AGENCY AGREEMENT
November
19, 2009
Crosshair
Exploration & Mining Corp.
1240 –
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx,
Xxxxxxx Xxxxxxxx
X0X
0X0
Attention:
Xx. Xxxx X. Xxxxxxxx, Chief Executive Officer
Dear
Sir:
The
undersigned, Xxxxx Securities Limited (the “Agent”) understands that
Crosshair Exploration & Mining Corp. (the “Corporation”) proposes to
issue and sell: (i) 12,000,000 common shares (“Common Shares”) in the capital
of the Corporation to be issued as “flow-through shares” (the “Flow-Through Shares”) within
the meaning of the Tax Act (as hereinafter defined) at a price of $0.25 per
Flow-Through Share (the “FTS
Issue Price”) for gross proceeds of $3,000,000 (the “Flow-Through Offering”); and
(ii) 5,000,000 units of the Corporation (the “Units”) at a price of $0.20
per Unit (the “Unit Issue
Price”) for gross proceeds of $1,000,000 (the “Unit Offering” and together
with the Flow-Through Offering, the “Offering”). Each
Unit shall consist of one Common Share (a “Unit Share”) and one Common
Share purchase warrant (a “Warrant”). Each Warrant shall
be exercisable to acquire one Common Share (a “Warrant Share”) at an exercise
price of $0.30 per Warrant Share on or before 5:00 p.m. (Vancouver time) on the
day that is 24 months following the Closing Date (as hereinafter defined) (the
“Expiry Time”) subject
to adjustments in certain events. The description of the Warrants
herein is a summary only and is subject to the specific attributes and detailed
provisions of the Warrants to be set forth in the Warrant Certificates (as
hereinafter defined). In case of any inconsistency between the
description of the Warrants in this Agreement (as hereinafter defined) and the
terms of the Warrants as set forth in the Warrant Certificates, the provisions
of the Warrant Certificates shall govern. The Units and the Flow-Through Shares
are hereinafter collectively referred to as the “Offered
Securities”.
Upon and
subject to the terms and conditions set forth herein, the Corporation hereby
appoints the Agent, and the Agent hereby agrees to act, as exclusive Agent to
the Corporation to effect the Offering on behalf of the Corporation on a
commercially reasonable best-efforts agency basis to Purchasers (as hereinafter
defined) in the Designated Provinces (as hereinafter defined) and in such other
jurisdictions consented to by the Corporation where the Offered Securities may
be lawfully sold pursuant to the terms and conditions hereof. The
Corporation acknowledges and agrees that the Agent shall not be under any
obligation whatsoever to purchase any of the Offered Securities, although the
Agent may subscribe for Offered Securities if it so desires.
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The Agent
shall be entitled to appoint a soliciting dealer group consisting of other
registered dealers acceptable to the Corporation (each a “Selling Firm”) for the
purposes of arranging for purchasers of the Offered Securities. The
Agent shall ensure that any Selling Firm shall agree with the Agent to comply
with all applicable laws (including applicable Securities Laws (as hereinafter
defined)) and with the covenants and obligations of the Agent
herein. Any fee payable to such dealers shall be for the account of
the Agent and shall be negotiated between the Agent and the Selling
Firm. The Agent agrees, however, that the Compensation Options (as
hereinafter defined) will not be offered and will not be issued by the
Corporation except to a Person (as hereinafter defined) who makes the
representations and warranties to the Corporation in Sections 3(b) and
(c).
In
consideration of the services to be rendered by the Agent hereunder and all
other matters in connection with the issue and sale of the Offered Securities,
the Corporation shall pay to the Agent at the Closing (as hereinafter defined) a
cash commission (the “Commission”) equal to 8% of
the gross proceeds realized by the Corporation in respect of the sale of the
Offered Securities. The obligation of the Corporation to pay the
Commission shall arise at the Closing and the Commission shall be fully earned
by the Agent at the Closing Time (as hereinafter defined).
As
additional compensation for the services to be rendered by the Agent hereunder,
the Corporation will issue to the Agent non-transferrable agent’s warrants (the
“Compensation Options”)
to purchase: (i) such number of Common Shares (the “Optioned Shares”) as is equal
to 10% of the number of Flow-Through Shares sold pursuant to the Flow-Through
Offering at an exercise price of $0.255 per Optioned Share at any time before
5:00 p.m. (Vancouver time) on the date that is 24 months following the Closing
Date; and (ii) such number of Units (the “Optioned Units”) as is equal
to 10% of the number of Units sold pursuant to the Unit Offering at an exercise
price of $0.255 per Optioned Unit at any time before 5:00 p.m. (Vancouver time)
on the date that is 24 months following the Closing Date. Each
Optioned Unit shall consist of one Common Share (an “Optioned Unit Share”) and one Common
Share purchase warrant of the Corporation (an “Optioned Warrant”) exercisable
to acquire one Common Share (an “OptionedWarrant Share”) at an exercise
price of $0.30 per Optioned Warrant Share on or before 5:00 p.m. (Vancouver
time) on the day that is 24 months following the Closing Date. At the Closing
Time, the Corporation shall execute and deliver to the Agent (or its agents, as
the case may be) certificates evidencing the Compensation Options (the “Compensation Option
Certificates”) to which the Agent is entitled in a form to be agreed upon
by the Agent and the Corporation, acting reasonably.
The
parties acknowledge that the Offered Securities, the Compensation Options and
the Underlying Securities (as hereinafter defined) have not been and will not be
registered under the U.S. Securities Act (as hereinafter defined) and may not be
offered or sold in the United States (as hereinafter defined) or to, or for the
account or benefit of, U.S. Persons (as hereinafter defined), nor may the
Compensation Options or the Warrants be exercised in the United States or by or
on behalf of a U.S. Person.
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DEFINITIONS
In this
Agreement, in addition to the terms defined above or elsewhere in this
Agreement, the following terms shall have the following meanings:
“affiliate”, “associate”, “distribution”, “misrepresentation”, “material fact” and “material change”, shall have the
respective meanings ascribed thereto in the Securities Act (British
Columbia);
“Agreement” means this
agreement resulting from the acceptance by the Corporation of the offer made by
the Agent hereby, including all schedules hereto, as amended or supplemented
from time to time;
“Business Day” means a day
which is not a Saturday, Sunday or statutory or civic holiday in the Cities of
Vancouver, British Columbia or Toronto, Ontario;
“Canadian Exploration Expense”
or “CEE” means Canadian
exploration expense described in paragraph (f) of the definition of “Canadian
exploration expense” in subsection 66.1(6) of the Tax Act, excluding any amounts
of CEE which may mot be renounced to a Purchaser;
“Claim” shall have the meaning
ascribed thereto in subsection 9(c);
“Closing” means the closing on
the Closing Date of the transaction of purchase and sale of the Flow-Through
Shares and the Units as contemplated by this Agreement and the Subscription
Agreements;
“Closing Date” means November 19, 2009
or such other date as the Corporation and the Agent may agree;
“Closing Time” means 11:00 a.m.
(Toronto time) on the Closing Date or such other time on the Closing Date as the
Corporation and the Agent may agree;
“Common Shares” means the
common shares of the Corporation which the Corporation is authorized to issue as
constituted on the date hereof;
“Corporation’s Auditors” means Davidson &
Company LLP, or such other firm of chartered accountants as the Corporation may
have appointed or may from time to time appoint as auditors of the
Corporation;
"CRA" means the Canada
Revenue Agency;
“Designated Provinces” means,
collectively, the provinces of Canada in which Purchasers are
resident;
“Disclosure Documents” means
all publicly available press releases, material change reports, financial
statements, information circulars, business acquisition reports, technical
reports and other documents that have been disclosed by the Corporation to the
public and filed with the Securities Regulators pursuant to applicable
Securities Laws;
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“Encumbrance” means any
encumbrance, lien, charge, hypothec, pledge, mortgage, title retention
agreement, security interest of any nature, adverse claim, exception,
reservation, easement, restriction, right of occupation, any matter capable of
registration against title, option, right of pre-emption, privilege or any
contract to create any of the foregoing;
“Engagement Letter” means the
letter agreement dated as of October 20, 2009 between the Corporation and the
Agent relating to the Offering;
“Environmental Laws” means all
applicable federal, provincial, municipal or local laws, regulations, orders,
governmental decrees or ordinances with respect to environmental, health or
safety matters;
“Exchange Conditions” means
each of the conditions of the TSX or NYSE Amex required to be satisfied prior to
the TSX’s or NYSE Amex’s, respectively, final acceptance of the
Offering;
“Flow-Through Mining
Expenditure” means an expense which is a “flow-through mining
expenditure” as defined in subsection 127(9) of the Tax Act;
“GAAP” means generally accepted
accounting principles in Canada;
“Governmental Authority” means
and includes, without limitation, any national or 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;
“Indemnified Party” shall have
the meaning ascribed thereto in subsection 9(a);
“Material Adverse Effect” when
used herein 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 of the board of directors is probable), event,
violation, inaccuracy, circumstance or effect that is, or will result in, a
material change that is materially adverse to the business, assets (including
intangible assets), capitalization, financial condition or results of operations
of the Corporation and the Subsidiaries (taken as a whole);
“NI 45-102” means National
Instrument 45-102 – Resale of
Securities;
“NI 45-106” means National
Instrument 45-106 – Prospectus
and Registration Exemptions;
“NI 51-102” means National
Instrument 51-102 – Continuous
Disclosure Obligations;
“NYSE Amex” means the NYSE Amex
LLC;
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“Person” shall mean any
individual, company, corporation, partnership, limited partnership, joint
venture, sole proprietorship, association, trust, trustee or other legal
entity;
“Prescribed Forms” means the
forms prescribed from time to time under subsection 66(12.7) of the Tax Act
filed or to be filed by the Corporation within the prescribed times renouncing
to the Purchaser the Resource Expenses incurred pursuant to its Subscription
Agreement and all parts or copies of such forms required by CRA to be delivered
to the Purchaser;
“Prescribed Relationship” means
a relationship between the Corporation and the Purchaser where the Purchaser and
the Corporation are related or otherwise do not deal at arm’s length for
purposes of the Tax Act;
“Purchasers” means the Persons
(which may include the Agent) who, as purchasers, acquire the Offered Securities
by duly completing, executing and delivering the Subscription
Agreements;
“Resource Expense” means an expense which is CEE and which qualifies as a
Flow-Through Mining Expenditure, which is incurred on or after the Closing Date
and on or before the Termination Date which may be renounced by the Corporation
pursuant to subsection 66(12.6) of the Tax Act with an effective date not later
than December 31, 2009 and in respect of which, but for the renunciation, the
Corporation would be entitled to a deduction from income for income tax
purposes;
“Securities Laws” means, unless
the context otherwise requires, all applicable securities laws and regulations
of each of the Designated Provinces, together with all written instruments,
rules and orders having the force of law of the securities regulatory
authorities in such jurisdictions;
“Securities Regulators” means,
collectively, the securities regulators or other securities regulatory
authorities in the Designated Provinces;
“Subscription Agreements”
means, collectively, the subscription agreements in the form agreed upon by the
Agent and the Corporation pursuant to which Purchasers agree to subscribe for
and purchase the Offered Securities as contemplated herein and shall include,
for greater certainty, all schedules and exhibits thereto;
“subsidiary” shall have the
meaning ascribed thereto in the Business Corporations Act
(British Columbia);
“Subsidiaries” means Target
Exploration & Mining Corp. and 448018 Exploration Inc.;
“Tax Act” means the Income Tax Act (Canada), as
amended, re-enacted or replaced from time to time;
“Technical Report” means the technical report posted on SEDAR entitled “Technical Report on the CMBNW Property, Newfoundland and Labrador, Canada” dated June 22,
“Technical Report” means the technical report posted on SEDAR entitled “Technical Report on the CMBNW Property, Newfoundland and Labrador, Canada” dated June 22,
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2009, as
prepared by Xxxxx X. Xxxx, M. Sc., P. Geo. of Xxxxx Xxxxxx Xxxxxx Xxxxxx
Associates Inc.;
“Termination Date” means
December 31, 2010;
“TSX” means the Toronto Stock
Exchange;
“Underlying Securities” means,
collectively, the Warrant Shares issuable upon exercise of the Warrants, the
Optioned Shares and Optioned Unit Shares issuable upon exercise of the
Compensation Options and the Optioned Warrant Shares issuable upon exercise of
the Optioned Units;
“United States” means the United States
as defined in Regulation S of the U.S. Securities Act;
“U.S. Person” means a U.S.
