FORM 20-F
US SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] REGISTRATION STATEMENT PURSUANT TO SECTION 12 (B) OR (G)
OF THE SECURITIES EXCHANGE ACT OF 1934
OR
[ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 ( D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ------------ to ------------
Commission file number
EARTHRAMP.COM COMMUNICATIONS INC.
(Exact name of Registrant as specified in its charter)
BRITISH COLUMBIA, CANADA
(Jurisdiction of incorporation or organization)
601 - 889 WEST PENDER STREET
VANCOUVER, BRITISH COLUMBIA, CANADA V6C 3B2
(Address of principal executive offices)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
None
Securities registered or to be registered pursuant to Section 12(g) of the Act:
Common Shares Without Par Value
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act: None
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Indicate the number of outstanding shares of each of the Company's classes of
capital or common stock as of the close of the period covered by the annual
report.
THERE WERE 8,232,342 COMMON SHARES, WITHOUT PAR VALUE, ISSUED AND OUTSTANDING AS
OF APRIL 21, 2000.
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such period that the Registrant was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days. YES NO X.
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Indicate by check mark which financial statement item the Registrant has elected
to follow. ITEM 17 X ITEM 18 .
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(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST
FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. YES NO .
<PAGE>
TABLE OF CONTENTS
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PAGE
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PART 1 1
Item 1 Description of Business 1
Item 2 Description of Property 21
Item 3 Legal Proceedings 22
Item 4 Control of the Company 22
Item 5 Nature of Trading Market 22
Item 6 Exchange Controls and Other Limitations
Affecting Security Holders 23
Item 7 Taxation 24
Item 8 Selected Financial Data 34
Item 9 Management's Discussion and Analysis of
Financial Condition and Results of Operations 36
Item 9A Quantitative and Qualitative Disclosures About
Market Risk (Not Applicable) 40
Item 10 Directors and Officers 40
Item 11 Compensation of Directors and Officers 41
Item 12 Options to Purchase Securities 43
Item 13 Interest of Management in Certain Transactions 44
PART II
Item 14 Description of Securities to be Registered 45
PART III
Item 15 Defaults Upon Senior Securities (Not Applicable) 46
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Item 16 Changes in Securities, Changes in Security
for Registered Securities and
Use of Proceeds (Not Applicable) 46
PART IV
Item 17 Financial Statements 47
Item 18 Financial Statements 47
Item 19 Financial Statements & Exhibits 47
EXHIBITS 48
SIGNATURE 50
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PART I
ITEM 1 DESCRIPTION OF THE BUSINESS
Introduction
Earthramp.com Communications Inc.'s (the "Company") primary business is the
creation and distribution of proprietary consumer, financial and news
information through the development of advanced Internet websites. The
Company's corporate offices are located at 601 - 889 West Pender Street,
Vancouver, British Columbia, Canada V6C 3B2. The telephone number is (604)
331-1008 and the facsimile number is (604) 331-0932.
The Company's consolidated financial statements are stated in Canadian Dollars
(CDN$) and are prepared in accordance with Canadian Generally Accepted
Accounting Principles. In this Registration Statement, unless otherwise
specified, all dollar amounts are expressed in Canadian Dollars. All references
in this Registration Statement to "US$" refer to United States Dollars and all
references to common shares refer to common shares in the capital of the
Company.
Description of the Company and its Subsidiaries
The Company was incorporated under the laws of the Province of British Columbia
on March 14, 1986 under the name "Dante Resources Ltd.". On July 16, 1987, the
Company's name was changed to "Abac Resources Ltd." and then changed to "Quality
Learning Systems (International) Inc." on December 29, 1992. On May 27, 1996,
the Company's name was changed to "Carta Resources Ltd.". The Company's name
was then changed to "Earthramp.com Communications Inc." on December 24, 1999.
The Company is a reporting issuer under the securities laws of the province of
British Columbia.
On December 2, 1987, the Company was registered as an Extra-Territorial
Corporation to do business in the Yukon under the name "Abac Resources Ltd.".
On June 28, 1999, the Company was registered as an Extra-Territorial Corporation
in the Yukon under the name "Carta Resources Ltd.".
On December 29, 1992, the Company altered its authorized capital by
consolidating all of the 10,000,000 common shares without par value into
2,000,000 common shares without par value, with every five (5) such common
shares before consolidation being consolidated into one (1) common share. Also
on December 29, 1992, the authorized capital of the Company was increased from
2,000,000 common shares without par value to 20,000,000 common shares without
par value.
As of the date hereof, the Company has one wholly owned subsidiary, Quotes
Canada Financial Network, Ltd. ("Quotes Canada"). Quotes Canada was
incorporated under the laws of British Columbia on August 5, 1998 and was
acquired by the Company effective on November 5, 1999.
Company History
From its incorporation in 1986 until November, 1999, the Company operated as a
junior natural resource issuer listed on the Vancouver Stock Exchange and
engaged in the exploration and development of mining claims located in Canada.
On October 30, 1995, the Company entered into an option agreement to acquire a
100% interest in a lithium property located in the Wekusko Lake area of the
Province of Manitoba, Canada. The property consisted of twelve claims, covering
an area of approximately eight square kilometres. The Company expended
approximately $75,386 on the exploration and development of the property. On
October 28, 1999, the Company decided it was no longer economically feasible to
proceed further with the exploration and development of this property and all
mining claims in connection with this property were written off, together with
related deferred exploration expenditures.
On April 29, 1999, the Company entered into an option agreement (the "Option
Agreement") to acquire a 100% interest in a property located in the Dawson
Mining District of Yukon Territory, Canada (the "Ami Property"), which property
consists of 42 mineral claims. The Company expended approximately $21,000 on
the exploration and development of the Ami Property. On January 15, 2000, the
Company decided it was no long economically feasible and did not proceed further
with the exploration and development of the Ami Property and all mining claims
in connection with this property were written off, together with related
deferred exploration expenditures. By way of an Assignment Agreement, dated
January 18, 2000, the Company assigned its rights under the Option Agreement to
H. Leo King and Associates Inc. in consideration of the payment of all future
expenses in connection with the Ami Propery and the assumption of all of the
Company's obligations under the Option Agreement. As a result of this
agreement, the Company has no further interest or further obligations in
connection with the Ami Property.
In connection with the Company's acquisition of Quotes Canada (as described
below), the Company was required to seek approval from the Vancouver Stock
Exchange (the "VSE") (the predecessor to the Canadian Venture Exchange (the
"CDNX")) because the acquisition constituted a change of business under the
policies of the VSE. The VSE approved the change of business and the
acquisition on November 5, 1999. The Company is presently engaged in the
business of providing consumer, financial and news information via the internet.
The Company changed its business because mining exploration would not enhance
shareholder value.
Present Operations of the Company
Pursuant to a letter agreement dated June 1, 1999 (the "Acquisition Agreement")
and the receipt of regulatory approval on November 5, 1999, the Company acquired
a 100% interest in Quotes Canada in consideration of a total of $240,000,
consisting of a cash payment of $50,000 and the issuance of 1,000,000 common
shares in the capital of the Company at a deemed price of $0.19 per share to
Paul Dickson and Glen Dickson (each to receive 50% of the common shares) (the
"Acquisition Shares"). A copy of the Acquisition Agreement is attached to this
Registration Statement as an exhibit. On August 12, 1999, under the terms of
the Acquisition Agreement, Paul Dickson and Glen Dickson were appointed to the
Board of Directors of the Company. In addition, each has entered into
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employment agreements, effective December 1, 1999, which provide each a salary
of $30,000 for 1999 and $42,000 for 2000 for a minimum two year period. Each
of Paul Dickson and Glen Dickson are to receive incentive stock options,
entitling each of them to purchase not less than 4% (or such lower percentage as
may be accepted by Paul Dickson and Glen Dickson) of the issued and outstanding
common shares of the Company at the minimum price permitted by the CDNX for a
period of five years from November 5, 1999. As part of the Acquisition
Agreement, Paul Dickson and Glen Dickson purchased, by way of private placement,
160,000 units (each unit consisting of one share and one share purchase warrant
with a two year term) at $0.15 per unit for a total purchase price of $12,000
for each of Paul and Glen Dickson. For more details regarding the private
placement, see Item 12 ("Options to Purchase Securities") of this Registration
Statement. The Company has determined that the effective date of the
acquisition was November 5, 1999.
Quotes Canada commenced services as an online Internet provider of real-time
stock market quotes and other financial information from its website,
www.quotescanada.com (the "Quotes Canada Website") in September, 1998. The
Quotes Canada Website is accessible through the Company's website,
www.earthramp.com (the "Company's Website") (collectively, the Quotes Canada
Website and the Company's Website are referred to as the "Websites"). By
December, 1998, users were able to access real-time stock quotes on the Quotes
Canada Website at no charge. As a result, the single web server used by Quotes
Canada became overloaded. At that time, Quotes Canada had only two employees,
Glen Dickson and Paul Dickson, and due to lack of funding and insufficient
advertising revenue, in January, 1999, Quotes Canada switched its originally
free services to a pay-per-quote system, which reduced the number of
subscribers, thereby allowing Quotes Canada to further develop their operations.
Under the pay-per-quote system in place at that time, subscribers paid USD$0.03
per quote.
At present, the Company provides a variety of online integrated data streaming
services through its Internet portal, the Quotes Canada Website, which has run
successfully for over one and one-half years. Integrated data streaming
services means that internet users can access data directly on the Company's
Website without having to link to another website. Presently, those online
integrated data streaming services include:
- - RealTime Stock Quotes for companies listed on the Montreal, Toronto,
Canadian Venture and Canadian Dealing Network Stock Exchanges.
- - Delayed Stock Quotes for both Canadian and US companies.
- - RealTime / Delayed corporate press releases for Canadian stock and mutual
fund companies.
- - Historical financial data, including an extensive database of historical
US and Canadian stock quotation information used to generate dynamic charts, and
access to over 10 years of stock closing prices.
- - Other financial information in connection with silver, gold, copper,
aluminum and nickel prices, international currencies, natural gas, gas, oil and
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Brent Crude Oil prices, and major world indices (New York, Nikkei, Hong Kong,
etc.) and emerging world market indices (Korean, Taiwan, Brazil, etc.).
- - Dynamic Charts for presentation of historical stock price information.
These charts can be customized and can create plots of all market data. Data
can be plotted back as far as 15 years.
- - Portfolio Tracking which enables users to maintain multiple portfolios for
US and Canadian stocks and mutual funds, through the Company's proprietary
software program call Portfolio Tracker. A new version of Portfolio Tracker is
scheduled to be released during the Company's second quarter this year.
- - A monthly newsletter containing Canadian and International market
information.
- - Links to weather reporting, telephone directories, horoscopes and other
entertainment related websites.
- - Links to Citizens Bank, with access to Citizens Bank's prime interest,
exchange, mortgage, term deposit and RRSP rate information. In addition,
several financial calculators are available, such as the currency exchange
calculator, the loan payment calculator, the mortgage calculator, the net worth
calculator, the term deposit calculator and the RRSP calculator. Users can also
directly apply online for a Citizens Bank bank account, mortgage account, loan
or Visa card on the Company's Website.
- - Links to various auction, book, gift, sporting goods and other product
related websites with a customized search engine allowing users to locate
websites that sell particular products.
- - Online travel reservation and quotation service. Presently, the Company's
travel site is not linked to another site.
At this time, the Company is able to offer all of these services, with the
exception of its real-time stock quotes, at no costs to users. On January 1,
1999, the Company started to charge a fee for access to its real-time stock
quotes ($0.03 per quote). Quotes can be purchased in blocks of 100 ($3.00), 200
($6.00), 300 ($9.00), 400 ($12.00) or 500 ($15.00).
The Company pays a minimum of $5,000 per month for electronic data feeds from
financial data resellers linked to various stock exchanges, which fee may be
increased depending on the volume of subscriber usage. Once this data is
received by the Company, it can be interpreted, formatted and bundled for
redistribution to its customers. The Company is able to provide and sell data
to its four business subscribers in almost any format they require. At present,
the Company charges its subscribers between $300 and $3,000 per month for this
custom service, depending on the services and information required. In
connection with this redistribution of data to its customers, the Company is
able to provide advanced programming, for an additional fee, so that the
particular customer can effectively utilize that data in any manner that the
customer requires. The Company offers additional programming services involving
in depth customization not available under the normal package of services. This
advanced programming service has always been available.
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In addition, the Quotes Canada Website provides computer and software
development services including custom server configuration, mission-critical
application development, database design and implementation, advanced Cold
Fusion, C++ and Java application development, high-traffic website hosting and
administration and business to business consulting.
On November 4, 1999, the Company announced the initial launch of
MoneyChallenge.Com (the "MoneyChallenge Website"), an online, interactive
fantasy investment game (www.moneychallenge.com). Following the initial launch,
the Company decided to upgrade the performance of the MoneyChallenge Website.
The new code to implement the upgraded website has been completed, and following
installation of the high speed data feed, the Money Challenge Website will be
operational. The Company anticipates that the full launch of MoneyChallenge.Com
will take place during August, 2000. The MoneyChallenge Website will offer
users the chance to exercise their investing abilities by trading US stocks
using $100,000 virtual dollars. The user with the highest net worth at the end
of each month is eligible to win cash and prizes for various sponsors and
advertisers. The Company intends to generate revenues from the MoneyChallenge
Website through sponsorship, advertising and software licensing. In addition,
MoneyChallenge.Com offers an online discussion forum, online investing tips and
Frequently Asked Questions (FAQs). The MoneyChallenge Website is not available
to the general public.
On January 24, 2000, the Company announced the launch of a new website,
www.silentbrowser.com ("SilentBrowser.Com"), which will enable web users to
protect their privacy online with anonymous web surfing. When users visit
websites without the benefit of a product like SilentBrowser.Com, they risk
dissemination of personal information (for example address, phone number, credit
card number) and information about their web surfing habits. SilentBrowser.Com
acts as a shield between the user and the sites he or she visits, concealing
confidential and personal information. In addition, SilentBrowser.Com is able
to block hostile Internet programs that may be embedded in web pages and which
may damage the user's computer. At present, SilentBrowser.Com is available as a
free service. The Company does anticipate that a user fee of $5 - $10 per month
will be instituted by August, 2000 for its business clients who use the
SilentBrowser website.
The Quotes Canada Website uses WebTrends traffic software. WebTrends allows the
web server to collect valuable information on the activity of the users on the
Quotes Canada Website. In addition, all user activity is logged and can be
graphed to reveal growth, system usage, popular features, computers being used
to access the Quotes Canada Website. The activity of users, such as which areas
of the site are being visited on the Company's website, is automatically
recorded by the Company's computers. Any increase in activity or visits by
users can therefore, be analyzed to indicate which sites are popular. The
Company intends to use these statistics to develop new products and services.
In addition, the Company collects demographic information from users who
volunteer to fill out a survey.
Presently, Quotes Canada does not host any retail merchandise directly through
the Websites, but rather generate revenue through commissions from sales
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generated by links from the Websites to other retailers' websites. Quotes
Canada does not intend to make these commissions a primary source of revenue.
The Company anticipates that subscriptions for its services and advertisements
on the Websites will generate the majority of its revenue.
The Quotes Canada Website offers a targeted advertising medium for small and
medium-sized companies whose customers are interested in finance. Advertising
banners and sponsorship buttons will be rotated regularly to appear on web pages
hosted by Quotes Canada. Banners consist of a set size graphical image designed
by the advertiser or Quotes Canada, which allows users to access the
advertiser's website, products and services by clicking on the banner. All
advertising on the Websites is currently arranged by ClickThrough.Ca.
Advertising space can be purchased in the form of impressions or page views.
Advertisers can check statistics on their advertisements 24 hours per day. The
cost of an advertisement impression for advertisers ranges from $0.01 to $0.06
per impression or page view that the user visits on the Company's website.
Business Relationships
Quotes Canada has recently entered into several business relationships with
other Internet content providers and data feed providers that either provide
direct revenues from advertising, sponsorship, user fees, or Commissions or
indirect revenues deriving from a mutually beneficial marketing relationship in
the form of co-branding that will attract internet users to the website of the
Company. All the services described in the agreements below are presently
provided on the Company's Website or being received from other parties except
for the Vector Agreement. Under the business relationships described below, the
Company is required to make payments of $10,800 over the next 12 months.
(a) ClickThrough.Ca Agreement
On September 17, 1999, Quotes Canada entered into a one year agreement (with a
one year renewal provision) with ClickThrough.Ca, a company specializing in
online advertising. Pursuant to the agreement, ClickThrough.Ca will manage
available advertising space on the Quotes Canada Website, by using their
employees, software and computer servers to solicit, sell and deploy banner
advertising on the ClickThrough website on behalf of the Company, thereby
increasing Quotes Canada's advertising revenues while concurrently bringing new
advertisers to the Quotes Canada Website. In consideration of its services,
ClickThrough.Ca will retain between 40% and 50% of the advertising revenues that
are generated from advertisements on the Quotes Canada Website. After 9 months
from the date of this agreement, either party may terminate the agreement
without reason upon 90 days notice. Furthermore, either party may terminate the
agreement upon 60 days notice of a breach of the agreement.
(b) ON24 Inc. Affiliate Agreement
On July 1, 1999, Quotes Canada and ON24 Inc. ("ON24") entered into an agreement
(the "Affiliate Contract") for a one year term. ON24 is streaming media
services company that develops and distributes corporate news and information on
the Internet. Under the Affiliate Contract, Quotes Canada will provide ON24's
syndicated newsfeed exclusively on the Quotes Canada Website. ON24's news
content includes CEO interviews, quarterly earnings reports, company news,
product launches and other related information targeted to online investors. In
consideration for ON24's services, Quotes Canada must distribute ON24's news
feed in a prime location on the Quotes Canada Website. The business
relationship with ON24 does not generate any direct revenues but it helps to
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promote the brand name of Quotes Canada. The Affiliate Contract is subject to
termination by either party upon 30 days notice of a breach of term of the
agreement. In addition, ON24 has the right to terminate the agreement upon
receiving notice of any arrangement that Quotes Canada has entered into with
respect to providing media content for investors.
(c) Citizens Bank of Canada
On August 17, 1999, Quotes Canada entered into a Web Linking Agreement with
Citizens Bank of Canada ("Citizens Bank'), an on-line banking company in Canada.
Under the Web Linking Agreement, Quotes Canada will provide Citizens Bank with
20 minutes delayed financial data in the form of co-branded stock charts, stock
and mutual fund quotes and historical stock quotation data. In this situation,
co-branding means that the Company gets the name of Quotes Canada exposed on the
site of Citizens Bank and Citizens Bank gets its name exposed on the Quotes
Canada site. Citizens Bank will in turn provide Quotes Canada with on-line
banking applications, mortgage rates, interest rates and other banking related
information, as well as a number of financial calculators. Quotes Canada will
derive revenues for each approved bank account application, Visa card
application, loan application and mortgage application, in the form of fees
payable by Citizens Bank as follows:
(i) Approved Account Application: $15
(ii) Approved and Funded Mortgage Application: 10 basis points of funds
advanced pursuant to the Mortgage Application (a one-time payment, not a
recurring fee)
(iii) Approved Visa Application: $15
(iv) Approved and Funded Loan Application: $15
Either party has the right to terminate the Web Linking Agreement upon five (5)
days notice to the other party or upon a material breach of the Web Linking
Agreement by either party.
(d) InfoSpaceCanada.Com Agreement
On August 31, 1999, Quotes Canada entered into an agreement with
InfoSpaceCanada.Com ("InfoSpace") (the "Distribution Agreement"), a specialist
in syndicating new, current event and other informative content through partners
including Netscape, Lycos, the Wall Street Journal, Microsoft, CBS and ABC,
among others. InfoSpace is an aggregator and integrator of such content
services for syndication to a broad network of affiliates, including existing
and emerging Internet portals, destination sites and suppliers of PCs and other
Internet access devices, such as cellular phones and pagers. InfoSpace gathers
content from multiple sources and integrates it to increase its value, thereby
serving as a single source of value-added content. Pursuant to the Distribution
Agreement, InfoSpace has granted Quotes Canada the right to include on the
Quotes Canada Website links which enable "point and click" access to locations
on the InfoSpace websites. In return, Quotes Canada has granted InfoSpace the
right to include on the InfoSpace websites links which enable "point and click"
access to locations of the Quotes Canada Website, the right to sell and serve
banner advertising on its co-branded pages and the right to track the number of
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impressions. As a result, Quotes Canada will be in a position to offer a range
of online information, including search directories, telephone directories,
classified listings and real estate listings. Pursuant to the Distribution
Agreement, and commencing October 1, 1999, Quotes Canada pays a monthly fee to
InfoSpace in the amount of $500. The Distribution Agreement is for a term of
three years with automatic one year renewal provisions. Under the Distribution
Agreement, InfoSpace will remit to Quotes Canada 30% of advertising revenue
received by Quotes Canada for banner advertising on the co-branded pages.
Either party may terminate the agreement upon 90 days notice of a material
breach of the agreement.
(e) ExactTrade.Com Agreement
On October 27, 1999, Quotes Canada entered into an agreement with
ExactTrade.Com, an online Canadian brokerage service. ExactTrade.com is a
Rampart Securities, Inc. company. Rampart is a full-service investment dealer
based in Toronto, Ontario, Canada, with branch offices in Calgary, Alberta,
Canada and Fredericton, New Brunswick, Canada, and structures and syndicates
underwritings, private placements, joint ventures, mergers and acquisitions in
various industries. Pursuant to the agreement, Quotes Canada will provide
ExactTrade.Com with financial data in the form of stock quotes, stock charts,
most active stocks, historical data and other related data services (the
"Data"). In return, the only consideration received by the Company will be that
on every page of ExactTrade.Com's website utilizing the Data, ExactTrade.Com
will display a logo (supplied to it by Quotes Canada) hyperlinked to the Quotes
Canada Website. The agreement is for a term of one year with automatic one year
renewal terms unless one party provides 60 days written notice electing to end
the agreement at the end of the most current term. The business relationship
with ExactTrade does not generate any direct revenues but may generate indirect
revenue resulting from users going to the Quotes Canada website.
(f) MostActives.Com
On November 23, 1999, the Company entered into a Co-Branding Agreement for a one
year term with MostActives.Com, an online discount brokerage firm operated by
the Benson York Group in New York. The Co-Branding Agreement will provide users
of MostActives.Com with the MoneyChallenge.Com service, and the Company
anticipates that the Co-Branding Agreement will increase the MoneyChallenge
Website subscriber base, advertising revenues and sponsors. The MoneyChallenge
Website will be accessible through the Company's Website and also accessible
through the MostActive website. Either party may terminate the agreement upon 5
days notice of a material breach of a provision of the agreement.
(g) Agreement with Internet Gateway
Since June, 1999, the QuotesCanada.Com web server has been located at Internet
Gateway, whose address is 8th Floor - 889 West Pender Street, Vancouver, BC.
The agreement with Internet Gateway enables the Quotes Canada Website to access
high speed Internet at affordable prices. Internet Gateway has a secure
computer environment with air conditioning and alarmed premises. The Company
uses the latest computer software and hardware technology to allow thousands of
users to access the QuotesCanada.Com Website quickly, responsively and reliably.
The Company pays a monthly fee of $400 to Internet Gateway for these services.
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(h) Vector Agreement
On March 28, 2000, Quotes Canada entered into an agreement with Vector Insurance
Network (Ontario) Limited to offer online insurance quotations on the
QuotesCanada.Com Website. The Company will receive revenues in the form of a
marketing fee of 1.25% of premiums written and settled for both new and renewal
policies purchased by users of the Quotes Canada Website. The agreement may be
terminated by Vector upon 90 days notice of its dissatisfaction with the
profitability of the program, or by Quotes Canada upon 90 days notice of its
dissatisfaction of Vector's services and prices. The term is for three years
with automatic renewal of one year terms. Presently, the Vector site is not in
operation.
Intellectual Property
The Company has applied for trademark protection in Canada and the United States
for "EarthRamp.Com" and "Quotes Canada Financial Network Inc.". The Company has
also made a trademark application for QuotesCanada.Com" in Canada only. In
addition, the Company has secured the registration of the domain names
"Earthramp.Com", "QuotesCanada.Com", "MoneyChallenge.com" and
"SilentBrowser.Com" with Network Solutions, Inc. (Internet).
Employees
As of the date hereof, the Company currently employs 14 full-time employees
consisting of 4 management staff members, 7 programmers and 3 administrators.
In total, the Company currently pays approximately $700,000 in salaries to its
employees on an annual basis.
Plan of Operation for the Next 12 Months
Quotes Canada's current focus is the creation and distribution of proprietary
finance-related software called Day Trader Pro Streamer ("Day Trader"), which
will enable stock investors to easily access live, real-time, tick by tick
quotations for North American equities. The Company anticipates that Day Trader
will be available through the Quotes Canada Website during the second quarter of
this year, at a subscription cost of approximately $20 per month. By August 1,
2000, Day Trader will be expanded to provide live news streamers to its
subscribers at an additional cost of between $30 - $50 per month.
In addition, the Company anticipates that its US and Canadian stock and mutual
fund discussion forum will be available on the Quotes Canada Website by the end
of August, 2000. Subscribers will be able to download the application from the
Quotes Canada Website at no cost. In order to raise revenue to support this
discussion forum, the Company intends to sell advertising at the forum site.
In addition to the Company's present business relationships, the Company will be
seeking and negotiating additional contractual relationships such as
advertising, sponsorship, co-branding, licensing, web linking and other
marketing agreements with Internet content providers and data feed providers.
Over the next two months, the Company intends to provide its clients with access
to valuable content and to provide quotations for a broad range of consumer
products and services, at an estimated cost of $500,000 for the next year.
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These products and services would include the following:
- - Corporate Capsules database of over 8,500 publicly traded companies
containing names, addresses, contacts, phone numbers and other information;
- - RealTime US stock quotes;
- - Headline news;
- - Financial news for Canadian and US companies;
- - Home, life, business and automobile insurance quotations (US only); and
- - Automobile purchase quotations (US only).
The Company is constantly trying to improve the speed of access, site security,
and the aesthetics of their Websites in terms of minor modifications.
Research and Development
Syndicated data is still in its infancy, and approximately 24 companies have
been able to create data sources that are easily integrated into websites. The
Company's research indicates that its competitors are still using primitive
re-distribution methods. Many of the Company's competitors provide either no
integration tools or tools that require an expert to use. The Company's methods
of re-distribution use the latest in Internet software technologies to integrate
data and receive little or no expert intervention. Complete automation of the
Quotes Canada Website has been achieved through the development and
implementation of software applications that read information from the data
source and then re-format the data in a manner that makes it useful to end
users. In January, 2000, the Company was licenced by the Canadian Exchange
Group to obtain and re-distribute real-time stock quotes.
The Company recognized a need for quality financial tools, a market that sees
continuous growth, and the Internet allows content providers such as
QuotesCanada.Com the ability to distribute products and services to the public
at a low cost.
The Company, through its subsidiary Quotes Canada, has researched and developed
marketable products and services over the past year, and has expended
approximately $80,000 in this regard. Although future research and development
is dependent upon market direction, the Company anticipates that it will spend
approximately $200,000 per year on research and development.
Acquisition of Equipment
The Company is currently assessing its equipment needs, and anticipates that it
will purchase new computer equipment in the form of servers and workstations
over the next 12 months. The Company expects to spend approximately $150,000 in
upgrading its current equipment and purchasing new equipment.
<PAGE>
Anticipated Changes in Number of Employees
The Company is currently in the process of hiring graphic artists, computer
programmers, marketing staff and sales staff. Over the next 12 months, the
Company intends to increase staff to 25 employees from 14 with most of the new
employees being hired as sales and marketing staff. The Company expects the
total monthly cost of salaries to be $95,050.
Securities and Exchange Commission's Public Reference
Any member of the public may read and copy any materials filed by the Company
with the Securities and Exchange Commission (the "SEC") at the SEC's Public
Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Information
on the operation of the Public Reference Room may be obtained by calling the SEC
at 1-800-SEC-0330. The SEC maintains an Internet website (http://www.sec.gov)
that contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC.
Forward Looking Statements
Much of the information included in this Registration Statement includes or is
based upon estimates, projections or other "forward-looking statements". Such
forward looking statements include any projections or estimates made by the
Company and its management in connection with its business operations. While
these forward-looking statements, and any assumptions upon which they are based,
are made in good faith and reflect the Company's current judgment regarding the
direction of its business, actual results will almost always vary, sometimes
materially, from any estimates, predictions, projections, assumptions, or other
future performance suggested herein.
Such estimates, projections or other "forward-looking statements" involve
various risks and uncertainties as outlined below. The Company cautions the
readers that important factors in some cases have affected and, in the future,
could materially affect actual results and cause actual results to differ
materially from the results expressed in any such estimates, projections or
other "forward-looking statements".
RISK FACTORS
The common shares of the Company are considered speculative due to the nature of
the Company's business and its present stage of development. Prospective
investors should consider carefully the risk factors set out below.
Limited Operating History
Because the Company changed its operations to that of an Internet-based
technology company in November, 1999, it has a limited operating history on
which to base an evaluation of its business and prospects. The Company's
prospects must be considered in light of the risks, uncertainties, expenses and
difficulties frequently encountered by companies in their early stages of
development, particularly companies in new and rapidly evolving markets similar
to those faced by the Company. Some of these risks and uncertainties relate to
the Company's ability to:
<PAGE>
- - attract and maintain a large base of subscribers for the Websites,
- - develop and introduce desirable services and original content for its
subscribers,
- - establish and maintain strategic alliances and relationships with content
providers, affiliates and sponsors,
- - establish and maintain relationships with advertisers and advertising
agencies,
- - respond effectively to competitive and technological developments,
- - build an infrastructure to support the Company's business,
- - provide compelling and unique content to Internet users,
- - successfully market and sell advertising,
- - effectively develop new and maintain existing relationships with
advertisers, content providers, business customers and advertising agencies,
- - continue to develop and upgrade the Company's technology and network
infrastructure,
- - respond to competitive developments,
- - successfully introduce enhancements to the Company's existing products and
services with a view to addressing new technologies and standards, and
- - attract, retain and motivate qualified personnel.
The Company cannot be sure that it will be successful in addressing these risks
and uncertainties and its failure to do so could have a materially adverse
effect on its financial condition. In addition, the Company's operating results
are dependent to a large degree upon factors outside the Company's control,
including the availability of compelling information and content for the
Websites and the continued use of the Internet as a source of financial, news
and other information. There are no assurances that the Company will be
successful in addressing these risks, and failure to do so may adversely affect
the Company's business.
History of Losses
In the past the Company has incurred substantial net losses. For the year ended
October 31, 1999, the Company incurred net losses of $185,112 and for the 3
months ended January 31, 2000 losses of $179,418. The Company also has an
accumulated deficit of $1,757,542 as at January 31, 2000. The Company's ability
to generate any revenues is uncertain. With respect to current and future
product and service offerings, the Company expects to significantly increase its
marketing and operating expenses in an effort to increase its customer base,
enhance its brand image and support its infrastructure. In order for the
Company to make a profit, it must generate revenue to cover these and other
future costs. The Company may not generate such or any revenue on a quarterly
or annual basis in the future.
<PAGE>
The Company's short and long-term prospects depend upon its ability to attract
both paying subscribers and advertisers to the Websites, to develop its existing
strategic relationships and to generate new relationships with content
providers. The Company has projected that a significant portion of its revenues
will be generated from business-to-business subscriptions for the Websites
(50%), business-to-consumer subscriptions (20%), online-based services (10%) and
advertising/sponsorship (20%). The Company's success is highly dependent on
future revenues from subscriptions, services and advertisements, and the Company
may never generate significant revenues if it does not establish a sufficient
subscriber base, brand image and advertising pool.
Need for Additional Financing
Based on its current operating plan, the Company anticipates that it will
require additional financing in order to finance its continued operations and to
increase the promotion and marketing of its products and services.
The Company's ability to continue in business depends upon its continued ability
to obtain such additional capital and financing. There can be no assurance that
any such financing would be available upon terms and conditions acceptable to
the Company, if at all. The inability to obtain additional financing in a
sufficient amount when needed and upon acceptable terms and conditions could
have a material adverse effect upon the Company. Although the Company believes
that it can raise financing sufficient to meet its immediate needs, it will
require funds to finance its development and marketing activities in the future.
There can be no assurance that such funds will be available or available on
terms satisfactory to the Company. If additional funds are raised by issuing
equity securities, further dilution to existing or future shareholders is likely
to result. If adequate funds are not available on acceptable terms when needed,
the Company may be required to delay, scale back or eliminate its promotional
and marketing campaign or its development programs. Inadequate funding also
could impair the Company's ability to compete in the marketplace and could
result in its dissolution.
Limited Marketing Experience
The Company has not incurred any significant advertising, sales or marketing
expenses to date. To increase awareness of the Company's online products and
services and its Website, the Company expects to spend significantly on
advertising, sales and marketing in the future. If the Company's marketing
strategy is unsuccessful, it may not be able to recover these expenses or
generate or increase its revenues from operations. The Company will be required
to develop a marketing and sales campaign that will effectively demonstrate the
advantages of its services and products. The Company's marketing and selling
experience of its services and products to date is very limited. The Company
may also elect to enter into agreements or relationships with third parties
regarding the promotion or marketing of its products and services. There can be
no assurance that the Company will be able to establish adequate sales and
marketing capabilities, that it will be able to enter into marketing agreements
or relationships with third parties on financially acceptable terms or that any
third parties with whom it enters into such arrangements will be successful in
marketing and promoting the Company's services and products.
<PAGE>
Acceptance of the Company, its Products and Services
The Company's success is dependent upon achieving significant market acceptance
of the Websites and the online products and services offered by the Company, by
Internet consumers, advertisers, affiliates, sponsors and content providers. It
cannot guarantee that Internet consumers, advertisers, affiliates, sponsors and
content providers will accept the Websites or the Company's products and
services, or even the Internet, as a replacement for traditional sources of
financial data, travel information, entertainment information, educational
material, sports data and audio/video content. Market acceptance of real-time
financial data, travel information, entertainment information, educational
material, sports data and audio/video content depends upon continued growth in
the use of the Internet generally and, in particular, as a source of financial
data, travel information, entertainment information, educational material,
sports data, URL databases and audio/video content for consumers. The Internet
may not prove to be a viable channel for these services because of inadequate
development of necessary infrastructure, such as reliable network backbones, or
complimentary services, such as high-speed modems and security procedures, the
implementation of competitive technologies, government regulation or other
reasons. Failure to achieve and maintain market acceptance of the Websites and
the Company's products and services would seriously harm the Company's business
and its continued operations.
Acceptance of the Company and its products and services depends on the success
of its advertising, promotional and marketing efforts and the ability to
continue to provide high-quality information to its users of its products and
services. To increase awareness of its products and services, the Company
expects to spend $300,000 on promotion, marketing and advertising in the next 12
months. If these expenses fail to develop an awareness of the Company's
products and services, these expenses may never be recovered and the Company may
never be able to generate future revenues. In addition, even if awareness of
its products and services increases, the Company may not be able to increase or
maintain the number of users of the Websites, its products and services. The
Company currently has an average of 40,000 registered users for its
business-to-consumer subscription services and 8 business-to-business
subscribers of whom 4 are paying a fee.
Reliance upon Technology and Computer Systems
The markets in which the Company competes are characterized by rapidly changing
technology, evolving technological standards in the industry, the creation of
competing websites, frequent new products and service offerings and changing
consumer demands. The Company's future success will depend on its ability to
adapt to these changes and to continuously improve the performance, features and
reliability of the Websites and its products and services in response to
competitive services and products and the evolving demands of the marketplace,
which it may not be able to do. Specifically, the Company's ability to continue
its operations in the future will depend on its ability to:
- - provide current financial data and news in a timely fashion,
- - build and maintain a base of subscribers willing to pay for the Company's
products and services,
<PAGE>
- - build a sufficient pool of advertisers, and
- - develop new products and services to meet consumer demand.
In addition, the widespread adoption of new internet telecommunications
technologies or other technological changes could require the Company to incur
substantial expenditures to modify or adapt its services or infrastructure,
which might impact its ability to become or remain profitable. Any failure by
the Company to anticipate or respond rapidly to technological advances, new
products and enhancements, or changes in customer requirements could have a
material adverse effect on the Company.
The Quotes Canada Website, and eventually the Company's Website, once expanded,
utilizes sophisticated and specialized network and computer technology. The
Company anticipates that it will be necessary to continue to invest in and
develop new and enhanced technology on a timely basis to maintain its
competitiveness. Significant capital expenditures may be required to keep its
technology up to date. Investments in technology and future investments in
upgrades and enhancements to software for such technology may not necessarily
maintain the Company's competitiveness. The Company's business is highly
dependent upon its computer and software systems, and the temporary or permanent
loss of such equipment or systems, through casualty, operating malfunction or
otherwise, could have a material adverse effect upon the Company. If the
Company cannot operate its website 24 hours a day seven days per week with
limited interruptions, its business may be seriously harmed. The Company's
Websites have been down 6 times, each no longer than 4 hours in duration and due
to problems in receiving the data fees from outside sources. The Websites may
be required to accommodate a high volume of traffic and deliver frequently
updated information. It may experience slower response times or system failures
due to increased traffic on the Websites or on the Internet. The Websites users
and members depend on Internet service providers and other website operators for
access to the Websites. These providers and operators have experienced
significant outages in the past and there can be no assurance that such outages
or other problems will not occur in the future. Any interruptions in the
operation of the Websites however caused could have a material adverse effect
upon the Company.
Services based on sophisticated software and computer systems often encounter
developmental delays, and the underlying software may contain undetected errors
that could cause system failures when introduced. Any system error or failure
causing interruption in the availability of content or an increase in response
time could result in a loss of potential or existing business services, users,
advertisers or content providers, and if sustained or repeated, could reduce the
attractiveness of the Websites to these individuals and entities. In addition,
because the Company's advertising revenues will be directly linked to the number
of advertisements delivered by the Company to users, system interruptions that
result in the unavailability of or slow response times to the websites would
reduce the number of advertisements delivered, thereby reducing revenues.
Conversely, a sudden, significant increase in traffic to the Websites could
strain the capacity of the software, hardware and telecommunications systems
utilized by the Company, possibly leading to slower response times or system
failures. The Company's operations are dependent upon the receipt of timely
<PAGE>
feeds from the content providers, and any failure or delay in the transmission
or receipt of the feeds could disrupt the Company's operations.
Response to Technological Change May be Inadequate
The Company's market is characterized by rapid technological developments,
frequent new product introductions and evolving industry standards. If the
Company fails to respond rapidly to technological developments, its business may
be adversely affected. The emerging character of these products and services and
their rapid evolution will require the Company to:
1. effectively use leading technologies;
2. continue to develop its technological expertise; and
3. enhance its current services and continue to improve the performance,
features and reliability of its network infrastructure.
Substantial Competition
The Company competes with companies such as Inktomi Corp. (www.inktomi.com) and
iSyndicate, Inc. (www.isyndicate.com), who, like the Company, provide syndicated
data and compete in the same market. The primary competitors of the Company
include Bridge Systems, Star Data, ILX, MAW, SeP and Bloomberg. The Company
competes with these and other numerous financial information providers.
Many of the Company's competitors are substantially larger than the Company and
have significantly greater financial resources and marketing capabilities than
the Company, together with better name recognition. It is also possible that
new competitors may emerge and acquire significant market share. Competitors
with superior resources and capabilities may be able to utilize such advantages
to market their products and services better, faster and/or cheaper than the
Company. Increased competition is likely to result in price reductions, reduced
gross margins and loss of market share, any of which could have a material
adverse effect upon the Company's business, results of operations and financial
condition. In addition, there can be no assurance that the Company will be able
to compete successfully against its present or future competitors.
The Company's ability to compete successfully will require it to develop and
maintain technologically advanced products and services, attract and retain
highly qualified personnel, obtain a significant customer base, whether alone or
with third parties. There can be no assurance that the Company will achieve
these objectives. Failure to do so would have a materially adverse effect on
its business, operating results and financial condition. Furthermore, the
Company's potential products and services, if successfully developed, will
compete directly with other existing and subsequently developed products using
competing technologies. There can be no assurance that the Company's
competitors will not succeed in developing or marketing technologies and
products that are more effective and commercially desirable than those developed
or marketed by the Company or that would render the Company's technology and
products non-competitive. Failure of the Company's potential products to
<PAGE>
compete successfully with products using competing technologies will have a
material adverse effect on the Company's business, operating results and
financial condition.
Uncertain Ability to Manage Growth
The Company's ability to achieve its planned growth is dependent upon a number
of factors including, but not limited to, its ability to hire, train and
assimilate management and other employees, the adequacy of the Company's
financial resources, the Company's ability to identify and efficiently provide
and perform such new products and services as the Company's customers may
require in the future and its ability to adapt its own systems to accommodate
its expanded operations. In addition, there can be no assurance that the
Company will be able to achieve its planned expansion or that it will be able to
manage successfully such expanded operations. Failure to manage anticipated
growth effectively and efficiently could have a material adverse effect on the
Company.
Dependence Upon Key Personnel
The Company considers that any of the Company's management team and other key
personnel, including J.E. Charlesworth, Thomas Boychuk. Glen Dickson and Paul
Dickson (the "Key Personnel"), are vital to the Company's continued operations.
The loss of the services of any of the Key Personnel or other employees, for any
reason, may have a materially adverse effect on the prospects of the Company.
There can be no assurance in this regard, nor any assurance that the Company
will be able to find a suitable replacement for such persons. Furthermore, the
Company does not maintain "key man" life insurance on the lives of the Key
Personnel or any other officers of the Company. To the extent that the services
of any of the Key Personnel become unavailable, the Company will be required to
retain other qualified persons; however, there can be no assurance that it will
be able to employ qualified persons upon acceptable terms.
J.E. Charlesworth provides management services to the Company at a rate of
$1,000 per month, pursuant to an oral agreement with the Company. Thomas
Boychuk also provides the Company, and provides management services and investor
relations services to the Company at a rate of $2,000 per month, pursuant to an
oral agreement with the Company. The contracts with both Mr. Charlesworth and
Mr. Boychuk are "month to month" and can be terminated by either party on one
months' notice.
The Company's business is labour intensive and places significant importance on
its ability to recruit and retain technical and professional personnel. The
success of the Company is therefore dependent upon its ability to identify, hire
and retain additional qualified personnel, for whose services the Company will
be in competition with other prospective employers, many of which may have
significantly greater resources than the Company. Additionally, demand for
qualified personnel conversant with certain technologies is intense and may
outstrip supply as new and additional skills are required to keep pace with
evolving telecommunications technology. There can be no assurance that the
Company will be able to hire and, if so, retain such additional qualified
personnel. Failure to attract and retain such personnel could have a material
adverse effect upon the Company.
<PAGE>
"Penny Stock" Rules May Restrict the Market for the Company's Shares
The Company's common shares are subject to rules promulgated by the SEC relating
to "penny stocks," which apply to companies whose shares are not traded on a
national stock exchange or on the NASDAQ system, trade at less than $5.00 per
share, or who do not meet certain other financial requirements specified by the
SEC. These rules require brokers who sell "penny stocks" to persons other than
established customers and "accredited investors" to complete certain
documentation, make suitability inquiries of investors, and provide investors
with certain information concerning the risks of trading in the such penny
stocks. These rules may discourage or restrict the ability of brokers to sell
the Company's common shares and may affect the secondary market for the
Company's common shares. These rules could also hamper the Company's ability to
raise funds in the primary market for the Company's common shares.
Government Regulation
Although there are few laws and regulations directly applicable to the Internet,
it is likely that new laws and regulations will be adopted in the United States
and elsewhere governing issues such as music licensing, broadcast license fees,
copyrights, privacy, pricing, sales taxes and characteristics and quality of
Internet services. It is possible that governments will enact legislation that
may be applicable to the Company in areas such as content, network security,
encryption and the use of key escrow, data and privacy protection, electronic
authentication or "digital" signatures, illegal and harmful content, access
charges and retransmission activities.
The adoption of restrictive laws or regulations could slow Internet growth or
expose the Company to liability associated with content available on the
Websites. The application of existing laws and regulations governing Internet
issues such as property ownership, libel, defamation, content, taxation and
personal privacy is also uncertain. The majority of such laws were adopted
before the widespread use and commercialization of the Internet and, as a
result, do not contemplate or address the unique issues of the Internet and
related technologies.
Any new law or regulation pertaining to the Internet, or the application or
interpretation of existing laws, could decrease demand for the Websites and
services, increase its cost of doing business or otherwise have a materially
adverse effect on its success and continued operations. Laws and regulations
may be adopted in the future that address Internet-related issues, including
online content, user privacy, pricing and quality of products and services. The
growing popularity and use of the Internet has burdened the existing
telecommunications infrastructure in many areas, as a result of which local
exchange carriers have petitioned the FCC to regulate Internet service providers
in a manner similar to long distance telephone carriers and to impose access
fees on the Internet service providers. The Company cannot guarantee that the
United States, Canada or foreign nations will not adopt legislation aimed at
protecting Internet users' privacy. Any such legislation could negatively
affect the Company's business. Moreover, it may take years to determine the
extent to which existing laws governing issues like property ownership, libel,
negligence and personal privacy are applicable to the Internet.
<PAGE>
Liability for Website Information and Inadequate Insurance Coverage
The Company may be subjected to claims for negligence, copyright, patent,
trademark, defamation, indecency and other legal theories based on the nature
and content of the materials that it broadcasts. Such claims have been brought,
and sometimes successfully litigated, against Internet content distributors. In
addition, the Company could be exposed to liability with respect to the content
or unauthorized duplication or broadcast of content. The Company's insurance
may not cover potential claims of this type or may not be adequate to indemnify
it for all liability that may be imposed. In addition, although the Company
generally requires its content providers to indemnify it for such liability,
such indemnification may be inadequate. Any imposition of liability that is not
covered by insurance, is in excess of insurance coverage or is not covered by an
indemnification by a content provider could adversely affect our business.
Limited Protection for Intellectual Property
While the Company is investigating the possibilities of patent, copyright and
trademark registration and protection for its intellectual property, no such
protection has yet been applied for (excepting the domain registration of the
names "www.earthramp.com" and "www.quotescanada.com" and the application for
trademark registration of the names Earthramp.com Communications Inc. and Quotes
Canada Financial Network Ltd.) or granted. There is no assurance that such
registration or protection will be available, and therefore the Company may have
little or no protection for its intellectual property assets, comprising the
main business assets of the Company.
The Company's financial data, business tools and consumer products and its other
intellectual property are important to the Company's continued operations and
success. The Company's efforts to protect this intellectual property may not be
adequate. Unauthorized parties may infringe upon or misappropriate its
financial data, business tools and consumer products or other proprietary
information. In the future, litigation may be necessary to protect and enforce
the Company's intellectual property rights or to determine the validity and
scope of its intellectual property, which could be time consuming and costly.
