EXHIBIT 1.1
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AGENCY OFFERING AGREEMENT
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THIS AGREEMENT dated for reference May 16, 1997, is made
BETWEEN
SYMPLEX COMMUNICATIONS CORPORATION, ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇
(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 British Columbia
Securities Commission (the "Commission") and the Vancouver Stock Exchange (the
"Exchange"), by offering for sale certain of its securities;
B. The Issuer wishes to appoint the Agent to distribute those securities
outside of the United States 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) "Agent's Warrants" means the common share purchase warrants of the
Issuer issued to the Agent in consideration of its guarantee to
purchase any Shares which are not subscribed for at the conclusion
of the Offering;
(b) "Agent's Warrant Shares" means any shares of Common stock of the
Issuer that may be issued on exercise of the Agent's Warrants;
(c) "Distribution" means the distribution or sale of the Securities
outside of the United States pursuant to this Agreement and includes
the distribution of the Agent's Warrants;
(d) "Effective Date" means the date on which the final receipt for the
Prospectus is issued by the Commission;
(e) "Material Change" has the meaning defined in the Securities Act
(British Columbia);
(f) "Material Fact" has the meaning defined in the Securities Act
(British Columbia);
(g) "Misrepresentation" has the meaning defined in the Securities Act
(British Columbia);
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(h) "Offering" means the offering of the Shares under the Prospectus;
(i) "Offering Day" means the day on which the Offering is made;
(j) "Offering Price" means U.S.$1.00 per Share;
(k) "Prospectus" means any preliminary offering circular and/or the
preliminary prospectus and any final offering circular and/or final
prospectus filed or intended to be filed by the Issuer with the
Regulatory Authorities in connection with the Offering and any
amendments to such circulars and/or preliminary prospectuses and
which may be filed with the Regulatory Authorities;
(l) "Regulatory Authorities" means the Commission and the Exchange;
(m) "Securities" means the Shares, the Agent's Warrants, Agent's Warrant
Shares, the Corporate Finance Shares and any common shares of the
Issuer which may be offered for sale under the Prospectus, pursuant
to a secondary or shareholder offering; and
(n) "Shares" means the shares of Common stock of the Issuer to be
distributed under the Prospectus.
2. APPOINTMENT OF AGENT
The Issuer appoints the Agent as its exclusive agent and the Agent accepts the
appointment and agrees to act as the exclusive agent of the Issuer to offer the
Shares for sale outside of the United States under the Prospectus at the
Offering Price in a number equal to 3,500,000 less the number of AConversion
Shares" issued under the "Canadian Bridge Financing Notes" which, in turn, were
issued in accordance with the agency agreement dated August 12, 1997, between
the Issuer and the Agent.
3. LISTING APPLICATION AND CONDUCT OF OFFERING
3.1 Prior to the Effective Date, the Issuer will apply to the Exchange for a
conditional listing of its common shares.
3.2 Following the Effective Date and after consulting with the Exchange, the
Issuer and the Agent will set the Offering Day.
3.3 The Issuer will reserve or set aside sufficient shares in its treasury to
issue the Shares and Agent's Warrant Shares.
3.4 The Offering Day will be on or before the earlier of the day which is:
(a) 90 days after the Effective Date; and
(b) 12 months after the date of the issue by the Commission of the
receipt for the preliminary prospectus filed in connection with the
Offering.
3.5 The Offering will be made through the facilities of and in accordance
with the rules and policies of the Exchange.
3.6 After the Offering has been completed, the Issuer and the Agent will
file any documents required by the Exchange in order to remove the conditional
listing and to list, post and call the common shares of the Issuer for trading
on the Exchange.
3.7 The Agent will advise the Issuer and its counsel in writing when the
Distribution under the Prospectus is complete.
4. OPINIONS AND CERTIFICATES
4.1 On the Effective Date, the Issuer will deliver the following documents to
the Agent and its counsel in a form acceptable to them:
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(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 or by another officer approved
by the Agent, certifying certain facts relating to the Issuer and
its affairs (the "Officer's 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.
4.2 On the day prior to the Offering Day 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 Officer's Certificate
updated to 4:00 p.m. on the day prior to the Offering Day.
5. AGENT'S COMMISSION
5.1 In consideration of the services performed by the Agent under this
Agreement, the Issuer agrees to pay the Agent a commission of 7.5% of the
Offering Price per share sold whether purchased by the Agent for its own account
or for its clients or purchased by other members of the Exchange for their own
accounts or for their clients, payable in lawful Canadian currency (the "Agent's
Commission").
