EXHIBIT 4.79
AGENCY AGREEMENT
December 12, 0000
Xxxx Xxxxxx Mining Corporation
Xxxxx 000-000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Attention: Xxxxxx Rip
Dear Sirs:
The undersigned, RBC Dominion Securities Inc., Salman Partners Inc. and Sprott
Securities Inc. (collectively, the "AGENTS") understand that Pine Valley Mining
Corporation (the "COMPANY") proposes to issue and sell up to 4,055,000 units of
the Company (individually a "UNIT" and, collectively, the "UNITS") subject to
the terms and conditions set out below.
Upon and subject to the terms and conditions set forth herein, the Agents hereby
agree to act and upon acceptance hereof the Company hereby appoints the Agents,
as the Company's exclusive agents to offer for sale, on a best efforts agency
basis, without underwriter liability, 4,055,000 Units at a price of $2.50 per
Unit for an aggregate gross proceeds to the Company of up to $10,137,500 (the
"OFFERING"). Each Unit shall consist of one Common Share (as hereinafter
defined) (a "UNIT SHARE") and one-half of one Common Share purchase warrant (a
"WARRANT"). Each whole Warrant will entitle the holder thereof to purchase one
Common Share (a "WARRANT SHARE") at a price of $3.50 per Warrant Share at any
time prior to 5:00 p.m. (Vancouver time) on the date that is 18 months following
the Closing Date (as hereinafter defined). The Warrants shall be created and
issued pursuant to a warrant indenture (the "WARRANT INDENTURE") to be dated as
of the Closing Date (as hereinafter defined) between the Company and the
Transfer Agent.
The Company agrees that the Agents will be permitted to appoint other registered
dealers (or other dealers duly licensed or registered in their respective
jurisdictions) as their agents to assist in the Offering and that the Agents may
determine the remuneration payable to such other dealers appointed by them. Such
remuneration shall be payable by the Agents.
In consideration of the services to be rendered by the Agents in connection with
the Offering, the Company shall pay to the Agents at Closing (as hereinafter
defined) in cash a commission equal to 6.5% of the gross proceeds realized by
the Company in respect of the sale of Units (the "COMMISSION").
DEFINITIONS
In this Agreement, in addition to the terms defined above, the following terms
shall have the following meanings:
"AFFILIATES" has the meaning ascribed thereto in Section 10;
"AGREEMENT" means the agreement resulting from the acceptance by the Company;
"BUSINESS DAY" means a day which is not a Saturday, Sunday or statutory or civic
holiday in the City of Vancouver, British Columbia, or Xxxxxxx, Xxxxxxx, as
applicable;
"CANADIAN SECURITIES LAWS" means all applicable securities laws in each of the
Canadian Selling Jurisdictions and the respective regulations made thereunder,
together with applicable published fee schedules, prescribed forms, policy
statements, notices, orders, blanket rulings and other regulatory instruments of
the securities regulatory authorities in such provinces and all rules and
policies of the TSXV;
"CLOSING" means the closing on the Closing Date of the transaction of purchase
and sale in respect of the Units as contemplated by this Agreement and the
Subscription Agreements;
"CLOSING DATE" means December 12, 2005 or such other date as the Agents, and the
Company shall agree;
"CLOSING TIME" means 10:00 a.m. (Toronto time) on the Closing Date or such other
time on the Closing Date as the Company and the Agents may agree;
"COMMON SHARE" means a common share in the capital of the Company;
"COMPANY'S AUDITORS" means Deloitte & Touche LLP, Chartered Accountants, or such
other firm of chartered accountants as the Company may have appointed or may
from time to time appoint as auditors of the Company;
"COMPANY'S KNOWLEDGE" means knowledge of members of the Company's Board of
Directors or senior management team;
"DEBT INSTRUMENT" means any loan, bond, debenture, promissory note or other
instrument evidencing indebtedness (demand or otherwise) for borrowed money or
other liability;
"ENVIRONMENTAL LAWS" has the meaning ascribed thereto in paragraph 4(a)(xxix);
"FINANCIAL STATEMENTS" has the meaning ascribed thereto in paragraph 4(a)(v);
"FMCI" means Falls Mountain Coal Inc.;
"GMC" means Globaltex Gold Mining Corp.
"INCLUDING" means including without limitation;
"INFORMATION" has the meaning ascribed thereto in paragraph 4(a)(xxi);
"INSTITUTIONAL ACCREDITED INVESTOR" means those institutional "accredited
investors" specified in Rule 501(a)(1), (a)(2), (a)(3) or (a)(7) of Regulation D
adopted pursuant to the U.S. Securities Act;
"LEASED PREMISES" means the premises which are material to the Company and its
subsidiaries, taken as a whole and which the Company or its subsidiaries occupy
as a tenant;
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"MATERIAL ADVERSE EFFECT" has the meaning ascribed thereto in paragraph 4(a)(i);
"MATERIAL AGREEMENT" means any material Debt Instrument, indenture, contract,
commitment, agreement (written or oral), instrument, lease or other document, to
which the Company or its subsidiaries are a party;
"MATERIAL SUBSIDIARIES" means FMCI and PVCL;
"MISREPRESENTATION", "MATERIAL FACT", "MATERIAL CHANGE", "AFFILIATE",
"ASSOCIATE", and "DISTRIBUTION" have the respective meanings ascribed thereto in
the Securities Act (Ontario);
"NI 43-101" has the meaning ascribed thereto in paragraph 4(a)(xliii);
"PERSON" means any individual, corporation, partnership, joint venture,
association, trust or other legal entity;
"PERSONNEL" has the meaning ascribed thereto in Section 10;
"PVCL" means Pine Valley Coal Ltd.;
"PUBLIC DISCLOSURE DOCUMENTS" means, collectively, all of the documents which
have been filed by or on behalf of the Company prior to the Closing Time with
the relevant Securities Regulators pursuant to the requirements of Canadian
Securities Laws, including all press releases filed on SEDAR;
"PURCHASERS" means the persons (which may include the Agents) who, as purchasers
or beneficial purchasers acquire Units by duly completing, executing and
delivering Subscription Agreements and any other required documentation and
permitted assignees or transferees of such persons from time to time;
"RBC" means RBC Dominion Securities Inc.
"SELLING JURISDICTIONS" means the provinces of Quebec and Ontario, and such
other jurisdictions inside or outside Canada, including the United States, as
mutually agreed to by the Company and the Agents;
"SECURITIES REGULATORS" means, collectively, the securities regulators or other
securities regulatory authorities in the Selling Jurisdictions;
"SUBSCRIPTION AGREEMENTS" means collectively the Canadian and U.S. subscription
agreements in the forms agreed upon by the Agents and the Company, pursuant to
which Purchasers agree to subscribe for and purchase the Units herein
contemplated and shall include, for greater certainty, all schedules thereto;
"SUBSIDIARY" and "SUBSIDIARIES" shall have the meaning ascribed thereto in the
Canada Business Corporations Act;
"TAXES" shall have the meaning ascribed thereto in paragraph 4(a)(vii);
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"TRANSFER AGENT" means Computershare Trust Company of Canada, in its capacity as
transfer agent, registrar and warrant agent of the Company at its principal
offices in the cities of Vancouver, British Columbia and Toronto, Ontario;
"TSXV" means the TSX Venture Exchange;
"U.S. SECURITIES ACT" means the United States Securities Act of 1933, as
amended;
TERMS AND CONDITIONS
1. (A) SALE ON EXEMPT BASIS. The Agents shall offer for sale and sell the Units
in the Selling Jurisdictions on a private placement basis in compliance with all
applicable Canadian Securities Laws and all applicable securities laws of other
Selling Jurisdictions such that the offer and sale of the Units does not
obligate the Company to file a prospectus, a registration statement or other
offering document under applicable securities legislation. The Agents shall
offer the Units for sale in the United States through a U.S. registered
broker-dealer affiliate pursuant to exemptions from the registration
requirements of the U.S. Securities Act and applicable state securities laws,
all such sales to be carried out and completed in accordance with Schedule "A"
annexed hereto, the particulars of which are incorporated herein by reference.
(B) FILINGS. The Company undertakes to file, or cause to be filed, all forms or
undertakings required to be filed by the Company in connection with the issue
and sale of the Units respectively so that the distribution of the Units to the
Purchasers may lawfully occur without the necessity of filing a prospectus, a
registration statement or an offering memorandum in Canada or the United States
(but on terms that will permit the Unit Shares and Warrants acquired by the
Purchasers in the Selling Jurisdictions to be sold by such Purchasers at any
time in the Selling Jurisdictions subject to applicable hold periods and other
restrictions under Canadian Securities Laws, the U.S. Securities Act and the
provisions of paragraph 2 of this Agreement), and the Agents undertake to use
their commercially reasonable best efforts to cause Purchasers of Units to
complete any forms required by Canadian Securities Laws or under other
applicable securities laws. All fees payable in connection with such filings
shall be at the expense of the Company.
(C) NO OFFERING MEMORANDUM. Neither the Company nor any of the Agents shall (i)
provide to prospective purchasers any document or other material that would
constitute an offering memorandum or future oriented financial information
within the meaning of Canadian Securities Laws or applicable securities laws of
the United States or any state or territory thereof; or (ii) engage in any form
of general solicitation or general advertising in connection with the offer and
sale of the Units, including causing the sale of the Units to be advertised in
any newspaper, magazine, printed public media, printed media or similar medium
of general and regular paid circulation, broadcast over radio, television or
telecommunications, including electronic display, or conduct any seminar or
meeting relating to the offer and sale of the Units whose attendees have been
invited by general solicitation or advertising.
