or instruments governing the same; (e) the Subscription Agreements and all other written or oral representations made by the Issuer to a Purchaser or potential Purchaser in connection with the Offering will be accurate in all material respects and will omit no fact, the omission of which will make such representations misleading or incorrect; (f) except as qualified by the disclosure in all prospectuses, filing statements, information circulars, financial statements, management discussion and analysis, press releases or material change reports filed with the Regulatory Authorities (collectively, the “Disclosure Record”), the Issuer is the beneficial owner of the properties, business and assets or the interests in the properties, business or assets referred to in the Disclosure Record and all agreements by which the Issuer holds an interest in a property, business or asset are in good standing according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated, and the Issuer does not own any material properties, business or assets not disclosed in the Disclosure Record; (g) the Issuer will, upon completion of the Offering and the transactions described in the Issuer’s September 7, 2010 news release, hold either freehold title, mining leases, mining claims or other conventional property, proprietary or contractual interests or rights, recognized in the jurisdiction in which a particular property is located, in respect of the ore bodies and minerals located in properties in which it has an interest under valid, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit it to explore the minerals relating thereto (the “Mining Rights”). The Mining Rights have been validly located and recorded in accordance with all applicable laws and are valid and subsisting, the Issuer has all necessary surface rights, access rights and other necessary rights and interests relating to the properties in which it has an interest granting it the right and ability to explore for minerals, ore and metals for development purposes as are appropriate in view of the rights and interest therein of it, with only such exceptions as do not materially interfere with the use made by it of the rights or interests so held, and, except as disclosed in the Disclosure Record, each of the material proprietary interests or rights and each of the documents, agreements and instruments and obligations relating thereto referred to above is currently in good standing in its name; (h) the Units, the Shares, the Warrants and the Warrants Shares offered and sold in the United States or to, or for the account or benefit of, U.S. Persons will be subject to resale restrictions under the U.S. Securities Act and the Securities contemplated hereby will not be subject to a restricted period or statutory hold period under the Acts of each Offering Jurisdiction in Canada or to any resale restrictions under the policies of the Exchange which extends beyond four months and one day after issuance of the Securities, other than for Purchasers who become control persons; (i) the Disclosure Record does not contain any material misrepresentation nor does it omit any Material Fact relating to the Issuer; (j) the financial statements contained in the Disclosure Record filed with any of the Commissions and supplied by the Issuer to the Agents in connection with the Offering have all been prepared in accordance with Canadian generally accepted accounting principles, accurately, fairly and fully reflect the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the Issuer, as of the date thereof, and no adverse material changes in the financial position of the Issuer has taken place since the date thereof; (k) the Issuer has complied and will comply fully in all material respects with the requirements of all applicable corporate and Securities Laws and administrative policies and directions, including, without limitation, the Acts and the Business (l) there is not presently, and will not be until the completion of the Closing any Material Change or change in any Material Fact relating to the Issuer which has not been or will not be fully disclosed to the Agents; (m) the issue and sale of the Securities by the Issuer and the Agents does not and will not conflict with, or result in a breach ~~of,~~ of any of the terms and provisions of, or constitute a default under, or conflict with, any contract, the organization documents of the ~~Issuer’s constating documents~~ Seller, any judgment, decree, order or award of any ~~agreement~~ court, governmental body or ~~instrument to which the Issuer is a party; (n) the Issuer is not a party to any actions, suits~~ arbitrator or ~~proceedings which could materially affect its business or financial condition, and~~ Law applicable to the ~~best of the Issuer’s knowledge no such actions~~Seller. 7.4 This Agreement, ~~suits or proceedings are contemplated or have~~ each assignment and all other instruments and documentation being delivered hereunder has been threatened which are not disclosed in the Disclosure Record; (o) neither the Issuer, nor to the best of the Issuer’s knowledge, any other party, is in default in the observance or performance of any term or obligation to be performed by it under any contract entered into by the Issuer which is material to the business of the Issuer duly and no event has occurred which with notice or lapse of time or both would directly or indirectly constitute such a default, in any such case which default or event would have a material adverse effect on the assets or properties, business, results of operations, prospects or condition (financial or otherwise) of the Issuer; (p) there are no judgments against the Issuer which are unsatisfied, nor is the Issuer subject to any consent decrees or injunctions; (q) this Agreement has been, or will be by the Closing, duly authorized by all necessary corporate action on the part of the Issuer, and the Issuer has full corporate power and authority to undertake the Offering, and this Agreement and the Subscription Agreements have been, or will be by the Closing, duly validly authorized, executed and delivered by the ~~Issuer~~ Seller and ~~this Agreement and the Subscription Agreements are legal,~~ constitutes a valid and legally binding ~~obligations~~ obligation of the ~~Issuer~~Seller, enforceable against the ~~Issuer~~ Seller in accordance with ~~their terms subject to laws relating to creditors’ rights generally~~its terms; 7.5 Seller is presently doing business only under the company and Trade Names set forth in this Agreement. 7.6 The place of business of Seller, or if Seller has more than one place of business, the location of its chief executive office, is at the location set forth in this Agreement and will not be moved therefrom, without at least thirty (30) days’ prior written notice to FSW. 7.7 All records of Seller pertaining to the Accounts are maintained electronically and shall be made accessible at Seller’s address set forth in this Agreement and said access availability will not be materially modified without at least thirty (30) days’ prior written notice to FSW. 7.8 Seller is solvent and able to pay its debts as they mature. 7.9 Seller is the true and lawful owner of ~~equitable remedies~~ the Accounts and ~~except as rights~~ the Collateral. 7.10 All financial statements, applications and information delivered to ~~indemnity and contribution~~ FSW or financial records or Seller’s Books which may be limited by applicable law; (r) the Issuer is a reporting issuer in the Provinces of British Columbia and Alberta, the common shares of the Issuer are listed on the NEX Board of the Exchange, and the Issuer is not in default of shown to FSW at any of the requirements of the Acts or any of the administrative policies or notices of the NEX Board of the Exchange or the Exchange; (s) other than the Exchange imposed halt on the Issuer’s Common Shares there is no order ceasing, halting or suspending trading in securities of the Issuer nor prohibiting the sale of such securities has been issued to and is outstanding against the Issuer or its directors, officers or promoters or to the best of the Issuer’s knowledge, against any other companies that have common directors, officers or promoters and to the best of the Issuer’s knowledge, no investigations or proceedings for such purposes are pending or threatened; (t) except as disclosed to the Agents in Schedule “C” with respect to outstanding options and convertible securities and as set out in the Disclosure Record or otherwise to any of the Regulatory Authorities, no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming such a right, agreement or option, for the issue or allotment of any unissued shares in the capital of the Issuer or any other security convertible into or exchangeable for any such shares, or to require the Issuer to purchase, redeem or otherwise acquire any of the issued and outstanding shares in its capital; (u) the Issuer has filed all federal, provincial, local and foreign tax returns which are required to time shall be filed, or have requested extensions thereof, and have paid all taxes required to be paid by them and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for such assessments, fines and penalties which are currently being contested in good faith; (v) the Issuer shall establish on its books and records, as may be applicable, reserves which are adequate for the payment of all taxes not yet due and payable and there are no liens for taxes on the assets of the Issuer except for taxes not yet due, and there are no audits of any of the tax returns of the Issuer which are known by the Issuer’s management to be pending, and there are no claims which have been or may be asserted relating to any such tax returns which, if determined adversely, would result in the assertion by any governmental agency of any deficiency which would have a material adverse effect on the properties, business or assets of the Issuer; (w) any and all operations of the Issuer have been conducted in accordance with good industry practices and in material compliance with applicable laws, rules, regulations, orders and directions of government and other competent authorities; (x) the Issuer (i) is in material compliance with any and all applicable federal, provincial, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received all material permits, licenses or other approvals required of any of them under applicable Environmental Laws to conduct its business, and (iii) is in material compliance with all terms and conditions of any such permit, licences or approval; (y) since current management of the Issuer assumed management of the Issuer, the minute books and corporate records of the Issuer are true and correct in all material respects and ~~contain~~ kept in accordance with generally accepted accounting principles consistently applied, and there has been no adverse change in the condition, financial or otherwise, of the business since the date thereof. 7.11 There are no actions, suits, proceedings or investigations pending or, to the knowledge of the Seller, threatened or contemplated, before any court, administrative agency, arbitrator, governmental body or other tribunal, except as may be specifically disclosed in writing to FSW, relating to: (i) the Accounts; (ii) Seller; or (iii) to Seller’s knowledge, the Customers, which could have a material adverse effect on the transactions contemplated by this Agreement, the ability of the Seller to perform hereunder or FSW’s ability to collect the Accounts or realize upon the Collateral. If any of the foregoing arises, Seller shall immediately notify FSW in writing with respect thereto. Without limitation thereof, Seller has not, within the past 180 days, contemplated or approved a bankruptcy filing with Seller as debtor, or a filing under comparable state law proceedings, including but not limited to an assignment for the benefit of creditors or a composition among creditors, nor has the Seller been threatened with any such action by its creditors on an involuntary basis. During that period, Seller has not consulted with bankruptcy or insolvency counsel with respect thereto. Seller has paid all federal, state and local taxes and assessments required of it by applicable Law (including timely payment or deposit of all OASDI, Medicare Tax, retirement plan, withholding tax payments and other mandatory withholdings) and no tax lien has been filed against Seller. 7.12 All of the ~~resolutions~~ Accounts and all Collateral are owned by Seller only and are free and clear of ~~their respective directors~~ any and ~~shareholders~~all liens, claims or security interests of any party and no financing statement covering the Accounts, the Collateral or the proceeds therefrom is or shall be on file at any public office, except as provided in Section 4.2 above. 7.13 Each Eligible Account: 7.13.1 is owned by Seller and has not been sold, transferred, or assigned to any other party, nor does any party have a security interest in any Account; ~~(z)~~ 7.13.2 is genuine and in all respects what it purports to be and represents a bona fide sale in the ~~Issuer will use its best efforts to remain~~ ordinary course of Seller’s business of the kind, quantity and quality of the goods or services described therein, and that the goods or services described therein have been completely delivered, installed or performed in accordance with any warranty, guaranty or service standards offered by Seller and in a ~~reporting issuer in British Columbia~~ commercially reasonable manner, and ~~Alberta for a minimum~~ at the time of ~~two years after~~ delivery or installation have been accepted by the ~~Closing~~Customer without condition; 7.13.3 is not owed by a Customer in which Seller or any manager, director, officer or equity owner of Seller has any legal or financial interest or represents services furnished or provided to or on behalf of any subsidiary, parent, person, associate or other entity affiliated with the Seller; 7.13.4 is not owed by a Customer who has commenced or has had a petition under the Bankruptcy Code commenced against it, and none of those proceedings are threatened; 7.13.5 is due and payable in thirty days or less or on other terms as are acceptable to FSW, in its sole discretion, which are expressly set forth on Schedule 7.13.5; 7.13.6 is not subject to any credit, deduction, discount, allowance, or dispute, and the goods represented by said Account have not been sold on consignment or with any return privilege whatsoever (~~aa)~~ excepting defective merchandise); 7.13.7 is not subject to any defense or setoff, counterclaim, recoupment, defense, abatement, suspension, deferment, deductible, reduction, dispute or termination which could be asserted by way of defense or counterclaim against Seller or FSW by the ~~Issuer shall not take~~ Customer, nor does any ~~action~~ condition exist which would ~~be reasonably expected to result~~ give rise thereto; 7.13.8 arose in a commercial transaction and is not for personal, family, household or agricultural purposes or in connection with the ~~delisting or suspension~~ sale of ~~the Shares on or from the Exchange or on or from any securities exchange, market or quoting facility on which the common shares are then listed or quoted~~ residential real estate; 7.13.9 has been originated and the ~~Issuer shall comply,~~ products sold and/or services rendered that underlie that Account were undertaken in full compliance with all ~~material respects, with the rules~~ legal duties of Seller and ~~regulations thereof;~~its agents. ~~(bb) the Issuer~~ 7.14 Seller has not ~~withheld~~settled, compromised, released or adjusted any Account and will not ~~withhold from~~ bring any suit or attempt to collect thereon, without FSW’s prior consent. 7.15 Seller has notified FSW and will continue to notify FSW of the ~~Agents~~occurrence of any of the following: (i) a tax lien or warrant is issued/filed against Seller (or, if Seller is an entity, any ~~facts~~ of its principals) or its assets; (ii) Seller (or, if Seller is an entity, any of its principals) fails to pay any tax when due; or (iii) Seller (or, if Seller is an entity, any of its principals) receives any notice of tax assessment, deficiency or levy. 7.16 Seller has no subsidiaries or other affiliates other than those disclosed in writing to FSW prior to the date of this Agreement, and no additional subsidiaries or other affiliates have been or will be created on or after the date of this Agreement without FSW’s prior written consent, which consent may be withheld in FSW’s absolute discretion or conditioned upon any such subsidiary or other affiliate entering into an agreement similar to this Agreement with FSW. 7.17 Seller has not and will not, without first satisfying in full all of Seller’s Obligations to FSW or otherwise upon receipt of FSW written consent, (1) merge or consolidate with or into another legal entity; (2) sell, lease, or otherwise substantially dispose of all or substantially all of its assets to another person or legal entity; or (3) purchase all or substantially all the stock or other equity interests in or assets of another person or legal entity. 7.18 Seller has and will continue to provide to FSW all such information about Seller’s ownership, officers, directors and corporate structure as may be required by FSW. 7.19 Seller operates its business in material compliance with all Laws. 7.20 The Seller has submitted all necessary documentation and supplied all necessary information for payment of each Account to the Customer and has fulfilled all of its other obligations in respect thereof, including verification of the eligibility of the Account for payment by such Customer. 7.21 Neither the Account nor the related contract has been satisfied, subordinated or rescinded or, except as disclosed in writing to FSW, amended in any manner. 7.22 True and correct copies of all claims, invoices, agreements and other documents relating to the ~~Issuer~~ creation of each Account have been or will prior to an Advance by Seller be delivered to FSW. 7.23 No action other than the execution and delivery of this Agreement and any assignment, the filing of financing statements on Form UCC-1 or such successor form as may from time to time be necessary or desirable, in the state in which the Seller has been formed or otherwise incorporated and the provision of consideration by FSW is required to perfect the interest of FSW, as the owner, assignee and transferee of the Accounts with a first priority security interest therein, and to perfect FSW as secured party with a first priority lien and security interest in the other Collateral pledged to FSW, and all such actions have been or will be accomplished no later than the date of purchase of the Accounts therefore. 7.24 The Seller has the right to sell, assign and transfer ownership of each Account. 7.25 The Seller has and shall treat the sale and assignment of Accounts as a true sale for all purposes, including, without limitation, tax and accounting, it being understood that it is the intention of both Parties that the assignment of Accounts pursuant to this Agreement and any assignment be treated as a sale for all purposes. The Seller shall mxxx its books and records to show the Accounts as sold to FSW. 7.26 The Seller has sold and will sell the Accounts to FSW without markup over the actual sales price and terms offered to the ~~offering~~ Customer, and that Seller sold the goods or services underlying the Accounts in good faith, for fair and reasonably equivalent value, and without intent to hinder, delay or defraud the Seller’s present or future creditors. 7.27 The Seller has no knowledge of any fact which should have led it to expect at the ~~FT Shares and~~ time of sale of such Account to FSW that such Account would not be paid in full, when due, in the ~~Units that would be considered material to a Purchaser;~~normal course. ~~(cc) the Issuer proposes to use the gross~~ 7.28 The proceeds of the sale of the ~~FT Shares to incur exploration expenses on its exploration properties which are currently limited to~~ Accounts will be used exclusively for the ~~Provinces of Ontario~~ business and ~~Quebec, that qualify as “Canadian exploration expenses” (“CEE”) as described in paragraph (f)~~ commercial purposes of the definition thereof in subsection 66.1(6) of the Income Tax Act (Canada) (“ITA”); (dd) the Issuer will file all necessary forms and documents with the Canada Revenue Agency to meet its obligations under the Subscription Agreements for FT Shares; (ee) the Issuer will maintain proper accounting books and records relating to the CEE expenditures and will make such books and records available for inspection by the Agents upon reasonable request; (ff) the Issuer is a “principal business corporation” within the meaning prescribed in section 66(15) of the ITA; (gg) upon issuance pursuant to the Subscription Agreements, the FT Shares will be “flow-through shares” as defined in subsection 66(15) of the ITA and will not be “prescribed shares” for the purpose of section 6202.1 of the regulations to the ITA; (hh) other than the Agents, no person, firm or corporation acting or purporting to act at the request of the Issuer is entitled to any brokerage, agency or finder’s fee in connection with the Offering; and (ii) its warranties and representations in this section and in Appendix I to the Subscription Agreements for FT Shares are true and correct and will remain so as of the ClosingSeller. 14.2 Each of the Agents warrant and represent to, and covenant with, the Issuer that: (a) it is a valid and subsisting corporation under the law of the jurisdiction in which it was incorporated and has good and sufficient right and authority to enter into this Agreement and complete the transactions under this Agreement on the terms and conditions set forth herein; (b) it is a broker or dealer properly registered under the Acts and is a member in good standing with the Exchange; (c) it is acquiring the Agents’ Securities as principal for its own account and not for the benefit of any other person; (d) the Agents and any sub-agents retained by the Agents will be acquiring the Agents’ Warrants as principals for their own account and are “accredited investors” within the meaning of National Instrument 45-106; (e) it is not a U.S. Person, did not receive the offer to purchase the Agents’ Securities in the United States, did not execute or deliver this Agreement in the United States and is not acquiring the Agents’ Securities for the account or benefit of a U.S. Person or person in the United States; (f) in connection with the Offering, it will sell the FT Shares and the Units in compliance with the Acts and this Agreement and in a manner such that no prospectus, offering memorandum, or other disclosure document need be prepared and filed or delivered by the Issuer in connection with the Offering and such that the Issuer is not made subject to new continuous disclosure reporting requirements; and (g) its warranties and representations in this section are true and correct and will remain so as of the Closing, and, in the case of the warranties and representations in Sections 14.2(c) and 14.2(f), as of the acquisition of any Agents’ Warrants Shares. 14.3 Each of the Agents acknowledges that none of the Securities have been or will be registered under the U.S. Securities Act or the securities laws of any state, agrees that the Agents’ Warrants may not be exercised in the United States or by or on behalf of a U.S. Person, nor may any of the Agents’ Securities described in this paragraph be offered or sold in the United States unless an exemption from registration under the U.S. Securities Act and any applicable state securities law is available, and agrees that it will not engage in any Directed Selling Efforts (as defined in Schedule “A” with respect to the Agents’ Securities).

Appears in 1 contract

Samples: Factoring and Security Agreement (Ammo, Inc.)

WARRANTIES, REPRESENTATIONS AND COVENANTS. ~~14.1~~ The Issuer warrants and represents to and covenants with the Agents that: (a) the Issuer ~~is a~~ and its subsidiaries are valid and subsisting ~~corporation~~ corporations duly incorporated and in good standing under the laws of the ~~Province of British Columbia and has all requisite corporate power and authority to carry on its business~~jurisdiction in which they are incorporated, ~~as now conducted and as presently proposed to be conducted and to own their respective assets~~continued or amalgamated; (b) the Issuer is and its subsidiaries are duly registered and ~~licensed~~ licenced to carry on business in the jurisdictions in which ~~it carries~~ they carry on business or ~~owns~~ own property where so required by the laws of that ~~jurisdiction~~jurisdiction and are not otherwise precluded from carrying on business or owning property in such jurisdictions by any other commitment, agreement or document except where failure to do so would not have an adverse material effect on the Issuer; (c) the authorized capital as at November 9, 2010, of the Issuer consists of an unlimited number of common shares without par value, of which as at November 9, 2010, 29,604,994 common shares are issued and outstanding as fully paid and non-assessable; (d) the Issuer will reserve or set aside sufficient shares in its treasury to issue the Shares, the FT Shares, the Warrant Shares and the Agents’ Shares, the Agents’ Warrant Shares and all such shares will be duly and validly issued as fully paid and non-assessable when issued in accordance with the agreements or instruments governing the same; (e) the Subscription Agreements and all other written or oral representations made by the Issuer to a Purchaser or potential Purchaser in connection with the Offering will be accurate in all material respects and will omit no fact, the omission of which will make such representations misleading or incorrect; (f) except as qualified by the disclosure in all prospectuses, filing statements, information circulars, financial statements, management discussion and analysis, press releases or material change reports filed with the Regulatory Authorities (collectively, the “Disclosure Record”), the Issuer is the beneficial owner of the properties, business and assets or the interests in the properties, business or assets referred to in the Disclosure Record and all agreements by which the Issuer holds an interest in a property, business or asset are in good standing according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated, and the Issuer does not own any material properties, business or assets not disclosed in the Disclosure Record; (g) the Issuer will, upon completion of the Offering and the transactions described in the Issuer’s September 7, 2010 news release, hold either freehold title, mining leases, mining claims or other conventional property, proprietary or contractual interests or rights, recognized in the jurisdiction in which a particular property is located, in respect of the ore bodies and minerals located in properties in which it has an interest under valid, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit it to explore the minerals relating thereto (the “Mining Rights”). The Mining Rights have been validly located and recorded in accordance with all applicable laws and are valid and subsisting, the Issuer has ~~all necessary surface rights, access rights~~ full corporate power and ~~other necessary rights and interests relating~~ authority to ~~the properties in which it has an interest granting it the right and ability to explore for minerals, ore and metals for development purposes~~ carry on its business as ~~are appropriate in view of the rights and interest therein of it, with only such exceptions as do not materially interfere with the use made~~ now carried on by it of the rights or interests so held, and, except as disclosed in the Disclosure Record, each of the material proprietary interests or rights and each of the documents, agreements and instruments and obligations relating thereto referred to above is currently in good standing in its name; (h) the Units, the Shares, the Warrants and the Warrants Shares offered and sold in the United States or to, or for the account or benefit of, U.S. Persons will be subject to resale restrictions under the U.S. Securities Act and the Securities will not be subject to a restricted period or statutory hold period under the Acts of each Offering Jurisdiction in Canada or to any resale restrictions under the policies of the Exchange which extends beyond four months and one day after issuance of the Securities, other than for Purchasers who become control persons; (i) the Disclosure Record does not contain any material misrepresentation nor does it omit any Material Fact relating to the Issuer; (j) the financial statements contained in the Disclosure Record filed with any of the Commissions and supplied by the Issuer to the Agents in connection with the Offering have all been prepared in accordance with Canadian generally accepted accounting principles, accurately, fairly and fully reflect the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the Issuer, as of the date thereof, and no adverse material changes in the financial position of the Issuer has taken place since the date thereof; (k) the Issuer has complied and will comply fully in all material respects with the requirements of all applicable corporate and Securities Laws and administrative policies and directions, including, without limitation, the Acts and the Business (l) there is not presently, and will not be until the completion of the Closing any Material Change or change in any Material Fact relating to the Issuer which has not been or will not be fully disclosed to the Agents; (m) the issue and sale of the Securities by the Issuer and the Agents does not and will not conflict with, or result in a breach of, any of the terms of the Issuer’s constating documents or any agreement or instrument to which the Issuer is a party; (n) the Issuer is not a party to any actions, suits or proceedings which could materially affect its business or financial condition, and to undertake the best of the Issuer’s knowledge no such actions, suits or proceedings are contemplated or have been threatened which are not disclosed in the Disclosure Record; (o) neither the Issuer, nor to the best of the Issuer’s knowledge, any other party, is in default in the observance or performance of any term or obligation to be performed by it under any contract entered into by the Issuer which is material to the business of the Issuer Private Placement and no event has occurred which with notice or lapse of time or both would directly or indirectly constitute such a default, in any such case which default or event would have a material adverse effect on the assets or properties, business, results of operations, prospects or condition (financial or otherwise) of the Issuer; (p) there are no judgments against the Issuer which are unsatisfied, nor is the Issuer subject to any consent decrees or injunctions; (q) this Agreement has been, or will be by the Closing, duly authorized by all necessary corporate action on the part of the Issuer, and the Issuer has full corporate power and authority to undertake the Offering, and this Agreement and the Subscription Agreements have been, or will be by the Closing, duly authorized, executed and delivered by the Issuer and ~~this Agreement and the Subscription Agreements are~~ it constitutes a legal, valid and binding ~~obligations~~ agreement of the ~~Issuer,~~ Issuer enforceable against the Issuer in accordance with ~~their terms subject to laws relating to creditors’ rights generally, the availability of equitable remedies and except as rights to indemnity and contribution may be limited by applicable law~~its terms; (rd) all of the ~~Issuer is a reporting issuer in the Provinces of British Columbia and Alberta, the common shares~~ material transactions of the Issuer ~~are listed on the NEX Board~~ have been promptly and properly recorded or filed in its books or records and its minute books or records contain all records of the ~~Exchange~~meetings and proceedings of its directors, shareholders, and ~~the Issuer is not in default of any of the requirements of the Acts or any of the administrative policies or notices of the NEX Board of the Exchange or the Exchange~~other committees, if any, since conception; (se) ~~other than~~ as of the ~~Exchange imposed halt on~~ date hereof, the ~~Issuer’s Common Shares there is no order ceasing, halting or suspending trading in securities~~ authorized capital of the Issuer ~~nor prohibiting the sale~~ consists of ~~such securities has been~~ 100,000,000 shares of common stock with a par value of $0.001 per share and 10,000,000 shares of preferred stock with a par value of $0.001 per share, of which 45,356,487 common shares are issued to and is outstanding ~~against the Issuer or its directors, officers or promoters or to the best of the Issuer’s knowledge, against any other companies that have common directors, officers or promoters~~ as fully paid and ~~to the best of the Issuer’s knowledge,~~ non- assessable and no ~~investigations or proceedings for such purposes~~ preferred shares are ~~pending or threatened; (t) except as disclosed to the Agents in Schedule “C” with respect to~~ outstanding ~~options~~ and ~~convertible securities and as set out in the Disclosure Record or otherwise to any of the Regulatory Authorities,~~ no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming such a right, agreement or option, for the issue or allotment of any unissued shares in the capital of the Issuer or its subsidiaries or any other security convertible into or exchangeable for any such shares, or to require the Issuer or its subsidiaries to purchase, redeem or otherwise acquire any of the issued and outstanding shares in its ~~capital~~capital other than as disclosed in the Disclosure Record or in the engagement letter between the Issuer and Xxxxxxx dated March 18, 2008; (f) the Issuer will reserve or set aside sufficient shares in its treasury to issue the Shares, the Warrant Shares, the Agents’Warrant Shares (and the additional Shares and Warrant Shares upon the issuance of the Penalty Units, if any) and upon receipt of the consideration therefor all such shares will be duly and validly issued as fully paid and non-assessable; (g) except as qualified by the Disclosure Record and except as disclosed in writing by the Issuer to the Agents or as would not reasonably be expected to have a material adverse effect on the Issuer, the Issuer is the legal and beneficial owner of and has good and marketable title to the properties, business and assets or the interests in the properties, business or assets referred to in the Disclosure Record in all material respects, all agreements by which the Issuer holds an interest in a property, business or assets are in good standing in all material respects according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated and all filings and work commitments required to maintain the properties in good standing have been properly recorded and filed in a timely manner with the appropriate regulatory body, except where failure to do so would not have an adverse material effect on the Issuer, and there are no mortgages, liens, charges, encumbrances or any other interests in or on such properties other than as disclosed in the Disclosure Record; (h) the Disclosure Record and all financial, marketing, sales and operational information provided to the Agents do not contain any misrepresentations (as such term is defined in the Applicable Legislation); (i) the subscription form and all other written or oral representations made by the Issuer to a Purchaser or potential Purchaser in connection with the Private Placement will be accurate in all material respects and will omit no fact, the omission of which will make such representations misleading or incorrect; (j) the financial statements filed with the Ontario Securities Commissions and the SEC have been prepared in accordance with United States generally accepted accounting principles, present fairly, in all material respects, the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the Issuer, and its subsidiaries, as of the date thereof, and there have been no adverse material changes in the financial position of the Issuer since the date thereof other than set forth in the Disclosure Record or with respect to liabilities incurred in the usual and ordinary course of the business of the Issuer and the business of the Issuer has been carried on in the usual and ordinary course consistent with past practice since the date thereof; (k) the auditors of the Issuer who audited the financial statements of the Issuer for the most recent financial year-end and who provided their audit report thereon are independent public accountants as required under Applicable Legislation and there has never been a reportable disagreement (within the meaning of National Instrument 51-102) with the present auditors of the Issuer; (l) the Issuer has complied and will comply in all material respects with the requirements of all applicable corporate and securities laws and administrative policies and directions, including, without limitation, the Applicable Legislation and the SEC in relation to the issue and trading of its securities and in all matters relating to the Private Placement; (m) except where failure to do so would not have an adverse material effect on the Issuer, the Issuer is in compliance with all applicable laws, regulations and statutes (including all environmental laws and regulations) in the jurisdictions in which it carries on business and which may materially affect the Issuer, has not received a notice of non-compliance, nor knows of, nor has reasonable grounds to know of, any facts that could give rise to a notice of non-compliance with any such laws, regulations and statutes; (n) to the best of its knowledge, the Issuer has not caused or permitted the release, in any manner whatsoever, of any pollutants, contaminants, chemicals or industrial toxic or hazardous waste or substances (collectively, the “Hazardous Substances”) on or from any of its properties or assets nor has it received any notice that it is potentially responsible for a clean-up site or corrective action under any applicable laws, statutes, ordinances, by-laws, regulations, or any orders, directions or decisions rendered by any government, ministry, department or administrative regulatory agency relating to the protection of the environment, occupational health and safety or otherwise relating to dealing with Hazardous Substances; (o) there is not presently, and will not be as of the Closing, any Material Change or change in any Material Fact relating to the Issuer which has not been or will not be fully disclosed to the public provided that public disclosure is required under the Applicable Legislation and the U.S. Exchange Act; (p) the issue and sale of the Securities by the Issuer and the Agents does not and will not conflict with, and does not and will not result in a breach of, or constitute a default under (A) any statute, rule or regulation applicable to the Issuer including, without limitation, the Applicable Legislation; (B) the constating documents, by- laws or resolutions of the Issuer which are in effect at the date hereof; (C) any agreement, debt instrument, mortgage, note, indenture, instrument, lease or other document to which the Issuer is a party or by which it is bound; or (D) any judgment, decree or order binding the Issuer or the property or assets of the Issuer; (q) neither the Issuer nor any of its subsidiaries is a party to any actions, suits or proceedings which could materially affect its business or financial condition, and to the best of the Issuer’s knowledge no such actions, suits or proceedings are contemplated or have been threatened; (r) there are no judgments against the Issuer or any of its subsidiaries which are unsatisfied, nor are there any consent decrees or injunctions to which the Issuer or any of its subsidiaries, if any, is subject; (s) the Issuer is a “reporting issuer”in Ontario and is not in material default of any of the requirements of the Applicable Legislation or any of the administrative policies or notices of the Regulatory Authorities; (t) no order suspending the sale of or ceasing the trading in the securities of the Issuer has been issued and not rescinded, revoked or withdrawn by any securities commission, regulatory authority or stock exchange in any jurisdiction, and no proceedings for that purpose have been instituted or are pending or are, to the knowledge of the the Issuer, contemplated or threatened by any securities commission, regulatory authority or stock exchange; (u) no enquiry or investigation, formal or informal, in relation to the Issuer or the Issuer’s directors or senior management, has been commenced or threatened by any official or officer of any securities commission, regulatory authority or stock exchange; (v) the Issuer has ~~filed~~ materially complied with all requirements of National Instrument 43-101, including but not limited to the preparation and filing of technical reports; (w) the Issuer and its Subsidiaries are in the process of preparing for filing all federal, ~~provincial~~state, local and foreign tax returns which are required to be filed~~, or have requested extensions thereof~~, and have paid all taxes required to be paid by them and any other assessment, fine or penalty levied against itthem, or any amounts due and payable to any governmental authority, to the extent that any of the foregoing is due and ~~payable,~~ payable except ~~for such assessments, fines and penalties which are currently being contested in good faith~~where failure to do so would not have an adverse material effect on the Issuer; (vx) the Issuer ~~shall establish~~ and its subsidiaries, if any, have established on ~~its~~ their books and ~~records, as may be applicable,~~ records reserves which are adequate for the payment of all taxes not yet due and payable and there are no liens for taxes on the assets of the Issuer or its subsidiaries, if any, except for taxes not yet due, and there are no audits of any of the tax returns of the Issuer or its subsidiaries, if any, which are known by the Issuer’s management to be pending, and there are no claims which have been or that to the Issuer’s knowledge may be asserted relating to any such tax returns which, if determined adversely, would result in the assertion by any governmental agency of any deficiency which would have a material adverse effect on the properties, business or assets of the ~~Issuer; (w) any and all operations of the~~ Issuer ~~have been conducted in accordance with good industry practices and in material compliance with applicable laws~~or its subsidiaries, rules, regulations, orders and directions of government and other competent authorities; (x) the Issuer (i) is in material compliance with any and all applicable federal, provincial, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received all material permits, licenses or other approvals required of any of them under applicable Environmental Laws to conduct its business, and (iii) is in material compliance with all terms and conditions of any such permit, licences or approvalif any; (y) ~~since current management of~~ except as disclosed in the Disclosure Record, the Issuer ~~assumed management~~ does not have any loans or other non-ordinary course indebtedness outstanding which has been made to any of its shareholders, officers, directors or employees, past or present, or any person not dealing at “arm’s length”(as such term is used in the ~~Issuer, the minute books and corporate records of the Issuer are true and correct in all material respects and contain all the resolutions of their respective directors and shareholders~~Income Tax Act (Canada)); (z~~) the Issuer will use its best efforts to remain a reporting issuer in British Columbia and Alberta for a minimum of two years after the Closing; (aa~~) the Issuer shall not take any action which would be reasonably expected to result in the delisting or suspension of ~~the Shares~~ its common shares on or from the ~~Exchange~~ Exchanges or on or from any ~~securities~~ stock exchange, market or ~~quoting~~ trading or quotation facility on which ~~the~~ its common shares are ~~then~~ listed or quoted and the Issuer shall comply, in all material respects, with the rules and regulations thereof; (bb) the Issuer has not withheld, and will not withhold from the Agents, any facts relating to the Issuer or to the offering of the FT Shares and the Units that would be considered material to a Purchaser; (cc) the Issuer proposes to use the gross proceeds of the sale of the FT Shares to incur exploration expenses on its exploration properties which are currently limited to the Provinces of Ontario and Quebec, that qualify as “Canadian exploration expenses” (“CEE”) as described in paragraph (f) of the definition thereof in subsection 66.1(6) of the Income Tax Act (Canada) (“ITA”); (dd) the Issuer will file all necessary forms and documents with the Canada Revenue Agency to meet its obligations under the Subscription Agreements for FT Shares; (ee) the Issuer will maintain proper accounting books and records relating to the CEE expenditures and will make such books and records available for inspection by the Agents upon reasonable request; (ff) the Issuer is a “principal business corporation” within the meaning prescribed in section 66(15) of the ITA; (gg) upon issuance pursuant to the Subscription Agreements, the FT Shares will be “flow-through shares” as defined in subsection 66(15) of the ITA and will not be “prescribed shares” for the purpose of section 6202.1 of the regulations to the ITA; (hhaa) other than the Agents, no person, firm or corporation acting or purporting to act at the request of the Issuer is entitled to any brokerage, agency or finder’s fee in connection with the ~~Offering~~transactions described herein; (bb) the Issuer’s common stock is registered under Section 12(b) of the Exchange Act and it is not in material default of any of the Issuer’s reporting obligations under Section 13(a) of the U.S. Exchange Act; (cc) the common shares of the Issuer are listed for trading on the Exchanges and the Issuer is in compliance with the rules and regulations of such bodies; and (iidd) ~~its~~ the warranties and representations in this section and in Appendix I to the Subscription Agreements for FT Shares are true and correct and will remain so as of the Closing. 14.2 Each of the Agents warrant and represent to, and covenant with, the Issuer that: (a) it is a valid and subsisting corporation under the law of the jurisdiction in which it was incorporated and has good and sufficient right and authority to enter into this Agreement and complete the transactions under this Agreement on the terms and conditions set forth herein; (b) it is a broker or dealer properly registered under the Acts and is a member in good standing with the Exchange; (c) it is acquiring the Agents’ Securities as principal for its own account and not for the benefit of any other person; (d) the Agents and any sub-agents retained by the Agents will be acquiring the Agents’ Warrants as principals for their own account and are “accredited investors” within the meaning of National Instrument 45-106; (e) it is not a U.S. Person, did not receive the offer to purchase the Agents’ Securities in the United States, did not execute or deliver this Agreement in the United States and is not acquiring the Agents’ Securities for the account or benefit of a U.S. Person or person in the United States; (f) in connection with the Offering, it will sell the FT Shares and the Units in compliance with the Acts and this Agreement and in a manner such that no prospectus, offering memorandum, or other disclosure document need be prepared and filed or delivered by the Issuer in connection with the Offering and such that the Issuer is not made subject to new continuous disclosure reporting requirements; and (g) its warranties and representations in this section Section are true and correct and will remain so as of the Closing, ~~and,~~ unless otherwise disclosed by the Issuer in ~~the case of the warranties and representations in Sections 14.2(c) and 14.2(f), as of the acquisition of any Agents’ Warrants Shares~~accordance with its obligations pursuant to this Agreement. 14.3 Each of the Agents acknowledges that none of the Securities have been or will be registered under the U.S. Securities Act or the securities laws of any state, agrees that the Agents’ Warrants may not be exercised in the United States or by or on behalf of a U.S. Person, nor may any of the Agents’ Securities described in this paragraph be offered or sold in the United States unless an exemption from registration under the U.S. Securities Act and any applicable state securities law is available, and agrees that it will not engage in any Directed Selling Efforts (as defined in Schedule “A” with respect to the Agents’ Securities).

