First Mining Gold Corp. Shares of Common Stock EQUITY DISTRIBUTION AGREEMENT
Exhibit 99.1
Shares of Common Stock
August
19, 2019
|
Cantor
Xxxxxxxxxx Canada Corporation
000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxx X0X 0X0
|
Ladies
and Gentlemen:
First
Mining Gold Corp., a company continued under the Business Corporations Act (British
Columbia) (“First Mining
Gold” or the “Company”), confirms its agreement
(this “Agreement”) with Cantor Xxxxxxxxxx
Canada Corporation (the “
Agent”) to issue and sell common
shares of the Company upon and subject to the terms and conditions
contained herein. Capitalized terms used herein have the meanings
given to them in Section 23 hereof.
The
Company agrees that, from time to time during the term of this
Agreement, on the terms and subject to the conditions set forth
herein, it may issue and sell through the Agent, common shares (the
“Shares”) of the
Company having an aggregate sales price of up to C$15,000,000,
provided that the market value of Shares distributed under the
Prospectus Supplement shall not exceed 10% of the aggregate market
value of the outstanding Shares as of the date specified in
Section 9.1 of NI 44-102, which shall be calculated in
accordance with Section 9.2 of NI 44-102 (the “Offering”). The Shares will be
sold on the terms set forth herein at such times and in such
amounts as the Company and the Agent shall agree from time to time.
The issuance and sale of the Shares through the Agent will be
effected pursuant to the Prospectus (as hereinafter defined) filed
by the Company.
(a) Placement Notice. Each time
that the Company wishes to issue and sell Shares hereunder (each, a
“Placement”), it
will notify the Agent by e-mail notice (or other method mutually
agreed to in writing by the parties) (a “Placement Notice”) in the form set
forth on Schedule 1 hereto, containing the parameters within which
it desires to sell the Shares, which shall at a minimum include the
number of Shares to be sold pursuant to this Agreement
(“Placement
Shares”), the time period during which sales are
requested to be made, any limitation on the number of Placement
Shares that may be sold in any one Trading Day, any minimum price
below which sales may not be made and the amount of the Placement
Fee. The Placement Notice shall originate from any of the
individuals (each an “Authorized Representative”) from
the Company set forth on Schedule 2 hereto and shall be
addressed to each of the respective individuals from the Agent set
forth on Schedule 2 hereto, as such Schedule 2 may be amended from
time to time. The Placement Notice shall be effective upon delivery
to the Agent unless and until (i) the Agent declines to accept the
terms contained therein for any reason, in its sole discretion, in
accordance with the notice requirements set forth in Section 4,
(ii) the entire amount of the Placement Shares have been sold,
(iii) the Company suspends or terminates the Placement Notice in
accordance with the notice requirements set forth in Sections 4 or
14, as applicable, (iv) the Company issues a subsequent Placement
Notice with parameters superseding those on the earlier Placement
Notice, or (v) this Agreement has been terminated under the
provisions of Section 14.
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(b) Placement Fee. The amount of
compensation to be paid by the Company to the Agent with respect to
each Placement for which such Agent acted as sales Agent under this
Agreement shall be equal to up to 3% of the gross proceeds from
such Placement (the “Placement Fee”).
(c) No Obligation. It is expressly
acknowledged and agreed that neither the Company nor the Agent will
have any obligation whatsoever with respect to a Placement or any
Placement Shares unless and until the Company delivers a Placement
Notice to the Agent, which Placement Notice has not been declined,
suspended or otherwise terminated in accordance with the terms of
this Agreement, and then only upon the terms specified therein and
herein. It is also expressly acknowledged that the Agent will be
under no obligation to purchase Placement Shares on a principal
basis. In the event of a conflict between the terms of this
Agreement and the terms of a Placement Notice, the terms of the
Placement Notice will prevail.
(d) Limitations on Placements.
Under no circumstances shall the Company deliver a Placement Notice
if, after giving effect to the issuance of the Placement Shares
requested to be issued under such Placement Notice, the aggregate
sales proceeds raised from the Placement Shares sold pursuant to
this Agreement would exceed C$15,000,000 or the aggregate number of
Placement Shares sold would exceed 55,555,556 Shares. Under no
circumstances shall the Company cause or request the offer or sale
of any Placement Shares if, after giving effect to the sale of such
Placement Shares, the aggregate gross sales proceeds of Placement
Shares sold pursuant to this Agreement would exceed the amount
authorized from time to time to be issued and sold under this
Agreement by the Company’s board of directors and notified to
the Agent in writing. Under no circumstances shall the Company
cause or request the offer or sale of any Placement Shares pursuant
to this Agreement at a price lower than the minimum price
authorized from time to time in the applicable Placement
Notice.
Subject
to the terms and conditions of this Agreement, upon the
Company’s issuance of a Placement Notice, and unless the sale
of the Placement Shares described therein has been declined,
suspended, or otherwise terminated in accordance with the terms of
this Agreement, the Agent will use its commercially reasonable
efforts consistent with its normal trading and sales practices to
sell on behalf of the Company and as agent, such Placement Shares
up to the amount specified during the time period specified, and
otherwise in accordance with the terms of such Placement Notice.
The Agent covenants and the Company acknowledges that the Agent
will conduct the sale of Placement Shares in compliance with
applicable laws, rules and regulations including, without
limitation, all applicable Canadian Securities Laws, and, if
applicable, the rules of the TSX, and that such compliance may
include a delay in commencement of sales efforts after receipt of a
Placement Notice. The Agent will provide written confirmation to
the Company no later than the opening of the Trading Day
immediately following the Trading Day on which it has made sales of
Placement Shares hereunder setting forth the number of Placement
Shares sold on such day (showing the number of Placement Shares
sold on the TSX or on any other “marketplace” (as such
term is defined in NI 21-101 in Canada (a “Marketplace”) and pursuant to any
other sales method used by the Agent), the average price of the
Placement Shares sold (showing the average price of the Placement
Shares sold on the TSX or any other Marketplace and pursuant to any
other sales method used by the Agent), the gross proceeds, the
commissions payable by the Company to the Agent with respect to
such sales and the Net Proceeds payable to the Company. Subject to
the terms and conditions of the Placement Notice, the Agent may
sell Placement Shares by any method permitted by law that
constitutes an “at-the-market distribution” under NI
44-102 and made in compliance with the Exemption, including,
without limitation, sales made directly on the TSX or any other
Marketplace, provided for greater certainty that no such
transactions may be made on any exchange or quotation system
outside of Canada.
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The
Agent acknowledges and agrees that the aggregate number of
Placement Shares sold on the TSX and all other Marketplaces on any
Trading Day shall not exceed 25% of the total trading volume of the
Shares on the TSX and all other Marketplaces on that Trading Day,
and covenants not to exceed that threshold.
Notwithstanding
anything to the contrary set forth in this Agreement or a Placement
Notice, the Company acknowledges and agrees that (i) there can be
no assurance that the Agent will be successful in selling any
Placement Shares or as to the price at which any Placement Shares
are sold, if at all, and (ii) the Agent will incur no liability or
obligation to the Company or any other person or entity if they do
not sell Placement Shares for any reason other than a failure by
the Agent to use its commercially reasonable efforts consistent
with its normal trading and sales practices to sell on behalf of
the Company and as agent such Placement Shares as provided under
this Section 3.
(a) The Company or the
Agent may, upon notice to the other party in writing, by telephone
(confirmed promptly by e-mail) or by e-mail notice (or other method
mutually agreed to in writing by the parties), suspend any sale of
Placement Shares for which it has received a Placement Notice;
provided, however, that such suspension shall not affect or impair
any party’s obligations with respect to any Placement Shares
sold hereunder prior to the receipt of such notice. The Company and
the Agent, severally and not jointly, agree that no such notice
shall be effective against any other party unless it is made to one
of the individuals named on Schedule 2 hereto, as such Schedule may
be amended from time to time.
(b) Notwithstanding any
other provision of this Agreement, during any period in which the
Company is in possession of material non-public information, the
Company and the Agent (provided they have been given prior written
notice of such by the Company, which notice the Agent agrees to
treat confidentially) agree that no sale of Placement Shares will
take place. The Company and the Agent, severally and not jointly,
agree that no such notice shall be effective against any other
party unless it is made to one of the individuals named on Schedule
2 hereto, as such Schedule may be amended from time to
time.
5. Settlement
(a) Settlement of Placement Shares.
Unless otherwise specified in the applicable Placement Notice,
settlement for sales of Placement Shares will occur on the second
(2nd)
trading day on the applicable stock exchange on which the Placement
Shares were sold or, if the Placement Shares are not sold on a
stock exchange, on the second (2nd) Trading Day (or,
in either case, such earlier day as is agreed by the parties to be
industry practice for regular-way trading) following the date on
which such sales are made (each a “Settlement Date”). The amount of
proceeds to be delivered to the Company on a Settlement Date
against the receipt of the Placement Shares sold
(“Net Proceeds”)
will be equal to the aggregate sales price at which such Placement
Shares were sold, after deduction for the commission or other
compensation for such sales payable by the Company to the Agent
pursuant to Section 2 hereof.
(b) Delivery of Shares. On each
Settlement Date, the Company will, or will cause its transfer agent
to, electronically transfer the Placement Shares being sold by
crediting the Agent’s account or its designee’s account
(provided that the Agent shall have given the Company written
notice of such designee at least one Trading Day prior to the
Settlement Date) at CDS Clearing and Depository Services Inc.
through its CDSX system or by such other means of delivery as may
be mutually agreed upon by the parties hereto and, upon receipt of
such Placement Shares, which in all cases shall be freely tradeable
and transferable shares in good deliverable form, the Agent will,
on each Settlement Date, deliver the related Net Proceeds in same
day funds to an account designated by the Company prior to the
Settlement Date. If the Company defaults in its obligation to
deliver Placement Shares on a Settlement Date, the Company agrees
that in addition to and in no way limiting the rights and
obligations set forth in Section 12 hereto, it will (i) hold the
Agent harmless against any loss, claim, damage, or expense
(including reasonable legal fees and expenses), as incurred,
arising out of or in connection with such default by the Company
and (ii) pay to the Agent any commission, discount, or other
compensation to which it would otherwise have been entitled absent
such default.
If the Company defaults in its obligation to
deliver Placement Shares on a Settlement Date, the Company agrees
that in addition to and in no way limiting the rights and
obligations set forth in Section 12 hereto,
it will (i) hold the Agent harmless against any loss, claim,
damage, or expense (including reasonable legal fees and expenses),
as incurred, arising out of or in connection with such default by
the Company and (ii) pay to the Agent any commission,
discount, or other compensation to which it would otherwise have
been entitled absent such default.
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The
Company has prepared and filed with the Qualifying Authorities in
the Qualifying Jurisdictions the Preliminary Base Prospectus and
has prepared and filed with the Qualifying Authorities in the
Qualifying Jurisdictions the Base Prospectus in respect of an
aggregate of up to C$100 million in common shares, preferred
shares, warrants, subscription receipts and units of the Company
(collectively, the “Shelf
Securities”), in each case in accordance with Canadian
Securities Laws. The British Columbia Securities Commission (the
“Reviewing
Authority”) is the principal regulator of the Company
under the passport system procedures provided for under
Multilateral Instrument 11-102 – Passport System and National Policy
11-202 – Process for
Prospectus Reviews in Multiple Jurisdictions in respect of
the Shelf Securities and the Offering. The Reviewing Authority has
issued a receipt evidencing that a receipt has been issued on
behalf of itself and the other Qualifying Authorities for the
Preliminary Base Prospectus and the Reviewing Authority has issued
a receipt evidencing that a receipt has been issued on behalf of
itself and the other Qualifying Authorities for the Base Prospectus
(the “Receipt”).