The Company could also be subject to intellectual property infringement claims
as the numbers of competitors grows. These claims, even if not meritorious,
could be expensive and divert the Company's attention from its continued
operations. If the Company becomes liable to any third parties for such claims,
it could be required to pay a substantial damage award or to develop comparable
non-infringing intellectual property and systems.
Misappropriation of Intellectual Property
The Company's actions to protect its trademarks and other proprietary rights may
be inadequate. In addition, it is possible that the Company could become subject
to infringement actions based upon content it may license from third parties.
Any of these claims, with or without merit, could subject the Company to costly
litigation and the diversion of its financial resources and technical and
management personnel. Further, if such claims are successful, the Company may
be required to change its trademarks, alter the content of its websites and pay
financial damages. Despite the Company's efforts to protect its proprietary
rights from unauthorized use or disclosure, parties may attempt to disclose,
obtain or use the Company's solutions or technologies.
<PAGE>
If third parties prepare and file applications in the United States that claim
trademarks used or registered by the Company, it may oppose those applications
and be required to participate in proceedings before the United States Patent
and Trademark Office to determine priority of rights to the trademark, which
could result in substantial costs. An adverse outcome in litigation or privity
proceedings could require the Company to license disputed rights from third
parties or to cease using such rights. Any litigation regarding the Company's
proprietary rights could be costly and divert its attention, result in the loss
of certain of its proprietary rights, require the Company to seek licenses from
third parties and prevent it from selling its services, any one of which could
adversely affect the Company's business.
Misappropriation of Proprietary Rights
The Company may not be able to prevent misappropriation of its proprietary
information and that agreements entered into for that purpose may not be
enforceable. It might be possible for a third party to copy or otherwise obtain
and use the Company's proprietary information without authorization. The laws
of some countries may afford the Company little or no effective protection of
its intellectual property.
Insider Control of Common Stock
As of April 21, 2000, directors and executive officers beneficially owned
approximately 42% of the outstanding Common Shares. As a result, these
shareholders, if they act as a group, will have a significant influence on all
matters requiring shareholder approval, including the election of directors and
approval of significant corporate transactions. Such control may have the
effect of delaying or preventing a change in control.
Dependence Upon New and Continued Relationships with Content Providers
At present, the Company has a limited number of relationships with content
providers, sponsors and affiliates. The Company's success depends significantly
on its ability to maintain these existing relationships and to build new
relationships with other content providers, sponsors and affiliates. The
Company cannot ensure that it will be able to maintain such relationships and
continue to obtain the necessary content.
The Company's future success depends upon its ability to deliver compelling
content over via the Websites. The Company relies on third party content
providers for compelling and entertaining content. The Company's ability to
maintain and build relationships with content providers, affiliates and sponsors
is critical to its success. The Company's agreements with third party content
providers, sponsors and affiliates may not be renewed or may be terminated prior
to the expiration of their terms if the Company does not fulfil its contractual
obligations. The Company's inability to secure licenses from content providers
or performance rights or the termination of any number of content provider
agreements would decrease the availability of content that it can offer users.
Such inability or termination may result in decreased traffic on the Websites
and, as a result, decreased advertising revenue, which could adversely affect
the Company's business.
<PAGE>
The Company's agreements with all content providers are nonexclusive, and many
of its competitors offer, or could offer, content that is similar to or the same
as that obtained by the Company from such nonexclusive content providers. Such
direct competition could adversely affect the Company's business.
Possible Volatility of Share Prices
The trading price of the Company's Common Shares has been and may continue to be
subject to wide fluctuations. The stock market in general, and the market for
Internet-related and technology companies in particular, has experienced extreme
price and volume fluctuations that have often been unrelated or disproportionate
to the operating performance of such companies. The trading prices of many
technology companies' stocks are at or near historical highs and reflect price
earnings ratios substantially above historical levels. There can be no
assurance that these trading prices and price earnings ratios will be sustained.
These broad market and industry factors may adversely affect the market price of
the common shares, regardless of the Company's operating performance.
In the past, following periods of volatility in the market price of a company's
securities, securities class-action litigation has often been instituted. Such
litigation, if instituted, could result in substantial costs for the Company and
a diversion of management's attention and resources.
Limited Liability of Directors, Officers and Others
The Company's articles contain provisions limiting the liability of officers and
directors of the Company for all acts, receipts, neglects or defaults of
themselves and all other officers or directors of the Company or for any other
loss, damage or expense happening to the Company which shall happen in the
execution of the duties of such officers or directors. Such limitations on
liability may reduce the likelihood of derivative litigation against officers
and directors of the Company and may discourage or deter the Company's
shareholders from suing officers and directors of the Company based upon
breaches of their duties to the Company, though such an action, if successful,
might otherwise benefit the Company and its shareholders.
ITEM 2 DESCRIPTION OF PROPERTY
The Company's executive office is located at Suite 601 - 889 West Pender Street,
Vancouver, British Columbia, V6C 3B2 (the "Premises"). Through its wholly owned
subsidiary, Quotes Canada, the Company has entered into a lease agreement to
lease the Premises, which is approximately 2414 square feet in size, at a base
rent of $26,544 per year (monthly instalments of $2,212), plus the Company's
proportionate share of building and office operating costs and municipal tax
costs. The lease is scheduled to commence on April 1, 2000 for a three year
term ending March 31, 2003; however, the Company took possession of the Premises
on January 17, 2000 on a rent-free basis until April 1, 2000. The Premises will
house all of the Company's executive and administrative offices.
<PAGE>
ITEM 3 LEGAL PROCEEDINGS
There are no pending legal proceedings to which the Company or its subsidiary is
a party or of which any of their respective property is the subject. There are
no legal proceedings to which any director, officer or affiliate of the Company
or its subsidiary, or any associate of any such director, officer or affiliate
of the Company or its subsidiary is a party or has a material interest adverse
to the Company or its subsidiaries.
ITEM 4 CONTROL OF THE COMPANY
To the best of the Company's knowledge, the Company is not directly or
indirectly owned or controlled by another corporation or by any foreign
government.
To the best of the Company's knowledge, other than those persons listed below,
no person beneficially owns more than 10% of any class of the Company's voting
securities. There were 8,232,342 common shares issued and outstanding as of
April 21, 2000. The following table sets forth, as of the date hereof: (1)
persons known to the Company to be the owner of more than ten (10%) of the
Company's common shares; and (2) the total amount of Company's common shares
beneficially owned by the officers and directors of the Company as a group.
<TABLE>
<CAPTION>
NAME IDENTITY OF PERSON
OR GROUP AMOUNT OWNED (2) PERCENT OF CLASS (1)
------------------ ---------------- --------------------
<S> <C> <C> <C>
Paul Edward Dickson. . 10% shareholder 1,080,000 13.1%
------------------ ---------------- --------------------
Glen Alexander Dickson 10% shareholder 1,080,000 13.1%
------------------ ---------------- --------------------
Officers and Directors N/A 3,429,423 41.7%
- ---------------------- ------------------ ---------------- --------------------
<FN>
(1) There were 8,232,342 common shares issued and outstanding as of April
21, 2000.
(2) The Company believes that all persons hold legal title and has no
knowledge of actual ownership.
</TABLE>
There are no arrangements, known to the Company, the operation of which may at a
subsequent date result in a change in the control of the Company.
ITEM 5 NATURE OF TRADING MARKET
The Company's common shares trade on the Canadian Venture Exchange (formerly the
Vancouver Stock Exchange ("CDNX"). The Company's symbol is ERA and its CUSIP
number is 27032X102. The Company's registrar and transfer agent is Pacific
Corporate Trust, Suite 830 - 625 Howe Street, Vancouver, British Columbia,
Canada (telephone (604) 689-9853, facsimile (604) 689-8144).
The Company has no established trading market in the United States.
The high and low trades on the CDNX (formerly the VSE) for the periods
referenced below were as follows:
<TABLE>
<CAPTION>
QUARTER ENDED HIGH LOW VOLUME
- ----------------- ----- ----- ---------
<S> <C> <C> <C>
April 30, 1997. . $0.55 $0.24 397,167
----- ----- ---------
July 31, 1997 . . $0.45 $0.13 360,701
----- ----- ---------
October 31, 1997. $0.20 $0.14 77,100
----- ----- ---------
January 31, 1998. $0.16 $0.11 122,000
----- ----- ---------
April 30, 1998. . $0.20 $0.11 62,400
----- ----- ---------
July 31, 1998 . . $0.15 $0.11 38,100
----- ----- ---------
October 31, 1998. $0.06 $0.04 11,295
----- ----- ---------
January 31, 1999. $0.08 $0.05 26,700
----- ----- ---------
April 30, 1999. . $0.12 $0.04 30,800
----- ----- ---------
July 31, 1999 . . $0.50 $0.15 434,750
----- ----- ---------
October 31, 1999. $0.80 $0.21 3,117,450
----- ----- ---------
December 31, 1999 $0.80 $0.35 1,054,500
----- ----- ---------
March 31, 2000. . $4.99 $0.55 3,918,397
- ----------------- ----- ----- ---------
</TABLE>
As of May 3, 2000, the closing price of the Company's common shares on the CDNX
was $2.20.
As of April 21, 2000, the registrar and transfer agent for the Company reported
that there were 8,232,342 common shares issued and outstanding. Of those common
shares issued and outstanding, 7,519,274 common shares were registered to
Canadian residents (18 shareholders), 61,600 common shares were registered to
residents of the United States (2 shareholders) and 639,000 common shares were
registered to residents of other foreign countries (2 shareholders).
ITEM 6 EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS
There are no government laws, decrees or regulations in Canada which restrict
the export or import of capital or which affect the remittance of dividends,
interest or other payments to non-resident holders of the Company's common
shares. Any remittances of dividends to United States residents and to other
non-residents are, however, subject to withholding tax. See "ITEM 7 -
TAXATION".
Except as provided in the Investment Canada Act, there are no limitations under
the applicable laws of Canada or by the charter of the Company or other
constituent documents of the Company on the right of foreigners to hold or vote
common shares or other securities of the Company.
The Investment Canada Act will prohibit implementation, or if necessary, require
divestiture of an investment deemed "reviewable" under the Investment Canada Act
by an investor that is not a "Canadian" as defined in the Investment Canada Act
(a "non-Canadian"), unless after review the Minister responsible for the
Investment Canada Act ("the Minister") is satisfied that the "reviewable"
investment is likely to be of net benefit to Canada. An investment in common
shares of the Company by a non-Canadian (other than an "American" as defined in
the Investment Canada Act) would be reviewable under the Investment Canada Act
if it was an investment to acquire control of the Company and the value of the
assets of the Company was $5 million or more. A non-Canadian (other than an
American) would be deemed to acquire control of the Company for the purposes of
the Investment Canada Act if the non-Canadian acquired a majority of the
outstanding common shares of the Company (or less than a majority but controlled
the Company in fact through the ownership of one-third or more of the
outstanding common shares of the Company) unless it could be established that,
on the acquisition, the Company was not controlled in fact by the acquirer
<PAGE>
through the ownership of such common shares. Certain transactions in relation
to the Company's common shares would be exempt from review under the Investment
Canada Act, including, among others, the following:
1. acquisition of common shares by a person in the ordinary course of
that person's business as a trader or dealer in securities;
2. acquisition of control of the Company in connection with the
realization of security granted for a loan or other financial assistance and not
for any purpose related to the provisions of the Investment Canada Act; and
3. acquisition of control of the Company by reason of an amalgamation,
merger, consolidation or corporate reorganization following which the ultimate
direct or indirect control of the Company, through the ownership of voting
interests, remains unchanged.
The Investment Canada Act was amended with the World Trade Organization
Agreement to provide for special review thresholds for "WTO Investors" of
countries belonging to the World Trade Organization, among others, nationals and
permanent residents (including "WTO Investor controlled entities" as defined in
the Investment Canada Act). Under the Investment Canada Act, as amended, an
investment in the Company's common shares by WTO Investors would be reviewable
only if it was an investment to acquire control of the Company and the value of
the assets of the Company was equal to or greater than a specified amount (the
"Review Threshold"), which is published by the Minister after its determination
for any particular year. The Review Threshold is currently $192 million for the
year 2000.
ITEM 7 TAXATION
CANADIAN FEDERAL INCOME TAXATION
The Company considers that the following summary fairly describes the principal
Canadian federal income tax consequences applicable to a holder of common shares
of the Company who at all material times deals at arm's length with the Company,
who holds all common shares as capital property, who is resident in the United
States, who is not a resident of Canada and who does not use or hold, and is not
deemed to use or hold, his common shares of the Company in connection with
carrying on a business in Canada (a "non-resident holder"). It is assumed that
the common shares will at all material times be listed on a stock exchange that
is prescribed for purposes of the Income Tax Act (Canada) (the "ITA") and
regulations thereunder.
This summary is based upon the current provisions of the ITA, the regulations
thereunder, the Canada-United States Tax Convention as amended by the Protocols
thereto (the "Treaty") as at the date of the registration statement and the
currently publicly announced administrative and assessing policies of Revenue
Canada. This summary does not take into account Canadian provincial income tax
consequences. This description is not exhaustive of all possible Canadian
federal income tax consequences and does not take into account or anticipate any
changes in law, whether by legislative, governmental or judicial action. This
summary does, however, take into account all specific proposals to amend the ITA
<PAGE>
and regulations thereunder, publicly announced by the Government of Canada to
the date hereof.
THIS SUMMARY DOES NOT ADDRESS POTENTIAL TAX EFFECTS RELEVANT TO THE COMPANY OR
THOSE TAX CONSIDERATIONS THAT DEPEND UPON CIRCUMSTANCES SPECIFIC TO EACH
INVESTOR. ACCORDINGLY, HOLDERS AND PROSPECTIVE HOLDERS OF COMMON SHARES OF THE
COMPANY SHOULD CONSULT WITH THEIR OWN TAX ADVISORS WITH RESPECT TO THE INCOME
TAX CONSEQUENCES TO THEM OF PURCHASING, OWNING AND DISPOSING OF COMMON SHARES OF
THE COMPANY.
DIVIDENDS
The ITA provides that dividends and other distributions deemed to be dividends
paid or deemed to be paid by a Canadian resident corporation (such as the
Company) to a non-resident of Canada shall be subject to a non-resident
withholding tax equal to 25% of the gross amount of the dividend of deemed
dividend. Provisions in the ITA relating to dividend and deemed dividend
payments to and gains realized by non-residents of Canada, who are residents of
the United States, are subject to the Treaty. The Treaty may reduce the
withholding tax rate on dividends as discussed below.
Article X of the Treaty as amended by the US-Canada Protocol ratified on
November 9, 1995 provides a 5% withholding tax on gross dividends or deemed
dividends paid to a United States corporation which beneficially owns at least
10% of the voting stock of the Company paying the dividend. In cases where
dividends or deemed dividends are paid to a United States resident (other than a
corporation) or a United States corporation which beneficially owns less than
10% of the voting stock of the Company, a withholding tax of 15% is imposed on
the gross amount of the dividend or deemed dividend paid. The Company will be
required to withhold any such tax from the dividend and remit the tax directly
to Revenue Canada for the account of the investor.
The reduction in withholding tax from 25%, pursuant to the Treaty, will not be
available:
(a) if the shares in respect of which the dividends are paid formed part of
the business property or were otherwise effectively connected with a permanent
establishment or fixed base that the holder has or had in Canada within the 12
months preceding the disposition, or
(b) the holder is a U.S. LLC which is not subject to tax in the U.S.
The Treaty generally exempts from Canadian income tax dividends paid to a
religious, scientific, literary, educational or charitable organization or to an
organization exclusively administering a pension, retirement or employee benefit
fund or plan, if the organization is resident in the U.S. and is exempt from
income tax under the laws of the U.S.
CAPITAL GAINS
A non-resident holder is not subject to tax under the ITA in respect of a
capital gain realized upon the disposition of a share of the Company unless the
share represents "taxable Canadian property" to the holder thereof. The Common
<PAGE>
shares of the Company will be considered taxable Canadian property to a
non-resident holder only if-.
(a) the non-resident holder;
(b) persons with whom the non-resident holder did not deal at arm's length-
or
(c) the non-resident holder and persons with whom he did not deal at arm's
length,
owned not less than 25% of the issued shares of any class or series of the
Company at any time during the five year period preceding the disposition. In
the case of a non-resident holder to whom shares of the Company represent
taxable Canadian property and who is resident in the United States, no Canadian
taxes will generally be payable on a capital gain realized on such shares by
reason of the Treaty unless:
(a) the value of such shares is derived principally from real property
(including resource property) situated in Canada,
(b) they formed part of the business property or were otherwise effectively
connected with a permanent establishment or fixed base that the holder has or
bad in Canada within the 12 months preceding the disposition, or
(c) the holder is a U.S. LLC which is not subject to tax in the U.S.
If subject to Canadian tax on such a disposition, the taxpayer's capital gain
(or capital loss) from a disposition is the amount by which the taxpayer's
proceeds of disposition exceed (or are exceeded by) the aggregate of the
taxpayer's adjusted cost base of the shares and reasonable expenses of
disposition. For Canadian income tax purposes, the "taxable capital gain" is
equal to three quarters of the capital gain.
UNITED STATES FEDERAL INCOME TAXATION
The following is a discussion of the material United States Federal income tax
consequences, under current law, applicable to a U.S. Holder (as defined below)
of common shares of the Company who holds such shares as capital assets. This
discussion does not address all potentially relevant Federal income tax matters
and it does not address consequences peculiar to persons subject to special
provisions of Federal income tax law, such as those described below as excluded
from the definition of a U.S. Holder. In addition, this discussion does not
cover any state, local, or foreign tax consequences. (See "Canadian Federal
Income Tax Consequences" above.)
The following discussion is based on the Internal Revenue Code of 1986, as
amended (the "Code"), Treasury Regulations, published Internal Revenue Service
("IRS") rulings, published administrative positions of the IRS and court
decisions that are currently applicable, any or all of which could be materially
and adversely changed, possibly on a retroactive basis, at any time. In
addition, this discussion does not consider the potential effects, both adverse
and beneficial, of any recently proposed legislation which, if enacted, could be
applied, possibly on a retroactive basis, at any time.
<PAGE>
THE DISCUSSION BELOW DOES NOT ADDRESS POTENTIAL TAX EFFECTS RELEVANT TO THE
COMPANY OR THOSE TAX CONSIDERATIONS THAT DEPEND UPON CIRCUMSTANCES SPECIFIC TO
EACH INVESTOR. IN ADDITION, THIS DISCUSSION DOES NOT ADDRESS THE TAX
CONSEQUENCES THAT MAY BE RELEVANT TO PARTICULAR INVESTORS SUBJECT TO SPECIAL
TREATMENT UNDER CERTAIN U.S. FEDERAL INCOME TAX LAWS, SUCH AS, DEALERS IN
SECURITIES, TAX-EXEMPT ENTITIES, BANKS, INSURANCE COMPANIES AND NON-U.S.
HOLDERS. PURCHASERS OF THE COMMON STOCK SHOULD THEREFORE SATISFY THEMSELVES AS
TO THE OVERALL TAX CONSEQUENCES OF THEIR OWNERSHIP OF THE COMMON STOCK,
INCLUDING THE STATE, LOCAL AND FOREIGN TAX CONSEQUENCES THEREOF (WHICH ARE NOT
REVIEWED HEREIN), AND SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO
THEIR PARTICULAR CIRCUMSTANCES.
U.S. HOLDERS
As used herein, a "U.S. Holder" includes a beneficial holder of common shares of
the Company who is a citizen or resident of the United States, a corporation or
partnership created or organized in or under the laws of the United States or of
any political subdivision thereof, any trust if either a US court is able to
exercise primary supervision over the administration of the trust or one or more
US persons have the authority to control all substantial decisions of the trust,
any entity which is taxable as a corporation for U.S. tax purposes and any other
person or entity whose ownership of common shares of the Company is effectively
connected with the conduct of a trade or business in the United States. A U.S.
Holder does not include persons subject to special provisions of Federal income
tax law, such as tax-exempt organizations, qualified retirement plans, financial
institutions, insurance companies, real estate investment trusts, regulated
investment companies, broker-dealers, non-resident alien individuals or foreign
corporations whose ownership of the common shares of the Company is not
effectively connected with the conduct of a trade or business in the United
States and shareholders who acquired their shares through the exercise of
employee stock options or otherwise as compensation.
DIVIDEND DISTRIBUTION ON SHARES OF THE COMPANY
U.S. Holders receiving dividend distributions (including constructive dividends)
with respect to the common shares of the Company are required to include in
gross income for United States Federal income tax purposes the gross amount of
such distributions to the extent that the Company has current or accumulated
earnings and profits, without reduction for any Canadian income tax withheld
from such distributions. Such Canadian tax withheld may be deducted or may be
credited against actual tax payable, subject to certain limitations and other
complex rules, against the U.S. Holder's United States Federal taxable income.
See "Foreign Tax Credit" below. To the extent that distributions exceed current
or accumulated earnings and profits of the Company, they will be treated first
as a return of capital to the extent of the shareholder's basis in the common
shares of the Company and thereafter as gain from the sale or exchange of the
common shares of the Company. Preferential tax rates for net long term capital
gains may be applicable to a U.S. Holder which is an individual, estate or
trust.
In general, dividends paid on the common shares of the Company will not be
eligible for the dividends received deduction provided to corporations receiving
dividends from certain United States corporations.
<PAGE>
FOREIGN TAX CREDIT
A U.S. Holder who pays (or who has had withheld from distributions) Canadian
income tax with respect to the ownership of the common shares of the Company may
be entitled, at the election of the U.S. Holder, to either a deduction or a tax
credit for such foreign tax paid or withheld. This election is made on a
year-by-year basis and generally applies to all foreign income taxes paid by (or
withheld from) the U.S. Holder during that year. There are significant and
complex limitations which apply to the credit, among which is the general
limitation that the credit cannot exceed the proportionate share of the U.S.
Holder's United States income tax liability that the U.S. Holder's foreign
source income bears to his or its world-wide taxable income. In determining the
application of this limitation, the various items of income and deduction must
be classified into foreign and domestic sources. Complex rules govern income
such as "passive income", "high withholding tax interest", "financial services
income", "shipping income" and certain other classifications of income. A U.S.
Holder who is treated as a domestic U.S. corporation owning 10% or more of the
voting stock of the Company is also entitled to a deemed paid foreign tax credit
in certain circumstances for the underlying foreign tax of the Company related
to dividends received or Subpart F income received from the Company. (See the
discussion below of Controlled Foreign Corporations). The availability of the
foreign tax credit and the application of the limitations on the foreign tax
credit are fact specific and holders and prospective holders of the common
shares of the Company should consult their own tax advisors regarding their
individual circumstances.
DISPOSITION OF COMMON SHARES
If a "U.S. Holder" is holding shares as a capital asset, a gain or loss realized
on a sale of the common shares of the Company will generally be a capital gain
or loss, and will be long-term if the shareholder has a holding period of more
than one year. However, gains realized upon sale of the common shares of the
Company may, under certain circumstances, be treated as ordinary income, if the
Company were determined to be a "collapsible corporation" within the meaning of
Code Section 341 based on the facts in existence on the date of the sale (See
below for definition of "collapsible corporation"). The amount of gain or loss
recognized by a selling U.S. Holder will be measured by the difference between
(i) the amount realized on the sale and (ii) his tax basis in the common shares
of the Company. U.S. Holders who are individuals may offset up to $3,000 of
ordinary income per year ($1,500 for married individuals filing separately) and
may carryover unused capital losses to offset capital gains realized in
subsequent years. For U.S. Holders which are corporations (other than
corporations subject to Subchapter S of the Code), any unused capital losses may
only be carried back three and forward five years from the year in which such
losses are realized.
A "collapsible corporation" is a corporation that is formed or availed
principally to manufacture, construct, produce, or purchase prescribed types or
property that the corporation holds for less than three years and that generally
would produce ordinary income on its disposition, with a view to the
stockholders selling or exchanging their stock and thus realizing gain before
the corporation realizes two thirds of the taxable income to be derived from
prescribed property. Prescribed property includes: stock in trade and
<PAGE>
inventory; property held primarily for sale to customers in the ordinary course
of business; unrealized receivables or fees, consisting of rights to payment for
noncapital assets delivered or to be delivered, or services rendered or to be
rendered to the extent not previously included in income, but excluding
receivables from selling property that is not prescribed; and property gain on
the sale of which is subject to the capital gain/ordinary loss rule. Generally,
a shareholder who owns directly or indirectly 5 percent or less of the
outstanding stock of the corporation may treat gain on the sale of his shares as
capital gain.
OTHER CONSIDERATIONS FOR U.S. HOLDERS
In the following circumstances, the above sections of this discussion may not
describe the United States Federal income tax consequences resulting from the
holding and disposition of common shares of the Registrant. Management of the
Company is of the opinion that there is little, if not, any likelihood of the
Company being deemed a "Foreign Personal Holding Company", a "Foreign Investment
Company" or a "Controlled Foreign Corporation" (each as defined below) under
current and anticipated conditions.
FOREIGN PERSONAL HOLDING COMPANY
If at any time during a taxable year more than 50% of the total combined voting
power or the total value of the Registrant's outstanding shares is owned,
actually or constructively, by five or fewer individuals who are citizens or
residents of the United States and 60% or more of the Registrant's gross income
for such year was derived from certain passive sources (e.g., from dividends
received from its subsidiaries), the Registrant would be treated as a "foreign
personal holding company." In that event, U.S. Holders that hold common shares
of the Registrant would be required to include in income for such year their
allocable portion of the Registrant's passive income which would have been
treated as a dividend had that passive income actually been distributed.
FOREIGN INVESTMENT COMPANY
If 50% or more of the combined voting power or total value of the Registrant's
outstanding shares are held, actually or constructively, by citizens or
residents of the United States, United States domestic partnerships or
corporations, or estates or trusts other than foreign estates or trusts (as
defined by the Code Section 7701(a)(31)), and the Registrant is found to be
engaged primarily in the business of investing, reinvesting, or trading in
securities, commodities, or any interest therein, it is possible that the
Registrant might be treated as a "foreign investment company" as defined in
Section 1246 of the Code, causing all or part of any gain realized by a U.S.
Holder selling or exchanging common shares of the Registrant to be treated as
ordinary income rather than capital gains.
PASSIVE FOREIGN INVESTMENT COMPANY
A U.S. Holder who holds stock in a foreign corporation during any year in which
such corporation qualifies as a passive foreign investment company ("PFIC") is
subject to U.S. federal income taxation of that foreign corporation under one of
two alternative tax methods at the election of each such U.S. Holder.
Section 1297 of the Code defines a PFIC as a corporation that is not formed in
the United States and, for any taxable year, either (i) 75% or more of its gross
income is "passive income," which includes interest, dividends and certain rents
<PAGE>
and royalties or (ii) the average percentage, by value (or, if the company is a
controlled foreign corporation or makes an election, adjusted tax basis), of its
assets that produce or are held for the production of "passive income" is 50% or
more. For taxable years of U.S. persons beginning after December 31, 1997, and
for tax years of foreign corporations ending with or within such tax years, the
Taxpayer Relief Act of 1997 provides that publicly traded corporations must
apply this test on a fair market value basis only. The Registrant believes that
it is a PFIC.
As a PFIC, each U. S. Holder must determine under which of the alternative tax
methods it wishes to be taxed. Under one method, a U.S. Holder who elects in a
timely manner to treat the Registrant as a Qualified Electing Fund ("QEF"), as
defined in the Code, (an "Electing U.S. Holder") will be subject, under Section
1293 of the Code, to current federal income tax for any taxable year in which
the Registrant's qualifies as a PFIC on his pro-rata share of the Registrant's
(i) "net capital gain" (the excess of net long-term capital gain over net
short-term capital loss), which will be taxed as long-term capital gain to the
Electing U.S. Holder and (ii) "ordinary earnings" (the excess of earnings and
profits over net capital gain), which will be taxed as ordinary income to the
Electing U.S. Holder, in each case, for the U.S. Holder's taxable year in which
(or with which) the Registrant taxable year ends, regardless of whether such
amounts are actually distributed. Such an election, once made shall apply to
all subsequent years unless revoked with the consent of the IRS.
A QEF election also allows the Electing U.S. Holder to (i) generally treat any
gain realized on the disposition of his common shares (or deemed to be realized
on the pledge of his common shares) as capital gain; (ii) treat his share of the
Registrant's net capital gain, if any, as long-term capital gain instead of
ordinary income, and (iii) either avoid interest charges resulting from PFIC
status altogether (see discussion of interest charge below), or make an annual
election, subject to certain limitations, to defer payment of current taxes on
his share of the Registrant's annual realized net capital gain and ordinary
earnings subject, however, to an interest charge. If the Electing U.S. Holder
is an individual, such an interest charge would be not deductible.
The procedure a U.S. Holder must comply with in making an timely QEF election
will depend on whether the year of the election is the first year in the U.S.
Holder's holding period in which the Registrant is a PFIC. If the U.S. Holder
makes a QEF election in such first year, (sometimes referred to as a "Pedigreed
QEF Election"), then the U.S. Holder may make the QEF election by simply filing
the appropriate documents at the time the U.S. Holder files its tax return for
such first year. If, however, the Registrant qualified as a PFIC in a prior
year, then the U.S. Holder may make an "Unpedigreed QEF Election" by recognizing
as an "excess distribution" (i) under the rules of Section 1291 (discussed
below), any gain that he would otherwise recognize if the U.S. Holder sold his
stock on the qualification date (Deemed Sale Election) or (ii) if the Registrant
is a controlled foreign corporation ("CFC"), the Holder's pro rata share of the
corporation's earnings and profits (Deemed Dividend Election) (But see
"Elimination of Overlap Between Subpart F Rules and PFIC Provisions"). The
effect of either the deemed sale election or the deemed dividend election is to
pay all prior deferred tax, to pay interest on the tax deferral and to be
treated thereafter as a Pedigreed QEF as discussed in the prior paragraph. With
respect to a situation in which a Pedigreed QEF election is made, if the
Registrant no longer qualifies as a PFIC in a subsequent year, normal Code rules
and not the PFIC rules will apply.
<PAGE>
If a U.S. Holder has not made a QEF Election at any time (a "Non-electing U.S.
Holder"), then special taxation rules under Section 1291 of the Code will apply
to (i) gains realized on the disposition (or deemed to be realized by reason of
a pledge) of his common shares and (ii) certain "excess distributions", as
specially defined, by the Registrant. An "excess distribution" is any
current-year distribution in respect of PFIC stock that represents a rateable
portion of the total distributions in respect of the stock during the year that
exceed 125 percent of the average amount of distributions in respect of the
stock during the three preceding years.
A Non-electing U.S. Holder generally would be required to pro-rate all gains
realized on the disposition of his common shares and all excess distributions
over the entire holding period for the common shares. All gains or excess
distributions allocated to prior years of the U.S. Holder (other than years
prior to the first taxable year of the Registrant during such U.S. Holder's
holding period and beginning after January , 1987 for which it was a PFIC) would
be taxed at the highest tax rate for each such prior year applicable to ordinary
income. The Non-electing U.S. Holder also would be liable for interest on the
deferred tax liability for each such prior year calculated as if such liability
had been due with respect to each such prior year. A Non-electing U.S. Holder
that is an individual is not allowed a deduction for interest on the deferred
tax liability. The portions of gains and distributions that are not
characterized as "excess distributions" are subject to tax in the current year
under the normal tax rules of the Internal Revenue Code.
If the Registrant is a PFIC for any taxable year during which a Non-electing
U.S. Holder holds common shares, then the Registrant will continue to be treated
as a PFIC with respect to such Common Shares, even if it is no longer by
definition a PFIC. A Non-electing U.S. Holder may terminate this deemed PFIC
status by electing to recognize gain (which will be taxed under the rules
discussed above for Non-Electing U.S. Holders) as if such common shares had been
sold on the last day of the last taxable year for which it was a PFIC.
Under Section 1291(f) of the Code, the Department of the Treasury has issued
proposed regulations that would treat as taxable certain transfers of PFIC stock
by Non-electing U.S. Holders that are generally not otherwise taxed, such as
gifts, exchanges pursuant to corporate reorganizations, and transfers at death.
If a U.S. Holder makes a QEF Election that is not a Pedigreed Election (i.e., it
is made after the first year during which the Registrant is a PFIC and the U.S.
Holder holds shares of the Registrant) (a "Unpedigreed Election"), the QEF rules
apply prospectively but do not apply to years prior to the year in which the QEF
first becomes effective. U.S. Holders should consult their tax advisors
regarding the specific consequences of making a Non-Pedigreed QEF Election.
Certain special, generally adverse, rules will apply with respect to the common
shares while the Registrant is a PFIC whether or not it is treated as a QEF.
For example under Section 1297(b)(6) of the Code (as in effect prior to the
Taxpayer Relief Act of 1997), a U.S. Holder who uses PFIC stock as security for
a loan (including a margin loan) will, except as may be provided in regulations,
be treated as having made a taxable disposition of such stock.
The foregoing discussion is based on currently effective provisions of the Code,
existing and proposed regulations thereunder, and current administrative rulings
and court decisions, all of which are subject to change. Any such change could
affect the validity of this discussion. In addition, the implementation of
<PAGE>
certain aspects of the PFIC rules requires the issuance of regulations which in
many instances have not been promulgated and which may have retroactive effect.
There can be no assurance that any of these proposals will be enacted or
promulgated, and if so, the form they will take or the effect that they may have
on this discussion. Accordingly, and due to the complexity of the PFIC rules,
U.S. Holders of the Registrant are strongly urged to consult their own tax
advisors concerning the impact of these rules on their investment in the
Registrant. For a discussion of the impact of the Taxpayer Relief Act of 1997
on a U.S. Holder of a PFIC, see "Mark-to-Market Election For PFIC Stock Under
the Taxpayer Relief Act of 1997" and "Elimination of Overlap Between Subpart F
Rules and PFIC Provisions" below.
MARK-TO-MARKET ELECTION FOR PFIC STOCK UNDER THE TAXPAYER RELIEF ACT OF 1997
The Taxpayer Relief Act of 1997 provides that a U.S. Holder of a PFIC may make a
mark-to-market election with respect to the stock of the PFIC if such stock is
marketable as defined below. This provision is designed to provide a current
inclusion provision for persons that are Non-Electing Holders. Under the
election, any excess of the fair market value of the PFIC stock at the close of
the tax year over the Holder's adjusted basis in the stock is included in the
Holder's income. The Holder may deduct any excess of the adjusted basis of the
PFIC stock over its fair market value at the close of the tax year. However,
deductions are limited to the net mark-to-market gains on the stock that the
Holder included in income in prior tax years, or so called "unreversed
inclusions." For purposes of the election, PFIC stock is marketable if it is
regularly traded on (1) a national securities exchange that is registered with
the SEC, (2) the national market system established under Section II A of the
Securities Exchange Act of 1934, or (3) an exchange or market that the IRS
determines has rules sufficient to ensure that the market price represents
legitimate and sound fair market value.
A Holder's adjusted basis of PFIC stock is increased by the income recognized
under the mark-to-market election and decreased by the deductions allowed under
the election. If a U.S. Holder owns PFIC stock indirectly through a foreign
entity, the basis adjustments apply to the basis of the PFIC stock in the hands
of the foreign entity for the purpose of applying the PFIC rules to the tax
treatment of the U.S. owner. Similar basis adjustments are made to the basis of
the property through which the U.S. persons hold the PFIC stock.
Income recognized under the mark-to-market election and gain on the sale of PFIC
stock with respect to which an election is made is treated as ordinary income.
Deductions allowed under the election and loss on the sale of PFIC with respect
to which an election is made, to the extent that the amount of loss does not
exceed the net mark-to-market gains previously included, are treated as ordinary
losses. The U.S. or foreign source of any income or losses is determined as if
the amount were a gain or loss from the sale of stock in the PFIC.
If PFIC stock is owned by a CFC (discussed below), the CFC is treated as a U.S.
person that may make the mark-to-market election. Amounts includible in the
CFC's income under the election are treated as foreign personal holding company
income, and deductions are allocable to foreign personal holding company income.
The above provisions apply to tax years of U.S. persons beginning after December
31, 1997, and to tax years of foreign corporations ending with or within such
tax years of U.S. persons.
<PAGE>
The rules of Code Section 1291 applicable to nonqualified funds as discussed
above generally do not apply to a U.S. Holder for tax years for which a
mark-to-market election is in effect. If Code Section 1291 is applied and a
mark-to-market election was in effect for any prior tax year, the U.S. Holder's
holding period for the PFIC stock is treated as beginning immediately after the
last tax year of the election. However, if a taxpayer makes a mark-to-market
election for PFIC stock that is a nonqualified fund after the beginning of a
taxpayer's holding period for such stock, a coordination rule applies to ensure
that the taxpayer does not avoid the interest charge with respect to amounts
attributable to periods before the election.
CONTROLLED FOREIGN CORPORATION STATUS
If more than 50% of the voting power of all classes of stock or the total value
of the stock of the Registrant is owned, directly or indirectly, by U.S.
Holders, each of whom own after applying rules of attribution 10% or more of the
total combined voting power of all classes of stock of the Registrant, the
Registrant would be treated as a "controlled foreign corporation" or "CFC" under
Subpart F of the Code. This classification would bring into effect many complex
results including the required inclusion by such 10% U.S. Holders in income of
their pro rata shares of "Subpart F income" (as defined by the Code) of the
Registrant and the Registrant's earnings invested in "U.S. property" (as defined
by Section 956 of the Code). In addition, under Section 1248 of the Code if the
Registrant is considered a CFC at any time during the five year period ending
with the sale or exchange of its stock, gain from the sale or exchange of common
shares of the Registrant by such a 10% U.S. Holder of Registrant at any time
during the five year period ending with the sale or exchange is treated as
ordinary dividend income to the extent of earnings and profits of the Registrant
attributable to the stock sold or exchanged. Because of the complexity of
Subpart F, and because the Registrant may never be a CFC, a more detailed review
of these rules is beyond of the scope of this discussion.
ELIMINATION OF OVERLAP BETWEEN SUBPART F RULES AND PFIC PROVISIONS
Under the Taxpayer Relief Act of 1997, a PFIC that is also a CFC will not be
treated as a PFIC with respect to certain 10% U.S. Holders. For the exception
to apply, (i) the corporation must be a CFC within the meaning of section 957(a)
of the Code and (ii) the U.S. Holder must be subject to the current inclusion
rules of Subpart F with respect to such corporation (i.e., the U.S. Holder is a
"United States Shareholder," see "Controlled Foreign Corporation," above). The
exception only applies to that portion of a U.S. Holder's holding period
beginning after December 31, 1997. For that portion of a United States Holder
before January 1, 1998, the ordinary PFIC and QEF rules continue to apply.
As a result of this new provision, if the Registrant were ever to become a CFC,
U.S. Holders who are currently taxed on their pro rata shares of Subpart F
income of a PFIC which is also a CFC will not be subject to the PFIC provisions
with respect to the same stock if they have previously made a Pedigreed QEF
Election. The PFIC provisions will however continue to apply to U.S Holders for
<PAGE>
any periods in which Subpart F does not apply (for example he is no longer a 10%
Holder or the Registrant is no longer a CFC) and to U.S. Holders that did not
make a Pedigreed QEF Election unless the U.S. Holder elects to recognize gain on
the PFIC shares held in the Registrant as if those shares had been sold.
ALL PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS WITH
RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF PURCHASING THE COMMON SHARES OF THE
COMPANY.
ITEM 8 SELECTED FINANCIAL DATA
The selected consolidated financial data presented below for the five year
period ended October 31 is derived from the Company's consolidated financial
statements which were examined by the Company's independent auditor. The
information set forth below should be read in conjunction with the Consolidated
Financial Statements of the Company (including related notes thereto) and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations". The data is presented in Canadian dollars.
Comparability of Selected Financial Data:
In 1996, the Company acquired certain mineral properties which were explored in
1997 and 1998. In 1999, the Company re-evaluated its properties and decided to
abandon most of the said properties. Also in 1999, management pursued a change
in business for the Company and subsequent to October 31, 1999, the Company
purchased an e-commerce business.
<TABLE>
<CAPTION>
SELECTED CONSOLIDATED FINANCIAL DATA(1)(2)
------------------------------------
(STATED IN CANADIAN DOLLARS)
FISCAL YEAR ENDED OCTOBER 31
----------------------------
3 MONTHS
ENDED
CANADIAN GAAP JAN. 31/2000 1999 1998 1997 1996 1995(3)
- ---------------------------------- ------------- --------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Revenue. . . . . . . . . . . . . . 13,947 -- -- -- -- --
------------- --------- -------- --------- -------- --------
Direct Costs . . . . . . . . . . . -- -- -- -- -- --
------------- --------- -------- --------- -------- --------
Operating Expenses . . . . . . . . 6,613 106 24,862 2,315 -- --
------------- --------- -------- --------- -------- --------
Administrative Expenses. . . . . . 126,021 76,184 26,660 56,797 90,558 29,534
------------- --------- -------- --------- -------- --------
Amortization and Asset Write-down. 49,166 111,886 3,496 -- -- --
------------- --------- -------- --------- -------- --------
Income (Loss) From Operations. . . (167,853) (188,176) (55,018) (59,112) (90,558) (29,500)
------------- --------- -------- --------- -------- --------
Other Income . . . . . . . . . . . 4,249 3,064 4,049 1,270 9,885 --
------------- --------- -------- --------- -------- --------
Net Income (Loss). . . . . . . . . (163,604) (185,112) (50,969) (57,842) (80,673) (29,534)
------------- --------- -------- --------- -------- --------
Income (Loss) per Common Share . . (0.03) (0.05) (0.01) (0.02) (0.06) (0.02)
------------- --------- -------- --------- -------- --------
Total Assets . . . . . . . . . . . 614,581 614,059 206,241 258,182 21,483 11,082
------------- --------- -------- --------- -------- --------
Long-Term Debt . . . . . . . . . . -- -- -- -- -- --
------------- --------- -------- --------- -------- --------
Cash Dividends per Common Share. . -- -- -- -- -- --
- ---------------------------------- ------------- --------- -------- --------- -------- --------
3 MONTHS
ENDED
U.S. GAAP. . . . . . . . . . . . . JAN. 31/2000 1999 1998 1997 1996 1995
- ---------------------------------- ------------- --------- -------- --------- -------- --------
Revenue. . . . . . . . . . . . . . 13,947 -- -- -- -- --
- ---------------------------------- ------------- --------- -------- --------- -------- --------
Direct Costs . . . . . . . . . . . -- -- -- -- -- --
------------- --------- -------- --------- -------- --------
Operating Expenses . . . . . . . . 6,613 21,087 36,891 64,306 4,061 --
------------- --------- -------- --------- -------- --------
Administrative Expenses. . . . . . 126,021 88,280 26,660 58,797 90,558 29,534
------------- --------- -------- --------- -------- --------
Amortization and Asset Write-down. 28,985 38,500 1 -- -- --
------------- --------- -------- --------- -------- --------
Income (Loss) From Operations. . . (147,672) (145,867) (63,552) (121,103) (94,619) (29,534)
------------- --------- -------- --------- -------- --------
Other Income . . . . . . . . . . . 4,249 3,064 4,049 1,270 9,885 --
------------- --------- -------- --------- -------- --------
Net Income (Loss) for the year . . (143,428) (142,803) (59,503) (119,833) (84,734) (29,534)
------------- --------- -------- --------- -------- --------
Income (Loss) per Common Share . . (0.03) (0.04) (0.02) (0.06) (0.13) (0.02)
------------- --------- -------- --------- -------- --------
Total Assets . . . . . . . . . . . 614,581 593,878 131,655 192,130 17,422 11,082
------------- --------- -------- --------- -------- --------
Long-Term Debt . . . . . . . . . . -- -- -- -- -- --
------------- --------- -------- --------- -------- --------
Cash Dividends per Common Share. . -- -- -- -- -- --
- ---------------------------------- ------------- --------- -------- --------- -------- --------
<FN>
1. See ITEM 9 - Management's Discussion and Analysis of Financial Condition and Results of
Operations and ITEM 9 - United States Generally Accepted Accounting Principles Reconciliation.
2. A reconciliation to U.S. GAAP for 1999, 1998 and 1997 is included in Note 12 to the Audited
Consolidated Financial Statements. Significant differences include accounting for mineral properties
and compensation expense related to escrow shares.
3. As at October 31, 1995, and for the nine months ended October 31, 1995. In fiscal 1995, the
Company changed its year end from January 31 to October 31.
</TABLE>
Since June 1, 1970, the government of Canada has permitted a floating exchange
rate to determine the value of the Canadian dollar as compared to the United
States dollar. For the past fiscal years ended October 31 and the interim
period ended December 31, 1999, the following exchange rates were in effect for
Canadian dollars exchanged for United States dollars, expressed in terms of
Canadian dollars (based on the noon buying rates in New York City, for cable
transfers in Canadian dollars, as certified for customs purposes by the Federal
Reserve Bank of New York):
<TABLE>
<CAPTION>
YEAR AVERAGE LOW-HIGH YEAR END/PERIOD END
- ---- -------- ----------------------- --------------------
<C> <C> <S> <C>
1995 $ 1.373 Low $1.346, High $1.413 $ 1.369
-------- ----------------------- --------------------
1996 $ 1.364 Low $1.338, High $1.375 $ 1.362
-------- ----------------------- --------------------
1997 $ 1.385 Low $1.349, High $1.427 $ 1.427
-------- ----------------------- --------------------
1998 $ 1.484 Low $1.417, High $1.543 $ 1.543
-------- ----------------------- --------------------
1999 $ 1.486 Low $1.461, High $1.519 $ 1.472
- ---- -------- ----------------------- --------------------
</TABLE>
The Company has not issued any dividends in the past five fiscal years.
<PAGE>
ITEM 9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(ALL NUMBERS IN CANADIAN DOLLARS UNLESS OTHERWISE STATED)
Results from Operations
Three months ended January 31, 2000
- ----------------------------------------
The Company acquired 100% of the outstanding shares of Quotes Canada Financial
Network Ltd. with an effective date of November 5, 1999. The Quotes Canada
assets and obligations were transferred to the Company immediately after
acquisition and all operations are conducted by the Company from the date of
acquisition.
The Company incurred a loss for the three months ended January 31, 2000 of
$163,604 or $0.03 per share compared to a loss of $2,201 or $0.0006 per share
for the three months ended January 31, 1999. The increase in the loss is due to
the following factors:
- - an increase in the write-down of mineral properties from nil to $30,246 as
the Company abandoned its remaining mineral properties in the first quarter of
2000 in order to concentrate on the Quotes Canada acquired operations;
- - an increase in depreciation and amortization by $18,920 as the Company
depreciates the equipment acquired on acquisition of Quotes Canada and
additional purchases during the quarter for total depreciation of $6,395 and
$12,525 in amortization of the goodwill recorded on the acquisition of Quotes
Canada;
- - an increase in consulting expenses of $48,250 as the Company paid its
programmers, graphic artists, marketing and sales staff relating to the Quotes
Canada acquired business;
- - an increase in professional fees by $35,050, regulatory fees by $2,550 and
transfer agent fees by $6,368 as the Company increased its regulatory activities
by issuing shares for private placements, obtained legal and accounting advice
relating to filing a registration statement with the Securities and Exchange
Commission and advice on other corporate matters;
- - an increase in general office costs such as rent, telephone and other
sundry office expenses by $19,920 due to activities relating to the acquired
business of Quotes Canada; and
- - somewhat offsetting these costs increases was revenue of $13,947 received
for the Company's integrated data streamlining services.