person as that term is defined in Rule 902(k) of Regulation S of the U.S.
Securities Act;
“U.S. Securities Act” means the
United States Securities Act of 1933, as amended;
“Warrant Certificates” means
the certificates to be dated as of and issued on the Closing Date representing
the Warrants in a form to be agreed upon by the Corporation and the Agent, each
acting reasonably.
TERMS
AND CONDITIONS
1. (a) Sale on Exempt
Basis. The Agent shall use commercially reasonable
best-efforts to arrange for the purchase of the Offered Securities:
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(i)
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in
the Designated Provinces in compliance with all the Securities Laws on a
private placement basis;
and
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(ii)
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subject
to the approval of the Corporation, in other jurisdictions (other than the
United States) on a private placement basis in compliance with all
applicable securities laws of such other
jurisdictions.
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(b) Filings. The Corporation undertakes to file or
cause to be filed all forms or undertakings required to be filed by the
Corporation in
connection with the purchase and sale of the Offered Securities so that the
distribution of the Offered Securities may lawfully occur without the necessity
of filing a prospectus, a registration statement or an offering memorandum in
Canada (but on terms that will permit Flow-Through Shares and the Common Shares
and Warrants comprising the Units acquired by the Purchasers in the Designated
Provinces to be sold to such Purchasers in the Designated Provinces subject to,
and in compliance with applicable hold periods and other restrictions under
applicable Securities Laws), and the Agent undertakes to use commercially
reasonable efforts to cause Purchasers to complete any forms required by
Securities Laws or other applicable securities laws and by the TSX and/or the
NYSE Amex. All fees payable in connection with such filings under all
applicable Securities Laws shall be at the expense of the
Corporation.
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(c) No Offering
Memorandum. Neither the Corporation nor the Agent shall: (i)
provide to prospective Purchasers any document or other material or information
that would constitute an offering memorandum within the meaning of Securities
Laws; or (ii) engage in any form of general solicitation or general advertising
in connection with the offer and sale of the Offered Securities, including but
not limited to, causing the sale of the Offered Securities to be advertised in
any newspaper, magazine, printed public media, printed media or similar medium
of general and regular paid circulation, broadcast over radio, television or
telecommunications, including electronic display, or conduct any seminar or
meeting relating to the offer and sale of the Offered Securities whose attendees
have been invited by general solicitation or advertising.
2. Covenants. The
Corporation hereby covenants to the Agent and to the Purchasers, and
acknowledges that each of them is relying on such covenants in purchasing the
Offered Securities, that the Corporation shall:
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(i)
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allow
the Agent and its representatives to conduct all due diligence regarding
the Corporation which the Agent may reasonably require to be conducted
prior to the Closing Date;
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(ii)
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for
a period of 12 months after the Closing Date, use commercially reasonable
efforts to maintain its status as a “reporting issuer” under Securities
Laws of the provinces of British Columbia, Alberta, Saskatchewan,
Manitoba, Ontario, New Brunswick, Nova Scotia, Xxxxxx Xxxxxx Island and
Newfoundland, not in default of any requirement of such Securities
Laws;
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(iii)
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for
a period of 12 months after the Closing Date, use commercially reasonable
efforts to maintain the listing of the Common Shares on the TSX and NYSE
Amex or such other recognized stock exchange or quotation system as the
Agent may approve, acting
reasonably;
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(iv)
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duly
execute and deliver the Subscription Agreements (which have been accepted
by the Corporation and duly completed and executed by the Purchasers), the
certificates representing the Flow-Through Shares, the Common Shares
partially comprising the Units, the Warrant Certificates and the
Compensation Option Certificates at the Closing Time, and comply with and
satisfy all terms, conditions and covenants therein contained to be
complied with or satisfied by the
Corporation;
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(v)
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use
commercially reasonable efforts to fulfil or cause to be fulfilled, at or
prior to the Closing Date, each of the conditions required to be fulfilled
by it set out in Section 5;
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(vi)
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ensure
that at the Closing Time the Flow-Through Shares and the Common Shares
partially comprising the Units shall be duly issued as fully paid and
non-assessable shares in the capital of the Corporation on payment of the
purchase price therefor;
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(vii)
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ensure
that at the Closing Time the Warrants shall be validly created and shall
have attributes corresponding in all material respects to the description
thereof set forth in this Agreement and the Subscription
Agreements;
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(viii)
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ensure
that at all times prior to the expiry of the Warrants, a sufficient number
of Warrant Shares are allotted and reserved for issuance upon the due
exercise of the Warrants in accordance with their
terms;
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(ix)
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ensure
that the Warrant Shares, upon the due exercise of the Warrants, shall be
duly issued as fully paid and non-assessable shares in the capital of the
Corporation on payment of the purchase price
therefor;
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(x)
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ensure
that at the Closing Time the Compensation Options shall be validly created
and shall have attributes corresponding in all material respects to the
description set forth in this
Agreement;
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(xi)
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ensure
that at all times prior to the expiry of the Compensation Options or the
Optioned Warrants, as applicable, a sufficient number of Optioned Shares,
Optioned Unit Shares and Optioned Warrant Shares are allotted and reserved
for issuance upon the due exercise of the Compensation Options or the
Optioned Warrants, as applicable, in accordance with their
terms;
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(xii)
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ensure
that the Optioned Shares and Optioned Unit Shares, upon the due exercise
of the Compensation Options and the Optioned Warrant Shares upon the due
exercise of the Optioned Warrants, shall be duly issued as fully paid and
non-assessable shares in the capital of the Corporation on payment of the
purchase price therefor;
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(xiii)
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use
commercially reasonable efforts to ensure that the Flow-Through Shares,
the Common Shares partially comprising the Units, the Warrant Shares, the
Optioned Shares, the Optioned Units Shares and the Optioned Warrant Shares
are, when issued, listed and posted for trading on the TSX and NYSE Amex
upon their respective dates of
issuance;
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(xiv)
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subject
to applicable law, obtain the prior approval of the Agent as to the
content and form of any press release relating to the
Offering;
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(xv)
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execute
and file with the Securities Regulators all forms, notices and
certificates relating to the Offering required to be filed pursuant to the
Securities Laws in the time required by applicable Securities Laws,
including, for greater certainty, all forms, notices and certificates set
forth in the opinions delivered to the Agent pursuant to this Agreement
required to be filed by the
Corporation;
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(xvi)
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incur
Resource Expenses in an amount equal to the aggregate FTS Issue Price for
the Flow-Through Shares being issued and sold pursuant to the Flow-Through
Offering on or before the Termination Date in accordance with the
Subscription Agreements and renounce to each Purchaser of Flow-Through
Shares, with an effective date no later than December 31, 2009, pursuant
to subsection 66(12.6)
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of
the Tax Act, and, in respect of Resource Expenses incurred by the
Corporation in 2010, pursuant to subsection 66(12.66) of the Tax Act,
Resource Expenses in an amount equal to the aggregate FTS Issue Price for
the Flow-Through Shares being issued and sold pursuant to the Flow-Through
Offering;
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(xi)
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the Corporation shall deliver to each Purchaser,
within the time prescribed by the Tax Act, the relevant Prescribed Forms,
fully completed and executed, renouncing to each Purchaser’s Resource
Expenses in an amount equal to the aggregate FTS Issue Price for the
Flow-Through Shares being issued and sold pursuant to the Flow-Through
Offering with an effective date of no later than December 31,
2009;
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(xii)
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ensure
that the Resource Expenses to be renounced by the Corporation to the
Purchasers of Flow-Through
Shares:
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(A)
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will
constitute Resource Expenses on the effective date of the
renunciation;
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(B)
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will
not include expenses that are (A) “Canadian exploration and development
overhead expenses” (as defined in the regulations to the Tax Act for
purposes of paragraph 66(12.6)(b) of the Tax Act) of the Corporation, (B)
amounts which constitute specified expenses for seismic data described in
paragraph 66(12.6)(b.1) of the Tax Act, or (C) any expenses for prepaid
services or rent that do not qualify as outlays and expenses for the
period as described in the definition of “expense” in subsection 66(15) of
the Tax Act;
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(C)
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will
not include any amount that has previously been renounced by the
Corporation to the Purchasers or to any other Person;
and
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(D)
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would
be deductible by the Corporation in computing its income for the purposes
of Part I of the Tax Act but for the renunciation to the
Purchasers.