(D) UNITED STATES OFFERS AND SALES. Each of the Company and the Agents (on their
own behalf and on behalf of a U.S. registered broker-dealer affiliate of the
Agents) agree that the representations, warranties and covenants contained in
Schedule "A" to this Agreement entitled "United States Offers and Sales" are
incorporated by reference in and shall form part of this Agreement with respect
to offers and sales of Units in the United States by a U.S. registered
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broker-dealer affiliate of the Agents. The Agents agree, on behalf of themselves
and their United States affiliates, for the benefit of the Company to comply
with the U.S. selling restrictions imposed by the laws of the United States and
contained in Schedule "A" to this Agreement. Notwithstanding the foregoing
provisions of this paragraph 1(d), an Agent will not be liable to the Company
under this paragraph or Schedule "A" to this Agreement with respect to a
violation by another Agent or by another member of the selling dealer group.
2. (A) COVENANTS OF THE COMPANY. The Company hereby covenants to the Agents, the
Purchasers and their respective permitted assigns and acknowledges that each of
them is relying on such covenants in connection with the purchase of the Units,
that the Company shall:
(i) for a period of two years after the Closing Date, use its
reasonable best efforts subject to the reasonable discretion of
the board of directors of the Company to act in the best
interest of the Company, remain a reporting issuer under
Canadian Securities Laws in the provinces of British Columbia
and Alberta not in default of any requirement of such Canadian
Securities Laws;
(ii) allow the Agents and their representatives the opportunity to
conduct all due diligence which the Agents may reasonably
require to be conducted prior to the Closing Date;
(iii) duly execute and deliver the Subscription Agreements and the
Warrant Indenture at the Closing Time and shall comply with and
satisfy all terms, conditions and covenants therein contained to
be complied with or satisfied by the Company;
(iv) fulfil or cause to be fulfilled, at or prior to the Closing
Date, each of the conditions applicable to the Company set out
in Section 6;
(v) ensure that the Unit Shares shall, upon issuance in accordance
with their terms, be duly issued as fully paid and
non-assessable securities in the capital of the Company, and
shall have the attributes corresponding in all material respects
to the description thereof set forth in this Agreement and the
Subscription Agreements;
(vi) ensure that the Warrants shall be duly and validly created,
authorized and issued and shall have the attributes
corresponding in all material respects to the description
thereof set forth in this Agreement and the Warrant Indenture;
(vii) ensure that at all times prior to the expiry of the Warrants,
sufficient Warrant Shares are allotted and reserved for issuance
upon the due and proper exercise of the Warrants and, upon
issuance in accordance with the terms of the Warrant Indenture,
shall be issued as fully paid and non-assessable securities in
the capital of the Company;
(viii) use its best efforts to ensure that the Unit Shares and the
Warrant Shares are listed and remain listed for trading on the
TSXV (or the Toronto Stock Exchange) if and when such securities
are issued;
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(ix) in connection with the issuance of the Units, execute and file
with the Securities Regulators all forms, notices and
certificates required to be filed pursuant to the Canadian
Securities Laws in the time required by the applicable Canadian
Securities Laws, including, for greater certainty, all forms,
notices and certificates set forth in the opinions delivered to
the Agents pursuant to Section 6 of this Agreement required to
be filed by the Company; and
(x) for a period of 120 days from the Closing Date, not directly or
indirectly, offer to sell, grant any option for the sale, or
issue or announce any intention to do so, in a public offering
or by way of private placement, any securities in the capital of
the Company without the prior written consent of RBC, such
consent not to be unreasonably withheld, except in conjunction
with: (i) the grant or exercise of stock options to or by
employees, officers or directors of, or consultants to, the
Company and other similar issuances pursuant to the existing
share incentive plan of the Company and other existing share
compensation arrangements of the Company; or (ii) outstanding
warrants or obligations disclosed in schedule "B" hereto.
3. (A) MATERIAL CHANGES DURING DISTRIBUTION. During the period from the date
hereof to the Closing Date, the Company shall promptly notify the Agents (and,
if requested by any of the Agents, confirm such notification in writing) of any
material change (actual, anticipated, contemplated or threatened, financial or
otherwise) in the business, affairs, operations, assets, liabilities (contingent
or otherwise) or capital of the Company and its subsidiaries, taken as a whole.
During the period from the date hereof to the Closing Date, the Company shall
promptly, and in any event, within any applicable time limitation, comply with
all applicable filing and other requirements under Canadian Securities Laws as a
result of such change. The Company shall in good faith discuss with the Agents
any fact or change in circumstances (actual, anticipated, contemplated or
threatened, and financial or otherwise) which is of such a nature that there is
reasonable doubt as to whether notice in writing need be given to the Agents
pursuant to this paragraph 3.
(B) PRESS RELEASES. During the period from the date hereof to the Closing Time,
subject to applicable law (including the time limits imposed thereunder), the
Company shall obtain prior approval of the Agents as to the content and form of
any press release. In addition, until the Closing Time, any press release
announcing or otherwise referring to this Offering shall include an appropriate
legend on each page as follows: "Not for distribution to U.S. news wire services
or dissemination in the United States."
4. (A) REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to the Agents, the U.S. registered broker-dealer affiliate of the
Agents, and the Purchasers, and acknowledges that each of them is relying upon
such representations and warranties in purchasing the Units, that:
(i) the Company and each of its Material Subsidiaries has been duly
incorporated and is validly existing under the laws of their
respective jurisdictions of existence, has all requisite
corporate power and authority and is duly qualified and possess
all material certificates, authority, permits (other than the
amended permit to allow
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the Company to produce 2.2 million tonnes of coal per annum) and
licences issued by the appropriate provincial, municipal,
federal regulatory agencies or bodies necessary (and has not
received or is not aware of any modification or revocation to
such licences, authority, certificates or permits, except such
modifications or amendments as are necessary for the conduct of
their business) to carry on their businesses as now conducted
and to own their properties and assets, except for those
certificates, authority, permits and licenses which the failure
to obtain would not, individually or in the aggregate, have a
material adverse effect on the business, results of operations
or financial condition of the Company and its Material
Subsidiaries, considered as a whole (a "MATERIAL ADVERSE
EFFECT"), has all requisite corporate power and authority to
carry out its obligations under this Agreement, the Subscription
Agreements and the Warrant Indenture;
(ii) the Company has no material subsidiaries other than as listed
below and the Company beneficially owns, directly or indirectly,
the percentage indicated below of the issued and outstanding
shares in the capital of the Material Subsidiaries, free and
clear of all mortgages, liens, charges, pledges, security
interests, encumbrances, claims or demands of any kind
whatsoever except as set out in the Public Disclosure Documents,
all of such shares have been duly authorized and validly issued
and are outstanding as fully paid and non-assessable shares and
no person has any right, agreement or option, present or future,
contingent or absolute, or any right capable of becoming a
right, agreement or option, for the purchase from the Company of
any interest in any of such shares or for the issue or allotment
of any unissued shares in the capital of any of the Material
Subsidiaries or any other security convertible into or
exchangeable for any such shares:
NAME JURISDICTION OF BENEFICIAL EQUITY/VOTING
INCORPORATION OR OWNERSHIP
CONTINUANCE
------------------------ ---------------- -------------------------
Falls Mountain Coal Inc. British Columbia 100%
Pine Valley Coal Ltd. Alberta 100%
GMC and Pine Valley Coal Pty. Limited are inactive wholly-owned
subsidiaries of the Company and are not material to the Company;
(iii) at the Closing Time, all consents, approvals, permits,
authorizations or filings as may be required under Canadian
Securities Laws necessary for the execution and delivery of this
Agreement, the Warrant Indenture and the Subscription
Agreements, the issuance and sale of the Unit Shares and the
Warrants comprising the Units and the Warrant Shares upon
exercise of the Warrants and the consummation of the
transactions contemplated hereby and thereby have been made or
obtained, as applicable;
(iv) each of the execution and delivery of this Agreement, the
Warrant Indenture and the Subscription Agreements, the
performance by the Company of its obligations hereunder or
thereunder, the issue and sale of the Unit Shares and Warrants
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comprising the Units and the issue and sale of Warrant Shares
upon the exercise of the Warrants and the consummation of the
transactions contemplated hereby and thereby do not and will not
conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, (whether
after notice or lapse of time or both), (A) any statute, rule or
regulation applicable to the Company or its subsidiaries
including Canadian Securities Laws and the securities laws of
any other Selling Jurisdiction; (B) the constating documents,
by-laws or resolutions of the Company or its subsidiaries which
are in effect at the date hereof; (C) any Debt Instrument,
Material Agreement, mortgage, indenture, contract, agreement,
instrument, lease or other document to which the Company or its
subsidiaries are a party or by which any one of them is bound;
or (D) any judgment, decree or order binding the Company or its
subsidiaries or the property or assets of the Company or its
subsidiaries;
(v) the audited consolidated financial statements of the Company as
at and for the year ended March 31, 2005 and the unaudited
consolidated financial statements of the Company as at and for
the six months ended September 30, 2005 (collectively, the
"FINANCIAL STATEMENTS") have been prepared in accordance with
generally accepted accounting principles in Canada consistently
applied throughout the period referred to therein and present
fairly, in all material respects, the financial position
(including the assets and liabilities, whether absolute,
contingent or otherwise) of the Company and its subsidiaries (on
a consolidated basis) as at such dates and results of operations
of the Company and its subsidiaries (on a consolidated basis)
for the periods then ended and there has been no change in
accounting policies or practices of the Company and its
subsidiaries since March 31, 2005;
(vi) there has been no adverse material change (actual, proposed or
prospective, whether financial or otherwise) in the business,
results of operations, assets, liabilities (contingent or
otherwise) or capital or financial condition of the Company or