During the three months ended January 31, 2000, the Company continued to develop
and refine its integrated data streamlining services. Significant expenses were
incurred to develop and market the Company's services. In addition, the Company
also focused on obtaining financing which will be required to fund future
expenses as the Company is still in process of developing and marketing its
services.
<PAGE>
Cash flow from operations for the three months ended January 31, 2000 was a cash
outflow of $105,886 compared to a cash inflow of $7,890 for the three months
ended January 31, 1999. The increase in the cash outflow is due to the increase
in cash expenses as discussed above.
Year ended October 31, 1999 compared to the Year ended October 31, 1998
- --------------------------------------------------------------------------------
The Company continued its program of exploring its current mineral properties
and searching for potential acquisitions of mineral properties or other viable
businesses. The Company incurred a loss for the year of $185,112 or $0.05 per
share compared to a loss of $50,969 or $0.01 per share in 1998. The increase in
the loss is due to the following:
- - an increase in the write-down of mineral properties from $3,496 to
$111,886 as the Company abandoned exploration and development of its Yukon
mineral property; and
- - an increase in professional fees from $7,368 in 1998 to $48,488 in 1999
and regulatory fees from $2,600 in 1998 to $8,876 in 1999 related to certain
acquisition negotiations including the acquisition of Quotes Canada Financial
Network Ltd. ("Quotes Canada") which closed subsequent to year end.
Cash flow from operations in 1999 was an outflow of $62,360 which is consistent
with 1998's cash outflow of $60,250. The cash outflow for 1999 consists
primarily of administration expenses paid during the year.
Year ended October 31, 1998 compared to the Year ended October 31, 1997
- --------------------------------------------------------------------------------
The Company incurred a loss for the year of $50,969 or $0.01 per share compared
to a loss of $57,842 or $0.02 per share in 1997. The decrease in the loss is
due to the following:
- - an increase in the exploration costs from $2,315 to $24,862 increased the
loss as the Company increased activity relating to its Manitoba property; and
- - an decrease in professional fees from $36,566 to $7,368 decreased the loss
as the Company did not require the use of professional services in 1998 to the
same extent as 1997. In 1997, the Company incurred legal fees relating to the
settlement of accounts payable through the issuance of shares and relating to
the acquisition of mineral properties.
Cash flow from operations in 1998 was an outflow of $60,250 which is
substantially lower than 1997's cash outflow of $231,150, due primarily to the
payment of significant current liabilities in 1997. The cash outflow for 1998
consists primarily of administration expenses and exploration expenses paid
during the year.
Year ended October 31, 1997 compared to the Year ended October 31, 1996
- --------------------------------------------------------------------------------
The Company incurred a loss for the year of $57,842 or $0.02 per share compared
to a loss of $80,673 or $0.06 per share in 1996. The decrease in the loss is
due to the following:
<PAGE>
- - an increase in the travel and accommodation from nil in 1996 to $6,081 in
1997 and office costs from $4,180 in 1996 to $7,066 in 1997 increased the loss;
and
- - an decrease in professional fees from $66,690 to $36,566 decreased the
loss as the Company did not require the use of professional services in 1997 to
the same extent as 1996.
Cash flow from operations in 1997 was an outflow of $231,150 which is
substantially higher than 1996's cash outflow of $27,608, due primarily to the
payment of significant current liabilities in 1997. The cash outflow consists
of administrative expenses paid during the year relating to 1997 activities plus
prior year administrative expenses and other accrued liabilities which were paid
in 1997.
Liquidity and Capital Resources
As at January 31, 2000
- --------------------------
During the three months ended January 31, 2000, the Company spent $195,135 on
operations, investing and financing activities, reducing the Company's cash
position from $453,290 at October 31, 1999 to $258,155 at January 31, 2000.
$105,886 was spent on operations as discussed in the results from operations
section of this report. $50,641 was spent on investing in equipment ($5,065),
trade names ($2,643) and mineral properties ($5,065), offset by $2,575 in cash
of Quotes Canada on acquisition. $38,608 was spent on financing activities as
the Company paid a finders fee relating to shares issued during the period for
previously issues subscriptions received.
The Company expects to fund expenditures for fiscal 2000 through the cash on
hand of $258,155 and further issuances of share capital if required. As at
April 18, 2000, the Company received regulatory approval for a private equity
placement of 1,000,000 Special Warrants at $1.46 Cdn. As of the date hereof, the
Company received gross proceeds of $584,000 for the current fiscal year.
As at October 31, 1999
- --------------------------
The Company improved its financial position in 1999 compared to 1998. Cash and
cash equivalents increased from $84,468 at October 31, 1998 to $453,290 at
October 31, 1999. The increase in cash is due to $590,600 received from the
issuance of shares and warrants for cash, somewhat offset by the $131,937 cash
outflow to Quotes Canada as part of the acquisition which closed subsequent to
year end, $27,481 cash outflow on the acquisition and exploration of mineral
properties and $62,360 cash outflow from operations.
With the acquisition of Quotes Canada subsequent to year end, the Company
intends to use the cash and cash equivalents of $453,290 to expand the business
of Quotes Canada. The Company expects to fund any further expenditures on
Quotes Canada through a further issuance of share capital. As at January 20,
2000, subject to regulatory approval, a private equity placement of 1,000,000
common shares at $1.46 Cdn for $1,460,000 has been arranged to provide the funds
required for the current year.
<PAGE>
As at October 31, 1998
- --------------------------
Cash and cash equivalents decreased from $161,747 in 1997 to $84,468 in 1998 due
to expenditures on the acquisition and development of mineral properties of
$17,029 and a cash outflow from operations of $60,250.
As at October 31, 1998, the Company had $109,586 ($35,000 in mineral properties
plus $74,586 in deferred exploration costs) capitalized costs relating to
mineral properties compared to $96,053 ($30,001 in mineral properties and
$66,052 in deferred exploration costs) in 1997.
Change in Business
- --------------------
With the acquisition of Quotes Canada subsequent to year end, the Company has
changed its business from the exploration and development of mineral properties
to the creation and distribution of proprietary consumer, financial and news
information through the development of advanced Internet websites. Given the
change in the Company's business, the results of operations for the years ended
October 31, 1999, 1998 and 1997 referred to above may not be indicative of
future results.
U.S. GAAP
- ----------
The results of operations discussed above are based on the Company's audited
financial statements prepared in accordance with Canadian generally accepted
accounting principles. Differences between Canadian generally accepted
accounting principles and principles generally accepted in the United States are
listed and quantified in note 13 to the financial statements included elsewhere
in this document. Significant differences between Canadian GAAP and US GAAP
include:
- - the requirement under US GAAP to expense mineral property exploration
expenditures and land-use costs relating to mineral properties for which
commercial feasibility has not yet been established, whereas under Canadian
GAAP, these expenses are capitalized and amortized based on future production or
expensed when the properties are abandoned;
- - the requirement under US GAAP to treat escrow shares as compensation
arrangements and record compensation expense based on the fair value of the
shares released to a shareholder that provides services as an officer, director,
employee, consultant or contractor, whereas under Canadian GAAP, escrow shares
are recorded based on the consideration paid on issuance and the release of
escrow shares does not result in an accounting entry by the Company
Loss for the year under U.S. GAAP was $142,803 (1998 - $59,503; 1997 - $123,894)
and loss per share was $0.04 (1998 - $0.02; 1997 - $0.06). The reasons for the
losses are as discussed above under Results from Operations.
<PAGE>
ITEM 9A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 10 DIRECTORS AND OFFICERS
The following table sets forth the names, municipalities of residence and
ownership of common shares of each of the directors and officers of the Company.
<TABLE>
<CAPTION>
NAME
OFFICE HELD SHARE OWNERSHIP
PLACE OF RESIDENCE DATE OF OFFICE AND TERM OF OFFICE(3) AS OF APRIL 21, 2000(1) (2)
- --------------------------- ---------------------------------------------- ---------------------------
<S> <C> <C>
Paul Edward Dickson . . . . Director since August 12, 1999 and
Director and President. . . President since January 17, 2000.
Vancouver, BC, Canada . . . Term until Annual General Meeting in 2001. 1,080,000
---------------------------------------------- ---------------------------
Glen Alexander Dickson. . . Director since August 12, 1999 and
Director and Vice-President Vice President since January 17, 2000.
North Vancouver, BC, Canada Term until Annual General Meeting in 2001. 1,080,000
---------------------------------------------- ---------------------------
Dianne Szigety
Corporate Secretary . . . . Corporate Secretary since January 17, 2000.
New Westminster, BC, Canada Term until Annual General Meeting in 2001. Nil
---------------------------------------------- ---------------------------
Thomas Julian Boychuk
Director. . . . . . . . . . Director since December 15, 1995.
Vancouver, BC, Canada . . . Term until Annual General Meeting in 2001. 649,423
---------------------------------------------- ---------------------------
Kurt Marty
Director. . . . . . . . . . Director since January 26, 2000.
Bremgarten,Switzerland. . . Term until Annual General Meeting in 2001. 620,000
---------------------------------------------- ---------------------------
Roxanne Ayotta. . . . . . . Chief Financial Officer since April 17, 2000.
Vancouver, BC, Canada . . . Term until Annual General Meeting in 2001. Nil
- --------------------------- ---------------------------------------------- ---------------------------
<FN>
(1) There were 8,232,342 common shares issued and outstanding as of April 21, 2000. The share
ownership includes escrow shares issued to directors and officers.
(2) Unless otherwise indicated, the Company believes that all persons named in the table have sole
voting and investment power with respect to the common shares beneficially owned by them.
(3) The directors are re-elected and the officers are re-appointed at the annual general meeting of
shareholders. The last annual meeting was held on January 17, 2000. Effective April 30, 2000, John
Charlesworth resigned as a director of the Company.
</TABLE>
Paul Dickson (President and Director) and Glen Dickson (Vice President and
Director) are brothers. There are no other family relationships between any of
the other Director or Executive Officers.
Aside from the appointment of Paul Dickson and Glen Dickson as Directors under
the terms of the Acquisition Agreement, there are no arrangements or
understandings between any of the Directors and/or Executive Officers and any
other person pursuant to which that Director and/or Executive Officer was
selected.
<PAGE>
As part of the acquisition of Quotes Canada, J.E. Charlesworth and Thomas
Boychuk agreed, for a period of three years, to cast the votes represented by
their common shares in support of the following actions:
(a) the election of Paul Dickson and Glen Dickson to the Company's
Board of Directors;
(b) the employment of Paul Dickson and Glen Dickson by the Company for
a minimum period of two years at a salary of not less than $2,500 per month
(increased to $3,500 per month on January 1, 2000); and
(c) the granting of stock options to Paul Dickson and Glen Dickson
entitling them to purchase not less than four (4%) percent (or such lower
percentage as may be accepted by Paul Dickson and Glen Dickson) of the issued
and outstanding common shares of the Company at a minimum price permitted by the
CDNX for a period of five (5) years.
ITEM 11 COMPENSATION OF DIRECTORS AND OFFICERS
Other than as set forth in the table below, no executive officer of the Company
was paid or earned compensation from the Company for performing his or her
duties during the years ended October 31, 1999, 1998 and 1997.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
==========================
NAME AND PRINCIPAL POSITION YEAR ANNUAL COMPENSATION LONG TERM COMPENSATION ALL OTHER COMPENSATION
=========================== ==== =================== ====================== =======================
SALARY BONUS OTHER ANNUAL AWARDS PAYOUTS
====== ===== ANNUAL ===== =======
COMPEN-
SATION
=======
SECURITIES RESTRICTED
UNDER SHARES OR
OPTIONS/ RESTRICTED
SARS SHARE UNITS LTIP PAYOUTS
GRANTED
======================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1999 Nil Nil Nil Nil Nil Nil Nil
J.E. CHARLESWORTH. 1998 Nil Nil Nil Nil Nil Nil Nil
PRESIDENT(1) . . . 1997 Nil Nil Nil 75,000 Nil Nil Nil
================== ==== === === === ============ =========================================== ============ ===
<FN>
(1) J.E. Charlesworth resigned as President of the Company on January 17, 2000.
</TABLE>
The aggregate amount of compensation paid by the Company and its subsidiaries to
its officers and directors as a group for all services in all capabilities
during the Company's last fiscal year was $7,500 (for geological services with
respect to the Ami Property).
<PAGE>
The Company did not grant any stock options to any of its executive officers
during the year ended October 31, 1999. There were no long-term incentive
awards made to the executive officers of the Company during the fiscal year
ended October 31, 1999. There are no pension plan benefits in place for the
executive officers of the Company.
The following stock options were exercised by the Company's executive officers
during the year ended October 31, 1999:
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
UNEXERCISED IN THE MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FY-END FY-END
AGGREGATE VALUE (#) ($)
SECURITIES ACQUIRED REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE ($)(1) UNEXERCISABLE UNEXERCISABLE(2)
================= =================== ================= ================ =====================
<S> <C> <C> <C> <C>
J.E. CHARLESWORTH 75,000 $ 37,500 NIL / NIL NIL / NIL
================= =================== ================= ================ =====================
<FN>
1. Based on the difference between the option exercise price and the closing market price of
the Company's common shares on the date of exercise.
2. In the money options are those where the market value of the underlying securities at the
fiscal year-end exceed the exercise price of the options.
</TABLE>
During the year ended October 31, 1999, other Directors and Officers (excluding
J.E. Charlesworth, as indicated in the above table) as a group exercised a total
of 285,000 stock options at an exercise price of $0.15 per share. On the day of
exercise, the closing price for each share was $0.65.
The Company has no compensatory plan or arrangement with respect to any officer
that results or will result from the resignation, retirement or any other
termination of employment of such officer's employment with the Company, from a
change in control of the Company or a change in such officer's responsibilities
following a change in control.
No cash compensation was paid to any director of the Company for the director's
services as a director during the fiscal year ended October 31, 1999. The
Company has no standard arrangement pursuant to which directors are compensated
by the Company for their services in their capacity as directors except for the
granting from time to time of incentive stock options in accordance with the
policies of the CDNX.
Since the year ended October 31, 1999, the Company has entered into the
following employment agreements:
(a) The Company entered into employment agreements with Paul Dickson and
Glen Dickson effective December 1, 1999, which provide for a salary of $2,500
per month plus bonuses from time to time upon the successful performance of
Quotes Canada, for a two year period. Beginning January 1, 2000, both Paul
Dickson and Glen Dickson received salary increases to $3,500 per month.
<PAGE>
(b) On November 30, 1999, the Company entered into an oral agreement with
J.E. Charlesworth to provide management services at a rate of $1,000 per month.
The Company's contracts with Mr. Charlesworth is "month to month" and can be
terminated with one months' notice.
(c) On November 30, 1999, the Company entered into an oral agreement with
Thomas Boychuk to provide management services and investor relations at a rate
of $2,000 per month. The Company's contracts with Mr. Boychuk is "month to
month" and can be terminated with one months' notice.
(d) In addition, the Company entered into employment agreements with 2
programmers (at rates of $3,200 and $2,500 per month respectively), and with 1
secretary (at a rate of $2,800 per month).
ITEM 12 OPTIONS TO PURCHASE SECURITIES
As part of a private placement of 350,000 special warrants, the Company issued
350,000 share purchase warrants in July, 1999 (the "July Warrants"). Each July
Warrant entitles the holder thereof to acquire one common share at a price of
$0.30 per common share for a period of two years from July 9, 1999. The holders
of the July Warrants are as follows:
<PAGE>
(a) Paul Dickson 80,000 warrants
(b) Glen Dickson 80,000 warrants
(c) J.E. Charlesworth 95,000 warrants
(d) Thomas Boychuk 95,000 warrants
As part of a private placement of 1,270,000 units, the Company issued 635,000
common share purchase warrants in September, 1999 (the "September Warrants").
Each September Warrant entitles the holder thereof to acquire one common share
for a period of two years from September 23, 1999, at a price of $0.48 during
the first year and $0.58 during the second year. The holder of the 635,000
September Warrants is Refima AG, a company controlled by Kurt Marty.
As a group the directors and officers hold warrants exercisable into 890,000
common shares of the Company.
On April 18, 2000, the Company received regulatory approval for the issuance of
1,000,000 special warrants (the "Special Warrants"). Each Special Warrant is
exercisable into one unit consisting of one common share and one common share
purchase warrant (the "April Warrants"). Rhein Investors AG, a company
controlled by Jorg Rudolf and Frank Junker, purchased 400,000 of the Special
Warrants and the balance of 600,000 has not closed. Each April Warrant entitles
the holder thereof to acquire one common share for a two year period, at a price
of $1.83. These common shares and warrants have not been issued.
<PAGE>
As of the date hereof the following securities to acquire common shares of the
Company were outstanding:
<TABLE>
<CAPTION>
AMOUNT OF SECURITIES
CALLED FOR BY THE EXERCISE PRICE OF
TYPE OF SECURITY WARRANTS WARRANTS EXPIRATION DATE
- ---------------- -------------------- ------------------- ------------------
<S> <C> <C> <C>
Common Shares. . 350,000 $ 0.30 July 9, 2001
-------------------- ------------------- ------------------
$ .048 (first year)
Common Shares. . 635,000 $0.58 (second year) September 23, 2001
-------------------- ------------------- ------------------
$ 1.83 (first year)
Common Shares. . 400,000 $1.83 (second year) February 23, 2002
- ---------------- -------------------- ------------------- ------------------
</TABLE>
As of the date hereof the following are stock options held by directors and
officers and employees of the Company, as separate groups:
<TABLE>
<CAPTION>
NUMBER OF COMMON EXERCISE PRICE PER
GROUP SHARES UNDER OPTION COMMON SHARE EXPIRY DATE
- ---------------------- ------------------- ------------------- ----------------
<S> <C> <C> <C>
Directors and Officers 425,000 $ 1.24 January 27, 2005
------------------- ------------------- ----------------
100,000 $ 3.06 March 8, 2005
------------------- ------------------- ----------------
Employees. . . . . . . 25,000 $ 1.24 January 27, 2005
------------------- ------------------- ----------------
25,000 $ 3.06 March 8, 2005
------------------- ------------------- ----------------
</TABLE>
ITEM 13 INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS
Except as set forth below, none of the following persons had or is to have any
material interest, direct or indirect, in any transaction during the last three
fiscal years or any presently proposed transaction to which the Company or any
of its subsidiaries was or is to be a party:
1. any director or officer of the Company;
2. any shareholder holding more than 10% of the Company's common
shares; and
3. any relative or spouse of any of the foregoing persons, or any
relative of such spouse, who has the same home as such person or who is a
director or officer of any subsidiary of the Company.
Pursuant to the Acquisition Agreement, the Company acquired a 100% interest in
Quotes Canada in consideration of a total of $240,000, consisting of a cash
payment of $50,000 and the issuance of the Acquisition Shares. Under the terms
of the Acquisition Agreement, both Paul Dickson and Glen Dickson were appointed
to the board of directors on August 12, 1999 and each have entered into
employment agreements effective December 1, 1999 which provide for a salary of
$2,500 per month (increased to $3,500 per month as of January 1, 2000) plus
bonuses from time to time upon the successful performance of Quotes Canada, for
a two year period. In addition, incentive stock options will be granted to each
of Paul Dickson and Glen Dickson, entitling them to purchase not less than 4%
(or such lower percentage as may be accepted by the optionee) of the issued
common shares of the Company at the minimum price permitted by the CDNX for a
period of five years.
<PAGE>
On February 21, 2000 the Company received regulatory approval for the issuance
of an aggregate of 1,526,200 additional escrow shares (the "Additional Escrow
Shares") to the existing Officers and Directors as a group. Prior to the
issuance of the Additional Escrow Shares, John Charlesworth and Thomas Boychuk
each held 199,600 escrow shares (the "Existing Escrow Shares").
The Existing Escrow Shares will effectively be cancelled and converted to the
new escrow agreement which now covers a total of 2,125,000 shares. The
Additional Escrow Shares will not be released from escrow, transferred or in any
manner dealt with without the express consent of the CDNX. Any shares not
released on or before ten years from the date of acceptance by CDNX will be
cancelled. The shares may also be cancelled at the time of a major
reorganization of the Company, if required as a condition of the consent to the
reorganization by the Executive Director for the British Columbia Securities
Commission or where the Company's shares have been subject to a cease trade
order under the Securities Act (British Columbia) for a period of two
consecutive years.
Except as set forth below, none of the following persons was indebted to the
Company or its subsidiary at any time during the last three fiscal years:
1. any director or officer of the Company; and
2. any associate of any such director or officer.
PART II
ITEM 14 DESCRIPTION OF SECURITIES TO BE REGISTERED
Capital Stock to be Registered
The Company's authorized share capital consists of 20,000,000 common shares
without par value, of which 8,232,342 were issued and outstanding as of April
21, 2000.
All of the authorized common shares of the Company, once issued, rank equally as
to dividends, voting powers, and participation in assets. Holders of common
shares are entitled to one vote for each common share held of record on all
matters to be acted upon by the shareholders. Holders of common shares are
entitled to receive such dividends as may be declared from time to time by the
Board of Directors, in its discretion, out of funds legally available therefore.
The articles of the Company do not provide for cumulative voting.
Upon liquidation, dissolution or winding up of the Company, holders of common
shares are entitled to receive pro rata the assets of Company, if any, remaining
after payments of all debts and liabilities. No common shares have been issued
subject to call or assessment. There are no pre-emptive or conversion rights
and no provisions for redemption or purchase for cancellation, surrender, or
sinking or purchase funds. There are no restrictions on the repurchase or
<PAGE>
redemption of common shares by the Company while there is any arrearage in the
payment of dividends or sinking fund instalments.
Provisions as to the modification, amendment or variation of the rights
attaching to the common shares or provisions are contained in the British
Columbia Company Act (the "BCCA"). The BCCA requires approval by a special
resolution (ie. approved by at least three-quarters of the votes cast at a
meeting of the shareholders of the Company or consented to in writing by each
shareholder of the Company) of the Company's shareholders in order to effect any
of the following changes:
(a) subdivide all or any of its unissued, or fully paid issued, shares with
par value into shares of smaller par value,
(b) subdivide all or any of its unissued, or fully paid issued, shares
without par value so that the number of those shares is increased,
(c) consolidate all or any of its shares with par value into shares of
larger par value,
(d) consolidate all or any of its shares without par value so that the
number of those shares authorized is reduced,
(e) change all or any of its unissued, or fully paid issued, shares with par
value into shares without par value,
(f) change all or any of its unissued shares without par value into shares
with par value,
(g) alter the name or designation of all or any of its shares, whether
issued or unissued, or
(h) alter the provisions as to the maximum price or consideration at or for
which shares without par value may be issued.
PART III
ITEM 15 DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 16 CHANGES IN SECURITIES, CHANGES IN SECURITY FOR REGISTERED SECURITIES
AND USE OF PROCEEDS
Not applicable.
PART IV
ITEM 17 FINANCIAL STATEMENTS
(All numbers are Canadian Dollars unless otherwise noted)
Consolidated Financial Statements of the Company for the Three Months Ended
January 31, 2000 (unaudited) and Years Ended October 31, 1999, 1998 and 1997
(audited), reported on by Topping, Eyton and Partners, Chartered Accountants.
These financial statements are expressed in Canadian dollars and were prepared
in accordance with Canadian Generally Accepted Accounting Principles, which are
substantially the same as United States Generally Accepted Accounting
Principles. For a reconciliation of Canadian with United States Generally
Accepted Accounting Principles, see Note 12 to the Company's Consolidated
Financial Statements. For a history of the exchange rates in effect between the
Canadian dollar and the United States dollar, see ITEM 8 - Selected Financial
Data.
ITEM 18 FINANCIAL STATEMENTS
Not applicable. See ITEM 17 - Financial Statements.
ITEM 19 FINANCIAL STATEMENTS AND EXHIBITS
All Audited Statements are in Canadian Dollars and presented on a consolidated
basis.
Financial Statements Filed as Part of the Registration Statement:
Consolidated Financial Statements of the Company for the Three Months Ended
January 31, 2000 (unaudited) and Years Ended October 31, 1999, 1998 and 1997
(audited), reported on by Topping, Eyton and Partners, Chartered Accountants:
Auditor's Report dated December 8, 1999 and January 27, 2000 as to
disclosure changes for generally accepted accounting principles in the United
States
Consolidated Balance Sheets
Consolidated Statement of Loss and Deficit
Consolidated Statement of Cash Flows
Notes to Consolidated Financial Statements
Consolidated Schedule of Deferred Explorations Costs
Financial Statements of Quotes Canada Financial Network, Ltd. for the Two Months
Ended October 31, 1999 and Twelve Months Ended August 31, 1999.
<PAGE>
Exhibits Required by Form 20-F
Exhibit Description
Number
(1) Articles of Incorporation and By-laws:
1.1 Articles of Incorporation of the Company, effective September 9,
1993
1.2 Altered Memorandum of the Company dated December 6, 1999
1.3 Certificate of Change of Name of the Company, dated December 24,
1999
(2) Instruments Defining Rights of Holders of Equity Securities Being
Registered:
2.1 See 1.1 above
(3) Material Contracts:
3.1 Escrow Agreement between Montreal Trust Company of Canada, the
Company and Each Shareholder, dated July 11, 1996
3.2 Agreement between Peter Ledwidge and the Company, dated April 29,
1999
3.3 Acquisition Agreement between Quotes Canada Financial Network Ltd.
and the Company, dated May 28, 1999 (executed June 1, 1999)
3.4 Affiliate Contract between Quotes Canada Financial Network Ltd. and
ON24 Inc., dated July 1, 1999
3.5 Sponsorship Agreement between Global Securities Corporation, the
Company and Quotes Canada Financial Network Ltd., dated July 6, 1999
3.6 Amendment Agreement between Glen Dickson and Paul Dickson and the
Company, dated July 29, 1999
3.7 Web Linking Agreement between Citizens Bank of Canada and Quotes
Canada Financial Network Ltd., dated August 17, 1999
3.8 Voting Trust Agreement between Quotes Canada Financial Network Ltd.
and the Company, dated August 25, 1999
3.9 Internet InfoSpace Canada Content Distribution Agreement between
InfoSpace Canada.com, Inc. and Quotes Canada, dated August 31, 1999
3.10 Sales Agency Website Agreement between ClickThrough Interactive
Services Inc. and Quotes Canada, dated September 17, 1999
3.11 Private Placement Subscription Agreement between the Company and
Refima AG, dated September 23, 1999
3.12 Republishing Agreement between Quotes Canada Financial Network
Ltd. and ExactTrade.Com, dated October 27, 1999
3.13 Lease Agreement between the Company's wholly-owned subsidiary,
Quotes Canada Financial Network Inc. and S & B Octagon Properties Canada Ltd.,
dated November 9, 1999
3.14 Republishing Agreement between the Company and MostActives.Com,
dated November 23, 1999
3.15 Amendment Agreement between Glen Dickson and Paul Dickson and the
Company, dated November 30, 1999
3.16 Employment and Confidentiality Agreement between the Company and
Glen Dickson, dated December 1, 1999
3.17 Employment and Confidentiality Agreement between the Company and
Paul Dickson, dated December 1, 1999
3.18 Escrow Agreement between Pacific Corporate Trust Company, the
Company and Each Principal, dated December 6, 1999
3.19 Assignment Agreement between the Company and H. Leo King &
Associates Ltd., dated January 18, 2000
3.20 Affinity Group Marketing Agreement between Quotes Canada and
Vector Insurance Network (Ontario) Limited, dated March 28, 2000
<PAGE>
Consolidated Financial Statements of
EARTHRAMP.COM
COMMUNICATIONS INC.
(formerly Carta Resources Ltd.)
Three months ended January 31, 2000 (unaudited) and
Years ended October 31, 1999, 1998 and 1997 (audited)
Auditors' Report
Consolidated Balance Sheets Statement 1
Consolidated Statement of Loss and Deficit Statement 2
Consolidated Statements of Cash Flows Statement 3
Notes to Consolidated Financial Statements
Consolidated Schedule of Deferred Explorations Costs Schedule 1
<PAGE>
AUDITORS' REPORT TO THE SHAREHOLDERS
We have audited the balance sheets of Earthramp.com Communications Inc.
(formerly Carta Resources Ltd.) as at October 31, 1999 and 1998 and the
statements of loss and deficit and cash flows for the three years ended October
31, 1999. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with Canadian generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at October 31, 1999 and 1998
and the results of its operations and its cash flows for the three years ended
October 31, 1999 in accordance with Canadian generally accepted accounting
principles. As required by the Company Act (British Columbia), we report that,
in our opinion, these principles have been applied on a basis consistent with
that of the preceding year.
/s/ TOPPING, EYTON and PARTNERS
Chartered Accountants
Vancouver, Canada
December 8, 1999
January 27, 2000 as to disclosure changes for generally
accepted accounting principles in the United States
<PAGE>
<TABLE>
<CAPTION>
EARTHRAMP.COM COMMUNICATIONS INC.
(formerly Carta Resources Ltd.) Statement 1
Consolidated Balance Sheets
- ---------------------------------------
January 31, October 31, October 31,
2000 1999 1998
(unaudited)
<S> <C> <C> <C>
Assets
Current assets:
Cash. . . . . . . . . . . . . . . . . $ 47,520 $ 53,290 $ 1,053
Term deposits . . . . . . . . . . . . 210,635 400,000 83,415
Accounts receivable . . . . . . . . . 9,731 3,651 12,187
Prepaid expenses. . . . . . . . . . . 2,655 -- --
270,541 456,941 96,655
Deposit and advances (note 3) . . . . . -- 131,937 -
Capital assets (note 4) . . . . . . . . 344,040 - -
Mineral properties, at cost (note 5). . - 5,000 35,000
Deferred exploration costs (schedule 1) - 20,181 74,586
$ 614,581 $ 614,059 $ 206,241
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable. . . . . . . . . . . $ 17,872 $ 5,138 $ 2,808
Shareholders' equity:
Share capital (note 6):
Authorized:
20,000,000 common shares
without par value
Issued and outstanding:
6,706,142 shares
(October 31,
1999 - 4,086,142;
1998 - 3,691,142) 2,252,501 1,566,009 1,510,509
Warrants and share subscriptions
(note 7). . . . . . . . . . . . . . . - 535,100 -
Contributed surplus (note 8). . . . . . 101,750 101,750 101,750
Deficit (statement 2) . . . . . . . . . (1,757,542) (1,593,938) (1,408,826)
596,709 608,921 203,433
Subsequent events (note 14)
$ 614,581 $ 614,059 $ 206,241
</TABLE>
See accompanying notes to consolidated financial statements.
On behalf of the Board:
/s/ Paul Dickson Director /s/ Glen Dickson Director
- ----------------------- -----------------------
<PAGE>
<TABLE>
<CAPTION>
EARTHRAMP.COM COMMUNICATIONS INC.
(formerly Carta Resources Ltd.) Statement 2
Consolidated Statements of Loss and Deficit
Three months ended January 31, Years ended October 31,
2000 1999 1999 1998 1997
(unaudited)
<S> <C> <C> <C> <C> <C>
Revenue. . . . . . . . . . . $ 13,947 $ - $ - $ - $ -
Expenses:
Advertising and promotion. 8,480 - 7,500 1,584 -
Amortization . . . . . . . 18,920 - - - -
Bank charges and interest. - - 37 35 (2,049)
Consulting fees. . . . . . 48,250 - - - -
Data feed. . . . . . . . . 6,613 - - - -
Exploration. . . . . . . . - - 106 24,862 2,315
Mineral properties
written off. . . . . . . 30,246 - 111,886 3,496 -
Office and sundry. . . . . 13,542 (686) 4,306 3,992 7,056
Professional fees. . . . . 35,422 372 48,488 7,368 36,566
Regulatory fees. . . . . . 4,650 2,100 8,876 2,600 4,709
Rent . . . . . . . . . . . 3,936 - - - -
Research and development . 1,273 - - - -
Telephone, interest and
cable. . . . . . . . . . 1,756 - - - -
Transfer agent . . . . . . 6,483 415 5,113 3,035 4,434
Travel and accommodation . 2,229 - 1,864 8,046 6,081
181,800 2,201 188,176 55,018 59,112
Loss from operations . . . . 167,853 2,201 188,176 55,018 59,112
Miscellaneous income . . . . - - - - 1,270
Interest income. . . . . . . 4,249 - 3,064 4,049 -
- ----------------------------
Net loss . . . . . . . . . . 163,604 2,201 185,112 50,969 57,842
Deficit, beginning of period 1,593,938 1,408,826 1,408,826 1,357,857 1,300,015
- ----------------------------
Deficit, end of period . . . $ 1,757,542 $1,411,027 $1,593,938 $1,408,826 $1,357,857
- ----------------------------
Loss per share . . . . . . . $ (0.03) $ (0.0006) $ (0.05) $ (0.01) $ (0.02)
- ----------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
EARTHRAMP.COM COMMUNICATIONS INC.
(formerly Carta Resources Ltd.) Statement 3
Consolidated Statements of Cash Flows
Three months ended January 31, Years ended October 31,
2000 1999 1999 1998 1997
(unaudited)
<S> <C> <C> <C> <C> <C>
Operating activities:
Net loss . . . . . . . . . $ (163,604) $(2,201) $(185,112) $(50,969) $ (57,842)
Add items not
affecting cash:
Amortization . . . . . 18,920 - - - -
Mineral properties
written-off. . . . . . 30,246 - 111,886 3,496 -
(114,438) (2,201) (73,226) (47,473) (57,842)
Net change in non-cash
working capital:
Accounts receivable. . . . . 508 10,399 8,536 (11,805) 967
Prepaid expenses . . . . . . 2,181 - - - -
Accounts payable . . . . . . 5,863 (308) 2,330 (972) 34,232
Due to related parties . . . - - - - (208,507)
- ----------------------------
(105,886) 7,890 (62,360) (60,250) (231,150)
Investing activities:
Deferred exploration
costs. . . . . . . . . . - (146) (20,981) (12,029) (61,991)
Deposit and advances . . . - - (131,937) - -
Mineral properties costs . (5,065) - (5,000) (5,000) (15,001)
Net additions to equipment (45,508) - - - -
Trade names. . . . . . . . (2,643) - - - -
Subsidiary cash on
acquisition. . . . . . . 2,575 - - - -
(50,641) (146) (157,918) (17,029) (76,992)
Financing activities:
Finders fee. . . . . . . . (38,608) - - - -
Proceeds from share
issuance . . . . . . . . - - 54,000 - 468,816
Proceeds from warrant
and share subscriptions. - - 535,100 - -
(38,608) - 589,100 - 468,816
Increase (decrease) in cash. (195,135) 7,744 368,822 (77,279) 160,674
Cash, beginning of period. . 453,290 84,468 84,468 161,747 1,073
- ----------------------------
Cash, end period . . . . . . $ 258,155 $92,212 $ 453,290 $ 84,468 $ 161,747
- ----------------------------
Represented by:
Cash . . . . . . . . . . . $ 47,520 $ 8,796 $ 53,290 $ 1,053 $ 898
Term deposit . . . . . . . 210,635 83,416 400,000 83,415 160,849
$ 258,155 $92,212 $ 453,290 $ 84,468 $ 161,747
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
EARTHRAMP.COM COMMUNICATIONS INC.
(formerly Carta Resources Ltd.)
Notes to Consolidated Financial Statements
Three months ended January 31, 2000 and 1999 and
Years ended October 31, 1999, 1998 and 1997
1. Nature of operations:
At an extraordinary general meeting of members on December 6, 1999, the
shareholders approved by special resolution the change of name of the Company
from Carta Resources Ltd. to Earthramp.com Communications Inc.
With the acquisition of Quotes Canada on November 5, 1999 (note 3), the Company
has changed its business from the exploration of mineral properties to the
creation and distribution of proprietary consumer, finance and news information
through the development of advanced Internet websites.
The Company has abandoned its mineral properties and has written-off all
capitalized mineral property and deferred exploration costs.
2. Significant accounting policies:
(a) Basis of presentation:
The consolidated financial statements include the accounts of Earthramp.com
Communications Inc. and its wholly-owned subsidiary, Quotes Canada Financial
Network Ltd, ("Quotes Canada") from the date of acquisition on November 5, 1999.
The Company acquired all the outstanding shares of Quotes Canada on November 5,
1999. The net assets of Quotes Canada were immediately transferred to the
Company and the subsidiary became inactive. The comparative figures are for the
Company itself.
(b) Cash and cash equivalents:
Cash equivalents of $258,155, $453,290 and $84,468 at January 31, 2000, October
31, 1999 and 1998, respectively, consist of overnight repurchase agreements and
certificates of deposits with an initial term of less than three months. For
purposes of the statements of cash flows, the Company considers all highly
liquid debt instruments with original maturities of three months or less to be
cash equivalents.
(c) Capital assets:
The Company amortizes its capital assets, which are recorded at cost, using the
diminishing balance method at the following rates:
Computer equipment 30%
Furniture and equipment 20%
(d) Mineral properties and deferred exploration costs:
The Company capitalizes acquisition, exploration and development costs related
to mineral properties. The costs of abandoned properties are charged to expense
in the year of abandonment. The cost of producing properties will be depleted
by the unit-of-production method based on estimated proven reserves.
<PAGE>
EARTHRAMP.COM COMMUNICATIONS INC.
(formerly Carta Resources Ltd.)
Notes to Consolidated Financial Statements, page 2
Three months ended January 31, 2000 and 1999 and
Years ended October 31, 1999, 1998 and 1997
2. Significant accounting policies (continued):
(e) Goodwill:
The excess of the purchase price for the acquisition, for accounting purposes,
of Quotes Canada over the fair value of the net liabilities of Quotes Canada has
been capitalized as goodwill. It is being amortized over five years using the
straight-line method.
(f) Income taxes:
The Company accounts for income taxes on the tax allocation method. Under this
method, timing differences between reported and taxable income result in
provisions for income taxes not currently payable. Such timing differences
result primarily as a result of claiming depreciation and depletion for tax
purposes at amounts differing from those charged to income. The tax benefit of
losses is only recognized to the extent that the benefit is of virtual
certainty.
(g) Use of estimates:
Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with Canadian generally accepted accounting principles. Actual
results could differ from those estimates.
(h) Share option plan:
The Company applies the intrinsic value-based method of accounting by Accounting
Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued to
Employees, and related interpretations, in accounting for its fixed plan stock
options. As such, compensation expense would be recorded on the date of grant
only if the current market price of the underlying stock exceeded the exercise
price.
(i) Loss per share:
Loss per share is calculated using the weighted average number of shares
outstanding for the year as follows:
Three months ended January 31,
2000 6,295,925
1999 3,694,131
Year ended October 31,
1999 3,739,553
1998 3,691,142
1997 3,322,180
<PAGE>
EARTHRAMP.COM COMMUNICATIONS INC.
(formerly Carta Resources Ltd.)
Notes to Consolidated Financial Statements, page 3
Three months ended January 31, 2000 and 1999 and
Years ended October 31, 1999, 1998 and 1997
2. Significant accounting policies (continued):
(j) Comparative figures:
Comparative figures are reclassified to conform with the presentation of the
current fiscal year.
3. Deposit and advances and acquisition of Quotes Canada Financial Network
Ltd.:
Deposit and advances at October 31, 1999 represent the following:
Non-refundable advance on acquisition of Quotes Canada Financial
Network Ltd. $ 50,000
Advances to Quotes Canada Financial Network Ltd.,
without interest or stated terms of repayment 81,937
- ------------------------------------------------------------------------------
$ 131,937
- ------------------------------------------------------------------------------
The Company entered into an agreement on June 1, 1999 whereby it agreed to
acquire a 100% interest in Quotes Canada Financial Network Ltd. ("Quotes
Canada") at a total cost of $240,000, consisting of a non-refundable payment of
$50,000 (which amount was paid by October 31, 1999) and the issuance of
1,000,000 common shares at a deemed price of $0.19 (based on the average trading
price of the Company's shares for the ten days ended May 31, 1999) to the
shareholders. The agreement was modified on November 30, 1999 by
recharacterizing the $50,000 non-refundable payment as a repayment of
shareholder loans which had been advanced by the vendors (existing shareholders)
of Quotes Canada prior to the acquisition. Quotes Canada provides real-time
stock market quotes and other financial information from its website. The
shares may not be traded until June 1, 2000.
The acquisition was subject to approval by the Company's shareholders and the
Vancouver Stock Exchange. Approval of the acquisition of Quotes Canada as
outlined above was received from the Vancouver Stock Exchange on November 5,
1999 and the Company's shareholders on December 6, 1999. The shareholders also
approved the issuance of an additional 1,526,200 escrow shares to the initial
and additional principals of the Company as a result of the acquisition of
Quotes Canada. The escrow shares were issued on February 8, 2000 at $0.01 per
share for total consideration of $15,262. The escrow shares can be released
based on an earn-out formula equal to approximately 10.5 shares for every $1 of
cumulative cash flow. No additional value above the $0.01 per share has been
ascribed to these escrow shares on the acquisition of Quotes Canada given their
contingent nature.
No finders fees were paid in connection with this acquisition.
<PAGE>
EARTHRAMP.COM COMMUNICATIONS INC.
(formerly Carta Resources Ltd.)
Notes to Consolidated Financial Statements, page 4
Three months ended January 31, 2000 and 1999 and
Years ended October 31, 1999, 1998 and 1997
3. Deposit and advances and acquisition of Quotes Canada Financial Network
Ltd. (continued):
This acquisition will be accounted for using the purchase method with an
effective date of November 5, 1999 and is summarized as follows:
<TABLE>
<CAPTION>
Net Acquired Assets
<S> <C>
Current assets. . . . $ 13,999
Equipment . . . . . . 4,308
Goodwill. . . . . . . 250,500
- --------------------------------
$328,807
Liabilities Assumed
Current liabilities . $ 6,871
Long-term liabilities 81,936
- --------------------------------
$ 88,807
- --------------------------------
Consideration paid:
Cash. . . . . . . . $ 50,000
Shares issued . . . 190,000
- --------------------------------
$240,000
- --------------------------------
</TABLE>
<PAGE>
EARTHRAMP.COM COMMUNICATIONS INC.
(formerly Carta Resources Ltd.)
Notes to Consolidated Financial Statements, page 5
Three months ended January 31, 2000 and 1999 and
Years ended October 31, 1999, 1998 and 1997
3. Deposit and advances and acquisition of Quotes Canada Financial Network
Ltd. (continued):
A summarized proforma statement of loss of the Company assuming the acquisition
of Quotes Canada had occurred on November 5, 1998 financed by a common share
issuance of $190,000 and cash of $50,000, is as follows:
<TABLE>
<CAPTION>
<S> <C>
Revenues. . . . . . . . . . . . . $ 12,383
Expenses:
General and administrative. . . . 19,431
Stock quotation services. . . . . 24,124
Depreciation and amortization . . 55,090
Professional fees . . . . . . . . 57,031
Travel, advertising and promotion 12,915
Regulatory and transfer agent . . 13,989
Mineral properties written-off. . 111,992
294,572
Loss from operations. . . . . . . 282,189
Interest income . . . . . . . . . 3,064
- ---------------------------------
Net loss. . . . . . . . . . . . . $279,125
- --------------------------------- --------
</TABLE>
<TABLE>
<CAPTION>
4. Capital assets:
Capital assets represent the following:
January 31,
2000
----
Accumulated Net book
Cost amortization value
(unaudited)
<S> <C> <C> <C>
Computer equipment . . . $ 106,926 $ 10,667 $ 96,259
Furniture and equipment. 7,880 727 7,153
Trade names. . . . . . . 2,643 - 2,643
Goodwill (note 3). . . . 250,500 12,525 237,975
- ---------------------------------------------------------------
$ 367,949 $ 23,919 $344,030
- ---------------------------------------------------------------
</TABLE>
<PAGE>
EARTHRAMP.COM COMMUNICATIONS INC.
(formerly Carta Resources Ltd.)
Notes to Consolidated Financial Statements, page 6
Three months ended January 31, 2000 and 1999 and
Years ended October 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
5. Mineral properties:
January 31, October 31, October 31,
2000 1999 1998
(unaudited)
<S> <C> <C> <C>
Yukon property $ - $5,000 $ -
Manitoba property. - - 35,000
- ------------------
$ - $5,000 $35,000
</TABLE>
(a) Yukon property:
The Company entered into an agreement dated April 29, 1999 to acquire a 100%
interest in certain mineral claims in the Dawson Mining District in the Yukon.
The terms of the agreement were as follows:
- - paying a total of $55,000; such sum shall be paid as follows:
(i) $5,000 is due and payable on the signing of the agreement, which sum has
been paid;
(ii) $10,000 is due and payable on or before May 1, 2000;
(iii) $10,000 is due and payable on or before May 1, 2001;
(iv) $10,000 is due and payable on or before May 1, 2002; and
(v) $20,000 is due and payable on or before May 1, 2003.
During the three months ended January 31, 2000, these claims were abandoned and
$5,000 in minerals claims was written-off.
(b) Manitoba property:
The Company entered into an agreement to purchase a 100% interest in certain
lithium claims in the Wekusko Lake area of Manitoba. Under the terms of the
original agreement dated October 30, 1995, the Company had to pay a total of
$250,000 over a period from signing the agreement to October 30, 2000. It had
complied with the terms of the agreement and paid a total of $30,000 to October
30, 1997. On October 29, 1998, the agreement was amended and the terms were as
follows:
- - paying a total of $260,000, such sum to be paid as follows:
(i) on October 30, 1998: $5,000 was due and payable, which sum was paid,
plus the issue of 25,000 free trading shares of the Company (which shares were
not issued until after the 1998 year end pending regulatory approval);
<PAGE>
EARTHRAMP.COM COMMUNICATIONS INC.
(formerly Carta Resources Ltd.)
Notes to Consolidated Financial Statements, page 7
Three months ended January 31, 2000 and 1999 and
Years ended October 31, 1999, 1998 and 1997
5. Mineral properties (continued):
(b) Manitoba property (continued):
(i) on October 30, 1999: an additional $5,000 was due and payable, plus the
issue of an additional 25,000 free trading shares of the Company (terms not
complied with in 1999);
(ii) on October 30, 2000, an additional $10,000 was due and payable;
(iii) on October 30, 2001, an additional $10,000 was due and payable;
(iv) on October 30, 2002, an additional $10,000 was due and payable;
(v) on October 30, 2003, an additional $20,000 was due and payable;
(vi) on October 30, 2004, an additional $25,000 was due and payable; and
(vii) on or before October 30, 2005: $175,000 was due and payable. This
$175,000 could be payable in cash and shares with a 50/50 cash and share split.
