Attached files
| file | filename |
|---|---|
| 8-K - Midway Gold Corp | v187888_8-k.htm |
| EX-5.2 - Midway Gold Corp | v187888_ex5-2.htm |
| EX-5.1 - Midway Gold Corp | v187888_ex5-1.htm |
| EX-10.2 - Midway Gold Corp | v187888_ex10-2.htm |
AGENCY
AGREEMENT
June 10,
2010
Midway
Gold Corp.
600 Lola
Street, Suite 10
Helena,
Montana 59601
Attention:
Daniel Wolfus, Chief Executive Officer
Dear
Sir:
Haywood
Securities Inc. (the "Agent") understands that
Midway Gold Corp., a corporation organized and existing under the laws of
British Columbia (the "Company"), intends to issue
and sell an aggregate of 9,412,000 units (the "Units") at a price (the "Offer Price") of $0.60 per
Unit, each unit being comprised of one common share of the Company (an "Offered Share") and one half of one
common share purchase warrant. Each whole common share purchase
warrant (a "Warrant")
will entitle the holder to acquire one common share a ("Warrant Share") at a price of
$0.80 per Warrant Share at any time prior to 5:00 p.m. (Vancouver time) on or
before the date that is 24 months from the Closing Date (as defined
below). The Warrants will be issued pursuant to a Warrant Indenture
(as defined below) that provides for, inter alia, the appropriate
adjustment in the class, number and price of the Warrant Shares to be issued
upon exercise of the Warrants upon the occurrence of certain events, including
any subdivision, consolidation or reclassification of the common shares of the
Company, and the amalgamation of the Company, and other terms and conditions
customary for agreements of that nature.
In
connection with the Offering, we understand that the Company wishes to appoint
the Agent as exclusive agent of the Company for the purpose of offering for
sale, on a best efforts basis, the Units (the "Offering").
As used
herein, "Base
Prospectuses" shall mean, collectively, the Canadian Base Prospectus and
the U.S. Base Prospectus (each as defined below); "Pricing Prospectuses" shall
mean, collectively, the Canadian Pricing Prospectus and the U.S. Pricing
Prospectus (each as defined below); and "Prospectuses" shall mean,
collectively, the Canadian Prospectus and the U.S. Prospectus (each as defined
below).
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1.
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Representations and
Warranties of the Company.
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The
Company represents and warrants to, and agrees with, the Agent
that:
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(a)
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The
Company is qualified to file a short form prospectus pursuant to the Shelf
Procedures (as defined below) and has prepared and filed a preliminary
short form base shelf prospectus dated April 15, 2010 (the "Canadian Preliminary Base Shelf
Prospectus") and a final short form base shelf prospectus dated May
4, 2010 (the "Canadian
Final Base Shelf Prospectus") providing for the offer and sale,
from time to time, of up to US$25,000,000 of the Company's common shares,
warrants to purchase common shares, or any combination of common shares or
warrants, with the British Columbia Securities Commission, as principal
regulator pursuant to Multilateral Instrument 11-101 – Principal Regulator
System (the "Reviewing Authority") and the
Canadian securities regulatory authorities in each of the Canadian
Jurisdictions (as defined below), (collectively, the "Canadian Qualifying
Authorities"); and the Reviewing Authority has issued a prospectus
receipt under National Policy 11-202 - Process for Prospectus Reviews in
Multiple Jurisdictions (a "Decision Document") on
behalf of the Canadian Qualifying Authorities for each of the Canadian
Preliminary Base Shelf Prospectus and the Canadian Final Base Shelf
Prospectus. The term "Canadian Jurisdictions"
means each of the provinces of British Columbia, Alberta and
Ontario. The term "Canadian Base
Prospectus" means the Canadian Final Base Shelf Prospectus,
including documents incorporated therein by reference, at the time the
Reviewing Authority issued a Decision Document with respect thereto in
accordance with the rules and procedures established under all applicable
securities laws in each of the Canadian Jurisdictions and the respective
regulations and rules under such laws together with applicable published
policy statements and instruments of the securities regulatory authorities
in the Canadian Jurisdictions ("Canadian Securities
Laws"), including National Instrument 44-101 - Short Form
Prospectus Distributions and National Instrument 44-102 - Shelf
Distributions (together, the "Shelf
Procedures"). The term "Canadian Pricing
Prospectus" means the preliminary prospectus supplement (the "Canadian Preliminary Prospectus
Supplement") relating to the Offering filed with the Canadian
Qualifying Authorities in accordance with the Shelf Procedures on May 28,
2010, together with the Canadian Base Prospectus, including all documents
incorporated therein by reference. The term "Canadian Prospectus"
means the prospectus supplement (the "Canadian Prospectus
Supplement") relating to the Offering to be dated the date hereof
and filed with the Canadian Qualifying Authorities in accordance with the
Shelf Procedures, together with the Canadian Base Prospectus, including
all documents incorporated therein by reference. No order
suspending the distribution of the Units or any other securities of the
Company has been issued by any of the Canadian Qualifying Authorities and
no proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Canadian Qualifying
Authorities, and any request on the part of the Canadian Qualifying
Authorities for additional information has been complied
with.
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All
references in this Agreement to the Canadian Preliminary Base Shelf Prospectus,
the Canadian Final Base Shelf Prospectus, the Canadian Preliminary Prospectus
Supplement and the Canadian Prospectus Supplement, or any amendments or
supplements to any of the foregoing, shall be deemed to include any copy thereof
filed with the Canadian Qualifying Authorities pursuant to the System for
Electronic Document Analysis and Retrieval (SEDAR).
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(b)
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The
Company meets the general eligibility requirements to file a registration
statement on Form S-3 under the Securities Act of 1933, as amended
(the "Securities
Act") and has prepared and filed with the Securities and Exchange
Commission (the "Commission") a
registration statement under the Securities Act and the rules and
regulations of the Commission (the "Rules and Regulations")
on Form S-3 (No. 333-165842), on April 1, 2010, providing for the
registration of up to US$25,000,000 of the Company’s common shares,
warrants to purchase common shares, or any combination of common shares
and warrants. Such registration statement, including the
exhibits to such registration statement and all documents incorporated by
reference in the prospectus contained therein, became effective pursuant
to Rule 461 under the Securities Act on May 6, 2010. Such
registration statement at any given time, as amended to such time,
including any exhibits and all documents incorporated therein by
reference, and the documents otherwise deemed to be a part thereof or
included therein by the Securities Act and the Rules and Regulations, is
referred to herein as the "Registration
Statement". The base prospectus contained in the
Registration Statement at the time it became effective, with such
additions thereto and deletions therefrom as permitted by Rule 424(b) of
the Securities Act, filed by the Company with the Commission pursuant to
Rule 424(b)(3) of the Securities Act on May 7, 2010, is referred to herein
as the "U.S. Base
Prospectus". The term "U.S. Pricing Prospectus"
means the preliminary prospectus supplement (the "U.S. Preliminary
Prospectus
Supplement") relating to the Offering filed with the Commission
pursuant to Rule 424(b)(2) on June 2, 2010, together with the U.S. Base
Prospectus, including all documents incorporated therein by
reference. The term "U.S. Prospectus" means
the prospectus supplement (the "U.S. Prospectus
Supplement") relating to the Offering to be dated the date hereof
and filed with the Commission pursuant to Rule 424(b)(2), together with
the U.S. Base Prospectus, including all documents incorporated therein by
reference. No stop order suspending the effectiveness of the
Registration Statement has been issued under the Securities Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission and any
request on the part of the Commission for additional information has been
complied with.
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Any
"issuer free writing prospectus" (as defined in Rule 433 under the Securities
Act) relating to the Units is hereafter referred to as an "Issuer Free Writing
Prospectus"; and the U.S. Pricing Prospectus, as supplemented by any
Issuer Free Writing Prospectuses issued at or prior to the Applicable Time, and
the information listed in Schedule "C" hereto, taken together, are hereafter
referred to collectively as the "Pricing Disclosure
Package". Any reference herein to the U.S. Base Prospectus,
the U.S. Pricing Prospectus and the U.S. Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein as of the date of
filing thereof; and any reference herein to any "amendment" or "supplement" with
respect to any of the U.S. Base Prospectus, the U.S. Pricing Prospectus and the
U.S. Prospectus shall be deemed to refer to and include (i) the filing of any
document with the Commission incorporated or deemed to be incorporated therein
by reference after the date of filing of such U.S. Base Prospectus, U.S. Pricing
Prospectus or U.S. Prospectus and (ii) any such document so filed.
The
Company was not an "ineligible issuer" (as defined in Rule 405 under the
Securities Act) as of the eligibility determination date for purposes of Rules
164 and 433 under the Securities Act with respect to the Offering contemplated
hereby.
All
references in this Agreement to the Registration Statement, the U.S. Base
Prospectus, the U.S. Pricing Prospectus or the U.S. Prospectus, or any Issuer
Free Writing Prospectus, or any amendments or supplements to any of the
foregoing, shall be deemed to include any copy thereof filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval System
(EDGAR).
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(c)
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The
Canadian Base Prospectus and the Canadian Pricing Prospectus did, and the
Canadian Prospectus (and any further amendments or supplements thereto)
will, comply in all material respects with the applicable requirements of
Canadian Securities Laws; the Canadian Pricing Prospectus, as of the time
of filing thereof, did not, and the Canadian Prospectus (and any further
amendments or supplements thereto) will not, as of the time of filing
thereof and through the Closing Date, include any untrue statement of a
material fact or omit to state a material fact that is required to be
stated or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not false or misleading, and
the Canadian Pricing Prospectus, as of the time of filing thereof,
constituted, and the Canadian Prospectus (and any further amendments or
supplements thereto) will, as of the time of filing thereof and through
the Closing Date, constitute, full, true and plain disclosure of all
material facts relating to the Units and to the Company; provided,
however, that this representation and warranty shall not apply to any
information contained in or omitted from the Canadian Pricing Prospectus
or the Canadian Prospectus or any amendment thereof or supplement thereto
in reliance upon and in conformity with information furnished in writing
to the Company by or on behalf of the Agent specifically for use
therein. The parties hereto agree that such information
provided by or on behalf of the Agent consists solely of the material
referred to in Section 16 hereof.
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(d)
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The
Registration Statement complies, and the U.S. Prospectus and any further
amendments or supplements to the Registration Statement or the U.S.
Prospectus will comply, in all material respects with the applicable
provisions of the Securities Act and the Rules and Regulations, and do not
and will not, as of the applicable effective date as to each part of the
Registration Statement and as of the applicable filing date as to the U.S.
Prospectus and any amendment thereof or supplement thereto, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein (in light of the circumstances under which they were made, in the
case of the U.S. Prospectus) not misleading; provided, however, that this
representation and warranty shall not apply to any information contained
in or omitted from the Registration Statement or the U.S. Prospectus or
any amendment thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by or on
behalf of the Agent specifically for use therein. The parties
hereto agree that such information provided by or on behalf of the Agent
consists solely of the material referred to in Section 16
hereof.
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(e)
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No
order preventing or suspending the use of the U.S. Base Prospectus, the
U.S. Pricing Prospectus or any Issuer Free Writing Prospectus has been
issued by the Commission, and the U.S. Pricing Prospectus, at the time of
filing thereof, complied in all material respects with the applicable
provisions of the Securities Act and the Rules and Regulations, and did
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that this representation and
warranty shall not apply to any information contained in or omitted from
the U.S. Pricing Prospectus in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of the
Agent specifically for use therein. The parties hereto agree
that such information provided by or on behalf of the Agent consists
solely of the material referred to in Section 16
hereof.
