Exhibit 1.1
AGENCY AGREEMENT
September 19, 2003
APOLLO GOLD CORPORATION
0000 XXX Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx, X.X.X.
00000-0000
ATTENTION: MR. R. XXXXX XXXXXXX
PRESIDENT & CHIEF EXECUTIVE OFFICER
Dear Sirs:
BMO Xxxxxxx Xxxxx Inc. ("BMO XXXXXXX XXXXX"), as lead agent and sole
bookrunner, Canaccord Capital Corporation, Xxxxxxxxx XxXxxxxx & Partners, Orion
Securities Inc. and Westwind Partners Inc. (collectively, the "AGENTS")
understand that Apollo Gold Corporation (the "COMPANY") proposes to issue and
sell 22,300,000 common shares of the Company (the "OFFERED SHARES") at the price
of $2.25 per share for aggregate gross proceeds of $50,175,000. The offering of
the Offered Shares (which term shall include any additional common shares of the
Company (the "COMMON SHARES") to be purchased in the event of the exercise of
the Over-Allotment Option (as defined below) and in the event of the exercise of
the Agents' Option (as defined below)) by the Company is hereinafter referred to
as the "OFFERING".
Upon and subject to the terms and conditions hereof, the Agents hereby
agree to act as, and the Company hereby appoints the Agents as, its exclusive
agents to offer the Offered Shares for sale on the Closing Date. The Agents
hereby agree to use their reasonable best efforts to lawfully secure the
subscriptions therefor, provided the Agents shall not be under any obligation to
purchase any of the Offered Shares.
The Agents shall have an option (the "OVER-ALLOTMENT OPTION"), which Option
may be exercised in the Agents' sole discretion and without obligation, to
purchase up to an additional 3,345,000 Common Shares of the Company which, if
subscribed for hereunder, shall be deemed to form part of the Offered Shares for
the purposes hereof. The Over-Allotment Option shall be exercisable by the
Agents prior to Closing and at any time up to 30 days after the Time of Closing
(as hereinafter defined) by delivering written notice to the Company prior to
the expiry of the Over-Allotment Option, after which time the Over-Allotment
Option shall be void and of no further force and effect.
In consideration of the Agents' services to be rendered in connection with
the Offering, including assisting in preparing documentation relating to the
Offered Shares including the Preliminary Prospectus and the Final Prospectus (in
each case as hereinafter defined), obtaining subscriptions for and distributing
the Offered Shares, directly and through other investment dealers and brokers,
and performing administrative work in connection with the Offering, the Company
agrees to pay the Agency Fee (as hereinafter defined) to the Agents. The Company
agrees that the Agents will be permitted to appoint, at their sole expense,
other registered dealers (or other dealers duly qualified in their respective
jurisdictions) as their sub-agents (collectively such sub-agents are referred to
herein as the "SUB-AGENCY GROUP") to assist in the Offering and that the Agents
may offer such sub-agents as compensation any part of the Agency Fee.
The following are the further terms and conditions of this Agreement.
1. INTERPRETATION
1.1 DEFINITIONS: Unless expressly provided otherwise, where used in this
agreement or any schedule hereto, the following terms shall have the following
meanings, respectively:
"1933 ACT" means the United States Securities Act of 1933, as amended;
"AGENCY FEE" means the fee payable to the Agents as specified in Section 10
hereof;
"AGENTS" shall have the meaning ascribed thereto in the first paragraph of this
agreement;
"AGENTS' OPTION" shall have the meaning ascribed thereto in Section 10 hereof;
"AMEX" means the American Stock Exchange;
"APPLICABLE SECURITIES LAWS" means, collectively, the applicable securities laws
of each of the Qualifying Jurisdictions, and the respective regulations,
rulings, rules, orders and prescribed forms thereunder together with the
applicable policy statements issued by the Securities Commissions thereunder and
where the context requires, the securities legislation of and policies issued by
each other relevant jurisdiction;
"BMO XXXXXXX XXXXX" means BMO Xxxxxxx Xxxxx Inc.;
"CLOSING DATE" means September 26, 2003 or such earlier or later date as the
Company and the Agents may agree, but in any event no later than October 31,
2003;
"COMMON SHARES" means the common shares in the capital of the Company;
"COMPANY" shall have the meaning ascribed thereto in the first paragraph of this
agreement;
"COMPANY'S INFORMATION RECORD" means the documents incorporated by reference in
the Preliminary Prospectus and the Final Prospectus;
"DIRECTED SELLING EFFORTS" means "directed selling efforts" as defined in
Regulation S under the 1933 Act;
"ELIGIBLE ISSUER" means an issuer which meets the criteria and has complied with
the requirements of NI 44-101 so as to allow it to offer the Offered Shares
using a short form prospectus;
"ENVIRONMENTAL LAWS" has the meaning ascribed thereto in Section 4.1.4(a);
"ENVIRONMENTAL PERMITS" has the meaning ascribed thereto in Section 4.1.4(b);
"EXCHANGES" means, collectively, the AMEX and the TSX;
"FINAL PROSPECTUS" means the (final) short form prospectus of the Company
qualifying the Offered Shares and the materials incorporated therein by
reference;
"GENERAL SOLICITATION OR GENERAL ADVERTISING" means "general solicitation or
general advertising" as used in Rule 502(c) of Regulation D under the 1933 Act;
"HAZARDOUS SUBSTANCES" has the meaning ascribed thereto in Section 4.1.4(a);
"INCLUDING" means including without limitation;
"MATERIAL ADVERSE EVENT" means a change or event that is material and adverse to
the assets and properties, business, prospects, results of operations or
condition (financial or otherwise) of the Company and the Subsidiaries, on a
consolidated basis;
"MATERIAL CHANGE" means a material change for the purposes of the Applicable
Securities Laws of the applicable jurisdiction or where such term is undefined
under such Applicable Securities Laws means a change in the business, operations
or capital of the Company and its subsidiaries, on a consolidated basis, that
would reasonably be expected to have a significant effect on the market price or
value of any of the Company's Common Shares and includes a decision to implement
such a change made by the Company's board of directors or by senior management
of the Company who believe that confirmation of the decision by the Company's
board of directors is probable;
"MATERIAL FACT" means a material fact for the purposes of the Applicable
Securities Laws of the applicable jurisdiction or where such term is undefined
under such Applicable Securities Laws means a fact that significantly affects,
or would reasonably be expected to have a significant effect on, the market
price or value of the Company's Common Shares;
"MISREPRESENTATION" means a misrepresentation for the purposes of the Applicable
Securities Laws of the applicable jurisdiction or where such term is undefined
under such Applicable Securities Laws means (i) an untrue statement of a
material fact, or (ii) an omission to state a material fact that is required to
be stated or that is necessary to make a statement not misleading in the light
of the circumstances in which it was made;
"NI 44-101" means National Instrument 44-101 - Short Form Prospectus
Distributions;
"NP 43-201" means National Policy 43-201 - Mutual Reliance Review System for
Prospectuses and Annual Information Forms;