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(xiii)
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subject
to the requirements of subsection 66(12.73) of the Tax Act, not reduce the
amount renounced to the Purchasers of Flow-Through Shares pursuant to
subsection 66(12.6) of the Tax
Act;
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(xiv)
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not
be subject to the provisions of subsection 66(12.67) of the Tax Act in a
manner which impairs its ability to renounce Resource Expenses to each
Purchaser of Flow-Through Shares in an amount equal to the aggregate FTS
Issue Price paid in respect of each Purchaser’s Flow-Through
Shares;
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(xv)
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if
the Corporation receives, or becomes entitled to receive, any government
assistance which is described in paragraph (a) of the definition of
“excluded obligation” in subsection 6202.1(5) of the Regulations to the
Tax Act and the receipt of or entitlement to receive such government
assistance has or will
have
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the
effect of reducing the amount of CEE validly renounced to a Purchaser of
Flow-Through Shares hereunder to less than the aggregate FTS Issue Price
paid in respect of the Flow-Through Shares, remit to such Purchaser the
benefit of all amounts received or receivable in respect of such
government assistance to the extent of such
reduction;
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(xvi)
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use
the proceeds of the Flow-Through Offering to finance the exploration
expenditures on its Canadian properties and for general working capital
purposes and use the net proceeds of the
Unit Offering to finance the exploration expenditures on its
properties and for general working capital purposes;
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(xvii)
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file
with the CRA within the time prescribed by subsection 66(12.68) of the Tax
Act the forms prescribed for the purposes of such legislation together
with a copy of the applicable Subscription Agreement or any “selling
instrument” contemplated by such legislation and forthwith following such
filings provide to the Purchaser of Flow-Through Shares a copy of such
forms certified by two officers of the
Corporation;
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(xviii)
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file
with the CRA, before March of the year following a particular year, any
return required to be filed under Part XII.6 of the Tax Act in respect of
the particular year, and will pay any tax or other amount owing in respect
of that return on a timely
basis;
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(xix)
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if
the Corporation does not incur and renounce to a Purchaser of Flow-Through
Shares, effective on or before December 31, 2009, Resource Expenses equal
to the Subscription Proceeds under the Flow-Through Offering, and provided
the Purchaser is not in breach of any of its representations under the
Subscription Agreement which would prevent the renunciation of such
expenses, indemnify and hold harmless each of the Purchasers and each of
the partners thereof if a Purchaser is a partnership or a limited
partnership (for the purposes of this paragraph each an “Indemnified Person”) as
to, and pay to the Indemnified Person on or before the twentieth Business
Day following the Termination Date, an amount equal to the amount of any
tax (within the meaning of paragraph (c) of the proposed definition of
“excluded obligation” in subsection 6202.1(5) of the regulations to the
Tax Act) payable under the Tax Act (and under any corresponding provincial
legislation) by any Indemnified Person as a consequence of such failure.
In the event that the amount renounced by the Corporation to a Purchaser
pursuant to subsection 66(12.73) of the Tax Act is reduced for any reason,
the Corporation shall indemnify and hold harmless each Indemnified Person
as to, and pay to the Indemnified Person, an amount equal to the amount of
any tax (within the meaning of paragraph (c) of the proposed definition of
“excluded obligation” in subsection 6202.1(5) of the regulations to the
Tax Act) payable under the Tax Act (and under any corresponding provincial
legislation) by the Indemnified Person as a consequence of such reduction,
provided that nothing in this paragraph
shall derogate from any rights or remedies the Purchaser may have at
common law with respect to liabilities
other
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than those payable under the Tax
Act and any corresponding provincial legislation;
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(xx)
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incur and renounce
Resource Expenses pursuant to the Subscription Agreements pro rata by the
number of Flow-Through Shares issued or to be issued pursuant thereto
before incurring and renouncing Resource Expenses pursuant to any other
agreement which the Corporation has entered into or shall enter into with
any Person with respect to the issue of Flow-Through Shares. The
Corporation shall not (a)
enter into any other agreement which would prevent or restrict its ability
to renounce Resource Expenses to the Purchasers in the amount of their
respective subscription amounts, or (b)
without the prior written consent of the Agent (which consent may not be
unreasonably withheld) enter into any agreement in 2009 with any Person
which provides for the issue of Flow-Through Shares or securities
exchangeable or exercisable for, or convertible into, Flow-Through Shares
at an effective price per Flow-Through Share which is less than the FTS
Issue Price. If the Corporation is required under the Tax Act or otherwise
to reduce Resource Expenses previously renounced to the Purchasers, such
reduction shall, to the extent possible, be made pro rata based on the
number of Flow-Through Shares issued pursuant to the Subscription
Agreements only after it has first reduced to the extent possible all CEE
renounced to Persons other than the Purchasers under any subsequent
agreement;
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(xxi)
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keep
proper books, records and accounts of all Resource Expenses and all
transactions affecting the amount of Resource Expenses to be renounced to
Purchasers of Flow-Through Shares, and upon reasonable notice, to make
such books, records and accounts available for inspection and audit by or
on behalf of the Purchasers of Flow-Through Shares;
and
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(xxii)
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not
issue, enter into any agreement to issue or announce the issuance of any
Common Shares or any securities convertible into or exchangeable for or
exercisable to acquire Common Shares, other than (A) as contemplated
herein, (B) pursuant to the grant or exercise of stock options and other
similar issuances pursuant to the share incentive plan of the Corporation
and other share compensation arrangements existing on the date hereof, (C)
pursuant to the exercise of outstanding warrants, or (D) in connection
with any property acquisitions or existing property agreements for a
period of 120 days following the Closing Date, without the prior written
consent of the Agent, such consent not to be unreasonably
withheld.
|
3. (a) Representations and Warranties of the
Corporation. The Corporation represents and warrants to the
Agent and to the Purchasers, and acknowledges that each of them is relying upon
such representations and warranties in purchasing the Offered Securities,
that:
|
|
(i)
|
each
of the Corporation and every Subsidiary 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;
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(ii)
|
the
Corporation has all requisite corporate power, authority and capacity to
enter into this Agreement and to perform the transactions contemplated
herein, including, without limitation, to issue the Offered Securities,
and each of the Corporation and the Subsidiaries has the requisite
corporate power, authority and capacity to own, lease and operate its
properties and assets and carry on its business as described in the
Disclosure Documents and no steps or proceedings have been taken by any
Person, voluntary or otherwise, requiring or authorizing its dissolution
or winding-up;
|
|
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(iii)
|
the
Corporation owns all of the issued and outstanding shares of the
Subsidiaries, all of the issued and outstanding shares of the Subsidiaries
are issued as fully paid and non-assessable shares, free and clear of all
Encumbrances, claims or demands whatsoever
and no Person has any agreement, option, right or privilege (whether
pre-emptive or contractual) capable of becoming an agreement, for the
purchase from the Corporation or the Subsidiaries of any interest in
any of the shares in the capital of any
Subsidiary;
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(iv)
|
the
Corporation has no material direct or indirect subsidiaries or any
investment or proposed investment in any Person other than the
Subsidiaries;
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(v)
|
each
of the Corporation and the Subsidiaries is conducting its business in
compliance in all material respects with all applicable laws, rules and
regulations in each jurisdiction in which its business is carried on and
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;
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(vi)
|
the
Corporation is a reporting issuer under the Securities Laws of the
provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario,
New Brunswick, Nova Scotia, Xxxxxx Xxxxxx Island and Newfoundland and
Labrador, is not in default of any requirement of the Securities Laws and
is not included on a list of defaulting reporting issuers maintained by
the Securities Regulators of such
provinces;
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(vii)
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at
the Closing Time, all consents, approvals, permits, authorizations or
filings as may be required to be made or obtained by the Corporation under
the Securities Laws necessary for the execution and delivery of this
Agreement, the Subscription Agreements, the certificates representing the
Flow-Through Shares, the Common Shares partially comprising the Units, the
Warrant Certificates and the Compensation Option Certificates and the
consummation of the transactions contemplated hereby and thereby, will
have been made or obtained, as applicable (other than the filing of
reports required under applicable Securities Laws within the prescribed
time periods and the filing of standard documents with the TSX and the
NYSE Amex, which documents shall be filed as soon as practicable after the
Closing Date and, in any event, within 10 Business Days of the Closing
Date
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or
within such other deadline imposed by applicable Securities Laws or the
TSX or the NYSE Amex);
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(viii)
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the
Flow-Through Shares, the Common Shares partially comprising the Units, the
Warrant Shares, the Optioned Shares, the Optioned Unit Shares and the
Optioned Warrant Shares have been authorized and allotted for issuance to
the Purchasers or the Agent (as the case may be) and, upon the due
exercise of the Warrants, Compensation Options and Optioned Warrants in
accordance with the respective provisions thereof, and payment of the
purchase price therefor, the Warrant Shares, Optioned Shares and Optioned
Unit Shares, and Optioned Warrant Shares, respectively, will be validly
issued as fully paid and non-assessable shares in the capital of the
Corporation;
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(ix)
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the
Warrants have been authorized and validly created for issuance to the
Purchasers;
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(x)
|
the
common shares in the capital of the Corporation are listed and posted for
trading on the TSX and the NYSE Amex and all necessary notices and filings
have been made with and all necessary consents, approvals and
authorizations have been obtained by the Corporation from the TSX and the
NYSE Amex subject to the satisfaction of the Exchange Conditions within
the time required (subject to any extensions permitted by the TSX or the
NYSE Amex and agreed to by the Agents, in writing), to ensure that the
Flow-Through Shares and the Common Shares partially comprising the Units,
the Warrant Shares issuable upon exercise of the Warrants, the Optioned
Shares and Optioned Unit Shares issuable upon exercise of the Compensation
Options and the Optioned Warrant Shares issuable upon exercise of the
Optioned Warrants will be listed and posted for trading on the TSX and the
NYSE Amex upon their
issuance;
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(xi)
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the
Flow-Through Shares, the Units and the Underlying Securities will not be
subject to a restricted period or to a statutory hold period under the
Securities Laws or to any resale restriction under the policies of the TSX
or the NYSE Amex which extends beyond four months and one day after the
