UNDERWRITING AGREEMENT
EXHIBIT
99.2
October
1, 0000
Xxxxxx
Xxxx Xxxx.
Xxxxx
0000, 0000 Xxxxx Xxxxx Xxxxxx
Xxxxx’x
Wharf Tower II
Xxxxxxx,
Xxxx Xxxxxx
X0X
0X0
Attention: Xxxx
X. Xxxx, Chairman, CEO & President
Dear
Sir:
We
understand that Brigus Gold Corp. (the “Corporation”) proposes to
issue and sell: (i) 30,000,000 units of the Corporation (the “Units”); and (ii) 2,941,177
common shares of the Corporation to be issued as “flow-through shares” (the
“Flow-Through Shares”)
within the meaning of the Tax Act (as hereinafter defined), upon and subject to
the terms and conditions contained herein, and Xxxxxxx Securities Inc. (“Xxxxxxx”), Cormark Securities
Inc., BMO Xxxxxxx Xxxxx Inc., CIBC World Markets Inc., Xxxxxxxx Capital Inc.,
Paradigm Capital Inc. and Xxxxx Securities Limited (collectively, the “Underwriters” and each
individually an “Underwriter”) hereby severally
offer to purchase from the Corporation in the respective percentages set forth
in section 22 hereof, and the Corporation hereby agrees to sell to the
Underwriters, on a “bought deal” basis, all but not less than all of the Units
at a price of $1.50 per Unit (the “Unit Issue Price”) for gross
proceeds of $45,000,000. In addition, Xxxxxxx hereby agrees to act as, and the
Corporation appoints Xxxxxxx as, agent of the Corporation in arranging for
purchasers for the Flow-Through Shares resident in the Qualifying Provinces (as
hereinafter defined) at a price of $1.70 per Flow-Through Share (the “FTS Issue Price”) for gross
proceeds of $5,000,000 pursuant to the terms and conditions hereof. The Units
and Flow-Through Shares are hereinafter collectively referred to as the “Offered Securities”. Xxxxxxx
further agrees that in the event that less than 2,941,177 Flow-Through Shares
are sold by Xxxxxxx, as agent, Xxxxxxx will, subject to the terms and conditions
set out herein, purchase as principal the Flow-Through Shares not sold by it as
agent.
Each Unit
shall consist of one common share of the Corporation (a “Unit Share”) and one quarter
of one common share purchase warrant of the Corporation (each whole common share
purchase warrant, a “Warrant”). Each Warrant will
entitle the holder thereof to acquire one common share of the Corporation (a
“Warrant Share”) at a
price of $2.19 per Warrant Share at any time before November 19,
2014.
The
Corporation has also granted to (i) the Underwriters, in respect of the Units,
and (ii) Xxxxxxx, in respect of the Flow-Through Shares, an over-allotment
option (the “Over-Allotment
Option”) exercisable, in whole or in part, in the sole discretion of the
Underwriters and/or Xxxxxxx, as the case may be, to purchase, in respect of the
Units (the “Over-Allotment
Units”), or to offer for sale, in respect of the Flow-Through Shares (the
“Over-Allotment Flow-Through
Shares”), up to an additional 4,500,000 Units and/or 441,176 Flow-Through
Shares (the “Additional
Securities”), in any combination of Over-Allotment Units and
Over-Allotment Flow-Through Shares, at a price of $1.50 per Over-Allotment Unit
and $1.70 per Over-Allotment Flow-Through Share, for a period of 30 days from
the date of the closing of the Offering (provided that the number of Additional
Shares which may be issued upon the exercise of the Over-Allotment Option does
not exceed 15% of the Units and Flow-Through Shares sold on the Closing Date.)
All references in this Agreement to the Offering, the Offered Securities, the
Units and the Flow-Through Shares shall include all Over-Allotment Units and
Over-Allotment Flow-Through Shares, as the case may be, issued upon exercise of
the Over-Allotment Option, if any.
In
consideration of the agreement of the Underwriters to purchase the Offered
Securities and to offer them to the public pursuant to the Prospectus (as
hereinafter defined) the Corporation agrees to pay an aggregate cash fee (the
“Commission”) equal to
(i) $2,700,000 ($3,105,000 if the Over-Allotment Option in respect of the Units
is exercised in full), being a fee equal to 6.0% of the aggregate purchase price
for the Units to the Underwriters and (ii) $300,000.05 ($345,000.06 if the
Over-Allotment Option in respect of the Flow-Through Shares is exercised in
full), being a fee equal to 6.0% of the aggregate purchase price for the
Flow-Through Shares to the Xxxxxxx. As additional compensation, the Corporation
agrees to issue compensation options (“Compensation Options”)
entitling (i) the Underwriters to purchase such number of Units (“Compensation Units”) as is
equal to 6.0% of the number of Units sold under the Offering (including any
Units sold pursuant to the exercise of the Over-Allotment Option) and (ii)
Xxxxxxx to purchase such number of Compensation Units as is equal to 6.0% of the
number of Flow-Through Shares sold under the Offering (including any
Flow-Through Shares sold pursuant to the exercise of the Over-Allotment Option),
all at a price per Compensation Unit equal to the Unit Issue Price at any time
before 5:00 p.m. (Toronto time) on the date which is 24 months after the Closing
Date. Each Compensation Unit consists of one common share of the
Corporation (a “Compensation
Share”) and one quarter of one common share purchase warrant (each whole
common share purchase warrant, a “Compensation
Warrant”). Each Compensation Warrant entitles the holder to
acquire one additional common share of the Corporation (a “Compensation Warrant Share”)
at a price of $2.19 per Compensation Warrant Share at any time before November
19, 2014. The Commission shall be payable, and the Compensation Options
issuable, at the Closing Time (as hereinafter defined).
The
Corporation and the Underwriters agree that any sales or purchases of Units in
the United States or to a U.S. Person (as hereinafter defined) will be made in
accordance with Schedule “A” attached hereto, which forms part of this
Agreement, will be conducted in such a manner so as not to require registration
thereof or the filing of a prospectus, registration statement or an offering
memorandum with respect thereto under the U.S. Securities Act (as hereinafter
defined) and will be conducted through one or more duly registered United States
broker-dealer affiliates of the Underwriters in compliance with applicable
federal and state securities laws of the United States. No
Flow-Through Shares will be sold to purchasers outside of Canada, and such
purchasers shall not be U.S. Persons.
2.
Terms and
Conditions
The
following are additional terms and conditions of this Agreement between the
Corporation and the Underwriters:
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1.
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Interpretation
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(a)
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Definitions. Where used
in this Agreement or in any amendment hereto, the following terms shall
have the following meanings,
respectively:
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“associate”, “distribution”, “misrepresentation”, “material fact”, “material change” and “affiliate”, shall have the
respective meanings ascribed thereto in the Securities Act
(Ontario);
“Agreement” means the agreement
resulting from the acceptance by the Corporation of the offer hereby made by the
Underwriters;
“Black Fox Property” means the
gold mine and mill located approximately 75 kilometres east of Timmins, Ontario
within the Destor-Porcupine gold district;
“Business Day” means a day,
other than a Saturday, a Sunday or a day on which chartered banks are not open
for business in Toronto, Ontario;
“Canadian Securities
Regulators” means the Securities Regulators in the Qualifying
Provinces;
“Canadian Exploration Expense”
or “CEE” means an
expense incurred in 2010 of the nature referred to in paragraphs (f) or (g) of
the definition of Canadian exploration expense in subsection 66.1(6) of the Tax
Act or incurred in 2011 of the nature referred to in paragraph (f) of the
definition of Canadian exploration expense in subsection 66.1(6) of the Tax Act,
other than amounts which are prescribed to be "Canadian exploration and
development overhead expense" for the purposes of the Tax Act or the cost of
acquiring or obtaining the use of seismic data described in paragraph
66(12.6)(x.x) of the Tax Act or any expenses for prepaid services or rent that
do not qualify as outlays and expenses for the period as described in the
definition of the term "expense" in paragraph 66(15) of the Tax Act or any
assistance received by the Issuer of the type described in paragraph 66(12.6)(a)
of the Tax Act;
“Closing” means the completion
of the issue and sale by the Corporation, and the purchase by the Underwriters,
of the Offered Securities pursuant to the Offering in accordance with the
provisions of this Agreement;
“Closing Date” means October
19, 2010 or such other date as the Corporation and the Underwriters may agree to
in writing, or in the case of the exercise of the Over-Allotment Option, means
any date or dates on which Over-Allotment Units or Over-Allotment Flow-Through
Shares are issued and sold;
3.
“Closing Time” means 8:00 a.m.
(Toronto time) on the Closing Date or such other time on the Closing Date as the
Corporation and the Underwriters may agree;
“Commitment Amount” means the
aggregate amount paid by the Purchasers for the Flow-Through
Shares;
“Common Shares” means the
common shares in the capital of the Corporation;
“Corporation’s Auditors” means
such firm of chartered accountants as the Corporation may have appointed or may
from time to time appoint as auditors of the Corporation, including prior
auditors of the Corporation, as applicable;
“CRA” means the Canada Revenue
Agency;
“Directed Selling Efforts”
means directed selling efforts as that term is defined in Regulation
S. Without limiting the foregoing, but for greater certainty, it
means, subject to the exclusions from the definition of directed selling efforts
contained in Regulation S, any activity undertaken for the purpose of, or that
could reasonably be expected to have the effect of, conditioning the market in
the United States for any of the Flow-Through Shares and includes, without
limitation, the placement of any advertisement in a publication with a general
circulation in the United States that refers to the offering of
Offered Securities;
“Documents Incorporated by
Reference” means all financial statements, management information
circulars, annual information forms, material change reports or other documents
issued by the Corporation, whether before or after the date of this Agreement,
that are required by applicable Canadian Securities Laws to be incorporated by
reference into the Prospectus;
“Engagement Letter” means the
letter agreement dated as of September 28, 2010 between the Corporation and
Xxxxxxx relating to the Offering;
“Final Decision Document” means
a receipt issued by the Ontario Securities Commission, as principal regulator
pursuant to the Passport System, and which evidences the receipt of the Ontario
Securities Commission, on behalf of itself and the Canadian Securities
Regulators of the other Qualifying Provinces for the Final
Prospectus;
“Final Prospectus” means the
(final) short form prospectus, including all of the Documents Incorporated by
Reference, prepared by the Corporation and relating to the distribution of the
Offered Securities and for which a Final Decision Document has been
issued;
“Financial Statements” means
the financial statements of the Corporation included in the Documents
Incorporated by Reference, including the notes to such statements and the
related auditors’ report on such statements;
4.
“Governmental Authority” means,
without limitation, any national, federal government, province, state,
municipality or other political subdivision of any of the foregoing, any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government and any corporation or other entity
owned or controlled (through stock or capital ownership or otherwise) by any of
the foregoing;
“Grey Fox Property” means the
exploration stage property that is located 3.5 kilometres southeast of the Black
Fox Property;
“Indemnified Parties” and
“Indemnified Party” have
the meanings ascribed thereto in subsection 19(a);
“Material Adverse Effect” when
used in connection with an entity means any change (including a decision to
implement such a change made by the board of directors or by senior management
who believe that confirmation of the decision by the board of directors is
probable), event, violation, inaccuracy, circumstance or effect that (i) is
materially adverse to the business, assets (including intangible assets),
properties, capitalization, prospects, condition (financial or otherwise) or
results of operations of such entity and its parent or subsidiaries (if
applicable), taken as a whole or (ii) would result in the Final Prospectus
containing a misrepresentation;
“NI 43-101” means National
Instrument 43-101 – Standards
of Disclosure for Mineral Projects;
“NI 51-102” means National
Instrument 51-102 – Continuous
Disclosure Obligations;
“Offering” means the issuance
and sale of the Offered Securities pursuant to this Agreement (including, if
applicable, any Over-Allotment Units and Over-Allotment Flow-Through Shares
issued pursuant to the exercise of the Over-Allotment Option);
“Offering Documents” has the
meaning ascribed thereto in paragraph 6(a)(ii) hereof;
“Over-Allotment Notice” has the
meaning ascribed thereto in subsection 17(a) hereof;
“Passport System” means the
passport system provided for under National Policy 11-202 – Process for Prospectus Reviews in
Multiple Jurisdictions, adopted by the Canadian Securities Regulators,
other than Ontario;
“person” shall be broadly
interpreted and shall include any individual, corporation, partnership, joint
venture, association, trust or other legal entity;
5.
“Pike River Property” means
certain mineral properties located in the Township of Xxxxxx, Ontario, Canada,
which are contiguous to the south-east boundary of the Corporation’s Black Fox
Property and the north-west boundary of the Corporation’s Grey Fox
Property;
“Preliminary Decision Document”
means a receipt issued by the Ontario Securities Commission as principal
regulator pursuant to the Passport System and which evidences the receipt of the
Ontario Securities Commission, on behalf of itself and the Canadian Securities
Regulators of the other Qualifying Provinces for the Preliminary
Prospectus;
“Preliminary Prospectus” means
the preliminary short form prospectus of the Corporation dated October 1, 2010,
including all of the Documents Incorporated by Reference, prepared by the
Corporation and relating to the distribution of the Offered Securities and for
which a Preliminary Receipt has been issued;
“Prescribed Forms” means the
forms prescribed from time to time under subsection 66(12.7) of the Tax Act
filed or to be filed by the Corporation within the prescribed times renouncing
to the Purchaser the Qualifying Expenses incurred pursuant to the Subscription
Agreement and all parts or copies of such forms required by CRA to be delivered
to the Purchaser;
“Prescribed Relationship” means
a relationship between the Corporation and the Purchaser where the Purchaser and
the Corporation are related or otherwise do not deal at arm’s length for
purposes of the Tax Act;
“Properties” means the
following properties of the Corporation described in the Prospectus, being the
Black Fox Property, Pike River Property and Grey Fox Property;
“Property Rights” has the
meaning ascribed thereto in subsection 9(d) hereof;
“Prospectus” means,
collectively, the Preliminary Prospectus and the Final Prospectus, in each case
including all of the Documents Incorporated by Reference;
“Purchasers” means,
collectively, each of the purchasers of the Offered Securities pursuant to the
Offering (including the Underwriters to the extent that substituted purchasers
for the Offered Securities have not been arranged);
“Qualifying Expense” means CEE
which is incurred on or after the Closing Date and on or before the Termination
Date which may be renounced by the Corporation pursuant to subsections 66(12.6)
or (12.66) of the Tax Act with an effective date not later than December 31,
2010 and in respect of which, but for the renunciation, the Corporation would be
entitled to a deduction from income for income tax purposes;
6.
“Qualifying Provinces” means,
collectively, each of the provinces of Canada except for Quebec;
“Regulation S” means Regulation
S adopted by the SEC under the U.S. Securities Act;
“Securities Laws” means, unless
the context otherwise requires, all applicable securities laws in each of the
Qualifying Provinces, the United States and the applicable securities laws of
all other jurisdictions other than the Qualifying Provinces and the United
States in which the Offered Securities are offered, as applicable, and the
respective regulations made thereunder, together with applicable published fee
schedules, prescribed forms, policy statements, national or multilateral
instruments, orders, blanket rulings and other regulatory instruments of the
securities regulatory authorities in such jurisdictions;
“Securities Regulator” means
the applicable securities commission or other securities regulatory authority in
each of the Qualifying Provinces, the United States and any other jurisdictions
in which the Offered Securities are offered, as the case may be;
“Selling Firm” has the meaning
ascribed thereto in subsection 4(a) hereof;
“Standard Listing Conditions”
has the meaning ascribed thereto in paragraph 5(a)(v) hereof;
“Stock Exchanges” means the
Toronto Stock Exchange and NYSE Amex Equities;
“Subscription Agreement” means
the subscription agreement in the form agreed upon by Xxxxxxx and the
Corporation, and which was attached to the Prospectus as an appendix, pursuant
to which Purchasers agree to subscribe for and purchase the Flow-Through Shares
as herein contemplated and shall include, for greater certainty, all schedules
thereto;
“Subsequent Disclosure
Documents” means any financial statements, management information
circulars, annual information forms, material change reports or other documents
issued by the Corporation after the date of this Agreement that are required to
be incorporated by reference in the Prospectus;
“subsidiary” has the meaning
ascribed thereto in the Business Corporations Act
(Yukon);
“Supplementary Material” means,
collectively, any amendment to the Prospectus, any amendment or supplemental
prospectus or ancillary materials that may be filed by or on behalf of the
Corporation under Canadian Securities Laws relating to the distribution of the
Offered Securities thereunder;
7.