its Material Subsidiaries, since March 31, 2005, which has not
been generally disclosed to the public and, except as disclosed
in the Public Disclosure Documents, the business of the Company
and its subsidiaries has been carried on in the usual and
ordinary course consistent with past practice since March 31,
2005 to the extent that such past practice is consistent with
the current business direction of the Company and its
subsidiaries;
(vii) all taxes (including income tax, capital tax, payroll taxes,
employer health tax, workers' compensation payments, property
taxes, customs duties and land transfer taxes), duties,
royalties, levies, imposts, assessments, deductions, charges or
withholdings and all liabilities with respect thereto including
any penalty and interest payable with respect thereto
(collectively, "TAXES") due and payable or required to be
collected or withheld and remitted, by the Company or its
subsidiaries have been paid, collected or withheld and remitted
as applicable, except for where the failure to pay such Taxes
would not have a Material Adverse Effect or result in an adverse
material change to the Company and its subsidiaries, taken as a
whole. All tax returns, declarations, remittances and filings
required to be filed by the Company or its subsidiaries have
been filed with all appropriate governmental authorities and all
such returns, declarations, remittances and filings
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are complete and accurate and no material fact or facts have
been omitted therefrom which would make any of them misleading
or result in an adverse material change to the Company and its
subsidiaries, taken as a whole. To the best knowledge of the
Company, no examination of any tax return of the Company or its
subsidiaries is currently in progress and there are no issues or
disputes outstanding with any governmental authority respecting
any taxes that have been paid, or may be payable, by the Company
or its subsidiaries. There are no agreements, waivers or other
arrangements with any taxation authority providing for an
extension of time for any assessment or reassessment of taxes
with respect to the Company;
(viii) the auditors of the Company who audited the consolidated
financial statements of the Company for the year ended March 31,
2005 and who provided their audit report thereon are independent
public accountants as required under applicable Canadian
Securities Laws;
(ix) there has never been a "reportable event" (within the meaning of
National Instrument 51-102) with the present or former auditors
of the Company;
(x) no holder of outstanding securities of the Company is entitled
to any pre-emptive or any similar rights to subscribe for any
Common Shares or other securities of the Company and no rights,
warrants or options to acquire, or instruments convertible into
or exchangeable for, any security in the capital of the Company
are outstanding other than as set forth in Schedule "B" hereto;
(xi) except as set out in the Public Disclosure Documents, there is
not, in the constating documents, by-laws or in any Debt
Instrument, Material Agreement, agreement, mortgage, indenture
or other instrument or document to which the Company is a party,
any restriction upon or impediment to, the declaration or
payment of dividends by the directors of the Company or the
payment of dividends by the Company to the holders of its Common
Shares;
(xii) neither the Company nor any of its subsidiaries are a party to
or bound or affected by any commitment, agreement or document
containing any covenant which expressly limits the freedom of
the Company or any of its subsidiaries to compete in any line of
business, transfer or move any of their respective assets or
operations or which materially or adversely affects the business
practices, operations or condition of the Company and its
subsidiaries, taken as a whole except as set out in the Public
Disclosure Documents;
(xiii) to the best of the Company's knowledge, no legal or governmental
proceedings are pending to which the Company or its Material
Subsidiaries are a party or to which their property is subject
that would result individually or in the aggregate in any
material adverse change in the operation, business or condition
of the Company and its subsidiaries, taken as a whole, and to
the best knowledge of the Company no such proceedings have been
threatened against or are contemplated with respect to the
Company or its subsidiaries or their properties;
(xiv) the Company and its Material Subsidiaries have conducted and are
conducting their business in material compliance with all
applicable laws and regulations of
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each jurisdiction in which they carry on business (including all
applicable federal, provincial, municipal and local
environmental, anti-pollution and licensing laws, regulations
and other lawful requirements of any governmental or regulatory
body, including relevant exploration and exploitation permits
and concessions) except where the failure to so comply would not
have a Material Adverse Effect and 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 or permits which would have a
Material Adverse Effect;
(xv) neither the Company nor the Material Subsidiaries are aware of
any pending or contemplated change to any applicable law or
regulation or governmental position that would materially
adversely affect the business of the Company and its
subsidiaries or the business or legal environment under which
the Company or its subsidiaries operate;
(xvi) this Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid and binding obligation of
the Company enforceable against the Company in accordance with
its terms;
(xvii) upon the execution and delivery thereof, the Subscription
Agreements and the Warrant Indenture shall constitute valid and
binding obligations of the Company and each shall be enforceable
against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or
affecting the rights of 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, contribution and waiver, and the ability to sever
unenforceable terms, may be limited by applicable law;
(xviii) at the Closing Time, all necessary corporate action will have
been taken by the Company to: (a) validly issue the Unit Shares
as fully paid and non-assessable securities in the capital of
the Company; (b) validly create, authorize and issue the
Warrants; and (c) allot, reserve and authorize the issuance of
Warrant Shares, as fully paid and non-assessable securities in
the capital of the Company upon the due exercise of the
Warrants;
(xix) at the Closing Date (and prior to giving effect to this
Offering) the authorized capital of the Company consists of an
unlimited number of Common Shares of which 71,647,878 Common
Shares are issued and outstanding as fully paid and
non-assessable;
(xx) the Company is a reporting issuer in the provinces of British
Columbia and Alberta. The Company is not currently in default of
any requirement of the Canadian Securities Laws of such
jurisdictions, except for such defaults as would not have a
Material Adverse Effect and the Company is not included on a
list of defaulting reporting issuers maintained by any of the
securities regulators of such jurisdictions;
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(xxi) all information which has been prepared by the Company relating
to the Company and its subsidiaries and their business, property
and liabilities and either publicly disclosed or provided to the
Agents, including all financial, marketing, sales and
operational information provided to the Agents and all Public
Disclosure Documents (collectively, the "INFORMATION") is, as of
the date of such information, true and correct in all material
respects, and no fact or facts have been omitted therefrom which
would make such information materially misleading;
(xxii) all filings and fees required to be made and paid by the Company
pursuant to the Canadian Securities Laws and general corporate
law have been made and paid, and such disclosure and filings
were true and accurate in all material respects as at the
respective dates thereof and the Company has not filed any
confidential material change reports;
(xxiii) the Company and its subsidiaries are in compliance with all laws
respecting employment and employment practices, terms and
conditions of employment, occupational health and safety, pay
equity and wages, except for such failures to comply as would
not have a Material Adverse Effect. There is not currently any,
or any reasonably foreseeable, labour disruption or conflict
involving the Company or its subsidiaries;
(xxiv) except as disclosed in the Public Disclosure Documents, none of
the Company or its subsidiaries have any loans or other
indebtedness outstanding which has been made to any of their
respective shareholders, officers, directors or employees, past
or present, or any person not dealing at "arm's length" (as such
term is defined in the Income Tax Act (Canada)) with the Company
or its subsidiaries;
(xxv) the assets of the Company and its subsidiaries and their
business and operations are insured against loss or damage with
responsible insurers on a basis consistent with insurance
obtained by reasonably prudent participants in comparable
businesses, and such coverage is in full force and effect, and
the Company or its subsidiaries have not breached the terms of
any policies in respect thereof nor failed to promptly give any
notice or present any material claim thereunder;
(xxvi) the Transfer Agent, at its principal offices in the city of
Vancouver, British Columbia has been duly appointed as transfer
agent and registrar in respect of the Common Shares and warrant
agent with respect of the Warrants;
(xxvii) other than the Agents, there are no persons acting or purporting
to act at the request or on behalf of the Company, that are
entitled to any brokerage or finder's fee in connection with the
transactions contemplated by this Agreement;
(xxviii)other than the Company, there is no person that is or will be
entitled to the proceeds from the sale of the Units pursuant to
this Offering under the terms of any Debt Instrument, Material
Agreement, mortgage, indenture, contract, instrument, lease
agreement (written or unwritten);
(xxix) the Company and its subsidiaries are in material compliance with
each material license and permit held by them and they are not
in material violation of, or in
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material default under, the applicable statutes, ordinances,
rules, regulations, orders or decrees (including "ENVIRONMENTAL
LAWS" as defined below) of any governmental entities, regulatory
agencies or bodies having, asserting or claiming jurisdiction
over them or over any part of their operations or assets;
(xxx) the Company and its subsidiaries (i) are in compliance with any
and all applicable foreign, federal, provincial, state and local
laws and regulations relating to the protection of human health
and safety, conservation, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL
LAWS"), except for such failures to comply as would not have a
Material Adverse Effect, (ii) have received all material
permits, licenses or other approvals required of any of them
under applicable Environmental Laws to conduct their business,
and (iii) are in compliance with all terms and conditions of any
such permit, license or approval, except in each case for such
permits, licenses, approvals or failures to comply that would
not have a Material Adverse Effect;
(xxxi) there have been no past, and there are no pending or, to the
best knowledge of the Company, threatened claims, complaints,
notices or requests for information received by the Company or
its subsidiaries with respect to any alleged violation of any
Environmental Law and no conditions exist at, on or under any
property now or previously owned, operated, leased or contracted
