EXHIBIT 1.1
AGENCY OFFERING AGREEMENT
THIS AGREEMENT dated for reference September --, 2004 is made
BETWEEN
CHEMOKINE THERAPEUTICS CORP., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
University of British Columbia, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
(the "Issuer");
AND
CANACCORD CAPITAL CORPORATION, ▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
(the "Agent").
WHEREAS:
A. The Issuer wishes to raise money for the purposes set forth in its
Prospectus, which is to be filed by the Issuer with the Commissions and the
Exchange, by offering for sale certain of its securities;
B. The Issuer wishes to appoint the Agent to distribute those securities and
the Agent is willing to accept the appointment on the terms and conditions of
this Agreement;
THE PARTIES to this Agreement therefore agree:
1. DEFINITIONS
In this Agreement:
(a) "1933 Act" means the United States Securities Act of 1933, as
amended;
(b) "Agent's Fee" means the fee which is set out in this Agreement and
which is payable by the Issuer to the Agent in consideration of the
services performed by the Agent under this Agreement;
(c) "Agent's Warrants" means the common share purchase warrants of the
Issuer issued to the Agent as part of the Agent's Fee;
(d) "Agent's Warrant Shares" means any common shares in the capital of
the Issuer that may be issued on exercise of the Agent's Warrants;
(e) "Applicable Legislation" means the securities acts in the Selling
Provinces, the regulations and rules made thereunder, and all
administrative policy statements, blanket orders, notices,
directions and rulings issued by the Commissions;
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(f) "Certificates" means the certificates representing the Shares,
Agent's Warrants and Corporate Finance Shares;
(g) "Closing" means the closing of the purchase and sale, and the
issuance by the Issuer of the Shares;
(h) "Closing Day" means the day which falls 10 days after the Offering
Day;
(i) "Commissions" means the securities commission or equivalent
regulatory authority in the Selling Provinces;
(j) "Corporate Finance Fee" means the Fee to be paid to the Agent by the
Issuer in consideration of corporate finance and structuring
services provided by the Agent;
(k) "Corporate Finance Shares" means the previously unissued common
shares of the Issuer which will be issued as part of the Corporate
Finance Fee;
(l) "Distribution" means the distribution or sale of the Securities
pursuant to this Agreement and includes the distribution of the
Agent's Warrants and Corporate Finance Shares;
(m) "Effective Date" means the date on which the final receipt for the
Prospectus is issued by the Commissions;
(n) "Exchange" means the Toronto Stock Exchange;
(o) "Exchange Act" means the United States Exchange Act of 1934 as
amended;
(p) "Greenshoe Option" has the meaning set forth in section 5.6;
(q) "Material Change" has the meaning defined in the Applicable
Legislation;
(r) "Material Fact" has the meaning defined in the Applicable
Legislation;
(s) "Misrepresentation" has the meaning defined in the Applicable
Legislation;
(t) "Offering" means the offering of the Shares under the Prospectus;
(u) "Offering Day" means the day chosen by the Agent to contract the
purchases of Shares by the Purchasers;
(v) "Offering Price" means $-- per Share;
(w) "Proceeds" means the gross proceeds of the Offering, less:
(i) that portion of the Agent's Fee which is payable in cash;
(ii) the expenses of the Agent in connection with the Offering which
have not been repaid by the Issuer; and
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(iii) any amount already received by the Issuer.
(x) "Prospectus" means the preliminary prospectus and the final
prospectus filed or intended to be filed by the Issuer with the
Regulatory Authorities in connection with the Offering and any
amendments to the preliminary prospectus and final prospectus which
may be filed with the Regulatory Authorities;
(y) "Registration Statement" means a registration statement prepared on
Form SB-2 intended to be filed by the Issuer with the SEC in
connection with the Offering, including any amendments;
(z) "Regulatory Authorities" means the Commissions and the Exchange;
(aa) "SEC" means the Securities and Exchange Commission of the United
States of America;
(bb) "Securities" means the Shares, Agent's Warrants, Agent's Warrant
Shares, and Corporate Finance Shares;
(cc) "Selling Provinces" means British Columbia, Alberta, Ontario and
Quebec; and
(dd) "Shares" means the previously unissued common shares in the capital
of the Issuer to be offered by the Issuer pursuant to this Agreement
and includes any Shares to be issued pursuant to the Greenshoe
Option.