Appears in 1 contract

Samples: Agency Agreement (Uranerz Energy Corp.)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 14.1 The Issuer warrants and represents to and covenants with the ~~Agents~~ Underwriters that: (a) the Subsidiaries are the only subsidiaries of the Issuer ~~is a~~ and the Issuer does not have any interest in any corporation, partnership, or other entity, other than the Subsidiaries and the Limited Partnership; (b) the Issuer and the Subsidiaries are valid and subsisting ~~corporation~~ corporations duly incorporated and in good standing under the laws of the ~~Province~~ jurisdiction in which they are incorporated, continued or amalgamated; pjm\pjm19035 (c) the Limited Partnership has been formed and is validly existing under the laws of ~~British Columbia~~ its jurisdiction of formation and ~~has all requisite corporate power and authority to carry on its business, as now conducted and as presently proposed to be conducted and to own their respective assets~~is in good standing under the laws of the jurisdiction in which is was formed; (bd) the ~~Issuer is~~ Issuer, the Subsidiaries and the Limited Partnership are duly registered and ~~licensed~~ licenced to carry on business in the jurisdictions in which ~~it carries~~ they carry on business or owns property where so required by the laws of that ~~jurisdiction; (c) the authorized capital as at November 9~~jurisdiction and are not otherwise precluded from carrying on business or owning property in such jurisdictions by any other commitment, 2010, of the Issuer consists of an unlimited number of common shares without par value, of which as at November 9, 2010, 29,604,994 common shares are issued and outstanding as fully paid and non-assessable; (d) the Issuer will reserve agreement or set aside sufficient shares in its treasury to issue the Shares, the FT Shares, the Warrant Shares and the Agents’ Shares, the Agents’ Warrant Shares and all such shares will be duly and validly issued as fully paid and non-assessable when issued in accordance with the agreements or instruments governing the samedocument; (e) the ~~Subscription Agreements~~ Issuer has full corporate power and ~~all other written or oral representations made~~ authority to carry on its business as now carried on by ~~the Issuer~~ it and to a Purchaser or potential Purchaser in connection with the Offering will be accurate in all material respects and will omit no fact, the omission of which will make such representations misleading or incorrect; (f) except as qualified by the disclosure in all prospectuses, filing statements, information circulars, financial statements, management discussion and analysis, press releases or material change reports filed with the Regulatory Authorities (collectively, the “Disclosure Record”), the Issuer is the beneficial owner of the properties, business and assets or the interests in the properties, business or assets referred to in the Disclosure Record and all agreements by which the Issuer holds an interest in a property, business or asset are in good standing according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated, and the Issuer does not own any material properties, business or assets not disclosed in the Disclosure Record; (g) the Issuer will, upon completion of undertake the Offering and the transactions described in the Issuer’s September 7, 2010 news release, hold either freehold title, mining leases, mining claims or other conventional property, proprietary or contractual interests or rights, recognized in the jurisdiction in which a particular property is located, in respect of the ore bodies and minerals located in properties in which it has an interest under valid, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit it to explore the minerals relating thereto (the “Mining Rights”). The Mining Rights have been validly located and recorded in accordance with all applicable laws and are valid and subsisting, the Issuer has all necessary surface rights, access rights and other necessary rights and interests relating to the properties in which it has an interest granting it the right and ability to explore for minerals, ore and metals for development purposes as are appropriate in view of the rights and interest therein of it, with only such exceptions as do not materially interfere with the use made by it of the rights or interests so held, and, except as disclosed in the Disclosure Record, each of the material proprietary interests or rights and each of the documents, agreements and instruments and obligations relating thereto referred to above is currently in good standing in its name; (h) the Units, the Shares, the Warrants and the Warrants Shares offered and sold in the United States or to, or for the account or benefit of, U.S. Persons will be subject to resale restrictions under the U.S. Securities Act and the Securities will not be subject to a restricted period or statutory hold period under the Acts of each Offering Jurisdiction in Canada or to any resale restrictions under the policies of the Exchange which extends beyond four months and one day after issuance of the Securities, other than for Purchasers who become control persons; (i) the Disclosure Record does not contain any material misrepresentation nor does it omit any Material Fact relating to the Issuer; (j) the financial statements contained in the Disclosure Record filed with any of the Commissions and supplied by the Issuer to the Agents in connection with the Offering have all been prepared in accordance with Canadian generally accepted accounting principles, accurately, fairly and fully reflect the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the Issuer, as of the date thereof, and no adverse material changes in the financial position of the Issuer has taken place since the date thereof; (k) the Issuer has complied and will comply fully in all material respects with the requirements of all applicable corporate and Securities Laws and administrative policies and directions, including, without limitation, the Acts and the Business (l) there is not presently, and will not be until the completion of the Closing any Material Change or change in any Material Fact relating to the Issuer which has not been or will not be fully disclosed to the Agents; (m) the issue and sale of the Securities by the Issuer and the Agents does not and will not conflict with, or result in a breach of, any of the terms of the Issuer’s constating documents or any agreement or instrument to which the Issuer is a party; (n) the Issuer is not a party to any actions, suits or proceedings which could materially affect its business or financial condition, and to the best of the Issuer’s knowledge no such actions, suits or proceedings are contemplated or have been threatened which are not disclosed in the Disclosure Record; (o) neither the Issuer, nor to the best of the Issuer’s knowledge, any other party, is in default in the observance or performance of any term or obligation to be performed by it under any contract entered into by the Issuer which is material to the business of the Issuer and no event has occurred which with notice or lapse of time or both would directly or indirectly constitute such a default, in any such case which default or event would have a material adverse effect on the assets or properties, business, results of operations, prospects or condition (financial or otherwise) of the Issuer; (p) there are no judgments against the Issuer which are unsatisfied, nor is the Issuer subject to any consent decrees or injunctions; (q) this Agreement has been, or will be by the Closing, duly authorized by all necessary corporate action on the part of the Issuer, ; (f) the Subsidiaries and the ~~Issuer has full corporate~~ Limited Partnership have the necessary power and authority to ~~undertake the Offering, and this Agreement and the Subscription Agreements have been, or will be~~ carry on their business as now carried on by the Closing, duly authorized, executed and delivered by the Issuer and this Agreement and the Subscription Agreements are legal, valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms subject to laws relating to creditors’ rights generally, the availability of equitable remedies and except as rights to indemnity and contribution may be limited by applicable lawthem; (rg) all of the material transactions of the Issuer have been promptly and properly recorded or filed in its books or records, and its minute books or records contain all records of the meetings and proceedings of its directors, shareholders, and committees of its board of directors, if any, since inception; (h) the authorized capital of the Issuer is ~~a reporting issuer~~ as disclosed in the ~~Provinces of British Columbia~~ Prospectus and ~~Alberta,~~ the issued and outstanding common shares of the Issuer are ~~listed on the NEX Board of the Exchange~~fully paid and non-assessable and, and the Issuer is not in default of any of the requirements of the Acts or any of the administrative policies or notices of the NEX Board of the Exchange or the Exchange; (s) other than the Exchange imposed halt on the Issuer’s Common Shares there is no order ceasing, halting or suspending trading in securities of the Issuer nor prohibiting the sale of such securities has been issued to and is outstanding against the Issuer or its directors, officers or promoters or to the best of the Issuer’s knowledge, against any other companies that have common directors, officers or promoters and to the best of the Issuer’s knowledge, no investigations or proceedings for such purposes are pending or threatened; (t) except as disclosed ~~to the Agents in Schedule “C” with respect to outstanding options and convertible securities and as set out~~ in the ~~Disclosure Record or otherwise to any of the Regulatory Authorities~~Prospectus, no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming such a right, agreement or option, for the issue or allotment of any unissued shares in the capital of the Issuer or its Subsidiaries or any other security convertible into or exchangeable for any such shares, or to require the Issuer or its Subsidiaries to purchase, redeem or otherwise acquire any of the issued and outstanding shares in its capital; (ui) the Issuer will reserve or set aside sufficient common shares in its treasury to issue the Shares and Warrant Shares; (j) except as qualified by the Prospectus, the Issuer is the legal and beneficial owner of and has good and marketable title to the properties, business and assets or the interests in the properties, business or assets referred to in the Prospectus; all agreements by which the Issuer holds an interest in a property (including any royalty interest therein), business or asset are in good standing according to their terms; (k) the Prospectus will contain full, true and plain disclosure of all Material Facts in relation to the Issuer (including the Subsidiaries and the Limited Partnership), its business and its securities, will contain no Misrepresentations and will be accurate in all material respects; pjm\pjm19035 (l) the financial statements of the Issuer which form part of the Prospectus have been prepared in accordance with Canadian generally accepted accounting principles, present fairly, in all material respects, the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the Issuer, the Subsidiaries and the Limited Partnership as at the date of the financial statements and there have been no adverse material changes in the financial position of the Issuer since September 30, 2006 that is not described in the Prospectus, and the business of the Issuer has been carried on in the usual and ordinary course consistent with past practice except as fully and plainly disclosed in the Prospectus; (m) the auditors of the Issuer who audited the financial statements of the Issuer for the most recent financial year-end and who provided their audit report thereon are independent public accountants as required under Applicable Legislation and there has never been a reportable disagreement (within the meaning of National Instrument 51-102) with the present auditors of the Issuer; (n) the Issuer has complied and will comply fully in all material respects with the requirements of all applicable corporate and securities laws and administrative policies and directions, including, without limitation, Applicable Legislation and its regulations and the Canada Business Corporations Act in relation to the issue and trading of its securities and in all matters relating to the Offering; (o) the Issuer, the Subsidiaries and the Limited Partnership are in compliance with all applicable laws, regulations and statutes in the jurisdictions in which they carry on business and which may materially affect the Issuer, have not received a notice of non-compliance, nor know of, nor has reasonable grounds to know of, any facts that could give rise to a notice of non-compliance with any such laws, regulations and statutes, and are not aware of any pending change or contemplated change to any applicable law or regulation or governmental position that would materially affect the business of the Issuer or the business or legal environment under which the Issuer operates; (p) the only material contracts to which the Issuer, its Subsidiaries or the Limited Partnership is a party or by which it is bound are the Material Contracts identified in the Prospectus and all such contracts are valid and subsisting agreements in full force and effect, are unamended and to the knowledge of the Issuer there exists no material default or event, occurrence, condition or act (including the issue of Units and the other transactions contemplated by this Agreement or as disclosed to the Underwriters) which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a material default under the Material Contracts by a party thereto or could operate to prevent or restrict the Issuer from enforcing any of its entitlements, rights, benefits and interests under the Material Contracts; (q) the issue and sale of the Securities by the Issuer does not and will not conflict with, and does not and will not result in a breach of, or constitute a default under (A) any statute, rule or regulation applicable to the Issuer including, without limitation, the Applicable Legislation; (B) the constating documents, articles or resolutions of the Issuer which are in effect at the date hereof; (C) any agreement, debt instrument, mortgage, note, indenture, instrument, lease or other document to which the Issuer is a party or by which it is bound; or (D) any judgment, decree or order binding the Issuer or the property or assets of the Issuer; pjm\pjm19035 (r) neither the Issuer nor any of the Subsidiaries or the Limited Partnership is a party to any actions, suits or proceedings which could materially affect its business or financial condition, and to the Issuer’s knowledge, no such actions, suits or proceedings are contemplated or have been threatened; (s) there are no judgments against the Issuer, the Subsidiaries or the Limited Partnership which are unsatisfied, nor are there any consent decrees or injunctions to which the Issuer, any of its Subsidiaries, or the Limited Partnership is subject; (t) there is not presently, and will not be until the conclusion of the Distribution, any Material Change or change in any Material Fact relating to the Issuer which has not been or will not be fully disclosed in the Prospectus; (u) no order ceasing, halting or suspending trading in securities of the Issuer nor prohibiting the sale of such securities has been issued to and is outstanding against the Issuer or its directors, officers or promoters or against any other companies that have common directors, officers or promoters and no investigations or proceedings for such purposes are pending or threatened; (v) the Issuer has complied with all material requirements of National Instrument 43-101, including but not limited to the preparation and filing of technical reports; (w) the Issuer is a reporting issuer in each of the Selling Provinces and is eligible to file a short form prospectus pursuant to National Instrument 44-101; (x) the Issuer’s annual information form, which is incorporated by reference into the Prospectus, is materially in the form required by National Instrument 44-101 and does not contain a Misrepresentation; (y) the Issuer, the Subsidiaries and the Limited Partnership have filed all federal, provincial, local and foreign tax returns which are required to be filed, or have requested extensions thereof, and have paid all taxes required to be paid by them and any other assessment, fine or penalty levied against itthem, or any amounts due and payable to any governmental authority, to the extent that any of the foregoing is due and payable~~, except for such assessments, fines and penalties which are currently being contested in good faith~~; (vz) the ~~Issuer shall establish~~ Issuer, the Subsidiaries and the Limited Partnership have established on ~~its~~ their books and ~~records, as may be applicable,~~ records reserves which are adequate for the payment of all taxes not yet due and payable and there are no liens for taxes on the assets of the ~~Issuer~~ Issuer, the Subsidiaries or the Limited Partnership except for taxes not yet due, and there are no audits of any of the tax returns of the ~~Issuer~~ Issuer, its Subsidiaries or the Limited Partnership which are known by the Issuer’s management to be pending, and there are no claims which have been or may be asserted relating to any such tax returns which, if determined adversely, would result in the assertion by any governmental agency of any deficiency which would have a material adverse effect on the properties, business or assets of the Issuer, the Subsidiaries or the Limited Partnership; pjm\pjm19035 (aa) the Issuer does not have any loans or other indebtedness outstanding which has been made to any of its shareholders, officers, directors or employees, past or present, or any person not dealing at “arm’s length” (as such term is used in the Income Tax Act (Canada)); (w) any and all operations of the Issuer have been conducted in accordance with good industry practices and in material compliance with applicable laws, rules, regulations, orders and directions of government and other competent authorities; (x) the Issuer (i) is in material compliance with any and all applicable federal, provincial, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received all material permits, licenses or other approvals required of any of them under applicable Environmental Laws to conduct its business, and (iii) is in material compliance with all terms and conditions of any such permit, licences or approval; (y) since current management of the Issuer assumed management of the Issuer, the minute books and corporate records of the Issuer are true and correct in all material respects and contain all the resolutions of their respective directors and shareholders; (z) the Issuer will use its best efforts to remain a reporting issuer in British Columbia and Alberta for a minimum of two years after the Closing; (aabb) the Issuer shall not take any action which would be reasonably expected to result in the delisting or suspension of ~~the Shares~~ its common shares on or from the ~~Exchange or on or from any securities exchange, market or quoting facility on which the common shares are then listed or quoted~~ Exchanges and the Issuer shall comply, in all material respects, with the rules and regulations thereof; (bb) the Issuer has not withheld, and will not withhold from the Agents, any facts relating to the Issuer or to the offering of the FT Shares and the Units that would be considered material to a Purchaser; (cc) the Issuer proposes to use the gross proceeds of the sale of the FT Shares to incur exploration expenses on its exploration properties which are currently limited to the Provinces of Ontario and Quebec, that qualify as “Canadian exploration expenses” (“CEE”) as described in paragraph (f) of the definition thereof in subsection 66.1(6) of the Income Tax Act (Canada) (“ITA”); (dd) the Issuer will file all necessary forms and documents with the Canada Revenue Agency to meet its obligations under the Subscription Agreements for FT Shares; (ee) the Issuer will maintain proper accounting books and records relating to the CEE expenditures and will make such books and records available for inspection by the Agents upon reasonable request; (ff) the Issuer is a “principal business corporation” within the meaning prescribed in section 66(15) of the ITA; (gg) upon issuance pursuant to the Subscription Agreements, the FT Shares will be “flow-through shares” as defined in subsection 66(15) of the ITA and will not be “prescribed shares” for the purpose of section 6202.1 of the regulations to the ITA; (hh) other than the ~~Agents~~Underwriters, no person, firm or corporation acting or purporting to act at the request of the Issuer is entitled to any brokerage, agency or finder’s fee in connection with the ~~Offering~~transactions described herein; and (iidd) ~~its~~ the warranties and representations in this ~~section and in Appendix I to the Subscription Agreements for FT Shares~~ Subsection are true and correct and will remain so as of the ~~Closing~~conclusion of the distribution under the Prospectus. 14.2 ~~Each~~ The Issuer covenants with the Underwriters that it will not agree to issue, or announce the issuance of any common shares of the ~~Agents warrant and represent to~~Issuer or any securities convertible into or exchangeable for or exercisable to acquire common shares of the Issuer, ~~and covenant with~~during the period that ends 90 days after Closing, without the ~~Issuer that~~prior written consent of Xxxxxxx, such consent not to be unreasonably withheld other than: (a) ~~it is a valid and subsisting corporation~~ under existing director or employee stock option or purchase plans as detailed in the law of the jurisdiction in which it was incorporated and has good and sufficient right and authority to enter into this Agreement and complete the transactions under this Agreement on the terms and conditions set forth herein;Issuer’s most recent information circular; or (b) ~~it is a broker~~ under such director or ~~dealer properly registered under the Acts and is a member~~ employee stock options granted subsequently in ~~good standing~~ accordance with ~~the Exchange;~~regulatory approval; or (c) ~~it is acquiring~~ as a result of the ~~Agents’ Securities as principal for its own account and not for the benefit~~ exercise of ~~any other person;~~currently outstanding commitments (including share purchase warrants or options); or (d) ~~the Agents and any sub-agents retained by the Agents will be acquiring the Agents’ Warrants as principals~~ for ~~their own account and are “accredited investors” within the meaning of National Instrument 45-106; (e) it is~~ arm’s length acquisitions that do not ~~a U.S. Person, did not receive the offer to purchase the Agents’ Securities~~ result in dilution in the ~~United States, did not execute or deliver this Agreement in the United States and is not acquiring the Agents’ Securities for the account or benefit~~ outstanding common shares of a U.S. Person or person in the United States; (f) in connection with the Offering, it will sell the FT Shares and the Units in compliance with the Acts and this Agreement and in a manner such that no prospectus, offering memorandum, or other disclosure document need be prepared and filed or delivered by the Issuer in connection with the Offering and such that the Issuer is not made subject to new continuous disclosure reporting requirements; and (g) its warranties and representations in this section are true and correct and will remain so as of ~~the Closing, and, in the case of the warranties and representations in Sections 14.2(c) and 14.2(f), as of the acquisition of any Agents’ Warrants Shares~~greater than 15%. 14.3 Each of the Agents acknowledges that none of the Securities have been or will be registered under the U.S. Securities Act or the securities laws of any state, agrees that the Agents’ Warrants may not be exercised in the United States or by or on behalf of a U.S. Person, nor may any of the Agents’ Securities described in this paragraph be offered or sold in the United States unless an exemption from registration under the U.S. Securities Act and any applicable state securities law is available, and agrees that it will not engage in any Directed Selling Efforts (as defined in Schedule “A” with respect to the Agents’ Securities).

Appears in 1 contract

Samples: Underwriting Agreement (International Royalty Corp)

