EXHIBIT 1.2
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THIS AGREEMENT dated April 29th, 1997 is made
BETWEEN
CANACCORD CAPITAL CORPORATION, a member of the Vancouver Stock
Exchange (the "Exchange"), of 2200 - 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxx Xxxxxxxx, X0X 0X0
(the "Member");
AND
SYMPLEX COMMUNICATIONS CORPORATION, a company incorporated under the
law of Delaware, of 0 Xxxxxxxx Xxxxx, Xxx Xxxxx, XX, 00000, XXX
(the "Issuer").
WHEREAS:
A. The Issuer has not previously carried out a distribution of its
securities to the public, and intends to file an Initial Listing Application to
list its common shares (the "Shares") on the Vancouver Stock Exchange (the
"Exchange") (the "Transaction");
B. Pursuant to Exchange Listings Policy No. 4 as amended ("Policy No.
4"), the Exchange requires that the Issuer obtain a member to act as its sponsor
within the meaning of Policy No. 4 as a condition of approval of the
Transaction;
THE PARTIES to this Agreement therefore agree:
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Agreement:
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(a) "Approval Date" means the date the Shares are posted and called
for trading on the Exchange;
(b) "Business" means the corporate undertaking of the Issuer;
(c) "Control Block" means a holding of Shares or other securities of
the Issuer or both held by a person or combination of persons
acting jointly or in concert to which are attached more than 20%
of the voting rights attached to all outstanding Voting
Securities;
(d) "Issuer" has the meaning assigned above and includes any wholly-
owned or partially-owned subsidiaries of the Issuer;
(e) "Listing Date" means the date the Issuer's securities are listed,
posted and called for trading on the Exchange;
(f) "Member" has the meaning assigned above;
(g) "Proceeds" means the proceeds from the Public Offering, if any;
(h) "Public Offering" means the offering of the Issuer's securities
contemplated to be made by the Member as agent contemporaneously
with or after the closing of the Transaction, if any;
(i) "Quarterly Report" means a report concerning the Issuer required
by paragraph 145 of the Regulation to the Securities Act (British
Columbia);
(j) "Reports" means any business plans, engineering reports,
geological reports, technical reports, valuation opinions or
similar documents concerning the Business;
(k) "Transaction" has the meaning assigned in Recital A;
(l) "Voting Security" means a security of the Issuer that carries a
voting right under all circumstances.
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2. INVESTIGATION BY MEMBER
2.1 The Issuer shall at all times afford full access to the Member and its
authorized representatives to all properties, books, contracts, commitments and
other corporate records, and shall furnish the Member with copies thereof and
such other information concerning the Business as the Member may request, in
order that the Member may undertake an investigation of the Issuer and the
Business.
2.2 The Issuer shall forthwith provide the Member with:
(a) the most recent audited financial statements concerning the
Issuer, and unaudited financial statements, prepared as of a date
satisfactory to the Member;
(b) a draft Pre-Listing Application and Fact Sheet appropriate to the
Transaction in the form required by the Exchange, together with
all required Schedules;
(c) a draft disclosure document (Prospectus, Filing Statement or
Exchange Offering Prospectus) appropriate to the Transaction;
(d) fully completed and executed personal information forms in Form
4B to the Regulation to the Securities Act (British Columbia) for
all directors;
(e) questionnaires, in the form provided by the Member, completed in
full by each of its directors and each member of its senior
management;
(f) copies of all relevant material contracts.
2.3 Upon conclusion of its investigation, the Member shall give notice to
the Issuer whether it has decided to act as the Issuer's sponsor with regard to
the Transaction.
3. TERM
This Agreement shall be effective from the date hereof until:
(a) if the Member gives notice to the Issuer that it has decided not
to act as the Issuer's sponsor with regard to the Transaction,
the date such notice is
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given; or
(b) if the Member gives notice to the Issuer that it has decided to
act as the Issuer's sponsor with regard to the Transaction, the
close of business on that day falling one year from the Listing
Date;
unless it is terminated earlier by the Member in accordance herewith.
4. FEE
The Issuer will pay the Member a fee of Cdn. $15,000.00 (plus G.S.T.) in
consideration of the Member acting as the Issuer's sponsor with regard to the
Transaction, payable: 1) as to 50% upon execution of this agreement and 2) the
acceptance of the Company*s Application by the Vancouver Stock Exchange*s Pre-
Listing Advisory Committee. The Member's G.S.T. Number is 133567545.