2. APPOINTMENT OF AGENT
The Issuer appoints the Agent as its exclusive agent and the Agent accepts the
appointment and will act as the exclusive agent of the Issuer to offer up to
15,000,000 Shares for sale under the Prospectus at the Offering Price on a
commercially reasonable efforts basis.
3. FILING OF PROSPECTUS
3.1 The Issuer will provide the Agent with a draft preliminary Prospectus as
soon as practicable.
3.2 As soon as practicable after the Agent has indicated that it is satisfied
with the form and substance of the draft preliminary Prospectus, the Issuer will
cause the Prospectus to be filed with the Regulatory Authorities, will deliver
all necessary copies of the Prospectus to the Regulatory Authorities and will
use its best efforts to have the Prospectus accepted by the Regulatory
Authorities.
3.3 The Issuer will provide the Agent with as many copies of the Prospectus
as the Agent reasonably requests.
3.4 Delivery of the Prospectus and any amendment thereto shall constitute a
representation and warranty by the Issuer to the Agent that all information and
statements (except information and statements relating solely to the Agent)
contained in the Prospectus and any amendment thereto are true and correct in
all material respects at the time of delivery thereof and contain no
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Misrepresentations and constitute full, true and plain disclosure of all
Material Facts relating to the Issuer and the Securities and that no Material
Fact or material information has been omitted therefrom (except facts of
information relating solely to the Agent) which is required to be stated therein
or is necessary to make statements of information contained therein not
misleading in light of the circumstances under which they were made. Such
delivery shall also constitute the Issuer's consent to the Agent's use of the
Prospectus, any amendment thereto and any other documents supplied to the Agent
by the Issuer for the purpose of the sale of Shares in the Selling Provinces in
compliance herewith and with the Applicable Legislation.
4. FILING OF REGISTRATION STATEMENT
4.1 The Issuer will provide the Agent with a draft Registration Statement as
soon as practicable.
4.2 As soon as practicable after the Agent has indicated that it is satisfied
with the form and substance of the Registration Statement, the Issuer will file
the Registration Statement with the SEC. The Issuer will promptly advise the
Agent when the Registration Statement has become effective.
4.3 From and after the Effective Date until the Closing Day, and for such
longer period as any of the Agent's Warrants remain outstanding (the "Specified
Period"), the Issuer will ensure that the Registration Statement:
(a) complies in all material respects with the 1933 Act and the rules
promulgated thereunder;
(b) constitutes full, true and plain disclosure of all material facts
relating to the Issuer and to the Securities; and
(c) does not contain any untrue statement of a material fact, or omit to
state any material fact required to be stated therein or necessary
to make the statements therein not misleading.
4.4 The Issuer will use its best efforts to cause the Registration Statement,
and any amendment thereto, to remain effective continuously through the
Specified Period. If the Issuer uses Rule 430A, or the filing of the prospectus
included in the Registration Statement is otherwise required under Rule 424(b)
of the 1933 Act, the Issuer will file such prospectus (properly completed if
Rule 430A has been used) pursuant to Rule 420(b) within the prescribed time
period and will provide satisfactory evidence to the Agent of such timely
filing. During the Specified Period, the Issuer:
(a) will not file any amendment of the Registration Statement or
amendment or supplement to the prospectus included therein unless
the Issuer has furnished such amendment or supplement to the Agent
prior to filing, and will not file any such amendment or supplement
to which the Agent reasonably objects;
(b) will advise the Agent of any request by the SEC for any amendment to
the Registration Statement, or any supplement to the prospectus
included therein or for any additional information;
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(c) will advise the Agent when any amendment to the Registration
Statement or supplement to the prospectus included therein shall
have been filed and when it has become effective;
(d) will advise the Agent of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose, and
will use its best efforts to prevent the issuance of any such stop
order;
(e) will advise the Agent of its receipt of any notification with
respect to the suspension of the qualification of the Securities for
trading in any jurisdiction, or the institution or threatening of
any proceeding for such purpose, and will use its best efforts to
prevent such suspension;
(f) will comply, at its own expense, with all requirements imposed upon
it by the SEC, the 1933 Act, the Exchange Act, and the rules and
regulations promulgated by the SEC thereunder, so far as necessary
to permit the continuance of sales or dealing in the Securities in
accordance with the certificates representing the Agent's Warrants
and this Agreement.