WARRANTIES, REPRESENTATIONS AND COVENANTS. ~~14.1~~ 13.1 The Issuer warrants and represents to and covenants with the Agents that: (a) the Issuer is a valid and subsisting corporation duly ~~incorporated~~ amalgamated and in good standing under the laws of British Columbia, is a "reporting issuer" under the ~~Province~~ Acts, and (i) is in good standing and up to date with all filings required under the Company Act (British Columbia); (ii) is not in default of ~~British Columbia and~~ any provision of Applicable Legislation; and (iii) has ~~all requisite~~ the corporate power and ~~authority~~ capacity to enter into this Agreement and to carry ~~on its business, as now conducted and as presently proposed to be conducted and to own their respective assets~~out the transactions herein contemplated; (b) as at the date hereof, the Issuer has no "subsidiaries" or "affiliated" companies, each within the meaning of the Securities Act (British Columbia), and does not otherwise own or control, directly or indirectly, any equity interest in any corporation, partnership or other form of business association. (c) the Issuer is duly registered and ~~licensed~~ licenced to carry on business in the jurisdictions in which it carries on business or owns property where so required by the laws of that jurisdiction, and holds all material licences and permits that are required for carrying on its business in the manner and in the jurisdictions in which such business is presently being carried on; (cd) as at the date hereof, the authorized capital ~~as at November 9, 2010,~~ of the Issuer consists of ~~an unlimited number of~~ 100 million common shares ~~without par value,~~ of which ~~as at November 9, 2010, 29,604,994~~ 15,517,865 common shares are issued and outstanding as fully paid and non-assessable; (de) the Issuer will reserve or set aside sufficient shares in its treasury to issue the Shares, the ~~FT Shares, the~~ Warrant Shares and the Agents’ ' Warrant Shares, ~~the Agents’ Warrant Shares~~ and all such shares will be duly and validly issued as fully paid and non-assessable when issued in accordance with the agreements or instruments governing the same; (e) the Subscription Agreements and all other written or oral representations made by the Issuer to a Purchaser or potential Purchaser in connection with the Offering will be accurate in all material respects and will omit no fact, the omission of which will make such representations misleading or incorrectassessable; (f) the minute books of the Issuer contain all records of the proceedings of the meetings of the Issuer's directors, shareholders and committees of directors since its date of amalgamation; (g) since the Audited Financial Statements, the business of the Issuer has been carried on in the usual and ordinary course and the Issuer has entered into no transaction out of the usual and ordinary course of business; (h) the Issuer has filed all documents which it is required to file under the continuous disclosure provisions of the Acts, and the Issuer has filed no Material Change reports on a confidential basis with the securities regulatory authorities in these jurisdictions where it is a "reporting issuer" which remain confidential; (i) the Issuer's outstanding common shares are listed for trading on the Exchange, and the Issuer is not in material breach of its Listing Agreement with the Exchange; (j) the Issuer is subject to no material mortgage, lien, lease, agreement, instrument or any other restriction of any kind or character which would prevent the consummation of the transactions contemplated herein; (k) except as qualified by the disclosure in all prospectuses, filing statements, information circulars, financial statements, management discussion and analysis, press releases or material change reports filed with the Regulatory Authorities (collectively, the “Disclosure Record”), the Issuer is the beneficial owner of the properties, business and assets or the interests in the properties, business or assets referred to in the Disclosure ~~Record and~~ Record, all agreements by which the Issuer holds an interest in a property, business or ~~asset~~ assets are in good standing according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated~~, and the Issuer does not own any material properties, business or assets not disclosed in the Disclosure Record~~; (gl) the Issuer will, upon completion of the Offering and the transactions described in the Issuer’s September 7, 2010 news release, hold either freehold title, mining leases, mining claims or other conventional property, proprietary or contractual interests or rights, recognized in the jurisdiction in which a particular property is located, in respect of the ore bodies and minerals located in properties in which it has an interest under valid, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit it to explore the minerals relating thereto (the “Mining Rights”). The Mining Rights have been validly located and recorded in accordance with all applicable laws and are valid and subsisting, the Issuer has all necessary surface rights, access rights and other necessary rights and interests relating to the properties in which it has an interest granting it the right and ability to explore for minerals, ore and metals for development purposes as are appropriate in view of the rights and interest therein of it, with only such exceptions as do not materially interfere with the use made by it of the rights or interests so held, and, except as disclosed in the Disclosure Record, ~~each of the material proprietary interests or rights and each of the documents,~~ subscription agreements and instruments and obligations relating thereto referred to above is currently in good standing in its name; (h) the Units, the Shares, the Warrants and the Warrants Shares offered and sold in the United States all other written or to, or for the account or benefit of, U.S. Persons will be subject to resale restrictions under the U.S. Securities Act and the Securities will not be subject to a restricted period or statutory hold period under the Acts of each Offering Jurisdiction in Canada or to any resale restrictions under the policies of the Exchange which extends beyond four months and one day after issuance of the Securities, other than for Purchasers who become control persons; (i) the Disclosure Record does not contain any material misrepresentation nor does it omit any Material Fact relating to the Issuer; (j) the financial statements contained in the Disclosure Record filed with any of the Commissions and supplied oral representations made by the Issuer to ~~the Agents~~ a Purchaser or potential Purchaser in connection with the ~~Offering~~ Private Placement will be accurate in all material respects and will omit no fact, the omission of which will make such representations misleading or incorrect at the time made; (m) the audited financial statements of the Issuer for its fiscal year ended December 31, 1998 (the "Audited Financial Statements) and the unaudited interim financial statements of the Issuer for the period ended March 31, 1999 (the "Interim Financial Statements") have ~~all~~ been prepared in accordance with Canadian generally accepted accounting principles, ~~accurately, fairly and fully~~ accurately reflect the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the ~~Issuer,~~ Issuer as of at the date thereof, and there have been no adverse ~~material changes~~ Material Changes in the financial position or condition of the Issuer ~~has taken place~~ or any damage, loss or other change of any kind whatsoever in circumstances materially affecting the business or assets of the Issuer or the right or capacity of the Issuer to carry on its business since the date ~~thereof~~of the Audited Financial Statements, except as recorded in the books of the Issuer and fully and plainly disclosed in the Disclosure Record; (kn) no financial statements of the Issuer are publicly available as at any date or for any period subsequent to the Interim Financial Statements; (o) all of the material transactions of the Issuer have been promptly and properly recorded or filed in or with the books or records of the Issuer; (p) all of the material contracts of the Issuer are described in the Disclosure Record and are in good standing in all material respects, and the Issuer is not in default in any material respect thereof, and the Issuer is not aware of any default in any material respect by any other party to such contracts; (q) the Issuer is party to no agreement, option, understanding or commitment, or any right or privilege capable of becoming an agreement, option, understanding or commitment, for the purchase of any of the businesses, properties or assets or interests in the businesses properties or assets referred to in the Disclosure Record, except as may be disclosed in the Disclosure Record; (r) the Issuer has complied and will comply fully ~~in all material respects~~ with the requirements of all applicable corporate and ~~Securities Laws~~ securities laws and administrative policies and directions, including, without limitation, Applicable Legislation, the ~~Acts~~ Company Act (British Columbia), the 1933 Act and the ~~Business~~1934 Act in relation to the issue and trading of its securities and in all matters relating to the Private Placement and the Distribution; (ls) there is not presently, and will not be until the ~~completion~~ closing of the ~~Closing~~ Distribution, any Material Change or change in any Material Fact relating to the Issuer which has not been or will not be fully disclosed to the ~~Agents~~Agents and in the Disclosure Record; (mt) the issue and sale of the Securities by the Issuer and the Agents and the execution and delivery of this Agreement and the Subscription Agreements and the performance of the transactions contemplated thereby does not and will not conflict with, or and does not and will not result in a breach of, any of the terms of ~~the Issuer’s constating~~ its incorporating documents or any agreement or instrument to which the Issuer is a party; (nu) as at the date hereof, the Issuer is not a party to any actions, suits or proceedings which could materially affect its business or financial condition, and to the best of the Issuer’s 's knowledge no such actions, suits or proceedings are contemplated or have been threatened which are not disclosed in the Disclosure Record; (ov) ~~neither~~ as at the ~~Issuer~~date hereof, nor to the best of the Issuer’s knowledge, any other party, is in default in the observance or performance of any term or obligation to be performed by it under any contract entered into by the Issuer which is material to the business of the Issuer and no event has occurred which with notice or lapse of time or both would directly or indirectly constitute such a default, in any such case which default or event would have a material adverse effect on the assets or properties, business, results of operations, prospects or condition (financial or otherwise) of the Issuer; (p) there are no judgments against the Issuer which are unsatisfied, nor ~~is the Issuer subject to~~ are there any consent decrees or ~~injunctions~~injunctions to which the Issuer is subject; (qw) ~~this Agreement has been~~as at the date hereof, or will be by the Closing, duly authorized by all necessary corporate action on the part of the Issuer, and the Issuer has full corporate power and authority to undertake the Offering, and this Agreement and the Subscription Agreements have been, or will be by the Closing, duly authorized, executed and delivered by the Issuer and this Agreement and the Subscription Agreements are legal, valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms subject to laws relating to creditors’ rights generally, the availability of equitable remedies and except as rights to indemnity and contribution may be limited by applicable law; (r) the Issuer is a reporting issuer in the Provinces of British Columbia and Alberta, the common shares of the Issuer are listed on the NEX Board of the Exchange, and the Issuer is not in default of any of the requirements of the Acts or any of the administrative policies or notices of the NEX Board of the Exchange or the Exchange; (s) other than the Exchange imposed halt on the Issuer’s Common Shares there is no order ceasing, halting or suspending trading in securities of the Issuer nor prohibiting the sale of such securities has been issued to and is outstanding against the Issuer or its directors, officers or promoters or ~~to the best of the Issuer’s knowledge,~~ against any other companies that have common directors, officers or promoters and ~~to the best of the Issuer’s knowledge,~~ no investigations or proceedings for such purposes are pending or threatened; (tx) the Issuer satisfies and will satisfy all necessary requirements of the Issuer under the Exemptions in order to permit the sale of the Special Warrants to Purchasers who are qualified to purchase the Special Warrants under the Exemptions, pursuant to this Private Placement; (y) as at the date hereof, except as disclosed ~~to the Agents~~ in Schedule “"C~~” with respect to outstanding options and convertible securities and as set out in the Disclosure Record or otherwise to any of the Regulatory Authorities~~" hereto, no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming such a right, agreement or option, for the issue or allotment of any unissued shares in the capital of the Issuer or any other security convertible into or exchangeable for any such shares, or to require the Issuer to purchase, redeem or otherwise acquire any of the issued and outstanding shares in its capital; (uz) as at the date hereof, the Issuer has filed all federal, provincial, local and foreign tax returns which are required to be filed, or ~~have~~ has requested extensions thereof, and ~~have~~ has paid all taxes required to be paid by ~~them~~ it and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for such assessments, fines and penalties which are currently being contested in good faith; (vaa) as at the date hereof, the Issuer ~~shall establish~~ has established on its books and ~~records, as may be applicable,~~ records reserves which are adequate for the payment of all taxes not yet due and payable and there are no liens for taxes on the assets of the Issuer except for taxes not yet due, and there are no audits of any of the tax returns of the Issuer which are known by the Issuer’s 's management to be pending, and there are no claims which have been or may be asserted relating to any such tax returns which, if determined adversely, would result in the assertion by any governmental agency of any deficiency which would have a material adverse effect on the properties, business or assets of the Issuer; (w) any and all operations of the Issuer have been conducted in accordance with good industry practices and in material compliance with applicable laws, rules, regulations, orders and directions of government and other competent authorities; (x) the Issuer (i) is in material compliance with any and all applicable federal, provincial, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received all material permits, licenses or other approvals required of any of them under applicable Environmental Laws to conduct its business, and (iii) is in material compliance with all terms and conditions of any such permit, licences or approval; (y) since current management of the Issuer assumed management of the Issuer, the minute books and corporate records of the Issuer are true and correct in all material respects and contain all the resolutions of their respective directors and shareholders; (z) the Issuer will use its best efforts to remain a reporting issuer in British Columbia and Alberta for a minimum of two years after the Closing; (aa) the Issuer shall not take any action which would be reasonably expected to result in the delisting or suspension of the Shares on or from the Exchange or on or from any securities exchange, market or quoting facility on which the common shares are then listed or quoted and the Issuer shall comply, in all material respects, with the rules and regulations thereof; (bb) the Issuer has not withheld, and will not withhold from the Agents, any facts relating to the Issuer or to the offering of the FT Shares and the Units that would be considered material to a Purchaser; (cc) the Issuer proposes to use the gross proceeds of the sale of the FT Shares to incur exploration expenses on its exploration properties which are currently limited to the Provinces of Ontario and Quebec, that qualify as “Canadian exploration expenses” (“CEE”) as described in paragraph (f) of the definition thereof in subsection 66.1(6) of the Income Tax Act (Canada) (“ITA”); (dd) the Issuer will file all necessary forms and documents with the Canada Revenue Agency to meet its obligations under the Subscription Agreements for FT Shares; (ee) the Issuer will maintain proper accounting books and records relating to the CEE expenditures and will make such books and records available for inspection by the Agents upon reasonable request; (ff) the Issuer is a “principal business corporation” within the meaning prescribed in section 66(15) of the ITA; (gg) upon issuance pursuant to the Subscription Agreements, the FT Shares will be “flow-through shares” as defined in subsection 66(15) of the ITA and will not be “prescribed shares” for the purpose of section 6202.1 of the regulations to the ITA; (hh) other than the Agents, no person, firm or corporation acting or purporting to act at the request of the Issuer is entitled to any brokerage, agency or finder’s fee in connection with the Offering; and (ii) its warranties and representations in this section and in Appendix I to the Subscription Agreements for FT Shares are true and correct and will remain so as of the Closing. 14.2 Each of the Agents warrant and represent to, and covenant with, the Issuer that: (a) it is a valid and subsisting corporation under the law of the jurisdiction in which it was incorporated and has good and sufficient right and authority to enter into this Agreement and complete the transactions under this Agreement on the terms and conditions set forth herein; (b) it is a broker or dealer properly registered under the Acts and is a member in good standing with the Exchange; (c) it is acquiring the Agents’ Securities as principal for its own account and not for the benefit of any other person; (d) the Agents and any sub-agents retained by the Agents will be acquiring the Agents’ Warrants as principals for their own account and are “accredited investors” within the meaning of National Instrument 45-106; (e) it is not a U.S. Person, did not receive the offer to purchase the Agents’ Securities in the United States, did not execute or deliver this Agreement in the United States and is not acquiring the Agents’ Securities for the account or benefit of a U.S. Person or person in the United States; (f) in connection with the Offering, it will sell the FT Shares and the Units in compliance with the Acts and this Agreement and in a manner such that no prospectus, offering memorandum, or other disclosure document need be prepared and filed or delivered by the Issuer in connection with the Offering and such that the Issuer is not made subject to new continuous disclosure reporting requirements; and (g) its warranties and representations in this section are true and correct and will remain so as of the Closing, and, in the case of the warranties and representations in Sections 14.2(c) and 14.2(f), as of the acquisition of any Agents’ Warrants Shares. 14.3 Each of the Agents acknowledges that none of the Securities have been or will be registered under the U.S. Securities Act or the securities laws of any state, agrees that the Agents’ Warrants may not be exercised in the United States or by or on behalf of a U.S. Person, nor may any of the Agents’ Securities described in this paragraph be offered or sold in the United States unless an exemption from registration under the U.S. Securities Act and any applicable state securities law is available, and agrees that it will not engage in any Directed Selling Efforts (as defined in Schedule “A” with respect to the Agents’ Securities).

Appears in 1 contract

Samples: Agency Agreement (Infowave Software Inc)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 14.1 The Issuer warrants and represents to and covenants with the ~~Agents~~ Agent that: (a) the Issuer is a valid and subsisting ~~corporation~~ company duly incorporated and in good standing under the laws of Delaware, and the ~~Province~~ Subsidiary is a valid and subsisting corporation duly incorporated under the laws of ~~British Columbia and has all requisite corporate power and authority to carry on~~ its ~~business, as now conducted and as presently proposed to be conducted and to own their respective assets~~jurisdiction of incorporation; (b) the Issuer ~~is duly registered~~ and ~~licensed to carry~~ its Subsidiary each hold all material licences and permits that are required for carrying on ~~business~~ their respective businesses in the manner and in the jurisdictions in which ~~it carries on business or owns property where so required by the laws of that jurisdiction~~such businesses are presently being carried on; (c) the Issuer and its Subsidiary each have the corporate power and capacity to own their assets and to carry on the business presently carried on by them; (d) the Issuer owns no equity interest in any body corporate or other legal entity whatsoever except a 100% interest in the Subsidiary; (e) the authorized and issued capital ~~as at November 9, 2010,~~ of the Issuer consists of ~~an unlimited~~ the number of common shares ~~without par value~~disclosed in the Public Record subject only to the issuance of up to 7,400,000 additional shares on the exercise of options pursuant to the stock option plan of the Issuer disclosed in the Public Record and up to 1,100,000 additional shares on the exercise of currently outstanding warrants disclosed in the Public Record and the potential issuance of shares pursuant to a consulting contract with Xxxxxx Delafield Xxxxxxx, LLC, dated June 14, 2001 (the "BDF Contract"), and all of ~~which~~ the shares shown in the Public Record as ~~at November 9, 2010, 29,604,994 common shares~~ issued are issued and outstanding as fully paid and non-~~assessable~~assessable as at the date hereof; (df) the Issuer will reserve or set aside sufficient shares in its treasury to issue the Shares and the Warrant Shares, the ~~FT Shares,~~ Agent's Shares and the Agent's Warrant Shares and ~~the Agents’ Shares~~they will, ~~the Agents’ Warrant Shares and all such shares will~~ when issued, be duly and validly issued as fully paid and non-~~assessable when issued in accordance with the agreements or instruments governing the same~~assessable; (eg) the ~~Subscription Agreements~~ Issuer will use its commercially reasonable efforts to file all documents and take all ~~other written or oral representations made by~~ action necessary to have the ~~Issuer to a Purchaser or potential Purchaser in connection with~~ Shares and the ~~Offering will be accurate in all material respects and will omit no fact~~Warrant Shares, the ~~omission~~ Agent's Shares and the Agent's Warrant Shares listed for trading on the Exchanges upon conversion of ~~which will make such representations misleading~~ the Special Warrants and Agent's Series "A" Special Warrants, or ~~incorrect~~exercise of the Warrants or Agent's Warrants, as the case may be, or as soon thereafter as is commercially reasonable; (fh) ~~except as qualified by~~ the ~~disclosure in~~ minute books of the Issuer contain all ~~prospectuses~~records of the proceedings of the meetings of the Issuer's directors, ~~filing statements~~shareholders and committees of directors since incorporation; (i) the minute book of its Subsidiary contains all records of the proceedings of the meetings of its Subsidiary's directors, ~~information circulars, financial statements, management discussion~~ shareholders and ~~analysis, press releases or material change reports filed with the Regulatory Authorities~~ committees of directors since its date of incorporation; (~~collectively, the “Disclosure Record”),~~ j) the Issuer is the beneficial owner of the ~~properties, business~~ material businesses and assets or the interests in the ~~properties, business or~~ businesses and assets referred to in the ~~Disclosure~~ Public Record as being owned by the Issuer or its Subsidiary, and all agreements by which the Issuer or a Subsidiary holds or may earn an interest in ~~a property, business~~ such businesses or ~~asset~~ assets are in good standing according to their ~~terms~~ terms; (k) the Public Record, taken as a whole, is true and complete in all material respects and each document included in the ~~properties are~~ Public Record was prepared in ~~good standing~~ accordance with the securities legislation applicable thereto and was true and correct and contained no Misrepresentation as at the date thereof; (l) the Issuer is a "reporting issuer" under the ~~applicable laws~~ securities legislation of each of the ~~jurisdictions~~ provinces of British Columbia and Ontario and is a "reporting company" under the Exchange Act and is not in material default of any of the requirements thereof or the regulation and rules made thereunder; (m) the Issuer has filed no material change reports on a confidential basis with the Commissions which ~~they~~ remain confidential; (n) the Issuer's outstanding common shares are ~~situated~~listed, posted and called for trading on the Exchanges, and the Issuer ~~does~~ is not ~~own any~~ in material ~~properties, business or assets not disclosed in~~ breach of its listing agreement with the ~~Disclosure Record~~Exchanges; (go) the ~~Issuer will, upon completion~~ audited financial statements of the ~~Offering and the transactions described in the Issuer’s September 7~~Issuer for its fiscal year ended March 31, 2010 news release, hold either freehold title, mining leases, mining claims or other conventional property, proprietary or contractual interests or rights, recognized in the jurisdiction in which a particular property is located, in respect of the ore bodies and minerals located in properties in which it has an interest under valid, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit it to explore the minerals relating thereto 2001 (the ~~“Mining Rights”). The Mining Rights~~ "Audited Financial Statements) have been validly located and recorded in accordance with all applicable laws and are valid and subsisting, the Issuer has all necessary surface rights, access rights and other necessary rights and interests relating to the properties in which it has an interest granting it the right and ability to explore for minerals, ore and metals for development purposes as are appropriate in view of the rights and interest therein of it, with only such exceptions as do not materially interfere with the use made by it of the rights or interests so held, and, except as disclosed in the Disclosure Record, each of the material proprietary interests or rights and each of the documents, agreements and instruments and obligations relating thereto referred to above is currently in good standing in its name; (h) the Units, the Shares, the Warrants and the Warrants Shares offered and sold in the United States or to, or for the account or benefit of, U.S. Persons will be subject to resale restrictions under the U.S. Securities Act and the Securities will not be subject to a restricted period or statutory hold period under the Acts of each Offering Jurisdiction in Canada or to any resale restrictions under the policies of the Exchange which extends beyond four months and one day after issuance of the Securities, other than for Purchasers who become control persons; (i) the Disclosure Record does not contain any material misrepresentation nor does it omit any Material Fact relating to the Issuer; (j) the financial statements contained in the Disclosure Record filed with any of the Commissions and supplied by the Issuer to the Agents in connection with the Offering have all been prepared in accordance with Canadian generally accepted accounting principles (with a reconciliation to United States generally accepted accounting principles), ~~accurately, fairly~~ and ~~fully~~ accurately reflect the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the ~~Issuer,~~ Issuer on a consolidated basis as of at the date thereof; (p) the unaudited financial statements of the Issuer for the three month period ended June 30, 2001 and the six month period ended September 30, 2001 (the "Interim Financial Statements") have been prepared in accordance with United States generally accepted accounting principles, and accurately reflect the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the Issuer on a consolidated basis as at the date thereof (q) there have been no adverse ~~material changes~~ Material Changes in the financial position of the Issuer ~~has taken place~~ since the date ~~thereof~~of the Audited Financial Statements, except as recorded in the books of the Issuer and fully and plainly disclosed in the Public Record; (kr) since the date of the Audited Financial Statements, there has been no damage, loss or other change of any kind whatsoever in circumstances materially affecting the business or assets of the Issuer or its Subsidiary, or the right or capacity of the Issuer or its Subsidiary to carry on its business; (s) no financial statements of the Issuer are available as at any date or for any period subsequent to the Interim Financial Statements; (t) all of the material transactions of the Issuer and its Subsidiary have been promptly and properly recorded or filed in or with the books or records of the Issuer or its Subsidiary; (u) all of the material contracts of the Issuer and its Subsidiary are described in the Public Record and are in good standing in all material respects, and neither the Issuer nor its Subsidiary is in default in any material respect thereof, and the Issuer is not aware of any default in any material respect by any other party to such contracts; (v) the Issuer has complied and will comply fully ~~in all material respects~~ with the requirements of all applicable corporate and ~~Securities Laws and administrative policies and directions~~securities laws, including, without limitation, the ~~Acts and the Business (l) there is not presently~~Applicable Legislation, and ~~will not be until~~ all applicable Delaware corporate legislation in relation to the ~~completion~~ issue of the ~~Closing any Material Change or change~~ Securities, and in ~~any Material Fact~~ all matters relating to the ~~Issuer which has not been or will not be fully disclosed to the Agents~~Private Placement; (mw) the issue and sale of the Securities by the Issuer ~~and the Agents~~ does not and will not conflict with, or and does not and will not result in a breach of, any of the terms of ~~the Issuer’s constating~~ its incorporating documents or any agreement or instrument to which the Issuer is a party; (nx) neither the Issuer nor its Subsidiary is ~~not a~~ party to any actions, ~~suits~~ suits, proceedings or ~~proceedings~~ arbitrations which could materially affect ~~its~~ the business or financial ~~condition~~condition of the Issuer, ~~and~~ taken as a whole, and, to the best of the knowledge of the Issuer, no such actions, suits, proceedings or arbitrations are contemplated or have been threatened; (y) there are no judgments against the Issuer or its Subsidiary which are unsatisfied, nor are there any consent decrees or injunctions to which the Issuer or its Subsidiary is subject; (z) to the best of the Issuer~~’s knowledge no such actions~~'s knowledge, ~~suits or proceedings are contemplated or have been threatened which are not disclosed in the Disclosure Record; (o)~~ neither the ~~Issuer,~~ Issuer nor ~~to the best of the Issuer’s knowledge, any other party,~~ its Subsidiary is in ~~default in the observance or performance~~ breach of any ~~term~~ law, ordinance, statute, regulation, bylaw, order or ~~obligation to be performed by it under~~ decree of any ~~contract entered into by the Issuer~~ kind whatsoever which is material to the business of the Issuer and no event has occurred which with notice or lapse of time or both would directly or indirectly constitute such a default, in any such case which default or event breach would have a material adverse effect on the ~~assets~~ financial position, business or ~~properties, business, results of operations,~~ prospects ~~or condition (financial or otherwise)~~ of the ~~Issuer~~Issuer on a consolidated basis; (~~p) there are no judgments against the Issuer which are unsatisfied, nor is the Issuer subject to any consent decrees or injunctions; (q~~aa) this Agreement has ~~been, or will be by the Closing,~~ been duly authorized by all necessary corporate action on the part of the ~~Issuer,~~ Issuer and the Issuer has full corporate power and authority to undertake the ~~Offering~~Private Placement; (bb) there is not presently, and ~~this Agreement~~ will not be until the Closing and the ~~Subscription Agreements have been~~Qualification Date, any Material Change relating to the Issuer which has not been or will not be by fully disclosed in the ~~Closing~~Public Record, ~~duly authorized, executed and delivered by the Issuer and this Agreement and the Subscription Agreements are legal, valid and binding obligations of the Issuer, enforceable against the Issuer~~ in accordance with ~~their terms subject to laws relating to creditors’ rights generally, the availability of equitable remedies and except as rights to indemnity and contribution may be limited by applicable law~~Applicable Legislation; (rcc) the Issuer is a reporting issuer in the Provinces of British Columbia and Alberta, the common shares of the Issuer are listed on the NEX Board of the Exchange, and the Issuer is not in default of any of the requirements of the Acts or any of the administrative policies or notices of the NEX Board of the Exchange or the Exchange; (s) other than the Exchange imposed halt on the Issuer’s Common Shares there is no order ceasing, halting or suspending trading in securities of the Issuer ~~nor~~ or prohibiting the sale of such securities has been issued to and is outstanding against the Issuer or or, to the best of the knowledge of the Issuer, its directors, officers or promoters or and, to the best of the ~~Issuer’s knowledge, against any other companies that have common directors, officers or promoters and to the best~~ knowledge of the Issuer~~’s knowledge~~, no investigations or proceedings for such purposes are pending or threatened; (tdd) except as disclosed in the Public Record and otherwise than pursuant to the ~~Agents in Schedule “C” with respect to outstanding options~~ Issuer's stock option plan and ~~convertible securities and as set out in~~ the ~~Disclosure Record or otherwise to any of the Regulatory Authorities~~BDF Contract, no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming such a right, agreement or option, for the issue or allotment of any ~~unissued~~ shares in the capital of the Issuer or any other security convertible into or exchangeable for any such shares, or to require the Issuer to purchase, redeem or otherwise acquire any of the issued and outstanding shares in its capital; (uee) the Issuer and its Subsidiary has filed all federal, provincial, local and foreign tax returns which are required to be filed, or ~~have~~ has requested extensions thereof, and ~~have~~ has paid all taxes required to be paid ~~by them~~ and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for such assessments, fines and penalties which are currently being contested in good faith; (vff) the Issuer ~~shall establish~~ and its Subsidiary has established on its books and ~~records, as may be applicable,~~ records reserves which are adequate for the payment of all taxes not yet due and payable and there are no liens for taxes on the assets of the Issuer or its Subsidiary except for taxes not yet due, and there are no audits of any of the tax returns of the Issuer or its Subsidiary which are known by the Issuer’s 's management to be pending, and there are no claims which have been or may be asserted relating to any such tax returns which, if determined adversely, would result in the assertion by any governmental agency of any deficiency which would have a material adverse effect on the properties, business or assets of the ~~Issuer; (w) any and all operations of the~~ Issuer have been conducted in accordance with good industry practices and in material compliance with applicable laws, rules, regulations, orders and directions of government and other competent authorities; (x) the Issuer (i) is in material compliance with any and all applicable federal, provincial, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received all material permits, licenses or other approvals required of any of them under applicable Environmental Laws to conduct its business, and (iii) is in material compliance with all terms and conditions of any such permit, licences or approval; (y) since current management of the Issuer assumed management of the Issuer, the minute books and corporate records of the Issuer are true and correct in all material respects and contain all the resolutions of their respective directors and shareholders; (z) the Issuer will use its best efforts to remain on a reporting issuer in British Columbia and Alberta for a minimum of two years after the Closing; (aa) the Issuer shall not take any action which would be reasonably expected to result in the delisting or suspension of the Shares on or from the Exchange or on or from any securities exchange, market or quoting facility on which the common shares are then listed or quoted and the Issuer shall comply, in all material respects, with the rules and regulations thereof; (bb) the Issuer has not withheld, and will not withhold from the Agents, any facts relating to the Issuer or to the offering of the FT Shares and the Units that would be considered material to a Purchaser; (cc) the Issuer proposes to use the gross proceeds of the sale of the FT Shares to incur exploration expenses on its exploration properties which are currently limited to the Provinces of Ontario and Quebec, that qualify as “Canadian exploration expenses” (“CEE”) as described in paragraph (f) of the definition thereof in subsection 66.1(6) of the Income Tax Act (Canada) (“ITA”); (dd) the Issuer will file all necessary forms and documents with the Canada Revenue Agency to meet its obligations under the Subscription Agreements for FT Shares; (ee) the Issuer will maintain proper accounting books and records relating to the CEE expenditures and will make such books and records available for inspection by the Agents upon reasonable request; (ff) the Issuer is a “principal business corporation” within the meaning prescribed in section 66(15) of the ITAconsolidated basis; (gg) ~~upon issuance pursuant to the Subscription Agreements, the FT Shares~~ this Agreement will be ~~“flow-through shares” as defined in subsection 66(15)~~ upon execution and delivery by the Issuer, a legal, valid and binding agreement of the ~~ITA~~ Issuer, enforceable against the Issuer in accordance with its terms, subject only to customary qualifications regarding creditors' rights and ~~will not be “prescribed shares” for~~ the ~~purpose~~ availability of ~~section 6202.1 of the regulations to the ITA~~equitable remedies; (hh) the Issuer or its Subsidiary own or are entitled to use all material patents, trademarks, service marks, trade names, copyrights, trade secrets, information, proprietary rights and processes necessary for the business of the Issuer and its Subsidiary as now conducted and as proposed to be conducted and, to the best of the knowledge of the Issuer and its Subsidiary, without any conflict with or infringement of the rights of others; (ii) neither the Issuer nor its Subsidiary has received any communication alleging that the Issuer or any Subsidiary has violated or, by conducting its business as proposed would violate any of the patents, trademarks, service marks, trade names, copyrights, or trade secrets or other ~~than~~ proprietary rights of any other person or entity; (jj) to the ~~Agents~~best of the Issuer's knowledge, neither the execution or delivery of this Agreement, the carrying on of the businesses of the Issuer and its Subsidiary, nor the conduct of the businesses of the Issuer or its Subsidiary by their respective employees will conflict with or result in a breach or default of any of the material terms of any contract, covenant or instrument under which any of such employees are bound; and (kk) apart from the Agent, no person, firm or corporation acting or purporting to act at the request of the Issuer is entitled to any brokerage, agency or finder’s 's fee in connection with the ~~Offering; and~~transactions described herein. ~~(ii) its~~ 14.2 The representations and warranties ~~and representations in this section and in Appendix I to~~ of the ~~Subscription Agreements for FT Shares are~~ Issuer contained herein will be true and correct ~~and will remain so~~ at the Closing and, except where the Issuer has provided updated information satisfactory to the Agent acting in its sole discretion, as of the ~~Closing~~Qualification Date, and, if that is not the case, then the Agent will be entitled for a period of one year following the Closing to seek remedy against the Issuer for any such misrepresentation or breach of warranty, and no investigation by or on behalf of the Agent or the Purchasers will diminish in any respect their rights to rely on such representations and warranties. ~~14.2 Each of the Agents warrant~~ 14.3 The Agent warrants and ~~represent to,~~ represents to and ~~covenant with,~~ covenants with the Issuer that: (a) it is a valid and subsisting corporation under the law of the jurisdiction in which it was ~~incorporated and has good and sufficient right and authority to enter into this Agreement and complete the transactions under this Agreement on the terms and conditions set forth herein~~incorporated; (b) it ~~is a broker or dealer properly registered under~~ will sell the ~~Acts and is a member~~ Special Warrants in ~~good standing~~ compliance with the ~~Exchange~~Applicable Legislation; (c) it will execute and deliver a Subscription Agreement, in one of the forms attached as Schedule "A", for any Special Warrants that it is ~~acquiring~~ required to purchase under this Agreement; and (d) if it or any of its subsidiaries transfers any Special Warrants, Agent's Series "A" Special Warrants, Agent's Series "B" Special Warrants or Agent's Warrants it has purchased or received from the ~~Agents’~~ Issuer, or any Shares, Agent's Shares or Agent's Warrant Shares issuable upon exercise of the Special Warrants or the Agent's Warrants to third parties, it will obtain any further acknowledgements, representations, warranties, or certifications from the Purchasers as required by the Applicable Legislation, and will fulfil any filing or reporting obligations in respect of the transfers in accordance with the Applicable Legislation and Exchange Policies. 14.4 In connection with all sales of the Securities, the Agent warrants and represents to and covenants with the Issuer that: (a) it acknowledges that the Securities ~~as principal for~~ have not been registered under the U.S. Securities Act and may be transferred or sold only in accordance with the Exemptions; (b) it has not entered and will not enter into any contractual arrangement with respect to the distribution of the Securities, except with its ~~own account~~ affiliates, any selling group members or with the prior written consent of the Issuer; (c) all offers and ~~not for~~ sales of the ~~benefit of any other person~~Securities in the United States will be effected by Canaccord Capital Corporation (USA), Inc. (the "Placement Agent") in accordance with all applicable U.S. broker-dealer requirements; (d) ~~the Agents and any sub-agents retained~~ all sales to residents of Alberta, Ontario or British Columbia, as applicable, will be effected by the ~~Agents~~ Agent in accordance with all applicable Alberta, Ontario and British Columbia registration requirements and will be ~~acquiring~~ made in strict compliance with, in the ~~Agents’ Warrants as principals for their own account~~ case of residents of Alberta, sections 65(1)(e) and ~~are “accredited investors” within~~ 107(1)(d) of the ~~meaning~~ Securities Act (Alberta), in the case of ~~National Instrument 45-106~~residents of British Columbia, sections 45(1)(5) and 74(2)(4) of the Securities Act (B.C.) and, in the case of residents of Ontario, sections 35(1)(5) and 72(1)(d) of the Securities Act (Ontario); (e) ~~it is not a U.S. Person~~other than the written documents prepared and agreed upon by the parties hereto in connection with this Private Placement transaction, ~~did not receive~~ no written material will be used or distributed in connection with the offer ~~to purchase~~ or sale of the ~~Agents’~~ Securities ~~in the United States, did not execute or deliver this Agreement in the United States and is not acquiring the Agents’ Securities for the account or benefit of a U.S. Person or person~~ in the United States; (f) all transfers or sales of the Securities in the United States will be made only to parties who, prior to such transfer or sale, represent and warrant in writing that they are an Institutional "Accredited Investor" as such term is defined in Rule 501 under the U.S. Securities Act; (g) no form of General Solicitation or General Advertising will be used, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio or television, or other form of telecommunications, including electronic display, or any seminar or meeting whose attendees had been invited by general solicitation or general advertising, in connection with the ~~Offering~~offer or sale of the Securities; (h) prior to any sale of Securities, it will sell the FT Shares and the Units in compliance with the Acts and this Agreement and in a manner such that no prospectus, offering memorandum, or other disclosure document need be prepared and filed or delivered by shall cause each purchaser thereof to give to the Issuer ~~in connection with the Offering and such that the Issuer is not made subject to new continuous disclosure reporting requirements; and (g) its~~ those representations, warranties and ~~representations in this section~~ agreements as are ~~true and correct and will remain so as of the Closing, and,~~ contained in the ~~case~~ Certification for Securities Law Compliance attached hereto as part of ~~the warranties and representations in Sections 14.2(c) and 14.2(f), as of the acquisition of any Agents’ Warrants Shares~~Schedule "A". 14.3 Each of the Agents acknowledges that none of the Securities have been or will be registered under the U.S. Securities Act or the securities laws of any state, agrees that the Agents’ Warrants may not be exercised in the United States or by or on behalf of a U.S. Person, nor may any of the Agents’ Securities described in this paragraph be offered or sold in the United States unless an exemption from registration under the U.S. Securities Act and any applicable state securities law is available, and agrees that it will not engage in any Directed Selling Efforts (as defined in Schedule “A” with respect to the Agents’ Securities).