"OFFERED SHARES" shall have the meaning ascribed thereto in the first paragraph
of this agreement and shall, if applicable, include any additional Common Shares
in respect of which the Over-Allotment Option may be exercised and any Common
Shares in respect of which the Agents' Option may be exercised;
"OFFERING" shall have the meaning ascribed thereto in the first paragraph of
this agreement;
"OFFERING DOCUMENTS" means, collectively, the Preliminary Prospectus, the Final
Prospectus and any Supplementary Material;
"OVER-ALLOTMENT OPTION" shall have the meaning ascribed thereto in the third
paragraph of this agreement;
"PERSON" includes any individual, corporation, limited partnership, general
partnership, joint stock company or association, joint venture association,
company, trust, bank, trust company, land trust, investment trust, society or
other entity, organization, syndicate, whether incorporated or not, trustee,
executor or other legal personal representative, and governments and agencies
and political subdivisions thereof;
"PRELIMINARY PROSPECTUS" means the preliminary short form prospectus of the
Company dated August 28, 2003, prepared in connection with the qualification of
the Offered Shares and the materials incorporated therein by reference;
"PURCHASERS" means, collectively, each of the purchasers of the Offered Shares
arranged by the Agents pursuant to the Offering, including, if applicable, the
Agents;
"QUALIFYING JURISDICTIONS" means, collectively, each of the provinces of Canada,
excluding Quebec;
"SECURITIES COMMISSIONS" means, collectively, the securities commissions or
similar regulatory authorities in each of the Qualifying Jurisdictions;
"SUB-AGENCY GROUP" means, collectively, those registered dealers appointed by
the Agents to assist in the Offering as contemplated in the fourth paragraph of
this agreement;
"SUBSEQUENT CLOSING DATE" means the closing dates of the exercise of the
Over-Allotment Option and the Agents' Option;
"SUBSIDIARIES" means, collectively, Apollo Gold, Inc., Apollo Gold Exploration,
Inc., Florida Canyon Mining, Inc., Montana Tunnels Mining, Inc. and Standard
Gold Mining, Inc. and the term "SUBSIDIARY" shall have the meaning ascribed
thereto in the Securities Act (Ontario);
"SUPPLEMENTARY MATERIAL" means, collectively, any amendment to the Final
Prospectus, any amended or supplemental prospectus or ancillary material
required to be filed with any of the Securities Commissions in connection with
the distribution of the Offered Shares and any material incorporated therein by
reference;
"TSX" means the Toronto Stock Exchange;
"TIME OF CLOSING" means 8:30 a.m. (Toronto time) on the Closing Date;
"U.S. ACCREDITED INVESTOR" means an "accredited investor" as defined in Rule
501(a) of Regulation D under the 1933 Act;
"U.S. AFFILIATE" means Xxxxxx Xxxxxxx Corp., the United States registered
broker-dealer affiliate of BMO Xxxxxxx Xxxxx;
"U.S. PERSON" shall have the meaning ascribed thereto in Regulation S under the
1933 Act; and
"UNITED STATES" means the United States of America, its territories and
possessions, any state of the United States, and the District of Columbia.
1.2 DIVISION AND HEADINGS: The division of this agreement into sections,
subsections, paragraphs and other subdivisions and the insertion of headings are
for convenience of reference only and shall not affect the construction or
interpretation of this agreement. Unless something in the subject matter or
context is inconsistent therewith, references herein to sections, subsections,
paragraphs and other subdivisions are to sections, subsections, paragraphs and
other subdivisions of this agreement.
1.3 GOVERNING LAW: This agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and the federal laws of
Canada applicable therein.
1.4 CURRENCY: Except as otherwise indicated, all amounts expressed herein in
terms of money refer to lawful currency of Canada and all payments to be made
hereunder shall be made in such currency.
1.5 SCHEDULES: The following are the schedules attached to this agreement,
which schedules are deemed to be a part hereof and are hereby incorporated by
reference herein: Schedule "A" - Details of the Offering; Schedule "B" -
Opinion of Company's Counsel; and Schedule "C" - Opinion of Company's U.S.
Counsel.
2. NATURE OF TRANSACTION
2.1 Each resident in a Qualifying Jurisdiction shall purchase pursuant to
the Final Prospectus. Each other Purchaser shall purchase in accordance with
such procedures as the Company and the Agents may mutually agree, acting
reasonably, in order to fully comply with the Applicable Securities Laws. The
Company hereby agrees to secure compliance with all securities regulatory
requirements of the Qualifying Jurisdictions on a timely basis in connection
with the distribution of the Offered Shares to Canadian Purchasers. Subject to
being notified by the Agents of the requirements thereof and upon request by the
Agents, the Company also agrees to file within the periods stipulated under
Applicable Securities Laws outside of Canada and at the Company's expense all
private placement forms required to be filed by the Company, in connection with
the Offering and agrees to pay all filing fees required to be paid in connection
therewith so that the distribution of the Offered Shares outside of Canada may
lawfully occur without the necessity of filing a prospectus or any similar
document under the Applicable Securities Laws outside of Canada, if applicable.
The Agents agree to assist the Company in all reasonable respects to secure
compliance with all regulatory requirements in connection with the Offering.
3. COVENANTS AND REPRESENTATIONS OF THE AGENTS
3.1 Each Agent severally covenants with the Company that it will (and will
use its commercially reasonable efforts to cause the members of the Sub-Agency
Group to):
(a) conduct all activities in connection with arranging for the sale and
distribution of the Offered Shares in compliance with all Applicable
Securities Laws and the provisions of this agreement;
(b) not, directly or indirectly, sell or solicit offers to purchase the
Offered Shares or distribute or publish any offering circular,
prospectus, form of application, advertisement or other offering
materials in any country or jurisdiction so as to require registration
or filing of a prospectus with respect thereto or compliance by the
Company with regulatory requirements under the laws of, or subject the
Company (or any of its directors, officers or employees) to any
inquiry, investigation or proceeding of any securities regulatory
authority, stock exchange or other authority in, any jurisdiction
(other than the Qualifying Jurisdictions);
(c) not, directly or indirectly, sell, or solicit offers to purchase, any
Offered Shares in the United States, or to, or for the account or
benefit of a U.S. Person except pursuant to exemptions from the
registration requirements of the 1933 Act and any Applicable
Securities Laws of any federal or state securities laws in the United
States, or disseminate in the United States any press releases
relating to the Offering;
(d) use all reasonable efforts to complete and to cause the members of the
Sub-Agency Group to complete the distribution of the Offered Shares as
soon as practicable; and
(e) upon the Company obtaining the necessary receipts therefor from each
of the Securities Commissions, deliver one copy of the Final
Prospectus and any Supplementary Material to each of the Purchasers.
