Investor Presentaiton
Statutory Rights of Action (continued)
ALPHA
EXPLORATION
Newfoundland and Labrador
The right of action for damages or rescission described herein is conferred by Section 130.1 of the Securities Act (Newfoundland and Labrador) (the "Newfoundland Act"). The Newfoundland Act
provides, in relevant part, that where an offering memorandum contains a Misrepresentation, as defined in the Newfoundland Act, a purchaser who purchases securities offered by the offering
memorandum has, without regard to whether the purchaser relied upon the Misrepresentation, a statutory right of action:
a)
for damages against:
I.
the issuer,
II. every director of the issuer at the date of the offering memorandum, and
III. every person or company who signed the offering memorandum; and
b)
for rescission against the issuer.
The Newfoundland Act provides a number of limitations and defences in respect of such rights. Where a Misrepresentation is contained in an offering memorandum, a person or company shall
not be liable for damages or rescission:
a)
b)
c)
where the person or company proves that the purchaser purchased the securities with knowledge of the Misrepresentation;
in the case of an action for damages, the defendant is not liable for all or any part of the damages that the defendant proves do not represent the depreciation in value of the security as a
result of the Misrepresentation; and
in no case will the amount recoverable in any action exceed the price at which the securities were offered under the offering memorandum.
In addition, no person or company, other than the issuer, is liable:
a)
b)
c)
where the person or company proves that the offering memorandum was sent to the purchaser without the person's or company's knowledge or consent and that, on becoming aware of its
being sent, the person or company promptly gave reasonable notice to the issuer that it was sent without the knowledge and consent of the person or company;
if the person or company proves that the person or company, on becoming aware of the Misrepresentation in the offering memorandum, withdrew the person's or company's consent to the
offering memorandum and gave reasonable notice to the issuer of the withdrawal and the reason for it;
if, with respect to any part of the offering memorandum purporting to be made on the authority of an expert or purporting to be a copy of, or an extract from, a report, opinion or statement
of an expert, the person or company proves that the person or company did not have any reasonable grounds to believe and did not believe that:
d)
I.
there had been a Misrepresentation; or
II.
the relevant part of the offering memorandum:
A. did not fairly represent the report, opinion or statement of the expert; or
B.
was not a fair copy of, or an extract from, the report, opinion or statement of the expert; or
with respect to any part of the offering memorandum not purporting to be made on the authority of an expert and not purporting to be a copy of, or an extract from, a report, opinion or
statement of an expert, unless the person or company:
I.
II.
did not conduct an investigation sufficient to provide reasonable grounds for a belief that there had been no misrepresentation; or
believed there had been a misrepresentation.
a)
Section 138 of the Newfoundland Act provides that no action shall be commenced to enforce these rights more than:
in the case of an action for rescission, 180 days after the date of the transaction that gave rise to the cause of action; or
b)
in the case of an action for damages, the earlier of:
180 days after the date that the purchaser first had knowledge of the facts giving rise to the cause of action; or
I.
II. three years after the date of the transaction that gave rise to the cause of action.
Nova Scotia
The right of action for damages or rescission described herein is conferred by section 138 of the Securities Act (Nova Scotia). Section 138 of the Securities Act (Nova Scotia) provides, in relevant
part, that in the event that an offering memorandum, together with any amendment thereto, or any advertising or sales literature (as defined in the Securities Act (Nova Scotia)) contains a
Misrepresentation, the purchaser will be deemed to have relied upon such Misrepresentation if it was a Misrepresentation at the time of purchase and has, subject to certain limitations and
defences, a statutory right of action for damages against the seller (which includes the issuer) and, subject to certain additional defences, every director of the seller at the date of the offering
memorandum and every person who signed the offering memorandum or, alternatively, while still the owner of the securities purchased by the purchaser, may elect instead to exercise a
statutory right of rescission against the seller, in which case the purchaser shall have no right of action for damages against the seller, directors of the seller or persons who have signed the
offering memorandum, provided that, among other limitations:
39View entire presentation