The term “Base
Prospectus” means the final short form base shelf
prospectus dated June 24, 2019 relating to the Shelf Securities, at
the time the Reviewing Authority issued the Receipt with respect
thereto in accordance with Canadian Securities Laws, including NI
44-101 and NI 44-102, and includes all documents incorporated
therein by reference and the documents otherwise deemed to be a
part thereof or included therein pursuant to Canadian Securities
Laws, including but not limited to, all Designated News Releases.
As used herein, a “Designated
News Release” means a news release disseminated by the
Company in respect of previously undisclosed information that, in
the Company's determination, constitutes a “material
fact” (as such term is defined in Canadian Securities
Laws) and identified by
the Company as a “designated news release” in writing
on the face page of the version of such news release that is filed
by the Company on SEDAR. As used herein, “Prospectus Supplement” means the
most recent prospectus supplement to the Base Prospectus relating
to the Placement Shares, filed by the Company with the Qualifying
Authorities in accordance with Canadian Securities Laws. The
Prospectus Supplement shall provide that any and all Designated
News Releases shall be deemed to be incorporated by reference in
the Base Prospectus.
For
purposes of this Agreement, all references to the Base Prospectus,
the Prospectus Supplement and the Prospectus or any amendment or
supplement thereto shall be deemed to refer to and include the
documents incorporated by reference therein, and any reference
herein to the terms “amend,” “amendment” or
“supplement” with respect to the Base Prospectus, the
Prospectus Supplement and the Prospectus or any amendment or
supplement thereto shall be deemed to refer to and include the
filing of any document with the Qualifying Authorities, as
applicable, on or after the effective date of the Base Prospectus,
the Prospectus Supplement and the Prospectus, as the case may be,
and deemed to be incorporated by reference therein.
All
references in this Agreement to financial statements and other
information which is “described,”
“contained,” “included” or
“stated” in the Base Prospectus or the Prospectus (or
other references of like import) shall be deemed to mean and
include all such financial statements and other information which
is incorporated by reference in or otherwise deemed by Canadian
Securities Laws to be a part of or included in the
Prospectus.
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The
Company represents and warrants to, and agrees with, the Agent that
as of the date of this Agreement and as of each Applicable Time (as
defined below), unless such representation, warranty or agreement
specifies a specific date, that:
(a) Incorporation and Good Standing of
Company. The Company has been continued and is validly
existing under the laws of the Province of British Columbia and has
all corporate power, capacity and authority to carry on its
business as now carried on and presently proposed to be conducted
as is or will be described in the Base Prospectus, the Prospectus
Supplement and the Prospectus, and to own and lease its properties
and assets as is or will be described in the Base Prospectus, the
Prospectus Supplement and the Prospectus in each jurisdiction in
which it carries on or proposes to carry on its business or owns,
leases, or operates or proposes to own, lease or operate its
properties and assets.
(b) Incorporation and Good Standing of
Subsidiaries. Each material subsidiary of the Company, being
Coastal Gold Corp., PC Gold Inc., Gold Canyon Resources Inc.,
Xxxxxxx Xxxx Operations Ltd., and Tamaka Gold Corporation
(collectively, the “Material
Subsidiaries”, and each a “Material Subsidiary”), has been
duly incorporated or otherwise formed and organized and is validly
existing under the laws of its jurisdiction of incorporation or
formation and has all corporate, partnership or limited liability
company power, capacity and authority to carry on its business as
now carried on and presently proposed to be conducted as is
described in the Base Prospectus, the Prospectus Supplement and the
Prospectus.
(c) Compliance with Applicable
Laws. Each of the Company and the Material Subsidiaries has
conducted and is conducting its business in compliance in all
material respects with all applicable securities laws in each
jurisdiction in which it carries on a material portion of its
business and is duly licensed, registered or qualified in all
jurisdictions in which it owns, leases or operates any material
portion of its properties or carries on any material portion of its
business to enable its business and assets to be owned, leased and
operated, except to the extent that the failure to so comply or to
be so licensed, registered or qualified would not, individually or
in the aggregate, have a material adverse effect on the earnings,
business, properties assets, condition (financial or otherwise),
prospects, stockholders’ equity or results of operations of
the Company and the Material Subsidiaries (taken as a whole) (a
“Material Adverse
Effect”), and all such licenses, registrations or
qualifications which are material are valid and existing in good
standing.
(d) No Contractual
Defaults.
(i)
None of the
Company or any of the Material Subsidiaries is in violation of its
constating documents in any material respect; and none of the
Company or any of the Material Subsidiaries is in default in the
performance or observation of any obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, loan
agreement, note or other instrument (a “Material Contract”) to which it is
a party or by which it may be bound or to which any of its
properties or assets is subject which would have a Material Adverse
Effect.
(ii)
The Company has no
knowledge of any default, or any circumstance which with the giving
of notice or lapse of time (or both) would give rise to a default,
by any person who is a party to any Material Contract with the
Company or any of the Material Subsidiaries, except for such
defaults which would not reasonably be expected to have a Material
Adverse Effect.
(e) Enforceability of Agreement.
The Company has duly authorized, executed and delivered this
Agreement and this Agreement constitutes a legal, valid and binding
obligation of the Company enforceable against it in accordance with
its terms, subject to the exceptions as to enforceability as are
contained in the opinion of Company Counsel referred to in Section
8(n) hereof.
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(f) No Consents Required. Except as
shall have been made or obtained on or before each Applicable Time
and associated Settlement Date, no consent, approval,
authorization, registration or qualification of any court,
governmental agency or body, regulatory authority or contractual
party is required for the distribution of the Placement Shares or
the consummation of the transactions contemplated
herein.
(g) Due Authorization. The Company
has the necessary corporate power and authority to execute and
deliver the Prospectus and, if applicable, will have the necessary
corporate power and authority to execute and deliver any amendment
to the Prospectus prior to the filing thereof, and all necessary
corporate action has been taken by the Company to authorize the
execution and delivery by it of the Prospectus and the filing
thereof, as the case may be, in each of the Qualifying
Jurisdictions under Canadian Securities Laws.
(h) No Material Adverse Change.
Except as has been disclosed in the Prospectus or any amendment to
the Prospectus, subsequent to December 31, 2018, there has not been
any material adverse change, actual or to the knowledge of the
Company, pending, in the capital, assets, liabilities (absolute,
accrued, contingent or otherwise), earnings, business, operations
or condition (financial or otherwise) or results of the operations
of the Company and the Material Subsidiaries (taken as a
whole).
(i) Financial
Information.
(i)
The audited
comparative consolidated financial statements of the Company,
including the auditors’ report and notes in respect thereof,
and any unaudited comparative consolidated financial statements and
notes in respect thereof incorporated by reference in the
Prospectus, present fairly in all material respects the financial
condition, results of operations and cash flows of the Company, as
applicable, as of the dates and for the periods indicated, comply
as to form with the applicable accounting requirements of Canadian
Securities Laws and have been prepared in conformity with
International Financial Reporting Standards (“IFRS”) applied on a
consistent basis throughout the periods involved (except as
otherwise noted therein). Any selected financial data set forth in
the Prospectus or any amendment to the Prospectus fairly present,
on the basis stated therein, the information included
therein.
(ii)
Other than as
disclosed in the consolidated financial statements of the Company
incorporated by reference in the Prospectus, there are no material
off-balance sheet transactions, arrangements, obligations
(including contingent obligations) or other relationships of the
Company or any of the Material Subsidiaries with unconsolidated
entities or other persons that may have a material current or
future effect on the Company and the Material Subsidiaries (taken
as a whole) or on the liquidity, capital expenditures, capital
resources, or significant components of revenues or expenses of the
Company and the Material Subsidiaries (taken as a
whole).
(iii)
Except as publicly
disclosed, none of the Company or any of the Material Subsidiaries
has any contingent liabilities, in excess of the liabilities that
are either reflected or reserved against in the financial
statements of the Company incorporated by reference in the
Prospectus which are material to the Company and the Material
Subsidiaries (taken as a whole) or to the capital or operations of
the Company.
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(iv)
The Company has (a)
designed disclosure controls and procedures to provide reasonable
assurance with (i) material information relating to the Company is
made known to the Chief Financial Officer or Chief Executive
Officer by others, particularly during the period in which the
interim filings are being prepared; and (ii) information required
to be disclosed by the Company in its annual filings, interim
filings or other reports filed or submitted by it under securities
legislation is recorded, processed, summarized and reported within
the time periods specified in securities legislation; and (b)
designed internal controls over financial reporting or caused it to
be designed under the Chief Financial Officer's or Chief Executive
Officer's supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with
IFRS.
(v)
The Company has not
entered into any derivative transactions for hedging
purposes.
(j) Legal Proceedings. Except as is
or will be disclosed in the Prospectus, there is no action, suit or
proceeding (whether or not purportedly by or on behalf of, the
Company or the Material Subsidiaries) to the knowledge of the
Company, pending or threatened against or affecting the Company or
any of the Material Subsidiaries at law or in equity or before or
by any federal, provincial, state, municipal or other governmental
department, commission, board or agency having jurisdiction over
the Company or any of the Material Subsidiaries, domestic or
foreign, which in any way materially adversely affects or could
reasonably be expected to materially adversely affect the business,
operations or condition of the Company and the Material
Subsidiaries (taken as a whole) (financial or
otherwise).
(k) Prospectus.
(i)
The Company is
qualified in accordance with the provisions of NI 44-101 and NI
44-102 to file a short form base shelf prospectus in each of the
Qualifying Jurisdictions and there are no reports or information
that in accordance with the requirements of Canadian Securities
Laws must be made publicly available in connection with the
Offering as at the date hereof that have not been made publicly
available as required.
(ii)
The delivery to the
Agent of the Base Prospectus, the Prospectus Supplement or the
Prospectus shall constitute the representation and warranty of the
Company to the Agent that, at the time of such delivery, the
information and statements contained therein, and of any documents
incorporated therein by reference (except information and
statements relating solely to and provided by the Agent expressly
for inclusion therein):
(A)
are true and
correct in all material respects;
(B)
constitute full,
true and plain disclosure of all material facts relating to: (i)
the Company and its Material Subsidiaries on a consolidated basis;
and (ii) the Placement Shares;
(C)
contain no
misrepresentations; and
(D)
do not omit a
material fact which is necessary to make the information and
statements contained therein not misleading in light of the
circumstances in which they were made.
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(l) The Company has
filed with the United States Securities and Exchange Commission
(the “Commission”) a registration
statement on Form F-10 (the “U.S. Registration Statement”)
relating to the Shelf Securities, which has been declared effective
by the Commission, an appointment of agent for service of process
on Form F-X (the “Form F-X”)
relating to the U.S. Registration Statement, and a prospectus
supplement relating to the offering of the Placement Shares,
together with the base prospectus filed as part of the U.S.
Registration Statement, pursuant to General Instruction II.L. of
Form F-10 (the “U.S.