“Tax Act” means the Income Tax Act (Canada) and
the regulations thereunder, as amended, re-enacted or replaced from time to
time;
“Technical Report” means the
current technical report of the Corporation relating to the Black Fox Property
being the report prepared by SRK Consulting Engineers and Scientists with an
effective date of February 29, 2008 and report date of April 14,
2008;
“Termination Date” means
December 31, 2011;
“TSX” means the Toronto Stock
Exchange;
“United States” means the
United States of America, its territories and possessions, any state of the
United States and the District of Columbia;
“U.S. Person” means a “U.S. person” as defined in
Rule 902(k) of Regulation S;
“U.S. Private Placement
Memorandum” has the meaning ascribed thereto in subsection 5(a)(iv)
hereof;
“U.S. Securities Act” means the
United States Securities Act of 1933, as amended;
“Warrant Agent” means such duly
authorized warrant agent appointed under the Warrant Indenture and agreed to by
the Corporation and the Underwriters, each acting reasonably;
“Warrant Certificates” has the
meaning ascribed thereto in subsection 8(g) hereof; and
“Warrant Indenture” means the
share purchase warrant indenture to be entered into on the Closing Date between
the Corporation and the Warrant Agent providing for the creation and issuance of
the Warrants and in a form to be agreed upon by the Corporation and the
Underwriters, each acting reasonably.
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(b)
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Prospectus Defined
Terms. Capitalized terms used but not defined herein have the
meanings ascribed to them in the
Prospectus.
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(c)
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Divisions 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.
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(d)
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Number and Gender. All
words and personal pronouns relating thereto shall be read and construed
as the number and gender of the party or parties referred to in each case
required and the verb shall be construed as agreeing with the required
word and/or pronoun.
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8.
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(e)
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Currency. Any reference
in this Agreement to “$” or to dollars shall refer to the lawful currency
of Canada, unless otherwise
specified.
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(f)
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Schedules. The following
Schedules are attached to this Agreement and are deemed to be part of and
incorporated in this Agreement:
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Schedule
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Title
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“A”
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Compliance
with United States Securities
Laws
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2.
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Attributes
of the Securities
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The Unit
Shares and Warrants comprising the Units and Over-Allotment Units and the
Flow-Through Shares and Over-Allotment Flow-Through Shares to be issued and sold
by the Corporation hereunder shall be duly and validly created and issued by the
Corporation and, when issued and sold by the Corporation, such Unit Shares,
Warrants and the Flow-Through Shares shall have the rights, privileges,
restrictions and conditions that conform in all material respects to the rights,
privileges, restrictions and conditions set forth in the Prospectus, subject to
such modifications or changes (if any) prior to the Closing Date as may be
agreed to in writing by the Corporation and the Underwriters.
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3.
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The
Offering
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(a)
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The
Corporation will prepare and file with the Ontario Securities Commission
and with each of the other Canadian Securities Regulators in the
Qualifying Provinces a Preliminary Prospectus relating to the Offering and
receive a Preliminary Decision Document in connection
therewith. The Preliminary Prospectus shall be in form and
substance satisfactory to the Underwriters and in compliance with
applicable securities laws of the Qualifying Provinces and shall be filed
no later than October 1, 2010. The Corporation shall
forthwith after any comments with respect to the Preliminary Prospectus
have been received from the Canadian Securities Regulators but not later
than noon (Toronto) on October 12, 2010 (or such later date as may be
agreed to in writing by the Corporation and the Underwriters, acting
reasonably), have prepared, filed and obtained a Final Decision
Document.
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(b)
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Prior
to the filing of the Prospectus and thereafter during the period of
distribution of the Offered Securities, the Corporation shall allow the
Underwriters to participate fully in the preparation of, and to approve
the form and content of, such documents and shall allow the Underwriters
to conduct all due diligence investigations which they may reasonably
require in order to fulfill their obligations as underwriters and in order
to enable them to execute the certificate required to be executed by them
at the end of such documents.
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9.
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4.
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Distribution
and Certain Obligations of the
Underwriters.
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(a)
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The
Underwriters shall, and shall require any investment dealer or broker
(other than the Underwriters) with which the Underwriters have a
contractual relationship in respect of the distribution of the Offered
Securities (each, a “Selling Firm”) to agree
to, comply with the Securities Laws in connection with the distribution of
the Offered Securities and shall offer the Offered Securities for sale to
the public directly and through Selling Firms upon the terms and
conditions set out in the Prospectus and this Agreement. The Underwriters
shall, and shall require any Selling Firm to, offer for sale to the public
and sell the Offered Securities only in those jurisdictions where they may
be lawfully offered for sale or sold (and in no event shall the
Flow-Through Shares be offered in the United States.) The Underwriters
shall: (i) use all commercially reasonable efforts to complete and cause
each Selling Firm to complete the distribution of the Offered Securities
as soon as reasonably practicable; and (ii) promptly notify the
Corporation when, in their opinion, the Underwriters and the Selling Firms
have ceased distribution of the Offered Securities and provide a breakdown
of the number of Offered Securities distributed in each of the Qualifying
Provinces where such breakdown is required for the purpose of calculating
fees payable to the Canadian Securities
Regulators.
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(b)
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The
Underwriters shall, and shall require any Selling Firm to agree to,
distribute the Offered Securities in a manner which complies with and
observes all applicable laws and regulations, including, for greater
certainty, all Securities Laws, in each jurisdiction into and from which
they may offer to sell the Offered Securities or distribute the
Prospectus, any Supplementary Material or the U.S. Private Placement
Memorandum in connection with the distribution of the Offered Securities
and will not, directly or indirectly, offer, sell or deliver any Offered
Securities or deliver the Prospectus, any Supplementary Material or the
U.S. Private Placement Memorandum to any person in any jurisdiction other
than in the Qualifying Provinces except in a manner which will not require
the Corporation to comply with the registration, prospectus, filing,
continuous disclosure or other similar requirements under the applicable
Securities Laws of such other jurisdictions or pay any additional
governmental filing fees which relate to such other jurisdictions (and in
no event shall the Flow-Through Shares be offered in the United States.)
Subject to the foregoing, the Underwriters and any Selling Firm shall be
entitled to offer and sell the Units in the United States and to U.S.
Persons solely pursuant to an applicable exemption or exemptions from the
registration requirements of the U.S. Securities Act and applicable state
securities laws and in other international jurisdictions in accordance
with any applicable securities and other laws in the jurisdictions in
which the Underwriters and/or Selling Firms offer the Units. Any offer or
sale of the Units in the United States or to U.S. Persons shall be made in
accordance with the terms and conditions set out in Schedule “A” to this
Agreement, which terms and conditions and the representations, warranties
and covenants of the parties therein, are hereby incorporated by reference
in and shall form part of this
Agreement.
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10.
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(c)
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For
the purposes of this section 4, the
Underwriters shall be entitled to assume that the Offered Securities are
qualified for distribution in any Qualifying Province where a receipt or
similar document in respect of the Final Prospectus shall have been
obtained from the applicable Canadian Securities Regulators (including the
Final Decision Document) following the filing of the Final Prospectus
unless otherwise notified in
writing.
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(d)
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Xxxxxxx
shall conduct the offering of the Flow-Through Shares in accordance with
Rule 903 of Regulation S and that, accordingly, in connection with the
Offering, neither Xxxxxxx, any Selling Firm nor any of their respective
affiliates or any other person acting on any of their behalf, will make
(i) any offer to sell, or any solicitation of an offer to buy, any
Flow-Through Shares to any U.S. Person, (ii) any sale of the Flow-Through
Shares to any purchaser unless, at the time the buy order was or will have
been originated, the purchaser was outside the United States or (iii) any
Directed Selling Efforts in the United States with respect to the
Flow-Through Shares.
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(e)
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Notwithstanding
the foregoing provisions of this section 4,
an Underwriter will not be liable to the Corporation under this section 4 with respect to a default under this section
4 or Schedule “A” by another Underwriter or
another Underwriter’s Selling Firm or duly registered broker-dealer
affiliate in the United States, as the case may
be.
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5.
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Deliveries
on Filing and Related Matters.
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(a)
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The
Corporation shall deliver to each of the
Underwriters:
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(i)
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at
the Closing Time, a copy of the Preliminary Prospectus and the Final
Prospectus signed and certified by the Corporation as required by
applicable Securities Laws in the Qualifying
Provinces;
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(ii)
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at
the Closing Time, a copy of any Supplementary Material required to be
filed by the Corporation in compliance with applicable Securities Laws in
the Qualifying Provinces;
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(iii)
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at
the Closing Time, a “long-form” comfort letter from the Corporation’s
Auditors dated the date of the Final Prospectus, in form and substance
satisfactory to the Underwriters, acting reasonably, addressed to the
Underwriters and the directors of the Corporation with respect to certain
financial and accounting information relating to the Corporation contained
in the Final Prospectus, including all Documents Incorporated by
Reference, which letter shall be based on a review by the Corporation’s
Auditors within a cut-off date of not more than two Business Days prior to
the date of the letter, which letter shall be in addition to the auditors’
consent letter and comfort letter, if any, addressed to the Canadian
Securities Regulators;
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11.
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(iv)
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as
soon as practicable after the Preliminary Prospectus, the Final Prospectus
and any Supplementary Material are prepared, the private placement
memorandum incorporating the Preliminary Prospectus, the Final Prospectus
or any Supplementary Material, as the case may be, prepared for use in
connection with the offer and sale of the Units in the United States and
to U.S. Persons (the “U.S. Private Placement
Memorandum”) and, forthwith after preparation, any amendment to the
U.S. Private Placement Memorandum;
and
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(v)
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prior
to the filing of the Final Prospectus with the Canadian Securities
Regulators, copies of correspondence indicating that the application for
the listing and posting for trading on the Stock Exchanges of the Unit
Shares, Flow-Through Shares, the Warrant Shares, the Compensation Shares
and the Compensation Warrant Shares has been approved subject only to
satisfaction by the Corporation of customary post-closing conditions
imposed by the Stock Exchanges in similar circumstances, if any (the
“Standard Listing
Conditions”).
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(b)
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The
Corporation shall also prepare and deliver promptly to the Underwriters
signed copies of all Supplementary Material. Concurrently with the
delivery of any Supplementary Material or the incorporation by reference
in the Prospectus of any Subsequent Disclosure Document, the Corporation
shall deliver to the Underwriters, with respect to such Supplementary
Material or Subsequent Disclosure Document, to the extent that such
Supplementary Material contains any financial and accounting information,
a comfort letter substantially similar to that referred to in paragraph
5(a)(iii).
|
|
|
(c)
|
Delivery
of the Preliminary Prospectus, the Final Prospectus and any Supplementary
Material by the Corporation shall constitute the representation and
warranty of the Corporation to the Underwriters that, as at their
respective dates of filing:
|
|
|
(i)
|
all
information and statements (except information and statements relating
solely to the Underwriters and provided by the Underwriters) contained and
incorporated by reference in the Preliminary Prospectus, the Final
Prospectus or any Supplementary Material, as the case may be, are true and
correct and contain no misrepresentation and constitute full, true and
plain disclosure of all material facts relating to the Corporation and the
Offered Securities as required by applicable Securities Laws in the
Qualifying Provinces;
|
|
|
(ii)
|
no
material fact or information has been omitted therefrom (except facts or
information relating solely to the Underwriters and provided by the
Underwriters) which is required to be stated in such disclosure or is
necessary to make the statements or information contained in such
disclosure not misleading in light of the circumstances under which they
were made; and
|
12.
|
|
(iii)
|
except
with respect to any information relating solely to the Underwriters and
provided by the Underwriters, such documents comply in all material
respects with the requirements of applicable Securities Laws in the
Qualifying Provinces.
|
Such
deliveries shall also constitute the Corporation’s consent to the Underwriters’
use of the Preliminary Prospectus, the Final Prospectus and any Supplementary
Material in connection with the distribution of the Offered Securities in the
Qualifying Provinces in compliance with this Agreement unless otherwise advised
in writing.
|
|
(d)
|
The
Corporation shall:
|
|
|
(i)
|
cause
commercial copies of the Preliminary Prospectus, the Final Prospectus and
any Supplementary Material to be delivered to the Underwriters without
charge, in such quantities and at such locations in the Qualifying
Provinces as the Underwriters may reasonably request by written
instructions to the Corporation’s printer of such documents, such delivery
shall be effected as soon as possible after filing thereof with the
Canadian Securities Regulators and, in any event, on or before noon
(Toronto time) on the second Business Day after the filing thereof with
the Canadian Securities Regulators;
|
|
|
(ii)
|
similarly
cause to be delivered to the Underwriters, as soon as practicable after
preparation thereof, without charge, in such numbers and at such locations
as the Underwriters may reasonably request, commercial copies of the U.S.
Private Placement Memorandum and any amendments thereto;
and
|
|
|
(iii)
|
cause
to be provided to the Underwriters, without charge, such number of copies
of any Documents Incorporated by Reference in the Preliminary Prospectus,
the Final Prospectus or any Supplementary Material as the Underwriters may
reasonably request for use in connection with the distribution of the
Offered Securities.
|
Such
deliveries shall constitute the consent of the Corporation to the Underwriters’
use of the Preliminary Prospectus and the Final Prospectus for the distribution
of the Offered Securities in the Qualifying Provinces in compliance with the
provisions of this Agreement and Canadian Securities Laws and of the U.S.
Private Placement Memorandum for the offer and sale of the Units in the United
States and to U.S. Persons in compliance with the provisions of Schedule
“A”.
|
|
(e)
|
During
the period commencing on the date hereof and until completion of the
distribution of the Offered Securities, the Corporation will promptly
provide to the Underwriters drafts of any press releases of the
Corporation, or other document prepared for the purpose of communication
with the shareholders of the Corporation, for review by the Underwriters
and the Underwriters’ counsel prior to
issuance.
|
13.
|
6.
|
Material
Changes
|
|
|
(a)
|
During
the period from the date of this Agreement until such time as the
Underwriters notify the Corporation of the completion of the distribution
of the Offered Securities under the Final Prospectus, the Corporation
covenants and agrees with the Underwriters that it shall promptly notify
the Underwriters (and if requested by the Underwriters, confirm such
notification in writing) of the full particulars
of:
|
|
|
(i)
|
any
material change (actual, anticipated, contemplated, threatened, financial
or otherwise) in the assets, liabilities (contingent or otherwise),
business, affairs, operations, capital or control of the Corporation and
its subsidiaries taken as a whole;
|
|
|
(ii)
|
any
material fact which has arisen or has been discovered and would have been
required to have been stated in the Preliminary Prospectus, the Final
Prospectus or any Supplementary Material (collectively, the “Offering Documents”) had
the fact arisen or been discovered on, or prior to, the date of such
documents; and
|
|
|
(iii)
|
any
change in any material fact (which for the purposes of this Agreement
shall be deemed to include the disclosure of any previously undisclosed
material fact) contained in the Offering Documents which fact or change
is, or may be, of such a nature as to render any of the Offering Documents
untrue or misleading in any material respect or to result in any
misrepresentation in any of the Offering Documents, or which would result
in the Final Prospectus or any Supplementary Material not complying (to
the extent that such compliance is required) with the Securities Laws of
any Qualifying Province.
|
The
Corporation shall promptly, and in any event within any applicable time
limitation, comply, to the satisfaction of the Underwriters, acting reasonably,
with all applicable filings and other requirements under the Securities Laws as
a result of such fact or change; provided that the Corporation shall not file
any Supplementary Material or other document without first obtaining from the
Underwriters the approval of the Underwriters, after consultation with the
Underwriters with respect to the form and content thereof, which approval will
not be unreasonably withheld. The Corporation shall in good faith discuss with
the Underwriters any fact or change in circumstances (actual, anticipated,
contemplated or threatened, financial or otherwise) which is of such a nature
that there is or could be reasonable doubt whether written notice need be given
under this subsection 6(a).