to perform work by the Company or its subsidiaries which, with
the passage of time, or the giving of notice or both, would give
rise to liability under any Environmental Law that, individually
or in the aggregate, has or may reasonably be expected to have a
Material Adverse Effect;
(xxxii) except as set out in the Public Disclosure Documents, the
Company is not party to any agreement, nor is the Company aware
of any agreement, which in any manner affects the voting control
of any of the securities of the Company or its subsidiaries;
(xxxiii)other than as disclosed in or contemplated by the Public
Disclosure Documents, the Company is not party to any Debt
Instrument or any agreement, contract or commitment to create,
assume or issue any Debt Instrument other than of the ordinary
cause of business;
(xxxiv) neither the Company, nor any of its subsidiaries, nor, to the
knowledge of the Company, any other person is in default in the
observance or performance of any term or obligation to be
performed by any one of them under any Material Agreement,
except for such defaults as would not have a Material Adverse
Effect and no event has occurred which with notice or lapse of
time or both would constitute such a default;
(xxxv) the minute books and records of the Company and its Material
Subsidiaries which the Company has made available to the Agents
and their counsel, Xxxxxxx Xxxxx & Xxxxxxxxx LLP, in connection
with their due diligence investigation of the Company for the
period from inception to the date of examination thereof, are
all of the minute books and substantially all the records of the
Company and its Material Subsidiaries for such period and
contain copies of all proceedings (or
- 12 -
certified copies thereof) of the shareholders, the board of
directors and all committees of the board of directors of the
Company and its subsidiaries to the date of review of such
corporate records and minute books. There have been no other
meetings, resolutions or proceedings of the shareholders, board
of directors or any committees of the board of directors of the
Company and its Material Subsidiaries during such period not
reflected in such minute books and other records;
(xxxvi) with respect to each of the Leased Premises, the Company or its
subsidiaries occupy the Leased Premises and have the exclusive
right to occupy and use the Leased Premises and each of the
leases pursuant to which the Company or its subsidiaries occupy
the Leased Premises is in good standing and in full force and
effect. The performance of obligations pursuant to and in
compliance with the terms of this Agreement and the completion
of the transactions described herein by the Company, will not
afford any of the parties to such leases or any other person the
right to terminate such lease or result in any additional or
more onerous obligations under such leases;
(xxxvii)there are no actions, suits, proceedings or inquiries pending
or, to the best knowledge of the Company, threatened against or
affecting the Company its subsidiaries or their respective
property or assets at law or in equity or before or by any
federal, provincial, municipal or other governmental department,
commission, board, bureau, agency or instrumentality other than
those that would not have a Material Adverse Effect;
(xxxviii)there are no judgments against the Company or its
subsidiaries, which are unsatisfied, nor are there any consent
decrees or injunctions to which the Company are subject;
(xxxix) the Company and its Material Subsidiaries are the absolute legal
and beneficial owners of, and have good and marketable title to
or leasehold interest in, all of the material property or assets
thereof as described in the Public Disclosure Documents, free of
all mortgages, liens, charges, pledges, security interests,
encumbrances, claims or demands whatsoever, other than those
described in the Information, and no other property rights are
necessary for the conduct of the business of the Company and its
subsidiaries (taken as a whole) as currently conducted or
contemplated to be conducted, the Company knows of no claim or
basis for any claim that might or could adversely affect the
right of the Company and its subsidiaries to use, transfer or
otherwise exploit such property rights, other than those
described in the Public Disclosure Documents, and the Company
and its Subsidiaries have no responsibility or obligation to pay
any commission, royalty, licence fee or similar payment to any
person with respect to the property rights thereof, expect as
described in the Public Disclosure Documents;
(xl) the Company and its Material Subsidiaries hold either freehold
title, mining leases, mining claims, coal licenses, coal leases,
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 coal deposits,
ore bodies and minerals located in properties in which the
Company and its Material Subsidiaries have an interest as
described in the Information under valid,
- 13 -
subsisting and enforceable title documents or other recognized
and enforceable agreements or instruments, sufficient to permit
the Company and its Material Subsidiaries to explore the coal
deposits, ore bodies or other minerals relating thereto, all
such property, leases or claims and all property, leases or
claims in which the Company or its Material Subsidiaries have
any interest or right have been validly located and recorded in
accordance with all applicable laws and are valid and
subsisting, the Company or its Material Subsidiaries have all
necessary surface rights, access rights and other necessary
rights and interest relating to the properties in which the
Company or its Material Subsidiaries have an interest as
described in the Information granting the Company or its
Material Subsidiaries the right and ability to explore for
minerals, ore and metals for development purposes as are
appropriate in view of their respective rights and interests
therein, and each of the proprietary interests or rights and
each of the documents, agreements and instruments and
obligations relating thereto referred to above are currently in
good standing in the name of the Company or its Material
Subsidiaries;
(xli) any and all of the agreements and other documents and
instruments pursuant to which the Company and its subsidiaries
hold their property and assets (including any interest in, or
right to earn an interest in, any property) are valid and
subsisting agreements, documents or instruments in full force
and effect, enforceable in accordance with the terms thereof,
the Company and its subsidiaries are not in default of any of
the provisions of any such agreements, documents or instruments
nor has any such default been alleged. None of the properties
(or any interest in, or right to earn an interest in, any
property) of the Company and its subsidiaries are subject to any
right of first refusal or purchase or acquisition rights which
are not disclosed in the Information;
(xlii) the Company has disclosed all material information relating to
the Willow Creek coal project in the Public Disclosure Documents
in compliance with Canadian Securities Laws and such disclosure
was true and complete and accurate in all material respects;
(xliii) all mining operations of the Company and the Material
Subsidiaries since acquisition of their material properties have
been conducted in all material respects in accordance with good
mining and engineering practices and all applicable material
workers' compensation and health and safety and workplace laws,
regulations and policies have been complied with in all material
respects except for such failures to comply as have not had and
would not reasonably be expected to have a Material Adverse
Effect;
(xliv) there are no environmental audits, evaluations, assessments,
studies or tests relating to the Company or any of the Material
Subsidiaries except for ongoing assessments conducted by or on
behalf of the Company in the ordinary course;
(xlv) there are no claims with respect to native rights currently or,
to the best of the knowledge of the Company, pending or
threatened with respect to any of the material properties at the
Company or the Material Subsidiaries;
- 14 -
(xlvi) the Company has duly filed with the applicable regulatory
authorities in compliance with Canadian Securities Laws all
reports required by National Instrument 43-101 ("NI 43-101"),
and all such reports comply with the requirements of NI 43-101;
(xlvii) the currently issued and outstanding common shares of the
Company are listed and posted for trading on the TSXV and no
order ceasing or suspending trading in any securities of the
Company or prohibiting the trading of the Company's issued
securities has been issued and no proceedings for such purpose
are pending or, to the knowledge of the Company, threatened;
(xlviii) neither the Company nor any of its subsidiaries shall take any
action which would be reasonably expected to result in the
delisting or suspension of its Common Shares on or from the TSXV
or the Toronto Stock Exchange (if as and when listed on such
exchange) or on or from any securities exchange, market or
trading or quotation facility on which its Common Shares are
then listed or quoted and the Company shall comply with the
rules and regulations thereof;
(xlix) no proceedings have been taken, instituted or, to the knowledge
of the Company, are pending for the dissolution or liquidation
of the Company or the Material Subsidiaries;
(l) the Transfer Agent, at its principal offices in Vancouver,
British Columbia and Xxxxxxx, Xxxxxxx, will be appointed as the
registrar and transfer agent in respect of the Warrants by the
Closing Time;
(li) each Debt Instrument to which the Company or a Material
Subsidiary is a party is in good standing and each of the
Company and the Material Subsidiaries is not in default of any
obligation or covenant under such Debt Instruments; and
(lii) subject to such risks and uncertainties as have been disclosed
in the Public Disclosure Documents, the net proceeds of the
Offering will be sufficient to meet the working capital
requirements of the Company to support its current operations
and to fund the completion of its expansion plans through the
end of its current fiscal year.
(liii) the coal licenses referenced in table 1 and table 2 and the coal
lease referenced in table 3 of the opinion provided pursuant to
section 6(j) hereto comprises all of the Company's material
licenses and leases and ownership interest in the Willow Creek
Project.
(B) REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE AGENTS. Each of the
Agents hereby severally represent, warrant and covenant to the Company and
acknowledges that the Company is relying upon such representations and
warranties, that:
(i) in respect of the offer and sale of the Units, it will comply
with all Canadian Securities Laws and all applicable laws of the
jurisdictions outside Canada in which it offers the Units and
will offer the Units in the United States only on a basis exempt
from the registration requirements under the U.S. Securities Act
in accordance with the provisions of Schedule "A" to this
Agreement;
- 15 -
(ii) it and its representatives have not engaged in or authorized,
and will not engage in or authorize, any form of general
solicitation or general advertising in connection with or in
respect of the Units in any newspaper, magazine, printed media
of general and regular paid circulation or any similar medium,
or broadcast over radio or television or otherwise or conducted
any seminar or meeting concerning the offer or sale of the Units
whose attendees have been invited by any general solicitation or
general advertising; and
(iii) it has not and will not solicit offers to purchase or sell the
Units so as to require the filing of a prospectus or offering
memorandum with respect thereto or the provision of a
contractual right of action (as defined in Ontario Securities
Commission Rule 14-501) under the laws of any jurisdiction,
including the United States of America or any state thereof.