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(f)
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For
purposes of this Agreement, the "Applicable Time" is 9:00 a.m. (Vancouver
time) on the date of this Agreement. The Pricing Disclosure
Package, as of the Applicable Time, did not, and from the Applicable Time
through the Closing Date, will not, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Each
Issuer Free Writing Prospectus complies in all material respects with the
applicable provisions of the Securities Act and the Rules and Regulations,
and does not include information that conflicts with the information
contained in the Registration Statement, the Pricing Prospectuses or the
Prospectuses, and any Issuer Free Writing Prospectus, as supplemented by
and taken together with the Pricing Disclosure Package as of the
Applicable Time, did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading. No representation and warranty
is made in this Section 1(f) with respect to any information contained in
or omitted from the Pricing Disclosure Package or any Issuer Free Writing
Prospectus in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of the Agent specifically for
use therein. The parties hereto agree that such information
provided by or on behalf of the Agent consists solely of the material
referred to in Section 16 hereof.
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(g)
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Each
document filed or to be filed with the Canadian Qualifying Authorities and
incorporated, or deemed to be incorporated, by reference in the Canadian
Prospectus complied, or will comply, when so filed in all material
respects with the requirements of Canadian Securities Laws, and none of
such documents contained, or will contain, at the time of its filing any
untrue statement of a material fact or omitted or will omit at the time of
its filing to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were or are made, not false or
misleading.
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(h)
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KPMG
LLP, who have audited the consolidated financial statements of the Company
and its subsidiaries that are included or incorporated by reference in the
Registration Statement, the Pricing Prospectuses and the Prospectuses, and
whose reports appear or are incorporated by reference in the Registration
Statement, the Pricing Prospectuses and the Prospectuses are independent
with respect to the Company as required by Canadian Securities Laws and
are independent public accountants as required by the Securities Act, the
United States Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
Rules and Regulations and the rules of the Public Company Accounting
Oversight Board.
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(i)
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Subsequent
to the respective dates as of which information is given in the
Registration Statement, the Pricing Prospectuses and the Prospectuses,
except as disclosed in the Pricing Prospectuses and the Prospectuses, (i)
the Company has not declared or paid any dividends, or made any other
distribution of any kind, on or in respect of its share capital, (ii)
there has not been any material change in the share capital or long-term
or short-term debt of the Company or any of its subsidiaries (each, a
"Subsidiary" and,
collectively, the "Subsidiaries"), (iii)
neither the Company nor any Subsidiary has sustained any material loss or
interference with its business or properties from fire, explosion, flood,
hurricane, accident or other calamity, whether or not covered by
insurance, or from any labour dispute or any legal or governmental
proceeding, and (iv) there has not been any material adverse change or any
development involving a prospective material adverse change, whether or
not arising from transactions in the ordinary course of business, in or
affecting the business, general affairs, management, condition (financial
or otherwise), results of operations, shareholders’ equity, properties or
prospects of the Company and the Subsidiaries, taken as a whole (a "Material Adverse
Change"). Since the date of the latest balance sheet
included, or incorporated by reference, in the Registration Statement, the
Pricing Prospectuses and the Prospectuses, neither the Company nor any
Subsidiary has incurred or undertaken any liabilities or obligations,
whether direct or indirect, liquidated or contingent, matured or
unmatured, or entered into any transactions, including any acquisition or
disposition of any business or asset, which are material to the Company
and the Subsidiaries, taken as a whole, except for liabilities,
obligations and transactions which are disclosed in the Pricing
Prospectuses and the Prospectuses.
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(j)
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Except
under laws of general application, no Subsidiary listed in Exhibit A
hereto (each, a "Material
Subsidiary" and, collectively, the "Material Subsidiaries")
is currently prohibited, directly or indirectly, from paying any dividends
to the Company, from making any other distribution on such Material
Subsidiary’s capital stock, from repaying to the Company any loans or
advances to such Material Subsidiary from the Company or from transferring
any of such Material Subsidiary’s property or assets to the Company or any
other Subsidiary of the Company.
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(k)
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The
Company has an authorized and outstanding capitalization as set forth in
the Pricing Prospectuses and the Prospectuses, and all of the issued and
outstanding share capital of the Company are fully paid and non-assessable
and have been duly and validly authorized and issued, in compliance with
all applicable Canadian, United States and other securities laws and not
in violation of or subject to any preemptive or similar right that
entitles any person to acquire from the Company or any Subsidiary any
common shares of the Company or other security of the Company or any
security convertible into, or exercisable or exchangeable for, common
shares of the Company or any other such security (any "Relevant Security"),
except for such rights as may have been fully satisfied or waived prior to
the effectiveness of the Registration Statement. All of the
issued share capital of or other ownership interests in each Material
Subsidiary have been duly and validly authorized and issued and are fully
paid and non-assessable and (except as otherwise set forth in the Pricing
Prospectuses and the Prospectuses) are owned directly or indirectly by the
Company free and clear of any lien, charge, mortgage, pledge, security
interest, claim, or other encumbrance of any kind whatsoever (any "Lien").
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(l)
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The
Company has full corporate capacity, power and authority to execute this
Agreement, the Warrant Indenture, the certificates representing the
Warrants and Agent's Warrants (as defined below) and to perform its
obligations set out herein and therein and this Agreement and the Warrant
Indenture are and the certificates representing the Warrants and Agent's
Warrants will be, on the Closing Date, duly authorized, executed and
delivered by the Company, and this Agreement and the Warrant Indenture are
and the certificates representing the Warrants and Agent's Warrants will
be, on the Closing Date, legal, valid and binding obligations of the
Company enforceable against the Company in accordance with their terms
subject to laws relating to creditors' rights generally and except as
rights to indemnity may be limited by applicable
law.
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(m)
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The
Offered Shares to be delivered on the Closing Date have been duly and
validly authorized, the Company will reserve or set aside sufficient
shares in its treasury to issue the Warrant Shares and the Agent's Shares
(as defined below) and, when issued and delivered in accordance with this
Agreement, the Warrant Indenture and the warrant certificates, as
applicable, will be duly and validly issued, fully paid and
non-assessable, will have been
issued in compliance with all applicable Canadian, United States and other
securities laws and will not have been issued in violation of or subject
to any preemptive or similar right that entitles any person to acquire any
Relevant Security from the Company.
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(n)
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The
Units, Offered Shares, the Warrants and the Agent's Warrants conform to
the descriptions thereof contained in the Registration Statement, the
Pricing Prospectuses and the Prospectuses. Except as disclosed
in the Pricing Prospectuses and the Prospectuses, the Company has no
outstanding warrants, options to purchase, or any preemptive rights or
other rights to subscribe for or to purchase, or any contracts or
commitments to issue or sell, any Relevant Security. Except as
disclosed in the Pricing Prospectuses and the Prospectuses, no holder of
any Relevant Security has any rights to require registration or
qualification under the Securities Act or the Canadian Securities Laws of
any Relevant Security in connection with the Offering, and any such rights
so disclosed have either been fully complied with by the Company or
effectively waived by the holders
thereof.
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(o)
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The
Material Subsidiaries are the only Subsidiaries that are "significant
subsidiaries" of the Company (within the meaning of the Securities Act) or
are otherwise material to the Company. The Company and each
Material Subsidiary has been duly organized and validly exists as a
corporation, partnership or limited liability company in good standing
under the laws of its jurisdiction of organization. The Company
and each Material Subsidiary is duly qualified to do business and is in
good standing as a foreign corporation, partnership or limited liability
company in each jurisdiction in which the character or location of its
properties (owned, leased or licensed) or the nature or conduct of its
business makes such qualification necessary, except for those failures to
be so qualified or in good standing which (individually and in the
aggregate) could not reasonably be expected to have a material adverse
effect on (i) the business, general affairs, management, condition
(financial or otherwise), results of operations, shareholders’ equity,
properties or prospects of the Company and the Subsidiaries, taken as a
whole; or (ii) the ability of the Company to consummate the Offering or
any other transaction contemplated by this Agreement, the Pricing
Prospectuses or the Prospectuses (a "Material Adverse
Effect").
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(p)
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The
Company and each Material Subsidiary has all requisite power and
authority, and all necessary material consents, approvals, authorizations,
orders, registrations, qualifications, licenses, filings and permits of,
with and from all judicial, regulatory and other legal or governmental
agencies and bodies and all third parties, Canadian, U.S. or foreign
(collectively, the "Consents"), to own,
lease and operate its properties and conduct its business as it is now
being conducted, in each case as disclosed in the Registration Statement,
the Pricing Prospectuses and the Prospectuses, and each such Consent is
valid and in full force and effect, except in each case as could not
reasonably be expected to have a Material Adverse
Effect. Neither the Company nor any Material Subsidiary has
received notice of any investigation or proceedings which, if decided adversely to the Company or any such
Material Subsidiary, could reasonably be expected to result
in, the revocation
of, or imposition of a materially burdensome
restriction on, any such
Consent.
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(q)
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There
are no reports or information that in accordance with the requirements of
the Canadian Securities Laws must be made publicly available in connection
with the Offering that have not been made publicly available as required;
there are no documents required to be filed as of the date hereof with the
Canadian Qualifying Authorities or with any other Canadian securities
regulatory authority in connection with the Offering that have not been
filed as required; the Company has not filed any confidential material
change reports or similar confidential report with any securities
regulatory authority that is still maintained on a confidential
basis.
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(r)
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The
completion of the Offering, the compliance by the Company with this
Agreement and the consummation of the transactions herein contemplated do
not and will not (i) conflict with or result in a breach or violation of
any of the terms and provisions of, or constitute a default (or an event
which with notice or lapse of time, or both, would constitute a default)
under, or result in the creation or imposition of any Lien upon any
property or assets of the Company or any Material Subsidiary pursuant to,
any indenture, mortgage, deed of trust, loan agreement or other agreement,
instrument, franchise, license or permit to which the Company or any
Material Subsidiary is a party or by which the Company or any Material
Subsidiary or their respective properties, operations or assets may be
bound or (ii) violate or conflict with any provision of the certificate or
articles of incorporation, by-laws, certificate of formation, limited
liability company agreement, partnership agreement or other organizational
documents of the Company or any Material Subsidiary, or (iii) violate or
conflict with any statute, law, rule, regulation, ordinance, directive,
judgment, decree or order of any judicial, regulatory or other legal or
governmental agency or body, Canadian, U.S. or other, except (in the case
of clauses (i) and (iii) above) as could not reasonably be expected to
have a Material Adverse Effect.
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(s)
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No
Consent of, with or from any judicial, regulatory or other legal or
governmental agency or body, or any third party, Canadian, U.S. or
foreign, is required for the execution, delivery and performance of this
Agreement or consummation of the transactions contemplated by this
Agreement, except the registration under the Securities Act of the Offered
Shares, Warrants and Warrant Shares, the qualification of the Offered
Shares, Warrants and Warrant Shares for distribution in the Canadian
Jurisdictions as contemplated by this Agreement, necessary approvals of
the TSX Venture Exchange Inc. (the "TSX.V"), NYSE Amex
Equities Exchange ("Amex") and any consents
as may be required under state or foreign securities or blue sky laws in
connection with the distribution of the Units, each of which has been
obtained and is in full force and effect (on a conditional basis, in the
case of the Consent of the TSX.V); except for the approval of the Amex,
which will be obtained in accordance with the terms and conditions of this
Agreement.
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(t)
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Except
as disclosed in the Registration Statement, the Pricing Prospectuses and
the Prospectuses, there is no judicial, regulatory, arbitral or other
legal or governmental proceeding or other litigation or arbitration, Canadian, United States or
foreign, pending to which the Company or any Subsidiary is a party
or of which any property, operations or assets of the Company or any
Subsidiary is the subject which, individually or in the aggregate, if
determined adversely to the Company or any Subsidiary, could reasonably be
expected to have a Material Adverse Effect; to the Company’s knowledge, no
such proceeding, litigation or arbitration is threatened or contemplated;
and the defence of all such proceedings, litigation and arbitration
against or involving the Company or any Subsidiary could not reasonably be
expected to have a Material Adverse
Effect.