The shares will be issued in accordance with the British Columbia Securities
laws and will be issued at a deemed value of the average closing trading price
for the previous 90 trading days;
- - incurring exploration expenditures of not less than an aggregate $250,000
to October 30, 2003; and
- - on commencement of commercial production, the property will be subject to
a Net Smelter Return ("NSR") of 2.5%. 1.5% of this NSR may be purchased at any
time for $1,000,000.
During the year, these claims were abandoned and the deferred exploration costs
written-off.
<PAGE>
EARTHRAMP.COM COMMUNICATIONS INC.
(formerly Carta Resources Ltd.)
Notes to Consolidated Financial Statements, page 8
Three months ended January 31, 2000 and 1999 and
Years ended October 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
6. Share capital:
Number Amount
<S> <C> <C>
Balance, October 31, 1996 . . . . . . . . . . . . . . . . 1,371,092 $ 787,668
Shares issued for cash. . . . . . . . . . . . . . . . . . 1,558,500 461,316
Shares issued for debt settlement . . . . . . . . . . . . 711,550 355,775
Escrow shares cancelled . . . . . . . . . . . . . . . . . (700,000) (101,750)
New escrow shares issued for cash . . . . . . . . . . . . 750,000 7,500
- ----------------------------------------------------------------------------------
Balance, October 31, 1997 and 1998. . . . . . . . . . . . 3,691,142 1,510,509
Shares issued pursuant to the purchase of the
Manitoba property . . . . . . . . . . . . . . . . . . . . 25,000 1,500
Shares issued pursuant to the purchase of the
Yukon property. . . . . . . . . . . . . . . . . . . . . . 10,000 -
Shares issued pursuant to the exercise of stock options . 360,000 54,000
- ----------------------------------------------------------------------------------
Balance, October 31, 1999 . . . . . . . . . . . . . . . . 4,086,142 1,566,009
Shares issued pursuant to acquisition of 100% interest
in Quotes Canada. . . . . . . . . . . . . . . . . . . . . 1,000,000 190,000
Shares issued pursuant to share subscriptions from
private placement (note 7(b)) . . . . . . . . . . . . . . 1,270,000 443,992
Shares issued pursuant to share subscriptions (note 7(a)) 350,000 52,500
- ----------------------------------------------------------------------------------
Balance, January 31, 2000 . . . . . . . . . . . . . . . . 6,706,142 $2,252,501
- ----------------------------------------------------------------------------------
</TABLE>
Included in issued and outstanding shares are 598,800 (1998 - 750,000; 1997 -
$750,000) escrow shares which may not be traded, transferred or released without
the consent of regulatory authorities (note 3).
7. Special warrants and share subscriptions:
During 1999, the Company entered into two private placement agreements as
follows:
(a) Subscribers will receive 350,000 special warrants at a price of $0.15
each. Each warrant is exchangeable, at no additional consideration, into one
common share and one share purchase warrant to purchase one additional share for
a period of two years at a price of $0.30 per share. Approval by regulatory
authorities was received on November 5, 1999 and 350,000 common shares were
issued on November 30, 1999.
(b) Subscribers will receive 1,270,000 units at a price of $0.38. Each unit
consists of one common share and warrant to acquire one-half of a share. Each
share purchase warrant is exchangeable, at no additional consideration, into
one-half of one common share for a two year period at a price of $0.48 in the
first year and $0.58 in the second year. The underlying shares and share
purchase warrants will be subject to a 12 month hold period. A finder's fee
agreement was entered into whereby 8% of the gross proceeds from this private
placement totalling $36,608 shall become due and payable ten days following the
date of all necessary approvals by regulatory authorities, which approvals were
received on November 5, 1999 and 1,270,000 shares were issued on November 12,
1999.
<PAGE>
EARTHRAMP.COM COMMUNICATIONS INC.
(formerly Carta Resources Ltd.)
Notes to Consolidated Financial Statements, page 9
Three months ended January 31, 2000 and 1999 and
Years ended October 31, 1999, 1998 and 1997
8. Contributed surplus:
Contributed surplus arose from the cancellation of 700,000 old escrow shares.
9. Government grants:
The Company received a $10,000 grant from the Manitoba government during the
1998 fiscal year. The deferred exploration costs are net of $34,047, being the
total grants received to date.
10. Income taxes:
The Company has non-capital tax losses totalling $534,830 which expire as
follows:
2002 $ 29,534
2003 80,673
2004 57,842
2005 50,969
2006 148,612
2007 167,200
- ----
$ 534,830
11. Segmented information:
For the three years ended October 31, 1999, the Company had one operating
segment - the exploration and development of mineral properties in Canada, In
late 1999, in conjunction with the potential acquisition of Quotes Canada, the
Company paid a $50,000 non-refundable deposit and $81.937 in advances to Quotes
Canada (note 3). These transactions have led to a change in the Company's
business (note 1). For the three months ended January 31, 2000, all operations
were related to the Company's new business except for the write-down of mineral
properties of $30,246 which related to the exploration and development of
mineral properties. At January 31, 2000, the Company has abandoned all mineral
properties and no longer conducts operations in this segment.
<PAGE>
EARTHRAMP.COM COMMUNICATIONS INC.
(formerly Carta Resources Ltd.)
Notes to Consolidated Financial Statements, page 10
Three months ended January 31, 2000 and 1999 and
Years ended October 31, 1999, 1998 and 1997
12. Uncertainty due to the Year 2000 Issue:
The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize the
year 2000 as 1900 or some other date, resulting in errors when information using
year 2000 dates is processed. In addition, similar problems may arise in some
systems which use certain dates in 1999 to represent something other than a
date. The effect of the Year 2000 Issue may be experienced before, on, or after
January 1, 2000, and, if not addressed, the impact on operations and financial
reporting may range from minor errors to significant systems failure which could
affect an entity's ability to conduct normal business operations. It is not
possible to be certain that all aspects of the Year 2000 Issue affecting the
Company, including those related to the efforts of customers, suppliers or other
third parties, have been fully resolved.
13. Differences between United States and Canadian generally accepted
accounting principles:
The financial statements are prepared in accordance with generally accepted
accounting principles in Canada. Significant differences to accounting
principles generally accepted in the United States ('U.S. GAAP") are as follows:
(a) Income taxes:
The Company would, under U.S. GAAP, be subject to Statement of Financial
Accounting Standard No. 109, "Accounting for Income Taxes". Adopting this
Standard would have no material effect on net income of the Company for any of
the years presented. The following additional disclosure would be provided:
<TABLE>
<CAPTION>
January 31, October 31, October 31,
2000 1999 1998
(unaudited)
<S> <C> <C> <C>
Deferred tax assets:
Net operating losses. . . $ 240,000 $ 165,000 $ 98,600
Less valuation allowance. (240,000) (165,000) (98,600)
- -------------------------
Net deferred tax assets . - - -
Deferred tax liabilities. - - -
- -------------------------
Deferred tax assets, net. $ - $ - $ -
- -------------------------
</TABLE>
A valuation allowance equal to the net deferred tax asset balance has been
recorded as the realization of such losses during the carryforward period at
October 31, 1999, cannot be considered to be more likely than not.
<PAGE>
EARTHRAMP.COM COMMUNICATIONS INC.
(formerly Carta Resources Ltd.)
Notes to Consolidated Financial Statements, page 11
Three months ended January 31, 2000 and 1999 and
Years ended October 31, 1999, 1998 and 1997
13. Differences between United States and Canadian generally accepted
accounting principles (continued):
(b) Mineral properties and deferred exploration costs:
Under U.S. GAAP, mineral property exploration expenditures and land-use costs
relating to mineral properties for which commercial feasibility has not yet been
established are expensed in the period incurred. For U.S. GAAP purposes, the
Company has expensed these costs in the year incurred. Under Canadian GAAP,
these costs are deferred and amortized over the estimated life of the property
following the commencement of commercial production or written-off if the
property is sold, allowed to lapse or abandoned.
(c) Stock based compensation:
In accordance with Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation", which became effective for fiscal
years beginning after December 15, 1995, the Company has opted to continue to
apply the intrinsic value method of valuing stock options granted to employees.
If the fair value method had been used compensation for stock options granted to
directors, officers and employees in 1997 of $44,800 would have been recorded
increasing the reported loss by such amount. Accordingly, the proforma loss and
loss per share for 1997 under U.S. GAAP are $168,694 and $0.08.
The fair value of options granted during 1997 was estimated using the
Black-Scholes option-pricing model with the following weighted average
assumptions: risk-free interest rate of 6%; no annual dividends; expected lives
equal to one-half the option lives; and volatility of 169%.
(d) Continuity of stock options:
<TABLE>
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
Balance outstanding, beginning of year 360,000 360,000 -
Granted during the year. . . . . . . . - - 360,000
Exercised at an average price of $0.15 (360,000) - -
Cancelled or expired during the year . - - -
- --------------------------------------
- 360,000 360,000
</TABLE>
(e) Escrow shares:
Under U.S. GAAP, escrow shares are treated as a compensatory arrangement.
Compensation expense is recognized in the statement of operations for the fair
value of the shares released to a shareholder that provides services as an
officer, director, employee, consultant or contractor. $12,096 in compensation
expense has been recorded in 1999 for escrow shares that were released in 1999.
<PAGE>
EARTHRAMP.COM COMMUNICATIONS INC.
(formerly Carta Resources Ltd.)
Notes to Consolidated Financial Statements, page 12
Three months ended January 31, 2000 and 1999 and
Years ended October 31, 1999, 1998 and 1997
13. Differences between United States and Canadian generally accepted
accounting principles (continued):
(f) Loss per shares:
Under U.S. GAAP, escrow shares are excluded from the calculation of weighted
average common shares outstanding during the years. 750,000 common shares were
held in escrow since July 11, 1996. 151,200 of these escrow shares were
released in 1999 based on performance criteria set by regulators.
(g) Reporting comprehensive income:
Effective for fiscal years beginning after December 15, 1997, Statement of
Financial Accounting Standards No. 130 ("FAS 130") "Reporting Comprehensive
Income", is applicable for U.S. GAAP purposes. FAS 130 establishes standards
for the reporting and display of comprehensive income and its components in a
full set of general purpose financial statements. FAS 130 requires that all
items that are required to be recognized under accounting standards as
components of comprehensive income be reported in a financial statement. The
Company does not have any items to be recognized under comprehensive income
except for the items in the statement of operations;
(h) New accounting pronouncements;
In June 1998, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities". SFAS No. 133 establishes
standards for derivative instruments, including certain derivative instruments
imbedded in other contracts, and for hedging activities. It requires that an
entity recognized all derivatives as either assets or liabilities in its balance
sheet and measure those instruments at fair value. This statement is effective
for all fiscal quarters of fiscal years beginning after June 15, 1999. As at
October 31, 1999, the Company does not have any derivative or hedging
instruments and, therefore, does not believe the adoptions of FAS 133 would
result in a material GAAP difference.
The effect of the differences between Canadian GAAP and U.S. GAAP (including
practices described by the SEC) on the balance sheets, statements of operations
and cash flows is summarized as follows:
<TABLE>
<CAPTION>
January 31, October 31, October 31,
2000 1999 1998
(unaudited)
<S> <C> <C> <C>
Deferred exploration costs under Canadian GAAP. $ - $ 20,181 $ 74,586
Adjustments for deferred exploration costs. . . - (20,181) (74,586)
- -----------------------------------------------
Deferred exploration costs under U.S. GAAP. . . $ - $ - $ -
- -----------------------------------------------
</TABLE>
<PAGE>
EARTHRAMP.COM COMMUNICATIONS INC.
(formerly Carta Resources Ltd.)
Notes to Consolidated Financial Statements, page 13
Three months ended January 31, 2000 and 1999 and
Years ended October 31, 1999, 1998 and 1997
13. Differences between United States and Canadian generally accepted
accounting principles (continued):
<TABLE>
<CAPTION>
January 31, October 31, October 31,
2000 1999 1998
(unaudited)
<S> <C> <C> <C>
Share capital under Canadian GAAP . . . . $ 2,252,501 $ 1,566,009 $ 1,510,509
Adjustment for escrow shares. . . . . . . 12,096 12,096 --
- ---------------------------------------------------------------------------------------
Share capital under U.S. GAAP . . . . . . $ 2,264,597 $ 1,578,105 $ 1,510,509
- ---------------------------------------------------------------------------------------
January 31, October 31, October 31,
2000 1999 1998
(unaudited)
- ---------------------------------------------------------------------------------------
Deficit under Canadian GAAP . . . . . . . $ (1,757,542) $ (1,593,938) $ (1,408,826)
- ---------------------------------------------------------------------------------------
Adjustment for escrow shares. . . . . . . (12,096) (12,096) -
Adjustment for mineral properties . . . . - (20,181) (74,856)
- ---------------------------------------------------------------------------------------
Deficit under U.S. GAAP . . . . . . . . . $ (1,769,638) $ (1,626,215) $ (1,483,682)
- ---------------------------------------------------------------------------------------
January 31, October 31, October 31,
2000 1999 1998
(unaudited)
- ---------------------------------------------------------------------------------------
Shareholders' equity under Canadian GAAP. $ 596,709 $ 608,921 $ 203,433
Adjustment for mineral properties . . . . - (20,181) (74,856)
- ---------------------------------------------------------------------------------------
Shareholders' equity under U.S. GAAP. . . $ 596,709 $ 588,740 $ 128,577
- ---------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Three months
ended
January 31, Years ended October 31,
2000 1999 1998 1997
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Loss for the period under Canadian GAAP $(163,604) $(185,112) $(50,969) $ (57,842)
Adjustment for mineral properties . . . 20,181 54,405 (8,534) (66,052)
Adjustment for escrow shares. . . . . . - (12,096) - -
- ---------------------------------------------------------------------------------------
Loss for the period under U.S. GAAP . . $(143,423) $(142,803) $(59,503) $(123,894)
</TABLE>
<PAGE>
EARTHRAMP.COM COMMUNICATIONS INC.
(formerly Carta Resources Ltd.)
Notes to Consolidated Financial Statements, page 14
Three months ended January 31, 2000 and 1999 and
Years ended October 31, 1999, 1998 and 1997
13. Differences between United States and Canadian generally accepted
accounting principles (continued):
<TABLE>
<CAPTION>
Three months
ended
January 31, Years ended October 31,
2000 1999 1998 1997
(unaudited)
<S> <C> <C> <C> <C>
Loss per share under U.S. GAAP $ (0.03) $ (0.04) $ (0.02) $ (0.06)
Three months
ended
January 31, Years ended October 31,
2000 1999 1998 1997
(unaudited)
<S> <C> <C> <C> <C>
Weighted average number of
shares under U.S. GAAP 5,675,125 3,269,414 2,941,142 2,167,100
</TABLE>
14. Subsequent events:
An additional 1,526,200 escrow shares to the initial and additional principals
of the Company as a result of the acquisition of Quotes Canada were issued after
January 31, 2000 (note 3). Also, the 598,800 escrow shares referred to in note
6 were cancelled and re-issued under a new Escrow Agreement dated December 6,
1999 making a total of 2,125,000 escrow shares.
Subsequent to January 31, 2000, the Company has granted 575,000 incentive stock
options to directors and employees to purchase common shares of the Company.
450,000 options are exercisable up to January 27, 2005 at a price of $1.24 per
share. 125,000 options are exercisable up to March 8, 2005 at a price of $3.06
per share.
<PAGE>
EARTHRAMP.COM COMMUNICATIONS INC.
(formerly Carta Resources Ltd.) Schdedule 1
Schedule of Deferred Exploration Costs
Three months ended January 31, 2000 and 1999 and
Years ended October 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
Manitoba Yukon Total
<S> <C> <C> <C>
Balance, October 31, 1998 (note 9) $ 74,586 $ - $ 74,586
Expenditures for the year:
Accommodation. . . . . . . . . . . - 2,125 2,125
Assays and geochemical . . . . . . - 1,998 1,998
Claim fees . . . . . . . . . . . . - 685 685
Geological services. . . . . . . . - 7,500 7,500
Professional fees. . . . . . . . . 800 - 800
Supplies . . . . . . . . . . . . . - 1,530 1,530
Transportation . . . . . . . . . . - 6,343 6,343
- --------------------------------------------------------------------
800 20,181 20,981
- --------------------------------------------------------------------
75,386 20,181 95,567
Mineral properties written-off . . (75,386) - (75,386)
- --------------------------------------------------------------------
Balance, October 31, 1999. . . . . - 20,181 20,181
Expenditures for the period. . . . - - -
Mineral properties written-off . . - (20,181) (20,181)
- --------------------------------------------------------------------
Balance, January 31, 2000. . . . . $ - $ - $ -
- --------------------------------------------------------------------
</TABLE>
<PAGE>
QUOTES CANADA FINANCIAL
NETWORK LTD.
FINANCIAL STATEMENTS
OCTOBER 31, 1999
<PAGE>
QUOTES CANADA FINANCIAL NETWORK LTD.
Financial Statements
Two Months Ended October 31, 1999
CONTENTS
Auditor's Report
Financial Statements:
Balance Sheet
Statement of Earnings
Statement of Cash Flows
Notes to Financial Statements
<PAGE>
T. DELANE TERRILLON
CERTIFIED GENERAL ACCOUNTANT
AUDITOR'S REPORT
To the shareholders of Quotes Canada Financial Network Ltd.
I have audited the balance sheet of Quotes Canada Financial Network Ltd. at
October 31, 1999 and the statements of deficit, and statement of cash flows for
the 2 months ended. These financial statements are the responsibility of the
company's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted the audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform an audit to obtain reasonable
assurance whether the financial statements are free of material missstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
In my opinion, these financial statements present fairly, in all material
respects, the financial position of the company as at October 31, 1999 and the
results of its operations and the changes in its financial position for the 2
months then ended in accordance with generally accepted accounting principles.
/s/ T. Delane Terrillon
CERTIFIED GENERAL ACCOUNTANT
North Vancouver
May 4th, 2000
<PAGE>
<TABLE>
<CAPTION>
QUOTES CANADA FINANCIAL NETWORK LTD.
BALANCE SHEET
As at October 31, 1999
ASSETS
CURRENT ASSETS OCTOBER 1999 AUGUST 1999
<S> <C> <C>
Cash. . . . . . . . . . . . $ 2,575 $ 1,574
Accounts Receivable . . . . 252 -
GST Receivable. . . . . . . 6,336 2,543
Prepaid expenses. . . . . . 4,836 1,875
-------------- -------------
13,999 5,992
CAPITAL ASSETS (Note 3). . 64,308 15,859
OTHER ASSETS
Incorporation Costs . . . . 525 525
Research and Development. . 16,112 7,105
-------------- -------------
$ 94,944 $ 29,481
============== =============
LIABILITIES
CURRENT LIABILITIES
Account Payable . . . . . . $ 787 $ 484
Accrued Liabilities . . . . 1,284 642
-------------- -------------
2,071 1,126
OTHER LIABILITIES
Shareholder's loan (Note 4) 54,800 56,717
Note Payable (Note 5) . . . 81,936 6,000
-------------- -------------
$ 138,807 $ 63,843
============== =============
SHAREHOLDERS' EQUITY
Share Capital (Note 6). . . $ 50 $ 50
Deficit . . . . . . . . . . (43,913) (34,412)
-------------- -------------
(43,863) (34,362)
-------------- -------------
$ 94,944 $ 29,481
============== =============
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
<TABLE>
<CAPTION>
QUOTES CANADA FINANCIAL NETWORK LTD.
STATEMENT OF CASH FLOWS
For two months ended October 31, 1999
2 Months 12 Months
OCTOBER 1999 AUGUST 1999
<S> <C> <C>
Cash from Operation:
Net Loss. . . . . . . . . . . . . . . . . $ (9,501) $ (34,412)
Add back Depreciation . . . . . . . . . . 2,275 2,715
-------------- -------------
Total Cash from Operation . . . . . . . . . (7,226) (31,697)
Changes in non-cash working capital items:
Accounts Receivable . . . . . . . . . . . (4,045) (2,543)
Prepaid Expenses. . . . . . . . . . . . . (2,961) (1,875)
Accounts Payable. . . . . . . . . . . . . 945 1,126
-------------- -------------
Net changes in Operation - (outflow). . . . (13,287) (34,989)
-------------- -------------
Financing Activities:
Notes Payable . . . . . . . . . . . . . . 75,937 6,000
Shareholders' Loan. . . . . . . . . . . . (1,917) 56,717
Share Capital Proceeds. . . . . . . . . . - 50
-------------- -------------
74,020 62,767
Investing Activities:
Research and Development. . . . . . . . . (9,008) (7,105)
Purchase of capital assets. . . . . . . . (50,724) (18,574)
Incorporation Costs . . . . . . . . . . . - (525)
-------------- -------------
14,288 36,563
Increase in cash during the year. . . . . . $ 1,001 $ 1,574
-------------- -------------
Cash, beginning of year . . . . . . . . . . 1,574 -
-------------- -------------
Cash, end of period . . . . . . . . . . . . $ 2,575 $ 1,574
============== =============
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
<TABLE>
<CAPTION>
QUOTES CANADA FINANCIAL NETWORK LTD.
STATEMENT OF LOSS AND DEFICIT
For two months ended October 31, 1999
2 Months 12 Months
OCTOBER 1999 AUGUST 1999
<S> <C> <C>
Sales . . . . . . . . . . . . $ 4,182 $ 8,201
============== =============
Expenses:
Accounting and Legal. . . . $ 975 $ 4,791
Advertising . . . . . . . . - 2,811
Bank Charges & Interest . . 20 215
Commissions . . . . . . . . 1,783 198
Communications. . . . . . . - 4,202
Consulting Services . . . . 2,777 -
Contract News Letter. . . . - 950
Depreciation & Amortization 2,275 2,715
Meals & Entertainment . . . - 279
Miscellaneous . . . . . . . - 15
Office & General Expense. . 3,588 4,117
Stock Quotation Services. . 2,265 21,859
Travel. . . . . . . . . . . - 461
-------------- -------------
Total Expenses. . . . . . . . $ 13,683 $ 42,613
Net Loss before taxes . . . . (9,501) (34,412)
Income Taxes. . . . . . . . . - -
-------------- -------------
Net Loss for the period . . . $ (9,501) $ (34,412)
Deficit, Beginning of Period. (34,412) -
-------------- -------------
Deficit, End of Period. . . . $ (43,913) $ (34,412)
============== =============
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
QUOTES CANADA FINANCIAL NETWORK LTD.
Notes to Financial Statements
October 31, 1999
1. Summary of Significant Accounting Policies:
(a) Amortization:
Amortization of capital assets is provided using the following annual rates:
Furniture and Fixtures 20% declining balance
Computer Hardware 30% declining balance
Computer Software 100% declining balance
2. These interim financial statements were prepared for the purpose of a
signed agreement to sell all the issued shares of Quotes Canada Financial
Network Ltd. to Carta Resources Ltd., for the sum of $240,000 due as follows:
1. $50,000 payable on signing the agreement
2. $190,000 to be paid by the issuance of 1,000,000 shares of Carta at a
deemed price of $0.19 per share, upon Vancouver Stock Exchange approval.
<TABLE>
<CAPTION>
3. Capital Assets
October August
1999 1999
Cost Amortization Net Net
<S> <C> <C> <C> <C>
Furniture and Fixtures $ 5,243 $ (258) $ 4,407 $14,584
Computer Hardware. . . 62,023 (4,682) 46,800 1,274
Telephone System . . . 2,032 (51) 1,727
------------- -------- -------
$ 69,298 $(4,990) $64,308 $15,858
</TABLE>
4. Shareholder's Loan:
Advances from Shareholders are non-interest bearing with no specific terms
of repayment.
5. Note Payable:
Advances from Carta Resources Ltd. are non-interest bearing with no
specific terms of repayment.
6. Share Capital:
Authorized:
1,000,000 common shares, no par value
1999
----
Issued and fully paid:
500,000 common shares, no par value $50
<PAGE>
7. Lease Obligations:
The company is committed to a building lease. The minimum lease payments are
summarized below:
Year 2000 $9064
8. Incorporation:
Quotes Canada Financial Network Ltd. was incorporated October 14, 1998 under the
laws of the Province of British Columbia.
9. Year 2000 Compatible:
Quotes Canada Financial Network Ltd. has designed its software and network to be
Y2K compliant and has taken the appropriate steps to ensure that the website
will be operational as intended on and after January 1, 2000. Quotes Canada's
management has endeavoured to confirm the Y2K readiness of its data vendors and
partners. No major disruptions in service are anticipated, although it cannot
be certain that affiliates, partners and suppliers have determined that their
systems are 100% Y2K compliant.
10. Differences between United States and Canadian generally accepted
accounting principles:
The financial statements are prepared in accordance with generally accepted
accounting principles in Canada. Significant differences to accounting
principles generally accepted in the United States ("U.S. GAAP") are as follows:
(a) Income taxes:
The Company would, under U.S. GAAP, be subject to Statement of Financial
Accounting Standard No. 109, "Accounting for Income Taxes". Adopting this
Standard would have no material effect on net income of the Company for any of
the years presented. The following additional disclosure would be provided:
Deferred tax assets:
Net operating losses $ 19,800
Less valuation allowance (19,800)
Net deferred tax assets -
Deferred tax liabilities -
Deferred tax assets, net $ -
------------------------ -------------
A valuation allowance equal to the net deferred tax asset balance has been
recorded as the realization of such losses during the carryforward period at
October 31, 1999, cannot be considered to be more likely than not.
(b) Research and development expenses:
Under Canadian GAAP, research and development expenses are deferred if they meet
certain defined criteria. Under U.S. GAAP, research and development expenses
are expensed as incurred. Consequently, under U.S. GAAP, deferred research and
development expenses of $9,007 for the two months ended October 31, 1999 and
$7,105 for the year ended August 31, 1999 would be expensed.
<PAGE>
QUOTES CANADA FINANCIAL NETWORK LTD.
Notes to Financial Statements
October 31, 1999
<TABLE>
<CAPTION>
10. Reconciliation to United States generally accepted accounting principles
("U.S. GAAP") (continued):
The effect of the differences between Canadian GAAP and U.S. GAAP (including practices
described by the SEC) on the balance sheets, statements of operations and cash flows is
summarized as follows:
October 31, 1999 August 31, 1999
------------------ -----------------
<S> <C> <C>
Capitalized research and development under Canadian GAAP $ 16,112 $ 7,105
Adjustments for research and development expenses. . . . (16,112) (7,105)
Capitalized research and development under U.S. GAAP . . $ - $ -
- -------------------------------------------------------- ------------------ -----------------
October 31, 1999 August 31, 1999
------------------ -----------------
Deficit under Canadian GAAP. . . . . . . . . . . . . . . $ (43,914) $ (34,412)
Adjustment for research and development costs. . . . . . (16,112) (7,105)
Deficit under U.S. GAAP. . . . . . . . . . . . . . . . . $ (60,026) $ (41,517)
- -------------------------------------------------------- ------------------ -----------------
October 31, 1999 August 31, 1999
------------------ -----------------
Shareholders' deficiency under Canadian GAAP . . . . . . $ (43,864) $ (34,362)
Adjustment for research and development costs. . . . . . (16,112) (7,105)
Shareholders' deficiency under U.S. GAAP . . . . . . . . $ (59,976) $ (41,467)
- -------------------------------------------------------- ------------------ -----------------
Two months ended Year ended
October 31, 1999 August 31, 1999
- -------------------------------------------------------- ------------------ -----------------
Loss for the period under Canadian GAAP. . . . . . . . . $ ( 9,501) $ (34,412)
Adjustment for research and development costs. . . . . . (9,007) (7,105)
Loss for the period under U.S. GAAP. . . . . . . . . . . $ (18,508) $ (41,517)
- -------------------------------------------------------- ------------------ -----------------
</TABLE>
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant certifies that it meets all of the requirements for
filing on Form 20-F and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, hereunto duly authorized.
Dated: May 4, 2000 EARTHRAMP.COM COMMUNICATIONS INC.
Per: /s/ Paul E. Dickson
------------------------------------
Paul E. Dickson
President
SCHEDULE "A"
ARTICLES
of
QUALITY LEARNING SYSTEMS (INTERNATIONAL) INC.
TABLE OF CONTENTS
PART ARTICLE SUBJECT
1 INTERPRETATION
1.1. Definitions
Construction of Words
1.2. Definitions same as Company Act
1.3. Interpretation Act Rules of Construction apply
2 SHARES
2.1. Member entitled to Certificate
2.2. Replacement of Lost or Defaced Certificate
2.3. Execution of Certificates
2.4. Recognition of Trusts
3 ISSUE OF SHARES
3.1. Directors Authorized
3.2. Conditions of Allotment
3.3. Commissions and Brokerage
3.4. Conditions of Issue
4 SHARE REGISTERS
4.1. Registers of Members, Transfers and Allotments
4.2. Branch Registers of Members
4.3. No Closing of Register of Members
5 TRANSFER AND TRANSMISSION OF SHARES
5.1. Transfer of Shares
5.2. Execution of Instrument of Transfer
5.3. Enquiry as to Title not Required
5.4. Submission of Instruments of Transfer
5.5. Transfer Fee
5.6. Personal Representative Recognized on Death
5.7. Death or Bankruptcy
<PAGE>
6 ALTERATION OF CAPITAL
6.1. Increase of Authorized Capital
6.2. Other Capital Alterations
6.3. Creation, Variation and Abrogation
of Special Rights and Restrictions
6.4. Special Rights of Conversion or Exchange
6.5. Class Meetings of Members
7 PURCHASE AND REDEMPTION OF SHARES
7.1. Authorized to Purchase or Redeem its Shares
7.2. & 7.3. Redemption of Shares
8 BORROWING POWERS
8.1. Powers of Directors
8.2. Special Rights Attached to and
Negotiability of Debt Obligations
8.3. Register of Debentureholders
8.4. Execution of Debt Obligations
8.5. Register of Indebtedness
9 GENERAL MEETINGS
9.1. Annual General Meetings
9.2. Waiver of Annual General Meeting
9.3. Classification of General Meetings
9.4. Calling of Meetings
9.5. Advance Notice for Election of Directors
9.6. Notice for General Meeting
9.7. Waiver for General Meeting
9.8. Notice of Special Business at General Meeting
10 PROCEEDINGS AT GENERAL MEETINGS
10.1. Special Business
10.2. Requirement of Quorum
10.3. Quorum
10.4. Lack of Quorum
10.5. Chairman
10.6. Alternate Chairman
10.7. Adjournments
10.8. Motion Proposed or Seconded by Chairman
10.9. Decisions by Show of Hands or Poll
<PAGE>
10.10. Casting Vote
10.11. Manner of Taking Poll
10.12. Retention of Ballots Cast on a Poll
10.13. Casting of Votes
10.14. Ordinary Resolution Sufficient
11 VOTES OF MEMBERS
11.1. Number of Votes Per Share of Member
11.2. Votes of Persons in Representative Capacity
11.3. Representative of a Corporate Member
11.4. Votes by Joint Holders
11.5. Vote by Committee for a Member
11.6. Appointment of Proxyholders
11.7. Execution of Form of Proxy
11.8. Deposit of Proxy
11.9. Form of Proxy
11.10. Validity of Proxy Vote
11.11. Revocation of Proxy
12 DIRECTORS
12.1. Number of Directors
12.2. Remuneration and Expenses of Directors
12.3. Qualification of Directors
13 ELECTION AND REMOVAL OF DIRECTORS
13.1. Election at Annual General Meetings
13.2. Eligibility of Retiring Director
13-3. Continuance of Directors
13.4. Election of Less than Required Number of Directors
13.5. Filling a Casual Vacancy
13.6. Additional Directors
13.7. Alternate Directors
13.8. Termination of Directorship
13.9. Removal of Directors
14 POWERS AND DUTIES OF DIRECTORS
14.1. Management of Affairs and Business
14.2. Appointment of Attorney
<PAGE>
15 DISCLOSURE OF INTEREST OF DIRECTORS
15.1. Disclosure of Conflicting Interest
15.2. Voting and Quorum re Proposed Contract
15.3. Director May Hold Office or Place of Profit with Company
15.4. Director Acting in Professional Capacity
15.5. Director Receiving Remuneration from Other Interests
16 PROCEEDINGS OF DIRECTORS
16.1. Chairman and Alternate
16.2. Meetings - Procedure
16.3. Meetings by Conference Telephone
16.4. Notice of Meeting
16.5. Waiver of Notice of Meetings
16.6. Quorum
16.7. Continuing Directors may Act During Vacancy
16.8. Validity of Acts of Directors
16.9. Resolution in Writing Effective
17 EXECUTIVE AND OTHER COMMITTEES
17.1. Appointment of Executive Committee
17.2. Appointment of Committees
17.3. Procedure at Meetings
18 OFFICERS
18.1. President and Secretary Required
18.2. Persons Holding More Than One Office
and Remuneration
18.3. Disclosure of Conflicting Interest
19 INDEMNITY AND PROTECTION OF
DIRECTORS, OFFICERS AND EMPLOYEES
9.1. Indemnification of Directors
19.2. Indemnification of Officers, Employees, Agents
19.3. Indemnification not Invalidated by Non-Compliance
19.4. Company May Purchase Insurance
20 DIVIDENDS AND RESERVES
20.1. Declaration of Dividends
20.2. Declared Dividend Date
<PAGE>
20.3. Proportionate to Number of Shares Held
20.4. Reserves
20.5. Receipts from Joint Holders
20.6. No Interest on Dividends
20.7. Payment of Dividends
20.8. Capitalization of Undistributed Surplus
21 DOCUMENTS, RECORDS AND REPORTS
21.1. Documents to be Kept
21.2. Accounts to be Kept
21.3. Inspection of Accounts
21.4. & 21.5. Financial Statements and Reports
22 NOTICES
22.1. Method of Giving Notice
22.2. Notice to Joint Holder
22.3. Notice to Personal Representative
22.4. Persons to Receive Notice
23 RECORD DATES
23.1. Record Date
23.2. No Closure of Register of Members
24 SEAL
24.1. Affixation of Seal to Documents
24.2. Mechanical Reproduction of Signatures
24.3. Official Seal for Other Jurisdictions
<PAGE>
PROVINCE OF BRITISH COLUMBIA
COMPANY ACT
ARTICLES
of
QUALITY LEARNING SYSTEMS (INTERNATIONAL) INC.
PART 1
INTERPRETATION
1.1. In these Articles, unless there is something in., the subject
or context inconsistent therewith:
"Board" and "the Directors" or "the directors" mean. the Directors or sole
Director of the Company for the time being.
"Company Act" means the Company Act of the Province of British Columbia as from
time to time enacted and all amendments thereto and includes the regulations
made pursuant thereto.
"Memorandum" means the Memorandum of the Company.
"month" means calendar month.
"proxyholder" means the person duly nominated by the registered owner to
represent him at the meeting and includes the duly authorized representative of
a corporation which is the registered owner.
"registered owner" or "registered holder" when used with respect to a share in
the authorized capital of the Company means the person registered in the:
register of members in respect of such share.
"seal" means the common seal of the Company.
"Securities Act" means the Securities Act of the Province of British Columbia as
from time to time enacted and all amendments thereto and includes the
regulations made pursuant thereto.
Expressions referring to writing shall be construed as including
references to printing, lithography, typewriting, photography and other modes of
representing or reproducing words in a visible form.
<PAGE>
Words importing the singular include the plural and vice versa; and
words importing male persons include female persons and words importing persons
shall include corporations.
1.2. The meaning of any words or phrases defined in the Company
Act shall, if not inconsistent with the subject- or context, bear the same
meaning in these Articles.
1.3. The Rules of Construction contained in the Interpretation Act
shall apply, mutatis mutandis, to the interpretation of these Articles.
PART 2
SHARES AND SHARE CERTIFICATES
2.1. Every member is entitled, without charge, to one certificate
representing the share or shares of each class held by him; provided that, in
respect of a share or shares held jointly by several persons, the Company shall
not be bound to issue more than one certificate, and delivery of a certificate
for a share to one of several joint registered holders or to his duly authorized
agent shall be sufficient delivery to all; and provided further that the Company
shall not be bound to issue certificates representing redeemable shares, if such
shares are to be redeemed within one month of the date on which they were
allotted. Any share certificate may be sent through the mail by registered
prepaid mail to the member entitled thereto at his address as recorded in the
register of members, and neither the Company nor any transfer agent shall be
liable for any loss occasioned to the member owing to any such share certificate
so sent being lost in the mail or stolen.
2.2. If a share certificate
(i) is worn out or defaced, the Directors shall, upon production to them of
the said certificate and upon such other terms, if any, as they may think fit,
order the said certificate to be cancelled and shall issue a new certificate in
lieu thereof;
(ii) is lost, Stolen or destroyed, then, upon proof thereof to the
satisfaction of the Directors and upon such indemnity, if any, as the Directors
deem adequate being given, a new share certificate in lieu thereof shall be
issued to the person entitled to such lost, stolen or destroyed certificate; or
(iii) represents more than one share and the registered owner thereof
surrenders it to the Company with a written request that the Company issue in
his name two or more certificates each representing a specified number of shares
and in the aggregate representing the same number of shares as the certificate
so surrendered, the Company shall cancel the Certificate so surrendered and
issue in lieu thereof certificates in accordance with such request.
Such sum as the Directors may from time to time fix, but not greater than the
amount prescribed under the Company Act from time to time, shall be paid to the
Company for each certificate to be issued under this Article.
<PAGE>
2.3. Every share certificate shall he signed manually by at least
one officer or Director of the Company, or by or on behalf of a registrar,
branch registrar, transfer agent or branch transfer agent of the Company and any
additional signatures may be printed or otherwise mechanically reproduced and,
in such event, a certificate so signed is as valid as if signed manually,
notwithstanding that any person whose signature is so printed or mechanically
reproduced shall have ceased to hold the office that he is stated an such
certificate to hold at the date of the issue of a share certificate.
2.4. Except as required by law, statute or these Articles, no
person shall be recognized by the Company as holding any share upon any trust,
and the Company shall not be bound by or compelled in any way to recognize (even
when having notice thereof) any equitable, contingent, future or partial
interest in any share or in any fractional part of a share or (except only as by
law, statute or these Articles provided or as ordered by a court of competent
jurisdiction) any other rights in respect of any share except an absolute right
to the entirety thereof in its registered holder.
PART 3
ISSUE OF SHARES
3.1. Subject to these Articles and the Memorandum and to any
direction to the contrary contained in a resolution passed at a general meeting
authorizing any increase or alteration of capital, the shares shall be under the
control of the Directors who may, subject to the Securities Act and to the
rights of the holders of the shares of the Company for the time being issued,
issue, allot, sell or otherwise dispose of, and/or grant options on or otherwise
deal in, shares authorized but not outstanding or which, having been previously
issued, have ' been purchased or redeemed by the Company and are available to be
sold or reissued at such times, to such persons (including Directors), in such
manner, upon such terms and conditions, and at such price or for such
consideration, as they, in their absolute discretion, may determine.
3.2. If the Company is, or becomes, a company which is not a
reporting company and the Directors are required by the Company Act before
allotting any shares to offer them pro rata to the members, the Directors shall,
before allotting any shares, comply with the applicable provisions of the
Company Act.
3.3. Subject to the provisions of the Company Act, the Company, or
the Directors on behalf of the Company, may pay a commission or allow a discount
to any person in consideration of his subscribing or agreeing to subscribe,
whether absolutely or conditionally, for any shares in the Company, or procuring
or agreeing to procure subscriptions, whether absolutely or conditionally, for
any such shares, provided that, if the Company is not a specially limited
company, the rate of the commission and discount shall not in the aggregate
exceed 25 per centum of the amount of the subscription price of such shares.
3.4. No share may be issued until it is fully paid and the Company
shall have received the full consideration therefor in cash, property or past
services actually performed for the Company. The value of property or services
for the purpose of this Article shall be an
<PAGE>
amount set by resolution of the Directors that is, in all circumstances of the
transaction, no greater than fair market value.
PART 4
SHARE REGISTERS
4.1. The Company shall keep or cause to be kept a register of
members, a register of transfers and a register of allotments within British
Columbia, all as required by the Company Act, and may combine one or more of
such registers. If the Company's capital shall consist of more than one class
or series of shares, a separate register of members,. register of transfers and
register of allotments may be kept in respect of each class or series of shares.
The Directors on behalf of the Company may appoint a trust company registered
under the Trust Company Act to keep the register of members, register of
transfers and register of allotments or, if there is more than one class or
series of shares, the Directors may- appoint a trust company, which need not be
the same trust company, to keep the register of members, the register of
transfers and the register of allotments for each class or series of share. The
Directors on behalf of the Company may also appoint one or more trust companies,
including the trust company which- keeps the said registers of its shares or of
a class or series thereof, as transfer agent for its shares or such class or
series thereof, as the case may be, and the same or another trust, company or
companies as registrar for its shares or such class thereof, as the case may be.
The Directors may terminate the appointment of any such trust company at any
time and may appoint another trust company in its place.
4.2. Subject to the Company Act, the Company may keep or cause to
be kept one or more branch registers of members at such place or places, whether
within or outside the Province of British Columbia, as the Directors may from
time to time determine.
4.3. The Company shall not at any time close its register of
members.
PART 5
TRANSFER AND TRANSMISSION OF SHARES
5.1. Subject to the provisions of the Memorandum and of these
Articles that may be applicable, and subject to the Securities Act, any member
may transfer any of his shares by instrument in writing executed by or on behalf
of such member. The instrument of transfer of any share of the Company shall be
in the form, if any, on the back of the Company's share certificates or in such
other form as the, Directors may from time to time approve. Except to the
extent that the Company Act may otherwise provide, the transferor shall be
deemed to remain the holder of shares until the name of the transferee is
entered in the register of members or branch register of members in respect
thereof.
5.2. The signature of the registered owner of any shares, or of
his duly authorized attorney, upon an authorized instrument of transfer shall
constitute a complete and sufficient authority to the Company, its directors,
officers and agents to register, in the name of the transferee as named in the
instrument of transfer, the number of shares specified therein or, if no number
is specified, all the shares of the registered owner represented by share
certificates
<PAGE>
deposited with the instrument of transfer. If no transferee is named in the
instrument of transfer, the instrument of transfer shall constitute a complete
and sufficient authority to the Company, its directors, officers and agents to
register, in the name of the person in whose behalf any certificate for the
shares to be transferred is deposited with the Company for the purpose of having
the transfer registered, the number of shares specified in the instrument of
transfer or, if no number is specified, all the shares represented by all share
certificates deposited with the instrument of transfer.
5.3. Neither the Company nor any Director, officer or agent
thereof shall be bound to inquire into the title of the person named in the form
of transfer as transferee, or, if no person is named therein as transferee, of
the person on whose behalf the certificate is deposited with the Company for the
purpose of having the transfer registered or be liable to any claim by such
registered owner or by any intermediate owner or holder of the certificate or of
any of the shares represented thereby or any interest therein for registering
the transfer, and the transfer, when registered, shall confer upon the person in
whose name the shares have been registered a valid title to such shares.
5.4. Every instrument of transfer shall be executed by the
transferor and left at the registered office of the company or at the office of
its transfer agent or branch transfer agent or registrar for registration
together with the share certificate for the shares to be transferred and such
other evidence if any, as the Directors or the transfer agent or branch transfer
agent or registrar or branch registrar may require to prove the title of the
transferor or his right to transfer the shares and the right of the transferee
to have the transfer registered. All instruments of transfer where the.
transfer is registered shall be retained by the Company or its transfer agent or
branch transfer agent of registrar or branch/registrar and any instrument of
transfer, where the transfer is not registered, shall be returned to the person
depositing the same together with the share certificate which accompanied the
same when tendered for registration.
5.5. There shall be paid to the Company in respect of the
registration of any transfer such sum, if any, as the Directors may from time to
time determine.
5.6. In the case of the death of a member, the survivor or
survivors where the deceased was a joint registered holder, and the legal
personal representative of the deceased where he was the sole holder, shall be
the only persons recognized by the Company as having any title to his interest
in the shares. Before recognizing any legal personal representative the
Directors may require him to deliver to the Company the documents required by
the Company Act to be produced by a person applying to effect transmission of
shares and such other evidence as the Directors may require of the personal
representative's appointment, and of the payment or satisfaction of all taxes,
duties, fees and other similar assessments payable to any governmental authority
in any applicable jurisdiction with respect to the shares arising out of the
member's death.
5.7. A guardian, committee, trustee, curator, tutor,, personal
representative or trustee in bankruptcy of a member, although not a member
himself, shall have the same rights, privileges and obligations that attach to
the shares held by the member if the documents required by the Company Act to be
produced by a person applying to effect transmission of shares shall have been
deposited with the Company together with such other evidence as the Directors
may
<PAGE>
require of the person's appointment. This Article does not apply on the death
of a member with respect to a share registered in his name and the name of
another person in joint tenancy.
PART 6
ALTERATION OF CAPITAL
6.1. The Company may by ordinary resolution filed with the
Registrar alter the Memorandum to increase the authorized capital of the Company
by:
(i) creating shares with par value or shares without par value, or both;
(ii) increasing the number of shares with par value or shares without par
value, or both; or
(iii) increasing the par value of a class of shares with par value, if no
shares of that class are issued.
6.2. The Company may by special resolution alter the Memorandum to
subdivide, consolidate, change from shares with par value to shares without par
value, or from shares without par value to shares with par value, or change the
designation of, all or any of its shares but only to such extent, in such manner
and with such consents of members holding a class or series of shares which is
the subject of or affected by such alteration, as the Company Act provides.
6.3. The Company may alter the Memorandum or these Articles
(i) by special resolution, to create, define and attach special rights or
restrictions to any shares, and
(ii) by special resolution and by otherwise complying with any applicable
provision of its Memorandum or these Articles, to vary or abrogate any special
rights and restrictions attached to any shares
and in each case by filing a certified copy of such resolution with the
Registrar but no right or special right attached to any issued shares shall be
prejudiced or interfered with unless all members holding shares of each class or
series whose right or special right is so prejudiced or interfered with consent
thereto in writing, or unless a resolution consenting thereto is passed at a
separate class or series meeting of the holders of the shares of each such class
or series by a majority of three-fourths of the votes cast, or such greater
majority as may be specified by the special rights attached to the class of
shares.
6.4. If the Company is or becomes a reporting company, no
resolution to create, vary or abrogate any special right of conversion or
exchange attaching to any class or series of shares shall be submitted to any
meeting of members unless, if so required by the Company Act, the Superintendent
of Brokers appointed pursuant to the Securities Act of British Columbia shall
have consented to the resolution.
<PAGE>
6.5. Subject to the Company Act and unless these Articles or the
Memorandum otherwise provide, the provisions of these Articles relating to
general meetings shall apply, with the necessary changes and so far as they are
applicable, to a class or series meeting of members holding a particular class
or series of shares but the quorum at a class or series meeting shall be one
person holding or representing by proxy one-third of the shares affected.