4.5 The Issuer will, as soon as practicable and in any event not later than
45 days after the end of its fiscal quarter in which the first anniversary date
of the effective date of the Registration Statement occurs, make generally
available (within the meaning of Section 11(a) of the ▇▇▇▇ ▇▇▇) to its
securityholders and to the Agent an earnings statement or statements of the
Issuer which will satisfy the provisions of Section 11(a) of the 1933 Act and
Rule 158 promulgated thereunder, covering a period of at least 12 consecutive
months beginning after the effective date of the Registration Statement.
4.6 The Issuer will timely file with the SEC an appropriate form to register
the Securities pursuant to Section 12(g) of the Exchange Act, and comply with
all registration, filing and reporting requirements of the Exchange Act which
may be applicable to the Issuer.
4.7 Neither the Issuer nor the Agent will take, directly or indirectly, any
action designed to or which has constituted or which might reasonably be
expected to cause or result, whether under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the Issuer to
facilitate the sale or resale of the Shares, the Agent's Warrant Shares or the
Corporate Finance Shares.
5. LISTING APPLICATION AND CONDUCT OF THE OFFERING
5.1 Prior to the Closing Day, the Issuer will make application to list the
Shares, Agent's Warrant Shares and Corporate Finance Shares on the Exchange and
conditional approval of such application must be obtained from the Exchange
prior to Closing.
5.2 Following the Effective Date and after consulting with the Exchange, the
Issuer and the Agent will set the Offering Day.
5.3 The Offering Day will be on or before the earlier of the day which is:
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(a) 90 days after the Effective Date; and
(b) 12 months after the date of the issue by the Commissions of the
preliminary receipt for the Prospectus.
5.4 Immediately after the Offering Day, the Issuer shall take all necessary
steps to complete and file with the Exchange its application for listing with
all other documentation required by the Exchange, to allow for the listing and
posting for trading of the common shares of the Issuer on the Exchange, which is
to occur no earlier than 10 business days after the Offering Day unless
otherwise agreed to by the Agent.
5.5 The Agent will advise the Issuer and its counsel in writing when the
Distribution under the Prospectus is complete.
5.6 The Agent may solicit and accept subscriptions for additional Shares up
to a maximum of 15% of the Offering (the "Greenshoe Option").
5.7 The number of additional Shares subject to the Greenshoe Option will be
the lesser of 15% of the Offering or the actual number of additional Shares for
which subscriptions have been received.
5.8 On the Closing Day, the Agent will advise the Issuer and the Exchange of
the number of Shares subject to the Greenshoe Option.
5.9 On receipt of notice in writing from the Agent given within 60 calendar
days of the Closing Day, the Issuer will issue and deliver to the Agent
forthwith, at the Offering Price, the number of Shares subject to the Greenshoe
Option.
5.10 Nothing in this Agreement will prevent the Agent from purchasing Shares
on the Exchange in order to fill subscriptions for additional Shares.
