SUBSCRIPTION AGREEMENT
TO: APOLLO GOLD CORPORATION (the
“Company”)
Linear
Gold Corp. (the “Purchaser”) hereby irrevocably
subscribes for and agrees to purchase the number of common shares of the Company
(the “Shares”) set out
below, at a price of $0.40 per Share, subject to the following terms and
conditions. This agreement, which for greater certainty includes and
incorporates the attached schedule, is referred to herein as the “Subscription
Agreement”. The Purchaser and the Company agree to be bound by
the terms and conditions set forth in the attached “Terms and Conditions of
Subscription” including without limitation the representations, warranties and
covenants set forth in the schedule attached thereto. The Purchaser
and the Company further agree, without limitation, that the other party and its
counsel may rely on the representations, warranties and covenants contained in
such documents.
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Issuer:
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Apollo
Gold Corporation
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Issue: Common
Shares
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Price Per
Share: $0.40
No. of Shares
Purchased: 62,500,000
Total Subscription
Price: $25,000,000
DATED this 9th day of March,
2010.
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Name
and Xxxxxxx xx Xxxxxxxxx
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Xxxxx
000, 2000 Barrington Street
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Linear
Gold Corp.
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Xxxxxxx,
Xxxx Xxxxxx X0X 0X0
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(Name
of Purchaser - please print)
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(Purchaser’s
Address)
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by:
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President and CEO | ||
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(Official
Capacity or Title - please print)
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| /s/ Xxxx Xxxx |
(000) 000-0000
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| Authorized Signature |
(Telephone
Number)
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(000)
000-0000
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| (Please print name of individual whose signature appears above if different than the name of the Purchaser printed above.) |
(Facsimile
Number)
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Registration
Instructions:
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Delivery
Instructions:
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Name
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Account
reference, if applicable
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Account
reference, if applicable
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Address
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Contact
Name
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Address
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Telephone
Number
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Facsimile
Number
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ACCEPTANCE
The
foregoing is acknowledged, accepted and agreed to this 9th day of March,
2010.
APOLLO
GOLD CORPORATION
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Per:
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/s/ R. Xxxxx Xxxxxxx |
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Authorized
Signing
Officer
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– 2 –
TERMS AND CONDITIONS OF
SUBSCRIPTION
1. Subscription. The
Purchaser hereby tenders to the Company this Subscription Agreement which, upon
acceptance by the Company, will constitute an irrevocable agreement of the
Purchaser to purchase from the Company, and of the Company to sell to the
Purchaser, an aggregate of 62,500,000 Shares at a price of $0.40 per Share (the
“Purchase Price”), all
on the terms and subject to the conditions set out in this Subscription
Agreement (the “Private
Placement”). The Company is a public company listed on the
Toronto Stock Exchange (the “TSX”) and the NYSE Amex
Equities Exchange (the “AMEX”).
2. Execution. At the
Execution Time on the Execution Date, the Company and the Purchaser shall duly
execute this Subscription Agreement pursuant to which the Purchaser shall
irrevocably subscribe for, and the Company shall irrevocably accept this
subscription by the Purchaser of, 62,500,000 Shares, subject to the conditions
set out in Section 11 hereof (which conditions may be waived by the Purchaser in
its sole discretion) which, for greater certainty, include: (i) the approval of
AMEX of the Private Placement (the “AMEX Approval”); (ii) the
entering into of a Support Agreement and a Lock-Up Agreement by each of the
Lenders; (iii) the receipt by the Purchaser of the legal opinions referred to in
subsections 11(i) and (k) hereof; and (iv) the receipt by the Purchaser of the
undertaking of the Company referred to in subsection 11(l) (collectively, the
“Closing Date
Conditions”). The Closing shall occur immediately following
satisfaction or waiver by the Purchaser of the last of the Closing Date
Conditions to be satisfied or waived, it being understood that the Closing shall
not occur until such time as all of the Closing Date Conditions have either been
satisfied or waived by the Purchaser.
3. Definitions. In
this Subscription Agreement, unless the context otherwise requires:
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(a)
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“affiliate” and “distribution” have the
respective meanings ascribed to them in the Securities Act
(Ontario);
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(b)
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“Arrangement” means the
proposed transaction pursuant to which the businesses of the Company and
the Purchaser will be combined pursuant to a plan of arrangement to be
completed under the Canada Business Corporations
Act;
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(c)
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“Black Fox Report” means
the technical report entitled “NI 43-101 Technical Report, Apollo Gold
Corporation, Black Fox Project, Timmins, Ontario, Canada” prepared by SRK
(US), Inc., AMEC Americas Limited and Xxxxxx Engineering, Inc. dated April
14, 2008 and filed on the Company’s SEDAR profile on April 14,
2008;
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(d)
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“Closing” means the
completion of the issue and sale by the Company and the purchase by the
Purchaser of the Shares pursuant to the provisions of this Subscription
Agreement;
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(e)
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“Closing Date” means the
date on which the last of the Closing Date Conditions to be satisfied is
satisfied or waived by the Purchaser or such other date as the Company and
the Purchaser may agree;
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(f)
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“Closing Time” means such
time on the Closing Date immediately following the satisfaction or waiver
by the Purchaser of the last of the Closing Date Conditions to be
satisfied or waived or such other time as the Company and the Purchaser
may agree;
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(g)
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“Common Shares” means the
common shares in the capital of the
Company;
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(h)
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“Company’s Auditors”
means such firm of chartered accountants as the Company may have appointed
or may from time to time appoint as auditors of the
Company;
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(i)
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“Disclosure Documents”
means all publicly available press releases, material change reports,
annual information forms, information circulars, financial statements and
other documents that have been disclosed by the Company to the public and
filed pursuant to applicable Securities Laws or otherwise posted on SEDAR
or XXXXX;
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– 3 –
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(j)
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“Execution Date” means
March 9, 2010 or such other date as the Company and the Purchaser may
agree;
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(k)
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“Execution Time” means
8:00 a.m. (Toronto time) on the Execution Date or such other time as the
Company and the Purchaser may
agree;
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(l)
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“Expenses” means the
Purchaser’s fees and expenses incurred in connection with the Private
Placement, including GST and disbursements, for which the Company shall be
responsible, to a maximum of $50,000, exclusive of GST and
disbursements;
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(m)
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“Lenders” means,
collectively, Macquarie Bank Limited and RMB Australia Holdings Limited,
being the lenders to the Company under the Project Facility
Agreement;
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(n)
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“Lock-Up Agreement” has
the meaning ascribed thereto in subsection 11(c)
hereof;
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(o)
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“Governmental Authority”
means and includes, without limitation, any national, federal government,
province, state, municipality or other political subdivision of any of the
foregoing, any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government and
any corporation or other entity owned or controlled (through stock or
capital ownership or otherwise) by any of the
foregoing;
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(p)
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“Huizopa Report” means
the technical report entitled “Report on the Geology and Current Status of
the Huizopa Gold-Silver Property, Chihuahua, Mexico” prepared by Xxxx X.
Xxxxxx, Consulting Geologist, dated May 20, 2009 and filed on the
Company’s SEDAR profile on August 19,
2009;
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(q)
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“Material Adverse Effect”
when used in connection with an entity means any change (including a
decision to implement such a change made by the board of directors or by
senior management who believe that confirmation of the decision by the
board of directors is probable), event, violation, inaccuracy,
circumstance or effect that is materially adverse to the business, assets
(including intangible assets), liabilities, capitalization, ownership,
financial condition or results of operations of such entity and its parent
(if applicable) or subsidiaries, taken as a
whole;
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(r)
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“NI 45-102” means
National Instrument 45-102 Resale of Securities as
such instrument is in effect at Closing in the Province of Nova Scotia in
which the Purchaser resides;
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(s)
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“NI 45-106” means
National Instrument 45-106 Prospectus and Registration
Exemptions as such instrument is in effect at Closing in the
Province of Nova Scotia in which the Purchaser
resides;
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(t)
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“person” means an
individual, firm, corporation, syndicate, partnership, trust, association,
unincorporated organization, joint venture, investment club, government or
agency or political subdivision thereof and every other form of legal or
business entity of whatsoever nature or
kind;
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(u)
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“Personal Information”
means any information about a Purchaser disclosed by the Purchaser in this
Subscription Agreement and the Schedules
hereto;
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(v)
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“Project Facility
Agreement” means the agreement among the Company, the Lenders and
RMB Resources Inc. dated February 20, 2009, as amended, relating to the
Company’s credit facility in respect of the Company’s Black Fox
project;
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(w)
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“Properties” means,
collectively, the properties of the Company that are the subject of the
Black Fox Report and the Huizopa
Report;
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(x)
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“Purchaser” means Linear
Gold Corp.;
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– 4 –
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(y)
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“Qualifying Jurisdiction”
means the Province of Nova
Scotia;
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(z)
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“Reporting Provinces”
means, collectively, the provinces of British Columbia, Alberta,
Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Xxxxxx Xxxxxx
Island, Newfoundland;
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(aa)
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“SEC” means the U.S.
Securities and Exchange Commission;
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(bb)
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“Securities Commission”
means the Nova Scotia Securities
Commission;
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(cc)
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“Securities Laws” means,
unless the context otherwise requires, all applicable securities laws in
the Qualifying Jurisdiction and the United
States and
the respective regulations made thereunder, together with applicable
published fee schedules, prescribed forms, policy statements, national or
multilateral instruments, orders, blanket rulings and other regulatory
instruments of the securities regulatory authorities in such
jurisdictions;
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(dd)
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“Support Agreement” has
the meaning ascribed thereto in subsection 11(b)
hereof;
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(ee)
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“United States” means the
United States of America, its territories and possessions, any State of
the United States and the District of
Columbia;
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(ff)
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“U.S. Person” means a
U.S. person as defined in Rule 902(k) of Regulation S under the U.S.
Securities Act; and
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(gg)
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“U.S. Securities Act”
means the United States Securities Act of 1933, as
amended.