Prospectus”). The U.S. Registration Statement, the
U.S. Prospectus and the Form F-X comply and, as amended or
supplemented, if applicable, will comply in all material respects
with the U.S. Securities Act of 1933, as amended and the applicable
rules and regulations of the Commission thereunder. The U.S.
Registration Statement, when it became effective, and the U.S.
Prospectus, as of the date thereof, did not contain and, as amended
or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading.
(m) No Other Defaults. The Company
is not in default or breach of, and the execution, delivery,
performance and compliance of or with the terms of this Agreement
and the distribution of the Placement Shares by the Company will
not result in any breach of, or be in conflict with or constitute a
default under, or create a state of facts which, after notice or
lapse of time, or both, would constitute a default under: (i) any
material term or provision of the articles or resolutions of the
directors (or any committee thereof) or the shareholders of the
Company, or any of the Material Subsidiaries, as applicable; (ii)
in any material respect, any material mortgage, note, indenture,
contract, agreement, instrument, lease or other document of which
any of the Company, or any of the Material Subsidiaries, is a party
or by which it is bound; or (iii) in any material respect, any
judgment, decree, order, statute, rule or regulation applicable to
the Company.
(n) Compliance with Anti-Corruption
Laws. None of the Company nor any of its Material
Subsidiaries, or to the knowledge of the Company, any director,
officer, agent, employee, affiliate or other person associated with
or acting on behalf of the Company or any of its Material
Subsidiaries, has: (i) made or provided any unlawful contribution
or gift or paid for or provided any unlawful entertainment or
expense relating in either case to political activity; (ii) made
any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii)
violated or is in violation of any provision of the Foreign Corrupt
Practices Act of 1977, as amended, and the rules and regulations
thereunder, to the extent applicable to the Company or such
Material Subsidiary; (iv) violated or is in violation of any
provision of the Corruption of
Foreign Public Officials Act (Canada), to the extent
applicable to the Company or such Material Subsidiary; or (v) made
or provided any bribe, rebate, payoff, influence payment, kickback
or other unlawful payment; and (B) neither the Company nor any of
its Material Subsidiaries will use, directly or indirectly, the
proceeds of the Offering in furtherance of an offer, payment,
promise to pay, or authorization of the payment or giving of money,
or anything else of value, to any person in violation of any
applicable anti-corruption laws.
(o) Compliance with Anti-Money Laundering
Laws. The operations of the Company and its Material
Subsidiaries are and have been conducted at all times in compliance
with the requirements of applicable anti-money laundering laws,
including, but not limited to, the Bank Secrecy Act of 1970, as
amended by the USA Patriot Act of 2001, the Proceeds of Crime (Money Laundering) and
Terrorist Financing Act (Canada), Part II.1 of the
Criminal Code (Canada) and,
in each case, the rules and regulations promulgated thereunder, and
the anti-money laundering laws of the various jurisdictions in
which the Company and its Material Subsidiaries conduct business
(collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by
or before any court or governmental agency, authority or body or
any arbitrator involving the Company or any of its Material
Subsidiaries with respect to the Money Laundering Laws is pending
or, to the knowledge of the Company, threatened.
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(p) Sanctions. (i) The Company
represents that, neither the Company nor any of its Subsidiaries
(collectively, the “Entity”) or any director, officer,
employee, agent, affiliate or representative of the Entity, is a
government, individual, or entity (in this paragraph (p),
“Person”) that is, or is owned or controlled by a
Person that is:
(A) the
subject of any sanctions administered or enforced by the U.S.
Department of Treasury’s Office of Foreign Assets Control
(“OFAC”), the United Nations Security Council, the
European Union, Her Majesty’s Treasury, Global Affairs Canada
or other relevant sanctions authorities, including, without
limitation, designation on OFAC’s Specially Designated
Nationals and Blocked Persons List or OFAC’s Foreign
Sanctions Evaders List (as amended, collectively,
“Sanctions”), nor
(B)
located, organized or resident in a country or territory that is
the subject of Sanctions that broadly prohibit dealings with that
country or territory (including, without limitation, Cuba, Iran,
North Korea, Sudan, Syria and the Crimea Region of the Ukraine)
(the “Sanctioned Countries”)).
(ii) The
Entity represents and covenants that it will not, directly or
indirectly, use the proceeds of the Offering, or lend, contribute
or otherwise make available such proceeds to any subsidiary, joint
venture partner or other Person:
(A) to
fund or facilitate any activities or business of or with any Person
or in any country or territory that, at the time of such funding or
facilitation, is the subject of Sanctions or is a Sanctioned
Country; or
(B) in
any other manner that will result in a violation of Sanctions by
any Person (including any Person participating in the offering,
whether as underwriter, advisor, investor or
otherwise).
(iii)
The Entity represents and covenants that, except as detailed in the
Prospectus, for the past 5 years, it has not engaged in, is not now
engaging in, and will not engage in, any dealings or transactions
with any Person, or in any country or territory, that at the time
of the dealing or transaction is or was the subject of Sanctions or
is or was a Sanctioned Country.
(q) None of the
Company, any of its Material Subsidiaries or to the knowledge of
the Company, any director, officer, agent, employee or affiliate of
the Company or any of its Material Subsidiaries is currently the
subject or the target of any sanctions administered or enforced by
the U.S. Government, including, without limitation, the Office of
Foreign Assets Control of the U.S. Department of the Treasury, Her
Majesty’s Treasury, Global Affairs Canada or other relevant
sanctions authority (collectively, “Sanctions”), and the Company will
not directly or indirectly use the proceeds of the Offering, or
lend, contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other person or entity (i) to
fund or facilitate any activities of or business with any person,
or in any country or territory, that, at the time of such funding,
is the subject or the target of Sanctions or (ii) in any other
manner that will result in a violation by any person (including any
person participating in the transaction, whether as underwriter,
agent, advisor, investor or otherwise) of Sanctions.
(r) Capitalization. The
Company is authorized to issue an unlimited number of Shares, of
which, as at August 19, 2019, 584,221,888 Shares are issued and
outstanding, all of which Shares are issued as fully paid and
non-assessable. The Company also has 15,872,998 common share
purchase warrants and 47,765,000 stock options to purchase common
shares of the Company outstanding as at August 19,
2019.
9
(s) Convertible Securities. Except
as provided for herein and under the Company’s stock option
plan and share-based compensation plan, no person now has any
agreement, option, right or privilege (whether pre-emptive or
contractual) capable of becoming an agreement (including
convertible securities or warrants) for the purchase, subscription
or issuance of Shares.
(t) Issuance of Placement
Shares.
(i)
The Company has
full corporate power and authority to issue the Placement
Shares.
(ii)
When issued, and
upon receipt of payment for the Placement Shares, all of the
Placement Shares will have been duly and validly created, allotted
and issued as fully paid and non-assessable.
(iii)
There is no
substantial U.S. market interest (within the meaning of Regulation
S) in the common shares of the Company.
(u) No
Orders. No Qualifying Authority or similar regulatory
authority or the TSX has issued any order which is currently
outstanding preventing or suspending trading in any securities of
the Company, no such proceeding is, to the knowledge of the
Company, after reasonable inquiry of the senior officers of the
Company, pending, contemplated or threatened and the Company is not
in material default of any requirement of Canadian Securities
Laws.
(v) Reporting
Issuer. The Company is a “reporting issuer” or
the equivalent thereof in each of the Qualifying Jurisdictions
where such concept exists and is not in breach of Canadian
Securities Laws, except where such breach would not, singly or in
the aggregate, be expected to have a Material Adverse
Effect.
(w) Independent
Accountants. PricewaterhouseCoopers LLP, the Company’s
auditors, who have certified certain consolidated financial
statements of the Company and delivered their report with respect
to the audited consolidated financial statements included or
incorporated by reference in the Prospectus, are independent
chartered accountants with respect to the Company within the
meaning of the Rules of Professional Conduct of the Institute of
Chartered Accountants of British Columbia.
(x) Transfer
Agent. Computershare Trust Company of Canada has been duly
appointed as transfer agent in respect of the Shares.
(y) No
Stabilization. The Company has not taken, directly or
indirectly, and will not take any action designed to or that would
constitute or that might reasonably be expected to cause or result
in, under Canadian Securities Laws or otherwise, stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Placement Shares.
(z) Compliance with Environmental
Laws. Except as set forth in or contemplated in the
Prospectus or as otherwise disclosed to the Agent in writing, the
Company and the Material Subsidiaries are: (i) in substantial
compliance with all applicable Environmental Laws; (ii) have
received and are in substantial compliance with all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses as
presently conducted; and (iii) have not received notice of any
actual or potential liability for the investigation or remediation
of any disposal or release of hazardous or toxic substances or
wastes, pollutants or contaminants, except where such
non-compliance with Environmental Laws, failure to receive required
permits, licenses or other approvals, or liability would not,
individually or in the aggregate, have a Material Adverse Effect,
whether or not arising from transactions in the ordinary course of
business. Except as set forth in the Prospectus, neither the
Company nor any of the Material Subsidiaries has been named as a
potentially responsible party under any applicable Environmental
Laws.
10
(aa) Exploration
Rights.
(i)
the Goldlund Gold
Project, Springpole Gold Project, Xxxxxxx Xxxx Project, Hope Brook
Gold Project, and Pickle Crow Gold Project, each as described in
the Prospectus (the “Material
Properties”) are the only mineral properties currently
material to the Company in which the Company or the Material
Subsidiaries have an interest; the Company, through the Material
Subsidiaries, holds either mineral claims, exploration permits,
prospecting permits or participant interests or other conventional
property or proprietary interests or rights, recognized in the
jurisdiction in which each Material Property is located in respect
of the Material Property under valid, subsisting and enforceable
title documents or other recognized and enforceable agreements,
contracts, arrangements or understandings, sufficient to permit the
Company (through the applicable Material Subsidiary), subject to
compliance with customary permit requirements for specific work
programs, to explore for the minerals relating thereto; all leases
or claims and permits relating to each Material Property in which
the Company (through the applicable Material Subsidiary) has an
interest or right have been validly located and recorded in
accordance with all applicable laws and are valid and subsisting;
except as disclosed in the Prospectus, the Company (through the
applicable Material Subsidiary) has all necessary rights and
interests relating to each Material Property in which the Company
(through the applicable Material Subsidiary) has an interest
granting the Company (through the applicable Material Subsidiary)
the right and ability to explore for minerals as are appropriate in
view of the rights and interest therein of the Company or the
applicable Material Subsidiary, with only such exceptions as do not
materially interfere with the current use made by the Company or
the applicable Material Subsidiary of the rights or interest so
held, and each of the proprietary interests or rights and each of
the agreements, contracts, arrangements or understandings and
obligations relating thereto referred to above is currently in good
standing in all respects in the name of the Company or the
applicable Material Subsidiary, except as would not have a Material
Adverse Effect, on the applicable Material Property; except as
disclosed in the Prospectus, the Company and the Material
Subsidiaries do not have any responsibility or obligation to pay
any commission, royalty, license, fee or similar payment to any
person with respect to the property rights thereof, other than
mineral claim fees, except where such fee or payment would not have
a Material Adverse Effect, either individually or in the
aggregate;
(ii)
except as disclosed
in the Prospectus, the Company and the Material Subsidiaries have
received all the material permits, certificates, and approvals
(collectively, the “Permits”) which are required for
the exploration of each Material Property as currently conducted;
and
(iii)
all assessments or
other work required to be performed in relation to the material
mineral claims of the Company and the applicable Material
Subsidiary in order to maintain their respective interests therein,
if any, have been performed to date and, except as disclosed in the
Prospectus, the Company and the applicable Material Subsidiary have
complied in all material respects with all applicable laws in this
regard as well as with regard to legal and contractual obligations
to third parties in this regard except in respect of mineral claims
that the Company and the applicable Material Subsidiary intend to
abandon or relinquish and except for any non-compliance which would
not either individually or in the aggregate have a Material Adverse
Effect; all such mineral claims are in good standing in all
respects as of the date of this Agreement.