Closing Date, subject to the conditions set forth in Section 2.5 of NI
45-102;
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(xii)
|
the
execution and delivery of this Agreement, the Subscription Agreements, the
Warrant Certificates and the Compensation Option Certificates, the
performance by the Corporation of its obligations hereunder or thereunder,
including the issuance and sale of the Flow-Through Shares, the Units and
the issuance of the Compensation Options, does not and will not conflict
with or result in a material 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) to the best of its knowledge, any law,
statute, rule or regulation applicable to the Corporation including,
without limitation, the Securities Laws and the policies, rules and
regulations of the TSX and the NYSE Amex; (B) the Notice of Articles,
Articles or resolutions of the Corporation which are in effect at the date
hereof; (C) any mortgage, note, indenture, contract, agreement, joint
venture, partnership,
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- 14
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instrument,
lease or other document to which the Corporation is a party or by which it
is bound; or (D) to the best of its knowledge, any judgment, decree or
order binding the Corporation or the property or assets of the
Corporation, which could have a Material Adverse
Effect;
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(xiii)
|
the
Corporation is in compliance in all material respects with its timely and
continuous disclosure obligations under the Securities Laws of the
provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario,
New Brunswick, Nova Scotia, Xxxxxx Xxxxxx Island and Newfoundland and
Labrador and the policies, rules and regulations of the TSX and the NYSE
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
conditions, capital or prospects of the Corporation and the Subsidiaries
(taken as a whole) since April 30, 2009, which has not been publicly
disclosed on a non-confidential basis and, except as may have been
corrected by subsequent disclosure, the statements set forth in the
Disclosure Documents did not contain any misrepresentation as of the date
of such statements and the Corporation has not filed any confidential
material change reports since the date of such statements which remain
confidential as at the date hereof;
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(xiv)
|
except
as has been publicly disclosed in the Disclosure Documents, neither the
Corporation nor any of the Subsidiaries has approved, has entered into any
agreement in respect of, or has any knowledge
of:
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|
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(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
Corporation or any of the Subsidiaries whether by asset sale, transfer of
shares or otherwise;
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(B)
|
any
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 Corporation or any of the Subsidiaries) of
the Corporation or any of the Subsidiaries;
or
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|
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(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
Corporation or any proposed or planned disposition of any of the
outstanding shares of any of the Subsidiaries by the
Corporation;
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(xv)
|
the
audited comparative financial statements of the Corporation as at and for
the year ended April 30, 2009 (the “Audited Financial
Statements”) and the unaudited financial statements of the
Corporation as at and for the three-month period ended July 31, 2009 have
been prepared in accordance with GAAP and present fairly, in all material
respects, the financial condition of the Corporation as at the dates
thereof and the results of the operations and cash flows of
the
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- 15
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|
Corporation
for the periods then ended and contain and reflect adequate provisions or
allowance for all reasonably anticipated liabilities, expenses and losses
of the Corporation that are required to be disclosed in such financial
statements and there has been no material change in accounting policies or
practices of the Corporation since April 30, 2009, except as has been
publicly disclosed in the Disclosure
Documents;
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|
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(xvi)
|
there
are no material liabilities of the Corporation whether direct, indirect,
absolute, contingent or otherwise required to be disclosed in the Audited
Financial Statements which are not disclosed or reflected in the Audited
Financial Statements, except those disclosed in the Disclosure Documents
since April 30, 2009;
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(xvii)
|
all
taxes (including income tax, capital tax, payroll taxes, employer health
tax, workers’ compensation payments, property taxes, sales taxes, custom
and land transfer taxes), duties, royalties, levies, imposts, assessments,
reassessments, 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 Corporation and the Subsidiaries have been paid or accrued, except
where the failure to pay such taxes would not constitute an adverse
material fact in respect of the Corporation or any Subsidiary or have a
Material Adverse Effect. All tax returns, declarations, remittances and
filings required to be filed by the Corporation and the Subsidiaries have
been filed with all appropriate Governmental Authorities and all such
returns, declarations, remittances and filings are complete and accurate
in all material respects 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 or material change in respect of the Corporation or the Subsidiaries
or have a Material Adverse Effect. To the knowledge of the
Corporation, no examination of any tax return of the Corporation 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 Corporation or any of the Subsidiaries, in any case
except where such examinations, issues or disputes would not constitute an
adverse material fact in respect of the Corporation or have a Material
Adverse Effect;
|
|
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(xviii)
|
the
Corporation’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 NI 51-102) between
the Corporation and the Corporation’s
Auditors;
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|
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(xix)
|
except
as contemplated by this Agreement or as disclosed in the Disclosure
Documents, no holder of outstanding shares in the capital of the
Corporation is entitled to any pre-emptive or any similar rights to
subscribe for any Common Shares or other securities of the Corporation and
no rights, warrants or options
to
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- 16
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acquire
from the Corporation, or instruments convertible into or exchangeable for,
any shares in the capital of the Corporation are
outstanding;
|
|
|
(xx)
|
to
its 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 Corporation or any of the
Subsidiaries;
|
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|
(xxi)
|
other
than as set out in the Disclosure Documents, none of the directors,
officers or employees of the Corporation or the Subsidiaries, any Person
who owns, directly or indirectly, more than 10% of any class of securities
of the Corporation or securities of any Person exchangeable for more than
10% of any class of securities of the Corporation, or any associate or
affiliate of any of the foregoing, had or has any material interest,
direct or indirect, in any transaction or any proposed transaction
(including, without limitation, any loan made to or by any such Person)
with the Corporation or any of the Subsidiaries which, as the case may be,
materially affects, is material to or will materially affect the
Corporation;
|
|
|
(xxii)
|
to
the knowledge of the Corporation, no legal or governmental proceedings or
inquiries are pending to which the Corporation 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 Corporation or any
Subsidiary which, if the subject of an unfavourable decision, ruling or
finding would have a Material Adverse Effect and to the knowledge of the
Corporation, no such legal or governmental proceedings or inquiries have
been threatened against or are contemplated with respect to the
Corporation, any Subsidiary or their
assets;
|
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(xxiii)
|
there
are no actions, suits, judgments, investigations, inquires or proceedings
of any kind whatsoever outstanding (whether or not purportedly on behalf
of the Corporation or any of the Subsidiaries), or the knowledge of the
Corporation, pending or threatened against or affecting the Corporation,
the Subsidiaries or their respective directors or officers, at law or in
equity or before or by any commission, board, bureau or agency of any kind
whatsoever and, to the knowledge of the Corporation or any of the
Subsidiaries, there is no basis therefor and neither the Corporation nor
any of the Subsidiaries 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 or would adversely affect the ability of the
Corporation to perform its obligations under this
Agreement;
|
|
|
(xxiv)
|
each
of the Corporation and the Subsidiaries are the absolute legal and
beneficial owner of, and has good and marketable title to, or has the
right to acquire the interest in, all of its property or assets as
described in the Disclosure Documents, free of all Encumbrances, claims or
demands whatsoever and no other property rights are necessary for the
conduct of the business of the Corporation as currently conducted or
contemplated to be conducted, the Corporation does
not
|
- 17
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|
know
of any claim or the basis for any claim that might or could adversely
affect the right thereof to use, transfer or otherwise exploit such
property rights and, except as disclosed in the Disclosure Documents, the
Corporation has no responsibility or obligation to pay any commission,
royalty, licence fee or similar payment to any person with respect to the
property rights thereof;
|
|
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(xxv)
|
the
Corporation holds 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,
the “Mining
Rights”), in respect of the material properties in which the
Corporation has an interest as described in the Disclosure Documents,
under valid, subsisting and enforceable documents or recognized and
enforceable agreements or instruments, sufficient to permit the
Corporation to explore the minerals relating thereto, and all material
property, options, leases or claims in which the Corporation has an
interest or right have been validly located and recorded in accordance
with all applicable laws and are valid and subsisting. The
Corporation has all necessary surface rights, access rights and other
necessary rights and interests relating to material properties in which
the Corporation has an interest granting the Corporation the right and
ability to explore for development purposes as are appropriate in view of
the rights and interest therein of the Corporation, with only such
exceptions as do not materially interfere with the use made by the
Corporation 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 Corporation. The Mining Rights in respect of
the Corporation’s material properties as disclosed in the Disclosure
Documents constitute a description of all material Mining Rights held by
the Corporation;
|
|
|
(xxvi)
|
the
Corporation is in material compliance with National Instrument 43-101 –
Standards of Disclosure
for Mineral Projects (“NI 43-101”) in
connection with the disclosure of scientific or technical information made
by the Corporation concerning each mineral project on a property material
to the Corporation and the Technical Report complies with NI
43-101;
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(xxvii)
|
the
Corporation has made available to the author of the Technical Report,
prior to the issuance thereof, for the purpose of preparing the Technical
Report, all information requested, and to the knowledge and belief of the
Corporation at the time the information was provided, such information did
not contain any material
misrepresentation;
|
|
|
(xxviii)
|
the
Corporation has conducted and is conducting its business in material
compliance with all applicable laws and regulations of each jurisdiction
in which it carries on business (including, without limitation, all
applicable Canadian and federal, provincial, municipal and
local environmental anti-pollution and licensing laws, regulations and
other lawful requirements of any governmental or regulatory body) and has
not received a notice of non-compliance, or knows
of,
|
- 18
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|
|
or
has reasonable grounds to know of, any facts that could give rise to a
notice of non-compliance with any such laws or regulations which would
have a Material Adverse Effect on the
Corporation;
|
|
|
(xxix)
|
except
to the extent that any violation or other matter referred to in this
subsection does not have a Material Adverse Effect on the Corporation as a
whole, in respect of the
Corporation:
|
|
|
(A)
|
the
Corporation is not in violation of any Environmental
Laws;
|
|
|
(B)
|
to
the best of its knowledge, it has operated its business at all times and
has received, handled, used, stored, treated, shipped and disposed of all