3.2 BMO Xxxxxxx Xxxxx shall notify the Company when, in its opinion, the
Agents and Sub-Agency Group have ceased distribution of the Offered Shares and,
if required for regulatory compliance purposes, provide a breakdown of the
number of Offered Shares distributed and proceeds received (A) in each of the
Qualifying Jurisdictions and (B) in any other jurisdictions.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
4.1 The Company hereby represents, warrants and covenants to and with the
Agents that:
4.1.1 General Matters
(a) the Company (i) has been duly incorporated and is validly existing
under the laws of the Yukon Territory and is and will at the Time of
Closing be up-to-date in all corporate filings except where failure to
be up-to-date in such corporate filings does not and will not
constitute a Material Adverse Event; (ii) has all requisite corporate
power and authority to carry on its business as now conducted and to
own, lease and operate its properties and assets; and (iii) has all
requisite corporate power and authority to create, issue and sell the
Offered Shares, to enter into this agreement and to carry out the
provisions of this agreement;
(b) the Subsidiaries are the only subsidiaries of the Company which are
material to the Company and all interests of the Company therein are,
except as otherwise disclosed in the Company's Information Record,
held by the Company free and clear of all mortgages, liens, charges,
pledges, security interests, encumbrances, claims and demands
whatsoever;
(c) each of the Subsidiaries (i) has been duly incorporated or formed and
organized in its respective jurisdiction and is and will at the Time
of Closing be up-to-date in all corporate or other required filings
and in good standing under the laws of such jurisdiction, as the case
may be except where failure to be up-to-date in such filings or to be
in good standing does not and will not constitute a Material Adverse
Event; and (ii) has all requisite corporate power and authority to
carry on its business as now conducted and to own, lease and operate
its properties and assets;
(d) the Company and each of the Subsidiaries are, in all material
respects, conducting their respective businesses in compliance with
all applicable laws, rules and regulations of each jurisdiction in
which their respective businesses are carried on and each is duly
licensed, registered or qualified in all jurisdictions in which it
owns, leases or operates its property or carries on business to enable
its business to be carried on as now conducted and its property and
assets to be owned, leased and operated and all such licences,
registrations and qualifications are and will at the Time of Closing
be valid, subsisting and in good standing, except, in each case, in
respect of matters which do not and will not result in a Material
Adverse Event,
and except where the failure to be so licensed, registered or
qualified or the absence of any such license, registration or
qualification which is not and will not be a Material Adverse Event;
(e) all necessary corporate action has been taken or will have been taken
prior to the Time of Closing by the Company so as to validly issue and
sell the Offered Shares and, upon receipt by the Company of the
purchase price as consideration for the issue of the Offered Shares,
such Common Shares will be validly issued and outstanding as fully
paid and non-assessable;
(f) the authorized and issued capital of the Company consists of an
unlimited number of Common Shares, of which, as of the close of
business on September 18, 2003, 48,988,876 were outstanding as fully
paid and non-assessable shares in the capital of the Company;
(g) the currently issued and outstanding Common Shares of the Company are
listed and posted for trading on the Exchanges and no order ceasing or
suspending trading in any securities of the Company or prohibiting the
sale of the Offered Shares or the trading of any of the Company's
issued securities has been issued and no proceedings for such purpose
are pending or, to the best of the Company's knowledge, information
and belief, threatened;
(h) except as provided under this agreement or as described in the
Company's Information Record and the Final Prospectus, no person now
has any agreement or option or right or privilege (whether at law,
preemptive or contractual) capable of becoming an agreement for the
purchase, subscription or issuance of, or conversion into, any
unissued shares, securities, warrants or convertible obligations of
any nature of the Company or any of the Subsidiaries;
(i) since December 31, 2002, except as disclosed in the Company's
Information Record and the Final Prospectus:
(i) there has not been any material change in the Company and
the Subsidiaries, on a consolidated basis; and
(ii) the Company and the Subsidiaries have carried on their
respective businesses in the ordinary course;
(j) the audited consolidated financial statements of the Company for the
fiscal year ended December 31, 2002 present fairly, in all material
respects, the financial condition of the Company on a consolidated
basis, for the periods then ended;
(k) there is no action, proceeding or investigation (whether or not
purportedly by or on behalf of the Company or any subsidiary) pending
or, to the best of the Company's knowledge, information and belief,
threatened against or affecting the Company or its Subsidiaries at law
or in equity (whether in any court, arbitration or similar tribunal)
or before or by any governmental department, commission, board or
agency, domestic or foreign, which is, or, if determined adversely to
the Company, could reasonably be expected to be, a Material Adverse
Event, or which questions the validity of the Offered Shares or of the
issuance thereof as fully paid and non-assessable Common Shares or any
action taken or to be taken by the Company pursuant to or in
connection with this agreement;
(l) neither the Company nor any of the Subsidiaries is in default or in
breach in any material respect of, and the execution and delivery of
this agreement by the Company, the performance and compliance with the
terms of this agreement and the sale of the Offered Shares (including
the grant of the Over-Allotment Option by the Company) will not result
in any material 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 any term or
provision of the constating documents, by-laws or resolutions of the
Company or any of the Subsidiaries or any material mortgage, note,
indenture, contract, agreement, instrument, lease or other document to
which the Company or any of the Subsidiaries is a party or by which
any of them is bound or any judgment, decree, order, statute, rule or
regulation applicable to any of them;
(m) the Company is, and will at the Time of Closing be, an Eligible Issuer
and a "reporting issuer", not in default, in each of the Qualifying
Jurisdictions. In particular, without limiting the foregoing, the
Company has since June 25, 2002 complied with its obligations to make
timely disclosure of all material changes relating to it and no such
disclosure has been made on a confidential basis and there is no
material change relating to the Company which has occurred and with
respect to which the requisite material change statement has not been
filed, except to the extent that the Offering constitutes a material
change;
(n) there has not been any reportable event (within the meaning of
National Policy Statement No. 31 of the Canadian Securities
Administrators) with the present or any former auditor of the Company;
(o) neither the Company nor any of the Subsidiaries, nor to the best of
the Company's knowledge, information and belief, any other person, is
in default in the observance or performance of any material term or
obligation to be performed by the Company or any of the Subsidiaries
or such other person under any material contract to which the Company
or any of the Subsidiaries is a party or otherwise bound and no event
has occurred which with notice or lapse of time or both would
constitute such a default by the Company, a Subsidiary or, to the best
of the Company's knowledge, information and belief, any other party;
(p) this agreement and all other contracts required in connection with the
issue and distribution of the Offered Shares shall be, prior to the
Closing Date, duly authorized, executed and delivered by the Company
and shall be valid and binding obligations of the Company enforceable
in accordance with their respective terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other laws
affecting the enforcement of creditors' rights generally and subject
to the qualification that equitable remedies may only be granted in
the discretion of a court of competent jurisdiction;
(q) the Company will use US$16 million of the net proceeds of the Offering
for the advanced exploration and feasibility of the Black Fox Project.
The balance of the proceeds will be used (i) to advance the Company's
other mineral properties, including the Montana Tunnels Mine and the
Florida Canyon Mine, in such amounts as may be determined by
management of the Company and (ii) for general corporate purposes;
(r) the attributes of the Offered Shares will conform in all material
respects with the description thereof in the Final Prospectus;
(s) other than as contemplated by the Offering and this agreement, the
Company will not, for a period of 120 days from the Closing Date,
issue or sell or agree to issue or sell (or announce any intention to
do so) any equity or voting shares in the capital of the Company or
financial instruments convertible or exchangeable into such shares,
other than (i) issuances under existing director or employee stock
option or stock purchase plans, (ii) issuances to satisfy outstanding
instruments and contractual commitments, and (iii) issuances of
flow-through shares which are sold at a price not less than the
purchase price of the Offered Securities, for a period of 120 days
from the Closing Date, without the prior written agreement of BMO
Xxxxxxx Xxxxx, such agreement not to be unreasonably withheld;
(t) the Company will use its reasonable commercial efforts to arrange for
the listing and posting for trading on the Exchanges of the Offered
Shares effective as of the Closing Date;
(u) none of the Company, its affiliates nor any person acting on behalf of
any of them has engaged or will engage in any form of General
Solicitation or General Advertising or has acted or will act in any
manner involving a public offering within the meaning of Section 4(2)
of the 1933 Act, in either case, in connection with the solicitation
of offers to purchase, offer or sale of the Offered Shares in the
United States or to, or for the account or benefit of, a U.S. Person;
(v) except with respect to the Offered Shares offered and sold in the
United States or to, or for the account or benefit of, a U.S.
Accredited Investor in reliance upon an exemption from registration
under the 1933 Act, neither the Company, nor any Person acting on
behalf of any of them (other than the Agents, the affiliates thereof
or any person acting on behalf of any of them, in respect of which no
representation is made), has made, or will make: (A) any offer to
sell, or any solicitation of an offer to buy, any Offered Shares in
the United States or to, or for the account or benefit of, a U.S.
