AGENCY AGREEMENT
Exhibit
1.1
April 30, 2009
Attention:
|
Xxxxxxxxxxx X. Xxxxxxx, Chief Executive Officer | |
Attention:
|
T. Xxxxxx Xxxxxx, Executive Chairman |
Dear Sirs:
Re: | Offering of Units |
Genuity Capital Markets and TD Securities Inc. (the “Lead Agents”), Canaccord Capital
Corporation, Dundee Securities Corporation and RBC Dominion Securities Inc. (collectively, the
“Agents”) understand that Oilsands Quest Inc. (the “Corporation”) proposes to issue and sell an
aggregate of up to 30,500,000 Units (the “Prospectus Units”), each consisting of one Common Share
(the “Prospectus Shares”), and one-half of a warrant to purchase one Common Share (the “Warrants”)
at a price of US$0.85 per Unit. Each whole Warrant will entitle the holder thereof to purchase one
Common Share (the “Warrant Shares”) at a price of US$1.10 per Common Share on or before the second
anniversary of the Closing Date. The Units will be separable into Common Shares and Warrants
immediately after issuance.
Subject to the terms and conditions hereof, the Agents agree to act as, and the Corporation by
this Agreement appoints the Agents as, the sole and exclusive agents of the Corporation to offer
the Prospectus Units for sale on the Closing Date in the Selling Jurisdictions or the United States
at the price of US$0.85 per Prospectus Unit and to use their reasonable best efforts to secure
subscriptions therefor. The Corporation acknowledges and agrees that the Agents may, but are not
obligated to, purchase any of the Prospectus Units as principal.
The Corporation hereby grants to the Agents an option (the “Over-Allotment Option”) to
purchase from the Corporation, at the Agents’ election, up to an additional 4,575,000 Common Shares
at U.S. $0.80 per share and up to an additional 2,287,500 Warrants at U.S. $0.10 per Warrant,
either separately or as units (each such unit consisting of the same securities as a Prospectus
Unit) at U.S. $0.85 per unit (the “Over-Allotment Option Units”). Common Shares and Warrants
purchased separately pursuant to the Over-Allotment Option are referred to as “Over-Allotment
Option Shares” and “Over-Allotment Option Warrants”, respectively, and Over-Allotment Option
Shares, Over-Allotment Option Warrants and Over-Allotment Option Units are collectively referred to
as “Over-Allotment Option Securities”. The Agents may exercise the Over-Allotment Option, in whole
or in part, at any time prior to 4:00 p.m. (Calgary time) on the date that is 30 days after the
Closing Date for the purpose of covering over-allotments, if any, and for market stabilization
purposes, by written notice to the Corporation setting forth the number of Over-Allotment Option
Securities to be issued and sold. The Corporation acknowledges and agrees that the Agents may, but
are not obligated to, purchase any of the Over-Allotment Option Securities as principal.
The Agents shall be entitled (but not obligated) in connection with the offering and sale of
the Offered Securities to retain as sub-agents other registered securities dealers and may receive
subscriptions
for Offered Securities from subscribers from other registered dealers. The fee payable to any
such sub-agent shall be for the account of the Agents.
1. Definitions
In this Agreement:
(a) | “Additional Closing Date” and “Additional Closing Time” have the meanings ascribed thereto in subsection 13(b); | ||
(b) | “Agents’ Canadian Counsel” means Blake, Xxxxxxx & Xxxxxxx LLP or such other legal counsel as the Agents, with the consent of the Corporation, may appoint; | ||
(c) | “Agents’ Counsel” means the Agents’ Canadian Counsel and the Agents’ U.S. Counsel; | ||
(d) | “Agents’ U.S. Counsel” means Shearman & Sterling LLP or such other legal counsel as the Agents, with the consent of the Corporation, may appoint; | ||
(e) | “Agreement” means this agreement and not any particular article or section or other portion except as may be specified, and words such as “hereof”, “hereto”, “herein” and “hereby” refer to this agreement as the context requires; | ||
(f) | “Applicable Time” means 7:00 a.m. (Calgary time) on April 30, 2009; | ||
(g) | “ASA” means the Securities Act (Alberta), RSA 2000 c.S-4, as amended, including the regulations promulgated thereunder; | ||
(h) | “ASC” means the Alberta Securities Commission; | ||
(i) | “affiliate” has the meaning ascribed thereto under the ASA; | ||
(j) | “Business Day” means a day which is not Saturday or Sunday or a legal holiday in Calgary, Alberta; | ||
(k) | “Canadian Base Prospectus” means the (final) MJDS shelf prospectus of the Corporation dated November 16, 2007 relating to the distribution of Common Shares, warrants and/or units of the Corporation filed with the Securities Commissions; | ||
(l) | “Canadian Preliminary Prospectus Supplement” means the preliminary prospectus supplement relating to the Offered Securities provided to the Agents for purposes of marketing the Offered Securities in Canada and filed with the Securities Commissions pursuant to the MJDS; | ||
(m) | “Canadian Prospectus Supplement” means the prospectus supplement relating to the Offered Securities to be filed with the Securities Commissions pursuant to the MJDS in accordance with section 3(b) hereof; | ||
(n) | “Canadian Prospectus” means the Canadian Base Prospectus as supplemented by the Canadian Preliminary Prospectus Supplement until such time as the Canadian Prospectus Supplement is filed with the Securities Commissions, after which time “Canadian |
Prospectus” means the Canadian Base Prospectus as supplemented by the Canadian Prospectus Supplement; | |||
(o) | “Canadian Securities Laws” means, collectively, the applicable securities laws of each of the Qualifying Provinces and the respective regulations, rules, instruments, rulings and orders made thereunder and the applicable policy statements issued by the Securities Commissions thereunder; | ||
(p) | “Closing Date” means May 12, 2009 or such other date as the parties hereto may agree, but in any event, not later than May 31, 2009; | ||
(q) | “Closing Time” means 6:30 a.m. (Calgary time) or such other time, on the Closing Date, as the Agents and the Corporation may agree; | ||
(r) | “Common Shares” means the common shares in the capital of the Corporation, par value $.001 per share and, where appropriate in the context, includes the Common Shares included in the Offered Securities; | ||
(s) | “Corporation” means Oilsands Quest Inc.; | ||
(t) | “Corporation’s auditors” means KPMG LLP, independent public auditors; | ||
(u) | “Corporation’s Counsel” means Corporation’s Canadian Counsel, Corporation’s U.S. Counsel and Corporation’s U.S. Corporate Counsel; | ||
(v) | “Corporation’s Canadian Counsel” means Xxxxxxx Xxxxx LLP or such other legal counsel as the Corporation, with the consent of the Agents, may appoint; | ||
(w) | “Corporation’s prior auditors” means Xxxxxxx Xxxx Xxxxxxx, independent registered public accounting firm, Vancouver, British Columbia; | ||
(x) | “Corporation’s U.S. Corporate Counsel” means Xxxxx Figa & Will P.C., or such other legal counsel as the Corporation, with the consent of the Agents, may appoint; | ||
(y) | “Corporation’s U.S. Counsel” means Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP or such other legal counsel as the Corporation, with the consent of the Agents, may appoint; | ||
(z) | “Decision Document” means a decision document issued in accordance with the Prospectus Review Procedures; | ||
(aa) | “distribution” means “distribution” or “distribution to the public”, as the case may be, as defined under the applicable Securities Laws and “distribute” has a corresponding meaning; | ||
(bb) | “Disclosure Package” means, as of the Applicable Time and all considered together: |
(i) | the U.S. Base Prospectus; | ||
(ii) | the U.S. Preliminary Prospectus Supplement; |
(iii) | the Issuer Free Writing Prospectuses, if any, identified in Schedule “A” hereto; and | ||
(iv) | any other Free Writing Prospectus that the parties hereto shall expressly agree in writing to treat as part of the Disclosure Package. |
(cc) | “Documents” means, collectively, the documents incorporated by reference in the Prospectuses and any Supplementary Material including: |
(i) | the Form 10-K; | ||
(ii) | the Forms 10-Q; | ||
(iii) | the Forms 8-K; and | ||
(iv) | the Corporation’s registration statement on Form 10-SB filed October 14, 1999, as amended by Forms 8-A filed on March 13, 2006 and August 23, 2006. |
(dd) | “Effective Date” means November 7, 2007, the date upon which the Registration Statement became effective; | ||
(ee) | “Exchange” means the NYSE Amex; | ||
(ff) | “Final MRRS Decision Document” means the decision document issued in accordance with the MRRS Procedures evidencing that the final receipt for the Canadian Prospectus has been issued in each of the Qualifying Provinces; | ||
(gg) | “Financial Statements”, means collectively: |
(i) | the audited annual consolidated financial statements of the Corporation as at and for the years ended April 30, 2008 and April 30, 2007, together with the report of the Corporation’s auditors thereon and the notes thereto; | ||
(ii) | the unaudited interim comparative consolidated financial statements of the Corporation as at and for the three and nine month periods ended January 31, 2009 and January 31, 2008, together with the notes thereto; |
(hh) | “Form 10-K” means the annual report of the Corporation on Form 10-K/A for the year ended April 30, 2008, as filed with the SEC on March 18, 2009, which amends the annual report of the Corporation on Form 10-K for the year ended April 30, 2008, filed with the SEC on June 27, 2008, including the exhibits thereto; | ||
(ii) | “Forms 10-Q” means each of the quarterly reports of the Corporation on Form 10-Q for the quarters ended July 31, 2008, October 31, 2008 and January 31, 2009 as filed with the SEC, including the exhibits thereto; | ||
(jj) | “Forms 8-K” means each of the current reports of the Corporation on Form 8-K since April 30, 2008 as filed with the SEC; |
(kk) | “Free Writing Prospectus” means any “free writing prospectus” as defined in Rule 405 of the Securities Act; | ||
(ll) | “Issuer Free Writing Prospectus” means any “issuer free writing prospectus” as defined in Rule 433 of the Securities Act; | ||
(mm) | “Material Adverse Effect” in respect of a person, means any effect, that is, or could reasonably be expected to be material and adverse to the condition (financial or otherwise), properties, assets, prospects, liabilities, obligations, cash flow, income or business operations of such person, taken as a whole; | ||
(nn) | “material change”, “material fact” and “misrepresentation” shall have the meanings ascribed thereto under the applicable Securities Laws; | ||
(oo) | “Material Subsidiaries” means Oilsands Quest Sask Inc. and any other Subsidiary of the Corporation, the total assets of which constitute more than 10% of the consolidated assets of the Corporation as at January 31, 2009 or the total revenues of which constitute more than 10% of the consolidated revenues of the Corporation as at January 31, 2009; | ||
(pp) | “XxXxxxxx” means XxXxxxxx & Associates Consultants Ltd., independent petroleum consultants of Calgary, Alberta; | ||
(qq) | “XxXxxxxx Reports” means (i) the report of XxXxxxxx dated June 23, 2008 with respect to an estimate of the discovered and undiscovered resources on portions of the Corporation’s Axe Lake discovery and Raven Ridge discovery as of April 30, 2008; and (ii) the report of XxXxxxxx dated March 12, 2009 with respect to an estimate of the contingent resources on portions of the Corporation’s Axe Lake discovery and Raven Ridge discovery as of December 31, 2008; | ||
(rr) | “MJDS” means the multi-jurisdictional disclosure system described in National Instrument 71-101 of the Canadian Securities Administrators, as amended; | ||
(ss) | “MRRS Procedures” means the mutual reliance review system and procedures provided for by National Policy 43-201 of the Canadian Securities Administrators, as amended; | ||
(tt) | “Offered Securities” means, collectively, the Prospectus Units and any Over-Allotment Option Securities; | ||
(uu) | “Prospectuses” means, collectively, the Canadian Prospectus, the U.S. Prospectus and the U.S. Warrant Prospectus; | ||
(vv) | “Prospectus Review Procedures” means the procedures for prospectus review in multiple jurisdictions provided for under National Policy 11-202, Process for Prospectus Review in Multiple Jurisdictions, of the Securities Commissions and Multilateral Instrument 11-202, Passport System, of the Securities Commissions (other than Ontario); | ||
(ww) | “Prospectus Supplements” means the Canadian Prospectus Supplement and the U.S. Prospectus Supplement; |
(xx) | “Public Record” means all information filed by or on behalf of the Corporation with the SEC and the Securities Commissions, including without limitation, the Documents, the Prospectuses, any Supplementary Material and any other information filed with the SEC or any Securities Commission in compliance, or intended compliance, with any applicable Securities Laws; | ||
(yy) | “Qualifying Provinces” means each of the provinces of Canada other than Quebec; | ||
(zz) | “Registration Statement” means the registration statement on Form S-3 (File no. 333-147200), which became automatically effective on the Effective Date, for the registration of Common Shares, warrants and/or units of the Corporation under the Securities Act, including the exhibits thereto and the documents incorporated by reference therein, as amended at the Effective Date; | ||
(aaa) | “SEC” means the United States Securities and Exchange Commission; | ||
(bbb) | “SEC Rules and Regulations” means the published rules and regulations of the SEC; | ||
(ccc) | “Securities Commissions” means the securities commissions or similar regulatory authorities in the Qualifying Provinces; | ||
(ddd) | “Securities Laws” means the Canadian Securities Laws and the U.S. Securities Laws; | ||
(eee) | “Selling Dealer Group” means the dealers and brokers other than the Agents who participate in the offer and sale of the Offered Securities pursuant to this Agreement; | ||
(fff) | “Selling Jurisdictions” means each of the provinces of Canada other than Québec and such other provinces and other foreign jurisdictions in which there are purchasers with respect to which the Agents shall have provided written notice to the Corporation not less than two Business Days prior to the Closing Date and which are acceptable to the Corporation, acting reasonably; | ||
(ggg) | “Subsidiary” means a subsidiary within the meaning of the ASA; | ||
(hhh) | “Supplementary Material” means, collectively, any amendment to a Prospectus, any amended or supplemented Prospectus or any ancillary material, information, evidence, return, report, application, statement or document which may be filed by or on behalf of the Corporation with the SEC or the Securities Commission under the applicable Securities Laws; | ||
(iii) | “Tax Act” means the Income Tax Act (Canada) as amended and the regulations thereunder; | ||
(jjj) | “United States” or “U.S.” means the United States of America, its territories and possessions, any state of the United States and the District of Columbia; | ||
(kkk) | “U.S. Base Prospectus” means the base prospectus included in the Registration Statement; | ||
(lll) | “U.S. Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended; |
(mmm) | “U.S. Preliminary Prospectus Supplement” means the preliminary prospectus supplement relating to the Offered Securities provided to the Agents for purposes of marketing the Offered Securities in the United States and filed with the SEC pursuant to Rule 424(b) of the SEC Rules and Regulations; | ||
(nnn) | “U.S. Prospectus Supplement” means the prospectus supplement relating to the Offered Securities to be filed with the SEC pursuant to Rule 424(b) of the SEC Rules and Regulations in accordance with section 3(b) hereof; | ||
(ooo) | “U.S. Prospectus” means the U.S. Base Prospectus as supplemented by the U.S. Preliminary Prospectus Supplement until such time as the U.S. Prospectus Supplement is filed with the SEC, after which time “U.S. Prospectus” means the U.S. Base Prospectus as supplemented by the U.S. Prospectus Supplement; | ||
(ppp) | “U.S. Securities Act” means the United States Securities Act of 1933, as amended; | ||
(qqq) | “U.S. Securities Laws” means all of the applicable federal and state securities laws and regulations of the United States, including without limitation, the U.S. Securities Act, the U.S. Exchange Act and the respective rules and regulations of the SEC thereunder; | ||
(rrr) | “U.S. Warrant Prospectus” means the U.S. Base Prospectus as supplemented by the U.S. Warrant Supplement; | ||
(sss) | “U.S. Warrant Supplement” means the prospectus supplement relating to the issuance of the Warrant Shares upon exercise of the Warrants to be filed with the SEC pursuant to Rule 424(b) of the SEC Rules and Regulations in accordance with section 3(j) hereof; and | ||
(ttt) | “Warrant Indenture” means the Indenture to be entered into between the Corporation and Computershare Trust Company of Canada, as indenture trustee, relating to the Warrants. |
In addition, unless otherwise defined herein capitalized terms shall have the meanings
ascribed thereto in the Prospectuses.