Appears in 1 contract

Samples: Private Placement Agency Agreement (Genetronics Biomedical Corp)

WARRANTIES, REPRESENTATIONS AND COVENANTS. ~~14.1~~ 15.1 The Issuer warrants and represents to and covenants with each of the Agents that: (a) the Issuer ~~is a~~ and its subsidiaries, if any, are valid and subsisting ~~corporation~~ corporations duly incorporated and in good standing under the laws of the ~~Province of British Columbia and has all requisite corporate power and authority to carry on its business~~jurisdiction in which they are incorporated, ~~as now conducted and as presently proposed to be conducted and to own their respective assets~~continued or amalgamated; (b) the Issuer is and its subsidiaries, if any, are duly registered and licensed to carry on business in the jurisdictions in which ~~it carries~~ they carry on business or ~~owns~~ own property where so required by the laws of that jurisdiction; (c) the authorized and issued capital ~~as at November 9, 2010,~~ of the Issuer ~~consists~~ are as disclosed to the Exchange and the outstanding shares of ~~an unlimited number of common shares without par value, of which as at November 9, 2010, 29,604,994 common shares~~ the Issuer are ~~issued and outstanding as~~ fully paid and non-assessable; (d) the Issuer will reserve or set aside sufficient shares in its treasury to issue the Flow-Through Shares, Non-Flow-Through Shares, the FT Non-Flow-Through Unit Warrant Shares, ~~the Warrant Shares~~ and the ~~Agents’ Shares, the Agents’~~ Agent’s Warrant Shares and all such shares will be duly and validly issued as fully paid and non-~~assessable when issued in accordance with the agreements or instruments governing the same~~assessable; (e) the Subscription Agreements and all other written or oral representations made by the Issuer to a Purchaser or potential Purchaser in connection with the Offering will be accurate in all material respects and will omit no fact, the omission of which will make such representations misleading or incorrect; (f) except as qualified by the disclosure in all prospectuses, filing statements, annual information ~~circulars~~forms, ~~financial statements~~including the Current AIF, ~~management discussion~~ and ~~analysis,~~ press releases ~~or material change reports~~ filed with the ~~Regulatory Authorities~~ Commissions or the Exchange, (~~collectively,~~ the “Disclosure Record”), ) the Issuer is the beneficial owner of the properties, business and assets or the interests in the properties, business or assets referred to in the Disclosure ~~Record and~~ Record, all agreements by which the Issuer holds an interest in a property, business or ~~asset~~ assets are in good standing according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated, ; (f) the subscription form and all other written or oral representations made by the Issuer ~~does not own any~~ to a Purchaser or potential Purchaser in connection with the Private Placement will be accurate in all material ~~properties~~respects and will omit no fact, ~~business~~ the omission of which will make such representations misleading or ~~assets not disclosed in the Disclosure Record~~incorrect; (g) the Issuer will, upon completion of the Offering and the transactions described in the Issuer’s September 7, 2010 news release, hold either freehold title, mining leases, mining claims or other conventional property, proprietary or contractual interests or rights, recognized in the jurisdiction in which a particular property is located, in respect of the ore bodies and minerals located in properties in which it has an interest under valid, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit it to explore the minerals relating thereto (the “Mining Rights”). The Mining Rights have been validly located and recorded in accordance with all applicable laws and are valid and subsisting, the Issuer has all necessary surface rights, access rights and other necessary rights and interests relating to the properties in which it has an interest granting it the right and ability to explore for minerals, ore and metals for development purposes as are appropriate in view of the rights and interest therein of it, with only such exceptions as do not materially interfere financial statements filed with the ~~use made by it of the rights~~ Commissions or interests so held, and, except as disclosed in the Disclosure Record, each of the material proprietary interests or rights and each of the documents, agreements and instruments and obligations relating thereto referred to above is currently in good standing in its name; (h) the Units, the Shares, the Warrants and the Warrants Shares offered and sold in the United States or to, or for the account or benefit of, U.S. Persons will be subject to resale restrictions under the U.S. Securities Act and the Securities will not be subject to a restricted period or statutory hold period under the Acts of each Offering Jurisdiction in Canada or to any resale restrictions under the policies of the Exchange which extends beyond four months and one day after issuance of the Securities, other than for Purchasers who become control persons; (i) the Disclosure Record does not contain any material misrepresentation nor does it omit any Material Fact relating to the Issuer; (j) the financial statements contained in the Disclosure Record filed with any of the Commissions and supplied by the Issuer to the Agents in connection with the ~~Offering~~ Private Placement have ~~all~~ been prepared in accordance with Canadian generally accepted accounting principles, ~~accurately, fairly and fully~~ accurately reflect the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the Issuer, and its subsidiaries, if any, as of the date thereof, and no adverse material changes in the financial position of the Issuer ~~has~~ have taken place since the date thereof, save in the ordinary course of the Issuer’s business; (kh) the Issuer has complied and will comply fully ~~in all material respects~~ with the requirements of all applicable corporate and ~~Securities Laws~~ securities laws and administrative policies and directions, including, without limitation, the ~~Acts~~ Applicable Legislation in relation to the issue and trading of its securities and in all matters relating to the ~~Business~~Private Placement; (li) there is not presently, and will not be until the ~~completion of the Closing~~ Final Closing, any Material Change or change in any Material Fact relating to the Issuer which has not been or will not be fully disclosed to the Agents; (mj) the issue and sale of the Securities by the Issuer and the Agents does not and will not conflict with, or and does not and will not result in a breach of, any of the terms of ~~the Issuer’s~~ its constating documents or any agreement or instrument to which the Issuer is a party; (nk) neither the Issuer nor any of its subsidiaries is ~~not~~ a party to any actions, suits or proceedings which could materially affect its business or financial condition, and to the best of the Issuer’s knowledge no such actions, suits or proceedings are contemplated or have been threatened which are not disclosed in the Disclosure Record; (o) neither the Issuer, nor to the best of the Issuer’s knowledge, any other party, is in default in the observance or performance of any term or obligation to be performed by it under any contract entered into by the Issuer which is material to the business of the Issuer and no event has occurred which with notice or lapse of time or both would directly or indirectly constitute such a default, in any such case which default or event would have a material adverse effect on the assets or properties, business, results of operations, prospects or condition (financial or otherwise) of the Issuer; (p1) there are no judgments against the Issuer or any of its subsidiaries, if any, which are unsatisfied, nor ~~is the Issuer subject to~~ are there any ‘ consent decrees or ~~injunctions~~injunctions to which the Issuer or any of its subsidiaries, if any, is subject; (qm) this Agreement has ~~been,~~ been or will be by the First Closing, duly authorized by all necessary corporate action on the part of the Issuer, and the Issuer has full corporate power and authority to undertake the Offering, and this Agreement and the Subscription Agreements have been, or will be by the Closing, duly authorized, executed and delivered by the Issuer and this Agreement and the Subscription Agreements are legal, valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms subject to laws relating to creditors’ rights generally, the availability of equitable remedies and except as rights to indemnity and contribution may be limited by applicable lawPrivate Placement; (rn) the Issuer is a “reporting ~~issuer in~~ issuer” within the ~~Provinces of British Columbia and Alberta, the common shares~~ meaning of the ~~Issuer are listed on the NEX Board of the Exchange,~~ Applicable Legislation and ~~the Issuer~~ is not in default of any of the requirements of the ~~Acts~~ Applicable Legislation or any of the administrative policies or notices of the ~~NEX Board of the Exchange or the Exchange~~Regulatory Authorities; (so) ~~other than~~ the ~~Exchange imposed halt on the~~ Issuer is and will be at each Closing a Qualifying Issuer~~’s Common Shares there is~~ ; (p) no order ceasing, halting or suspending trading in securities of the Issuer nor prohibiting the sale of such securities has been issued to and is outstanding against the Issuer or its directors, officers or promoters or ~~to the best of the Issuer’s knowledge,~~ against any other companies that have common directors, officers or promoters and ~~to the best of the Issuer’s knowledge,~~ no investigations or proceedings for such purposes are pending or threatened; (tq) except as disclosed ~~to the Agents in Schedule “C” with respect to outstanding options and convertible securities and as set out~~ in the Disclosure Record or otherwise to ~~any of~~ the Regulatory Authorities, no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming such a right, agreement or option, for the issue or allotment of any unissued shares in the capital of the Issuer or its subsidiaries, if any, or any other security convertible into or exchangeable for any such shares, or to require the Issuer or its subsidiaries, if any, to purchase, redeem or otherwise acquire any of the issued and outstanding shares in its capital; (ur) the Issuer ~~has~~ and its subsidiaries, if any, have filed all federal, provincial, local and foreign tax returns which are required to be filed, or have requested extensions thereof, and have paid all taxes required to be paid by them and any other assessment, fine or penalty levied against itthem, to the extent that any of the foregoing is due and payable, except for such assessments, fines and penalties which are currently being contested in good faith; (vs) the Issuer ~~shall establish~~ and its subsidiaries, if any, have established on ~~its~~ their books and ~~records, as may be applicable,~~ records reserves which are adequate for the payment of all taxes not yet due and payable and there are no liens for taxes on the assets of the Issuer or its subsidiaries, if any, except for taxes not yet due, and there are no audits of any of the tax returns of the Issuer or its subsidiaries, if any, which are known by the Issuer’s management to be pending, and there are no claims which have been or may be asserted relating to any such tax returns which, if determined adversely, would result in the assertion by any governmental agency of any deficiency which would have a material adverse effect on the properties, business or assets of the ~~Issuer~~Issuer or its subsidiaries, if any; (w) any and all operations of the Issuer have been conducted in accordance with good industry practices and in material compliance with applicable laws, rules, regulations, orders and directions of government and other competent authorities; (xt) the Issuer ~~(i) is in material compliance with any~~ is, and all applicable federal, provincial, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received at all material ~~permits~~times will remain, licenses or other approvals required of any of them under applicable Environmental Laws to conduct its business, and (iii) is in material compliance with all terms and conditions of any such permit, licences or approval; (y) since current management of a “principal-business corporation” within the Issuer assumed management of the Issuer, the minute books and corporate records of the Issuer are true and correct in all material respects and contain all the resolutions of their respective directors and shareholders; (z) the Issuer will use its best efforts to remain a reporting issuer in British Columbia and Alberta for a minimum of two years after the Closing; (aa) the Issuer shall not take any action which would be reasonably expected to result in the delisting or suspension of the Shares on or from the Exchange or on or from any securities exchange, market or quoting facility on which the common shares are then listed or quoted and the Issuer shall comply, in all material respects, with the rules and regulations thereof; (bb) the Issuer has not withheld, and will not withhold from the Agents, any facts relating to the Issuer or to the offering of the FT Shares and the Units that would be considered material to a Purchaser; (cc) the Issuer proposes to use the gross proceeds of the sale of the FT Shares to incur exploration expenses on its exploration properties which are currently limited to the Provinces of Ontario and Quebec, that qualify as “Canadian exploration expenses” (“CEE”) as described in paragraph (f) of the definition thereof in meaning prescribed by subsection ~~66.1(6~~66(15) of the Income Tax Act (Canada) (the “ITA”); (ddu) the Issuer will file all necessary forms and documents with the Canada Revenue Agency to meet its obligations under the Subscription Agreements for FT Shares; (ee) the Issuer will maintain proper accounting books and records relating to the CEE expenditures and will make such books and records available for inspection by the Agents upon reasonable request; (ff) the Issuer is a “principal business corporation” within the meaning prescribed in section 66(15) of the ITA; (gg) upon issuance pursuant to the Subscription Agreements, the FT Flow-Through Shares will be qualify as “flow-through shares” as ~~defined~~ described in subsection 66(15) of the ITA and in particular will not be “prescribed ~~shares” for the purpose of~~ shares as defined in section 6202.1 of the regulations to the ITA; (hhv) if the Issuer amalgamates with any one or more companies, any shares or warrants issued to or held by Purchasers as a replacement for the Flow-Through Shares as a result of such amalgamation will qualify by virtue of subsection 87(4.4) of the ITA as “flow-through shares” as described in subsection 66(15) of the ITA and in particular will not be prescribed shares as defined in section 6202.1 of the regulations to the ITA; (w) the Issuer will incur expenses which are Qualifying Expenses, all in an amount which equals the proceeds derived from the sale to the Purchasers of Flow-Through Shares, renounce those amounts to purchasers of Flow-Through Shares and otherwise comply with its obligations set forth in the agreements for Flow-Through Units entered into between the Issuer and Purchasers thereof in connection with the Private Placement; (x) other than the Agents, no person, firm or corporation acting or purporting to act at the request of the Issuer is entitled to any brokerage, agency or finder’s fee in connection with the ~~Offering~~transactions described herein; and (iiy) ~~its~~ the warranties and representations in this ~~section and in Appendix I to the Subscription Agreements for FT Shares~~ Section are true and correct and will remain so as of the Final Closing. ~~14.2~~ 15.2 Each of the Agents warrant and represent ~~to, and covenant with,~~ to the Issuer that: (a) it is a valid and subsisting corporation under the law of the jurisdiction in which it was ~~incorporated and has good and sufficient right and authority to enter into this Agreement and complete the transactions under this Agreement on the terms and conditions set forth herein~~incorporated; (b) it one of either Pacific or Xxxxxxx is a broker ~~or dealer properly~~ registered under the ~~Acts and is a member in good standing with the Exchange~~Applicable Legislation; (c) it is ~~acquiring~~ a member in good standing of the ~~Agents’ Securities as principal for its own account and not for the benefit of any other person~~Exchange; (d) it will sell the ~~Agents and any sub-agents retained by~~ Units in compliance with the ~~Agents will be acquiring the Agents’ Warrants as principals for their own account and are “accredited investors” within the meaning of National Instrument 45-106;~~Applicable Legislation; and (e) it is not a U.S. ~~Person, did not receive the offer to purchase the Agents’ Securities~~ Person or in the United States, did not execute or deliver this Agreement in the United States and is not acquiring the Agents’ Securities for the account or benefit of a U.S. Person or person in the United States; (f) in connection with the Offering, it will sell the FT Shares and the Units in compliance with the Acts and this Agreement and in a manner such that no prospectus, offering memorandum, or other disclosure document need be prepared and filed or delivered by the Issuer in connection with the Offering and such that the Issuer is not made subject to new continuous disclosure reporting requirements; and (g) its warranties and representations in this section are true and correct and will remain so as of the Closing, and, in the case of the warranties and representations in Sections 14.2(c) and 14.2(f), as of the acquisition of any Agents’ Warrants Shares. 14.3 Each of the Agents acknowledges that none of the Securities have been or will be registered under the U.S. Securities Act or the securities laws of any state, agrees that the Agents’ Warrants may not be exercised in the United States or by or on behalf of a U.S. Person, nor may any of the Agents’ Securities described in this paragraph be offered or sold in the United States unless an exemption from registration under the U.S. Securities Act and any applicable state securities law is available, and agrees that it will not engage in any Directed Selling Efforts (as defined in Schedule “A” with respect to the Agents’ Securities).

Appears in 1 contract

Samples: Agency Agreement (Platinum Group Metals LTD)

WARRANTIES, REPRESENTATIONS AND COVENANTS. ~~14.1~~ 13.1 The Issuer warrants and represents to and covenants with the ~~Agents~~ Underwriters that: (a) the delivery by the Issuer to the Underwriters of the Preliminary Prospectus, the Prospectus or any Supplementary Material shall constitute the Issuer’s representation and warranty to the Underwriters that: (i) the Preliminary Prospectus, Prospectus or Supplementary Material, as the case may be, contains, at the date of such document, no misrepresentation and constitutes full, true and plain disclosure of all Material Facts relating to the Underlying Shares; (ii) no Material Fact has been omitted from the Preliminary Prospectus, Prospectus or Supplementary Material, as the case may be, which is required to be stated or which is necessary to make any statements or information contained therein not misleading in light of the circumstances in which they are made; (iii) the Preliminary Prospectus, Prospectus or Supplementary Material, as the case may be, complies fully with the requirements of the Applicable Legislation in the Selling Provinces; and (iv) the financial statements of the Issuer included or incorporated by reference in the Preliminary Prospectus, Prospectus or Supplementary Material, as the case may be, including any auditor’s reports thereon and the notes thereto, fairly present, in accordance with IFRS, consistently applied, the financial position and condition, the results of operations, cash flows and the other information purported to be shown therein of the Issuer as at the dates thereof and for the periods then ended and reflect all assets, liabilities and obligations (absolute, accrued, contingent or otherwise) of the Issuer as at the dates thereof required to be disclosed by IFRS, and include all adjustments necessary for a fair presentation; provided that the Issuer makes no representation or warranty with respect to statements contained in or omissions from the Preliminary Prospectus, Prospectus or Supplementary Material, as the case may be, relating solely to the Underwriters and provided by the Underwriters in writing expressly for inclusion in the Preliminary Prospectus, the Prospectus or the Supplementary Material. (b) the Issuer has no subsidiaries, and the amalgamation of the Issuer with Alpha Minerals Inc. was duly completed in compliance with applicable laws; (c) the Issuer is a valid and ~~subsisting~~ existing corporation duly ~~incorporated~~ incorporated, continued or amalgamated and in good standing under the laws of the ~~Province of British Columbia and has all requisite corporate power and authority to carry on its business~~jurisdiction in which it was incorporated, ~~as now conducted and as presently proposed to be conducted and to own their respective assets~~continued or amalgamated; (bd) the Issuer is duly registered and licensed to carry on business in the jurisdictions in which it carries on business or owns property where so required by the laws of that ~~jurisdiction; (c) the authorized capital as at November 9~~jurisdiction and is not otherwise precluded from carrying on business or owning property in such jurisdictions by any other commitment, 2010, of the Issuer consists of an unlimited number of common shares without par value, of which as at November 9, 2010, 29,604,994 common shares are issued and outstanding as fully paid and non-assessable; (d) the Issuer will reserve agreement or set aside sufficient shares in its treasury to issue the Shares, the FT Shares, the Warrant Shares and the Agents’ Shares, the Agents’ Warrant Shares and all such shares will be duly and validly issued as fully paid and non-assessable when issued in accordance with the agreements or instruments governing the samedocument; (e) the Issuer has full corporate power and capacity to carry on its business as now carried on by it, to enter into this Agreement and the Subscription Agreements and ~~all other written or oral representations made by the Issuer~~ to a Purchaser or potential Purchaser in connection with the Offering will be accurate in all material respects and will omit no fact, the omission of which will make such representations misleading or incorrect; (f) except as qualified by the disclosure in all prospectuses, filing statements, information circulars, financial statements, management discussion and analysis, press releases or material change reports filed with the Regulatory Authorities (collectively, the “Disclosure Record”), the Issuer is the beneficial owner of the properties, business and assets or the interests in the properties, business or assets referred to in the Disclosure Record and all agreements by which the Issuer holds an interest in a property, business or asset are in good standing according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situatedcarry out its obligations thereunder, and to undertake the ~~Issuer does not own any material properties, business or assets not disclosed in~~ Private Placement and issue the Disclosure Record; (g) the Issuer will, upon completion of the Offering and the transactions described in the Issuer’s September 7, 2010 news release, hold either freehold title, mining leases, mining claims or other conventional property, proprietary or contractual interests or rights, recognized in the jurisdiction in which a particular property is located, in respect of the ore bodies and minerals located in properties in which it has an interest under valid, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit it to explore the minerals relating thereto (the “Mining Rights”). The Mining Rights have been validly located and recorded in accordance with all applicable laws and are valid and subsisting, the Issuer has all necessary surface rights, access rights and other necessary rights and interests relating to the properties in which it has an interest granting it the right and ability to explore for minerals, ore and metals for development purposes as are appropriate in view of the rights and interest therein of it, with only such exceptions as do not materially interfere with the use made by it of the rights or interests so held, and, except as disclosed in the Disclosure Record, each of the material proprietary interests or rights and each of the documents, agreements and instruments and obligations relating thereto referred to above is currently in good standing in its name; (h) the Units, the Shares, the Special Warrants and the Warrants Shares offered and sold in the United States or to, or for the account or benefit of, U.S. Persons will be subject to resale restrictions under the U.S. Securities Act and the Securities will not be subject to a restricted period or statutory hold period under the Acts of each Offering Jurisdiction in Canada or to any resale restrictions under the policies of the Exchange which extends beyond four months and one day after issuance of the Securities, other than for Purchasers who become control persons; (i) the Disclosure Record does not contain any material misrepresentation nor does it omit any Material Fact relating to the Issuer; (j) the financial statements contained in the Disclosure Record filed with any of the Commissions and supplied by the Issuer to the Agents in connection with the Offering have all been prepared in accordance with Canadian generally accepted accounting principles, accurately, fairly and fully reflect the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the Issuer, as of the date thereofUnderlying Shares, and no adverse material changes in the financial position of the Issuer has taken place since the date thereof; (k) the Issuer has complied and will comply fully in all material respects with the requirements of all applicable corporate and Securities Laws and administrative policies and directions, including, without limitation, the Acts and the Business (l) there is not presently, and will not be until the completion of the Closing any Material Change or change in any Material Fact relating to the Issuer which has not been or will not be fully disclosed to the Agents; (m) the issue and sale of the Securities by the Issuer and the Agents does not and will not conflict with, or result in a breach of, any of the terms of the Issuer’s constating documents or any agreement or instrument to which the Issuer is a party; (n) the Issuer is not a party to any actions, suits or proceedings which could materially affect its business or financial condition, and to the best of the Issuer’s knowledge no such actions, suits or proceedings are contemplated or have been threatened which are not disclosed in the Disclosure Record; (o) neither the Issuer, nor to the best of the Issuer’s knowledge, any other party, is in default in the observance or performance of any term or obligation to be performed by it under any contract entered into by the Issuer which is material to the business of the Issuer and no event has occurred which with notice or lapse of time or both would directly or indirectly constitute such a default, in any such case which default or event would have a material adverse effect on the assets or properties, business, results of operations, prospects or condition (financial or otherwise) of the Issuer; (p) there are no judgments against the Issuer which are unsatisfied, nor is the Issuer subject to any consent decrees or injunctions; (q) this Agreement has ~~been, or will be by the Closing,~~ been duly authorized by all necessary corporate action on the part of the Issuer~~, and the Issuer has full corporate power and authority to undertake the Offering, and~~ ; (f) this Agreement and the Subscription Agreements ~~have been, or~~ entered into with Purchasers will ~~be by the Closing, duly authorized, executed and delivered by the Issuer and this Agreement and the Subscription Agreements are legal,~~ constitute valid and binding obligations of the ~~Issuer,~~ Issuer in accordance with their terms and will be enforceable against the Issuer in accordance with their ~~terms subject to~~ terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws relating to ~~creditors’~~ or affecting the rights ~~generally, the availability~~ of ~~equitable remedies~~ creditors generally and except as limited by the application of equitable principles when equitable remedies are sought, and by the fact that rights to ~~indemnity~~ indemnity, contribution and ~~contribution~~ waiver, and the ability to sever unenforceable terms, may be limited by applicable law; (rg) all of the ~~Issuer is a reporting issuer in the Provinces of British Columbia and Alberta, the common shares~~ material transactions of the Issuer ~~are listed on the NEX Board~~ have been promptly and properly recorded or filed in its books or records and its minute books or records contain all records of the ~~Exchange~~meetings and proceedings of its directors and shareholders and other committees, ~~and the Issuer is not in default of any of the requirements of the Acts or any of the administrative policies or notices of the NEX Board of the Exchange or the Exchange~~if any, since inception; (sh) ~~other than~~ as of the ~~Exchange imposed halt on~~ date hereof, the ~~Issuer’s Common Shares there is no order ceasing, halting or suspending trading in securities~~ authorized capital of the Issuer ~~nor prohibiting the sale~~ consists of ~~such securities has been~~ an unlimited number of Common Shares, of which 331,928,461 Common Shares are issued to and is outstanding ~~against the Issuer or its directors, officers or promoters or to the best of the Issuer’s knowledge, against any other companies that have common directors, officers or promoters~~ as fully paid and to the best of the Issuer’s knowledge, no investigations or proceedings for such purposes are pending or threatened; (t) except as disclosed to the Agents in Schedule “C” with respect to outstanding options non-assessable and ~~convertible securities and as set out in the Disclosure Record or otherwise to any of the Regulatory Authorities,~~ no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming such a right, agreement or option, , (i) for the issue or allotment of any unissued shares in the capital of the Issuer or any other security convertible into or exchangeable for any such shares, or with the exception of 26,121,749 outstanding options, 8,553,760 outstanding share purchase warrants of the Issuer, as disclosed in its Disclosure Record; or (ii) to require the Issuer to purchase, redeem or otherwise acquire any of the issued and outstanding shares in its ~~capital~~capital other than as disclosed in its Disclosure Record; (i) the only issued and outstanding convertible securities of the Issuer are those options and warrants referred to in subsection (h) of this Section 13.1; (j) by the Closing Time, the Issuer will have reserved or set aside sufficient shares in its treasury to issue (i) the Underlying Shares and (ii) the Underwriters’ Warrant Shares and, upon receipt of the consideration therefor, all such shares will be duly and validly issued as fully paid and non-assessable; (k) upon issuance, the Securities shall have the same attributes as outlined in this Agreement and in the Subscription Agreements and, in the case of the Special Warrants, the Warrant Indenture; (l) the Issuer is the legal and beneficial owner of and has good and marketable title to the properties, business and assets or the interests in the properties, business or assets referred to in the Disclosure Record, all agreements by which the Issuer holds an interest in a property, business or assets are in good standing according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated and all filings and work commitments required to maintain the properties in good standing have been properly recorded and filed in a timely manner with the appropriate regulatory body and there are no mortgages, liens, charges, encumbrances or any other interests in or on such properties other than as disclosed in the Disclosure Record or that are not material; (m) as of the respective dates of such information and statements and at the time such documents were filed on SEDAR, as applicable, the Disclosure Record and all financial, marketing, sales and operational information provided to the Underwriters by the Issuer do not contain any misrepresentations (as such term is defined in the Applicable Legislation); (n) the Issuer is in compliance in all material respects with the timely and continuous disclosure obligations under Applicable Legislation (including the Exchange Policies); (o) the Subscription Agreements and all other written or oral representations made by the Issuer to a Purchaser or potential Purchaser in connection with the Private Placement are accurate in all material respects and omit no fact, the omission of which will make such representations misleading or incorrect; (p) the financial statements filed with the Commissions by the Issuer and, prior to April 26, 2013, by Fission Energy Corp., or supplied by the Issuer to the Underwriters in connection with the Private Placement (together with the certifications required by National Instrument 52-109 Certification of Disclosure in Issuer’s Annual and Interim Filings) have been prepared in accordance with Canadian generally accepted accounting principles or IFRS, as applicable, present fairly, fully and correctly, in all material respects, the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the Issuer and any subsidiary or Fission Energy Corp., as applicable, as of the date thereof, and there have been no adverse material changes in the financial position of the Issuer since the date thereof, and other than in connection with the arrangement agreement with Xxxxxxx Mines Corp. dated March 7, 2013 and the Arrangement Agreement, the business of the Issuer and its subsidiaries have been carried on in the usual and ordinary course consistent with past practice since the date thereof; (q) the auditors of the Issuer who audited the financial statements of the Issuer for the most recent financial year-end and who provided their audit report thereon and are independent public accountants as required under Applicable Legislation and there has never been a reportable event (within the meaning of National Instrument 51-102) with the auditors of the Issuer; (r) the Issuer has complied and will comply fully with the requirements of all applicable corporate and securities laws and administrative policies and directions and all orders from a Commission thereunder, including, without limitation, the Applicable Legislation in relation to the issue and trading of its securities and in all matters relating to the Private Placement; (s) the Issuer is in compliance with all applicable laws, regulations and statutes (including all environmental laws and regulations) in the jurisdictions in which it carries on business and which may materially affect the Issuer, has not received a notice of non-compliance, nor knows of, nor has reasonable grounds to know of, any facts that could give rise to a notice of non-compliance with any such laws, regulations and statutes, and is not aware of any pending change or contemplated change to any applicable law or regulation or governmental position that would materially affect the business of the Issuer or the business or legal environment under which the Issuer operates; (t) neither the Issuer nor Fission Energy Corp. (prior to April 26, 2013), has caused or permitted the release, in any manner whatsoever, of any pollutants, contaminants, chemicals or industrial toxic or hazardous waste or substances (collectively, the “Hazardous Substances”) on or from any of the Issuer’s properties or assets nor has it received any notice that it is potentially responsible for a clean-up site or corrective action under any applicable laws, statutes, ordinances, by-laws, regulations, or any orders, directions or decisions rendered by any government, ministry, department or administrative regulatory agency relating to the protection of the environment, occupational health and safety or otherwise relating to dealing with Hazardous Substances except where such release or notice would not reasonably be expected to have a material adverse effect on the Issuer; (u) the Issuer has ~~filed~~ all ~~federal~~licences, ~~provincial~~permits, ~~local~~ approvals, consents, certificates, registrations and ~~foreign tax returns which are required~~ other authorizations (collectively the “Permits”) under all applicable laws and regulations necessary for the operation of the businesses carried on or proposed to be ~~filed~~commenced by the Issuer except where the failure to have such Permits would not reasonably be expected to have a material adverse effect on the Issuer and each Permit is valid, subsisting and in good standing and the Issuer is not in material default or ~~have requested extensions thereof~~breach of any Permit, and ~~have paid all taxes required to be paid by them and any other assessment, fine or penalty levied against it,~~ to the ~~extent that any~~ best of the ~~foregoing~~ knowledge of the Issuer, other than as disclosed to the Underwriters in writing, no proceeding is ~~due and payable, except for such assessments, fines and penalties which are currently being contested in good faith~~pending or threatened to revoke or limit any Permit; (v) to the ~~Issuer shall establish on its books~~ Issuer’s knowledge, information and ~~records~~belief, ~~as may be applicable, reserves which are adequate for~~ none of the ~~payment of all taxes not yet due and payable and there are no liens for taxes on the assets~~ directors or officers of the Issuer ~~except for taxes not yet due~~is currently subject to regulatory, ~~and there are no audits of any of the tax returns of the Issuer which are known by the Issuer’s management to be pending, and there are no claims which have been~~ criminal or ~~may be asserted relating to any such tax returns~~ bankruptcy proceedings in Canada or elsewhere which, if determined adversely, would ~~result in~~ materially and adversely affect the ~~assertion by any governmental agency of any deficiency which would have a material adverse effect on the properties, business or assets~~ consummation of the ~~Issuer~~transactions contemplated in this Agreement; (w) ~~any and~~ all operations of the Issuer and its subsidiaries, and of Fission Energy Corp. prior to April 26, 2013, have been conducted and are currently conducted in all material respects in accordance with ~~good industry practices and in material compliance with~~ all applicable laws, ~~rules~~including, ~~regulations~~but not limited to, ~~orders~~ all applicable material workers’ compensation, and ~~directions of government~~ health, safety and ~~other competent authorities~~workplace laws, regulations and policies; (x) there is not presently, and will not be until the ~~Issuer (i) is~~ Closing, any Material Change or change in ~~material compliance with~~ any ~~and all applicable federal, provincial, state and local laws and regulations~~ Material Fact relating to the ~~protection of human health and safety,~~ Issuer which has not been or will not be fully disclosed to the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received all material permits, licenses or other approvals required of any of them under applicable Environmental Laws to conduct its business, and (iii) is in material compliance with all terms and conditions of any such permit, licences or approvalpublic; (y) ~~since current management of~~ neither the Issuer ~~assumed management~~ nor, to the best of the Issuer’s knowledge, any other person, is in default in the ~~minute books~~ observance or performance of any material terms, covenant, obligation to be performed by the Issuer or such other person under any material instrument, document, agreement, or arrangement (including memorandums of understanding or joint venture agreements) to which the Issuer is a party or otherwise bound and ~~corporate records~~ all such material instruments, contracts, agreements, or arrangements (including memorandums of understanding or joint venture agreements) are in good standing and no event has occurred which with notice or lapse of time or both would constitute such a default by the Issuer or, to the best of the ~~Issuer are true and correct in all material respects and contain all the resolutions of their respective directors and shareholders~~Issuer’s knowledge, any other party; (z) the ~~Issuer will use its best efforts to remain a reporting issuer in British Columbia~~ issuance and ~~Alberta for a minimum~~ sale of ~~two years after~~ the ~~Closing; (aa)~~ Securities by the Issuer ~~shall not take any action which would be reasonably expected to result in~~ and the ~~delisting or suspension~~ Underwriters, the entering into of this Agreement and the entering into of the Shares on or from the Exchange or on or from any securities exchange, market or quoting facility on which the common shares are then listed or quoted and the Issuer shall comply, in all material respects, with the rules and regulations thereof; (bb) the Issuer has Subscription Agreements do not ~~withheld,~~ and will not ~~withhold from the Agents~~conflict with, and do not and will not result in a breach of, or constitute a default under (A) any ~~facts relating~~ law, statute, rule or regulation applicable to the Issuer or to the offering of the FT Shares and the Units that would be considered material to a Purchaser; (cc) the Issuer proposes to use the gross proceeds of the sale of the FT Shares to incur exploration expenses on its exploration properties which are currently limited to the Provinces of Ontario and Quebecincluding, that qualify as “Canadian exploration expenses” (“CEE”) as described in paragraph (f) of the definition thereof in subsection 66.1(6) of the Income Tax Act (Canada) (“ITA”); (dd) the Issuer will file all necessary forms and documents with the Canada Revenue Agency to meet its obligations under the Subscription Agreements for FT Shares; (ee) the Issuer will maintain proper accounting books and records relating to the CEE expenditures and will make such books and records available for inspection by the Agents upon reasonable request; (ff) the Issuer is a “principal business corporation” within the meaning prescribed in section 66(15) of the ITA; (gg) upon issuance pursuant to the Subscription Agreementswithout limitation, the ~~FT Shares will be “flow-through shares” as defined in subsection 66(15) of the ITA and will not be “prescribed shares” for the purpose of section 6202.1 of the regulations to the ITA~~Applicable Legislation; (hh) other than the Agents, no person, firm or corporation acting or purporting to act at the request of the Issuer is entitled to any brokerage, agency or finder’s fee in connection with the Offering; and (ii) its warranties and representations in this section and in Appendix I to the Subscription Agreements for FT Shares are true and correct and will remain so as of the Closing. 14.2 Each of the Agents warrant and represent to, and covenant with, the Issuer that: (a) it is a valid and subsisting corporation under the law of the jurisdiction in which it was incorporated and has good and sufficient right and authority to enter into this Agreement and complete the transactions under this Agreement on the terms and conditions set forth herein; (b) it is a broker or dealer properly registered under the Acts and is a member in good standing with the Exchange; (c) it is acquiring the Agents’ Securities as principal for its own account and not for the benefit of any other person; (d) the Agents and any sub-agents retained by the Agents will be acquiring the Agents’ Warrants as principals for their own account and are “accredited investors” within the meaning of National Instrument 45-106; (e) it is not a U.S. Person, did not receive the offer to purchase the Agents’ Securities in the United States, did not execute or deliver this Agreement in the United States and is not acquiring the Agents’ Securities for the account or benefit of a U.S. Person or person in the United States; (f) in connection with the Offering, it will sell the FT Shares and the Units in compliance with the Acts and this Agreement and in a manner such that no prospectus, offering memorandum, or other disclosure document need be prepared and filed or delivered by the Issuer in connection with the Offering and such that the Issuer is not made subject to new continuous disclosure reporting requirements; and (g) its warranties and representations in this section are true and correct and will remain so as of the Closing, and, in the case of the warranties and representations in Sections 14.2(c) and 14.2(f), as of the acquisition of any Agents’ Warrants Shares. 14.3 Each of the Agents acknowledges that none of the Securities have been or will be registered under the U.S. Securities Act or the securities laws of any state, agrees that the Agents’ Warrants may not be exercised in the United States or by or on behalf of a U.S. Person, nor may any of the Agents’ Securities described in this paragraph be offered or sold in the United States unless an exemption from registration under the U.S. Securities Act and any applicable state securities law is available, and agrees that it will not engage in any Directed Selling Efforts (as defined in Schedule “A” with respect to the Agents’ Securities).

