AGENCY AGREEMENTAgency Agreement |
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AGENCY AGREEMENT
____________, 2006
Digifonica International
Corp. (f/k/a Moliris Corp.)
Suite 1424 — 4710 Kingsway,
Burnaby, BC
V5H 2M2
Attention: President
Dear Sirs:
Re: Private Placement of
Units
Loewen Ondaatje McCutcheon
Limited (the “Agent”) understands that:
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(a) |
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Digifonica
International Corp., a Florida corporation formerly known as Moliris Corp.
(the “Corporation”) is authorized to issue, among other
things, 50,000,000 Common Shares and 1,000,000 Class B Shares (each as
hereinafter defined); |
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(b) |
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as at
August 1, 2006, 22,548,600 Common Shares and no Class B Shares were
outstanding as fully paid and non-assessable shares and as at August 1,
2006, no Common Shares or Class B Shares were reserved for issuance
pursuant to outstanding options, warrants, share incentive plans,
convertible, exercisable and exchangeable securities and other rights to
acquire Common Shares (as hereinafter defined); |
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(c) |
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the Corporation
is prepared to issue and sell up to 2,500,000 Units (as hereinafter defined),
at a price of US$2.00 per Unit, each Unit consisting of one Common Share and
one half of one warrant (each whole warrant a “Warrant”),
and each Warrant being exercisable to acquire one Common Share at an exercise
price of US$2.50 per Common Share for a period of 12 months after the
Closing Date (as hereinafter defined), or at an exercise price of US$3.00 per
Common Share for a period of 13 to 24 months after the Closing Date for
maximum aggregate gross proceeds of US$5,000,000 on the terms and subject to
the conditions contained hereinafter. For greater certainty, the Purchase
Price of US$2.00 per Unit will be allocated as to US$1.99 to the Common Share
and as to US$.01 to the one half of one Warrant; and |
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(d) |
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In addition, if
a Going Public Transaction (as hereinafter defined) is not completed within
9 months following the Closing Date (the “Penalty Date”)
the Corporation shall issue additional Common Shares (“Penalty
Shares”) equal to 10% of the dollar value of the Common Shares
(with the Common Shares being valued at US$1.99 per Common Share) each
Purchaser (as hereinafter defined) initially purchased in the Offering. Such
Penalty Shares will be issued as liquidated damages for the delay to complete
such listing or quotation and obtain such reporting issuer status. |
Based upon the understanding
of the Agent set out above and upon the terms and subject to the conditions
contained hereinafter, upon the acceptance hereof by the Corporation, the
Corporation hereby appoints
2.
the Agent to act as the sole
and exclusive agent of the Corporation to solicit, on a best efforts basis,
offers to purchase the Offered Securities (as hereinafter defined), and the
Agent hereby agrees to act as such agent. It is understood and agreed that the
Agent is under no obligation to purchase any of the Offered Securities,
although the Agent may subscribe for and purchase Offered Securities if it so
desires.
The terms and conditions of
this Agreement are as follows:
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1. |
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Definitions,
Interpretation and Schedules |
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(a) |
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Definitions: Whenever used in this Agreement: |
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(i) |
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“1933
Act” means the Securities Act of 1933 (United States), as
amended; |
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(ii) |
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“Agent”
means Loewen Ondaatje McCutcheon Limited; |
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(iii) |
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“Agreement”
means the agreement resulting from the acceptance by the Corporation of the
offer made by the Agent herein, including the Schedules attached hereto, as
amended or supplemented from time to time; |
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(iv) |
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“Ancillary
Documents” means all agreements, certificates (including the
Warrant Certificates and the Broker Warrant Certificate) and documents
executed and delivered, or to be executed and delivered, by the Corporation
in connection with the transactions contemplated by this Agreement or the
Subscription Agreements and includes the Subscription Agreements; |
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(v) |
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“Auditor”
means HLB Cinnamon Jang Willoughby, LLP, the auditors of the Corporation; |
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(vi) |
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“Broker
Shares” means the Common Shares which may be issued on the exercise
of the Broker Warrant; |
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(vii) |
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“Broker
Warrant” means the non-transferable broker warrant which will
entitle the Agent to acquire Common Shares equal in number to 7% of the
number of Offered Securities sold at any time commencing on the Closing Date
and continuing until the date which is 12 months after the date on which
the Common Shares issuable upon the exercise of the Broker Warrant may first
be publicly resold by the Agent in Canada or the United States at an exercise
price that is equal to the issuance price of each Unit sold under the
Offering; |
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(viii) |
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“Broker
Warrant Certificate” means the certificate representing the Broker
Warrant; |
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(ix) |
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“Business
Day” means a day which is not a Saturday, Sunday or a statutory or
civic holiday in the City of Toronto, Province of Ontario; |
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(x) |
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“Class B
Shares” means the shares of Class B Common Stock, no par
value, that the Corporation is authorized to issue as constituted on the date
hereof; |
3.
