AGENCY AGREEMENT
January 9, 2004
Northwestern Mineral Ventures Inc.
Xxxxx 0000, 00 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: President
Dear Sirs/Mesdames:
RE: INITIAL PUBLIC OFFERING OF ISSUER INC.
The undersigned, Xxxxxxxx & Xxxxxxxx Securities Inc. (the "AGENT") understands
that Northwestern Mineral Ventures Inc. ("ISSUER") proposes to complete its
initial public offering by offering for sale a minimum of 8,000,000 and a
maximum of 15,000,000 common shares (the "COMMON SHARES") in the capital of
Issuer (the "OFFERED COMMON Shares") at a price of $0.10 per Common Share to
raise a minimum of $800,000 and a maximum of $1,500,000 (the "OFFERING"). At the
same time and by virtue of the Final Prospectus, Issuer intends to qualify
2,000,000 Common Shares to be issued without additional payment upon the
exercise of 2,000,000 special warrants ("SPECIAL Warrants") that were issued and
sold on November 12, 2003 for $0.10 per Special Warrant for aggregate gross
proceeds of $200,000.
The Agent proposes to offer the Offered Common Shares for sale, as Agent of
Issuer, on a best efforts basis, in the manner contemplated by this Agreement to
investors (the "PURCHASERS").
DEFINITIONS
In this Agreement,
"AFFILIATE", "MATERIAL CHANGE", "MATERIAL FACT" and "MISREPRESENTATION" have the
respective meanings given to them in the Securities Act (Ontario);
"AGENCY FEE" has the meaning given to it in Section 7;
"AGENT" has the meaning given to it in the first paragraph of this Agreement;
"AGREEMENT" means this agreement as it may be amended, modified or supplemented
from time to time in accordance with its terms;
"AUTHORITIES" has the meaning given it in Section 6(v);
"BEST OF ISSUER'S KNOWLEDGE" means to the knowledge of Issuer after due inquiry;
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"BUSINESS DAY" means a day which is not a Saturday, a Sunday or a statutory or
civic holiday in Toronto, Ontario;
"CANADIAN SECURITIES LAWS" means all applicable securities laws in the
Qualifying Province and the regulations and rules under such laws together with
applicable published policy statements, notices and orders of the securities
regulatory authorities in the Qualifying Province;
"CLAIM" has the meaning given to it in Section 11;
"CLOSING" means the completion of the issue and sale by Issuer of the Offered
Common Shares pursuant to this Agreement;
"CLOSING DATE" means January 23, 2004 or such other date as Issuer and the Agent
may agree upon in writing or as may be changed pursuant to Section 3(d) provided
that in no event shall it be later than April 8, 2004;
"CLOSING TIME" means 11:00 a.m. (Toronto time) on the Closing Date or such other
time on the Closing Date as Issuer and the Agent may agree;
"COMMON SHARES" means common shares in the capital of Issuer;
"DISTRIBUTION" means "distribution" or "distribution to the public" as those
terms are defined under Canadian Securities Laws;
"DISTRIBUTION PERIOD" means the period commencing on the date hereof and ending
on the date of the completion of the Distribution of the Offered Common Shares;
provided, however, that the Distribution Period shall not continue for a period
of more than 90 days after the date of receipt for the Final Prospectus if
subscriptions representing the Minimum Offering (as such term is defined in the
Final Prospectus) are not obtained within such period unless each of the
Purchasers who had subscribed during such period have consented to a
continuation beyond the 90 day period;
"FINAL PROSPECTUS" means the (final) prospectus of Issuer dated January 9, 2004;
"FRONTEER" means Fronteer Development Group Inc., a corporation incorporated
under the laws of the Province of Ontario;
"HAZARDOUS MATERIALS" has the meaning given to it in Section 6(aa);
"INDEMNIFIED PARTY" has the meaning given to it in Section 11;
"ISSUER" means Northwestern Mineral Ventures Inc., a corporation incorporated
under the laws of the Province of Ontario;
"ISSUER PROPERTY" means the property and assets of Issuer and includes the
Resource Properties and all sums or property of any type and description
(including the proceeds of subscriptions for Common Shares and Special
Warrants), any income therefrom and other accretions thereto and any additions
thereto or replacements thereof from time to time;
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"MATERIAL ADVERSE EFFECT" means a material adverse effect on the business,
affairs, property, liabilities (contingent or otherwise), operating results,
capital or prospects of Issuer;
"MATERIAL CONTRACTS" means each of the agreements referred to in the Prospectus
under the heading "Material Contracts" which have been executed on or before
such date as the context may require;
"NOTICE" has the meaning given to it in Section 20;
"OFFERED COMMON SHARES" has the meaning given to it in the first paragraph of
this Agreement;
"OFFERING" has the meaning given to it in the first paragraph of this Agreement;
"OSC" means the Ontario Securities Commission;
"XXXXXX DODGE" means Xxxxxx Dodge Corporation of Canada, Limited, a corporation
governed by the laws of the State of Delaware;
"PRELIMINARY PROSPECTUS" means the preliminary prospectus of Issuer dated
November 28, 2003;
"PROSPECTUS" means, collectively, the Preliminary Prospectus and the Final
Prospectus;
"PROSPECTUS AMENDMENT" means any amendment to the Final Prospectus;
"PURCHASERS" has the meaning given to it in the second paragraph of this
Agreement;
"QUALIFYING PROVINCE" means Ontario only;
"RESOURCE PROPERTIES" means the Conjuror, Achook and McPhoo properties situated
within the Northwest Territories Mining District, Camsell River, Calder River
and Great Bear Lake areas, Northwest Territories, known as the Bear Project, all
as more particularly identified and discussed in the Prospectus;
"SHAREHOLDER" means a holder of Common Shares;
"SUB AGENT" has the meaning given to it in Section 1;
"SPECIAL WARRANTS" has the meaning given to it in the first paragraph of this
Agreement; and
"TSXV" means the TSX Venture Exchange.
Unless otherwise expressly provided in this Agreement, words importing only the
singular number include the plural and vice versa and words importing gender
include all genders. References to "paragraph" and "Section" (unless otherwise
indicated) are to the appropriate paragraphs and sections of this Agreement.
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TERMS AND CONDITIONS
1. APPOINTMENT OF AGENT
Issuer hereby appoints the Agent as Issuer's sole and exclusive agent to effect
the Offering on a best efforts basis. The Agent agrees to act as Issuer's agent
for such purpose and to use its commercially reasonable best efforts to effect
the sale of the Offered Common Shares on Issuer's behalf to Purchasers, subject
to the terms and conditions hereinafter provided.
The Agent may form a sub-agency group including other qualified investment
dealers (the "SUB AGENTS"), and may determine the percentage fee payable to the
members of such group, which fee will be paid by the Agent out of the Agency
Fees. The Agent will effect sales of the Offered Common Shares only in those
jurisdictions where they may be lawfully offered for sale or sold and upon the
terms and conditions set forth in the Final Prospectus and this Agreement. The
Agent will not solicit offers to purchase or sell the Offered Common Shares so
as to require registration of Common Shares or the filing of a prospectus,
registration statement or other similar document with respect thereto under the
laws of any jurisdiction other than the Qualifying Province.