Person; (B) any sale of Offered Shares unless, at the time the buy
order was or will have been made, the purchaser is (i) outside the
United States or (ii) the Company and any Person acting on behalf of
any of them reasonably believe that the purchaser is outside the
United States and not a U.S. Person; or (C) any Directed Selling
Efforts in the United States with respect to the Offered Shares;
(w) during the period in which the Offered Shares are offered for sale,
neither the Company, nor any person acting on its behalf, has taken,
or will take, any action that would cause the exemptions afforded by
Regulation D under the 1933 Act to be unavailable for offers and sales
of Offered Shares;
(x) the Company is not, and as a result of the sale of the Offered Shares
contemplated hereby will not be, an "investment company" as defined in
the United Sates Investment Company Act of 1940, as amended;
(y) except with respect to the offer and sale of Offered Shares, the
Company has not, for a period of six months prior to the date hereof,
sold, offered for sale or solicited any offer to buy any securities
thereof in the United States or to, or for the account or benefit of,
a U.S. Person in a manner that would be integrated with the offer and
sale of the Offered Shares and would cause the exemption from
registration under the 1933 Act set forth in Rule 506 of Regulation D
to become unavailable with respect to the offer and sale of the
Offered Shares;
(z) during the period in which the Offered Shares are offered for sale,
neither the Company, nor any person acting on its behalf (other than
the Agent, the affiliates thereof or any person acting on behalf of
any of them, in respect of which no representation is made) has taken
or will take any action that would cause the exemption afforded by
Rule 506 of Regulation D to be unavailable for offers and sales of
Offered Shares in the United States in accordance with this Agreement
or the exclusion from registration under the 1933 Act afforded by Rule
903 of Regulation S to be unavailable for offers and sales of the
Offered Shares outside the United States in accordance with this
Agreement;
(aa) assuming that the representations and warranties provided to the
Company by Purchasers who are U.S. Persons are true and correct, and
the Agents have complied with their obligations hereunder, the offer,
sale and issuance of the Offered Shares in conformity with the terms
of this Agreement constitute transactions exempt from the registration
requirements under the 1933 Act;
(bb) Neither the Company, nor anyone acting on its behalf, has or will
offer or sell the Offered Shares or any other security so as to
require the registration of the Offered Shares pursuant to the
provisions of the 1933 Act or any federal or state securities laws of
the United States, unless the Offered Shares are so registered;
(cc) that within 15 days after the first sale of the Offered Shares in the
United States or to, or for the account or benefit, of, a U.S. Person
pursuant to Rule 506 of Regulation D under the 1933 Act, the Company
will prepare and file with the United States Securities and Exchange
Commission a notice on Form D and all other notices required to be
filed with any regulatory authority in the United States with respect
to the Offered Shares offered in the United States or to, or for the
account or benefit of, a U.S. Person;
(dd) CIBC Mellon Trust Company has been duly appointed the registrar and
transfer agent in Canada for the Common Shares of the Company at its
principal transfer office in the city of Toronto, Ontario; and
(ee) other than the Agents pursuant to this agreement, there is no person
acting or purporting to act at the request of the Company, who is
entitled to any brokerage, agency or other fiscal advisory or similar
fee in connection with the Offering.
4.1.2 Prospectus Matters
(a) the Company will, provided the Agents have taken all action required
by them hereunder to permit the Company to do so, use all reasonable
efforts to file the Final Prospectus pursuant to NP 43-201 and to
obtain a final expedited review receipt document from the Ontario
Securities Commission in respect of each Qualifying Jurisdiction and
if any Securities Commission in a Qualifying Jurisdiction opts out of
the expedited review system, a final receipt (or a decision document
equivalent thereof) from any such Securities Commission, and shall
have taken all other steps and proceedings that may be necessary in
order to qualify the Offered Shares for distribution pursuant to the
Final Prospectus in each of the Qualifying Jurisdictions before close
of business on September 19, 2003 (or such other date as may be agreed
to in writing by the Company and the Agents);
(b) the Company will deliver from time to time without charge to the
Agents as many copies of the Preliminary Prospectus, the Final
Prospectus and any Supplementary Material as they may reasonably
request for the purposes contemplated hereunder and contemplated by
the Applicable Securities Laws in the Qualifying Jurisdictions and
such delivery shall constitute the consent of the Company to the
Agents' use of such documents in connection with the distribution or
the distribution to the public of the Offered Shares, subject to the
provisions of the Applicable Securities Laws in the Qualifying
Jurisdictions and the provisions of this agreement;
(c) all the information and statements contained in the Offering Documents
shall, at the time of filing thereof, constitute full, true and plain
disclosure of all material facts relating to, the Company and the
Offered Shares (provided that this representation does not extend to
information and statements included in reliance upon and in conformity
with information furnished to the Company by or on behalf of the
Agents specifically for use therein);
(d) at the time of filing thereof, no Offering Document will contain a
misrepresentation (provided that this representation does not extend
to information and statements included in reliance upon and in
conformity with information furnished to the Company by or on behalf
of the Agents specifically for use therein);
(e) the Offering Documents shall contain the disclosure required by and
conform to all requirements of the Applicable Securities Laws;
(f) at all times until the primary distribution of the Offered Shares has
been completed, but in any event not later than 60 days following the
Closing Date, the Company will, to the reasonable satisfaction of
counsel to the Agents, promptly take or cause to be taken all
additional steps and proceedings that may be required from time
to time under the Applicable Securities Laws of the Qualifying
Jurisdictions to continue to so qualify the Offered Shares or, in the
event that the Offered Shares have, for any reason, ceased to so
qualify, to again so qualify the Offered Shares.
4.1.3 Due Diligence Matters
(a) prior to the filing of the Final Prospectus and any Supplementary
Material, the Company will allow the Agents to participate fully in
the preparation of the Final Prospectus and any Supplementary Material
and shall allow the Agents to conduct all due diligence which they may
reasonably require to conduct in order to fulfil their obligations
under Applicable Securities Laws and in order to enable them to
responsibly execute the certificates required to be executed by them
at the end of the Final Prospectus and any applicable Supplementary
Material;
(b) the Company will promptly notify the Agents in writing if, prior to
termination of the distribution of the Offered Shares, there shall
occur any material change or change in a material fact (in either
case, whether actual, anticipated, contemplated or threatened and
other than a change or change in fact relating solely to the Agents)
or any event or development involving a prospective material change or
a change in a material fact relating to the Company and the
Subsidiaries, on a consolidated basis, or any other change which is of
such a nature as to result in, or could be considered reasonably
likely to result in a misrepresentation in the Final Prospectus or any
Supplementary Material, as they exist immediately prior to such
change, or could render any of the foregoing, as they exist
immediately prior to such change, not in compliance with any of the
Applicable Securities Laws;
(c) the Company will promptly notify the Agents in writing with full
particulars of any such actual, anticipated, contemplated, threatened
or prospective change referred to in the preceding paragraph and the
Company shall, to the reasonable satisfaction of the Agents, provided
the Agents have taken all action required by them hereunder to permit
the Company to do so, file promptly and, in any event, within all
applicable time limitation periods with the Securities Commissions a
new or amended Final Prospectus or Supplementary Material, as the case
may be, or material change report as may be required under the
Applicable Securities Laws and shall comply with all other applicable
filing and other requirements under the Applicable Securities Laws
including any requirements necessary to qualify the issuance and
distribution of the Offered Shares in the Qualifying Jurisdictions and
shall deliver to the Agents as soon as practicable thereafter their
reasonable requirements of conformed or commercial copies of any such
new or amended Final Prospectus or Supplementary Material. The Company
will not file any such new or amended disclosure documentation or
material change report without first obtaining the approval of the
form and content thereof by the Agents, which approval shall not be
unreasonably withheld or delayed; provided that the Company will not
be required to file a registration statement or otherwise register or
qualify the Offered Shares for distribution outside Canada;
(d) the Company will in good faith discuss with the Agents as promptly as
possible any circumstance or event which is of such a nature that
there is or ought to be consideration given as to whether there may be
a material change or change in a material fact or other change
described in the preceding two paragraphs; and
(e) the minute books of the Company, and each of the Subsidiaries,
contain copies of all constating documents and all proceedings of
security holders and directors (and committees thereof) and are
complete, in all material respects.