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(xi) |
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“Closing”
means the purchase and sale of the Offered Securities subscribed for by the
Purchasers pursuant to the Subscription Agreements; |
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(xii) |
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“Closing
Date” means August 9, 2006 or such other date as the
Corporation and the Agent may mutually agree upon in writing; |
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(xiii) |
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“Closing
Time” means 2:00 p.m. (Toronto time) on the Closing Date or such
other time on the Closing Date as the Corporation and the Agent may mutually
agree upon in writing; |
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(xiv) |
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“Common
Shares” means the shares of Class A Common Stock, par value
$0.001 per share, that the Corporation is authorized to issue as constituted
on the date hereof; |
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(xv) |
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“Corporation”
means Digifonica International Corp., a corporation incorporated under the
laws of the State of Florida, and includes any successor corporation thereto; |
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(xvi) |
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“Directed
Selling Efforts” means “directed selling efforts” as
defined in Regulation S; |
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(xvii) |
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“Exchange
Act” means the Securities Exchange Act of 1934 (United
States), as amended. |
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(xviii) |
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“General
Solicitation or General Advertising” means “general
solicitation or general advertising” as used in Rule 502(c) of
Regulation D; |
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(xix) |
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“Going
Public Transaction” means a public offering of Common Shares
pursuant to a prospectus filed and receipted under the Ontario Act or similar
document filed under applicable securities laws in one or more of the
provinces in Canada which results in the Corporation becoming a reporting
issuer in a province of Canada and an effective registration statement filed
with the SEC, and which results in the Common Shares of the Corporation (or
the securities of a successor issuer) being listed and posted for trading on
the Toronto Stock Exchange, Tier 1 or Tier 2 of the TSX Venture Exchange,
NASDAQ or American Stock Exchange; |
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(xx) |
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“Material
Adverse Effect” means any adverse change or effect that,
individually or when taken together with all other such changes or effects,
would be materially adverse to the condition (financial or otherwise),
results of operations, business, properties, prospects, assets or liabilities
(contingent or otherwise) of the Corporation or any Subsidiary. |
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(xxi) |
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“Offered
Securities” means up to 2,500,000 Units to be issued and sold at
the Purchase Price under the Offering; |
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(xxii) |
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“Offering”
means the offering for sale by the Corporation on a private placement basis
of the Offered Securities; |
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(xxiii) |
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“Offering
Jurisdictions” means the Provinces of British Columbia, Alberta,
Ontario, the United States and the states and territories thereof and such
other provinces and territories of Canada and other jurisdictions as may be
mutually agreed upon by the Agent and the Corporation where the Offered
Securities are offered to prospective purchasers or those provinces,
territories or other jurisdictions where Purchasers reside, as the context
permits or requires; |
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(xxiv) |
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“Ontario
Act” means the Securities Act (Ontario) and the regulations
thereunder, together with the instruments, policies, rules, orders, codes,
notices and interpretation notes of the Ontario Securities Commission, as
amended, supplemented or replaced from time to time; |
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(xxv) |
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“Penalty
Date” has the meaning ascribed thereto in paragraph (d) of the
first page of this Agreement; |
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(xxvi) |
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“Penalty
Shares” has the meaning ascribed thereto in paragraph (d) of
the first page of this Agreement; |
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(xxvii) |
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“Person”
means an individual, a firm, a corporation, a syndicate, a partnership, a trust,
an association, an unincorporated organization, a joint venture, an
investment club, a government or an agency or political subdivision thereof
and every other form of legal or business entity of any nature or kind
whatsoever; |
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(xxviii) |
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“Purchase
Price” means the price to be paid by the Purchasers for each
Offered Security under the Offering, being US$2.00 per Unit; |
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(xxix) |
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“Purchasers”
means the purchasers of the Offered Securities collectively; |
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(xxx) |
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"Regulation D”
means Regulation D promulgated under the 1933 Act; |
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(xxxi) |
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"Regulation S”
means Regulation S promulgated under the 1933 Act; |
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(xxxii) |
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"SEC”
means the United States Securities and Exchange Commission. |
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(xxxiii) |
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“SEC
Filings” means all filings of the Corporation with the SEC pursuant
to United States Securities Laws, including without limitation any
registration statements, proxy or information statements, annual reports on
Form 10-KSB, quarterly reports on Form 10-QSB and current reports on Form
8-K. |
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(xxxiv) |
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“Securities
Commissions” means the securities regulatory authorities of the
Offering Jurisdictions collectively, as the case may be; |
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(xxxv) |
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“Securities
Laws” means the securities legislation and regulations of, and the
instruments, policies, rules, orders, codes, notices and interpretation notes
of the securities regulatory authorities of, the applicable jurisdiction or
jurisdictions collectively; |
5.