The Agent understands that the Offered Common Shares are not being registered
under the United States Securities Act of 1933, as amended, and represents that
it has not offered or sold and agrees that it will not offer, sell or deliver at
any time, directly or indirectly, in the United States (which term, as used
herein, includes its territories or possessions) or to or for the account of any
person who it knows or has reason to believe is a United States national or
resident thereof, any of the Offered Common Shares, other than with the express
prior written consent of Issuer. The Agent further agrees that it will require
any dealer who purchases from it any of the Offered Common Shares (whether as a
Sub Agent or otherwise) to comply with this requirement.
The Agent agrees to sell the Offered Common Shares, only in the Qualifying
Province and in accordance with, and in a manner permitted by, the laws of the
jurisdiction in which such Common Shares are sold and to require each Sub Agent
to agree with the Agent to so sell such Common Shares. The Agent further agrees,
subject to receipt of the same from Issuer, to send a copy of all Prospectus
Amendments to all persons to whom copies of the Final Prospectus are sent and
further agrees to require each Sub Agent to agree with the Agent to distribute
the same documents in the manner stipulated.
For the purposes of this Section, the Agent shall be entitled to assume that the
Offered Common Shares are qualified for Distribution in the Qualifying Province
where a receipt for the Final Prospectus shall have been obtained from the OSC
following the filing of the Final Prospectus.
Issuer shall co-operate in all reasonable respects with the Agent to allow and
assist the Agent to participate fully in the preparation of the Final Prospectus
and any Prospectus Amendment and shall allow the Agent and its counsel to
conduct all "due diligence" investigations which the Agent may reasonably
require to fulfil the Agent's obligations as agent and to enable the Agent to
execute any certificate required to be executed by the Agent in such
documentation.
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2. COMPLIANCE WITH CANADIAN SECURITIES LAWS
The Agent shall, when effecting sales of the Offered Common Shares, comply with
the provisions of Canadian Securities Laws and this Agreement and shall cause
its Sub Agents to so comply. For greater certainty, the Agent shall deliver
copies of the Final Prospectus and any Prospectus Amendment to Purchasers in
compliance with Canadian Securities Law. Issuer shall fulfil and comply with, to
the satisfaction of the Agent, acting reasonably, the Canadian Securities Laws
required to be fulfilled or complied with by Issuer to qualify the Offered
Common Shares for Distribution in the Qualifying Province through the Agent or
any Sub-Agent who complies with the applicable Canadian Securities Laws of the
Qualifying Province. All legal requirements to enable the Distribution of the
Offered Common Shares shall be fulfilled as soon as practicable. Without
limiting the generality of the foregoing, Issuer shall, as soon as possible
after any regulatory deficiencies have been satisfied with respect to the
Preliminary Prospectus on a basis acceptable to the Agent, acting reasonably,
file the Final Prospectus in the Qualifying Province and obtain a receipt for
the Final Prospectus by the OSC on or prior to 5:00 p.m. (Toronto time)
onJanuary 9, 2004 (or such later date as may be agreed to in writing by Issuer
and the Agent) on behalf of the Province of Ontario, being the only Qualifying
Province.
3. (a) DELIVERIES ON FILING
Concurrently with the execution and delivery of this Agreement or as soon as
possible thereafter, Issuer shall deliver to the Agent:
(i) a copy of the Final Prospectus signed and certified; and
(ii) a copy of any other document required to be filed by Issuer under
the laws of the Qualifying Province in compliance with the
Canadian Securities Laws.
(b) REPRESENTATIONS AS TO PROSPECTUS AND PROSPECTUS AMENDMENTS
Delivery of the Prospectus and any Prospectus Amendment to the Agent shall
constitute Issuer's representation and warranty to the Agent that, as at the
date of the Prospectus or Prospectus Amendment, as the case may be, (i) all
information and statements (except information and statements relating solely to
the Agent), contained in the Prospectus and any Prospectus Amendments are true
and correct in all material respects and contain no misrepresentation and
constitute full, true and plain disclosure of all material facts relating to
Issuer and the Offered Common Shares; (ii) no material fact or information has
been omitted from such disclosure (except facts or information relating solely
to the Agent) which is required to be stated in such disclosure or is necessary
to make the information contained in such disclosure not misleading in light of
the circumstances under which it was made; and (iii) such documents comply in
all material respects with the requirements of the Canadian Securities Laws.
Such deliveries shall also constitute Issuer's consent to the use by the Agent
and any Sub Agent of the Final Prospectus and any Prospectus Amendment in
connection with the Distribution of the Offered Common Shares in the Qualifying
Province in compliance with this Agreement and the Canadian Securities Laws.
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(c) COMMERCIAL COPIES
Issuer shall cause commercial copies of the Final Prospectus to be delivered to
the Agent without charge, in such numbers and in such cities as the Agent may
reasonably request by oral instructions to the printer of the Final Prospectus
given forthwith after a receipt has been issued therefor. Such delivery shall be
effected as soon as possible and, in any event, with respect to the Final
Prospectus on or before the date which is four Business Days (or such later day
as the Agent and Issuer may agree upon) after a receipt for the Final Prospectus
has been issued by the OSC as provided for in Section 2. Issuer shall similarly
cause to be delivered commercial copies of any Prospectus Amendment. The
commercial copies of the Final Prospectus and any Prospectus Amendment shall be
identical in content to the electronically transmitted versions thereof filed
with Canadian securities regulatory authorities pursuant to the System for
Electronic Document Analysis and Retrieval established pursuant to National
Instrument 13-101 of the Canadian securities administrators.
(d) CHANGE OF CLOSING DATE
Subject to Section 10, if a material change or a change in a material fact such
as is contemplated by Section 4 occurs prior to the Closing Date, the Closing
Date shall be, unless Issuer and the Agent otherwise agree in writing, and
provided that all applicable periods during which Purchasers may withdraw
subscriptions under Canadian Securities Laws have expired, the sixth Business
Day following the later of:
(i) the date on which all applicable filings or other requirements of
the Canadian Securities Laws with respect to such material change
or change in a material fact have been complied with in the
Qualifying Province and any appropriate receipts obtained for
such filings and notice of such filings from Issuer or its
counsel have been received by the Agent; and
(ii) the date upon which the commercial copies of any Prospectus
Amendments have been delivered in accordance with Section 3(c).
4. MATERIAL CHANGE DURING DISTRIBUTION
During the Distribution Period, Issuer shall promptly notify the Agent in
writing of:
(a) any material change (actual, anticipated, contemplated, proposed or
threatened, financial or otherwise) in the business, financial
condition, affairs, operations, assets, liabilities or obligations
(contingent or otherwise) or capital of Issuer;
(b) any material fact that has arisen or has been discovered which would
have been required to have been stated in the Final Prospectus or a
Prospectus Amendment had the fact arisen or been discovered on, or
prior to, the date of the Final Prospectus or the Prospectus
Amendment; and
(c) any change in any material fact or matter covered by a statement
contained in the Final Prospectus or any Prospectus
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Amendment which change is, or may be, of such a nature as to render
any statement in the Final Prospectus or any Prospectus Amendment
misleading or untrue or which would result in a misrepresentation in
the Final Prospectus or any Prospectus Amendment.
During the Distribution Period, Issuer shall promptly, and in any event within
any applicable statutory time limitation, comply, to the reasonable satisfaction
of the Agent, with all applicable filings and other requirements under the
Canadian Securities Laws as a result of such material fact or change; provided
that Issuer shall not file any Prospectus Amendment or other document without
first obtaining the approval of the Agent, after consultation with the Agent
with respect to the form and content thereof. Issuer shall in good faith discuss
with the Agent any fact or change in circumstances (actual, anticipated,
contemplated, proposed or threatened, financial or otherwise) which is of such a
nature that there is reasonable doubt whether written notice need be given under
this Section.
