THIS AGREEMENT, dated for reference March 13, 1996, is made
BETWEEN:
HEALTHCARE CAPITAL CORP., a corporation incorporated pursuant
to the laws of the Province of Alberta and having an office
located at 0000-000 Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx,
X0X 0X0
(the "Issuer");
AND:
X.X. XXXXXX & COMPANY LIMITED, a company amalgamated under the
laws of British Columbia, having its head office at the 2nd
Floor, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx,
X0X 0X0
(the "Sponsor").
WHEREAS:
A. The Issuer wishes to distribute to residents of British Columbia and Alberta
units, comprised of one common share and one share purchase warrant, to be
issued on the exercise of previously issued special warrants, on the terms and
conditions described in the prospectus of the Issuer to be filed with the
British Columbia Securities Commission and the Alberta Securities Commission
(the "Prospectus");
B. The Sponsor is an investment dealer based in Vancouver and is a member of the
Vancouver, Alberta, Toronto and Montreal stock exchanges and of the Pacific
District of the Investment Dealers Association of Canada, and is registered as a
dealer under the Securities Act (British Columbia);
C. The Sponsor is prepared, on and subject to the terms and conditions of this
Agreement, to conduct an investigation of the organization, management, business
and affairs of the Issuer, sufficient to enable it to sign the certificate for
the final Prospectus of the Issuer.
THEREFORE, the parties agree:
1. INTERPRETATION
1.1 Defined Terms
In this Agreement:
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(a) "Distribution" means the distribution by the Issuer
of the Units to holders of the Securities under the
Prospectus and "distribute" has a corresponding
meaning;
(b) "Finders' Special Warrants" means the Special
Warrants issued by the Issuer as a finders' fee
pursuant to a private placement completed by the
Issuer on February 28, 1996;
(c) "Indemnified Parties" means the Sponsor, its
affiliates and their respective directors, officers,
employees and agents;
(d) "Issuer" means HealthCare Capital Corp.;
(e) "Marketing Materials" means any marketing materials
to be used in connection with the Offering;
(f) "material change", "material fact" and
"misrepresentation" have the respective meanings
assigned in the Securities Act (British Columbia);
(g) "Offering" means the offering, sale and distribution
of the Securities pursuant to the Prospectus;
(h) "Prospectus" means the final prospectus of the Issuer
to be filed with the Securities Commissions in
connection with the Offering;
(i) "Related Agreements" means any contract which may be
regarded as material to the purchase of Securities,
each as more particularly described in the
Prospectus;
(j) "Securities" means the 1,870,000 Units of the Issuer
issuable pursuant to the Special Warrants and
additional 35,750 Units of the Issuer issuable
pursuant to the Finders' Special Warrants offered
under the Prospectus;
(k) "Securities Commissions" means the Alberta Securities
Commission and the British Columbia Securities
Commission;
(l) "Securities Law" means collectively the applicable
laws, regulations, policies and prescribed forms of
Alberta and British Columbia relating to the
distribution of the Securities;
(m) "Security Holder" means any person whose subscription
for Securities is accepted by the Issuer, or any
subsequent transferee or successor of such person;
(n) "Sponsor" means X.X. Xxxxxx & Company Limited; and
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(o) "Special Warrants" means the outstanding special
warrants of the Issuer each such special warrant
entitling the acquisition of one common share and one
non-transferable share purchase warrant to purchase
one additional common share in the capital of the
Issuer.
1.2 Accounting Terms
Any accounting terms used herein which are not specifically defined in the
preceding section 1.1 shall be construed in accordance with generally accepted
Canadian accounting principles.
1.3 Number and Gender
Words importing the singular number include plural and vice versa and words
importing gender include the masculine, feminine and neuter genders.
1.4 Headings
The division of this Agreement into sections, subsections, paragraphs,
subparagraphs, schedules and clauses, and the insertion of headings and captions
are for convenience of reference only and do not affect the construction or
interpretation of this Agreement.
1.5 Severability
Any provision of this Agreement which may be found to be prohibited by or
unenforceable pursuant to the laws of any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such unenforceability or
prohibition without invalidating the remaining terms and provisions hereof.