5. CLOSING DELIVERIES. The purchase and sale of the Units shall be completed at
the Closing Time at the offices of Xxxxxxx Xxxxx & Xxxxxxxxx LLP in Xxxxxxx,
Xxxxxxx, or at such other place as RBC (on behalf of the Agents) and the Company
may agree upon. At or prior to the Closing Time: (a) the Company shall, subject
to the provisions of Section 6 of this Agreement, duly and validly deliver to
the Agents certificates in definitive form representing the Unit Shares and
Warrants comprising the Units in the names of the Purchasers or as indicated on
their respective Subscription Agreements in the City of Toronto, against payment
at the direction of the Company of the subscription price therefor, in lawful
money of Canada. The Agents and the Company may discharge their respective
payment obligations by delivery by the Agents of a bank draft, certified cheque
or by transfer of funds by electronic wire transfer to the designated bank
account of each of the Company. Such payment to the Company shall be solely in
respect of the sale of Units and shall be equal to the aggregate purchase price
for the Units, less the Commission payable in respect of the sale of Units and
the reasonable out-of-pocket costs and expenses of the Agents of the Offering,
including reasonable fees and disbursements of counsel expenses (subject to the
maximum amount set out and as more particularly described in paragraph 8
hereof).
6. CLOSING CONDITIONS. Each Purchaser's obligation to purchase the Units at the
Closing Time shall be conditional upon the fulfilment at or before the Closing
Time of the following conditions:
(A) the Agents shall have received a certificate, dated as of the Closing
Date, signed by the Chief Executive Officer and Chief Financial Officer
of the Company, or such other officers of the Company as the Agents may
agree, certifying for and on behalf of the Company, to the best of their
knowledge, information and belief after due inquiry, that:
(i) no order, ruling or determination having the effect of
suspending the sale or ceasing the trading in any securities of
the Company (including the Common Shares) has been issued by any
regulatory authority and is continuing in effect and no
proceedings for that purpose have been instituted or are pending
or, are contemplated or threatened by any regulatory authority;
(ii) the Company has duly complied with all the terms, covenants and
conditions of this Agreement on its part to be complied with up
to the Closing Time; and
- 16 -
(iii) the representations and warranties of the Company contained in
this Agreement are true and correct as of the Closing Time with
the same force and effect as if made at and as of the Closing
Time after giving effect to the transactions contemplated by
this Agreement.
(B) the Agents shall have received at the Closing Time certificates dated
the Closing Date, signed by appropriate officers of the Company
addressed to the Agents and their counsel, with respect to the articles
and by-laws of the Company, all resolutions of the Company's board of
directors relating to this Agreement and the transactions contemplated
hereby and thereby, the incumbency and specimen signatures of signing
officers, the constating documents of the Company and such other matters
as the Agents may reasonably request;
(C) the Agents shall have received at the Closing Time, evidence that all
requisite approvals, consents and acceptances of the shareholders, the
appropriate regulatory authorities and the TSXV required to be made or
obtained by the Company in order to complete the Offering have been made
or obtained;
(D) the Subscription Agreements, the Warrant Indenture and the certificates
representing the Unit Shares and the Warrants shall have been executed
or endorsed, as applicable and delivered by the parties thereto in form
and substance satisfactory to the Agents and their counsel, acting
reasonably;
(E) the TSXV shall have issued its conditional acceptance for the issuance
of the Unit Shares and the Warrant Shares;
(F) the Agents shall have received favourable legal opinions addressed to
the Agents dated the Closing Date, from Bull, Housser & Xxxxxx, counsel
for the Company (it being understood that such counsel may rely to the
extent appropriate in the circumstances, (i) as to matters of fact, on
certificates of the Company executed on its behalf by a senior officer
of the Company and on certificates of the Transfer Agent, as to the
issued capital of the Company; (ii) as to matters of fact not
independently established, on certificates of the Company's auditors or
a public official); and (iii) as to matters of law with respect to
consulting counsel in the applicable local jurisdictions) with respect
to the following matters:
(i) as to the incorporation and subsistence of the Company
under the laws of British Columbia and as to the
corporate power of the Company to carry out its
obligations under this Agreement, the Subscription
Agreements and the Warrant Indenture and to issue the
Unit Shares, the Warrants and the Warrant Shares;
(ii) as to the authorized and issued capital of the Company;
(iii) that the Company has all requisite corporate power and
authority under the laws of its jurisdiction of
incorporation to carry on its business as presently
carried on and to own its properties;
(iv) that none of the execution and delivery of this
Agreement, the Subscription Agreements and the Warrant
Indenture, the performance by
- 17 -
the Company of its obligations hereunder and thereunder,
or the sale or issuance of the Unit Shares, the Warrants
and the Warrant Shares will conflict with or result in
any breach of the constating documents or by-laws of the
Company or the resolutions of the directors and
shareholders of the Company or applicable corporate law;
(v) that each of this Agreement, the Subscription Agreements
and the Warrant Indenture have been duly authorized and
executed and delivered by the Company, and constitute a
valid and legally binding obligation of the Company
enforceable against it in accordance with its terms,
except as enforcement thereof may be limited by
bankruptcy, insolvency, liquidation, reorganization,
moratorium or similar laws affecting the rights of
creditors generally and except as limited by the
application of equitable principles when equitable
remedies are sought, and the qualification that the
enforceability of rights of indemnity and contribution
may be limited by applicable law;
(vi) that the Unit Shares have been validly issued as fully
paid and non-assessable securities in the capital of the
Company;
(vii) that the Warrants have been duly and validly created and
issued;
(viii) Computershare Trust Company of Canada has been appointed
the warrant agent under the Warrant Indenture and
transfer agent and registrar for the Common Shares;
(ix) that the Warrant Shares have been reserved and
authorized and allotted for issuance to the Purchasers
and, upon the due exercise of the Warrants in accordance
with the provisions thereof and of the Warrant
Indenture, will be validly issued as fully paid and
non-assessable securities in the capital of the Company;
(x) that the issuance and sale by the Company of the Unit
Shares and Warrants to the Purchasers are exempt from
the prospectus and registration requirements of
applicable Canadian Securities Laws in the Canadian
Selling Jurisdictions and no documents are required to
be filed (other than specified forms accompanied by
requisite filing fees), proceedings taken or approvals,
permits, consents or authorizations obtained under the
applicable Canadian Securities Laws to permit such
issuance and sale;
(xi) that the issuance of the Warrant Shares upon the due
exercise of the Warrants will be exempt from the
prospectus and registration requirements of applicable
Canadian Securities Laws subject to certain provisos and
specified resale restrictions;
(xii) that no other documents will be required to be filed,
proceedings taken or approvals, permits, consents or
authorizations obtained under the applicable Canadian
Securities Laws in connection with the first trade of
the Unit Shares, the Warrants or the Warrant Shares, as
the case may be,
- 18 -
provided that four months and a day have lapsed since
the Closing Date, subject to the usual qualifications;
(xiii) that the issuance of the Unit Shares, the Warrants and
the Warrant Shares has been conditionally accepted for
filing by the TSXV and the Common Shares of the Company
are listed on the TSXV;
(xiv) as to such other matters as the Agents' legal counsel
may reasonably request prior to the Closing Time.
(G) the Agents shall have received certificates of status or similar
certificates with respect to the jurisdiction in which the Company is
incorporated;
(H) the Agents shall have received a legal opinion addressed to the Agents
and the Purchasers from special United States counsel to the Company,
dated as of the Closing Date, in form and substance satisfactory to the
Agents and their counsel, acting reasonably, with respect to the initial
sale of the Units by the Company in the United States or to U.S. persons
(as such term is defined in Regulation S under the U.S. Securities Act).
(I) the Agents shall have received a favourable legal opinion addressed to
the Agents and the Purchasers dated as of the Closing Date, in form and
substance satisfactory to the Agents and its counsel, acting reasonably,
as to (i) the incorporation and subsistence of the Material
Subsidiaries; (b) the corporate power and authority of the Material
Subsidiaries; (iii) the ability of each of the Material Subsidiaries to
carry on its business as presently carried on and to own it assets; (iv)
the authorized capital, issued and outstanding share capital of the
Material Subsidiaries; and (v) as to the ownership of the issued and
outstanding securities of the Material Subsidiaries;
(J) the Agents shall have received a favourable legal opinion addressed to
the Agents, the Purchasers and the Agents' counsel, as to the title to
the coal licenses and coal leases issued pursuant to the Coal Act
(British Columbia) and constituting the Willow Creek coal project, dated
as of the Closing Date, in form and substance satisfactory to the Agents
and its counsel, acting reasonably; and
(K) the Agents shall, in their sole discretion, be satisfied with their due
diligence review with respect to the business, assets, financial
condition, affairs and prospects of the Company.
7. RIGHTS OF TERMINATION
(A) DUE DILIGENCE OUT. In the event that the due diligence investigations
performed by the Agents and/or their representatives reveal any material
information or fact not generally known to the public which might, in the sole
opinion of the Agents (or any one of them), acting reasonably, adversely affect
the market price of the Common Shares, quality of the investment or
marketability of the Offering, the Agents (or any one of them) shall be
entitled, at their sole option and in accordance with subparagraph 7(g) of this
Agreement, to terminate their obligations under this Agreement (and the
obligations of the Purchasers arranged by them to purchase the Units ) by notice
to that effect given to the Company any time prior to the Closing Time.