During the Distribution Period, Issuer shall advise the Agent promptly, and
forthwith provide the Agent with copies, of any written communications issued by
any securities regulatory authority or by the TSXV (a) suspending or preventing
the use of the Prospectus or a Prospectus Amendment; or (b) otherwise relating
to the Prospectus or the Offering.
Issuer shall deliver promptly to the Agent signed and certified copies of all
Prospectus Amendments and the Agent agrees to provide the same to each person
who has received a Final Prospectus
5. CHANGE IN CANADIAN SECURITIES LAWS
If during the Distribution Period there shall be any change in the Canadian
Securities Laws which, in the opinion of the Agent and its legal counsel, acting
reasonably, requires the filing of a Prospectus Amendment, Issuer shall promptly
prepare and file such Prospectus Amendment, to the reasonable satisfaction of
the Agent, with the appropriate securities regulatory authority in the
Qualifying Province; provided that Issuer shall not file any Prospectus
Amendment or other document without first obtaining the approval of the Agent
with respect to the form and content thereof, such approval not to be
unreasonably withheld.
6. OTHER COVENANTS, REPRESENTATIONS AND WARRANTIES OF ISSUER
Issuer hereby covenants, represents and warrants as follows to the Agent and
acknowledges that the Agent and the Purchasers are relying upon such
representations, warranties and covenants:
(a) Issuer is a corporation duly incorporated and organized and is validly
subsisting under the laws of the Province of Ontario, has all legal
capacity, requisite corporate power and authority and is duly
qualified or authorized to undertake the Offering, to own or lease the
Issuer Property and conduct its business as presently being conducted
by it in all jurisdictions where such qualification or authority is
required;
(b) to Best of Issuer's Knowledge Fronteer is a corporation duly
incorporated and organized and validly subsisting under the laws of
its incorporating jurisdiction and has all legal capacity, requisite
corporate power and authority and is duly qualified or authorized to
own the part of the Resource Properties presently
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owned or leased by it and to conduct its business as same relates to
the Resource Properties as presently being conducted by it in all
jurisdictions where such qualification or authority is required;
(c) Issuer will, prior to Closing, be a reporting issuer and not in
default under Canadian Securities Laws and will be prior to Closing,
in compliance with the by-laws, rules and regulations of the TSXV;
Issuer shall use its reasonable best efforts to maintain its status as
a reporting issuer not in default under Canadian Securities Laws;
(d) the execution and delivery of this Agreement by Issuer, and the issue,
sale and delivery of the Offered Common Shares by Issuer pursuant to
this Agreement and the performance or the consummation of the
transactions contemplated in this Agreement, do not and will not
conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under (whether after notice
or lapse of time or both), any of the Material Contracts or any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement (written or oral) or instrument to which Issuer is a party
or by which it is bound or to which any of its property or assets is
subject, nor will such action conflict with or result in any violation
of the provisions of the constating documents or any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over Issuer or any of its properties;
(e) all necessary organizational or corporate action has been taken by
Issuer to authorize the execution, delivery and performance by it of
this Agreement and the Material Contracts to which it is a party;
(f) this Agreement and the Material Contracts to which it is a party have
been duly executed and delivered by Issuer and constitute valid and
binding obligations of Issuer, enforceable against it in accordance
with its and their terms, except as enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium and other laws
relating to or affecting the rights of creditors generally, and except
as limited by the application of equitable principles when equitable
remedies are sought and by the fact that rights to indemnity,
contribution and waiver, and the ability to sever unenforceable terms,
may be limited by applicable law;
(g) to Best of Issuer's Knowledge, the option agreement entered into
between Issuer and Fronteer dated September 26, 2003, as amended
December 17, 2003, has been duly executed and delivered by Fronteer
and constitutes a valid and binding obligation of Fronteer,
enforceable against it in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting the
rights of creditors generally, and except as limited by the
application of equitable principles when equitable remedies are sought
and by the fact that rights to indemnity, contribution and waiver, and
the ability to sever unenforceable terms, may be limited by applicable
law;
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(h) to Best of Issuer's Knowledge, the exploration option agreement
entered into between Fronteer and Xxxxxx Dodge dated effective October
4, 2002 has been duly executed and delivered by Fronteer and
constitutes a valid and binding obligation of Fronteer, enforceable
against Fronteer in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting the rights of
creditors generally, and except as limited by the application of
equitable principles when equitable remedies are sought and by the
fact that rights to indemnity, contribution and waiver, and the
ability to sever unenforceable terms, may be limited by applicable
law;
(i) the terms and conditions of the Offering comply in all material
respects with Canadian Securities Laws;
(j) other than as may be required by, and as have or will have been
obtained prior to Closing under, Canadian Securities Laws, no consent,
approval, authorization, order, registration or qualification of or
with any court or governmental agency or body is required for the
issue, sale and delivery of the Offered Common Shares as contemplated
in this Agreement or the consummation by Issuer of the transactions
contemplated in this Agreement; Issuer shall make all necessary
filings with, and take all necessary actions required by, Canadian
Securities Laws with respect to the Offering and the exercise of the
Special Warrants (other than those that may be required to be made by
a person who exercises any of the Special Warrants);
(k) the minute book of Issuer as provided to counsel to the Agent to
review is true and correct and contains all the resolutions of the
board of directors (or any committee thereof) and shareholders of
Issuer passed since its date of incorporation;
(l) the authorized capital of Issuer consists of an unlimited number of
Common Shares of which 1,000,000 Common Shares were issued and
outstanding as fully paid and non-assessable;
(m) unless waived by Agent in writing, the Common Shares will prior to
Closing be conditionally listed on the TSXV and Issuer will use its
commercially reasonable best efforts to obtain and thereafter maintain
a listing for the Common Shares on the TSXV;
(n) Issuer is not party to and has not granted any agreement, warrant,
option, right or privilege capable of becoming an agreement, for the
purchase, subscription or issuance of any of the Common Shares or
securities convertible into or exchangeable for the Common Shares
other than the Special Warrants;
(o) the Offered Common Shares have been authorized for issuance and, when
issued the Offered Common Shares will be validly issued as fully paid;
(p) upon the exercise of the Special Warrants in accordance with their
terms the Common Shares resulting therefrom will be validly issued as
fully-paid and non-
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assessable Common Shares; Issuer shall ensure that at all times prior
to the expiry of the Special Warrants sufficient Common Shares are
authorized and reserved for issuance upon the due and proper exercise
of the Special Warrants;
(q) since Issuer's date of incorporation, Issuer has not, directly or
indirectly, declared or paid any dividend or declared or made any
other distribution on any of its shares or securities of any class,
or, directly or indirectly, redeemed, purchased or otherwise acquired
any of its shares or securities or agreed to do any of the foregoing;
there is not, in the constating documents of Issuer or in any
agreement, mortgage, note, debenture, indenture or other instrument or