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(xxxvi) |
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“Subject
Shares” means the Unit Shares, the Warrant Shares, the Broker
Shares and the Penalty Shares collectively; |
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(xxxvii) |
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“Subscription
Agreements” means the subscription agreements to be entered into
between the Corporation and Purchasers with respect to the purchase of the
Units; |
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(xxxviii) |
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“Subsidiaries”
means, collectively, Digifonica (International) Limited, a corporation
organized under the laws of Gibraltar; Digifonica Intellectual Properties
Limited, a corporation organized under the laws of Gibraltar; Digifonica Canada
Limited, a corporation organized under the laws of Canada; Shenzen Sino-Can
Inter-Communication Technology Limited, a corporation organized under the
laws of the Peoples Republic of China; Moliris Corp., a Texas corporation;
and Moliris Packaging Corp., a Texas corporation; |
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(xxxix) |
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“Unit
Shares” means the Common Shares comprising part of the Units; |
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(xl) |
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“United
States” means the “United States” as defined in
Regulation S; |
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(xli) |
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“Units”
means the units of the Corporation being offered for sale by the Agent under
the Offering, each Unit being comprised of one Unit Share and one-half of one
Warrant; |
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(xlii) |
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“U.S.
Accredited Investor” means an “accredited investor” as
defined in Rule 501(a) of Regulation D; |
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(xliii) |
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"U.S.
Person” means a “U.S. person” as defined in
Regulation S; |
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(xliv) |
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"Warrant
Certificates” means the certificates representing the Warrants; |
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(xlv) |
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“Warrant
Shares” means the Common Shares which may be issued upon the exercise
of the Warrants; and |
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(xlvi) |
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“Warrants”
means the warrants of the Corporation, one-half of one Warrant comprising
part of each Unit, with each whole Warrant to entitle the holder thereof to
acquire one Warrant Share at any time from the date of issuance of the
Warrants until 5:00 p.m. (Toronto time) on the date which is 24 months
after the Closing Date, at an exercise price of US$2.50 per Warrant Share for
12 months from the Closing Date and $3.00 for a period of 13 to 24 months
after the Closing Date. |
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(xlvii) |
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Other
Defined Terms: Whenever
used in this Agreement, the words and terms “affiliate”,
“associate”, “material fact”, “material
change”, “misrepresentation”, “senior officer”
and “subsidiary” shall have the meaning given to such word or
term in the Ontario Act unless specifically provided otherwise herein. |
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(b) |
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Headings: The section headings contained in this
Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement. |
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(c) |
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Usage: The term “or” will not be
interpreted as excluding any of the items described. The term
“include” or any derivative of such term does not mean that the
items following such term are the only types of such items. |
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(d) |
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Plural and
Gender: Whenever used
in this Agreement, words importing the singular number only shall include the
plural and vice versa and words importing the masculine gender shall
include the feminine gender and neuter. |
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(e) |
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Drafting: The language in all parts of this
Agreement shall be interpreted, in all cases, according to its fair meaning. |
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(f) |
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Currency: All references to monetary amounts in
this Agreement are to United States dollars. |
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(g) |
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Schedules: The following Schedules are attached
to this Agreement and are hereby incorporated by reference into and made a
part of this Agreement for all purposes: |
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Schedule |
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A |
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Officers’ Certificate |
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B |
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Agent’s Certificate |
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2. |
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The
Offered Securities |
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(a) |
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Offered
Securities: The Offered
Securities are up to 2,500,000 Units, each Unit comprised of one Common Share
and one-half of one Warrant. |
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(b) |
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The Warrants: The terms and conditions, and the
material attributes and characteristics, of the Warrants shall be
satisfactory to the Corporation and the Agent and consistent with the
provisions of this Agreement. Such terms and conditions, and material
attributes and characteristics, will be contained in the Warrant
Certificates, which will contain, among other things, anti-dilution
provisions and provisions for the appropriate adjustment in the class and
number of Warrant Shares or other securities to be received on the exercise
of Warrants upon the occurrence of any subdivision, consolidation or
reclassification of the Common Shares or any payment of dividends or the
amalgamation of, or other reorganization involving, the Corporation. Subject
to adjustment in accordance with the provisions of the Warrant Certificates,
each whole Warrant shall entitle the holder thereof to purchase one Warrant
Share at any time commencing on the Closing Date and prior to 5:00 p.m.