Appears in 1 contract

Samples: Underwriting Agreement

WARRANTIES, REPRESENTATIONS AND COVENANTS. 14.1 The Issuer warrants and represents to and covenants with the ~~Agents~~ Agent that: (a) the Issuer ~~is a~~ and its subsidiaries, if any, are valid and subsisting ~~corporation~~ corporations duly incorporated and in good standing under the laws of the ~~Province of British Columbia and has all requisite corporate power and authority to carry on its business~~jurisdiction in which they are incorporated, ~~as now conducted and as presently proposed to be conducted and to own their respective assets~~continued or amalgamated; (b) the Issuer is and its subsidiaries, if any, are duly registered and ~~licensed~~ licenced to carry on business in the jurisdictions in which ~~it carries~~ they carry on business or ~~owns~~ own property where so required by the laws of that jurisdiction; (c) the authorized and issued capital ~~as at November 9, 2010,~~ of the Issuer ~~consists~~ are as disclosed to the Exchange and the outstanding shares of ~~an unlimited number of common shares without par value, of which as at November 9, 2010, 29,604,994 common shares~~ the Issuer are ~~issued and outstanding as~~ fully paid and non-assessable; (d) the Issuer will reserve or set aside sufficient shares in its treasury to issue the Shares, the FT Warrant Shares, the Agent's Warrant ~~Shares and the Agents’~~ Shares, the ~~Agents’~~ Corporate Finance Shares, the Corporate Finance Warrant Shares and all such shares will be duly and validly issued as fully paid and non-~~assessable when issued in accordance with the agreements or instruments governing the same~~assessable; (e) the Subscription Agreements and all other written or oral representations made by the Issuer to a Purchaser or potential Purchaser in connection with the Offering will be accurate in all material respects and will omit no fact, the omission of which will make such representations misleading or incorrect; (f) except as qualified by the disclosure in all prospectuses, filing statements, annual information ~~circulars~~forms, ~~financial statements, management discussion~~ including the Issuer's Current AIF and ~~analysis,~~ press releases ~~or material change reports~~ filed with the ~~Regulatory Authorities~~ Commissions or the Exchange, (~~collectively,~~ the “"Disclosure Record~~”),~~ ") the Issuer is the beneficial owner of the properties, business and assets or the interests in the properties, business or assets referred to in the Disclosure ~~Record and~~ Record, all agreements by which the Issuer holds an interest in a property, business or ~~asset~~ assets are in good standing according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated, ; (f) the subscription form and all other written or oral representations made by the Issuer ~~does not own any~~ to a Purchaser or potential Purchaser in connection with the Private Placement will be accurate in all material ~~properties~~respects and will omit no fact, ~~business~~ the omission of which will make such representations misleading or ~~assets not disclosed in the Disclosure Record~~incorrect; (g) the Issuer will, upon completion of the Offering and the transactions described in the Issuer’s September 7, 2010 news release, hold either freehold title, mining leases, mining claims or other conventional property, proprietary or contractual interests or rights, recognized in the jurisdiction in which a particular property is located, in respect of the ore bodies and minerals located in properties in which it has an interest under valid, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit it to explore the minerals relating thereto (the “Mining Rights”). The Mining Rights have been validly located and recorded in accordance with all applicable laws and are valid and subsisting, the Issuer has all necessary surface rights, access rights and other necessary rights and interests relating to the properties in which it has an interest granting it the right and ability to explore for minerals, ore and metals for development purposes as are appropriate in view of the rights and interest therein of it, with only such exceptions as do not materially interfere financial statements filed with the ~~use made by it of the rights~~ Commissions or interests so held, and, except as disclosed in the Disclosure Record, each of the material proprietary interests or rights and each of the documents, agreements and instruments and obligations relating thereto referred to above is currently in good standing in its name; (h) the Units, the Shares, the Warrants and the Warrants Shares offered and sold in the United States or to, or for the account or benefit of, U.S. Persons will be subject to resale restrictions under the U.S. Securities Act and the Securities will not be subject to a restricted period or statutory hold period under the Acts of each Offering Jurisdiction in Canada or to any resale restrictions under the policies of the Exchange which extends beyond four months and one day after issuance of the Securities, other than for Purchasers who become control persons; (i) the Disclosure Record does not contain any material misrepresentation nor does it omit any Material Fact relating to the Issuer; (j) the financial statements contained in the Disclosure Record filed with any of the Commissions and supplied by the Issuer to the ~~Agents~~ Agent in connection with the ~~Offering~~ Private Placement have ~~all~~ been prepared in accordance with Canadian generally accepted accounting principles, ~~accurately, fairly and fully~~ accurately reflect the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the Issuer, and its subsidiaries, if any, as of the date thereof, and no adverse material changes in the financial position of the Issuer ~~has~~ have taken place since the date thereof;, save in the ordinary course of the Issuer's business; ddd\dddO3673 (kh) the Issuer has complied and will comply fully ~~in all material respects~~ with the requirements of all applicable corporate and ~~Securities Laws~~ securities laws and administrative policies and directions, including, without limitation, the ~~Acts~~ Applicable Legislation in relation to the issue and trading of its securities and in all matters relating to the ~~Business~~Private Placement; (li) there is not presently, and will not be until the ~~completion of the Closing~~ Final Closing, any Material Change or change in any Material Fact relating to the Issuer which has not been or will not be fully disclosed to the ~~Agents~~Agent; (mj) the issue and sale of the Securities by the Issuer and the ~~Agents~~ Agent does not and will not conflict with, or and does not and will not result in a breach of, any of the terms of ~~the Issuer’s constating~~ its incorporating documents or any agreement or instrument to which the Issuer is a party; (nk) neither the Issuer nor any of its subsidiaries is ~~not~~ a party to any actions, suits or proceedings which could materially affect its business or financial condition, and to the best of the Issuer’s 's knowledge no such actions, suits or proceedings are contemplated or have been threatened which are not disclosed in the Disclosure Record; (o) neither the Issuer, nor to the best of the Issuer’s knowledge, any other party, is in default in the observance or performance of any term or obligation to be performed by it under any contract entered into by the Issuer which is material to the business of the Issuer and no event has occurred which with notice or lapse of time or both would directly or indirectly constitute such a default, in any such case which default or event would have a material adverse effect on the assets or properties, business, results of operations, prospects or condition (financial or otherwise) of the Issuer; (p1) there are no judgments against the Issuer or any of its subsidiaries, if any, which are unsatisfied, nor ~~is the Issuer subject to~~ are there any consent decrees or ~~injunctions~~injunctions to which the Issuer or any of its subsidiaries, if any, is subject; (qm) this Agreement has ~~been,~~ been or will be by the First Closing, duly authorized by all necessary corporate action on the part of the Issuer, and the Issuer has full corporate power and authority to undertake the Offering, and this Agreement and the Subscription Agreements have been, or will be by the Closing, duly authorized, executed and delivered by the Issuer and this Agreement and the Subscription Agreements are legal, valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms subject to laws relating to creditors’ rights generally, the availability of equitable remedies and except as rights to indemnity and contribution may be limited by applicable lawPrivate Placement; (rn) the Issuer is a "reporting ~~issuer~~ issuer" in the ~~Provinces~~ provinces of British Columbia and ~~Alberta, the common shares of the Issuer are listed on the NEX Board of the Exchange,~~ Alberta and ~~the Issuer~~ is not in default of any of the requirements of the ~~Acts~~ Applicable Legislation of those provinces or any of the administrative policies or notices of the ~~NEX Board~~ Regulatory Authorities of ~~the Exchange or the Exchange~~those provinces; (so) ~~other than the Exchange imposed halt on the Issuer’s Common Shares there is~~ no order ceasing, halting or suspending trading in securities of the Issuer nor prohibiting the sale of such securities has been issued to and is outstanding against the Issuer or its directors, officers or promoters or ~~to the best of the Issuer’s knowledge,~~ against any other companies that have common directors, officers or promoters and ~~to the best of the Issuer’s knowledge,~~ no investigations or proceedings for such purposes are pending or threatened; (tp) except as disclosed ~~to the Agents in Schedule “C” with respect to outstanding options and convertible securities and as set out~~ in the Disclosure Record or otherwise to ~~any of~~ the Regulatory Authorities, no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming such a right, agreement or option, for the issue or allotment of any unissued shares in the capital of the Issuer or its subsidiaries, if any, or any other security convertible into or exchangeable for any such shares, or to require the Issuer or its subsidiaries, if any, to purchase, redeem or otherwise acquire any of the issued and outstanding shares in its capital;; ddd\dddO3673 (uq) the Issuer ~~has~~ and its subsidiaries, if any, have filed all federal, provincial, local and foreign tax returns which are required to be filed, or have requested extensions thereof, and have paid all taxes required to be paid by them and any other assessment, fine or penalty levied against itthem, to the extent that any of the foregoing is due and payable, except for such assessments, fines and penalties which are currently being contested in good faith; (vr) the Issuer ~~shall establish~~ and its subsidiaries, if any, have established on ~~its~~ their books and ~~records, as may be applicable,~~ records reserves which are adequate for the payment of all taxes not yet due and payable and there are no liens for taxes on the assets of the Issuer or its subsidiaries, if any, except for taxes not yet due, and there are no audits of any of the tax returns of the Issuer or its subsidiaries, if any, which are known by the Issuer’s 's management to be pending, and there are no claims which have been or may be asserted relating to any such tax returns which, if determined adversely, would result in the assertion by any governmental agency of any deficiency which would have a material adverse effect on the properties, business or assets of the ~~Issuer~~Issuer or its subsidiaries, if any; (ws) ~~any and all operations~~ neither the execution or delivery of this Agreement nor the carrying on of the business of the Issuer have been conducted in accordance with good industry practices and in material compliance with applicable laws, rules, regulations, orders and directions of government and other competent authorities; (x) by the Issuer (i) is in material compliance with any and all applicable federal, provincial, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received all material permits, licenses or other approvals required of any of them under applicable Environmental Laws to conduct its business, and (iii) is in material compliance with all terms and conditions of any such permit, licences or approval; (y) since current management of the Issuer assumed management employees of the Issuer, nor the ~~minute books and corporate records~~ conduct of the business of the Issuer ~~are true and correct~~ will conflict with or result in ~~all material respects and contain all~~ a breach of the ~~resolutions~~ terms, conditions, or provisions of ~~their respective directors and shareholders~~or constitute a default under, any contract, covenant or instrument under which any of such employees is now obligated; (z) the Issuer will use its best efforts to remain a reporting issuer in British Columbia and Alberta for a minimum of two years after the Closing; (aa) the Issuer shall not take any action which would be reasonably expected to result in the delisting or suspension of the Shares on or from the Exchange or on or from any securities exchange, market or quoting facility on which the common shares are then listed or quoted and the Issuer shall comply, in all material respects, with the rules and regulations thereof; (bb) the Issuer has not withheld, and will not withhold from the Agents, any facts relating to the Issuer or to the offering of the FT Shares and the Units that would be considered material to a Purchaser; (cc) the Issuer proposes to use the gross proceeds of the sale of the FT Shares to incur exploration expenses on its exploration properties which are currently limited to the Provinces of Ontario and Quebec, that qualify as “Canadian exploration expenses” (“CEE”) as described in paragraph (f) of the definition thereof in subsection 66.1(6) of the Income Tax Act (Canada) (“ITA”); (dd) the Issuer will file all necessary forms and documents with the Canada Revenue Agency to meet its obligations under the Subscription Agreements for FT Shares; (ee) the Issuer will maintain proper accounting books and records relating to the CEE expenditures and will make such books and records available for inspection by the Agents upon reasonable request; (ff) the Issuer is a “principal business corporation” within the meaning prescribed in section 66(15) of the ITA; (gg) upon issuance pursuant to the Subscription Agreements, the FT Shares will be “flow-through shares” as defined in subsection 66(15) of the ITA and will not be “prescribed shares” for the purpose of section 6202.1 of the regulations to the ITA; (hht) other than the ~~Agents~~Agent, no person, firm or corporation acting or purporting to act at the request of the Issuer is entitled to any brokerage, agency or finder’s 's fee in connection with the ~~Offering~~transactions described herein; (u) the Issuer has and will have filed all documents that are required to be filed under the continuous disclosure provisions of the Applicable Legislation, including annual and interim financial information and annual reports, press releases disclosing material changes and material change reports; and (iiv) ~~its~~ the warranties and representations in this ~~section and in Appendix I to the Subscription Agreements for FT Shares~~ Section are true and correct and will remain so as of the Final Closing. 14.2 ~~Each of the Agents warrant~~ The Agent warrants and ~~represent to, and covenant with,~~ represents to the Issuer that: (a) it is a valid and subsisting corporation under the law of the jurisdiction in which it was ~~incorporated and has good and sufficient right and authority to enter into this Agreement and complete the transactions under this Agreement on the terms and conditions set forth herein~~incorporated; (b) it is a broker ~~or dealer properly~~ registered under the ~~Acts and is a member in good standing with the Exchange~~Applicable Legislation; (c) it is ~~acquiring~~ a member in good standing of the ~~Agents’ Securities as principal for its own account and not for the benefit of any other person;~~Exchange; and (d) the Agents and any sub-agents retained by the Agents will be acquiring the Agents’ Warrants as principals for their own account and are “accredited investors” within the meaning of National Instrument 45-106; (e) it is not a U.S. Person, did not receive the offer to purchase the Agents’ Securities in the United States, did not execute or deliver this Agreement in the United States and is not acquiring the Agents’ Securities for the account or benefit of a U.S. Person or person in the United States; (f) in connection with the Offering, it will sell ~~the FT Shares and~~ the Units in compliance with the Acts and this Agreement and in a manner such that no prospectus, offering memorandum, or other disclosure document need be prepared and filed or delivered by the Issuer in connection with the Offering and such that the Issuer is not made subject to new continuous disclosure reporting requirements; and (g) its warranties and representations in this section are true and correct and will remain so as of the Closing, and, in the case of the warranties and representations in Sections 14.2(c) and 14.2(f), as of the acquisition of any Agents’ Warrants Shares. 14.3 Each of the Agents acknowledges that none of the Securities have been or will be registered under the U.S. Securities Act or the securities laws of any state, agrees that the Agents’ Warrants may not be exercised in the United States or by or on behalf of a U.S. Person, nor may any of the Agents’ Securities described in this paragraph be offered or sold in the United States unless an exemption from registration under the U.S. Securities Act and any applicable state securities law is available, and agrees that it will not engage in any Directed Selling Efforts (as defined in Schedule “A” with respect to the Agents’ Securities).Applicable Legislation. ddd\dddO3673

Appears in 1 contract

Samples: Agency Agreement (Amera Resources CORP)

WARRANTIES, REPRESENTATIONS AND COVENANTS. ~~14.1~~ 12.1 The Issuer warrants and represents to ~~and covenants with~~ the Agents that: (a) the Issuer ~~is a~~ and its subsidiaries, if any, are valid and subsisting ~~corporation~~ corporations duly incorporated and in good standing under the laws of the ~~Province of British Columbia and has all requisite corporate power and authority to carry on its business~~jurisdictions in which they are incorporated, ~~as now conducted and as presently proposed to be conducted and to own their respective assets~~continued or amalgamated; (b) the Issuer is and its subsidiaries, if any, are duly registered and ~~licensed~~ licenced to carry on business or own property in the jurisdictions in which ~~it carries~~ they carry on business or ~~owns~~ own property where so required by the laws of that jurisdiction; (c) the authorized and issued capital ~~as at November 9, 2010,~~ of the Issuer ~~consists of an unlimited number of common shares without par value, of which~~ is as ~~at November 9, 2010, 29,604,994 common shares are~~ disclosed in the Prospectus and the issued and outstanding as common shares of the Issuer are fully paid and non-assessable; (d) the Issuer will reserve or set aside sufficient common shares in its treasury to issue the Shares, ~~the FT~~ Agents' Warrant Shares, ~~the Warrant Shares~~ and ~~the Agents’~~ Corporate Finance Shares~~, the Agents’ Warrant Shares and all such shares will be duly and validly issued as fully paid and non-assessable when issued in accordance with the agreements or instruments governing the same~~; (e) the Subscription Agreements and all other written or oral representations made by the Issuer to a Purchaser or potential Purchaser in connection with the Offering will be accurate in all material respects and will omit no fact, the omission of which will make such representations misleading or incorrect; (f) except as qualified by the ~~disclosure in all prospectuses, filing statements, information circulars, financial statements, management discussion~~ Prospectus and ~~analysis, press releases or material change reports filed with the Regulatory Authorities (collectively, the “Disclosure Record”)~~Registration Statement, the Issuer is the beneficial owner of the properties, business and assets or the interests in the properties, business or assets referred to in the ~~Disclosure Record~~ Prospectus and Registration Statement; all agreements by which the Issuer holds an interest in a property, business or asset are in good standing according to their ~~terms~~ terms, and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated, ; (f) the Prospectus and the ~~Issuer does not own any~~ Registration Statement will contain full, true and plain disclosure of all Material Facts in relation to the Issuer, its subsidiaries (if any), its business and its securities, will contain no Misrepresentations, will be accurate in all material ~~properties~~respects and will omit no fact, ~~business~~ the omission of which will make such representations misleading or ~~assets not disclosed in the Disclosure Record~~incorrect; (g) the ~~Issuer will, upon completion~~ financial statements of the Offering and the transactions described in the Issuer’s September 7, 2010 news release, hold either freehold title, mining leases, mining claims or other conventional property, proprietary or contractual interests or rights, recognized in the jurisdiction in Issuer which ~~a particular property is located, in respect~~ form part of the ore bodies and minerals located in properties in which it has an interest under valid, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit it to explore the minerals relating thereto (the “Mining Rights”). The Mining Rights Prospectus have been validly located and recorded in accordance with all applicable laws and are valid and subsisting, the Issuer has all necessary surface rights, access rights and other necessary rights and interests relating to the properties in which it has an interest granting it the right and ability to explore for minerals, ore and metals for development purposes as are appropriate in view of the rights and interest therein of it, with only such exceptions as do not materially interfere with the use made by it of the rights or interests so held, and, except as disclosed in the Disclosure Record, each of the material proprietary interests or rights and each of the documents, agreements and instruments and obligations relating thereto referred to above is currently in good standing in its name; (h) the Units, the Shares, the Warrants and the Warrants Shares offered and sold in the United States or to, or for the account or benefit of, U.S. Persons will be subject to resale restrictions under the U.S. Securities Act and the Securities will not be subject to a restricted period or statutory hold period under the Acts of each Offering Jurisdiction in Canada or to any resale restrictions under the policies of the Exchange which extends beyond four months and one day after issuance of the Securities, other than for Purchasers who become control persons; (i) the Disclosure Record does not contain any material misrepresentation nor does it omit any Material Fact relating to the Issuer; (j) the financial statements contained in the Disclosure Record filed with any of the Commissions and supplied by the Issuer to the Agents in connection with the Offering have all been prepared in accordance with ~~Canadian~~ United States generally accepted accounting principles, ~~accurately, fairly and fully~~ accurately reflect the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the ~~Issuer~~Issuer and its subsidiaries, if any, as at the date of the ~~date thereof,~~ financial statements and there have been no adverse material changes in the financial position of the Issuer ~~has taken place~~ since that date, except as fully and plainly disclosed in the ~~date thereof~~Prospectus; (kh) the Issuer has complied and will comply fully ~~in all material respects~~ with the requirements of all applicable corporate and ~~Securities Laws~~ securities laws and administrative policies and directions, including, without limitation, the ~~Acts~~ Applicable Legislation, the 1933 Act, the Exchange Act and the ~~Business~~corporate law of the jurisdiction in which it was incorporated in relation to the issue and trading of its securities and in all matters relating to the Offering; (i) the Issuer is not and, after giving effect to the Offering and sale of the Shares, Agents' Warrants, Agents' Warrant Shares and Corporate Finance Shares, will not be an "investment company" as such term is defined in the Investment Company Act of 1940, as amended; (j) the issue and sale of the Shares, Agents' Warrants, Agents' Warrant Shares and Corporate Finance Shares by the Issuer does not and will not conflict with, and does not and will not result in a breach of, any of the terms of its incorporating documents or any agreement or instrument to which the Issuer is a party; (k) except as disclosed in the Prospectus and the Registration Statement, neither the Issuer or its subsidiaries, if any, is a party to any actions, suits or proceedings which could materially affect its business or financial condition, and no such actions, suits or proceedings are contemplated or have been threatened; (l) there are no judgments against the Issuer or any of its subsidiaries, if any, which are unsatisfied, nor are there any consent decrees or injunctions to which the Issuer or any of its subsidiaries, if any, is subject; (m) this Agreement has been duly authorized by all necessary corporate action on the part of the Issuer and the Issuer has full corporate power and authority to undertake the Offering; (n) there is not presently, and will not be until the ~~completion~~ conclusion of the ~~Closing~~ Distribution, any Material Change or change in any Material Fact relating to the Issuer which has not been or will not be fully disclosed to in the ~~Agents; (m) the issue and sale of the Securities by the Issuer~~ Prospectus and the Agents does not and will not conflict with, or result in a breach of, any of the terms of the Issuer’s constating documents or any agreement or instrument to which the Issuer is a party; (n) the Issuer is not a party to any actions, suits or proceedings which could materially affect its business or financial condition, and to the best of the Issuer’s knowledge no such actions, suits or proceedings are contemplated or have been threatened which are not disclosed in the Disclosure RecordRegistration Statement; (o) neither the Issuer, nor to the best of the Issuer’s knowledge, any other party, is in default in the observance or performance of any term or obligation to be performed by it under any contract entered into by the Issuer which is material to the business of the Issuer and no event has occurred which with notice or lapse of time or both would directly or indirectly constitute such a default, in any such case which default or event would have a material adverse effect on the assets or properties, business, results of operations, prospects or condition (financial or otherwise) of the Issuer; (p) there are no judgments against the Issuer which are unsatisfied, nor is the Issuer subject to any consent decrees or injunctions; (q) this Agreement has been, or will be by the Closing, duly authorized by all necessary corporate action on the part of the Issuer, and the Issuer has full corporate power and authority to undertake the Offering, and this Agreement and the Subscription Agreements have been, or will be by the Closing, duly authorized, executed and delivered by the Issuer and this Agreement and the Subscription Agreements are legal, valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms subject to laws relating to creditors’ rights generally, the availability of equitable remedies and except as rights to indemnity and contribution may be limited by applicable law; (r) the Issuer is a reporting issuer in the Provinces of British Columbia and Alberta, the common shares of the Issuer are listed on the NEX Board of the Exchange, and the Issuer is not in default of any of the requirements of the Acts or any of the administrative policies or notices of the NEX Board of the Exchange or the Exchange; (s) other than the Exchange imposed halt on the Issuer’s Common Shares there is no order ceasing, halting or suspending trading in securities of the Issuer ~~nor~~ or prohibiting the sale of such securities has been issued to and is outstanding against the Issuer or its directors, officers or promoters or ~~to the best of the Issuer’s knowledge,~~ against any other companies that have common directors, officers or promoters and ~~to the best of the Issuer’s knowledge,~~ no investigations or proceedings for such purposes are pending or threatened; (tp) except as disclosed ~~to the Agents in Schedule “C” with respect to outstanding options and convertible securities and as set out~~ in the ~~Disclosure Record or otherwise to any of~~ Prospectus and the ~~Regulatory Authorities~~Registration Statement, no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming such a right, agreement or option, for the issue or allotment of any unissued shares in the capital of the Issuer or its subsidiaries, if any, or any other security convertible into or exchangeable for any such shares, or to require the Issuer or its subsidiaries, if any, to purchase, redeem or otherwise acquire any of the issued and outstanding shares in its capital; (uq) the Issuer ~~has~~ and its subsidiaries, if any, have filed all federal, provincial, local and foreign tax returns which are required to be filed, or have requested extensions thereof, and have paid all taxes required to be paid by them and any other assessment, fine or penalty levied against itthem, to the extent that any of the foregoing is due and payable, except for such assessments, fines and penalties which are currently being contested in good faith; (vr) the Issuer ~~shall establish~~ and its subsidiaries, if any, have established on ~~its~~ their books and ~~records, as may be applicable,~~ records reserves which are adequate for the payment of all taxes not yet due and payable and there are no liens for taxes on the assets of the Issuer or its subsidiaries, if any, except for taxes not yet due, and there are no audits of any of the tax returns of the Issuer or its subsidiaries, if any, which are known by the Issuer’s 's management to be pending, and there are no claims which have been or may be asserted relating to any such tax returns which, if determined adversely, would result in the assertion by any governmental agency of any deficiency which would have a material adverse effect on the properties, business or assets of the ~~Issuer~~Issuer or its subsidiaries, if any; (ws) ~~any~~ the Issuer owns or possesses adequate rights to use all material patents, trademarks, service marks, trade names, copyrights, trade secrets, information, proprietary rights and ~~all operations~~ other intellectual property necessary for the business of the Issuer ~~have been~~ now conducted ~~in accordance~~ and proposed to be conducted, without any conflict with ~~good industry practices and in material compliance with applicable laws, rules, regulations, orders and directions~~ or infringement of ~~government and other competent authorities; (x)~~ the rights of others. The Issuer has received no communication or alleging that the Issuer ~~(i) is in material compliance with~~ has violated or, by conducting its business as proposed, would violate any ~~and all applicable federal~~of the patents, ~~provincial~~trademarks, ~~state and local laws and regulations relating to the protection of human health and safety~~service marks, ~~the environment~~ trade names, copyrights or ~~hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received all material permits, licenses~~ trade secrets or other ~~approvals required~~ proprietary rights of any other person or entity. Neither the execution or delivery of ~~them under applicable Environmental Laws to conduct its business, and (iii) is in material compliance with all terms and conditions~~ this Agreement nor the carrying on of ~~any such permit, licences or approval; (y) since current management~~ the business of the Issuer ~~assumed management~~ by the employees of the Issuer, nor the ~~minute books and corporate records~~ conduct of the business of the Issuer ~~are true and correct~~ will conflict with or result in ~~all material respects and contain all~~ a breach of the ~~resolutions~~ terms, conditions, or provisions of ~~their respective directors and shareholders~~or constitute a default under, any contract, covenant or instrument under which any of such employees is now obligated; (z) the Issuer will use its best efforts to remain a reporting issuer in British Columbia and Alberta for a minimum of two years after the Closing; (aa) the Issuer shall not take any action which would be reasonably expected to result in the delisting or suspension of the Shares on or from the Exchange or on or from any securities exchange, market or quoting facility on which the common shares are then listed or quoted and the Issuer shall comply, in all material respects, with the rules and regulations thereof; (bb) the Issuer has not withheld, and will not withhold from the Agents, any facts relating to the Issuer or to the offering of the FT Shares and the Units that would be considered material to a Purchaser; (cc) the Issuer proposes to use the gross proceeds of the sale of the FT Shares to incur exploration expenses on its exploration properties which are currently limited to the Provinces of Ontario and Quebec, that qualify as “Canadian exploration expenses” (“CEE”) as described in paragraph (f) of the definition thereof in subsection 66.1(6) of the Income Tax Act (Canada) (“ITA”); (dd) the Issuer will file all necessary forms and documents with the Canada Revenue Agency to meet its obligations under the Subscription Agreements for FT Shares; (ee) the Issuer will maintain proper accounting books and records relating to the CEE expenditures and will make such books and records available for inspection by the Agents upon reasonable request; (ff) the Issuer is a “principal business corporation” within the meaning prescribed in section 66(15) of the ITA; (gg) upon issuance pursuant to the Subscription Agreements, the FT Shares will be “flow-through shares” as defined in subsection 66(15) of the ITA and will not be “prescribed shares” for the purpose of section 6202.1 of the regulations to the ITA; (hht) other than the Agents, no person, firm or corporation acting or purporting to act at the request of the Issuer is entitled to any brokerage, agency or finder’s 's fee in connection with the ~~Offering~~transactions described herein; and (iiu) ~~its~~ the warranties and representations in this ~~section and in Appendix I to the Subscription Agreements for FT Shares~~ Subsection are true and correct and will remain so as of the Closing. ~~14.2~~ 12.2 Each of the Agents ~~warrant~~ warrants and ~~represent to, and covenant with,~~ represents to the Issuer that: (a) it is a valid and subsisting corporation under the law of the jurisdiction in which it was ~~incorporated and has good and sufficient right and authority to enter into this Agreement and complete the transactions under this Agreement on the terms and conditions set forth herein~~incorporated, continued or amalgamated; (b) it is a ~~broker or dealer properly registered under the Acts and is a~~ member in good standing ~~with~~ of the Exchange;; and (c) it ~~is acquiring~~ has complied with and will fully comply with the ~~Agents’ Securities as principal for its own account~~ requirements of all applicable securities laws, including, without limitation, the Applicable Legislation and ~~not for~~ the ~~benefit~~ by-laws and rules of ~~any other person; (d)~~ the Agents and any sub-agents retained by the Agents will be acquiring the Agents’ Warrants as principals for their own account and are “accredited investors” within the meaning of National Instrument 45-106; (e) it is not a U.S. PersonExchange, ~~did not receive the offer~~ in relation to ~~purchase the Agents’ Securities~~ trading in the ~~United States~~Shares, ~~did not execute or deliver this Agreement in the United States~~ Agents' Warrants, Agents' Warrant Shares and ~~is not acquiring the Agents’ Securities for the account or benefit of a U.S. Person or person in the United States; (f) in connection with~~ Corporate Finance Shares and all matters relating to the Offering, it will sell the FT Shares and the Units in compliance with the Acts and this Agreement and in a manner such that no prospectus, offering memorandum, or other disclosure document need be prepared and filed or delivered by the Issuer in connection with the Offering and such that the Issuer is not made subject to new continuous disclosure reporting requirements; and (g) its warranties and representations in this section are true and correct and will remain so as of the Closing, and, in the case of the warranties and representations in Sections 14.2(c) and 14.2(f), as of the acquisition of any Agents’ Warrants Shares. 14.3 Each of the Agents acknowledges that none of the Securities have been or will be registered under the U.S. Securities Act or the securities laws of any state, agrees that the Agents’ Warrants may not be exercised in the United States or by or on behalf of a U.S. Person, nor may any of the Agents’ Securities described in this paragraph be offered or sold in the United States unless an exemption from registration under the U.S. Securities Act and any applicable state securities law is available, and agrees that it will not engage in any Directed Selling Efforts (as defined in Schedule “A” with respect to the Agents’ Securities).