5. COVENANTS OF THE ISSUER
5.1 If, during the term of this Agreement, a material change in the
assets, liabilities (contingent or otherwise), business, operations or capital
of the Issuer should occur, or be anticipated or threatened, the Issuer shall
notify the Member immediately, in writing, with full particulars of the change.
5.2 If the Issuer is not certain as to whether a material change has
occurred, the Issuer shall promptly notify the Member in writing of the full
particulars of the event giving rise to the uncertainty, and shall consult with
the Member as to whether such event constitutes a material change.
5.3 The Issuer shall provide the Member with copies of all Reports
forthwith upon preparation or receipt of same.
5.4 The Issuer shall notify the Member of:
(a) any change proposed to be made in the Business;
(b) any proposed issuance of a Control Block;
(c) any proposed sale or other disposition of any outstanding shares
in the
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capital of any subsidiaries wholly or partially owned by
the Issuer;
forthwith upon the proposal of such change, issuance, sale or disposition.
5.5 The Issuer shall notify the Member of any proposed change to the
constitution of the Board of Directors of the Issuer, or to the membership of
senior management of the Issuer, forthwith upon the proposal of such a change.
Forthwith after giving such notification, the Issuer shall provide the Member
with a questionnaire in the form provided by the Member, completed in full by
the proposed candidate. The Issuer shall promptly notify the Member, in writing
of any resignations, terminations or departures of members of the Board of
Directors or senior management.
5.6 The Member reserves its right to terminate this Agreement, resign as
Sponsor and to notify the Exchange of its decision to resign should it object to
any of the proposed changes set forth in Subsections 5.4 and 5.5.
5.7 The Issuer shall provide the Member with copies of all Quarterly
Reports, press releases, promotional materials, material change reports,
materials prepared in connection with the Issuer's annual general meeting and
any special meetings of shareholders, annual reports, and financial statements
prepared by or for the Issuer forthwith upon preparation or receipt of the same.
5.8 The Issuer shall notify the Member of any circumstances where the
Issuer does not expect to comply with a filing deadline imposed by regulatory
authorities. Such notification shall be provided at least 10 business days
before the deadline.
5.9 If the Issuer sells Shares or other securities to the public during
the Member's term as sponsor, then, commencing with the last day of the month in
which such sale closes, the Issuer will provide the Member with Quarterly
Sources and Uses of Funds statements within 15 days of each quarter's end. Such
statements will illustrate variances with the Use of Proceeds set out in the
Prospectus or Exchange Offering Prospectus prepared in connection with the sale
of Shares or other securities.
5.10 The Issuer shall at all times use its best efforts to assist the
Member in carrying out its duties as sponsor.
5.11 The Issuer acknowledges that it has appointed Xxxxxx Xxxxxxx as its
officer
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responsible for carrying out its reporting obligations to the Member
hereunder, and agrees that the Member may direct and address all inquiries and
submit all notices hereunder to the attention of Xxxxxx Xxxxxxx.
5.12 Nothing in this Agreement is or shall be construed as a xxxxxx on the
discretion of the directors of the Issuer.
6. ACKNOWLEDGMENTS OF ISSUER
6.1 The Issuer acknowledges that the Member has informed the Issuer and
its directors and management of their responsibilities concerning continuous and
timely disclosure under the Securities Act (British Columbia), and in
particular, without limitation, of the Issuer's responsibility to issue a press
release, and file a material change report, in the event of a material change,
as that term is defined in the Securities Act (British Columbia), in the
business, operations, assets or ownership of the Issuer. The Issuer further
acknowledges in this regard that it has been made aware by the Member of the
services offered by commercial news disseminators.
6.2 The Issuer acknowledges that the Member has advised the Issuer
concerning the Exchange's on-going requirements concerning the minimum
distribution of the Shares.