4.1.4 Environmental Matters
(a) except as disclosed in the Final Prospectus and the Company's
Information Record, the Company and each of the Subsidiaries are in
material compliance with all applicable laws, statutes, ordinances,
by-laws and regulations and orders, directives and decisions rendered
by any ministry, department or administrative or regulatory agency,
domestic or foreign (the "ENVIRONMENTAL LAWS") relating to the
protection of the environment, occupational health and safety or the
processing, use, treatment, storage, disposal, discharge, transport or
handling of any pollutants, contaminants, chemicals or industrial,
toxic or hazardous wastes or substances ("HAZARDOUS SUBSTANCES"); and
(b) except as disclosed in the Final Prospectus and the Company's
Information Record, the Company and the Subsidiaries have,
collectively, obtained all material licences, permits, approvals,
consents, certificates, registrations and other authorizations under
all applicable Environmental Laws (the "ENVIRONMENTAL PERMITS")
necessary as at the date hereof for the operation of the businesses
carried on or proposed to be commenced by the Company and the
Subsidiaries, and each Environmental Permit is valid, subsisting and
in good standing and neither the Company nor any of the Subsidiaries
is in material default or breach of any Environmental Permit and
no proceeding is pending or threatened to revoke or limit any
Environmental Permit.
5. CONDITIONS OF CLOSING
5.1 The following are conditions of the obligations of the Agents and the
Purchasers to purchase the Offered Shares from the Company as contemplated
hereby, which conditions the Company covenants to exercise its reasonable best
efforts to have fulfilled on or prior to the Closing Date, which conditions may
be waived in writing in whole or in part by the Agents on their own behalf and
on behalf of the Purchasers:
(a) the Company will have made and/or obtained the necessary filings,
approvals, consents and acceptances to or from, as the case may be,
the Securities Commissions and the Exchanges required to be made or
obtained by the Company in connection with the Offering, on terms
which are acceptable to the Company and the Agents, acting reasonably,
prior to the Closing Date, it being understood that the Agents will do
all that is reasonably required to assist the Company to fulfil this
condition;
(b) the Company shall have delivered to the Agents within 36 hours of the
filing of the Final Prospectus, or such later time as may be agreed
upon by the Company and the Agents, in such Canadian cities as the
Agents may reasonably request, the reasonable requirements of
conformed commercial copies of the Final Prospectus;
(c) the Offered Shares will have been accepted for listing by the
Exchanges, subject to the usual conditions, and will, subject to
closing of the Offering at the Time of Closing, at the opening of
trading on the Exchanges on the Closing Date, be posted for trading on
the Exchanges;
(d) the Company's board of directors will have authorized and approved
this agreement, the sale and issuance of the Offered Shares and all
matters relating to the foregoing;
(e) the Company will deliver a certificate of the Company and signed on
behalf of the Company, but without personal liability, by the Chief
Executive Officer of the Company and the Chief Financial Officer of
the Company or such other senior officers of the Company as may be
acceptable to the Agents, acting reasonably, addressed to the Agents
and their counsel and dated the Closing Date, in form and content
satisfactory to the Agents' counsel, acting reasonably, certifying
that:
(i) no order ceasing or suspending trading in any securities of
the Company or prohibiting the sale of the Offered Shares or
any of the Company's issued securities has been issued and
no proceedings for such purpose are pending or, to the
knowledge of such officers, threatened;
(ii) to the knowledge of such officers, there has been no
adverse material change relating to the Company and its
Subsidiaries, on a consolidated basis, since the date hereof
which has not been generally disclosed;
(iii) since the date hereof, no material change relating to the
Company and the Subsidiaries, on a consolidated basis,
except for the Offering, has occurred with respect to which
the requisite material change statement or report has not
been filed and no such disclosure has been made on a
confidential basis;
(iv) the representations and warranties of the Company contained
in this agreement (a) qualified by materiality (or Material
Adverse Event or similar qualifications), are true and
correct and (b) not so qualified are true and correct in all
material respects, in each case at the Time of Closing, with
the same force and effect as if made by the Company as at
the Time of Closing;
(v) the Company has complied, and in the case of Subsection
4.1.1(q) will comply, with all the covenants and satisfied
(or will satisfy) all the terms and conditions of this
agreement on its part to be complied with or satisfied,
other than conditions which have been waived by the Agents,
at or prior to the Time of Closing; and
(vi) such other matters in relation to this Offering as the
Company and the Agents shall agree prior to the Time of
Closing;
(f) the Company will have caused a favourable legal opinion to be
delivered by its Canadian counsel addressed to the Agents and the
Agents' counsel addressing the matters identified in Schedule "B"
hereto. In giving such opinions, counsel to the Company shall be
entitled to rely, to the extent appropriate in the circumstances, upon
local counsel and shall be entitled as to matters of fact not within
their knowledge to rely upon a certificate of fact from responsible
persons in a position to have knowledge of such facts and their
accuracy;
(g) the Company will have caused a favourable legal opinion to be
delivered by its U.S. counsel addressed to the Agents and the Agents'
counsel addressing the matters identified in Schedule "C" hereto;
(h) the Company will have caused a favourable legal opinion to be
delivered by local counsel in the jurisdiction of incorporation of
each of the Subsidiaries, addressed to the Agents, in form and
substance satisfactory to the Agents, and with respect to the
following matters:
(i) the incorporation and existence of each subsidiary under the
laws of its jurisdiction of incorporation;
(ii) as to the holder of the issued and outstanding shares of
each subsidiary as set forth in the Preliminary Prospectus
and the Final Prospectus; and
(iii) that each subsidiary has all requisite corporate power
under the laws of its jurisdiction of incorporation to carry
on its businesses and own it properties as described in the
Prospectus;
(i) the Company will have caused Deloitte & Touche LLP to deliver an
updated version of its letter referred to in Section 6.1 below; and
(j) the Company will cause its registrar and transfer agent to deliver a
certificate as to the issued and outstanding shares of the Company as
at a date not more than two business days prior to the Closing Date.
6. ADDITIONAL DOCUMENTS UPON FILING OF FINAL PROSPECTUS
6.1 The Company shall cause to be delivered to the Agents concurrently with
the filing of the Final Prospectus and any Supplementary Material a comfort
letter dated the date thereof from the auditors of the Company and addressed to
the Agents and to the directors of the Company, in form and substance reasonably
satisfactory to the Agents, relating to the verification of the financial
information and accounting data and other numerical data of a financial nature
contained therein and matters involving changes or developments since the
respective dates as of which specified financial information is given therein,
to a date not more than two business days prior to the date of such letter.
7. CLOSING
7.1 The Offering will be completed at the offices of the Company's counsel
in Toronto at the Time of Closing or such other place, date or time as may be
mutually agreed to; provided that if the Company has not been able to comply in
any material respect with any of the covenants or conditions set out herein
required to be complied with by the Time of Closing or such other date and time
as may be mutually agreed to, the respective obligations of the parties will
terminate without further liability or obligation except for payment of
expenses, indemnity and contribution provided for in this agreement.