11
(bb) Technical
Disclosure. The Company made available to the respective
authors thereof prior to the issuance of all of the applicable
technical reports filed by the Company on SEDAR relating to each
Material Property (the “Reports”), for the purpose of
preparing the Reports, as applicable, all material information
requested, and no such information contained any material
misrepresentation as at the relevant time the relevant information
was made available. All technical information disclosed in the
Prospectus, including information relating to any Material Property
for the purposes of the instruments noted below, has been reviewed
as required under National Instrument 43-101 – Standards of
Disclosure for Mineral Projects (“NI 43-101”), except as otherwise
set forth in the Prospectus, the Reports complied in all material
respects with the requirements of NI 43-101 as at the date of each
such Report and as of the date hereof there is no new material
scientific or technical information concerning each Material
Property that is not included in the Reports.
(cc) Material
Changes. Except as referred to in and contemplated by the
Prospectus, if any, subsequent to the respective dates as of which
information is given in such documents:
(i)
there has not been
any material change in the operations, assets, liabilities or
obligations (absolute, accrued, contingent or otherwise) of the
Company and the Material Subsidiaries on a consolidated
basis;
(ii)
there has not been
any material change in the capital or long-term debt of the Company
and the Material Subsidiaries on a consolidated basis;
and
(iii)
there has not been
any material change in the condition of the Company.
(dd) Fees.
Except as provided herein, there is no person, firm or corporation
which has been engaged by the Company to act for the Company and
which is entitled to any brokerage or finder’s fee in
connection with the Placement Shares, and in the event any such
person, firm or corporation establishes a claim for any fee from
the Agent, the Company covenants to indemnify and hold harmless the
Agent with respect thereto and with respect to all costs reasonably
incurred in the defence thereof.
(ee) Taxes.
Other than as disclosed to the Agent in writing: (i) the Company
and each Material Subsidiary has, on a timely basis, filed all
necessary tax returns and notices and has paid or made provision
for all applicable taxes of whatever nature for all tax years to
the date hereof to the extent such taxes have become due or have
been alleged to be due, except to the extent that the failure to do
any of the foregoing would not be expected to have a Material
Adverse Effect; and (ii) the Company is not aware of any material
tax deficiencies or material interest or penalties accrued or
accruing or alleged to be accrued or accruing, thereon with respect
to itself or any subsidiary which have not otherwise been provided
for by the Company, except to the extent that any such deficiency,
interest or penalty would not be expected to have a Material
Adverse Effect.
(ff) Listing
on TSX. The issued and outstanding Shares are listed and
posted for trading on the TSX and the Placement Shares will be
listed and posted for trading on the TSX upon the Company complying
with the conditions imposed by the TSX.
(gg) Exchange
Act Status. The issued and outstanding Shares are registered
pursuant to Section 12(b) of the of Securities Exchange
Act of 1934, as amended, and are quoted on the OTC-QX.
(hh) Purchases
by the Agent. The Company acknowledges and agrees that the
Agent has informed the Company that the Agent may, but is not
required to, to the extent permitted under Canadian Securities
Laws, this Agreement and the Exemption, purchase and sell Shares
for the Agent’s own accounts and for the accounts of its
clients at the same time as sales of Placement Shares occur
pursuant to this Agreement.
12
The
Company covenants and agrees with the Agent that:
(a) Prospectus Amendments. After
the date of this Agreement and until the completion of the sales
contemplated hereunder, (i) the Company will notify the Agent
promptly of the time when any subsequent amendment to the Base
Prospectus has been filed with any Qualifying Authority and has
become effective or where a receipt has been issued therefor, as
applicable, or any subsequent supplement to the Prospectus has been
filed (each, an “Amendment
Date”) and of any request by any Qualifying Authority
for any amendment or supplement to the Prospectus or for additional
information; (ii) the Company will file promptly all other material
required to be filed by it with the Qualifying Authorities;
(iii) the Company will submit to the Agent a copy of any
amendment or supplement to the Prospectus (other than a copy of any
documents incorporated by reference into Prospectus) a reasonable
period of time before the filing thereof and will afford the Agent
and the Agent’s counsel a reasonable opportunity to comment
on any such proposed filing and to perform any due diligence
investigations as may reasonably be required prior to such proposed
filing; and (iv) the Company will furnish to the Agent at the time
of filing thereof a copy of any document that upon filing is deemed
to be incorporated by reference in the Prospectus (provided that
the Company shall not be required to deliver documents or
information incorporated by reference into the Prospectus if such
documents are accessible from SEDAR) and the Company will cause
each amendment or supplement to the Prospectus to be filed with the
Qualifying Authorities as required pursuant to Shelf Procedures or,
in the case of any document to be incorporated therein by
reference, to be filed with the Qualifying Authorities as required
pursuant to Canadian Securities Laws, within the time period
prescribed.
(b) Notice of Stop Orders. The
Company will advise the Agent, promptly after it receives notice
thereof, of the issuance by the Qualifying Authorities of any stop
order or of any order preventing or suspending the use of the
Prospectus or other prospectus in respect of the Shares, of the
suspension of the qualification of the Shares for offering or sale
in the Qualifying Jurisdictions, of the initiation or threatening
of any proceeding for any such purpose, or of any request by the
Qualifying Authorities for the amending or supplementing of the
Prospectus or for additional information relating to the Shares. If
there is a Placement Notice that has been issued by the Company
that has not been suspended or terminated in accordance with the
notice requirements set forth in Sections 4 or 14, as applicable,
the Company will use its commercially reasonable efforts to prevent
the issuance of any stop order or any order preventing or
suspending the use of the Prospectus or other prospectus in respect
of the Shares, the suspension of any qualification for offering or
sale in the Qualifying Jurisdictions, and, in the event of the
issuance of any such stop order or any such order preventing or
suspending the use of any prospectus relating to the Shares or
suspending any such qualification, the Company will use its
commercially reasonable efforts to obtain the lifting or withdrawal
of such order as soon as possible. If there is no such outstanding
Placement Notice, then, if, in the Company’s determination
and at the Company’s sole discretion, it is necessary to
prevent the issuance of any stop order or have a stop order lifted,
the Company will use its commercially reasonable efforts to prevent
the issuance of any stop order or any order preventing or
suspending the use of the Prospectus or other prospectus in respect
of the Shares, the suspension of any qualification for offering or
sale in the Qualifying Jurisdictions, and, in the event of the
issuance of any such stop order or any such order preventing or
suspending the use of any prospectus relating to the Shares or
suspending any such qualification, the Company will use its
commercially reasonable efforts to obtain the lifting or withdrawal
of such order as soon as possible.
13
(c) Delivery of Prospectus; Subsequent
Changes. Within the time during which a prospectus relating
to the Shares is required to be delivered by the Agent under
Canadian Securities Laws (disregarding, for such purpose, the
applicability of the Exemption), the Company will comply in all
material respects with all requirements imposed upon it by Canadian
Securities Laws, as appropriate and as from time to time in force,
and will file on or before their respective due dates all reports
required to be filed by it with the Qualifying Authorities pursuant
to Canadian Securities Laws, as appropriate. If during such period
any event occurs as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of
material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary
to amend or supplement the Prospectus to comply with Canadian
Securities Laws, the Company will immediately notify the Agent to
suspend the offering of Placement Shares during such period and,
if, in the Company’s determination and at the Company’s
sole discretion, it is necessary to file an amendment or supplement
to the Prospectus to comply with Canadian Securities Laws, the
Company will promptly prepare and file with the Qualifying
Authorities such amendment or supplement as may be necessary to
correct such statement or omission or to make the Prospectus comply
with such requirements, and the Company will furnish to the Agent
such number of copies of such amendment or supplement as the Agent
may reasonably request.
(d) Prospectus. The Company will
furnish to the Agent and its counsel (at the expense of the
Company) copies of the Prospectus (including all documents
incorporated by reference therein) and all amendments and
supplements to the Prospectus that are filed with the Qualifying
Authorities during the period in which a prospectus relating to the
Shares is required to be delivered by the Qualifying Authorities
(including all documents filed with the Qualifying Authorities
during such period that are deemed to be incorporated by reference
therein), in each case as soon as reasonably practicable and in
such quantities as the Agent may from time to time reasonably
request; provided, however, the Company shall not be required to
furnish any documents to the Agent that are available on
SEDAR.
(e) Company Information. The
Company will furnish to the Agent such information in its
possession as is reasonably requested by the Agent as necessary or
appropriate to fulfil its obligations as agent pursuant to this
Agreement and Canadian Securities Laws.
(f) Material Non-Public Information. The
Company covenants that it will not issue a Placement Notice to the
Agent in accordance with Section 2 hereof if the Company is in
possession of material non-public information regarding the Company
and its subsidiaries, taken as a whole, or the Shares.
(g) Expenses. The Company, whether
or not the transactions contemplated hereunder are consummated or
this Agreement is terminated in accordance with Section 14, will
pay all expenses relating to the following matters: (i) the
preparation and filing of the Prospectus and each amendment and
supplement thereto, (ii) the preparation, issuance and delivery of
the Placement Shares, (iii) all fees and disbursements of the
Company’s counsel, accountants and other advisors, (iv) the
reasonable fees, disbursements and expenses of counsel to the Agent
in connection with this Agreement and the Prospectus and ongoing
services in connection with the transaction contemplated hereunder,
(v) the qualification of the Placement Shares under securities law,
including filing fees in connection therewith, (vi) the printing
and delivery to the Agent of copies of the Prospectus and any
amendments or supplements thereto, and of this Agreement, (vii) the
fees and expenses incurred in connection with the listing or
qualification of the Placement Shares for trading on the TSX, and
(viii) the filing fees and expenses related to the Qualifying
Authorities. All fees and expenses are to be paid in the currency
in which such fees and expenses were incurred.
14
(h) Use of Proceeds. The Company
will use the Net Proceeds as described in the
Prospectus.
(i) Change of Circumstances. During
the term of this Agreement, the Company will, at any time during a
fiscal quarter in which the Company intends to deliver a Placement
Notice to the Agent to sell Placement Shares, advise the Agent
promptly after it has received notice or obtained knowledge
thereof, of any information or fact that would alter or affect in
any material respect any representation, opinion, certificate,
letter or other document provided to the Agent pursuant to this
Agreement.
(j) Due Diligence Cooperation. The
Company will cooperate with any due diligence review conducted by
the Agent or their Agent, including, without limitation, providing
information and making available documents and senior corporate
officers, as the Agent or its counsel may reasonably request;
provided, however, that the Company shall be required to make
available senior corporate officers only (i) by telephone or at the
Company’s principal offices and (ii) during the
Company’s ordinary business hours.