contaminants without violation of Environmental
Laws;
|
|
|
(C)
|
there
have been no material spills, releases, deposits or discharges of
hazardous or toxic substances, contaminants or wastes into the earth, air
or into any body of water or any municipal or other sewer or drain water
systems by the Corporation that have not been
remedied;
|
|
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(D)
|
no
orders, rulings, directions or notices have been issued and remain
outstanding or to the best of its knowledge are pending or threatened
against it under or pursuant to any Environmental
Laws;
|
|
|
(E)
|
the
Corporation has no knowledge of, and has not received any notice of, any
claim, judicial or administrative proceeding, pending or threatened
against it which may materially adversely affect the Corporation as a
whole relating to or alleging any material violation of Environmental Laws
and the Corporation is not aware of any facts which could give rise to any
such claim or judicial or administrative proceeding and the Corporation to
the best of its knowledge is not the subject of any investigation,
evaluation, audit or review by any Governmental Authority to determine
whether any material violation of Environmental Laws has occurred or is
occurring or whether any remedial action is
needed;
|
|
|
(F)
|
to
the best of its knowledge, it has not failed to report to the proper
Governmental Authority the occurrence of any event which is required to be
so reported by any Environmental Law;
and
|
|
|
(G)
|
it
holds all licences, permits and approvals required under any Environmental
Laws in connection with the operation of its business and the ownership
and use of its assets, all such licences, permits and approvals are in
full force and effect, and the Corporation has not received any
notification pursuant to any Environmental Laws that any work, repairs,
constructions or
|
- 19
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|
|
capital
expenditures are required to be made by it as a condition of continued
compliance with any Environmental Laws, or any licence, permit or approval
issued pursuant thereto, or that any license, permit or approval referred
to above is about to be reviewed, made subject to limitations or
conditions, revoked, withdrawn or
terminated;
|
|
|
(xxx)
|
neither
the Corporation nor any of the Subsidiaries is in violation of its
articles or by-laws or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any
material 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 except where such violation or default in
performance would not have a Material Adverse
Effect;
|
|
|
(xxxi)
|
to
the knowledge of the Corporation and the Subsidiaries, no counterparty to
any material obligation, agreement, covenant or condition contained in any
material contract, indenture, trust deed, mortgage, loan agreement, note,
lease or other agreement or instrument to which the Corporation or any
Subsidiary is a party is in default in the performance or observance
thereof, except where such violation or default in performance would not
have a Material Adverse Effect;
|
|
|
(xxxii)
|
each
of the Corporation and the Subsidiaries owns or has the right to use under
licence, sub-licence or otherwise all material intellectual property used
by the Corporation or 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;
|
|
|
(xxxiii)
|
at
the Closing Time, each of this Agreement, the Subscription Agreements, the
Warrant Certificates and the Compensation Option Certificates shall have
been duly authorized and executed and delivered by the Corporation and
upon such execution and delivery each shall constitute a valid and binding
obligation of the Corporation and each shall be enforceable against the
Corporation 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;
|
|
|
(xxxiv)
|
no
order, ruling or determination having the effect of suspending the sale or
ceasing the trading in any securities of the Corporation 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
Corporation, are pending, contemplated or threatened by any regulatory
authority;
|
- 20
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|
(xxxv)
|
the
authorized capital of the Corporation consists of an unlimited number of
Common Shares, of which, as at the close of business on November 18, 2009,
112,209,313 Common Shares were issued and outstanding as fully paid and
non-assessable shares in the capital of the
Corporation;
|
|
|
(xxxvi)
|
except
as disclosed in the Disclosure Documents, neither the Corporation nor any
Subsidiary has made any loans to or guaranteed the obligations of any
Person;
|
|
|
(xxxvii)
|
except
as disclosed in the Disclosure Documents or as incurred in the ordinary
course of business, neither the Corporation nor any of the Subsidiaries is
indebted to any
Person;
|
|
|
(xxxviii)
|
with
respect to each premises of the Corporation or the Subsidiaries which is
material to the Corporation and the Subsidiaries on a consolidated basis
and which the Corporation or any of the Subsidiaries occupies as tenant
(the “Leased
Premises”), the Corporation or any of the Subsidiaries 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 Corporation and/or
any of the Subsidiaries occupies the Leased Premises is in good standing
and in full force and
effect;
|
|
|
(xxxix)
|
the
Corporation 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, and has not and is not engaged
in any unfair labour
practice;
|
|
|
(xl)
|
there
has not been in the last two years and there is not currently any labour
disruption or conflict between the Corporation or any of the Subsidiaries
and the employees of the Corporation or any of the Subsidiaries which
could reasonably be expected to have a Material Adverse
Effect;
|
|
|
(xli)
|
Computershare
Investor Services Inc., at its principal offices in Vancouver, British
Columbia has been duly appointed as registrar and transfer agent for the
Common Shares;
|
|
|
(xlii)
|
the
minute books and records of the Corporation and the Subsidiaries for the
period from their respective dates of incorporation to the date hereof are
all of the minute books and records of the Corporation and the
Subsidiaries and contain copies of all proceedings (or certified copies
thereof or drafts thereof pending approval) of the shareholders, the
directors and all committees of directors of the Corporation 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
Corporation and the Subsidiaries during such period not reflected in such
minute books and other records, other than those in respect of this
Offering or
|
- 21
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|
|
which
are not material to the Corporation or the Subsidiaries on a consolidated
basis;
|
|
|
(xliii)
|
the
Corporation 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 GAAP and to maintain accountability for
assets;
|
|
|
(xliv)
|
the
Corporation has not withheld and will not withhold from the Agent prior to
the Closing Time, any material facts relating to the Corporation or the
Offering;
|
|
|
(xlv)
|
all
material information which has been prepared by the Corporation relating
to the Corporation and the Subsidiaries and their respective business,
property and liabilities and made available to the Agent, including all
financial and operational information provided to the Agent 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;
|
|
|
(xlvi)
|
to
the knowledge of the Corporation and the Subsidiaries, none of the
Corporation, the Subsidiaries or their officers or directors is aware of
any circumstances presently existing under which liability is or would
reasonably be expected to be incurred under Part XXIII.1 – Civil Liability
for Secondary Market Disclosure of the Securities Act
(Ontario) or comparable legislation under the applicable Securities
Laws of the Designated Provinces;
|
|
|
(xlvii)
|
other
than the Agent and the Selling Firms, if any, there is no Person acting or
purporting to act at the request or on behalf of the Corporation that is
entitled to any brokerage or finder’s fee or other compensation in
connection with the transactions contemplated by this
Agreement;
|
|
|
(xxiii)
|
except
as a result of any agreement, arrangement, undertaking, obligation or
understanding to which the Corporation is not a party and of which it has
no knowledge, upon issue, the Flow-Through Shares will be “flow-through
shares” as defined in subsection 66(15) of the Tax Act and are not and
will not be prescribed shares within the meaning of section 6202.1 of the
regulations to the Tax Act. The Corporation does not have and
will not have prior to the Termination Date a Prescribed Relationship with
a Purchaser of Flow-Through Shares and, if the Purchaser is a partnership,
any partner or limited partner of the
partnership;
|
|
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(xxiv)
|
the
Corporation is a “principal-business corporation” as defined in subsection
66(15) of the Tax Act and will continue to be a “principal-business
corporation” until such time as all of the Resource Expenses required to
be renounced under this Agreement and the Subscription Agreements have
been incurred and validly renounced pursuant to the Tax Act;
and
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- 22
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(xxv)
|
the
Corporation has no reason to believe that it will be unable to incur, on
or after the Closing Date and on or before the Termination Date or that it
will be unable to renounce to the Purchasers of Flow-Through Shares
effective on or before December 31, 2009, Resource Expenses in an
aggregate amount equal to the aggregate FTS Issue Price paid in respect of
the Flow-Through Shares and the Corporation has no reason to expect any
reduction of such amount by virtue of subsection 66(12.73) of the Tax
Act.
|
(b) Representations, Warranties and
Covenants of the Agent. The Agent hereby represents, warrants
and covenants to the Corporation, and acknowledges that the Corporation is
relying upon such representations, warranties and covenants, that:
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|
(i)
|
it
will, and will require any Selling Firm, if any, to agree to, conduct its
activities in connection with the proposed Offering in compliance with all
Securities Laws and all applicable laws of the jurisdictions outside
Canada in which it offers the Offered
Securities;
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|
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(ii)
|
it
will not, and will require any Selling Firm, if any, to agree not to,
engage in or authorize, any form of general solicitation or general
advertising in connection with or in respect of the Offered Securities in
any newspaper, magazine, printed media of general and regular paid
circulation or any similar medium, or broadcast over radio or television
or by means of the Internet or otherwise or conduct any seminar or meeting
concerning the offer or sale of the Offered Securities whose attendees
have been invited by any general solicitation or general
advertising;
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(iii)
|
it
will not, and will require any Selling Firm, if any, to agree not to,
directly or indirectly, offer, sell, solicit offers to purchase or sell
the Offered Securities so as to require the filing of a prospectus,
registration statement or offering memorandum or similar document with
respect thereto or the provision of a contractual right of action (as
defined in Ontario Securities Commission Rule 14-501 – “Definitions”) or a
statutory right of action under the laws of any
jurisdiction;
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(iv)
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it
will not, and will require any Selling Firm, if any, to agree not to,
solicit subscriptions for the Offered Securities except in accordance with
the terms and conditions of this
Agreement;
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(v)
|
it
will use commercially reasonable efforts to obtain a duly completed and
executed Subscription Agreement from each Purchaser along with all other
applicable forms, reports, undertakings and/or documentation required
under applicable Securities Laws;
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(vi)
|
it
is a valid and subsisting corporation under the laws of the jurisdiction
in which it was incorporated and in good standing under the laws of the
jurisdiction in which it is
incorporated;;
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(vii)
|
it
has good and sufficient right and authority to enter into this Agreement
and complete its transactions contemplated under this Agreement on the
terms and conditions set forth
herein;
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(viii)
|
it
holds all licenses and permits that are required for carrying on its
business in the manner in which such business has been carried
on;
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(ix)
|
it
will be acquiring the Compensation Options (and Offered Securities, if
any) as principal for its own account and it is an “accredited investor”
within the meaning of NI 45-106;
and
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(x)
|
it
is not a U.S. Person, did not receive the offer to purchase the
Compensation Options (and Offered Securities, if any) in the United
States, did not execute this Agreement and did not and will not receive
the Compensation Options (and Offered Securities, if any) in the United
States and is not acquiring the Compensation Options (and Offered
Securities, if any) for the account or benefit of a U.S. Person or person
in the United States.