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4. Delivery and
Payment. The Purchaser agrees that the following shall be
delivered:
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(a)
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to
the Company at the Execution Time, a completed and duly signed copy of
this Subscription Agreement together with a duly completed and executed
copy of the Accredited Investor Status Certificate in the form attached
hereto as Schedule A; and
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(b)
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at
the Closing Time, a certified cheque or bank draft made payable on or
before the Closing Date in same day freely transferable Canadian funds at
par in Toronto, Ontario to “Fogler, Xxxxxxxx LLP, in Trust” representing
the aggregate Purchase Price payable by the Purchaser for the Shares, less
the Expenses, or such other method of payment of the same amount against
delivery of the Shares as the Company may
accept.
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The
Purchaser acknowledges and agrees that any document referred to in this Section
4, when executed and delivered by the Purchaser, will form part of and will be
incorporated into this Subscription Agreement with the same effect as if each
constituted a representation and warranty or covenant of the Purchaser hereunder
in favour of the Company. The Purchaser consents to the filing of
such documents as may be required to be filed with the Securities Commission,
the SEC, the TSX and AMEX in connection with the transactions contemplated
hereby.
5. Closing. The
transactions contemplated hereby will be completed at the offices of Fogler,
Xxxxxxxx LLP, counsel to the Company, in Toronto, Ontario on the Closing Date at
the Closing Time or such other date or time as the Purchaser and the Company may
agree upon. At or prior to the Closing Time, the Company shall duly
and validly deliver to the Purchaser one or more certificates in definitive form
representing the Shares registered as directed by the Purchaser in writing,
against payment at the direction of the Company, in lawful money of Canada by
certified cheque, banker’s draft or wire transfer payable at par in the City of
Toronto, of an amount equal to the aggregate purchase price for the Shares being
issued and sold hereunder, less the Expenses.
– 5 –
6. Covenants of the
Company. The Company hereby covenants to the Purchaser and its
permitted assigns, and acknowledges that the Purchaser is relying on such
covenants in purchasing the Shares, that the Company shall:
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(a)
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allow
the Purchaser and its representatives to conduct all due diligence
regarding the Company which the Purchaser may reasonably require to be
conducted prior to the Closing Date. Without limiting the
generality of the foregoing, the Company shall make available its
directors, senior management, audit committee, auditors, technical
advisors, legal counsel and other experts to any questions the Purchaser
may have;
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(b)
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use
its best efforts to fulfill, at or before the Closing Date, each of the
conditions set out in Section 11;
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(c)
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duly
execute and deliver this Subscription Agreement at the Execution Time, and
comply with and satisfy all terms, conditions and covenants herein
contained to be complied with or satisfied by the
Company;
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(d)
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ensure
that at the Closing Time the Shares are duly issued as fully paid and
non-assessable shares in the capital of the Company on payment of the
purchase price therefor;
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(e)
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use
US$10,000,000 of the net proceeds of the Private Placement to repay
indebtedness under the Project Facility Agreement and use the balance of
the net proceeds for working capital
purposes;
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(f)
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subject
to compliance with applicable Securities Laws, obtain the prior approval
of the Purchaser as to the content and form of any press release relating
to the Private Placement or the
Arrangement;
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(g)
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execute
and file with the Securities Commission and the SEC all forms, notices and
certificates relating to the Private Placement required to be filed by it
pursuant to the Securities Laws in the time required by applicable
Securities Laws;
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(h)
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execute
and file with the TSX and AMEX all necessary documents and use its
commercially reasonable efforts to ensure that the Shares have been
approved for listing and trading on the TSX and AMEX as of their date of
issuance;
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(i)
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ensure
that the Shares shall not be subject to a restricted period or statutory
hold period under applicable Securities Laws or to the resale restriction
under the policies of the TSX which extends beyond four months and one day
after the Closing Date; provided, however, that the Shares shall be
“restricted securities” under the U.S. Securities
Act;
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(j)
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for
a period of five (5) years following the Closing Date, use commercially
reasonable efforts to maintain its status as a “reporting issuer” under
the Securities Laws of at least one jurisdiction in Canada not in default
of any requirement of such Securities Laws, unless during such period the
Company is acquired by another entity through a formal takeover bid, plan
of arrangement or other form of merger, reorganization or business
combination;
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(k)
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for
a period of five (5) years following the Closing Date, use commercially
reasonable efforts to maintain the listing of the Common Shares on the TSX
and AMEX, or such other recognized stock exchange or quotation system as
the Purchaser may approve, acting reasonably, unless during such period
the Company is acquired by another entity through a formal takeover bid,
plan of arrangement or other form of merger, reorganization or business
combination;
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(l)
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in
the event the Arrangement is not completed for any reason: (i) upon the
request of the Purchaser, file a registration statement with the SEC in
respect of the Shares to register the resale of the Shares by the
Purchaser in the United States, which registration statement shall be
filed as soon as practicable following the request of the Purchaser and in
any event within 30 days of such request; and (ii) use its commercially
reasonable best efforts to resolve all comments of the SEC (if any) and to
take all necessary steps in order to have such registration statement
declared effective by the SEC as expeditiously as possible following the
date of such filing;
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– 6 –
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(m)
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during
the period between the Execution Time and the Closing Time, not do or
cause, permit or suffer to be done any act or thing which would have the
effect of making untrue any representation or warranty of the Company
contained in this Subscription Agreement, nor fail or omit to do or fail
or omit to cause to be done any act or thing the non-performance of which
would have the effect of making untrue any representation or warranty
contained in this Subscription Agreement;
and
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(n)
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during
the period between the Execution Time and the Closing Time, not do or
cause, permit or suffer to be done any act or thing which would reasonably
be regarded as being directed towards or likely to prevent or delay the
successful completion of the transactions contemplated in this
Subscription Agreement.
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7. Representations and Warranties of the
Company. The Company represents and warrants to the Purchaser
and its permitted assigns, and acknowledges that the Purchaser is relying upon
such representations and warranties in connection with the execution of this
Subscription Agreement and the completion of the Private Placement,
that:
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(i)
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the
Company and each of the Subsidiaries (as hereinafter defined) is a
corporation duly incorporated, continued or amalgamated and validly
existing under the laws of the jurisdiction in which it was incorporated,
continued or amalgamated, as the case may be, has all requisite corporate
power and authority and is duly qualified and holds all necessary material
permits, licences and authorizations necessary or required to carry on its
business as now conducted and to own, lease or operate its properties and
assets and no steps or proceedings have been taken by any person,
voluntary or otherwise, requiring or authorizing its dissolution or
winding up, and the Company has all requisite power and authority to enter
into this Subscription Agreement and to carry out its obligations
hereunder;
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(ii)
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the
Company has no subsidiaries other than the following (the “Subsidiaries” and each a
“Subsidiary”) nor
any investment or proposed investment in any person which, for the
financial year ended December 31, 2009 accounted for more than five
percent of the consolidated assets or consolidated revenues of the Company
or would otherwise be material to the business and affairs of the Company
on a consolidated basis:
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Subsidiaries
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Corporate
Jurisdiction
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Percentage
Ownership
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Apollo
Gold, Inc.
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Delaware
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100 | % | |||
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Mine
Development Finance, Inc.
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Delaware
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100 | % | |||
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Minera
Sol de ORO S.A. de C.V.
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Mexico
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100 | % | |||
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Minas
de Argonautas S de X.X. de C.V.
