Retain a sales agent and a trustee in connection with a public offering of shares under a prospectus in Alberta with this Agency and Trustee Agreement.
- The issuer (offering corporation) retains the Agent to sell the securities on a 'best efforts' basis.
- The Trustee will hold all subscription funds on behalf of the issuer.
- The Agent may enter into arrangements with other investment dealers registered to sell securities in Alberta, at no additional cost to the issuer.
- The Trustee will keep the subscription funds in a daily-interest escrow account or in short-term interest-bearing securities.
- The issuer indemnifies the Trustee against claims or losses, and against its costs incurred in the performance of its duties.
- The issuer also indemnifies the Agent against claims or losses, costs or expenses (except loss of profits).
This Alberta Agency and Trustee Agreement is available as a downloable and fully editable MS Word document.
AGENCY AGREEMENT THIS AGENCY AGREEMENT dated the _____ day of ______________, _______. AMONG: [ISSUER], a corporation incorporated under the laws of the Province of Alberta, with an office in the City of [city] (the “Corporation”) - AND - [AGENT], a corporation with an office in [city], Alberta (the “Agent”) - AND - [TRUSTEE], a trust company with an office in [city], Alberta (the “Trustee”) WHEREAS: A. The Corporation wishes to raise Funds for the purposes more particularly enumerated under the heading “Use of Proceeds” in the Prospectus hereinafter referred to, by offering for sale to the public a maximum of [no. of shares] Common Shares, at a price of $[price per share] per Common Share; B. The Corporation wishes to retain the Agent, and the Agent is willing to act as agent of the Corporation in connection with this offering, on a “best efforts basis”, subject to the terms and conditions hereof; C. The Trustee has agreed to act as trustee of all subscription funds on behalf of the Corporation subject to the terms and conditions hereof. NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual covenants herein contained, it is agreed by the parties as follows: 1. DEFINITIONS For the purpose of this Agreement and any amendments hereto the following words and phrases shall have the following meanings: (a) “Agreement” means this agreement and the schedules hereto. (b) “Closing” means the completion of the transactions herein contemplated on the Closing Date as herein provided. (c) “Closing Date” means ninety (90) days from issue of a receipt for the Prospectus by the Securities Commission or such other date as the parties hereto may agree and the Securities Commission may allow. (d) “Common Shares” means all or any portion of the [no. of shares] common shares of the Corporation offered to the public pursuant to the Prospectus. -2- (e) “Minimum Subscription” means the minimum subscription of [no. of shares] common shares by at least _________ board lot subscriptions on or before the Closing Date as more fully described in the Prospectus. (f) “Misrepresentation” has the meaning ascribed thereto by the Securities Act (Alberta). (g) “Preliminary Prospectus” means the Preliminary Prospectus of the Corporation approved, signed and certified in accordance with the Securities Legislation relating to the offering of the Common Shares to the public and filed with the Securities Commission. (h) “Prospectus” means the final Prospectus of the Corporation and any amendments thereto, approved, signed and certified in accordance with the Securities Legislation and relating to the offering and distribution of the Common Shares to the public and filed with the Securities Commission. (i) “Securities Commission” means the Alberta Securities Commission. (j) “Securities Legislation” means the Securities Act (Alberta) and regulations thereto, and the policy statements, notices and blanket orders of the Securities Commission, the national policy statements and uniform act policies applied by the Securities Commission and the policies and by-laws of CDNX. (k) “Subscriber” or “Subscribers” means a person or those persons resident in Alberta who subscribe for Common Shares through the Agent or such other investment dealers contracted by the Agent to sell subscriptions in conjunction with the Agent. (l) “Subscription Funds” means all funds received with respect to all Successful Subscriptions in accordance with the terms and provisions of this Agreement. (m) “Successful Subscription” means a subscription for Common Shares which does not exceed 2% of the Common Shares offered for distribution to the public under the Prospectus and which subscription has been accepted by the Corporation and the Agent. (n) “Time of Closing” means [time], [city] Time on the Closing Date, or such other time on the Closing Date as the parties hereto may agree. 2. APPOINTMENT OF AGENT 2.1 Subject to the terms hereof, the Corporation hereby appoints the Agent and the Agent hereby agrees to act as agent of the Corporation to assist in soliciting subscriptions for the Common Shares. 2.2 The Agent may enter into arrangements with other investment dealers registered to sell securities in Alberta, at no additional cost to the Corporation, whereby such other investment dealers will be permitted to solicit subscriptions for the Common Shares. The arrangements between the Agent and such investment dealers shall be on such terms and subject to such conditions as the Agent may deem appropriate. 2.3 The Corporation will pay to the Agent, in consideration for the services to be performed by the Agent hereunder, an agency fee in the amount of $[deposit] (the “Deposit”) of which $[initial deposit] has already been paid. -3- 2.4 The Corporation will pay the fees, charges and expenses of the Agent’s counsel, up to a maximum of $[maximum] plus GST, by bank draft or certified cheque payable to or to the order of the Agent or the Agent’s counsel. 