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(c)
|
The
Agent further represents and warrants that it is, and, to the best of its
knowledge, each Selling Firm, if any, is properly registered as a “dealer”
(as such term is defined under applicable Securities Laws) in the
Designated Provinces in which the Agent or Selling Firm, as applicable,
solicits or procures subscriptions for the Offered
Securities.
|
4. Closing
Deliveries. The purchase and sale of the Offered Securities
shall be completed at the Closing Time at the offices of Xxxxxxxxx Dellelce LLP,
Toronto, Ontario, or at such other place(s) as the Agent and the Corporation may
agree. At or prior to the Closing Time, the Corporation shall duly
and validly deliver to the Agent certificates in definitive form representing
the the Flow-Through Shares, the Common Shares partially comprising the Units,
the Warrant Certificates and the Compensation Option Certificates, in each case
registered as directed by the Agent in writing, against payment at the direction
of the Corporation, in lawful money of Canada by certified cheque, banker’s
draft or wire transfer payable at par in Toronto, Ontario of an amount equal to
the aggregate FTS Issue Price for the Flow-Through Shares being issued and sold
hereunder plus the aggregate Unit Issue Price for the Units being issued and
sold hereunder less the Commission and all of the estimated out-of-pocket
expenses of the Agent payable by the Corporation to the Agent in accordance with
Section 11.
5. Closing
Conditions. Each Purchaser’s obligation to purchase the
Offered Securities at the Closing Time shall be conditional upon the fulfilment
at or before the Closing Time of the following conditions:
(a) the
Agent shall have received a certificate, dated as of the Closing Date, signed by
the Chief Executive Officer of the Corporation, or such other officer of the
Corporation as the Agent may agree, certifying for and on behalf of the
Corporation, to the best of the knowledge, information and belief of the person
so signing, that:
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(i)
|
no
order, ruling or determination having the effect of suspending the sale or
ceasing the trading in any securities of the Corporation has been issued
by any regulatory authority and is continuing in effect and no proceedings
for that
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- 24
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|
purpose
have been instituted or are pending or, to the knowledge of such officers,
contemplated or threatened by any regulatory
authority;
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|
|
(ii)
|
since
April 30, 2009, (A) there has been no material adverse change, financial
or otherwise, in the assets or liabilities (contingent or otherwise),
business, financial condition, capital or prospects of the Corporation and
the Subsidiaries (taken as a whole) as of the date of this Agreement that
has not been generally disclosed, and (B) no material transactions have
been entered into by the Corporation or the Subsidiaries other than in the
ordinary course of business, except as has been disclosed in the
Disclosure Documents;
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(iii)
|
the
Corporation has duly complied with all the terms, covenants and conditions
of this Agreement on its part to be complied with up to the Closing Time;
and
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(iv)
|
the
representations and warranties of the Corporation contained in this
Agreement are true and correct as of the Closing Time with the same force
and effect as if made at and as of the Closing Time after giving effect to
the transactions contemplated by this
Agreement.
|
(b) the
Agent shall have received at the Closing Time a certificate dated the Closing
Date, signed by an appropriate officer or officers of the Corporation addressed
to the Agent, with respect to the constating documents of the Corporation, all
resolutions of the Corporation’s board of directors relating to this Agreement,
and the transactions contemplated hereby and thereby, the incumbency and
specimen signatures of signing officers and such other matters as the Agent may
reasonably request;
(c) the
Agent shall have received satisfactory evidence that all requisite approvals of
the TSX and the NYSE Amex have been obtained by the Corporation in order to
complete the Offering;
(d) the
Flow-Through Shares, the Common Shares partially comprising the Units, the
Warrant Shares issuable upon the exercise of the Warrants, the Optioned Shares
and Optioned Unit Shares issuable upon exercise of the Compensation Options and
the Optioned Warrant Shares issuable upon exercise of the Optioned Warrants
shall have been conditionally approved for listing on the TSX and the NYSE
Amex;
(e) the
Subscription Agreements, the certificates representing the Flow-Through Shares,
the certificates representing the Common Shares partially comprising the Units,
the Warrant Certificates and the Compensation Option Certificates shall have
been executed and delivered by the Corporation in form and substance
satisfactory to the Agent, acting reasonably;
(f) the
Agent shall have received a certificate from Computershare Investor Services
Inc. as to the number of Common Shares issued and outstanding as at a date not
more than two Business Days prior to the Closing Date;
(g) the
Agent shall have received favourable legal opinions addressed to the Agent, in
form and substance satisfactory to the Agent, acting reasonably, dated as of the
Closing Date, from Blake, Xxxxxxx & Xxxxxxx LLP counsel for the Corporation,
and where appropriate, counsel in
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the other
Designated Provinces, which counsel in turn may rely, as to matters of fact, on
certificates of public officials and officers of the Corporation, as
appropriate, with respect to the following matters:
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(i)
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as
to the valid existence of the Corporation, and as to the requisite
corporate power of the Corporation to carry out its obligations under this
Agreement, the Subscription Agreements, the Warrant Certificates and the
Compensation Option Certificates and to issue the Flow-Through Shares, the
Common Shares and Warrants comprising the Units and the Underlying
Securities;
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(ii)
|
as
to the authorized and issued capital of the
Corporation;
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(iii)
|
the
Corporation has all requisite corporate power and authority under the laws
of British Columbia to carry on its business as presently carried on and
to own, lease and operate its properties and
assets;
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(iv)
|
none
of the execution and delivery of this Agreement, the Subscription
Agreements, the Warrant Certificates and the Compensation Option
Certificates by the Corporation, the performance by the Corporation of its
obligations hereunder and thereunder, will conflict with or result in any
breach of any law, statute, rule or regulation applicable to the
Corporation, or the constating documents of the
Corporation;
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(v)
|
each
of this Agreement, the Subscription Agreements, the Warrant Certificates
and the Compensation Option Certificates has been duly authorized and
executed and delivered by the Corporation, and constitutes a valid and
legally binding agreement of the Corporation enforceable against it in
accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, liquidation, reorganization, moratorium or similar
laws affecting the rights of creditors generally and except as limited by
the application of equitable principles when equitable remedies are
sought, and the qualification that the enforceability of rights of
indemnity, contribution and waiver and the ability to sever unenforceable
terms may be limited by applicable
law;
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(vi)
|
the
Flow-Through Shares, the Common Shares, the Warrant Shares, the Optioned
Shares, the Optioned Unit Shares and the Optioned Warrant Shares have been
duly authorized and allotted and, in the case of the Warrant Shares, the
Optioned Shares, the Optioned Unit Shares and the Optioned Warrant Shares
reserved for issuance;
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(vii)
|
the
Flow-Through Shares and the Common Shares partially comprising the Units
have been and, upon the due exercise of the Warrants and the Compensation
Options in accordance with the respective provisions thereof the Warrant
Shares and the Optioned Shares, the Optioned Unit Shares and the Optioned
Warrant Shares, will be, validly issued as fully paid and non-assessable
shares in the capital of the
Corporation;
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(viii)
|
the
Warrants partially comprising the Units have been validly issued and
created;
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- 26
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|
(ix)
|
the
issuance and sale by the Corporation of the Offered Securities to the
Purchasers and the issuance of the Compensation Options to the Agent are
exempt from the prospectus and registration requirements of applicable
Securities Laws of the Designated Provinces and no documents are required
to be filed (other than specified forms accompanied by requisite filing
fees), proceedings taken or approvals, permits, consents or authorizations
obtained under the applicable Securities Laws of the Designated Provinces
to permit such issuance and sale;
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(x)
|
the
issuance of the Warrant Shares upon exercise of the Warrants, the issuance
of the Optioned Shares and Optioned Unit Shares upon the exercise of the
Compensation Options and the issuance of the Optioned Warrant Shares upon
exercise of the Optioned Warrants will be exempt from the prospectus and
registration requirements of applicable Securities Laws of the Designated
Provinces;
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(xi)
|
the
first trade by the Purchasers or the Agent (as applicable) of the
Flow-Through Shares, the Common Shares and the Warrants comprising the
Units, the Compensation Options, the Warrant Shares, the Optioned Shares,
the Optioned Unit Shares and the Optioned Warrant Shares in the Designated
Provinces will be a distribution subject to the prospectus requirements
under the Securities Laws of the Designated Provinces
unless:
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|
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(A)
|
the
Corporation is and has been a reporting issuer in a jurisdiction of Canada
for the four months immediately preceding the
trade;
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(B)
|
at
the time of such trade, at least four months have elapsed from the
“distribution date” (as defined under NI 45-102) of the Flow-Through
Shares, the Common Shares and Warrants comprising the Units and the
Compensation Options, as the case may
be;
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|
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(C)
|
the
certificates representing the Flow-Through Shares, the Common Shares
partially comprising the Units, the Warrant Certificates, the Compensation
Option Certificates and the certificates representing the Option Shares,
the Optioned Unit Shares and the Optioned Warrant Shares, as applicable,
were issued with a legend stating the prescribed restricted period in
accordance with section 2.5 of NI
45-102;
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|
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(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;
|
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|
(F)
|
no
extraordinary commission or consideration is paid to a person or
corporation in respect of such trade;
and
|
|
|
(G)
|
if
the selling securityholder is an insider or officer of the Corporation,
the selling securityholder has no reasonable grounds to believe that
the
|
- 27
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|
|
Corporation
is in default of “securities legislation” (as defined in National
Instrument 14-101 – Definitions and
Interpretation); and
|
|
|
(xii)
|
the
TSX has conditionally accepted the Offering as outlined in the TSX
letter;
|
|
|
(xiii)
|
the
NYSE Amex has conditionally accepted the Offering as outlined in the NYSE
Amex letter;
|
|
|
(xiv)
|
the
Flow-Through Shares are “flow-through shares” as defined in subsection
66(15) of the Tax Act;
|
|
|
(xv)
|
the
Flow-Through Shares do not constitute “prescribed shares” for the purpose
of Regulation 6202.1 of the Regulations to the Tax
Act;
|
|
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(xvi)
|
the
expenditures to be renounced in respect of the Flow-Through Shares will be
“flow-through mining expenditures” as defined in subsection 127(q) of the
Tax Act;
|
|
|
(xvii)
|
the
form and terms of the definitive certificates representing the
Flow-Through Shares and the Common Shares have been approved by the board
of directors of the Corporation and the certificates representing the
Flow-Through Shares and the Common Shares comply in all material respects
with the Business
Corporations Act
(British Columbia) and the rules of the TSX;
and
|
|
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(xviii)
|
such
other matters as the Agent’s legal counsel may reasonably request prior to
the Closing Time;
|
(h) the
Agent shall have received a certificate of status with respect to the
jurisdiction in which the Corporation is incorporated; and
(i) the
Agent shall have received a certificate of status (or similar certificate) with
respect to the jurisdiction in which each of the Subsidiaries was incorporated,
amalgamated or continued, as the case may be.