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Mexico
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100 | % | |||
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(iii)
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the
Company owns, directly or indirectly, the percentage of issued and
outstanding shares of each of the Subsidiaries set out in subsection 7(ii)
above, all of the issued and outstanding shares of the Subsidiaries are
issued as fully paid and non-assessable shares, in each case, other than
as disclosed in the Disclosure Documents, free and clear of all mortgages,
liens, charges, pledges, security interests, encumbrances,
claims or demands whatsoever
and no person, firm or corporation has any agreement, option, right or
privilege (whether pre-emptive or contractual) capable of becoming an
agreement, for the purchase from the Company or any of the Subsidiaries of
any interest in any of the shares in the capital of any of the
Subsidiaries;
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(iv)
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other
than as disclosed in the Disclosure Documents, the Company and each of the
Subsidiaries holds all requisite licences, registrations, qualifications,
permits and consents necessary or appropriate for carrying on its business
as currently carried on and all such licences, registrations,
qualifications, permits and consents are valid and subsisting and in good
standing in all material respects except where the failure to hold such
licences, registrations, qualifications, permits and consents would not
have a Material Adverse Effect on the Company or any
Subsidiary. In particular, without limiting the generality of
the foregoing, neither the Company nor any of the Subsidiaries has
received any notice of proceedings relating to the revocation or adverse
modification of any material mining or exploration permit or licence, nor
have any of them received notice of the revocation or cancellation of, or
any intention to revoke or cancel, any mining claims, groups of claims,
exploration rights, concessions or leases with respect to any of the
resource properties described in the Disclosure Documents where such
revocation or cancellation would have a Material Adverse Effect on the
Company or any Subsidiary;
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(v)
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except
as disclosed in the Disclosure Documents, (a) the Company and the
Subsidiaries are the absolute legal and beneficial owners of, and have
good and marketable title to, all of the material property or assets
thereof as described in the Disclosure Documents, and no other Mining
Rights (as hereinafter defined) are necessary for the conduct of the
business of the Company or any Subsidiary as currently conducted, (b) none
of the Company or any Subsidiary knows of any claim or the basis for any
claim that might or could materially and adversely affect the right
thereof to use, transfer or otherwise exploit such Mining Rights and, (c)
none of the Company or any Subsidiary has any responsibility or obligation
to pay any material commission, royalty, licence fee or similar payment to
any person with respect to the Mining Rights
thereof;
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(vi)
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the
Company and the Subsidiaries hold either freehold title, mining leases,
mining concessions, mining claims or participating interests or other
conventional property or proprietary interests or rights, recognized in
the jurisdiction in which a particular property is located (collectively,
“Mining Rights”),
in respect of the ore bodies and minerals located in properties in which
the Company and the Subsidiaries have an interest as described in the
Disclosure Documents under valid, subsisting and enforceable title
documents or other recognized and enforceable agreements or instruments,
sufficient to permit the Company or the applicable Subsidiary to explore
the minerals relating thereto; all property, leases or claims in which the
Company or any Subsidiary has an interest or right have been validly
located and recorded in accordance in all material respects with all
applicable laws and are valid and subsisting except where the failure to
be so would not have a Material Adverse Effect on the Company or any
Subsidiary; the Company and the Subsidiaries have all necessary surface
rights, access rights and other necessary rights and interests relating to
the properties in which the Company and the Subsidiaries have an interest
as described in the Disclosure Documents granting the Company or the
applicable Subsidiary the right and ability to explore for minerals, ore
and metals for development purposes as are appropriate in view of the
rights and interest therein of the Company or the applicable Subsidiary,
with only such exceptions as do not interfere with the use made by the
Company or the applicable Subsidiary of the rights or interest so held;
and each of the proprietary interests or rights and each of the documents,
agreements and instruments and obligations relating thereto referred to
above is currently in good standing in the name of the Company or a
Subsidiary except where the failure to be so would not have a Material
Adverse Effect on the Company or any Subsidiary. The Mining Rights in
respect of the Company’s properties, as disclosed in the Disclosure
Documents, constitute a description of all material Mining Rights held by
the Company and the Subsidiaries;
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(vii)
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the
Company has made available to the respective authors thereof, prior to the
issuance of the Black Fox Report and the Huizopa Report for the purpose of
preparing the Black Fox Report and the Huizopa Report, respectively, all
information requested, and to the knowledge and belief of the Company, no
such information contains any material misrepresentation. The Company does
not have any knowledge of a material adverse change in any production,
cost, price, reserves or other relevant information provided since the
dates that such information was so
provided;
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(viii)
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to
the best of the knowledge of the Company, the Black Fox Report and the
Huizopa Report, as supplemented by the disclosure in respect of such
properties in the Disclosure Documents, accurately and completely set
forth all material facts relating to the properties that are subject
thereto. Since the date of preparation of the the Black Fox Report and the
Huizopa Report, respectively, there has been no change of which the
Company is aware that would disaffirm any aspect of such reports in any
material respect;
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(ix)
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the
Company is a reporting issuer under the Securities Laws of each of the
Reporting Provinces, is not in default of any requirement of such
Securities Laws and the Company is not included on a list of defaulting
reporting issuers maintained by the securities regulatory authorities of
such provinces;
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(x)
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at
the Execution Time, all consents, approvals, permits, authorizations or
filings as may be required to be made or obtained by the Company under the
Securities Laws necessary for the execution and delivery of this
Subscription Agreement, and the consummation of the transactions
contemplated herein, will have been made or obtained, as applicable (other
than the AMEX Approval);
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(xi)
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at
the Closing Time, the AMEX Approval will have been obtained and other than
the filing of reports required under applicable Securities Laws within the
prescribed time periods and the filing of standard documents with the SEC,
TSX and AMEX, which documents shall be filed as soon as practicable after
the Closing Date, no consents, approvals, permits, authorizations or
filings will be required by the Company under the Securities Laws
necessary for the consummation of the transactions contemplated
herein;
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(xii)
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the
Shares will not be subject to a restricted period or to a statutory hold
period under the Securities Laws in Canada or to any resale restriction
under the policies of the TSX which extends beyond four months and one day
after the Closing Date;
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(xiii)
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the
execution and delivery of this Subscription Agreement, the performance by
the Company of its obligations hereunder, the issue and sale of the Shares
hereunder and the consummation of the transactions contemplated in this
Subscription Agreement, do not and will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, (whether after notice or lapse of time or both), (A) any
statute, rule or regulation applicable to the Company including, without
limitation, the Securities Laws, the policies, rules and regulations of
the TSX and, subject to the receipt of the AMEX Approval, the policies,
rules and regulations of the AMEX; (B) the constating documents, by-laws
or resolutions of the Company which are in effect at the date hereof; (C)
any mortgage, note, indenture, contract, agreement, joint venture,
partnership, instrument, lease or other document to which the Company is a
party or by which it is bound; or (D) any judgment, decree or order
binding the Company, any Subsidiary or the property or assets
thereof;
|
|
|
(xiv)
|
the
Company is in compliance in all material respects with its timely and
continuous disclosure obligations under the Securities Laws and the rules
and regulations of the TSX and AMEX and, without limiting the generality
of the foregoing, there has not occurred any material adverse change,
financial or otherwise, in the assets, liabilities (contingent or
otherwise), business, financial condition, capital or prospects of the
Company and the Subsidiaries (taken as a whole) since September 30, 2009,
which has not been publicly disclosed on a non-confidential basis and all
the statements set forth in the Disclosure Documents were true, correct
and complete in all material respects and did not contain any
misrepresentation as of the date of such statements and the Company has
not filed any confidential material change reports since the date of such
statements which remains confidential as at the date
hereof;
|
|
|
(xv)
|
except
as disclosed in the Disclosure Documents, neither the Company nor any
Subsidiary has approved, or has entered into any agreement in respect of,
or has any knowledge of:
|
– 9 –
|
|
(A)
|
the
purchase of any material property or assets or any interest therein or the
sale, transfer or other disposition of any material property or assets or
any interest therein currently owned, directly or indirectly, by the
Company or any Subsidiary whether by asset sale, transfer of shares or
otherwise;
|
|
|
(B)
|
the
change in control (by sale, transfer or other disposition of shares or
sale, transfer, lease or other disposition of all or substantially all of
the property and assets of the Company) of the Company or any Subsidiary;
or
|
|
|
(C)
|
a
proposed or planned disposition of shares by any shareholder who owns,
directly or indirectly, 10% or more of the outstanding shares of the
Company or any Subsidiary;
|
|
|
(xvi)
|
the
audited consolidated financial statements of the Company as at and for the
year ended December 31, 2008 (the “Audited Financial
Statements”) and consolidated comparative financial statements for
the nine months ended September 30, 2009 have been prepared in accordance
with generally accepted accounting principles in Canada and present fully,
fairly and correctly in all material respects, the consolidated financial
condition of the Company as at the date thereof and the results of the
operations and the changes in the financial position of the Company for
the periods then ended and contain and reflect adequate provisions or
allowance for all reasonably anticipated liabilities, expenses and losses
of the Company and, except as disclosed in the Disclosure Documents, there
has been no change in accounting policies or practices of the Company
since September 30, 2009;
|
|
|
(xvii)
|
all
taxes (including income tax, capital tax, payroll taxes, employer health
tax, workers’ compensation payments, property taxes, custom and land
transfer taxes), duties, royalties, levies, imposts, assessments,
deductions, charges or withholdings and all liabilities with respect
thereto including any penalty and interest payable with respect thereto
(collectively, “Taxes”) due and payable
by the Company and the Subsidiaries have been paid, except where the
failure to pay such taxes would not constitute an adverse material fact in