14.
|
|
(b)
|
If
during the period of distribution of the Offered Securities there shall be
any change in applicable Securities Laws which, in the opinion of the
Underwriters, acting reasonably, requires the filing of any Supplementary
Material, upon written notice from the Underwriters, the Corporation
shall, to the satisfaction of the Underwriters, acting reasonably,
promptly prepare and file any such Supplementary Material with the
appropriate Canadian Securities Regulators where such filing is
required.
|
|
7.
|
Regulatory
Approvals
|
Prior to
the filing of the Final Prospectus with the Canadian Securities Regulators, the
Corporation shall file or cause to be filed with the Stock Exchanges all
necessary documents and shall take or cause to be taken all necessary steps to
ensure that the Corporation has obtained all necessary approvals for the issue
of Unit Shares, Flow-Through Shares, Warrant Shares, the Compensation Shares and
the Compensation Warrant Shares to be conditionally approved by the Stock
Exchanges, subject only to the Standard Listing Conditions. The Corporation will
use its commercially reasonable best efforts to obtain the listing of the
Warrants on the TSX subject to the Warrants meeting the minimum public
distribution requirements of the TSX.
|
8.
|
Covenants
of the Corporation
|
The
Corporation hereby covenants and agrees with the Underwriters that the
Corporation:
|
|
(a)
|
will
advise the Underwriters, promptly after receiving notice thereof, of the
time when the Preliminary Prospectus, the Final Prospectus and any
Supplementary Material has been filed and Preliminary Decision Document
and Final Decision Document therefor have been, obtained, as applicable,
and will provide evidence reasonably satisfactory to the Underwriters of
each such filing and copies of such Preliminary Decision Document and
Final Decision Document;
|
|
|
(b)
|
will
advise the Underwriters, promptly after receiving notice or obtaining
knowledge thereof, of: (i) the issuance by any Canadian Securities
Regulators of any order suspending or preventing the use of the
Preliminary Prospectus, the Final Prospectus or any Supplementary
Material; (ii) the suspension of the qualification of the Offered
Securities in any of the Qualifying Provinces or the institution,
threatening or contemplation of any proceeding for any such purposes; or
(iii) any requests made by any Canadian Securities Regulators for an
amendment to the Preliminary Prospectus or the Final Prospectus or for
additional information, and will use its commercially reasonable efforts
to prevent the issuance of any order referred to in (i) above and, if any
such order is issued, to obtain the withdrawal thereof as quickly as
possible;
|
|
|
(c)
|
will
use its commercially reasonable best efforts to maintain its status as a
“reporting issuer” (or the equivalent thereof) not in default of the
requirements of the Securities Laws of at least one of the Qualifying
Provinces which have such a concept to the date that is at least 24 months
following the date of issuance of any Warrant Shares issuable upon
exercise of the Warrants;
|
15.
|
|
(d)
|
will
use its commercially reasonable best efforts to maintain the listing of
the Common Shares on the Stock Exchanges or such other recognized stock
exchange or quotation system as the Underwriters may approve, acting
reasonably, for a period of at least 24 months following the date of
issuance of any Warrant Shares issuable upon exercise of the Warrants so
long as the Corporation meets the minimum listing requirements of the
Stock Exchanges or such other exchange or quotation
system;
|
|
|
(e)
|
will
use its commercially reasonable best efforts to obtain the listing of the
Warrants on the TSX subject to the Warrants meeting the minimum public
distribution requirements of the
TSX;
|
|
|
(f)
|
will
ensure that the Unit Shares and the Flow-Through Shares issuable at the
Closing Time shall be duly issued as fully paid and non-assessable Common
Shares;
|
|
|
(g)
|
will
duly execute and deliver the Warrant Indenture and the certificates
representing the Warrants (the “Warrant Certificates”)
at the Closing Time, and comply with and satisfy all terms, conditions and
covenants therein contained to be complied with or satisfied by the
Corporation;
|
|
|
(h)
|
will
ensure that the Warrants are duly and validly created, authorized and
issued and have attributes corresponding in all material respects to the
description set forth in this Agreement, the Prospectus and the Warrant
Indenture;
|
|
|
(i)
|
will
ensure that at all times prior to the expiry thereof, sufficient Warrant
Shares are allotted and reserved for issuance upon the due exercise of the
Warrants;
|
|
|
(j)
|
will
ensure that the Warrant Shares issuable upon exercise of the Warrants
shall, upon issuance in accordance with the terms set out in the Warrant
Certificates and Warrant Indenture, be duly issued as fully paid and
non-assessable Common Shares;
|
|
|
(k)
|
will
duly execute and deliver the certificates representing the Compensation
Options (the “Compensation Option
Certificates”) at the Closing Time, and comply with and satisfy all
terms, conditions and covenants therein contained to be complied with or
satisfied by the Corporation;
|
|
|
(l)
|
will
ensure that the Compensation Warrants are duly and validly created,
authorized and issued and have attributes corresponding in all material
respects to the description set forth in this Agreement, the Prospectus
and the Compensation Option
Certificates;
|
|
|
(m)
|
will
ensure that at all times prior to the expiry thereof, sufficient
Compensation Shares and Compensation Warrant Shares are allotted and
reserved for issuance upon the due exercise of the Compensation Options
and the Compensation Warrants, as the case may
be;
|
|
|
(n)
|
will
duly execute and deliver the certificates representing the Compensation
Warrants (the “Compensation Warrant
Certificates”) upon exercise of the Compensation Options, and
comply with and satisfy all terms, conditions and covenants therein
contained to be complied with or satisfied by the
Corporation;
|
16.
|
|
(o)
|
will
ensure that the Compensation Shares, upon issuance in accordance with the
terms set out in the Compensation Option Certificates, and the
Compensation Warrant Shares, upon issuance in accordance with the terms
set out in the Compensation Warrant Certificates, shall be duly issued as
fully paid and non-assessable Compensation Shares and Compensation Warrant
Shares;
|
|
|
(p)
|
will
use the proceeds of the Offering in the manner specified in the Final
Prospectus;
|
|
|
(q)
|
will,
to the extent that any Units are sold in the United States or to U.S.
Persons, file such notices with the United States Securities and Exchange
Commission as are required under the U.S. Securities Act and applicable
state securities laws;
|
|
|
(r)
|
will
incur Qualifying Expenses in an amount equal to the Commitment Amount on
or before the Termination Date in accordance with the Subscription
Agreement and renounce to the Purchasers of the Flow-Through Shares, with
an effective date no later than December 31, 2010, Qualifying Expenses in
an amount equal to the Commitment
Amount;
|
|
|
(s)
|
will
deliver to each Purchaser of the Flow-Through Shares, within the time
period prescribed by the Tax Act, the relevant Prescribed Forms, fully
completed and executed, renouncing to each such Purchaser Qualifying
Expenses in an amount equal to the Commitment Amount with an effective
date of no later than December 31, 2010 and shall timely file such
Prescribed Forms with the relevant tax
authorities;
|
|
|
(t)
|
will
ensure that the Qualifying Expenses to be renounced by the Corporation to
the Purchasers of the Flow-Through
Shares:
|
|
|
(i)
|
will
constitute CEE on the effective date of the
renunciation;
|
|
|
(ii)
|
will
not include expenses that are (1) “Canadian exploration and development
overhead expenses” (as defined in the Regulations to the Tax Act for
purposes of paragraph 66(12.6)(b) of the Tax Act) of the Corporation, (2)
amounts which constitute specified expenses that are a cost of, or for the
use of seismic data described in paragraph 66(12.6)(b.1) of the Tax Act ,
(3) any expenses for prepaid services or rent that do not qualify as
outlays and expenses for the period as described in the definition of
“expense” in subsection 66(15) of the Tax Act or (4) any assistance
received by the Corporation of the type described in paragraph 66(12.6)(a)
of the Tax Act;
|
|
|
(iii)
|
will
not include any amount that has previously been renounced by the
Corporation to the Purchasers or to any other
person;
|
17.
|
|
(iv)
|
would
be deductible by the Corporation in computing its income for the purposes
of Part I of the Tax Act but for the renunciation to the Purchasers;
and
|
|
|
(v)
|
will
not be subject to any reduction under subsection 66(12.73) of the Tax
Act;
|
|
|
(u)
|
will
refrain from entering into transactions or taking deductions which would
be likely to reduce its cumulative CEE to an extent that would preclude a
renunciation of Qualified Expenses under the Subscription Agreement in an
amount equal to the Commitment
Amount;
|
|
|
(v)
|
will
not be subject to the provisions of subsection 66(12.67) of the Tax Act in
a manner which impairs its ability to renounce Qualifying Expenses to each
Purchaser of the Flow-Through Shares in an amount equal to the Commitment
Amount;
|
|
|
(w)
|
if
the Corporation receives, or becomes entitled to receive, any government
assistance which is described in paragraph (a) of the definition of
“excluded obligation” in proposed subsection 6202.1(5) of the regulations
to the Tax Act and the receipt of or entitlement to receive such
government assistance has or will have the effect of reducing the
Qualifying Expenses renounced to a Purchaser of the Flow-Through Shares
hereunder to less than the Commitment Amount, the Corporation shall incur
additional Qualifying Expenses so that it may renounce to the Purchaser
Qualifying Expenses in an amount not less than the Commitment
Amount;
|
|
|
(x)
|
will
file with the CRA the form prescribed by subsection 66(12.68) of the Tax
Act, together with a copy of the form of the Subscription Agreement
pursuant to which the Flow-Through Shares were issued in accordance with
and within the time period prescribed by the Tax
Act;
|
|
|
(y)
|
if
the Corporation does not renounce to the Purchasers of the Flow-Through
Shares, effective on or before December 31, 2010, Qualifying Expenses
equal to the Commitment Amount, the Corporation shall indemnify and hold
harmless the Purchasers of the Flow-Through Shares and each of the
partners thereof if any Purchaser is a partnership or a limited
partnership (for the purposes of this paragraph each an “Indemnified Person”) as
to, and pay in settlement thereof to the Indemnified Person on or before
the 20th
Business Day following the date the amount is determined, an amount equal
to the amount of any tax (within the meaning of paragraph (c) of the
definition of “excluded obligation” in proposed subsection 6202.1(5) of
the regulations to the Tax Act) payable under the Tax Act (and under any
corresponding provincial legislation) by any Indemnified Person as a
consequence of such failure. In the event that the CRA (or similar
provincial tax authority) reduces the amount renounced by the Corporation
to the Purchasers of the Flow-Through Shares pursuant to subsection
66(12.73) of the Tax Act (or any corresponding provincial legislation),
the Corporation shall indemnify and hold harmless each Indemnified Person
as to, and pay in settlement thereof to the Indemnified Person, an amount
equal to the amount of any tax (within the meaning of paragraph (b) of the
definition of “excluded obligation” in subsection 6602.1(5) of the
Regulations to the Tax Act as it currently reads or within the meaning of
paragraph (c) of the definition of “excluded obligation” in proposed
subsection 6202.1(5) of the regulations to the Tax Act) payable under the
Tax Act (and under any corresponding provincial legislation) by the
Indemnified Person as a consequence of such reduction. For certainty, the
foregoing indemnity shall have no force or effect and the Purchasers of
Flow-Through Shares shall not have any recourse or rights of action to the
extent that such indemnity, recourse or rights of action would otherwise
cause the Flow-Through Shares to be “prescribed shares” within the meaning
of section 6202.1 of the regulations to the Tax
Act;
|
18.
|
|
(z)
|
will
keep proper books, records and accounts of all Qualifying Expenses and all
transactions affecting the amount of Qualifying Expenses to be renounced
to Purchasers of the Flow-Through Shares, and upon reasonable notice, to
make such books, records and accounts available for inspection and audit
by or on behalf of such Purchasers;
|
|
|
(aa)
|
shall
maintain its status as a “principal-business corporation” as defined in
subsection 66(15) of the Tax Act until such time as all of the Qualifying
Expenses required to be renounced under this Agreement have been incurred
and validly renounced pursuant to the Tax
Act;
|
|
|
(bb)
|
shall
use the Commitment Amount for an exploration program on certain interests
in mineral resource properties situated in Canada for the purpose of
determining the existence, location, extent and quality of the mineral
resources located thereon; and
|
|
|
(cc)
|
shall
perform and carry out all of the acts and things to be completed by it as
provided in this Agreement, unless waived by the
Underwriters.
|
|
9.
|
Representations
and Warranties of the Corporation
|
The
Corporation represents and warrants to the Underwriters as of the date hereof,
and acknowledges that the Underwriters are relying upon each of such
representations and warranties in completing the Closing, that:
|
|
(a)
|
the
Corporation is a corporation duly incorporated, continued or amalgamated
and validly existing under the laws of the jurisdiction in which it was
incorporated, continued or amalgamated, as the case may be, has all
requisite corporate power and authority and is duly qualified and holds
all necessary material permits, licences and authorizations necessary or
required to carry on its business as now conducted and to own, lease or
operate its properties and assets and no steps or proceedings have been
taken by any person, voluntary or otherwise, requiring or authorizing its
dissolution or winding up, and the Corporation has all requisite power and
authority to enter into each of this Agreement, the Subscription
Agreement, the Warrant Indenture, the Compensation Option Certificates and
the Compensation Warrant Certificates and to carry out its obligations
hereunder and thereunder;
|
19.
|
|
(b)
|
except
as disclosed in the Prospectus, the Corporation has no direct or indirect
material subsidiaries nor any investment or proposed investment in any
person which, for the financial year ended December 31, 2009 accounted for
or which, for the financial year ending December 31, 2009, is expected to
account for, more than ten percent of the consolidated assets or
consolidated revenues of the Corporation or would otherwise be material to
the business and affairs of the Corporation on a consolidated
basis.
|
|
|
(c)
|
except
as disclosed in the Prospectus, the Corporation holds all requisite
licences, registrations, qualifications, permits and consents necessary or
appropriate for carrying on business as currently carried on and all such
licences, registrations, qualifications, permits and consents are valid
and subsisting and in good standing in all material respects except where
the failure to hold or the lack of good standing in respect to such
licences, registrations, qualifications, permits and consents in all
material respects would not have a Material Adverse Effect on the
Corporation or any of the Subsidiaries. In particular, without limiting
the generality of the foregoing, the Corporation has not received any
notice of proceedings relating to the revocation or adverse modification
of any material mining or exploration permit or licence, nor has the
Corporation received notice of the revocation or cancellation of, or any
intention to revoke or cancel, any mining claims, groups of claims,
exploration rights, concessions or leases with respect to any of the
Properties where such revocation or cancellation would have a Material
Adverse Effect on the Corporation;
|
|
|
(d)
|
except
as disclosed in the Prospectus, the Corporation is the absolute legal and
beneficial owner of the Properties and holds either freehold title,
leases, concessions, claims, options or participating interests or other
conventional property or proprietary interests or rights, recognized in
the jurisdiction in which a particular Property is located (collectively,
“Property
Rights”), in respect of the mineral rights located in the
Properties in which the Corporation has an interest as described in the
Prospectus under valid, subsisting and enforceable title documents or
other recognized and enforceable agreements or instruments, sufficient to
permit the Corporation to explore for mineral deposits relating thereto
and, except as disclosed in the Prospectus, the Corporation holds interest
in such Properties free and clear of any liens, charges or encumbrances
and no material commission, royalty, licence fee or similar payment to any
person with respect to the Properties is
payable;
|
20.
|
|
(e)
|
all
Property Rights in which the Corporation holds an interest or right have
been validly registered and recorded in accordance in all material
respects with all applicable laws and are valid and subsisting; the
Corporation has all necessary surface rights, access rights and other
necessary rights and interests relating to the Properties granting the
Corporation the right and ability to explore for mineral deposits as are
appropriate in view of the rights and interests therein of the Corporation
and the operations of the Corporation as it is currently being conducted,
with only such exceptions as do not unreasonably interfere with the use
made by the Corporation of the rights or interest so held; and each of the
Property Rights and each of the documents, agreements and instruments and
obligations relating thereto referred to above is currently in good
standing in the name of the Corporation except where the failure to be in
good standing would not have a Material Adverse Effect on the
Corporation;
|
|
|
(f)
|
the
Properties and Property Rights of the Corporation, as disclosed in the
Prospectus, constitute an accurate description of the Properties and all
material Property Rights held by the Corporation, and no other property or
assets are necessary for the conduct of the business of the Corporation as
currently conducted, the Corporation does not know of any claim or the
basis for any claim that could reasonably be expected to materially and
adversely affect the right thereof to use, transfer or otherwise explore
for mineral deposits on such Properties and, except as disclosed in the
Prospectus, the Corporation holds interests in such Properties free and
clear of any liens, charges or encumbrances and no material commission,
licence fee or similar payment to any person with respect to the
Properties is payable;
|
|
|
(g)
|
to
the Corporation’s knowledge the Technical Report complied with the
requirements of NI 43-101 at the time of filing thereof and the Technical
Report reasonably presented the quantity of mineral resources attributable
to the properties evaluated therein as at the date stated therein based
upon information available at the time the Technical Report was
prepared;
|
|
|
(h)
|
the
Corporation made available to the authors of the Technical Report, prior
to the issuance thereof, for the purpose of preparing such reports, all
information requested by them, which information, to the knowledge of the
Corporation, did not contain any material misrepresentation at the time
such information was so provided. The Corporation has no knowledge of a
material adverse change in any information provided to the authors of the
Technical Report since that date;
|
|
|
(i)
|
the
Corporation is in compliance with the provisions of NI 43-101 and has
filed all technical reports required thereby and there has been no change
to the information set out in the Technical Report of which the
Corporation is aware that would require the filing of a new technical
report[s] under NI 43-101;
|
|
|
(j)
|
all
exploration activities on the Properties by the Corporation have been
conducted in all material respects in accordance with good exploration
practices and all applicable workers’ compensation and health and safety
and workplace laws, regulations and policies have been complied with in
all material respects;
|
21.