7. REPRESENTATIONS, WARRANTIES AND
INDEMNIFICATIONS OF THE ISSUER
7.1 The Issuer warrants and represents to the Member, and acknowledges
that the Member has relied on such warranties and representations in entering
into this Agreement, that:
(a) the responses in all questionnaires completed by the directors
and senior management personnel of the Issuer and provided to the
Member pursuant to this Agreement shall be accurate and complete;
(b) the descriptions of the assets and the liabilities of the Issuer
set out in the balance sheets of the Issuer, including the notes
thereto, to be provided to the Member will be true and correct,
will accurately and fairly present the financial position and
condition of the Issuer as at the respective dates thereof, will
reflect all liabilities (absolute, accrued, contingent or
otherwise) of the Issuer at the respective dates thereof and will
be prepared in accordance with generally accepted accounting
principles, applied on a
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consistent basis;
(c) the statement of earnings, retained earnings and changes in
financial position of the Issuer, including the notes thereto, to
be provided to the Member will in each case accurately and fairly
present the results of the operations of the Issuer for the
respective periods covered thereby and will be prepared in
accordance with generally accepted accounting principles applied
on a consistent basis throughout such period;
(d) the financial position of the Issuer as at the date hereof is no
less favourable than that disclosed in the latest balance sheets
provided to the Member;
(e) the information concerning the Business which will be provided to
the authors of the Reports will be accurate, complete and fair,
and the Reports, to the best of the knowledge of the Issuer, will
be fair and accurate in all particulars;
(f) the information contained in the Sources and Uses of Funds
statements to be provided to the Member hereunder will be
accurate and complete;
(g) the execution of this Agreement by the Issuer does not and will
not conflict with, and does not and will not result in a breach
of, or constitute a default under, any agreement or instrument to
which the Issuer is a party, or by which the Issuer is bound, or
the terms of the incorporating documents of the Issuer;
(h) the execution of this Agreement has been authorized by all
necessary corporate action on the part of the Issuer;
(i) as of the date hereof:
(i) there has not been any material change in the assets,
liabilities or obligations (absolute, accrued, contingent or
otherwise) of the Issuer;
(ii) there has not been any material change in the capital or
long-term debt of the Issuer;
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(iii) there has not been any material change in the Business,
business prospects, condition (financial or otherwise) or
results of the operation of the Issuer from those
disclosed in the most recent [consolidated] financial
statements provided to the Member of which the Member has
not been made aware by the Issuer;
(j) since the date of the most recent financial statements provided
to the Member, the Issuer has carried on the Business in the
ordinary course;
(k) the Issuer is duly registered and licensed to carry on business
in the jurisdictions which it carries on business or owns
property;
(l) no order suspending the sale of or ceasing the trading in the
Shares or other securities of the Issuer has been issued and not
rescinded, revoked or withdrawn by any securities commission,
regulatory authority or stock exchange in any jurisdiction, and
no proceedings for that purpose have been instituted or are
pending or are, to the knowledge of the directors or senior
management of the Issuer, contemplated or threatened by any
securities commission, regulatory authority or stock exchange;
(m) no enquiry or investigation, formal or informal, in relation to
the Issuer or the Issuer's directors or senior management, has
been commenced or threatened by any official or officer of any
securities commission, regulatory authority or stock exchange;
7.2 The representations and warranties of the Issuer set forth in
Subsections 7.1 hereof shall continue to be true and accurate throughout the
term of this Agreement.
7.3 The Issuer shall indemnify and save harmless the Member, and each
director, officer, employee or agent of the Member, from and against all losses,
claims, damages, liabilities, costs or expenses caused or incurred by the Member
or any of its directors, officers, employees or agents, arising or resulting
from any breach by the Issuer of any of the terms of this Agreement.
7.4 If any action or claim is brought against the Member in respect of
which indemnity may be sought from the Issuer pursuant to this Agreement, the
Member will promptly notify the
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Issuer in writing.
7.5 The Issuer will assume the defence of the action or claim, including
the employment of counsel and the payment of all expenses.
7.6 The Member will have the right to employ separate counsel, and the
Issuer will pay the fees and expenses of such counsel.
7.7 The indemnity provided for in this Section will not be limited or
otherwise affected by any other indemnity obtained by the Member 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 Member arising out
of this Agreement has been extinguished by the operation of law.