document to which Issuer is a party, any restriction upon or
impediment to, the declaration or payment of dividends by the
directors of Issuer or the payment of dividends by Issuer to the
holders of Common Shares;
(r) there are no legal or governmental actions, proceedings or
investigations in existence to which Issuer is a party or to which the
property of Issuer is subject or, to the Best of Issuer's Knowledge,
contemplated or threatened, at law or in equity or before or by any
federal, provincial, municipal or other governmental department,
commission, board or agency, domestic or foreign, which (i) could have
a Material Adverse Effect, or (ii) questions the validity of the
issuance, sale or delivery of the Offered Common Shares or the
validity of any action taken or to be taken by Issuer pursuant to or
in connection with this Agreement;
(s) to the Best of Issuer's Knowledge, there are no legal or governmental
actions, proceedings or investigations in existence to which Fronteer
is a party or to which the property of Fronteer is subject or
contemplated or threatened, at law or in equity or before or by any
federal, provincial, municipal or other governmental department,
commission, board or agency, domestic or foreign, which could have a
Material Adverse Effect;
(t) the nature of the interests held by each of Issuer, Fronteer and, to
the Best of Issuer's Knowledge, Xxxxxx Dodge in each Resource Property
is accurately described in the Final Prospectus and each of Issuer and
Fronteer have all the right, title and interest in and to the Resource
Properties, free and clear of all mortgages, liens, charges, pledges,
security interests, claims, demands or royalties of any kind
whatsoever other than those listed in the Final Prospectus; no other
property rights are necessary for the conduct of Issuer's business in
relation to the Resource Properties; Issuer has no responsibility or
obligation to pay any commission, royalty or similar payment to any
person with respect to its property rights other than as disclosed in
the Final Prospectus;
(u) Issuer does not have any mineral property interests other than those
described in the Final Prospectus;
(v) to the Best of Issuer's Knowledge, Issuer has conducted and is
conducting its business in compliance in all material respects with
all applicable laws, rules, regulations, tariffs, orders and
directives, including without limitation, all laws,
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regulations and statutes relating to mining and to mining claims,
concessions or leases, and environmental, health and safety
legislation, regulations or by-laws or other lawful requirements of
any governmental or regulatory bodies having jurisdiction over it, and
Issuer holds all material certificates, authorities, permits,
licences, registrations and qualifications (collectively, the
"AUTHORITIES") in all jurisdictions in which it carries on its
business which are necessary or desirable to carry on its business as
now conducted including, without limitation, with respect to the
development and operation of the Resource Properties in accordance
with the future exploration and development plans with respect thereto
set forth in the Final Prospectus, and all the Authorities are valid
and existing and in good standing and none of the Authorities contain
any burdensome term, provision, condition or limitation which has or
is likely to have any Material Adverse Effect on the business of
Issuer as now conducted or as proposed to be conducted, and Issuer has
not received any notice of proceedings relating to the revocation or
modification of any of the Authorities which, singly or in the
aggregate, if the subject of an unfavourable decision, ruling or
finding, would have any Material Adverse Effect or any notice of the
revocation or cancellation of, or any intention to revoke or cancel,
any of the mining claims, concessions or leases comprising the
Resource Properties;
(w) to the Best of Issuer's Knowledge, and as same relates to or has an
impact upon the Resource Properties only, Fronteer has conducted and
is conducting its business in compliance in all material respects with
all applicable laws, rules, regulations, tariffs, orders and
directives, including without limitation, all laws, regulations and
statutes relating to mining and to mining claims, concessions or
leases, and environmental, health and safety legislation, regulations
or by-laws or other lawful requirements of any governmental or
regulatory bodies having jurisdiction over it; to the Best of Issuer's
Knowledge Fronteer holds all Authorities in all jurisdictions which
are necessary or desirable to carry on its business as now conducted
with respect to the development and operation of the Resource
Properties in accordance with the future exploration and development
plans with respect thereto set forth in the Prospectus, and all the
Authorities are valid and existing and in good standing and none of
the Authorities contain any burdensome term, provision, condition or
limitation which has or is likely to have any material adverse effect
on Fronteer's business as it relates to or has an impact upon the
Resource Properties as now conducted or as proposed to be conducted;
and to Best of Issuer's Knowledge Fronteer has not received any notice
of proceedings relating to the revocation or modification of any of
the Authorities which, singly or in the aggregate, if the subject of
an unfavourable decision, ruling or finding, would have any material
adverse effect on the conduct of the business, operations, financial
condition, or income of Fronteer or any notice of the revocation or
cancellation of, or any intention to revoke or cancel, any of the
mining claims, concessions or leases comprising the Resource
Properties;
(x) any and all agreements or other documents pursuant to which Issuer
holds or holds an interest in the Resource Properties are valid and
subsisting agreements in full force and effect, enforceable in
accordance with their respective terms, and
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Issuer is not, and to the Best of Issuer's Knowledge the third parties
thereto are not, in material default of any of the provisions of any
such agreements or other documents nor has any such default been
alleged, and such Resource Properties are in good standing under the
applicable statutes and regulations of the jurisdictions in which they
are situate; all leases pursuant to which Issuer derives its interests
in such Resource Properties are in good standing and there has been no
material default under any such leases and no material default will
result from the entering into of this Agreement by Issuer or by the
performance by Issuer of its obligations hereunder;
(y) all real or other property taxes required to be paid with respect to
the Resource Properties to the date hereof have been paid;
(z) the future exploration and development plans with respect to the
Resource Properties have been developed in accordance with prudent
mining practices and have been diligently reviewed by Issuer, and
Issuer is not aware of any facts or state of affairs which would
materially hinder or prevent Issuer (or to the extent required, either
Fronteer or Xxxxxx Dodge) from operating the Resource Properties in
accordance with such plans;
(aa) none of the Resource Properties (including the buildings constructed
thereon) or any of Issuer's or, to Best of Issuer's Knowledge,
Fronteer's operations is subject to any judicial or administrative
proceeding alleging the violation of any federal, provincial, state,
territorial, municipal or other environmental, health or safety
statute or regulation or, to the Best of Issuer's Knowledge, is
subject to any investigation concerning whether any remedial action is
needed to respond to a release of any Hazardous Material into the
environment that would have a Material Adverse Effect. Neither Issuer
nor, to the Best of Issuer's Knowledge, any other occupier of the
Resource Properties (including Fronteer or Xxxxxx Dodge), has filed
any notice under any federal, provincial, state, territorial,
municipal or other law indicating past or present treatment, storage
or disposal of a Hazardous Material. Except in material compliance
with applicable environmental laws, none of the Resource Properties
have at any time been used by Issuer or, to the best of Issuer's
knowledge, by any other occupier (including Fronteer or Xxxxxx Dodge),
as a waste storage or waste disposal site or to operate a waste
management business. Neither Issuer, nor, to the Best of Issuer's