2. Agency Fee
In consideration for its services hereunder, the Corporation agrees to pay to the Agents:
(a) | at the Closing Time, a fee equal to the amount of US$0.0425 (5%) for each Prospectus Unit sold; | ||
(b) | at the Additional Closing Time, a fee of: |
(i) | US$0.0425 (5%) for each Over-Allotment Option Unit purchased; | ||
(ii) | US$0.04 (5%) for each Over-Allotment Option Share purchased; and | ||
(iii) | US$0.005 (5%) for each Over-Allotment Option Warrant purchased. |
The foregoing fees (collectively, the “Agency Fee”) may, at the sole option of the Agents, be
deducted from the aggregate gross proceeds of the sale of the Offered Securities and withheld for
the account of the Agents. For greater certainty, the services provided by the Agents in
connection herewith will not be subject to the Goods and Services Tax (“GST”) provided for in the
Excise Tax Act (Canada) and taxable supplies provided will be incidental to the exempt financial
services provided. However, in the event that the Canada Revenue Agency determines that GST
provided for in the Excise Tax Act (Canada) is exigible on the Agency Fee, the Corporation agrees
to pay the amount of GST forthwith upon the request of the Agents. The Corporation also agrees to
pay the Agents’ expenses as set forth in section 10 hereof.
3. Qualification for Sale
(a) | The Corporation represents and warrants to the Agents that: |
(i) | the Corporation meets the general eligibility requirements for use of Form S-3 under the U.S. Securities Act; | ||
(ii) | (A) at the time of filing the Registration Statement and (B) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the U.S. Securities Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Sections 13 or 15(d) of the U.S. Exchange Act or form of prospectus) the Corporation was or is (as the case may be) a “well-known seasoned issuer” as defined in Rule 405. The Corporation agrees to pay the fees required by the SEC relating to the Offered Securities and the Warrant Shares within the time required by Rule 456(b)(1) without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r). All Rules referred to in this paragraph (ii) are references to rules of the SEC Rules and Regulations; | ||
(iii) | the Corporation has filed the Registration Statement with the SEC and the Registration Statement became effective upon filing on November 7, 2007; | ||
(iv) | the Corporation is eligible to make use of the MJDS for the distribution of the Offered Securities in the Qualifying Provinces; | ||
(v) | the Corporation has filed the Canadian Base Prospectus with the Securities Commissions in accordance with the MJDS and Canadian Securities Laws and has obtained a Final MRRS Decision Document from the ASC (as the principal regulator) confirming that a final receipt has been issued by each of the Securities Commissions; | ||
(vi) | the Corporation has filed the U.S. Preliminary Prospectus Supplement with the SEC pursuant to Rule 424(b)(5) of the SEC Rules and Regulations and has filed the Canadian Preliminary Prospectus Supplement with the Securities Commissions pursuant to the MJDS and Canadian Securities Laws; | ||
(vii) | the Corporation has fulfilled all requirements to be fulfilled by the Corporation, including the filing of the Canadian Base Prospectus and the Canadian Preliminary Prospectus Supplement but excluding the preparation and filing of the Canadian Prospectus Supplement, to enable the Offered Securities to be |
offered for sale and sold to the public in the Qualifying Provinces through registrants who have complied with the relevant provisions of applicable Canadian Securities Laws. |
(b) | The Corporation shall forthwith prepare the U.S. Prospectus Supplement and the Canadian Prospectus Supplement in a form satisfactory to the Agents, acting reasonably, and in compliance with all applicable Securities Laws and file the U.S. Prospectus Supplement with the SEC pursuant to Rule 424(b) of the SEC Rules and Regulations and the Canadian Prospectus Supplement with the Securities Commissions in accordance with applicable Canadian Securities Laws within the time period prescribed and will provide evidence satisfactory to the Agents of such timely filings. | ||
(c) | The Corporation will promptly advise the Agents: |
(i) | when the U.S. Prospectus shall have been filed with the SEC pursuant to Rule 424(b) of the SEC Rules and Regulations; | ||
(ii) | when the Canadian Prospectus has been filed with the Securities Commission pursuant to applicable Canadian Securities Laws; | ||
(iii) | when, prior to the termination of the offering of the Offered Securities, any amendment to the Registration Statement or the Prospectuses shall have been filed or become effective or a Decision Document in respect of any such amendment had been issued, as the case may be; | ||
(iv) | of any request by the SEC or its staff for any amendments of the Registration Statement or for any supplement to the U.S. Prospectus or any additional information; | ||
(v) | of any request by any Securities Commission or any regulatory authority in Canada for any amendment or supplement to the Canadian Prospectus or any additional information; | ||
(vi) | of the issuance by the SEC of any stop orders suspending the effectiveness of the Registration Statement or of any notice that would prevent its use, or the issuance by any Securities Commission or any other regulatory authority in Canada of any cease trading or similar order relating to the Offered Securities, or the institution or threatening of any proceeding for such purposes; | ||
(vii) | of the receipt by the Corporation of any communication related to the Prospectuses, the offering of the Offered Securities or the listing of the Common Shares or the Warrants included in the Offered Securities on the Exchange; and | ||
(viii) | of the receipt by the Corporation of any notification with respect to the suspension of the qualification of the Offered Securities for sale in any jurisdiction or the institution or threatening of any proceedings for such purpose. |
(d) | The Corporation will use its best efforts to prevent the issuance of any such stop order or the occurrence of any such suspension or objection and, upon such issuance, occurrence or objection, to obtain as soon as possible the withdrawal of such stop order or relief from such occurrence or prevention, including, if necessary, by filing an amendment to the Registration Statement or the Prospectuses or a new registration statement or prospectus or use its best efforts to have such amendment or new registration statement or prospectus declared effective or qualified as soon as practicable. | ||
(e) | During the period of distribution of the Offered Securities, prior to the filing with any Securities Commissions or the SEC of any Supplementary Material or any documents incorporated by reference therein after the date hereof, the Corporation shall have allowed the Agents and the Agents’ Counsel to participate fully in the preparation of, and to approve the form of, such documents and to have reviewed any documents incorporated by reference therein. | ||
(f) | During the period from the date hereof until completion of the distribution of the Offered Securities, the Corporation shall allow the Agents to conduct all due diligence which they may reasonably require in order to fulfill their obligations as Agents and in order to enable the Agents responsibly to execute the certificates required to be executed by them in the Prospectuses or in any Supplementary Material. Without limiting the generality of the foregoing, the Corporation shall make available its directors, senior management, current and former auditors, independent engineers, legal counsel and other experts to be available, to answer any questions which the Agents may have and to participate in one or more due diligence sessions to be held prior to the Closing Time (collectively, the “Due Diligence Session”). The Agents shall distribute a list of written questions to be answered in advance of such Due Diligence Session and the Corporation shall provide written responses to such questions and shall use its commercially reasonable efforts to have its current and former auditors, independent engineers, legal counsel and other experts provide written responses to such questions in advance of the Due Diligence Session. | ||
(g) | The Corporation shall, in cooperation with the Agents, take such action as the Agents may reasonably request to qualify the Offered Securities for offering and sale under the applicable Securities Laws of such states of the United States as the Agents may designate and maintain such qualification in effect for so long as shall be necessary to effect the distribution of the Offered Securities as contemplated hereby; provided, however, that with respect to state securities law qualifications, the Corporation shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subjected. | ||
(h) | Until the distribution of the Offered Securities shall have been completed, the Corporation shall promptly take or cause to be taken all additional steps and proceedings that from time to time may be required under the Securities Laws to continue to qualify the Offered Securities for distribution in all of the Qualifying Provinces and to qualify the Offered Securities for distribution in the United States or, in the event that the Offered Securities have, for any reason, ceased so to qualify, to again qualify the Offered Securities. |
(i) | Unless the Corporation and the Lead Agents otherwise agree in writing, neither the Corporation nor any Agent has made and none of them will make any offer relating to the Offered Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus” (as defined in Rule 405 of the SEC Rules and Regulations); provided that the prior written consent of the parties hereto shall be deemed to have been given in respect of the Free Writing Prospectuses, if any, included in Schedule “A” hereto and in respect of any electronic roadshow furnished to the Agents prior to first use and not objected to by the Agents. Any such free writing prospectus consented to by the Agents or the Corporation is hereinafter referred to as a “Permitted Free Writing Prospectus”. The Corporation agrees that (i) it will treat each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and (ii) it will comply with the requirements of Rules 164 and 433 of the SEC Rules and Regulations applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the SEC, legending and recording keeping. | ||
(j) | The Corporation shall file the U.S. Warrant Supplement with the SEC on or before the Closing Date. | ||
(k) | For as long as any Warrants are outstanding the Corporation shall keep effective the Registration Statement, including the U.S. Warrant Supplement which registers the issuance of the Warrant Shares, or such other registration statement under the U.S. Securities Act that registers the issuance of the Warrant Shares and the Corporation shall make reasonable best efforts to keep such shelf registration statement continuously available for the issuance of Warrant Shares during such time. |
4. Delivery of Registration Statement, Prospectus and Related Documents
The Corporation shall deliver or cause to be delivered without charge to the Agents and the
Agents’ Counsel the documents set out below at the respective times indicated:
(a) | prior to or contemporaneously with the execution of this Agreement: |
(i) | copies of each of the Canadian Prospectus and the Canadian Preliminary Prospectus Supplement signed as required under applicable Canadian Securities Law; | ||
(ii) | copies of the Registration Statement signed as required by the applicable Securities Laws; | ||
(iii) | copies of the U.S. Preliminary Prospectus Supplement; and | ||
(iv) | copies of any documents incorporated by reference in the Registration Statement and the Prospectuses which have not previously been delivered to the Agents; |
(b) | as soon as they are available, copies of any Supplementary Material, signed as required by Securities Laws and including, in each case, copies of any documents incorporated by reference therein which have not been previously delivered to the Agents; and |
(c) | at the time of the execution of this Agreement, a “comfort letter” from the Corporation’s auditors and the Corporation’s prior auditors, dated such date, addressed to the Agents and satisfactory in form and substance to the Agents and the Agents’ Counsel, acting reasonably, confirming that such firm is an “independent registered accounting firm” with respect to the Corporation and its Subsidiaries within the meaning of the U.S. Securities Act and the SEC Rules and Regulations and Public Company Accounting Oversight Board (United States) and “independent” with respect to the Corporation for the purposes of the ASA and to the effect that they have carried out certain procedures performed for the purposes of comparing certain specified financial information contained or incorporated by reference in the Registration Statement, the Disclosure Package and the Prospectuses with indicated amounts in the financial statements or accounting records of the Corporation and have found such information to be in agreement, which comfort letters shall be based on the applicable auditors’ review having a cut-off date of not more than two Business Days prior to the date of this Agreement. |
Comfort letters similar to the foregoing shall be provided to the Agents with respect to any
Supplementary Material and any other relevant document at the time the same is presented to the
Agents for their signature or, if the Agents’ signature is not required, at the time the same is
filed. All such letters shall be in form and substance acceptable to the Agents and the Agents’
Counsel, acting reasonably.