- 19 -
(B) LITIGATION. If any inquiry, action, suit, investigation or proceeding
whether formal or informal (including matters of regulatory transgression or
unlawful conduct and including any inquiry or investigation by the TSXV, any
securities commission, or the U.S. Securities Exchange Commission) is commenced,
announced or threatened in relation to, the Company or its Material
Subsidiaries, or any of their respective officers, directors or principal
shareholders, the Agents (or any one of them) shall be entitled, at their sole
option and in accordance with subparagraph 7(g) of this Agreement, to terminate
their obligations under this Agreement (and the obligations of the Purchasers
arranged by them to purchase the Units ) by notice to that effect given to the
Company any time prior to the Closing Time.
(C) DISASTER OUT. In the event that prior to the Closing Time, there should
develop, occur or come into effect any event of any nature, including terrorism,
accident, a new or change in any governmental law or regulation, or other
condition or major financial occurrence of national or international
consequence, which, in the sole opinion of the Agents (or any one of them),
materially adversely affects, or may adversely affect, the financial markets
generally or the business, operations, affairs or profitability of the Company
and its Material Subsidiaries, taken as a whole, or on the market price or value
of the Common Shares, the Agents (or any one of them) shall be entitled at their
sole option, in accordance with subparagraph 7(g) of this Agreement, to
terminate their obligations under this Agreement (and the obligations of the
Purchasers arranged by them to purchase the Units ) by written notice to that
effect given to the Company prior to the Closing Time.
(D) CHANGE IN MATERIAL FACT. In the event that prior to the Closing Time, the
Agents or the Agents' representatives, through their due diligence
investigations, or otherwise discover or there should occur a material change or
a change in any material fact or new material fact shall arise, which, in the
sole opinion of the Agents (or any one of them), has or could be expected to
have a material adverse change or material adverse effect on the business,
affairs or profitability of the Company and its Material Subsidiaries, taken as
a whole, or on the market price or value of the Common Shares, the Agents (or
any one of them) shall be entitled, at their sole option, in accordance with
subparagraph 7(g), to terminate their obligations under this Agreement (and the
obligations of the Purchasers arranged by them to purchase the Units ) by
written notice to that effect given to the Company prior to the Closing Time.
(E) NON-COMPLIANCE WITH CONDITIONS. The Company agrees that all terms,
conditions and covenants in this Agreement shall be construed as conditions and
complied with so far as the same relate to acts to be performed or caused to be
performed by the Company, as applicable, that they will each use its best
efforts to cause such conditions to be complied with, and any breach or failure
by the Company to comply with any of such conditions or in the event that any
representation or warranty given by the Company becomes false and is not
rectified as at the Closing Time, shall entitle the Agents (or any one of them),
at their sole option in accordance with subparagraph 7(g), to terminate their
obligations under this Agreement (and the obligations of the Purchasers arranged
by them to purchase the Units ) by notice to that effect given to the Company at
or prior to the Closing Time. The Agents may waive, in whole or in part, or
extend the time for compliance with, any terms and conditions without prejudice
to their rights in respect of any other of such terms and conditions or any
other or subsequent breach or non-compliance, provided that any such waiver or
extension shall be binding upon the Agents only if the same is in writing and
signed by them.
- 20 -
(F) CEASE TRADE ORDER. In the event that any order to cease trading in
securities of the Company is made or threatened by a Securities Regulator,
which, in the sole opinion of the Agents (or any one of them), acting
reasonably, operates or could operate to prevent or restrict trading in the
Common Shares or distribution or sale of the Units in the Selling Jurisdictions,
or any other jurisdiction where Purchasers are resident the Agents (or any one
of them) shall be entitled, at their sole option, in accordance with
subparagraph 7(g) of this Agreement, to terminate their obligations under this
Agreement (and the obligations of the Purchasers arranged by them to purchase
the Units) by written notice to that effect given to the Company prior to the
Closing Time.
(G) EXERCISE OF TERMINATION RIGHTS. The rights of termination contained in
subparagraphs 7(a), (b), (c), (d), (e) and (f) may be exercised by the Agents
and are in addition to any other rights or remedies the Agents may have in
respect of any default, act or failure to act or non-compliance by the Company
in respect of any of the matters contemplated by this Agreement or otherwise. In
the event of any such termination by the Agents, there shall be no further
liability on the part of the Agents to the Company or on the part of the Company
to the Agents except in respect of any liability which may have arisen or may
arise after such termination in respect of acts or omissions prior to such
termination under paragraphs 8 and 10.
8. EXPENSES. Whether or not the Offering is completed, the Company will pay all
reasonable expenses and fees in connection with the Offering, including all
expenses of or incidental to the issue, sale or distribution of the Units
including, the fees and expenses of the Company's counsel; all costs incurred in
connection with the preparation of documents relating to the Offering; and all
reasonable expenses and fees incurred by the Agents which shall include the
reasonable fees (to a maximum of $75,000, exclusive of GST) and disbursements of
the Agents' counsel. All reasonable fees and expenses incurred by the Agents or
on their behalf shall be payable by the Company immediately upon receiving an
invoice therefor from the Agents and shall be payable whether or not the
Offering is completed.
9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All terms, warranties,
representations, covenants and agreements herein contained or contained in any
documents submitted pursuant to this Agreement and in connection with the
transactions herein contemplated shall survive the purchase and sale of the Unit
Shares and Warrants comprising the Units and continue in full force and effect
for the benefit of the Agents and the Purchasers and shall not be limited or
prejudiced by any investigation made by or on behalf of the Agents in connection
with the purchase and sale of the Unit Shares and Warrants comprising the Units.
10. (A) INDEMNITY. The Company hereby agrees to indemnify and hold the Agents
and/or any of their respective affiliates (the "AFFILIATES") and each of the
directors, officers, employees and shareholders of the Agents and/or the
Affiliates (hereinafter collectively referred to as the "PERSONNEL") harmless
from and against any and all expenses, losses (other than loss of profits),
claims, actions, damages or liabilities, whether joint or several (including the
aggregate amount paid in reasonable settlement of any actions, suits,
proceedings or claims), and the reasonable fees and expenses of their counsel
that may be incurred in advising with respect to and/or defending any claim that
may be made against the Agents and/or the Affiliates, to which the Agents and/or
the Affiliates and/or the Personnel may become subject or otherwise involved in
any capacity under any statute or common law or otherwise insofar as such
expenses, losses, claims, damages, liabilities or actions arise out of or are
based, directly or indirectly, upon the performance of professional services
rendered to the Company by the Agents and/or the
- 21 -
Affiliates and the Personnel hereunder or otherwise in connection with the
matters referred to in this Agreement, provided, however, that this indemnity
shall not apply to the extent that a court of competent jurisdiction in a final
judgment that has become non-appealable shall determine that:
(i) the Agents and/or the Affiliates or the Personnel have been
grossly negligent or dishonest or have committed any fraudulent
act in the course of such performance;
(ii) the expenses, losses, claims, damages or liabilities, as to
which indemnification is claimed, were directly caused by the
gross negligence, dishonesty or fraud referred to in (i).
If for any reason (other than the occurrence of any of the events itemized in
(i) and (ii) above), the foregoing indemnification is unavailable to the Agents
and/or the Affiliates or insufficient to hold them harmless, then the Company
shall contribute to the amount paid or payable by the Agents and/or the
Affiliates as a result of such expense, loss, claim, damage or liability in such
proportion as is appropriate to reflect not only the relative benefits received
by the Company on the one hand and the Agents and/or the Affiliates on the other
hand but also the relative fault of the Company and the Agents and/or the
Affiliates, as well as any relevant equitable considerations; provided that the
Company shall, in any event, contribute to the amount paid or payable by the
Agents and/or the Affiliates as a result of such expense, loss, claim, damage or
liability, any excess of such amount over the amount of the fees received by the
Agents and/or the Affiliates hereunder pursuant to this Agreement.
The Company agrees that in case any legal proceeding shall be brought against
the Company and/or the Agents and/or the Affiliates by any governmental
commission or regulatory authority or any stock exchange or other entity having
regulatory authority, either domestic or foreign, shall investigate the Company
and/or the Agents and/or the Affiliates and any Personnel shall be required to
testify in connection therewith or shall be required to respond to procedures
designed to discover information regarding, in connection with, or by reason of
the performance of professional services rendered to the Company by the Agents
and/or the Affiliates under this Agreement, the Agents and/or the Affiliates
shall have the right to employ its own counsel in connection therewith, and the
reasonable fees and expenses of such counsel as well as the reasonable costs
(including an amount to reimburse the Agents and/or the Affiliates for time
spent by its Personnel in connection therewith) and out-of-pocket expenses
incurred by its Personnel in connection therewith shall be paid by the Company
as they occur. Provided that, notwithstanding the foregoing, the Agents and/or
the Affiliates and the Personnel shall utilize counsel to the Company unless in
the opinion of the Agents and/or the Affiliates, based on counsel, there is an
actual, potential or apparent conflict between the interests of such parties and
the interests of the Company such that joint representation would be
inappropriate.
Promptly after receipt of notice of the commencement of any legal proceeding
against the Agents and/or the Affiliates or any of the Personnel or after
receipt of notice of the commencement of any investigation, which is based,
directly or indirectly, upon any matter in respect of which indemnification may
be sought from the Company, the Agents and/or the Affiliates (or any one of
them) will notify the Company in writing of the commencement thereof and,
throughout the course thereof, will provide copies of all relevant documentation
to the Company, will keep the
- 22 -
Company advised of the progress thereof and will discuss with the Company all
significant actions proposed.