respect of the Company or any Subsidiary or have a Material Adverse Effect
on the Company or any Subsidiary. All tax returns,
declarations, remittances and filings required to be filed by the Company
and the Subsidiaries have been filed with all appropriate Governmental
Authorities and all such returns, declarations, remittances and filings
are complete and accurate and no material fact or facts have been omitted
therefrom which would make any of them misleading, except where the
failure to file such documents would not constitute an adverse material
fact in respect of the Company or have a Material Adverse Effect on the
Company or any Subsidiary. To the best of the knowledge of the
Company, no examination of any tax return of the Company or any Subsidiary
is currently in progress and there are no issues or disputes outstanding
with any Governmental Authority respecting any taxes that have been paid,
or may be payable, by the Company or any Subsidiary, in any case, except
where such examinations, issues or disputes would not constitute an
adverse material fact in respect of the Company or have a Material Adverse
Effect on the Company or any Subsidiary;
|
|
(xviii)
|
the
Company’s Auditors who audited the Audited Financial Statements and who
provided their audit report thereon are independent public accountants as
required under applicable Securities Laws and there has never been a
reportable event (within the meaning of National Instrument 51-102 Continuous Disclosure
Obligations) between the Company and the Company’s Auditors or, to
the knowledge of the Company, any former auditors of the
Company;
|
|
|
(xix)
|
other
than: (i) 11,594,371 Common Shares issuable pursuant to outstanding stock
options of the Company and an additional 100,000 Common Shares issuable
pursuant to stock options of the Company to be granted after public
announcement of the Arrangement; (ii) 104,138,178 Common Shares issuable
pursuant to outstanding common share purchase warrants of the Company;
(iii) 800,000 Common Shares issuable to RAB Special Situations (Master)
Fund Limited (“RAB”) pursuant to the
Third Amending Agreement dated February 26, 2010 between the Company and
RAB; (iv) 1,592,733 Common Shares issuable to Xxxxx Xxxxx, Xxxxx Xxxxx,
Xxxx Xxxxxx and Xxxxx Xxxx pursuant to a letter of intent dated February
22, 2010 among the Company, Calais Resources, Inc.; (v) 8,580,000 Common
Shares issuable pursuant to convertible debentures and (vi) 2,448,390
Common Shares issuable pursuant to agents’ compensation units, and the
foregoing persons, no person, firm or corporation has or will have at the
effective date of the Arrangement any agreement or option, or right or
privilege (whether pre-emptive or contractual) capable of becoming an
agreement or option, for the purchase of any unissued shares or securities
of the Company or of any of the
Subsidiaries;
|
– 10 –
|
|
(xx)
|
to
the Company’s knowledge, there is no agreement in force or effect which in
any manner affects or will affect the voting or control of any of the
securities of the Company or of the
Subsidiaries;
|
|
|
(xxi)
|
except
as disclosed in the Disclosure Documents, none of the officers or
employees of the Company or of any Subsidiary, any person who owns,
directly or indirectly, more than 10% of any class of securities of the
Company or securities of any person exchangeable for more than 10% of any
class of securities of the Company, or any associate or affiliate of any
of the foregoing, had or has any material interest, direct or indirect, in
any transaction or any proposed transaction (including, without
limitation, any loan made to or by any such person) with
the Company or any of the Subsidiaries which, as the case may
be, materially affects, is material to or will materially affect the
Company on a consolidated basis;
|
|
|
(xxii)
|
except
as disclosed in the Disclosure Documents, no legal or governmental
proceedings or inquiries are pending to which the Company or any
Subsidiary is a party or to which its property is subject that would
result in the revocation or modification of any material certificate,
authority, permit or license necessary to conduct the business now owned
or operated by the Company and the Subsidiaries which, if the subject of
an unfavourable decision, ruling or finding would have a Material Adverse
Effect on the Company or any Subsidiary and, to the knowledge of the
Company, no such legal or governmental proceedings or inquiries have been
threatened against or are contemplated with respect to the Company or with
respect to its properties;
|
|
(xxiii)
|
except
as disclosed in the Disclosure Documents, there are no actions, suits,
judgments, investigations or proceedings of any kind whatsoever
outstanding, pending or, to the best of the Company’s knowledge,
threatened against or affecting the Company, the Subsidiaries, or their
respective directors, officers or employees, at law or in equity or before
or by any commission, board, bureau or agency of any kind whatsoever and,
to the best of the Company’s knowledge, there is no basis therefor and
neither the Company nor any Subsidiary is subject to any judgment, order,
writ, injunction, decree, award, rule, policy or regulation of any
governmental authority, which, either separately or in the aggregate, may
have a Material Adverse Effect on the Company or any Subsidiary or that
would adversely affect the ability of the Company to perform its
obligations under this Subscription
Agreement;
|
|
(xxiv)
|
no
approval, authorization, consent or other order of, and no filing,
registration or recording with, any Governmental Authority or other person
is required of the Company in connection with the execution and delivery
of or with the performance by the Company of this Subscription Agreement
except in compliance with the Securities Laws with regard to the
distribution of the Shares in the Qualifying Jurisdiction and other
routine filings with the SEC;
|
|
|
(xxv)
|
none
of the Company nor any of the Subsidiaries is in violation of its
constating documents or in default of the performance or observance of any
material obligation, agreement, covenant or condition contained in any
contract, indenture, trust deed, mortgage, loan agreement, note, lease or
other agreement or instrument to which it is a party or by which it or its
property may be bound;
|
|
(xxvi)
|
the
Company and each of the Subsidiaries owns or has the right to use under
licence, sub-licence or otherwise all material intellectual property used
by the Company and the Subsidiaries in its business, including copyrights,
industrial designs, trade marks, trade secrets, know how and proprietary
rights, free and clear of any and all
encumbrances;
|
– 11 –
|
(xxvii)
|
except
as disclosed in the Disclosure Documents, any and all of the agreements
and other documents and instruments pursuant to which the Company and the
Subsidiaries hold the property and assets thereof (including any interest
in, or right to earn an interest in, any property) are valid and
subsisting agreements, documents or instruments in full force and effect,
enforceable in accordance with terms thereof, neither the Company nor any
Subsidiary is in default of any of the material provisions of any such
agreements, documents or instruments nor has any such default been alleged
and such properties and assets are in good standing under the applicable
statutes and regulations of the jurisdictions in which they are situated,
all material leases, licences and other agreements pursuant to which the
Company or any Subsidiary derives the interests thereof in such property
and assets are in good standing and there has been no material default
under any such lease, licence or agreement. None of the
properties (or any interest in, or right to earn an interest in, any
property) of the Company or any Subsidiary is subject to any right of
first refusal or purchase or acquisition right which is not disclosed in
the Disclosure Documents;
|
|
(xxviii)
|
subject
to the receipt by the Company of the AMEX Approval, all actions required
to be taken by or on behalf of the Company, including the passing of all
requisite resolutions of its directors, necessary to carry out its
obligations under this Subscription Agreement, have been or will, by the
Execution Time, be completed;
|
|
(xxix)
|
at
the Execution Time, this Subscription Agreement shall have been duly
authorized and executed and delivered by the Company and upon such
execution and delivery each shall constitute a valid and binding
obligation of the Company and shall be enforceable against the Company in
accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium and other laws relating
to or affecting the rights of creditors generally and except as limited by
the application of equitable principles when equitable remedies are
sought, and by the fact that rights to indemnity, contribution and waiver,
and the ability to sever unenforceable terms, may be limited by applicable
law;
|
|
|
(xxx)
|
at
the Closing Time, all necessary corporate action will have been taken by
the Company to allot and authorize the issuance of the Shares as fully
paid and non-assessable shares of the
Company;
|
|
(xxxi)
|
the
Common Shares are listed and posted for trading on the TSX and all
necessary notices and filings will have been made before the Execution
Time with and all necessary consents, approvals and authorizations
obtained by the Company from the TSX to ensure that, subject to fulfilling
the conditions contained in a letter from the TSX dated March 5, 2010 in
connection with the conditional acceptance of the Private Placement, the
Shares will be listed and posted for trading on the TSX upon their
issuance;
|
|
(xxxii)
|
the
Common Shares are listed and posted for trading on the AMEX and all
necessary notices and filings will have been made before the Execution
Time with the AMEX to ensure that, subject to receipt of the AMEX
Approval, the Shares will be listed and posted for trading on the
AMEX upon their issuance;
|
|
(xxxiii)
|
no
order, ruling or determination having the effect of suspending the sale or
ceasing the trading in any securities of the Company (including the
Shares) has been issued by any regulatory authority and is continuing in
effect and no proceedings for that purpose have been instituted or, to the
knowledge of the Company, are pending, contemplated or threatened by any
regulatory authority;
|
|
(xxxiv)
|
the
authorized capital of the Company consists of an unlimited number of
Common Shares, of which, as at the close of business on March 5, 2010,
273,081,000 Common Shares were issued and outstanding as fully paid and
non-assessable shares of the
Company;
|
|
(xxxv)
|
other
than as set out in the Disclosure Documents, neither the Company nor any
of the Subsidiaries has made any loans to or guaranteed the obligations of
any person;
|
– 12 –
|
(xxxvi)
|
with
respect to each premises of the Company or the Subsidiaries which is
material to the Company and the Subsidiaries on a consolidated basis and
which the Company or any of the Subsidiaries occupies as tenant (the
“Leased
Premises”), the Company or such Subsidiary occupies the Leased
Premises and has the exclusive right to occupy and use the Leased Premises
and each of the leases pursuant to which the Company and/or the
Subsidiaries occupies the Leased Premises is in good standing and in full
force and effect;
|
|
(xxxvii)
|
the
assets of the Company and the Subsidiaries and their business and
operations are insured against loss or damage with responsible insurers on
a basis consistent with insurance obtained by reasonably prudent
participants in comparable businesses, and such coverage is in full force
and effect, and the Company has not failed to promptly give any notice of
any material claim thereunder;
|
|
(xxxviii)
|
the
Company and each of the Subsidiaries is in compliance with all laws
respecting employment and employment practices, terms and conditions of
employment, pay equity and wages, except where non-compliance with such
laws could not reasonably be expected to have a Material Adverse Effect on
the Company or any Subsidiary, and has not and is not engaged in any
unfair labour practice;
|
|
(xxxix)
|
there
has not been in the last two years and there is not currently any labour
disruption, grievance, arbitration proceeding or other conflict which
could reasonably be expected to have a Material Adverse Effect on the
Company’s or any of the Subsidiaries’ business, taken as a whole, and the
Company and each of the Subsidiaries is in compliance with all provisions
of all federal, provincial, local and foreign laws and regulations
respecting employment and employment practices, terms and conditions of
employment and wages and hours, except where non-compliance with any such
provisions would not have a Material Adverse Effect on the Company or any
of the Subsidiaries;
|
|
|
(xl)
|
no
union has been accredited or otherwise designated to represent any
employees of the Company or any of the Subsidiaries and, to the knowledge
of the Company, no accreditation request or other representation question