PART 7
PURCHASE AND REDEMPTION OF SHARES
7.1. Subject to the special rights and restrictions attached to
any class or series of shares, the, Company may,, by a resolution of the
Directors and in compliance with the Company Act, purchase any of its shares at
the price and upon the terms specified in such resolution or redeem any class or
series of its shares in accordance with the special rights and restrictions
attaching thereto. Unless the shares are to be purchased through a stock
exchange or the Company is- purchasing the shares from dissenting members
pursuant to the requirements of the Company Act or from an employee or former
employee of the Company or of an affiliate of the Company or from his personal
representatives, the Company shall make its offer to purchase pro rata to every
member who holds shares of the class or series, as the case may be, to be
purchased.
7.2. If the Company proposes at its option to redeem some but not
all of the shares of any class or series, the Directors may, subject to the
special rights and restrictions attached to such class or series of shares,
decide the manner in which the shares to be redeemed shall be selected.
7.3. Subject to the provisions of the Company Act and of the
Securities Act, any shares purchased or redeemed by the Company may be sold or
if cancelled, reissued by it, but, while such shares which have not been
cancelled are held by the Company, it shall not exercise any vote in respect of
these shares and no dividend or/other distribution shall be paid or made
thereon.
PART 8
BORROWING POWERS
8.1. The Directors may from time to time on behalf of the Company
(i) borrow money in such manner and amount, on such security, from such
sources and upon such terms, and conditions as they think fit, and may authorize
the guaranteeing of any obligations of any other person,
(ii) issue bonds, debentures, and other debt obligations either outright or
as security for any liability or obligation of the Company or any other person,
and
(iii) mortgage, charge, whether by way of specific or floating charge, or
give other security on the undertaking, or on the whole or any part of the
property and assets, of the Company (both present. and future).
<PAGE>
8.2. Any bonds, debentures or other debt obligations of the
Company may be issued at a discount, premium or otherwise, and with any special
privileges as, to redemption, surrender, drawing, allotment of or conversion
into or exchange for shares or other securities, attending and voting at general
meetings of the Company, appointment or election of Directors or otherwise and
may by their terms be assignable free from any equities between the Company and
the person to whom they were issued or any subsequent holder thereof, all as the
Directors may determine.
8.3. The Company shall keep or cause to be kept within the
Province of British Columbia in accordance with the Company Act a register of
its debentures and a register of debentureholders, which registers may be
combined, and, subject to the provisions of the Company Act, may keep or cause
to be kept one or more branch registers of its debentureholders at such place or
places as the Directors may from time to time determine and the Directors may by
resolution, regulation or otherwise make such provisions as they think fit
respecting the keeping of such branch registers, provided that any such branch
register kept within British Columbia shall be kept by a Trust Company.
8.4. Every bond, debenture or other debt obligation of the Company
shall be signed manually by at least one Director or officer of the Company or
by or on behalf of a trustee, registrar, branch registrar, transfer agent or
branch transfer agents for the bond, debenture or other debt obligation
appointed by the Company or under any instrument under which the bond, debenture
or other debt obligation is issued or by or on behalf of a trustee who certifies
it in accordance with a trust indenture and any additional signatures may be
printed or otherwise mechanically reproduced thereon and, in such event, a bond,
debenture or other debt obligation so signed is as valid as if signed manually
notwithstanding that the person whose signature is so printed or mechanically
reproduced shall have ceased to hold the office that he is stated on such bond,
debenture or other debt obligation to hold at the date of the issue thereof.
8.5. If the Company is, or becomes, a company which is a reporting
company, the Company shall keep or cause to be kept a register of its
indebtedness to every Director or officer of the Company or an associate of any
of them in accordance with the provisions of and to the extent required by the
Company Act.
PART 9
GENERAL MEETINGS
9.1. Subject to any extensions of time permitted pursuant to the
Company Act, the first annual general meeting of the Company shall be held
within fifteen months from the date of incorporation, the date of amalgamation
or the effective date of a certificate of continuation, and thereafter an annual
general meeting shall be held once in every calendar year at such time (not
being more than thirteen months after the date that the last annual general
meeting was held or deemed to have been held) and place as may be determined by
the Directors.
9.2. If the Company is, or becomes, a company which is not a
reporting company and all the members entitled to attend and vote at an annual
general meeting consent in
<PAGE>
writing to all the business which is required or desired to be transacted at the
meeting, the meeting need not be held.
9.3. All general meetings other than annual general meetings are
herein referred to as and may be called extraordinary general meetings.
9.4. The Directors may,, whenever they think fit, convene an
extraordinary general meeting. An extraordinary general meeting, if
requisitioned in accordance with the Company Act, shall be convened by the
Directors or, if not convened by the Directors, may be convened by the
requisitionists as provided in the Company Act.
9.5. If the Company is or becomes a reporting company, advance
notice of any general meeting at which any Director is to be elected shall be
published in the manner required by the Company Act.
9.6. A notice convening a general meeting specifying the place,
the date, and the hour of the meeting, and, in case of special business, the
general nature of that business, shall be given as provided in the Company Act
and in the manner hereinafter in these Articles mentioned, or- in such other
manner (if any) as may be prescribed by ordinary resolution, whether previous
notice thereof has been given or not, to such persons as are entitled by law or
under these Articles to receive such notice from the Company. Accidental
omission to give notice of a meeting to, or the non-receipt of notice of a
meeting, by any member shall not invalidate the proceedings at that meeting.
9.7. All. the members of the Company entitled to attend and vote
at a general meeting may, by unanimous consent in writing given before, during
or after the meeting, waive or reduce the period of notice of such meeting and
an entry in the minute book of such waiver or reduction shall be sufficient
evidence of the due convening of the meeting.
9.8. Except as otherwise provided by the Company Act, where any
special business at a general meeting includes considering, approving,
ratifying, adopting or authorizing any document or the execution thereof or the
giving of effect thereto, the notice convening the meeting shall, with respect
to such document, be sufficient if it states that a copy of the document or
proposed document is or will be available for inspection by members at the
registered office or records office of the Company or at some other place in
British Columbia designated in the notice during usual business hours up to the
date of such general meeting.
PART 1 0
PROCEEDINGS AT GENERAL MEETINGS
10.1. All business shall be deemed special business, which is
transacted at
(i) an extraordinary general meeting other than the conduct of and voting
at, such meeting; and
(ii) an annual general meeting, with the exception of the conduct of, and
voting at, such meeting, the consideration of the financial statement and of the
<PAGE>
respective reports of the Directors and Auditor, fixing or changing the number
of directors, the election of Directors, the appointments of- the Auditor, the
fixing of the remuneration of the Auditor and of the Directors and such other
business as by these Articles or the Company Act may be transacted at a general
meeting without prior notice thereof being given to the members or any business
which is brought under consideration by the report of the Directors.
10.2. No business, other than election of the chairman or the
adjournment of the meeting, shall be transacted at any general meeting unless a
quorum of members, entitled to attend and vote, is present at the commencement
of the meeting, but the quorum need not be present throughout the meeting.
10.3. Save as herein otherwise provided, a quorum shall be two
persons present and being, or representing by proxy, members holding not less
than one-twentieth of the issued shares entitled to be voted at the meeting. If
there is only one member the quorum is one person present and being, or
representing by proxy, such member. The Directors, the Secretary or, in his
absence, an Assistant Secretary, and the solicitor of the Company shall be
entitled to attend at any general meeting but no such person shall be counted in
the quorum or be entitled to vote at any general meeting unless he shall be a
member or proxyholder entitled to vote thereat.
10.4 If within half an hour from the time appointed for a general
meeting, a quorum is not present, the meeting, if convened by requisition of the
members, shall be dissolved; but otherwise it shall stand adjourned to a place
on a date and at a time, to be fixed by the chairman of the meeting before the
adjournment, which shall be not more than two weeks following the date for which
the meeting was called, or failing such designation then to the same day in the
second week following the meeting at the same time and place, in either case
without giving further notice. If at such adjourned meeting, a quorum is not
present within half an hour from the time appointed, the person or persons
present and being, or representing by proxy, a member or members entitled to
attend and vote at the meeting, shall be a quorum.
10.5. The Chairman of the Board, if any, or in his absence the
President of the Company or in his absence a Vice-President of the Company, if
any, shall be entitled to preside as chairman at every general meeting of the
Company.
10.6. If at any general meeting neither the Chairman of the Board
nor President nor a Vice-President is present within fifteen minutes after the
time appointed for holding the meeting or is willing to act as chairman, the
Directors present shall choose some one of their number to be chairman or if all
the Directors present decline to take the chair or shall fail to so choose or if
no Director be present, the members present shall choose one of their number to
be chairman.
10.7. The chairman may and shall, if so directed by the meeting,
adjourn the meeting from time to time and from place to place, but no business
shall be transacted at any adjourned meeting other than the business left
unfinished at the meeting from which the adjournment took place. When a meeting
is adjourned for thirty days or more, notice, but not "advance notice", of the
adjourned meeting shall be given as in the case of an original meeting or if so
determined by. the Directors, by an advertisement published at least once in a
daily
<PAGE>
newspaper in Vancouver, British Columbia, or in the city where the meeting
commenced. Save as aforesaid, it shall not be necessary to give any notice of
an adjourned meeting or of the business to be transacted at an adjourned
meeting.
10.8. The chairman may propose or second a motion.
10.9. Subject to the provisions of the Company Act, at any meeting
a resolution put to the vote of the meeting shall be decided on a show of hands,
unless (before or on the declaration of the result of the show of hands) a poll
is directed by the chairman or demanded by at least one member entitled to vote
who is present in person or by proxy. The chairman shall declare to the meeting
the decision on every question in accordance with the result of the show of
hands or the poll, and such decision shall be entered in the book of'
proceedings of the Company. A declaration by the chairman that a resolution has
been carried, or carried unanimously, or by a particular majority, or lost or
not carried by a particular majority and an entry to that effect in the book Of
the proceedings of the Company shall be conclusive evidence of the fact, without
proof of the number or proportion of the votes recorded in favour of, or
against, that resolution.
10.10. In the case of an equality of votes, whether on a show of
hands or on a poll, the chairman of the meeting at which the show of hands takes
place or at which the poll is demanded shall not be entitled to a second or
casting vote.
10.11. No poll may be demanded on the. election of a chairman. A
poll demanded on a question of adjournment shall be taken forthwith. A poll
demanded on any other question shall be taken as soon as, in the opinion of the
chairman, is reasonably convenient, but in no event later than seven days after
the meeting and at such time and place and in such manner as the chairman of the
meeting directs. The result of the poll shall be deemed to be the resolution of
and passed at the meeting at which the poll was demanded. Any business other
than that upon which the poll has been demanded may be proceeded with pending
the taking of the pollA demand for a poll may be withdrawn. In any dispute as
to the admission or rejection of a vote the decision of the chairman made in
good faith shall be final and conclusive.
10.12. Every ballot cast upon a poll and every proxy appointing a
proxyholder who casts a ballot upon a poll shall be retained by the Secretary
for such period and be subject to such inspection as the Company Act may
provide.
10.13. On a poll a person entitled to cast more than one vote need
not, if he votes, use all his, votes or cast all the votes he uses in the same
way.
10.14. Unless the Company Act, the Memorandum or these Articles
otherwise provide, any action to be taken by a resolution of the members may be
taken by an ordinary resolution.
<PAGE>
PART 11
VOTES OF MEMBERS
11.1. Subject to any special voting rights or restrictions
attached to any class or series of shares and the restrictions on joint
registered holders of shares, on a show of hands every member who is present in
person and entitled to vote thereat shall have one vote and on a poll every
member shall have one vote for each share of which he is the registered holder
and may exercise such vote either in person or by proxyholder.
11.2. Any person who is not registered as a member but is entitled
to vote at any general meeting in respect of a share, may vote the share in the
same manner as if he were a member; but, unless the Directors have previously
admitted his right to vote at that meeting in respect of the share, he shall
satisfy the directors of his right to vote the share before the time for holding
the meeting, or adjourned meeting, as the case may be, at which he proposes to
vote.
11.3. Any corporation not being a subsidiary which is a member of
the Company may by resolution of its directors or other governing body authorize
such person as it thinks fit to act as its representative at any general meeting
or class meeting. The person so authorized shall be entitled to exercise in
respect of and at such meeting the same powers on behalf of the corporation
which he represents as that corporation could exercise if it were an individual
member of the Company personally present, including, without limitation, the
right, unless restricted by such resolution, to appoint a proxyholder to
represent such corporation, and shall, if present at the meeting, be counted for
the purpose of forming a quorum and be deemed to be a member present at the
meeting. Evidence of the appointment of any such representative may be sent to
the Company by written instrument, telegram, telex or any method of transmitting
legibly recorded messages. Notwithstanding the foregoing, a corporation being a
member may appoint a proxyholder.
11.4. If a share is registered in the name of two or more persons,
the vote of the senior who exercises a vote, whether in person or by
proxyholder, shall be accepted to the exclusion of the votes of the other joint
registered holders; and for this purpose seniority shall be determined by the
order in which the names stand in the register of members. Several legal
personal representatives of a deceased member whose shares are registered in his
sole name shall for the purpose of this Article be deemed to be two or more
persons, as the case may be.
11.5. A member of unsound mind entitled to attend and vote, in
respect of whom an order has been made by any court having jurisdiction, may
vote, whether on a show of hands or on a poll, by his committee, curator bonis,
or other person in the nature of a committee or curator bonis appointed by that
court, and any such committee, curator bonis, or other person may appoint a
proxyholder.
11.6. Every member, including a member that is a corporation,
entitled to vote at a general meeting or a class meeting of the Company may,, by
proxy, appoint a proxyholder as his nominee to attend and act at the meeting in
the manner, to the extent and with the power conferred by the proxy. A member
may also appoint one or more alternate proxyholders to act in the place and
stead of an absent proxyholder.
<PAGE>
11.7. A form of proxy shall be in writing under the hand of the
appointor or of his attorney duly authorized in writing, or, if the appointor is
a corporation, either under the seal of the corporation or under the hand of a
duly authorized officer or attorney. A proxyholder need not be a member of the
Company if
(i) the Company is at the time a reporting company, or
(ii) the member appointing the proxyholder is a corporation, or
(iii) the Company shall have at the time only one member, or
(iv) the persons present in person or by proxy and entitled to vote at the
meeting by resolution permit the proxyholder to attend and vote; for the purpose
of such resolution the proxyholder shall be counted in the quorum but shall not
be entitled to vote
and in all other cases a proxyholder must be a member.
11.8. Unless otherwise ordered by the Directors, a form of proxy
and the power of attorney or other authority, if any, under which it is signed,
or a notarially certified copy thereof, shall be deposited at the registered
office of the Company, or at such other place as is specified for that purpose
in the notice convening the meeting or in the information circular relating
thereto, not less than 48 hours (excluding Saturdays, Sundays and holidays)
before the time for holding the meeting in respect of which the person named in
the instrument is appointed. In addition to any other method of depositing
proxies provided for in these Articles, the Directors may from time to time by
resolution make regulations relating to the depositing of proxies at any place
or places and fixing the time or times for depositing the proxies not exceeding
48 hours (excluding Saturdays, Sundays and holidays) preceding the meeting or
adjourned meeting specified in the notice calling a meeting of members or in the
information circular relating thereto and providing for particulars of such
proxies to be sent to the Company or any agent of the Company in writing or by
letter, telegram, telex or any method of transmitting legibly recorded messages
so as to arrive before the commencement of the meeting or adjourned meeting at
the office of the Company or of any agent of the Company appointed for the
purpose of receiving such particulars and providing that proxies so deposited
may be acted upon as though the proxies themselves were deposited as required by
this Part and votes given in accordance with such regulations shall be valid and
shall be counted.
11.9. Unless the Company Act or any other statute or law which is
applicable to the Company or to any class or series of its shares requires any
other form of proxy, a proxy, whether for a specified meeting or otherwise shall
be in the form following, but may also be in any other form that the Directors
or the chairman of the meeting shall approve:
(Name of Company)
The undersigned, being a member of the above named Company, hereby appoints
______________________ or failing him _______________________ as proxyholder for
the undersigned to attend, act and vote for and on behalf of the
<PAGE>
undersigned at the general meeting of the Company to be held on the ____ day of
____________________, and at any adjournment thereof.
Signed this _____ day of ________________, 19____.
(Signature of member).
11.10. A vote given in accordance with the terms of a proxy is
valid notwithstanding the previous death or incapacity of the member giving the
proxy or the revocation of the proxy or of the authority under which the form of
proxy was executed or the transfer of the share in respect of which the proxy is
given, provided that no notification in writing of such death, incapacity,
revocation or transfer shall have been received at the registered office of the
Company or by the chairman of the meeting or adjourned meeting for which the
proxy was given before the vote is taken.
11.11. Every proxy may be revoked by an instrument in writing
(i) executed by the member giving the same or by his attorney authorized in
writing or, where the member is a corporation, by a duly authorized officer or
attorney of the corporation; and
(ii) delivered either at the registered 'office of the Company at any time
up to and including the last business day preceding the day of the meeting., or
any adjournment thereof at which the proxy is to be used, or to the chairman of
the meeting on the day of the meeting or any adjournment thereof before any vote
in respect of which the proxy is to be used shall have been taken
or in any other manner provided by law. A proxy shall cease to be valid one
year from its date.
PART 12
DIRECTORS
12.1. The subscribers to the Memorandum of the Company are the
first Directors. The Directors to succeed the first Directors may be appointed
in writing by a majority of the subscribers to the Memorandum or at a meeting of
the subscribers, or if not so appointed, they shall be elected by the members
entitled to vote on the election of Directors and the number of Directors shall
be the same as the number of' Directors so appointed or elected. The number of
Directors, excluding additional Directors, may be fixed or changed from time to
time by ordinary resolution, whether previous notice thereof has been given or
not, but notwithstanding anything contained in these Articles the number of
Directors shall never be less than one or, if the Company is or becomes a
reporting company, less than three.
12.2. The remuneration of the Directors as such may from time to
time be determined by the Directors or, if the Directors shall so decide, by the
members. Such remuneration may be in addition to any salary or other
remuneration paid to any officer or employee of the Company as such who is also
a Director. The Directors-, shall be repaid such reasonable. travelling, hotel
and other expenses as they incur in and about the business of the
<PAGE>
Company and if any Director shall perform any professional or other services for
the Company that in the opinion of the Directors are outside the ordinary duties
of a Director or shall otherwise be specially occupied in or about the Company's
business, he may be paid a remuneration to be fixed by the Board, or, at the
option of such Director, by the Company in general meeting, and such
remuneration may be either in addition to, or in substitution for any other
remuneration that he may be entitled to receive. The Directors on behalf of the
Company, unless otherwise determined by ordinary resolution, may pay a gratuity
or pension or allowance on retirement to any Director who has held any salaried
office or place of profit with the Company or to his spouse or defendants and
may make contributions to any fund and pay premiums for the purchase or
provision of any such gratuity, pension or allowance.
12.3. A Director shall not be required to hold a share in the
capital of the Company as qualification for his office but shall be qualified as
required by the Company Act, to become or act as a Director.
PART 13
ELECTION AND REMOVAL OF DIRECTORS
13.1. At each annual general meeting of the Company all the
Directors shall retire and the members entitled to vote thereat shall elect a
Board of Directors consisting of the number of Directors for the time being
fixed pursuant to these Articles. If the Company is, or becomes, a company that
is not a reporting company and the business to be transacted at any annual
general meeting is consented to in writing by all the members who are entitled
to attend and vote thereat such annual general meeting shall be deemed for the
purpose of this Part to have been held on such written consent becoming
effective.
13.2. A retiring Director shall be eligible for re-election.
13.3. Where the Company fails to hold an annual general meeting in
accordance with the Company Act, the Directors then in office shall be deemed to
have been elected or appointed as Directors on the last day on which the annual
general meeting could have been held pursuant to these Articles and they may
hold office until other Directors are appointed or elected or until the day on
which the next annual general meeting is held.
13.4. If at any general meeting at which there should be an
election of Directors, the places of any of the retiring Directors are not
filled by such election, such of the retiring Directors who are not re-elected
as may be requested by the newly-elected Directors shall, if willing to do so,
continue in office to complete the number of Directors for the time being fixed
pursuant to these Articles until further new Directors are elected at a general
meeting convened for the purpose. If any such election or continuance of
Directors does not result in the election or continuance of the number of
Directors for the time being fixed pursuant to these Articles such number shall
be fixed at the number of Directors actually elected or continued in office.
13.5. Any casual vacancy occurring in the Board of Directors may
be filled by the remaining Directors or Director. A vacancy resulting from an
increase by the members in the number of Directors may be filled by the members
by ordinary resolution or by the Directors.
<PAGE>
13.6. Between successive annual general meetings the Directors
shall have power to appoint one or more additional Directors but not more than
one-third of the number of Directors fixed pursuant to these Articles and in
effect at the last general meeting at which Directors were elected, and the
number of Directors shall be increased accordingly. Any Director so appointed
shall hold office only until the next following annual general meeting of the
Company, but shall be eligible for election at such meeting and so long as he is
an additional Director the number of Directors shall be increased, accordingly.
13.7. Any Director may by instrument in writing delivered to the
Company appoint any person to be his alternate to act in his place at meetings
of the Directors at which he is not present unless the Directors shall have
reasonably disapproved the appointment of such person as an alternate Director
and shall have given notice to that effect to the Director appointing the
alternate Director within a reasonable time after delivery of such instrument to
the Company. Every such alternate shall be entitled to notice of meetings of
the Directors and to attend and vote as a Director at a meeting at which the
person appointing him is not personally present. A person may be appointed as
an alternate Director by more than one Director, and an alternate Director shall
be counted separately in determining the quorum for, and having a separate vote
on behalf of, each Director he is representing, in addition to being so counted
and voting where he is himself a Director. Every alternate Director, if
authorized by the instrument appointing them, may sign in place of the Director
who appointed him resolutions submitted to the Directors to be consented to in
writing as referred to in Article 16.9. Every alternate Director shall be deemed
not to be the agent of a Director appointing him. An alternate Director shall
be deemed to be a Director for all purposes of these Articles in the performance
of any function authorized under this Article 13.7, but shall not otherwise be
deemed to be a Director or to have power to act as a Director. A Director may
at any time by instrument telegram, telex or any method of transmitting legibly
recorded messages delivered to the Company revoke the appointment of an
alternate appointed by him. An alternate Director may be repaid by the Company
such expenses as might properly be repaid to him if he were a Director and he
shall be entitled to receive from the Company such proportion, if any, of the
remuneration otherwise payable to the Director appointing him as such Director
may from time to time direct.
13.8. The office of Director shall be vacated if the, Director:
(i) resigns his office by notice in writing delivered to the registered
office of the Company; or
(ii) is convicted of an indictable offence and the other Directors shall
have resolved to remove him; or
(iii) ceases to be qualified to act as a Director pursuant to the Company
Act.
13.9. The Company may by special resolution remove any Director
before the expiration of his period of office, and may by an ordinary resolution
appoint another person in his stead.
<PAGE>
PART 14
POWERS AND DUTIES OF DIRECTORS
14.1. The Directors shall manage, or supervise the management of,
the affairs and business of the Company and shall have the authority to exercise
all such powers of the Company as are not, by the Company Act or by the
Memorandum or these Articles, required to be exercised by the Company in general
meeting.
14.2. The Directors may from time to time by power of attorney or
other instrument under the seal, appoint any person to be the attorney of the
Company for such purposes, and with such powers, authorities and discretions
(not exceeding those vested in or exercisable by the Directors under these
Articles and excepting the powers of the Directors relating to the constitution
of the Board and of any of its committees and the appointment or removal of
officers and the power to declare dividends) and for such period, with such
remuneration and subject to such conditions as the Directors may think fit, and
any such appointment may be made in favour of any of the Directors or any of the
members of the Company or in favour of any corporation, or of any of the
members, directors, nominees or managers of any corporation, firm or joint
venture and any such power of attorney may contain such provisions for the
protection or convenience of persons dealing with such attorney as the Directors
think fit. Any such attorney may be authorized by the Directors to sub-delegate
all or any of the powers, authorities and discretions for the time being vested
in him.
PART 15
DISCLOSURE OF INTEREST OF DIRECTORS
15.1. A Director who is, in any way, directly or indirectly
interested in a proposed contract or transaction with the Company or who holds
any office or possesses any property whereby, directly or indirectly, a duty or
interest might be created to conflict with his duty or interest as a Director
shall declare the nature and extent of his interest in such contract or
transaction or of the conflict or potential conflict with his duty and interest
as a Director, as the case may be, in accordance with the provisions of the
Company Act.
15.2. A Director shall not vote in respect of any such contract or
transaction with the Company in which he is interested and if he shall do so his
vote shall not be counted, but he shall be counted in the quorum present at the
meeting at which such vote is taken. Subject to the provisions of the Company
Act, the foregoing prohibitions shall not apply to
(i) any such contract or transaction relating to a loan to the Company,
which a Director or a specified corporation or a specified firm in which he has
an interest has guaranteed or joined in guaranteeing the repayment of the loan
or any part of the loan;
(ii) any contract or transaction made or to be made with, or for the benefit
of an affiliated corporation of which a Director is a director or officer;
(iii) determining the remuneration of the Directors;
<PAGE>
(iv) purchasing and maintaining insurance to cover Directors against
liability incurred by them as Directors under Section 152 of the Company Act; or
(v) the indemnification of any Director by the Company under Section 152 of
the Company Act.
These exceptions may from time to time be suspended or amended to any extent
approved by the Company in general meeting and. permitted by the Company Act,
either generally or in respect of any particular contract or transaction or for
any particular period.
15.3. A Director may hold any office or place of profit with the
Company (other than the office of auditor of the Company) in conjunction with
his office of Director for such period and on such terms (as to remuneration or
otherwise) as the Directors may determine and no Director or intended Director
shall be disqualified by his office from contracting with the Company either
with regard to his tenure of any such other office or place of profit or as
vendor, purchaser or otherwise, and, subject to compliance with the provisions
of the Company Act, no contract or transaction entered into by or on behalf of
the Company in which a Director is in any way interested shall be liable to be
voided by reason thereof.
15.4. Subject to compliance with the provisions of the Company
Act, a Director or his firm may act in a professional capacity for the Company
(except as auditor of the Company) and he or his firm shall be entitled to
remuneration for professional services as if he were not a Director.
15.5. A Director may be or become a director or other officer or
employee of, or otherwise interested in, any corporation or firm in which the
Company may be interested as a shareholder or otherwise, and, subject to
compliance with the provisions of the Company Act, such Director shall not be
accountable to the Company for any remuneration or other benefits received by
him as director, officer or employee of, or from his interest in, such other
corporation or firm, unless the Company in general meeting otherwise directs.
PART 16
PROCEEDINGS OF DIRECTORS
16.1. The Chairman of the Board, if any, or in his absence, the
Vice-Chairman or in his absence, the President shall preside as chairman at
every meeting of the Directors, or if neither the Chairman of the Board nor the
Vice-Chairman nor the President is present within fifteen minutes of the time
appointed for holding the meeting or is willing to act. as chairman, or, if the
Chairman of the Board, the Vice-Chairman, and the President have advised the
Secretary that they will not be present at the meeting, the Directors present
shall choose one of their number to be chairman of the meeting.
16.2. The Directors may meet together for the dispatch of
business, adjourn and otherwise regulate their meetings, as they think fit.
Questions arising at any meeting shall be decided by a majority of votes. In
case of an equality of votes the chairman shall have a second or casting vote.
Meetings of the Board held at regular intervals may be held at such place, at
<PAGE>
such time and upon such notice (if any) as the Board may by resolution from time
to time determine.
16.3. A meeting of the Directors or of any committee of the
Directors may take place by means of conference telephones or other
communications facilities by which means all Directors participating in the
meeting can hear each other and provided that all such Directors agree to such
meeting being held in such manner. Directors participating in a meeting in
accordance with this Article shall be deemed to be present at the meeting and to
have so agreed and shall be counted in the quorum therefor and be entitled to
speak and vote thereat.
16.4. A Director may, and the Secretary or an Assistant Secretary
upon request of a Director shall, call a meeting of the Board at any time.
Reasonable notice of such meeting specifying the place, day and hour of such
meeting shall be given by mail, postage prepaid, addressed to each of the
Directors and alternate Directors at his address as it appears on the books of
the Company or by leaving it at his usual business or residential address or by
telephone, telegram, telex, or any method of transmitting legibly recorded
messages. It shall not be necessary to give notice of a meeting of Directors to
any Director or alternate Directors (i) who is at the time not in the Province
of British Columbia or (ii) if such meeting is to be held immediately following
a general meeting at which such Director shall have been elected or is the
meeting of Directors at which such Director is appointed. Accidental omission
to give notice of a meeting to or the nonreceipt of notice of a meeting by, any
Director or alternate Director shall not invalidate the proceedings at the
meeting.
16.5. Any Director of the Company may file with the Secretary a
document executed by him waiving notice of any past, present or future meeting
or meetings of the Directors being, or required to have been, sent to him and
may at any time withdraw such waiver with respect to meetings held thereafter.
After filing such waiver with respect to future meetings and until such waiver
is withdrawn no notice need be given. to such Director and, unless the Director
otherwise requires in writing to the Secretary, to his alternate Director of any
meeting of Directors and all meetings of the Directors so held shall be deemed
not to be improperly called or constituted by reason of notice not having been
given to such Director or alternate Director.
16.6. The quorum necessary for the transaction of the business of
the Directors may be fixed by the Directors and if not so fixed shall be two
Directors or, if the number of Directors is fixed at one, shall be one Director.
16.7. The continuing Directors may act notwithstanding any vacancy
in their body, but, if and so long as their number is reduced below the number
fixed pursuant to these Articles as the necessary quorum of Directors, the
continuing Directors may act for the purpose of increasing the number of
Directors to that number, or of summoning a general meeting of the Company, but
for no other purpose.
16.8. Subject to the provisions of the Company Act, all acts done
by any meeting of the Directors or of a committee of Directors, or by any person
acting as a Director, shall, notwithstanding that it be afterwards discovered
that there was some defect in the qualification, election or appointment of any
such Directors or of the members of such committee or person acting as
aforesaid, or that they or any of them were disqualified, be as
<PAGE>
valid as if every such person had been duly elected or appointed and was
qualified to be a Director.
16.9. A resolution consented to in writing, whether by document,
telegram, telex or any method of transmitting legibly recorded messages or other
means, by all of the Directors shall be as valid and effectual as if it had been
passed at a meeting of the Directors duly called and held. Such resolution may
be in two or more counterparts which together shall be deemed to constitute one
resolution in writing. Such resolution shall be filed with the minutes of the
proceedings of the Directors and shall be effective on the date stated thereon
or on the latest date stated on any counterpart.
PART 17
EXECUTIVE AND OTHER COMMITTEES
17.1. The Directors may by resolution appoint an Executive
Committee to consist of such member or members of their - body as they think
fit, which Committee shall have, and may exercise during the intervals between
the meetings of the Board, all the powers vested in the Board except the power
to fill vacancies in the Board, the power to change the membership of, or fill
vacancies in, said Committee or any other committee of the Board and such other
powers, if any, as may be specified in the resolution. The said Committee shall
keep regular minutes of its transactions and shall cause them to be recorded in
books kept for that purpose, and shall report the same to the Board of Directors
at such times as the Board of Directors may from time to time require. The
Board shall have the power at any time to revoke or override the authority given
to or acts done by the Executive Committee except as to acts done before such
revocation or overriding and to terminate the appointment or change the
membership of such Committee and to fill vacancies in it. The Executive
Committee may make rules for the conduct of its business and may appoint such
assistants as it may deem necessary. A majority of the members of said
Committee shall constitute a quorum thereof.
17.2. The Directors may from time to time by resolution
constitute, dissolve or reconstitute standing committees and other committees
consisting of such persons as the Board may determine. Every committee
constituted by the Board shall have the powers, authorities and discretions
delegated to it by the Board (which shall not include the power to fill
vacancies in the Board and the power to change the membership of or fill
vacancies in any committee constituted by the Board or the power to appoint or
remove officers appointed by the Board) and shall conform to the regulations
which may from time to time be imposed upon it by the Board.
17.3. The Executive Committee and any other committee may meet and
adjourn as it thinks proper. Questions arising at any meeting shall be
determined by a majority of votes of the members of the committee present, and
in case of an equality of votes the chairman shall not have a second or casting
vote. A resolution approved in writing by all the members of the Executive
Committee or any other committee shall be as valid and effective as if it had
been passed at a meeting of such Committee duly called and constituted. Such
resolution may be in two or more counterparts which together shall be deemed to
constitute one resolution in writing. Such resolution shall be filed with the
minutes of the proceedings of the committee and shall be effective on the date
stated thereon or on the latest date stated in any counterpart.
<PAGE>
PART 18
OFFICERS
18.1. The Directors shall, from time to time, appoint a President
and a Secretary and such other officers, if any, as the Directors shall
determine and the Directors may, at any time, terminate any such appointment.
No officer shall be appointed unless he is qualified in accordance with the
provisions of the Company Act.
18.2. One person may hold more than one of such offices except
that the offices of President and Secretary must be held by different persons
unless the Company has only one member. Any person appointed as the Chairman of
the Board, the President or the Managing Director shall be a Director. The
other officers need not be Directors. The remuneration of the officers of the
Company as such and the terms and conditions of their tenure of office or
employment shall from time to time be determined by the Directors; such
remuneration may be by way of salary, fees, wages, commission or participation
in profits or any other means or all of these modes and an officer may in
addition to such remuneration be entitled to receive after he ceases to hold
such office or leaves the employment of the Company a pension or gratuity. The
Directors may decide what functions and duties each officer shall perform and
may entrust to and confer upon him any of the powers exercisable by them upon
such terms and conditions and with such restrictions as they think fit and may
from time to time revoke, withdraw, alter or vary all or any of such functions,
duties and powers. The Secretary shall, inter alia, perform the functions of
the. Secretary specified in the Company Act.
18.3. Every officer of the Company who holds any office or
possesses any property whereby, whether directly or indirectly, duties or
interests might be created in conflict with his duties or interests as an
officer of the Company shall, in writing, disclose to the President the fact and
the nature, character and extent of the conflict.
PART 19
INDEMNITY AND PROTECTION OF
DIRECTORS, OFFICERS AND EMPLOYEES
19.1. Subject to the provisions of the Company Act, the Directors
shall cause the Company to indemnify a Director or former Director of the
Company and the Directors may cause the Company to indemnify a director or
former director of a corporation of which the Company is or was a shareholder
and the heirs and personal representatives of any such person against all costs,
charges and expenses, including an amount paid to settle an action or satisfy a
judgment, actually and reasonably incurred by him or them including an amount
paid to settle an action or satisfy a judgment in a civil, criminal or
administrative action or proceeding to which he is or they are made a party by
reason of his being or having been a Director of the Company or a director of
such corporation, including any action brought by the Company or any such
corporation. The Company shall apply to the court for all approvals of the
court which may be required to make any indemnity referred to in this Part
effective and enforceable. Each Director of the Company on being elected or
appointed shall be deemed to have contracted with the Company on the terms of
the foregoing indemnity.
<PAGE>
19.2. Subject to the provisions of the Company Act, the Directors
may cause the Company to indemnify any officer, employee or agent of the Company
or of a corporation of which the Company is or was a shareholder
(notwithstanding that he is also a Director) and his heirs and personal
representatives against all costs, charges and expenses whatsoever incurred by
him or them and resulting from his acting as an officer, employee or agent of
the Company or such corporation. In addition the Company shall indemnify the
Secretary or an Assistant Secretary of the Company (if he shall not be a full
time employee of the Company and 'notwithstanding that he is also a Director)
and his respective heirs and legal representatives against all costs, charges
and expenses whatsoever incurred by him or them and arising out of the functions
assigned to the Secretary by the Company Act or these Articles and each such
Secretary and Assistant Secretary shall on being appointed be deemed to have
contracted with the Company on the terms of the foregoing indemnity.
19.3. The failure of a Director or officer of the Company to
comply with the provisions of the Company Act or of the Memorandum or these
Articles shall not invalidate any indemnity to which he is entitled under this
Part.
19.4. The Directors may cause the Company to purchase and maintain
insurance for the benefit of any person who is or was serving as a Director,
officer, employee or agent of the Company or as a director, officer, employee or
agent of any corporation of which the Company is or was a shareholder and his
heirs or personal representatives against any liability incurred by him as such
Director, director, officer, employee or agent.
PART 20
DIVIDENDS AND RESERVE
20.1. The Directors may from time to time declare and authorize
payment of such dividends, if any, as they may deem advisable and need not give
notice of such declaration to any member. No dividend shall be paid otherwise
than out of funds and/or assets properly available for the payment of dividends
and a declaration by the Directors as to the amount of such funds or assets
available for dividends shall be conclusive. The Company may pay any such
dividend wholly or in part by the distribution of specific assets and in
particular by paid up shares, bonds, debentures or other securities of the
Company or any other corporation or in any one or more such ways as may be
authorized by the Company or the Directors and where any difficulty arises with
regard to such a distribution the Directors may settle the same as they think
expedient, and in particular may fix the value for distribution of such specific
assets or any part thereof, and may determine that cash payments in substitution
for all or any part of the specific assets to which any members are entitled
shall be made to any members on the basis of the value so fixed in order to
adjust the rights of all parties and may vest any such specific assets in
trustees for the persons entitled to the dividend as may seem expedient to the
Directors.
20.2. Any dividend declared on shares of any class or series by
the Directors may be made payable on such date as is fixed by the Directors.
<PAGE>
20.3. Subject to the rights of members (if any) holding shares
with special rights as to dividends, all dividends on shares of any class or
series shall be declared and paid according to the number of such shares held.
20.4. The Directors may, before declaring any dividend, set aside
out of the funds properly available for the payment of dividends such sums as
they think proper as a reserve or reserves, which shall, at the discretion of
the Directors, be applicable for meeting contingencies, or for equalizing
dividends, or for any other purpose to which such funds of the Company may be
properly applied, and pending such application may, at the like discretion,
either be employed in the business of the Company or be invested in such
investments as the Directors may from time to time think fit. The Directors may
also, without placing the same in reserve, carry forward such funds, which they
think prudent not to divide.
20.5. If several persons are registered as joint holders of any
share, any one of them may given an effective receipt for any dividend, bonuses
or other moneys payable in respect of the share.
20.6. No dividend shall bear interest against the company. Where
the dividend to which a member is entitled includes a fraction of a cent, such
fraction shall be disregarded in making payment thereof and such payment shall
be deemed to be payment in full.
20.7. Any dividend, bonuses or other moneys payable in cash in
respect of shares may be paid by cheque or warrant sent through the post
directed to the registered address of the holder, or in the case of joint
holders, to the registered address of that one of the joint holders who is first
named on the register, or to such person and to such address as the holder or
joint holders may direct in writing. Every such cheque or warrant shall be made
payable to the order of the person to whom it is sent. The mailing of such
cheque or warrant shall, to the extent of the sum represented thereby (plus the
amount of any tax required by law to be deducted) discharge all liability for
the dividend, unless such cheque or. warrant shall not be paid on presentation
or the amount of tax so deducted shall not be paid to the appropriate taming
authority.
20.8. Notwithstanding anything contained in these Articles, but
subject to the Securities Act, the Directors may from time to time capitalize
any undistributed surplus on hand of the Company and may from time to time issue
as fully paid and non-assessable any unissued shares, or any bonds, debentures
or debt obligations of the Company as a dividend representing such undistributed
surplus on hand or any part thereof.
PART 21
DOCUMENTS, RECORDS AND REPORTS
21.1. The Company shall keep at its records office or at such
other place as the Company Act may permit, the documents, copies registers,
minutes, and records which the Company is required by the Company Act to keep at
its records office or such other place, as the case may be.
<PAGE>
20.3. Subject to the rights of members (if any) holding shares
with special rights as to dividends, all dividends on shares of any class or
series shall be declared and paid according to the number of such shares held.
20.4. The Directors may, before declaring any dividend, set aside
out of the funds properly available for the payment of dividends such sums as
they think proper as a reserve or reserves, which shall, at the discretion of
the Directors, be applicable for meeting contingencies, or for equalizing
dividends, or for any other purpose to which such funds of the Company may be
properly applied, and pending such application may, at the like discretion,
either be employed in the business of the Company or be invested in such
investments as the Directors may from time to time think fit. The Directors may
also, without placing the same in reserve, carry forward such funds, which they
think prudent not to divide.
20.5. If several persons are registered as joint holders of any
share, any one of them may given an effective receipt for any dividend, bonuses
or other moneys payable in respect of the share.
20.6. No dividend shall bear interest against the company. Where
the dividend to which a member is entitled includes a fraction of a cent, such
fraction shall be disregarded in making payment thereof and such payment shall
be deemed to be payment in full.
20.7. Any dividend, bonuses or other moneys payable in cash in
respect of shares may be paid by cheque or warrant sent through the post
directed to the registered address of the holder, or in the case of joint
holders, to the registered address of that one of the joint holders who is first
named on the register, or to such person and to such address as the holder or
joint holders may direct in writing. Every such cheque or warrant shall be made
payable to the order of the person to whom it is sent. The mailing of such
cheque or warrant shall, to the extent of the sum represented thereby (plus the
amount of any tax required by law to be deducted) discharge all liability for
the dividend, unless such cheque or. warrant shall not be paid on presentation
or the amount of tax so deducted shall not be paid to the appropriate taming
authority.
20.8. Notwithstanding anything contained in these Articles, but
subject to the Securities Act, the Directors may from time to time capitalize
any undistributed surplus on hand of the Company and may from time to time issue
as fully paid and non-assessable any unissued shares, or any bonds, debentures
or debt obligations of the Company as a dividend representing such undistributed
surplus on hand or any part thereof.
PART 21
DOCUMENTS, RECORDS AND REPORTS
21.1. The Company shall keep at its records office or at such
other place as the Company Act may permit, the documents, copies registers,
minutes, and records which the Company is required by the Company Act to keep at
its records office or such other place, as the case may be.
<PAGE>
such notice, whichever is the earlier, shares which confer the right to notice
of and to attend and vote at any such meeting. No other person except the
auditor of the Company and the Directors of the Company shall be entitled to
receive notices of any such meeting.
PART 23
RECORD DATES
23.1. The Directors may fix in advance a date, which shall not be
more than the maximum number of days permitted by the Company Act preceding the
date of any meeting of members or any class or series thereof or of the payment
of any dividend or of the proposed taking of any other proper action requiring
the determination of members as the record date for the determination of the
members entitled to notice of, or to attend and vote at, any such meeting and
any adjournment thereof, or entitled to receive payment of any such dividend or
for any other proper purpose and, in such case, notwithstanding anything
elsewhere contained in these Articles, only members of record on the date so
fixed shall be deemed to be members for the purposes aforesaid.
23.2. Where no record date is so fixed for the determination of
members as provided in the preceding Article the date on which the notice is
mailed or on which the resolution declaring the dividend is adopted, as the case
may be, shall be the record date for such determination.
PART 24
SEAL
24.1. The Directors may provide a seal for the Company and, if
they do so, shall provide for the safe custody of the seal which shall not be
affixed to any instrument except in the presence of the following persons,
namely,
(i) any two Directors, or
(ii) one of the Chairman of the Board, the President, the Managing Director,
a Director and a. Vice-President together with one of the Secretary, the
Treasurer, the Secretary-Treasurer, an Assistant. Secretary, an Assistant
Treasurer and an Assistant Secretary-Treasurer, or
(iii) if the Company shall have only one member, the President or the
Secretary, or
(iv) subject to Article 8.4., such person or persons as the Directors may
from time to time by resolution appoint
and the said Directors, officers, person or persons in whose presence the seal
is so affixed to an instrument shall sign such instrument. For the purpose of
certifying under seal true copies of any document or resolution the seal may be
affixed in the presence of any one of the foregoing persons.
<PAGE>
24.2. To enable the seal of the Company to be affixed to any
bonds, debentures, share certificates, or other securities of the Company,
whether in definitive or interim form, on which facsimiles of any of the
signatures of the Directors or officers of the Company are, in accordance with
the Company Act and/or these Articles, printed or otherwise mechanically
reproduced there may be delivered to the firm or company employed to
engravelithograph or print such definitive or interim bonds, debentures, share
certificates or other securities one or more unmounted dies reproducing the
Company's seal and the Chairman of the Board, the President, the Managing
Director or a Vice-President and the Secretary, Treasurer,, Secretary-Treasurer,
an Assistant Secretary, an Assistant Treasurer or an Assistant
Secretary-Treasurer may by a document authorize such firm or company to cause
the Company's seal to be affixed to such definitive or interim bonds,
debentures, share certificates or other securities by the use of such dies.
Bonds, debentures, share certificates or other securities to which the Company's
seal has been so affixed shall for all purposes be deemed to be under and to
bear -the Company's seal lawfully affixed thereto.
24.3. The Company may have for use in any- other province, state,
territory or country an official seal and all of the powers conferred by the
Company Act with respect thereto may be exercised by the Directors or by a duly
authorized agent of the Company.
COMPANY ACT
EARTHRAMP.COM COMMUNICATIONS INC.
ALTERED MEMORANDUM
(As altered by special resolution
passed December 6, 1999)
1. The name of the Company is Earthramp.com Communications Inc.
2. The authorized capital of the Company consists of 20,000,000 common
shares without par value.
NUMBER: 306146
CERTIFICATE
OF
CHANGE OF NAME
COMPANY ACT
I Hereby Certify that
CARTA RESOURCES LTD.
has this day changed its name to
EARTHRAMP.COM COMMUNICATIONS INC.
Issued under my hand at Victoria, British Columbia
on December 24, 1999
JOHN S. POWELL
Registrar of Companies
PROVINCE OF BRITISH COLUMBIA
CANADA
See 1.1. above.
ESCROW AGREEMENT
THIS AGREEMENT is dated for reference as of the 11th day of July, 1996
and made
AMONG:
MONTREAL TRUST COMPANY OF CANADA, of 510 Burrard Street, Vancouver, B.C., V6C
3B9
(the "Escrow Agent")
AND:
CARTA RESOURCES LTD., a British Columbia company, having its registered and
records office at Suite 1700, 1185 West Georgia Street, Vancouver, British
Columbia, V6E 4E6;
(the "Issuer")
AND:
EACH SHAREHOLDER, as defined in this Agreement;
(collectively, the "Parties").
WHEREAS:
A. The Shareholder has acquired or is about to acquire shares of the
Issuer;
B. The Escrow Agent has agreed to act as escrow agent in respect of the
shares upon the acquisition of the shares by the Shareholder;
NOW THEREFORE in consideration of the covenants contained in this
agreement and other good and valuable consideration (the receipt and sufficiency
of which is acknowledged), the Parties agree as follows:
1. INTERPRETATION
1.1 In this agreement:
(a) "Acknowledgement" means the acknowledgement and agreement to be bound in
the form attached as Schedule "A" to this agreement;
(b) "Act" means the Securities Act, S.B.C. 1985, c. 83;
(c) "Exchange" means the Vancouver Stock Exchange;
<PAGE>
(d) "Local Policy Statement 3-07" means the Local Policy Statement 3-07 of
the Executive Director in effect as of the date of reference of this agreement;
(e) "Shareholder" means a holder of shares of the Issuer who executes this
agreement or an Acknowledgement;
(f) "Shares" means the shares of the Shareholder described in Schedule "B"
to this agreement, as amended from time to time in accordance with section 9;
and
(g) "Executive Director" means the Executive Director appointed under the
Act.