|
|
(k)
|
the
Corporation is a reporting issuer under the Securities Laws of British
Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova
Scotia, Xxxxxx Xxxxxx Island and Newfoundland, is not in default of any
material requirement of such Securities Laws, is not included on a list of
defaulting reporting issuers maintained by the Securities Regulators of
such provinces and will be, at the time of Closing, a reporting issuer
under the Securities Laws of each of the Qualifying
Provinces;
|
|
|
(l)
|
each
of the execution and delivery of this Agreement, the Subscription
Agreement, the Warrant Indenture, the Warrant Certificates, the
Compensation Option Certificates and the Compensation Warrant
Certificates, the performance by the Corporation of its obligations
hereunder or thereunder, the issue and sale of the Offered Securities
hereunder and the consummation of the transactions contemplated in this
Agreement, including the issuance and delivery of the Offered Securities
and the issuance and delivery of the Warrant Shares upon the exercise of
the Warrants, the Compensation Shares upon the exercise of the
Compensation Options and the Compensation Warrant Shares upon the exercise
of the Compensation Warrants, do not and will not conflict with or result
in a breach or violation of any of the terms or provisions of, or
constitute a default under (whether after notice or lapse of time or
both), (A) any statute, rule or regulation applicable to the Corporation
including, without limitation, applicable Securities Laws and the rules
and regulations of the Stock Exchanges; (B) the constating documents of
the Corporation, or resolutions of the directors or shareholders of the
Corporation which are in effect at the date hereof; (C) any mortgage,
note, indenture, contract, agreement, joint venture, partnership,
instrument, lease or other document to which the Corporation is a party or
by which it is bound; or (D) any judgment, decree or order binding the
Corporation or the property or assets
thereof;
|
|
|
(m)
|
the
Corporation is in compliance in all material respects with its continuous
disclosure obligations under applicable Securities Laws and the rules and
regulations of the Stock Exchanges and, without limiting the generality of
the foregoing, there has not occurred any material adverse change,
financial or otherwise, in the assets, liabilities (contingent or
otherwise), business, financial condition or capital of the Corporation on
a consolidated basis since December 31, 2009 which has not been publicly
disclosed on a non-confidential basis, all statements set forth in all
documents publicly filed by or on behalf of the Corporation pursuant to
applicable Securities Laws, including the Documents Incorporated by
Reference, were true, correct, and complete in all material respects and
did not contain any misrepresentation as of the date of such statements
and the Corporation has not filed any confidential material change reports
since the date of such statements which remains confidential as at the
date hereof;
|
|
|
(n)
|
the
Corporation has not approved, has not entered into any binding agreement
in respect of, nor has any knowledge
of:
|
|
|
(A)
|
the
purchase of any material property or assets or any interest therein or the
sale, transfer or other disposition of any material property or assets or
any interest therein currently owned, directly or indirectly, by the
Corporation whether by asset sale, transfer of shares or
otherwise;
|
22.
|
|
(B)
|
the
change of control (by sale or transfer of shares or sale of all or
substantially all of the property and assets of the Corporation or
otherwise) of the Corporation; or
|
|
|
(C)
|
a
proposed or planned disposition of shares by any shareholder who owns,
directly or indirectly, 10% or more of the outstanding shares of the
Corporation;
|
|
|
(o)
|
the
Financial Statements, including the notes and the related auditors’
reports thereto, in each case as incorporated by reference in the
Prospectus, have been prepared in accordance with generally accepted
accounting principles in the United States and present fairly and
correctly in all material respects, the consolidated financial condition
of the Corporation as at the dates thereof and the consolidated results of
the operations and the changes in the financial position of the
Corporation for the periods then ended and contain and reflect adequate
provisions or allowance for all reasonably anticipated liabilities,
expenses and losses of the Corporation, as applicable, and there has been
no change in accounting policies or practices of the Corporation since
December 31, 2009 except as disclosed in the
Prospectus;
|
|
|
(p)
|
except
as disclosed in the Financial Statements, all taxes (including income tax,
capital tax, payroll taxes, employer health tax, workers’ compensation
payments, property taxes, custom and land transfer taxes), duties,
royalties, levies, imposts, assessments, deductions, charges or
withholdings and all liabilities with respect thereto including any
penalty and interest payable with respect thereto (collectively, “Taxes”) due and payable
by the Corporation have been paid, except where the failure to pay Taxes
would not constitute an adverse material fact in respect of the
Corporation or have a Material Adverse Effect on the
Corporation. All tax returns, declarations, remittances and
filings required to be filed by the Corporation have been filed with all
appropriate Governmental Authorities and all such returns, declarations,
remittances and filings are complete and accurate and no material fact or
facts have been omitted therefrom which would make any of them misleading,
except where the failure to file such documents would not constitute an
adverse material fact in respect of the Corporation or have a Material
Adverse Effect on the Corporation. To the knowledge of the Corporation, no
examination of any tax return of the Corporation or any Subsidiary is
currently in progress and there are no issues or disputes outstanding with
the Governmental Authority respecting any Taxes that have been paid, or
may be payable, by the Corporation or any Subsidiary, in any case, except
where such examinations, issues or disputes would not constitute an
adverse material fact in respect of the Corporation or have a Material
Adverse Effect on the
Corporation;
|
23.
|
|
(q)
|
to
the Corporation’s knowledge, the Corporation’s Auditors who audited the
financial statements of the Corporation for the year ended December 31,
2009 and who provided their audit report thereon are independent in
accordance with the auditors’ rules of professional conduct of the
Institute of Chartered Accountants of Ontario, are, to the Corporation’s
knowledge, independent public accountants as required under applicable
Securities Laws in Canada and there has never been a reportable event
(within the meaning of NI 51-102) between the Corporation and the
Corporation’s Auditors or, to the knowledge of the Corporation, any former
auditors of the Corporation;
|
|
|
(r)
|
except
pursuant to the transactions contemplated herein, and for Common Shares
issuable to Xxxxxxx Xxxxx pursuant to the terms of the severance agreement
dated August 27, 2010 between the Corporation and Xxxxxxx Xxxxx (the
“Nanna Shares”)
and as disclosed in the Prospectus, no person has or will have at the
Closing Time any agreement or option, or right or privilege (whether
pre-emptive or contractual) capable of becoming an agreement or option,
for the purchase from the Corporation of any unissued shares or securities
of the Corporation;
|
|
|
(s)
|
to
the knowledge of the Corporation, there is no agreement in force or effect
which in any manner affects or will affect the voting or control of any of
the securities of the Corporation;
|
|
|
(t)
|
except
as disclosed in the Prospectus, to the knowledge of the Corporation, none
of the officers or employees of the Corporation, any person who owns,
directly or indirectly, more than 10% of any class of securities of the
Corporation or securities of any person exchangeable for more than 10% of
any class of securities of the Corporation, or any associate or affiliate
of any of the foregoing, had or has any material interest, direct or
indirect, in any transaction or any proposed transaction (including,
without limitation, any loan made to or by any such person) with the
Corporation which, as the case may be, materially affects, is material to
or will materially affect the
Corporation;
|
|
|
(u)
|
except
as disclosed in the Prospectus, there are no actions, suits, judgments,
investigations, inquires or proceedings of any kind whatsoever outstanding
(whether or not purportedly on behalf of the Corporation), pending or, to
the knowledge of the Corporation, threatened against or affecting the
Corporation, or its directors or officers, at law or in equity or before
or by any commission, board, bureau or agency of any kind whatsoever and,
to the knowledge of the Corporation, there is no basis therefor and the
Corporation is not subject to any judgment, order, writ, injunction,
decree, award, rule, policy or regulation of any Governmental Authority
which, either separately or in the aggregate, may have a Material Adverse
Effect on the Corporation or would adversely affect the ability of the
Corporation to perform its obligations under this
Agreement;
|
24.
|
|
(v)
|
no
legal or governmental proceedings or inquiries are pending to which the
Corporation is a party or to which its property is subject that would
result in the revocation or modification of any material certificate,
authority, permit or licence necessary to conduct the business now
conducted by the Corporation which, if the subject of an unfavourable
decision, ruling or finding would have a Material Adverse Effect on the
Corporation and, to the knowledge of the Corporation, no such legal or
governmental proceedings or inquiries have been threatened against or are
contemplated with respect to the Corporation, or with respect to its
properties and assets;
|
|
|
(w)
|
no
approval, authorization, consent or other order of, and no filing,
registration or recording with, any Governmental Authority or other person
is required of the Corporation in connection with the execution and
delivery of or with the performance by the Corporation of this Agreement,
the Subscription Agreement and the Warrant Indenture, the Warrant
Certificate, the certificates representing the Compensation Options and
the Compensation Warrants, except: (i) those which have been obtained or
those which may be required and shall be obtained prior to the Closing
Time under applicable Securities Laws or the rules of the Stock Exchanges,
including in compliance with applicable Securities Laws with regard to the
distribution of the Offered Securities in the Qualifying Provinces, and
(ii) such post-Closing notice filings with Securities Regulators and the
Stock Exchanges as may be required in connection with the Offering,
including under the U.S. Securities Act and related notice filings under
applicable United States state securities laws as may be required in
connection with the issue and sale of Units in the United States or to
U.S. Persons;
|
|
|
(x)
|
except
as disclosed in the Prospectus, the Corporation is not in violation of its
constating documents or in default of the performance or observance of any
material obligation, agreement, covenant or condition contained in any
material contract, indenture, trust deed, mortgage, loan agreement, note,
lease or other agreement or instrument to which it is a party or by which
it or its property may be bound;
|
|
|
(y)
|
except
as disclosed in the Prospectus, any and all of the agreements and other
documents and instruments pursuant to which the Corporation holds its
respective property and assets (including any interest in, or right to
earn an interest in, any property) are valid and subsisting agreements,
documents or instruments in full force and effect, enforceable in
accordance with their terms, the Corporation is not in default of any of
the material provisions of any such agreements, documents or instruments
nor has any such default been alleged and such properties and assets are
in good standing under the applicable statutes and regulations of the
jurisdictions in which they are situated, all material leases, licences
and claims pursuant to which the Corporation or the Subsidiaries derive
the interests thereof in such property and assets are in good standing and
there has been no material default under any such lease, licence or claim.
None of the Properties of the Corporation or any Subsidiary is subject to
any right of first refusal or purchase or acquisition right which is not
disclosed in the Prospectus;
|
25.
|
|
(z)
|
at
the Closing Time, each of this Agreement, the Subscription Agreement, the
Warrant Indenture, the Warrant Certificates and the Compensation Option
Certificates shall have been duly authorized and executed and delivered by
the Corporation and upon such execution and delivery each shall constitute
a valid and binding obligation of the Corporation and each shall be
enforceable against the Corporation in accordance with its terms, except
as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting the
rights of creditors generally and except as limited by the application of
equitable principals 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;
|
|
|
(aa)
|
at
the Closing Time, all necessary corporate action will have been taken by
the Corporation to carry out its obligations hereunder and to allot and
authorize the issuance of the Unit Shares and the Flow-Through Shares,
and, upon receipt by the Corporation of the purchase price as
consideration for the issuance of the Unit Shares and the Flow-Through
Shares, such shares will be validly issued and outstanding as fully paid
and non-assessable securities in the capital of the
Corporation;
|
|
|
(bb)
|
at
the Closing Time, all necessary corporate action will have been taken by
the Corporation to carry out its obligations under the Warrant Indenture
and to allot and authorize the issuance of the Warrant Shares, and, upon
the due exercise of the Warrants in accordance with the provisions
thereof, the Warrant Shares issuable on exercise of the Warrants, the
Compensation Shares issuable on the exercise of the Compensation Options
and the Compensation Warrant Shares issuable upon the exercise of the
Compensation Warrants will be validly issued as fully paid and
non-assessable securities in the capital of the
Corporation;
|
|
|
(cc)
|
the
Common Shares are listed and posted for trading on the Stock Exchanges,
and at the Closing Time, all necessary notices and filings will have been
made with and all necessary consents, approvals and authorizations
obtained by the Corporation from the Stock Exchanges to ensure that,
subject to fulfilling the Standard Listing Conditions, the Unit Shares,
Flow-Through Shares, the Warrant Shares, the Compensation Shares and the
Compensation Warrant Shares will be listed and posted for trading on the
Stock Exchanges upon their
issuance;
|
|
|
(dd)
|
at
the Closing Time, all necessary notices and filings will have been made
with and all necessary consents, approvals and authorizations will have
been obtained by the Corporation from the TSX to ensure that, subject to
fulfilling the Standard Listing Conditions, the Warrants will be listed
and posted for trading on the TSX upon their issuance subject to the
Warrants meeting the minimum public distribution requirements of the
TSX;
|
|
|
(ee)
|
no
order, ruling or determination having the effect of suspending the sale or
ceasing the trading in any securities of the Corporation has been issued
by any regulatory authority and is continuing in effect and no proceedings
for that purpose have been instituted or, to the knowledge of the
Corporation, are pending, contemplated or threatened by any regulatory
authority;
|
26.
|
|
(ff)
|
the
authorized capital of the Corporation consists of an unlimited number of
Common Shares of which, as at the close of business on September 30, 2010,
140,658,406 Common Shares were issued and
outstanding;
|
|
|
(gg)
|
the
Corporation has not made any material loans to or guaranteed the
obligations of any person;
|
|
|
(hh)
|
with
respect to each premises of the Corporation which is material to the
Corporation and which the Corporation occupies as tenant (the “Leased Premises”), the
Corporation occupies the Leased Premises and has the exclusive right to
occupy and use the Leased Premises and each of the leases pursuant to
which the Corporation occupies the Leased Premises is in good standing and
in full force and effect;
|
|
|
(ii)
|
the
assets of the Corporation and its business and operations are insured
against loss or damage with responsible insurers on a basis consistent
with insurance obtained by reasonably prudent participants in comparable
businesses, and such coverage is in full force and effect, and the
Corporation has not failed to promptly give any notice of any material
claim thereunder;
|
|
|
(jj)
|
CIBC
Mellon Trust Company at its principal office in the city of Toronto,
Ontario has been duly appointed as registrar and transfer agent for the
Common Shares;
|
|
|
(kk)
|
prior
to the Closing Time, the Warrant Agent shall have been duly appointed as
the warrant agent under the Warrant
Indenture;
|
|
|
(ll)
|
the
minute books and records of the Corporation made available to counsel for
the Underwriters in connection with their due diligence investigation of
the Corporation are all of the minute books and records of the Corporation
and contain copies of all material proceedings (or certified copies
thereof or drafts thereof pending approval) of the shareholders, the
directors and all committees of directors of the Corporation to the date
of review of such corporate records and minute books and there have been
no other meetings, resolutions or proceedings of the shareholders,
directors or any committees of the directors of the Corporation to the
date hereof not reflected in such minute books and other records, other
than those which have been disclosed to the Underwriters or which are not
material in the context of the Corporation, on a consolidated
basis;
|
|
(mm)
|
to
the knowledge of the Corporation, the Corporation has not been and is not
currently in violation of, in connection with the ownership, use,
maintenance or operation of its property and assets, including the
Properties and the Leased Premises, any applicable federal, provincial,
state, municipal or local laws, by-laws, regulations, orders, policies,
permits, licences, certificates or approvals having the force of law,
domestic or foreign, relating to environmental, health or safety matters
(collectively the “Environmental Laws”)
which would have a Material Adverse Effect on the
Corporation;
|
27.
|
|
(nn)
|
without
limiting the generality of the subsection immediately above, the
Corporation does not have any knowledge of, and has not received any
notice of, any material claim, judicial or administrative proceeding,
pending or threatened against, or which may affect, either the Corporation
or any of its property, assets or operations, relating to, or alleging any
violation of any Environmental Laws, the Corporation is not aware of any
facts which could give rise to any such claim or judicial or
administrative proceeding and neither the Corporation nor any of its
respective property, assets or operations is the subject of any
investigation, evaluation, audit or review by any Governmental Authority
to determine whether any violation of any Environmental Laws has occurred
or is occurring or whether any remedial action is needed in connection
with a release of any contaminant into the environment, except for
compliance investigations conducted in the normal course by any
Governmental Authority, in each case which could reasonably be expected to
have a Material Adverse Effect on the
Corporation;
|
|
|
(oo)
|
there
are no orders, rulings or directives issued, pending or, to the best of
the Corporation’s knowledge, threatened against the Corporation under or
pursuant to any Environmental Laws requiring any work, repairs,
construction or capital expenditures with respect to the property or
assets of the Corporation or any of the Subsidiaries (including the Leased
Premises) which would have a Material Adverse Effect on the
Corporation;
|
|
|
(pp)
|
the
Corporation is not subject to any contingent or other liability relating
to the restoration or rehabilitation of land, water or any other part of
the environment (except for those derived from normal exploration,
development and mining activities) or non-compliance with Environmental
Laws which could reasonably be expected to have a Material Adverse Effect
on the Corporation;
|
|
|
(qq)
|
there
has not been and there is not currently any labour disruption, grievance,
arbitration proceeding or other conflict which could reasonably be
expected to have a Material Adverse Effect on the Corporation, and the
Corporation is in compliance with all provisions of all federal,
provincial, local and foreign laws and regulations respecting employment
and employment practices, terms and conditions of employment and wages and
hours, except where non-compliance with any such provisions would not have
a Material Adverse Effect on the
Corporation;
|
|
|
(rr)
|
to
the knowledge of the Corporation, no union has been accredited or
otherwise designated to represent any employees of the Corporation and, to
the knowledge of the Corporation, no accreditation request or other
representation question is pending with respect to the employees of the
Corporation and no collective agreement or collective bargaining agreement
or modification thereof has expired or is in effect in any of the
Corporation’s facilities and none is currently being negotiated by the
Corporation;
|
28.