6. Termination
Events. The Agent shall be entitled to terminate its
obligations hereunder by written notice to that effect given to the Corporation
at or prior to the Closing Time if:
|
(a)
|
there
is, in the sole opinion of the Agent, acting reasonably, a material change
or change in a material fact or new material fact or an undisclosed
material fact or material change which might be expected to have a
Material Adverse Effect on the condition (financial or otherwise),
property, assets, operations, business, affairs, profitability or
prospects of the Corporation;
|
|
(b)
|
(i)
any inquiry, action, suit, proceeding or investigation (whether formal or
informal) in relation to the Corporation or any of the directors or
officers of the Corporation (including matters of regulatory transgression
or unlawful conduct), is commenced, announced or threatened or any order
made by any federal, provincial, state, municipal or other governmental
department, commission, board, bureau, agency or
instrumentality
|
- 28
-
|
|
including,
without limitation, the TSX and the NYSE Amex or any securities regulatory
authority, or any law or regulation is enacted or changed which in the
opinion of the Agent, acting reasonably, operates to prevent or restrict
the trading of the Offered Securities or any other securities of the
Corporation or materially and adversely affects or will materially and
adversely affect the market price or value of the Offered Securities or
any other securities of the Corporation; or (ii) if there should develop,
occur or come into effect or existence any event, action, state, condition
or major financial occurrence of national or international consequence
(including terrorism) or any new law or regulation or a change thereof
which in the reasonable opinion of the Agent seriously adversely affects,
or involves, or will, or could reasonably be expected to, seriously
adversely affect, or involve, the financial markets or the business,
operations or affairs of the Corporation and the Subsidiaries taken as a
whole;
|
|
(c)
|
the
state of the financial markets is such that, in the sole opinion of the
Agent, acting reasonably, it would be unprofitable to offer or continue to
offer for sale the Offered
Securities;
|
|
(d)
|
any
order to cease or suspend trading in any securities of the Corporation is
made, threatened or announced by any securities regulatory authority, the
TSX or the NYSE Amex; or
|
|
(e)
|
the
Corporation is in breach of any material term, condition, covenant or
agreement contained in this Agreement or any representation or warranty
given by the Corporation in this Agreement is or becomes untrue, false or
misleading in any material respect.
|
7. Exercise of Termination
Right. The right of the Agent to terminate its obligations
under this Agreement is in addition to such other remedies as it may have in
respect of any default, act or failure to act of the Corporation in respect of
any of the matters contemplated by this Agreement. If this Agreement
is terminated by the Agent pursuant to Section 6, there shall be no further
liability on the part of the Agent or of the Corporation to the Agent, except in
respect of any liability which may have arisen or thereafter arises under
Sections 9, 10 and 11.
8. Survival of Representations and
Warranties. All representations and warranties herein
contained or contained in any documents delivered pursuant to this Agreement and
in connection with the transactions herein contemplated shall survive the
purchase and sale of the Offered Securities for a period of two years after the
Closing Date, regardless of the Closing of the Offering and regardless of any
investigations which may be carried out by the Agent or on its behalf and shall
not be limited or prejudiced by any investigation made by or on behalf of the
Agent in connection with the purchase and sale of the Offered Securities or
otherwise. Notwithstanding the foregoing, the representations,
warranties and covenants of the Corporation contained herein which may be
applicable in respect of a Purchaser’s claim for any income tax deductions or
credits under the Tax Act, and the indemnity in paragraph 9 of this Agreement,
shall survive and continue in full force and effect until 60 days following the
expiry of the period for which any applicable taxation authority may issue a
notice of assessment or reassessment of any Purchaser in respect of the
renunciation of Resource Expenses by the Corporation in favour of the Purchasers
as contemplated herein.
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9. (a) Indemnity. The Corporation
shall indemnify and save harmless the Agent and any of its affiliates and
Selling Firms, if any, and the directors, officers, employees, partners,
shareholders and agents of the Agent and/or its affiliates and Selling Firms, if
any, (collectively, the “Indemnified Parties” and
each, an “Indemnified
Party”) from and against all liabilities, claims, actions, suits,
proceedings, losses (other than loss of profits), costs, damages and expenses
whether joint or several (including the aggregate amount paid in reasonable
settlement of any actions, suits, proceedings or claims), and the reasonable
fees and expenses of counsel that may be incurred in advising with respect to
and/or defending any claim that may be made against the Indemnified Party to
which the Indemnified Party may become subject or otherwise involved in any
capacity under any statute or common law or otherwise insofar as such expenses,
losses, claims, damages, liabilities or actions arise out of or are based,
directly or indirectly, upon the performance of professional services rendered
to the Corporation by the Agent or any Indemnified Party hereunder or otherwise
in connection with the Offering, including, without limitation:
|
|
(i)
|
any
breach of any representation or warranty made by the Corporation
herein;
|
|
|
(ii)
|
any
information or statement (except any information or statement relating
solely to the Indemnified Party) contained in any certificate of the
Corporation delivered under this Agreement or pursuant to this Agreement
which at the time and in the light of the circumstances under which it was
made contains or is alleged to contain a
misrepresentation;
|
|
|
(iii)
|
any
omission or alleged omission to state in any certificate of the
Corporation delivered under this Agreement or pursuant to this Agreement
any material fact (except facts relating solely to the Indemnified Party),
required to be stated in such document or necessary to make any statement
in such document not misleading in light of the circumstances under which
it was made;
|
|
|
(iv)
|
any
order made or enquiry, investigation or proceedings commenced or
threatened by any securities regulator or other competent authority based
upon any untrue statement or omission or alleged untrue statement or
alleged omission or any misrepresentation or alleged misrepresentation
(except a statement or omission or alleged statement or omission relating
solely to the Indemnified Party) based upon any failure to comply with the
Securities Laws (other than any failure or alleged failure to comply by
the Indemnified Party), preventing or restricting the trading in or the
sale or distribution of the Offered Securities in any of the Designated
Provinces; or
|
|
|
(v)
|
the
non-compliance or alleged non-compliance by the Corporation with any of
the Securities Laws of the Designated Provinces, including the
Corporation’s non-compliance with any statutory requirement to make any
document available for inspection,
|
provided,
however, that this indemnity shall not apply to the extent that a court of
competent jurisdiction in a final judgement that has become non-appealable shall
determine that:
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|
|
(i)
|
an
Indemnified Party has been negligent or has committed any fraudulent act
or wilful misconduct in the course of such performance;
and
|
|
|
(ii)
|
the
expenses, losses, claims, damages or liabilities, as to which
indemnification is claimed, were directly caused by the negligence, fraud
or wilful misconduct referred to in
(i).
|
(b) Repayment. If the
indemnity does not apply pursuant to subparagraphs (i) and (ii) above, each such
Indemnified Party shall immediately reimburse any funds advanced by the
Corporation to such party pursuant to this indemnity.
(c) Notification of Claims. If any
matter or thing contemplated by this Section 9 (any such matter or thing being
referred to as a “Claim”) is asserted against an
Indemnified Party, such Indemnified Party will notify the Corporation as soon as
possible of the nature of such Claim and the Corporation shall be entitled (but
not required) to assume the defence of any suit brought to enforce such Claim;
provided, however, that the defence shall be conducted through legal counsel
acceptable to the Indemnified Party, acting reasonably, and that no settlement
of any such Claim may be made by the Corporation or the Indemnified Party
without the prior written consent of the other party, such consent not to be unreasonably withheld or delayed,
and the Corporation shall not be liable for any settlement of any such Claim
unless it has consented in writing to such settlement.
(d) Right of Indemnity in Favour of
Others. With respect to any Indemnified Party who is not a party to this
Agreement, the Agent shall obtain and hold the rights and benefits of this
Section 9 and Section 10 in trust for and on behalf of such Indemnified
Party.