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(u)
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The
consolidated financial statements, including the notes thereto, included
or incorporated by reference in the Registration Statement, the Pricing
Prospectuses and the Prospectuses present fairly, in all material
respects, the financial position as of the dates indicated and the cash
flows and results of operations for the periods specified of the Company
and its consolidated Subsidiaries; except as otherwise stated in the
Registration Statement, the Pricing Prospectuses and the Prospectuses,
said consolidated financial statements have been prepared in conformity
with generally accepted accounting principles in the United States applied
on a consistent basis throughout the periods involved. No other
financial statements or supporting schedules are required to be included
in the Registration Statement, the Pricing Prospectuses and the
Prospectuses by Canadian Securities Laws, the Securities Act, the Exchange
Act or the Rules and Regulations. The other financial and
statistical information included or incorporated by reference in the
Registration Statement, the Pricing Prospectuses and the Prospectuses
present fairly the information included therein and have been prepared on
a basis consistent with that of the financial statements that are included
or incorporated by reference in the Registration Statement, the Pricing
Prospectuses and the Prospectuses and the books and records of the
Company.
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(v)
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There
has not been any reportable event (within the meaning of National
Instrument 51-102 – Continuous Disclosure Obligations) between the Company
and its auditors.
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(w)
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The
common shares of the Company have been registered pursuant to Section
12(b) of the Exchange Act. The common shares of the Company are
listed on the TSX.V and on Amex, and the Company has taken no action
designed to, or likely to have the effect of, terminating the registration
of the common shares of the Company under the Exchange Act or de-listing
the common shares of the Company from the TSX.V or Amex, nor has the
Company received any notification that the Commission, the Canadian
Qualifying Authorities, the TSX.V or Amex is contemplating terminating
such registration or listing.
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(x)
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Except
as disclosed in the Pricing Prospectus and the Prospectuses, the Company
and its Material Subsidiaries maintain a system of internal accounting and
other controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets,
(iii) access to assets is permitted only in accordance with management’s
general or specific authorization, and (iv) the recorded accounting for
assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any
differences. Except as disclosed in the Pricing Prospectus and
the Prospectuses, the Company maintains a system of internal control over
financial reporting (as such term is defined in Rule 13a-15(f) under the
Exchange Act) that complies with the requirements of the Exchange Act and
has been designed by the Company’s principal executive officer and
principal financial officer, or under their supervision, to provide
reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in
accordance with United States generally accepted accounting
principles. Except as disclosed in the Pricing Prospectus and
the Prospectuses, the Company believes that the Company’s and its Material
Subsidiaries’ internal control over financial reporting is effective and
the Company and its Material Subsidiaries are not aware of any material
weakness in their internal control over financial
reporting.
|
- 8
-
|
(y)
|
Since
the date of the latest audited consolidated financial statements included
or incorporated by reference in the Pricing Prospectuses and the
Prospectuses there has been no change in the Company’s internal control
over financial reporting that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control over financial
reporting.
|
|
(z)
|
The
Company and its Subsidiaries maintain disclosure controls and procedures
(as such term is defined in the Exchange Act and Canadian Securities Laws)
that comply with the requirements of the Exchange Act and Canadian
Securities Laws; such disclosure controls and procedures have been
designed to ensure that material information relating to the Company and
its Subsidiaries is made known to the Company’s principal executive
officer and principal financial officer by others within those
entities. Such disclosure controls and procedures are
effective.
|
|
(aa)
|
There
is and has been no failure on the part of the Company or any of its
directors or officers, in their capacities as such, to comply with any
provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith, including, without limitation,
Section 402 related to loans and Sections 302 and 906 related to
certifications.
|
|
(bb)
|
Neither
the Company nor, to the Company’s knowledge, any of its affiliates (within
the meaning of Rule 144 under the Securities Act) has taken, directly or
indirectly, any action which constitutes or is designed to cause or result
in, or which could reasonably be expected to constitute, cause or result
in, the stabilization or manipulation of the price of any security to
facilitate the sale or resale of the
Units.
|
|
(cc)
|
Neither
the Company nor, to the Company’s knowledge, any of its affiliates (within
the meaning of Rule 144 under the Securities Act) has, prior to the date
hereof, made any offer or sale of any securities which could be
"integrated" (within the meaning of the Securities Act and the Rules and
Regulations) with the offer and sale of the
Units.
|
|
(dd)
|
The
statements set forth (i) in the Base Prospectuses under the captions
"Description of Share Capital" and "Risk Factors – Risks Related to
Midway's Securities – We are a foreign corporation and have
officers and directors resident outside the United States…."; (ii) in the
Canadian Prospectus Supplement and the U.S. Prospectus Supplement under
the captions "Canadian Federal Income Tax Considerations" and "Eligibility
for Investment"; and (iv) in the Registration Statement under "Part II –
Indemnification of Directors and Officers", insofar as such statements
summarize legal matters, agreements, documents or proceedings discussed
therein, are, in all material respects, accurate, complete and fair
summaries of such legal matters, agreements, documents or
proceedings.
|
|
(ee)
|
There
is no franchise, contract or other document of a character required to be
described in the Registration Statement, the Pricing Prospectuses or the
Prospectuses, or to be filed as an exhibit thereto, which is not described
or filed as required; insofar as such descriptions summarize legal
matters, agreements, documents or proceedings discussed therein, such
descriptions are accurate and fair summaries of such legal matters,
agreements, documents or
proceedings.
|
- 9
-
|
(ff)
|
The Company is subject to the reporting
requirements of Section 13 of the Exchange Act and files periodic reports
with the Commission. All conditions for use of Form S-3
to register the Units under the Securities Act have been
satisfied. The documents incorporated or deemed to be
incorporated by reference in the Pricing Prospectuses and the
Prospectuses, at the time they were or hereafter are filed with the
Commission or the Canadian Qualifying Authorities, complied and will
comply in all material respects with the requirements of the Securities
Act, the Exchange Act, the Rules and Regulations and Canadian Securities
Laws and, when read together with the other information in the Pricing
Prospectuses and the Prospectuses, as applicable, do not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
|
|
(gg)
|
Except
as disclosed in the Pricing Prospectuses and the Prospectuses, the Company
is not and, at all times up to and including consummation of the
transactions contemplated by this Agreement, and after giving effect to
application of the net proceeds of the Offering as described in the
Pricing Prospectuses and the Prospectuses, will not be, required to
register as an "investment company" under the Investment Company Act of
1940, as amended, and is not and will not be an entity "controlled" by an
"investment company" within the meaning of such
act.
|
|
(hh)
|
Except
as disclosed in the Pricing Prospectuses and the Prospectuses, there are
no contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or the
Agent for a brokerage commission, finder’s fee or other like payment in
connection with the transactions contemplated by this Agreement or, to the
Company’s knowledge, any arrangements, agreements, understandings,
payments or issuance with respect to the Company or any of its officers,
directors, shareholders, partners, employees, Subsidiaries or affiliates
that may affect the Agent's
compensation.
|
|
(ii)
|
Neither
the Company nor any of its Subsidiaries (i) has any material lending or
other relationship with any bank or lending affiliate of the Agent and
(ii) intends to use any of the proceeds from the Offering hereunder to
repay any outstanding debt owed to any affiliate of the
Agent.
|
|
(jj)
|
Except
as disclosed in the Pricing Prospectuses and the Prospectuses, (i) the
Company and each Material Subsidiary owns or leases all such properties as
are necessary to the conduct of its business as presently operated and as
proposed to be operated as described in the Pricing Prospectuses and the
Prospectuses; (ii) to the knowledge of the Company, it and the Material
Subsidiaries have good and marketable title to all real property and good
and marketable title to all personal property owned by them, in each case
free and clear of any and all Liens except such as are described in the
Pricing Prospectuses and the Prospectuses or such as do not (individually
or in the aggregate) materially affect the value of such property or
materially interfere with the use made or proposed to be made of such
property by the Company and the Material Subsidiaries; and any real
property and buildings held under lease or sublease by the Company and the
Material Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material to, and do not
materially interfere with, the use made and proposed to be made of such
property and buildings by the Company and the Material Subsidiaries; and
(iii) neither the Company nor any Material Subsidiary has received any
notice of any claim adverse to its ownership of any real or personal
property or of any claim against the continued possession of any real
property, whether owned or held under lease or sublease by the Company or
any Material Subsidiary, except as could not reasonably be expected to
have a Material Adverse Effect.
|
- 10
-
|
(kk)
|
All
interests in material mining claims, concessions, exploitation or
extraction rights or similar rights ("Mining Claims") that are
held by the Company or any of its Material Subsidiaries are in good
standing, are valid and enforceable, are free and clear of any material
liens or charges, and no material royalty is payable in respect of any of
them, except as disclosed in the Pricing Prospectuses and the
Prospectuses. Except as disclosed in the Pricing Prospectuses
and the Prospectuses, no other material property rights are necessary for
the conduct of the Company’s business as described therein, and there are
no material restrictions on the ability of the Company and its Material
Subsidiaries to use, transfer or otherwise exploit any such property
rights except as required by applicable law. Except as
disclosed in the Pricing Prospectuses and the Prospectuses, the Mining
Claims held by the Company or its Material Subsidiaries cover the
properties required by the Company for the purposes described
therein.
|
|
(ll)
|
Except
as disclosed in the Pricing Prospectuses and the Prospectuses, and except
for estimates of mineralized material prepared in accordance with Guide 7
of the Commission and contained in the Company’s filings with the
Commission, the information relating to estimates by the Company of the
proven and probable reserves and the measured, indicated and inferred
resources associated with its mineral property projects contained in the
Pricing Prospectuses and the Prospectuses has been prepared in all
material respects in accordance with National Instrument 43-101- Standards
of Disclosure for Mineral Projects. The Company believes that
all of the assumptions underlying such reserve and resource estimates are
reasonable and appropriate.
|
|
(mm)
|
The Company and the Material Subsidiaries maintain insurance in such amounts
and covering such risks as the Company reasonably considers adequate for
the conduct of its business and the value of its properties and as is
customary for companies engaged in similar businesses in similar
industries, all of which insurance is in full force and effect,
except where the failure to maintain such insurance could not reasonably
be expected to have a Material Adverse Effect. There are no
material claims by the Company or any Material Subsidiary under any such
policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights
clause. The Company reasonably believes that it will be able to
renew its existing insurance as and when such coverage expires or will be
able to obtain replacement insurance adequate for the conduct of the
business and the value of its properties at a cost that would not have a
Material Adverse Effect.
|
|
(nn)
|
The
Company and each Subsidiary has accurately prepared and timely filed all
U.S., Canadian and foreign tax returns that are required to be filed by
it, or have requested extensions for the filing thereof, and has paid or
made provision for the payment of all taxes, assessments, governmental or
other similar charges, including without limitation, all sales and use
taxes and all taxes which the Company or any Subsidiary is obligated to
withhold from amounts owing to employees, creditors and third parties,
with respect to the periods covered by such tax returns (whether or not
such amounts are shown as due on any tax return), except in any such case
as could not reasonably be expected to have a Material Adverse
Effect. No deficiency assessment with respect to a proposed
adjustment of the Company’s or any Subsidiary’s Canadian federal and
provincial, U.S. federal and state, local or foreign taxes is pending or,
to the best of the Company’s knowledge, threatened. The
accruals and reserves on the books and records of the Company and the
Subsidiaries in respect of tax liabilities for any taxable period not
finally determined are adequate to meet any assessments and related
liabilities for any such period and, since the date of the most recent
audited consolidated financial statements, the Company and the
Subsidiaries have not incurred any liability for taxes other than in the
ordinary course of its business. There is no tax lien, whether imposed by
any U.S., Canadian or other taxing authority, outstanding against the
assets, properties or business of the Company or any
Subsidiary.