Appears in 1 contract

Samples: Agency Offering Agreement (Chemokine Therapeutics Corp)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 14.1 The Issuer warrants and represents to and covenants with the ~~Agents~~ Agent that: (a) the Issuer is a ~~valid and subsisting~~ validly existing corporation duly incorporated and in good standing under the laws of Nevada, and all the ~~Province~~ subsidiaries of ~~British Columbia~~ the Issuer ("Subsidiaries") are valid and ~~has all requisite corporate power and authority to carry on its business, as now conducted and as presently proposed to be conducted and to own~~ subsisting corporations duly incorporated under the laws of their respective ~~assets~~jurisdictions of incorporation; (b) pursuant to the Pannonian Merger Agreement, the Issuer has acquired and is ~~duly~~ the registered and ~~licensed to carry on business in~~ beneficial owner of all of the ~~jurisdictions in which it carries on business or owns property where so required by~~ issued and outstanding shares of Pannonian Energy, Inc. and Pannonian Energy, Inc. is a wholly-owned Subsidiary of the ~~laws of that jurisdiction~~Issuer; (c) the Issuer and its Subsidiaries each hold all material licences and permits that are required for carrying on their respective businesses in the manner and in the jurisdictions in which such businesses are presently being carried on; (d) the Issuer and its Subsidiaries each have the corporate power and capacity to own their assets and to carry on the business presently carried on by them; (e) the authorized and issued capital ~~as at November 9, 2010,~~ of the Issuer consists of ~~an unlimited~~ the number of common shares ~~without par value~~disclosed in the Public Record, and all of ~~which~~ the shares shown in the Public Record as ~~at November 9, 2010, 29,604,994 common shares~~ issued are issued and outstanding as fully paid and non-~~assessable~~assessable as at the date hereof; (df) the Issuer will reserve or set aside sufficient authorized but unissued shares ~~in its treasury~~ to issue the ~~Shares, the FT Shares, the Warrant~~ Shares and the ~~Agents’ Shares, the Agents’ Warrant~~ Shares ~~and all such shares~~ will be duly and validly issued as fully paid and non-~~assessable when issued in accordance with the agreements or instruments governing the same~~assessable; (eg) the ~~Subscription Agreements and all other written or oral representations made by~~ minute books of the Issuer ~~to a Purchaser or potential Purchaser in connection with~~ contain all records of the ~~Offering will be accurate in~~ proceedings of the meetings of the Issuer's directors, shareholders and committees of directors since incorporation; lxs\lxs01411\2\March 22, 2001 (h) the minute books of the Subsidiaries contains all ~~material respects~~ records of the proceedings of the meetings of the Subsidiaries' directors, shareholders and ~~will omit no fact, the omission~~ committees of ~~which will make such representations misleading or incorrect~~directors since their respective dates of incorporation; (fi) except as qualified by the disclosure in all prospectuses, filing statements, information circulars, financial statements, management discussion and analysis, press releases or material change reports filed with the Regulatory Authorities (collectively, the “Disclosure Record”), the Issuer is the beneficial owner of the ~~properties, business~~ material businesses and assets or the interests in the ~~properties, business or~~ businesses and assets referred to in the ~~Disclosure~~ Public Record as being owned by the Issuer or its Subsidiaries, and all agreements by which the Issuer or a Subsidiary holds or may earn an interest in a ~~property,~~ business or asset are in good standing according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated, and the Issuer does not own any material properties, business or assets not disclosed in the Disclosure Record; (g) the Issuer will, upon completion of the Offering and the transactions described in the Issuer’s September 7, 2010 news release, hold either freehold title, mining leases, mining claims or other conventional property, proprietary or contractual interests or rights, recognized in the jurisdiction in which a particular property is located, in respect of the ore bodies and minerals located in properties in which it has an interest under valid, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit it to explore the minerals relating thereto (the “Mining Rights”). The Mining Rights have been validly located and recorded in accordance with all applicable laws and are valid and subsisting, the Issuer has all necessary surface rights, access rights and other necessary rights and interests relating to the properties in which it has an interest granting it the right and ability to explore for minerals, ore and metals for development purposes as are appropriate in view of the rights and interest therein of it, with only such exceptions as do not materially interfere with the use made by it of the rights or interests so held, and, except as disclosed in the Disclosure Record, each of the material proprietary interests or rights and each of the documents, agreements and instruments and obligations relating thereto referred to above is currently in good standing in its name; (h) the Units, the Shares, the Warrants and the Warrants Shares offered and sold in the United States or to, or for the account or benefit of, U.S. Persons will be subject to resale restrictions under the U.S. Securities Act and the Securities will not be subject to a restricted period or statutory hold period under the Acts of each Offering Jurisdiction in Canada or to any resale restrictions under the policies of the Exchange which extends beyond four months and one day after issuance of the Securities, other than for Purchasers who become control persons; (i) the Disclosure Record does not contain any material misrepresentation nor does it omit any Material Fact relating to the Issuerterms; (j) the ~~financial statements contained~~ Public Record, taken as a whole, is true and complete in all material respects and each document included in the ~~Disclosure~~ Public Record ~~filed~~ was prepared in accordance with the securities legislation and rules applicable thereto and was true and correct and contained no misrepresentation as at the date thereof; (k) the Issuer is a "reporting company" under the federal securities legislation of the United States and is not in default of any of the ~~Commissions~~ requirements thereof or the regulation and ~~supplied by~~ rules made thereunder; (l) the Issuer's outstanding common shares are approved for quotation on the NASD OTC Bulletin Board; (m) the audited financial statements of the Issuer to for its fiscal years ended December 31, 1999 and 2000 (the ~~Agents in connection with the Offering~~ "Audited Financial Statements) have ~~all~~ been prepared in accordance with ~~Canadian~~ United States generally accepted accounting principles, ~~accurately, fairly~~ and ~~fully~~ accurately reflect the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the ~~Issuer,~~ Issuer on a consolidated basis as of at the date thereof; (n) the unaudited financial statements of the Issuer for the nine month period ended September 30, 2000 (the "Interim Financial Statements") have been prepared in accordance with United States generally accepted accounting principles and accurately reflect the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the Issuer as at the date thereof; (o) the unaudited financial statements of Pannonian Energy, Inc. dated March 31, 2001 and provided to the Agent on April 27, 2001 have been prepared in accordance with United States generally accepted accounting principles and accurately reflect the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of Pannonian Energy, Inc. as at the date thereof; (p) there have been no adverse material changes in the financial position of the Issuer ~~has taken place~~ since the date ~~thereof~~of the Audited Financial Statements, except as recorded in the books of the Issuer and fully and plainly disclosed in the Public Record; (kq) since the date of the Audited Financial Statements, there has been no damage, loss or other change of any kind whatsoever in circumstances materially affecting the business or assets of the Issuer or any of its Subsidiaries, or the right or capacity of the Issuer or any of its Subsidiaries to carry on its business; (r) all of the material transactions of the Issuer and its Subsidiaries have been promptly and properly recorded or filed in or with the books or records of the Issuer or its Subsidiaries; (s) with the exception of the Memorandum of Understanding between the Issuer and New Energy West Corporation dated March 26, 2001, all of the material contracts of the Issuer and its Subsidiaries are described in the Public Record and are in good standing in all material respects, and neither the Issuer nor any of its Subsidiaries is in default in any material respect thereof, and the Issuer is not aware of any default in any material respect by any other party to such contracts; lxs\lxs01411\2\March 22, 2001 (t) the Issuer has complied and will comply fully ~~in all material respects~~ with the requirements of all applicable corporate and ~~Securities Laws and administrative policies and directions, including, without limitation, the Acts and the Business (l) there is not presently~~securities laws, and ~~will not be until~~ all applicable Nevada corporate legislation in relation to the ~~completion~~ issue of the ~~Closing any Material Change or change~~ Shares, and in ~~any Material Fact~~ all matters relating to the ~~Issuer which has not been or will not be fully disclosed to the Agents~~Private Placement; (mu) the issue and sale of the Securities by the Issuer ~~and the Agents~~ does not and will not conflict with, or and does not and will not result in a breach of, any of the terms of ~~the Issuer’s constating~~ its incorporating documents or any agreement or instrument to which the Issuer is a party; (nv) neither the Issuer nor any of its Subsidiaries is ~~not a~~ party to any actions, ~~suits~~ suits, proceedings or ~~proceedings~~ arbitrations which could materially affect ~~its~~ the business or financial ~~condition~~condition of the Issuer, ~~and~~ taken as a whole, and, to the best of the knowledge of the Issuer, no such actions, suits, proceedings or arbitrations are contemplated or have been threatened; (w) there are no judgments against the Issuer or any of its Subsidiaries which are unsatisfied, nor are there any consent decrees or injunctions to which the Issuer or any of its Subsidiaries is subject; (x) to the best of the Issuer~~’s knowledge no such actions~~'s knowledge, ~~suits or proceedings are contemplated or have been threatened which are not disclosed in the Disclosure Record; (o)~~ neither the ~~Issuer,~~ Issuer nor ~~to the best~~ any of ~~the Issuer’s knowledge, any other party,~~ its Subsidiaries is in ~~default in the observance or performance~~ breach of any ~~term~~ law, ordinance, statute, regulation, bylaw, order or ~~obligation to be performed by it under~~ decree of any ~~contract entered into by the Issuer~~ kind whatsoever which is material to the business of the Issuer and no event has occurred which with notice or lapse of time or both would directly or indirectly constitute such a default, in any such case which default or event breach would have a material adverse effect on the ~~assets~~ financial position, business or ~~properties, business, results of operations,~~ prospects ~~or condition (financial or otherwise)~~ of the ~~Issuer~~Issuer on a consolidated basis; (~~p) there are no judgments against the Issuer which are unsatisfied, nor is the Issuer subject to any consent decrees or injunctions; (q~~y) this Agreement has ~~been, or will be by the Closing,~~ been duly authorized by all necessary corporate action on the part of the ~~Issuer,~~ Issuer and the Issuer has full corporate power and authority to undertake the Offering, and this Agreement and the Subscription Agreements have been, or will be by the Closing, duly authorized, executed and delivered by the Issuer and this Agreement and the Subscription Agreements are legal, valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms subject to laws relating to creditors’ rights generally, the availability of equitable remedies and except as rights to indemnity and contribution may be limited by applicable lawPrivate Placement; (rz) there is not presently, and will not be until the Final Closing, any material change relating to the Issuer ~~is a reporting issuer~~ which has not been or will not be fully disclosed in the Provinces of British Columbia and Alberta, the common shares of the Issuer are listed on the NEX Board of the Exchange, and the Issuer is not in default of any of the requirements of the Acts or any of the administrative policies or notices of the NEX Board of the Exchange or the ExchangePublic Record; (saa) ~~other than the Exchange imposed halt on the Issuer’s Common Shares there is~~ no order ceasing, halting or suspending trading in securities of the Issuer ~~nor~~ or prohibiting the sale of such securities has been issued to and is outstanding against the Issuer or or, to the best of the knowledge of the Issuer, its directors, officers or promoters or and, to the best of the ~~Issuer’s knowledge, against any other companies that have common directors, officers or promoters and to the best~~ knowledge of the Issuer~~’s knowledge~~, no investigations or proceedings for such purposes are pending or threatened; (tbb) except as disclosed ~~to the Agents in Schedule “C” with respect to outstanding options and convertible securities and as set out~~ in the ~~Disclosure Record or otherwise to any of the Regulatory Authorities~~Public Record, no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming such a right, agreement or option, for the issue or allotment of any ~~unissued~~ shares in the capital of the Issuer or any other security convertible into or exchangeable for any such shares, or to require the Issuer to purchase, redeem or otherwise acquire any of the issued and outstanding shares in its capital; (ucc) the Issuer and each of its Subsidiaries has filed all federal, ~~provincial~~state, local and foreign tax returns which are required to be filed, or ~~have~~ has requested extensions thereof, and ~~have~~ has paid all taxes required to be paid ~~by them~~ and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for such assessments, fines and penalties which are currently being contested in good faith; (vdd) ~~the Issuer shall establish on its books and records, as may be applicable, reserves which are adequate for the payment of all taxes not yet due and payable and~~ there are no liens for taxes on the assets of the Issuer or any of its Subsidiaries except for taxes not yet due, and there are no audits of any of the tax returns of the Issuer or any of its Subsidiaries which are known by the Issuer’s 's management to be pending, and there are no claims which have been or may be asserted relating to any such tax returns which, if determined adversely, would result in the assertion by any governmental agency of any deficiency which would have a material adverse effect on the properties, business or assets of the ~~Issuer; (w) any and all operations of the~~ Issuer have been conducted in accordance with good industry practices and in material compliance with applicable laws, rules, regulations, orders and directions of government and other competent authorities; (x) the Issuer (i) is in material compliance with any and all applicable federal, provincial, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received all material permits, licenses or other approvals required of any of them under applicable Environmental Laws to conduct its business, and (iii) is in material compliance with all terms and conditions of any such permit, licences or approval; (y) since current management of the Issuer assumed management of the Issuer, the minute books and corporate records of the Issuer are true and correct in all material respects and contain all the resolutions of their respective directors and shareholders; (z) the Issuer will use its best efforts to remain on a reporting issuer in British Columbia and Alberta for a minimum of two years after the Closing; (aa) the Issuer shall not take any action which would be reasonably expected to result in the delisting or suspension of the Shares on or from the Exchange or on or from any securities exchange, market or quoting facility on which the common shares are then listed or quoted and the Issuer shall comply, in all material respects, with the rules and regulations thereof; (bb) the Issuer has not withheld, and will not withhold from the Agents, any facts relating to the Issuer or to the offering of the FT Shares and the Units that would be considered material to a Purchaser; (cc) the Issuer proposes to use the gross proceeds of the sale of the FT Shares to incur exploration expenses on its exploration properties which are currently limited to the Provinces of Ontario and Quebec, that qualify as “Canadian exploration expenses” (“CEE”) as described in paragraph (f) of the definition thereof in subsection 66.1(6) of the Income Tax Act (Canada) (“ITA”); (dd) the Issuer will file all necessary forms and documents with the Canada Revenue Agency to meet its obligations under the Subscription Agreements for FT Sharesconsolidated basis; (ee) this Agreement will be upon execution and delivery by the Issuer, a legal, valid and binding agreement of the Issuer, enforceable against the Issuer ~~will maintain proper accounting books and records relating~~ in accordance with its terms, subject only to customary qualifications regarding the ~~CEE expenditures and will make such books and records available for inspection by the Agents upon reasonable request;~~availability of equitable remedies; lxs\lxs01411\2\March 22, 2001 (ff) the Issuer ~~is a “principal~~ or its Subsidiaries own or are entitled to use all material patents, trademarks, service marks, trade names, copyrights, trade secrets, information, proprietary rights and processes necessary for the business ~~corporation” within the meaning prescribed in section 66(15)~~ of the ~~ITA~~Issuer and each of its Subsidiaries as now conducted and as proposed to be conducted, without any conflict with or infringement of the rights of others; (gg) ~~upon issuance pursuant~~ neither the Issuer nor any of its Subsidiaries has received any communication alleging that the Issuer or any Subsidiary has violated or, by conducting its business as proposed would violate any of the patents, trademarks, service marks, trade names, copyrights, or trade secrets or other proprietary rights of any other person or entity, and, to the ~~Subscription Agreements~~best of the Issuer's knowledge, neither the execution or delivery of this Agreement, the ~~FT Shares will be “flow-through shares” as defined in subsection 66(15)~~ carrying on of the ~~ITA and will not be “prescribed shares” for the purpose of section 6202.1~~ businesses of the ~~regulations to~~ Issuer and its Subsidiaries, nor the ~~ITA;~~conduct of the businesses of the Issuer or its Subsidiaries by their respective employees will conflict with or result in a breach or default of any of the material terms of any contract, covenant or instrument under which any of such employees are bound; and (hh) ~~other than~~ apart from the ~~Agents~~Agent, no person, firm or corporation acting or purporting to act at the request of the Issuer is entitled to any brokerage, agency or finder’s 's fee in connection with the ~~Offering; and~~transactions described herein. ~~(ii) its~~ 14.2 The representations and warranties ~~and representations in this section and in Appendix I to~~ of the ~~Subscription Agreements for FT Shares are~~ Issuer contained herein will be true and correct at the Closing, will survive the Closing for a period of one year, and ~~will remain so as~~ no investigation by or on behalf of the ~~Closing~~Agent or the Purchasers will diminish in any respect their rights to rely on such representations and warranties. ~~14.2 Each of the Agents warrant~~ 14.3 The Agent warrants and ~~represent to, and covenant with,~~ represents to the Issuer that: (a) it is a valid and subsisting corporation under the law of the jurisdiction in which it was ~~incorporated and has good and sufficient right and authority to enter into this Agreement and complete the transactions under this Agreement on the terms and conditions set forth herein;~~incorporated; and (b) it is a broker or dealer properly registered under the Acts and is a member in good standing with the Exchange; (c) it is acquiring the Agents’ Securities as principal for its own account and not for the benefit of any other person; (d) the Agents and any sub-agents retained by the Agents will be acquiring the Agents’ Warrants as principals for their own account and are “accredited investors” within the meaning of National Instrument 45-106; (e) it is not a U.S. Person, did not receive the offer to purchase the Agents’ Securities in the United States, did not execute or deliver this Agreement in the United States and is not acquiring the Agents’ Securities for the account or benefit of a U.S. Person or person in the United States; (f) in connection with the Offering, it will sell the FT Shares ~~and the Units~~ in compliance with the Acts and this Agreement and in a manner such that no prospectus, offering memorandum, or other disclosure document need be prepared and filed or delivered by the Issuer in connection with the Offering and such that the Issuer is not made subject to new continuous disclosure reporting requirements; and (g) its warranties and representations in this section are true and correct and will remain so as of the Closing, and, in the case of the warranties and representations in Sections 14.2(c) and 14.2(f), as of the acquisition of any Agents’ Warrants SharesApplicable Legislation. 14.3 Each of the Agents acknowledges that none of the Securities have been or will be registered under the U.S. Securities Act or the securities laws of any state, agrees that the Agents’ Warrants may not be exercised in the United States or by or on behalf of a U.S. Person, nor may any of the Agents’ Securities described in this paragraph be offered or sold in the United States unless an exemption from registration under the U.S. Securities Act and any applicable state securities law is available, and agrees that it will not engage in any Directed Selling Efforts (as defined in Schedule “A” with respect to the Agents’ Securities).

Appears in 1 contract

Samples: Private Placement Agency Agreement (Gasco Energy Inc)