1.6 Certificates and Certified Copies
Whenever in this Agreement reference is made to a certificate or a certified
copy to be delivered by a party, unless specifically provided otherwise, such
certificate or certified copy must be executed by an officer of the party who,
by virtue of his office, is familiar with the subject of such certificate or
certified copy and shall certify the completeness, truth and accuracy thereof as
of the date of such certificate or certified copy.
1.7 Governing Law
This Agreement is governed by, and will be construed in accordance with, the
laws of British Columbia, Canada.
1.8 Entire Agreement
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This Agreement, including any thing expressly incorporated by reference herein,
contains all the terms and conditions in connection with the subject matter
hereof and no other agreements, written or oral, respecting such subject matter
shall be deemed to exist or to bind any party.
1.9 Currency References
All dollar amounts referred to in this Agreement are in Canadian dollars unless
otherwise specifically provided.
2. APPOINTMENT OF SPONSOR
2.1 Appointment of Sponsor
The Issuer appoints the Sponsor as sponsor of the Offering and the Sponsor
accepts the appointment and agrees to act as sponsor of the Issuer under the
Prospectus on the terms of this Agreement.
2.2 Duties of Sponsor
As sponsor of the Issuer under the Prospectus, the Sponsor will conduct an
investigation of the organization, management, business and affairs of the
Issuer sufficient, in its sole discretion, to enable it to determine whether or
not it is able to sign the certificate of the Prospectus.
2.3 Signature of Certificate
If, following the investigation referred to in subsection 2.2, the Sponsor
determines in its sole discretion that it is able to do so, the Sponsor will
sign the certificate for the Prospectus, certifying that, to the best of its
knowledge, the Prospectus contains full, true and plain disclosure of all
material facts relating to the Securities.
2.4 Review of Business
The Issuer will provide, or cause to be provided, to the Sponsor, its counsel
and its agents a reasonable opportunity to conduct such full and comprehensive
review of its business, capital, finances, operations and principals as the
Sponsor, in its sole discretion, considers reasonably necessary in the
circumstances.
2.5 Sponsor's Fee
For the services of the Sponsor as sponsor of the Offering and as full and
complete compensation therefor, the Issuer will pay to the Sponsor the sum of
$32,100 (inclusive of Goods and Services Tax), the receipt of which is
acknowledged by the Sponsor.
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3. REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Issuer
The Issuer represents and warrants to the Sponsor that:
(a) Status of the Issuer
The Issuer, and each of its subsidiaries, is a
corporation duly incorporated, validly existing and
in good standing under the respective laws of the
jurisdiction of its incorporation and each has all
requisite power and authority and holds all material
licences, certificates, consents, permits and other
authorizations as are necessary to enable it to carry
on its proposed business as disclosed in the
Prospectus.
(b) Regular Business
The business of the Issuer and its subsidiaries have
been carried on, in all material respects, as
contemplated by and in compliance with the
requirements of their respective constating documents
and in compliance with all applicable laws, rules and
regulations, and neither the Issuer nor any of its
subsidiaries is in breach of or in default under any
mortgage, note, indenture, contract, instrument,
lease or other document or agreement to which it is a
party.
(c) Corporate and Partnership Authority
The execution, delivery and performance by the Issuer
of this Agreement and the Related Agreements, when
executed and delivered, to which it is or will be a
party are within the Issuer's powers, have been or
will have been, at the time of execution and delivery
thereof, duly authorized by all necessary corporate
action and do not and will not contravene its
constating documents or any provision of any contract
binding on it.
(d) Claims and Potential Claims
To the knowledge of the Issuer, no litigation,
proceeding or investigation is pending or threatened
before any court, agency, arbitrator or otherwise
which will or might reasonably result in any material
adverse change in the business, affairs or properties
or conditions (financial or otherwise) of the Issuer
or any of its subsidiaries or which might reasonably
result in any material liability on the part of the
Issuer or any of its subsidiaries.