|
|
(oo)
|
There
are no transfer taxes or other similar fees or charges under Canadian or
U.S. federal law or the laws of any state, province or any political
subdivision thereof, required to be paid in connection with the execution
and delivery of this Agreement or the issuance by the Company or sale by
the Company of the Units.
|
- 11
-
|
(pp)
|
No
stamp duty, registration or documentary taxes, duties or similar charges
are payable under the federal laws of Canada or the laws of any province
in connection with the creation, issuance, sale and delivery of the Units
or the authorization, execution, delivery and performance of this
Agreement.
|
|
(qq)
|
Except
as disclosed in the Pricing Prospectuses and the Prospectuses, no dispute
between the Company and any local, native or indigenous group exists or is
threatened or imminent with respect to any of the Company’s properties or
exploration activities that could reasonably be expected to have a
Material Adverse Effect.
|
|
(rr)
|
No
labour disturbance by the employees of the Company or any Material
Subsidiary exists or, to the best of the Company’s knowledge, is imminent
and the Company is not aware of any existing or imminent labour
disturbances by the employees of any of its or any Material Subsidiary’s
principal suppliers, manufacturers, customers or contractors, which, in
either case (individually or in the aggregate), could reasonably be
expected to have a Material Adverse
Effect.
|
|
(ss)
|
There
has been no storage, generation, transportation, handling, use, treatment,
disposal, discharge, emission, contamination, release or other activity
involving any kind of hazardous, toxic or other wastes, pollutants,
contaminants, petroleum products or other hazardous or toxic substances,
chemicals or materials ("Hazardous Substances")
by, due to, on behalf of, or caused by the Company or any Subsidiary (or,
to the Company’s knowledge, any other entity for whose acts or omissions
the Company is or may be liable) upon any property now or previously
owned, operated, used or leased by the Company or any Subsidiary, or upon
any other property, which would be a violation of or give rise to any
liability under any applicable law, rule, regulation, order, judgment,
decree or permit, common law provision or other legally binding standard
relating to pollution or protection of human health and the environment
("Environmental
Law"), except for violations and liabilities which, individually or
in the aggregate, could not reasonably be expected to have a Material
Adverse Effect. There has been no disposal, discharge, emission
contamination or other release of any kind at, onto or from any such
property or into the environment surrounding any such property of any
Hazardous Substances with respect to which the Company or any Subsidiary
has knowledge, except as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. There
is no pending or, to the best of the Company’s knowledge, threatened
administrative, regulatory or judicial action, claim or notice of
noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company or any Subsidiary. No
property of the Company or any Subsidiary is subject to any Lien under any
Environmental Law. Except as disclosed in the Pricing
Prospectuses and the Prospectuses, neither the Company nor any Subsidiary
is subject to any order, decree, agreement or other individualized legal
requirement related to any Environmental Law, which, in any case
(individually or in the aggregate), could reasonably be expected to have a
Material Adverse Effect.
|
|
(tt)
|
In
the ordinary course of its business, the Company periodically reviews the
effect of Environmental Laws on the business, operations and properties of
the Company and its Subsidiaries, in the course of which it identifies and
evaluates associated costs and liabilities (including, without limitation,
any capital or operating expenditures required for clean-up, closure or
remediation of properties or compliance with Environmental Laws, or any
permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties). On
the basis of such review, the Company has reasonably concluded that such
associated costs and liabilities would not, individually or in the
aggregate, have a Material Adverse
Effect.
|
- 12
-
|
(uu)
|
None
of the Company, any Subsidiary or, to the Company’s knowledge, any of its
employees or agents, has at any time during the last five years (i) made
any unlawful contribution to any candidate for non-United States office,
or failed to disclose fully any such contribution in violation of law, or
(ii) made any payment to any federal or state governmental officer or
official, or other person charged with similar public or quasi-public
duties, other than payments required or permitted by the laws of the
United States of any jurisdiction thereof. The operations of
the Company and each Subsidiary are and have been conducted at all times
in compliance with applicable financial record-keeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the money laundering statutes of all applicable
jurisdictions, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines issued, administered or enforced
by any governmental agency (collectively, the "Money Laundering Laws")
and no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or any
Subsidiary with respect to the Money Laundering Laws is pending or, to the
best knowledge of the Company, threatened. Neither the Company
nor any Subsidiary nor, to the knowledge of the Company, any director,
officer, agent, employee or affiliate of the Company or any Subsidiary is
currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department ("OFAC"); and the Company
will not directly or indirectly use the proceeds of the Offering, or lend,
contribute or otherwise make available such proceeds to any Subsidiary,
joint venture partner or other person or entity, for the purpose of
financing the activities of any person currently subject to any U.S.
sanctions administered by OFAC.
|
|
(vv)
|
Neither
the Company nor any Material Subsidiary (i) is in violation of its
certificate or articles of incorporation, by-laws, certificate of
formation, limited liability company agreement, partnership agreement or
other organizational documents, (ii) is in default under, and no event has
occurred which, with notice or lapse of time or both, would constitute a
default under or result in the creation or imposition of any Lien upon any
property or assets of the Company or any Material Subsidiary pursuant to,
any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which it is a party or by which it is bound or to which
any of its property or assets is subject, or (iii) is in violation of any
statute, law, rule, regulation, ordinance, directive, judgment, decree or
order of any judicial, regulatory or other legal or governmental agency or
body, Canadian, U.S. or foreign, except in any such case for violations or
defaults that could not (individually or in the aggregate) reasonably be
expected to have a Material Adverse
Effect.
|
|
(ww)
|
The Company has complied with the
requirements of Rule 433 under the Securities Act with respect to each
Issuer Free Writing Prospectus including, without limitation, all
prospectus delivery, filing, record retention and legending requirements
applicable to any such Issuer Free Writing Prospectus. The
Company has not (i) distributed any offering material in connection with
the Offering other than the Pricing Prospectuses, the Prospectuses and any
Issuer Free Writing Prospectus set forth on Schedule "C" hereto, or (ii)
filed, referred to, approved, used or authorized the use of any "free
writing prospectus" as defined in Rule 405 under the Securities Act with
respect to the Offering, except for any Issuer Free Writing Prospectus set
forth in Schedule "C" hereto and any electronic
road show previously approved by the
Agent.
|
|
(xx)
|
The
Company is a reporting issuer under the securities laws of the Canadian
Qualifying Authorities and is not on the list of defaulting reporting
issuers maintained by such Canadian Qualifying
Authorities.
|
|
(yy)
|
Computershare
Investor Services Inc. at its principal offices in the city of Vancouver,
British Columbia is the duly appointed registrar and transfer agent of the
Company with respect to its common shares and Computershare Trust Company
of Canada is the duly appointed warrant agent with respect to the Warrants
under the Warrant Indenture.
|
- 13
-
|
(zz)
|
The
minute books and corporate records of the Company and its Material
Subsidiaries are true and correct in all material respects and contain all
minutes of all meetings and all resolutions of the directors (and any
committees of such directors) and shareholders of the Company and its
Material Subsidiaries as at the date hereof and at the Closing Date will
contain the minutes of all meetings and all resolutions of the directors
(and any committees of such directors) and shareholders of the Company and
its Material Subsidiaries.
|
|
(aaa)
|
All
of the information provided to the Agent or to counsel for the Agent by
the Company and, to the best of its knowledge, by its officers and
directors and the holders of greater than 5% of the Company’s common
shares in connection with letters, filings or other supplemental
information provided to the Financial Industry Regulatory Authority
("FINRA") pursuant
to FINRA Corporate Financing Rule 5110, is to the best of the Company’s
knowledge true, complete and correct. On June 10, 2010, the
Agent withdrew its FINRA submission under File ID:
2010-0602-001.
|
|
(bbb)
|
Each
stock option granted under any stock option plan of the Company or any
Subsidiary (each, a "Stock Plan") was granted
with a per share exercise price no less than the fair market value per
common share on the grant date of such option, and no such grant involved
any "back-dating," "forward-dating" or similar practice with respect to
the effective date of such grant; each such option (i) was granted in
compliance with applicable law and with the applicable Stock Plan, (ii)
was duly approved by the board of directors (or a duly authorized
committee thereof) of the Company or such Subsidiary, as applicable, and
(iii) has been properly accounted for in the Company’s financial
statements and disclosed, to the extent required, in the Company’s filings
or submissions with the Commission and the Canadian Qualifying
Authorities.
|
Any
certificate signed by or on behalf of the Company and delivered to the Agent or
to its counsel shall be deemed to be a representation and warranty by the
Company to the Agent as to the matters covered thereby.
|
2.
|
Representations and
Warranties of the Agent.
|
The Agent
represents and warrants to, and agrees with, the Company that:
|
(a)
|
the
Agent is, and will remain so, until completion of the Offering,
appropriately registered under applicable Canadian Securities Laws and
policies of the TSX.V so as to permit it to lawfully fulfil its
obligations hereunder;
|
|
(b)
|
the
Agent:
|
|
(i)
|
(A) will not offer, and will use its commercially
reasonable efforts to ensure that no member of the selling group offers,
the Units to any person located in the United States or to a U.S. person
as defined under United States federal securities laws; and (B) will not
share any of the compensation the Agent receives under section 4 hereto,
including the cash fee and Agent’s Warrants with any member of
FINRA; and
|
|
|
(ii)
|
has only communicated (or caused to be
communicated) and will only communicate (or cause to be communicated) in
or into the United Kingdom an invitation or inducement to engage in
investment activity (within the meaning of section 21 of the Financial
Services and Markets Act 2000 (as amended) ("FSMA") in connection with the issue and sale of the
Units circumstances in which it may do so without breach of section 21(1)
of the FSMA;
|
- 14
-
|
|
(iii)
|
has only offered and will only
offer the Units (or cause them to be offered) to the public in the United
Kingdom (within the meaning of section 102B of the FMSA) in circumstances
in which, pursuant to section 86 of the FSMA, it may do so without an
approved prospectus within the meaning of section 85 of the FSMA having
first been made available and, in particular, the Agent has not offered
(or caused to be offered) and will not offer (or cause to be offered) the
Units to more than 99 persons other than "qualified investors" (as defined
in section 86(7) of the FSMA); and
|
|
(c)
|
the
Agent has full corporate capacity, power and authority to execute this
Agreement and to perform its obligations set out herein and this Agreement
is a legal, valid and binding obligation of the Agent enforceable against
the Agent in accordance with their terms subject to laws relating to
creditors' rights generally.
|
For the purposes of calculating the number of persons to
whom an offer is made for the purposes of Section 2(b)(iii), an offer made to a
person who not acting as principal is considered to be made to all principals
such person.