(k) Affirmation of Representations,
Warranties, Covenants and Other Agreements. Upon
commencement of the offering of the Placement Shares under this
Agreement (and upon the recommencement of the offering of the
Placement Shares under this Agreement following any suspension of
sales under Section 4), and, upon delivery of each Placement
Notice at each Applicable Time, each Settlement Date and each
Amendment Date, the Company shall be deemed to have affirmed each
representation and warranty contained in this
Agreement.
(l) Required Filings Relating to Placement
of Placement Shares. In each quarterly report, annual
information form or annual financial statements filed by the
Company in respect of any period in which sales of Placement Shares
were made by the Agent under this Agreement, the Company shall set
forth with regard to such period the number of Placement Shares
sold through the Agent under this Agreement, the Net Proceeds
received by the Company and the compensation paid by the Company to
the Agent with respect to sales of Placement Shares pursuant to
this Agreement. For so long as the Shares are listed on the TSX,
the Company will provide the TSX with all information it requires
with respect to the Offering within the timelines prescribed by the
TSX.
(m) Representation Dates;
Certificate. During the term of this Agreement, each time
the Company (i) files a Prospectus relating to the Placement Shares
or amends or supplements the Prospectus relating to the Placement
Shares by means of an amendment or supplement but not by means of
incorporation of document(s) by reference to the Prospectus
relating to the Placement Shares; (ii) files or amends an annual
information form; (iii) files or amends annual or interim financial
statements; or (iv) at any other time reasonably requested by the
Agent (each date of filing shall be a “Representation Date”), the Company
shall furnish the Agent with a certificate, in the form attached
hereto as Exhibit A-1 within three (3) Trading Days of any
Representation Date. The requirement to provide a certificate under
this Section 8(m) shall be waived for any Representation Date
occurring at a time at which no Placement Notice is pending, which
waiver shall continue until the earlier to occur of the date the
Company delivers a Placement Notice hereunder (which for such
calendar quarter shall be considered a Representation Date) and the
next occurring Representation Date. Notwithstanding the foregoing,
if the Company subsequently decides to sell Placement Shares
following a Representation Date when the Company relied on such
waiver and did not provide the Agent with a certificate under this
Section 8(m), then before the Company delivers the Placement Notice
or any Agent sells any Placement Shares, the Company shall provide
the Agent with the certificate, in the form attached hereto as
Exhibit A-1, dated the date of the Placement Notice.
(n) Legal Opinions. Upon execution
of this Agreement and (x) within three (3) Trading Days of each
Representation Date with respect to which the Company is obligated
to deliver the certificate in the form attached hereto as Exhibit
A-1 for which no waiver is applicable and (y) concurrently with the
delivery of a certificate pursuant to the last sentence of Section
8(m), the Company will furnish or cause to be furnished to the
Agent, the written opinions of Company Counsel, such opinions to be
substantially similar to the form attached hereto as Exhibit B,
dated the date that the opinion is required to be delivered, in
form and substance satisfactory to the Agent and its counsel,
acting reasonably, and such other opinions as the Agent or counsel
to the Agent may reasonably require in connection with the issuance
of the Placement Shares or the Material Properties, or, in lieu of
such opinions, counsel last furnishing such opinion to the Agent
may furnish the Agent with a letter to the effect that the Agent
may rely on such last opinion to the same extent as though it was
dated the date of such letter authorizing reliance (except that
statements in such last opinion shall be deemed to relate to the
Prospectus as amended and supplemented to the time of delivery of
such letter authorizing reliance).
15
(o) Comfort Letters. Upon execution
of this Agreement and (x) within three (3) Trading Days of each
Representation Date with respect to which the Company is obligated
to deliver the certificate in the form attached hereto as Exhibit
A-1 for which no waiver is applicable and (y) concurrently with the
delivery of a certificate pursuant to the last sentence of Section
8(m), the Company shall cause PricewaterhouseCoopers LLP, the
Company’s auditors, to furnish to the Agent a letter (each, a
“Comfort
Letter”) addressed to the Agent dated the date such
Comfort Letter is delivered, in form and substance satisfactory to
the Agent, acting reasonably, (A) relating to the verification of
certain of the financial information and statistical and accounting
data relating to the Company and its subsidiaries, as applicable,
contained in the Prospectus or incorporated by reference therein,
which comfort letters shall be based on a review having a cut-off
date not more than two (2) business days prior to the date of such
letter, (B) stating that such auditors are independent public
accountants within the meaning of Canadian Securities Laws and the
rules and regulations thereunder, and that in their opinion the
portion of the audited financial statements of the Company
incorporated by reference in the Prospectus and audited by such
auditors comply as to form in all material respects with the
applicable accounting requirements of Canadian Securities Laws (the
first such letter in each case, the “Initial Comfort Letter”) and
(C) if applicable, updating the Initial Comfort Letter with
any information which would have been included in the Initial
Comfort Letter had it been given on such date and modified as
necessary to relate to the Prospectus, as amended and supplemented
to the date of such letter.
(p) Market Activities. The Company
will not, directly or indirectly, (i) take any action designed to
or that would constitute or that might reasonably be expected to
cause or result in, under Canadian Securities Laws or otherwise,
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Placement Shares or
(ii) bid for, or purchase the Placement Shares, or pay anyone any
compensation for soliciting purchases of the Placement Shares other
than the Agent.
(q) No Offer to Sell. Neither the
Agent nor the Company (including its agents and representatives,
other than the Agent in each of their capacities as such) will
make, use, prepare, authorize, approve or refer to any written
communication that constitutes an offer to sell or solicitation of
an offer to buy Placement Shares hereunder.
(r) Consent to the Agent’s
Trading. The Company consents to the extent permitted under
Canadian Securities Laws, the rules of the TSX, the Exemption and
under this Agreement, to the Agent trading in the Shares of the
Company: (i) for the account of their clients at the same time as
sales of Placement Shares occur pursuant to this Agreement; and
(ii) for the Agent’s own accounts provided that no such
purchase or sale shall take place by the Agent while such Agent has
received a Placement Notice that remains in effect, unless the
Company has expressly authorized or consented in writing to any
such trades by such Agent.
(s) Sale of Placement Shares in the United
States. The
Company will not engage in, and not permit any of its affiliates or
any person acting on its behalf to engage in, any Directed Selling
Efforts or in any form of General Solicitation or General
Advertising in the United States with respect to the Placement
Shares.
(t) Listing of Placement Shares.
Prior to the date of the first Placement Notice, the Company will
use its reasonable best efforts to cause the Placement Shares to be
listed on the TSX.
16
The Agent will use its commercially reasonable
efforts to deliver to the Company, for each month during which
Placement Shares are sold through the Agent or distributed pursuant
to this Agreement, and otherwise as reasonably requested by the
Company to enable the Company to meet its monthly reporting
requirements under Canadian Securities Laws or any applicable
requirements of the TSX or any other Marketplace or the Exemption,
promptly upon a request from the Company, a report providing
sufficient information regarding the distribution of the Placement
Shares for the Company to meet its monthly reporting requirements
under Canadian Securities Laws or any applicable requirements of
the TSX or any other Marketplace or the Exemption. Unless Canadian
Securities Laws, the applicable requirements of the TSX or such
other Marketplace or the Exemption otherwise require, the Company
and Agent agree that the Agent's report referred to in this
Section 9
shall state the aggregate number of
Placement Shares issued on all Settlement Dates occurring during
the month together with such information as specified in
Section 3
on an aggregate monthly
basis.
10. Additional
Representations and Covenants of the Company
(a) Distribution of Offering
Materials. The Company has not distributed and will not
distribute, during the term of this Agreement, any “marketing
materials” (as defined in National Instrument 41-101 –
General Prospectus
Requirements) in connection with the offering and sale of
the Placement Shares other than the Prospectus, provided that the
Agent covenants with the Company not to take any action that would
result in the Company being required to file with the Qualifying
Authorities any “marketing materials” that otherwise
would not be required to be filed by the Company, but for the
action of the Agent.
11. Conditions
to the Agent’s Obligations.
The
obligations of the Agent hereunder with respect to a Placement will
be subject to the continuing accuracy and completeness of the
representations and warranties made by the Company herein, to the
due performance by the Company of its obligations hereunder, to the
completion by the Agent of a due diligence review satisfactory to
the Agent in its reasonable judgment, and to the continuing
satisfaction (or waiver by the Agent in its sole discretion) of the
following additional conditions:
(a) Prospectus Supplement. The
Prospectus Supplement shall have been filed with the Qualifying
Authorities under the Shelf Procedures and in accordance with this
Agreement, all requests for additional information on the part of
the Qualifying Authorities shall have been complied with to the
reasonable satisfaction of the Agent and the Agent’s counsel
and the Exemption shall remain in full force and effect without
amendment.
(b) No Material Notices. None of
the following events shall have occurred and be continuing:
(i) receipt by the Company of any request for additional
information from the Qualifying Authorities or any other federal or
state or foreign or other governmental, administrative or
self-regulatory authority during the period of effectiveness of the
Prospectus, the response to which would require any amendments or
supplements to the Prospectus; (ii) the issuance by the Qualifying
Authorities or any other federal or state or foreign or other
governmental authority of any stop order suspending the
effectiveness of the Prospectus or the initiation of any
proceedings for that purpose; (iii) receipt by the Company of any
notification with respect to the suspension of the qualification or
exemption from qualification of any of the Placement Shares for
sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; (iv) the occurrence of any event that
makes any statement made in the Prospectus or any document
incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires the making of any
changes in the Prospectus or documents so that it will not contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading; and (v) the Company’s
reasonable determination that an amendment to the Prospectus would
be appropriate.
17
(c) Material Changes. Except as
contemplated and appropriately disclosed in the Prospectus, or
disclosed in the Company’s reports filed with the Qualifying
Authorities, in each case at the time the applicable Placement
Notice is delivered, there shall not have been any material change,
on a consolidated basis, in the authorized common share capital of
the Company, or any development that causes or could reasonably be
expected to cause a Material Adverse Effect (financial or
otherwise), the effect of which, in the sole judgment of the Agent
(without relieving the Company of any obligation or liability it
may otherwise have), acting reasonably, is so material as to make
it impracticable or inadvisable to proceed with the offering of the
Placement Shares on the terms and in the manner contemplated in the
Prospectus.
(d) Certificate. The Agent shall
have received the certificate required to be delivered pursuant to
Section 8(m) on or before the date on which delivery of such
certificate is required pursuant to Section 8(m).
(e) Legal Opinions. The Agent shall
have received the opinions of counsel to be delivered pursuant to
Section 8(n) on or before the date on which such delivery of such
opinions are required pursuant to Section 8(n). In addition,
Company Counsel may rely upon the opinions of local counsel as to
all matters relating to jurisdictions other than the Provinces of
Ontario, Alberta, and British Columbia, not governed by the laws of
the respective jurisdictions in which they are qualified to
practice, and may rely, to the extent appropriate in the
circumstances, as to matters of fact on certificates of the
Company, auditors and public officials, and that the opinions of
counsel may be subject to usual qualifications as to equitable
remedies, creditors’ rights laws and public policy
considerations.
(f) Comfort Letters. The Agent
shall have received the Comfort Letter(s) required to be delivered
pursuant to Section 8(n) on or before the date on which the
delivery of such letter is required pursuant to Section
8(n).
(g) Approval for Listing; No
Suspension. The Placement Shares shall have either been (i)
approved for listing, subject to notice of issuance, on the TSX, or
(ii) the Company shall have filed an application for listing of the
Placement Shares on the TSX at or prior to the issuance of the
Placement Notice. Trading in the Shares shall not have been
suspended on such markets.