The deliveries referred to in subsections 4(a) and (b) shall also constitute the Corporation’s
consent to the use by the Agents and other members of the Selling Dealer Group of the Registration
Statement, the Disclosure Package and the Prospectuses, the Documents, the Prospectuses and any
Supplementary Material in connection with the offering and sale of the Offered Securities.
5. Commercial Copies
(a) | The Corporation shall, as soon as possible but in any event not later than noon (local time at the place of delivery) on the Business Day following the date of the filing of the Canadian Prospectus Supplement and the U.S. Prospectus Supplement, with the Securities Commissions and no later than noon (local time) on the first Business Day after the execution of any Supplementary Material in connection with the Prospectuses, cause to be delivered to the Agents, without charge, commercial copies of the Prospectuses or such Supplementary Material in such numbers and in such cities as the Agents may reasonably request by oral or written instructions to the Corporation or the printer thereof given no later than the time when the Corporation authorizes the printing of the commercial copies of such documents. | ||
(b) | The Corporation shall cause to be provided to the Agents such number of copies of any documents incorporated by reference in the Prospectuses or any Supplementary Materials as the Agents may reasonably request. |
6. Material Change and Certain Other Covenants
(a) | During the period of distribution of the Offered Securities, the Corporation will promptly inform the Agents in writing of the full particulars of: |
(i) | any material change (actual, anticipated or threatened) in or affecting the business, operations, revenues, capital, properties, assets, liabilities (absolute, |
accrued, contingent or otherwise), condition (financial or otherwise) or results of operations of the Corporation; | |||
(ii) | any change in any material fact contained or referred to in the Registration Statement, the Disclosure Package and the Prospectuses or any Supplementary Material; and | ||
(iii) | the occurrence or discovery of a material fact or event which, in any such case, is, or may be, of such a nature as to: |
(A) | render the Registration Statement, the Disclosure Package and the Prospectuses or any Supplementary Material untrue, false or misleading in any material respect; | ||
(B) | result in a misrepresentation in the Registration Statement, the Disclosure Package and the Prospectuses or any Supplementary Material; | ||
(C) | result in the Registration Statement, the Disclosure Package and the Prospectuses or any Supplementary Material not complying in any material respect with Securities Laws; or | ||
(D) | result in any Issuer Free Writing Prospectus including any information that conflicts with the information contained in the Registration Statement, |
provided that if the Corporation is uncertain as to whether a material change, change, occurrence or event of the nature referred to in this section has occurred or been discovered, the Corporation shall promptly inform the Agents of the full particulars of the occurrence giving rise to the uncertainty and shall consult with the Agents as to whether the occurrence is of such nature. | |||
(b) | During the period of distribution of the Offered Securities, the Corporation will promptly inform the Agents in writing of the full particulars of: |
(i) | any request of any Securities Commission, the SEC or similar regulatory authority for any amendment to, or to suspend or prevent the use of, the Registration Statement, Disclosure Package and the Prospectuses, or any other part of the Public Record or for any additional information; | ||
(ii) | the issuance by any Securities Commission, the SEC or similar regulatory authority, the Exchange or any other competent authority of any order to cease or suspend trading of any securities of the Corporation or of the institution or threat of institution of any proceedings for that purpose; and | ||
(iii) | the receipt by the Corporation of any communication from any Securities Commission, the SEC or similar regulatory authority, the Exchange or any other competent authority relating to the Registration Statement, the Disclosure Package and the Prospectuses or any other part of the Public Record or the distribution of the Offered Securities. |
(c) | The Corporation will promptly comply to the reasonable satisfaction of the Agents and the Agents’ Counsel with applicable Securities Laws with respect to any material change, change, occurrence or event of the nature referred to in subsections 6(a) or 6(b) above and the Corporation will prepare and file promptly at the Agents’ request any amendment to the Disclosure Package, the Prospectuses, the Registration Statement or Supplementary Material as may be required under Securities Laws; provided that the Corporation shall have allowed the Agents and the Agents’ Counsel to participate fully in the preparation of any Supplementary Material, to have reviewed any other documents incorporated by reference therein and conduct all due diligence investigations which the Agents may reasonably require in order to fulfill their obligations as agents and in order to enable the Agents responsibly to execute the certificate required to be executed by them in, or in connection with, any Supplementary Material, such approval not to be unreasonably withheld and to be provided in a timely manner. The Corporation shall further promptly deliver to each of the Agents and the Agents’ Counsel a copy of each Supplementary Material as filed with the Securities Commissions, and of letters with respect to each such Supplementary Material substantially similar to those referred to in section 4 above. | ||
(d) | During the period of distribution of the Offered Securities, the Corporation will promptly provide to the Agents, for review by the Agents and the Agents’ Counsel, prior to filing or issuance: |
(i) | any financial statement of the Corporation; | ||
(ii) | any proposed document, including without limitation any amendment to any document, which may be incorporated, or deemed to be incorporated, by reference in the Registration Statement, the Preliminary Prospectus or the Prospectuses; and | ||
(iii) | any press release of the Corporation. |
7. Representations and Warranties of the Corporation
(a) | Each delivery of the Prospectuses, the Prospectus Supplements and any Supplementary Material pursuant to section 4 above shall constitute a representation and warranty to the Agents by the Corporation (and the Corporation hereby acknowledges that each of the Agents is relying on such representations and warranties in entering into this Agreement) that: |
(i) | all of the information and statements (except information and statements furnished by and relating solely to the Agents) contained in the Registration Statement, the Disclosure Package, the Prospectuses and each electronic roadshow, if any, when taken together as a whole with the Disclosure Package, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be, at the respective dates of such documents and at the Closing Date: |
(A) | conform in all material respects to the requirements of the applicable Securities Laws, including without limitation the Securities Act and the SEC Rules and Regulations; |
(B) | contain no misrepresentation; | ||
(C) | did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and | ||
(D) | constitute full, true and plain disclosure of all material facts relating to the Corporation and the Offered Securities; |
(ii) | the Canadian Prospectus, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be, complies in all material respects with the applicable Securities Laws. The Corporation meets all eligibility requirements to offer the Offered Securities in Canada pursuant to MJDS; | ||
(iii) | as of the Applicable Time, the Disclosure Package does not and will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; | ||
(iv) | except as is disclosed in the Registration Statement, the Disclosure Package and the Prospectuses, there has been no intervening material change (adverse material change until filing of the Prospectuses) (actual, proposed or prospective, whether financial or otherwise), from the date of the Registration Statement, the Disclosure Package and the Prospectuses to the time of delivery thereof, in the business, operations, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations of the Corporation; and | ||
(v) | each Issuer Free Writing Prospectus will not include any information that conflicts with the information contained in the Registration Statement, including any document incorporated therein by reference that has not been superseded or modified. |
(b) | In addition to the representations and warranties contained in subsection 7(a) hereof, the Corporation represents and warrants to the Agents, and acknowledges that each of the Agents is relying upon such representations and warranties in entering into this Agreement, that: |
(i) | each of the Corporation and each Material Subsidiary has been duly incorporated, continued or organized, as the case may be, and is validly existing under the laws of the jurisdiction of its incorporation, continuance or organization and has all requisite corporate authority and power to carry on its businesses, as now conducted and as presently proposed to be conducted by it, and to own its assets; | ||
(ii) | the only Subsidiaries of the Corporation are Oilsands Quest Sask Inc. (“OQI Sask”), Township Petroleum Corporation (“TPC”), Western Petrochemicals Corp. (“WPC”), Stripper Energy Services Inc. (“Stripper”), Oilsands Quest |
Technology Inc. (“OQI Technology”) and 1291329 Alberta Ltd. (“1291329”) and the only Material Subsidiary of the Corporation is OQI Sask and the Corporation is not “affiliated” (within the meaning of that term in the ASA) with any other entity, nor is it a partner of any partnerships (other than participating in industry partnerships in the ordinary course of business) or limited partnerships, and the Corporation has no material shareholdings in any other corporation or business organization; | |||
(iii) | each of the Corporation and its Material Subsidiaries is qualified to carry on business under the laws of each jurisdiction where it carries on its business; | ||
(iv) | the Corporation has full corporate capacity, power and authority to enter into this Agreement and the Warrant Indenture and to perform its obligations set out herein and therein (including, without limitation, to create, issue and sell the Offered Securities), and this Agreement is, and at the Closing Time the Warrant Indenture will have been, duly authorized, executed and delivered by the Corporation and will be valid and binding obligations of the Corporation enforceable against the Corporation in accordance with their respective terms subject to laws relating to creditors’ rights generally and except as rights to indemnity may be limited by applicable law; | ||
(v) | the sale and delivery of the Offered Securities by the Corporation: |
(A) | have been duly authorized by all necessary action on the part of the Corporation; | ||
(B) | do not require the consent, approval, authorization, registration or qualification of or with any governmental authority, stock exchange, Securities Commission, the SEC or other regulatory authority or other similar third party (except (A) those which have been obtained or (B) those as may be required (and will be obtained prior to the Closing Time) under applicable Securities Laws); | ||
(C) | do not and will not (or will not with the giving of notice, the lapse of time or the happening of any other event or condition) result in a breach or a violation of, or conflict with or result in a default under (A) any of the terms or provisions of the articles or by-laws of the Corporation, (B) any resolution of the board of directors, (or any committee thereof) or securityholders of the Corporation, or (C) any judgment, decree, order or award of any court, governmental body or arbitrator having jurisdiction over the Corporation, or any agreement, license or permit to which the Corporation is a party; | ||
(D) | do not and will not result in the violation of any law; and | ||
(E) | do not and will not give rise to any lien on or with respect to the properties or assets now owned or hereafter acquired by the Corporation or the acceleration of or the maturity of any indebtedness or other liabilities or obligations under any indenture, mortgage, |
lease, agreement or instrument binding or affecting any of them or any of its properties; |
(vi) | neither the Corporation nor any Material Subsidiary is a party to any material mortgage, note, indenture, deed of trust, contract, agreement, instrument, lease, license or other document other than as described in the Registration Statement, the Disclosure Package and the Prospectuses; | ||
(vii) | each of the Corporation and its Subsidiaries has conducted and is conducting its business in compliance in all respects with all applicable laws, rules and regulations of each jurisdiction in which its business is carried on and holds all valid permits, licenses, registrations, qualifications, consents and approvals that are required and necessary to enable its business to be carried on as now conducted and its property and assets to be owned, leased and operated, except in each case where the failure to be in such compliance or to hold such permits, licenses, registrations, qualifications, consents and approvals would not have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole) and all such permits, licenses, registrations, qualifications, consents and approvals are in good standing and none contains any term, provision, condition or limitation which will have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole) and the Corporation is not aware of any fact or matter which would reasonably be expected to result in the termination of any such permit or otherwise have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole); | ||
(viii) | neither the Corporation nor any Material Subsidiary is in breach or violation of any of the terms, conditions or provisions of the articles, constating documents, by-laws or resolutions of the shareholders or directors (or any committee thereof) of the Corporation or the Material Subsidiary, as the case may be; | ||
(ix) | neither of the Corporation nor any Subsidiary is in breach or violation of: |
(A) | any permits, licenses, consents and approvals issued to the Corporation or the Subsidiary, as the case may be, or any agreement, indenture, lease, document or instrument to which the Corporation or the Subsidiary is a party or by which it is contractually bound, except for any breach or violations which would not have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole); or | ||
(B) | any statute, regulation or rule applicable to the Corporation or any Subsidiary or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Corporation or any Subsidiary, except for any breach or violations which would not have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole); |
(x) | to the knowledge of the senior management of the Corporation, after reasonable inquiry, there is no person who as of the date hereof directly or indirectly will beneficially own or have control or direction over greater than 10% of the voting rights attached to all outstanding voting securities of the Corporation |
other than as disclosed in the Registration Statement, the Disclosure Package, and the Prospectus; | |||
(xi) | the Corporation is not in default or breach of, and the execution and delivery of, and the performance of and compliance with the terms of this Agreement, the Warrant Indenture or any of the transactions contemplated hereby or thereby by the Corporation, does not and will not result in any breach of or constitute a default under, and does not and will not create a state of facts which, after notice or lapse of time or both, would result in a breach of or constitute a default under, any term or provision of the articles, by-laws or resolutions of shareholders or directors of the Corporation, or any indenture, mortgage, note, contract, agreement (written or oral), instrument, lease or other document to which the Corporation is a party or by which it is bound, or any law, judgment, decree, order, statute, rule or regulation applicable to the Corporation, except for any breach or default which would not have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole) or would impair the ability of the Corporation to consummate the transactions contemplated hereby or to duly observe and perform its obligations contained in this Agreement or the Warrant Indenture; | ||
(xii) | since April 30, 2008 there have been no facts, transactions, events or occurrences which, to the knowledge of the Corporation, could have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole) which have not been disclosed in the Registration Statement, the Disclosure Package and the Prospectuses; | ||