2. PLACEMENT OF SHARES IN ESCROW
2.1 The Shareholder places the Shares in escrow with the Escrow Agent
and shall deliver the certificates representing the Shares to the Escrow Agent
as soon as practicable.
3. VOTING OF SHARES IN ESCROW
3.1 Except as provided by section 4.1(a), the Shareholder may exercise
all voting rights attached to the Shares.
4. WAIVER OF SHAREHOLDER'S RIGHTS
4.1 The Shareholder waives the rights attached to the Shares
(a) to vote the Shares on a resolution to cancel any of the Shares,
(b) to receive dividends, and
(c) to participate in the assets and property of the Issuer on a winding up
or dissolution of the Issuer.
5. ABSTENTION FROM VOTING AS A DIRECTOR
5.1 A Shareholder that is or becomes a director of the Issuer shall
abstain from voting on a directors' resolution to cancel any of the Shares.
6. TRANSFER WITHIN ESCROW
6.1 The Shareholder shall not transfer any of the Shares except in
accordance with Local Policy Statement 3-07 and with the consent of the
Executive Director or the Exchange.
6.2 The Escrow Agent shall not effect a transfer of the Shares within
escrow unless the Escrow Agent has received
(a) a copy of an Acknowledgement executed by the person to whom the Shares
are to be transferred, and
(b) a letter from the Executive Director or the Exchange consenting to the
transfer.
<PAGE>
6.3 Upon the death or bankruptcy of a Shareholder, the Escrow Agent
shall hold the Shares subject to this agreement for the person that is legally
entitled to become the registered owner of the Shares.
6.4 It is understood and acknowledged that the transfer of any of the
Shares within escrow may only be effected with the consent of the Executive
Director or Exchange and may only be made to persons who fall within the
definition of "principal" contained in Section 4.1 of Local Policy #3-07 of the
Executive Director or other persons acceptable to the Executive Director or the
Exchange. The parties agree that a Shareholder who ceases to be a principal,
dies or becomes bankrupt shall retain any performance shares then held by such
Shareholder and is not obligated to transfer or surrender to the Company or any
other person for cancellation, consideration or otherwise, the performance
shares held by such Shareholder.
7. RELEASE FROM ESCROW
7.1 The Shareholder irrevocably directs the Escrow Agent to retain the
Shares until the Shares are released from escrow pursuant to subsection 7.2 or
surrendered for cancellation pursuant to section 8.
7.2 The Escrow Agent shall not release the Shares from escrow unless
the Escrow Agent has received a letter from the Executive Director or the
Exchange consenting to the release.
7.3 The approval of the Executive Director or the Exchange to a release
from escrow of any of the Shares shall terminate this agreement only in respect
of the Shares so released.
8. SURRENDER FOR CANCELLATION
8.1 The Shareholder shall surrender the Shares for cancellation and the
Escrow Agent shall deliver the certificates representing the Shares to the
Issuer
(a) at the time of a major reorganization of the Issuer, if required as a
condition of the consent to the reorganization by the Executive Director or the
Exchange;
(b) where the Issuer's shares have been subject to a cease trade order
issued under the Act for a period of 2 consecutive years; and
(c) any shares not released from the escrow hereby created before the
expiration of five years from the date the Exchange accepts this agreement for
filing shall be surrendered by the shareholder for cancellation forthwith and
the Company and the Escrow Agent hereby agree to take all such actions as may be
necessary to expeditiously effect such cancellation.
9. AMENDMENT OF AGREEMENT
9.1 Subject to subsection 9.2, this agreement may be amended only by a
written agreement among the Parties and with the written consent of the
Executive Director or the Exchange.
<PAGE>
9.2 Schedule "B" to this agreement shall be amended upon
(a) a transfer of Shares pursuant to section 6,
(b) a release of Shares from escrow pursuant to section 7, or
(c) a surrender of Shares for cancellation pursuant to section 8,
and the Escrow Agent shall note the amendment on the Schedule 'B" in its
possession.
10. INDEMNIFICATION OF ESCROW AGENT
10.1 The Issuer and the Shareholders, jointly and severally, release,
indemnify and save harmless the Escrow Agent from all costs, charges, claims,
demands, damages, losses and expenses resulting from the Escrow Agent's
compliance in good faith with this agreement.
11. RESIGNATION OF ESCROW AGENT
11.1 If the Escrow Agent wishes to resign as escrow agent in respect of
the Shares, the Escrow Agent shall give notice to the Issuer.
11.2 If the Issuer wishes the Escrow Agent to resign as escrow agent in
respect of the Shares, the Issuer shall give notice to the Escrow Agent.
11.3 A notice referred to in subsection 11.1 or 11.2 shall be in
writing and delivered to:
(a) the Issuer at Carta Resources Ltd, c/o Page Fraser & Associates, Suite
1100, 1185 West Georgia Street, Vancouver, B.C., V6E 4E6, Attention: L.J. Hogg:
or
(b) the Escrow Agent at Montreal Trust Company of Canada, 510 Burrard
Street, Vancouver, B.C., V6C 3B9
and the notice shall be deemed to have been received on the date of delivery.
The Issuer or the Escrow Agent may change its address for notice by giving
notice to the other party in accordance with this subsection.
11.4 A copy of a notice referred to in subsection 11.1 or 11.2 shall
concurrently be delivered to the Executive Director or the Exchange.
11.5 The resignation of the Escrow Agent shall be effective and the
Escrow Agent shall cease to be bound by this agreement on the date that is 180
days after the date of receipt of the notice referred to in subsection 11.1 or
11.2 or on such other date as the Escrow Agent and the Issuer may agree upon
(the "resignation date").
11.6 The Issuer shall, before the resignation date and with the written
consent of the Executive Director or the Exchange, appoint another escrow agent
and that appointment shall be binding on the Issuer and the Shareholders.
<PAGE>
12. FURTHER ASSURANCES
12.1 The Parties shall execute and deliver any documents and perform
any acts necessary to carry out the intent of this agreement.
13. TIME
13. Time is of the essence of this agreement.
14. GOVERNING LAWS
14.1 This agreement shall be construed in accordance with and governed
by the laws of British Columbia and the laws of Canada applicable in British
Columbia.
15. COUNTERPARTS
15.1 This agreement may be executed in two or more counterparts, each
of which shall be deemed to be an original and all of which shall constitute one
agreement.
16. LANGUAGE
16.1 Wherever a singular expression is used in this agreement, that
expression is deemed to include the plural or the body corporate where required
by the context.
17. ENUREMENT
17.1 This agreement enures to the benefit of and is binding on the
Parties and their heirs, executors, administrators, successors and permitted
assigns.
The Parties have executed and delivered this agreement as of the date
of reference of this agreement.
<PAGE>
THE CORPORATE SEAL OF )
MONTREAL TRUST COMPANY OF )
CANADA was hereunto affixed in )
the presence of: )
)
- ------------------------------- )
Authorized Signatory )
)
- ------------------------------- )
Authorized Signatory ) C/S
THE CORPORATE SEAL OF )
CARTA RESOURCES LTD. )
was hereunto affixed in )
the presence of: )
)
- ------------------------------- )
Authorized Signatory )
)
- ------------------------------- )
Authorized Signatory ) C/S
SIGNED, SEALED AND DELIVERED )
by JOHN E. CHARLESWORTH in )
the presence of: )
)
- ------------------------------- )
Signature )
)
- ------------------------------- )
Address )
)
- ------------------------------- )
Occupation )
SIGNED, SEALED AND DELIVERED )
by THOMAS J. BOYCHUK in )
the presence of: )
)
- ------------------------------- )
Signature )
)
- ------------------------------- )
Address )
)
- ------------------------------- )
Occupation )
SIGNED, SEALED AND DELIVERED )
by H. LEO KING in )
the presence of: )
)
- ------------------------------- )
Signature )
)
- ------------------------------- )
Address )
)
- ------------------------------- )
Occupation )
<PAGE>
SCHEDULE "A" TO ESCROW AGREEMENT
NAME AND ADDRESS NUMBER OF SHARES
OF SHAREHOLDER HELD IN ESCROW
JOHN E. CHARLESWORTH 250,000
THOMAS J. BOYCHUK 250,000
H. LEO KING 250,000
TOTAL: 750,000
THIS AGREEMENT is made and entered into as of this "29" day of April 1999 by and
Between: Peter Ledwidge
Box 627
Dawson City, Yukon
V0B 1G0
Radio Phone JS 35960
(Hereinafter called "Ledwidge")
And: Carta Resources Ltd.
1075 Duchess Ave.
West Vancouver, BC V7T 1G8
Telephone: (604) 922-9264
Fax: (604) 922-9182
(Hereinafter called "Carta")
WHEREAS:
A. Ledwidge owns a 100% beneficial interest in certain mineral claims
located in the Dawson Mining District near the 60 Mile River in the Yukon (the
"Property") as outlined in the attached Schedule "A".
B. Ledwidge is prepared to sell Carta 100% interest in the Property pursuant
to the terms and conditions of this Agreement.
Article 1.0 - WARRANTIES OF LEDWIDGE
1.1 Ledwidge warrants that he is the sole owner of all mineral interest in
the Property subject to the right of the Crown, and has not and will not enter
into any other agreement to sell, lease, option or otherwise dispose of any
interest in the mineral claims making up the Property, and to the best of his
knowledge the said mineral claims are free and clear of all liens, charges and
encumbrances whatsoever.
1.2 To the best of Ledwidge's knowledge the mineral claims comprising the
Property have been properly located and recorded pursuant to the Mineral Tenure
Act of the Yukon and are in good standing until the dates set forth in Schedule
"A".
Article 2.0 - WARRANTIES OF CARTA
2.1 Carta has full right and corporate authority to enter into this
Agreement.
2.2 Carta warrants that it fully understands the terms and conditions of
this Agreement.
<PAGE>
Article 3.0 - SALE BY LEDWIDGE TO CARTA OF 100% INTEREST IN MINERAL
CLAIMS OUTLINED IN THE ATTACHED SCHEDULE "A".
3.1 Ledwidge grants Carta the exclusive right to acquire a 100% interest in
the Property and all rights appurtenant therto by making the following payments
and exploration expenditures.
(a) Payment to Ledwidge a total of Fifty Five Thousand Dollars ($55,000),
such sum shall be paid as follows:
(1) $5,000 is due and payable on the signing of this Agreement.
(2) $10,000 is due and payable on or before May 1, 2000
(3) $10,000 is due and payable on or before May 1, 2001
(4) $10,000 is due and payable on or before May 1, 2002
(5) $20,000 is due and payable on or before May 1, 2003.
(b) Carta must incur Exploration Expenditures by May 1, 2003 of not less
than $300,000 on the Property and any claims that Carta may stake in an area
within three kilometers of the Property.
(c) Signing Consideration
Upon signing of this Agreement, Carta shall within ten days after approval by
the Vancouver Stock Exchange provide Ledwidge with a share certificate for ten
thousand (10,000) common shares of Carta Resources Ltd. payable to Ledwidge in
consideration for signing this Agreement.
3.2 Carta acknowledges that on commencement of Commercial Production, the
Property will be subject to a Net Smelter Return ("NSR") of 1% payable to
Ledwidge per Schedule "B".
3.3 Ledwidge agrees that any claims that he stakes or caused to be staked
within three kilometers of the Property shall be offered, at cost, on a right of
first refusal basis to Carta.
3.4 Carta agrees that any claims that they stake or cause to be staked
within three kilometers of the Property will be subject to a Net Smelter Return
("NSR") of 1% the same as the Property.
Article 4.0 - POWERS, DUTIES AND OBLIGATIONS OF CARTA.
4.1 Carta shall have full right, power and authority to do everything
necessary or desirable to carry out an exploration program on the Property and
to determine the manner of exploration and development of the Property.
<PAGE>
4.2 Carta shall have the duties and obligations to:
(a) keep the Property free and clear of all liens and encumbrances arising
from its operation hereunder (except liens contested in good faith by Carta) and
in good standing by doing and filing, or payment in lieu therof, of all
necessary assessment work and all other payments required to be made which may
be necessary in that regard.
(b) file, for assessment credit all work done on the Property or any claims
that Carta may stake in an area within three kilometers of the Property, up to
and including the $300,000 described in 3.1(b) of this Agreement.
(c) give written notice to Ledwidge at least ninety (90) days prior to the
Expiry Date of the Property if Carta wishes to abandon the Property.
IN WITNESS WHEREOF, THE PARTIES HAVE CAUSED THIS AGREEMENT to be executed as of
the day and year first above written:
Peter Ledwidge
Witnessed by:
Date
Carta Resources Ltd.
Witnessed by:
Date
<PAGE>
Schedule "A"
Mineral claims located in the 60 Mile area of the Dawson Mining District in the
Yukon.
Claims Names and Numbers Expiry Dates
MUG 1 - 8 YCO 7351 - YCO 7358 June 29, 1999
Om 1 - 12 YCO 7359 - YCO 7370 June 29, 1999
A total of 20 mineral claims.
<PAGE>
Schedule "B"
NET SMELTER RETURNS
1. For the purpose of this Agreement, "Net Smelter Returns" shall mean the
actual proceeds received by Carta from a smelter or other place of sale or
treatment with respect to all ore removed by Carta from the Property as
evidenced by its returns or settlement sheets after deducting from the said
proceeds all freight or other transportation costs from the shipping point to
the smelter or other place of sale or treatment.
2. Net Smelter Returns due and payable to Ledwidge hereunder shall be paid
within thirty (30) days after receipt of the said actual proceeds by Carta.
3. Within ninety (90) days after the end of each fiscal year of Carta during
which the Property was in commercial production, the records relating to the
calculation of Net Smelter Returns during the fiscal year shall be audited and
any adjustments shall be made forthwith. The audited statements shall be
delivered to Ledwidge who shall have sixty (60) days after receipt of such
statements to question in writing their accuracy and, failing such question, the
statements shall be deemed correct.
GLEN DICKSON
PAUL DICKSON
1409-675 West Hastings Street
Vancouver B.C.
V6B lN2
Tel: (604) 722-1827
Fax: (604) 408-1377
[email protected]
May 28, 1999
Carta Resources Ltd.
1075 Duchess Avenue
West Vancouver, B.C.
V7T 1G8
Attention: J. E. Charlesworth, President
Dear Sirs:
Re: Quotes Canada Financial Network Ltd. ("QC"')
The purpose of this letter is to offer for sale to Carta Resources Ltd.
("Carta"), on the terms and conditions set out herein, all of the issued shares
of QC.
1. Glen Dickson and Paul Dickson (collectively the "Vendors") have
represented to Carta that:
(a) the Vendors, Glen Dickson and Paul Dickson each as to 250,000 shares,
are the registered and beneficial shareholders of 500,000 shares of QC (the
"Shares"), representing all of the issued shares of QC;
(b) the authorized capital of QC consists of 1,000,000 common shares without
par value, of which 500,000 are issued and outstanding;
(c) there are no options, share purchase warrants, agreements or other
instruments pursuant to which any person has a right to acquire shares of QC,
either from the Vendors or from the treasury of QC;
(d) the Shares are fully paid and non-assessable shares in capital of QC,
and are free and clear of all charges, liens and encumbrances;
(e) QC is a corporation duly incorporated in the province of British
Columbia, and is in good standing with the Registrar of Companies;
<PAGE>
(f) QC is an emerging company engaged in the business of providing stock
market quotation and related services through the internet;
(g) to the best of their knowledge, there is no litigation involving QC, nor
is any litigation pending or threatened against QC;
(h) QC has all permits and licences necessary for it to conduct and continue
to conduct its business in the manner in which it has been conducted hitherto;
and
(i) on the closing of the transaction contemplated in this agreement, QC
will have liabilities of $ 1,000 or less.
2. Carta has represented to each of the Vendors that:
(a) it has full corporate power and authority to enter into this agreement
and the entering into of this agreement does not conflict with any applicable
laws or with its charter documents nor does it conflict with, or result in a
breach of, or accelerate the performance required by any contract or other
commitment to which it is party or by which it is bound;
(b) it is a company in good standing under the laws of the province of
British Columbia;
(c) it is a reporting issuer in good standing under the Securities Act
(British Columbia);
(d) its common shares are listed and posted for trading on the Vancouver
Stock Exchange (the "VSE") and Carta is not in breach of its listing agreement
with the VSE;
(e) it is a reporting issuer only in the province of British Columbia;
(f) its authorized capital consists of 20,000,000 common shares without par
value of which 3,726,142 are issued and outstanding;
(g) there are no shares of Carta which are subject to issuance except a
total of 360,000 of its shares which are subject to issuance pursuant to
incentive stock options, and an additional 25,000 shares which are subject to
issuance pursuant to a property acquisition agreement;
(h) the directors of Carta are as follows:
J. E. Charlesworth
Thomas Boychuk
H. Leo King
(i) Carta in not an "inactive" company on the VSE, and Carta does not intend
to seek such status, nor has it received any notice from the VSE that it will be
deemed to be inactive by the VSE.
3. The Vendors hereby offer to sell all of the Shares to Carta on the
following terms and conditions:
(a) the purchase price for the Shares shall be $240,000 payable as follows:
<PAGE>
(i) $50,000 cash to be paid by certified cheque on the acceptance of this
offer by Carta;
(ii) an additional $190,000 to be paid by the issuance of 1,000,000 shares
of Carta at the deemed price of $0.19 per share, such shares to be issued and
delivered within five business days following the date of issuance (the
"Effective Date") by the VSE of a notice accepting this agreement for filing;
(b) each of Paul Dickson and Glen Dickson shall, if they consent, be
appointed to the board of directors of Carta such that the board of directors of
Carta shall comprise five persons;
(c) each of Paul Dickson and Glen Dickson shall enter into an employment
contract with Carta for a minimum period of two years at the salary of not less
than $2,500 per month;
(d) incentive stock options shall be granted such that each of Glen Dickson
and Paul Dickson shall be granted from time to time an incentive stock option
entitling him to purchase not less than 4% (or such lower percentage as may be
accepted by the optionee) of the issued shares in the capital of Carta at the
minimum price permitted by the VSE for a period of five years;
(e) J.E. Charlesworth and Thomas Boychuk (collectively the "Shareholders")
shall enter into a voting trust agreement with the Vendors such that the
Shareholders, for a period of three years following the closing of the purchase
and sale contemplated hereunder, shall vote their respective shares in the
capital of Carta in a manner which is consistent with the intent of this
agreement, and notwithstanding the generality of the foregoing, in a way as to
implement the provisions of sub-paragraphs 3(b), 3(c) and 3(d) hereof, and
(f) the Vendors shall purchase, by way of private placement from the
treasury of Carta, 160,000 units (each unit comprising one share and one share
purchase warrant with a two year term) at a price of $0.15 per unit, such
purchase to close concurrently with the sale and purchase of the Shares
contemplated hereunder.
4. The Vendors shall promptly provide Carta with all information and
documentation as is requested and required by the applicable securities
regulatory bodies. Carta, at its sole cost and expense, shall prepare any
valuation of QC that may be required by the securities regulatory bodies.
5. Except for the payment of $50,000 referred to in sub-paragraph 3(a)(i),
which payment is unconditional, this agreement is subject to it being accepted
for filing by the VSE and subject to Carta's review and acceptance, acting
reasonably, of QC's audited financial statements. Carta shall advise the
Vendors as to the acceptability of the said financial statements within two
business days of Carta's receipt of them Carta shall use its good faith best
efforts to obtain VSE acceptance of this agreement as quickly as possible;
provided that if the Effective Date has not occurred on or before July 31, 1999,
this agreement shall terminate at the election of the Vendors at any time
thereafter, and the Vendors shall be entitled to retain, as liquidated damages,
the sum of $50,000 paid pursuant to sub-paragraph 3 (a)(i) hereof
<PAGE>
6. The shares to be issued to the Vendors under sub-paragraph 3(a)(ii)
hereof shall be free-trading and non-assessable shares in the capital of Carta,
subject to no pooling or escrow restrictions or hold periods other than those
required by law or the policies of any securities regulatory body having
jurisdiction.
7. All cash and share payments due to the Vendors hereunder shall be made to
Glen Dickson and Paul Dickson, each as to 50%, unless Carta receives written
instructions to the contrary from the Vendors.
8. The Vendors agree that, until the Closing Date, QC will not, without the
prior written consent of Carta, which consent shall not be unreasonably withheld
or delayed
(a) purchase or sell any assets which are of material value;
(b) waive or surrender any material right in connection with its business;
(c) issue any shares;
(d) make any public announcement concerning the transactions contemplated by
this Agreement, other than as required by law or by an regulatory authority
having jurisdiction over QC; or
(e) declare or pay dividends or make any other distribution to shareholders.
9. Until the closing of the transaction contemplated hereunder, QC will
conduct its business only in the ordinary course, and neither QC nor the Vendors
will solicit, initiate, or encourage the submission of proposals or offers from
any other person, entity or group relating to, and will not participate in any
negotiations regarding, or (except an order to comply with any requirement of
law to furnish information to regulatory authorities) furnish to any other
person, entity or group any information with respect to, or otherwise cooperate
in any way with, or assist or participate in, facilitate or encourage, any
effort or attempt with respect to, the disposition of the business of QC or any
of its assets out to the ordinary course or acquisition of any outstanding
shares of QC or any shares in the capital of QC from treasury. The Vendors
agree that if they receive any such proposal or offer in respect to any of the
foregoing, they will immediately notify Carta in writing of all relevant details
relating to the proposal or offer. While this agreement is in effect, neither
the Vendors nor Carta may use or refer to this agreement or any aspect of its
negotiations with the other party, without the other parties prior written
consent, except as may otherwise be required by law.
<PAGE>
If this offer is acceptable to Carta, kindly execute a copy of this letter
and return in to the Vendors on or before June 1, 1999, whereupon this shall
constitute a binding agreement between us, enforceable in accordance with its
terms. Forthwith upon the execution and delivery of this letter agreement, the
parties shall use their respective best efforts to enter into a comprehensive
agreement embodying the terms and conditions of this agreement Failure to return
such an executed copy within such time period shall result in the termination of
this offer.
Yours Truly
Glen Dickson
Paul Dickson
Agreed to and accepted as of the 1st day of June, 1999,
CARTA RESOURCES LTD.
Per:
Authorized Signatory
AFFILIATE CONTRACT
This agreement ("Agreement"), effective as of July 1, 1999 (the "Effective
Date"), contains the understandings and agreement of QuotesCanada.com, Inc.
("QuotesCanada.com") and ON24, Inc. ("ON24") with regard to a strategic alliance
between said parties.
Section 1: Responsibility of Parties
Partnership Opportunity: ON24 Corporation is an Internet media services company
that develops and distributes corporate news/information on the web using video
and audio. The ON24 Network services are targeted to the online investor
audience. ON24 provides daily video and audio content consisting of CEO
interviews, quarterly earnings, company news, products launches, and others
events that could affect a company's stock price.
ON24 Responsibilities: ON24 provides turnkey development of the Daily Newsline
feed. ON24 also provides advanced hosting and technology infrastructure,
including bandwidth and server software for the ON24 streaming media content.
ON24 will deliver a daily news feed through QuotesCanada.com that will be
indexed by ticker symbol, company name, and will include a 3 sentence story
summary.
QuotesCanada.com Responsibilities: Recognize ON24 as the provider of services
described herein during the term of the Agreement. QuotesCanada.com will
distribute the ON24 news feed to its users on its home page. QuotesCanada.com
will be held responsible for displaying ON24's brand name on the home page of
its site. QuotesCanada.com permits ON24 to use the QuotesCanada.com and
corresponding brand identification in conjunction with ON24's activities
hereunder, subject to normal guidelines on trademark usage. QuotesCanada.com
agrees to place ON24's content in a prime location, easily accessible to its
users and very visible.
Section 2: Agreement Specifics
Branding: The ON24 news fee and individual news stories will be branded solely
ON24, and the ON24 logo will be displayed directly above the daily headlines.
Channels: ON24 will provide a dynamic feed for 6 unique channels of investor
content. Headlines for each channel (sans Investor Events) will be updated
through the day. The six channels are:
Channel Description
- ------- -----------
Breaking Financial News Real-time constantly updated breaking news stories
- ------------------------- --------------------------------------------------
IPO's The latest news on IPO's $1 filing - market trading
-------------------------------------------------------------
CEOs Daily Interviews with big name/big company CEOs
-----------------------------------------------------
Product Announcements Coverage of all major new product releases
------------------------------------------------
Analysts Interviews with Wall St.'s best: Benjamin Meeker, Rimer
--------------------------------------------------------------
Investor Events Exclusive coverage of investor conferences like the H & Q
- ---------------- -----------------------------------------------------------
conference
- ----------
Any or all of these channels may be dispersed throughout the site via
channel-specific headline windows.
<PAGE>
Marketing: QuotesCanada.com is obliged to prominently display the financial
news channel or links to the financial news channel in a premier position in
their member section. In addition, QuotesCanada.com is obligated to promote
visibly all agreed upon channels.
Code: In order to receive copyright clearance to display ON24 content,
Affiliate site must display content in the manner in which it is provided with
no modifications or alterations allows without the express written consent of
ON24. The code will be provided in the form shown in exhibit A.
Exclusivity: This agreement will be effective from the date hereof, until the
second anniversary of such date. The contract will be subject to earlier
termination by either party in the event that the other party: (i) becomes
insolvent; (ii) files a petition in bankruptcy; (iii) makes an assignment for
the benefit of its creditors; or (iv) breaches any of its obligations under this
Agreement in any material respect, which breach is not remedied within thirty
(30) days following written notice to such party. Any such termination shall be
without any liability or obligation to the terminating party, other than with
respect to any breach of this Agreement prior to termination. During this term,
QuotesCanada.com will provide written notice to ON24 of any agreement or
arrangement with any other party providing streaming media content for investors
including, but not limited to, product announcements, corporate news, CEO
interviews, quarterly earnings and press releases. ON24 reserves the right to
terminate contract in light of said information.
Provision of Contract: ON24 will provide the Affiliate with it's content in
either of two forms. They are:
Server-Side Include - ON24 will host a portion of said Affiliate's page on it's
site, and will be responsible for continual updating and maintenance of view
window. The data will be provided as an include (inc) file.
XML fee - XML files that are delivered electronically via email (ftp).
In either case, integration of the feed into Affiliate's home page is the
Affiliate's responsibility.
Section 3: Term of Contract
The term of this contract will be binding for a period of one year.
QuotesCanada.com agrees that the date of launch for first ON24 feed on said
Affiliate's homepage will be no more than thirty (30) days after the signing of
this contract.
Section 4: Miscellaneous
This Agreement will bind and inure to the benefit of each party's permitted
successors and assigns. Neither party may assign this Agreement, in whole or in
part, without the other party's written consent; provided, however, that: either
party may assign this Agreement without such consent in connection with any
merger, consolidation, any sale of all or substantially all of such party's
assets or any other transaction in which more than fifty percent (50%) of such
party's voting power is transferred. This Agreement will be governed by and
construed in accordance
<PAGE>
with the laws of the State of California, without reference to conflicts of laws
rules, and without regard to its location of execution or performance. Neither
this Agreement, nor any terms and conditions contained herein may be construed
as creating or constituting a partnership, joint venture or agency relationship
between the parties. No failure of either party to exercise or enforce any of
its rights under this Agreement will act as a waiver of such rights. This
Agreement and its exhibits are the complete and exclusive agreement between the
parties with respect to the subject matter hereof, superseding and replacing any
and all prior agreements, communications, and understandings, both written and
oral, regarding such subject matter. This Agreement may only be modified, or
any rights under it waived, by a written document executed by both parties.
This Agreement may be executed in any number of counterparts, all of which taken
together shall constitute a single instrument. Executions and delivery of this
Agreement may be evidenced by facsimile transmission. UNDER NO CIRCUMSTANCES
SHALL EITHER PARTY OR ANY OF THEIR AFFILIATES BE LIABLE TO ANOTHER PARTY FOR
INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES ARISING FROM
THIS AGREEMENT OR ANY BREACH HEREOF, EVEN IF THAT PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES, SUCH AS, BUT NOT LIMITED TO, LOSS OF REVENUE OR
ANTICIPATED PROFITS OR LOST BUSINESS.
This Agreement is signed by the duly authorized representatives of
QuotesCanada.com and ON24, Inc.
ON24, Inc. QuotesCanada.com, Inc.
By: By:
Name:Sam Polk Name: Paul Dickson
Title: Affiliate Marketing Manager Title: President
Address:833 Market Street, Sixth Floor Address: 1409-675 W.
Hastings
San Francisco, CA 94103 Vancouver, BC V6B 1N2
Sponsorship Agreement: Change of Business/Reverse Takeover
THIS AGREEMENT, dated July 6,1999 is made:
AMONG:
GLOBAL SECURITIES CORPORATION, a member of the Vancouver Stock Exchange (the
"Exchange"), of 11th Floor, Three Bentall Centre, 595 Burrard Street, P.O. Box
49049, Vancouver, British Columbia, V7X 1C4;
(the "Member")
OF THE FIRST PART
AND:
CARTA RESOURCES LTD., a company incorporated under the laws of the Province of
British Columbia, of #1488 - 1090 West Georgia Street, Vancouver, British
Columbia, V6E 3V7;
(the "Issuer")
OF THE SECOND PART
AND:
QUOTES CANADA FINANCIAL NETWORK LTD., a company incorporated under the laws of
the Province of British Columbia, of #1409 - 675 West Hastings Street,
Vancouver, British Columbia, V6B 1N2
(the "Target")
OF THE THIRD PART
WHEREAS:
A. The Issuer's common shares are listed on the Vancouver Stock Exchange
(the "Exchange");
B. The Issuer and certain shareholders of the Target have agreed that the
Issuer will acquire all or substantially all of the issued and outstanding
shares of the Target (the "Transaction");
C. The Transaction will constitute a change of business of the Issuer within
the meaning of Exchange Policy No. 18;
<PAGE>
D. Pursuant to Exchange Policy No. 4 ("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;
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Agreement:
(a) "Act" means the Securities Act, (British Columbia), R.S.B.C. 1996, as
amended, the regulations and rules made thereunder and all administrative policy
statements, blanket orders, notices, directions and rulings issued by the
Commission;
(b) "Approval Date" means the date the Exchange gives notice of approval of
the Transaction;
(c) "Business" means the corporate undertaking of the Issuer on completion
of the Transaction, which will consist substantially of the corporate
undertaking of the Target as presently constituted;
(d) "Commission" means the British Columbia Securities Commission;
(e) "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;
(f) "Exchange Policy" means a policy, as amended, contained in the
Exchange's Corporate Finance Services Policy and Procedures Manual;
(g) "Issuer" has the meaning defined above, and includes any wholly-owned
or, partially-owned subsidiaries of the Issuer (and will include the Target upon
completion of the Transaction);
(h) "Material Change" has the meaning defined in the Act;
(i) "Member" has the meaning defined above;
(j) "Proceeds" means the proceeds from the Public Offering, if any;
(k) "Public Offering" means the offering of the Issuer's securities
contemplated to be made by the Member as agent, contemporaneously with or after
closing, of the Transaction, if any;
(1) "Quarterly Report" means a report of the Issuer prepared on Form 61
to the Act;
<PAGE>
(m) "Reports" means any business plans, engineering reports, geological
reports, technical reports, valuation opinions or similar documents, concerning
the Business;
(n) "Shares" means common shares in the capital of the Issuer;
(o) "Target" has the meaning assigned above;
(p) "Transaction" has the meaning assigned in Recital B; and
(q) "Voting Security" means a security of the Issuer that carries a voting
right under all circumstances.
2. INVESTIGATION BY MEMBER
2.1 The Issuer and the Target shall each at all times afford full
access to the Member and its authorized representatives to all, of their
respective 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 Business.
2.2 The Issuer and the Target shall each forthwith provide the Member
with their most recent audited financial statements, and unaudited financial
statements, prepared as of a date satisfactory to the member.
2.3 The Issuer or Target, as the case may be, shall forthwith provide
the Member with:
(a) a draft Pre-Listing Application and Fact Sheet or a draft disclosure
document appropriate to the Transaction, in the form required by the Exchange,
together with all required schedules or attachments;
(b) a draft disclosure document appropriate to the Transaction and any
financing which may be contemplated to be undertaken concurrently therewith
(e.g. a prospectus or filing statement);
(c) fully completed and executed personal information forms in Form 4B to
the Act for all proposed directors and officers of the Issuer on completion of
the Transaction;
(d) copies of all Reports which are available, in final form or in draft if
such Reports have not been finalized;
(e) questionnaires, in the form provided by the Member, completed in full by
each of the directors and each member of senior management of the Issuer and the
Target; and
(f) copies of all material contracts to which it is a party.
<PAGE>
3. TERM
This Agreement shall be effective from the date hereof until:
(a) the date such notice is given 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; or
(b) the close of business on the Approval Date if the Member gives notice to
the Issuer that it has decided to act as the Issuer's sponsor with regard to the
Transaction.
4. SPONSORSHIP DUTIES
If the Member gives notice to the Issuer that it will act as sponsor with
regard, to, the Transaction, the Member will undertake the sponsorship duties
prescribed by Policy No. 4 relating to the sponsorship.
5. FEE
5.1 The Issuer will pay the Member a fee of $15,000.00, (plus 7%
G.S.T.) in consideration of the Member's acting as the Issuer's sponsor with
regard to the Transaction, payable:
(a) as to 50% + GST upon execution of this Agreement; and
(b) as to 50% + GST upon the receipt of notice from the Exchange that the
Transaction has cleared the Pre-Assessment Stage.
5.2 The Issuer's obligation to pay the above fee earned by the Member
up to the date of termination of this Agreement shall survive the termination of
this Agreement.
6. COVENANTS OF THE ISSUER AND THE TARGET
6.1 If, during the term of this Agreement, a Material Change in the
assets, liabilities (contingent or otherwise), business, operations or capital
of the Issuer or the Target should occur, or be anticipated or threatened, the
Issuer or the Target, as the case may be, shall notify the Member immediately,
in writing, with full particulars of the change.
6.2 If the Issuer or the Target is not certain as to whether a Material
Change has occurred, the Issuer or the Target, as the case may be, 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.
6.3 The Issuer and the Target shall each provide the Member with copies
of all Reports forthwith upon preparation or receipt of the same.
6.4 The Issuer shall notify the Member of:
(a) any chance proposed to be made in the Business;
<PAGE>
(b) any proposed issuance of a Control Block;
(c) any proposed sale or other disposition of any of the outstanding shares
in the capital of any subsidiaries wholly or partially owned by the Issuer or
the Target;
forthwith upon the proposal of such change, issuance, sale or other disposition.
6.5 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 any of its directors
or senior management.
6.6 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 6.4 and 6.5.
6.7 The Issuer shall provide the Member with copies of all Quarterly
Reports, press releases, promotional materials, material change reports,
materials prepared in correction with the Issuer's annual general meeting or any
special meetings of shareholders, annual reports and financial statements
prepared by or for the Issuer, forthwith upon preparation or receipt of the
same.
6.8 The Issuer shall notify the member of any circumstances where it
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.
6.9 The Issuer and the Target shall each at all times use their best
efforts to assist the Member in carrying out its duties as sponsor.
6.10 The Issuer acknowledges that it has appointed Thomas Boychuk as
its officer responsible for carrying out its 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 Thomas Boychuk.
6.11 The Target acknowledges that it has appointed Thomas Boychuk as
its officer responsible for carrying out its 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 Thomas Boychuk.
6.12 Nothing, in this Agreement is or shall be construed as a fetter on
the discretion of the directors of the Issuer or the Target.
6.13 All information relating to the Issuer and the Target provided by
the Issuer and the Target to the Member shall be directed to the corporate
finance department of the Member, and neither the Issuer nor the Target will
disclose to any other person associated with the Member any information relating
to the Issuer or the Target which is not publicly available.
<PAGE>
7. ACKNOWLEDGEMENTS OF ISSUER AND TARGET
7.1 Each of the Issuer and the Target acknowledges that the Member has
informed the, Issuer, the Target and their respective directors and management
of their responsibilities concerning continuous and timely disclosure under the
Act 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 in the business, operations, assets or ownership of the Issuer.
Each of the Issuer and the Target further acknowledges in this regard that each
has been made aware by the Member of the services offered by commercial news
disseminators.
7.2 Each of the Issuer and the Target acknowledges that the Member has
advised the Issuer, the Target and their respective directors about the
Exchange's on-going requirements concerning the minimum distribution of the
Shares on completion of the Transaction.
8. REPRESENTATIONS, WARRANTIES AND
INDEMNIFICATIONS OF THE ISSUER AND THE TARGET
8.1 Each of the Issuer and the Target severally 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 its directors and
senior management personnel and provided to the Member pursuant to this
Agreement shall be accurate and complete;
(b) the descriptions of its assets and liabilities set out in its balance
sheets, including the notes thereto, to be provided to the Member will be true
and correct, will accurately and fairly present its financial position and
condition as at the dates thereof, will reflect all liabilities (absolute,
accrued, contingent or otherwise) as at the dates thereof and will be prepared
in accordance with generally accepted accounting principles, applied on a
consistent basis;
(c) its statements of earnings, retained earnings and chances in financial
position, including the notes thereto, to be provided to the Member will in each
case accurately and fairly present the results of operations for the periods
covered thereby and will be prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout such periods;
(d) its financial position as at the date hereof is no less favourable than
that disclosed in the latest balance sheets provided to the Member, except as
has been disclosed 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 its knowledge, will be fair and accurate in all particulars;
<PAGE>
(f) to the extent that they are required to do so, the authors of the
Reports will possess all of the qualifications required by the Exchange and the
Commission. of authors of such reports;
(g) the information contained in the sources and uses of funds statements to
be provided to the Member hereunder will be accurate and complete;
(h) the execution of this Agreement 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 it is a party, or by which it is bound, or the
terms of its incorporating documents;
(i) the execution of this Agreement has been authorized by all necessary
corporate action on its part;
(j) as of the date hereof:
(i) there has not been any Material Chancre in its assets, liabilities or
obligations (absolute, accrued, contingent or otherwise);
(ii) there has not been any Material Change in its capital or long-term
debt;
(iii) there has not been any Material Change in its business prospects,
condition (financial or otherwise) or the results of its operations;
from those disclosed in the most recent [consolidated] financial statements
provided to the Member of which the Member has not been notified;
(k) since the date of the most recent financial statements provided to the
Member, it has carried on business in the ordinary course;
(l) it is duly registered and licensed to carry on business in the
jurisdictions which it carries on business or owns property;
(m) no order suspending the sale of or ceasing, the trading in any of its
securities 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 its directors or senior management,
contemplated or threatened by any securities commission, regulatory authority or
stock exchange; and
(n) no enquiry or investigation, formal or informal, in relation to it or
its directors or senior management, has been commenced or threatened by any
official or officer of any securities commission, regulatory authority or stock
exchange.
8.2 The representations and warranties of the Issuer and the Target set
forth herein shall continue to be true and accurate throughout the term of this
Agreement.
<PAGE>
8.3 The Issuer and the Target shall each indemnity and save harmless
the Member, and each director, officer, employee or agent of the Member
(collectively, the "Indemnified Parties"), from and against all losses, claims,
damages, liabilities, costs or expenses caused or incurred by the Indemnified
Party, arising or resulting from any breach by the Issuer or the Target of any
of the terms of this Agreement.
8.4 If any action or claim is brought against an Indemnified Party in
respect of which indemnity may be sought from the Issuer or the Target pursuant
to this Agreement, the Indemnified Party will promptly notify the Issuer or the
Target, as the case may be, in writing.
8.5 The Issuer or the Target, as the case may be, will assume the
defence of the action or claim, including the employment of counsel and the
payment of all expenses.
8.6 The Indemnified Party will have the right to employ separate
counsel, and the Issuer or the Target, as the case may be, will pay the fees and
expenses of such counsel.
8.7 The indemnities 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 this Agreement has been extinguished by the
operation of law.
8.8 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, the Target 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 and the Target, 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.
8.9 To the extent that any Indemnified Party is not a party to this
Agreement, the Member will obtain and hold the right and benefit of this section
in trust for and on behalf of such Indemnified Party.
9. RIGHT OF FIRST REFUSAL
9.1 The Issuer will notify the Member of the terms of any equity
financing that it requires or proposes to obtain during, the term of this
Agreement, and the Member will have the right of first refusal to provide any
such financing.
9.2 The right of first refusal must be exercised by the Member within 15
days following the receipt of the notice referred to in Subsection 9.1 by
notice), the Issuer that it will provide the financing on the terms set out in
the notice.
<PAGE>
9.3 If the Member falls to give notice within the time provided for in
Subsection 9.2 hereof, the Issuer shall then be free to make other arrangements
to obtain the financing from another source on the same terms or on terms no
less favourable to the Issuer.
9.4 The Member's right of first refusal will not terminate if, on
receipt of any notice from the Issuer under this Section, the Member fails to
exercise the right.
9.5 The right of first refusal granted under this Section shall
terminate one year from the Approval Date.
10. TERMINATION
10.1 The Member may terminate this Agreement in any of the following
events:
(a) if an adverse Material Change (actual, anticipated or threatened) in the
assets, liabilities (contingent or otherwise), business operations or capital of
the Issuer or the Target 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 or other securities of
the Issuer or the Target 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 or the Target'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 or the Target shall at any time be in breach of any of the
terms of this Agreement;
(e) if the Issuer or the Target determines to take a course of action
referred to in Subsections 6.4 or 6.5, to which the Member has notified the
Issuer in writing it objects; and
(f) if the Member determines that any representation or warranty made by the
Issuer or the Target in this Agreement is false or has become false.
10.2 Any termination by the Member hereunder shall be made by notice in
writing to the Issuer and the Target. 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.
10.3 The Issuer and the Target acknowledge and agree that, if the
Member terminates this Agreement, the member shall comply with all applicable
provisions of Policy No. 4 relating to termination, 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 or the
Target 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,
information which the Issuer or the Target has disclosed to the Member on a
privileged or confidential basis.
<PAGE>
10.4 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 or the Target in respect of any
of the matters contemplated by this Agreement.
10.5 The Issuer or the Target may terminate this Agreement upon giving
10 days' written notice to the Member.
11. EXPENSES OF MEMBER
11.1 The Issuer will pay all of the expenses 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.
11.2 The Member may, from time to time, render accounts for such
expenses to the Issuer for payment on the dates set out in such accounts.
11.3 The Issuer's covenant to pay the Member's expenses shall survive
termination of this Agreement.
12. NOTICE
12.1 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.
12.2 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.
12.3 If notice is mailed, it will be deemed to have been received 48
hours following the, date of mailing of the notice.
12.4 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 facsimile transmission or will be
delivered.
12.5 All notices to the Issuer or the Target shall be sent to the
attention of Thomas Boychuk and Ted Charlesworth respectively.
13. TIME
Time is of the essence of this Agreement and will be calculated in accordance
with the provisions of the Interpretation Act (British Columbia).
<PAGE>
14. LANGUAGE
Wherever the singular or masculine expression is used in this Agreement, that
expression is deemed to include the plural, feminine or body corporate where
required by the context.
15. 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.
16. COUNTERPARTS
This Agreement may be executed in two or more counterparts and 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.
17. HEADINGS
The headings in this Agreement are for convenience of reference only and do not
affect the interpretation of this Agreement.
18. ENUREMENT
This Agreement enures to the benefit of and is binding upon the parties hereto
and their respective administrators, successors and assigns.
19. LAW
This Agreement is governed by the law of British Columbia, and the parties
hereto irrevocably attorn and submit to the jurisdiction of the courts of
British Columbia with respect to any dispute related to this Agreement.
IN WITNESS WHEREOF this Agreement has been executed by the parties hereto as of
the day and year first above written.
THE CORPORATE SEAL OF GLOBAL SECURITIES )
CORPORATION was hereunto affixed )
in the presence of: )
)
)
Authorized Signatory )
)
)
Authorized Signatory ) C/S
THE CORPORATE SEAL OF CARTA RESOURCES )
LTD. was hereunto affixed )
in the presence of: )
)
)
Authorized Signatory )
)
)
Authorized Signatory ) C/S
THE CORPORATE SEAL OF QUOTES CANADA )
FINANCIAL NETWORK LTD. was hereunto affixed )
in the presence of: )
)
)
Authorized Signatory )
)
)
Authorized Signatory ) C/S
<PAGE>
<TABLE>
<CAPTION>
Schedule of Appendix 2: Share Ownership Reverse Takeovers (RTOs), Change of
Business (COBs) or Qualifying Transactions (QTs) - Direct Share Issuances
Category # Name of Person Before RTO, COT or QT After RTO, COB or QT
(show share-
holding from
fully diluted
issuances on Number $amount Percentage Price Number $amount Percentage Price
separate of shares paid of total paid of shares paid of total paid
schedule acquired shares per acquired shares per
share share
- ---------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C>
3 J.E. Charlesworth 162,823 4.36% 75,000 $11,025 3.72% $0.15
3 J.E. Charlesworth 199,600 $ 2,500. 65.35 $ 0.01 4.96%
Total . . . . . . . 362,423 9.71% 437,423 8.68%
3 Thomas Boychuk. . 409,823 10.99% 75,000 $11,025 8.62% $0.15
3 Thomas Boychuk. . 199,600 $ 2,500 5.35% $ 0.01 4.96%
Total:. . . . . . . 609,423 16.34% 684,423 13.58%
3 H. Leo King . . . 55,400 1.48% Nil .10%
3 H. Leo King . . . 199,600 $ 2,500. 5.35% $ 0.01 4.96%
Total:. . . . . . . 255,000 6.83$ 255,000 5.01%
3 Glen Dickson. . . Nil 500,000 $ 95,000 9.92% $0.19
3 Glen Dickson. . . Nil 80,000 $ 12,000 1.59% $0.15
Total:. . . . . . . 580,000 11.51%
3 Paul Dickson. . . Nil 500,000 $ 95,000 9.92% $.019
3 Paul Dickson. . . Nil 80,000 $ 12,000 1.59% $0.15
Total:. . . . . . . 580,000 11.51%
</TABLE>
<TABLE>
<CAPTION>
Schedule of Appendix 2: Share Ownership Reverse Takeovers (RTOs), Change of
Business (COBs) or Qualifying Transactions (QTs) - Fully Diluted Share Issuances
(excluding direct issuances)
Category # Name of Person Before RTO, COT or QT After RTO, COB or QT
(show share- o/s 4,086,142 o/s 9,432,284
holding from
fully diluted
issuances on Number $amount Percentage Price Number $amount Percentage Price
separate of shares paid of total paid of shares paid of total paid
schedule acquired shares per acquired shares per
share share
- ---------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C>
3 J.E. Charlesworth 362,423 8.86% 75,000* $0.15
J.E. Charlesworth 75,000** $0.30
3 Thomas Boychuk 609,423 14.91% 150,000* $0.15
Thomas Boychuk 74,000** $0.30
3 H. Leo King 255,000 6.83% 60,000* $0.15
3 Paul Dickson 80,000** $0.30
3 Glen Dickson 80,000** $0.30
* Stock Options
** Share purchase warrants
</TABLE>
THIS AMENDMENT AGREEMENT MADE THE 29TH DAY OF JULY, 1999
BETWEEN:
GLEN DICKSON and PAUL DICKSON, 1409 - 675 West Hastings Street, Vancouver, B.C.