(e) Retaining Counsel. In any such
Claim, the Indemnified Party shall have the right to retain other counsel to act
on behalf of the Indemnified Party and to participate in the defence thereof,
provided that the fees and disbursements of such counsel shall be paid by the
Indemnified Party unless: (i) the Corporation and the Indemnified Party shall
have mutually agreed to the retention of the other counsel; (ii) the Corporation
fails to assume the defence of such Claim on behalf of the Indemnified Party
within a reasonable period of time of receiving written notice to assume the
defence of such Claim; or (iii) the named parties to any such Claim (including
any added third party) include both the Indemnified Party and the Corporation
and the Indemnified Party shall have been advised by counsel that representation
of the Indemnified Party by counsel for the Corporation is inappropriate as a
result of potential or actual differing interests of those represented; in each
of which cases the Corporation shall not have the right to assume the defence of
such Claim on behalf of the Indemnified Party but the Corporation shall be
liable to pay the reasonable fees and disbursements of counsel to the
Indemnified Party, subject as hereinafter provided. Where more than one
Indemnified Party is entitled to retain separate counsel in the circumstances
described in this Section 9(d), all Indemnified Parties shall be represented by
one separate counsel and the fees and disbursements of only one separate counsel
for all Indemnified Parties shall be paid by the Corporation unless otherwise
agreed to by the Corporation.
10. (a) Contribution. In
order to provide for a just and equitable contribution in circumstances in which
the indemnity provided in Section 9 would otherwise be
available in
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accordance
with its terms but is, for any reason, held to be unavailable to or
unenforceable by the Agent or enforceable otherwise than in accordance with its
terms, the Corporation and the Agent shall contribute to the aggregate of all
claims, expenses, costs and liabilities (including any legal expenses reasonably
incurred by the Indemnified Party in connection with any claim which is the
subject of this section) and all losses (other than loss of profits) of a nature
contemplated in Section 9 in such proportions as are appropriate to reflect not
only the relative benefits received by the Corporation on the one hand and the
Agent on the other hand, but also the relative fault of the Corporation and the
Agent, as well as any relevant equitable consideration. However, no
party who has engaged in any fraud, misrepresentation, wilful misconduct or
gross negligence shall be entitled to claim contribution from any Person who has
not engaged in such fraud, misrepresentation, wilful misconduct or
gross negligence.
(b) Right of Contribution in Addition to
Other Rights. The rights to contribution provided in this
Section 10 shall be in addition to and not in derogation of any other right to
contribution which the Agent may have by statute or otherwise at
law.
(c) Calculation of Contribution.
In the event that the Corporation may be held to be entitled to contribution
from the Agent under the provisions of any statute or at law, the Corporation
shall be limited to contribution in an amount not exceeding the lesser
of:
|
|
(i)
|
the
portion of the full amount of the loss or liability giving rise to such
contribution for which the Agent are responsible, as determined in
subsection 10(a) above; and
|
|
|
(ii)
|
the
amount of the aggregate fee actually received by the Agent from the
Corporation under this Agreement.
|
(d) Notice. If the
Agent has reason to believe that a claim for contribution may arise, it shall
give the Corporation notice of such claim in writing, as soon as reasonably
possible, but failure to notify the Corporation shall not relieve the
Corporation of any obligation which it may have to the Agent under this
subsection.
11. Expenses. The
Corporation shall pay all of its own expenses in connection with the Offering,
including, without limitation, all expenses of or incidental to the creation,
issue, sale or distribution of the Offered Securities, the fees and expenses of
the Corporation’s counsel and all costs incurred in connection with the
preparation of documents or certificates relating to the Offering. The
Corporation shall also pay all reasonable out-of-pocket costs incurred by the
Agent, including the reasonable fees, disbursements and taxes of the Agent’s
counsel (up to a maximum of $45,000.00 exclusive of disbursements and taxes),
whether or not the Offering is completed.
12. Advertisements. The
Corporation acknowledges that the Agent shall have the right after Closing,
subject always to subsections 1(a) and (c) and 3(b) of this Agreement, at its
own expense, subject to the prior consent of the Corporation, such consent not
to be unreasonably withheld or delayed, to place such advertisement or
advertisements relating to the purchase and sale of the Offered Securities
contemplated herein as the Agent may consider desirable or appropriate and as
may be permitted by applicable law. The Corporation and the
Agent each
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-
agree
that they will not make or publish any advertisement in any media whatsoever
relating to, or otherwise publicize, the transaction provided for herein so as
to result in any exemption from the prospectus and registration or other similar
requirements under applicable securities legislation in any of the provinces of
Canada or any other jurisdiction in which the Offered Securities shall be
offered and sold being unavailable in respect of the sale of the Offered
Securities to prospective purchasers.
13. Notices. Unless otherwise
expressly provided in this Agreement, any notice or other communication to be
given under this Agreement (a “notice”) shall be in writing
addressed as follows:
|
(a)
|
if
to the Corporation, to:
|
||
|
Crosshair
Exploration & Mining Corp.
|
|||
|
1240
– 0000 Xxxx Xxxxxx Xxxxxx
|
|||
|
Xxxxxxxxx,
Xxxxxxx Xxxxxxxx X0X 0X0
|
|||
|
Attention:
|
Xx.
Xxxx X. Xxxxxxxx, Chief Executive Officer
|
||
|
Facsimile:
|
000-000-0000
|
||
|
with
a copy to (which shall not constitute notice hereunder):
|
|||
|
Blake,
Xxxxxxx & Xxxxxxx LLP
|
|||
|
000
Xxxxxxx Xxxxxx
|
|||
|
P.O.
Box 49314
|
|||
|
Xxxxx
0000, Xxxxx Xxxxxxx Xxxxxx
|
|||
|
Xxxxxxxxx,
Xxxxxxx Xxxxxxxx X0X 0X0
|
|||
|
Attention:
|
Xxx
Xxxxxx
|
||
|
Facsimile:
|
000-000-0000
|
||
|
(b)
|
if
to the Agent, to:
|
||
|
Xxxxx
Securities Limited
|
|||
|
0
Xxxx Xxxxxx Xxxx, Xxxxx 0000
|
|||
|
Xxxxxxx,
Xxxxxxx X0X 0X0
|
|||
|
Attention:
|
Xxxxxxx
Xxxx
|
||
|
Facsimile:
|
(000)
000-0000
|
||
|
Email:
|
xxxxxxx@xxxxxxxxxxxxxxxxxxx.xxx
|
||
|
with
a copy to (which shall not constitute notice
hereunder):
|
|||
|
Xxxxxxxxx
Dellelce LLP
|
|||
|
8th
Floor, 000 Xxx Xxxxxx
|
|||
|
Xxxxxxx,
Xxxxxxx X0X 0X0
|
|||
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-
|
Attention:
|
Xxxxx
Xxxxxx
|
||
|
Facsimile:
|
(000)
000-0000
|
or to
such other address as any of the parties may designate by notice given to the
others.
Each
notice shall be personally delivered to the addressee or sent by facsimile
transmission to the addressee and: (i) a notice which is personally delivered
shall, if delivered on a Business Day, be deemed to be given and received on
that day and, in any other case, be deemed to be given and received on the first
Business Day following the day on which it is delivered; and (ii) a notice which
is sent by facsimile transmission shall be deemed to be given and received on
the first Business Day following the day on which it is sent.
14. Confidentiality. The Agent
will establish reasonable procedures to hold in confidence all information
received by them from the Corporation which has not been generally disclosed to
the public and will not knowingly disclose such information, except as required
in their opinion, acting reasonably, to discharge their obligations under this
Agreement or under applicable law or regulatory policy.
15. Time of the Essence. Time
shall, in all respects, be of the essence hereof.
16. Canadian Dollars. All
references herein to dollar amounts are to lawful money of Canada.
17. Headings. The headings
contained herein are for convenience only and shall not affect the meaning or
interpretation hereof.
18. Singular and Plural, etc.
Where the context so requires, words importing the singular number include the
plural and vice versa, and words importing gender shall include the masculine,
feminine and neuter genders.
19. Entire Agreement. This
Agreement constitutes the only agreement between the parties with respect to the
subject matter hereof and shall supersede any and all prior negotiations and
understandings, including, without limitation, the Engagement Letter. This
Agreement may be amended or modified in any respect by written instrument
only.
20. Severability. The invalidity
or unenforceability of any particular provision of this Agreement shall not
affect or limit the validity or enforceability of the remaining provisions of
this Agreement.
21. Governing Law. This Agreement
shall be governed by and construed in accordance with the laws of the Province
of British Columbia and the federal laws of Canada applicable
therein.
22. Successors and Assigns. The
terms and provisions of this Agreement shall be binding upon and ensure to the
benefit of the Corporation, the Agent and the Purchasers (as contemplated under
the Subscription Agreements) their respective executors, heirs, successors and
permitted assigns; provided that, this Agreement shall not be assignable by any
party without the prior written consent of the others.
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-
23. Further Assurances. Each of
the parties hereto shall do or cause to be done all such acts and things and
shall execute or cause to be executed all such documents, agreements and other
instruments as may reasonably be necessary or desirable for the purpose of
carrying out the provisions and intent of this Agreement.
24. Effective Date. This Agreement
is intended to and shall take effect as of the date first set forth above,
notwithstanding its actual date of execution or delivery.
25. Language. The
parties hereby acknowledge that they have expressly required this Agreement and
all notices, statements of account and other documents required or permitted to
be given or entered into pursuant hereto to be drawn up in the English language
only. Les parties
reconnaissent avoir expressment demandées que la présente convention ainsi que
tout avis, tout état de compte et tout autre document a être ou pouvant etre
donné ou conclu en vertu des dispositions des présentes, soient rédigés en
langue anglaise seulement.
26. Counterparts and Facsimile
Copies. This Agreement may be executed in any number of counterparts and
by facsimile or similar electronic means, which taken together shall form one
and the same agreement.
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-
If the
Corporation is in agreement with the foregoing terms and conditions, please so
indicate by executing a copy of this Agreement where indicated below and
delivering the same to the Agent.
Yours
very truly,
|
XXXXX
SECURITIES LIMITED
|
|
|
Per:
|
“Xxxxx
Xxxx”
|
|
Authorized
Signing Officer
|
|
The
foregoing is hereby accepted on the terms and conditions therein set
forth.
DATED as of the 19 day of
November, 2009.
|
CROSSHAIR
EXPLORATION & MINING
CORP.
|
|
|
Per:
|
“Xxxx
Xxxxxxxx”
|
|
Chief
Executive Officer
|
|
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