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EXHIBIT 1.1
SANCTUARY XXXXX MULTIMEDIA CORPORATION, INC.
SUBSCRIPTION RIGHTS AGENCY AGREEMENT
This Subscription Rights Agency Agreement (the "Agreement") is made as of this
24th day of February, 1997, by and between SANCTUARY XXXXX MULTIMEDIA
CORPORATION, INC., a British Columbia corporation (the "Company"); and Bank of
Boston, a national banking association, as subscription and distribution agent
("Agent").
WHEREAS, the Company proposes to make a subscription offer by issuing
certificates or other evidences of subscription rights, in the form designated
by the Company (the "Subscription Certificates") to shareholders of record (the
"Shareholders") of its Common Stock, as of a record date specified by the
Company (the "Record Date"), pursuant to which each Shareholder will have
certain rights (the "Rights") to subscribe for shares of Common Stock, as
described in and upon such terms as are set forth in the final prospectus (the
"Prospectus") included in the Form S- 2 Registration Statement originally filed
by the Company with the Securities and Exchange Commission on January 17, 1997,
as amended (as amended, the "Registration Statement"), in accordance with the
applicable requirements of the Securities Act of 1933, as amended (the "Act");
WHEREAS, the Company wishes the Agent to perform certain acts on its behalf and
the Agent is willing to so act, in connection with the distribution of the
Subscription Certificates and the issuance and exercise of the Rights to
subscribe therein set forth, all upon the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the foregoing and of the mutual agreements
set forth herein, the parties agree as follows:
1. Pursuant to resolution of its Board of Directors, the Company hereby
appoints and authorizes the Agent to act on its behalf in accordance
with the provisions hereof, and the Agent hereby accepts such
appointment and agrees to so act.
2. (a) Each Subscription Certificate shall evidence the Rights of the
Shareholder therein named to purchase Common Stock upon the
terms and conditions therein and herein set forth.
(b) Upon the written advice of the Company signed by its Chairman,
President, Secretary or Assistant Secretary, as to the Record
Date, the Agent shall, from a list of Shareholders as of the
Record Date to be prepared by the transfer agent of the
Company, prepare and record Subscription Certificates in the
names of the Shareholders, setting forth the number of Rights
to subscribe to Common Stock calculated on the basis of one
Right for each share of Common Stock recorded on the books of
the Company in the name of each such Shareholder as of the
Record Date.
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3. Rights and Issuance of Subscription Certificates.
(a) Each Subscription Certificate shall be non-transferable and
shall, unless exercised by the holder thereof in the manner
set forth in the Prospectus, expire upon the expiration of the
offer. The Agent shall maintain a register of Subscription
Certificates and the holders of record thereof (each of whom
shall be deemed a "Shareholder" hereunder for purposes of
determining the rights of holders of Subscription
Certificates). Each Subscription Certificate shall, subject
to the provisions thereof, entitle the Shareholder in whose
name it is recorded to the following:
(1) The right (the "Primary Subscription Right") to
purchase a number of shares of Common Stock equal to one share
of Common Stock for every one (1) Right(s); provided, however,
that no fractional shares of Common Stock shall be issued; and
(2) The right (the "Primary Over-Subscription Right") to
purchase additional shares of Common Stock, subject to the
availability of such shares and to allotment of such shares as
may be available among Shareholders who exercise Over-
Subscription Rights on the basis specified in the Prospectus;
provided, however, that a Shareholder who has not exercised
his Primary Subscription Right with respect to the full number
of shares that such Shareholder is entitled to purchase by
virtue of his Primary Subscription Right as of the Expiration
Date (as hereinafter defined), if any, shall not be entitled
to any Over-Subscription Right.
(b) A Shareholder may exercise his Primary Subscription Right and
Over-Subscription Right by delivery to the Agent at its
corporate office specified in the Prospectus of (i) the
Subscription Certificate with respect thereto, duly executed
by such Shareholder in accordance with and as provided by the
terms and conditions of the Subscription Certificate, together
with (ii) the estimated subscription price for each share of
Common Stock subscribed for by exercise of such Rights, in
United States dollars by money order or check drawn on a bank
located in the United States and in each case payable to the
order of Sanctuary Xxxxx Mutlimedia Corporation, Inc.
(c) Rights may be exercised at any time after the date of issuance
of the Subscription Certificates with respect thereto but no
later than 5:00 P.M. New York City time on such date as the
Company shall designate to the Agent in writing (the
"Expiration Date"). For the purpose of determining the time
of the exercise of any Rights, delivery of any material to the
Agent shall be deemed to occur when such materials are
received at the corporate office of the Agent specified in the
Prospectus.