(Toronto time) on the date which is 12 months after the Closing Date at
an exercise price of US$2.50 per Warrant Share, or on the date which is 13 to
24 months after the Closing Date, at an exercise price of US$3.00 per
Warrant Share. |
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The
Offering |
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(a) |
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Sale on
Exempt Basis: The Agent
will use its best efforts to arrange for Purchasers in the Offering
Jurisdictions. The Agent shall offer for sale on behalf of the Corporation
the Offered Securities in the Offering Jurisdictions in compliance with the
Securities Laws of the Offering Jurisdictions and only to such Persons and in
such manner so that, pursuant to the provisions of the Securities Laws of the
Offering Jurisdictions, no prospectus, registration statement or offering
memorandum or other similar document need be filed with, or delivered to, any
Securities Commission in any Offering Jurisdiction in connection therewith.
The Agent shall offer the Units for sale on behalf of the Corporation in the
United States only through the Agent, pursuant to an exemption from
the registration requirements of the 1933 Act, in compliance with applicable
state Securities Laws and in accordance with section 10 hereof. |
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(b) |
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Agency Group: The Corporation agrees that, subject
to the consent of the Corporation, such consent not to be unreasonably
withheld, the Agent has the right to invite one or more investment dealers to
form an agency group to participate in the soliciting of offers to purchase
the Offered Securities. The Agent shall have the exclusive right to control
all compensation arrangements between the members of the agency group; provided,
however, that the Agent hereby acknowledges and agrees that the
Corporation shall be obligated only to the Agent with respect to commissions
owed by the Corporation pursuant to this Agreement, and the Agent hereby
covenants and agrees to protect, indemnify and save harmless the Corporation
and each Subsidiary from and against all claims of any member of the agency
group other than the Agent for any fees, commissions or other compensation
pursuant to this Agreement. The Corporation grants all of the rights and
benefits of this Agreement to any investment dealer who is a member of any
agency group formed by the Agent and appoints the Agent as trustee of such
rights and benefits for all such investment dealers, and the Agent hereby
accepts such trust and agrees to hold such rights and benefits for and on
behalf of all such investment dealers. The Agent shall ensure that any
investment dealer who is a member of any agency group formed by the Agent
pursuant to the provisions of this subsection 3(b) or with whom the Agent has
a contractual relationship with respect to the Offering, if any, agrees with
the Agent to comply with the covenants and obligations given by the Agent
herein. |
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(c) |
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Covenants of
the Agent: The Agent
covenants with the Corporation that (i) it will comply with the
Securities Laws of the Offering Jurisdictions in which it solicits or
procures subscriptions for Offered Securities in connection with the
Offering, (ii) it will not solicit or procure subscriptions for Offered
Securities so as to require the registration thereof or the filing of a
prospectus with respect thereto under the laws of any jurisdiction, and
(iii) it will obtain from each Purchaser an executed subscription
agreement in a form acceptable to the Corporation and the Agent, acting
reasonably. The Agent represents and warrants that it is, and, to the best of
its knowledge, each member of any agency group formed by the Agent is,
qualified so to act in the Offering Jurisdictions in which such member solicits
or procures subscriptions for the Offered Securities. |
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(d) |
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Filings: The Corporation undertakes to file or
cause to be filed all forms and undertakings required to be filed by the
Corporation in connection with the Offering so |
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that the
distribution of the Offered Securities may lawfully occur in the Offering
Jurisdictions without the necessity of filing a prospectus or an offering
memorandum in Canada and the Agent undertakes to use commercially reasonable
efforts to cause the Purchasers of the Offered Securities to complete (and it
shall be a condition of closing in favour of the Corporation that the
Purchasers complete and deliver to the Corporation) any forms and
undertakings required by the Securities Laws of the Offering Jurisdictions.
All fees payable in connection with such filings shall be at the expense of
the Corporation. |
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