Knowledge, any occupier of the Resource Properties (including
Fronteer), generates, transports, treats, stores or disposes of any
waste, subject waste, hazardous waste, deleterious substance,
industrial waste (as defined in applicable federal, provincial, state,
territorial, municipal or other legislation) on any of the Resource
Properties in contravention of applicable federal, provincial, state,
territorial, municipal or other laws or regulations enacted for the
protection of the natural environment or
-13-
human health. To the Best of Issuer's Knowledge, no underground
storage tanks or surface impoundments containing a petroleum product
or Hazardous Material are located on any of the Resource Properties in
contravention of applicable federal, provincial, state, territorial,
municipal or other laws or regulations enacted for the protection of
the natural environment or human health. For the purposes hereof,
"HAZARDOUS MATERIAL" means any contaminant, pollutant, subject waste,
hazardous waste, deleterious substance, industrial waste, toxic matter
or any other substance that when released into the natural environment
is likely to cause, at some immediate or future time, material harm or
degradation to the natural environment or material risk to human
health and, without restricting the generality of the foregoing,
includes any contaminant, pollutant, subject waste, deleterious
substance, industrial waste, toxic matter or hazardous waste as
defined by applicable federal, provincial, state, territorial,
municipal or other laws or regulations enacted for the protection of
the natural environment or human health;
(bb) the statement of financial position of Issuer and the notes thereto
contained in the Final Prospectus fairly present the financial
position and results of operations of Issuer as of the date indicated
thereon and such statement of financial position has been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis;
(cc) Issuer's audited financial statements as at, and for the period from
incorporation to November 13, 2003, together with the auditors' report
thereon and the notes thereto, (i) have been prepared in accordance
with Canadian generally accepted accounting principles applied (except
as may otherwise be disclosed in the audited financial statements);
(ii) are, in all material respects, consistent with the books and
records of Issuer; (iii) contain and reflect all material adjustments
for the fair presentation of the results of operations and the
financial condition of the business of Issuer for the period covered
thereby; and (iv) present fairly, in all material respects, the
financial position of Issuer as at the dates thereof and the results
of its operations for the periods then ended. There has not been any
material change in the assets, liabilities or obligations (absolute,
contingent or otherwise) of Issuer from the position set forth in the
audited financial statements or as otherwise disclosed in this
Agreement or the Prospectus, or in press releases disseminated by
Issuer and there has not been any material adverse change in the
business, operations, capital, condition (financial or otherwise) or
results of operations of Issuer (taken as a whole) since November 13,
2003; and since that date there have been no material facts,
transactions, events or occurrences, other than as disclosed in the
information filed by or on behalf of Issuer in compliance or intended
compliance with Canadian Securities Laws that could reasonably be
expected to have a material adverse effect on the capital, assets,
liabilities (absolute, accrued, contingent or otherwise), business,
operations or condition (financial or otherwise) or results of
operations of Issuer that have not been so disclosed;
(dd) Issuer has filed all necessary tax returns and notices and has paid
all applicable taxes of whatever nature to the date hereof to the
extent such taxes have become due or have been alleged to be due and
Issuer is not aware of any tax deficiencies or interest or penalties
accrued or accruing, or alleged to be accrued or accruing, thereon
with respect to itself where, in any of the above cases, it could
reasonably be expected to have any Material Adverse Effect;
-14-
(ee) since its incorporation and other than as disclosed in the Final
Prospectus or pursuant to Canadian Securities Laws, Issuer has not
incurred any obligation or liability, direct or indirect, contingent
or otherwise, except in the ordinary course of business and which is
not material; entered into any material transaction; approved or
entered into any agreement in respect of the purchase of any property
or any interest therein or the sale, transfer or other disposition of
any property or any interest therein owned, directly or indirectly, by
Issuer whether by asset sale, transfer of shares, or otherwise; or
approved or entered into any agreement in respect of the change of
control (by sale or transfer of shares or sale of all or substantially
all of the assets of Issuer or otherwise) of Issuer;
(ff) Issuer has no subsidiaries (as that term is defined in the Securities
Act (Ontario);
(gg) with the exception of the Material Contracts, to the Best of Issuer's
Knowledge, there are no other material contracts of or pertaining to
Issuer;
(hh) other than pursuant to this Agreement Issuer is not a party to any
contract, agreement or understanding with any person that would give
rise to a valid claim against Issuer or the Agent for a brokerage
commission, finder's fee or like payment in connection with the
Offering;
(ii) other than the Agent (including any Sub-Agents), there is no person,
firm or corporation acting or purporting to act at the request of
Issuer, who is entitled to any brokerage, finder's or consulting fee
in connection with the transactions contemplated herein;
(jj) Equity Transfer Services Inc., at its office in Toronto, has been duly
appointed as the transfer agent and registrar for the Common Shares;
(kk) Issuer will apply the net proceeds from the Offering in accordance
with the description set forth in the Final Prospectus under the
heading "Use of Proceeds"; and
(ll) Issuer has not withheld, and will not withhold, from the Agent any
facts relating to Issuer or to the Offering that would be material to
a prospective purchaser of the Offered Shares and the information and
statements contained in the Final Prospectus and any Prospectus
Amendment do not contain a misrepresentation.
7. SERVICES PROVIDED BY AGENT AND THE AGENCY FEE AND ADDITIONAL COMPENSATION
In return for the Agent's services including but not limited to acting as
Issuer's Agent in arranging for the sale of the Offered Common Shares, assisting
it in the preparation of the Prospectus, and performing administrative work in
connection with the sales of the Offered Common Shares, Issuer will pay to the
Agent a fee (the "AGENCY FEE") equal to 7% of the gross proceeds raised in the
Offering.
-15-
8. DELIVERY OF PURCHASE PRICE, AGENCY FEE AND CERTIFICATE
The purchase and sale of the Offered Common Shares for which orders have been
received, shall be completed at the offices of Xxxxxxx & Xxxx LLP, in the City
of Toronto at the Closing Time.
The delivery of the Offered Common Shares will be made against payment to Issuer
of the purchase price therefore by bank draft, wire transfer, certified cheque
or other means acceptable to Issuer and Agent (net of the Agency Fee) pursuant
to a book-entry only system whereby a book-entry only certificate representing
the Offered Common Shares will be issued in registered form to CDS or its
nominee on the Closing Date. Each Purchaser of Offered Common Shares will
receive a customer confirmation of purchase from the brokers, dealers, banks or
other financial institutions for whom, from time to time, CDS effects book
entries and from which such Offered Common Shares have been purchased by such
Purchaser.
The obligations of the Agent and Issuer to complete the Closing shall be subject
to the condition that subscriptions for 8,000,000 Common Shares have been
received and not withdrawn on or before the Closing Date in respect of such
Common Shares and subject to the condition that all applicable periods during
which Purchasers may withdraw subscriptions under Canadian Securities Laws shall
have expired. Pending satisfaction of these conditions, proceeds from
subscriptions will be held by the Agent. If these conditions are not satisfied
or the Closing does not occur for any other reason, the Agent shall ensure that
the subscription proceeds received from prospective Purchasers are returned by
the Agent to such Purchasers promptly without interest or deduction.