5.2 In consideration of the corporate finance services to be provided by
the Agents, the Issuer will also pay to the Agents a corporate finance fee of
70,000 shares of the Common stock of the Issuer (the "Corporate Finance
Shares") to be issued on the Effective Date, subject to any necessary approval
from the Regulatory Authorities.
6. GUARANTEED AGENCY AND AGENT'S WARRANTS
6.1 The Agent will purchase any of the Shares which are unsubscribed for
on the Offering Day (the "Guarantee") including any Shares in respect of which a
subscription has been received but is not binding on the subscriber by reason of
the receipt by the Agent, in accordance with the Securities Act (British
Columbia), of written notice evidencing the intention of the subscriber not to
be bound by the subscription.
6.2 In consideration for the Guarantee, the Issuer will issue Agent's
Warrants to the Agent or to members of its selling group as directed by the
Agent entitling the Agent to purchase up to 400,000 Agent's Warrant Shares.
6.3 The Agent's Warrants will be non-transferable and one Agent's
Warrant will entitle the holder to purchase one common share of the Issuer at
the Offering Price.
6.4 The right to purchase Agent's Warrant Shares under the Agent's
Warrants may be exercised at any time up to the close of business 365 days from
the day the common shares of the Issuer are listed, posted and called for
trading on the Exchange.
6.5 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.
6.6 The issue of the Agent's Warrants will not restrict or prevent the
Issuer from obtaining any other financing, nor from issuing additional
securities or rights during the period within which the Agent's Warrants are
exercisable.
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7. CLOSING
7.1 In this Section:
(a) "Certificates" representing the Shares and the Corporate Finance
Shares in the names and denominations reasonably requested by the
Agent and the certificates representing the Agent's Warrants;
(b) "Proceeds" means the gross proceeds of the Offering, less:
(i) that portion of the Agent's Commission payable in cash;
(ii) the expenses of the Agent in connection with the Offering
which have not been previously paid by the Issuer;
(iii) any amount which has been attached by garnishing order or
other form of attachment; and
(iv) any amount already received by the Issuer.
7.2 The Issuer will, within three business days of the Offering Day,
deliver the Certificates, through its registrar and transfer agent, to the Agent
against payment of the Proceeds.
7.3 If the Issuer has satisfied all of its obligations under this
Agreement, the Agent will, within three business days of the Offering Day, pay
the Proceeds to the Issuer through its registrar and transfer agent, against
delivery of the Certificates.
7.4 The obligation of the Agent on the Offering Day 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 Officer's Certificate shall contain
certification to that effect;
(c) the Issuer shall have made, within the time limited, each of the
deliveries provided for in Section 4 hereof; 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 Act to qualify the Distribution of the Shares to
the public in British Columbia through registrants who have complied
with the provision of the Act, including the filing and the obtaining
of receipts for the Prospectus.
8. MATERIAL CHANGES
8.1 If, after the Prospectus is filed with the Regulatory Authorities but
before the conclusion of the distribution of all the Securities under the
Prospectus, 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; and
(c) provide as many copies of that amendment to the Agent as the Agent
may reasonably request.
8.2 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.
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9. TERMINATION
9.1 The Agent may terminate its obligations under this Agreement by notice
in writing to the Issuer at any time before the opening of the market on the
Offering Day 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, the Agent
determines, in its sole discretion, that it is not in the interest of
investors to complete the Offering;
(d) the Securities cannot, in the opinion of the Agent, be profitably
marketed due to the state of the financial markets; 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.
9.2 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.
9.3 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.
9.4 This Agreement will terminate if a final receipt for the Prospectus is
not issued by the Commission on or before January 31, 1998.
9.5 The Agent will be relieved of all obligations under this Agreement if
the Issuer or its filing solicitor does not receive, within five days before the
Effective Date, written confirmation from the Agent or its solicitors that this
Agreement remains in effect and that the Agent accepts the proposed Effective
Date.