2.5 The Corporation shall further pay to the Agent, in consideration for the services to be performed by it hereunder, a commission in the amount of _______ (___%) percent of the Subscription Funds. The commission shall be paid at the Time of Closing by bank draft, certified cheque or solicitors’ trust cheque payable to or to the order of the Agent. 2.6 The Agent hereby undertakes to use its best efforts to assist the Corporation to procure subscriptions for the Common Shares in accordance with Securities Legislation, but is under no obligation to purchase any Common Shares. Provided that the Minimum Subscription is achieved before the Time of Closing and notwithstanding the fact that the Agent is not obligated to purchase any Common Shares, the Corporation will grant to the Agent at the Time of Closing, an irrevocable option to purchase ____% of the number of Common Shares sold pursuant to the Prospectus at a price of $[price per share] per Common Share on the terms and conditions contained in Schedule “A” annexed hereto. The Corporation and the Agent intend that the Agent’s option be qualified under and be distributed pursuant to the Prospectus. 3. SUBSCRIPTIONS 3.1 The Corporation will: (a) at such time as Successful Subscriptions for the Common Shares in a minimum amount of [no. of shares] Common Shares, or such other number as the Corporation and the Agent may agree upon, have been received; or (b) at 5:00 p.m. on the ([city] time), on the day prior to the Closing Date, close the subscription books and thereafter shall not receive any further subscriptions for Common Shares. 3.2 Subscribers may subscribe for Common Shares by delivering to the Agent on or prior to the Closing Date: (a) a fully executed subscription form, such subscription form to be provided by the Agent; and (b) payment in Canadian funds of the aggregate subscription price. 3.3 Upon receipt of the subscription form and Subscription Funds from each Subscriber, the Agent shall endeavour to effect a prompt collection of the amount of any cheque, bank draft, or other negotiable instrument. All sums so collected and all Subscription Funds received in cash will be delivered as soon as reasonably possible by the Agent to the Trustee, and the Subscription Funds shall be held by the Trustee in [city] in trust for the Subscribers pursuant to the terms of this Agreement and dealt with by the Trustee as provided herein. 4. APPOINTMENT OF TRUSTEE 4.1 The Trustee is hereby appointed as escrow agent and custodian for the receipt and holding of any and all Subscription Funds, in accordance with the terms of this Agreement and the Prospectus. -4- 4.2 The Trustee shall receive, tabulate, hold and account for all Subscription Funds received. After the receipt by the Trustee of the first Subscription Funds, the Trustee will advise the Corporation on request of the number and amount of subscriptions received. 4.3 Upon receipt of Subscription Funds from the Agent, the Trustee shall deposit the Subscription Funds in an escrow account in accordance with the terms and provisions hereof. 4.4 The Trustee shall keep the Funds held by it in the escrow account pursuant to Section 4.3 hereof invested as designated by the Corporation, and as agreed to by the Trustee, in a daily-interest escrow account or in short term interest-bearing securities, issued by a Canadian chartered bank, including any affiliate of the Trustee, a trust company licensed to do business as such in the Province of Alberta, including those of the Trustee or issued by, or guaranteed by the government of Canada or the government of any Canadian province, and as agreed to by the Trustee. 4.5 The Corporation shall, prior to requesting the release of Subscription Funds from escrow in accordance herewith, advise the Trustee by a certificate or certificates of its President or Secretary- Treasurer and countersigned by the Agent, which subscriptions constitute Successful Subscriptions and which subscriptions have been rejected by the Corporation, whether as to the whole or a part of each subscription. 5. INDEMNITY OF TRUSTEE 5.1 The Corporation shall indemnify and save harmless the Trustee against and from all reasonable costs which may be incurred by the Trustee in performance of its duties hereunder, provided, however, that all Subscription Funds, once cleared, while in the custody of the Trustee, shall be and shall remain at the sole risk and responsibility of the Trustee. The Trustee shall be liable to the Corporation for any loss related to the Subscription Funds or any interest thereon while in the custody of the Trustee. 5.2 In addition, the Corporation shall indemnify and save harmless the Trustee, its directors, officers, employees, and agents against and from all claims, losses, damages, liabilities, demands and judgments which may arise from the carrying out by the Trustee of its obligations under this Agreement except for such claims, demands and judgments that are attributable to the negligence or misconduct of the Trustee. This indemnity shall survive the termination of this Agreement. 5.3 The Trustee may in relation to the trusts herein created act on the opinion or advice or information obtained from any lawyer or other expert, whether retained by the Trustee, the Corporation or the Agent, or otherwise, but shall not be bound to act upon such opinion, advice or information and shall not be held responsible for any loss occasioned for so acting or not so acting, as the case may be, except where such loss results from the negligence or misconduct of the Trustee, and the Trustee may employ such assistants as may be necessary to properly discharge its duties and may pay any reasonable moneys required for any legal or other advice as aforesaid. 