9. CLOSING CONDITIONS
The Agent's obligations hereunder shall be subject to the accuracy of the
representations and warranties of Issuer contained in this Agreement as of the
date of this Agreement and as of the Closing Date, the performance by Issuer of
its respective obligations under this Agreement and the following conditions:
(a) The Agent shall have received at the Closing Time a legal opinion
dated the Closing Date, in form and substance satisfactory to counsel
to the Agent, acting reasonably, addressed to the Agent and counsel to
the Agent from Xxxxxxx & Xxxx LLP, as to the laws of Canada and the
Qualifying Province with respect to the following matters:
(i) as to the incorporation or formation and existence of Issuer
under the laws of the Province of Ontario, and the power and
capacity of Issuer to carry on its businesses as described in
the Final Prospectus and to enter into and to carry out its
obligations under this Agreement, and the requisite power and
authority of Issuer to issue the Offered Common Shares as
contemplated by this Agreement;
(ii) that all necessary corporate action has been taken by and on
behalf of Issuer to authorize the undertaking of the Offering,
the execution and delivery of the Final Prospectus and, if
applicable, any Prospectus
-16-
Amendments, and the filing of such documents under the Canadian
Securities Laws in the Qualifying Province;
(iii) that Issuer is authorized to issue an unlimited number of
Common Shares and that all necessary corporate action has been
taken by and on behalf of Issuer to authorize the creation and
issuance of the presently issued and outstanding Common Shares
(which shares have been duly and validly created and are issued
and outstanding as fully paid and non-assessable) and the
Offered Common Shares;
(iv) that the execution and delivery of this Agreement and the other
Material Contracts, the issue and sale of the Offered Common
Shares, and the consummation of the transactions contemplated
by this Agreement, do not and will not result in a breach
(whether after notice or lapse of time or both) of any of the
terms, conditions or provisions of the constating documents of
Issuer or any applicable laws of the Province of Ontario or the
laws of Canada applicable therein;
(v) that this Agreement and the other Material Contracts which have
then been executed have been duly authorized and executed on
behalf of Issuer, as applicable, and constitute a legal, valid
and binding obligation, as applicable, enforceable against it
in accordance with their terms, except as enforcement of such
agreements may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights
of creditors generally and except as limited by the application
of equitable principles when equitable remedies are sought and
by the fact that rights to indemnity, contribution and waiver,
and the ability to sever unenforceable terms, may be limited by
applicable law;
(vi) that all necessary documents have been filed and all requisite
proceedings have been taken and all necessary approvals,
permits, consents and authorizations of the appropriate
regulatory authorities under the Canadian Securities Laws have
been obtained by Issuer to qualify the Offered Common Shares
for Distribution in the Qualifying Province through investment
dealers or brokers registered under the applicable laws of the
Qualifying Province who have complied with the relevant
provisions of such applicable legislation;
(vii) that Equity Transfer Services Inc., at its principal office in
Toronto, Ontario, has been duly appointed the registrar and
transfer agent in respect of the Common Shares;
(viii) that the Common Shares have been conditionally approved for
listing by the TSXV; and
(ix) as to such other matters as the Agent or counsel to the Agent
may reasonably request in connection with the Offering.
-17-
(b) The Agent shall have received at or prior to the Closing Time a legal
opinion in form and substance satisfactory to counsel to the Agent,
acting reasonably, addressed to the Agent and counsel to the Agent
from Xxxxxx Xxxxxxx, Barristers & Solicitors of the Northwest
Territories as to title to the Resource Properties and mineral rights
issues related to the Resource Properties.
(c) The Agent shall have received at the Closing Time certificates dated
the Closing Date, addressed to the Agent and counsel to the Agent and
signed by or on behalf of Issuer, with respect to the constating
documents of Issuer, all resolutions of the directors of Issuer
relating to this Agreement, the incumbency and specimen signatures of
signing officers of Issuer and with respect to such other matters as
the Agent may reasonably request.
(d) The Agent shall have received at the Closing Time a certificate or
certificates dated the Closing Date, addressed to the Agent and
counsel to the Agent from Issuer and signed by the Chief Executive
Officer and by the Chief Financial Officer of Issuer or other officers
of Issuer acceptable to the Agent, certifying, after having made due
enquiry and after having carefully examined the Final Prospectus and
any Prospectus Amendments, that:
(i) since the respective dates as of which information is given in
the Final Prospectus as amended by any Prospectus Amendment (A)
there has been no material change (actual, anticipated,
contemplated, proposed or threatened, whether financial or
otherwise) in the business, financial condition, affairs,
operations, assets, liabilities or obligations (contingent or
otherwise) or capital of Issuer and (B) no transaction has been
entered into by Issuer which is material to Issuer, other than
as disclosed in the Final Prospectus or the Prospectus
Amendments, as the case may be;
(ii) Issuer has complied with and satisfied the covenants, terms and
conditions of this Agreement on its part to be complied with
and satisfied up to the Closing Time; and
(iii) the representations and warranties of Issuer contained in this
Agreement are true and correct as of the Closing Date with the
same force and effect as if made at and as of the Closing Time
after giving effect to the transactions contemplated by this
Agreement.
(e) Issuer shall have received the conditional approval of the TSXV to the
listing of the Common Shares for trading on such exchange.
10. RIGHTS OF TERMINATION
(a) DUE DILIGENCE
If prior to the Closing Time the Agent is not satisfied in its sole discretion
with the results of any portion of its due diligence review and investigations
of Issuer, its business or its assets the Agent shall be entitled, at its sole
option, in accordance with Section 10(f), to terminate its
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obligations under this Agreement by written notice to that effect given to
Issuer at any time prior to the Closing Time.
(b) PROCEEDINGS
If prior to the Closing Time any enquiry, action, suit, investigation or other
proceeding whether formal or informal is instituted or threatened or any order
is made by any federal, provincial or other governmental authority in relation
to Issuer, which, in the sole opinion of the Agent, acting reasonably, operates
to prevent or materially adversely affect trading in the Offered Common Shares
or the Distribution of the Offered Common Shares or which, in the sole opinion
of the Agent, acting reasonably, would reasonably be expected to have a
significant effect on the market price or value of the Offered Common Shares,
the Agent shall be entitled, at its sole option, in accordance with Section
10(f), to terminate its obligations under this Agreement by written notice to
that effect given to Issuer at any time prior to the Closing Time.
(c) DISASTER/MARKET OUT CLAUSE
If prior to the Closing Time (i) there should develop, occur or come into effect
or existence any occurrence of national or international consequence or any
change or development involving a prospective change in national or
international political, financial or economic conditions or any action,
governmental law or regulation, enquiry or other occurrence, whether in any
financial market or otherwise, of any nature whatsoever which, in the sole
opinion of the Agent, acting reasonably, materially adversely affects or may
materially adversely affect the marketability of the Offered Common Shares, the
Canadian, U.S. or international financial markets, or (ii) the state of the
Canadian, U.S. or international financial markets is such that, in the sole
opinion of the Agent, acting reasonably, the Offered Common Shares cannot be
profitably marketed; then, in any one or more of the foregoing cases, the Agent
shall be entitled, at its sole option, in accordance with Section 10(f), to
terminate its obligations under this Agreement by written notice to that effect
given to Issuer at any time prior to the Closing Time.
(d) MATERIAL CHANGE
If prior to the Closing Time there should occur or be announced by Issuer, any
material change or a change in any material fact such as is contemplated by
Section 4 which results or, in the sole opinion of the Agent, acting reasonably,
might reasonably be expected to result, in the Purchasers of a material number
of Offered Common Shares exercising their right under applicable legislation to
withdraw from their purchase of Offered Common Shares or, in the sole opinion of
the Agent, acting reasonably, might reasonably be expected to have a significant
adverse effect on the market price or value of the Offered Common Shares, the
Agent shall be entitled, at its sole option, in accordance with Section 10(f),
to terminate its obligations under this Agreement by written notice to that
effect given to Issuer at any time prior to the Closing Time.
(e) NON-COMPLIANCE WITH CONDITIONS
Issuer agrees that all terms and conditions in Section 9 shall be construed as
conditions and complied with so far as they relate to acts to be performed or
caused to be performed by it, that it will use its commercially reasonable best
efforts to cause such conditions to be complied with
-19-
and that any failure by it to comply with, or any breach of, or failure to
satisfy, any such conditions shall entitle the Agent to terminate its
obligations to purchase the Offered Common Shares by notice to that effect given
to Issuer at or prior to the Closing Time, unless otherwise expressly provided
in this Agreement. The Agent may waive, in whole or in part, or extend the time
for compliance with, any terms and conditions without prejudice to their rights
in respect of any other terms and conditions or any other or subsequent breach
or non-compliance, provided that any such waiver or extension shall be binding
upon the Agent only if such waiver or extension is in writing and signed by the
Agent.