is pending with respect to the employees of the Company or any of the
Subsidiaries and no collective agreement or collective bargaining
agreement or modification thereof has expired or is in effect in any of
the Company’s facilities and none is currently being negotiated by the
Company or any Subsidiary;
|
|
|
(xli)
|
the
Disclosure Documents disclose, to the extent required by applicable
Securities Laws, each material plan for retirement, bonus, stock purchase,
profit sharing, stock option, deferred compensation, severance or
termination pay, insurance, medical, hospital, dental, vision care, drug,
sick leave, disability, salary continuation, legal benefits, unemployment
benefits, vacation, incentive or otherwise contributed to, or required to
be contributed to, by the Company for the benefit of any current or former
director, officer, employee or consultant of the Company (the “Employee Plans”), each
of which has been maintained in all material respects with its terms and
with the requirements prescribed by any and all statutes, orders, rules
and regulations that are applicable to such Employee
Plans;
|
|
|
(xlii)
|
the
Company maintains a system of internal accounting controls sufficient to
provide reasonable assurances that (A) transactions are executed in
accordance with management’s general or specific authorization, and (B)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with Canadian generally accepted accounting
principles and to maintain accountability for
assets;
|
|
|
(xliii)
|
except
as disclosed in the Disclosure Documents, none of the directors, officers
or employees of the Company 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 Company
or its Subsidiaries which materially affects, is material to or will
materially affect the Company or any
Subsidiary;
|
– 13 –
|
|
(xliv)
|
CIBC
Mellon Trust Company, at its office in the City of Toronto, Ontario has
been duly appointed as registrar and transfer agent for the Common
Shares;
|
|
|
(xlv)
|
the
minute books and records of the Company and the Subsidiaries made
available to the Purchaser and its counsel in connection with their due
diligence investigation of the Company for the periods from January 2002
to the date hereof are all of the minute books and records of the Company
and the Subsidiaries and contain copies of all material proceedings (or
certified copies thereof or drafts thereof pending approval) of the
shareholders, the directors and all committees of directors of the Company
and the Subsidiaries to the date of review of such corporate records and
minute books and there have been no other meetings, resolutions or
proceedings of the shareholders, directors or any committees of the
directors of the Company or any of its Subsidiaries to the date hereof not
reflected in such minute books and other
records;
|
|
|
(xlvi)
|
neither
the Company nor any of its Subsidiaries has been in violation of, in
connection with the ownership, use, maintenance or operation of its
property and assets, including the Leased Premises, any applicable
federal, provincial, state, municipal or local laws, by-laws, regulations,
orders, policies, permits, licences, certificates or approvals having the
force of law, domestic or foreign, relating to environmental, health or
safety matters (collectively the “Environmental Laws”)
which would have a Material Adverse Effect on the Company or any of its
Subsidiaries;
|
|
(xlvii)
|
without
limiting the generality of the immediately preceding paragraph, the
Company and each of its Subsidiaries do not have any knowledge of, and
have not received any notice of, any material claim, judicial or
administrative proceeding, pending or threatened against, or which may
affect, either the Company or any Subsidiary or any of the property,
assets or operations thereof, relating to, or alleging any violation of
any Environmental Laws, the Company is not aware of any facts which could
give rise to any such claim or judicial or administrative proceeding and
neither the Company, nor any Subsidiary nor any of the property, assets or
operations thereof is the subject of any investigation, evaluation, audit
or review by any Governmental Authority to determine whether any violation
of any Environmental Laws has occurred or is occurring or whether any
remedial action is needed in connection with a release of any contaminant
into the environment, except for compliance investigations conducted in
the normal course by any Governmental Authority, in each case which could
reasonably be expected to have a Material Adverse Effect on the Company or
any of its Subsidiaries;
|
|
(xlviii)
|
there
are no orders, rulings or directives issued, pending or, to the best of
the Company’s knowledge reasonably held, being based on due direction and
enquiry of its personnel and advisors, threatened against the Company or
any of its Subsidiaries under or pursuant to any Environmental Laws
requiring any work, repairs, construction or capital expenditures with
respect to the property or assets of the Company or any of its
Subsidiaries (including the Leased Premises) which would have a Material
Adverse Effect on the Company or any of its
Subsidiaries;
|
|
|
(xlix)
|
the
Company and the Subsidiaries are not subject to any contingent or other
liability relating to the restoration or rehabilitation of land, water or
any other part of the environment (except for those derived from normal
exploration activities) or non-compliance with Environmental Laws which
could reasonably be expected to have a Material Adverse Effect on the
Company or any of the Subsidiaries;
|
|
|
(l)
|
all
information which has been prepared by the Company and the Subsidiaries
relating to the Company and the Subsidiaries and the business, property
and liabilities thereof and either publicly disclosed, provided or made
available to the Purchaser, including all financial, marketing, sales and
operational information provided to the Purchaser is, as of the date of
such information, true and correct in all material respects, taken as a
whole, and no fact or facts have been omitted therefrom which would make
such information materially
misleading;
|
– 14 –
|
|
(li)
|
the
Company is not aware of any circumstances presently existing under which
liability is or could reasonably be expected to be incurred under Part
XXIII – Civil Liability for Secondary Market Disclosure of the Securities Act
(Ontario); and
|
|
|
(lii)
|
there
is no person acting or purporting to act at the request of or
on behalf of the Company that is entitled to any brokerage or finder’s fee
or other compensation in connection with the transactions contemplated by
this Subscription Agreement.
|
8. Purchaser’s Representations and
Warranties. The Purchaser represents and warrants to the
Company as follows and acknowledges that the Company is relying on such
representations and warranties in connection with the transactions contemplated
in this Subscription Agreement:
|
|
(i)
|
the
Purchaser is duly incorporated and is a valid and existing corporation,
has the necessary corporate capacity and authority to execute and deliver
this Subscription Agreement, to subscribe for the Shares and to observe
and perform its covenants and obligations hereunder and has taken all
necessary corporate action in respect thereof and upon acceptance by the
Company, this Subscription Agreement will constitute a legal, valid and
binding agreement of the Purchaser enforceable against the Purchaser in
accordance with its terms and will not result in a violation of or create
a state of facts which, after notice, lapse of time or both, would
constitute a default or breach of any of the Purchaser’s constating
documents, by-laws or authorizing resolutions (if applicable), any
agreement to which the Purchaser is a party or by which the Purchaser is
bound or any law applicable to the Purchaser or any judgment, decree,
order, statute, rule or regulation applicable to the
Purchaser;
|
|
|
(ii)
|
the
Purchaser was offered the Shares in, and is a resident of, the Qualifying
Jurisdiction, intends that the Securities Laws of that jurisdiction do and
shall govern any transaction involving the Shares subscribed for by the
Purchaser and that such addresses of the Purchaser as set out on the face
page of this Subscription Agreement was not created and are not used
solely for the purpose of acquiring the
Shares;
|
|
|
(iii)
|
the
Purchaser has properly completed, executed and delivered to the Company
the certificate (dated as of the date hereof) set forth in Schedule A
attached hereto and the information contained therein is true and correct
as of the Execution Time and the representations, warranties and covenants
contained in the schedule attached hereto will be true and correct as at
the Closing Time;
|
|
|
(iv)
|
as
of the Execution Time, the Purchaser will not beneficially own any Common
Shares or securities convertible into Common
Shares;
|
|
|
(v)
|
the
Purchaser is purchasing the Shares as principal (as defined in all
applicable Securities Laws) for its own account, and not for the benefit
of any other person;
|
|
|
(vi)
|
the
Purchaser is purchasing the Shares for investment only and not with a view
to resale or distribution of all or any of the
Shares;
|
|
|
(vii)
|
there
is no person acting or purporting to act in connection with the
transactions contemplated herein who is entitled to any brokerage or
finder’s fee and if any person establishes a claim that any fee or other
compensation is payable in connection with this subscription for the
Shares;
|
|
|
(viii)
|
none
of the funds being used to purchase the Shares are to the Purchaser’s
knowledge proceeds obtained or derived directly or indirectly as a result
of illegal activities. The funds being used to purchase the
Shares which will be advanced by the Purchaser to the Escrow Agent
hereunder will not represent proceeds of crime for the purposes of the
Proceeds of Crime (Money
Laundering) Act (Canada) (the “PCMLA”) and the
Purchaser acknowledges that the Company may in the future be required by
law to disclose the Purchaser’s and other information relating to this
Subscription Agreement and the Purchaser's subscription hereunder, on a
confidential basis, pursuant to the PCMLA. To the best of its knowledge
(i) none of the funds to be provided by the Purchaser are being
tendered on behalf of a person or entity who has not been identified to
the Purchaser, and (ii) it shall promptly notify the Company if the
Purchaser discovers that any of such representations cease to be true, and
to provide the Company with appropriate information in connection
therewith;
|
– 15 –
|
|
(ix)
|
the
Purchaser was not created or being used solely to permit purchases of or
to hold securities without a prospectus in reliance on a prospectus
exemption;
|
|
|
(x)
|
the
Purchaser acknowledges that this Subscription Agreement requires the
Purchaser to provide certain Personal Information to the
Company. Such information is being collected and will be used
by the Company for the purposes of completing the proposed Private
Placement which includes, without limitation, determining the Purchaser’s
eligibility to purchase the Shares under applicable Securities Laws and
completing filings required by the SEC, the Securities Commission and/or
the TSX or AMEX. The Purchaser agrees that the Purchaser’s Personal
Information may be disclosed by the Company to: (a) stock exchanges
and applicable securities regulatory authorities, (b) the Company’s
registrar and transfer agent, and (c) any of the other parties
involved in the proposed Private Placement, including legal counsel, and
may be included in record books in connection with the Private
Placement. By executing this Subscription Agreement, the
Purchaser consents to the foregoing collection, use and disclosure of the
Purchaser’s Personal Information. The Purchaser also consents to the
filing of copies or originals of any of the Purchaser’s documents
described in Section 4 hereof as may be required to be filed with any
stock exchange or securities regulatory authority in connection with the
transactions contemplated hereby;
|
|
|
(xi)
|
the
Purchaser is not a “U.S. Person” (as that term is defined by Regulation S
under the U.S. Securities Act, which definition includes, but is not
limited to, an individual resident in the United States, an estate or
trust of which any executor or administrator or trustee, respectively, is
a U.S. Person and any partnership or company organized or incorporated
under the laws of the United States (or any State thereof)) and is not
acquiring the Shares for the account or benefit of a U.S. Person or a
person in the United States;
|
|
|
(xii)
|
the
Shares have not been offered to the Purchaser in the United States, and
the individuals making the order to purchase the Shares and executing and
delivering this Subscription Agreement on behalf of the Purchaser were not
in the United States when the order was placed and this Subscription
Agreement was executed and
delivered;
|
|
|
(xiii)
|
the
Purchaser undertakes and agrees that it will not offer or sell the Shares
in the United States unless such shares are registered under the U.S.