WARRANTIES, REPRESENTATIONS AND COVENANTS. 14.1 The Issuer warrants and represents and, as applicable, covenants to ~~and covenants with~~ the ~~Agents~~ Agent that: (a) the Issuer is a valid and subsisting corporation duly incorporated and in good standing under the laws of the ~~Province of British Columbia and has all requisite corporate power and authority to carry on its business~~jurisdiction in which it is incorporated, ~~as now conducted and as presently proposed to be conducted and to own their respective assets~~continued or amalgamated; (b) the Issuer is duly registered and ~~licensed~~ licenced to carry on business in the jurisdictions in which it carries on business or owns property where so required by the laws of that ~~jurisdiction~~jurisdiction and is not otherwise precluded from carrying on business or owning property in such jurisdictions by any other commitment, agreement or document; (c) the ~~authorized capital~~ Issuer has full corporate power and authority to carry on its business as ~~at November 9, 2010, of~~ now carried on by it and to undertake the ~~Issuer consists of an unlimited number of common shares without par value, of which as at November 9, 2010, 29,604,994 common shares are issued~~ Offering and ~~outstanding as fully paid~~ this Agreement and non-assessable; (d) the Issuer will reserve or set aside sufficient shares in its treasury to issue the Shares, the FT Shares, the Warrant Shares and the Agents’ Shares, the Agents’ Warrant Shares and all such shares will be duly and validly issued as fully paid and non-assessable when issued in accordance with the agreements or instruments governing the same; (e) the Subscription Agreements and all other written or oral representations made by the Issuer to a Purchaser or potential Purchaser in connection with the Offering will be accurate in all material respects and will omit no fact, the omission of which will make such representations misleading or incorrect; (f) except as qualified by the disclosure in all prospectuses, filing statements, information circulars, financial statements, management discussion and analysis, press releases or material change reports filed with the Regulatory Authorities (collectively, the “Disclosure Record”), the Issuer is the beneficial owner of the properties, business and assets or the interests in the properties, business or assets referred to in the Disclosure Record and all agreements by which the Issuer holds an interest in a property, business or asset are in good standing according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated, and the Issuer does not own any material properties, business or assets not disclosed in the Disclosure Record; (g) the Issuer will, upon completion of the Offering and the transactions described in the Issuer’s September 7, 2010 news release, hold either freehold title, mining leases, mining claims or other conventional property, proprietary or contractual interests or rights, recognized in the jurisdiction in which a particular property is located, in respect of the ore bodies and minerals located in properties in which it has an interest under valid, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit it to explore the minerals relating thereto (the “Mining Rights”). The Mining Rights have been validly located and recorded in accordance with all applicable laws and are valid and subsisting, the Issuer has all necessary surface rights, access rights and other necessary rights and interests relating to the properties in which it has an interest granting it the right and ability to explore for minerals, ore and metals for development purposes as are appropriate in view of the rights and interest therein of it, with only such exceptions as do not materially interfere with the use made by it of the rights or interests so held, and, except as disclosed in the Disclosure Record, each of the material proprietary interests or rights and each of the documents, agreements and instruments and obligations relating thereto referred to above is currently in good standing in its name; (h) the Units, the Shares, the Warrants and the Warrants Shares offered and sold in the United States or to, or for the account or benefit of, U.S. Persons will be subject to resale restrictions under the U.S. Securities Act and the Securities will not be subject to a restricted period or statutory hold period under the Acts of each Offering Jurisdiction in Canada or to any resale restrictions under the policies of the Exchange which extends beyond four months and one day after issuance of the Securities, other than for Purchasers who become control persons; (i) the Disclosure Record does not contain any material misrepresentation nor does it omit any Material Fact relating to the Issuer; (j) the financial statements contained in the Disclosure Record filed with any of the Commissions and supplied by the Issuer to the Agents in connection with the Offering have all been prepared in accordance with Canadian generally accepted accounting principles, accurately, fairly and fully reflect the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the Issuer, as of the date thereof, and no adverse material changes in the financial position of the Issuer has taken place since the date thereof; (k) the Issuer has complied and will comply fully in all material respects with the requirements of all applicable corporate and Securities Laws and administrative policies and directions, including, without limitation, the Acts and the Business (l) there is not presently, and will not be until the completion of the Closing any Material Change or change in any Material Fact relating to the Issuer which has not been or will not be fully disclosed to the Agents; (m) the issue and sale of the Securities by the Issuer and the Agents does not and will not conflict with, or result in a breach of, any of the terms of the Issuer’s constating documents or any agreement or instrument to which the Issuer is a party; (n) the Issuer is not a party to any actions, suits or proceedings which could materially affect its business or financial condition, and to the best of the Issuer’s knowledge no such actions, suits or proceedings are contemplated or have been threatened which are not disclosed in the Disclosure Record; (o) neither the Issuer, nor to the best of the Issuer’s knowledge, any other party, is in default in the observance or performance of any term or obligation to be performed by it under any contract entered into by the Issuer which is material to the business of the Issuer and no event has occurred which with notice or lapse of time or both would directly or indirectly constitute such a default, in any such case which default or event would have a material adverse effect on the assets or properties, business, results of operations, prospects or condition (financial or otherwise) of the Issuer; (p) there are no judgments against the Issuer which are unsatisfied, nor is the Issuer subject to any consent decrees or injunctions; (q) this Agreement has been, or will be by the Closing, duly authorized by all necessary corporate action on the part of the Issuer, and the Issuer has full corporate power and authority to undertake the Offering, and this Agreement and the Subscription Agreements have been, or will be by the Closing, duly authorized, executed and delivered by the Issuer and this Agreement is and each of the Subscription Agreements ~~are legal, valid and binding obligations of the Issuer,~~ will be enforceable against the Issuer ~~in accordance with~~ on their ~~terms subject to laws relating to creditors’ rights generally, the availability of equitable remedies and except as rights to indemnity and contribution may be limited by applicable law~~respective terms; (rd) all of the material transactions of the Issuer have been promptly and properly recorded or filed in its books or records and its minute books or records contain all records of the meetings and proceedings of its directors, shareholders, and other committees, if any, since inception; (e) the authorized capital of the Issuer is ~~a reporting issuer~~ as disclosed in the ~~Provinces of British Columbia~~ Prospectus and ~~Alberta,~~ the issued and outstanding common shares of the Issuer are ~~listed on the NEX Board of the Exchange~~fully paid and non-assessable and, and the Issuer is not in default of any of the requirements of the Acts or any of the administrative policies or notices of the NEX Board of the Exchange or the Exchange; (s) other than the Exchange imposed halt on the Issuer’s Common Shares there is no order ceasing, halting or suspending trading in securities of the Issuer nor prohibiting the sale of such securities has been issued to and is outstanding against the Issuer or its directors, officers or promoters or to the best of the Issuer’s knowledge, against any other companies that have common directors, officers or promoters and to the best of the Issuer’s knowledge, no investigations or proceedings for such purposes are pending or threatened; (t) except as disclosed ~~to the Agents in Schedule “C” with respect to outstanding options and convertible securities and as set out~~ in the ~~Disclosure Record or otherwise to any of the Regulatory Authorities~~Prospectus, no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming such a right, agreement or option, for the issue or allotment of any unissued shares in the capital of the Issuer or any other security convertible into or exchangeable for any such shares, or to require the Issuer to purchase, redeem or otherwise acquire any of the issued and outstanding shares in its capital; (f) the Issuer has no subsidiaries (as that term is defined in section 1.1 of the (g) the Issuer will reserve or set aside sufficient common shares in its treasury to issue the Flow-Through Shares, Non Flow-Through Shares, Warrant Shares, Agent’s Warrant Shares, the Corporate Finance Shares and the Corporate Finance Warrant Shares; (h) except as qualified by the Prospectus, the Issuer is the legal and beneficial owner of and has good and marketable title to the properties, business and assets or the interests in the properties, business or assets referred to in the Prospectus; all agreements by which the Issuer holds an interest in a property, business or asset are in good standing according to their terms, and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated and all filings and work commitments required to maintain the properties in good standing have been properly recorded and filed in a timely manner with the appropriate regulatory body and there are no mortgages, liens, charges, encumbrances or any other interests in or on such properties; (i) each of the material contracts as listed in the Prospectus have been duly authorized by all necessary corporate action on the part of the Issuer and such contracts are enforceable against the Issuer on their terms; (j) the preliminary Prospectus, in relation to the Issuer, its business and its securities: (i) contains full, true and plain disclosure of all Material Facts; (ii) contains no Misrepresentations; (iii) is accurate in all material respects; and (iv) does not omit any fact, the omission of which would make such representations misleading or incorrect; (k) the final Prospectus will, in relation to the Issuer, its business and its securities: (i) contain full, true and plain disclosure of all Material Facts; (ii) contain no Misrepresentations; (iii) be accurate in all material respects; and (iv) will omit no fact, the omission of which will make such representations misleading or incorrect; (l) the financial statements of the Issuer which form part of the Prospectus have been prepared in accordance with Canadian generally accepted accounting principles, present fairly, in all material respects, the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the Issuer as at the date of the financial statements and there have been no adverse Material Changes in the financial position of the Issuer since the date thereof, and the business of the Issuer has been carried on in the usual and ordinary course consistent with past practice except as fully and plainly disclosed in the Prospectus; (m) the auditors of the Issuer who audited the financial statements of the Issuer for the most recent financial year-end and who provided their audit report thereon are, to the knowledge of the Issuer, independent public accountants as required under Applicable Legislation and there has never been a reportable event (within the meaning of National Instrument 51-102) with the present auditors of the Issuer; (n) the Issuer has complied and will comply fully with the requirements of all applicable corporate and securities laws and administrative policies and directions, including, without limitation, Applicable Legislation and its regulations and the Business Corporations Act (British Columbia) in relation to the issue and trading of its securities and in all matters relating to the Offering; (o) the Issuer is in compliance with all applicable laws, regulations and statutes (including all environmental laws and regulations) in the jurisdictions in which it carries on business and which may materially affect the Issuer, has not received a notice of non-compliance, nor knows of, nor has reasonable grounds to know of, any facts that could give rise to a notice of non-compliance with any such laws, regulations and statutes, and is not aware of any pending change or contemplated change to any applicable law or regulation or governmental position that would materially affect the business of the Issuer or the business or legal environment under which the Issuer operates; (p) the Issuer has not caused or permitted the release, in any manner whatsoever, of any pollutants, contaminants, chemicals or industrial toxic or hazardous waste or substances (collectively, the “Hazardous Substances”) on or from any of its properties or assets nor has it received any notice that it is potentially responsible for a clean-up site or corrective action under any applicable laws, statutes, ordinances, by-laws, regulations, or any orders, directions or decisions rendered by any government, ministry, department or administrative regulatory agency relating to the protection of the environment, occupational health and safety or otherwise relating to dealing with Hazardous Substances; (q) the Issuer has all licences, permits, approvals, consents, certificates, registrations and other authorizations (collectively the “Permits”) necessary for the operation of the businesses carried on or proposed to be commenced by the Issuer and each Permit is valid, subsisting and in good standing and the Issuer is not in material default or breach of any Permit, and to the best of the knowledge of the Issuer, no proceeding is pending or threatened to revoke or limit any Permit; (r) all operations on the properties of the Issuer have been conducted and are currently conducted in all material respects in accordance with good engineering practices and all applicable material workers’ compensation, and health, safety and workplace laws, regulations and policies; (s) the issue and sale of the Securities by the Issuer does not and will not conflict with, and does not and will not result in a breach of, or constitute a default under (A) any statute, rule or regulation applicable to the Issuer including, without limitation, the Applicable Legislation; (B) the constating documents, by-laws or resolutions of the Issuer which are in effect at the date hereof; (C) any agreement, debt instrument, mortgage, note, indenture, instrument, lease or other document to which the Issuer is a party or by which it is bound; or (D) any judgment, decree or order binding the Issuer or the property or assets of the Issuer; (t) the Issuer is not a party to any actions, suits or proceedings which could materially affect its business or financial condition, and no such actions, suits or proceedings are, to the knowledge of the Issuer, contemplated or have been threatened; (u) there are no judgments against the Issuer which are unsatisfied, nor are there any consent decrees or injunctions to which the Issuer is subject; (v) there is not presently, and will not be until the conclusion of the Distribution, any Material Change or change in any Material Fact relating to the Issuer which has not been or will not be fully disclosed in the Prospectus; (w) no order ceasing, halting or suspending trading in securities of the Issuer nor prohibiting the sale of such securities has been issued to and is outstanding against the Issuer or its directors, officers or promoters or against any other companies that have common directors, officers or promoters and no investigations or proceedings for such purposes are, to the knowledge of the Issuer, pending or threatened; (x) the Issuer has complied with all requirements of National Instrument 43-101 in all material respects, including but not limited to the preparation and filing of technical reports; (y) the Issuer has filed all federal, provincial, local and foreign tax returns which are required to be filed, or ~~have~~ has requested extensions thereof, and ~~have~~ has paid all taxes required to be paid by ~~them~~ it and any other assessment, fine or penalty levied against it, or any amounts due and payable to any governmental authority, to the extent that any of the foregoing is due and payable~~, except for such assessments, fines and penalties which are currently being contested in good faith~~; (vz) the Issuer ~~shall establish~~ has established on its books and ~~records, as may be applicable,~~ records reserves which are adequate for the payment of all taxes not yet due and payable and there are no liens for taxes on the assets of the Issuer except for taxes not yet due, and there are no audits of any of the tax returns of the Issuer which are known by the Issuer’s management to be pending, and there are no claims which have been or may be asserted relating to any such tax returns which, if determined adversely, would result in the assertion by any governmental agency of any deficiency which would have a material adverse effect on the properties, business or assets of the Issuer; (waa) ~~any~~ the Issuer owns or possesses adequate rights to use all material patents, trademarks, service marks, trade names, copyrights, trade secrets, information, proprietary rights and ~~all operations~~ other intellectual property necessary for the business of the Issuer ~~have been~~ now conducted ~~in accordance~~ and proposed to be conducted, without any conflict with ~~good industry practices and in material compliance with applicable laws~~or infringement of the rights of others. (bb) the Issuer has received no communication alleging that the Issuer has violated or, ~~rules~~by conducting its business as proposed, ~~regulations~~would violate any of the patents, ~~orders and directions~~ trademarks, service marks, trade names, copyrights or trade secrets or other proprietary rights of ~~government and~~ any other ~~competent authorities~~person or entity; (xcc) the Issuer does not have any loans or other indebtedness outstanding which has been made to any of its shareholders, officers, directors or employees, past or present, or any person not dealing at “arm’s length” (ias such term is used in the ITA) (dd) ~~is in material compliance~~ if the Issuer amalgamates with any one or more companies on or before December 31, 2011, any shares or warrants issued to or held by Purchasers of Flow-Through Shares in consideration for the disposition of such Flow-Through Shares as a result of such amalgamation will qualify for the purposes and ~~all applicable federal, provincial, state~~ by virtue of subsection 87(4.4) of the ITA as "flow-through shares" as described in subsection 66(15) of the ITA and ~~local laws and~~ in particular will not be prescribed shares as defined in section 6202.1 of the regulations ~~relating~~ to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received all material permits, licenses or other approvals required of any of them under applicable Environmental Laws to conduct its business, and (iii) is in material compliance with all terms and conditions of any such permit, licences or approvalITA; (y) since current management of the Issuer assumed management of the Issuer, the minute books and corporate records of the Issuer are true and correct in all material respects and contain all the resolutions of their respective directors and shareholders; (zee) the Issuer will ~~use its best efforts~~ keep proper books, records and accounts, including books, records and accounts of all Qualifying CEE to ~~remain~~ be renounced pursuant to the Subscription Agreements and all material transactions affecting the Exploration Program (as defined in the Subscription Agreement), and, in the event the Canada Revenue Agency denies or proposes to deny the deduction of Qualifying CEE renounced to the Purchasers and upon reasonable request to the Issuer in writing by any Purchaser of Flow-Through Shares and with reasonable notice and on a ~~reporting issuer~~ reasonable basis and at such Purchaser's sole expense (such expense to be paid in ~~British Columbia~~ advance), the Issuer will make information in the possession of the Issuer relating to the proper classification of expenses as Qualifying CEE incurred in performing the Exploration Program, as such expenses may pertain to such Purchaser, available for inspection and ~~Alberta~~ review by or on behalf of such Purchaser for the sole purpose of enabling such Purchaser to respond to such denial or proposal by the Canada Revenue Agency; provided that the Issuer will not be required to provide information to a ~~minimum~~ Purchaser under this paragraph where it would result in a breach of ~~two years after~~ laws, regulations or rules applicable to the ~~Closing~~Issuer; (aaff) ~~the Issuer~~ it shall ~~not take any action which would be reasonably expected~~ use commercially reasonable efforts to ~~result in the delisting or suspension~~ maintain its listing of the Shares on ~~or from~~ the Exchange ~~or on or from any securities exchange, market or quoting facility on which the common shares are then listed or quoted~~ and ~~the Issuer shall~~ comply, in all material respects, with the rules and regulations ~~thereof; (bb) the Issuer has not withheld, and will not withhold~~ thereof for a period of two years from the Agents, any facts relating to the Issuer or to the offering of the FT Shares and the Units that would be considered material to a Purchaser; (cc) the Issuer proposes to use the gross proceeds of the sale of the FT Shares to incur exploration expenses on its exploration properties which are currently limited to the Provinces of Ontario and Quebec, that qualify as “Canadian exploration expenses” (“CEE”) as described in paragraph (f) of the definition thereof in subsection 66.1(6) of the Income Tax Act (Canada) (“ITA”); (dd) the Issuer will file all necessary forms and documents with the Canada Revenue Agency to meet its obligations under the Subscription Agreements for FT Shares; (ee) the Issuer will maintain proper accounting books and records relating to the CEE expenditures and will make such books and records available for inspection by the Agents upon reasonable request; (ff) the Issuer is a “principal business corporation” within the meaning prescribed in section 66(15) of the ITAClosing Date; (gg) upon issuance pursuant to the Subscription Agreements, the FT Shares will be “flow-through shares” as defined in subsection 66(15) of the ITA and will not be “prescribed shares” for the purpose of section 6202.1 of the regulations to the ITA; (hh) other than the ~~Agents~~Agent, no person, firm or corporation acting or purporting to act at the request of the Issuer is entitled to any brokerage, agency or finder’s fee in connection with the ~~Offering~~transactions described herein; and (iihh) ~~its~~ the warranties and representations in this ~~section and in Appendix I to the Subscription Agreements for FT Shares~~ Subsection are true and correct and will remain so as of the ~~Closing~~conclusion of the Distribution under the Prospectus. 14.2 ~~Each of the Agents warrant~~ The Agent warrants and ~~represent to~~represents and, ~~and covenant with~~as applicable, covenants to the Issuer that: (a) it is a valid and subsisting corporation under the law of the jurisdiction in which it was ~~incorporated and has good and sufficient right and authority to enter into this Agreement and complete the transactions under this Agreement on the terms and conditions set forth herein~~incorporated, continued or amalgamated; (b) it has full corporate power and authority to carry on its business as now carried on by it and to undertake the Offering and this Agreement has been, or will be by the Closing, duly authorized by all necessary corporate action on the part of the Agent and this Agreement is enforceable against the Agent on its terms; (c) it will have the authority to bind each subscriber to their respective Subscription Agreement; (d) it is a member in good standing of the Exchange; (e) it is, and any member of the Selling Group is, a broker or dealer properly registered under the Acts and is a member in good standing with the Exchange; (c) it is acquiring the Agents’ Securities as principal for its own account and not for the benefit of any other person; (d) the Agents and any sub-agents retained by the Agents will be acquiring the Agents’ Warrants as principals for their own account and are “accredited investors” within the meaning of National Instrument 45-106; (e) it is not a U.S. Person, did not receive the offer to purchase the Agents’ Securities in the United States, did not execute or deliver this Agreement in the United States and is not acquiring the Agents’ Securities for the account or benefit of a U.S. Person or person in the United States;Applicable Legislation; and (f) ~~in connection~~ it has complied with and will fully comply with the ~~Offering~~requirements of all Applicable Legislation, ~~it will sell the FT Shares~~ its rules and regulations and the ~~Units in compliance with the Acts~~ by-laws and this Agreement and in a manner such that no prospectus, offering memorandum, or other disclosure document need be prepared and filed or delivered by the Issuer in connection with the Offering and such that the Issuer is not made subject to new continuous disclosure reporting requirements; and (g) its warranties and representations in this section are true and correct and will remain so as rules of the ~~Closing, and~~Exchange, in ~~the case of the warranties and representations~~ relation to trading in ~~Sections 14.2(c) and 14.2(f), as of the acquisition of any Agents’ Warrants Shares. 14.3 Each of the Agents acknowledges that none of~~ the Securities have been or will be registered under the U.S. Securities Act or the securities laws of any state, agrees that the Agents’ Warrants may not be exercised in the United States or by or on behalf of a U.S. Person, nor may any of the Agents’ Securities described in this paragraph be offered or sold in the United States unless an exemption from registration under the U.S. Securities Act and ~~any applicable state securities law is available, and agrees that it will not engage in any Directed Selling Efforts (as defined in Schedule “A” with respect~~ all matters relating to the ~~Agents’ Securities)~~Offering.

Appears in 1 contract

Samples: Agency Offering Agreement

WARRANTIES, REPRESENTATIONS AND COVENANTS. ~~14.1~~ 12.1 The Issuer warrants and represents to and covenants with the ~~Agents~~ Agent that: (a) the Issuer is a valid and subsisting ~~corporation~~ entity duly incorporated and in good standing under the laws of the ~~Province of British Columbia~~ jurisdiction in which it is incorporated, continued, amalgamated or otherwise formed and has all requisite corporate power and authority to carry on its business, as now conducted and as presently proposed to be conducted and to own ~~their respective~~ its assets; (b) the Issuer is duly registered and licensed to carry on business in the jurisdictions in which it carries on business or owns property where so required by the laws of that jurisdiction; (c) the authorized ~~capital as at November 9, 2010,~~ share structure of the Issuer consists of an unlimited number of ~~common shares~~ Common Shares without par ~~value~~value and, ~~of which~~ as at ~~November 9~~October 31, ~~2010~~2018, ~~29,604,994 common shares~~ an aggregate of 8,510,000 Common Shares are issued and outstanding as fully paid and ~~non-~~non‐ assessable; (d) the Issuer will reserve or set aside sufficient ~~shares~~ Common Shares in its treasury to issue the ~~Shares~~Shares pursuant to the Private Placement and upon the issuance thereof in accordance with the terms contemplated by this Agreement, the ~~FT Shares,~~ Shares pursuant to the ~~Warrant Shares and the Agents’ Shares, the Agents’ Warrant Shares and~~ Private Placement will all ~~such shares will~~ be duly and validly issued as fully paid and ~~non-assessable when issued in accordance with the agreements or instruments governing the same~~non‐ assessable; (e) the Subscription Agreements and all other written or oral representations made by the Issuer to a Purchaser or potential Purchaser in connection with the ~~Offering~~ Private Placement will be accurate in all material respects and will omit no ~~fact~~Material Fact, the omission of which will make such representations misleading or incorrect; (f) except as qualified by the disclosure in all prospectuses, filing statements, information circulars, financial statements, management discussion and analysis, press releases or material change reports filed with the Regulatory Authorities (collectively, the “Disclosure Record”), the Issuer is ~~the beneficial owner of the properties, business and assets or the interests~~ a “reporting issuer” in the ~~properties~~Provinces of British Columbia, ~~business or assets referred to in~~ Alberta and Ontario, the ~~Disclosure Record and all agreements by which~~ Common Shares are listed on the Issuer holds an interest in a property, business or asset are in good standing according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated, Exchange and the Issuer ~~does~~ is not ~~own~~ in any material ~~properties~~respect in default of any of the requirements of the Acts in Canada or any of the administrative policies or notices of the Exchange. The Issuer will use its commercially reasonable efforts to maintain its status as a “reporting issuer” in at least one of the Provinces of British Columbia or Alberta and to maintain the listing of its Common Shares on the Exchange, ~~business~~ or ~~assets not disclosed in~~ such other recognized North American stock exchange or quotation system, to the ~~Disclosure Record~~date that is 24 months and one day following the final Closing Date, so long as the Issuer meets the minimum listing requirements of the Exchange or such other exchange or quotation system; (g) no order ceasing or suspending trading in securities of the Issuer ~~will~~nor prohibiting the sale of such securities has been issued to and is outstanding against the Issuer or, ~~upon completion~~ to the best of ~~the Offering and the transactions described in~~ the Issuer’s ~~September 7~~knowledge, ~~2010 news release~~any of its directors, ~~hold either freehold title~~officers or promoters and no investigations or proceedings for such purposes are pending or, ~~mining leases, mining claims or other conventional property, proprietary or contractual interests or rights, recognized in~~ to the ~~jurisdiction in which a particular property is located, in respect~~ knowledge of the ~~ore bodies and minerals located in properties in which it has an interest under valid~~Issuer, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit it to explore the minerals relating thereto (the “Mining Rights”). The Mining Rights have been validly located and recorded in accordance with all applicable laws and are valid and subsisting, the Issuer has all necessary surface rights, access rights and other necessary rights and interests relating to the properties in which it has an interest granting it the right and ability to explore for minerals, ore and metals for development purposes as are appropriate in view of the rights and interest therein of it, with only such exceptions as do not materially interfere with the use made by it of the rights or interests so held, and, except as disclosed in the Disclosure Record, each of the material proprietary interests or rights and each of the documents, agreements and instruments and obligations relating thereto referred to above is currently in good standing in its namethreatened; (h) to the ~~Units~~Issuer’s knowledge, after due inquiry, the ~~Shares, the Warrants and the Warrants~~ Shares ~~offered and sold in the United States or to, or for the account or benefit of, U.S. Persons will be subject to resale restrictions under the U.S. Securities Act and the Securities~~ will not be subject to a restricted period or statutory hold period under the Acts ~~of each Offering Jurisdiction in Canada~~ or to any resale restrictions under the policies of the Exchange which extends beyond four months and one day after the issuance of the ~~Securities, other than for Purchasers who become control persons~~Shares; (i) to the Issuer’s knowledge, the Issuer’s auditors are independent public accountants as required by the Acts; (j) to the Issuer’s knowledge there has never been any reportable event (within the meaning of National Instrument 51‐102 ‐ Continuous Disclosure Obligations) with the present or any former auditor of the Issuer; (k) the Disclosure Record ~~does not contain~~ is in all material respects accurate and, at the applicable time of filing thereof, there were no misrepresentations in any of the documents that comprise the Disclosure Record which would reasonably be expected to be material ~~misrepresentation nor does it omit any Material Fact relating~~ to the Issuer; (jl) the Issuer’s financial statements contained in the Disclosure Record ~~filed with any of~~ (the ~~Commissions and supplied by the Issuer to the Agents in connection with the Offering~~ “Financial Statements”) have all been prepared in accordance with ~~Canadian generally accepted accounting principles~~International Financial Reporting Standards applied on a consistent basis, ~~accurately, fairly~~ and ~~fully~~ accurately reflect the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the ~~Issuer,~~ Issuer which are required to be reported therein in accordance with International Financial Reporting Standards as of the date thereof, and no adverse ~~material changes~~ Material Changes in the financial position of the Issuer ~~has~~ have taken place since the date ~~thereof~~of the most recent such audited Financial Statements; (km) other than as disclosed in the Financial Statements, there are no off‐balance sheet transactions, arrangements, obligations (including contingent obligations) or other relationships of the Issuer with unconsolidated entities or other persons that may have a material current or future effect on the financial condition, changes in financial condition, results of operations, earnings, cash flow, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses of the Issuer or that would reasonably be expected to be material to an investor in making a decision to purchase the Shares; (n) except as disclosed in the Financial Statements, the Issuer does not have any contingent liabilities in excess of the liabilities that are either reflected or reserved against in the Financial Statements which would reasonably be expected to be material to the Issuer; (o) the Issuer has complied and will comply fully ~~in all material respects~~ with the material requirements of all applicable corporate and ~~Securities Laws~~ securities laws and administrative policies and directions, including, without limitation, the Acts and the ~~Business~~Business Corporations Act (British Columbia), in relation to the Private Placement; (lp) there is ~~not presently, and will not be until the completion of the Closing any~~ no Material Change or relating to the Issuer and no change in any Material Fact relating to any of the ~~Issuer~~ Shares, which has not been or will not be fully disclosed prior to the ~~Agents~~Closing in accordance with the requirements of the Acts and the policies of the Exchange; (mq) the issue and sale of the ~~Securities~~ Shares by the Issuer ~~and the Agents~~ does not and will not conflict with, or result in a breach of, any of the terms of the Issuer’s ~~constating~~ incorporating documents or any agreement or instrument to which the Issuer is a ~~party~~party or by which it is bound; (nr) the Issuer is not a party to any actions, suits or proceedings of which it has been served that could materially affect ~~its~~ their business or financial condition, and to the best of the Issuer’s knowledge no such actions, suits or proceedings are contemplated or have been threatened ~~which are~~ that have not been disclosed in to the ~~Disclosure Record~~Agent; (os) ~~neither~~ the ~~Issuer, nor to the best of the Issuer’s knowledge, any other party,~~ Issuer is not in default in the observance or performance of any term or obligation to be performed by it under any contract entered into by the Issuer which is material to the business or affairs of the Issuer on a consolidated basis and no event has occurred which with notice or lapse of time or both would directly or indirectly constitute such a default, in any such case which default or event would have a material adverse effect on the assets or properties, business, results of ~~operations, prospects~~ operations or condition (financial or otherwise) of the Issuer; (pt) there are no judgments against the Issuer which are unsatisfied, nor is the Issuer subject to any consent decrees or injunctions; (qu) this Agreement ~~has been~~and the Subscription Agreements have been or will, ~~or will be~~ by the Closing, be duly authorized by all necessary corporate action on the part of the Issuer, and the Issuer has full corporate power and authority to undertake the ~~Offering~~Private Placement, and this Agreement has been, and the Subscription Agreements ~~have been, or~~ will be by the ~~Closing~~Closing be, duly ~~authorized,~~ executed and delivered by the Issuer and ~~this Agreement and the Subscription Agreements are~~ is or will be legal, valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms subject to laws relating to creditors’ rights generally, the availability of equitable remedies and except as rights to indemnity and contribution may be limited by applicable law; (r) the Issuer is a reporting issuer in the Provinces of British Columbia and Alberta, the common shares of the Issuer are listed on the NEX Board of the Exchange, and the Issuer is not in default of any of the requirements of the Acts or any of the administrative policies or notices of the NEX Board of the Exchange or the Exchange; (s) other than the Exchange imposed halt on the Issuer’s Common Shares there is no order ceasing, halting or suspending trading in securities of the Issuer nor prohibiting the sale of such securities has been issued to and is outstanding against the Issuer or its directors, officers or promoters or to the best of the Issuer’s knowledge, against any other companies that have common directors, officers or promoters and to the best of the Issuer’s knowledge, no investigations or proceedings for such purposes are pending or threatened; (tv) except as disclosed ~~to the Agents in Schedule “C” with respect to outstanding options and convertible securities and as set out~~ in the Disclosure Record or ~~otherwise~~ pursuant to ~~any of~~ the ~~Regulatory Authorities~~Issuer’s stock option plan, no person has or will, by the Closing, have any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming such a right, agreement or option, for the issue or allotment of any unissued shares in the capital of the Issuer or any other security convertible into or exchangeable for any such shares, or to require the Issuer to purchase, redeem or otherwise acquire any of the issued and outstanding ~~shares in its capital~~Common Shares; (uw) the Issuer has filed all federal, provincial, local and foreign tax returns which are required to be filed, or ~~have~~ has requested extensions thereof, and ~~have~~ has paid all taxes required to be paid by ~~them~~ it and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for such ~~assessments~~assessment, fines and penalties which are currently being contested in good faith; (vx) the Issuer ~~shall establish~~ has not violated the Corruption of Foreign Public Officials Act (Canada); (y) the Issuer has established on its respective books and ~~records, as may be applicable,~~ records reserves which are adequate for the payment of all taxes not yet due and payable and there are no liens for taxes on the assets of the Issuer except for taxes not yet due, and there are no audits of any of the tax returns of the Issuer which are known by the Issuer’s management to be pending, and there are no claims which have been or or, to the Issuer’s knowledge, may be asserted relating to any such tax returns which, if determined adversely, would result in the assertion by any governmental agency of any deficiency which would have a material adverse effect on the properties, business or assets of the Issuer; (wz) ~~any and all operations~~ the minute books of the Issuer have been conducted in accordance with good industry practices and in material compliance with applicable laws, rules, regulations, orders and directions of government and other competent authorities; (x) the Issuer (i) is in material compliance with any and all applicable federal, provincial, state and local laws and regulations relating as provided or made available to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received all material permits, licenses or other approvals required of any of them under applicable Environmental Laws to conduct its business, and (iii) is in material compliance with all terms and conditions of any such permit, licences or approval; (y) since current management of the Issuer assumed management of the Issuer, the minute books and corporate records of the Issuer Agent are true and correct in all material respects and contain all the resolutions of ~~their respective~~ its directors and shareholders; (~~z) the Issuer will use its best efforts to remain a reporting issuer in British Columbia and Alberta for a minimum of two years after the Closing; (~~aa) the Issuer shall not take any action which would be reasonably expected to result in the delisting or suspension of the Shares on or from the Exchange or on or from any securities exchange, market or quoting facility on which the common shares are then listed or quoted and the Issuer shall comply, in all material respects, with the rules and regulations thereof; (bb) the Issuer has not withheld, and will not ~~withhold~~ withhold, from the ~~Agents,~~ Agent any facts relating to the Issuer or to the offering of the FT Shares ~~and the Units~~ that would reasonably be considered material to a Purchaser;; and (cc) the Issuer proposes to use the gross proceeds of the sale of the FT Shares to incur exploration expenses on its exploration properties which are currently limited to the Provinces of Ontario and Quebec, that qualify as “Canadian exploration expenses” (“CEE”) as described in paragraph (f) of the definition thereof in subsection 66.1(6) of the Income Tax Act (Canada) (“ITA”); (dd) the Issuer will file all necessary forms and documents with the Canada Revenue Agency to meet its obligations under the Subscription Agreements for FT Shares; (ee) the Issuer will maintain proper accounting books and records relating to the CEE expenditures and will make such books and records available for inspection by the Agents upon reasonable request; (ff) the Issuer is a “principal business corporation” within the meaning prescribed in section 66(15) of the ITA; (gg) upon issuance pursuant to the Subscription Agreements, the FT Shares will be “flow-through shares” as defined in subsection 66(15) of the ITA and will not be “prescribed shares” for the purpose of section 6202.1 of the regulations to the ITA; (hhbb) other than the ~~Agents~~Agent, no person, firm or corporation acting or purporting to act at the request of the Issuer is entitled to any brokerage, agency or finder’s fee in connection with the ~~Offering; and (ii) its warranties and representations in this section and in Appendix I to the Subscription Agreements for FT Shares are true and correct and will remain so as of the Closing~~Private Placement. ~~14.2 Each of the Agents warrant~~ 12.2 The Agent warrants and ~~represent to,~~ represents to and ~~covenant with,~~ covenants with the Issuer that: (a) it is a valid and subsisting corporation under the ~~law~~ laws of the jurisdiction in which it was ~~incorporated~~ incorporated, continued or amalgamated and has good and sufficient right and authority to enter into this Agreement and complete the transactions under this Agreement on the terms and conditions set forth herein; (b) it is ~~a broker~~ duly registered and licensed to carry on business in the jurisdictions in which it carries on business or ~~dealer properly registered under the Acts and is a member in good standing with the Exchange~~owns property; (c) ~~it is acquiring~~ this Agreement has been or will, by the ~~Agents’ Securities as principal for~~ Closing, be duly authorized by all necessary corporate action on the part of the Agent, and the Agent has full corporate power and authority to enter into this Agreement and to perform its ~~own account and not for the benefit of any other person~~obligations set out herein; (d) this Agreement is a legal, valid and binding obligation of the ~~Agents~~ Agent, enforceable against the Agent in accordance with its terms subject to laws relating to creditors’ rights generally, the availability of equitable remedies and ~~any sub-agents retained~~ except as rights to indemnity and contribution may be limited by ~~the Agents will be acquiring the Agents’ Warrants as principals for their own account and are “accredited investors” within the meaning of National Instrument 45-106~~applicable law; (e) it is ~~not a U.S. Person, did not receive~~ an investment dealer properly registered under the ~~offer to purchase the Agents’ Securities~~ Acts in the United States, did not execute or deliver this Agreement in the United States and is not acquiring the Agents’ Securities for the account or benefit of a U.S. Person or person in the United StatesCanada; (f) it is a member in ~~connection with~~ good standing of the Offering, it will sell the FT Shares and the Units in compliance with the Acts and this Agreement and in a manner such that no prospectus, offering memorandum, or other disclosure document need be prepared and filed or delivered by the Issuer in connection with the Offering and such that the Issuer is not made subject to new continuous disclosure reporting requirementsExchange; and (g) ~~its warranties and representations~~ in ~~this section are true and correct and will remain so as of~~ connection with the ~~Closing~~Private Placement, ~~and~~it will, in the case of the warranties and representations in Sections 14.2(c) and 14.2(f), as of the acquisition of any Agents’ Warrants Shares. 14.3 Each of the Agents acknowledges that none of the Securities have been or will be registered under the U.S. Securities Act or the securities laws of any state, agrees that the Agents’ Warrants may not be exercised in the United States or by or on behalf of ~~a U.S. Person~~the Issuer, ~~nor may any~~ sell the Shares to the Purchasers, and otherwise in relation to all matters relating to the Private Placement will be, in compliance with the Acts, the by‐laws and rules of the ~~Agents’ Securities described~~ Exchange and the restrictions set out in this paragraph be offered or sold in the United States unless an exemption from registration under the U.S. Securities Act and any applicable state securities law is available, and agrees that it will not engage in any Directed Selling Efforts (as defined in Schedule “A” with respect to the Agents’ Securities)Section 4.