The indemnity and contribution obligations of the Company shall be in addition
to any liability which the Company may otherwise have, shall extend upon the
same terms and conditions to those of the Agents and/or the Affiliates and the
Personnel who are not signatories hereto and shall be binding upon and enure to
the benefit of any successors, assigns, heirs and personal representatives of
the Company, the Agents and/or the Affiliates and any of the Personnel of the
Agents and/or the Affiliates. The foregoing provisions shall survive the
completion of professional services rendered under this Agreement or any
termination of the authorization given by this Agreement.
(B) RIGHT OF INDEMNITY IN FAVOUR OF OTHERS. With respect to any party who may be
indemnified by paragraph 10(a) above and is not a party to this Agreement, the
Agents shall obtain and hold the rights and benefits of this paragraph 10 in
trust for and on behalf of such Indemnified Party.
11. ACTION BY AGENTS. All steps which must or may be taken by the Agents in
connection with this Agreement, with the exception of the matters relating to
termination contemplated by Section 7 or matters relating to indemnity and
contribution contemplated by Section 10, may be taken by RBC on behalf of itself
and the Agents and the execution and delivery of this Agreement by the Company
and the Agents shall constitute the authority of the Company for accepting
notification of any such steps from, and for delivery of the definitive
documents constituting the Units to RBC. RBC agrees to consult with the other
Agents with respect to all material matters.
12. SYNDICATION OF AGENTS
The sale of the Units in connection with the Offering shall be on a
"reasonable best efforts" basis without underwriter liability or obligation and
shall be as to the following percentages of the Units to be sold at that time:
NAME OF AGENT SYNDICATE POSITION
RBC Dominion Securities Inc. 75.0%
Salman Partners Inc. 12.5%
Sprott Securities Inc. 12.5%
If any of the Agents fails to sell its applicable percentage of the
aggregate amount of the Units at the Closing Time, the other Agents shall have
the right, but shall not be obligated, to sell the Units which would otherwise
have been sold by the Agent which fails to sell.
13. ADVERTISEMENTS. The Company acknowledges that the Agents shall have the
right, subject always to clauses 1(a) and (c) and 4(b) of this Agreement, at
their own expense, to place such advertisement or advertisements relating to the
sale of the Units contemplated herein as the Agents may consider desirable or
appropriate and as may be permitted by applicable law. The Company and the
Agents each agree that they will not make or publish any advertisement in any
media whatsoever relating to, or otherwise publicize, the transaction provided
for herein so as to result in any exemption from the prospectus and registration
requirements of applicable Canadian Securities Laws or the securities
legislation in any other jurisdiction in which the Xxxxx
- 00 -
xxxxx xx offered or sold being unavailable in respect of the sale of the Units
to prospective purchasers.
14. NOTICES. Unless otherwise expressly provided in this Agreement, any notice
or other communication to be given under this Agreement (a "NOTICE") shall be in
writing addressed as follows:
(A) If to the Company, to:
Pine Valley Mining Corporation
Suite 501 - 000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Attention: Xxxxxx Rip, Vice President, Finance and Chief Financial
Officer
Fax: (000) 000-0000
with a copy to:
Bull, Housser & Xxxxxx
3000 - 0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Attention: Xxxxx Xxxxxx
Fax: (000) 000-0000
(B) If to the Agents, to:
RBC Dominion Securities Inc.
Xxxxx Xxxx Xxxxx, Xxxxx Xxxxx
0xx Xxxxx, P.O. Box 50
Toronto, Ontario M5J 2W7
Attention: Xxxxxx Xxxx
Fax: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxx & Xxxxxxxxx LLP
Suite 2100, Scotia Plaza
00 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxx Xxxxxxx
Telecopier: (000) 000-0000
or to such other address as any of the parties may designate by notice given
to the others.
Each notice shall be personally delivered to the addressee or sent by facsimile
transmission to the addressee and (i) a notice which is personally delivered
shall, if delivered on a Business Day, be
- 24 -
deemed to be given and received on that day and, in any other case, be deemed to
be given and received on the first Business Day following the day on which it is
delivered; and (ii) a notice which is sent by facsimile transmission shall be
deemed to be given and received on the first Business Day following the day on
which it is sent.
15. TIME OF THE ESSENCE. Time shall, in all respects, be of the essence hereof.
16. CANADIAN DOLLARS. All references herein to dollar amounts are to lawful
money of Canada.
17. HEADINGS. The headings contained herein are for convenience only and shall
not affect the meaning or interpretation hereof.
18. SINGULAR AND PLURAL, ETC. Where the context so requires, words importing the
singular number include the plural and vice versa, and words importing gender
shall include the masculine, feminine and neuter genders.
19. ENTIRE AGREEMENT. This Agreement constitutes the only agreement between the
parties with respect to the subject matter hereof and shall supersede any and
all prior negotiations and understandings, including the engagement letter dated
November 15, 2005. This Agreement may be amended or modified in any respect by
written instrument only.
20. SEVERABILITY. The invalidity or unenforceability of any particular provision
of this Agreement shall not affect or limit the validity or enforceability of
the remaining provisions of this Agreement.
21. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Province of British Columbia and the laws of
Canada applicable therein.
22. SUCCESSORS AND ASSIGNS. The terms and provisions of this Agreement shall be
binding upon and enure to the benefit of the Company, the Agents and the
Purchasers and their respective executors, heirs, successors and permitted
assigns; provided that, except as provided herein or in the Subscription
Agreements, this Agreement shall not be assignable by any party without the
written consent of the others.
23. FURTHER ASSURANCES. Each of the parties hereto shall do or cause to be done
all such acts and things and shall execute or cause to be executed all such
documents, agreements and other instruments as may reasonably be necessary or
desirable for the purpose of carrying out the provisions and intent of this
Agreement.
24. EFFECTIVE DATE. This Agreement is intended to and shall take effect as of
the date first set forth above, notwithstanding its actual date of execution or
delivery.
25. LANGUAGE. The parties hereby acknowledge that they have expressly required
this Agreement and all notices, statements of account and other documents
required or permitted to be given or entered into pursuant hereto to be drawn up
in the English language only. Les parties reconnaissent avoir expressment
demandees que la presente Convention ainsi que tout avis, tout etat de compte et
tout autre document a etre ou pouvant etre donne ou conclu en vertu des
dispositions des presentes, soient rediges en langue anglaise seulement.
- 25 -
[INTENTIONALLY LEFT BLANK]
- 26 -
26. COUNTERPARTS. This Agreement may be executed in any number of counterparts
and by facsimile, each of which so executed shall constitute an original and all
of which taken together shall form one and the same agreement. If the Company is
in agreement with the foregoing terms and conditions, please so indicate by
executing a copy of this letter where indicated below and delivering the same to
the Agents.
Yours very truly,
RBC DOMINION SECURITIES INC.
Per:
------------------------------------
Authorized Signing Officer
SALMAN PARTNERS INC.
Per:
------------------------------------
Authorized Signing Officer
SPROTT SECURITIES INC.
Per:
------------------------------------
Authorized Signing Officer
The foregoing is hereby accepted on the terms and conditions therein set forth.
DATED as of December 12, 2005.
PINE VALLEY MINING CORPORATION
Per:
------------------------------
Authorized Signing Officer
- 27 -
SCHEDULE "A"
UNITED STATES OFFERS AND SALES
As used in this Exhibit A, capitalized terms used herein and not defined
herein shall have the meaning ascribed thereto in the Agency Agreement to which
this Exhibit is annexed and the following terms shall have the meanings
indicated:
(a) "Directed Selling Efforts" means directed selling efforts as
that term is defined in Regulation S. Without limiting the
foregoing, but for greater clarity in this Exhibit, it means,
subject to the exclusions from the definition of directed
selling efforts contained in Regulation S, any activity
undertaken for the purpose of, or that could reasonably be
expected to have the effect of, conditioning the market in the
United States for any of the Units and includes the placement of
any advertisement in a publication with a general circulation in
the United States that refers to the offering of the Units;
(b) "Foreign Issuer" means a foreign issuer as that term is defined
in Regulation S. Without limiting the foregoing, but for greater
clarity in this Exhibit, it means any issuer which is (a) the
government of any foreign country or of any political
subdivision of a foreign country; or (b) a corporation or other
organization incorporated under the laws of any foreign country,
except an issuer meeting the following conditions: (1) more than
50 percent of the outstanding voting securities of such issuer
are held of record either directly or through voting trust
certificates or depositary receipts by residents of the United
States; and (2) any of the following: (i) the majority of the
executive officers or directors are United States citizens or
residents, (ii) more than 50 percent of the assets of the issuer
are located in the United States, or (iii) the business of the
issuer is administered principally in the United States;
(c) "Institutional Accredited Investor" means those institutional
"accredited investors" specified in Rule 501(a)(1), (a)(2),
(a)(3) or (a)(7) of Regulation D adopted pursuant to the U.S.
Securities Act;
(d) "Regulation D" means Regulation D adopted by the SEC under the
U.S. Securities Act;
(e) "Regulation S" means Regulation S adopted by the SEC under the
U.S. Securities Act;
(f) "Rule 144" means Rule 144 adopted by the SEC under the U.S.