6. OPINIONS AND CERTIFICATES
6.1 On the Effective Date, the Issuer will deliver the following documents to
the Agent and its counsel in a form acceptable to them:
(a) a comfort letter from the auditor of the Issuer, dated as of the
date of the Prospectus and addressed to the Agent and its counsel,
relating to the accuracy of the financial statements forming part of
the Prospectus and the accuracy of the financial, numerical and
certain other information disclosed in the Prospectus;
(b) an opinion of counsel for the Issuer, dated as of the Effective Date
and addressed to the Agent and its counsel, relating to any legal
matter in connection with the creation, issuance and sale of the
Securities for which the Agent may reasonably request an opinion
(the "Legal Opinion");
(c) a certificate of the Issuer, dated as of the Effective Date and
signed by the president of the Issuer and the chief financial
officer of the Issuer or such other
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officers of the Issuer approved by the Agent, certifying certain
facts relating to the Issuer and its affairs (the "Officers'
Certificate"); and
(d) any other certificates, comfort letters or opinions in connection
with any matter related to the Prospectus which are reasonably
requested by the Agent or its counsel.
6.2 On Closing, the Issuer will provide the Agent and its counsel with
evidence of the necessary approval of the Regulatory Authorities for the
Offering, the Legal Opinion and the Officers' Certificate updated to the Closing
Day.
7. AGENT'S FEE
7.1 In consideration of the services performed by the Agent under this
Agreement, the Issuer agrees to pay to the Agent on Closing, including any
closing of the Greenshoe Option, an Agent's Fee consisting of:
(a) a cash commission equal to 7.5% of the gross proceeds received by
the Issuer from the sale of the Shares, payable in lawful Canadian
currency; and
(b) that number of Agent's Warrants which is equal to 8% of the number
of Shares sold on such Closing.
7.2 Each Agent's Warrant will entitle the holder, on exercise, to purchase
one Agent's Warrant Share at a price of $-- per Agent's Warrant Share.
7.3 The right to purchase an Agent's Warrant Share under an Agent's Warrant
may be exercised at any time until the close of business on the day which is 18
months from the date such Agent's Warrant was issued to the holder.
7.4 The Issuer agrees to pay a Corporate Finance Fee to the Agent by the
issuance of 100,000 Corporate Finance Shares on the Closing.
7.5 The Agent's Warrants will be represented by certificates, and will be
non-transferable except as permitted by Applicable Legislation and any order
granted by the Commissions.
7.6 The terms governing the Agent's Warrants will include, among other
things, provisions for the appropriate adjustment in the class, number and price
of the Agent's Warrant Shares upon the occurrence of certain events, including
any subdivision, consolidation or reclassification of the shares, the payment of
stock dividends or the amalgamation of the Issuer.
8. MINIMUM SUBSCRIPTION
8.1 The Offering is subject to a minimum subscription of -- Shares.
8.2 All funds received by the Agent for subscription will be held in trust by
the Agent or placed in trust with the Issuer's registrar and transfer agent
until the minimum subscription has been obtained.
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8.3 Notwithstanding any other term of this Agreement, all subscription funds
received by the Agent will be returned to the subscribers if the minimum
subscription is not obtained by 5:00 p.m. (Vancouver time) on the Offering Day.
9. CLOSING
9.1 The Closing will take place on the Closing Day.
9.2 On Closing, the Issuer will deliver the Certificates, through its
registrar and transfer agent, to the Agent against payment of the Proceeds.
9.3 If the Issuer has satisfied all of its obligations under this Agreement,
on Closing, the Agent will pay the Proceeds to the Issuer through its registrar
and transfer agent, against delivery of the Certificates.
9.4 The obligation of the Agent to pay the Proceeds to the Issuer shall be
subject to the following conditions precedent:
(a) the Issuer shall have performed or complied with each covenant and
obligation herein provided on its part to be performed or complied
with;
(b) each of the representations and warranties of the Issuer herein
shall continue to be true, and the Officers' Certificate shall
contain certification to that effect;
(c) the Registration Statement shall have been declared effective; and
(d) the Issuer shall have, to the satisfaction of the Agent's counsel,
taken or caused to be taken all steps and proceedings which may be
requisite under the Applicable Legislation to qualify the
Distribution of the Shares to the public in the Selling Provinces
through registrants who have complied with the provision of the
Applicable Legislation, including the filing and the obtaining of
receipts for the Prospectus.