10. WARRANTIES AND REPRESENTATIONS
10.1 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 Delaware
General Corporations Law;
(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;
(c) the authorized and issued capital of the Issuer is as disclosed in
the Prospectus and the issued and outstanding shares of the Issuer are
fully paid and non-assessable;
(d) the Issuer will reserve or set aside sufficient shares in its
treasury to issue the Shares, Agent's Warrant
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Shares and the Corporate Finance Shares;
(e) except as qualified by the Prospectus, 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; 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 will and does contain full, true and plain disclosure
of all "material facts", within the meaning of the Securities Act
(British Columbia), in relation to the Issuer, its subsidiaries (if
any), its business and its securities, and will and does not contain
any "misrepresentations" within the meaning of the Securities Act
(British Columbia), and is accurate in all material respects and
omits 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 United States
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
Securities Act (British Columbia) and the U.S. Securities Act of
1933 (the "1933 Act") and their regulations and the Delaware General
Corporations Law in relation to the issue and trading of its
securities and in all matters relating to the Offering;
(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, 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 or otherwise to the Agent;
(n) no order ceasing, halting or suspending trading in securities of the
Issuer nor 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, 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,
state, 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
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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 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) 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
(s) except as set out in the Prospectus, or otherwise disclosed to the
Agents in writing, the Issuer will not issue or sell or agree to
issue or sell any common shares in its capital, or securities
convertible into or exchangeable into common shares prior to the
Effective Date, other than at a price equal to the price at which
the Shares are offered, without the prior written consent of the
Agents, which consent will not be unreasonably withheld and the
Issuer agrees that any such common shares or securities convertible
into or exchangeable into common shares will be sold to accounts
with the Agents; and
(t) the Issuer shall file a registration statement with the U.S.
Securities and Exchange Commission ("SEC")seeking the registration
of the Issuer's class of common shares pursuant to Section12(g) of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and thereafter shall diligently prosecute such registration
so that it may, with the consent of the Agents become effective on
the sixtieth day following such filing (or such earlier date as
shall be mutually satisfactory to the Agents and the Issuer) and
prior to the Offering Day, and shall thereafter timely make all such
filings as are required by section 13 of the Exchange Act; and
(u) the warranties and representations in this Subsection are true and
correct and will remain so as of the conclusion of the distribution
under the Prospectus.
10.2 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
Securities Act (British Columbia), its rules and regulations and the
by-laws and rules of the Exchange, in relation to trading in the
Securities and all matters relating to the Offering.
10.3 The Issuer warrants and represents to the Agents that neither the
Issuer nor any other person described in SEC Rule 262(a) or (b) is or has been
the subject of any matters or proceedings as described therein, and the Agents
warrant and represent to the Issuer that neither it nor any of its directors or
officers is or has been the subject of any matters or proceedings as described
in SEC Rule 262(b) or (c).
11. EXPENSES OF AGENT
11.1 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.
11.2 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 failure of acceptance
or completion or the termination is the result of a breach of this Agreement by
the Agent.
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11.3 The Agent may, from time to time, render accounts to the Issuer for
its expenses for payment on or before the dates set out in the accounts.
11.4 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.
12. FILING OF PROSPECTUS
12.1 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.
12.2 The Issuer will provide the Agent with as many copies of the
Prospectus as the Agent reasonably requests.
12.3 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
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 British Columbia in
compliance herewith and with the Securities Act (British Columbia).
12.4 With respect to matters involving the potential application of United
States securities laws, the parties agree as follows:
(a) it is intended that the initial sale of the Securities will be made
solely to persons who are neither U.S. Persons, Distributors nor their
affiliates, as those terms are used in SEC Regulation S; and
(b) that in order for the sale of the Securities to qualify for the
exemption from 1933 Act registration provided by SEC Rule 903(c)(2):
(i) the Agent agrees that all offers and sales of the securities
prior to the expiration of the 40 day restricted period specified
in such Rule 903(c)(2) shall be made only: in accordance with
the provisions of SEC Rules 903 or 904; pursuant to registration
of the securities under the 1933 Act; or pursuant to an available
exemption from the registration requirements of the 1933 Act; and
(ii) the Issuer and the Agent agree that all offering materials and
documents (other than press releases) used in connection with
offers and sales of the securities prior to the expiration of the
40 day restricted period specified in Rule 903(c)(2) shall
include statements to the effect that the securities have not
been registered under the 1933 Act and may not be offered or sold
in the United States or to U.S. persons (other than distributors)
unless the securities are registered under the 1933 Act, or an
exemption from the registration requirements of the 1933 Act is
available; and that such statements shall appear:
(A) on the cover or inside cover page of any prospectus or
offering circular used in connection with the offer or
sale of the Securities;
(B) in the underwriting section of any prospectus or offering
circular used in connection with the offer or sale of the
Securities; and
(C) in any advertisement made or issued by the Issuer, the
Agent, any of their respective affiliates, or any person
acting on behalf of any of the foregoing.
12.5 Although it is intended that the offering of common shares pursuant to
this Agency Agreement will be made solely to persons who are neither U.S.