(xiii) | the Financial Statements fairly present, in all material respects and in accordance with generally accepted accounting principles in the United States consistently applied, the financial position and condition, the results of operations, cash flows and other information purported to be shown therein of the Corporation as at the dates thereof and for the periods then ended and reflect all assets, liabilities and obligations (absolute, accrued, contingent or otherwise) of the Corporation as at the dates thereof required to be disclosed in accordance with generally accepted accounting principles in the United States, and include all adjustments necessary for a fair presentation; | ||
(xiv) | except as disclosed in the Registration Statement, the Disclosure Package and the Prospectuses, each of the Corporation and its Material Subsidiaries has carried on business in the ordinary course; | ||
(xv) | there are no actions, suits, proceedings or inquiries pending or, to the knowledge of the Corporation, threatened against or affecting the Corporation or any of its Material Subsidiaries at law or in equity or before or by any federal, provincial, municipal or other governmental department, commission, board, bureau, agency or instrumentality which, in any way could reasonably be expected to have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole) or which affects or may affect the distribution of the Offered Securities or which would impair the ability of the Corporation to consummate the transactions contemplated hereby or to duly observe and perform any of its covenants or obligations contained in this Agreement or the |
Warrant Indenture and the Corporation is not aware of any existing ground on which such action, suit, proceeding or inquiry might be commenced with any reasonable likelihood of success; | |||
(xvi) | the authorized capital of the Corporation consists of 750 million Common Shares and 10 million preferred shares, issuable in series, and as of April 28, 2009 the issued and outstanding capital of the Corporation consists of 241,559,549 Common Shares, and one Series B Preferred Share, each of which has been validly issued as a fully paid and non-assessable share in the capital of the Corporation; | ||
(xvii) | except as disclosed in the Public Record, no person, firm or corporation holds any securities convertible or exchangeable into securities of the Corporation or any Material Subsidiary or has any agreement, warrant, option, right or privilege (whether pre-emptive or contractual) being or capable of becoming an agreement, warrant, option or right for the purchase, subscription or issuance of any unissued Common Shares; | ||
(xviii) | except as disclosed in the Public Record, the Corporation does not, directly or indirectly, hold any shares, other securities, options or rights to subscribe for shares or other securities of any corporation, partnership or other entity except for the Subsidiaries; | ||
(xix) | Computershare Trust Company of Canada acts as the transfer agent and registrar for the Common Shares; | ||
(xx) | none of the SEC, a Securities Commission, other securities commission or similar regulatory authority or exchange in the Selling Jurisdictions or the United States has issued any order which is currently outstanding preventing or suspending trading in any securities of the Corporation, no such proceeding is, to the knowledge of the Corporation, pending, contemplated or threatened and the Corporation is not in default of any requirement of Securities Laws in the Selling Jurisdictions or the United States; | ||
(xxi) | there is not in the constating documents or by-laws of the Corporation or any Material Subsidiary, or in any agreement, mortgage, note, debenture, indenture or other instrument or document to which the Corporation or any Material Subsidiary is a party, any restriction upon or impediment to the declaration of dividends by its directors or payment of dividends by its holders of its shares; | ||
(xxii) | the Corporation is a reporting issuer in good standing under the laws of each of the Qualifying Provinces; | ||
(xxiii) | excepting out those things and matters which are not material to the Corporation or any of its Material Subsidiaries, the Corporation and each of its Material Subsidiaries has duly and on a timely basis filed all tax returns required to be filed by it, has paid all taxes due and payable by it and has paid all assessments and re-assessments and all other taxes, governmental charges, penalties, interest and other fines due and payable by it and which are claimed by any governmental authority to be due and owing and adequate provision has |
been made for taxes payable for any completed fiscal period for which tax returns are not yet required and there are no agreements, waivers, or other arrangements providing for an extension of time with respect to the filing of any tax return or payment of any tax, governmental charge or deficiency by the Corporation or any Material Subsidiary and there are no actions, suits, proceedings, investigations or claims or, to the knowledge of the Corporation, threatened or pending against the Corporation or any Material Subsidiary in respect of taxes, governmental charges or assessments or any matters under discussion with any governmental authority relating to taxes, governmental charges or assessments asserted by any such authority; | |||
(xxiv) | KPMG LLP is, and Xxxxxxx Xxxx Xxxxxxx were, independent with respect to the Corporation as required by applicable Canadian Securities Laws and the rules of the Exchange and there has not been any reportable disagreement (within the meaning of section 4.11 of National Instrument No. 51-102 of the Canadian Securities Administrators) with the auditors of the Corporation since incorporation of the Corporation; | ||
(xxv) | the Corporation and each Material Subsidiary maintains a system of internal accounting controls sufficient to provide reasonable assurance that in all material respects: |
(A) | transactions are executed in accordance with management’s general or specific authorization; | ||
(B) | transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; and | ||
(C) | access to assets is permitted only in accordance with management’s general or specific authorization. |
(xxvi) | the Corporation is in compliance with all continuous and timely disclosure obligations under Securities Laws (including the completion of all applicable filings and the payment of all applicable fees) and the information and statements set forth in the Public Record were true, correct and complete and did not contain any misrepresentation as at the date of such information or statement and the Corporation has not filed any confidential material change reports which continue to be confidential; | ||
(xxvii) | as at the date of this Agreement, no insider (as such term is defined in Securities Laws) has advised the Corporation of its intention to sell any securities of the Corporation held by it; | ||
(xxviii) | each of the Corporation and its Material Subsidiaries owns or possesses, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks and trade names or other intellectual property (collectively, “Intellectual Property”) necessary to carry on the |
business now operated by it and neither the Corporation or any Subsidiary has received any notice and is not otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interest of the Corporation or its Subsidiaries therein, and which infringement or conflict (if the subject of any unfavourable decision, ruling or finding) or invalidity or inadequacy, singly or in the aggregate, would result in a Material Adverse Effect on the Corporation or its Subsidiaries (taken as a whole); | |||
(xxix) | each of the Corporation and its Subsidiaries has good and marketable title to its property and assets free and clear of all liens and defects that would affect the value thereof or interfere with the use made or to be made thereof by the Corporation or such Subsidiary, as the case may be, except for such liens and defects which would not, singly or in the aggregate, result in a Material Adverse Effect on the Corporation or its Subsidiaries (taken as a whole), and each of the Corporation and its Subsidiaries holds all of its leased real or personal property under valid and enforceable leases with no exceptions that would interfere with the use made or to be made thereof by the Corporation or such Subsidiary, as the case may be, except for such exceptions which would not, singly or in the aggregate, result in a Material Adverse Effect on the Corporation as its Subsidiaries (taken as a whole), and neither the Corporation or any of its Subsidiaries, as the case may be, has received notice of any claim of any sort that has been asserted by any person adverse to the rights of the Corporation or any of its Subsidiaries, as the case may be, to the continuing possession and use of the leased or subleased properties except for such claims which would not, singly or in the aggregate, result in a Material Adverse Effect on the Corporation or its Subsidiaries (taken as a whole), each of the Corporation and its Material Subsidiaries owns or leases all such properties as are necessary to its business as currently conducted or proposed to be conducted; | ||
(xxx) | the Corporation and each Material Subsidiary made available to XxXxxxxx prior to the issuance of the XxXxxxxx Reports all information requested by XxXxxxxx, which information did not contain any misrepresentation; the Corporation has no knowledge of any adverse material change in any information provided to XxXxxxxx since the date that such information was so provided; the Corporation believes that the XxXxxxxx Reports accurately estimate the discovered, undiscovered and contingent resources, as applicable, at the Axe Lake Discovery and the Raven Ridge Discovery (as such terms are used in the XxXxxxxx Reports) as at the effective date thereof based upon information available in respect of such resources at the time such report was prepared and the assumptions contained therein; and the Corporation has no knowledge of any adverse material change in any resource information upon which the XxXxxxxx Reports are based; | ||
(xxxi) | except for the Agents, there is no other person, firm or corporation acting or purporting to act at the request of the Corporation who is entitled to any brokerage, finder’s, underwriter’s or agency fee in connection with the transactions contemplated herein; |
(xxxii) | no authorization, approval or consent of any court or governmental authority or agency is required to be obtained by the Corporation in connection with the sale and delivery of the Offered Securities except as contemplated hereby; | ||
(xxxiii) | the minute books for the Corporation and each of its Material Subsidiaries contain full, true and correct copies of the constating documents of the Corporation and each of its Material Subsidiaries, as the case may be, and contain copies or drafts of all minutes of all meetings and all consent resolutions of the directors, committees of the directors and shareholders of the Corporation and each of its Material Subsidiaries, as the case may be, and all such meetings were duly called, properly held and all such consent resolutions were properly obtained; | ||
(xxxiv) | the issued and outstanding Common Shares are, and subject to approval of the Exchange, the Common Shares and Warrants that make up the Offered Securities will be, listed and posted for trading on the Exchange and the Corporation is in material compliance with the by-laws, rules and regulations of the Exchange; | ||
(xxxv) | to the knowledge of the Corporation, none of its directors or officers are subject to an order or ruling of any securities regulatory authority or stock exchange prohibiting such individual from acting as a director or officer of a public company or of a company listed on a particular stock exchange; | ||
(xxxvi) | the Corporation and each Material Subsidiary is insured by insurers of recognized financial responsibly against such losses and risks and in such amounts as are prudent and customary in the businesses in which it is engaged; all policies of insurance insuring the Corporation and each Material Subsidiary or its businesses, assets, employees, officers and directors are in full force and effect, except where the failure to be in full force and effect would not have an adverse material effect on the business, operations, capital or condition (financial or otherwise) of the Corporation and its Subsidiaries (taken as a whole) or their assets; | ||
(xxxvii) | except to the extent that any violation or other matter referred to in this subparagraph does not have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole): |
(A) | the Corporation and each Subsidiary is not in violation of any applicable federal, provincial, state, municipal or local laws, regulations, orders, government decrees or ordinances with respect to environmental, health or safety matters (collectively, “Environmental Laws”); | ||
(B) | the Corporation and each Subsidiary has operated its business at all times and has received, handled, used, stored, treated, shipped and disposed of all contaminants without violation of Environmental Laws; |
(C) | except as have been disclosed in the Registration Statement, the Disclosure Package and the Prospectuses, there have been no spills, releases, deposits or discharges of hazardous or toxic substances, contaminants or wastes into the earth, air or into any body of water or any municipal or other sewer or drain water systems by the Corporation and each Subsidiary that have not been remedied; | ||
(D) | no orders, directions or notices have been issued and remain outstanding pursuant to any Environmental Laws relating to the business or assets of the Corporation and each Subsidiary; | ||
(E) | the Corporation and each Subsidiary has not failed to report to the proper federal, provincial, municipal or other political subdivision, government, department, commission, board, bureau, agency or instrumentality, domestic or foreign (“Government Authority”) the occurrence of any event which is required to be so reported by any Environmental Law; and | ||
(F) | the Corporation and each Subsidiary holds, or will hold at the required time, all licences, permits and approvals required under any Environmental Laws in connection with the operation of its business and the ownership and use of its assets, all such licences, permits and approvals are in full force and effect, and except for notifications and conditions of general application to assets of the type owned by it and the Corporation and each Subsidiary has not received any notification pursuant to any Environmental Laws that any work, repairs, constructions or capital expenditures are required to be made by it as a condition of continued compliance with any Environmental Laws, or any licence, permit or approval issued pursuant thereto, or that any licence, permit or approval referred to above is about to be reviewed, made subject to limitation or conditions, revoked, withdrawn or terminated; |
(xxxviii) | any and all operations of the Corporation and each Subsidiary and, to the knowledge of the Corporation, any and all operations by third parties, on or in respect of the assets and properties of the Corporation and each Subsidiary, have been conducted in accordance with good oil and gas industry practices and in material compliance with applicable laws, rules, regulations, orders and directions of governmental and other competent authorities; | ||
(xxxix) | in respect of the assets and properties of the Corporation and each Subsidiary that are operated by it, it holds all valid licenses, permits and similar rights and privileges that are required and necessary under applicable law to operate such assets and properties as presently operated; | ||
(xl) | the Common Shares and Warrants included in the Offered Securities and the Common Shares to be issued upon exercise of the Warrants have been duly and validly created, authorized and reserved and, when issued and delivered against payment therefor, will be duly and validly issued, fully paid and non-assessable and free of any pre-emptive or similar rights and will conform to the |
description thereof contained in the Registration Statement, the Disclosure Package and the Prospectuses; | |||
(xli) | no officer, director, employee or any other person not dealing at arm’s length with the Corporation and each Subsidiary or, to the knowledge of the Corporation, any associate or affiliate of any such person, owns, has or is entitled to any royalty, net profits interest, carried interest, licensing fee or any other encumbrances or claims of any nature whatsoever which are based on the Corporation’s or such Subsidiary’s revenues; | ||
(xlii) | the Corporation and each Material Subsidiary is not a party to or bound by any agreement of guarantee, indemnification (other than an indemnification of directors and officers in accordance with the by-laws of the Corporation and applicable laws, indemnification agreements or covenants that are entered into arising in the ordinary course of business, including operating and similar agreements, indemnification and contribution provisions in agency and underwriting agreements and in transfer agency agreements) or any other like commitment of the obligations, liabilities (contingent or otherwise) or indebtedness of any other person; | ||
(xliii) | other than as set forth in the Registration Statement, the Disclosure Package or the Prospectuses, the Corporation and each Material Subsidiary does not have any loans or other indebtedness outstanding which have been made to or from any of its shareholders, officers, directors or employees or any other person not dealing at arm’s length with the Corporation that are currently outstanding; | ||