V6B 1N2
(the "Vendors")
AND:
CARTA RESOURCES LTD., 175 Duchess Avenue, West Vancouver, B.C. V7T 1G8
("Carta")
WHEREAS the Vendors and Carta entered into a letter agreement dated May 28,
1999 (the "Agreement") for the acquisition by Carta of a 100% interest in Quotes
Canada Financial Network Ltd.;
AND WHEREAS the Agreement provides that 1,000,000 shares of Carta shall be
delivered within five business days following the date of issuance by the
Vancouver Stock Exchange of a notice accepting the Agreement for filing (the
"Effective Date");
AND WHEREAS as at the date of this amendment agreement, the Vancouver Stock
Exchange has not issued its notice accepting the Agreement for filing;
AND WHEREAS the parties wish to extend the Effective Date in order to
obtain Vancouver Stock Exchange acceptance;
WITNESSES THAT in consideration of the premises and the mutual covenants
and agreements herein set forth, the parties hereto covenant and agree with each
other to amend the Amendment Agreement as follows:
1. All terms defined in the Agreement will have the same meaning as in this
amendment agreement.
2. Paragraph 5 of the Agreement be amended so as to provide that if the
Effective Date has not occurred on or before September 30, 1999, the Agreement
shall terminate at the election of the Vendors at any time thereafter, and the
Vendors shall be entitled to retain, as liquidated damages, the sum of $50,000
paid pursuant to sub-paragraph 3(a)(i) therein.
3. Except as amended hereby, the Agreement shall remain in full force and
effect.
<PAGE>
IN WITNESS WHEREOF the parties hereto have hereunto set their hands and
seals effective as of the date first above written.
GLEN DICKSON PAUL DICKSON
CARTA RESOURCES LTD.
Per:
Authorized Signatory
WEB LINKING AGREEMENT
THIS AGREEMENT dated as of August 17, 1999
BETWEEN:
CITIZENS BANK OF CANADA, having an office at 401 - 815 West Hastings Street,
Vancouver, British Columbia, V6C 1B4 (fax: (604) 708-7790)
("Citizens")
AND:
QUOTES CANADA FINANCIAL NETWORK LTD., having an office at 1409 - 675 West
Hastings Street, Vancouver, British Columbia, V6B 1N2 (fax: (604) 408-1377)
("Quotes Canada")
(each of Citizens and Quotes Canada are referred to herein as a "Party")
WHEREAS:
A. Quotes Canada maintains a world wide web ("Web") site located at
www.quotescanada.com (the "Investment Site");
B. Citizens maintains a Web site located at www.citizensbank.ca (the
"Citizens Site");
C. Quotes Canada wishes Citizens to develop certain content for the Citizens
Site which Quotes Canada intends to have the Investment Site linked to: and
D. Citizens wishes Quotes Canada to provide links on the Investment Site to
certain pages of the Citizens Site.
NOW THEREFORE the Parties have agreed to the following terms and conditions:
1. Linking. Quotes Canada agrees to provide links from the Investment Site
to the Citizens Site in accordance with the terms of this Agreement and Citizens
hereby agrees to permit Quotes Canada to link from the Investment Site to the
Citizens Site in accordance with the terms of this Agreement. This permission
is given on the basis that Quotes Canada's linking rights hereunder are
non-exclusive and non-transferable. Citizens agrees to provide links from the
Citizens Site to the Investment Site in accordance with the terms of this
Agreement and Quotes Canada hereby agrees to permit Citizens to link from the
Citizens Site to the Investment Site in accordance with the terms of this
Agreement. This permission is given on the basis that Citizens' linking rights
hereunder are non-exclusive and non-transferable.
<PAGE>
2. Link Locations. Quotes Canada agrees to link the Investment Site only to
the locations within the Citizens Site noted on Schedule A (the "Locations")
with such links being only being provided by Buttons (as defined in Section 8).
Citizens agrees to link to the Investment Site only from (i) the Locations; or
(ii) such other Web pages in the Citizens Site as approved by Quotes Canada with
such links only being provided by Buttons.
3. Content and Style. Citizens agrees to develop the Locations within a
reasonable period of time so that they have a style and content as more
particularly described in Schedule A. Quotes Canada shall provide input and
assistance to Citizens in the development of the Locations. The ultimate style
and content of the Locations shall, however, be determined by Citizens in its
sole discretion. Citizens shall be the exclusive owner of the Locations and all
intellectual property rights related thereto (collectively, the "Content").
Quotes Canada hereby assigns to Citizens any and all right, title and interest
throughout the world and universe, including without limitation, all copyright,
trade-marks, trade secrets, patent rights and any other intellectual property
rights in and to the Content which it may otherwise acquire, effective at the
time each is created. Quotes Canada covenants that it shall not, either during
the term of this Agreement of thereafter, directly or indirectly, contest, or
assist any third party to contest, Citizens' ownership of the Content. Without
limiting the generality of the foregoing, Quotes Canada agrees that it shall not
duplicate, reproduce, copy, use or otherwise take any action either directly or
indirectly with respect to the Content except as otherwise expressly set out in
this Agreement. Notwithstanding the foregoing, Citizens acknowledges and agrees
that Link Logos (as defined in Section 7(3)) of Quotes Canada used in the
Locations or otherwise used by Citizens shall be the sole and exclusive property
of Quotes Canada pursuant to Section 7(2) below.
4. Reporting. Within thirty (30) days after the end of each calendar month
Citizens shall provide a report to Quotes Canada of (i) total number of web
pages of each Location that have been loaded into the browser of a Web user
("Impressions"); (ii) total number of completed on-line applications from the
Locations ("Applications"); and (iii) total number of approved and (as
applicable) funded Applications. Quotes Canada and its employees or related
person or parties shall not take any actions, directly or indirectly, which will
artificially increase the number of Impressions. For greater certainty any
information reported by Citizens to Quotes Canada pursuant to this Section shall
be deemed to be Confidential Information (as defined in Section 14(1)).
5. Fees. Citizens agrees that it shall pay to Quotes Canada these fees as
more particularly described in Schedule B (the "Fees"). The Fees shall be
payable within thirty (30) days after the end of each calendar quarter for Fees
calculated and payable with respect to such calendar quarter.
6. Uptime. Quotes Canada acknowledges that the availability of the
Investment Site to users is important for maximizing Impressions. Consequently,
Quotes Canada agrees to use commercially reasonable efforts to make the
Investment Site available to users twenty-four hours a day seven days a week.
<PAGE>
7. Trade-Mark License.
(1) Citizens hereby grants to Quotes Canada a non-exclusive,
non-transferable, limited license to use only those trade-marks on Citizens
listed on Schedule A to create links to the Locations.
(2) Quotes Canada hereby grants to Citizens a non-exclusive,
non-transferable, limited license to use only those trade-marks of Quotes Canada
listed on Schedule A to create links to the Investment Site.
(3) Each Party agrees that:
(a) they will not alter the appearance of the other Party's trade-marks as
listed in Schedule A (the "Link Logos");
(b) they will use only the approved graphical image of the Link Logo
supplied by the other Party;
(c) the Link Logos may not be reduced in size beyond what is electronically
provided by the other Party;
(d) the Link Logo must stand by itself and must include a minimum amount of
[30] pixels of empty space around it so as to avoid unintended associations with
other objects, including without limitation, type, photography, borders and
edges;
(e) they will comply with any other reasonable trade-mark usage policies
established by the other Party from time to time;
(f) all goodwill associated with the other Party's Link Logos shall accrue
to the other Party;
(g) they will not use any other logos, slogans, copyright material or
trade-marks of the other Party except for the Link Logos;
(h) they will not use the other Party's Link Logo as a feature or design
element of another logo;
(i) they will not use the other Party's Link Logo more prominently than its
own company, product or Web site name or Logo; and
(j) they will include a notice on their Web site to the effect that the
other Party's Link Logo is a trade-mark of the other Party and is used under
license.
4. Each Party acknowledges the other Party's worldwide ownership of its
Link Logos and will not contest such ownership.
<PAGE>
8. Approvals. The initial location and appearance, and any subsequent
change in location or appearance, of the other Party's Link Logos or other forms
of links to the other Party's Web site (collectively, the "Buttons") on each
Party's Web site shall be subject to prior approval by the other Party which
approval may be conditional upon the inclusion of notices or statements as
required by the approving Party. Each Party shall notify the other Party in
advance of any move or modification of the Buttons utilized by that Party.
Notwithstanding the foregoing, neither Party shall be responsible for the
content of the other Party's Web site.
9. Appropriate Conduct. Neither Party will use the Buttons in any manner
that implies sponsorship or product endorsement by the other Party. Neither
Party will make negative or disparaging references to the other Party's products
or services. Neither Party will place the other Party's Web pages in a "frame"
within its own site, or otherwise cause a user's browser to frame the other
Party's Web site such that both Party's sites appear on the same screen, without
prior written permission from the other Party. Each Party agrees not to use the
other Party's Link Logos in a manner or take any other action likely to cause
confusion with, dilute or damage the reputation or image of the other Party or
its products or services. Each Party agrees that its Web site will not contain
material that is obscene, pornographic, excessively violent or which breaches
any Canadian federal or provincial statute or regulation. Subject to the
foregoing, each Party reserves the right to alter, modify or discontinue its Web
site at any time.
10. Warranties. Each Party represents and warrants to the other Party that
(i) each has duly registered the domain name of its respective Web site with all
applicable authorities and possesses all rights necessary to use such domain
name, and (ii) the content and material which it has placed on its Web site does
not infringe upon or violate any (a) copyright, patent, trade-mark or
proprietary right of a third party, or (b) any applicable law, regulation or
non-proprietary third-party right.
11. Indemnity. Each Party (the "First Party") agrees to indemnify, defend
and hold harmless the other Party and its directors, officers, employees and
agents from any and all actions, claims, costs, damages, demands, expenses,
liabilities, losses and suites (including reasonable legal fees) arising from,
in whole or in part, (i) a breach by the First Party of the warranties in
Section 10(ii), a claim that the First Party's Link Logos infringe or violate
the intellectual property rights of a third party, or (iii) any acts or
omissions of the First Party or its employees or agents in performing under this
Agreement.
12. Term and Termination.
(1) This Agreement shall continue until (i) such time as either Party
terminates this Agreement upon giving the other Party at least five days written
notice; or (ii) immediately upon delivery by one Party to the other Party of
written notice that such other Party has breached a material provision of this
Agreement.
(2) Upon termination of this Agreement (i) each Party shall immediately
remove all Buttons from its Web site; and (ii) neither Party shall under any
circumstances provide any link from its Web site to the other Party's Web site
nor shall either Party represent or otherwise take any action which could be
construed as suggesting that such Party has any relationship with or is
otherwise associated with the other Party.
<PAGE>
(3) Sections 5, 7(4), 11, 13, 14 and 16 and this Section 12 shall
survive termination of this Agreement.
13. Limitation of Liability Neither Party shall be liable to the other
Party for any special or punitive damages, damages for lost profits or revenues,
or for any other types of economic loss or consequential damages.
14. Confidential and Restricted Information
(1) Each Party acknowledges that the other Party (the "Discloser") may
disclose to such Party (the "Recipient"), or allow the Recipient access to,
trade secrets and other information, in the possession of the Discloser and
owned by the Discloser or entities affiliated, associated or related to the
Discloser, or by their respective suppliers, customers or other business
partners, that is not generally known to the public including, without
limitation, financial information, legal, corporate, marketing, product,
technical, personnel, customer and supplier information and any other
information, in whatever form or media, specifically identified as confidential
by the Discloser, or the nature of which is such that it would generally be
considered confidential in the industry of the Discloser, or which the Discloser
is obliged to treat as confidential or proprietary (collectively, "Confidential
Information"). The Recipient acknowledges that this information is of
significant value to the Discloser.
(2) The non-disclosure obligations of the Recipient under this Section
14 shall not apply to Confidential Information which the Recipient can
establish:
(a) is, or becomes, readily available to the public other than through a
breach of this Section;
(b) is disclosed, lawfully and not in breach of any contractual or other
legal obligation, to the Recipient by a third party; or
(c) through written records, was known to the Recipient, prior to the date
of first disclosure of the Confidential Information to the Recipient by the
Disclosure.
(3) The Recipient acknowledges that Confidential Information is and
shall be the sole and exclusive property of the Discloser or its designate and
that the Recipient shall not acquire any right, title or interest in or to any
Confidential Information.
(4) The Recipient shall keep all Confidential Information strictly
confidential and shall take all necessary precautions against unauthorized
disclosure of the Confidential Information during the term of this Agreement and
thereafter. Without limitation, the Recipient shall not, and shall take all
reasonable steps to ensure that its employees do not, directly or indirectly,
disclose, allow access to, transmit or transfer the Confidential Information to
a third party without the Discloser's consent, or use or reproduce Confidential
Information, in any manner, except as reasonably required to fulfil the purposes
of this Agreement. Notwithstanding the foregoing, to the extent that the
Recipient can establish it is required by law to disclose any Confidential
Information, it shall be permitted to do so, provided that notice of this
requirement to disclose is first delivered to the Discloser, so that it may
contest this potential disclosure. The Recipient shall ensure that all copies
of Confidential Information are clearly marked, or
<PAGE>
otherwise identified as confidential and proprietary to the Discloser, and are
stored in a secure location while in the Recipient's possession, control, charge
or custody.
(5) Notwithstanding any other provisions of this Section 14 or any
other term of this Agreement, there is certain information which Citizens is
prohibited by law from disclosing to third parties including, without
limitation, financial and personal information relating to its customers
(collectively, "Restricted Information"). Quotes Canada therefore covenants and
agrees that it shall not either directly or indirectly take any steps or actions
which result in or which could have the effect of resulting in Quotes Canada
having access to any Restricted Information and Quotes Canada shall take all
reasonable steps to ensure that none of its employees or users of the Investment
Site obtain access to Restricted Information.
15. Citizens Ethical Policy. Quotes Canada covenants and agrees to comply
with Citizens' ethical policy as such policy is amended from time to time (the
"Ethical Policy"). The form of the Ethical Policy as of the date of this
Agreement is attached hereto as Schedule C.
16. General
(1) Entire Agreement. This Agreement constitutes the entire agreement
and understanding between the Parties on the subject hereof and supersedes any
and all prior oral or written agreements, statements, representations,
warranties or understandings by any Party, and all of which are merged herein
and superseded hereby. Neither Party shall be bound by any definition,
warranty, condition or representation other than as expressly set forth in this
Agreement or as may be set forth in a writing signed by the Party to be bound
thereby. This Agreement may not be modified except by a written agreement
signed by the Parties hereto.
(2) Interpretation. In construing this Agreement or determining the
rights of the Parties hereto, no Party shall be deemed to have drafted or
created this Agreement.
(3) Governing Law. This Agreement is made and entered into under the
laws of the Province of British Columbia and shall be interpreted, applied and
enforced under those laws. The Parties hereby agree to attorn to the
jurisdiction of the courts of British Columbia.
(4) Severability. The provisions of this Agreement are severable, and
if any one or more provisions is determined to be illegal, indefinite, invalid
or otherwise unenforceable, in whole or in part, the remaining provisions of
this Agreement shall continue in full force and effect and shall be binding and
enforceable.
(5) Assignment. Neither this Agreement nor any right or duty hereunder
shall be assignable or delegable by either Party without the express consent of
the other Party, and nothing in this Agreement, express or implied, is intended
to confer upon any person other than the Parties hereto any rights or remedies
under or by reason of this Agreement. This Agreement shall be binding upon and
shall inure to the benefit of the Parties hereto and their respective heirs,
administrators, executors, legal representatives, successors in interest and
permitted assigns.
(6) Waiver. No waiver of any provisions of this Agreement shall be
deemed to be or shall constitute a waiver of any provision, whether or not
similar, nor shall any waiver constitute
<PAGE>
a continuing waiver. No waiver shall be binding unless executed in writing by
the Party making the waiver. The failure of any Party to object to any act,
omission or breach by the other Party or to declare the other Party in default,
irrespective of how long such failure continues, shall not constitute a waiver
by such Party of any rights or remedies hereunder or otherwise provided at law
or in equity.
(7) Notices. All notices, requests, demands and other communications
to be given hereunder shall be in writing and shall be deemed to have been duly
given on the date of personal service or on the fifth day after mailing by
certified or registered mail or on the date sent by facsimile addressed to the
Parties at the addresses noted on page one or at such other address as either
Party may hereafter indicate by appropriate notice.
(8) No Agency. Nothing in this Agreement creates a relationship of
agency, partnership, joint venture, or the like between the Parties, and neither
Party shall be entitled to, or purport to, bind or represent the other Party.
Neither party shall do or allow any act which would imply apparent authority to
act for the other Party.
IN WITNESS WHEREOF the Parties have signed this Agreement as of the date first
above written.
CITIZENS BANK OF CANADA
QUOTES CANADA FINANCIAL NETWORK LTD.
By: By:
Name: "Stephen Midgley" Name: "Paul Dickson"
Title: "Manager, Interactive Services" Title: "VP-Operations"
<PAGE>
SCHEDULE A
Locations and Link Logos
1. Locations
URLs Content
(a) Calculators and rate tables
(b) on-line account application ("Account Application")
(c) on-line mortgage application ("Mortgage Application")
(d) on-line VISA applications ("VISA Applications")
(e) on-line personal loan / line-of-credit application ("Loan Application")
(f) Printable term deposit application
(g) Citizens Net
2. Link Logos
(a) Citizens
(b) Quotes Canada
<PAGE>
SCHEDULE B
Fees
Action Fee
1. Approved Account Application $15 Cdn.
2. Approved and Funded Mortgage Application 10 basis points of funds
advanced pursuant to the Mortgage Application which fee is a one time payment to
Quotes Canada and not a reoccurring payment
3. Approved VISA Application $15 Cdn.
4. Approved and Funded Loan Application $15 Cdn.
<PAGE>
SCHEDULE C
Citizens Ethical Policy
J.E. CHARLESWORTH THOMAS J. BOYCHUK
1075 Duchess Avenue 2304 West 5th Avenue
West Vancouver, B.C. V7T 1G8 Vancouver, B.C. V6K 1S5
August 25, 1999
Glen Dickson and
Paul Dickson
1409 - 675 West Hastings Street
Vancouver, B.C. V6B 1N2
Dear Sirs:
Re: Acquisition of Quotes Canada Financial Network Ltd.
(the "Acquisition") by Carta Resources Ltd. (the "Company")
With respect to the acquisition of Quotes Canada Financial Network Ltd. by Carta
Resources Ltd., this is to confirm that J.E. Charlesworth and Thomas Boychuk
shall, for a period of three years following the closing of the Acquisition,
vote their respective shares in the capital of the Company in a manner which is
consistent with the following terms:
(a) that Paul Dickson and Glen Dickson shall be appointed to the board of
directors of the Company;
(b) that the Company shall enter into employment agreements with Paul
Dickson and Glen Dickson for a minimum period of two years at a salary of not
less than $2,500 per month;
(c) that incentive stock options shall be granted to Paul Dickson and Glen
Dickson from time to time entitling each of them to purchase not less than 4%
(or such lower percentage as may be accepted by Paul Dickson and Glen Dickson),
of the issued shares in the capital of the Company at a minimum price permitted
by the Vancouver Stock Exchange for a period of five years.
J.E. CHARLESWORTH THOMAS J. BOYCHUK
INTERNET INFOSPACECANADA CONTENT (WORLD WIDE WEB SITE)
DISTRIBUTION AGREEMENT
THIS AGREEMENT, dated as of August 31, 1999 (the "Effective Date'), is made by
and between InfoSpaceCanada.com, Inc., a Delaware corporation
("InfoSpaceCanada"), a wholly owned subsidiary of InfoSpace.com, Inc.
("InfoSpace"), with offices at 15375 NE 90th Street, Redmond, WA 98052, and
Quotes Canada Inc., a , with offices at
.
RECITALS
This Agreement is entered into with reference to the following facts:
A. InfoSpaceCanada is a wholly owned subsidiary of InfoSpace and,
through InfoSpace, maintains on certain locations of its Web Sites (as defined
below) and makes available to Internet users certain content, resources,
archives, indices, catalogs and collections of information (collectively, such
materials are identified in Exhibit A and referred to herein as the "Content").
B. InfoSpaceCanada wishes to grant certain rights and licenses to
Quotescanada.com Inc. with respect to access to the Content and certain other
matters, and Quotescanada.com Inc. wishes to grant certain rights and licenses
to InfoSpaceCanada with respect to the Quotescanada.com Inc. Web Sites (as
defined below) and certain other matters, as set forth in this Agreement.
AGREEMENT
The parties agree as follows:
Section 1. Definitions
As used herein, the following terms have the following defined meanings:
"Advertising Revenue" is defined on Exhibit C.
"Banner Advertisement" means a rotating banner advertisement of
approximately 468x60 pixels located at the top and/or bottom of a Web Page.
"Co-branded Pages" means, collectively, Query Pages and Results Pages.
"Quotescanada.com Inc. Marks" means those Trademarks of Quotescanada.com
Inc. set forth on Exhibit B hereto and such other Trademarks (if any) as
Quotescanada.com Inc. may from time to time notify InfoSpaceCanada in writing to
be "Quotescanada.com Inc. Marks" within the meaning of this Agreement.
"Quotescanada.com Inc. Web Sites" means, collectively, all Web Sites
maintained by or on behalf of Quotescanada.com Inc. and its affiliates.
<PAGE>
"Graphical User Interface" means a graphical user interface, to be designed
by Quotescanada.com Inc. and InfoSpaceCanada and implemented by InfoSpaceCanada
pursuant to the terms of this Agreement, that contains or implements branding,
graphics, navigation, content or other characteristics or features such that a
user reasonably would conclude that such interface is part of the
Quotescanada.com Inc. Web Sites.
"Impression" means a user's viewing of any discrete screen of a Co-branded
Page containing any Banner Advertisement.
"InfoSpaceCanada Marks" means those Trademarks of InfoSpaceCanada (if any)
set forth on Exhibit B hereto, including prospective Marks and parent company
Marks, and such other Trademarks as InfoSpaceCanada may from time to time notify
Quotescanada.com Inc. in writing to be "InfoSpaceCanada Marks" within the
meaning of this Agreement.
"InfoSpaceCanada Web Sites" means, collectively: (a) the Web Site the
primary home page of which is located at http://www.insospacecanada.com; and (b)
other Web Sites maintained by InfoSpaceCanada and its affiliates.
"Intellectual Property Rights" means any patent, copyright, rights in
Trademarks, trade secret rights, moral rights and other intellectual property or
proprietary rights arising under the laws of the jurisdiction.
"Person" means any natural person, corporation, partnership, limited
liability Quotescanada.com Inc. or other entity.
"Query Page" means any page hosted on the InfoSpaceCanada Web Sites which
incorporates the Graphical User Interface and on which users may input queries
and searches relating to the Content.
"Results Page" means any page hosted on the InfoSpaceCanada Web Sites which
incorporates the Graphical User Interface and displays Content in response to
queries and searches made on a Query Page.
"Trademarks" means any trademarks, service marks, trade dress, trade names,
corporate names, proprietary logos or indicia and other source or business
identifiers.
"Web Site" means any point of presence maintained on the Internet or on any
other public data network. With respect to any Website maintained on the World
Wide Web, such Website includes all HTML pages (or similar unit of information
presented in any relevant data protocol) that either (a) are identified by the
same second-level domain (such as infospace.com) or by the same equivalent level
identifier in any relevant address scheme, or (b) contain branding, graphics,
navigation or other characteristics such that a user reasonably would conclude
that the pages are part of an integrated information or service offering.
2. Certain Rights Grants.
2.1 InfoSpaceCanada Grant. Subject to the terms and conditions of this
Agreement, InfoSpaceCanada hereby grants to Quotescanada.com Inc. the following
rights:
<PAGE>
(a) the right to include on the Quotescanada.com Inc. Web Sites
hypertext links (whether in graphical, text or other format) which enable "point
and click" access to locations of the InfoSpaceCanada Web Sites specified by
InfoSpaceCanada (and subject to change by InfoSpaceCanada from time to time);
and
(b) the right to permit users to link to Results Pages via Query
Pages hosted on the Quotescanada.com Inc. Web Sites.
2.2 Quotescanada.com Inc. Grant. Subject to the terms and conditions
of this Agreement, Quotescanada.com Inc. hereby grants InfoSpaceCanada the
following rights:
(a) the right to include on the InfoSpaceCanada Web Sites
hypertext (whether in graphical, text or other format) which enable "point and
click" access to locations on the Quotescanada.com Inc. Web Sites specified by
Quotescanada.com Inc. (and subject to change by Quotescanada.com Inc. from time
to time); and
(b) the right to sell and serve Banner Advertisements directly on
the Co-branded Pages as provided in Section 4; and
(c) the right to track the number of Impressions.
2.3 Limitations. Quotescanada.com Inc. and its affiliates shall have
no right to reproduce or sub-license, re-sell or otherwise distribute all or any
portion of the Content to any Person via the Internet (including the World Wide
Web) or any success public or private data network. This Agreement and delivery
of the Content or any portion hereunder to Company shall not cause
InfoSpaceCanada to be in violation of any laws of any jurisdiction or third
party agreement, and InfoSpaceCanada may modify the Content if necessary in
InfoSpaceCanada's sole discretion to avoid any such potential violation. In
addition, neither party shall have any right to: (a) edit or modify any Banner
Advertisements submitted for a Co-branded Page (but without limiting
InfoSpaceCanada's right to reject any Banner Advertisements pursuant to this
Agreement); or (b) remove, obscure or alter any notices of Intellectual Property
Rights appearing in or on any materials (including Banner Advertisements)
provided by the other party.
2.4 Quotescanada.com Inc. Marks License. Subject to Section 2.6,
Quotescanada.com Inc. hereby grants InfoSpaceCanada the right to use, reproduce,
publish, perform and display the Quotescanada.com Inc. Marks: (a) on the
InfoSpaceCanada Web Sites in connection with the posting of hyperlinks to the
Quotescanada.com Inc. Web Sites; (b) in and in connection with the development,
use, reproduction, modification, adaptation, publication, display and
performance of the Graphical User Interface and Results Pages; and (c) in
promotional marketing materials, content directories and indexes, and electronic
and printed advertising, publicity, press releases, newsletters and mailings
about InfoSpaceCanada.
2.5 InfoSpaceCanada Marks License. Subject to Section 2.6,
InfoSpaceCanada hereby grants the right to use, reproduce, publish, perform and
display the InfoSpaceCanada Marks: (a) on the Quotescanada.com Inc. Web Sites in
connection with the posting of hyperlinks to the InfoSpaceCanada Web Sites; (b)
in and in connection with the development, user, reproduction in promotional and
marketing materials, content directories and indexes, and electronic and printed
advertising, publicity, press releases, newsletters and mailings about
Quotescanada.com Inc.
<PAGE>
2.6 Approval of Trademark Usage. InfoSpaceCanada shall not use or
exploit in any manner any of the Quotescanada.com Inc. Marks, and
Quotescanada.com Inc. shall not use or exploit in any manner any of the
InfoSpaceCanada Marks, except in such manner and media as the other party may
consent to in writing, which consent shall not be unreasonably withheld or
delayed. Either party may revoke or modify any such consent upon written notice
to the other party.
2.7 Non-exclusivity. Each party acknowledges and agrees that the
rights granted to the other party in this Agreement are non-exclusive, and that,
without limiting the generality of the foregoing, nothing in this Agreement
shall be deemed or construed to prohibit either party from participating in
similar business arrangements as those described herein including soliciting
third party advertisements or other materials, serving advertisements or other
materials to third parties' Web Sites, or hosting or permitting third parties to
place advertisements on such party's Web Site, whether or not, in each such
case, such advertisements are competitive with the products, services or
advertisements of the other party.
3. Certain Obligations of the Parties.
3.1 Graphical User Interface and Co-branded Pages. Quotescanada.com
Inc. and InfoSpaceCanada will cooperate to design the user-perceptible elements
of the Graphical user Interface, with the goals of: (a) conforming the display
output of the "look and feel" associated with the applicable Quotescanada.com
Inc. Web Sites; and (b) maximizing the commercial effectiveness thereof.
Following agreement by the parties upon the design specifications thereof,
InfoSpaceCanada will use commercially reasonable efforts to develop the
Graphical User Interface and to implement the same on Co-branded Pages.
InfoSpaceCanada shall have no liability or obligations for failure to develop or
implement the Graphical User Interface or any Co-branded Pages, as contemplated
by this Section 3.1, or for any nonconformity with the design specifications
agreed upon by the parties, provided InfoSpaceCanada has used commercially
reasonable efforts to develop and implement the same as provided in this Section
3.1.
3.2 Quotescanada.com Inc. Obligations. Quotescanada.com Inc. shall
integrate links to pages of the InfoSpaceCanada Web Sites determined by
InfoSpaceCanada (and subject to change by InfoSpaceCanada from time to time) on
the primary home page for each of the Quotescanada.com Inc. Web Sites. In
addition, the InfoSpaceCanada logo and at least one other link pointing to pages
on the InfoSpaceCanada Web Sites specified by InfoSpaceCanada (and subject to
change by InfoSpaceCanada from time to time) will be present on all Co-branded
Pages. Each link contemplated by this Section 3.2 shall be: (a) prominent in
relation to links to other Web Sites on the applicable page (and in any event at
least as prominent as any link to any third party Web Site); and (b)
above-the-fold (i.e. immediately visible to any user accessing the applicable
page without the necessary of scrolling downward or horizontally).
3.3 Accessibility of Web Sites. Each party will use commercially
reasonable efforts to ensure accessibility of its Web Sites (including, in the
case of InfoSpaceCanada, the accessibility of the Content).
<PAGE>
3.4 Impression Information. InfoSpaceCanada shall track and allow the
Quotescanada.com Inc. to remotely access in electronic form information
maintained by InfoSpaceCanada concerning the number of Impressions.
3.5 Publicity. The parties may work together to issue publicity and
general marketing communications concerning their relationship and other
mutually agreed-upon matters, provided, however, that neither party shall have
any obligation to do so. In addition, neither party shall issue such publicity
and general marketing communications concerning their relationship without the
prior written consent of the other party (not to be unreasonably withheld).
Neither party shall disclose the terms of this Agreement to any third party
other than its outside counsel, auditors, and financial advisors, except as
required by law.
4. Advertising and Revenue Share.
4.1 Placement of Banner Advertisements. In addition to the terms and
conditions otherwise set forth in this Agreement, Banner Advertisements on the
Co-branded Pages shall be governed by the terms and conditions set forth on
Exhibit C.
4.2 Remuneration. All amounts payable under this Agreement are
denominated in Canadian dollars. Other than as explicitly stated on Exhibit C,
InfoSpaceCanada shall have no obligation to share with, allow Quotescanada.com
Inc. to sell, or account to Quotescanada.com Inc. regarding, any sums received
by InfoSpaceCanada or any of its affiliates from any advertisements or
promotions on any of the InfoSpaceCanada Web Sites (including, without
limitation, any of the Co-branded Pages), including, without limitation, any
Banner Advertisements thereon.
5. Warranties, Indemnification and Limitation of Direct Liability.
5.1 Warranties.
Each party to this Agreement represents and warrants to the other party
that:
a) it has the full corporate right, power and authority to enter into this
Agreement and to perform the acts required of it hereunder;
b) its execution of this Agreement by such party and performance of its
obligations hereunder, do not and will not violate any agreement to which it is
a party or by which it is bound;
c) when executed and delivered, this Agreement will constitute the legal,
valid and binding obligation of such party, enforceable against it in accordance
with its terms; and
d) its Web Sites and the content contained therein, and all Banner
Advertisements served or submitted by it to the Co-branded Pages, as the case
may be, will not contain any material that is obscene, libelous or defamatory,
or infringing of any Intellectual Property Rights or other rights of any third
party.
<PAGE>
5.2 Indemnification. Each party (the "Indemnifying Party") will
defend, indemnify and hold harmless the other party (the "Indemnified Party"),
and the respective directors, officers, employees and agent of the Indemnifying
Party, from and against any and all claims, costs, losses, damages, judgments
and expenses (including reasonable attorneys' fees) arising out of or in
connection with any third-party claim alleging any breach of such party's
representations or warranties or covenants set forth in this Agreement. The
Indemnified Party agrees that the Indemnifying Party shall have sole and
exclusive control over the defense and settlement of any such third party claim.
However, the Indemnifying Party shall not acquiesce to any judgment or enter
into any settlement that adversely affects the Indemnified Party's rights or
interests without prior written consent of the Indemnified Party. The
Indemnified Party shall promptly notify the Indemnifying Party of any such claim
of which it becomes aware and shall: (a) at the Indemnifying Party's expense,
provide reasonable cooperation to the Indemnifying Party in connection with the
defense or settlement of any such claim; and (b) at the Indemnified Party's
expense, be entitled to participate in the defense of any such claim.
5.3 Limitation of Liability; Disclaimer.
(a) Liability. UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO
THE OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY
DAMAGES (EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES), ARISING FROM ANY PROVISION OF THIS AGREEMENT, SUCH AS, BUT NOT LIMITED
TO, LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS INFOSPACECANADA'S
LIABILITY (WHETHER ARISING IN TORT, CONTRACT OR OTHERWISE AND NOTWITHSTANDING
ANY FAULT, NEGLIGENCE (WHETHER ACTIVE, PASSIVE OR IMPUTED), PRODUCT LIABILITY OR
STRICT LIABILITY OF INFOSPACECANADA) UNDER THIS AGREEMENT OR WITH REGARD TO ANY
OF THE PRODUCTS OR SERVICES RENDERED BY INFOSPACECANADA UNDER THIS AGREEMENT
(INCLUDING ANY SERVERS OR OTHER HARDWARE, SOFTWARE AND ANY OTHER ITEMS USED OR
PROVIDED BY INFOSPACECANADA OR ANY THIRD PARTIES IN CONNECTION WITH HOSTING THE
CO-BRAND PAGES), THE INFOSPACECANADA WEB SITES AND ANY OTHER ITEMS OR SERVICES
FURNISHED UNDER THIS AGREEMENT WILL IN NO EVENT EXCEED THE COMPENSATION PAID BY
QUOTESCANADA.COM INC. TO INFOSPACECANADA UNDER THIS AGREEMENT.
(b) No Additional Warranties. EXCEPT AS SET FORTH IN THIS AGREEMENT,
NEITHER PARTY MAKES, AND EACH PARTY HEREBY SPECIFICALLY DISCLAIMS, ANY
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND IMPLIED
WARRANTIES ARISING FROM COURSE OF DEALING OR COURSE OF PERFORMANCE), AND EACH
PARTY HEREBY SPECIFICALLY DISCLAIMS ANY CLAIM IN TORT (INCLUDING NEGLIGENCE), IN
EACH CASE, REGARDING THEIR WEB SITES, ANY PRODUCTS OR SERVICES DESCRIBED
THEREON, ANY BANNER ADVERTISEMENTS, OR ANY OTHER ITEMS OR SERVICES PROVIDED
UNDER THIS AGREEMENT. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
QUOTESCANADA.COM INC. ACKNOWLEDGES THAT THE INFOSPACECANADA WEB SITES AND THE
CONTENT (INCLUDING ANY SERVERS OR OTHER HARDWARE, SOFTWARE AND ANY OTHER ITEMS
USED OR PROVIDED BY INFOSPACECANADA OR ANY THIRD PARTIES IN CONNECTION WITH
HOSTING THE INFOSPACECANADA WEB SITES OR THE CONTENT OR PERFORMANCE OF ANY
SERVICES HEREUNDER) ARE PROVIDED "AS IS" AND THAT INFOSPACECANADA MAKES NO
WARRANTY THAT IT WILL CONTINUE TO OPERATE ITS WEB SITES IN THEIR CURRENT FORM,
THAT ITS WEB SITES WILL BE ACCESSIBLE WITHOUT INTERRUPTION, THAT THE SITES WILL
MEET THE REQUIREMENTS OR EXPECTATIONS OF THE OTHER PARTY, OR THAT THE CONTENT OR
ANY OTHER ANY MATERIALS ON ITS WEB SITES OR THE SERVERS AND SOFTWARE THAT MAKES
ITS WEB SITES AVAILABLE ARE FREE FROM ERRORS, DEFECTS, DESIGN FLAWS OR
OMISSIONS.
<PAGE>
6. Term and Termination.
6.1 Term. The term of this Agreement is as set forth on Exhibit C.
6.2 Termination. Either party may terminate the Term upon not less
than ninety (90) days' prior written notice to the other party of any material
breach hereof by such other party, provided that such other party has not cured
such material breach within such ninety (90) day period.
6.3 Effect of Termination. Upon termination or expiration of the Term
for any reason, all rights and obligations of the parties under this Agreement
shall be extinguished, except that: (a) all accrued payment obligations
hereunder shall survive such termination or expiration; and (b) the rights and
obligations of the parties under Section 4.2, 4.3, 5, 6, 7 and 8 shall survive
such termination or expiration.
7. Intellectual Property.
7.1 Quotescanada.com Inc. As between the parties, Quotescanada.com
Inc. retains all right, title and interest in and to the Quotescanada.com Inc.
Web Sites (including, without limitation, any and all content, data, URLs,
domain names, technology, software, code, user interfaces, "look and feel",
Trademarks and other items posted thereon or used in connection or associated
therewith; but excluding any Content or other items supplied by InfoSpaceCanada)
and the Quotescanada.com Inc. Marks along with all Intellectual Property Rights
associated with any of the foregoing. All goodwill arising out of
InfoSpaceCanada's use of any of the Quotescanada.com Inc. Marks shall inure
solely to the benefit of Quotescanada.com Inc.
7.2 InfoSpaceCanada. As between the parties, InfoSpaceCanada retains
all right, title and interest in and to the Content and the InfoSpaceCanada Web
Sites (including, without limitation, any and all content, data, URLs, domain
names, technology, software, code, user interfaces, "look and Feel", Trademarks
and other items posted thereon or used in connection or associated therewith;
but excluding any items supplied by Quotescanada.com Inc.) and the
InfoSpaceCanada Marks, along with all Intellectual Property Rights associated
with any of the foregoing. All goodwill arising out of Quotescanada.com Inc.'s
use of any of the InfoSpaceCanada Marks shall inure solely to the benefit of
InfoSpaceCanada.
<PAGE>
7.3 Copyright Notices. All Co-branded Pages will include the following
acknowledgement, along with the InfoSpaceCanada logo, or other log designated by
InfoSpaceCanada:
"Powered by InfoSpaceCanada" or "Powered by InfoSpaceCanada.com"
InfoSpaceCanada and Quotescanada.com Inc. acknowledge that the Co-branded
Pages may also contain copyright and patent notices of copyrighted or
copyrightable works, including those of InfoSpaceCanada Content providers.
7.4 Other Trademarks. InfoSpaceCanada shall not register or attempt to
register any of the Quotescanada.com Inc. Marks or any Trademarks which
Quotescanada.com Inc. reasonably deems to be confusingly similar to any of the
Quotescanada.com Inc. Marks. Quotescanada.com Inc. shall not register or
attempt to register any of the InfoSpaceCanada Marks or any Trademarks which
InfoSpaceCanada reasonably deems to be confusingly similar to any of the
InfoSpaceCanada Marks.
7.5 Further Assurances. Each party shall take, at the other party's
expense, such action (including, without limitation, execution of affidavits or
other documents) as the other party may reasonably request to effect, perfect or
confirm such other party's ownership interests and other rights as set forth
above in this Section 7.
8. General Provisions.
8.1 Confidentiality. Each party (the "Receiving Party") undertakes to
retain in confidence the terms of this Agreement and all other non-public
information and know-how of the other party disclosed or acquired by the
Receiving Party pursuant to or in connection with this agreement which is either
designated as proprietary and/or confidential or by the nature of the
circumstances surrounding disclosure, ought in good faith to be treated as
proprietary and/or confidential ("Confidential Information"); provided that each
party may disclose the terms and conditions of this Agreement to its immediate
legal and financial consultants in the ordinary course of its business. Each
party agrees to use commercially reasonable efforts to protect Confidential
Information of the other party, and in any event, to take precautions at least
as great as those taken to protect its own confidential information of a similar
nature. Quotescanada.com Inc. acknowledges that the terms of this Agreement are
Confidential Information of InfoSpaceCanada. The foregoing restrictions shall
not apply to any information that: (a) was known by the Receiving Party prior to
disclosure thereof by the other party; (b) was in or entered the public domain
through no fault of the Receiving Party; (c) is disclosed to the Receiving Party
by a third party legally entitled to make such disclosure without violation of
any obligation of confidentiality; (d) is required to be disclosed by applicable
laws or regulations (but in such event, only to the extent required to be
disclosed); or (e) is independently developed by the Receiving Party without
reference to any Confidential Information of the other party. Upon request of
the other party, or in any event upon any termination or expiration of the Term,
each party shall return to the other all materials, in any medium, which
contain, embody, reflect or reference all or any part of any Confidential
Information of the other party. Each party acknowledges that breach of this
provision by it would result in irreparable harm to the other party, for which
money damages would be an insufficient remedy, and therefore, that the other
party shall be entitled to seek injunctive relief to enforce the provisions of
this Section 8.1.
<PAGE>
8.2 Independent Contractors. Quotescanada.com Inc. and InfoSpaceCanada
are independent contractors under this Agreement, and nothing herein shall be
construed to create a partnership, joint venture, franchise or agency
relationship between Quotescanada.com Inc. and InfoSpaceCanada. Neither party
has any authority to enter into agreements of any kind on behalf of the other
party.
8.3 Assignment. Neither party may assign this Agreement or any of its
rights or delegate any of its duties under this Agreement without the prior
written consent of the other party, not to be unreasonably withheld; except that
either party may, without the other party's consent, assign this agreement or
any of its rights or delegate any of its duties under this Agreement: (a) to any
affiliate of such party; or (b) to any purchaser of all or substantially all of
such party's assets or to any successor by way of merger, consolidation or
similar transaction. Subject to the foregoing, this Agreement will be binding
upon, enforceable by, and inure to the benefit of the parties and their
respective successors and assigns.
8.4 Choice of Law; Forum Selection. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Washington
without reference to its choice of law rules, Quotescanada.com Inc. hereby
irrevocably consents to exclusive personal jurisdiction and venue in the state
and federal courts located in King County, Washington with respect to any
actions, claims or proceedings arising out of or in connection with this
Agreement, and agrees not to commence or prosecute any such action, claim or
proceeding other than in the aforementioned courts.
8.5 Nonwaiver; English Language. No waiver of any breach of any
provision of this Agreement shall constitute a waiver of any prior, concurrent
or subsequent breach of the same o any other provisions hereof, and no waiver
shall be effective unless made in writing and signed by an authorized
representative of the waiving party. The parties acknowledge having expressly
required that this Agreement and all documents relating to it be written in
English. Les parties reconnaissent avoir expressement exige que ce Contrat et
tours les documents s'y rapportant soient rediges en anglais.
8.6 Force Majeure. Neither party shall be deemed to be in default of
or to have breached any provision of this Agreement as a result of any delay,
failure in performance or interruption of service, resulting directly or
indirectly from acts of God, acts of civil or military authorities, civil
disturbances, wars, strikes or other labor disputes, fires, transportation
contingencies, interruptions in telecommunications or Internet services or
network provider services, failure of equipment and/or software, other
catastrophes or any other occurrences which are beyond such party's reasonable
control.
8.7 Notices. Any notice or other communication required or permitted
to be given hereunder shall be given in writing and delivered in person, mailed
via confirmed facsimile or e-mail, or delivered by recognized courier services,
properly addressed and stamped with the required postage, to the individual
signing this Agreement on behalf of the applicable party at its address
specified in the opening paragraph of the agreement and shall be deemed
effective upon receipt. Either party may from time to time change the
<PAGE>
individual to receive notices or its address by giving the other party notice of
the change in accordance with this section. In addition, a copy of any notice
sent to InfoSpaceCanada shall also be sent to the following address:
InfoSpaceCanada.com Inc.
15375 NE 90th Street
Redmond, WA 98052
Fax: (425) 883-4846
Attention: General Counsel
8.8 Savings. In the event any provision of this Agreement shall for
any reason be held to be invalid, illegal or unenforceable in any respect, the
remaining provisions shall remain in full force and effect. If any provision of
this Agreement shall, for any reason, be determined by a court of competent
jurisdiction to be excessively broad or unreasonable as to scope or subject,
such provision shall be enforced to the extent necessary to be reasonable under
the circumstances and consistent with applicable law while reflecting as closely
as possible the intent of the parties as expressed herein.
8.9 Integration. This Agreement contains the entire understanding of
the parties hereto with respect to the transactions and matters contemplated
hereby, supersedes all previous agreements or negotiations between
InfoSpaceCanada and Quotescanada.com Inc. concerning the subject matter hereof,
and cannot be amended except by a writing signed by both parties.
8.10 Counterparts; Electronic Signature. This Agreement may be
executed in counterparts, each of which will be deemed an original, and all of
which together constitute one and the same instrument. To expedite the process
of entering into this Agreement, the parties acknowledge that Transmitted Copies
of the Agreement will be equivalent to the original documents until such time as
original documents are completely executed and delivered. "Transmitted Copies"
will mean copies that are reproduced or transmitted via photocopy, facsimile or
other process of complete and accurate reproduction and transmission.
IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement as of the Effective Date.
Quotescanada.com Inc. Canada, Inc. InfoSpaceCanada.com, Inc.
("Quotescanada.com Inc.") ("InfoSpaceCanada")
By: (signature) By (signature)
Name: Paul Dickson Name: Ellen Alben
Title: President Title: SVP, Legal Business Affairs
<PAGE>
EXHIBIT A
CONTENT
The Content consists of, but is not limited to, the following indices,
directories and other items and services (as the same may be updated, revised or
modified by InfoSpaceCanada in its sole discretion from time to time):
1. Business Finder
2. People Finder
3. Reverse LookUp
4. International Listings
5. Net Community
6. Classifieds
7. Mapping
8. Other items and services mutually pre-determined as agreeable content.
<PAGE>
EXHIBIT B
TRADEMARKS
Quotescanada.com Inc. Marks
[Quotescanada.com Inc. to supply list of its applicable trademarks]
InfoSpaceCanada Marks
InfoSpace
Infospace.ca
InfoSpace.com
InfoSpaceCanada.com
Powered by InfoSpace
Powered by Infospace.ca
Powered by InfoSpace.com
Powered by InfoSpaceCanada.com
The Ultimate Directory
The Ultimate Canadian Directory
ActiveShopper
PageExpress
Search Engine For the Real World
The Stuff That Portals Are Made Of
<PAGE>
EXHIBIT C
1. Definitions. As used in this Agreement, the following terms have
the following defined meanings:
"Advertising Revenue" means the gross revenues (less any taxes,
commissions and any required fees payable to third parties) received by a party
for delivering Impressions.