7.2 At the Time of Closing on the Closing Date and any Subsequent Closing
Dates, the Company shall deliver to the Agents:
(a) certificates representing the Offered Shares duly registered as the
Agents may direct;
(b) certificates representing the Agent's Option duly registered as the
Agents may direct;
(c) the requisite legal opinions and certificates as contemplated in
Section 5.1; and
(d) such further documentation as may be contemplated herein or as counsel
to the Agents or the Securities Commissions may reasonably require,
against payment of the aggregate purchase price for the Offered Shares, net of
the Agency Fee and the expenses payable by the Company under Section 10 hereof
to the Agents and the
reasonable fees of the Agents' counsel all in accordance with a detailed invoice
delivered on the business day prior to the Closing Date or any Subsequent
Closing Date payable to the Company by wire transfer.
8. TERMINATION OF PURCHASE OBLIGATION
8.1 Without limiting any of the other provisions of this agreement, the
Agents, on their own behalf and on behalf of the Purchasers, will be entitled,
at their option, to terminate and cancel, without any liability, their
obligations under this agreement, to purchase the Offered Shares, by giving
written notice to the Company at any time through to the Time of Closing if:
(a) any order or ruling is issued, any inquiry, investigation or other
proceeding (whether informal or formal) in relation to the Company or
a Subsidiary is made or announced by any officer or official of the
Exchanges or the Securities Commissions (other than such order,
ruling, enquiry or investigation based solely upon the activities or
alleged activities of the Agents) which operates to cease, suspend,
prevent or restrict trading in, or distribution of, any securities of
the Company including the Offered Shares;
(b) there should develop, occur or come into effect any event of any
nature, including without limitation, accident, governmental law or
regulation, which in the opinion of the Agents adversely affects or
may adversely affect the financial markets or the business, affairs or
operations of the Company and the Subsidiaries on a consolidated basis
or the market price or value of the Offered Shares;
(c) the Agents and or their representatives, through their due diligence
investigations, discover any misrepresentation, or there is in the
opinion of the Agents a material adverse change or a change in
material fact or a new material fact shall arise which would be
expected to have an adverse effect on the business, affairs or
operations of the Company and the Subsidiaries on a consolidated basis
or on the market price or value of the Offered Shares;
(d) the state of the financial markets is such that in the opinion of the
Agents the Offered Shares cannot be successfully marketed;
(e) the Company shall be in material breach of any material term,
condition or covenant in this agreement, or any representation or
warranty of the Company is or becomes false; or
(f) the Agents, or any of them, or any affiliate of any of the Agents or
any of their respective directors, or officers receives notice of any
material claim, action, proceeding or investigation against any of
them, by or before any court, government department, commission, board
or agency, foreign or domestic, which arises as a result of the
Agents' obligations hereunder;
the occurrence or non-occurrence of any of the foregoing events or circumstances
to be determined in the sole discretion of the Agents, acting reasonably.
The Agents shall make reasonable efforts to give notice to the Company (in
writing or by other means) of the occurrence of any of the events referred to in
this section; provided that neither the giving nor the failure to give such
notice shall in any way affect the Agents' entitlement to exercise this right at
any time through to the Time of Closing.
The Agents' rights of termination contained in this section are in addition
to any other rights or remedies they may have in respect of any default, act or
failure to act or noncompliance by the Company in respect of any of the matters
contemplated by this agreement.
8.2 If the obligations of the Agents are terminated under this agreement
pursuant to the termination rights provided for in Section 8.1, the Company's
liabilities to the Agents shall be limited to the Company's obligations under
the indemnity, contribution and expense provisions of this agreement.
9. INDEMNITY AND CONTRIBUTION
9.1 The Company agrees to indemnify and hold harmless each Agent, the U.S.
Affiliate, its subsidiaries and its directors, officers, employees, partners,
agents, each other person, if any, controlling an Agent, the U.S. Affiliate, or
any of its subsidiaries and each shareholder of an Agent or the U.S. Affiliate
(collectively, the "INDEMNIFIED PARTIES" and individually, an "INDEMNIFIED
PARTY"), from and against any and all losses (other than loss of profits),
expenses, claims (including shareholder actions, derivative or otherwise),
actions, damages and liabilities, including the aggregate amount paid in
reasonable settlement of any actions, suits, proceedings, investigations or
claims and the reasonable fees and expenses of their counsel that may be
incurred in advising with respect to and/or defending any action, suit,
proceeding, investigation or claim that may be made or threatened against any
Indemnified Party or in enforcing this indemnity (collectively, the "CLAIMS") to
which any Indemnified Party may become subject or otherwise involved in any
capacity insofar as the Claims relate to, are caused by, result from, arise out
of or are based upon, directly or indirectly, this agreement. The Company also
agrees that no Indemnified Party shall have any liability (whether direct or
indirect, in contract or tort or otherwise) to the Company or any person
asserting claims on behalf of or in right of the Company for or in connection
with this agreement except to the extent any losses, expenses, claims, actions,
damages or liabilities incurred by the Company are determined by a court of
competent jurisdiction in a final judgment that has become non-appealable to
have resulted primarily from the negligence or wilful misconduct of such
Indemnified Party. Neither the Company nor any Indemnified Party will, without
prior written consent of the other party, not to be unreasonably withheld,
settle, compromise, consent to the entry of any judgment in or otherwise seek to
terminate any action, suit, proceeding, investigation or claim in respect of
which indemnification may be sought hereunder (whether or not any Indemnified
Party is a party thereto) unless such settlement, compromise, consent or
termination includes a release of each Indemnified Party (in the case of a
settlement by the Company), or of the Company, the Subsidiaries and its
directors, officers and shareholders (in the case of a settlement by an
Indemnified Party), from any liabilities arising out of such action, suit,
proceeding, investigation or claim.
9.2 Promptly after receiving notice of an action, suit, proceeding or claim
against an Indemnified Party or receipt of notice of the commencement of any
investigation which is based, directly or indirectly, upon any matter in respect
of which indemnification may be sought from the Company, the Indemnified Party
will notify the Company in writing of the particulars thereof, provided that the
omission so to notify the Company shall not relieve the Company of any liability
which the Company may have to the Indemnified Party except and only to the
extent that any such delay in or failure to give notice as herein required
prejudices the defence of such action, suit, proceeding, claim or investigation
or results in any increase in the liability which the Company has under this
indemnity. Upon receipt of such notice, the Company shall be entitled but not
obligated to assume defence of the Indemnified Party.
9.3 The foregoing indemnity shall not apply to the extent that a court of
competent jurisdiction or a final judgment that has become non-appealable shall
determine that such losses, expenses, claims, actions, damages or liabilities to
which the Indemnified Party may be subject were primarily caused by the gross
negligence, dishonesty or commission of any fraudulent act by the Indemnified
Party.
9.4 If for any reason the foregoing indemnity is unavailable (other than in
accordance with the terms hereof) to any Indemnified Party or is insufficient to
hold any Indemnified Party harmless, the Company shall contribute to the amount
paid or payable by the Indemnified Party as a result of such Claim in such
proportion as is appropriate to reflect not only the relative benefits received
by the Company on the one hand and the Indemnified Party on the other hand but
also the relative fault of the Company, and any Indemnified Party as well as any
relevant equitable considerations, provided that the Company shall in any event
contribute to the amount paid or payable by any Indemnified Party as a result of
such Claim any excess of such amount over the amount of the fees received by the
Indemnified Party under this Agreement.
9.5 The Company also agrees to reimburse an Indemnified Party for the time
spent by its personnel in connection with any Claim at their normal per diem
rates, provided such rates are reasonable. An Indemnified Party may retain
counsel to separately represent them in the defence of a Claim, the reasonable
fees in respect of which shall be at the Company's expense if (i) the Company
does not assume the defence of the Claim in a reasonable period of time, (ii)
the Company agrees to separate representation or (iii) the Company is advised by
counsel that there is an actual or potential conflict in the Company's and an
Indemnified Party's respective interests, which makes representation by the same
counsel inappropriate.