(d) Not withstanding the provisions of Section 3(b) and 3(c) above
regarding delivery of an executed Subscription Certificate to
the Agent prior to 5:00 P.M. New York
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City time on the Expiration Date, if prior to such time the
Agent receives a properly completed and executed Notice of
Guaranteed Delivery in the form accompanying the Prospectus by
facsimile or otherwise from a financial institution that is a
member of the Securities Transfer Agents Medallion Program,
the Stock Exchange Medallion Program or the New York Stock
Exchange Medallion Signature Program, guaranteeing delivery of
(i) payment of the full subscription price for shares
purchased and subscribed for by virtue of a Subscription
Certificate, and (ii) a properly completed and executed
Subscription Certificate, then such exercise of Primary
Subscription Rights and Over-Subscription Rights shall be
regarded as timely, subject, however, to receipt of the
duly-executed Subscription Certificate, together will full
payment, by the Agent within three business days after the
Expiration Date.
(e) On a date (the "Confirmation Date") that is no later than
eight business days after the Expiration Date (as defined in
the Prospectus), the Agent shall send a confirmation to each
Shareholder (or, for shares of Common Stock on the Record Date
held by Cede & Co. or any other depository or nominee, to Cede
& Co. or such other depository or nominee), showing (i) the
number of shares acquired pursuant to the Primary Subscription
Rights, (ii) the number of shares, if any, acquired pursuant
to the Over-Subscription Rights, (iii) the per share and total
purchase price for the shares, (iv) any amount payable to the
Shareholder pursuant to Section 8 below, and (v) any
additional amount payable by the Shareholder to the Company or
any excess to be refunded by the Company to the Shareholder,
in each case based on the Subscription Price as determined on
the Expiration Date. Any additional payment required from a
Shareholder must be received by the Agent within ten business
days after the Confirmation Date. Any excess payment to be
refunded by the Company to a Shareholder shall be mailed by
the Agent to the Shareholder as provided in Section 6 below.
4. Pursuant to the terms of the Prospectus, the Company reserves the
right to increase the number of shares of Common Stock subject to
subscription by up to ___% (any such, an Increased Allocation"). The
Agent shall confer with the Company concerning the Company's decision
as to whether or not to undertake an Increased Allocation. If, after
allocation of shares of Common Stock to persons exercising Primary
Subscription Rights, there remain unexercised Rights (taking into
account any Increased Allocation elected by the Company), then the
Agent shall allot the shares issuable upon exercise of such
unexercised Rights (the "Remaining Shares") to persons exercising
Over-Subscription Rights, in the amounts of such over-subscriptions.
If the number of shares for which Over-Subscription Rights have been
exercised is greater than the Remaining Shares, the Agent shall allot
the Remaining Shares to the persons exercising Over-Subscription
Rights pro rata based solely on the number of shares of Common Stock
held on the Record Date.
5. All proceeds from the exercise of Rights shall be held by the Agent in
a segregated, interest-bearing account in the name of the Company.
The Agent shall advise the
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Company immediately upon the completion of the allocation set forth
above as to the total number of shares subscribed and distributable.
6. (a) The Agent shall mail to the Shareholders as soon as
practicable after the Confirmation Date and after full payment
for the shares subscribed for has cleared: (i) certificates
representing those shares purchased pursuant to exercise of
Primary Subscription Rights and those shares purchased
pursuant to the exercise of Over-Subscription Rights; and (ii)
in the case of each Shareholder who subscribed and paid for
shares at an estimated subscription price greater than the
actual Subscription Price, a refund in the amount of the
difference between the estimated subscription price and the
actual Subscription Price.
(b) The Agent shall deliver the proceeds of the exercise of Rights
to the Company as promptly as practicable, but in no event
later than 20 business days after the Expiration Date.
7. The Agent shall account promptly to the Company with respect to Rights
exercised and concurrently account for all monies received and
returned by the Agent with respect to the purchase of shares of Common
Stock upon the exercise of Rights.
8. In the event the Agent does not receive, within ten business days
after the Confirmation Date, any amount due from a Shareholder as
specified in Section 3 (e), then it shall take such action with
respect to such Shareholder's Rights as may be instructed in writing
by the Company, including without limitation (i) applying any payment
actually received by it toward the purchase of the greatest whole
number of shares of Common Stock which could be acquired with such
payment, (ii) allocating the shares subject to such Subscription
Rights to one or more other Shareholders, and (iii) selling all or a
portion of the shares of Common Stock deliverable upon exercise of
such Rights on the open market, and applying the proceeds thereof to
the amount owed.
9. No Subscription Certificate shall entitle a Shareholder to vote or
receive dividends or be deemed the holder of shares of Common Stock
for any purpose, nor shall anything contained in any Subscription
Certificate be construed to confer upon any Shareholder any of the
rights of a shareholder of the Company or any right to vote, give or
withhold consent to any action by the Company (whether upon any
recapitalization, issue of stock, reclassification of stock,
consolidation, merger, conveyance or otherwise), receive notice of
meetings of other action affecting shareholders or receive dividends
or otherwise, until the Rights evidenced thereby shall have been
exercised and the shares of Common Stock purchasable upon the exercise
thereof shall have become deliverable as provided in this Agreement
and in the Prospectus.