|
|
(ss)
|
other
than usual and customary health and related benefit plans for employees,
the Prospectus discloses, to the extent required by applicable Securities
Laws in the Qualifying Provinces, each material plan for retirement,
bonus, stock purchase, profit sharing, stock option, deferred
compensation, severance or termination pay contributed to, or required to
be contributed to, by the Corporation for the benefit of any current or
former director, officer, employee or consultant of the Corporation (the
“Employee Plans”),
each of which has been maintained in all material respects with its terms
and with the requirements prescribed by any and all statutes, orders,
rules and regulations that are applicable to such Employee
Plans;
|
|
|
(tt)
|
the
Corporation maintains a system of internal accounting controls sufficient
to provide reasonable assurances that (A) transactions are executed in
accordance with management’s general or specific authorization, and (B)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with United States generally accepted accounting
principles and to maintain accountability for
assets;
|
|
|
(uu)
|
upon
satisfaction of the Standard Listing Conditions on the Closing Date, the
Unit Shares and Warrants comprising the Units and the Flow-Through Shares
will be qualified investments under the Tax Act and the regulations
thereunder for trusts governed by registered retirement savings plans,
registered retirement income funds, registered disability savings plans,
deferred profit sharing plans, registered education savings plans and
tax-free savings accounts, provided that, in the case of the Warrants,
either (a) they are listed on a “designated stock exchange” as defined in
the Tax Act, or (b) the Corporation deals at arm’s length with each person
who is an annuitant, a beneficiary, an employer or a subscriber under such
plan;
|
|
|
(vv)
|
all
information which has been prepared by the Corporation relating to the
Corporation, and the business, property and liabilities thereof and either
publicly disclosed, provided or made available to the Underwriters,
including the Prospectus and all financial, marketing, sales and
operational information provided to the Underwriters is, as of the date of
such information, true and correct in all material respects, taken as
whole, and no fact or facts have been omitted there from which would make
such information materially
misleading;
|
|
(ww)
|
the
Corporation has not withheld and will not withhold from the Underwriters
prior to the Closing Time, any material facts relating to the Corporation
or to the Offering;
|
|
|
(xx)
|
the
Corporation has not completed any “significant acquisition” nor is it
proposing any “probable acquisitions” (as such terms are used in NI 44-101
– Short form Prospectus
Distributions of the Canadian Securities Administrators) that would
require the inclusion of any additional financial statements or pro forma
financial statements in the Prospectus pursuant to applicable Securities
Laws in the Qualifying
Provinces;
|
29.
|
|
(yy)
|
the
Corporation is eligible to file a short form prospectus in each of the
Qualifying Provinces pursuant to applicable Securities Laws and on the
date of and upon filing of the Final Prospectus there will be no documents
required to be filed under applicable Securities Laws in connection with
the Offering that will not have been filed as
required;
|
|
|
(zz)
|
to
the knowledge of the Corporation, none of the Corporation, its officers or
directors is aware of any circumstances presently existing under which
material liability to the Corporation is or could reasonably be expected
to be incurred under Part XXIII – Civil Liability for Secondary Market
Disclosure of the Securities Act
(Ontario);
|
|
(aaa)
|
other
than the Underwriters, there is no person acting or purporting to act at
the request or on behalf of the Corporation that is entitled to any
brokerage or finder’s fee in connection with the transactions contemplated
by this Agreement;
|
|
(bbb)
|
upon
issue, the Flow-Through Shares will be “flow-through shares” as defined in
subsection 66(15) of the Tax Act and are not and will not be prescribed
shares within the meaning of section 6202.1 of the regulations to the Tax
Act;
|
|
(ccc)
|
the
Corporation is, and at all relevant times will be, a “principal-business
corporation” as defined in subsection 66(15) of the Tax
Act;
|
|
(ddd)
|
the
Corporation has no reason to believe that it will be unable to incur, on
or after the Closing Date and on or before the Termination Date or that it
will be unable to renounce to the Purchasers of the Flow-Through Shares
effective on or before December 31, 2010, Qualifying Expenses in an
aggregate amount equal to the Commitment Amount and the Corporation has no
reason to expect any reduction of such amount by virtue of subsection
66(12.73) of the Tax Act;
|
|
(eee)
|
other
than pursuant to the $14 million flow-through financing completed by the
Corporation on July 29, 2010, the Corporation has not entered into any
agreements or made any covenants to any parties that would restrict the
Corporation from entering into the Subscription Agreement and agreeing to
incur and renounce Qualifying Expenses in accordance with this Agreement
and the Subscription Agreement nor that would require the prior
renunciation to any other person of Qualifying Expenses prior to the
renunciation of the Commitment Amount in favour of the Purchasers of the
Flow-Through Shares and the Corporation has no outstanding obligations to
incur and renounce Qualifying Expenses to any persons other than pursuant
to the Subscription Agreement; and
|
|
|
(fff)
|
the
representations and warranties of the Corporation in the Subscription
Agreements are, or will on the Closing Date be, true and correct and the
Corporation will fulfill its obligations and comply with all the
covenants, terms and conditions of the Subscription
Agreements.
|
30.
|
10.
|
Closing
|
The
purchase and sale of the Offered Securities shall be completed at the Closing
Time at the offices of Fogler, Xxxxxxxx LLP, or at such other place as Xxxxxxx
and the Corporation may agree. At or prior to the Closing Time, the Corporation
shall duly and validly deliver (i) to the Underwriters one or more certificates
in definitive form representing the Unit Shares, Warrants and Compensation
Options and (ii) to Xxxxxxx one or more certificates in definitive form
representing the Flow-Through Shares, as applicable, all registered in the name
of “CDS & Co.” or such other name or names as Xxxxxxx, on behalf of the
Underwriters, may notify the Corporation in writing not less than 24 hours prior
to the Closing Time (provided that any Unit Shares or Warrants sold in the
United States or to U.S. Persons pursuant to Schedule “A” shall be individually
certificated and shall not be included in any global certificate), against
payment by Xxxxxxx, on behalf of the Underwriters in respect of the sale of the
Units and on its own behalf in respect of the sale of the Flow-Through Shares,
to the Corporation, at the direction of the Corporation, in lawful money of
Canada by wire transfer or, if permitted by applicable law, by certified cheque
or bank draft, payable at par in the City of Xxxxxxx, Xxxxxxx, of an amount
equal to the aggregate purchase price for the Offered Securities being issued
and sold hereunder less the Commission and all of the estimated out-of-pocket
expenses of the Underwriters payable by the Corporation to the Underwriters in
accordance with section 21 hereof, together with a
copy of the Subscription Agreement duly signed by Xxxxxxx as agent on behalf of
the purchasers of Flow-Through Shares, a receipt signed by Xxxxxxx (on behalf of
the Underwriters in respect of the Units and on its own behalf in respect of the
Flow-Through Shares) for such definitive certificate(s) and for receipt of the
Commission and such expenses.
|
11.
|
Conditions
of Closing
|
The
Underwriters’ obligations hereunder at the Closing Time shall be subject to the
accuracy of the representations and warranties of the Corporation contained in
this Agreement as of the date of this Agreement and as of the Closing Date, the
performance by the Corporation of its obligations under this Agreement and the
following conditions:
|
|
(a)
|
the
Corporation shall cause its counsel, Fogler, Xxxxxxxx LLP, to deliver to
the Underwriters and their counsel, a legal opinion dated and delivered on
the Closing Date, in form and substance satisfactory to the Underwriters,
acting reasonably, and subject to and containing standard assumptions and
qualifications, with respect to the following
matters:
|
|
|
(i)
|
the
Corporation is a “reporting issuer”, or its equivalent, in each of the
Qualifying Provinces and it is not listed as in default of any of the
Securities laws in the Qualifying
Provinces;
|
|
|
(ii)
|
the
Corporation is a corporation existing under the laws of Yukon Territory
and has all requisite corporate power to carry on its business as now
conducted and to own, lease and operate its property and
assets;
|
|
|
(iii)
|
the
authorized and issued and outstanding share capital of the
Corporation;
|
31.
|
|
(iv)
|
the
Corporation has all necessary corporate power and capacity: (A) to execute
and deliver this Agreement, the Subscription Agreement, the Warrant
Indenture and the Warrant Certificates and to perform its obligations
hereunder and thereunder; (B) to create, issue and sell the Units and
Flow-Through Shares; (C) to issue the Warrant Shares issuable upon
exercise of the Warrants in accordance with their terms; (D) to issue the
Compensation Shares upon the exercise of the Compensation Options; and (E)
to issue the Compensation Warrant Shares upon the issue of the
Compensation Warrants;
|
|
|
(v)
|
all
necessary corporate action has been taken by the Corporation to authorize
the execution and delivery of each of the Preliminary Prospectus, the
Final Prospectus and any Supplementary Material and the filing thereof
with the Canadian Securities
Regulators;
|
|
|
(vi)
|
upon
the payment therefor, the Unit Shares and Flow-Through Shares will have
been validly issued as fully paid and non-assessable shares in the capital
of the Corporation;
|
|
|
(vii)
|
the
Warrants have been validly created;
|
|
|
(viii)
|
the
Warrant Shares issuable upon exercise of the Warrants have been authorized
and allotted for issuance and, upon the exercise of the Warrants in
accordance with the provisions thereof, such Warrant Shares will be
validly issued as fully paid and non-assessable shares of the
Corporation;
|
|
|
(ix)
|
the
Compensation Options have been validly
created;
|
|
|
(x)
|
the
Compensation Shares issuable upon exercise of the Compensation Options
have been authorized and allotted for issuance and, upon the exercise of
the Compensation Options in accordance with the provisions thereof, such
Compensation Shares will be validly issued as fully paid and
non-assessable shares of the
Corporation;
|
|
|
(xi)
|
the
Compensation Warrant Shares issuable upon exercise of the Compensation
Warrants have been authorized and allotted for issuance and, upon the
exercise of the Compensation Warrants in accordance with the provisions
thereof, such Compensation Warrant Shares will be validly issued as fully
paid and non-assessable shares of the
Corporation;
|
|
|
(xii)
|
all
necessary corporate action has been taken by the Corporation to authorize
the execution and delivery of this Agreement, the Subscription Agreement,
the Warrant Indenture, the Warrant Certificates, the Compensation Option
Certificates and the Compensation Warrant Certificates and the performance
of its obligations hereunder and thereunder and this Agreement, the
Warrant Indenture, the Warrant Certificates and the Compensation Option
Certificates have been executed and delivered by the Corporation and
constitute legal, valid and binding obligations of the Corporation
enforceable against it in accordance with their terms, subject to
bankruptcy, insolvency and other laws affecting the rights of creditors
generally and subject to such other standard assumptions and
qualifications including the qualifications that equitable remedies may be
granted in the discretion of a court of competent jurisdiction and that
enforcement of rights to indemnity, contribution and waiver of
contribution may be limited by applicable
law;
|
32.
|
|
(xiii)
|
the
rights, privileges, restrictions and conditions attaching to the Unit
Shares, the Flow-Through Shares, the Warrants, the Warrant Shares, the
Compensation Options, the Compensation Shares, the Compensation Warrants
and the Compensation Warrant Shares are accurately summarized in all
material respects in the Final
Prospectus;
|
|
|
(xiv)
|
all
necessary documents have been filed, all requisite proceedings have been
taken and all approvals, permits and consents of the appropriate
regulatory authority in each of the Qualifying Provinces have been
obtained by the Corporation to qualify the distribution to the public of
the Unit Shares, Flow-Through Shares and the Warrants and the distribution
to the Underwriters of the Compensation Options in each of the Qualifying
Provinces through persons who are registered under applicable Securities
Laws and who have complied with the relevant provisions of applicable
Securities Laws;
|
|
|
(xv)
|
the
issue by the Corporation of the Warrant Shares to be issued upon due
exercise of the Warrants pursuant to the terms thereof is exempt from, or
is not subject to, the prospectus and registration requirements of the
Securities Laws of each of the Qualifying Provinces and no prospectus or
other documents are required to be filed, proceedings taken, or approvals,
permits, consents or authorizations obtained by the Corporation under
Securities Laws in any of the Qualifying Provinces in respect of such
distribution;
|
|
|
(xvi)
|
the
issue by the Corporation of the Compensation Shares to be issued upon due
exercise of the Compensation Options pursuant to the terms thereof is
exempt from, or is not subject to, the prospectus and registration
requirements of the Securities Laws of each of the Qualifying Provinces
and no prospectus or other documents are required to be filed, proceedings
taken, or approvals, permits, consents or authorizations obtained by the
Corporation under Securities Laws in any of the Qualifying Provinces in
respect of such distribution;
|
|
|
(xvii)
|
the
issue by the Corporation of the Compensation Warrant Shares to be issued
upon due exercise of the Compensation Warrants pursuant to the terms
thereof is exempt from, or is not subject to, the prospectus and
registration requirements of the Securities Laws of each of the Qualifying
Provinces and no prospectus or other documents are required to be filed,
proceedings taken, or approvals, permits, consents or authorizations
obtained by the Corporation under Securities Laws in any of the Qualifying
Provinces in respect of such
distribution;
|
33.
|
|
(xviii)
|
the
first trade in, or resale of, the Warrant Shares issuable upon exercise of
the Warrants is exempt from, or is not subject to, the prospectus
requirements of the Securities Laws of each of the Qualifying Provinces
and no prospectus or other documents are required to be filed, proceedings
taken, or approvals, permits, consents or authorizations obtained under
Securities Laws in any of the Qualifying Provinces in respect of such
trade, subject to the exceptions generally provided for in such
opinions;
|
|
|
(xix)
|
the
first trade in, or resale of, the Compensation Shares issuable upon
exercise of the Compensation Options is exempt from, or is not subject to,
the prospectus requirements of the Securities Laws of each of the
Qualifying Provinces and no prospectus or other documents are required to
be filed, proceedings taken, or approvals, permits, consents or
authorizations obtained under Securities Laws in any of the Qualifying
Provinces in respect of such trade, subject to the exceptions generally
provided for in such opinions;
|
|
|
(xx)
|
the
first trade in, or resale of, the Compensation Warrant Shares issuable
upon exercise of the Compensation Warrants is exempt from, or is not
subject to, the prospectus requirements of the Securities Laws of each of
the Qualifying Provinces and no prospectus or other documents are required
to be filed, proceedings taken, or approvals, permits, consents or
authorizations obtained under Securities Laws in any of the Qualifying
Provinces in respect of such trade, subject to the exceptions generally
provided for in such opinions;
|
|
|
(xxi)
|
subject
only to the Standard Listing Conditions, the Unit Shares, Flow-Through
Shares, the Warrant Shares, the Compensation Shares and the Compensation
Warrant Shares have been conditionally approved for listing on the Stock
Exchanges;
|
|
|
(xxii)
|
subject
only to the Standard Listing Conditions, the Warrants have been
conditionally approved for listing on the
TSX;
|
|
|
(xxiii)
|
the
form and terms of the definitive certificates representing the Common
Shares have been approved by the board of directors of the Corporation and
comply in all material respects with the Business Corporations Act,
(Yukon) and the rules and by-laws of the Stock
Exchanges;
|
34.
|
|
(xxiv)
|
the
execution and delivery of this Agreement, the Subscription Agreement, the
Warrant Indenture, the Warrant Certificates, the Compensation Option
Certificates and the Compensation Warrant Certificates, the fulfilment of
the terms hereof and thereof by the Corporation and the issuance, sale and
delivery of the Offered Securities to be issued and sold by the
Corporation at the Closing Time and the issuance of the Unit Shares, the
Flow-Through Shares, the Warrants and the Warrant Shares 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, and do not and will not conflict with: (A) the
provisions of the Business Corporations Act, Yukon or Yukon securities
law; or (B) the constating documents of the
Corporation;
|
|
|
(xxv)
|
CIBC
Mellon Trust Company has been duly appointed as the transfer agent and
registrar for the Common Shares;
|
|
|
(xxvi)
|
the
Warrant Agent has been duly appointed as warrant agent under the Warrant
Indenture;
|
|
|
(xxvii)
|
the
text the Final Prospectus under the headings “Canadian Federal Income Tax
Considerations” and “Eligibility for Investment” in the Final Prospectus
construes an accurate statement of law subject to the assumptions and
other qualifications referred to
therein;
|
|
|
(xxviii)
|
the
Flow-Through Shares are “flow-through shares” as defined in subsection
66(15) of the Tax Act; and
|
|
|
(xxix)
|
the
Flow-Through Shares do not constitute “prescribed shares” for the purpose
of regulation 6202.1 of the Regulations to the Tax
Act.