(h) Other Materials. On each date
on which the Company is required to deliver a certificate pursuant
to Section 8(m), the Company shall have furnished to the Agent such
appropriate further information, certificates and documents as the
Agent may reasonably request.
(i) Securities Filings Made. All
filings required by the Qualifying Authorities to have been filed
prior to the issuance of any Placement Notice hereunder shall have
been made within the applicable time period prescribed for such
filing by Canadian Securities Laws.
18
(a) The Company shall
indemnify and hold harmless each of the Agent and the Agent’s
affiliates, directors, officers, shareholders, partners, members,
agents and employees and each person who controls the Agent or any
of its affiliates within the meaning of Canadian Securities Laws
(collectively, the “Indemnified Parties” and
individually, an “Indemnified
Party”) from and against all liabilities, claims,
demands, losses, costs, damages and expenses (including, without
limitation, any legal or other expenses incurred by them in
connection with investigating or defending any such liability,
claim, demand, loss, damage or expense) in any way caused by or
arising directly or indirectly from or in consequence of: (i) any
information or statement (except for the Agent’s Information
(as defined below)) in the Prospectus or any amendment thereto or
in any other document incorporated therein by reference being
alleged to be a misrepresentation or untrue, or any omission or
alleged omission to state therein any fact or information (except
for the Agent’s Information) required to be stated therein or
necessary to make any of the statements therein not misleading in
light of the circumstances in which they were made; (ii) any untrue
statement or alleged untrue statement of a material fact in the
Prospectus or any amendment thereto, or any omission or alleged
omission of a material fact (except for the Agent’s
Information) necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
(iii) the Company not complying with any requirement of applicable
Canadian Securities Laws in connection with the transactions
contemplated herein; or (iv) any order made or any inquiry,
investigation (whether formal or informal) or proceeding commenced
or threatened by any securities, regulatory or other competent
authority based upon the circumstances described in (i), (ii) or
(iii) above which operates to prevent or restrict the trading in or
the distribution of the Placement Shares or any of them in any of
the provinces and territories of Canada, except that if and to the
extent that a court of competent jurisdiction in a final judgment
that has become non-appealable determines that the liability,
claim, demand, loss, cost, damage or expense was primarily and
directly the result of the gross negligence or wilful misconduct of
the Indemnified Party claiming indemnity, such Indemnified Party
will promptly reimburse the Company any funds advanced to the
Indemnified Party in respect of such liability, claim, demand,
loss, cost, damage or expense and the indemnity provided for in
this Section 12 shall cease to apply to such Indemnified Party in
respect of such liability, claim, demand, loss, cost, damage or
expense. For greater certainty, the Company and the Agent agree
that they do not intend that any failure by the Agent to conduct
such reasonable investigation as necessary to provide the Agent
with reasonable grounds for believing the Prospectus contained no
misrepresentation shall constitute “ “gross
negligence” or “wilful misconduct” for the
purposes of this Section 12 or otherwise disentitle the Agent from
indemnification hereunder.
The
Agent agrees to indemnify and hold harmless each of the Company and
its directors, officers, employees and agents and each person who
controls the Company within the meaning of Canadian Securities
Laws, from and against any and all losses (other than loss of
profits), claims, damages and liabilities (including, without
limitation, the legal fees and other expenses incurred in
connection with any suit, action or proceeding or any claim
asserted) caused by (i) any untrue statement or alleged untrue
statement of a material fact relating solely to the Agent that has
been provided in writing to the Company by or on behalf of any
Agent specifically for inclusion in and contained in the Prospectus
(including any amendment or supplement if the Company shall have
furnished any amendments or supplements thereto) or (ii) any
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading made solely in reliance on facts or
information relating solely to the Agent or any of them that has
been provided in writing to the Company by or on behalf of any
Agent specifically for inclusion therein.
The
Company acknowledges that the name of the Agent set forth on the
cover constitutes the only information furnished in writing by or
on behalf of the Agent for inclusion in the Prospectus
(collectively, the “Agent’s
Information”).
19
(b) In order to
provide for just and equitable contribution in circumstances in
which the indemnification provided for in Section 12(a) hereof is
unavailable, in whole or in part, for any reason to an Indemnified
Party in respect of any liabilities, claims, demands, losses,
costs, damages and expenses referred to therein, the Company shall
contribute to the amount paid or payable (or, if such indemnity is
unavailable only in respect of a portion of the amount so paid or
payable, such portion of the amount so paid or payable) by such
Indemnified Party as a result of such liabilities, claims, demands,
losses, costs, damages and expenses:
(i)
in such proportion
as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Agent on the other hand from the
distribution of the Placement Shares; or
(ii)
if the allocation
provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Agent on the other
hand in connection with the matters or things referred to in
Section 12(a) hereof which resulted in such liabilities, claims,
demands, losses, costs, damages or expenses, as well as any other
relevant equitable considerations;
provided
that the Agent shall not in any event be liable to contribute, in
the aggregate, any amount in excess of the Placement Fee or any
portion thereof actually received. The relative benefits received
by the Company on the one hand and the Agent on the other shall be
deemed to be in the same ratio as the total net proceeds from the
distribution of Placement Shares received by the Company is to the
Placement Fee received by the Agent. The relative fault of the
Company on the one hand and of the Agent on the other shall be
determined by reference to, among other things, whether the matters
or things referred to in Section 12(a) hereof which resulted in
such liabilities, claims, demands, losses, costs, damages and
expenses relate to information supplied by or steps or actions
taken or done or not taken or done by or on behalf of the Company
(including indirectly as aforesaid) or to information supplied by
or steps or actions taken or done or not taken or done by or on
behalf of the Agent and the relative intent, knowledge, access to
information and opportunity to correct or prevent such statement,
omission or misrepresentation, or other matter or thing referred to
in Section 12(a) hereof. The parties hereto agree that it would not
be just and equitable if contribution pursuant to this Section
12(b) were determined by any method of allocation which does not
take into account the equitable considerations referred to above in
this Section 12(b).
Notwithstanding the
provisions of this Section 12(b), no person guilty of fraudulent
misrepresentation shall be entitled to contribution from any person
who was not guilty of such fraudulent
misrepresentation.
(c) If any matter or
thing contemplated by this Section 12 shall be asserted
against any Indemnified Party, the Indemnified Party concerned
shall promptly notify the indemnifying party (the
“Indemnifying
Party”) and the Agent of the nature of such claim
(provided that any failure to so notify the Indemnifying Party
promptly shall relieve the Indemnifying Party of liability under
this Section 12 only to the extent that such failure
materially prejudices the Indemnifying Party’s ability to
defend such claim), and the Indemnifying Party shall, subject as
hereinafter provided, be entitled (but not required) to assume the
defence of any suit or proceeding (including any governmental or
regulatory investigation or proceeding) brought to enforce such
claim. Any such defence shall be through legal counsel acceptable
to the Indemnified Party (whose acceptance shall not be
unreasonably withheld) and no admission of liability or settlement
shall be made by any Indemnified Party in respect of any
Indemnified Party without, in each case, the prior written consent
of the Indemnified Party. An Indemnified Party shall have the right
to employ separate counsel in any such suit and participate in the
defence thereof but the fees and expenses of such counsel shall be
at the expense of the Indemnified Party unless: (i) the
Indemnifying Party fails to assume the defence of such suit on
behalf of the Indemnified Party within a reasonable period of time;
or (ii) the employment of such counsel has been authorized in
writing by the Indemnifying Party; (iii) the Indemnified Party has
reasonably concluded, based on advice of counsel, that there may be
one or more legal defences available to the Indemnified Party which
are different from or in addition to those available to the
Company, or (iv) a conflict or potential conflict exists, based on
advice of counsel to the Indemnified Party (and in the case of
(iii) and (iv), if such Indemnified Party notifies the Company in
writing that it elects to employ separate counsel at the expense of
the Company, the Company shall not have the right to assume the
defence of such suit or proceeding on behalf of the Indemnified
Party and shall be liable to pay the reasonable fees and expenses
of counsel for the Indemnified Party), it being understood,
however, that the Company shall not, in connection with any one
such action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses
of more than one separate law firm for all such Indemnified Parties
(other than local counsel). No Indemnifying Party shall, without
the prior written consent of each Indemnified Party, settle or
compromise or consent to the entry of any judgment in any pending
or threatened claim, action or proceeding relating to the matters
contemplated by this Section 11 (whether or not any Indemnified
Party is a party thereto), unless such settlement, compromise or
consent (1) includes an express and unconditional release of each
Indemnified Party, in form and substance reasonably satisfactory to
such indemnified party, from all liability arising out of such
litigation, investigation, proceeding or claim and (2) does not
include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any Indemnified Party. It is
the intention of the Company to constitute the Agent as trustee,
for the Agent’s directors, officers, shareholders, agents and
employees, and each person who controls the Agent of the covenants
of the Company under Sections 12(a) and 12(b) hereof with respect
to the Agent’s directors, officers, shareholders, agents and
employees, and each person who controls the Agent, and the Agent
agrees to accept such trust and to hold and enforce such covenants
on behalf of such persons.
20
The
Company agrees that in case any legal proceedings or investigation
shall be brought against or initiated against the Company by any
governmental commission, regulatory authority, exchange, court or
other authority and an Indemnified Party or other representative of
the Agent shall be required to testify or respond to procedures
designed to discover information regarding, in connection with or
relating to the performance of professional services rendered to
the Company by the Agent, the Company agrees to pay the Agent the
reasonable costs (including an amount to reimburse the Agent for
the time spent by the personnel in connection therewith on a
per diem basis and
out-of-pocket expenses) in connection therewith.
(d) The rights provided
in this Section 12 shall be in addition to and not in derogation of
any other right which the Agent may have by statute or otherwise at
law.
All
representations and warranties of the Company herein or in
certificates delivered pursuant hereto shall remain operative and
in full force and effect regardless of (i) any investigation made
by or on behalf of the Agent, its affiliates, directors, officers,
shareholders, agents and employees and any controlling persons,
(ii) delivery and acceptance of the Placement Shares and payment
therefor or (iii) any termination of this Agreement.
(a) The Agent may
terminate this Agreement, by notice to the Company, as hereinafter
specified at any time (1) if there has been, since the time of
execution of this Agreement or since the date as of which
information is given in the Prospectus, any change, or any
development or event involving a prospective change, in the
condition, financial or otherwise, or in the business, properties,
earnings, results of operations or prospects of the Company and its
Subsidiaries considered as one enterprise, whether or not arising
in the ordinary course of business, which individually or in the
aggregate, in the sole judgment of the Agent is material and
adverse and makes it impractical or inadvisable to market the
Placement Shares or to enforce contracts for the sale of the
Placement Shares, (2) if there has occurred any material adverse
change in the financial markets in Canada or the international
financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development
involving a prospective change in national or international
political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the
Agent, impracticable or inadvisable to market the Placement Shares
or to enforce contracts for the sale of the Placement Shares, (3)
if trading in the Shares has been suspended or limited by the
Qualifying Authorities or the TSX, or if trading generally on the
TSX has been suspended or limited, or minimum prices for trading
have been fixed on the TSX, (4) if any suspension of trading of any
securities of the Company on any exchange or in the
over-the-counter market shall have occurred and be continuing, or
(5) if a major disruption of securities settlements or clearance
services in Canada shall have occurred and be continuing. Any such
termination shall be without liability of any party to any other
party except that the provisions of Sections 8(g), 12, 13, 14(e),
16, 19 and 20 hereof shall remain in full force and effect
notwithstanding such termination. If the Agent elects to terminate
this Agreement as provided in this Section 13(a), the Agent shall
provide the required notice as specified in Section
14.