10. MATERIAL CHANGES
10.1 If, after the Prospectus is filed with the Regulatory Authorities but
before the Closing, a Material Change or change in a Material Fact occurs in the
affairs of the Issuer, the Issuer will:
(a) notify the Agent immediately, in writing, with full particulars of
the change;
(b) file with the Regulatory Authorities as soon as practicable, and in
any event no later than 10 days after the change occurs, an
amendment to the Prospectus in a form acceptable to the Agent
disclosing the material change;
(c) file with the SEC as soon as practicable, an amendment to the
Registration Statement disclosing the material change; and
(d) provide as many copies of the applicable amendments to the Agent as
the Agent may reasonably request.
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10.2 The Issuer shall in good faith discuss with the Agent any fact or change
in circumstances (actual and anticipated, contemplated or threatened, whether
financial or otherwise) which is of such a nature that there is reasonable doubt
as to whether notice in writing need be given to the Agent pursuant to the
previous Subsection.
11. TERMINATION
11.1 The Agent may terminate its obligations under this Agreement by notice in
writing to the Issuer at any time before the Closing if:
(a) there is 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 Issuer or any subsidiary of the Issuer or the
ability of the Agent to perform its obligations under this Agreement
or an investor's decision to purchase Shares;
(b) an adverse Material Change or change in a Material Fact relating to
any of the Securities occurs or is announced by the Issuer;
(c) following a consideration of the history, business, products,
property or affairs of the Issuer or its principals and promoters,
or the state of the financial markets in general, or the state of
the market for the Issuer's securities in particular, or the
possibility of investors exercising their statutory rights to
withdraw from the purchase of the Shares, the Agent determines, in
its discretion, that it is not in the interest of investors to
complete the Offering;
(d) the Shares cannot, in the opinion of the Agent, be marketed due to
the state of the financial markets, or the market for the Shares in
particular; or
(e) an enquiry or investigation (whether formal or informal) in relation
to the Issuer, or the Issuer's directors, officers or promoters, is
commenced or threatened by an officer or official of any competent
authority.
11.2 The Agent may terminate its obligations under this Agreement at any time
if:
(a) any order to cease trading (including communicating with persons in
order to obtain expressions of interest) in the securities of the
Issuer is made by a competent regulatory authority and that order is
still in effect;
(b) the Issuer is in breach of any term of this Agreement;
(c) the Agent determines that any of the representations or warranties
made by the Issuer in this Agreement is false or has become false.
11.3 If the Agent exercises its right to terminate this Agreement, then the
Issuer will immediately issue a press release setting out particulars of the
termination.
11.4 This Agreement will terminate if a final receipt for the Prospectus is
not issued by the Commissions within 120 days of the reference date of this
Agreement.