Securities Act and the securities laws of all applicable states of the
United States or another exemption from such registration requirements is
available, and further that it will not resell the Shares except in
accordance with the provisions of applicable securities legislation,
regulations, rules, policies and orders and stock exchange
rules;
|
|
|
(xiv)
|
the
Purchaser will not engage in hedging transactions with regard to the
Shares unless conducted in compliance with the U.S. Securities Act;
and
|
|
|
(xv)
|
the
Purchaser acknowledges that the Company and its transfer agent will refuse
to register any transfer of any of the Shares not made in accordance with
the provisions of Regulation S of the U.S. Securities Act, pursuant to an
available exemption from registration under the U.S. Securities Act or
under an effective registration statement under the U.S. Securities
Act.
|
9. Purchaser’s
Acknowledgements. The Purchaser acknowledges and agrees, and
without in any way limiting the foregoing that:
– 16 –
|
(a)
|
(i)
no agency, securities commission, governmental authority, regulatory body,
stock exchange or other entity has reviewed or passed on, made any finding
or determination as to the merit for investment of, nor have any such
agencies, securities commissions or governmental authorities made any
recommendation or endorsement with respect to the Shares or the Private
Placement; (ii) there is no government or other insurance covering the
Shares; and (iii) there are risks associated with the purchase of the
Shares;
|
|
(b)
|
the
purchase of the Shares has not been or will not be (as applicable) made
through, or as a result of, and the distribution of the Shares is not
being accompanied by, a general solicitation or advertisement including
articles, notices or other communications published in any newspaper,
magazine or similar media or broadcast over radio or television, or any
seminar or meeting whose attendees have been invited by general
solicitation or general
advertising;
|
|
(c)
|
no
prospectus or other offering document has been filed by the Company with a
securities commission or other securities regulatory authority in any
province of Canada, or any other jurisdiction in or outside of Canada
(including the United States) in connection with the issuance of the
Shares and such issuance is exempt from the prospectus requirements
otherwise applicable under the provisions of Securities Laws and, as a
result, in connection with its purchase of the Shares hereunder, as
applicable:
|
|
|
(i)
|
the
Company has advised the Purchaser that the Company is relying on an
exemption from the requirements to provide the Purchaser with a prospectus
and to sell the Shares through a person registered to sell securities
under the Securities Laws and that the Purchaser is restricted from using
most of the protections, rights and remedies available under Securities
Laws including, without limitation, statutory rights of rescission or
damages;
|
|
|
(ii)
|
the
Purchaser will not receive information that may otherwise be required to
be provided to the Purchaser under applicable Securities Laws or contained
in a prospectus prepared in accordance with applicable Securities
Laws;
|
|
|
(iii)
|
the
Company is relieved from certain obligations that would otherwise apply
under such applicable Securities Laws;
and
|
|
|
(iv)
|
there
are restrictions on the Purchaser’s ability to resell the Shares and it is
the responsibility of the Purchaser to find out what these restrictions
are and to comply with them before reselling such
securities.
|
|
(d)
|
the
Shares will be subject to certain resale restrictions under the Securities
Laws and the Purchaser agrees to comply with such
restrictions. The Purchaser also acknowledges that it has been
advised to consult its own legal advisors with respect to applicable
resale restrictions and that it is solely responsible (and the Company is
not in any manner responsible) for complying with such
restrictions. For purposes of complying with the Securities
Laws and NI 45-102, the Purchaser understands and acknowledges that upon
the issuance of the Shares, all the certificates representing the Shares
shall bear a legends substantially in the following
form:
|
“UNLESS
PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT
TRADE THE SECURITY BEFORE [THE
DATE THAT IS FOUR MONTHS PLUS ONE DAY FROM THE CLOSING
DATE].”;
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK
EXCHANGE, HOWEVER, THE SAID SECURITIES CANNOT BE TRADED THROUGH THE FACILITIES
OF SUCH EXCHANGE SINCE THEY ARE NOT FREELY TRANSFERABLE, AND CONSEQUENTLY ANY
CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT 'GOOD DELIVERY' IN SETTLEMENT OF
TRANSACTIONS ON THE TORONTO STOCK EXCHANGE”;
In
addition, the certificate(s) representing the Shares will also bear a legend
substantially in the following form as required by the U.S. Securities
Act:
– 17 –
“THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S ADOPTED
UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE
TRANSFER THE SECURITY EVIDENCED HEREBY, EXCEPT (A) TO THE ISSUER OR A SUBSIDIARY
THEREOF; (B) TO PERSONS OTHER THAN U.S. PERSONS OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT; (C) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 ADOPTED UNDER THE SECURITIES
ACT OR ANOTHER AVAILABLE EXEMPTION UNDER THE SECURITIES ACT (IF AVAILABLE); OR
(D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
AND (3) AGREES THAT IT WILL, PRIOR TO ANY TRANSFER OF THIS SECURITY, FURNISH TO
THE ISSUER OR ISSUER'S COUNSEL SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS MAY BE REQUIRED BY THE ISSUER TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN
TO THEM BY REGULATION S UNDER THE SECURITIES ACT. IN ANY CASE, THE HOLDER HEREOF
WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD
TO THIS SECURITY, EXCEPT AS PERMITTED BY THE SECURITIES ACT.”;
provided
that in the event that the Purchaser proposes to sell, transfer or assign the
Shares, the Company and the Purchaser shall cooperate and use their mutual
commercially reasonable best efforts to deliver and provide or cause to be
delivered and provided all such information and documents (including
declarations and, if necessary, legal opinions, in customary form) as may be
required to remove the U.S. Securities Act legend set forth above (if a basis
for removal exists under the Securities Laws).
|
(e)
|
no
person has made any written or oral representations: (i) that any person
will resell or repurchase the Shares; (ii) that any person will refund the
Purchase Price; or (iii) as to the future price or value of the Shares
.
|
10. Conditions of Closing in Favour of
the Company. The Purchaser acknowledges that the Company’s
obligation to sell the Shares to the Purchaser at the Closing Time shall be
conditional upon the fulfilment of the following conditions:
|
(a)
|
the
Purchaser executing and returning to the Company all documents required by
applicable Securities Laws for delivery on behalf of the Purchaser
including, without limitation, Schedule A attached hereto, by no later
than the Closing Time;
|
|
(b)
|
the
Company having obtained all required regulatory approvals (including those
that may be required under Securities Laws) to permit the completion of
the transactions contemplated hereby, including the AMEX
Approval;
|
|
(c)
|
the
offer, issue, sale and delivery of the Shares being exempt from the
requirements to file a prospectus or deliver an offering memorandum (as
defined in applicable Securities Laws, including Ontario Securities
Commission Rule 14-501 Definitions) or any
similar document under applicable Securities Laws and other applicable
securities laws relating to the sale of the Shares, or the Company having
received such orders, consents or approvals as may be required to permit
such sale without the requirement of filing a prospectus or delivering an
offering memorandum or any similar
document;
|
– 18 –
|
(d)
|
the
representations and warranties set out herein, including in the Schedules
attached hereto, of the Purchaser being true and correct as at the Closing
Time; and
|
|
(e)
|
at
the Closing Time, the Company shall have received a certificate, dated as
of the Closing Date, signed by the Chief Executive Officer and the Chief
Financial Officer of the Purchaser, or such other officers or directors of
the Purchaser as the Company may agree, certifying for and on behalf of
the Purchaser, to the best of the knowledge, information and belief of the
persons so signing, that:
|
|
|
(i)
|
the
Purchaser has complied with all the covenants and satisfied all the terms
and conditions of this Subscription Agreement on its part to be complied
with and satisfied up to the Closing Time;
and
|
|
|
(ii)
|
the
representations and warranties of the Purchaser contained in this
Subscription Agreement are true and correct as of the Closing Time, with
the same force and effect as if made at and as of the Closing Time after
giving effect to the transactions contemplated by this Subscription
Agreement.
|
11. Conditions of Closing in Favour of
the Purchaser. The Company acknowledges that the Purchaser’s
obligation to purchase the Shares at the Closing Time shall be conditional upon
the fulfilment of the following conditions:
(a) at
the Closing Time, the Purchaser shall have received a certificate, dated as of
the Closing Date, signed by the Chief Executive Officer and the Chief Financial
Officer of the Company, or such other officers or directors of the Company as
the Purchaser may agree, certifying for and on behalf of the Company, to the
best of the knowledge, information and belief of the persons so signing,
that:
|
|
(i)
|
no
order, ruling or determination having the effect of suspending the sale or
ceasing the trading in any securities of the Company has been issued by
any regulatory authority and is continuing in effect and no proceedings
for that purpose have been instituted or are pending or, to the knowledge
of such officers, contemplated or threatened by any regulatory
authority;
|
|
|
(ii)
|
since
September 30, 2009, (A) there has been no material adverse change (actual,
proposed or prospective, whether financial or otherwise) in the business,
business prospects, affairs, operations, assets, liabilities (contingent
or otherwise) or capital of the Company or any of its Subsidiaries as of
the date of this Subscription Agreement that has not been generally
disclosed, and (B) no material transactions have been entered into by the
Company or any of the Subsidiaries other than in the ordinary course of
business, except as has been disclosed in the Disclosure
Documents;
|
|
|
(iii)
|
the
Company has complied with all the covenants and satisfied all the terms
and conditions of this Subscription Agreement on its part to be complied
with and satisfied up to the Closing Time;
and
|
|
|
(iv)
|
the
representations and warranties of the Company contained in this
Subscription Agreement are true and correct as of the Closing Time, with
the same force and effect as if made at and as of the Closing Time after
giving effect to the transactions contemplated by this Subscription
Agreement;
|
(b) at
or before the Closing Time, each of the Lenders shall have entered into a
support agreement, in form and substance satisfactory to the Purchaser ,
pursuant to which each Lender agrees, among other things, to support
and vote in favour of the Arrangement (a “Support
Agreement”);
(c) at
or before the Closing Time, each of the Lenders shall have entered into a
lock-up agreement, in form and substance satisfactory to the Purchaser, pursuant
to which each Lender agrees, among other things, not to, directly or indirectly,
exercise or offer, sell, contract to sell, lend, swap, or enter into any other
agreement to transfer the economic consequences of any of the Common Shares or
common share purchase warrants of the Company held by them until December 31,
2010 (a “Lock-Up
Agreement”);
– 19 –
(d) the
Purchaser shall have received at the Execution Time a certificate dated the
Closing Date, signed by an appropriate officer or officers of the Company
addressed to the Purchaser and its counsel, with respect to the articles and
by-laws of the Company, all resolutions of the Company’s board of directors
relating to this Subscription Agreement and the transactions contemplated
hereby, the incumbency and specimen signatures of signing officers and such
other matters as the Purchaser may reasonably request;