(b) The Company shall
have the right to terminate this Agreement by giving ten (10)
days’ notice as hereinafter specified to terminate this
Agreement in its sole discretion at any time after the date of this
Agreement. Any such termination shall be without liability of any
party to any other party except that the provisions of Sections
8(g), 12, 13, 14(e), 16, 19 and 20 hereof shall remain in full
force and effect notwithstanding such termination.
21
(c) The Agent shall
have the right to terminate its obligations under this Agreement in
its sole discretion by giving ten (10) days’ notice as
hereinafter specified to terminate this Agreement in its sole
discretion at any time after the date of this Agreement. Any such
termination shall be without liability of any party to any other
party except that the provisions of Sections 8(g), 12, 13, 14(e),
16, 19 and 20 hereof shall remain in full force and effect
notwithstanding such termination.
(d) This Agreement
shall remain in full force and effect until the earliest to occur
of (i) termination pursuant to Sections 14(a), 14(b)or 14(c) or
otherwise by mutual agreement of the parties; (ii) such date that
the aggregate gross sales proceeds of Shares sold pursuant to this
Agreement equals $15,000,000; or (iii) July 24, 2021; provided that
any such termination shall in all cases be deemed to provide that
Sections 8(g), 12, 13, 14(e), 16, 19 and 20 shall remain in full
force and effect.
(e) Any termination
of this Agreement shall be effective on the date specified in such
notice of termination; provided that such termination shall not be
effective until the close of business on the date of receipt of
such notice by the Agent or the Company, as the case may be. If
such termination shall occur prior to the Settlement Date for any
sale of Placement Shares, such Placement Shares shall settle in
accordance with the provisions of this Agreement.
(f) In the event that
the Company terminates this Agreement, as permitted under
Section 14(a), the Company shall be under no continuing
obligation, either pursuant to this Agreement or otherwise, to
utilize the services of the Agent in connection with any sale of
securities of the Company or to pay any compensation to the Agent
other than compensation with respect to sales of Placement Shares
subscribed on or before the termination date and the Company shall
be free to engage other placement agents and underwriters before
(except with respect to the sale of securities hereunder), from and
after the termination date with no continuing obligation to the
Agent.
15. Notices
All
notices or other communications required or permitted to be given
by any party to any other party pursuant to the terms of this
Agreement shall be in writing and if sent to the Agent, shall be
delivered to:
Cantor
Xxxxxxxxxx Canada Corporation
000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxxxxxxx
Xxxxx and Xxxxxx Xxxxxx
Email: [REDACTED]
22
and
Cantor
Xxxxx Xxxxxxxxxx
000
Xxxx Xxx.
Xxx
Xxxx, XX
Attention: General
Counsel
Email: [REDACTED]
with a
copy to:
Stikeman Elliott
LLP
000 Xxx
Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxx
Xxxxxxx
Email: [REDACTED]
or if
sent to the Company, shall be delivered to:
0000-000 Xxxx
Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx
Xxxxxxxx X0X 0X0
Attention: Xxxxx
Xxxxx, General Counsel & Corporate Secretary
Email: [REDACTED]
with a
copy to:
Xxxxxxx
Xxxxx LLP
000
Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxx
Xxxxxxxx X0X 0X0
Attention: Xxxxx
Xxxxx
Email: [REDACTED]
Each
party to this Agreement may change such address for notices by
sending to the other parties to this Agreement written notice of a
new address for such purpose. Each such notice or other
communication shall be deemed given (i) when delivered personally
or by e-mail (with an original to follow) on or before 4:30 p.m.
(Toronto time), on a Business Day or, if such day is not a Business
Day, on the next succeeding Business Day, (ii) on the next Business
Day after timely delivery to a nationally-recognized overnight
courier, (iii) on the Business Day actually received if deposited
in the mail (certified or registered mail, return receipt
requested, postage prepaid), and (iv) if sent by email, on the
Business Day on which receipt is confirmed by the individual to
whom the notice is sent, other than via auto-reply. For purposes of
this Agreement, “Business Day” shall mean any day on
which the TSX is open for business.
23
The
Company irrevocably (i) agrees that any legal suit, action or
proceeding against the Company brought by the Agent or by any
person who controls any Agent arising out of or based upon this
Agreement or the transactions contemplated thereby may be
instituted in any court of the Province of Ontario, (ii) waives, to
the fullest extent it may effectively do so, any objection which it
may now or hereafter have to the laying of venue of any such
proceeding and (iii) submits to the exclusive jurisdiction of such
courts in any such suit, action or proceeding. To the extent that
the Company has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment
in aid of execution, execution or otherwise) with respect to itself
or its property, it hereby irrevocably waives such immunity in
respect of its obligations under the above- referenced documents,
to the extent permitted by law. The provisions of this
Section 16 shall survive any termination of this Agreement, in
whole or in part.
17. Successors
and Assigns
This
Agreement shall inure to the benefit of and be binding upon the
Company and its affiliates, directors, officers, shareholders,
agents and employees and the controlling persons referred to in
Section 12 hereof. References to any of the parties contained in
this Agreement shall be deemed to include the successors and
permitted assigns of such party. Nothing in this Agreement, express
or implied, is intended to confer upon any party other than the
parties hereto or their respective successors and permitted assigns
any rights, remedies, obligations or liabilities under or by reason
of this Agreement, except as expressly provided in this Agreement.
No party may assign its rights or obligations under this Agreement
without the prior written consent of the other
parties.
18. Adjustments
for Stock Splits
The
parties acknowledge and agree that all share related numbers
contained in this Agreement shall be adjusted to take into account
any stock split, stock dividend or similar event effected with
respect to the Shares.
This
Agreement (including all schedules and exhibits attached hereto and
Placement Notices issued pursuant hereto) constitutes the entire
agreement and supersedes all other prior and contemporaneous
agreements and undertakings, both written and oral, among the
parties hereto with regard to the subject matter hereof. Neither
this Agreement nor any term hereof may be amended except pursuant
to a written instrument executed by the Company and the Agent. In
the event that any one or more of the provisions contained herein,
or the application thereof in any circumstance, is held invalid,
illegal or unenforceable, the validity, legality and enforceability
of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired
thereby.
This
Agreement and any claim, controversy or dispute relative to or
arising out of this Agreement shall be governed by and interpreted
in accordance with the laws of the Province of Ontario and the
federal laws of Canada applicable in the Province of Ontario. Each
of the parties hereto irrevocably attorns to the jurisdiction of
the courts of the Province of Ontario.
24
21. Waiver
of Jury Trial
The
Company and the Agent hereby irrevocably waive any right either may
have to a trial by jury in respect of any claim based upon or
arising out of this Agreement or any transaction contemplated
hereby.
22. Absence
of Fiduciary Duties
The
parties acknowledge that they are sophisticated in business and
financial matters and that each of them is solely responsible for
making its own independent investigation and analysis of the
transactions contemplated by this Agreement. They further
acknowledge that the Agent has not been engaged by the Company to
provide, and has not provided, financial advisory services in
connection with the terms of the Offering nor has the Agent assumed
at any time a fiduciary relationship to the Company in connection
with such Offering. The Company hereby waives, to the fullest
extent permitted by law, any claims it may have against the Agent
for breach of fiduciary duty or alleged breach of fiduciary duty
and agrees the Agent shall have no liability (whether direct or
indirect) to the Company in respect of such a fiduciary duty claim
or to any person asserting a fiduciary duty claim on behalf of or
in right of the Company, including shareholders, employees or
creditors of Company.
As used
in this Agreement, the following terms have the respective meanings
set forth below:
(a)
“Amendment Date” has the meaning
given thereto in Section 8(a) hereof;
(b)
“Applicable
Time” means (i) each Representation Date, (ii) the
time of each sale of any Placement Shares pursuant to this
Agreement and (iii) each Settlement Date;
(c)
“Authorized Representative” has the
meaning given thereto in Section 2(a) hereof;
(d)
“Base Prospectus” has the meaning
given thereto in Section 6 hereof;
(e)
“Canadian Securities Laws” means
the Securities Act (Ontario), the equivalent
legislation in each of the other Qualifying Jurisdictions and
applicable rules and regulations under such laws, together with
applicable published national, multilateral and local policy
statements, instruments, notices and blanket orders of the
Qualifying Authorities in each of the Qualifying Jurisdictions as
modified by the Exemption;
(f)
“Comfort Letter” has the meaning
given thereto in Section 8(n) hereof;
(g)
“Company Counsel” means the law
firm of Xxxxxxx Xxxxx LLP, counsel for the Company in the Provinces
of Ontario, British Columbia, and Alberta;
(h)
“Designated News Release” has the
meaning given thereto in Section 6 hereof;
(i)
“Directed Selling Efforts” means
“directed selling efforts” as defined in Regulation S
and, without limiting the foregoing, but for greater clarity,
means, subject to the exclusions from the definition of directed
selling efforts contained in Regulation S, any activity undertaken
for the purpose of, or that could reasonably be expected to have
the effect of, conditioning the market in the United States for the
Placement Shares and includes, without limitation, the placement of
any advertisement in a publication with a general circulation in
the United States that refers to the offering of any of the
Placement Shares;
25
(j)
“Environmental Laws” means all
applicable foreign, federal, provincial, state and local laws and
regulations, as well as any obligations or requirements arising
under the common law, relating to occupational health and safety
applicable to employees of the Company or to the protection of the
environment;
(k)
“Exemption” means the exemptive
relief decision dated August 13, 2019, obtained by the Company
pursuant to National Policy 11-203 – Process for Exemptive Relief Applications in
Multiple Jurisdictions providing relief from certain
Canadian Securities Laws with respect to the Offering;
(l)
“General Solicitation” and
“General
Advertising” means “general solicitation”
and “general advertising”, respectively, as used in
Rule 502(c) of Regulation D, including, without limitation, any
advertisement, article, notice or other communications published in
any newspaper, magazine or similar media or broadcast over the
internet, radio or television, or any seminar or meeting whose
attendees had been invited by general solicitation or general
advertising or in any other manner involving a public offering
within the meaning of Section 4(a)(2) of the U.S. Securities
Act;
(m)
“Indemnified Party” and
“Indemnified
Parties” each has the meaning given thereto in
Section 12(a) hereof;
(n)
“Initial Comfort Letter” has the
meaning given thereto in Section 8(n) hereof;
(o)
“Marketplace” has the meaning given
thereto in Section 3 hereof;
(p)
“Material Adverse Effect” has the
meaning given thereto in Section 7(c) hereof;
(q)
“Material Contract” has the meaning
given thereto in Section 7(d)(i) hereof;
(r)
“Material Subsidiaries” has the
meaning given thereto in Section 7(b) hereof;
(s)
“Net Proceeds” has the meaning
given thereto in Section 5(a) hereof;
(t)
“NI 21-101” means National
Instrument 21-101 – Market
Operations;
(u)
“NI 44-101” means National
Instrument 44-101 – Short
Form Prospectus Distributions;
(v)
“NI 44-102” means National
Instrument 44-102 – Shelf
Distributions;
(w)
“Offering” has the meaning given
thereto in Section 1 hereof;
(x)
“Placement” has the meaning given
thereto in Section 2(a) hereof;
(y)
“Placement Fee” has the meaning
given thereto in Section 2(a) hereof;
(z)
“Placement Notice” has the meaning
given thereto in Section 2(a) hereof;
(aa)
“Placement Shares” has the meaning
given thereto in Section 2(a) hereof;
26
(bb)
“Preliminary Base Prospectus” means
the preliminary short form base shelf prospectus of the Company
dated May 29, 2019;
(cc)
“Prospectus” means the Prospectus
Supplement (and any additional prospectus supplement prepared in
accordance with the provisions of this Agreement and filed with the
Qualifying Authorities in accordance with Canadian Securities Laws)
together with the Base Prospectus;
(dd)
“Prospectus Supplement” has the
meaning given thereto in Section 6 hereof;
(ee)
“Qualifying Authorities” means the
securities regulatory authorities in each of the provinces of
Canada;
(ff)
“Qualifying Jurisdictions” means
each of the provinces of Canada;
(gg)
“Receipt” has the meaning given
thereto in Section 6 hereof;
(hh)
“Regulation D” means Regulation D
under the U.S. Securities Act;
(ii)
“Regulation S” means Regulation S
under the U.S. Securities Act;
(jj)
“Representation Date” has the
meaning given thereto in Section 8(n) hereof;
(kk)
“Reviewing Authority” has the
meaning given thereto in Section 6 hereof;
(ll)
“SEDAR” means the System for
Electronic Document Analysis and Retrieval;
(mm)
“Settlement Date” has the meaning
given thereto in Section 5(a) hereof;
(nn)
“Shares” has the meaning given
thereto in Section 1 hereof;
(oo)
“Shelf Procedures” has the meaning
given in NI 44-102;
(pp)
“Shelf Securities” has the meaning
given thereto in Section 6 hereof;
(qq)
“Trading Day” means any day on
which the TSX is open for trading;
(rr)
“TSX” means the Toronto Stock
Exchange; and
(ss)
“U.S. Securities Act” means the
United States Securities Act of 1933, as amended.