(xliv) | none of the directors, officers or employees of the Corporation or any Material Subsidiary, any person who owns, directly or indirectly, more than 10% of any class of securities of the Corporation, or any associate or affiliate of any of the foregoing, had or has any material interest, direct or indirect, in any material transaction or any proposed material transaction with the Corporation or any Material Subsidiary which, as the case may be, materially affects, is material to or will materially affect the Corporation and its Subsidiaries (taken as a whole); | ||
(xlv) | the Corporation has filed all reports required to be filed with the SEC pursuant to Section 13 of the U.S. Exchange Act, and the Common Shares are listed on the Exchange; | ||
(xlvi) | the responses given by the Corporation and its directors and officers in the Due Diligence Sessions held on April 19, 2009, April 26, 2009, April 27, 2009, April 28, 2009 and April 29, 2009 (and any due diligence sessions held subsequent thereto) were true and correct where they relate to matters of fact, and the Corporation and its directors and officers have responded in as thorough and complete a fashion as possible and where the responses reflect the opinion or view of the Corporation or its directors or officers, such opinions or views were honestly held at the time they were given; | ||
(xlvii) | neither the Corporation nor, to its knowledge, any of its shareholders is a party to any unanimous shareholders agreement, pooling agreement, voting trust or other similar type of arrangements in respect of outstanding securities of the |
Corporation, other than the Voting and Exchange Trust Agreement respecting the exchangeable shares of OQI Sask; | |||
(xlviii) | the books of account and other records of the Corporation, whether of a financial or accounting nature or otherwise, have been maintained in accordance with prudent business practices; | ||
(xlix) | as of April 30, 2008 all of the shares of OQI Sask were owned by the Corporation, other than certain exchangeable shares which are exchangeable into Common Shares; | ||
(l) | all filings made by the Corporation under which the Corporation has received or is entitled to government incentives, have been made in accordance, in all material respects, with all applicable legislation and contain no misrepresentations of material fact or omit to state any material fact which could cause any amount previously paid to the Corporation or previously accrued on the accounts thereof to be recovered or disallowed; | ||
(li) | the form and terms of definitive certificates representing the Offered Securities have been duly approved and adopted by the Corporation and comply with all legal requirements relating thereto; | ||
(lii) | other than as disclosed in the Public Record, there are no material contracts or agreements to which the Corporation is a party or by which it is bound and each of the contracts and agreements set forth in the Public Record constitutes a legally valid and binding agreement of the Corporation enforceable in accordance with their respective terms and, to the knowledge of the Corporation, no party thereto is in default thereunder; | ||
(liii) | except as disclosed in the Public Record and the employment agreements between OQI and each of Xxxxx Xxxxxx, Xxxx X’Xxxxxxxx and Xxxxx Xxxxxxxx, the Corporation is not a party to any contracts of employment which provide for payments occurring on a change of control of the Corporation; | ||
(liv) | to the knowledge of the Corporation, no other party is in default in the observance or performance of any term or obligation to be performed by it under any contract to which the Corporation is a party or by which the Corporation and any such party are bound which is material to the business of the Corporation and no event has occurred which with notice or lapse of time or both would directly or indirectly constitute such a default, in any such case which default or event would reasonably be expected to have a Material Adverse Effect on the Corporation; and | ||
(lv) | no default under any material agreement or instrument pursuant to which indebtedness of the Corporation has been issued, has occurred, and no event which with the giving of notice or the passage of time or both would constitute default under any such agreement or instrument has occurred and is continuing. |
8. Indemnity
(a) | The Corporation shall indemnify and save each of the Agents, and each of the Agents’ agents, directors, officers, affiliates and employees harmless against and from all liabilities, claims, demands, losses (other than losses of profit), costs (including, without limitation, legal fees and disbursements on a full indemnity basis), damages and expenses to which the Agents, or any of the Agents’ agents, directors, officers, affiliates or employees may be subject or which the Agents, or any of the Agents’ agents, directors, officers, shareholders or employees may suffer or incur, whether under the provisions of any statute or otherwise, in any way caused by, or arising directly or indirectly from or in consequence of: |
(i) | any information or statement contained in the Registration Statement, the Disclosure Package, any Issuer Free Writing Prospectus or the Prospectuses or any Supplementary Material or in any other document or material filed, delivered or made available by or on behalf of the Corporation (other than any information or statement relating solely to the Agents and furnished to the Corporation by the Agents expressly for inclusion in the Registration Statement, the Disclosure Package, any Issuer Free Writing Prospectus or the Prospectuses or any Supplementary Material or such other document or material) which is or is alleged to be untrue or any omission or alleged omission to provide any information or state any fact (other than any information or fact relating solely to the Agents) the omission of which makes or is alleged to make any such information or statement untrue or misleading in light of the circumstances in which it was made; | ||
(ii) | any misrepresentation or alleged misrepresentation (except a misrepresentation which is based upon information relating solely to the Agents and furnished to the Corporation by the Agents expressly for inclusion in the Registration Statement, the Disclosure Package, any Issuer Free Writing Prospectus or the Prospectuses or any Supplementary Material or in any document or other part of the Public Record) contained in the Registration Statement, the Disclosure Package, any Issuer Free Writing Prospectus, the Prospectuses, any Supplementary Material or in any other document or any other part of the Public Record filed by or on behalf of the Corporation; | ||
(iii) | any prohibition or restriction of trading in the securities of the Corporation or any prohibition or restriction affecting the distribution of the Offered Securities imposed by any competent authority if such prohibition or restriction is based on any misrepresentation or alleged misrepresentation of a kind referred to in subsection 8(a)(ii); | ||
(iv) | any order made or any inquiry, investigation (whether formal or informal) or other proceeding commenced or threatened by any one or more competent authorities (not based upon the activities or the alleged activities of the Agents or their banking or Selling Dealer Group members, if any) prohibiting, restricting, relating to or materially affecting the trading or distribution of the Offered Securities; or |
(v) | any breach of, default under or non-compliance by the Corporation with any requirements of the applicable Securities Laws, the by-laws, rules or regulations of the Exchange or any representation, warranty, term or condition of this Agreement or in any certificate or other document delivered by or on behalf of the Corporation hereunder or pursuant hereto. |
(b) | If any claim contemplated by subsection 8(a) shall be asserted against any of the persons or corporations in respect of which indemnification is or might reasonably be considered to be provided for in such subsections, such person or corporation (the “Indemnified Person”) shall notify the Corporation (provided that failure to so notify the Corporation of the nature of such claim in a timely fashion shall relieve the Corporation of liability hereunder only if and to the extent that such failure materially prejudices the Corporation’s ability to defend such claim) as soon as possible of the nature of such claim and the Corporation shall be entitled (but not required) to assume the defence of any suit brought to enforce such claim, provided however, that the defence shall be through legal counsel selected by the Corporation and acceptable to the Indemnified Person acting reasonably and that no admission of liability or settlement may be made by the Corporation or the Indemnified Person without the prior written consent of the other, such consent not to be unreasonably withheld. The Indemnified Person shall have the right to retain its own counsel in any proceeding relating to a claim contemplated by subsection 8(a) if: |
(i) | the Indemnified Person has been advised by counsel that there may be a reasonable legal defense available to the Indemnified Person which is different from or additional to a defense available to the Corporation and that representation of the Indemnified Person and the Corporation by the same counsel would be inappropriate due to the actual or potential differing interests between them (in which case the Corporation shall not have the right to assume the defense of such proceedings on the Indemnified Person’s behalf); | ||
(ii) | the Corporation shall not have taken the defense of such proceedings and employed counsel within ten days after notice has been given to the Corporation of commencement of such proceedings; or | ||
(iii) | the employment of such counsel has been authorized by the Corporation in connection with the defense of such proceedings; |
and, in any such event, the reasonable fees and expenses of such Indemnified Person’s counsel (on a solicitor and his own client basis) shall be paid by the Corporation, provided that the Corporation shall not, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate law firm (in addition to any local counsel) for all such Indemnified Persons. | |||
(c) | The Corporation hereby waives its rights to recover contribution from the Agents with respect to any liability of the Corporation by reason of or arising out of any misrepresentation in the Registration Statement, the Disclosure Package, any Issuer Free Writing Prospectus or the Prospectuses or any Supplementary Material or any other part of the Public Record provided, however, that such waiver shall not apply in respect of |
liability caused or incurred by reason of any misrepresentation which is based upon information relating solely to the Agents contained in such document and furnished to the Corporation by the Agents expressly for inclusion in the Registration Statement, the Disclosure Package, any Issuer Free Writing Prospectus or the Prospectuses or any Supplementary Material or any other part of the Public Record. | |||
(d) | If any legal proceedings shall be instituted against the Corporation in respect of the Registration Statement, the Disclosure Package, any Issuer Free Writing Prospectus or the Prospectuses or any Supplementary Material or any other part of the Public Record or the Offered Securities or if any regulatory authority or stock exchange shall carry out an investigation of the Corporation in respect of the Registration Statement, the Disclosure Package, any Issuer Free Writing Prospectus or the Prospectuses or any Supplementary Material or any other part of the Public Record or the Offered Securities and, in either case, any Indemnified Person is required to testify, or respond to procedures designed to discover information, in connection with or by reason of the services performed by the Agents hereunder, the Indemnified Persons may employ their own legal counsel and, provided such proceeding is not brought as a result of any negligence, fraud, willful misconduct or any actions or inactions of the Indemnified Person, the Corporation shall pay and reimburse the Indemnified Persons for the reasonable fees, charges and disbursements (on a full indemnity basis) of such legal counsel, the other expenses reasonably incurred by the Indemnified Persons in connection with such proceedings or investigation and a fee at the normal per diem rate for any director, officer or employee of the Agents involved in the preparation for or attendance at such proceedings or investigation. | ||
(e) | The rights and remedies of the Indemnified Persons set forth in sections 8, 9 and 11 (in the case of the Agents) hereof are to the fullest extent possible in law cumulative and not alternative and the election by any Agent or other Indemnified Person to exercise any such right or remedy shall not be, and shall not be deemed to be, a waiver of any other rights and remedies. | ||
(f) | The Corporation hereby acknowledges that the Agents are acting as trustees for the Agents’ respective agents, directors, officers, shareholders and employees under this section 8 and under section 9 with respect to all such agents, directors, officers, affiliates and employees. | ||
(g) | The Corporation waives any right it may have of first requiring an Indemnified Person to proceed against or enforce any other right, power, remedy or security or claim or to claim payment from any other person before claiming under this indemnity. It is not necessary for an Indemnified Person to incur expense or make payment before enforcing such indemnity. | ||
(h) | The rights of indemnity contained in this section 8 shall not apply if the Corporation has complied with the provisions of sections 3 and 4 and the person asserting any claim contemplated by this section 8 was not provided with a copy of the Prospectuses or any amendment to the Prospectuses or other document which corrects any misrepresentation or alleged misrepresentation which is the basis of such claim and which was required, under applicable Securities Laws, to be delivered to such person by the Agents. |
(i) | If the Corporation has assumed the defense of any suit brought to enforce a claim hereunder, the Indemnified Person shall provide the Corporation copies of all documents and information in its possession pertaining to the claim, take all reasonable actions necessary to preserve its rights to object to or defend against the claim, consult and reasonably cooperate with the Corporation in determining whether the claim and any legal proceeding resulting therefrom should be resisted, compromised or settled and reasonably cooperate and assist in any negotiations to compromise or settle, or in any defense of, a claim undertaken by the Corporation. |
9. Contribution
In order to provide for just and equitable contribution in circumstances in which the
indemnification provided for in this Agreement is due in accordance with its terms but is, for any
reason, held by a court to be unavailable from the Corporation on grounds of policy or otherwise,
the Corporation and the party or parties seeking indemnification shall contribute to the aggregate
liabilities, claims, demands, losses (other than losses of profit), costs (including, without
limitation, legal fees and disbursements on a full indemnity basis), damages and expenses to which
they may be subject or which they may suffer or incur:
(a) | in such proportion as is appropriate to reflect the relative benefit received by the Corporation on the one hand, and by the Agents on the other hand, from the offering of the Offered Securities; or | ||
(b) | if the allocation provided by subsection 9(a) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in subsection 9(a) above but also to reflect the relative fault of the Agents on the one hand, and the Corporation, on the other hand, in connection with the statements, commissions or omissions or other matters which resulted in such liabilities, claims, demands, losses, costs, damages or expenses, as well as any other relevant equitable considerations. |
The relative benefits received by the Corporation, on the one hand, and the Agents, on the
other hand, shall be deemed to be in the same proportion that the total proceeds of the offering
received by the Corporation (net of fees but before deducting expenses) bear to the fees received
by the Agents. In the case of liability arising out of the Prospectuses, any Supplementary
Material or any other part of the Public Record, the relative fault of the Corporation, on the one
hand, and of the Agents, on the other hand, shall be determined by reference, among other things,
to whether the misrepresentation or alleged misrepresentation, order, inquiry, investigation or
other matter or thing referred to in section 8 relates to information supplied or which ought to
have been supplied by, or steps or actions taken or done on behalf of or which ought to have been
taken or done on behalf of the Corporation or the Agents and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such misrepresentation or
alleged misrepresentation, order, inquiry, investigation or other matter or thing referred to in
section 8.