The
representations and warranties of the Agent contained in this Agreement shall be
true as of the Closing Date as though they were made at the time of the closing
of the Offering and they shall survive the completion of the transactions
contemplated under this Agreement.
|
3.
|
Purchase, Sale and
Delivery of the Securities.
|
|
(a)
|
The
Company hereby appoints the Agent as its sole and exclusive agent for the
purpose of selling, in accordance with the terms and conditions hereof,
the Units. The Agent hereby accepts such agency and agrees to
use its best efforts to sell the Units on said terms and conditions. The
appointment of the Agent hereunder shall terminate upon the Closing Date
unless earlier terminated pursuant to Section 12 hereof. The
Agent represents, warrants and agrees that it shall comply with all
Canadian Securities Laws, the policies of the TSX.V, and all applicable
laws of any other jurisdiction in which it offers or from which it
solicits offers to purchase Units in connection with the
Offering.
|
|
(b)
|
On
the basis of the representation, warranties, covenants and agreements
contained herein, but subject to the terms and conditions herein set
forth, the Company agrees to issue and to sell the Units to the persons
identified by the Agent at the Offer Price. It is understood
that in no event shall the Agent be obligated to purchase any Units. The
Offering is strictly a "best efforts" offering. All Units to be
offered and sold in the Offering shall be issued and sold through the
Agent, as agent for the Company, and the Company will not sell or agree to
sell any of the Units otherwise than through the Agent. In the event the
Company or any of its executive officers is contacted directly or
indirectly by prospective purchasers of the Units, the Company will
promptly forward the names of such prospective purchasers to the
Agent.
|
|
(c)
|
Payment
of the purchase price for and delivery of certificates for the Offered
Shares and Warrants comprising the Units shall be made at the offices of
Stikeman Elliott LLP, or at such other place as shall be agreed upon by
the Agent and the Company, at 6:00 a.m. (Vancouver time) on June 16, 2010,
or such other time and date as the Agent and the Company may agree upon in
writing (such time and date of payment and delivery being herein called
the "Closing
Date"). Payment in respect of the purchase price for the
Units sold by the Agent shall be denominated in Canadian dollars, and
shall be made to the Company by wire transfers of immediately available
funds to a bank account designated by the Company, against delivery to the
Agent of certificates for the Offered Shares and
Warrants.
|
- 15
-
|
(d)
|
Certificates
for the Offered Shares and Warrants shall be in such denominations and
registered in such names as the Agent may request in writing at least two
business days before the Closing Date. The Company will permit
the Agent to examine such certificates for delivery at least one full
business day prior to the Closing Date. At the option of the
Agent, delivery of certificates for the Offered Shares may be made to
Agent through the facilities of CDS Clearing and Depositary Services Inc.
for the respective accounts of the
Agent.
|
|
(e)
|
At
the Closing Date the Company shall contemporaneously pay to the Agent the
fee referred to in Section 4 of this
Agreement.
|
|
(f)
|
The
Company acknowledges and agrees that (i) the terms of this Agreement and
the Offering (including the price of the Units and commission with respect
to the Offering) were negotiated at arm’s length between sophisticated
parties represented by counsel; (ii) the Agent's obligations to the
Company in respect of the Offering are set forth in this Agreement in
their entirety and (iii) it has obtained such legal, tax, accounting and
other advice as it deems appropriate with respect to this Agreement and
the transactions contemplated hereby and any other activities undertaken
in connection therewith, and it is not relying on the Agent with respect
to any such matters.
|
|
4.
|
Compensation of the
Agent.
|
In
consideration for its services hereunder, the Company agrees to pay to the Agent
at the Closing Date:
|
(a)
|
A
fee equal to the amount of $0.042 (7%) per Unit sold in the
Offering.
|
|
(b)
|
Compensation
warrants (the "Agent's
Warrants") entitling the Agent to purchase that number of common
shares of the Company equal to 7% of the aggregate number of Units sold in
the Offering.
|
Each
Agent's Warrant will be non-transferrable and exercisable for one common share
of the Company (an "Agent's
Share") at price of $0.80 per share for a period of 24 months following
the Closing Date. Certificates for the Agent's Warrants shall be in
such denominations and registered in such names as the Agent may request in
writing.
- 16
-
|
5.
|
Payment of
Expenses.
|
Whether
or not the transactions contemplated by this Agreement, the Registration
Statement and the Prospectuses are consummated or this Agreement is terminated,
the Company hereby agrees to pay all costs and expenses incident to the
performance of its obligations hereunder, including (except as expressly stated
below in respect of the fees and disbursements of the Agent’s legal counsel) the
following: (i) all expenses in connection with the preparation, printing and
filing of the Registration Statement, the Base Prospectuses, the Pricing
Prospectuses, the Prospectuses, any Issuer Free Writing Prospectus and any and
all amendments and supplements thereto and the mailing and delivering of copies
thereof to the Agent; (ii) the fees, disbursements and expenses of the Company’s
counsel and accountants in connection with the qualification of the Units under
Canadian Securities Laws, the registration of the Units under the Securities Act
and the Offering; (iii) the cost of producing this Agreement, blue sky survey,
closing documents and other instruments, agreements or documents (including any
compilations thereof) in connection with the Offering; (iv) all expenses in
connection with the qualification of the Securities for offering and sale under
United States state securities, or "blue sky", laws as provided in Section 6(f)
hereof, including the reasonable fees and disbursements of counsel for the Agent
in connection with such qualification and in connection with any blue sky
survey; (v) the reasonable fees and disbursements of counsel for the Agent and
the Company, as applicable (vi) all fees and expenses in connection with listing
the Offered Shares, Warrant Shares and Agent's Shares on the TSX.V and Amex;
(vii) all travel expenses of the Company’s officers and employees and any other
expense of the Company incurred in connection with attending or hosting meetings
with prospective purchasers of the Units; and (viii) any transfer taxes incurred
in connection with this Agreement or the Offering. The Company also
will pay or cause to be paid: (a) the cost of preparing certificates
representing the Offered Shares, Warrants, Warrant Shares, Agent's Warrants and
Agent's Shares; (b) the cost and charges of any transfer agent or registrar for
the Offered Shares; (c) the cost and charges of any warrant agent with respect
to the Warrants; (d) the reasonable costs and expenses of the Agent, including
the reasonable fees and disbursements of their counsel, any experts or
consultants retained by them and other out of pocket expenses incurred by them
in connection with the transactions contemplated by this Agreement, up to an
aggregate of $30,000, provided that such fees and expenses were incurred prior
to termination of this Agreement; and (e) all other reasonable costs and
expenses incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section 5.
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6.
|
Covenants of the
Company.
|
In
addition to the other covenants and agreements of the Company contained herein,
the Company further covenants and agrees with the Agent that:
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(a)
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The
Company will comply with the Shelf Procedures and the general instructions
of Form S-3 and Rule 424 under the Securities Act. Prior to the
termination of the Offering, the Company will not file any amendment to
the Registration Statement or supplement or amendment to the Prospectuses
unless the Company has furnished a copy to the Agent and its legal counsel
for their review prior to filing and will not file any such proposed
amendment or supplement to which the Agent reasonably
objects. The Company will cause the Prospectuses, properly
completed, and any supplement thereto to be filed, each in a form approved
by the Agent with the Canadian Qualifying Authorities in accordance with
the Shelf Procedures (in the case of the Canadian Prospectus) and with the
Commission pursuant to Rule 424 under the Securities Act (in the case
of the U.S. Prospectus) within the time period prescribed and will provide
evidence satisfactory to the Agent of such timely filings. The Company
will promptly advise the Agent (1) when the U.S. Prospectus and
any supplement thereto shall have been filed with the Commission
pursuant to Rule 424 under the Securities Act, (2) when the Canadian
Prospectus shall have been filed with the Canadian Qualifying Authorities
pursuant to the Shelf Procedures, (3) when, prior to termination of the
Offering, any amendment to the Registration Statement or the Canadian
Prospectus shall have been filed or become effective or a Decision
Document in respect of any such amendment has been issued, as the case may
be, (4) of any request by the Canadian Qualifying Authorities or the
Commission for any amendment of or supplement to the Canadian Prospectus,
the Registration Statement or the U.S. Prospectus, as applicable, or for
any additional information, (5) of the Company’s intention to file, or
prepare any supplement or amendment to, the Registration Statement, the
Prospectuses or any Issuer Free Writing Prospectus, (6) of the time when
any amendment to the Canadian Prospectus has been filed with or receipted
by the Reviewing Authority, or of the filing with or mailing or the
delivery to the Commission for filing of any amendment of or supplement to
the Registration Statement or the U.S. Prospectus, (7) of the issuance by
the Canadian Qualifying Authorities or the Commission of any cease trade
order or any stop order suspending the effectiveness of the Canadian
Prospectus or the Registration Statement, as applicable, or any
post-effective amendment thereto, or suspending the use of any
Prospectuses or any Issuer Free Writing Prospectus or, in each case, of
the initiation or threatening of any proceedings therefor, (8) of the
receipt of any comments or communications from the Canadian Qualifying
Authorities, the Commission or any other regulatory authority relating to
the Prospectuses, the Registration Statement, or the listing of the
Offered Shares and Warrant Shares on the TSX.V or Amex, and (9) of the
receipt by the Company of any notification with respect to the suspension
of the qualification of the Units for sale in any jurisdiction or the
initiation or threatening of any proceeding for that
purpose. If the Canadian Qualifying Authorities or the
Commission shall propose or enter a cease trade order or a stop order at
any time, the Company will use its reasonable best efforts to prevent the
issuance of any such cease trade order or stop order and, if issued, to
obtain the lifting of such order as soon as
possible.
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(b)
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The
Company will prepare and file with the Canadian Qualifying Authorities,
promptly after the date of this Agreement, and in any event no later than
2:00 p.m. (Vancouver time) on the date of this Agreement, and in
conformity in all material respects with applicable Canadian Securities
Laws, the Canadian Prospectus.
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(c)
|
The
Company will prepare and file with the Commission, promptly after the date
of this Agreement, and in any event no later than 2:00 p.m. (Vancouver
time) on the date of this Agreement, the U.S.
Prospectus.
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(d)
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If
at any time when a prospectus relating to the Units (or, in lieu thereof,
the notice referred to in Rule 173(a) under the Securities Act) is
required to be delivered under the Securities Act, any event shall have
occurred as a result of which the Pricing Disclosure Package (prior to the
availability of the U.S. Prospectus) or the U.S. Prospectus as then
amended or supplemented would, in the judgment of the Agent or the
Company, include an untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances existing at the time of
delivery of such Pricing Disclosure Package or U.S. Prospectus (or, in
lieu thereof, the notice referred to in Rule 173(a) under the Securities
Act) to the purchaser, not misleading, or if to comply with the Securities
Act, the Exchange Act or the Rules and Regulations it shall be necessary
at any time to amend or supplement the Pricing Disclosure Package, the
U.S. Prospectus or the Registration Statement, or to file any document
incorporated by reference in the Registration Statement or the U.S.
Prospectus or in any amendment thereof or supplement thereto, the Company
will notify the Agent promptly and prepare and file with the Canadian
Qualifying Authorities and/or the Commission an appropriate amendment,
supplement or document (in form and substance satisfactory to the Agent)
that will correct such statement or omission or effect such compliance,
and will use its best efforts to have any amendment to the Registration
Statement declared effective as soon as
possible.
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(e)
|
The
Company will not, without the prior consent of the Agent, (i) make any
offer relating to the Units that would constitute a "free writing
prospectus" as defined in Rule 405 under the Securities Act and any electronic
road show previously approved by the Agent, or (ii) file, refer to,
approve, use or authorize the use of any "free writing prospectus" as
defined in Rule 405 under the Securities Act with respect to the
Offering. If at any time any event shall have occurred as a
result of which any Issuer Free Writing Prospectus as then amended or
supplemented would, in the judgment of the Agent or the Company, conflict
with the information in the Registration Statement, the Pricing
Prospectuses or the Prospectuses as then amended or supplemented or would,
in the judgment of the Agent or the Company, include an untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances existing at the time of delivery to the purchaser, not
misleading, or if to comply with the Securities Act or the Rules and
Regulations it shall be necessary at any time to amend or supplement any
Issuer Free Writing Prospectus, the Company will notify the Agent promptly
and, if requested by the Agent, prepare and furnish without charge to the
Agent an appropriate amendment or supplement (in form and substance
satisfactory to the Agent) that will correct such statement, omission or
conflict or effect such compliance.
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(f)
|
The
Company has complied and will comply in all material respects with the
requirements of Rule 433 with respect to each Issuer Free Writing
Prospectus including, without limitation, all prospectus delivery, filing,
record retention and legending requirements applicable to each such Issuer
Free Writing Prospectus.