(e) the
Purchaser shall have received evidence on or before the Execution Time that all
requisite regulatory approvals, including the approval of the TSX, have been
obtained by the Company in order to complete the Private Placement, other than
the AMEX Approval;
(f) the
Purchaser shall have received evidence on or before the Closing Time that the
AMEX Approval has been obtained;
(g) the
Shares shall have been conditionally approved for listing on the TSX and
AMEX;
(h) the
Purchaser shall have received a certificate from CIBC Mellon Trust Company as to
the number of Common Shares issued and outstanding as at a date no more than two
Business Days prior to the Closing Date;
(i) at
or before the Closing Time, the Purchaser shall have received favourable legal
opinions addressed to the Purchaser, in form and substance satisfactory to the
Purchaser, acting reasonably, dated as of the Closing Date, from Fogler,
Xxxxxxxx LLP, counsel for the Company, and where appropriate, other local
counsel of the Company, which counsel in turn may rely, as to matters of fact,
on certificates of auditors, public officials and officers of the Company, as
appropriate, with respect to the following matters:
|
|
(i)
|
as
to the valid existence of the Company under the laws of the Yukon and as
to the corporate power of the Company to carry out its obligations under
this Subscription Agreement and to issue the
Shares;
|
|
|
(ii)
|
the
Company is a reporting issuer not on the list of defaulting reporting
issuers maintained pursuant to the applicable Securities Laws of the
Qualifying Jurisdiction;
|
|
|
(iii)
|
as
to the authorized capital of the
Company;
|
|
|
(iv)
|
the
Company has all requisite corporate power and authority under the laws of
Canada to carry on its business as presently carried on and to own, lease
and operate its properties and
assets;
|
|
|
(v)
|
none
of the execution and delivery of this Subscription Agreement, the
performance by the Company of its obligations hereunder, or the sale or
issuance of the Shares, will conflict with or result in any breach of the
constating documents or by-laws of the Company, the provisions of any law,
statute, rule or regulation to which the Company is subject or any
resolutions of the directors or shareholders of the
Company;
|
|
|
(vi)
|
this
Subscription Agreement has been duly authorized and executed and delivered
by the Company, and constitutes a valid and legally binding agreement of
the Company enforceable against it in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency, liquidation,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and except as limited by the application of equitable
principals when equitable remedies are sought, and the qualification that
the enforceability of rights of indemnity, contribution and waiver and the
ability to sever unenforceable terms may be limited by applicable
law;
|
|
|
(vii)
|
the
Shares have been authorized and allotted for issuance and will be validly
issued as fully paid and non-assessable securities of the
Company;
|
|
|
(viii)
|
the
offering, issue, sale and delivery of the Shares to the Purchaser in the
Qualifying Jurisdiction in accordance with this Subscription Agreement is
exempt from the prospectus and registration requirements of applicable
Securities Laws and no prospectus will be required to be filed, no other
document will be required to be filed, no proceeding taken and no
approval, permit, consent or authorization of the Securities Commission
will be required to be obtained under applicable Securities Laws to permit
the offering, issue, sale and delivery of the Shares to the Purchaser,
subject to the completion of filings required to be made after the
completion of the Private
Placement;
|
– 20 –
|
|
(ix)
|
other
than a trade that is otherwise exempt from the prospectus and registration
requirements of the Securities Laws, the first trade by the Purchaser in
the Qualifying Jurisdiction of the Shares is a distribution unless at the
time of such trade:
|
|
|
(a)
|
the
Company is and has been a reporting issuer in a jurisdiction of Canada for
the four months immediately preceding the
trade;
|
|
|
(b)
|
at
least four months have elapsed from the “distribution date” (as defined
under the National Instrument) of the
Shares;
|
|
|
(c)
|
the
certificate representing the Shares carries a legend stating “Unless
permitted under securities legislation, the holder of this security must
not trade the security before the date that is four months and a day after
the Closing Date”;
|
|
|
(d)
|
such
trade is not a “control distribution” (as defined in the NI
45-102);
|
|
|
(e)
|
no
unusual effort is made to prepare the market or to create a demand for the
securities that are the subject of such
trade;
|
|
|
(f)
|
no
extraordinary commission or consideration is paid to a person or company
in respect of such trade; and
|
|
|
(g)
|
if
the selling securityholder is an insider or officer of the Company, the
selling securityholder has no reasonable grounds to believe that the
Company is in default of “securities legislation” (as defined in National
Instrument 14-101 – Definitions and
Interpretation); and
|
|
|
(x)
|
the
TSX has conditionally accepted the listing of the Shares subject to
compliance with its conditions outlined in such conditional
acceptance.
|
(j) at
the Closing Time, the Purchaser shall have received a certificate of compliance
with respect to the Company and a reporting issuer certificate for the Company
from the Securities Commission;
(k)
at the
Closing Time, the Purchaser shall have received a favourable legal opinion
addressed to the Purchaser from counsel to the Company, in form and substance
satisfactory to the Purchaser, acting reasonably, dated as of the Closing Date,
with respect to title and other Mining Rights in regards to each of the
Properties (the “Title
Opinion”);
(l) at
the Closing Time, the Purchaser shall have received an undertaking of the
Company to deliver to the Purchaser with 10 business days following the Closing
Date an updated Title Opinion in form and substance satisfactory to the
Purchaser, acting reasonably, which Title Opinion shall include reference to the
results of customary off-title reviews, searches and enquiries in regards to
each of the Properties; and
(m) the
Purchaser shall have completed and be satisfied, in its sole discretion, with
the results of its due diligence investigations regarding the Company, the
Subsidiaries and their respective business.
12. Survival of Representations and
Warranties. All terms, warranties, representations, covenants,
indemnities and agreements herein contained or contained in any documents
delivered pursuant to this Subscription Agreement and in connection with the
transactions herein contemplated shall survive the purchase and sale of the
Shares and continue in full force and effect for the benefit of the Purchaser
and/or the Company, as the case may be, regardless of the Closing of the Private
Placement and regardless of any investigations which may be carried out by the
Purchaser or on its behalf and shall not be limited or prejudiced by any
investigation made by or on behalf of the Purchaser in connection with the
purchase and sale of the Shares or otherwise.
– 21 –
13. Indemnity. (a) The
Purchaser agrees to indemnify and hold harmless the Company and its directors,
officers, employees, agents, advisers and shareholders from and against any and
all loss, liability, claim, damage and expense whatsoever (including, but not
limited to, any and all fees, costs and expenses whatsoever reasonably incurred
in investigating, preparing or defending against any claim, lawsuit,
administrative proceeding or investigation whether commenced or threatened)
arising out of or based upon any representation or warranty of the Purchaser
contained herein or in any document furnished by the Purchaser to the Company in
connection herewith being untrue in any material respect or any breach or
failure by the Purchaser to comply with any covenant or agreement made by the
Purchaser herein or in any document furnished by the Purchaser to the Company in
connection herewith.
(b) The
Company agrees to indemnify and hold harmless the Purchaser and its directors,
officers, employees, agents, advisers and shareholders from and against any and
all loss, liability, claim, damage and expense whatsoever (including, but not
limited to, any and all fees, costs and expenses whatsoever reasonably incurred
in investigating, preparing or defending against any claim, lawsuit,
administrative proceeding or investigation whether commenced or threatened)
arising out of or based upon any representation or warranty of the Company
contained herein or in any document furnished by the Company to the Purchaser in
connection herewith being untrue in any material respect or any breach or
failure by the Company to comply with any covenant or agreement made by the
Company herein or in any document furnished by the Company to the Purchaser in
connection herewith.
14. Modification. Subject
to the terms hereof, neither this Subscription Agreement nor any provision
hereof shall be modified, changed, discharged or terminated except by an
instrument in writing signed by the party against whom any waiver, change,
discharge or termination is sought.
15. Assignment. The
terms and provisions of this Subscription Agreement shall be binding upon and
enure to the benefit of the Purchaser, the Company and their respective
successors and assigns; provided that this Subscription Agreement shall not be
assignable by any party without the prior written consent of the other
party.
16. Miscellaneous and
Counterparts. This Subscription Agreement may be executed in
any number of counterparts, each of which when delivered, either in original or
facsimile form, shall be deemed to be an original and all of which together
shall constitute one and the same document.
17. Governing Law. This
Subscription Agreement shall be governed by and construed in accordance with the
laws of the Province of Ontario and the federal laws of Canada applicable
therein. The Purchaser and the Company hereby irrevocably attorn to the
jurisdiction of the courts of the Province of Ontario with respect to any
matters arising out of this Subscription Agreement.
18. Facsimile
Subscriptions. The Company and the Purchaser shall be entitled
to rely on delivery by facsimile machine or other electronic means of an
executed copy of this Subscription Agreement, including the completed Schedules
hereto, and acceptance by the Company and the Purchaser of such facsimile copy
shall be legally effective to create a valid and binding agreement between the
Purchaser and the Company in accordance with the terms hereof.
19. Entire
Agreement. This Subscription Agreement (including the
Schedules hereto) contains the entire agreement of the parties hereto relating
to the subject matter hereof and there are no representations, covenants or
other agreements relating to the subject matter hereof except as stated or
referred to herein. This Subscription Agreement may be amended or
modified in any respect by written instrument only.
20. Time of
Essence. Time shall be of the essence of this Subscription
Agreement.
21. Currency. Unless
otherwise specified herein, all dollar amounts referred to in this Subscription
Agreement are in Canadian dollars.
– 22 –
22. Further
Assurances. Each of the parties hereto shall do or cause to be
done all such acts and things and shall execute or cause to be executed all such
documents, agreements and other instruments as may reasonably be necessary or
desirable for the purpose of carrying out the provisions and intent of this
Subscription Agreement.
23. Singular and Plural,
etc. Where the context so requires, words importing the
singular number include the plural and vice versa, and words importing gender
shall include the masculine, feminine and neuter genders.
24. Headings. The
headings contained herein are for convenience only and shall not affect the
meaning or interpretation hereof.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
– 23 –
SCHEDULE
A
ACCREDITED
INVESTOR STATUS CERTIFICATE
The
categories listed herein contain certain specifically defined
terms. If you are unsure as to the meanings of those terms, or are
unsure as to the applicability of any category below, please contact your broker
and/or legal advisor before completing this certificate.