The amount paid or payable by an Indemnified Person as a result of liabilities, claims,
demands, losses (other than losses of profit), costs, damages and expenses (or claims, actions,
suits or proceedings in respect thereof) referred to above shall, without limitation, include any
legal or other expenses reasonably incurred by the Indemnified Person in connection with
investigating or defending such liabilities, claims, demands, losses, costs, damages and expenses
(or claims, actions, suits or proceedings in respect thereof) whether or not resulting in any
action, suit, proceeding or claim.
Each of the Corporation and the Agents agree that it would not be just and equitable if
contributions pursuant to this Agreement were determined by pro rata allocation or by any other
method of allocation which does not take into account the equitable considerations referred to in
the immediately preceding sections. The rights to contribution provided in this section 9 shall be
in addition to, and without prejudice to, any other right to contribution which the Agents or other
Indemnified Persons may have.
Any liability of the Agents under this section 9 shall be limited to the amount of the agency
fees actually received by the Agents under section 2.
10. Expenses
Whether or not the transactions contemplated herein shall be completed all costs and expenses
(including applicable GST) of or incidental to the transactions contemplated hereby including,
without limitation, those relating to the distribution of the Offered Securities, shall be borne by
the Corporation including, without limitation, all costs and expenses of or incidental to the
preparation, filing, reproduction (including the commercial copies thereof) of the Registration
Statement, the Disclosure Package, the Prospectuses, or any Supplementary Material or any Issuer
Free Writing Prospectus and the delivery thereof to the Agents, the fees and expenses of the
Corporation’s Counsel, the fees and expenses of agent counsel retained by the Corporation or the
Corporation’s Counsel, the fees and expenses of the Corporation’s transfer agent and any auditors,
engineers and other outside consultants, all stock exchange listing fees, the reasonable legal fees
and disbursements of Agents’ U.S. and Canadian Counsel, the out-of-pocket expenses of the Agents
and all other costs and expenses relating to the transactions contemplated herein.
11. Termination
(a) | The Agents, or any of them, may, without liability, terminate their obligations hereunder, by written notice to the Corporation in the event that after the date hereof and at or prior to the Closing Time: |
(i) | any order to cease or suspend trading in any securities of the Corporation or prohibiting or restricting the distribution of any of the Offered Securities is made, or proceedings are announced, commenced or threatened for the making of any such order, by any securities commission or similar regulatory authority, the Exchange or any other competent authority, and has not been rescinded, revoked or withdrawn; | ||
(ii) | any inquiry, action, suit, investigation or other proceeding (whether formal or informal) in relation to the Corporation or any of its directors or senior officers is announced, commenced or threatened by any securities commission or similar regulatory authority, the Exchange or any other competent authority or there is a change in law, regulation or policy or the interpretation or administration thereof, if, in the reasonable opinion of the Agents or any one of them, the change, announcement, commencement or threatening thereof materially adversely affects, or may materially adversely affect, the trading or distribution of the Offered Securities or any other securities of the Corporation; | ||
(iii) | there shall have occurred or be discovered any adverse change, as determined by the Agents or any one of them in their sole discretion, acting reasonably, in |
the business, operations, capital or condition (financial or otherwise), business or business prospects of the Corporation or its properties, assets, liabilities or obligations (absolute, accrued, contingent or otherwise) which in the opinion of the Agents or any one of them, acting reasonably, after consultation with the Corporation, would reasonably be expected to have a significant adverse effect on the market price or value or marketability of the Offered Securities; | |||
(iv) | there should develop, occur or come into effect or existence, or be announced, any event, action, state, condition or occurrence of national or international consequence, or any law, action, regulation or other occurrence of any nature whatsoever, which, in the sole opinion of the Agents or any one of them, acting reasonably, seriously adversely affects or involves, or will seriously adversely affect or involve, the financial markets generally or the business, operations or affairs of the Corporation and its Subsidiaries (taken as a whole); | ||
(v) | the Agents shall become aware of any material information with respect to the Corporation which had not been publicly disclosed or disclosed in writing to the Agents at or prior to the date hereof and which in the sole opinion of the Agents or any one of them, acting reasonably, could be expected to have a material adverse effect on the market price or value of the Offered Securities or any other securities of the Corporation or the investment quality or marketability of the Offered Securities or any other securities of the Corporation; | ||
(vi) | the Corporation shall be in breach of, default under or non-compliance with any representation, warranty, covenant, term or condition of this Agreement in any material respect, other than with respect to the representations and warranties contained in sections 7(b)(vii), 7(b)(ix), 7(b)(xi), 7(b)(xii), 7(b)(xv), 7(b)(xxviii), 7(b)(xxix), 7(b)(xxxvii) and 7(b)(liv), where the Agents, or any of them, may, without liability, terminate their obligations hereunder, by written notice to the Corporation if the Corporation shall be in breach of, default under or non-compliance with such representations and warranties in any respect; | ||
(vii) | the state of the financial markets in Canada or the United States is such that the Offered Securities cannot in the sole opinion of the Agents or any of them, acting reasonably, be profitably marketed; or | ||
(viii) | there is announced any change or proposed change in the income tax laws of Canada or the United States or the interpretation or administration thereof and such change, which in the sole opinion of the Agents, or any one of them, acting reasonably, could be expected to have a significant adverse effect on the market price or value of the Offered Securities or any other securities of the Corporation. |
(b) | The Agents, or any of them, may exercise any or all of the rights provided for in subsection 11(a) or section 12 or 16 notwithstanding any material change, change, event or state of facts and (except where the Agent purporting to exercise any of such rights is in breach of its obligations under this Agreement) notwithstanding any act or thing taken or done by the Agents or any inaction by the Agents, whether before or after the occurrence of any material change, change, event or state of facts including, without |
limitation, any act of the Agents related to the offering or continued offering of the Offered Securities for sale and any act taken by the Agents in connection with any amendment to the Prospectuses including the execution of any amendment or any other Supplementary Material and the Agents shall only be considered to have waived or be estopped from exercising or relying upon any of their rights under or pursuant to subsection 11(a) or section 12 or 16 if such waiver or estoppel is in writing and specifically waives or estops such exercise or reliance. | |||
(c) | Any termination pursuant to the terms of this Agreement shall be effected by notice in writing delivered to the Corporation provided that no termination shall discharge or otherwise affect any obligation of the Corporation under section 8, 9, 10 or 16. The rights of the Agents to terminate their obligations hereunder are in addition to, and without prejudice to, any other rights or remedies they may have. | ||
(d) | If an Agent elects to terminate its obligation to purchase the Offered Securities as aforesaid, whether the reason for such termination is within or beyond the control of the Corporation, the liability of the Corporation hereunder with respect to such Agent shall be limited to the indemnity referred to in section 8, the contribution rights referred to in section 9 and the payment of expenses referred to in section 10. |
12. Closing Documents
The obligations of the Agents hereunder shall be conditional upon all representations and
warranties and other statements of the Corporation herein being, at and as of the Closing Time,
true and correct in all material respects (other than with respect to the representations and
warranties contained in sections 7(b)(vii), 7(b)(ix), 7(b)(xi), 7(b)(xii), 7(b)(xv), 7(b)(xxviii),
7(b)(xxix), 7(b)(xxxvii) and 7(b)(liv), where such representations and warranties shall be true and
correct in all respects), the Corporation having performed in all material respects, at the Closing
Time, all of its obligations hereunder theretofore to be performed and the Agents receiving at the
Closing Time:
(a) | favourable legal opinions of the Corporation’s Counsel (as identified in parentheses below) addressed to the Agents, in form and substance reasonably satisfactory to the Agents, with respect to such matters as the Agents may reasonably request relating to the Corporation, the offering of the Offered Securities and the transactions contemplated hereby, including, without limitation, that: |
(i) | the Corporation and each Material Subsidiary has been duly incorporated and is validly subsisting under the laws of the jurisdiction of its incorporation and has all requisite corporate capacity, power and authority to carry on its business as now conducted by it and to own its properties and assets (Corporation’s U.S. Corporate Counsel and Corporation’s Canadian Counsel); | ||
(ii) | the Corporation has full corporate power and authority to enter into this Agreement and the Warrant Indenture and to perform its obligations set out herein and therein and this Agreement and the Warrant Indenture have been duly authorized, executed and delivered by the Corporation and this Agreement and the Warrant Indenture constitutes a legal, valid and binding obligation of the Corporation, enforceable against it in accordance with their respective terms, subject to laws relating to creditors’ rights generally and except as rights |
to indemnity may be limited by applicable law (Corporation’s U.S. Corporate Counsel and Corporation’s Canadian Counsel, as applicable); | |||
(iii) | the execution and delivery of this Agreement and the Warrant Indenture and the fulfillment of the terms hereof and thereof by the Corporation, and the performance of and compliance with the terms of this Agreement and the Warrant Indenture by the Corporation does not and will not result in a breach of, or constitute a default under, and do not and will not create a state of facts which, after notice or lapse of time or both, will result in a breach of or constitute a default under: (a) any applicable federal or state laws of the United States or applicable laws of the Province of Alberta or the federal laws of Canada applicable therein; (b) any term or provision of the articles, by-laws or other constating documents, as applicable, of the Corporation or, of which counsel is aware, any resolutions of the shareholders or directors (or any committee thereof) of the Corporation (c) any indenture, mortgage, note, contract, agreement (written or oral), instrument, lease or other document to which the Corporation is a party or by which it is bound, of which counsel is aware; or (d) any judgment, decree or order, of any court, governmental agency or body or regulatory authority having jurisdiction over or binding the Corporation or their respective properties or assets, of which counsel is aware (Corporation’s U.S. Corporate Counsel, Corporation’s U.S. Counsel and Corporation’s Canadian Counsel, as applicable); | ||
(iv) | the Common Shares included in the Prospectus Units have been, and the Warrant Shares will be, validly issued as fully paid and non-assessable Common Shares of the Corporation and the Over-Allotment Option has been duly and validly created and authorized (Corporation’s U.S. Corporate Counsel); | ||
(v) | the Warrants have been validly issued as obligations of the Corporation (Corporation’s U.S. Corporate Counsel); | ||
(vi) | to such counsel’s knowledge, the Corporation is subject to and has complied in all material respects with the requirements of Section 13 of the U.S. Exchange Act (Corporation’s U.S. Counsel); | ||
(vii) | the Corporation is a “reporting issuer” not in default of any requirement of Canadian Securities Laws and is eligible to participate in NI 71-101 in each Qualifying Province (Corporation’s Canadian Counsel); | ||
(viii) | the attributes of the Offered Securities, the Warrant Indenture and the Over-Allotment Option conform in all material respects with the description thereof contained in the Disclosure Package and the Prospectuses (Corporation’s U.S. Corporate Counsel and Corporation’s Canadian Counsel, as applicable); | ||
(ix) | the Offered Securities are eligible investments as set out under the heading “Eligibility for Investment” in the Canadian Prospectus (Corporation’s Canadian Counsel); |
(x) | all necessary documents have been filed, all necessary proceedings have been taken and all legal requirements have been fulfilled as required under the applicable Securities Laws of each of the Qualifying Provinces in order to qualify the Offered Securities for distribution and sale to the public in each of such Qualifying Provinces by or through investment dealers and brokers duly registered under the applicable laws of such provinces who have complied with the relevant provisions of such applicable Securities Laws and to qualify the Over-Allotment Option for distribution to the Agents in each of the Qualifying Provinces (Corporation’s Canadian Counsel); | ||
(xi) | no prospectus or registration is required and no other documents must be filed, proceedings taken or authorizations, approvals, permits, orders or consents obtained under applicable Securities Laws in connection with the issuance and delivery of the Warrant Shares (Corporation’s Canadian Counsel); | ||
(xii) | the Registration Statement is effective under the Securities Act, and no stop order suspending the effectiveness of the Registration Statement or any part thereof, preventing or suspending the use of the Preliminary Prospectus or the Prospectuses or any part thereof shall have been issued and to such counsel’s knowledge no proceedings for that purpose or pursuant to Section 8A under the Securities Act shall have been initiated or threatened by the SEC, and all requests for additional information on the part of the SEC (to be included or incorporated by reference in the Registration Statement, the U.S. Preliminary Prospectus or the Prospectus or otherwise) shall have been complied with to the reasonable satisfaction of the Agents (Corporation’s U.S. Counsel); | ||
(xiii) | the Registration Statement and the U.S. Prospectus, as of their respective effective or issue times, appear on their face to be appropriately responsive in all material respects to the requirements of the Securities Act and the SEC Rules and Regulations (Corporation’s U.S. Counsel); | ||