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|
(g)
|
The
Company will promptly deliver to the Agent conformed copies of the
Canadian Base Prospectus, the Canadian Pricing Prospectus and the Canadian
Prospectus, signed and certified as required by Canadian Securities Laws
in the Canadian Jurisdictions, a copy of any other document required to be
filed by the Company in compliance with Canadian Securities Laws in
connection with the Offering, a conformed copy of the Registration
Statement, as initially filed and all amendments thereto, including all
consents and exhibits filed therewith. The Company will
promptly deliver to the Agent such number of copies of the Pricing
Prospectuses, Prospectuses and the Registration Statement, all amendments
of and supplements to such documents, if any, as the Agent may reasonably
request. Prior to 9:00 a.m. (Vancouver time) on the business
day next succeeding the date of this Agreement and from time to time
thereafter, the Company will furnish the Agent with copies of the Final
Prospectuses in Vancouver in such quantities as the Agent may reasonably
request.
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|
(h)
|
The
Company will make generally available to its security holders as soon as
practicable an earnings statement of the Company (which need not be
audited) which will satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158
thereunder.
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|
(i)
|
On
the Closing Date, the Company will use its best efforts to concurrently
close an offering of up to 1,666,666 units (each unit having the same
terms and conditions as the Units) to one or more persons located in the
United States for gross proceeds of up to $999,999.60 (the "US
Offering").
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|
(j)
|
Except
for the US Offering, during a period of 60 days from the Closing Date, the
Company will not, without the prior written consent of the Agent (i)
directly or indirectly, offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase or otherwise transfer or
dispose of any common shares or any securities convertible into or
exercisable or exchangeable for common shares or file any registration
statement under the Securities Act with respect to any of the foregoing,
(ii) enter into any swap or any other agreement or in respect of the
foregoing, any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequence of ownership of the common shares,
whether any such swap or transaction described in clause (i) or (ii) above
is to be settled by delivery of common shares or such other securities, in
cash or otherwise, or (iii) publicly announce an intention to do any of
the foregoing. The foregoing sentence shall not apply to (A) any common
shares issuable upon exercise of the warrants or other derivative
securities of the Company outstanding on the date hereof, (B) the Offered
Shares, Warrant and Agent’s Warrants to be issued pursuant to or in
connection with the Offering, the Warrant Shares issuable pursuant to the
exercise of the Warrants or the Agent's Shares issuable pursuant to the
exercise of the Agent's Warrants, (C) securities issuable pursuant to the
US Offering; (D) any common shares issued or options to purchase common
shares granted pursuant to existing stock option plans of the Company
referred to in the U.S. Prospectus and the Canadian Prospectus; and (E)
any common shares representing up to 10% of the outstanding common stock
of the Company as of the date hereof in connection with the acquisition of
any business, property or asset that is consistent with the Company's
business as presently conducted and as described in the
Prospectuses.
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(k)
|
The
Company will use its commercially reasonable efforts to effect and
maintain the listing of its common shares (or, if the corporation enters
into an amalgamation, arrangement or merger of the corporation with or
into any other corporation or other entity which effects a change of the
common shares of the Company into other shares or an exchange of the
common shares of the Company for other securities (including securities of
another entity), such securities) on the TSX.V and Amex for a period of at
least two years from the date of this
Agreement.
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|
(l)
|
The
Company will apply the net proceeds from the sale of the Units as set
forth under the caption "Use of Proceeds" in the
Prospectuses.
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(m)
|
The
Company will not take, and will cause its affiliates not to take, directly
or indirectly, any action which constitutes or is designed to cause or
result in, or which could reasonably be expected to constitute, cause or
result in, the stabilization or manipulation of the price of any security
to facilitate the sale or resale of the Offered Shares, the Warrant Shares
or the Agent's Shares.
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|
(n)
|
The
Company shall use its commercially reasonable efforts during the term of
the Warrants to maintain the effectiveness of one or more registration
statements under the Securities Act covering the issuance and sale of the
Warrant Shares, and shall take such other action as may be commercially
reasonable to ensure that Warrant Shares shall not be subject to
restrictions on resale under the Securities Act by persons that are not
affiliates of the Company (provided, however, that nothing shall prevent
the amalgamation, merger or sale of the Company, including any take-over
bid, and any associated delisting or deregistration or ceasing to be a
reporting issuer, provided that, so long as the Warrants are outstanding
and represent a right to acquire securities of the acquiring company, the
acquiring company shall assume the Company’s obligations under the Warrant
Indenture).
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|
(o)
|
The
Company shall provide the Agent with a draft of any press release to be
issued in connection with the Offering, and will provide the Agent and its
counsel sufficient time to comment thereon and will accept all reasonable
comments of the Agent and its counsel on such press
releases.
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|
7.
|
Conditions of Agent's
Obligations.
|
The
obligations of the Agent to the performance of their obligations herein are
subject to the accuracy of the representations and warranties of the Company
herein contained, as of the date hereof and as of the Closing Date, and to the
performance by the Company of all of its obligations hereunder on the Closing
Date including the Agent receiving on the Closing Date:
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(a)
|
The
Canadian Prospectus shall have been filed with the Canadian Qualifying
Authorities and the U.S. Prospectus shall have been filed with the
Commission in a timely fashion in accordance with Section 6 hereof; no
order of any securities commission, securities regulatory authority or
stock exchange in Canada to cease distribution of the Units under the
Canadian Prospectus, as amended or supplemented, shall have been issued,
and no proceedings for such purpose shall have been instituted or, to the
knowledge of the Company, threatened; no stop order suspending the
effectiveness of the Registration Statement or any post-effective
amendment thereto, and no stop order suspending or preventing the use of
the U.S. Pricing Prospectus, the U.S. Prospectus or any Issuer Free
Writing Prospectus, shall have been issued by the Commission and no
proceedings therefor shall have been initiated or threatened by the
Commission; all requests for additional information on the part of the
Canadian Qualifying Authorities or the Commission shall have been complied
with to the Agent's reasonable satisfaction; and all necessary regulatory
or stock exchange approvals in respect of the Offering shall have been
received.
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(b)
|
A
favourable legal opinion of Stikeman Elliott LLP, Canadian counsel for the
Company addressed to the Agent, in form and substance satisfactory to the
Agent, to the effect set forth in Schedule "A" hereto and to such other
matters as may reasonably be requested by the
Agent.
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|
(c)
|
A
favourable legal opinion of Dorsey & Whitney LLP, United States
counsel for the Company, addressed to the Agent, in form and substance
satisfactory to the Agent, to the effect set forth in Schedule "B" hereto
and to such other matters as may reasonably be requested by the
Agent.
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(d)
|
A
favourable legal opinion of Nesbitt & Associates LLC, United States
counsel to Company addressed to the Agent, in form and substance
satisfactory to the Agent, as to ownership by the Company of the Spring
Valley Property and Pan Property.
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(e)
|
A
favourable legal opinion of Parr Brown Gee & Loveless addressed to the
Agent, in form and substance satisfactory to the Agent, as to ownership of
the Material Subsidiaries (other than Pan-Nevada Gold Corporation and GEH
(B.C.) Holding Inc.) and their due incorporation or organization, valid
existence and good standing (if such concept is recognized in such
jurisdiction) and such other matters as may reasonably be requested by the
Agent.
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(f)
|
A
certificate of the Chief Executive Officer and Chief Financial Officer of
the Company in form and substance satisfactory to the Agent, as to the
accuracy of the representations and warranties of the Company set forth in
Section 1 hereof as of the date hereof and as of the Closing Date as to
the performance by the Company of all of its obligations hereunder to be
performed at or prior to the Closing Date and as to the matters set forth
in subsection (a) of this Section
7.
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(g)
|
At
the time this Agreement is executed and at the Closing Date, the Agent
shall have received comfort letters, from KPMG LLP, independent chartered
accountants for the Company, dated as of the date of this Agreement and as
of the Closing Date, respectively, and addressed to the Agent, and in form
and substance satisfactory to the Agent and its
counsel.
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(h)
|
At
the time this Agreement is executed, a fully executed copy of the warrant
indenture (the "Warrant
Indenture") between the Company and Computershare Trust Company of
Canada providing for the creation and issuance of the Warrants, in form
and substance satisfactory to the Agent and its
counsel.
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(i)
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At
the Closing Date the Offered Shares, the Warrant Shares and the Agent's
Shares shall have been conditionally approved for listing on the TSX.V and
shall be approved for listing, subject to official notice of issuance, on
Amex.
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(j)
|
The
Company shall have furnished to the Agent and its counsel with such other
certificates, opinions or other documents as they may have reasonably
requested.
|
If any of
the conditions specified in this Section 7 shall not have been fulfilled when
and as required by this Agreement, or if any of the certificates, opinions,
written statements or letters furnished to the Agent or to its counsel pursuant
to this Section 7 shall not be satisfactory in form and substance to the Agent
and its counsel, all obligations of the Agent hereunder may be cancelled by the
Agent at, or at any time prior to, the Closing Date. Notice of such cancellation
shall be given to the Company in writing.
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8.
|
Indemnification.
|
|
(a)
|
The
Company covenants and agrees to indemnify and save harmless the Agent and
its respective directors, officers, shareholders and employees and agents
(collectively, the "Agent's Personnel") from
any and all losses (other than loss of profits), claims, damages,
liabilities, costs or expenses, whether joint or several, caused or
incurred by reason of or in connection with the transactions contemplated
hereby including, without limitation, the following: (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, including all documents incorporated by reference
therein (or contained in the Registration Statement as amended or
supplemented by any post-effective amendment or supplement thereof or
thereto by the Company), or any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.; (ii) any "misrepresentation" within
the meaning of Canadian Securities Laws or any untrue statement of
material fact or alleged untrue statement of material fact included in the
Canadian Preliminary Prospectus, the U.S. Preliminary Prospectus, the
Canadian Prospectus, the U.S. Prospectus, in any Issuer Free Writing
Prospectus or in any prospectus together with any combination of one or
more Issuer Free Writing Prospectuses, or in any materials or information
provided to investors by, or with the approval of, the Company in
connection with the marketing of the Offering, including any roadshow or
investor presentations made to investors by the Company (whether in person
or electronically), or any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances in which
they were made; (iii) the omission or alleged omission to state in any
certificate of the Company, or of any officers of the Company delivered
hereunder or pursuant hereto, of any material fact required to be stated
therein where such omission or alleged omission constitutes or is alleged
to constitute a misrepresentation; (iv) any order made or any
inquiry, investigation or proceeding commenced or threatened by any
securities regulatory authority, stock exchange or by any other competent
authority, based upon any misrepresentation or alleged misrepresentation
in the Pricing Prospectuses or the Prospectuses based upon any failure or
alleged failure to comply with Canadian Securities Laws or the applicable
securities laws of the United States (other than any failure or alleged
failure to comply by the Agent) preventing and restricting the trading in
or the sale of the common shares or any of them in the jurisdictions of
Canada, the United States, or any state of the United States; (v) the
non-compliance or alleged non-compliance by the Company with any material
requirement of applicable securities laws, including the Company’s
non-compliance with any statutory requirement to make any document
available for inspection; or (vi) the material breach of any
representation, warranty or covenant of the Company contained herein or
the failure of the Company to comply in all material respects with any of
its obligations hereunder, except, with respect to any of the Pricing
Prospectuses or the Prospectuses, insofar as any such loss, claim, damage,
liability, cost or expense arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in, and
in conformity with, information concerning the Agent furnished by the
Agent to the Company expressly for use in, such document, or arises out of
or is based upon any omission or alleged omission to state a material fact
in any of the Pricing Prospectuses or Prospectuses in connection with such
information, which material fact was not contained in such information and
which material fact was required to be stated in such information, or was
necessary to make such information not misleading. The parties hereto
agree that such information provided by the Agent consists solely of the
materials referred to in Section 16
hereof.
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(b)
|
The
Company shall reimburse the Agent promptly upon demand for any legal or
other expenses reasonably incurred by them in connection with
investigating or defending any such losses, claims, damages, liabilities
or actions in respect thereof, as
incurred.