8. TERMINATION
8.1 The Member may terminate this Agreement in any of the following
events:
(a) if a material adverse change (actual, anticipated or threatened)
in the assets, liabilities (contingent or otherwise), business
operations or capital of the Issuer should occur;
(b) if any order is made suspending trading in the Shares on the
Exchange, or any order to cease or suspend trading in the Shares
is made pursuant to any of the Canadian Securities Acts or is
made by any other regulatory authority, and is not rescinded,
revoked or withdrawn within 30 days of the making thereof;
(c) if any enquiry or investigation (whether formal or informal) in
relation to the Issuer or the Issuer's directors or senior
management, is commenced or threatened by an officer or official
of any securities regulatory authority in Canada or by any
officer or official of any other competent authority;
(d) if the Issuer shall at any time be in breach of any of the terms
of this Agreement;
(e) if the Issuer determines to take a course of action referred to
in Subsections 5.4 or 5.5 to which the Member has notified the
Issuer in
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writing it objects;
(f) if the Member determines that any representation or warranty made
by the Issuer in this Agreement is false or has become false.
8.2 Any termination by the Member hereunder shall be made by notice in
writing to the Issuer. Notwithstanding the giving of any notice of termination
hereunder, the expenses and fees agreed to be paid by the Issuer incurred up to
the time of the giving of such notice shall be paid by the Issuer as herein
provided.
8.3 The Issuer acknowledges and agrees that, if the Member terminates this
Agreement, the Member shall comply with all applicable provisions of Policy No.
4 relating to termination of sponsorship, including the filing of a letter
explaining the termination with the Exchange. In such event, the Member may
disclose to the Exchange such information concerning the Issuer as the Member in
its sole discretion considers to be necessary to fulfill its obligations to the
Exchange and the requirements of Policy No. 4, including any information which
the Issuer has disclosed to the Member on a privileged or confidential basis.
8.4 The rights of the Member to terminate this Agreement are in addition
to such other remedies as it may have in respect of any default,
misrepresentation, act or failure of the Issuer in respect of any of the matters
contemplated by this Agreement.
8.5 The Issuer may terminate this Agreement upon giving 30 days written
notice to the Member.
9. EXPENSES OF MEMBER
9.1 The Issuer will pay all of the expenses of the Member reasonably
incurred by the Member in connection herewith, including, without limitation,
the fees and expenses of any solicitors which might be retained by the Member in
connection herewith and not to exceed Cdn. $2,500.00.
9.2 The Member may, from time to time, render accounts for such expenses
to the Issuer for payment on or before the dates set out in such accounts.
9.3 The Issuer's covenant to pay the Member's expenses shall survive
termination of this Agreement.
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10. NOTICE
10.1 Any notice under this Agreement will be given in writing and must be
delivered, sent by telex, telegram or telecopier 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.
10.2 If notice is sent by telex, telegram or telecopier or is delivered, it
will be deemed to have been given at the time of transmission or delivery.
10.3 If notice is mailed, it will be deemed to have been received 48 hours
following the date of mailing of the notice.
10.4 If there is an interruption in normal mail service due to strike,
labour unrest or other cause at or prior to or within 48 hours of the time a
notice is mailed the notice will be sent by telex, telegram or telecopier or
will be delivered.
11. TIME
Time is of the essence of this Agreement and will be calculated in accordance
with the provisions of the Interpretation Act (British Columbia).
12. 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.
13. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and cancels and supersedes any prior
understandings and agreements between the parties hereto with respect thereto.
14. COUNTERPARTS
This Agreement may be executed in two or more counterparts and may be delivered
by telecopier. Each executed counterpart will be deemed to be an original, and
all of them will constitute one agreement, effective as of the reference date
given above.
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15. HEADINGS
The headings in this Agreement are for convenience of reference only and do not
affect the interpretation of this Agreement.
16. ENUREMENT
This Agreement enures to the benefit of and is binding on the parties to this
Agreement and their successors.
The common seal of )
CANACCORD CAPITAL )
CORPORATION was hereunto )
affixed in the presence of: )
)
/s/ (illegible) )
_____________________________ )
Authorized Signatory ) c/s
)
/s/ (illegible) )
_____________________________ )
Authorized Signatory )
The common seal of )
SYMPLEX COMMUNICATIONS CORPORATION )
was hereunto affixed in the )
presence of: )
)
/s/ Xxxx X. Xxxxx )
_____________________________ )
Authorized Signatory ) c/s
)
/s/ Xxxxxx Xxxxxxx )
_____________________________ )
Authorized Signatory )