Securities Act;
(g) "SEC" means the United States Securities and Exchange
Commission;
(h) "Selling Dealer Group" means dealers or brokers other than the
Agents and their U.S. affiliates who participate in the offer
and sale of the Units pursuant to the Agency Agreement;
- 28 -
(i) "Substantial U.S. Market Interest" means substantial U.S. market
interest as that term is defined in Regulation S;
(j) "U.S. Exchange Act" means the United States Securities Exchange
Act of 1934, as amended;
(k) "U.S. Person" means a U.S. person as that term is defined in
Regulation S; and
(l) "U.S. Securities Act" means the United States Securities Act of
1933, as amended;
(m) "United States" means the United States of America, its
territories and possessions, any state of the United States, and
the District of Columbia.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE AGENTS
The Agents acknowledge that the Units, Unit Shares, Warrants, Warrant Shares
have not been and will not be registered under the U.S. Securities Act and may
be offered and sold within the United States or to, or for the account or
benefit of, U.S. persons only in transactions exempt from or not subject to the
registration requirements of the U.S. Securities Act. Accordingly, the Agents
represent, warrant and covenant to and with the Company that:
1. They have not offered or sold, and will not offer or sell, any Units
except (a) in an offshore transaction in accordance with Rule 903 of
Regulation S or (b) within the United States as provided in paragraphs 2
through 10 below. Accordingly, none of the Agents, their affiliates, any
persons acting on their behalf, or any member of the Selling Dealer
Group have made or will make (except as permitted in paragraphs 2
through 10 below) (i) any offer to sell or any solicitation of an offer
to buy, any Units to any U.S. Person or any person in the United States,
(ii) any sale of Units to any purchaser unless, at the time the buy
order was or will have been originated, the purchaser was outside the
United States, or such Agents, affiliate or person acting on behalf of
either, reasonably believed that such purchaser was outside the United
States, or (iii) any Directed Selling Efforts in the United States with
respect to the Units. Terms used in this paragraph have the meanings
given to them by Regulation S.
2. They have not entered and will not enter into any contractual
arrangement with respect to the distribution of the Units, except with
their affiliates, any members of the Selling Dealer Group or with the
prior written consent of the Company. They shall require each selling
group member to agree, for the benefit of the Company, to comply with,
and shall use their best efforts to ensure that each selling group
member complies with, the same provisions of this Exhibit as apply to
the Agents as if such provisions applied to such selling group member.
3. All offers and sales of Units in the United States shall be made through
a U.S. registered broker dealer affiliate in compliance with all
applicable U.S. broker-dealer requirements.
4. Offers and sales of Units in the United States shall not be made (i) by
any form of general solicitation or general advertising (as those terms
are used in Regulation D), including advertisements, articles, notices
or other communications published in any newspaper, magazine, or similar
media or broadcast over radio or television, or any seminar or
- 29 -
meeting whose attendees had been invited by general solicitation or
general advertising or (ii) in any manner involving a public offering
within the meaning of Section 4(2) of the U.S. Securities Act.
5. Any offer, sale or solicitation of an offer to buy Units that has been
made or will be made in the United States was or will be made only to
Institutional Accredited Investors in accordance with the requirements
of Rule 506 of Regulation D in transactions that are exempt from
registration under the U.S. Securities Act and applicable state
securities laws.
6. The Agents acting through a U.S. registered broker dealer affiliate, may
offer the Units in the United States only to offerees with respect to
which any of the Agents has a pre-existing relationship and has
reasonable grounds to believe are Institutional Accredited Investors and
immediately prior to making any such offer and, based on the
institutional accredited investor certificates attached as a schedule to
the Subscription Agreement for Purchasers purchasing as Institutional
Accredited Investors, had reasonable grounds to believe and did believe
that each offeree was an Institutional Accredited Investor, and on the
date hereof, they continue to believe that each U.S. Purchaser is an
Institutional Accredited Investor.
7. Prior to any sales of Units in the United States, they shall cause each
U.S. Purchaser thereof to sign and deliver a Subscription Agreement
containing such representations, warranties and acknowledgements as may
be necessary to ensure compliance with U.S. securities laws.
8. Prior to completion of any sale to the Closing Time, they will provide
the Company with a list of all purchasers of the Units in the United
States.
9. At least one business day prior to the Closing Time, they will provide
the Company with a list of all purchasers of the Units in the United
States.
10. They will inform, and cause the U.S. registered broker dealer affiliate
to inform, all purchasers of the Units in the United States that the
Units have not been and will not be registered under the U.S. Securities
Act and are being sold to them without registration under the U.S.
Securities Act in reliance on Rule 506 of Regulation D.
11. The Agents agree that at the Closing Time, they, together with the U.S.
registered broker dealer affiliate, will provide a certificate,
substantially in the form of Annex I to this Exhibit A, relating to the
manner of the offer and sale of the Units in the United States.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
The Company represents, warrants, covenants and agrees that:
1. The Company is a Foreign Issuer within the meaning of Regulation S and
reasonably believes that there is no Substantial U.S. Market Interest in
the Units.
2. The Company is not, and as a result of the sales of the Units
contemplated hereby will not be, an "investment company" as defined in
the United States Investment Company Act of 1940, as amended.
- 30 -
3. Except with respect to offers and sales within the United States to
accredited investors (within the meaning of Rule 501(a) of Regulation D)
who are Qualified Institutional Buyers, in reliance upon any exemption
from registration under Regulation D, neither the Company nor any of its
affiliates, nor any person acting on its behalf, has made or will make:
(A) any offer to sell, or any solicitation of an offer to buy, any Units
to a U.S. Person or a person in the United States; or (B) any sale of
Units unless, at the time the buy order was or will have been
originated, the purchaser is (i) outside the United States or (ii) the
Company, its affiliates, and any person acting on their behalf
reasonably believes that the purchaser is outside the United States.
4. During the period in which the Units are offered for sale, neither it
nor any of its affiliates, nor any person acting on its or their behalf
(i) has engaged in or will engage in any form of general solicitation or
general advertising (as those terms are used in Regulation D) with
respect to offers or sales of the Units in the United States, including
advertisements, articles, notices or other communications published in
any newspaper, magazine or similar media, or broadcast over radio, or
television, or any seminar or meeting whose attendees have been invited
by general solicitation or general advertising; or (ii) or in any manner
involving a public offering within the meaning of Section 4(2) of the
U.S. Securities Act.
5. Except with respect to the offer and sale of the Units offered hereby
and offers and sales of Common Shares to accredited investors only
pursuant to the Company's employee benefit plans in accordance with Rule
506 of the U.S. Securities Act, the Company has not, for a period of six
months prior to the date hereof sold, offered for sale or solicited any
offer to buy any of its securities in the United States.
6. Neither the Company, nor any of its affiliates, nor any person acting on
its or their behalf, has paid or will pay any commission or other
remuneration, directly or indirectly for soliciting the exercise of the
Warrants.
7. The Corporation will use its commercially reasonable efforts to qualify
as a "foreign issuer" for a period of 24 months after the Closing Date.
- 31 -
ANNEX I TO SCHEDULE A
UNDERWRITERS' CERTIFICATE
In connection with the private placement in the United States of the units (the
"Units") of Pine Valley Mining Corporation (the "Company") with one or more U.S.
Institutional Accredited Investors (the "U.S. Purchasers") pursuant to one or
more Subscription Agreements dated as of December 12, 2005, the undersigned RBC
Dominion Securities Inc., on behalf of the Agents referred to in the Agency
Agreement dated December 12, 2005 among the Company, RBC Dominion Securities
Inc., Sprott Securities Inc. and Salman Partners Inc. (the "Agency Agreement"),
and RBC Capital Markets Corporation who has signed below in its capacity as
placement agent in the United States for the Agents (the "U.S. Placement
Agent"), do hereby certify as follows:
(i) the U.S. Placement Agent is a duly registered broker or dealer
with the United States Securities and Exchange Commission (the
"SEC") and the National Association of Securities Dealers, Inc,
("NASD") and is in good standing with the NASD and the SEC on
the date hereof;
(ii) all offers and sales of Units in the United States were made to
a maximum of 50 U.S. Purchasers by the U.S. registered
broker-dealer affiliate;
(iii) no written material other than the Subscription Agreement, was
used in connection with the offer and sale of the Units in the
United States;
(iv) immediately prior to offering Units to such offerees in the
United States, we had reasonable grounds to believe and did
believe that each offeree was an "accredited investor" of the
type specified in Rule 501(a)(1), (a)(2), (a)(3) or (a)(7) of
Regulation D adopted pursuant to the U.S. Securities Act" (an
"Institutional Accredited Investor") and, on the date hereof, we
continue to believe that each U.S. person purchasing Units
through us, as agent, is an Institutional Accredited Investor;
(v) no form of general solicitation or general advertising (as those
terms are used in Regulation D under the U.S. Securities Act)
was used, nor will be used, by us or our representatives,
including advertisements, articles, notices or other
communications published in any newspaper, magazine or similar
media or broadcast over radio or television, or any seminar or
meeting whose attendees had been invited by general solicitation
or general advertising, in connection with the offer or sale of
the Units in the United States or to U.S. persons;
(vi) the offering of the Units in the United States has been
conducted by the Agents through the U.S. Placement Agent in
accordance with the Agency Agreement and all applicable U.S.
broker-dealer requirements; and
- 32 -
(vii) prior to the sale of Units in the United States pursuant to Rule
506 of Regulation D, we caused each U.S. purchaser to execute a
Subscription Agreement which includes a term sheet and
containing such representations, warranties and acknowledgements
as may be necessary to ensure compliance with U.S. securities
laws.
Terms used in this certificate have the meanings given to them in the Agency
Agreement unless defined herein.
DATED this 12 day of December, 2005
RBC DOMINION SECURITIES INC. RBC CAPITAL MARKETS
CORPORATION
By: By:
----------------------------- ----------------------------
Authorized Signing Officer Authorized Signing Officer
- 33 -
SCHEDULE "B"
OUTSTANDING CONVERTIBLE SECURITIES
- 34 -