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(c)
|
The
Company shall not, without the prior written consent of the Agent, which
shall not be unreasonably withheld, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder
(whether or not the Agent is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of the Agent and of the Agent's Personnel from all
liability arising out of such claim, action, suit or proceeding and does
not include a statement as to, or an admission of, fault, culpability or
any failure to act, by or on behalf of the Agent or the Agent's
Personnel.
|
Notwithstanding
the foregoing, the Company shall not be liable for the settlement of any claim
or action in respect of which indemnity may be sought hereunder effected without
its written consent, which consent shall not be unreasonably
withheld.
|
(d)
|
If
any matter or thing contemplated by this Section 8 shall be asserted
against any party in respect of which indemnification is or might
reasonably be considered to be provided (an "Indemnified Party"),
such Indemnified Party will notify the Company as soon as possible and in
any event on a timely basis, of the nature of such claim, provided,
however, that the omission to so notify the Company shall not relieve the
Company from any liability which the Company may have to any Indemnified
Party hereunder unless the Company is materially prejudiced by such
omission. The Company shall be entitled (but not required) to assume the
defence of any suit brought to enforce such claim; provided, however, that
the defence shall be through legal counsel acceptable to the Indemnified
Party, acting reasonably, and that no settlement may be made by the
Company or the Indemnified Party without the prior written consent of the
other.
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|
(e)
|
The
foregoing indemnity shall not apply to the extent that a court of
competent jurisdiction in a final judgment that has become non-applicable
shall determine that such losses, expenses, claims, damages or liabilities
to which the Indemnified Party may be subject were caused by the fraud,
gross negligence, wilful misconduct or bad faith of an Indemnified
Party.
|
|
(f)
|
In
any such claim, the Indemnified Party shall have the right to retain other
counsel to act on the Indemnified Party’s behalf, provided that the fees
and disbursements of such other counsel reasonably incurred shall be paid
by the Indemnified Party, unless (i) the Company and the Indemnified Party
mutually agree to retain such other counsel or (ii) the named parties to
any such claim (including any third or implicated party) include both the
Indemnified Party, on the one hand, and the Company, on the other hand,
and the representation of the Company and the Indemnified Party by the
same counsel would be inappropriate due to actual or potential conflicting
interests, in which event such fees and disbursements shall be paid by the
Company to the extent that they have been reasonably incurred; provided
that in no circumstances shall the Company be required to pay the fees and
disbursements of more than one set of counsel for all Indemnified
Parties.
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|
(g)
|
The
Company hereby waives all rights which it may have by statute or common
law to recover contribution from the Agent in respect of losses, claims,
costs, damages, expenses or liabilities which any of them may suffer or
incur directly or indirectly (in this paragraph, "losses") by reason of or
in consequence of a document containing a misrepresentation; provided,
however, that such waiver shall not apply in respect of losses by reason
of or in consequence of any misrepresentation which is based upon or
results from information or statements furnished by the
Agent.
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9.
|
Contribution.
|
If the
indemnification provided for herein is for any reason unavailable to or
insufficient to hold harmless an Indemnified Party in respect of any losses,
liabilities, claims, damages or expenses referred to therein, then the Company
shall contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such Indemnified Party (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Agent on the other hand from the Offering or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company, on the one
hand, and of the Agent, on the other hand, in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The
relative benefits received by the Company, on the one hand, and the Agent, on
the other hand, in connection with the Offering shall be deemed to be in the
same respective proportions as the total net proceeds from the Offering (before
deducting expenses) received by the Company and the total fee received by the
Agent pursuant to Section 4. The relative fault of the Company, on the one hand,
and the Agent, on the other hand, shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Agent and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an Indemnified Party and referred to above shall be deemed to include any
legal or other expenses reasonably incurred by such Indemnified Party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding
the foregoing provisions, the Agent shall not be required to contribute any
amount in excess of the aggregate fees actually received by the Agent from the
Company.
No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) or a misrepresentation, as defined in Canadian Securities
Laws, that is fraudulent shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
The
rights of contribution provided herein shall be in addition to and not in
derogation of any right to contribute which the Agent may have by statute or
otherwise.
|
10.
|
Severability.
|
If any
provision of Sections 8 and 9 is determined to be void or unenforceable in whole
or in part, it shall be deemed not to affect or impair the validity of any other
provision of this Agreement and such void or unenforceable provision shall be
severable from this Agreement.
|
11.
|
Survival of
Representations and
Agreements.
|
All
warranties, representations, covenants and agreements herein contained or
contained in any documents submitted pursuant to this Agreement and in
connection with the transaction herein contemplated shall survive the purchase
and sale of the Units and continue in full force and effect for the benefit of
the Agent for a period the two years following the Closing Date and shall not be
limited or prejudiced by any investigation made by or on behalf of the Agent in
connection with the purchase and sale of the Units or the preparation of the
Base Prospectuses, Pricing Prospectuses, Prospectuses or otherwise. This
Agreement shall constitute the entire agreement with respect to the Offering
among the parties and supersedes any other previous agreement between the
parties with respect to the Offering (including, without limitation, the letter
agreement between them dated May 27, 2010, which the parties agree is hereby
terminated and each of the parties hereby releases the other from any and all
liabilities and obligations, and waive any rights they may have against the
other, under such letter agreement).
- 24
-
|
12.
|
Effective Date of
Agreement; Termination.
|
|
(a)
|
This
Agreement shall become effective when the parties hereto have executed and
delivered this Agreement.
|
|
(b)
|
The
Agent shall have the right to terminate this Agreement at any time prior
to the Closing Date, by notice in writing to the Company, if, at or after
the Applicable Time:
|
|
|
(i)
|
there
shall have occurred any material change or change in any material fact, or
there shall be discovered any previously undisclosed material change or
material fact which was required to be disclosed in the Prospectuses or
otherwise, which, in each case, in the reasonable opinion of the Agent,
has or would be expected to have a material adverse effect on the market
price or value of any of the securities of the Company, including, without
limitation, the Units;
|
|
|
(ii)
|
any
inquiry, action, suit, proceeding or investigation (whether formal or
informal) in relation to the Company or any of the directors, officers or
principal shareholders of the Company (including matters of regulatory
transgression or unlawful conduct), is commenced, announced or threatened
or any order made by any federal, provincial, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality including, without limitation, the TSX.V and Amex or any
securities regulatory authority, or any law or regulation is enacted or
changed which, in any such case, in the opinion of the Agent, acting
reasonably, operates to prevent or restrict the trading of the common
shares of the Company or any other securities of the Company or materially
and adversely affects or will materially and adversely affect the market
price or value of the common shares or any other securities of the
Company;
|
|
|
(iii)
|
trading
in the Company’s common shares shall have been suspended by the
Commission, the Canadian Qualifying Authorities, the TSX.V or Amex, or
trading in securities generally on the TSX.V or Amex shall have been
suspended or been made subject to material limitations, or minimum or
maximum prices for trading shall have been fixed, or maximum ranges for
prices for securities shall have been required, on the TSX.V or Amex or by
order of the Commission or any other governmental authority having
jurisdiction;
|
|
|
(iv)
|
the
state of the financial markets is such that, in the sole opinion of the
Agent, the Units cannot be profitably
marketed;
|
|
|
(v)
|
the
Company is in breach of any material term of this
Agreement;
|
|
|
(vi)
|
the
Agent determines that any of the representations or warranties made by the
Company in this Agreement are false or have become
false;
|
|
|
(vii)
|
if
there is a failure by the Company, or otherwise, of the satisfaction of
any of the conditions precedent set out in this
Agreement;
|
- 25
-
|
|
(viii)
|
the
Agent is not satisfied with the results of its due diligence of the
Company prior to the Closing Date, acting reasonably;
or
|
|
|
(ix)
|
there
is a catastrophe of national or international consequence or an event,
accident, governmental law or regulation or other occurrence of any nature
which, in the opinion of the Agent, seriously affects or will seriously
affect the financial markets, or the business of the Company on a
consolidated basis, or the ability of the Agent to perform its obligations
under this Agreement, or a purchaser's decision to purchase the
Units.
|
13. Notices. Any
notice under this Agreement will be given in writing and must be delivered, sent
by facsimile transmission or mailed by prepaid post and addressed to the party
to which notice is to be given at the address indicated below, or at another
address designated by the party in writing.
|
if
to the Company:
|
if
to the Agent:
|
|||
|
Midway
Gold Corp.
600
Lola Street, Suite 10
Helena,
Montana 59601
|
Haywood
Securities Inc.
2000-400
Burrard Street
Vancouver,
BC V6C 3A6
|
|||
|
Attention:
|
Daniel
Wolfus
|
Attention:
|
Kevin
Campbell
|
|
|
Facsimile:
|
(406)
475-9596
|
Facsimile:
|
(604)
697-7495
|
|
|
with
a copy to:
|
with
a copy to:
|
|||
|
Stikeman
Elliott LLP
|
Blake,
Cassels & Graydon LLP
|
|||
|
Suite
1700, 666 Burrard Street
|
Suite
2600, 595 Burrard Street
|
|||
|
Vancouver,
BC V6C 2X8
|
Vancouver
BC V7X 1L3
|
|||
|
Attention:
|
John
Anderson
|
Attention:
|
Bob
Wooder
|
|
|
Facsimile:
|
(604)
681-1825
|
|
Facsimile:
|
(604)
631-3309
|
If notice
is sent by facsimile transmission or is delivered, it will be deemed to have
been given at the time of transmission or delivery. If notice is
mailed, it will be deemed to have been received 48 hours following the date of
mailing of the notice. If there is an interruption in normal mail
service due to strike, labour unrest or other cause at or prior to the time a
notice is mailed the notice will be sent by facsimile transmission or will be
delivered.
14. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of the
Province of British Columbia and the laws of Canada applicable
therein.
- 26
-
15. No Fiduciary
Relationship.
The
Company hereby acknowledges that the Agent is acting solely as agent in
connection with the Offering contemplated hereby. The Company further
acknowledges that the Agent is acting pursuant to a contractual relationship
created solely by this Agreement entered into on an arm’s length basis, and in
no event do the parties intend that the Agent act or be responsible as a
fiduciary to the Company, its management, shareholders or creditors or any other
person in connection with any activity that the Agent may undertake or have
undertaken in furtherance of the Offering, either before or after the date
hereof. The Agent hereby expressly disclaims any fiduciary or similar
obligations to the Company, either in connection with the transactions
contemplated by this Agreement or any matters leading up to such transactions,
and the Company hereby confirms its understanding and agreement to that
effect. The Company and the Agent agree that they are each
responsible for making their own independent judgments with respect to any such
transactions and that any opinions or views expressed by the Agent to the
Company regarding such transactions, including, but not limited to, any opinions
or views with respect to the price or market for the Company’s securities, do
not constitute advice or recommendations to the Company. The Company
and the Agent agree that the Agent is acting as agent and not a fiduciary of the
Company and the Agent has not assumed, nor will assume, any advisory
responsibility in favour of the Company with respect to the transactions
contemplated hereby or the process leading thereto (irrespective of whether the
Agent has advised or is currently advising the Company on other
matters). The Company hereby waives and releases, to the fullest
extent permitted by law, any claims that the Company may have against the Agent
with respect to any breach or alleged breach of any fiduciary, advisory or
similar duty to the Company in connection with the transactions contemplated by
this Agreement or any matters leading up to such transactions.
16. Agent
Information.
The
parties hereto acknowledge and agree that, for the purposes of this Agreement,
the information provided by or on behalf of the Agent consists solely of the
name of the Agent contained on the cover of the Pricing Prospectuses and the
Prospectuses.
17. Currency
Except as
otherwise indicated, all amount expressed herein in terms of money refer to
lawful currency of Canada and all payments to be made hereunder shall be made in
such currency. References to "US$" are references to United States
dollars.