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(e) Prospectus
The Prospectus complies with the requirements of the
Securities Law in all material respects. The
Prospectus does not contain any misrepresentation or
any untrue statement of a material fact or omit any
statement or information, the omission of which
constitutes a misrepresentation, or omit to state any
material fact required to be stated or necessary to
make any statement contained therein not false or
misleading in light of the circumstances in which it
is made and all information and statements contained
in the Prospectus are true and correct. In addition,
all information and statements contained in the
Prospectus constitute full, true and plain disclosure
of all material facts.
(f) Financial Statements
The financial statements of the Issuer contained in
the Prospectus accurately reflect the financial
position of the Issuer on a consolidated basis at the
dates thereof and there have been no adverse material
changes in the financial position of the Issuer or
any of its subsidiaries since the respective dates
thereof, except as fully and plainly disclosed in the
Prospectus.
(g) Representations and Warranties
The representations and warranties in this Agreement
are true and will remain true as of the date of the
Prospectus.
3.2 Representations and Warranties of the Sponsor
The Sponsor represents and warrants to the Issuer that:
(a) Corporate Status
It is a corporation duly amalgamated, validly
existing and in good standing under the laws of
British Columbia.
(b) Corporate Authority
The execution, delivery and performance by the
Sponsor of this Agreement is within the Sponsor's
corporate powers, has been duly authorized by all
necessary corporate action and does not contravene:
(i) the memorandum or articles of the Sponsor;
or
(ii) any law; or
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(iii) any provision of any other contract binding
on the Sponsor.
(c) Governmental Approvals
Except for compliance with the requirements of the
Securities Law, no authorization or approval or other
action by and no notice to or filing with any
governmental authority or regulatory body is required
for the due execution, delivery and performance by
the Sponsor of this Agreement.
3.3 Survival of Representations and Warranties
Each of the parties hereto acknowledges that the other parties are relying on
each of the representations and warranties addressed to such other parties set
forth in section 3.1 or 3.2, as the case may be, and any representations made in
any certificate issued to such other parties in connection with this Agreement
notwithstanding any investigations heretofore or hereafter made by such other
parties or their counsel or representatives. All such representations and
warranties shall not merge in or be prejudiced by, and shall survive for a
period of three years from the completion of the distribution of the Units.
4. COVENANTS OF THE ISSUER
The Issuer covenants with the Sponsor that:
(a) it will take all such acts and execute, file and
deliver all such documents, amendments, notices and
information as may be necessary to cause the
purchasers of Securities to become Security Holders
of the Issuer;
(b) it will execute or procure the execution of all
documents and use its best efforts to take or cause
to be taken all steps which may be reasonably
necessary to enable the transactions contemplated
herein to be completed;
(c) it will notify the Sponsor promptly in writing of the
full particulars of any material change, whether
actual, anticipated or threatened, in any material
fact stated or referred to in the Prospectus or which
would result in an omission from the Prospectus to
state a material fact necessary to make any statement
contained therein not misleading in light of the
circumstances in which it is made;
(d) during the period of distribution, distribution to
the public or primary distribution to the public (as
contemplated by the Securities Law) of the
Securities, it will advise the Sponsor promptly of
any request of any securities commission or other
securities authority for a cease trading order
relating to the Securities, or of the institution or
threat of institution of any proceedings for that
purpose, or of the receipt by it, or its counsel
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of any material communication from any securities
commission or other securities authority relating to
the Prospectus or any supplements or amendments
thereto;
(e) upon the occurrence of a material change, it shall,
to the satisfaction of the Sponsor, promptly comply
with all applicable filing and other requirements
under the Securities Law as a result of such material
change;
(f) the Securities, when issued, will have the attributes
described in the Prospectus; and
(g) it will deliver or cause to be delivered all
documents, including legal opinions, required
hereunder and by the Prospectus.