(f) EXERCISE OF TERMINATION RIGHTS
The rights of termination set forth above are in addition to any other rights or
remedies the Agent may have in respect of any default, act or failure to act or
non-compliance by Issuer in respect of any of the matters contemplated by this
Agreement or otherwise. In the event of any such termination, there shall be no
further liability on the part of the Agent to Issuer or on the part of Issuer to
the Agent except in respect of any liability which may have arisen prior to or
arise after such termination under any of Section 11, 12 and 14.
11. INDEMNIFICATION & CONTRIBUTION
Issuer hereby agrees to indemnify and hold harmless the Agent and its
affiliates, their respective directors, officers, employees, partners, agents,
shareholders and legal counsel (collectively, the "INDEMNIFIED PARTIES" and
individually, an "INDEMNIFIED PARTY"), to the full extent lawful, from and
against any and all expenses, losses, claims, actions, damages and liabilities,
joint or several, (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 actions, suits, proceedings, investigations or claims
that may be made or threatened against any Indemnified Party but not including
any amount for lost profits) to which any Indemnified Party may become subject
or otherwise involved in any capacity under any statute or common law or
otherwise (collectively, "CLAIMS" and individually a "CLAIM") insofar as such
Claims relate to, are caused by, result from, arise out of or are based upon,
directly or indirectly:
(i) any information or statement (except any information or
statement relating solely to the Agent) contained in the Final
Prospectus or any Prospectus Amendment or in any certificate or
other document of Issuer, delivered to the Agent pursuant to
this Agreement which at the time and in the light of the
circumstances under which it was made contains or is alleged to
contain a misrepresentation;
(ii) any omission or alleged omission to state in the Final
Prospectus, any Prospectus Amendment or any certificate or
other document of Issuer, delivered to the Agent pursuant to
this Agreement, any fact (except facts relating solely to the
Agent), required to be stated in such document or necessary to
make any statement in such document not misleading in light of
the circumstances under which it was made;
-20-
(iii) any order made or enquiry, investigation or proceeding
commenced or threatened by any securities regulatory authority
or any other competent authority based upon any untrue
statement or omission or alleged untrue statement or alleged
omission or any misrepresentation or alleged misrepresentation
(except a statement, alleged omission or alleged
misrepresentation or alleged statement, omission or
misrepresentation relating solely to the Agent) in the Final
Prospectus or any Prospectus Amendment or in any other document
of Issuer, filed with the Canadian securities regulatory
authorities or based upon any failure to comply with the
Canadian Securities Laws (other than any failure or alleged
failure to comply by the Agent), preventing or restricting the
trading in or the sale or Distribution of the Offered Common
Shares in any of the Qualifying Province; or
(iv) the breach by Issuer of any representation or warranty set
forth herein or the failure of Issuer to comply with any of its
obligations hereunder.
Notwithstanding the foregoing, the indemnity provided above shall not apply to
the extent that such Claims to which the Indemnified Party may be subject were
primarily caused by the negligence, bad faith, wilful misconduct or breach of
securities laws or the rules and regulations of any stock exchange by the
Indemnified Party.
If for any reason (other than determinations as to any of the events referred to
in the second paragraph of this indemnity) the foregoing indemnification is
unavailable to the Agent or any other Indemnified Party or insufficient to hold
the Agent or any other Indemnified Party, harmless, Issuer shall contribute to
the amount paid or payable by the Agent or the other Indemnified Party as a
result of such expense, loss, claim, action, damage or liability in such
proportion as is appropriate to reflect not only the relative benefits received
by the Issuer on the one hand and the Agent or any other Indemnified Party on
the other hand but also the relative fault of the Issuer, the Agent or any other
Indemnified Party as well as any relevant equitable considerations; provided
that Issuer shall in any event contribute any amount paid or payable by the
Agent or any other Indemnified Party as a result of such Claim which exceeds in
the aggregate the amount of the fees received by the Agent hereunder.
Issuer agrees that, in respect of any matter for which indemnity may be sought
against it, in case any legal proceeding shall be brought against Issuer by any
governmental commission or regulatory authority or any stock exchange or other
entity having regulatory authority, either domestic or foreign, or any such
authority shall investigate Issuer and the Agent or any other Indemnified Party
shall be required to testify in connection therewith or shall be required to
respond to procedures designed to discover information regarding, in connection
with, or by reason of the attached letter agreement, the engagement of the Agent
thereunder, or the performance of professional services rendered to Issuer by
the Agent thereunder, the Agent or such other Indemnified Party shall have the
right to employ their own counsel in connection therewith, and the reasonable
fees and expenses of such counsel as well as the reasonable costs (including any
amount to reimburse the Agent for time spent by its, or any of its affiliates,
directors, officers, employees, partners or agents in connection therewith), and
out-of-pocket expenses incurred by such persons in connection therewith shall be
paid by Issuer as they occur,
-21-
provided that the conduct of the Agent or other Indemnified Party is not the
subject matter of the legal proceeding, investigation or enquiry or examination.
Promptly after receiving notice of an action, suit, proceeding or claim against
the Agent or any other 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 Issuer, the
Agent or other Indemnified Party will notify Issuer in writing of the
particulars thereof, will provide copies of all relevant documentation to Issuer
and, unless Issuer participates in the defence thereof as contemplated herein,
will keep Issuer advised of the progress thereof and will discuss all
significant actions proposed. The omission to so notify Issuer shall not relieve
Issuer of any liability which it may have to the Agent or any other Indemnified
Party except 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 material increase in the liability
which Issuer would otherwise have under this indemnity had the Agent or other
Indemnified Party not delayed in or failed to give the notice required
hereunder.
Issuer shall be entitled, at its own expense, to participate in an action, suit,
proceeding, claim or investigation referred to above, provided such defence is
conducted by experienced and competent counsel for Issuer which, with the
Agent's or other Indemnified Party's consent, may be the Agent's or other
Indemnified Party's counsel.
No admission of liability and no settlement of any action, suit, proceeding,
claim or investigations shall be made without the consent of the Indemnified
Parties affected, such consent not to be unreasonably withheld. No admission of
liability shall be made and Issuer shall not be liable for any settlement of any
action, suit, proceeding, claim or investigation made without its consent, such
consent not to be unreasonably withheld.
Issuer hereby acknowledges that the Agent acts as trustee for other Indemnified
Parties of Issuer's covenants hereunder with respect to such persons and the
Agent agrees to accept such trust and to hold and enforce such covenants on
behalf of such persons.
Issuer hereby waives any right it may have of first requiring any Indemnified
Party to proceed against or enforce any other right, power, remedy or security
or claim payments form any other person before claiming indemnity or
contribution hereunder.
The indemnity and contribution obligations of Issuer hereunder shall be in
addition to any liability which Issuer may otherwise have, shall extend upon the
same terms and conditions to the Indemnified Parties, shall be binding upon and
inure to the benefit of any successors, permitted assigns, heirs and personal
representatives of Issuer, the Agent and any other Indemnified Party. The
foregoing provisions shall survive the completion of professional services
rendered hereunder or any termination of the authorization given hereby.