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10. (a) The Company covenants that all shares of Common Stock issued
upon exercise of the Rights will be validly issued, fully
paid, non-assessable and free of preemptive rights.
(b) Upon request, the Company shall furnish to the Agent an
opinion of counsel or other evidence satisfactory to the Agent
to the effect that a registration statement is then in effect
with respect to its shares of Common Stock issuable upon
exercise of the Rights set forth in the Subscription Rights.
Upon written advice to the Agent that the Securities and
Exchange Commission shall have issued or threatened to have
issued any order preventing or suspending the use of the
Prospectus, or if for any reason it shall be necessary to
amend or supplement the Prospectus in order to comply with the
Act, the Agent shall cease acting hereunder until receipt of
written instructions from the Company and such assurances as
it may reasonably request that it may comply with such
instruction without violations of the Act.
11. (a) Any corporation into which the Agent may be merged or
converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which the Agent shall be a party, or any
corporation succeeding to the corporate trust business of the
Agent, shall be the successor to the Agent hereunder without
the execution or filing of any document by any of the parties
hereto, provided that such corporation would be eligible for
appointment as a successor to the Agent. In case at the time
such successor to the Agent shall succeed to the agency
created by this Agreement, any of the Subscription
Certificates shall have been countersigned but not delivered,
any such successor to the Agent may adopt the countersignature
of the Agent and deliver such Subscription Certificates as
countersigned, and in case at that time any of the
Subscription Certificates shall not have been countersigned,
the successor to the Agent may countersign such Subscription
Certificates either in the name of the Agent or in the name of
the successor Agent, and in all such cases such Subscription
Certificates shall have the full force and legal effect
provided in the Subscription Certificates and in this
Agreement.
(b) If, at any time, the name of the Agent shall be changed and at
such time any of the Subscription Certificates shall have been
countersigned but not delivered, the Agent may adopt the
countersignature under its prior name and deliver Subscription
Certificates so countersigned, and in case at that time any of
the Subscription Certificates shall not have been
countersigned, the Agent may countersign such Subscription
Certificates either in its prior name or in its changed name,
and in all such cases such Subscription Certificates shall
have the full force provided in the Subscription Certificates
and in this Agreement.
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12. The Company agrees to pay to the Agent at the completion of the
offering, on demand of the Agent, reasonable compensation for all
services rendered by it hereunder and also its reasonable
out-of-pocket expenses and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties hereunder as provided for in Appendix A
attached hereto.
13. The Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions:
(a) Whenever in the performance of its duties under this Agreement
the Agent shall deem it necessary or desirable that any fact
or matter be proved or established, prior to taking or
suffering any action hereunder, such fact or matter (unless
prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the
Board or President or a Vice President or the Secretary or
Assistant Secretary or the Treasurer of the Company delivered
to the Agent, and such certificate shall be full authorization
to the Agent for any action taken or suffered in good faith by
it under the provisions of this Agreement in reliance upon
such certificate.
(b) The Agent shall not be responsible for and the Company shall
indemnify and hold the Agent harmless from and against, any
and all losses, damages, costs, charges, counsel fees,
payments, expenses and liability arising out of or
attributable to all actions of the Agent or its agents or
subcontractors required to be taken pursuant to this
Agreement, provided that such actions are taken in good faith
and without negligence or willful misconduct.
(c) The Agent shall be liable hereunder only for its own
negligence or misconduct, and for the negligence or misconduct
of its agents or subcontractors.
(d) Nothing herein shall preclude the Agent from acting in any
other capacity for the Company or for any other legal entity;
(e) The Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties
hereunder from any officer or assistant officer of the Company
and to apply to any such officer or assistant officer of the
Company for advice or instructions in connection with its
duties, and shall be indemnified and not be liable for any
action taken or suffered by it in good faith in accordance
with instructions of any officer or assistant officer of the
Company; and
(f) The Agent shall be indemnified and shall incur no liability for
or in respect of any
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action taken, suffered, or omitted by it in reliance upon any
Subscription Certificate or Certificate for Common Stock,
instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document that it
reasonably believes to be genuine and to be signed, executed
and, where necessary, verified or acknowledged, by the proper
person or persons.
14. The Agent may, without the consent or concurrence of the Shareholders
in whose names Subscription Certificates are registered, by
supplemental agreement or otherwise, concur with the Company in making
any changes or corrections in a Subscription Certificate that it shall
have been advised by counsel (who may be counsel for the Company) is
appropriate to cure any ambiguity or to correct any defective or
inconsistent provision or clerical omission or mistake or manifest
error therein or herein contained, and which shall not be inconsistent
with the provisions of the Subscription Certificate or the Prospectus
except insofar as any such change may confer additional rights upon
the Shareholders.
15. All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
16. The validity, interpretation and performance of this Agreement shall
be governed by the law of the Commonwealth of Massachusetts.
BANK OF BOSTON SANCTUARY XXXXX MULTIMEDIA
CORPORATION, INC.,
_________________________ ____________________________
Signature Signature
_________________________ ____________________________
Title Title