5. EXPERT OPINIONS
The Issuer shall deliver to the Sponsor on the date of filing the Prospectus:
(a) a letter dated as of a date not more than one
Business Day prior to the date of the Prospectus, in
form and substance satisfactory to the Sponsor, from
the then current auditor of the Issuer:
(i) stating that, in such auditor's opinion, the
financial statements and notes thereto of
the Issuer examined by them and included in
the Prospectus covered by his report therein
comply as to form in all material respects
with the applicable accounting requirements
of the Securities Law; and
(ii) stating that, in such auditor's opinion, the
balance sheet of the Issuer examined by the
auditor and included in the Prospectus and
covered by his report therein complies as to
form in all material respects with the
applicable accounting requirements of the
Securities Law; and
(iii) addressing such other matters relating to
the financial information in the Prospectus
to which the Sponsor may reasonably require
comfort;
(b) a favourable legal opinion, in form and content
reasonably satisfactory to the Sponsor, by counsel to
the Issuer dated the date of the Prospectus and
addressed to the Sponsor, relating to such legal
matters as the Sponsor may reasonably request,
including, without limitation, certain of the matters
in section 3.1, title to the Issuer's property, and
matters pertaining to the Securities Law;
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(c) a certificate of the Issuer certifying certain facts
relating to the business of the Issuer, and its
affairs as may be reasonably requested by the
Sponsor; and
(d) any other certificates, comfort letters or opinions
in connection with any matter related to the
Prospectus which are reasonably requested by the
Sponsor or their legal counsel.
6. TERMINATION
6.1 Term of Agreement
This Agreement shall terminate and, subject to the provisions set forth below,
be of no further force or effect on the exercise by the Sponsor of its right to
terminate this Agreement as provided in subsection 6.2, provided that, in any
event, sections 3, 7 and 8 and, in the event that such termination occurs by
virtue of paragraph 6.2(b), subsection 2.5 shall not terminate (except as set
forth therein) and shall continue in full force and effect for the benefit of
the Sponsor or the other parties to this Agreement, as the case may be.
6.2 Termination of Agreement
The Sponsor may, at its sole option, terminate this Agreement at any time prior
to the issuance of a receipt for the Prospectus by all of the Securities
Commissions by notice in writing to the Issuer if:
(a) any representation or warranty made by or on behalf
of the Issuer herein or in any certificate delivered
in connection with this Agreement proves to have been
incorrect in any material respect when made;
(b) any material adverse change occurs in the business or
financial condition of the Issuer or any of its
subsidiaries;
(c) the Issuer breaches or fails to perform or observe
any of the covenants or agreements to be performed or
observed by it hereunder;
(d) any order operating to restrict, prevent or cease
trading in the Securities is made under the
Securities Law;
(e) any inquiry or investigation, whether formal or
informal, is commenced or threatened by a securities
commission against the Issuer or its directors,
officers or agents; or
(f) any of the conditions set forth in section 5 are not
satisfied.
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6.3 Obligations of Sponsor Clarified
For greater certainty, the Sponsor is obligated under this Agreement, subject to
subsection 6.2, only to perform the investigation referred to in subsection 2.2,
and nothing in this Agreement will obligate the Sponsor to sign the certificate
for the Prospectus, unless, in its sole discretion, it considers itself able to
do so.
7. COSTS, EXPENSES AND TAXES
Whether or not the Sponsor signs the certificate as contemplated in subsection
2.3, the Issuer will bear the costs and expenses in connection with the
Offering, the preparation, execution and delivery of this Agreement, amendments
to the Prospectus and the other documents to be delivered hereunder, including,
without limitation:
(a) the reasonable fees and out-of-pocket expenses of
counsel for the Sponsor with respect thereto (which
fees, not including expenses and taxes, are not
expected to exceed $15,000 but may after consultation
with and receipt of the prior approval of the Issuer)
and with respect to advising the Sponsor as to its
rights and responsibilities under this Agreement;
(b) fees and costs of preparing and reproducing the
Prospectus, any amendments thereto and any other
Marketing Materials prepared by the Issuer;
(c) filing fees in connection with compliance with the
Securities Law;
(d) all costs and expenses associated with obtaining an
assessment report in compliance with Interim Local
Policy Statement 3-17 of the British Columbia
Securities Commission, if required; and
(e) all costs and expenses, if any (including reasonable
counsel fees and expenses), in connection with the
enforcement of this Agreement, and the other
documents to be delivered hereunder.