|
In
connection with such opinion, counsel to the Corporation may rely on the
opinions of local counsel in the Qualifying Provinces acceptable to counsel to
the Underwriters, acting reasonably, as to certain corporate and securities
matters relating to the Corporation and as to the qualification for distribution
of the Unit Shares, the Flow-Through Shares, the Warrants and the Compensation
Options or opinions may be given directly by local counsel of the Corporation
with respect to those items and as to other matters governed by the laws of
jurisdictions other than the province in which they are qualified to practise
and may rely, to the extent appropriate in the circumstances, as to matters of
fact on certificates of officers of the Corporation and others;
|
|
(b)
|
for
purposes of Schedule “A”, if any Units are sold by an Underwriter or any
affiliate of the Underwriters or Selling Firm in transactions requiring an
exemption from the registration requirements under the U.S. Securities
Act, the Corporation shall cause a favourable legal opinion to be
delivered by its United States counsel, Xxxxx, Xxxxxx & Xxxxxx LLP, to
the Underwriters, such opinion to be subject to such qualifications and
assumptions as the Underwriters may agree, acting reasonably, to the
effect that no registration of the Unit Shares and Warrants will be
required under the U.S. Securities Act in connection with the offer and
sale of the Units in the United States or to U.S. Persons, provided, that
the sale of the Units in the United States and to U.S. Persons is made in
accordance with Schedule “A” hereto, it being understood that such counsel
need not express its opinion with respect to any subsequent resales of the
Unit Shares or Warrants comprising the Units or the Warrant Shares and may
rely, to the extent appropriate in the circumstances, as to matters of
fact on certificates of officers of the Corporation and
others;
|
35.
|
|
(c)
|
the
Underwriters shall have received a favourable legal opinion addressed to
the Underwriters, in form and substance satisfactory to the Underwriters,
acting reasonably, dated as of the Closing Date, from local counsel to the
Corporation with respect to title to the Black Fox Property, Pike River
Property and Grey Fox Property;
|
|
|
(d)
|
the
Underwriters shall have received a certificate, dated as of the Closing
Date, signed by the Chief Executive Officer and Chief Financial Officer of
the Corporation, or such other officer(s) of the Corporation as the
Underwriters may agree, certifying for and on behalf of the Corporation,
to the best of the knowledge, information and belief of the persons so
signing, with respect to: (i) the articles and by-laws of the Corporation;
(ii) the resolutions of the Corporation’s board of directors relevant to
the issue and sale of the Offered Securities to be issued and sold by the
Corporation and the authorization of the other agreements and transactions
contemplated herein; and (iii) the incumbency and signatures of signing
officers of the Corporation;
|
|
|
(e)
|
the
Corporation shall cause the Corporation’s Auditors to deliver to the
Underwriters a comfort letter, dated as of the Closing Date, in form and
substance satisfactory to the Underwriters, acting reasonably, bringing
forward to a date not more than two Business Days prior to the Closing
Date the information contained in the comfort letter referred to in
paragraph 5(a)(iii) hereof;
|
|
|
(f)
|
the
Underwriters shall have received a certificate, dated as of the Closing
Date, signed by the Chief Executive Officer and Chief Financial Officer of
the Corporation, or such other officers of the Corporation as the
Underwriters may agree, certifying for and on behalf of the Corporation
and without personal liability, to the best of the knowledge, information
and belief of the persons so signing, after having made due enquiry and
after having carefully examined the Final Prospectus and any Supplementary
Material, that:
|
|
|
(i)
|
the
Corporation has complied with all the covenants and satisfied all the
terms and conditions of this Agreement on its part to be complied with and
satisfied at or prior to the Closing
Time;
|
|
|
(ii)
|
the
representations and warranties of the Corporation contained herein are
true and correct as at the Closing Time, with the same force and effect as
if made on and as at the Closing Time after giving effect to the
transactions contemplated
hereby;
|
36.
|
|
(iii)
|
receipts
or decision documents have been issued by the Canadian Securities
Regulators for the Final Prospectus and no order, ruling or determination
having the effect of ceasing the trading or suspending the sale of the
Common Shares or any other securities of the Corporation has been issued
by any regulatory authority and is continuing in effect and no proceedings
for such purpose have been instituted or are pending or, to the knowledge
of such officers, contemplated or threatened under any Securities Laws or
by any regulatory authority;
|
|
|
(iv)
|
since
the respective dates as of which information is given in the Final
Prospectus (A) there has been no material change (actual, anticipated,
contemplated or threatened, whether financial or otherwise) in the
business, affairs, operations, assets, liabilities (contingent or
otherwise) or capital of the Corporation on a consolidated basis, and (B)
no transaction has been entered into by the Corporation which is material
to the Corporation, other than as disclosed in the Final Prospectus or the
Supplementary Material, as the case may be;
and
|
|
|
(v)
|
there
has been no change in any material fact (which includes the disclosure of
any previously undisclosed material fact) contained in the Final
Prospectus which fact or change is, or may be, of such a nature as to
render any statement in the Final Prospectus misleading or untrue in any
material respect or which would result in a misrepresentation in the Final
Prospectus or which would result in the Final Prospectus not complying
with applicable Securities Laws in the Qualifying
Provinces;
|
|
|
(g)
|
the
Underwriters shall have received copies of correspondence indicating that
the Corporation has obtained all necessary approvals for the Unit Shares,
Flow-Through Shares, Warrant Shares, the Compensation Shares and the
Compensation Warrant Shares to be conditionally listed on the Stock
Exchanges, subject only to the Standard Listing
Conditions;
|
|
|
(h)
|
the
Underwriters shall have received copies of correspondence indicating that
the Corporation has obtained all necessary approvals for the Warrants to
be conditionally listed on the TSX, subject only to the Standard Listing
Conditions;
|
|
|
(i)
|
the
Underwriters shall have completed and be satisfied, in their sole
discretion, acting reasonably, with the results of their due diligence
investigations regarding the Corporation, its business, operations and
financial condition and market conditions at the Closing
Time;
|
|
|
(j)
|
the
Underwriters shall have received duly executed copies of the Warrant
Indenture in form and substance satisfactory to the Underwriters, acting
reasonably;
|
|
|
(k)
|
Xxxxxxx
shall have received a duly executed copy of the Subscription Agreement in
form and substance satisfactory to Xxxxxxx, acting
reasonably;
|
37.
|
|
(l)
|
the
Underwriters shall have received a certificate from CIBC Mellon Trust
Company as to the number of Common Shares issued and outstanding as at the
date immediately prior to the Closing
Date;
|
|
|
(m)
|
the
Underwriters shall have received a certificate of compliance or the
equivalent in respect of the Corporation issued by the appropriate
regulatory authority in the jurisdiction in which the Corporation is
incorporated;
|
|
|
(n)
|
the
Underwriters shall have received confirmation that the Corporation is a
reporting issuer or the equivalent in each Qualifying Province not in
default of the applicable Securities Laws of such Qualifying Province;
and
|
|
|
(o)
|
the
Corporation shall have entered into a registration rights agreement, in
form and substance satisfactory to the Underwriters, acting reasonably,
relating to the registration of the Offered Securities and the Warrant
Shares on a Form F-10 registration statement to be filed with the United
States Securities and Exchange Commission within 120 days of the Closing
Date and be declared effective within 180 days of the Closing
Date.
|
|
12.
|
Alternative
Transaction
|
In the
event that the Corporation withdraws from the Offering after the date of this
Agreement (except in the event that such withdrawal was the result of a breach
or termination by the Underwriters of this Agreement) to complete an alternative
transaction (which transaction is completed within 12 months of the termination
of this Agreement), the Corporation shall pay to the Underwriters promptly upon
closing the alternative transaction a fee equal to the maximum amount of fees
otherwise payable under this Agreement calculated on the basis of the maximum
offering proposed hereunder. An “alternative transaction” shall
include any debt or equity offering or combination thereof in relation to the
Corporation.
|
13.
|
Restrictions
on Further Issues or Sales
|
|
|
(a)
|
During
the period commencing on the date hereof and ending on the day which is 90
days following the Closing Date, the Corporation shall not, directly or
indirectly, without the prior consent of Xxxxxxx, such consent not to be
unreasonably withheld, issue or announce any offer, sale or other issuance
of any Common Shares or further securities or agree to do so, save and
except for (i) as contemplated by this Agreement, (ii) pursuant to the
grant or exercise of stock options and other similar issuances pursuant to
the Corporation’s share incentive plan and other share compensation
arrangements outstanding as of the date hereof, (iii) pursuant to the
exercise of warrants outstanding as at the date hereof or the Warrants and
Compensation Options issued under the Offering, (iv) pursuant to share
issuance obligations under existing agreements (including, without
limitation, the Nanna Shares); or (v) the issue of securities in
connection with property or share acquisitions in the normal course of
business.
|
38.
|
|
(b)
|
During
the period commencing on the date hereof and ending on the day which is 90
days following the Closing Date, the officers and directors of the
Corporation shall not, directly or indirectly, without the prior consent
of Xxxxxxx, such consent not to be unreasonably withheld, sell or agree to
sell (or announce any intention to do so), any Common Shares or securities
exchangeable or convertible into Common
Shares.
|
|
14.
|
All
Terms to be Conditions
|
The
Corporation agrees that the conditions contained in section 11 will be complied
with insofar as the same relate to acts to be performed or caused to be
performed by the Corporation and that it will use its reasonable best efforts to
cause all such conditions to be complied with. Any breach or failure to comply
with any of the conditions set out in section 11 shall entitle the Underwriters
(or any of them) to terminate their obligation to arrange for the sale of the
Offered Securities, by written notice to that effect given to the Corporation at
or prior to the Closing Time. It is understood that any Underwriter may waive,
in whole or in part, or extend the time for compliance with, any of such terms
and conditions without prejudice to the rights of such Underwriter in respect of
any such terms and conditions or any other or subsequent breach or
non-compliance, provided that to be binding on an Underwriter any such waiver or
extension must be in writing and signed by such Underwriter.
|
15.
|
Termination
Events
|
Each
Underwriter shall also be entitled to terminate its obligation to purchase the
Offered Securities by written notice to that effect given to the Corporation at
or prior to the Closing Time if:
|
|
(a)
|
material change – there
shall have occurred or been discovered any material change or new material
fact or a development in the Corporation’s affairs that could result in a
material change or a new material fact that, in the opinion of the
Underwriters, or any of them, acting reasonably, prevents or restricts
trading in or the distribution of the Offered Securities in a material
respect or has or may have a materially adverse effect on the market price
or value of the Corporation’s common
shares;
|
|
|
(b)
|
disaster out/regulatory
out – (i) any inquiry, action, suit, investigation or other
proceeding (whether formal or informal) is commenced, announced or
threatened or any order made by any federal, provincial, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality including, without limitation, the Stock Exchanges or any
securities regulatory authority (other than any such inquiry, action, suit
investigation or other proceeding or order relating solely to the
Underwriter) or any law or regulation is enacted or proposed or changed
that, in the opinion of the Underwriters, or any of them, acting
reasonably, operates to prevent or restrict the trading of the Offered
Securities in a material respect or materially and adversely affects or
will materially and adversely affect the market price or value of the
Offered Securities; or (ii) if there should develop, occur or come into
effect or existence any event, action, state, condition or major financial
occurrence of national or international consequence, any acts of terrorism
or hostilities or escalation thereof or other calamity or crisis, or any
law or regulation that, in the opinion of the Underwriters, or any of
them, acting reasonably, materially adversely affects, or would be
expected to materially adversely affect, the financial markets or the
business, operations or affairs of the Corporation taken as a
whole;
|
39.
|
|
(c)
|
breach of agreement -
the Corporation is in breach of any material term, condition or covenant
of this Agreement or any material representation or warranty given by the
Corporation in this Agreement becomes false and such breach is not
remedied by the Corporation at or prior to the Closing
Time.
|
|
16.
|
Exercise
of Termination Right
|
If this
Agreement is terminated by any of the Underwriters pursuant to section 15, there
shall be no further liability on the part of such Underwriter or of the
Corporation to such Underwriter, except in respect of any liability which may
have arisen or may thereafter arise under sections 19, 20 and 21. The right of
the Underwriters (or any of them) to terminate their obligations under this
Agreement is in addition to such other remedies as they may have in respect of
any matter contemplated by this Agreement. A notice of termination given by one
Underwriter under section 15 shall not be binding upon the other
Underwriters.
|
17.
|
Over-Allotment
Option
|
|
|
(a)
|
The
Corporation hereby grants to (i) the Underwriters, in respect of the
Units, and (ii) Xxxxxxx, in respect of the Flow-Through Shares an
over-allotment option (the “Over-Allotment Option”)
exercisable, in whole or in part, in the sole discretion of the
Underwriters and/or Xxxxxxx, as the case may be, to purchase, in respect
of the Units, or to offer for sale, in respect of the Flow-Through Shares,
up to an additional 4,500,000 Units and/or 441,176 Flow-Through Shares in
any combination of Over-Allotment Units and Over-Allotment Flow-Through
Shares, at a price of $1.50 per the Unit and $1.70 per Flow-Through Share,
for a period of 30 days from the Closing Date, for market stabilization
purposes and to cover the Underwriters' and/or Xxxxxxx’x (as the case may
be) over-allocation position, if any (provided that the number of
Additional Securities which may be issued upon the exercise of the
Over-Allotment Option does not exceed 15% of the Units and Flow-Through
Shares sold on the Closing Date.) For greater certainty, the Underwriters
shall be paid the Commission and issued Compensation Options in respect of
the issue and sale of any Over-Allotment Units, and in the case of
Xxxxxxx, Over-Allotment Flow-Through Shares, purchased pursuant to the
exercise of the Over-Allotment Option on the day of issue of the
Over-Allotment Units or the Over-Allotment Flow-Through Shares. Xxxxxxx,
on its own behalf and on behalf of the Underwriters, may exercise the
Over-Allotment Option in whole or in part from time to time during the
currency thereof by delivering written notice to the Corporation (the
“Over-Allotment
Notice”) specifying the number of Over-Allotment Units, and/or, in
the case of Xxxxxxx, Over-Allotment Flow-Through Shares, which the
Underwriters wish to purchase. If the Underwriters exercise the
Over-Allotment Option, the Underwriters shall, on the Closing Date, which
shall be a date that is not less than three Business Days and not more
than seven Business Days after the date of the Over-Allotment Notice (such
day to be agreed between the Underwriters and the Corporation, each acting
reasonably), pay to the Corporation the aggregate purchase price for the
Over-Allotment Units, and/or in the case of Xxxxxxx, Over-Allotment
Flow-Through Shares, so purchased, less the Commission and all
out-of-pocket expenses of the Underwriters payable by the Corporation to
the Underwriters relating to the Over-Allotment Option in accordance with
section 21 hereof, by wire transfer, certified cheque or bank draft in
Canadian currency payable at par in Toronto, Ontario against delivery of
one or more certificates in definitive form representing the Unit Shares
and Warrants comprising the Over-Allotment Units and/or Flow-Through
Shares comprising the Over-Allotment Flow-Through Shares, registered in
the name of “CDS & Co.” or in such other name or names as the
Underwriters direct (provided that any Unit Shares or Warrants sold in the
United States or to U.S. Persons pursuant to Schedule “A” shall be
individually certificated and shall not be included in any global
certificate). The applicable terms, conditions and provisions of this
Agreement (including, without limitation, the provisions of section 11
relating to Closing deliveries unless otherwise agreed to by the
Corporation and the Underwriters) shall apply mutatis mutandis to the
Closing of the issuance of any Over-Allotment Units and/or Over-Allotment
Flow-Through Shares pursuant to any exercise of the Over-Allotment
Option.
|
40.
|
|
(b)
|
In
the event that the Corporation shall subdivide, consolidate, reclassify or
otherwise change its Common Shares during the period in which the
Over-Allotment Option is exercisable, appropriate adjustments will be made
to the Unit Issue Price and/or FTS Issue Price, as applicable, and to the
number of Over-Allotment Units and/or Over-Allotment Flow-Through Shares,
as applicable, issuable on exercise thereof such that the Underwriters are
entitled to arrange for the sale of the same number and type of securities
that the Underwriters would have otherwise arranged for had they exercised
such Over-Allotment Option immediately prior to such subdivision,
consolidation, reclassification or
change.
|
|
18.
|
Survival
of Representations and Warranties
|
All
representation, warranties, covenants and agreements herein contained or
contained in any documents delivered pursuant to this Agreement and in
connection with the transaction of purchase and sale herein contemplated shall
survive the purchase and sale of the Offered Securities and the termination of
this Agreement and shall continue in full force and effect for the benefit of
the Underwriters, the Purchasers and/or the Corporation, as the case may be, in
accordance with applicable law, regardless of any subsequent disposition of the
Offered Securities or any investigation by or on behalf of the Underwriters with
respect thereto for a period ending on the later of: (i) the date that is two
years following the Closing Date, and (ii) the latest date under the applicable
Securities Laws relevant to a substituted purchaser of the Offered Securities
(non-residents of Canada being deemed to be resident in the Province of Ontario
for such purposes) that a substituted purchaser may be entitled to commence an
action or exercise a right of rescission, with respect to a misrepresentation
contained in the Prospectus or, if applicable, any Supplementary Material. The
Underwriters and the Corporation shall be entitled to rely on the
representations and warranties of the Corporation or the Underwriters, as the
case may be, contained herein or delivered pursuant hereto notwithstanding any
investigation which the Underwriters or the Corporation may undertake or which
may be undertaken on their behalf.