27
(a) In the event that
the Agent that is a Covered Entity becomes subject to a proceeding
under a U.S. Special Resolution Regime, the transfer from the Agent
of this Agreement, and any interest and obligation in or under this
Agreement, will be effective to the same extent as the transfer
would be effective under the U.S. Special Resolution Regime if this
Agreement, and any such interest and obligation, were governed by
the laws of the United States or a state of the United
States.
(b) In the event that
the Agent that is a Covered Entity or a BHC Act Affiliate of the
Agent becomes subject to a proceeding under a U.S. Special
Resolution Regime, Default Rights under this Agreement that may be
exercised against the Agent are permitted to be exercised to no
greater extent than such Default Rights could be exercised under
the U.S. Special Resolution Regime if this Agreement was governed
by the laws of the United States or a state of the United
States.
(c)
As used in this
Section 24:
(i)
“BHC Act Affiliate” has the meaning
assigned to the term “affiliate” in, and shall be
interpreted in accordance with, 12 U.S.C. §
1841(k).
(ii)
“Covered Entity” means any of the
following:
(A)
a “covered
entity” as that term is defined in, and interpreted in
accordance with, 12 C.F.R. § 252.82(b);
(B)
a “covered
bank” as that term is defined in, and interpreted in
accordance with, 12 C.F.R. § 47.3(b); or
(C)
a “covered
FSI” as that term is defined in, and interpreted in
accordance with, 12 C.F.R. § 382.2(b).
(iii)
“Default Right” has the meaning
assigned to that term in, and shall be interpreted in accordance
with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as
applicable.
(iv)
“U.S. Special Resolution Regime”
means each of (i) the Federal Deposit Insurance Act and the
regulations promulgated thereunder and (ii) Title II of the
Xxxx-Xxxxx Xxxx Street Reform and Consumer Protection Act and the
regulations promulgated thereunder.
25. Counterparts
This
Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument. Delivery of an executed
Agreement by one party to the other may be made by email
transmission.
[Remainder of page left intentionally blank.]
28
If the
foregoing accurately reflects your understanding and agreement with
respect to the matters described herein please indicate your
agreement by countersigning this Agreement in the space provided
below.
Yours
very truly,
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By:
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/s/ Xxxxxx X.
Xxxxxx
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Name: Xxxxxx
X. Xxxxxx
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Title: Chief
Executive Officer
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By:
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/s/
Xxxxxx Xxxxxxxx
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Name: Xxxxxx
Xxxxxxxx
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Title: Chief
Financial Officer
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Signature Page to Sales Agreement
29
ACCEPTED as of the date first-above
written.
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CANTOR XXXXXXXXXX CANADA CORPORATION |
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By:
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/s/ Xxxxxxxxxxx
Xxxxx
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Name:
Xxxxxxxxxxx
Xxxxx
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Title:
President and Chief
Financial Officer
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Signature Page to Sales Agreement
30
SCHEDULE 1
_________________________
Form of Placement Notice
__________________________
From:
First Mining Gold Corp.
To:
Cantor Xxxxxxxxxx Canada Corporation ([REDACTED])
Attention:
●
CFCC Sales and
Trading
●
Xxxxxx Xxxxxxx,
Controlled Equity Offering Group
Subject:
Placement
Notice
Date:
[●], 20[●]
Ladies
and Gentlemen:
Pursuant
to the terms and subject to the conditions contained in the Equity
Distribution Agreement between First Mining Gold Corp, a company
continued under the Business
Corporations Act (British Columbia) (the “Company”),
and Cantor Xxxxxxxxxx Canada Corporation (the “Agent”), dated August 19, 2019,
the Company hereby requests that the Agent sell up to [●] of
the Company’s common shares, at a minimum market price of
$[●] per share, during the time period beginning [month, day,
time] and ending [month, day, time].
31
SCHEDULE 2
The
Authorized Representatives of the Company are as
follows:
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Name and Office / Title
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E-mail Address
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Telephone Numbers
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Xxxxxx
X. Xxxxxx
Chief
Executive Officer
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[REDACTED]
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Office: [REDACTED]
Cell: [REDACTED]
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Xxxxxx
Xxxxxxxx
Chief
Financial Officer
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[REDACTED]
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Office: [REDACTED]
Cell: [REDACTED]
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The
Authorized Representatives of the Agent are as
follows:
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Name and Office / Title
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E-mail Address
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Xxxxxx
Xxxxxxx
Managing
Director
With
copies to: Cantor ATMs
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[REDACTED]
[REDACTED]
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32
EXHIBIT A-1
OFFICER’S CERTIFICATE
I, [name of
executive officer], the
[title of
executive officer] of First
Mining Gold Corp. (the “Company”), a company continued under the
Business
Corporations Act (British
Columbia), do hereby certify in such capacity and not in my
personal capacity, on behalf of the Company pursuant to
Section 8(m)
of the Sales Agreement dated August
19, 2019 (the “Distribution
Agreement”) between the
Company and Cantor Xxxxxxxxxx Canada Corporation, and without
personal liability, that, to the best of my
knowledge:
(i)
except as set forth
in the Prospectus, the representations and warranties of the
Company in Section 7 of the Distribution Agreement are true and
correct on and as of the date hereof with the same force and effect
as if expressly made on and as of the date hereof, except for those
representations and warranties that speak solely as of a specific
date and which were true and correct as of such date;
and
(ii)
the Company has
complied with all agreements and satisfied all conditions on its
part to be performed or satisfied pursuant to the Distribution
Agreement at or prior to the date hereof.
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Date:________________________________
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By:
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Name:
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Title:
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33
EXHIBIT B
MATTERS TO BE COVERED BY
INITIAL OPINION OF COMPANY
COUNSEL
1.
The Company is a
company continued and existing under the laws of the Province of
British Columbia and has the corporate power to conduct its
business as described in the Prospectus;
2.
each of Coastal
Gold Corp., a company incorporated and existing under the laws of
the Province of Ontario, PC Gold Inc., a company incorporated and
existing under the laws of the Province of Ontario, Gold Canyon
Resources Inc., a company incorporated and existing under the laws
of the Province of British Columbia, Xxxxxxx Xxxx Operations Ltd.,
a company incorporated and existing under the laws of the Province
of Ontario, and Tamaka Gold Corporation, a company incorporated and
existing under the laws of the Province of Ontario (individually a
“Subsidiary” and
collectively the “Subsidiaries”), has the corporate
power to conduct its business as described in the
Prospectus;
3.
the Company has the
corporate power to enter into and deliver the Agreement and to
perform its obligations thereunder and to carry out the
transactions contemplated thereby and the Agreement has been
authorized, executed and, to the extent delivery is a matter
governed by the laws of the Province of British Columbia or the
federal laws of Canada applicable therein (the “Applicable Laws”), delivered by
the Company, and such agreement is a legal, valid and binding
agreement of the Company and is enforceable against the Company in
accordance with its terms under the laws of the Province of
Ontario;
4.
the Company’s
authorized share capital consists of an unlimited number of Common
Shares and an unlimited number of Preferred Shares;
5.
the attributes and
characteristics of the Shares conform in all material respects with
the descriptions thereof in the Prospectus;
6.
all necessary
corporate action has been taken by the Company to authorize the
issuance and delivery of the Placement Shares;
7.
the Placement
Shares to be delivered under the Agreement will, when issued, be
validly issued as fully paid and non-assessable shares in the
capital of the Company;
8.
the execution and
delivery by the Company of, and the performance by the Company of
its obligations under the Agreement will not contravene any
provisions of
(i)
the notice of
articles or articles, as amended, of the Company, or
(ii)
Applicable
Laws applicable to the offering of the Placement Shares, excluding
the Company’s and any of its subsidiaries’ specially
regulated activities (as to which such counsel need express no
opinion).
34
9.
no consent,
approval or authorization or order, of or registration,
qualification, recording or filing with any governmental body or
agency is required for the issuance, sale and delivery of the
Placement Shares, except such as may have been made or
obtained;
10.
the TSX has
conditionally approved the listing and posting for trading of up to
55,555,556 Placement Shares, subject to the Company fulfilling all
of the requirements of such exchange;
11.
a receipt has been
obtained in respect of the Base Prospectus from each Securities
Regulator, the Prospectus Supplement has been filed with the
Securities Regulators in the manner and within the time period
required by the Shelf Procedures, and no order having the effect of
ceasing or suspending the distribution of the Placement Shares, to
the knowledge of counsel, has been issued by any Securities
Regulator and no proceedings for that purpose, to the knowledge of
counsel, have been instituted or are pending;
12.
all documents have
been filed, all proceedings have been taken and all other legal
requirements have been fulfilled by the Company as required under
the Securities Laws to qualify the distribution of the Placement
Shares to the public in each of the Qualifying Jurisdictions
through dealers duly registered under the Securities Laws who have
complied with the relevant provisions of such laws;
and
13.
the statements
under the heading “Eligibility for Investment” in the
the Prospectus are true and correct, subject to the assumptions,
limitations, conditions and restrictions set out
therein.
In
giving the opinions described above, such counsel may state that
the opinions above are limited to the laws of the Provinces of
Alberta, British Columbia, and Ontario and the federal laws of
Canada therein, except to the extent such opinions are made in
reliance on the opinion of local counsel in other jurisdictions and
as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and public
officials.
35