5.4 In respect of the discharge of any of its duties set forth hereunder, the Trustee shall be entitled to rely upon a certificate by the President or Secretary of the Corporation. 5.5 The Trustee may rely on any certificate, opinion, or instruction purporting to be a certificate, opinion, or instruction referred to in this Agreement and on the truth of the facts as set out herein and therein. The Trustee shall not be liable for any error in judgement, or for any act done or step taken or omitted by it in good faith, or as a result of a mistake in fact, or for anything it may do or refrain from doing in connection herewith except for its own negligence or willful misconduct. The duties and obligations of the Trustee hereunder shall be determined solely by the provisions of this Agreement and -5- the Trustee shall not be liable except for the performance of such duties and obligations as it has undertaken in this Agreement. 6. RELEASE OF SUBSCRIPTION FUNDS 6.1 The Trustee shall not at any time deliver any Subscription Funds received by it to the Corporation until it shall have received each of the following: (a) the certificate referred to in Section 4.5 hereof; (b) a written request from the Corporation requesting the delivery of Subscription Funds to the Corporation; (c) a written instruction from the Agent instructing the Trustee to deliver the Subscription Funds to the Corporation; and (d) a certificate signed by the President or the Secretary of the Corporation and countersigned by the Agent, to the effect that Successful Subscriptions for the Common Shares from not less than ____ board lot subscribers have been received by the Corporation. 6.2 Upon receiving the documentation referred to in Section 6.1 hereof, subject to Section 6.4 hereof, the Trustee shall forthwith deliver to the Corporation all Subscription Funds resulting from Successful Subscriptions held by it pursuant to this Agreement together with all interest earned on such funds and an accounting of all such Subscription Funds and interest. 6.3 If the Minimum Subscription is not received or if the Trustee has not received the documentation referred to in Section 6.1 hereof at or prior to the Time of Closing, the Trustee shall promptly thereafter remit by ordinary mail to each person whose Subscription Funds are held by the Trustee, the Subscriber’s Subscription Funds, without interest or deduction. 6.4 If the funds of any Subscriber delivered to the Trustee are for any reason rejected (in whole or in part) by the Corporation, such rejected funds shall be returned to such Subscriber without interest in the manner provided in Section 6.3 hereof. 6.5 All interest which shall have accrued with respect to Subscription Funds held pursuant to Section 4.3 shall be paid to the Corporation. 7. TRUSTEE FEE 7.1 The Corporation will pay to the Trustee for its services as Trustee hereunder the remuneration mutually agreed to by the Corporation and the Trustee, and in addition, the Trustee, upon presentation of its accounting and supporting invoices therefor, shall be reimbursed for all reasonable disbursements and out-of-pocket costs incurred by it in the furtherance of its duties hereunder, including, but not limiting the generality of the foregoing, any reasonable costs and disbursements incurred pursuant to Section 4.1 hereof. 8. PUBLIC OFFERING OF SHARES 8.1 It is understood by the parties that the Common Shares will be offered to persons resident in Alberta. -6- 8.2 The Corporation covenants and agrees with the Agent to execute or use its best efforts to procure the execution of all documents and to use its best efforts to take or cause to be taken all steps as may be reasonably necessary or desirable to fulfill all legal requirements to enable the Agent to assist in the sale of the Common Shares to persons resident in Alberta through itself, and in conjunction with the Corporation and other qualified registrants in accordance with the Securities Legislation, all as more particularly described herein and in the Prospectus. 9. REPRESENTATIONS AND WARRANTIES OF THE CORPORATION 9.1 The Corporation hereby represents and warrants to the Agent and acknowledges that the Agent is relying thereon, that: (a) The Corporation has been duly incorporated and organized and is validly existing in good standing under the laws of its jurisdiction of incorporation and has all the requisite corporate power and authority to carry on its business as now conducted and as presently proposed to be conducted. (b) The Corporation is conducting its business in compliance with all applicable laws, rules and regulations in the jurisdiction in which its business is carried on. (c) All of the common shares of the capital of the Corporation presently issued and outstanding have been validly allotted and issued as fully paid and non-assessable, and no other securities of the Corporation are issued or outstanding. (d) No person, firm or corporation now has any agreement or option, right or privilege (whether pre- emptive or contractual) capable of becoming an agreement (including convertible securities or warrants), for the purchase, subscription or issuance of any unissued common shares or other securities of the Corporation except as disclosed in the Prospectus. (e) The descriptions of the assets and the liabilities of the Corporation set out in the balance sheet in the Prospectus including the notes thereto, are true and correct, accurately and fairly present the financial position and condition of the Corporation, as at the date thereof, reflect all liabilities (absolute, accrued, contingent or otherwise) of the Corporation as at the date thereof, and have been prepared in accordance with generally accepted accounting principles applied on a consistent basis. (f) Except as referred to in and contemplated