9.6 The obligations of the Company hereunder are in addition to any
liabilities which the Company may otherwise have to any Indemnified Party.
10. FEES EXPENSES
10.1 In consideration for their services hereunder, the Company agrees to
pay to the Agents at the Closing Time on the Closing Date, a fee (the "AGENCY
FEE") equal to six per cent (6%) for each Offered Security subscribed for,
including any Offered Shares purchased by the Agents as principals hereunder.
10.2 In further consideration of their services hereunder, the Company
hereby grants the Agents a non-transferable option (the "AGENTS' OPTION") to
acquire such number of Common Shares as is equal to 3% of the total number of
Offered Shares sold under the Offering at a price per share equal to the
purchase price of the Offered Shares. The Agents' Option will be exercisable by
the Agents at any time until the second anniversary of the Closing Date.
10.3 Whether or not the transactions herein contemplated shall be completed,
all expenses of the Company and the Agents related to, or incidental to, the
authorization, issue, delivery and sale of the Offered Shares and of or
incidental to all other matters in connection with the transactions herein set
out shall be borne by the Company, including, without limitation, the cost of
the direct travel expenses incurred on behalf of officers of the Company and the
Agents with respect to any road shows, expenses payable in connection with the
qualification of the Offered Securities for sale to the public, the fees and
expenses of the Company's counsel, all costs incurred in connection with the
preparation, printing and delivery of the Preliminary Prospectus, the Final
Prospectus and any Supplementary Materials, including commercial copies thereof,
of the definitive certificates representing or documents constituting the
Offered Shares, any stock exchange listing fees, transfer agent and filing fees,
reasonable fees and disbursements (up to a maximum of US$80,000 plus G.S.T. and
all other applicable taxes) of the Agents' counsel and the Agents' reasonable
"out-of-pocket" expenses. All reasonable fees and expenses of the Agents shall
be payable by the Company at the Closing Time or upon receipt by the Company of
a detailed invoice from BMO Xxxxxxx Xxxxx and be payable whether or not the
Offering is completed.
11. RIGHT OF FIRST REFUSAL
11.1 Provided that the Offering is completed, the Company hereby agrees, for
a period of 12 months commencing on the Closing Date, to grant BMO Xxxxxxx Xxxxx
a right of first refusal to be the lead underwriter or lead agent on the
Company's next equity offering, subject to the Company and BMO Xxxxxxx Xxxxx,
both acting reasonably, agreeing to the terms and conditions thereof.
12. ACTION BY AGENTS
12.1 All steps which must or may be taken by the Agents in connection with
the closing of the Offering, may be taken by BMO Xxxxxxx Xxxxx on behalf of
itself and the other Agents and the execution of this agreement by the other
Agents and by the Company shall constitute the Company's authority and
obligation for accepting notification of any such steps from, and for delivering
the definitive documents constituting the Offered Shares to or to the order of,
BMO Xxxxxxx Xxxxx. BMO Xxxxxxx Xxxxx shall fully consult with the other Agents
with respect to all notices, waivers, extensions or other communications to or
with the Company.
13. CONDITIONS
13.1 All of the material terms and conditions contained in this agreement to
be satisfied by the Company prior to the Closing Time shall be construed as
conditions, and any breach or failure by the Company to comply with any of such
terms and conditions in any material respect shall entitle the Agents to
terminate their obligations pursuant to this agreement by written notice to that
effect given to the Company prior to the Closing Time. It is understood and
agreed that the Agents may waive in whole or in part, or extend the time for
compliance with, any of such terms and conditions or any other or subsequent
breach or non-compliance; provided, however, that to be binding, any such waiver
or extension must be in writing. If the Agents elect to terminate their
obligations pursuant to this agreement, whether the reason for such termination
is within or beyond the control of the Company, the liability of the Company
hereunder shall be limited to the indemnity referred to in Section 9 hereof and
the payment of expenses referred to in Section 10 hereof.
14. SURVIVAL OF WARRANTIES, REPRESENTATIONS, COVENANTS AND AGREEMENTS
14.1 All warranties, representations, covenants and agreements of the
Company herein contained or contained in documents submitted or required to be
submitted pursuant to this agreement shall survive the payment by the Agents for
the Offered Shares and shall continue in full force and effect for the benefit
of the Agents regardless of the closing of the sale of the Offered Shares and
regardless of any investigation which may be carried on by the Agents or on
their behalf. Such warranties, representations, covenants and agreements of the
Company shall survive for a period of two (2) years, save and except for those
set forth under Subsection 4.1.2(c) and 4.1.2(d) which shall survive for the
maximum period of time as the Agents and the Purchasers may be entitled to
commence an action or exercise a right of recission, with respect to the
disclosure contained in the Final Prospectus, any amendment thereto, or either
of them, pursuant to Applicable Securities Laws in any of the Qualifying
Jurisdictions. For greater certainty, and without limiting the generality of
the foregoing, the provisions contained in this agreement in any way related to
the indemnification of the Agents by the Company or the contribution obligations
of the Agents or those of the Company shall survive and continue in full force
and effect, indefinitely.
15. GENERAL CONTRACT PROVISIONS
15.1 Any notice or other communication to be given hereunder shall be in writing
and shall be given by delivery or by telecopier, as follows:
(a) if to the Company:
Apollo Gold Corporation
0000 XXX Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000-0000
X.X.X.
Attention: R. Xxxxx Xxxxxxx
Telecopier Number: (000) 000-0000
with a copy to:
Fogler, Xxxxxxxx LLP
Royal Trust Tower
Toronto Dominion Centre
00 Xxxx Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, XX X0X 0X0
Attention: Xxxxxxx Xxxxxx
Telecopier Number: (000) 000-0000
(b) if to the Agents:
BMO Xxxxxxx Xxxxx Inc.
1 First Canadian Place
4th Floor, P.O. Box 150
Toronto, ON M5X 1H3
Attention: Xxxxxx Xxxxxxxxx
Telecopier Number: (000) 000-0000
Canaccord Capital Corporation
X.X. Xxx 0, Xxxxx 0000
000 Xxx Xxxxxx
Xxxxxxx, XX X0X 0X0
Attention: Xxxx XxXxxxxx
Telecopier Number: (000) 000-0000
Xxxxxxxxx XxXxxxxx & Partners
000 Xxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, XX X0X 0X0
Attention: Xxxx Xxxxxxxx
Telecopier Number: (000) 000-0000
Orion Securities Inc.
BCE Place
Suite 3100, P.O. Box 830
000 Xxx Xxxxxx
Xxxxxxx, XX X0X 0X0
Attention: Xxx Xxxxxx
Telecopier Number: (000) 000-0000
Westwind Capital Partners
00 Xxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, XX X0X 0X0
Attention: Xxxxx Xxxxxx
Telecopier Number: (000) 000-0000
with a copy to:
Fraser Xxxxxx Casgrain LLP
1 First Canadian Place
000 Xxxx Xxxxxx Xxxx
Xxxxxxx, XX X0X 0X0
Attention: Xxxx Xxxxxx
Telecopier Number: (000) 000-0000
The Company or any of the Agents may change its address for notice by
notice given in the manner aforesaid. Any such notice or other communication
shall be deemed to have been given on the day on which it was delivered or sent
by telecopier if received during normal business hours; otherwise it shall be
deemed to have been received by 9:00 a.m. on the next business day.