41.
For
greater certainty, the indemnities provided by this section 18 in respect of the
Flow-Through Shares are given to Xxxxxxx in its capacity as agent of the
Corporation in connection with the sale of the Flow-Through Shares and shall not
apply to Xxxxxxx in its capacity as a Purchaser of Flow-Through Shares if and to
the extent that Xxxxxxx acquires the Flow-Through Shares as principal under this
Agreement and the Subscription Agreement.
|
19.
|
Indemnification
by the Corporation
|
|
|
(a)
|
The
Corporation shall fully indemnify and save harmless each of the
Underwriters and their respective affiliates, and the respective
directors, officers, employees and agents thereof (collectively, the
“Indemnified
Parties” and individually an “Indemnified Party”) from
and against all losses (other than losses of profit), claims, damages,
liabilities, costs and expenses, (including the reasonable fees and
expenses of the Indemnified Parties’ counsel that may be incurred in
advising with respect to or defending such claim), in any capacity under
any statute or common law or otherwise insofar as such expenses, losses,
claims, damages, liabilities or actions arise out of or are based,
directly or indirectly, upon the performance of professional services
rendered to the Corporation by the Indemnified Parties or otherwise in
connection with the matters referred to in this Agreement, including,
without limitation, in any way caused by, or arising directly or
indirectly from, or in consequence of caused by or arising directly or
indirectly from or in consequence
of:
|
|
|
(i)
|
the
breach of, or default under, any term, condition, covenant or agreement of
the Corporation made or contained herein or in any other document of the
Corporation delivered pursuant hereto or made by the Corporation in
connection with the sale of the Offered Securities or any representation
or warranty of the Corporation made or contained herein or in any other
document of the Corporation delivered pursuant hereto or in connection
with the sale of the Offered Securities being or being alleged to be
untrue, false or misleading;
|
|
|
(ii)
|
any
negligence or wilful misconduct by the Corporation relating to or
connected with the sale by the Corporation of the Offered
Securities;
|
|
|
(iii)
|
any
omission or alleged omission to state in any of the Preliminary
Prospectus, Final Prospectus or Supplementary Material (including, for
greater certainty, the Documents Incorporated by Reference and any
Subsequent Disclosure Documents) or in any certificate of the Corporation
delivered under this Agreement or pursuant to this Agreement any fact
(except facts relating solely to the Underwriters), 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;
|
42.
|
|
(iv)
|
any
order made or enquiry, investigation or proceedings commenced or
threatened by any securities regulator or other competent authority, not
based upon the activities or alleged activities of the Underwriters, based
upon any untrue, false or misleading statement or omission or alleged
untrue, false or misleading statement or omission or any misrepresentation
or alleged misrepresentation made by the
Corporation;
|
|
|
(v)
|
the
non-compliance or alleged non-compliance by the Corporation with any of
the Securities Laws of the Qualifying Provinces or the U.S. Securities Act
relating to or connected with the sale by the Corporation of the Offered
Securities, including the Corporation’s non-compliance with any statutory
requirement to make any document available for
inspection,
|
provided
that, in the event and to the extent that a court of competent jurisdiction in a
final judgment from which no appeal can be made or a regulatory authority in a
final ruling from which no appeal can be made shall determine that the
liabilities, claims, actions, suits, proceedings, losses, costs, damages or
expenses resulted from the negligence, fraud or wilful misconduct of an
Indemnified Party claiming indemnity, this indemnity shall not
apply.
|
|
(b)
|
If
any claim contemplated by this section 19 shall be asserted against any of
the Indemnified Parties, or if any potential claim contemplated by this
section 19 shall come to the knowledge of any of the Indemnified Parties,
the Indemnified Party concerned shall notify in writing the Corporation as
soon as possible of the nature of such claim (provided that any failure to
so notify in respect of any potential claim shall affect the liability of
the Corporation under this section 19 only to the extent that the
Corporation is prejudiced by such failure). The Corporation shall, subject
as hereinafter provided, be entitled (but not required) to assume the
defence on behalf of the Indemnified Party of any suit brought to enforce
such claim; provided that the defence shall be through legal counsel
selected by the Corporation and acceptable to the Indemnified Party,
acting reasonably and no admission of liability shall be made by the
Corporation or the Indemnified Party without, in each case, the prior
written consent of all the Indemnified Parties affected and the
Corporation, in each case such consent not to be unreasonably withheld. An
Indemnified Party shall have the right to employ separate counsel in any
such suit and participate in the defence thereof but the fees and expenses
of such counsel shall be at the expense of the Indemnified Party
unless:
|
|
|
(i)
|
the
Corporation fails to assume the defence of such suit on behalf of the
Indemnified Party within twenty days of receiving notice of such
suit;
|
|
|
(ii)
|
the
employment of such counsel has been authorized by the Corporation;
or
|
43.
|
|
(iii)
|
the
named parties to any such suit (including any added or third parties)
include the Indemnified Party and the Corporation and the Indemnified
Party and the Corporation shall have been advised in writing by counsel
that representation of the Indemnified Party by counsel for the
Corporation is inappropriate as a result of the potential or actual
conflicting interests of those
represented;
|
(in each
of cases (i), (ii) or (iii), the Corporation shall not have the right to assume
the defence of such suit on behalf of the Indemnified Party, but the Corporation
shall only be liable to pay the reasonable fees and disbursements of one firm of
separate counsel for all Indemnified Parties. In no event shall the Corporation
be required to pay the fees and disbursements of more than one set of counsel
for all Indemnity Parties in respect of any particular claim or set of
claims).
|
|
(c)
|
The
Corporation hereby acknowledges and agrees that, with respect to sections
19 and 20 hereof, the Underwriters are contracting on their own behalf and
as agents for their affiliates, directors, officers, employees and agents
and their respective directors, officers, employees and agents
(collectively, the “Beneficiaries”). In this
regard, each of the Underwriters shall act as trustee for the
Beneficiaries of the covenants of the Corporation under sections 19 and 20
hereof with respect to the Beneficiaries and accepts these trusts and
shall hold and enforce such covenants on behalf of the
Beneficiaries.
|
The
rights of indemnity contained in this section 19 shall not enure to the benefit
of the Underwriters or any other Indemnified Party if the person asserting any
claim contemplated by this section 19 was not provided with a copy of the
Prospectus or Supplementary Material which corrects any untrue statement or
information, misrepresentation or omission which is the basis of such claim and
which is required under the Securities Laws to be delivered to such person by
the Underwriters or members of their banking or selling group (if
any).
|
20.
|
Contribution
|
|
|
(a)
|
In
order to provide for just and equitable contribution in circumstances in
which the indemnity provided in section 19 hereof would otherwise be
available in accordance with its terms but is, for any reason not solely
attributable to any one or more of the Indemnified Parties, held to be
unavailable to or unenforceable by the Indemnified Parties or enforceable
otherwise than in accordance with its terms, the Underwriters and the
Corporation shall contribute to the aggregate of all claims, damages,
liabilities, costs and expenses and all losses (other than losses of
profits) of the nature contemplated in section 19 hereof and suffered or
incurred by the Indemnified Parties in proportions such that the
Underwriters shall be responsible for the portion represented by the
percentage that the total Underwriters’ fee payable to the Underwriters
bears to the aggregate purchase price of the Offered Securities, both as
determined pursuant to the provisions hereof, and the Corporation shall,
subject to subsection (b) of this section 20 be responsible for the
balance, whether or not it has been sued or sued separately; provided that
the Underwriters shall not in any event be liable to contribute, in the
aggregate, any amount in excess of such total fee or any portion thereof
actually received. However, no party that has been determined by a court
of competent jurisdiction in a final judgment from which no appeal can be
made or a regulatory authority in a final ruling from which no appeal can
be made to have engaged in any fraud, fraudulent misrepresentation or
negligence shall be entitled to claim contribution from any person who has
not been so determined to have engaged in such fraud, fraudulent
misrepresentation or
negligence.
|
44.
|
|
(b)
|
For
greater certainty, the Corporation shall not have any obligation to
contribute pursuant to this section 20 in respect of any claim except to
the extent the indemnity given by it in section 19 hereof would have been
applicable to such claim in accordance with its terms, had such indemnity
been found to be enforceable and available to the Indemnified
Parties.
|
|
|
(c)
|
The
rights to contribution provided in this section 20 shall be in addition to
and not in derogation of any other right to contribution which the
Indemnified Parties may have by statute or otherwise at law provided that
subsections (a) and (b) of this section 20 shall apply, mutatis mutandis, in
respect of such other right.
|
|
|
(d)
|
If
an Indemnified Party has reason to believe that a claim for contribution
may arise, the Indemnified Party shall give the Corporation notice thereof
in writing, but failure to so notify shall not relieve the Corporation of
any obligation which it may have to the Indemnified Party under this
section 20 provided that the Corporation is not prejudiced by such
failure, and the right of the Corporation to assume the defence of such
Indemnified Party shall apply as set out in section 19 hereof, mutatis
mutandis.
|
|
21.
|
Expenses
|
The
Corporation shall pay all expenses and fees in connection with the Offering
contemplated by this Agreement, including, without limitation, all expenses of
or incidental to the creation, issue, sale or distribution of the Offered
Securities and all expenses of or incidental to all other matters in connection
with the transaction set out in this Agreement, including, without limitation,
the fees and expenses payable in connection with the qualification of the
Offered Securities for distribution, the fees and expenses of the Corporation’s
counsel and of local counsel to the Corporation, the reasonable fees and
expenses of the Corporation’s Auditors and the transfer agent for the Common
Shares, all costs incurred in connection with the preparation and printing of
the Offering Documents and certificates representing the Offered Securities, all
reasonable expenses and fees incurred by the Underwriters and the reasonable
fees of the Underwriters’ counsel, whether or not the Offering or any part
thereof is completed.
|
22.
|
Underwriters’
Obligations
|
The
Underwriters’ obligations under this Agreement, as it applies to the Units,
shall be several and not joint, and the Underwriters’ respective obligations and
rights and benefits hereunder shall be as to the following
percentages:
|
Xxxxxxx
Securities Inc.
|
-
|
46.0%
|
|
Cormark
Securities Inc.
|
-
|
27.0%
|
|
BMO
Xxxxxxx Xxxxx Inc.
|
-
|
15%
|
45.
|
CIBC
World Markets Inc.
|
-
|
7.5%
|
|
Xxxxxxxx
Capital Inc.
|
-
|
2.0%
|
|
Paradigm
Capital Inc.
|
-
|
2.0%
|
|
Xxxxx
Securities Limited
|
-
|
0.5%
|
If an
Underwriter (a “Refusing
Underwriter”) shall not complete the purchase and sale of the Units which
such Underwriter has agreed to purchase hereunder for any reason whatsoever, the
other Underwriters (the “Continuing Underwriters”)
shall be entitled, at their option, to purchase all but not less than all of the
Units which would otherwise have been purchased by such Refusing Underwriter
pro rata according to
the number of Units to have been acquired by the Continuing Underwriters
hereunder or in such proportion as the Continuing Underwriters shall agree in
writing. If the Continuing Underwriters do not elect to purchase the balance of
the Units pursuant to the foregoing:
|
|
(a)
|
the
Continuing Underwriters shall not be obliged to purchase any of the Units
that any Refusing Underwriter is obligated to purchase;
and
|
|
|
(b)
|
the
Corporation shall not be obliged to sell less than all of the
Units,
|
and the
Corporation shall be entitled to terminate its obligations under this Agreement
arising from its acceptance of this offer, in which event there shall be no
further liability on the part of the Corporation or the Continuing Underwriters,
except pursuant to the provisions of sections 19, 20 and 21. Nothing
in this Agreement shall oblige any U.S. broker-dealer affiliate of any of the
Underwriters to purchase the Units. Any U.S. broker dealer affiliate who makes
any offers of the Offered Securities in the United States or to U.S. Persons
will do so solely as an agent for an Underwriter.
|
23.
|
Underwriters’
Authority
|
The
Corporation shall be entitled to and shall act on any notice, request,
direction, consent, waiver, extension and other communication given or agreement
entered into by or on behalf of the Underwriters by Xxxxxxx who shall represent
the Underwriters and have authority to bind the Underwriters hereunder. In all
cases, Xxxxxxx shall use its best efforts to consult with the other Underwriters
prior to taking any action contemplated herein.
|
24.
|
Notices
|
Unless
otherwise expressly provided in this Agreement, any notice or other
communication to be given under this Agreement (a “notice”) shall be in writing
addressed as follows:
|
|
(a)
|
If
to the Corporation, to:
|
Suite
2001, 0000 Xxxxx Xxxxx Xxxxxx
Xxxxx’x
Wharf Tower II
Xxxxxxx,
Xxxx Xxxxxx
X0X
0X0
46.
Fax: (000)
000-0000
Attention: Xxxx
Xxxx, President and CEO
with a
copy (but not as notice) to:
Fogler,
Xxxxxxxx LLP
00
Xxxxxxxxxx Xxxxxx Xxxx
Xxxxx
0000
Xxxxxxx,
Xxxxxxx
X0X
0X0
Fax: (000)
000-0000
Attention: Xxxxxxx
Xxxxxx
|
|
(b)
|
If
to the Underwriters, to:
|
Xxxxxxx
Securities Inc.
Brookfield
Place, 000 Xxx Xx.
Xxxxx
0000, Xxx 000
Xxxxxxx,
Xxxxxxx
X0X
0X0
Fax: (000)
000-0000
Attention: Xxxx
XxXxxxxx
and
to:
Cormark
Securities Inc.
Royal
Bank Plaza – South Tower
000 Xxx
Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxx
X0X
0X0
Fax: (000)
000-000-0000
Attention: Xxx
Xxxxxxxxxx
and
to:
BMO
Xxxxxxx Xxxxx Inc.
000 Xxxx
Xx. X., 0xx
Xxxxx
Xxxxxxx,
Xxxxxxx
X0X
0X0
Fax: (000)
000-0000
Attention: Xxxxx
Xxxx
47.
and
to:
CIBC
World Markets Inc.
000 Xxx
Xx., 0xx
Xxxxx
Xxxxxxx,
Xxxxxxx
X0X
0X0
Fax:
(000) 000-0000
Attention: Xxxxx
Cobbald
and
to:
Xxxxxxxx
Capital Inc.
00 Xxxxx
Xx., Xxxxx 000
Xxxxxxx,
Xxxxxxx
X0X
0X0
Fax: (000)
000-0000
Attention: Xxxxx
Xxxxxx
and
to:
Paradigm
Capital Inc.
00
Xxxxxxxxxx Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxx
X0X
0X0
Fax: (000)
000-0000
Attention: Xxx
Xxxxxx
and
to:
Xxxxx
Securities Limited
#300 –
000 Xxx Xxxxxx
Xxxxxxx,
Xxxxxxx
X0X
0X0
Fax: (000)
000-0000
Attention: Xxxx
X. XxxXxxxxx
with a
copy (but not as notice) to:
Fraser
Xxxxxx Casgrain LLP
1 First
Canadian Place
000 Xxxx
Xxxxxx Xxxx
Xxxxxxx,
Xxxxxxx
X0X
0X0
48.
Fax: (000)
000-0000
Attention: Xxxxx
Xxxxxxxx
Each
notice or other communication shall be in writing and shall be personally
delivered to the addressee or sent by facsimile transmission to the addressee
and: (i) a notice which is personally delivered shall, if delivered on a
Business Day, be deemed to be given and received on that day and, in any other
case, be deemed to be given and received on the first Business Day following the
day on which it is delivered; and (ii) a notice which is sent by facsimile
transmission shall be deemed to be given and received on the first Business Day
following the day on which it is sent. The Corporation and the Underwriters may
change their respective addresses for notices by notice given in the manner
aforesaid.
|
25.
|
Time
of the Essence
|
Time
shall, in all respects, be of the essence hereof.
|
26.
|
Headings
|
The
headings contained herein are for convenience only and shall not affect the
meaning or interpretation hereof.
|
27.
|
Singular
and Plural, etc.
|
Where the
context so requires, words importing the singular number include the plural and
vice versa, and words importing gender shall include the masculine, feminine and
neuter genders.
|
28.
|
Entire
Agreement
|
This
Agreement constitutes the only agreement between the parties in connection with
the issue and sale of the Offered Securities and shall supersede any and all
prior negotiations and understandings in connection with the issue and sale of
the Offered Securities, including, without limitation, the Engagement Letter.
This Agreement may be amended or modified in any respect by written instrument
only.
|
29.
|
Severability
|
The
invalidity or unenforceability of any particular provision of this Agreement
shall not affect or limit the validity or enforceability of the remaining
provisions of this Agreement.
|
30.
|
Governing
Law
|
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.