(xiv) | the Corporation has the necessary corporate power and authority to execute and deliver the Prospectuses and all necessary corporate action has been taken by the Corporation to authorize the execution and delivery by it of the Canadian Prospectus and the filing thereof, as the case may be, in each of the Qualifying Provinces in accordance with Applicable Securities Laws (Corporation’s U.S. Corporate Counsel) ; | ||
(xv) | subject to the qualifications set out therein, the statements in the Canadian Prospectus under the heading “Canadian Federal Income Tax Considerations” constitute a fair summary of the principal Canadian federal income tax consequences arising under the Tax Act to persons referred to therein who hold Offered Securities (Corporation’s Canadian Counsel); | ||
(xvi) | the Common Shares and Warrants included in the Offered Securities and the Warrant Shares are conditionally approved for listing and, upon notification to the Exchange of the issuance and sale thereof and fulfillment of the conditions of the Exchange, will be listed and posted for trading on the Exchange (Corporation’s U.S. Counsel); |
(xvii) | Computershare Trust Company of Canada has been duly appointed by the Corporation as the transfer agent and registrar for the Common Shares (including the Common Shares included in the Offered Securities) and the Warrants (Corporation’s Canadian Counsel); | ||
(xviii) | subject to the qualifications set out therein, the statements in the U.S. Prospectus under the heading “Certain United States Income Tax Considerations” to the extent that they constitute summaries of U.S. federal law or regulation or legal conclusions, have been reviewed by the Corporation’s U.S. Counsel and fairly summarize the matters described under that heading in all material respects (Corporation’s U.S. Counsel); | ||
(xix) | the authorized and issued capital of the Corporation (Corporation’s U.S. Corporate Counsel); |
and as to all other legal matters, including compliance with applicable Securities Laws in any way connected with the issuance, sale and delivery of the Offered Securities as the Agents may reasonably request. | |||
(b) | favourable legal opinions of the Agents’ Counsel, addressed to the Agents, in form and substance reasonably satisfactory to the Agents, with respect to such matters as the Agents may reasonably request relating to the offering of the Offered Securities and the transactions contemplated hereby. including a 10b-5 side letter from Agents’ U.S. Counsel; | ||
(c) | in addition to the opinions set forth above, at the Closing Time, the Agents shall have received from each of Corporation’s U.S. Counsel and the Corporation’s Canadian Counsel, a letter of each firm containing statements to the effect that such counsel has reviewed and participated in discussions concerning the preparation of the Registration Statement, the Disclosure Package and the Prospectuses with certain officers or employees of the Corporation and its auditors. Such counsel may also state that the limitations inherent in the independent verification of factual matters and in the role of outside counsel are such, however, that they cannot and do not assume any responsibility for the accuracy, completeness or fairness of any of the statements made in the Registration Statement, the Disclosure Package or the Prospectuses. | ||
The letters of such counsel shall also state that, subject to the limitations set forth in the preceding paragraph, on the basis of the information they gained in the course of performing the services referred to above, no facts came to such counsel’s attention which gave them reason to believe that (a) the Registration Statement (other than the Financial Statements, schedules and other financial data, and statistical information relating to oil and gas resources, production and working interests, including the information derived from the XxXxxxxx Report in reliance on the authority of such firm as experts within the meaning of the US Securities Act, contained therein or omitted therefrom, as to which such counsel need not comment), at the time it became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (b) the Disclosure Package (other than the Financial Statements, schedules and other financial data, and statistical information relating to oil and gas resources, production and working interests, including the information derived from the XxXxxxxx Report in reliance on the authority of such |
firm as experts within the meaning of the US Securities Act, contained therein or omitted therefrom, as to which such counsel need not comment), as of the Applicable Time, contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (c) the U.S. Prospectus (other than the Financial Statements, schedules and other financial data, and statistical information relating to oil and gas resources, production and working interests, including the information derived from the XxXxxxxx Report in reliance on the authority of such firm as experts within the meaning of the US Securities Act, contained therein or omitted therefrom, as to which such counsel need not comment) as of its date and the date of such letter, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. | |||
The letters of such counsel may be in such form and may also contain such qualifications and other statements as are customary for such letters delivered by Canadian or U.S. Counsel, as applicable. | |||
It is understood that the respective counsel may rely on the opinions of local counsel acceptable to them as to matters governed by the laws of jurisdictions other than where they are qualified to practice law, and on certificates of officers of the Corporation, the transfer agent and the Corporation’s auditors as to relevant matters of fact. It is further understood that the Agents’ Counsel may rely on the opinion of the Corporation’s Counsel as to matters which specifically relate to the Corporation or the Offered Securities, including the issuance of the Offered Securities; | |||
(d) | a certificate of the Corporation dated the Closing Date or the Additional Closing Date (as applicable) addressed to the Agents and signed on behalf of the Corporation by the Chief Executive Officer and the Chief Financial Officer of the Corporation or such other officers of the Corporation satisfactory to the Agents, acting reasonably, certifying that: |
(i) | the Corporation has complied with and satisfied in all material respects all terms and conditions of this Agreement on its part to be complied with or satisfied at or prior to the Closing Time; | ||
(ii) | the representations and warranties of the Corporation set forth in this Agreement are true and correct in all material respects (other than with respect to the representation and warranties contained in sections 7(b)(vii), 7(b)(ix), 7(b)(xi), 7(b)(xii), 7(b)(xv), 7(b)(xxviii), 7(b)(xxix), 7(b)(xxxvii) and 7(b)(liv), where such representations and warranties shall be true and correct in all respects) at the Closing Time, as if made at such time; and | ||
(iii) | no event of a nature referred to in subsection 11(a)(i), 11(a)(ii), 11(a)(iii) or 11(a)(vi) has occurred or to the knowledge of such officer is pending, contemplated or threatened (excluding any requirement to make any determination as to any Agent’s opinion); |
and the Agents shall have no knowledge to the contrary; |
(e) | a comfort letter of the Corporation’s auditors and prior auditors addressed to the Agents and dated the Closing Date, satisfactory in form and substance to the Agents, acting reasonably, bringing the information contained in the comfort letters referred to in subsection 4(c) hereof up to the Closing Time, which comfort letters shall be not more than two Business Days prior to the Closing Date; | ||
(f) | evidence satisfactory to the Agents that the Common Shares and the Warrants included in the Offered Securities and the Warrant Shares have been conditionally listed on the Exchange, and upon notice to the Exchange shall be posted for trading as at the opening of business on the Closing Date or first trading date after notice of the issuance of such Common Shares and Warrants; | ||
(g) | evidence of filing of the U.S. Warrant Supplement with the SEC; | ||
(h) | delivery of lock-up agreements, in substantially the form attached hereto as Schedule “B”, from each director and officer of the Corporation; | ||
(i) | an executed copy of the Warrant Indenture; and | ||
(j) | such other certificates and documents as the Agents may request, acting reasonably. |
13. Deliveries
(a) | The issue and sale of the Prospectus Units shall be completed at the Closing Time at the offices of the Corporation’s Counsel in Calgary, Alberta or at such other place as the Corporation and the Agents may agree. Subject to the conditions set forth in section 12, the Agents, on the Closing Date, shall deliver to the Corporation, by wire transfer, the gross proceeds of the issue and sale of the Offered Securities against delivery by the Corporation of: |
(i) | the opinions, certificates and documents referred to in section 12; | ||
(ii) | definitive certificates representing, in the aggregate, all of the Prospectus Units registered in such name or names as the Agents shall notify the Corporation in writing not less than 24 hours prior to the Closing Time; and | ||
(iii) | payment to Genuity Capital Markets by certified cheque, bank draft or wire transfer or such other means as the Corporation and the Agents may agree, of the Agency Fee provided for in subsection 2(a); |
or the Agents may, in their discretion, deliver by wire transfer the net amount of the amount in respect of the Prospectus Units referred to above and the amount referred to in (iii) above. | |||
(b) | The issue and sale of the Over-Allotment Option Securities, if applicable, shall be completed at the offices of the Corporation’s Counsel in Calgary, Alberta or at such other place as the Corporation and the Agents may agree, on the date (the “Additional Closing Date”) and at the time (“Additional Closing Time”) specified by the Agents in the written notice given by the Agents pursuant to their election to purchase such Over-Allotment Option Securities (provided that in no event shall such time be earlier than the |
Closing Time or earlier than two or later than ten Business Days after the date of the written notice of the Agents to the Corporation in respect of the Over-Allotment Option Securities), or at such other time and date as the Agents and the Corporation may agree upon in writing. Subject to the conditions set forth in section 12 (with the references therein to the Closing Time changed to the Additional Closing Time), the Agents, at the Additional Closing Time, shall deliver to the Corporation, by bank or wire transfer or such other means as the Corporation and the Agents may agree, the aggregate purchase price for the Over-Allotment Option Securities to be issued and sold pursuant to the exercise of the Over-Allotment Option, against delivery by the Corporation of: |
(i) | the opinions, certificates and documents referred to in section 12 (with the references therein to the Closing Time and Closing Date changed to the Additional Closing Time and Additional Closing Date respectively); | ||
(ii) | definitive certificates representing, in the aggregate, all of the Common Shares and Warrants comprising the Over-Allotment Option Securities registered in such name or names as the Agents shall notify the Corporation in writing not less than 24 hours prior to the Additional Closing Time; and | ||
(iii) | payment to Genuity Capital Markets by certified cheque, bank or wire transfer or such other means as the Corporation and the Agents may agree, of the Agency Fee provided for in subsection 2(b) in respect of the Over-Allotment Option Securities; |
or the Agents may, in their discretion, deliver by wire transfer the net amount of the amount in respect of the Over-Allotment Option Securities referred to above and the amount referred to in (b)(iii) above. | |||
Whether or not specifically contemplated in this Agreement, all provisions of this Agreement shall apply in the same manner and upon the same terms and conditions in respect of any Over-Allotment Option Securities as would apply to the Prospectus Units issued and sold pursuant to this Agreement, and any steps to be taken or conditions to be satisfied at the Additional Closing shall be the same as those steps to be taken or conditions to be satisfied at Closing Time. |
14. Restrictions on Offerings
The Corporation covenants and agrees with the Agents that the Corporation will not, directly
or indirectly, during the period commencing the date of this Agreement and ending on the day which
is 90 days following the Closing Date, without the prior written consent of the Lead Agents’, on
behalf of the Agents, (which consent will not be unreasonably withheld), (i) offer, issue, secure,
pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, or otherwise lend, transfer or dispose of,
directly or indirectly, any Common Shares, or any securities convertible into or exercisable or
exchangeable for Common Shares, or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of Common Shares,
whether any such transaction described in clauses (i) or (ii) is to be settled by delivery of
Common Shares, other securities or cash or otherwise or (iii) announce any intention to effect any
of the foregoing, provided that notwithstanding the foregoing the Corporation may (A) grant stock
options pursuant to the Corporation’s existing stock option plan or issue securities pursuant to
bona
fide compensation arrangements to or for the benefit of employees, consultants and directors
(not in excess of the number of options allowable under the rules of the Exchange) and issue shares
to the holders thereof or to holders of other stock options existing to the date hereof, (B) issue
securities in connection with the exchange, transfer, conversion, or exercise rights of existing
outstanding securities or existing commitments to issue securities.
15. Notices
Any notice or other communication to be given hereunder shall, in the case of notice to the
Corporation, be addressed to:
Oilsands Quest Inc.
800, 000 – 00xx Xxxxxx XX
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Vice President, Legal Services
Telecopy No.: (000) 000-0000
800, 000 – 00xx Xxxxxx XX
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Vice President, Legal Services
Telecopy No.: (000) 000-0000
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
and a copy to:
Xxxxxxx Xxxxx llp
3700, 000 – 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx Xxxxxxx
Telecopy No.: (000) 000-0000
and in the case of notice to the Agents, be addressed to:
3700, 000 – 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx Xxxxxxx
Telecopy No.: (000) 000-0000
and in the case of notice to the Agents, be addressed to:
Genuity Capital Markets
1700, 000 – 0xx Xxx. XX
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxx X. Xxxxx
Telecopy No.: (000) 000-0000
1700, 000 – 0xx Xxx. XX
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxx X. Xxxxx
Telecopy No.: (000) 000-0000
and to:
TD Securities Inc.
800, 324 – 0xx Xxxxxx X.X.
P.O. Box 2850
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
800, 324 – 0xx Xxxxxx X.X.
P.O. Box 2850
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
and to:
Canaccord Capital Corporation
0000, 000-0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx XxXxxxxx
Telecopy No.: (000) 000-0000
Canaccord Capital Corporation
0000, 000-0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx XxXxxxxx
Telecopy No.: (000) 000-0000
and to:
Dundee Securities Corporation
0000, 000-0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxx X. Xxxxxxx
Telecopy No.: (000) 000-0000
0000, 000-0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxx X. Xxxxxxx
Telecopy No.: (000) 000-0000
and to:
RBC Dominion Securities Inc.