Persons, Distributors nor their affiliates, as those terms are used in
Regulation S, at the request of the Agent:
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(a) the Issuer will file such form of registration statement as may be
available to the Issuer (a "Registration Statement") and will use
its best efforts to ensure that the effectiveness of the
Registration Statement will be declared contemporaneously with, and
not later than, the issuance of a receipt for the (final) Prospectus
by the Commission; and
(b) if, at any time following the closing of the Issuer's distribution
via the Prospectus in Canada, the Agent is unable, in the opinion of
its counsel (which counsel shall be reasonably acceptable to the
Issuer), to sell any of the securities acquired for its own account
hereunder in British Columbia or the United States pursuant to a
U.S. securities registration exemption which will leave such
securities free trading in the hands of the purchaser(s), the Issuer
will, at its expense and promptly upon the written request of the
Agent, file a Registration Statement with the SEC covering the
Agent's sale of all such securities, and will thereafter diligently
seek the effectiveness of such Registration Statement.
13. GARNISHING ORDERS
13.1 If at any time, up to and including the final date of payment for
the Securities, the Agent receives a garnishing order or other form of
attachment purporting to attach or garnish a part or all of the sale price or
exercise price of any of the Securities, the Agent will be free to pay the
amount purportedly attached or garnished into court.
13.2 Any payment by the Agent into court contemplated in this Agreement
will be deemed to have been received by the Issuer as payment by the Agent
against the sale price or exercise price of the Securities to the extent of the
amount paid, and the Issuer will be bound to issue and deliver the Securities
proportionately to the amount paid by the Agent.
13.3 The Agent will not be bound to ascertain the validity of any
garnishing order or attachment, or whether in fact it attaches any monies held
by the Agent, and the Agent will be free to act with impunity in replying to any
garnishing order or attachment.
13.4 The Issuer will release, indemnify and save harmless the Agent in
respect of all damages, costs, expenses or liability arising from any acts of
the Agent under this Section.
14. REPORTS ON SOURCE AND APPLICATION OF FUNDS
The Issuer will deliver to the Agent, at its request, within 30 days of the end
of each month following the completion of the Offering, a copy of any financial
report required to be filed with the Regulatory Authorities relating to the
expenditure of the proceeds of the Offering.
15. INDEMNITY
15.1 The Issuer will indemnify the Agent and each of the Agent's
controlling persons, agents, directors, officers, affiliates and employees
(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 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 any fact
necessary to make such statements or representation not misleading
(except for information and statements supplied by and 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 supplied by and 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 as required by this Agreement;
(d) resulting from the breach by the Issuer of any of the terms of this
Agreement;
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(e) resulting from any representation or warrant made by the Issuer
herein not being true or ceasing to be true;
(f) if the Issuer fails to issue and deliver the certificates for the
Securities 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.
15.2 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.
15.3 The Issuer will assume the defence of the action or claim, including
the employment of counsel and the payment of all expenses.
15.4 The Indemnified Party will have the right to employ separate
counsel, and the Issuer will pay the fees and expenses of such counsel.
15.5 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.
15.6 If indemnification under this Agreement is found in a final judgment
(not subject to further appeal) by a court of competent jurisdiction not to be
available for reason of public policy, the Issuer and the Indemnified Parties
will contribute to the losses, claims, damages, liabilities or expenses (or
actions in respect thereof) for which such indemnification is held unavailable
in such proportion as is appropriate to reflect the relative benefits to and
fault of the Issuer, on the one hand, and the Indemnified Parties on the other
hand, in connection with the matter giving rise to such losses, claims, damages,
liabilities or expenses (or actions in respect thereof). No person found liable
for a fraudulent misrepresentation (within the meaning of applicable securities
laws) will be entitled to contribution from any person who is not found liable
for such fraudulent misrepresentation.
15.7 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.
15.8 The Issuer will make no claim for, and waives irrevocably any right
by statute or common law to, contribution against any Indemnified Party in the
event an action is brought against the Issuer as a result of any of the events
described in Subsection 15.1.
16. ASSIGNMENT AND SELLING GROUP PARTICIPATION
16.1 The Agent will not assign this Agreement or any of its rights under
this Agreement nor, 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.
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.
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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 exclusive 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.
The common seal of )
SYMPLEX COMMUNICATIONS CORPORATION )
was hereunto affixed in the )
presence of: )
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Authorized Signatory ) c/s
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Authorized Signatory )
The common seal of )
CANACCORD CAPITAL CORPORATION )
was hereunto affixed in the )
presence of: )
)
/s/ (illegible) )
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Authorized Signatory ) c/s
)
/s/ (illegible) )
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Authorized Signatory )