49.
|
31.
|
Successors
and Assigns
|
The terms
and provisions of this Agreement shall be binding upon and enure to the benefit
of the Corporation and the Underwriters and their respective successors and
permitted assigns.
|
32.
|
Further
Assurances
|
Each of
the parties hereto shall do or cause to be done all such acts and things and
shall execute or cause to be executed all such documents, agreements and other
instruments as may reasonably be necessary or desirable for the purpose of
carrying out the provisions and intent of this Agreement.
|
33.
|
Obligations
of the Underwriters
|
In
performing their respective obligations under this Agreement, the Underwriters
shall be acting severally and not jointly and severally. Nothing in this
Agreement is intended to create any relationship in the nature of a partnership,
or joint venture between the Underwriters.
|
34.
|
Market
Stabilization
|
In
connection with the distribution of the Offered Securities, the Underwriters (or
any of them) may effect transactions which stabilize or maintain the market
price of the Common Shares at levels other than those which might otherwise
prevail in the open market, but in each case as permitted by applicable Canadian
Securities Laws. Such stabilizing transactions, if any, may be discontinued by
the Underwriters at any time.
|
35.
|
Effective
Date
|
This
Agreement is intended to and shall take effect as of the date first set forth
above, notwithstanding its actual date of execution or delivery.
|
36.
|
Counterparts
and Facsimile Copies
|
This
Agreement may be executed in any number of counterparts and by facsimile, which
taken together shall form one and the same agreement.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
50.
If the
Corporation is in agreement with the foregoing terms and conditions, please so
indicate by executing a copy of this Agreement where indicated below and
delivering the same to the Underwriters.
Yours
very truly,
XXXXXXX
SECURITIES INC.
|
Per:
|
“Xxxx XxXxxxxx”
|
|
|
Authorized
Signing Officer
|
CORMARK
SECURITIES INC.
|
Per:
|
“Xxx Xxxxxxxxxx”
|
|
|
Authorized
Signing Officer
|
BMO
XXXXXXX XXXXX INC.
|
Per:
|
“Xxxxx Xxxx”
|
|
|
Authorized
Signing Officer
|
CIBC
WORLD MARKETS INC.
|
Per:
|
“Xxxxx Xxxxxxx”
|
|
|
Authorized
Signing Officer
|
XXXXXXXX
CAPITAL INC.
|
Per:
|
“Xxxxx Xxxxxx”
|
|
|
Authorized
Signing Officer
|
51.
PARADIGM
CAPITAL INC.
|
Per:
|
“Ian X.X. Xxxxxx”
|
|
|
Authorized
Signing Officer
|
XXXXX
SECURITIES LIMITED
|
Per:
|
“Xxxxx Xxxx”
|
|
|
Authorized
Signing Officer
|
The
foregoing is hereby accepted and agreed to by the undersigned as of the date
first written above.
|
Per:
|
“Xxxx X. Xxxx”
|
|
|
Authorized
Signing Officer
|
52.
SCHEDULE
“A”
COMPLIANCE
WITH UNITED STATES SECURITIES LAWS
This
is Schedule “A” to the underwriting agreement dated as of October 1, 2010 among
the Corporation and the Underwriters (the “Underwriting
Agreement”).
|
1.
|
As
used in this Schedule “A”, capitalized terms used herein and not defined
herein shall have the meanings ascribed thereto in the Underwriting
Agreement to which this Schedule “A” is annexed and the following terms
shall have the meanings indicated:
|
“Accredited
Investor” means an “accredited investor” as such term is defined in Rule 501(a)
of Regulation D;
“Foreign
Issuer” shall have the meaning ascribed thereto in Regulation
S. Without limiting the foregoing, but for greater clarity, it means
any issuer which is (a) the government of any country other than the United
States, of any political subdivision thereof or a national of any country other
than the United States; or (b) a corporation or other organization incorporated
or organized under the laws of any country other than the United States, except
an issuer meeting the following conditions: (1) more than 50 percent of the
outstanding voting securities of such issuer either directly or indirectly owned
of record by residents of the United States; and (2) any of the following: (i)
the majority of the executive officers or directors are United States citizens
or residents, (ii) more than 50 percent of the assets of the issuer are located
in the United States, or (iii) the business of the issuer is administered
principally in the United States;
“General
Solicitation” or “General Advertising” means “general solicitation or general
advertising,” as used under Rule 502(c) of Regulation D. Without
limiting the foregoing, but for greater clarity, general solicitation or general
advertising includes, but is not limited to, any advertisements, articles,
notices or other communications published in any newspaper, magazine or similar
media or on the Internet or broadcast over radio, television or the Internet, or
any seminar or meeting whose attendees had been invited by general solicitation
or general advertising;
“Institutional
Accredited Investor” means an institutional Accredited Investor that satisfies
one of the criteria of Rule 501(a)(1), (2), (3) or (7) of Regulation
D;
“Regulation
D” means Regulation D adopted by the SEC under the U.S. Securities
Act;
“SEC”
means the United States Securities and Exchange Commission;
“U.S.
Affiliate” means the United States registered broker-dealer affiliate of the
Underwriter; and
“U.S.
Exchange Act” means the United States Securities Exchange Act of 1934, as
amended and the rules and regulations promulgated thereunder.
|
2.
|
The
Corporation hereby represents, warrants, covenants and agrees to and with
the Underwriters that:
|
|
|
(a)
|
The
Corporation is a Foreign Issuer.
|
A-1
|
|
(b)
|
During
the period in which the Offered Securities are offered for sale, none of
the Corporation, its affiliates or any person acting on its or their
behalf (other than the Underwriters, the U.S. Affiliates, or a Selling
Firm, as to whom the Corporation makes no representation) (i) has engaged
or will engage in any Directed Selling Efforts, (ii) has taken or will
take any action in violation of Regulation M under the U.S. Exchange Act
in connection with the Offered Securities, or (iii) has offered or will
offer to sell, or has solicited or will solicit offers to buy, the Units
in the United States or to U.S. Persons by means of any form of General
Solicitation or General Advertising or in any manner involving a public
offering within the meaning of Section 4(2) of the U.S. Securities
Act.
|
|
|
(c)
|
The
Corporation is not, and as a result of the sale of the Offered Securities,
the Unit Shares, the Warrants or the Warrant Shares contemplated hereby
will not be, registered or required to be registered as an “investment
company” under the United States Investment Company Act of 1940, as
amended.
|
|
|
(d)
|
Except
with respect to offers and sales of Units to Institutional Accredited
Investors in reliance upon the exemption from registration available under
Rule 506 of Regulation D, none of the Corporation, its affiliates or any
person acting on its or their behalf (other than the Underwriters, the
U.S. Affiliates or any person acting on its or their behalf, in respect of
which no representation is made) has made or will make: (i) any offer to
sell, or any solicitation of an offer to buy, the Offered Securities to a
person in the United States or to a U.S. Person; or (ii) any sale of
Offered Securities unless, at the time the buy order was or will be
originated, the purchaser is (A) outside the United States and not a U.S.
Person or (B) the Corporation, its affiliates and any person acting on
their behalf reasonably believe that the purchaser is outside the United
States and not a U.S. Person.
|
|
|
(e)
|
Except
with respect to the offer and sale of the Units offered hereby, the
Corporation has not, for a period of six months prior to the commencement
of the offering of the Offered Securities, sold, offered for sale or
solicited any offer to buy any of its securities in the United States or
to U.S. Persons in a manner that would be integrated with the offer and
sale of the Units and would cause the exemption from registration set
forth in Rule 506 of Regulation D to become unavailable with respect to
the offer and sale of the Units.
|
|
|
(f)
|
During
the period in which the Units are offered for sale, none of it, its
affiliates, or any person acting on its or their behalf (other than the
Underwriters, the U.S. Affiliates, their respective affiliates or any
person acting on their behalf, in respect of which no representation is
made) will take any action in violation of Regulation M under the U.S.
Exchange Act in connection with the Offered Securities, or that would
cause the exemption afforded by Rule 506 of Regulation D to be unavailable
for offers and sales of the Units in the United States or to U.S. Persons
in accordance with the Underwriting Agreement, including this Schedule
“A”, or the exclusion from registration afforded by Rule 903 of Regulation
S to be unavailable for offers and sales of the Offered Securities outside
the United States to non-U.S. Persons in accordance with the Underwriting
Agreement, including this Schedule
“A”.
|
|
|
(g)
|
None
of the Corporation or any of its predecessors or affiliates has been
subject to any order, judgment or decree of any court of competent
jurisdiction temporarily, preliminarily or permanently enjoining such
person for failure to comply with Rule 503 of Regulation
D.
|
A-2
|
|
(h)
|
The
Corporation will, within the prescribed time periods, prepare and file any
forms or notices required under the U.S. Securities Act or any state
securities laws in connection with the sale of the
Units.
|
|
3.
|
Each
of the Underwriters acknowledges that the Offered Securities, the Unit
Shares, the Warrants and the Warrant Shares have not been and will not be
registered under the U.S. Securities Act or applicable state securities
laws, and the Offered Securities may be offered and sold only in
transactions exempt from or not subject to the registration requirements
of the U.S. Securities Act and applicable state securities
laws. Accordingly, each Underwriter represents, warrants and
covenants to and with the Corporation and will cause its U.S. Affiliate to
comply with such representations, warranties and covenants,
that:
|
|
|
(a)
|
It
has not offered or sold, and will not offer or sell, any Offered
Securities constituting part of its allotment, except (i) in the case of
Units, within the United States or to U.S. Persons in compliance with this
Schedule “A”, or (ii) outside the United States to non-U.S. Persons in
“offshore transactions,” as such term is defined in Regulation S, in
accordance with Regulation S. Accordingly, except as provided
in the Underwriting Agreement or this Schedule “A”, none of it, its
affiliate(s) or any persons acting on its or their behalf have engaged or
will engage in: (i) any offer to sell or any solicitation of an offer
to buy, any Offered Securities to any person in the United States or to a
U.S. Person; (ii) any sale of Offered Securities to any purchaser
unless, at the time the buy order was or will have been originated, the
purchaser was outside the United States and not a U.S. Person, or such
Underwriter, affiliate or person acting on behalf of either reasonably
believed that such purchaser was outside the United States and not a
U.S. Person; or (iii) any Directed Selling
Efforts.
|
|
|
(b)
|
It
has not entered and will not enter into any contractual arrangement with
respect to the distribution of the Offered Securities, except with its
affiliates, a Selling Firm or with the prior written consent of the
Corporation.
|
|
4.
|
Each
of the Underwriters represents, warrants, covenants and agrees to and with
the Corporation that:
|
|
|
(a)
|
All
offers and sales of the Units in the United States will be effected
through its U.S. Affiliate in accordance with all applicable U.S. federal
and state broker-dealer
requirements.
|
|
|
(b)
|
Its
U.S. Affiliate is a member of, and in good standing with, the Financial
Industry Regulatory Authority on the date
hereof.
|
|
|
(c)
|
It
will not offer or sell Offered Securities in the United States or to U.S.
Persons, except that it may offer the Units to substituted purchasers who
are Institutional Accredited Investors and who will purchase such
securities directly from the Corporation in compliance with Rule 506
of Regulation D or in the manner contemplated in this Schedule
“A”.
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A-3
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(d)
|
It
has not used and will not use any written material other than the U.S.
Private Placement Memorandum relating to the offering of the Units in the
United States and to U.S. Persons, and it agrees to deliver, through its
U.S. Affiliate, a copy of the final U.S. Private Placement Memorandum
(which includes the Final Prospectus), to each person in the United States
or who is a U.S. Person purchasing Units pursuant to Rule 506 of
Regulation D.
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(e)
|
It
will not, either directly or through its U.S. Affiliate, solicit offers
for, or offer to sell, the Units by means of any form of General
Solicitation or General Advertising or in any manner involving a public
offering within the meaning of Section 4(2) of the U.S. Securities
Act.
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(f)
|
It
will solicit, and will cause its U.S. Affiliate to solicit, offers for the
Units in the United States or to U.S. Persons only from, and will offer
such securities only to, persons it reasonably believes to be
Institutional Accredited Investors.
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(g)
|
It
will inform, and cause its U.S. Affiliate to inform, all purchasers of the
Units in the United States or who are U.S. Persons who are buying such
securities pursuant to Rule 506 of Regulation D that such securities have
not been and will not be registered under the U.S. Securities Act or
applicable state securities laws and are being sold to them without
registration under the U.S. Securities Act in reliance on Rule 506 of
Regulation D.
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(h)
|
Prior
to the completion of any sale of Units to any U.S. purchaser who is an
Institutional Accredited Investor, such purchaser shall be required to
provide to its U.S. Affiliate an executed copy of the form of Purchaser’s
Letter attached to the final U.S. Private Placement
Memorandum.
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(i)
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Immediately
prior to soliciting such offerees, the Underwriter, its U.S. Affiliate,
and any person acting on its or their behalf, has reasonable grounds to
believe and did believe that each offeree in the United States or who was
a U.S. Person was an Institutional Accredited Investor, and at the time of
each sale to a person in the United States or to a U.S. Person, the
Underwriter, its U.S. Affiliate and any person on its or their behalf will
have reasonable grounds to believe and will believe that each purchaser is
an Institutional Accredited
Investor.
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(j)
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None
of the Underwriter, its affiliates or any person acting on its or their
behalf (other than the Corporation, its affiliates and any person acting
on their behalf as to which no representation is made) has taken on will
take, directly or indirectly, any action in violation of Regulation M
under the U.S. Exchange Act in connection with the offer and sale of the
Offered Securities.
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5.
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Each
Underwriter that offers Units in the United States or to U.S. Persons
agrees that:
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(a)
|
Prior
to the Closing Date, it will provide the Corporation and its transfer
agent with a list of all purchasers of such securities in the United
States or who are U.S. Persons.
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(b)
|
At
the Closing Time, it, together with its U.S. Affiliate offering Units in
the United States or to U.S. Persons, will provide a certificate,
substantially in the form of Exhibit I to this Schedule “A”, relating to
the manner of the offer and sale of such securities in the United States
and to U.S. Persons. The Underwriters shall require each
Selling Firm to agree in writing, for the benefit of the Corporation to
comply with, and shall use their best efforts to ensure that each Selling
Firm complies with, the provisions of this Schedule “A” as if such
provisions applied to such Selling
Firm.
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A-4
EXHIBIT
I TO SCHEDULE “A”
UNDERWRITERS’
CERTIFICATE
In
connection with the private placement in the United States and to U.S. Persons
of Units of the Corporation pursuant to the Underwriting Agreement dated October
1, 20010 among the Corporation and the Underwriters named therein (the
“Underwriting Agreement”), each of the undersigned does hereby certify as
follows:
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1.
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the
Units have been offered in the United States only by the U.S. Affiliate,
which was on the dates of such offers, and is on the date hereof, a duly
registered broker or dealer with the SEC, with the Financial Industry
Regulatory Authority (“FINRA”) and under the securities laws of each state
of the United States where such offers and sales were made (unless
exempted from the respective state’s broker-dealer registration
requirements), and was in good standing with FINRA and the SEC and all
offers of Units in the United States were effected by the U.S. Affiliate
in accordance with all applicable U.S. federal an state broker-dealer
requirements;
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2.
|
each
U.S. purchaser was provided with a copy of the final U.S. Private
Placement Memorandum, including the Final Prospectus incorporated by
reference therein, for the offering of the Units in the United States and
to U.S. Persons;
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3.
|
immediately
prior to transmitting such U.S. Private Placement Memorandum to offerees
in the United States or who were U.S. Persons, we had reasonable grounds
to believe and did believe that each such U.S. offeree was, and continue
to believe that each such U.S. purchaser purchasing Units is an
Institutional Accredited Investor;
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4.
|
no
form of General Solicitation or General Advertising was used by us in
connection with the offer or sale of the Units in the United States or to
U.S. Persons;
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|
5.
|
no
Directed Selling Efforts have been undertaken by us and neither we nor any
Selling Firm, nor any of our or their affiliates, have taken or will take
any action which would constitute a violation of Regulation M under the
U.S. Exchange Act in connection with the Offered
Securities;
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6.
|
the
offering of the Units in the United States and to U.S. Persons has been
conducted by us in accordance with the Underwriting Agreement, including
Schedule “A” thereto; and
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|
7.
|
prior
to any sale of Units in the United States or to a U.S. Person, we caused
each such U.S. purchaser to execute a subscription agreement containing
representations, warranties and agreements to the Corporation in the form
attached to the final U.S. Private Placement
Memorandum.
|
Terms
used in this Certificate have the meanings given to them in the Underwriting
Agreement, including Schedule “A” thereto, unless otherwise defined
herein.
IN
WITNESS OF WHICH the parties have duly executed this Certificate.
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NAME
OF UNDERWRITER
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||
|
By:
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||
|
Name:
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||
|
Title:
|
||
Exhibit
A-1
|
NAME
OF U.S. AFFILIATE
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
Exhibit
A-2