0000, 000-0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
0000, 000-0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Blake, Xxxxxxx & Xxxxxxx llp
3500, 000 – 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxx Xxxxxxxx
Telecopy No.: (000) 000-0000
3500, 000 – 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxx Xxxxxxxx
Telecopy No.: (000) 000-0000
and with a copy to:
Shearman & Sterling LLP
Common Court West
000 Xxx Xxxxxx
Xxxxxxx, XX X0X 0X0
Attention: Xxxxxxx Xxxxx
Telecopy No.: (000) 000-0000
Common Court West
000 Xxx Xxxxxx
Xxxxxxx, XX X0X 0X0
Attention: Xxxxxxx Xxxxx
Telecopy No.: (000) 000-0000
or to such other address as the party may designate by notice given to the others. Each
communication shall be personally delivered to the addressee or sent by facsimile transmission to
the addressee, and:
(a) | communication which is personally delivered shall, if delivered before 4:30 p.m. (local time) on a Business Day, be 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 | ||
(b) | a communication which is sent by facsimile transmission shall, if sent on a Business Day before 4:30 p.m. (local time), be deemed to be given and received, subject to confirmation of transmission 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 sent, subject to confirmation of transmission. |
16. Conditions
All terms, covenants and conditions of this Agreement to be performed by the Corporation shall
be construed as conditions, and any breach or failure to comply with any material terms and
conditions which are for the benefit of the Agents shall entitle the Agents to terminate their
obligations to purchase the Offered Securities, by written notice to that effect given to the
Corporation prior to the Closing Time. The Agents may waive in whole or in part any breach of,
default under or non-compliance with any representation, warranty, term or condition hereof, or
extend the time for compliance therewith, without prejudice to any of their rights in respect of
any other representation, warranty, term or condition hereof or any other breach of, default under
or non-compliance with any other representation, warranty, term or condition hereof, provided that
any such waiver or extension shall be binding on the Agents only if the same is in writing.
17. Survival of Representations and Warranties
All representations, warranties, terms and conditions herein including, without limitation,
those contained in section 7 or contained in certificates or documents submitted pursuant to or in
connection with the transactions contemplated herein shall survive the payment by the Agents for
the Offered Securities and the distribution of the Offered Securities pursuant to the Prospectuses
and shall continue in full force and effect for the benefit of the Agents for a period of three
years from the Closing Date regardless of any investigation by or on behalf of the Agents with
respect thereto.
18. Authority to Bind Agents
The Corporation shall be entitled to and shall act on any notice, waiver, extension or
communication given by or on behalf of the Agents by the Lead Agents, which shall represent the
Agents, and which shall have the authority to bind the Agents in respect of all matters hereunder,
except in respect of any settlement under section 8 or 9 or any matter referred to in section 11.
While not affecting the foregoing, the Lead Agents shall consult with the other Agents with respect
to any such notice, waiver, extension or other communication.
19. Agents’ Covenants
(a) | Each of the Agents shall offer the Offered Securities for sale to the public in Canada (other than in the province of Québec) and the United States only, directly and through the Selling Dealer Group, upon the terms and conditions set forth in the Prospectuses and this Agreement. | ||
(b) | Each of the Agents shall use its reasonable commercial efforts to complete, and to cause the Selling Dealer Group to complete, the distribution of the Offered Securities as soon as possible after the Closing Time. | ||
(c) | Each of the Agents covenants and agrees with the Corporation that it will: |
(i) | conduct activities in connection with the proposed offer and sale of the Offered Securities in compliance with all the Securities Laws and cause a similar covenant to be contained in any agreement entered into with any Selling Dealer Group established in connection with the distribution of the Offered Securities; | ||
(ii) | as soon as reasonably practicable after the Closing Date (and in any event within 30 days thereof) provide the Corporation with a breakdown of the number of Offered Securities sold in each of the Qualifying Provinces and, upon completion of the distribution of the Offered Securities, provide to the Corporation notice to that effect, if required by applicable Securities Laws. |
(d) | For the purposes of this section 19, the Agents shall be entitled to assume that the Offered Securities may be lawfully offered for sale and sold in the Qualifying Provinces and that the Offered Securities are registered under the U.S. Securities Laws, unless the Agents have actual knowledge, or have been notified in writing to the contrary by the Corporation or any applicable securities regulatory authority. | ||
(e) | The Agents shall be entitled to offer the Prospectus Units and the Over-Allotment Option Securities in any jurisdiction outside of Canada and the United States but only in |
compliance with applicable law and in a manner which will not require the Corporation to register in such jurisdiction or file a prospectus or similar offering document in such jurisdiction. | |||
(f) | No Agent will be liable to the Corporation under this section 19 with respect to a default by any of the other Agents but will be liable to the Corporation only for its own default. |
20. Severance
If one or more of the provisions contained herein shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement, but this Agreement shall be construed as if
such invalid, illegal or unenforceable provision or provisions had never been contained herein.
21. Relationship Between the Corporation and the Agents
The Corporation: (i) acknowledges and agrees that the Agents have certain statutory
obligations as registrants under the applicable Securities Laws; and (ii) consent to the Agents
acting hereunder while continuing to act for their clients. To the extent that the Agents’
statutory obligations as registrants under the applicable Securities Laws or fiduciary
relationships with their clients conflicts with their obligations hereunder the Agents shall be
entitled to fulfil their statutory obligations as registrants under the applicable Securities Laws
and their duties to their clients. Nothing in this Agreement shall be interpreted to prevent the
Agents from fulfilling their statutory obligations as registrants under the applicable Securities
Laws or to act as a fiduciary of their clients.
The Corporation acknowledges and agrees that: (i) the issue and sale of the Offered Securities
pursuant to this Agreement, including the determination of the offering price of the Offered
Securities and any related discounts and commissions, is an arm’s-length commercial transaction
between the Corporation, on the one hand, and the several Agents, on the other hand, and the
Corporation is capable of evaluating and understanding and understand and accept the terms, risks
and conditions of the transactions contemplated by this Agreement; (ii) in connection with each
transaction contemplated hereby and the process leading to such transaction each Agent is and has
been acting solely as a principal and is not the financial advisor, agent or fiduciary of the
Corporation or its affiliates, stockholders, creditors or employees or any other party; (iii) no
Agent has assumed or will assume an advisory, agency or fiduciary responsibility in favour of the
Corporation with respect to any of the transactions contemplated hereby or the process leading
thereto (irrespective of whether such Agent has advised or is currently advising the Corporation on
other matters) and no Agent has any obligation to the Corporation with respect to the offering
contemplated hereby except the obligations expressly set forth in this Agreement; (iv) the several
Agents and their respective affiliates may be engaged in a broad range of transactions that involve
interests that differ from those of the Corporation and that the several Agents have no obligation
to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and
(v) the Agents have not provided any legal, accounting, regulatory or tax advice with respect to
the offering contemplated hereby and the Corporation has consulted its own legal, accounting,
regulatory and tax advisors to the extent it deemed appropriate.
22. Stabilization
In connection with the distribution of the Offered Securities, the Agents may over-allot or
effect transactions which stabilize or maintain the market price of the Common Shares and the
Warrants at
levels other than those which might otherwise prevail on the open market, but in each case
only as permitted by applicable law. Such stabilizing transactions, if any, may be discontinued at
any time.
23. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the Province
of Alberta and the laws of Canada applicable therein. Each of the Corporation and the Agents
hereby attorn to the non-exclusive jurisdiction of the courts of the Province of Alberta.
24. Time of the Essence
Time shall be of the essence of this Agreement.
25. Counterpart Execution
This Agreement may be executed in one or more counterparts each of which so executed shall
constitute an original and all of which together shall constitute one and the same Agreement.
Delivery of counterparts may be effected by facsimile transmission.
26. Further Assurances
Each party to this Agreement covenants and agrees that from time to time, it will, at the
request of the requesting party, execute and deliver all such documents and do all such other acts
and things as any party hereto, acting reasonably, may from time to time request be executed or
done in order to better evidence or perfect or effectuate any provision of this Agreement or of any
agreement or other document executed pursuant to this Agreement or any of the respective
obligations intended to be created hereby or thereby.
27. Entire Agreement
It is understood that the terms and conditions of this Agreement supersede any previous verbal
or written Agreement between the Agents and the Corporation and amends and supercedes the Agency
Agreement dated April 29, 2009 between the Corporation and the Agents.
[The remainder of this page was intentionally left blank.]
If the foregoing is in accordance with your understanding and is agreed to by you, please
confirm your acceptance by signing the enclosed copies of this letter at the place indicated and by
returning the same to Genuity Capital Markets.
GENUITY CAPITAL MARKETS
By: | /s/ Xxxx X. Xxxxx | |||
|
||||
TD SECURITIES INC. | ||||
By: | /s/ Xxxx Xxxxxxx | |||
|
||||
CANACCORD CAPITAL CORPORATION | ||||
By: | /s/ Xxxxx XxXxxxxx | |||
|
||||
DUNDEE SECURITIES CORPORATION | ||||
By: | /s/ Xxx X. Xxxxxxx | |||
|
||||
RBC DOMINION SECURITIES INC. | ||||
By: | /s/ Xxxx X. Xxxxxxxx | |||
SCHEDULE “A”
ISSUER FREE WRITING PROSPECTUS INCLUDED IN THE DISCLOSURE PACKAGE
1. | Corporate presentation dated April 2009 (filed with the SEC as a free writing prospectus on April 29, 2009). |
2. | Term Sheet dated April 29, 2009 respecting the Offering (filed with the SEC as a free writing prospectus on April 29, 2009). |
3. | Press Release dated April 29, 2009 (filed with the SEC as a free writing prospectus on April 29, 2009). |
4. | Term Sheet (Final Terms) dated April 30, 2009 respecting the Offering (attached hereto). |
- 2 -
SCHEDULE “B”
FORM OF LOCK-UP AGREEMENT
April , 2009
Genuity Capital Markets |
TD Securities Inc. | |
1700, 300 – 0xx Xxxxxx X.X. |
800, 324 – 8th Avenue S.W. | |
Calgary, AB T2P 3C4 |
Xxxxxxx, XX X0X 0X0 |
Re: Oilsands
Quest Inc. (the “Corporation”)
The undersigned understands that the Corporation proposes to carry out a public offering (the
“Offering”) of units of the Corporation (the “Units”) for which Genuity Capital Markets and TD
Securities Inc. (the “Lead Agents”) will act as the lead agents for a syndicate of agents
(collectively, the “Agents”). Each Unit will consist of one common share (a “Share”) and one/half
of one Share purchase warrant in the capital of the Corporation. The undersigned represents and
warrants that the undersigned is the owner of record or beneficial owner of those Shares or
securities convertible into or exchangeable or exercisable for Shares set out below the
undersigned’s signature on page 2 hereof. The undersigned recognises that the Offering will be of
benefit to the undersigned and will benefit the Corporation by, among other things, raising
additional capital. The undersigned acknowledges that you are relying on the agreement of the
undersigned contained in this letter as an inducement to carrying out the Offering and in entering
into an agency agreement with the Corporation.
In consideration of the foregoing, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the undersigned agrees that, during the period
beginning from the date hereof and ending on the date that is 90 days from the date hereof, the
undersigned shall not directly or indirectly, without the prior written consent of the Lead Agents,
on behalf of the Agents (such consent not to be unreasonably withheld or delayed) (i) offer, issue,
secure, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, or otherwise lend, transfer or
dispose of, directly or indirectly, any Shares, or any securities convertible into or exercisable
or exchangeable for Shares, or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of Shares, whether any
such transaction described in clauses (i) or (ii) is to be settled by delivery of Common Shares,
other securities or cash or otherwise.
Notwithstanding the restrictions on transfers described above, the undersigned may transfer
Shares:
• | pursuant to a bona fide third party take-over bid made to all holders of Shares or a similar acquisition transaction provided that in the event that the take-over bid or acquisition transaction is not completed, any Shares shall remain subject to the restrictions contained in this undertaking; |
• | by way of pledge or security interest to a bona fide financial institution or similar lender provided that the pledge or beneficiary of the security interest agrees in writing with the Lead Agents, on behalf of the Agents, to be bound by this undertaking; or |
- 3 -
• | to (A) a spouse, parent, child or grandchild of the undersigned (a “Relation”), (B) a trust the only beneficiaries of which are any of the undersigned and/or one or more of its Relations, or (C) a corporation or other entity of which any of the undersigned and/or its Relations are at all times the direct or indirect legal and beneficial owners of all of the outstanding securities or similar interests, (D) to an executor or personal representative or trustee in the event of the undersigned’s demise or incapacity, provided that in each case the transferee agrees in writing with the Lead Agents, on behalf of the Agents, to be bound by this undertaking in respect of future transfers. |
This Agreement shall be governed by and construed in accordance with the laws of the Province
of Alberta and the laws of Canada applicable therein. The undersigned hereby represents and
warrants that the undersigned has full power and authority to enter into this agreement. This
agreement is irrevocable and will be binding on the undersigned and the respective successors,
heirs, personal representatives and assigns of the undersigned.
If corporate holder: [CORPORATION NAME] |
||||
By: | ||||
Title: | ||||
If individual: | ||
Number of Shares owned or subject to warrants, options or exchangeable or convertible securities
[To be inserted]