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12. WARRANTIES AND REPRESENTATIONS
12.1 The Issuer warrants and represents to the Agent that:
(a) the Issuer and its subsidiaries, if any, are valid and subsisting
corporations duly incorporated and in good standing under the laws
of the jurisdictions in which they are incorporated, continued or
amalgamated;
(b) the Issuer and its subsidiaries, if any, are duly registered and
licenced to carry on business or own property in the jurisdictions
in which they carry on business or own property where so required by
the laws of that jurisdiction;
(c) the authorized and issued capital of the Issuer is as disclosed in
the Prospectus and the issued and outstanding common shares of the
Issuer are fully paid and non-assessable;
(d) the Issuer will reserve or set aside sufficient common shares in its
treasury to issue the Shares, Agent's Warrant Shares, and Corporate
Finance Shares;
(e) except as qualified by the Prospectus and Registration Statement,
the Issuer is the beneficial owner of the properties, business and
assets or the interests in the properties, business or assets
referred to in the Prospectus and Registration Statement; all
agreements by which the Issuer holds an interest in a property,
business or asset are in good standing according to their terms, and
the properties are in good standing under the applicable laws of the
jurisdictions in which they are situated;
(f) the Prospectus and the Registration Statement will contain full,
true and plain disclosure of all Material Facts in relation to the
Issuer, its subsidiaries (if any), its business and its securities,
will contain no Misrepresentations, will be accurate in all material
respects and will omit no fact, the omission of which will make such
representations misleading or incorrect;
(g) the financial statements of the Issuer which form part of the
Prospectus have been prepared in accordance with Canadian generally
accepted accounting principles, accurately reflect the financial
position and all material liabilities (accrued, absolute, contingent
or otherwise) of the Issuer and its subsidiaries, if any, as at the
date of the financial statements and there have been no adverse
material changes in the financial position of the Issuer since that
date, except as fully and plainly disclosed in the Prospectus;
(h) the Issuer has complied and will comply fully with the requirements
of all applicable corporate and securities laws and administrative
policies and directions, including, without limitation, the
Applicable Legislation, the 1933 Act, the Exchange Act and the
corporate law of the jurisdiction in which it was incorporated in
relation to the issue and trading of its securities and in all
matters relating to the Offering;
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(i) the issue and sale of the Securities by the Issuer does not and will
not conflict with, and does not and will not result in a breach of,
any of the terms of its incorporating documents or any agreement or
instrument to which the Issuer is a party;
(j) except as disclosed in the Prospectus and the Registration
Statement, neither the Issuer or its subsidiaries, if any, is a
party to any actions, suits or proceedings which could materially
affect its business or financial condition, and no such actions,
suits or proceedings are contemplated or have been threatened;
(k) there are no judgments against the Issuer or any of its
subsidiaries, if any, which are unsatisfied, nor are there any
consent decrees or injunctions to which the Issuer or any of its
subsidiaries, if any, is subject;
(l) this Agreement has been duly authorized by all necessary corporate
action on the part of the Issuer and the Issuer has full corporate
power and authority to undertake the Offering;
(m) there is not presently, and will not be until the conclusion of the
Distribution, any Material Change or change in any Material Fact
relating to the Issuer which has not been or will not be fully
disclosed in the Prospectus and the Registration Statement;
(n) no order ceasing, halting or suspending trading in securities of the
Issuer or prohibiting the sale of such securities has been issued to
and is outstanding against the Issuer or its directors, officers or
promoters or against any other companies that have common directors,
officers or promoters and no investigations or proceedings for such
purposes are pending or threatened;
(o) except as disclosed in the Prospectus and the Registration
Statement, no person has any right, agreement or option, present or
future, contingent or absolute, or any right capable of becoming
such a right, agreement or option, for the issue or allotment of any
unissued shares in the capital of the Issuer or its subsidiaries, if
any, or any other security convertible into or exchangeable for any
such shares, or to require the Issuer or its subsidiaries, if any,
to purchase, redeem or otherwise acquire any of the issued and
outstanding shares in its capital;
(p) the Issuer and its subsidiaries, if any, have filed all federal,
provincial, local and foreign tax returns which are required to be
filed, or have requested extensions thereof, and have paid all taxes
required to be paid by them and any other assessment, fine or
penalty levied against them, to the extent that any of the foregoing
is due and payable, except for such assessments, fines and penalties
which are currently being contested in good faith;
(q) the Issuer and its subsidiaries, if any, have established on their
books and records reserves which are adequate for the payment of all
taxes not yet due and payable and there are no liens for taxes on
the assets of the Issuer or its subsidiaries, if any, except for
taxes not yet due, and there are no audits of any of the tax returns
of the Issuer or its subsidiaries, if any, which are known by the
Issuer's
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management to be pending, and there are no claims which have been or
may be asserted relating to any such tax returns which, if
determined adversely, would result in the assertion by any
governmental agency of any deficiency which would have a material
adverse effect on the properties, business or assets of the Issuer
or its subsidiaries, if any;
(r) the Issuer owns or possesses adequate rights to use all material
patents, trademarks, service marks, trade names, copyrights, trade
secrets, information, proprietary rights and other intellectual
property necessary for the business of the Issuer now conducted and
proposed to be conducted, without any conflict with or infringement
of the rights of others. The Issuer has received no communication or
alleging that the Issuer has violated or, by conducting its business
as proposed, would violate any of the patents, trademarks, service
marks, trade names, copyrights or trade secrets or other proprietary
rights of any other person or entity. Neither the execution or
delivery of this Agreement nor the carrying on of the business of
the Issuer by the employees of the Issuer, nor the conduct of the
business of the Issuer will conflict with or result in a breach of
the terms, conditions, or provisions of or constitute a default
under, any contract, covenant or instrument under which any of such
employees is now obligated;
(s) other than the Agent, no person, firm or corporation acting or
purporting to act at the request of the Issuer is entitled to any
brokerage, agency or finder's fee in connection with the
transactions described herein; and
(t) the warranties and representations in this Subsection are true and
correct and will remain so as of the Closing.