In
connection with the purchase by the undersigned Purchaser of the Shares, the
Purchaser hereby represents, warrants, covenants and certifies to the Company
(and acknowledges that the Company and its counsel are relying thereon)
that:
|
|
(a)
|
the
Purchaser is purchasing the Shares as principal for its own account and
not for the benefit of any other
person;
|
|
|
(b)
|
the
Purchaser is an “accredited investor” within the meaning of NI 45-106 on
the basis that the undersigned fits within the category of an “accredited
investor” reproduced below beside which the undersigned has indicated the
undersigned belongs to such category;
and
|
|
|
(c)
|
upon
execution of this Schedule A by the Purchaser, this Schedule A shall be
incorporated into and form a part of the Subscription
Agreement.
|
(PLEASE
CHECK THE BOX OF THE APPLICABLE CATEGORY OF ACCREDITED INVESTOR)
| o | (a) |
a
Canadian financial institution, or a Schedule III bank;
|
|
¨
|
(b)
|
the
Business Development Bank of Canada incorporated under the Business Development Bank of
Canada Act (Canada);
|
|
¨
|
(c)
|
a
subsidiary of any person referred to in paragraphs (a) or (b), if the
person owns all of the voting securities of the subsidiary, except the
voting securities required by law to be owned by directors of that
subsidiary;
|
|
¨
|
(d)
|
a
person registered under the securities legislation of a jurisdiction of
Canada as an adviser or dealer, other than a person registered solely as a
limited market dealer under one or both of the Securities Act
(Ontario) or the Securities Act
(Newfoundland and Labrador);
|
|
¨
|
(e)
|
an
individual registered or formerly registered under the securities
legislation of a jurisdiction of Canada as a representative of a person
referred to in paragraph (d);
|
|
¨
|
(f)
|
the
Government of Canada or a jurisdiction of Canada, or any crown
corporation, agency or wholly owned entity of the Government of Canada or
a jurisdiction of Canada;
|
|
¨
|
(g)
|
a
municipality, public board or commission in Canada and a metropolitan
community, school board, the Comité de gestion de la taxe scolaire de
l’île de Montréal or an intermunicipal management board in
Québec;
|
|
¨
|
(h)
|
any
national, federal, state, provincial, territorial or municipal government
of or in any foreign jurisdiction, or any agency of that
government;
|
|
¨
|
(i)
|
a
pension fund that is regulated by either the Office of the Superintendent
of Financial Institutions (Canada) or a pension commission or similar
regulatory authority of a jurisdiction of
Canada;
|
A-1
|
¨
|
(j)
|
an
individual who, either alone or with a spouse, beneficially owns financial
assets having an aggregate realizable value that before taxes, but net of
any related liabilities, exceeds
$1,000,000;
|
|
¨
|
(k)
|
an
individual whose net income before taxes exceeded $200,000 in each of the
two most recent calendar years or whose net income before taxes combined
with that of a spouse exceeded $300,000 in each of the two most recent
calendar years and who, in either case, reasonably expects to exceed that
net income level in the current calendar
year;
|
|
¨
|
(l)
|
an
individual who, either alone or with a spouse, has net assets of at least
$5,000,000;
|
|
x
|
(m)
|
a
person, other than an individual or investment fund, that has net assets
of at least $5,000,000 as shown on its most recently prepared financial
statements;
|
|
¨
|
(n)
|
an
investment fund that distributes or has distributed its securities only to
(i) a person that is or was an accredited investor at the time of the
distribution, (ii) a person that acquires or acquired securities in the
circumstances referred to in sections 2.10 [Minimum amount
investment] and 2.19 [Additional investment in
investment funds] of NI 45-106, or (iii) a person described in
paragraph (i) or (ii) that acquires or acquired securities under section
2.18 [Investment fund
reinvestment] of NI 45-106;
|
|
¨
|
(o)
|
an
investment fund that distributes or has distributed securities under a
prospectus in a jurisdiction of Canada for which the regulator or, in
Québec, the securities regulatory authority, has issued a
receipt;
|
|
¨
|
(p)
|
a
trust company or trust corporation registered or authorized to carry on
business under the Trust
and Loan Companies Act (Canada) or under comparable legislation in
a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a
fully managed account managed by the trust company or trust corporation,
as the case may be;
|
|
¨
|
(q)
|
a
person acting on behalf of a fully managed account managed by that person,
if that person (i) is registered or authorized to carry on business as an
adviser or the equivalent under the securities legislation of a
jurisdiction of Canada or a foreign jurisdiction, and (ii) in Ontario, is
purchasing a security that is not a security of an investment
fund;
|
|
¨
|
(r)
|
a
registered charity under the Income Tax Act (Canada)
that, in regard to the trade, has obtained advice from an eligibility
adviser or an adviser registered under the securities legislation of the
jurisdiction of the registered charity to give advice on the securities
being traded;
|
|
¨
|
(s)
|
an
entity organized in a foreign jurisdiction that is analogous to any of the
entities referred to in paragraphs (a) to (d) or paragraph (i) in form and
function;
|
|
¨
|
(t)
|
a
person in respect of which all of the owners of interests, direct,
indirect or beneficial, except the voting securities required by law to be
owned by directors, are persons that are accredited
investors;
|
|
¨
|
(u)
|
an
investment fund that is advised by a person registered as an adviser or a
person that is exempt from registration as an adviser,
or
|
|
¨
|
(v)
|
a
person that is recognized or designated by the securities regulatory
authority or, except in Ontario and Québec, the regulator as (i) an
accredited investor, or (ii) an exempt purchaser in Alberta or British
Columbia.
|
A–2
For the
purposes hereof, the following definitions are included for
convenience:
|
|
(a)
|
“Canadian
financial institution” means (i) an
association governed by the Cooperative Credit
Associations Act (Canada) or a central cooperative credit society
for which an order has been made under section 473(1) of that Act, or (ii)
a bank, loan corporation, trust company, trust corporation, insurance
company, treasury branch, credit union, caisse populaire, financial
services cooperative, or league that, in each case, is authorized by an
enactment of Canada or a jurisdiction of Canada to carry on business in
Canada or a jurisdiction of Canada;
|
|
|
(b)
|
“control
person” has
the same meaning as in securities legislation except in Manitoba,
Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut,
Ontario, Xxxxxx Xxxxxx Island and Quebéc where control person means any
person that holds or is one of a combination of persons that holds (i) a
sufficient number of any of the securities of an issuer so as to affect
materially the control of the issuer, or (ii) more than 20% of the
outstanding voting securities of an issuer except where there is evidence
showing that the holding of those securities does not affect materially
the control of the issuer;
|
|
|
(c)
|
“entity”
means a company, syndicate, partnership, trust or unincorporated
organization;
|
|
|
(d)
|
“financial
assets” means cash, securities, or a contract of insurance, a deposit or
an evidence of a deposit that is not a security for the purposes of
securities legislation;
|
|
|
(e)
|
“founder” means, in respect
of an issuer, a person who, (i) acting alone, in conjunction, or in
concert with one or more persons, directly or indirectly, takes the
initiative in founding, organizing or substantially reorganizing the
business of the issuer, and (ii) at the time of the trade is actively
involved in the business of the
issuer;
|
|
|
(f)
|
“fully
managed account” means an account of a client for which a person makes the
investment decisions if that person has full discretion to trade in
securities for the account without requiring the client’s express consent
to a transaction;
|
|
|
(g)
|
“investment
fund” means a mutual fund or a non-redeemable investment fund, and, for
greater certainty in British Columbia, includes an employee venture
capital corporation that does not have a restricted constitution, and is
registered under Part 2 of the Employee Investment Act
(British Columbia), R.S.B.C. 1996 c. 112, and whose business objective is
making multiple investments and a venture capital corporation registered
under Part 1 of the Small Business Venture Capital
Act (British Columbia), R.S.B.C. 1996 c. 429 whose business
objective is making multiple
investments;
|
|
|
(h)
|
“related
liabilities” means liabilities incurred or assumed for the purpose of
financing the acquisition or ownership of financial assets and liabilities
that are secured by financial
assets;
|
|
|
(i)
|
“Schedule
III bank” means an
authorized foreign bank named in Schedule III of the Bank Act
(Canada);
|
|
|
(j)
|
“spouse”
means an individual who(i)is married to another individual and is not
living separate and apart within the meaning of the Divorce Act (Canada),
from the other individual, (ii) is living with another individual in a
marriage-like relationship, including a marriage-like relationship between
individuals of the same gender, or (iii) in Alberta, is an individual
referred to in paragraph (i) or (ii), or is an adult interdependent
partner within the meaning of the Adult Interdependent
Relationships Act (Alberta);
and
|
|
|
(k)
|
“subsidiary”
means an issuer that is controlled directly or indirectly by another
issuer and includes a subsidiary of that
subsidiary.
|
In NI
45-106 a person or company is considered to be an affiliated entity of another
person or company if one is a subsidiary entity of the other, or if both are
subsidiary entities of the same person or company, or if each of them is
controlled by the same person or company.
A–3
In NI
45-106 a person (first person) is considered to control another person (second
person) if (a) the first person, directly or indirectly,
beneficially owns or exercises control or direction over securities of the
second person carrying votes which, if exercised, would entitle the first person
to elect a majority of the directors of the second person, unless that first
person holds the voting securities only to secure an obligation, (b) the second
person is a partnership, other than a limited partnership, and the first person
holds more than 50% of the interests of the partnership, or (c) the second
person is a limited partnership and the general partner of the limited
partnership is the first person.
In NI
45-106 a trust company or trust corporation described in paragraph (p) above of
the definition of “accredited investor” (other than in respect of a trust
company or trust corporation registered under the laws of Xxxxxx Xxxxxx Island
that is not registered or authorized under the Trust and Loan Companies Act
(Canada) or under comparable legislation in another jurisdiction of
Canada) is deemed to be purchasing as principal.
In NI
45-106 a person described in paragraph (q) above of the definition of
“accredited investor” is deemed to be purchasing as principal.
The
foregoing representations contained in this certificate are true and accurate as
of the date of this certificate and will be true and accurate as of the Closing
Time. If any such representations shall not be true and accurate
prior to the Closing Time, the undersigned shall give immediate written notice
of such fact to the Company prior to the Closing Time.
|
Dated:
|
March 9, 2010 |
Signed:
|
/s/ Xxxx Xxxx | ||
|
Linear
Gold Corp.
|
|||||
|
Print
the name of Purchaser
|
|||||
|
Print
name and title of Authorized Signing
Officer
|
|||||
A–4