by the Prospectus, subsequent to the respective dates as of which information is given in the Prospectus: (i) there has not been any material change in the assets, liabilities or obligations (absolute, accrued, contingent or otherwise) of the Corporation; (ii) there has not been any material change in the authorized or issued capital or indebtedness of the Corporation; (iii) there has not been any material change in the business, business prospects, condition (financial or otherwise) or results of the operations of the Corporation; (iv) the financial position of the Corporation as of the date hereof is at least as good as that disclosed in the financial statements contained in the Prospectus; and -7- (v) since the date of the financial statements contained in the Prospectus, the Corporation has carried on its business in the ordinary course. (g) Neither the business nor the assets of the Corporation have been materially adversely affected in any way (whether or not insured) except as disclosed in the Prospectus. (h) Except as disclosed in the Prospectus, there is, to the knowledge of the Corporation, no action, proceeding or investigation (whether or not purportedly on behalf of the Corporation) pending or, to the knowledge of the Corporation and its directors or officers, threatened against or affecting the Corporation, at law or in equity or before or by any federal, provincial, municipal or other government department, commission, board or agency, domestic or foreign, which in any way materially adversely affects the Corporation, or the condition (financial or other) of the Corporation, or which questions the validity of the issuance, as fully paid and non-assessable, of the Common Shares or any action taken or to be taken by the Corporation pursuant to or in connection with this Agreement. (i) There is not in the Articles of Incorporation or the by-laws of the Corporation, or in any agreement, mortgage, note, debenture, indenture or other instrument or document to which the Corporation is a party, any restriction upon or impediment to the declaration of dividends by the directors of the Corporation or payment of dividends by the Corporation to the holders of the Common Shares except as disclosed in the Prospectus. (j) The Corporation is not in default or breach of, and the execution and delivery of this Agreement, and all other material contracts (as listed in the Prospectus under the heading “Material Contracts” thereof), the performance and compliance with the terms of this Agreement and all material contracts, and the sale of the Common Shares by the Corporation will not result in any breach of, or be in conflict with or constitute a default under, or create a state of facts which after notice or lapse of time, or both, would constitute a default under any term or provisions of the Articles of Incorporation, by-laws or shareholders’ or directors’ resolutions of the Corporation, or any mortgage, note, indenture, contract, agreement (written or oral), instrument, lease or other document to which the Corporation is a party, or, to the best of the knowledge of the Corporation, any judgment, decree, order, statute, rule or regulation applicable to the Corporation and any term or provisions or conditions (financial or otherwise) applicable to the Corporation or its properties or assets. (k) There is no person, firm or corporation acting or purporting to act for the Corporation entitled to any brokerage or finder’s fee in connection with this Agreement or any of the transactions contemplated hereunder, except as provided herein and as referred to in the Prospectus. (l) To the knowledge of management of the Corporation, none of the directors or senior officers of the Corporation, any holder of more than ten (10%) percent of its outstanding common shares, any promoters of the Corporation, or any associate or affiliate of any of the foregoing persons or companies as such terms are defined in the Securities Legislation has had any material interest, direct or indirect, in any material transaction within the three (3) years prior to the date of the Preliminary Prospectus, which, as the case may be, materially affects, is material to or will materially affect the Corporation, except as stated in the Prospectus, in which are fully set forth all relevant particulars required by the Securities Legislation. (m) Following the issuance of the Common Shares, all issued common shares of the Corporation will have been duly allotted and will be outstanding as fully paid and non-assessable. -8- (n) This Agreement has been duly authorized, executed and delivered on behalf of the Corporation and is a valid and binding obligation of the Corporation enforceable in accordance with its terms. (o) The Trustee, at its principal office in the City of [city], has been appointed transfer agent and registrar for the common shares of the Corporation and the Trustee as provided by the terms and conditions hereof. (p) The Corporation has not, directly or indirectly, declared or paid any dividends or declared or made any other distribution on any of its shares of any class since incorporation. (q) Application has been made to list the common shares of the Corporation on CDNX and conditional approval of such application has been obtained. (r) The net proceeds received by the Corporation from the sale of the Common Shares will be applied for the specific purposes more particularly set forth under “Use of Proceeds” in the Prospectus. 10. COVENANTS OF THE CORPORATION AND CONDITIONS OF CLOSING The Corporation covenants and agrees with the Agent and undertakes that: 10.1 Now and at all times subsequent hereto during the distribution of the Common Shares to the public or such longer period of time, if any, while the P
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