12.2 The Agent warrants and represents to the Issuer that:
(a) it is a valid and subsisting corporation under the law of the
jurisdiction in which it was incorporated, continued or amalgamated;
(b) it is a member in good standing of the Exchange; and
(c) it has complied with and will fully comply with the requirements of
all applicable securities laws, including, without limitation, the
Applicable Legislation and the by-laws and rules of the Exchange, in
relation to trading in the Securities and all matters relating to
the Offering.
13. EXPENSES OF AGENT
13.1 The Issuer will pay all of the expenses of the Offering and all the
expenses reasonably incurred by the Agent in connection with the Offering
including, without limitation, the fees and expenses of the solicitors for the
Agent.
13.2 The Issuer will pay the expenses referred to in the previous Subsection
even if the Prospectus and this Agreement are not accepted by the Regulatory
Authorities or the transactions contemplated by this Agreement are not completed
or this Agreement is terminated, unless the
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failure of acceptance or completion or the termination is the result of a breach
of this Agreement by the Agent.
13.3 The Agent may, from time to time, render accounts to the Issuer for its
expenses for payment on the dates set out in the accounts.
13.4 The Issuer authorizes the Agent to deduct its reasonable expenses in
connection with the Offering from the proceeds of the Offering, including
expenses for which an account has not yet been rendered to the Issuer.
14. INDEMNITY
14.1 The Issuer will indemnify the Agent and each of the Agent's agents,
directors, officers and employees (individually, an "Indemnified Party" and
collectively, the "Indemnified Parties") and save them harmless against all
losses, claims, damages or liabilities:
(a) existing (or alleged to exist) by reason of untrue statements
contained in the Prospectus, Registration Statement or other written
or oral representation made by the Issuer to an investor in
connection with the Offering or by reason of the omission to state
in the Prospectus and the Registration Statement any fact necessary
to make such statements or representations not misleading (except
for information and statements referring solely to the Agent);
(b) arising directly or indirectly out of any order made by any
regulatory authority based upon an allegation that any such untrue
statement or representation or omission exists (except for
information and statements referring solely to the Agent) including,
without limitation, an order that trading in or distribution of the
Securities is to cease;
(c) resulting from the failure by the Issuer to file an amendment to the
Prospectus or the Registration Statement as required by this
Agreement;
(d) resulting from the breach by the Issuer of any of the terms of this
Agreement;
(e) resulting from any representation or warranty made by the Issuer
herein not being true or ceasing to be true;
(f) if the Issuer fails to issue and deliver the Certificates in the
form and denominations satisfactory to the Agent at the time and
place required by the Agent with the result that any completion of a
sale of the Securities does not take place; or
(g) if, following the completion of a sale of any of the Securities, a
determination is made by any competent authority setting aside the
sale unless that determination arises out of an act or omission by
the Agent.