12. INTENTIONALLY DELETED
13. RIGHT OF FIRST REFUSAL
Agent shall have a right of first refusal to act as lead agent or underwriter in
respect of any
-22-
offerings of securities or any acquisitions, dispositions or takeovers, where
Issuer is the acquiror or the target, where an investment dealer or advisor is
involved or proposes to be involved, during the period ending six months after
the Closing Date. The Agent shall have a period of ten days from the date of the
receipt by its Toronto office of written notice from Issuer of any such proposed
financing or transaction, in which notice Issuer shall set forth in reasonable
detail the terms of such proposed offering or transaction, to provide written
notice to Issuer that Agent intends to exercise its right of first refusal in
which event it shall be so retained as lead agent or underwriter. If Agent does
not give written notice within such ten-day period, it shall be deemed to have
waived its right in respect of such transaction. Should Agent fail, or be deemed
to fail, to give notice within ten days of the receipt of Issuer's notice,
Issuer may then make other arrangements to engage another source to obtain
financing or advice on terms no less favourable to Issuer than as set out in the
written notice for a period of 60 days thereafter. Agent's waiver of its right
in respect of any one or more transactions will not constitute a waiver or its
right of first refusal in respect of any other transaction. If another party is
not engaged in connection with a transaction where the Agent waives or is deemed
to have waived its right of first refusal within such 60 days the transaction
shall be deemed to be a new transaction requiring Issuer to give written notice
to Agent as set forth above. For greater certainty, the right of first refusal
set forth in this Section 13 shall not apply until the Closing Date occurs.
14. SEVERABILITY
If any provision of this Agreement is determined to be void or unenforceable in
whole or in part, it shall be deemed not to affect or impair the validity of any
other provision of this Agreement and such void or unenforceable provision shall
be severable from this Agreement.
15. EXPENSES
Whether or not the transactions contemplated by this Agreement shall be
completed all expenses of or incidental to the issue, sale and delivery of the
Offered Common Shares and all expenses of or incidental to all other matters in
connection with the Offering set out in this Agreement shall be borne directly
by Issuer, including without limitation, fees and expenses payable in connection
with the qualification of the Offered Common Shares for distribution, the fees
relating to listing of the Offered Common Shares on any exchange, the reasonable
fees and disbursements of counsel to Issuer, counsel to the Agent (subject to a
maximum amount of $15,000 for fees, which amount is exclusive of GST and
expenses of Agent's counsel which shall also be borne directly by Issuer) and
provided that any other expenses of Agent in excess of $1,000 shall be subject
to prior approval of Issuer, local counsel, all fees and expenses of Issuer's
auditors, the reasonable fees and expenses relating to the marketing of the
Offered Common Shares (including, without limitation, "road shows", marketing
meetings and marketing documentation) and all reasonable out-of-pocket expenses
of the Agent relating to this transaction including marketing and all costs
incurred in connection with the preparation, filing, printing and mailing of the
Prospectus and Prospectus Amendments.
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations, warranties, obligations and agreements contained in this
Agreement and in any certificate delivered pursuant to this Agreement or in
connection with the purchase and sale
-23-
of the Offered Common Shares shall survive the purchase of the Offered Common
Shares and shall continue in full force and effect for a period of two years
unaffected by any subsequent disposition of the Offered Common Shares by the
Agent or the termination of the Agent's obligations and shall not be limited or
prejudiced by any investigation made by or on behalf of the Agent in connection
with the preparation of the Prospectus, any Prospectus Amendment or the
distribution of the Offered Common Shares.
17. TIME OF THE ESSENCE
Time shall be of the essence of this Agreement.
18. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of
Ontario and the laws of Canada applicable therein.
19. FUNDS
All funds referred to in this Agreement shall be in Canadian dollars.
20. NOTICE
Unless otherwise expressly provided in this Agreement, any notice or other
communication to be given under this Agreement (a "NOTICE") shall be in writing
addressed as follows:
If to Issuer addressed and sent to:
Northwestern Mineral Ventures Inc.
00 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX, X0X 0X0
Attention: Xxxxx Xxxxx
Fax: (000) 000-0000
With copy to:
Xxxxxxx & Xxxx LLP
000 Xxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, XX X0X 0X0
Attention: Xxx Xxxxxxx
Fax: (000) 000-0000
If to Agent Inc. addressed and sent to:
Xxxxxxxx & Xxxxxxxx Securities Inc.
000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX, X0X 0X0
Attention: Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
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With copy to:
Xxxxxxxx Xxxxxxxxx Xxxxx (PIA)
000 Xxxxx Xxxxxx
Xxxxxxx, XX, X0X 0X0
Attention: Xxxxxx Xxxxx
Fax: (000) 000-0000
or to such other address as any of the persons may designate by Notice given to
the others.
Each Notice shall be personally delivered or sent by commercial courier to the
addressee or sent by fax to the addressee and (i) a Notice which is couriered or
personally delivered shall, if delivered on a Business Day, be deemed to be
given and received on that day and, in any other case, be deemed to be given and
received on the first Business Day following the day on which it is delivered;
and (ii) a Notice which is sent by fax shall be deemed to be given and received
on the first Business Day following the day on which it is sent.
21. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements
including, without limitation, the engagement letter between Issuer and Agent
dated November 24, 2003.
22. PRESS RELEASES AND ADVERTISEMENTS
From and after the date hereof to the Closing Time, Issuer shall provide the
Agent with a copy of all press releases and advertisements to be issued by
Issuer concerning the Offering prior to the issuance thereof, and shall give the
Agent a reasonable opportunity to provide comments on any such press release or
advertisement.
23. ATTORNMENT
Issuer and the Agent hereby agree:
(i) that any action or proceeding relating to this Agreement may
(but need not) be brought in any court of competent
jurisdiction in the Province of Ontario, and for that purpose
now irrevocably and unconditionally attorns and submits to the
jurisdiction of such Ontario court;
(ii) that it irrevocably waives any right to, and will not, oppose
any such Ontario action or proceeding on any jurisdictional
basis, including forum non conveniens; and
(iii) it will not oppose the enforcement against it in any other
jurisdiction of any judgment or order duly obtained from an
Ontario court as contemplated by this Xxxxxxx 00.
-00-
00. XXXXXXXXXXXX/XXXXXXXXX SIGNATURES
This Agreement may be executed by any one or more of the parties to this
Agreement in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument. The transmission by facsimile of a copy of the execution page hereof
reflecting the execution of this Agreement by any party hereto shall be
effective to evidence that party's intention to be bound by this Agreement and
that party's agreement to the terms, provisions and conditions hereof, all
without the necessity of having to produce an original copy of such execution
page.
If the foregoing is in accordance with your understanding and is agreed to by
you, please signify your acceptance by executing the enclosed copies of this
letter where indicated below and returning the same upon which this letter as so
accepted shall constitute an agreement among us.
Yours very truly,
XXXXXXXX & XXXXXXXX SECURITIES INC.
By: "Xxxx Xxxxxxxx"
Name: Xxxx Xxxxxxxx
Title: President
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The foregoing is accepted and agreed to as of the date first above written.
NORTHWESTERN MINERAL VENTURES INC.
By: "Xxxxx Xxxxx"
Name: Xxxxx Xxxxx
Title: President & C.E.O.
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