8. INDEMNIFICATION
8.1 Indemnification of Indemnified Parties
The Issuer shall and does hereby indemnify and save the Indemnified Parties
harmless from and against any liability, claim, demand or loss, excluding loss
of profits, which the Indemnified Parties may suffer, whether pursuant to
statute or otherwise, howsoever arising, in consequence of:
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(a) any statement or omission in the Prospectus, or
otherwise made or omitted by the Issuer in connection
with the Offering, being or being alleged to be a
misrepresentation;
(b) the Issuer not complying with any requirement of
applicable legislation of Canada or of British
Columbia or Alberta; or
(c) any order made or any inquiry, investigation or
proceeding commenced, threatened or announced by any
securities regulatory authority or other competent
authority in British Columbia, Alberta or Ontario
which prevents or restricts trading in or the sale or
distribution in British Columbia and Alberta of the
Securities.
8.2 Right to Counsel
If any claim contemplated by this section is asserted against any of the
Indemnified Parties, the Issuer shall be entitled (but not required) to assume
the defence on behalf of the Indemnified Parties of any suit brought to enforce
such claim, provided that the defence shall be through legal counsel acceptable
to the Indemnified Parties and no admission of liability shall be made by the
Issuer or the Indemnified Parties without, in each case, the prior written
consent of all the parties hereto, such consent not to be unreasonably withheld.
Any of the Indemnified Parties shall have the right to employ separate counsel
in any such suit and participate in the defence thereof, at the expense of the
Issuer.
8.3 Indemnity
The indemnity provided for in this section will not be limited or otherwise
affected by any other indemnity obtained by the Sponsor 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 Sponsor arising out of the
transactions contemplated by this Agreement has been extinguished by the
operation of law.
9. NOTICES
Any notice required or permitted to be given hereunder shall be in writing and
be given by personal service, telex, telegram, telecopy or by registered letter,
with postage fully prepaid, to the address set forth below:
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(a) if to the Issuer at:
HealthCare Capital Corp.
c/o Ballem XxxXxxxx
Barristers and Solicitors
First Canadian Centre
0000, 000-0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxxx XxXxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
(b) if to the Sponsor at:
X.X. Xxxxxx & Company Limited
2nd Floor, 000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Attention: Xxxx Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
Any notice delivered personally or by telex, telegram or telecopy shall be
deemed to be received by and given to the addressee on the day of delivery. Any
notice mailed as aforesaid shall be deemed to have been received by and given to
the addressee on the fifth Business Day following the date of mailing except in
the event of a disruption of postal service, in which event notice shall be
delivered personally or given by telex, telegram or telecopy. Either party
hereto may designate a new address by giving written notice thereof to the other
party at least ten days in advance of the effective date of such designation.
10. MISCELLANEOUS
10.1 Amendments, Etc.
No amendment or waiver of any provision of this Agreement nor consent to any
departure by the Issuer therefrom shall in any event be effective unless it is
in writing and signed by the Sponsor and then such waiver or consent will be
effective only in the specific instance and for the specific purpose for which
given.
10.2 Time
Time shall be of the essence of this Agreement.
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10.3 Binding Effect
This Agreement is binding upon and enures to the benefit of the parties and
their respective successors and assigns, and no party shall have the right to
assign its rights hereunder or any interest herein without the prior written
consent of the other parties.
10.4 Governing Law
This Agreement will be governed by the law of British Columbia and the parties
attorn to the non-exclusive jurisdiction of the courts of British Columbia for
the resolution of all disputes arising in connection with this Agreement.
11. EXECUTION IN COUNTERPART
This Agreement may be executed by any party in two or more counterparts, each
such counterpart will be deemed to be an original, and all such counterparts
taken together will constitute one and the same agreement.
IN WITNESS of this Agreement, the parties have executed and delivered this
Agreement as of the date given above.
HEALTHCARE CAPITAL CORP.
By: /s/ Xxxxxxx X. Good
Title: Chief Financial Officer
X.X. XXXXXX & COMPANY LIMITED
By: /s/ C. M. O'Xxxxx
Title: Chairman
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