14.2 If any action or claim is brought against an Indemnified Party in respect
of which indemnity may be sought from the Issuer pursuant to this Agreement, the
Indemnified Party will promptly notify the Issuer in writing.
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14.3 The Issuer will assume the defence of the action or claim, including the
employment of counsel and the payment of all expenses.
14.4 The Indemnified Party will have the right to employ separate counsel, and
the Issuer will pay the reasonable fees and expenses of such counsel.
14.5 The indemnity provided for in this Section will not be limited or
otherwise affected by any other indemnity obtained by the Indemnified Party from
any other person in respect of any matters specified in this Agreement and will
continue in full force and effect until all possible liability of the
Indemnified Party arising out of the transactions contemplated by this Agreement
has been extinguished by the operation of law.
14.6 To the extent that any Indemnified Party is not a party to this
Agreement, the Agent will obtain and hold the right and benefit of this Section
in trust for and on behalf of such Indemnified Party.
15. RIGHT OF FIRST REFUSAL
15.1 The Issuer will notify the Agent of the terms of any further financing
that it requires or proposes to obtain during the period ending 12 months from
the Closing Day and the Agent will have the right of first refusal to provide
any such financing.
15.2 The right of first refusal must be exercised by the Agent within 15 days
following the receipt of the notice by notifying the Issuer that they will
provide such financing on the terms set out in the notice.
15.3 If the Agent fails to give notice within the 15 days that it will provide
such financing upon the terms set out in the notice, the Issuer will then be
free to make other arrangements to obtain financing from another source on the
same terms or on terms no less favourable to the Issuer, subject to obtaining
the acceptance of the Regulatory Authorities.
15.4 The right of first refusal will not terminate if, on receipt of any
notice from the Issuer under this Section, the Agent fails to exercise the
right.
16. ASSIGNMENT AND SELLING GROUP PARTICIPATION
16.1 The Agent will not assign this Agreement or any of its rights under this
Agreement or, with respect to the Securities, enter into any agreement in the
nature of an option or a sub-option unless and until, for each intended
transaction, the Agent has obtained the consent of the Issuer and notice has
been given to and accepted by the Regulatory Authorities.
16.2 The Agent may offer selling group participation in the normal course of
the brokerage business to selling groups of other licensed dealers, brokers and
investments dealers, who may or who may not be offered part of the commissions
or warrants to be received by the Agent pursuant to this Agreement.
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17. NOTICE
17.1 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
above, or at another address designated by such party in writing.
17.2 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.
17.3 If notice is mailed, it will be deemed to have been received 48 hours
following the date of mailing of the notice.
17.4 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.
18. TIME
Time is of the essence of this Agreement and will be calculated in accordance
with the provisions of the Interpretation Act (British Columbia).
19. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations, warranties, covenants and indemnities of the parties
contained in this Agreement will survive the closing of the purchase and sale of
the Securities.
20. LANGUAGE
Wherever a singular or masculine expression is used in this Agreement, that
expression is deemed to include the plural, feminine or the body corporate where
required by the context.
21. ENUREMENT
This Agreement enures to the benefit of and is binding on the parties to this
Agreement and their successors and permitted assigns.
22. HEADINGS
The headings in this Agreement are for convenience of reference only and do not
affect the interpretation of this Agreement.
23. COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of which will
be deemed to be an original and all of which will constitute one agreement,
effective as of the reference date given above.
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24. LAW
This Agreement is governed by the law of British Columbia and shall be treated
in all respects as a British Columbia contract, and the parties hereto
irrevocably attorn and submit to the jurisdiction of the courts of British
Columbia with respect to any dispute related to this Agreement.
This document was executed and delivered as of the date given above.
CHEMOKINE THERAPEUTICS CORP.
Per:
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Authorized Signatory
Per:
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Authorized Signatory
CANACCORD CAPITAL CORPORATION
Per:
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Authorized Signatory
Per:
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Authorized Signatory