15.2 This agreement and the other documents herein referred to constitute
the entire agreement between the Agents and the Company relating to the subject
matter hereof and supersedes all prior agreements between the Agents and the
Company with respect to their respective rights and obligations in respect of
the Offering, including the engagement letter between BMO Xxxxxxx Xxxxx and the
Company dated August 22, 2003.
16. TIME OF ESSENCE
16.1 Time shall be of the essence of this Agreement.
17. GOVERNING LAW
17.1 This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario and the laws of Canada applicable therein
and the courts of such province shall have non-exclusive jurisdiction over any
dispute hereunder.
18. COUNTERPARTS
18.1 This Agreement may be executed in several counterparts, each of which
when so executed shall be deemed to be an original and such counterparts
together shall constitute one and the same instrument.
If the foregoing is in accordance with your understanding and is agreed to
by you, will you please confirm your acceptance by signing the enclosed copies
of this letter at the place indicated and returning the same to BMO Xxxxxxx
Xxxxx on behalf of the undersigned.
Yours very truly,
[Signature page follows]
BMO XXXXXXX XXXXX INC. CANACCORD CAPITAL XXXXXXXXX XXXXXXXX
CORPORATION & PARTNERS
/s/ Xxxxxx Xxxxxxxxx /s/ Xxxx XxXxxxxx /s/ Xxxx Xxxxxxxx
--------------------------- ---------------------------------- ---------------------
Per: "Xxxxxx Xxxxxxxxx" Per: "Xxxx XxXxxxxx" Per: "Xxxx Xxxxxxxx"
Title: Managing Director Title: Vice President and Director Title: Partner
ORION SECURITIES INC. WESTWIND CAPITAL
PARTNERS
/s/ Xxx Xxxxxx /s/ Xxxxx Xxxxxx
--------------------------- ----------------------------------
Per: "Xxx Xxxxxx" Per: "Xxxxx Xxxxxx"
Title: Managing Director Title: Vice President
Accepted and agreed to as of September 19, 2003.
APOLLO GOLD CORPORATION
/s/ R. Xxxxx Xxxxxxx
----------------------------------
Per: "R. Xxxxx Xxxxxxx"
Title: President and Chief Executive Officer
SCHEDULE "A"
DETAILS OF THE OFFERING
This is Schedule "A" to the Agency Agreement dated as of September 19, 2003
between Apollo Gold Corporation, BMO Xxxxxxx Xxxxx Inc., Canaccord Capital
Corporation, Xxxxxxxxx XxXxxxxx & Partners, Orion Securities Inc. and Westwind
Partners Inc.
ISSUER: Apollo Gold Corporation (the "COMPANY")
ISSUE: Treasury offering of Common Shares
ISSUE PRICE: C$2.25 per Common Share (in the context of the market)
ISSUE AMOUNT: C$50,175,000
OVER-ALLOTMENT OPTION: The Company has granted the Agents an option,
exercisable at the Issue Price for a period of 30 days
following the closing of this offering, to purchase up
to an additional 15% of the Issue Amount to cover
over-allotments, if any.
USE OF PROCEEDS: US$16 million of the net proceeds of the Offering will
be used for the advanced exploration and feasibility of
the Black Fox Project. The balance of the proceeds will
be used (i) to advance the Company's other mineral
properties including the Montana Tunnels Mine and the
Florida Canyon Mine in such amounts as may be
determined by management of the Company and (ii) for
general corporate purposes.
FORM OF OFFERING: Marketed public offering by way of a short form
prospectus filed in all provinces of Canada, excluding
Quebec. U.S. sales by private placement to accredited
investors pursuant to Rule 506 of Regulation D or
another available private placement exemption.
ELIGIBILITY: Eligible under the usual statutes and for RRSPs, RRIFs,
RESPs and DPSPs.
LISTING: An application will be made to list the Common Shares
on the Toronto Stock Exchange and on the AMEX. Common
shares currently trade on the Toronto Stock Exchange
under the symbol "APG". The Company is currently
pursuing a listing on the AMEX, and common shares are
expected to trade under the symbol "AGT" on or about
August 26, 2003.
COMMISSION: 6.00% + broker warrants (equal to 3.0% of the Common
Shares sold)
PRICING: Expected mid-September, 2003.
CLOSING: Expected late-September, 2003.
SCHEDULE "B"
OPINION OF THE COMPANY'S COUNSEL
This is Schedule "B" to the Agency Agreement dated as of September 19, 2003
between Apollo Gold Corporation, BMO Xxxxxxx Xxxxx Inc., Canaccord Capital
Corporation, Xxxxxxxxx XxXxxxxx & Partners, Orion Securities Inc. and Westwind
Partners Inc.
The opinion of the Company's counsel shall, inter alia, contain opinions with
respect to the following matters:
(a) the Company has been incorporated and is validly existing under its
jurisdiction of incorporation and has the corporate capacity and power
to own its property and to carry on its business as presently carried
on;
(b) the authorized capital of the Company;
(c) the Company has the corporate capacity and power to execute and
deliver this agreement and to perform its obligations hereunder;
(d) the Offered Shares have been duly authorized and validly issued and
are outstanding as fully paid and non-assessable;
(e) all necessary corporate action has been taken by the Company to
authorize (i) the allotment, issuance and sale of the Offered Shares;
(ii) the grant of the Over-Allotment Option; (iii) the issuance and
sale of the Restricted Common Shares of the Company upon exercise of
the Over-Allotment Option; (iv) the grant of the Agents' Option; and
(v) the issuance and sale of the Common Shares of the Company upon
exercise of the Agent's Option; provided that the Company shall have
received payment of the required consideration therefore;
(f) this agreement has been duly authorized, executed and delivered by the
Company and is a legal, valid and binding obligation of the Company
enforceable against it in accordance with its terms;
(g) CIBC Mellon Trust Company has been duly appointed the transfer agent
and registrar for the Company's Common Shares;
(h) the Exchanges have accepted notice of the issuance of the Offered
Shares and have conditionally approved the listing of the Offered
Shares subject to usual conditions;
(i) the execution, delivery and performance of this agreement and the
consummation by the Company of the transactions contemplated in this
agreement and the Final Prospectus and compliance by the Company with
its obligations under this agreement do not and will not conflict with
and do not and will not result in a breach of, and do not and will not
create a state of facts which after notice or lapse of time or both
will result in a breach of any of the terms, conditions or provisions
of the constating documents of the Company, or to counsel's knowledge
any resolution passed or consented to by the directors or shareholders
of the Company;
(j) all necessary documents have been filed, all requisite proceedings
have been taken and all other legal requirements have been fulfilled
under the laws of each of the Qualifying Jurisdictions to qualify the
distribution and sale of the Offered Shares and to permit the offering
of the Offered Shares in such provinces pursuant to the Final
Prospectus through investment dealers or brokers registered in such
provinces and territories who have complied with the relevant
provisions of the securities legislation of such jurisdictions;
(k) as to the reporting issuer status of the Company in each of the
Qualifying Jurisdictions; and
(l) opinions with respect to eligibility for investment as referred to in
the Final Prospectus.
SCHEDULE "C"
OPINION OF THE COMPANY'S U.S. COUNSEL
This is Schedule "C" to the Agency Agreement dated as of September 19, 2003
between Apollo Gold Corporation, BMO Xxxxxxx Xxxxx Inc., Canaccord Capital
Corporation, Xxxxxxxxx XxXxxxxx & Partners, Orion Securities Inc. and Westwind
Partners Inc.
The opinion of the Company's U.S. counsel shall, inter alia, contain an opinion
with respect to the following matter:
(a) no registration of the Offered Shares under the United States
Securities Act of 1933, as amended, is required for the sale of the
Offered Shares in the United States in accordance with the provisions
of the Agency Agreement.