18. Headings.
The
headings herein are inserted for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this
Agreement.
19. Time is of the
Essence.
Time
shall be of the essence of this Agreement. As used herein, the term
"business day" shall mean any day other than a Saturday, Sunday or statutory or
civic holiday in the city of Vancouver, British Columbia or Toronto,
Ontario.
11. Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument. Delivery of a signed counterpart of this Agreement
by facsimile transmission shall constitute valid and sufficient delivery
thereof.
[signature
page follows]
- 27
-
If the
foregoing correctly sets forth your understanding, please so indicate in the
space provided below for that purpose, whereupon this agreement shall constitute
a binding agreement among us.
|
Very
truly yours,
|
|
|
HAYWOOD
SECURITIES INC.
|
|
By:
|
" Kevin Campbell
"
|
||
|
Name:
|
Kevin
Campbell
|
||
|
Title:
|
Managing
Director, Investment
Banking
|
||
Accepted
as of the date first above written
MIDWAY
GOLD CORP.
|
By:
|
"Daniel
Wolfus"
|
|
|
Name:
|
Daniel
Wolfus
|
|
|
Title:
|
Chairman,
Chief Executive Officer and
Director
|
|
EXHIBIT
A
Material
Subsidiaries
|
Name of Subsidiary
|
Jurisdiction
|
|
|
MGC
Resources Inc.
|
Nevada
|
|
|
MGC
Properties Inc.
|
Nevada
|
|
|
Pan-Nevada
Gold Corporation
|
British
Columbia
|
|
|
GEH
(B.C.) Holding Inc.
|
British
Columbia
|
|
|
GEH
(U.S.) Holding Inc.
|
Nevada
|
|
|
Golden
Eagle Holding Inc.
|
|
Washington
|
Schedule
"A"
Form of Opinion of Stikeman
Elliott LLP
|
1.
|
Each
of the Company, Pan-Nevada Gold Corporation ("PNG") and GEH (B.C.)
Holding Inc. ("GEH") is a corporation
incorporated and existing and in good standing under the laws of the
Province of British Columbia.
|
|
2.
|
All
of the issued and outstanding shares of GEH and PNG are registered in the
name of the Company.
|
|
3.
|
The
Company has all requisite corporate capacity, power and authority under
the laws of the Province of British Columbia to carry on its business as
now conducted by it and to own its properties and assets, in each case, as
described in the Prospectus.
|
|
4.
|
The
Company has all necessary corporate power to enter into and perform its
obligations under the Agency Agreement and the Warrant
Indenture.
|
|
5.
|
Each
of the Agency Agreement and the Warrant Indenture has been duly
authorized, executed and delivered by the Company as a matter of corporate
law in compliance with the laws of the Province of British Columbia and
constitutes a legal, valid and binding agreement of the Company
enforceable against it in accordance with its respective terms under with
the laws of the Province of British
Columbia.
|
|
6.
|
The
execution and delivery of and performance by the Company of the Agency
Agreement and the Warrant Indenture and compliance by the Company with its
obligations under the Agency Agreement and the Warrant Indenture does not
and will not, whether with or without the giving of notice or lapse of
time or both, result in any violation
of:
|
|
|
(a)
|
any
law of general application in the Canadian
Jurisdictions;
|
|
|
(b)
|
the
Notice of Articles or Articles of the Company;
or
|
|
|
(c)
|
any
resolutions of the board of directors (or any committee thereof) of the
Company relating to the Offering and attached to the Officer's
Certificate.
|
|
7.
|
All
necessary corporate action has been taken by the Company to authorize the
filings of each of the Canadian Final Base Shelf Prospectus and the Final
Canadian Prospectus Supplement with the Securities
Commissions.
|
|
8.
|
All
necessary corporate action has been taken by the Company to authorize the
filing of the Company's prospectus dated May 6, 2010 and the US Prospectus
Supplement relating to the Offering dated June 10, 2010 with the
Commission.
|
|
9.
|
Subject
to receipt of payment in full for them, the Offered Shares will be validly
issued as fully paid and non-assessable shares in the capital of the
Company.
|
|
10.
|
All
necessary corporate action has been taken by the Company to authorize the
creation and issue of the Warrants and the Agent
Warrants.
|
|
11.
|
The
reservation and issuance of the Warrant Shares in accordance with the
terms of the Warrant Indenture has been authorized by all necessary
corporate action on the part of the Company and, upon the due and proper
exercise of the Warrants in accordance with the terms of the Warrant
Indenture, the Warrant Shares will be issued as fully paid and
non-assessable shares in the capital of the
Company.
|
|
12.
|
The
reservation and issuance of the Agent Shares in accordance with the terms
of the Agent Warrant Certificate has been authorized by all necessary
corporate action on the part of the Company and, upon the due and proper
exercise of the Agent Warrants in accordance with the terms of the Agent
Warrant Certificate, the Agent Shares will be issued as fully paid and
non-assessable shares in the capital of the
Company.
|
|
13.
|
The
form of certificate used to evidence each of the Offered Shares has been
approved and adopted by the Company and complies in all material respects
with (i) applicable statutory requirements, (ii) any applicable
requirements of the articles of the Company, and (iii) the applicable
requirements of the TSX.V for such
certificates.
|
|
14.
|
The
authorized capital of the Company consists of an unlimited number of
Common Shares without par value. The statements in the
Prospectus under the heading "Description of Share Capital – Common
Shares" fairly summarize such legal matters in all material
respects. The attributes and characteristics of the Offered
Shares, the Warrant Shares and the Warrants conform in all material
respects to the attributes and characteristics thereof described in the
Prospectus.
|
|
15.
|
The
statements in the Prospectus under the heading "Eligibility for
Investment" and Certain Canadian Federal Income Tax Considerations" fairly
summarize such legal matters in all material
respects.
|
|
16.
|
All
necessary documents have been filed, all necessary proceedings have been
taken and all necessary authorizations, approvals, permits, consents and
orders have been obtained in each case under the Applicable Canadian
Securities Laws of each of the Canadian Jurisdictions to qualify the
distribution of the Offered Shares and the Warrants to the public in each
of the Canadian Jurisdictions through registrants registered under the
Applicable Canadian Securities Laws (including related and applicable
regulations and rules) of the Canadian Jurisdictions who have complied
with the applicable provisions of such Applicable Canadian Securities
Laws.
|
|
17.
|
The
issue, sale and delivery by the Company of the Warrant Shares, when issued
in accordance with the terms and conditions of the Warrants and the issue
of the Agent Shares, when issued in accordance with the terms and
conditions of the Agent's Warrants, will be exempt from, or is not subject
to, the prospectus requirements of the Applicable Canadian Securities Laws
in the Canadian Jurisdictions and no prospectus or other documents are
required to be filed, proceeding taken, or approvals, permits, consents or
authorizations obtained under such Applicable Canadian Securities Laws in
the Canadian Jurisdictions in respect of such distribution, other than
such as have been filed, taken or
obtained.
|
|
18.
|
The
first trade of the Warrant Shares issuable upon the exercise of the
Warrants and the Agent Shares issuable upon the exercise of the Agent's
Warrants will
be exempt from, or will not be subject to, the prospectus requirements of
the Applicable Canadian Securities Laws of the Canadian Jurisdictions and
no filing, proceeding or approval will need to be made, taken or obtained
by the Company under such Applicable Canadian Securities Laws in
connection with such trade, provided that the trade is not a "control
distribution", as such term is defined in National Instrument 45-102 –
Resale of Securities.
|
- 2
-
|
19.
|
The
Company is a "reporting issuer" under Applicable Canadian Securities Laws
of each Canadian Jurisdiction that recognizes the concept of reporting
issuer and is not on the list of defaulting reporting issuers maintained
under Applicable Canadian Securities Laws in such provinces, if
any.
|
|
20.
|
The
TSX.V has conditionally approved the listing of all of the Offered Shares,
the Warrant Shares and the Agent Shares, subject to the satisfaction by
the Company of the conditions set forth in the Conditional Listing
Letter.
|
- 3
-
Schedule
"B"
Form of Dorsey & Whitney
LLP
|
1.
|
To
such counsel’s knowledge, and other than as set forth in the U.S.
Preliminary Prospectus and the U.S. Prospectus, here are no judicial,
regulatory or other legal or governmental proceedings pending by or before
any court or governmental agency, authority or body to which the Company
is a party or of which any property of the Company is the subject which,
if determined adversely to the Company, would individually or in the
aggregate have a Material Adverse Effect; and, to the best of our
knowledge, no such proceedings are threatened or
contemplated.
|
|
2.
|
The
issuance and sale of the Units by the Company, the compliance by the
Company with all of the provisions of the Agency Agreement and the
performance by the Company of its obligations thereunder will not violate
Applicable Law or any judgment, order or decree of any court or arbitrator
known to such counsel. For purposes of this letter, the term
"Applicable Law" means those laws, rules and regulations of the federal
government of the United States of America which in such counsel’s
experience are normally applicable to the transactions of the type
contemplated by the Agency Agreement, except that, "Applicable Law" does
not include the anti-fraud provisions of the securities laws of any
applicable jurisdiction or any state securities or Blue Sky laws of the
various states.
|
|
3.
|
No
consent, approval, authorization or order of, or filing, registration or
qualification with, any Governmental Authority, is required by the Company
under any Applicable Law for the issuance or sale of the Units or the
performance by the Company of its obligations under the Agency Agreement
except for (1) such as may be required under state securities or blue sky
laws in connection with the offer and sale of the Units, Shares, Warrants
and Warrant Shares (as to which we express no opinion) and (2) such as
have been made or obtained under the Securities Act. For
purposes of this letter, the term "Governmental Authority" means any
executive, legislative, judicial, administrative or regulatory body of the
federal government of the United States of
America.
|
|
4.
|
The
Registration Statement, the U.S. Preliminary Prospectus and the U.S.
Prospectus, and each amendment or supplement thereto (except for the
financial statements, financial statement schedules and other financial
data included therein or omitted therefrom as to which we express no
opinion), as of their respective effective or issue dates, comply as to
form in all material respects with the requirements of the U.S. Securities
Act and the rules and regulations
thereunder.
|
|
5.
|
The
documents incorporated by reference into the Registration Statement, the
U.S. Preliminary Prospectus and the U.S. Prospectus (except for the
financial statements, financial statement schedules and other financial
data included therein or omitted therefrom as to which we express no
opinion) when they were filed with the Commission, complied as to form in
all material respects with the requirements of the U.S. Exchange Act and
the rules and regulations
thereunder.
|
|
6.
|
The
statements included in the U.S. Preliminary Prospectus Supplement and the
U.S. Prospectus Supplement under the heading “Certain United States
Federal Income Tax Considerations” insofar as such statements summarize
legal matters discussed therein, are accurate and fair summaries of such
legal matters in all material
respects.
|
|
7.
|
The
Company is not and, after giving effect to the Offering, and the
application of their proceeds as described in the U.S. Prospectus under
the heading "Use of proceeds," will not be required to be registered as an
investment company under the Investment Company Act of 1940, as amended,
and the rules and regulations of the Commission promulgated
thereunder.
|
- 2
-
Schedule
"C"
Pricing
Terms included in the Disclosure Package
|
Number
of Units:
|
9,412,000
|
|
|
Public
Offering Price per Unit
|
$0.60
|
|
|
Agent
commission per Unit:
|
· $0.042
per Unit (7%)
|
|
|
·
non-transferable common share purchase warrants with an exercise
price of $0.80, exercisable for a period of 24 months after the closing of
the Offering entitling the Agent to purchase that number of Warrant Shares
which is equal to 7% of the number of Units sold under the
Offering
|
||
|
Date
of Delivery of Units:
|
|
On
or about June 16, 2010
|
Issuer
Free Writing Prospectuses
Canadian
Preliminary Prospectus Supplement