Appears in 1 contract

Samples: Agency Agreement

WARRANTIES, REPRESENTATIONS AND COVENANTS. ~~14.1~~ 13.1 The Issuer warrants and represents to ~~and covenants with~~ the Agents that: (a) the Issuer ~~is a~~ and the Subsidiaries are valid and subsisting ~~corporation~~ corporations duly incorporated and in good standing under the laws of the ~~Province of British Columbia and has all requisite corporate power and authority to carry on its business~~jurisdictions in which they are incorporated, ~~as now conducted and as presently proposed to be conducted and to own their respective assets~~continued or amalgamated; (b) the Issuer is and the Subsidiaries are duly registered and ~~licensed~~ licenced to carry on business or own property in the jurisdictions in which ~~it carries~~ they carry on business or ~~owns~~ own property where so required by the laws of that jurisdiction; (c) the authorized and issued capital ~~as at November 9, 2010,~~ of the Issuer ~~consists of an unlimited number of common shares without par value, of which~~ is as ~~at November 9, 2010, 29,604,994 common shares are~~ disclosed in the Prospectus and the issued and outstanding as common shares of the Issuer are fully paid and non-assessable; (d) the Issuer will reserve or set aside sufficient common shares in its treasury to issue the Shares, the ~~FT Shares, the~~ Warrant Shares and ~~the Agents’ Shares, the~~ Agents’ Warrant ~~Shares and all such shares will be duly and validly issued as fully paid and non-assessable when issued in accordance with the agreements or instruments governing the same~~Shares; (e) the Subscription Agreements and all other written or oral representations made by the Issuer to a Purchaser or potential Purchaser in connection with the Offering will be accurate in all material respects and will omit no fact, the omission of which will make such representations misleading or incorrect; (f) except as qualified by the disclosure in all prospectuses, filing statements, information circulars, financial statements, management discussion and analysis, press releases or material change reports filed with the Regulatory Authorities (collectively, the “Disclosure Record”)Prospectus, the Issuer is the beneficial owner of the properties, business and assets or the interests in the properties, business or assets referred to in the ~~Disclosure Record and~~ Prospectus; all agreements by which the Issuer holds an interest in a property, business or asset are in good standing according to their ~~terms~~ terms, and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated; (f) the Prospectus will contain full, true and plain disclosure of all Material Facts in relation to the ~~Issuer does not own any~~ Issuer, the Subsidiaries, its business and its securities, will contain no Misrepresentations, will be accurate in all material ~~properties~~respects and will omit no fact, ~~business~~ the omission of which will make such representations misleading or ~~assets not disclosed in the Disclosure Record~~incorrect; (g) the ~~Issuer will, upon completion~~ financial statements of the Offering and the transactions described in the Issuer’s September 7, 2010 news release, hold either freehold title, mining leases, mining claims or other conventional property, proprietary or contractual interests or rights, recognized in the jurisdiction in Issuer which ~~a particular property is located, in respect~~ form part of the ore bodies and minerals located in properties in which it has an interest under valid, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit it to explore the minerals relating thereto (the “Mining Rights”). The Mining Rights Prospectus have been validly located and recorded in accordance with all applicable laws and are valid and subsisting, the Issuer has all necessary surface rights, access rights and other necessary rights and interests relating to the properties in which it has an interest granting it the right and ability to explore for minerals, ore and metals for development purposes as are appropriate in view of the rights and interest therein of it, with only such exceptions as do not materially interfere with the use made by it of the rights or interests so held, and, except as disclosed in the Disclosure Record, each of the material proprietary interests or rights and each of the documents, agreements and instruments and obligations relating thereto referred to above is currently in good standing in its name; (h) the Units, the Shares, the Warrants and the Warrants Shares offered and sold in the United States or to, or for the account or benefit of, U.S. Persons will be subject to resale restrictions under the U.S. Securities Act and the Securities will not be subject to a restricted period or statutory hold period under the Acts of each Offering Jurisdiction in Canada or to any resale restrictions under the policies of the Exchange which extends beyond four months and one day after issuance of the Securities, other than for Purchasers who become control persons; (i) the Disclosure Record does not contain any material misrepresentation nor does it omit any Material Fact relating to the Issuer; (j) the financial statements contained in the Disclosure Record filed with any of the Commissions and supplied by the Issuer to the Agents in connection with the Offering have all been prepared in accordance with Canadian generally accepted accounting principles, ~~accurately, fairly and fully~~ accurately reflect the financial position and all material liabilities (accrued, absolute, contingent or otherwise) of the ~~Issuer,~~ Issuer and the Subsidiaries as at the date of the ~~date thereof,~~ financial statements and there have been no adverse material changes in the financial position of the Issuer ~~has taken place~~ since that date, except as fully and plainly disclosed in the ~~date thereof~~Prospectus; (kh) the Issuer has complied and will comply fully ~~in all material respects~~ with the requirements of all applicable corporate and ~~Securities Laws~~ securities laws and administrative policies and directions, including, without limitation, ~~the Acts~~ Canadian Applicable Legislation and its regulations and the ~~Business~~Business Corporations Act (British Columbia) in relation to the issue and trading of its securities and in all matters relating to the Offering; (i) the issue and sale of the Securities by the Issuer does not and will not conflict with, and does not and will not result in a breach of, any of the terms of its incorporating documents or any agreement or instrument to which the Issuer is a party; (j) except as disclosed in the Prospectus, neither the Issuer or the Subsidiaries is a party to any actions, suits or proceedings which could materially affect its business or financial condition, and no such actions, suits or proceedings are contemplated or have been threatened; (k) there are no judgments against the Issuer or any of the Subsidiaries which are unsatisfied, nor are there any consent decrees or injunctions to which the Issuer or any of the Subsidiaries is subject; (l) this Agreement has been duly authorized by all necessary corporate action on the part of the Issuer and the Issuer has full corporate power and authority to undertake the Offering; (m) the Issuer is a reporting issuer in each of the Selling Provinces; (n) the Issuer is not currently in default of any requirement under Canadian Applicable Legislation and is not included in a list of defaulting issuers maintained by any of the Commissions; (o) there is not presently, and will not be until the ~~completion~~ conclusion of the ~~Closing~~ Distribution, any Material Change or change in any Material Fact relating to the Issuer which has not been or will not be fully disclosed to the Agents; (m) the issue and sale of the Securities by the Issuer and the Agents does not and will not conflict with, or result in a breach of, any of the terms of the Issuer’s constating documents or any agreement or instrument to which the Issuer is a party; (n) the Issuer is not a party to any actions, suits or proceedings which could materially affect its business or financial condition, and to the best of the Issuer’s knowledge no such actions, suits or proceedings are contemplated or have been threatened which are not disclosed in the Disclosure Record; (o) neither the Issuer, nor to the best of the Issuer’s knowledge, any other party, is in default in the observance or performance of any term or obligation to be performed by it under any contract entered into by the Issuer which is material to the business of the Issuer and no event has occurred which with notice or lapse of time or both would directly or indirectly constitute such a default, in any such case which default or event would have a material adverse effect on the assets or properties, business, results of operations, prospects or condition (financial or otherwise) of the IssuerProspectus; (p) there are no judgments against the Issuer which are unsatisfied, nor is the Issuer subject to any consent decrees or injunctions; (q) this Agreement has been, or will be by the Closing, duly authorized by all necessary corporate action on the part of the Issuer, and the Issuer has full corporate power and authority to undertake the Offering, and this Agreement and the Subscription Agreements have been, or will be by the Closing, duly authorized, executed and delivered by the Issuer and this Agreement and the Subscription Agreements are legal, valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms subject to laws relating to creditors’ rights generally, the availability of equitable remedies and except as rights to indemnity and contribution may be limited by applicable law; (r) the Issuer is a reporting issuer in the Provinces of British Columbia and Alberta, the common shares of the Issuer are listed on the NEX Board of the Exchange, and the Issuer is not in default of any of the requirements of the Acts or any of the administrative policies or notices of the NEX Board of the Exchange or the Exchange; (s) other than the Exchange imposed halt on the Issuer’s Common Shares there is no order ceasing, halting or suspending trading in securities of the Issuer nor prohibiting the sale of such securities has been issued to and is outstanding against the Issuer ~~or its directors~~or, ~~officers or promoters or~~ to the best of the Issuer’s knowledge, its directors, officers or promoters or against any other companies that have common directors, officers or promoters and ~~to the best of the Issuer’s knowledge,~~ no investigations or proceedings for such purposes are pending or threatened; (tq) except as disclosed ~~to the Agents in Schedule “C” with respect to outstanding options and convertible securities and as set out~~ in the ~~Disclosure Record or otherwise to any of the Regulatory Authorities~~Prospectus, no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming such a right, agreement or option, for the issue or allotment of any unissued shares in the capital of the Issuer or the Subsidiaries or any other security convertible into or exchangeable for any such shares, or to require the Issuer or the Subsidiaries to purchase, redeem or otherwise acquire any of the issued and outstanding shares in its capital; (ur) the Issuer ~~has~~ and the Subsidiaries have filed all federal, provincial, local and foreign tax returns which are required to be filed, or have requested extensions thereof, and have paid all taxes required to be paid by them and any other assessment, fine or penalty levied against itthem, to the extent that any of the foregoing is due and payable, except for such assessments, fines and penalties which are currently being contested in good faith; (vs) the Issuer ~~shall establish~~ and the Subsidiaries have established on ~~its~~ their books and ~~records, as may be applicable,~~ records reserves which are adequate for the payment of all taxes not yet due and payable and there are no liens for taxes on the assets of the Issuer or the Subsidiaries except for taxes not yet due, and there are no audits of any of the tax returns of the Issuer or the Subsidiaries which are known by the Issuer’s management to be pending, and there are no claims which have been or may be asserted relating to any such tax returns which, if determined adversely, would result in the assertion by any governmental agency of any deficiency which would have a material adverse effect on the properties, business or assets of the Issuer or the Subsidiaries; (t) the Issuer owns or possesses adequate rights to use all material patents, trademarks, service marks, trade names, copyrights, trade secrets, information, proprietary rights and other intellectual property necessary for the business of the Issuer now conducted and proposed to be conducted, without any conflict with or infringement of the rights of others; (u) the Issuer has received no communication alleging that the Issuer has violated or, by conducting its business as proposed, would violate any of the patents, trademarks, service marks, trade names, copyrights or trade secrets or other proprietary rights of any other person or entity; (v) neither the execution or delivery of this Agreement nor the carrying on of the business of the Issuer by the employees of the Issuer, nor the conduct of the business of the Issuer will conflict with or result in a breach of the terms, conditions, or provisions of or constitute a default under, any contract, covenant or instrument under which any of such employees is now obligated; (w) any and all operations of the Issuer have been conducted in accordance with good industry practices and in material compliance with applicable laws, rules, regulations, orders and directions of government and other competent authorities; (x) the Issuer (i) is in material compliance with any and all applicable federal, provincial, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received all material permits, licenses or other approvals required of any of them under applicable Environmental Laws to conduct its business, and (iii) is in material compliance with all terms and conditions of any such permit, licences or approval; (y) since current management of the Issuer assumed management of the Issuer, the minute books and corporate records of the Issuer are true and correct in all material respects and contain all the resolutions of their respective directors and shareholders; (z) the Issuer will use its best efforts to remain a reporting issuer in British Columbia and Alberta for a minimum of two years after the Closing; (aa) the Issuer shall not take any action which would be reasonably expected to result in the delisting or suspension of the Shares on or from the Exchange or on or from any securities exchange, market or quoting facility on which the common shares are then listed or quoted and the Issuer shall comply, in all material respects, with the rules and regulations thereof; (bb) the Issuer has not withheld, and will not withhold from the Agents, any facts relating to the Issuer or to the offering of the FT Shares and the Units that would be considered material to a Purchaser; (cc) the Issuer proposes to use the gross proceeds of the sale of the FT Shares to incur exploration expenses on its exploration properties which are currently limited to the Provinces of Ontario and Quebec, that qualify as “Canadian exploration expenses” (“CEE”) as described in paragraph (f) of the definition thereof in subsection 66.1(6) of the Income Tax Act (Canada) (“ITA”); (dd) the Issuer will file all necessary forms and documents with the Canada Revenue Agency to meet its obligations under the Subscription Agreements for FT Shares; (ee) the Issuer will maintain proper accounting books and records relating to the CEE expenditures and will make such books and records available for inspection by the Agents upon reasonable request; (ff) the Issuer is a “principal business corporation” within the meaning prescribed in section 66(15) of the ITA; (gg) upon issuance pursuant to the Subscription Agreements, the FT Shares will be “flow-through shares” as defined in subsection 66(15) of the ITA and will not be “prescribed shares” for the purpose of section 6202.1 of the regulations to the ITA; (hh) other than the Agents, no person, firm or ~~corporation~~ company acting or purporting to act at the request of the Issuer is entitled to any brokerage, agency or finder’s fee in connection with the ~~Offering; and~~transactions described herein; (iix) ~~its~~ the Issuer has filed all documents required to be filed under the continuous disclosure provisions of Canadian Applicable Legislation, including an annual information form, material change reports, press releases, financial statements, management discussion and analysis and all such documents did not contain any Misrepresentations as of the date they were issued or filed, as the case may be; (y) to the best of the Issuer’s knowledge having made due enquiries of the directors, the details concerning each of the directors provided to the Agents in their directors’ and officers’ questionnaires are true and accurate in all respects and there is nothing concerning any of the directors which is not contained in such directors’ and officers’ questionnaires provided to the Agent which is or might reasonably by expected to be material to be known to the Agents in connection with the Offering; (z) the warranties and representations in this ~~section and in Appendix I to the Subscription Agreements for FT Shares~~ Subsection are true and correct and will remain so as of the ~~Closing~~conclusion of the distribution under the Prospectus. ~~14.2 Each~~ 13.2 The Issuer covenants with the Agents that the Issuer will not issue or announce the issuance of any common shares of the ~~Agents warrant and represent to, and covenant with,~~ Issuer or any securities convertible into or exchangeable for or exercisable to acquire common shares of the Issuer ~~that~~without the prior written consent of the Canaccord, such consent to not be unreasonably withheld, during the period ending 90 days after the Closing Day, other than pursuant to: (a) ~~it is a valid~~ presently outstanding rights to acquire common shares, including options, warrants and ~~subsisting corporation under the law~~ other exchangeable or convertible securities outstanding as of the jurisdiction in which it was incorporated and has good and sufficient right and authority to enter into this Agreement and complete the transactions under this Agreement on the terms and conditions set forth hereindate hereof; (b) ~~it is a broker~~ options or ~~dealer properly registered under~~ shares granted to officers, directors or employees of the ~~Acts~~ Issuer or any subsidiary thereof pursuant to existing stock option and ~~is a member in good standing with the Exchange~~stock ownership plans or any stock option, stock ownership or bonus plans; (c) ~~it is acquiring~~ any merger or acquisition transactions effected by the ~~Agents’ Securities as principal for its own account and not for the benefit of any other person;~~Issuer; or (d) the Agents and any sub-agents retained by the Agents will be acquiring the Agents’ Warrants as principals for their own account and are “accredited investors” within the meaning of National Instrument 45-106; (e) it is not a U.S. Person, did not receive the offer to purchase the Agents’ Securities in the United States, did not execute or deliver this Agreement in the United States and is not acquiring the Agents’ Securities for the account or benefit of a U.S. Person or person in the United States; (f) in connection with an investment in the ~~Offering, it will sell the FT Shares and the Units in compliance~~ Issuer by an industry or strategic investor; 13.3 The Issuer shall provide Canaccord with ~~the Acts and this Agreement and in~~ a ~~manner such that no prospectus, offering memorandum, or other disclosure document need~~ copy of all press releases to be ~~prepared and filed or delivered~~ issued by the Issuer ~~in connection with~~ concerning the Offering prior to the issuance thereof, and shall give Canaccord an opportunity, where practicable, to provide comments on any such ~~that~~ press release. Notwithstanding the ~~Issuer is not made subject to new continuous disclosure reporting requirements; and (g) its warranties and representations~~ foregoing, nothing contained in this section ~~are true and correct and will remain so as~~ shall prevent the Issuer from issuing a press release forthwith in the event that it is necessary in order to comply with securities laws or the rules or policies of the ~~Closing, and, in the case of the warranties and representations in Sections 14.2(c) and 14.2(f), as of the acquisition of any Agents’ Warrants Shares~~Exchange. 14.3 Each of the Agents acknowledges that none of the Securities have been or will be registered under the U.S. Securities Act or the securities laws of any state, agrees that the Agents’ Warrants may not be exercised in the United States or by or on behalf of a U.S. Person, nor may any of the Agents’ Securities described in this paragraph be offered or sold in the United States unless an exemption from registration under the U.S. Securities Act and any applicable state securities law is available, and agrees that it will not engage in any Directed Selling Efforts (as defined in Schedule “A” with respect to the Agents’ Securities).

Appears in 1 contract

Samples: Agency Agreement (MIGENIX Inc.)

WARRANTIES, REPRESENTATIONS AND COVENANTS. ~~14.1 The Issuer warrants~~ SECTION 2.1 Mortgagor warrants, represents and ~~represents~~ covenants to and ~~covenants~~ with ~~the Agents~~ BOTW that: : (a) Mortgagor has the ~~Issuer is a valid and subsisting corporation duly incorporated and~~ right to receive at all times the "Net Revenue Interest" specified in ~~good standing under~~ Exhibit "A" of all Hydrocarbons produced from the ~~laws of~~ xxxxx located on the Province of British Columbia and has all requisite corporate power and authority to carry on its business, as now conducted and as presently proposed to be conducted and to own their respective assets; Collateral; (b) Mortgagor's share of development and operating costs with respect to any of the ~~Issuer is duly registered and licensed to carry on business~~ xxxxx or properties included in the ~~jurisdictions~~ Collateral is no greater than the "Working Interest" specified in ~~which it carries on business~~ Exhibit "A" for that well or ~~owns~~ property ~~where so required~~ (unless Mortgagor's right to receive production proceeds from such well or property has been increased by a proportionate amount over the ~~laws of that jurisdiction;~~ applicable "Net Revenue Interest" specified for such well or property in Exhibit "A"); (c) Mortgagor is the ~~authorized capital as at November 9~~lawful owner of good and defensible title to the Collateral, ~~2010~~free and clear of all liens, security interests, encumbrances and burdens, except liens, security interests and other matters permitted by the terms of the ~~Issuer consists of an unlimited number of common shares without par value, of which as at November 9, 2010, 29,604,994 common shares are issued and outstanding as fully paid and non-assessable;~~ Credit Agreement; (d) ~~the Issuer will reserve or set aside sufficient shares in its treasury to issue the Shares~~each loan, the ~~FT Shares~~payment of which constitutes an Obligation hereunder, ~~the Warrant Shares~~ is or shall be for a business or commercial purpose; and the Agents’ Shares, the Agents’ Warrant Shares and all such shares will be duly and validly issued as fully paid and non-assessable when issued in accordance with the agreements or instruments governing the same; (e) Mortgagor will forever defend the ~~Subscription Agreements~~ title to the Collateral against the claims of all persons whomsoever claiming or to claim the same or any part thereof. SECTION 2.2 Mortgagor covenants that, so long as any part of the Obligations remains unpaid or unsatisfied, unless BOTW shall have otherwise consented in writing: A. Mortgagor shall promptly and, insofar as not contrary to applicable law, at Mortgagor's own expense, file and ~~all~~ refile in such offices, at such times and as often as may be necessary, this Instrument and every other ~~written~~ instrument in addition or ~~oral representations made by the Issuer to a Purchaser or potential Purchaser in connection with the Offering will be accurate in all material respects and will omit no fact~~supplemental hereto, ~~the omission of which will make such representations misleading or incorrect; (f) except as qualified by the disclosure in all prospectuses, filing~~ including applicable financing statements, ~~information circulars~~as may be necessary to create, ~~financial statements~~perfect, ~~management discussion~~ maintain and ~~analysis~~preserve the lien, ~~press releases or material change reports filed with the Regulatory Authorities (collectively, the “Disclosure Record”), the Issuer is the beneficial owner of the properties, business~~ encumbrance and ~~assets or the interests in the properties, business or assets referred~~ security interest intended to ~~in the Disclosure Record~~ be created hereby and all agreements by which the Issuer holds an interest in a property, business or asset are in good standing according to their terms and the properties are in good standing under the applicable laws of the jurisdictions in which they are situated, and the Issuer does not own any material properties, business or assets not disclosed in the Disclosure Record; (g) the Issuer will, upon completion of the Offering and the transactions described in the Issuer’s September 7, 2010 news release, hold either freehold title, mining leases, mining claims or other conventional property, proprietary or contractual interests or rights, recognized in the jurisdiction in which a particular property is located, in respect of the ore bodies and minerals located in properties in which it has an interest under valid, subsisting and enforceable title documents or other recognized and enforceable agreements or instruments, sufficient to permit it to explore the minerals relating thereto (the “Mining Rights”). The Mining Rights have been validly located and recorded in accordance with all applicable laws and are valid and subsisting, the Issuer has all necessary surface rights, access rights and other necessary rights and interests relating to the properties in which it has an interest granting it the right and ability to explore for minerals, ore and metals for development purposes as are appropriate in view of the rights and remedies of BOTW hereunder; B. Mortgagor shall execute, acknowledge and deliver to BOTW such other and further instruments and do such other acts as in the reasonable opinion of BOTW may be necessary or desirable to more fully identify and subject to the lien, encumbrance and security interest ~~therein~~ and assignment created hereby any property intended by the terms hereof to be covered hereby, to assure the first priority thereof, and otherwise to effect the intent of itthis Instrument, ~~with only such exceptions~~ promptly upon request of BOTW and at Mortgagor's expense; and C. If the title, interest, lien or encumbrance, as ~~do not materially interfere with~~ the ~~use made by it~~ case may be, of Mortgagor or BOTW to the Collateral or any part thereof, or the security of this Instrument, or the rights or ~~interests so held~~powers of BOTW hereunder, ~~and~~shall be attacked, ~~except~~ either directly or indirectly, or if any legal proceedings are commenced involving Mortgagor or the Collateral, Mortgagor shall promptly give written notice thereof to BOTW and at Mortgagor's own expense shall take all reasonable steps diligently to defend against any such attack or proceedings; and BOTW may take such independent action in connection therewith as disclosed in the Disclosure Record, each of the material proprietary interests or rights and each of the documents, agreements and instruments and obligations relating thereto referred to above is currently in good standing it may in its ~~name; (h) the Units~~discretion deem advisable, the Shares, the Warrants and the Warrants Shares offered and sold in the United States or to, or for the account or benefit of, U.S. Persons will be subject to resale restrictions under the U.S. Securities Act and the Securities will not be subject to a restricted period or statutory hold period under the Acts of each Offering Jurisdiction in Canada or to any resale restrictions under the policies of the Exchange which extends beyond four months and one day after issuance of the Securities, other than for Purchasers who become control persons; (i) the Disclosure Record does not contain any material misrepresentation nor does it omit any Material Fact relating to the Issuer; (j) the financial statements contained in the Disclosure Record filed with any of the Commissions and supplied by the Issuer to the Agents in connection with the Offering have all been prepared in accordance with Canadian generally accepted accounting principles, accurately, fairly and fully reflect the financial position and all ~~material liabilities (accrued, absolute, contingent or otherwise) of the Issuer, as of the date thereof,~~ costs and no adverse material changes in the financial position of the Issuer has taken place since the date thereof; (k) the Issuer has complied and will comply fully in all material respects with the requirements of all applicable corporate and Securities Laws and administrative policies and directionsexpenses, including, without limitation, reasonable attorneys' fees and legal expenses, incurred by BOTW in connection therewith shall be a demand obligation owing by Mortgagor to BOTW, shall bear interest at the ~~Acts and~~ applicable rate provided in the ~~Business (l) there is not presently~~Credit Agreement, and ~~will not~~ shall be until the completion of the Closing any Material Change or change in any Material Fact relating to the Issuer which has not been or will not be fully disclosed to the Agents; (m) the issue and sale of the Securities by the Issuer and the Agents does not and will not conflict with, or result in a breach of, any of the terms of the Issuer’s constating documents or any agreement or instrument to which the Issuer is a party; (n) the Issuer is not a party to any actions, suits or proceedings which could materially affect its business or financial condition, and to the best of the Issuer’s knowledge no such actions, suits or proceedings are contemplated or have been threatened which are not disclosed in the Disclosure Record; (o) neither the Issuer, nor to the best of the Issuer’s knowledge, any other party, is in default in the observance or performance of any term or obligation to be performed by it under any contract entered into by the Issuer which is material to the business of the Issuer and no event has occurred which with notice or lapse of time or both would directly or indirectly constitute such a default, in any such case which default or event would have a material adverse effect on the assets or properties, business, results of operations, prospects or condition (financial or otherwise) of the Issuer; (p) there are no judgments against the Issuer which are unsatisfied, nor is the Issuer subject to any consent decrees or injunctions; (q) this Agreement has been, or will be by the Closing, duly authorized by all necessary corporate action on the part of the Issuer, and the Issuer has full corporate power and authority to undertake the Offering, and this Agreement and the Subscription Agreements have been, or will be by the Closing, duly authorized, executed and delivered by the Issuer and this Agreement and the Subscription Agreements are legal, valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms subject to laws relating to creditors’ rights generally, the availability of equitable remedies and except as rights to indemnity and contribution may be limited by applicable law; (r) the Issuer is a reporting issuer in the Provinces of British Columbia and Alberta, the common shares of the Issuer are listed on the NEX Board of the Exchange, and the Issuer is not in default of any of the requirements of the Acts or any of the administrative policies or notices of the NEX Board of the Exchange or the Exchange; (s) other than the Exchange imposed halt on the Issuer’s Common Shares there is no order ceasing, halting or suspending trading in securities of the Issuer nor prohibiting the sale of such securities has been issued to and is outstanding against the Issuer or its directors, officers or promoters or to the best of the Issuer’s knowledge, against any other companies that have common directors, officers or promoters and to the best of the Issuer’s knowledge, no investigations or proceedings for such purposes are pending or threatened; (t) except as disclosed to the Agents in Schedule “C” with respect to outstanding options and convertible securities and as set out in the Disclosure Record or otherwise to any of the Regulatory Authorities, no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming such a right, agreement or option, for the issue or allotment of any unissued shares in the capital of the Issuer or any other security convertible into or exchangeable for any such shares, or to require the Issuer to purchase, redeem or otherwise acquire any of the issued and outstanding shares in its capital; (u) the Issuer has filed all federal, provincial, local and foreign tax returns which are required to be filed, or have requested extensions thereof, and have paid all taxes required to be paid by them and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for such assessments, fines and penalties which are currently being contested in good faith; (v) the Issuer shall establish on its books and records, as may be applicable, reserves which are adequate for the payment of all taxes not yet due and payable and there are no liens for taxes on the assets of the Issuer except for taxes not yet due, and there are no audits of any of the tax returns of the Issuer which are known by the Issuer’s management to be pending, and there are no claims which have been or may be asserted relating to any such tax returns which, if determined adversely, would result in the assertion by any governmental agency of any deficiency which would have a material adverse effect on the properties, business or assets of the Issuer; (w) any and all operations of the Issuer have been conducted in accordance with good industry practices and in material compliance with applicable laws, rules, regulations, orders and directions of government and other competent authorities; (x) the Issuer (i) is in material compliance with any and all applicable federal, provincial, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received all material permits, licenses or other approvals required of any of them under applicable Environmental Laws to conduct its business, and (iii) is in material compliance with all terms and conditions of any such permit, licences or approval; (y) since current management of the Issuer assumed management of the Issuer, the minute books and corporate records of the Issuer are true and correct in all material respects and contain all the resolutions of their respective directors and shareholders; (z) the Issuer will use its best efforts to remain a reporting issuer in British Columbia and Alberta for a minimum of two years after the Closing; (aa) the Issuer shall not take any action which would be reasonably expected to result in the delisting or suspension of the Shares on or from the Exchange or on or from any securities exchange, market or quoting facility on which the common shares are then listed or quoted and the Issuer shall comply, in all material respects, with the rules and regulations thereof; (bb) the Issuer has not withheld, and will not withhold from the Agents, any facts relating to the Issuer or to the offering of the FT Shares and the Units that would be considered material to a Purchaser; (cc) the Issuer proposes to use the gross proceeds of the sale of the FT Shares to incur exploration expenses on its exploration properties which are currently limited to the Provinces of Ontario and Quebec, that qualify as “Canadian exploration expenses” (“CEE”) as described in paragraph (f) of the definition thereof in subsection 66.1(6) of the Income Tax Act (Canada) (“ITA”); (dd) the Issuer will file all necessary forms and documents with the Canada Revenue Agency to meet its obligations under the Subscription Agreements for FT Shares; (ee) the Issuer will maintain proper accounting books and records relating to the CEE expenditures and will make such books and records available for inspection by the Agents upon reasonable request; (ff) the Issuer is a “principal business corporation” within the meaning prescribed in section 66(15) of the ITA; (gg) upon issuance pursuant to the Subscription Agreements, the FT Shares will be “flow-through shares” as defined in subsection 66(15) of the ITA and will not be “prescribed shares” for the purpose of section 6202.1 of the regulations to the ITA; (hh) other than the Agents, no person, firm or corporation acting or purporting to act at the request of the Issuer is entitled to any brokerage, agency or finder’s fee in connection with the Offering; and (ii) its warranties and representations in this section and in Appendix I to the Subscription Agreements for FT Shares are true and correct and will remain so as of the ClosingObligations. XI. 14.2 Each of the Agents warrant and represent to, and covenant with, the Issuer that: (a) it is a valid and subsisting corporation under the law of the jurisdiction in which it was incorporated and has good and sufficient right and authority to enter into this Agreement and complete the transactions under this Agreement on the terms and conditions set forth herein; (b) it is a broker or dealer properly registered under the Acts and is a member in good standing with the Exchange; (c) it is acquiring the Agents’ Securities as principal for its own account and not for the benefit of any other person; (d) the Agents and any sub-agents retained by the Agents will be acquiring the Agents’ Warrants as principals for their own account and are “accredited investors” within the meaning of National Instrument 45-106; (e) it is not a U.S. Person, did not receive the offer to purchase the Agents’ Securities in the United States, did not execute or deliver this Agreement in the United States and is not acquiring the Agents’ Securities for the account or benefit of a U.S. Person or person in the United States; (f) in connection with the Offering, it will sell the FT Shares and the Units in compliance with the Acts and this Agreement and in a manner such that no prospectus, offering memorandum, or other disclosure document need be prepared and filed or delivered by the Issuer in connection with the Offering and such that the Issuer is not made subject to new continuous disclosure reporting requirements; and (g) its warranties and representations in this section are true and correct and will remain so as of the Closing, and, in the case of the warranties and representations in Sections 14.2(c) and 14.2(f), as of the acquisition of any Agents’ Warrants Shares. 14.3 Each of the Agents acknowledges that none of the Securities have been or will be registered under the U.S. Securities Act or the securities laws of any state, agrees that the Agents’ Warrants may not be exercised in the United States or by or on behalf of a U.S. Person, nor may any of the Agents’ Securities described in this paragraph be offered or sold in the United States unless an exemption from registration under the U.S. Securities Act and any applicable state securities law is available, and agrees that it will not engage in any Directed Selling Efforts (as defined in Schedule “A” with respect to the Agents’ Securities).

Appears in 1 contract

Samples: Credit Agreement (Kodiak Oil & Gas Corp)

Common use of WARRANTIES, REPRESENTATIONS AND COVENANTS Clause in Contracts