"Co-brand Fee" means a monthly nonrefundable sum in the amount of five
hundred CA dollars ($500 CA).
"Impression Threshold" means 300,000 Impressions per month for any
month during the Term of this Agreement.
"Impression Threshold Date" means the first date on which the number
of Impressions meets or exceeds the Impression Threshold.
2. Term. The term of this Agreement shall commenced on the Effective
Date and, unless earlier terminated or extended as provided below, shall end
upon the third anniversary of this Agreement (the "Term"); provided that the
Term shall be automatically be renewed for successive one year periods unless
either party provides written notice of termination to the other party at least
ninety (90) days prior to the end of the then-current Term.
3. Co-brand Fee. The Company will pay to InfoSpace the Co-brand Fee as
follows:
(a) the Co-brand Fee shall be payable as follows: monthly, and the
initial payment shall be the first day of the month following the date when the
Co-branded Pages are generally accessible to the public; and
(b) the Co-brand Fee for any subsequent time periods shall be payable
on or before the first day of each month.
3. Banner Advertisements. InfoSpaceCanada shall have the exclusive
right to serve and sell Banner Advertisements on the Co-branded Pages. The
appearance of the Banner Advertisements will be as reasonably determined by
InfoSpaceCanada; provided, that InfoSpaceCanada may reject any Banner
Advertisement if such Banner Advertisement would materially adversely affect the
download time or performance of such Co-branded Page. Neither party will submit
for any Co-branded Page any Banner Advertisement which contains any material
that is libellous or defamatory or that infringes any Intellectual Property
Right or other right of any third party.
4. Banner Advertising Revenue Share. The parties will share Banner
Advertising Revenues as follows: InfoSpaceCanada shall remit to Quotescanada.com
Inc. thirty percent (30%) of the Advertising Revenue received by InfoSpaceCanada
for Banner Advertisements on the Co-branded Pages served on or after the first
day of the first month following the Impression Threshold Date. Advertising
Revenue share payments will be reconciled and paid within thirty (30) days
following the calendar quarter in which the applicable Advertising Revenues are
received by InfoSpace. InfoSpaceCanada will provide with each such payment a
report setting forth Advertising Revenues received by it for such quarter and
the percentage thereof payable to Quotescanada.com Inc.
CLICKTHROUGH INTERACTIVE SERVICES INC.
SALES AGENCY WEBSITE AGREEMENT
CLICKTHROUGH INTERACTIVE SERVICES INC., an Ontario incorporated company
("ClickThrough") with its business office address at 86 Bloor Street West, 5th
floor, Toronto, Ontario, M5S 1M5, and Quotes Canada Financial Network Ltd. (the
"Company") with its business office address at 1409 - 675 W. Hasting Street,
Vancouver, British Columbia, V6B 1N2 for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, agree as follows:
1. Definitions:
(i) "Advertisements" means an advertisement placed on the Company's Website
that has the technical specifications and dimensions set out in the ClickThrough
Insertion Order.
(ii) "Advertising Sales Revenues" means the advertising sales revenues
generated and collected by ClickThrough from advertisers from the sale of
Advertisements on the Company's Website.
(iii) "Agency Commission" means the advertising agency commissions, if any,
payable by ClickThrough under the terms of this agreement, as set out in
Schedule "A" attached hereto.
(iv) "ClickThrough Advertising Agreement" means the ClickThrough online
advertiser agreement entered into between an advertiser and ClickThrough, on
behalf of the Company, to place Advertisements for the advertiser on the
Company's Website, substantially in the form attached hereto as Schedule "B", as
may be amended by ClickThrough.
(v) "ClickThrough Banner Swap Program" means the program through which, in
order to drive traffic to the ClickThrough Network, ClickThrough may, at no
charge, use unsold inventory on websites which form part of the ClickThrough
network to place advertisements for other websites which form part of the
ClickThrough Network and which do not compete directly with such website
Advertisements placed by ClickThrough through the ClickThrough Banner Swap
Program may promote only the website which forms part of the ClickThrough
Network, and not a product or service sold by the operator of such website.
(vi) "ClickThrough Network" means the network of websites that have retained
ClickThrough to act as the websites' sales representative to market and sell
advertisements on the pages of the websites to advertisers.
(vii) "ClickThrough Insertion Order" means the ClickThrough insertion order
entered into between ClickThrough and the Company to place Advertisements for an
advertiser on the Company's Website, substantially in the form attached hereto
as Schedule "C", as may be amended by ClickThrough.
<PAGE>
(viii) "ClickThrough Rate Card" means the rate card published by
ClickThrough that sets out ClickThrough's advertising rates, as such rates may
be amended from time to time.
(ix) "CPM" means the dollar cost per thousand impressions with respect to
advertising sold by ClickThrough to an advertiser.
(x) "Impressions" means the delivery of an Advertisement to a visitor of the
Company Website.
(xi) "Ad Tag" means NetGravity Ad Tags used to target and identify
Advertisements for placement on the pages of the website where such
Advertisements are permitted.
(xii) "Net Advertising Sales Revenues" means the Advertising Sales Revenues
less any applicable Agency Commission and NetGravity Charges.
(xiii) "NetGravity" means certain advertising tracking, serving and
reporting software licensed to ClickThrough.
(xiv) "NetGravity Charges" means the fees and charges payable by the Company
to ClickThrough with respect to the trafficking, serving and reporting of
Advertisements by ClickThrough utilizing NetGravity, as set out in Schedule "A"
attached hereto.
(xv) "Territory" means the territory set out in Schedule "A" attached
hereto.
(xvi) "Website" means those website of the Company set out in Schedule "A"
attached hereto.
2. Appointment:
2.1 Appointment. Subject to the terms and conditions set forth in this
agreement, the Company hereby appoints ClickThrough to be its exclusive sales
representative in the Territory to market and sell Advertisements to advertisers
on the Company's Website during the term of this agreement and any renewal
thereof, and ClickThrough hereby accepts such appointment. ClickThrough shall
have the right to appoint sub-agents to perform its duties hereunder.
2.2 ClickThrough Banner Swap Program. company agrees that Company's Website
shall form part of the ClickThrough Network that ClickThrough may use for the
ClickThrough Banner Swap Program.
3. Term and Termination:
3.1 Term. This Agreement shall be effective as of the date of execution by
both parties and shall continue for a period of "one" years from such date.
<PAGE>
3.2 Renewal. This agreement may be renewed for an additional "one" year
term at the end of the original term upon the mutual written agreement of the
parties. In the event the parties have not entered into a mutual written
agreement to renew this agreement prior to the termination of the original term,
the agreement shall automatically renew.
3.3 Termination without Reason. After 9 months from the date hereof, either
party may terminate this agreement without reason upon 90 days written notice by
registered mail to the other party, delivered to such other party at the address
provided on the first page of this agreement and to the attention of the
President of such party
3.4 Termination for Breach. In the event of any breach of this agreement,
the non-breaching party may terminate this agreement by giving 60 days written
notice to the other party in the manner provided for in Section 3.3 above;
provided, however, that this agreement shall not terminate if the other party
has cured the breach prior to the expiration of such 60 day period, or if such
breach cannot be cured within such 60 day period, the other party has taken
steps within such 60 day period to cure the breach and thereafter cured such
breach as soon as practicable.
3.5 Effect of Termination. Upon termination or non-renewal of this
agreement:
(i) ClickThrough shall pay to the Company the monies payable by ClickThrough
as set out in this agreement; provided that the Company was entitled to such
monies under the terms of this agreement during the period immediately preceding
the date of termination or non-renewal;
(ii) the Company shall return to ClickThrough any and all advertising
materials provided by ClickThrough, its advertisers or others to the Company
under this agreement;
(iii) if requested by either party, the parties will issue a mutually
acceptable communication regarding the termination or non-renewal in order to
provide a smooth transition for advertisers of ClickThrough following such
termination or non-renewal;
(iv) termination of this agreement by either party will be without prejudice
to that party's other rights and remedies under this agreement; provided that no
cost or damages shall be paid to or by either party as a result of the
termination of this agreement in accordance with its terms, other than costs and
damages arising out of a breach of this agreement; and
(v) The Company and ClickThrough shall continue to perform such of their
respective obligations to the other until completion of each outstanding
ClickThrough Insertion Order.
3.6 Survival. The parties agree that sections 3.5, 3.6, 8.2, 8.3 and 9.2
shall survive any termination or non-renewal of this agreement.
4. ClickThrough Obligations:
<PAGE>
4.1 ClickThrough Obligations. In consideration of its appointment pursuant
to this Agreement, ClickThrough agrees to fulfill the following obligations:
(i) use commercially reasonable efforts to market and sell Advertisements on
the Company's Website on behalf of the Company;
(ii) maintain an adequately trained advertising sales force to market and
sell Advertisements to advertisers on behalf of the Company;
(iii) market and sell Advertisements using the ClickThrough Advertising
Agreement, the ClickThrough Insertion Order and the ClickThrough Rate Card;
(iv) fairly and accurately represent the Company's Website and not represent
to the public that ClickThrough is marketing and selling Advertisements other
than as independent sales agent for the Company;
(v) Provide to the Company NetGravity Ad Tags, at the Company's sole cost,
for installation by the Company.
5. Company's Obligations:
5.1 Company's Obligations. The Company agrees to fulfill the following
obligations:
(i) provide to ClickThrough, its employees and subagents, all information
and training concerning the Company's Website as may be required by ClickThrough
to market and sell Advertisements on the Company's Website;
(ii) maintain the Company's Website as a high quality website, attractive to
potential advertisers;
(iii) within five (5) business days of request by ClickThrough, make any and
all reasonable and necessary changes to the Company's Website as may be required
to place an Advertisement on the Company's Website, including, without
limitation, changes to accommodate technical specifications and dimensions of an
Advertisement, as more specifically set forth in the ClickThrough Insertion
Order;
(iv) install all NetGravity Ad Tags in the Company's Website as specified by
ClickThrough; and
(v) Place a notice on the home page and on each of the most
highly-trafficked pages on the Company's Website, which notice shall identify
ClickThrough as the Company's exclusive sales agent for marketing and selling
Advertisements on the Company's Website. The notice shall be in a form provided
by ClickThrough and shall be a hyperlink to a URL specified by ClickThrough.
6. Advertising and Bill Procedures:
<PAGE>
6.1 Insertion Order. ClickThrough shall e-mail the Company the ClickThrough
Insertion Order after receipt of the ClickThrough Advertising Agreement signed
by a prospective advertiser. The Company shall approve or disapprove the
ClickThrough Insertion Order within 24 hours of receipt, failing which the
ClickThrough Insertion Order will be deemed to have been accepted by the Company
unless ClickThrough determines, in its sole discretion, that the Advertisement
is of such a nature that the Company's consent would be appropriate.
ClickThrough shall ensure that the ClickThrough Insertion Order is fully
completed and contains all relevant information regarding the advertising in
order to allow the Company to properly review the advertising proposal. Any
incomplete ClickThrough Insertion Order shall be returned to ClickThrough within
24 hours of receipt by the Company, failing which it will be deemed to have been
accepted by the Company. ClickThrough, upon receiving approval for the
ClickThrough Insertion Order from the Company shall enter into the ClickThrough
Advertising Agreement with the advertiser.
6.2 Billing Procedures. ClickThrough shall be responsible for billing and
collecting all accounts from advertisers and others. All payments on such
accounts shall be payable and remitted only to ClickThrough.
7. Commissions, Payments and Other Monetary Terms:
7.1 ClickThrough Commissions. ClickThrough shall be entitled to a
commission for the marketing and selling of advertisements hereunder equal to
the amount set out in Schedule "A" attached hereto which amount shall be
deducted by ClickThrough from Net Advertising Sales Revenues.
7.2 Payments to Company. ClickThrough shall pay to the Company an amount
equal to the Net Advertising Sales Revenues collected by ClickThrough, less
ClickThrough's commissions as set forth in Section 7.1 above. The payment to
the Company shall be accompanied by a statement supporting the calculation for
the payment for such month.
7.3 Calculation Example. An example of the calculation of the applicable
revenue, commission and charges in a typical ClickThrough advertising proposal
would be as follows:
Item Cost
Revenues From an Advertising Proposal $35.00 CPM
Less Applicable Agency Commission @ 15% ($5.25)
Less NetGravity Charges @ $0.50US ($0.80) Canadian Dollar equivalent
Equals Net Advertising Sales $28.95
ClickThrough Commission @ 37.5% $10.86
Balance of Revenue to be paid to Company $18.09
8. Warranty and Indemnity:
8.1 Warranty. Each party hereto warrants to the other it has the right to
enter into this agreement and that by entering in to this agreement and
performing its obligations hereunder, such party shall not be in breach of any
agreement or undertaking with any third party.
<PAGE>
8.2 Indemnification. Each party (the "indemnifying party") shall, at its
own expense, indemnify and hold the other party, its successor and assigns, and
each of their respective directors, officers, employees and agents (collectively
the "indemnified parties") harmless from and against any claims, demands,
actions, causes of action, damage, loss, deficiency, cause, liability and
expense which may be made or brought against any of the indemnified parties or
which any of the indemnified parties may suffer or incur as a result of, in
respect of arising out of any non-performance or non-fulfillment by the
indemnifying party of any term of this agreement. The indemnifying party will
defend, at its expense, any action brought by a third party against any of the
indemnified parties to the extent that the claim by a third party relates to or
arises from the actions or omissions of the indemnifying party, and will
indemnify and hold each of the indemnified parties harmless from and against any
costs, damages and fees incurred by any of the indemnified parties from such
claim
8.3 Limitation of Liability. In no event shall ClickThrough or the Company
be liable to any person for any special, consequential, incidental or indirect
damages, however caused, and whether or not the Company or ClickThrough has been
advised of damages or whether such damages were reasonably foreseeable. In the
event of any breach of the Agreement by ClickThrough, ClickThrough shall only be
liable to the Company for an amount equal to the lesser of the direct damages
actually suffered by the Company as a result of such breach and $5000.00.
9. General:
9.1 Relationship of Parties. Nothing in this agreement shall either render,
or be interpreted or construed to mean, that the Company and ClickThrough are
either partners, joint venturers, employer/employee or related other than as
principal and sales agent. Neither party shall have any authority whatsoever to
obligate or command the other party, contractually or otherwise, except as
expressly provided in this agreement.
9.2 Governing Law. This agreement shall be governed by, and construed in
accordance with, the laws of the Province of Ontario and the laws of Canada
applicable therein. The courts of the Province of Ontario shall have the
exclusive jurisdiction to adjudicate any dispute arising under this agreement
and the parties hereto agree to attorn to the courts of the Province of Ontario.
9.3 Entire Agreement. This agreement together with the Schedules attached
hereto represents the entire agreement between the parties hereto relating to
the subject matter herein. This agreement shall be binding upon and inure to
the benefit of the Company and ClickThrough and their respective successors and
permitted assigns.
9.4 Amendment, Waiver and Assignment. No modification of or amendment to
neither this agreement, nor any waiver of any rights under this agreement shall
be effective unless given in writing signed by the party to be charged. This
agreement shall not be assigned by any party without the prior written consent
of the other party.
<PAGE>
9.5 Interpretation. This agreement has been negotiated by the parties
hereto and shall be thoroughly interpreted in accordance with its terms and
without any rules of construction relating to which party drafted the agreement
being applied in favour of or against the other party.
9.6 Currency. All references to dollar amounts in this agreement are to
Canadian dollars unless expressly referred to in United States dollars.
9.7 Counterparts and Facsimile. This agreement may be executed in
counterpart by facsimile, each of which shall be deemed an original and all of
which together shall constitute one instrument.
9.8 Confidentiality. Each party agrees that it shall retain the non-public,
confidential or proprietary information concerning the other party that is
furnished in connection with this agreement in confidence. Both parties shall
not disclose any of that information to any third party without the prior
written consent of the party which disseminated such information, and except as
may be necessary, upon the advice of outside counsel for the party seeking to
make disclosure, for such party not to be in violation of any law.
9.9 Language. It is the express wish of both parties that this Agreement
and all related documents have been drawn up in English. C'est la volonti
exprisse des parties que la presente convention ainsi que les documents qui s'y
r'attachment soient ridigt en anglais.
ClickThrough Interactive Services Inc. Quotes Canada Financial Network Ltd.
Signature: Signature:
Print Name: Mark Lajoie Print Name: Paul Dickson
Title: Site Relations Manager Title: President
Date: 9.17.99 Date: 9.17.99
<PAGE>
Schedule "A"
ClickThrough Interactive Contract Terms
1(ii) Advertising Agency Commissions: up to 15% of Advertising Sales
Revenues
1(xii) NetGravity Charges: 50.50 US charged at Canadian $ equivalent
1(xiii) Territory: North America
1(xiv) Company Website: www.quotescanada.com
7.1 ClickThrough Commissions: 37.5% of Net Advertising Sales Revenues
Special Terms:
Initialed for identification:
On behalf of the Company Dated: 9.17.99
-------
(Authorized Signing Officer) Name: Paul Dickson
On behalf of ClickThrough Dated: 9.17.99
-------
(Authorized Signing Officer) Name: Mark Lajoie
PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT - UNITS
THIS AGREEMENT, dated for reference September 23, 1999, is made
BETWEEN:
CARTA RESOURCES LTD., of 1075 Duchess Avenue, West Vancouver, British Columbia
V7T 1G8
(the "Issuer")
REFIMA AG, of Muhlenplatx 1, CH-6002, Luzern, Switzerland
(the "Subscriber")
1. SUBSCRIPTION
1.1 The Subscriber, as principal, irrevocably subscribes for and agrees to
purchase 1,270,000 units (the "Units") of the Issuer at a price of $0.38 per
Unit, for an aggregate purchase price of $482,600.
1.2 This is a subscription only and will not become an agreement between the
Issuer and the.
Subscriber until accepted by the Issuer by signing this subscription in the
space below. A reference to "this Agreement" in this subscription refers to the
agreement formed on acceptance by the Issuer.
1.3 The Subscriber waives the necessity for the Issuer to communicate
acceptance of this subscription, and acknowledges that this Agreement will
become binding on acceptance by the Issuer.
1.4 Each Unit will consist of one common share in the capital of the Issuer
(the "Shares") and one-half of a non-transferable share purchase warrant (the
"Warrants").
2. THE WARRANTS
2,1 One whole Warrant will entitle the Subscriber to purchase one common
share of the Issuer at a price of $0.48 per share if exercised during the first
year or at a price of $0.58 per share if exercised during the second year,
exercisable on or before two years from the date of this Agreement
2.2 The terms and conditions which govern the Warrants will be referred to
on the certificates representing the Warrants and will contain, among other
things, anti-dilution provisions and provisions for the appropriate adjustment
in the class, number and price for the Warrant Shares upon the occurrence of
certain events including any subdivision, consolidation or reclassification of
the shares or payments of stock dividends or the amalgamation of the Issuer.
2.3 The issue of the Warrants will not restrict or prevent the Issuer from
obtaining any other financing or from issuing additional securities or rights
during the period within which the Warrants are exercisable.
2.4 In this Agreement, the term "the Securities" means any or all of the
Shares, the Warrants and the shares of the Issuer issued on the exercise of the
Warrants (the "Warrant Shares").
3. PAYMENT AND USE OF FUNDS
3.1 The Subscriber will, on execution of this Agreement, deliver the
subscription price to the Issuer directly at the address referred to above, by
delivery of a certified cheque, bank draft, wire transfer or other form of
immediately available funds.
3.2 Upon receipt of the subscription price by the Issuer, and upon
acceptance by the Issuer of this subscription the Issuer will use its reasonable
efforts to obtain the acceptance of the Exchange to the issue and sale of the
Units to the Subscriber.
3.3 If this private placement is not accepted by the Exchange within the
time set out below, the Issuer will repay the subscription price to the
Subscriber on demand, without interest.
4. CLOSING
4.1 Upon receipt of the approval of the Exchange and payment of the
subscription price, the Issuer will issue and deliver the Shares and the
Warrants to the Subscriber in the names and denominations set out below.
4.2 If the approval of the Exchange to this transaction is not obtained
within 90 days of the date of this Agreement,, either party may elect to
terminate this Agreement by giving written notice of termination to the other
party
5.1 REPRESENTATIONS AND WARRANTIES
The Subscriber represents and warrants to the Issuer that:
(a) the Securities are not being purchased as a result of any material
information about the Issuer's affairs which has not been publicly disclosed;
(b) except to the extent qualified below the Subscriber is purchasing the
Units as principal on his or her own behalf and no other person has a direct or
indirect interest, present or future in the Securities;
(c) the Subscriber qualifies to purchase the Units under one of the
following categories:
(i) portfolio manager;
(i) the Subscriber is purchasing the Units as principal, or is a trust
company, an insurer or a portfolio manager who is purchasing the Units for
accounts that are fully managed by the Subscriber, and the Subscriber is
purchasing Units having an aggregate acquisition cost of not less than $97,000;
or
(ii) the Subscriber is an employee, senior officer or director of the Issuer
or of an affiliate of the Issuer and has not been induced to purchase the Units
by expectation of employment or continued employment; or
(iii) the Subscriber is a spouse, parent, brother, sister, child or close
personal friend of a senior officer or director of the Issuer or of an affiliate
of the Issuer; or
(iv) the Subscriber- is a company, all the voting securities of which are
owned by one or more of the classes of persons referred to in subparagraphs (ii)
or (iii) above;
(d) no person has made any written or oral representation to the Subscriber:
(i) that any person will resell or repurchase the Securities;
(ii) that any person will refund the purchase price of the Securities, other
than as provided in this Agreement;
(iii) relating to the future price or value of the Securities; or
(iv) that the Securities will be listed and posted for trading on a stock
exchange or that application has been made to list and post the Securities for
trading on a stock exchange, other than the Exchange;
(e) the representations, warranties and statements of fact made by the
Subscriber in the Securities Act (British Columbia) Form 20A in the form
accompanying this subscription are true;
(f) the Subscriber is ordinarily -resident at the address Jet out on the
first page of this Subscription;
(g) the Subscriber will promptly notify the Issuer of any material change in
any representation or warranty of the Subscriber in this Agreement between the
time this Agreement is made and the completion of the purchase and sale of the
Units; and
(h) the Subscriber has the legal capacity and competence to enter this into
Agreement and to purchase the Units, the Subscriber has obtained all necessary
authority or consents required to make this subscription and, if the Subscriber
is not an individual, the person signing this subscription has been duty
authorized to sign the subscription on behalf of the Subscriber,
5.2 Acknowledgments
The Subscriber acknowledges that:
(a) pursuant to the laws of British Columbia, the Subscriber will be
required to hold the Shares, and any shares acquired through the exercise of the
Warrants, for a period of 12 months from the date this Agreement has been
executed by the Issuer and the Subscriber has irrevocably committed the
subscription funds to acquire the Units, except as permitted by the Securities
Act (British Columbia) and the Securities Rules (British Columbia) and that the
certificates representing the Shares and the Warrants, and any shares of the
Issuer acquired upon exercise of the Warrants, will contain a legend to that
effect;
(b) resale of the Shares and any shares acquired through exercise of the
Warrants will be restricted beyond the time set out in paragraph 5.2(a) if:
(i) the Subscriber, is an insider of the Issuer, other than a director or
officer, and has not filed all records required to be filed under sections 87
(insider reports) and 90 (Form 4B personal information form) of the Securities
Act (British Columbia); or
(ii) the Subscriber is a director or officer of the Issuer and has not filed
all records required to be filed under sections 87 and 90 of the Securities Act
(British Columbia) or the Issuer has not filed all records required to be filed
under Part 12 (continuous disclosure) of the Securities Act (British Columbia)
and the Securities Rules (British Columbia); or
(iii) the Subscriber is, or subsequently becomes, a control person within
the meaning of the Securities Act (British Columbia); or
(iv) an unusual effort is made to prepare the market or create a demand for
the securities; or
(v) an extraordinary commission or consideration is paid in respect of the
trade; or
(vi) required by the laws of the jurisdiction in which the Subscriber
resides;
(c) the Subscriber has obtained all the necessary information concerning the
Issuer that he requires and that he does not require any additional information
about the Issuer, its shares or the proposed private placement;
(d) an investment in the Securities is highly speculative and could result
in a total loss of his investment and that he has a net worth sufficient to
permit him to afford a. total loss of his investment without substantially
affecting his present business affairs;
(e) the Warrants are non-transferable;
(f) this subscription for Units is irrevocable;
(g) the Issuer will rely on the representations and warranties of the
Subscriber in completing the sale of the Units to the Subscriber;
(h) the Issuer has not provided the Subscriber with investment, legal or tax
advice or acted as an adviser with respect to this subscription and the
Subscriber is relying solely on his or her own professional advisers, if any,
for any necessary advice;
(i) the Subscriber has had an opportunity to ask questions and receive
answers concerning the Issuer and its proposed business. and that any request
for such information has been complied with to the Subscriber's satisfaction;
(j) the Shares and any shares acquired through the exercise of the Warrants
have not and will not be registered under the United States Securities Act of
1933 or the securities laws of any state and may not be offered or sold or
re-offered or resold, directly or indirectly, in the United States or to or for
the account or benefit of a U.S. Person without registration under the United
States Securities Act of 1993 and the securities laws of all applicable states
unless an exemption from registration is available; and
(k) neither the Shares or any shares acquired through the exercise of the
Warrants may be transferred to or exercised in the United States or by or on
behalf of a U.S. Person, unless such Shares and Warrant Shares are registered
under the United States Securities Act of 1933 and applicable state securities
laws or unless an exemption from such registration is available;
(l) a finder's fee is payable in cash by the Issuer in connection with this
Private Placement.
6. MISCELLANEOUS
6.1 This Agreement is governed by the laws of British Columbia, and the
parties hereby irrevocably attorn to the non-exclusive jurisdiction of the
courts of British Columbia.
6.2 Any notice, payment, or other communication to a party under this
Agreement may be made, given or served by telecopier or other similar means of
recorded transmission or by hand delivery, courier or by mail. Notices sent by
telecopier or other similar means of recorded transmission, or by hand delivery
or courier, will be deemed to be received at 9:00 a.m. local time on the day
following the transmission or delivery. Local time refers to the time in the
location where the notice is received. Notices sent by mail will be deemed to
be received one week following mailing. Each party may change his or its
address for service at any time by notice in writing to the other.
6.3 Time is of the essence of this Agreement.
6.4 This Agreement and the rights and obligations contained in this
Agreement may not be assigned by the Subscriber or the Issuer.
6.5 The parties will execute and deliver all such further documents and
instruments and do all such further acts and things as the other party may
reasonably require to carry out the full intent and meaning of this Agreement
and to effect the issuance of the Shares and the Warrants to the Subscriber.
6.6 This Agreement contains the whole agreement between the Issuer and the
Subscriber in respect of the purchase and sale contemplated and there are no
warranties, representations, terms, conditions or collateral agreements,
express, implied or statutory, other than those expressly set forth in this
Agreement.
REFIMA AG
By:
Authorized Signatory
A C C E P T A N C E
The Issuer accepts this subscription in respect of 1,270,000 Units, this "23"
day of September, 1999
CARTA RESOURCES LTD.
By:
Authorized Signatory
<PAGE>
Name and Address of Subscriber:
REFIMA AG
- ----------
Name
Muhlenplatz 1, P.O. Box 4851
- --------------------------------
Street Address
CH-6002, Luzern, Switzerland
- ------------------------------
City Country
REFIMA AG (0041) 41210740
- ----------------------------
Postal Code Telephone Number Facsimile Number
Registration and Delivery Instructions
Address for Delivery, if different from the address above
Number and Denominations of Certificates in multiples of 1,000
Details of Subscription
Number of Units: 1,270,000
---------
Price per Unit: $0.38
----
Total Price: $482,6000 (If no instructions are given, a single certificate
- ------------------------ ---------------------------------------------------
will be issued)
- -----------------
<PAGE>
SCHEDULE "A"
FORM 20A (NIP)
B.C. Securities Act
Acknowledgment of Purchaser that is not an Individual
1. Refima AG (the "Purchaser") has agreed to purchase from Carta Resources
Ltd. (the "Issuer") 1,270,000 Units (the "Securities") of the Issuer.
2. The Purchaser is purchasing the Securities as principal, or is a trust
company, insurer or portfolio manager acting on behalf of fully managed accounts
and is deemed to be purchasing as principal under section 74(1) of the British
Columbia Securities Act (the "Act").
3. On closing of the agreement of purchase and sale, the Purchaser will be
the beneficial owner of the Securities, except where the Purchaser is a trust
company, insurer or portfolio manager acting on behalf of fully managed accounts
under section 74(1) of the Act.
4. The Purchaser has not received an offering memorandum describing the
Issuer and the Securities.
5. The Purchaser acknowledges that:
(a) no securities commission or similar regulatory authority has reviewed or
passed on the merits of the Securities, AND
(b) there is no government or other insurance covering the Securities, AND
(c) the Purchaser may lose all of its investment, AND
(d) there are restrictions on the Purchaser's ability to resell the
Securities and it is the responsibility of the Purchaser to find out what those
restrictions are and to comply with them before selling the Securities, AND
(e) the Purchaser will not receive a prospectus that the Act would otherwise
require be given to the Purchaser because the Issuer has advised the Purchaser
that the Issuer is relying on a prospectus exemption, AND
(f) because the Purchaser is not purchasing the Securities under a
prospectus, the Purchaser will not have the civil remedies that would otherwise
be available to the Purchaser, AND
(g) the Issuer has advised the Purchaser that the Issuer is using an
exemption from the requirement to sell through a dealer registered under the
Act, except purchases referred to in paragraph 6(b), and as a result the
Purchaser does not have the benefit of any protection that might have been
available to the Purchaser by having a dealer act on the Purchaser's behalf.
6. The Purchaser also acknowledges that:
(a) it is a "sophisticated purchaser" as described in paragraph 2 in the
attached Appendix A [circle the applicable subparagraph in paragraph 2 in
Appendix A]; OR
(b) the Securities were purchased under section 128(c) ($25,000 - registrant
required) of the Rules and an authorized signatory of the Purchaser has spoken
to a person ____________________________ [Name of registered person] (the
"Registered Person") who has advised the authorized signatory that the
Registered Person is registered to trade or advise in the Securities and that
the purchase of the Securities is a suitable investment for the Purchaser; OR
(c) the Purchaser is a corporation, all the voting securities of which are
beneficially owned by one or more of:
(i) a close personal friend of a senior officer or director of the Issuer,
or of an affiliate of the Issuer, OR
(ii) a senior officer or director of the Issuer, or of an affiliate of the
Issuer, OR
(iii) a spouse, parent, brother, sister, or child of a senior officer or
director of the Issuer, or of an affiliate of the Issuer.
7. If the Purchaser is referred to in paragraph 6(a), the Purchaser
acknowledges that, on the basis of information about the Securities furnished by
the Issuer, the Purchaser is able to evaluate the risks and merits of the
Securities because: [circle one]
(a) of the financial, business or investment experience of the Purchaser, OR
(b) the Purchaser has received advice from a person ____________________
[Name of adviser] (the "Adviser") who has advised the Purchaser that the Adviser
is:
(i) registered to advise, or exempted from the requirement to be registered
to advise, in respect of the Securities, AND
(ii) not an insider of, or in a special relationship with, the Issuer.
The statements made in this report are true.
DATED the "22" day of "October", 1999.
Signature of Authorized Signatory of Purchaser
KURT MARTY, Director
----------------------
Name and Office of Authorized Signatory of Purchaser
REFIMA AG
----------
Name of Purchaser
Muhlenplatz 1, P.O. Box 4851
--------------------------------
Address of Purchaser
CH-6002 Luzern, Switzerland
-----------------------------
<PAGE>
APPENDIX A TO FORM 20A (NIP)
[Circle the applicable subparagraph in paragraph 2.]
"Sophisticated purchaser" means a purchaser that, in connection with a
distribution, gives an acknowledgment under section 135 of the Rules to the
Issuer, where the Issuer does not believe, and has no reasonable grounds to
believe, that the acknowledgment is false, acknowledging both that:
1. the purchaser is able, on the basis of information about the investment
furnished by the Issuer, to evaluate the risks and merits of the prospective
investment because of:
(a) the purchaser's financial, business or investment experience, OR
(b) advice the purchaser receives from a person who is registered to advise,
or is exempted from the requirement to be registered to advise, in respect of
the security that is the subject of the trade (the "Security") and who is not an
insider of, or in a special relationship with, the Issuer of the Security; AND
2. the purchaser is one of the following [circle one]:
(a) a person registered under the Securities Act, OR
(b) an individual who:
(i) has a net worth, or net worth jointly with the individual's spouse, at
the date of the agreement of purchase and sale of the Security, of not less than
$400,000, OR
(ii) has had in each of the 2 most recent calendar years, and reasonably
expects to have in the current calendar year:
- - annual net income before tax of not less than $75,000, OR
- - annual net income before tax, jointly with the individual's spouse, of not
less than $125,000; OR
(c) a corporation, partnership or trust that:
(i) has net assets of not less than $400,000, OR
(ii) has had in each of the 2 most recent calendar years, and reasonably
expects to have in the current calendar year, net income before tax of not less
than $125,000, OR
(d) a corporation in which all of the voting shares are beneficially owned
by sophisticated purchasers or of which the majority of the directors are
sophisticated purchasers, OR
(e) a general partnership in which all of the partners are sophisticated
purchasers, OR
(f) a limited partnership in which a majority of the general partners are
sophisticated purchasers, OR
(g) a trust in which all of the beneficiaries are sophisticated purchasers
or the majority of the trustees are sophisticated purchasers.
REPUBLISHING AGREEMENT
THIS REPUBLISHING AGREEMENT dated as of October 27, 1999
BETWEEN:
QUOTES CANADA FINANCIAL NETWORK LTD.,
having an office at
1409 - 675 W. Hastings Street
Vancouver, BC
("Licensor")
AND:
EXACTTRADE.COM
A Service of Rampart Securities Inc.,
having an office at
55 University Ave. suite 1000
Toronto, Ont. M5J 2P8
("Exacttrade.com")
(each of Quotes Canada and Exacttrade.com are referred to herein as a "Party")
WHEREAS:
A. Licensor is the owner or licensee of rights to certain financial content
more particularly described in Schedule A attached hereto and incorporated
herein by reference (the "Material");
B. EXACTTRADE.COM owns, operates and maintains a Web site located at
www.Exacttrade.com and other sites located at other domain names (the
"EXACTTRADE.COM Site")
NOW THEREFORE the Parties have agreed to the following terms and conditions:
1. License. Licensor hereby grants to Exacttrade.com a non-exclusive,
worldwide license for the term set out below to use the Material subject to the
following provisions. The License granted pursuant to this Section 1 shall
include the non-exclusive right to (i) publish, publicly display and otherwise
exploit and utilize, the Material, and all or any portions, adaptations or
updates thereof, and (ii) make use of such trademarks and names of Licensor as
are associated with the material with such quality control requirements as
Licensor may reasonably specify.
2. Delivery. Licensor shall provide EXACTTRADE.COM the Material at such
time and in such formats as are set forth in Schedule A. The parties may agree
to add content to the Material by executing an additional document in the form
of Schedule A and any such document shall constitute an addition to the
Agreement and shall be subject to all the terms hereof.
3. Content and Style. Licensor shall be the exclusive owner of the Material
and all intellectual property rights related thereto. Exacttrade.com covenants
that it shall not, either during the term of this Agreement or thereafter,
directly or indirectly, contest, or assist any third party to contest, the
Licensor's ownership of the Material. Notwithstanding the foregoing, neither
Party shall be responsible for the content of the other Party's Web site.
4. Linking. EXACTTRADE.COM shall display a logo, no larger than 164 pixels
wide and 35 pixels tall, supplied by the Licensor and hyper linked to a URL
specified by the Licensor (the "Link Logos") on every page of the EXACTTRADE.COM
Site containing the Materials. The placement Link Logos shall be at
Exacttrade.com's reasonable discretion.
5. Trade-Mark License.
(1) Licensor hereby grants to EXACTTRADE.COM a non-exclusive,
non-transferable, limited license to use only those trade-marks of the Licensor
to create links to the Licensor's site.
(2) Exacttrade.com agrees that:
(a) they will not alter the appearance of the other Licensor's trade-marks;
(b) Exacttrade.com will use only the approved graphical image of the Link
Logo supplied by the Licensor;
(c) the Link Logos may not be reduced in size beyond what is electronically
provided by the Licensor provided, however that Link Logo shall not be larger in
size than 164 pixels wide and 35 pixels high;
(d) the Link Logo must stand by itself and must include a minimum amount of
[30] pixels of empty space around it so as to avoid unintended associations with
other objects, including without limitation, type, photography, borders and
edges;
(e) Exacttrade.com will comply with any other reasonable trade-mark usage
policies established by the Licensor from time to time;
(f) all goodwill associated with the Licensor's Link Logos shall accrue to
the Licensor;
(g) Exacttrade.com will not use any other logos, slogans, copyright material
or trade-marks of the Licensor as set forth herein;
(h) Exacttrade.com will not use the Licensor's Link Logo as a feature or
design element of another logo;
(i) Exacttrade.com will not use the Licensor's Link Logo more prominently
than its own company, product or Web site name or Logo; and
(j) Exacttrade.com will include a notice on its Web site to the effect that
the Licensor's Link Logo is a trade-mark of the Licensor and is used under
license.
(4) Exacttrade.com acknowledges the Licensor's worldwide ownership of
its Link Logo and will not contest such ownership.
6. Approvals. The initial location and appearance, and any subsequent
change in location or appearance, of the Link shall be subject to prior approval
by the Licensor which approval may be conditional upon the inclusion of notices
or statements as required by the Licensor.
7. Appropriate Conduct. Neither Party will use the Link Logos in any manner
that implies sponsorship or product endorsement by the other Party. Neither
Party will place the other Party's Web pages in a "frame" within its own site,
or otherwise cause a user's browser to frame the other Party's Web site such
that both Party's sites appear on the same screen, without prior written
permission from the other Party. Each Party agrees that its Web site will to
the best of either party's knowledge not contain material that is obscene,
pornographic, excessively violent or which breaches any Canadian federal or
provincial statute or regulation. Subject to the foregoing, each Party reserves
the right to alter, modify or discontinue its Web site at any time.
8. Warranties. Exacttrade.com represents and warrants to the Licensor that
(i) it has duly registered the domain name of its respective Web site with all
applicable authorities and possesses all rights necessary to use such domain
name, and (ii) the content and material (other than the Material) which it has
placed on its Web site to the best of Exacttrade.com's knowledge does not
infringe upon or violate any (a) copyright, patent, trade-mark or proprietary
right of a third party, or (b) any applicable law, regulation or non-proprietary
third-arty right.
Licensor represents and warrants to Exacttrade.com that (i) the Material does
not infringe upon or violate any (a) copyright, patent, trade-mark or
proprietary right of a third party, or (b) any applicable law, regulation or
non-proprietary third-party right.
9. Indemnity. Each Party (the "First Party") agrees to indemnify, defend
and hold harmless the other Party and its directors, officers, employees and
agents from any and all actions, claims, costs, damages, demands, expenses,
liabilities, losses and suits (including reasonable legal fees) arising from, in
whole or in part, (i) a breach by the First Party of the warranties, (ii) a
claim that the First Party's Link Logos infringe or violate the intellectual
property rights of a third party, or (iii) any acts or omissions of the First
Party or its employees or agents in performing under this Agreement.
10. Term and Termination.
(1) This Agreement shall remain in effect for the period of one year after
which the term shall be reviewed automatically for additional one year periods
unless either party gives written notice not to renew no later than 60 days
before the end of the then-current term. In the event that either Party has
breached a material provision of this Agreement and such breach hasn't been
corrected within 5 business days after notice from the First Party, the other
Party may terminate this agreement immediately by written notice.
(2) Upon termination of this Agreement Exacttrade.com shall (i) immediately
remove all Link Logos from its Web site; and (ii) Exacttrade.com will delete the
Materials from the EXACTTRADE.COM Site and cease offering visitors to the site
access to the Materials as soon as possible; and (iii) neither Party shall under
any circumstances provide any link from its Web site to the other Party's Web
site nor shall either Party represent or otherwise take any action which could
be construed as suggesting that such Party has any relationship with or is
otherwise associated with the other Party.
11. Limitation of Liability. Neither Party shall be liable to the other
Party for any special or punitive damages, damages for lost profits or revenues,
or for any other types of economic loss or consequential damages.
12. Confidential and Restricted Information.
(1) Each Party acknowledges that the other Party (the "Discloser") may
disclose to such Party (the "Recipient"), or allow the Recipient access to,
trade secrets and other information, in the possession of the Discloser and
owned by the Discloser or entities affiliated, associated or related to the
Discloser, or by their respective suppliers, customers or other business
partners, that is not generally known to the public including, without
limitation, financial information, legal, corporate, marketing, product,
technical, personnel, customer and supplier information and any other
information, in whatever form or media, specifically identified as confidential
by the Discloser, or the nature of which is such that it would generally be
considered confidential in the industry of the Discloser, or which the Discloser
is obligated to treat as confidential or proprietary (collectively,
"Confidential Information"). The Recipient acknowledges that this information
is of significant value to the Discloser.
(2) The non-disclosure obligations of the Recipient under this Section
12 shall not apply to Confidential Information which the Recipient can
establish:
(a) is, or becomes, readily available to the pubic other than through a
breach of this Section;
(b) is disclosed, lawfully and not in breach of any contractual or other
legal obligation, to the Recipient by a third party; or
(c) through written records, was known to the Recipient, prior to the date
of first disclosure of the Confidential Information to the Recipient by the
Discloser.
(3) The Recipient acknowledges that Confidential Information is and
shall be the sole and exclusive property of the Discloser or its designate and
that the Recipient shall not acquire any right, title or interest in or to any
Confidential Information.
(4) The Recipient shall keep all Confidential Information strictly
confidential and shall take all necessary precautions against unauthorized
disclosure of the Confidential Information during the term of this Agreement and
thereafter. Without limitation, the Recipient shall not, and shall take all
reasonable steps to ensure that its employees do not, directly or indirectly,
disclose, allow access to, transmit or transfer the Confidential Information to
a third party without the Discloser's consent, or use or reproduce Confidential
Information, in any manner, except as reasonably required to fulfill the
purposes of this Agreement. Notwithstanding the foregoing, to the extent that
the Recipient can establish it is required by law to disclose any Confidential
Information, it shall be permitted to do so, provided that notice of this
requirement to disclose is first delivered to the Discloser, so that it may
contest this potential disclosure. The Recipient shall ensure that all copies
of Confidential Information are clearly marked, or otherwise identified as
confidential and proprietary to the Discloser, and are stored in a secure
location while in the Recipient's possession, control, charge or custody.
(5) Notwithstanding any other provision of this Section 12 or any other
term of this Agreement, there is certain information which the Licensor is
prohibited by law from disclosing to third parties including, without
limitation, financial and personal information relating to its customers
(collectively, "Restricted Information Exacttrade.com therefore covenants and
agrees that it shall not either directly or indirectly take any steps or actions
which result in or which could have the effect of resulting in Exacttrade.com
having access to any Restricted Information and Exacttrade.com shall take all
reasonable steps to ensure that none of its employees or users of the
Exacttrade.com Site obtain access to Restricted Information.
13. General
(1) Entire Agreement. This Agreement constitutes the entire agreement
and understanding between the Parties on the subject hereof and supersedes any
and all prior oral or written agreements, statements, representations,
warranties or understandings by any Party, and all of which are merged herein
and superseded hereby. Neither Party shall be bound by any definition,
warranty, condition or representation other than as expressly set forth in this
Agreement or as may be set forth in a writing signed by the Party to be bound
thereby. This Agreement may not be modified except by a written agreement
signed by the Parties hereto.
(2) Interpretation. In construing this Agreement or determining the
rights of the Parties hereto, no Party shall be deemed to have drafted or
created this Agreement.
(3) Governing Law. This Agreement is made and entered into under the
laws of the state of the defending party and shall be interpreted, applied and
enforced under those laws.
(4) Severability. The provisions of this Agreement are severable, and
if any one or more provisions is determined to be illegal, indefinite, invalid
or otherwise unenforceable, in whole or in part, the remaining provisions of
this Agreement shall continue in full force and effect and shall be binding and
enforceable.
(5) Assignment. Neither this Agreement nor any right or duty hereunder
shall be assignable or delegable by either Party without the express consent of
the other Party, and nothing in this Agreement, express or implied, is intended
to confer upon any person other than the Parties hereto any rights or remedies
under or by reason of this Agreement. This Agreement shall be binding upon and
shall inure to the benefit of the Parties hereto and their respective heirs,
administrators, executors, legal representatives, successors in interest and
permitted assigns.
(6) Waiver. No wavier of any provision of this Agreement shall be
deemed to be or shall constitute a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing waiver. No wavier shall
be binding unless executed in writing by the Party making the wavier. The
failure of any Party to object any act, omission or breach by the other Party or
to declare the other Party in default, irrespective of how long such failure
continues, shall not constitute a waiver by such Party of any rights or remedies
hereunder or otherwise provided at law or in equity.
(7) Notices. All notices, requests, demands and other communications
to be given hereunder shall be in writing and shall be deemed to have been duly
given on the date of personal service or on the fifth day after mailing by
certified or registered mail or on the date sent by facsimile addressed to the
Parties at the addresses noted on page one or at such other address as either
Party may hereafter indicate by appropriate notice.
(8) No Agency. Nothing in this Agreement creates a relationship of
agency, partnership, joint venture, or the like between the Parties, and neither
Party shall be entitled to, or purport to, bind or represent the other Party.
Neither party shall do or allow any act which would imply apparent authority to
act for the other Party.
IN WITNESS WHEREOF the Parties have signed this Agreement as of the date first
above written.
EXACTTRADE.COM QUOTES CANADA FINANCIAL
NETWORK LTD.
By: By:
Name: Frank Abrams Name: Paul Dickson
Title: VP Corporate Development Title: EVP
Date: October 27, 1999 Date: October 27, 1999
<PAGE>
SCHEDULE A
MATERIAL
The latest commercially available version of the following content is added
and made subject to the certain Republishing Agreement dated as of October 27,
1999 between Quotes Canada Financial Network LTD. And Exacttrade.com (the
"Agreement") and shall constitute Material (as that term is defined in the
Agreement):
Web Site Title: www.quotescanada.com
Publisher: Quotes Canada Financial Network, Ltd.
Content Description: financial data that includes
- - 8 variable delayed data feed for all Canadian and US exchanges
- - Proprietary looking charting engine
- - Up to 10 year historical data
- - Proprietary looking portfolio tracker co-brand
- - Symbol lookup database
- - Global market indices
- - 24 Hour Delayed press releases
Frequency: up to 20 minute delay
Electronic data provided in comma delimited format and/or graphical image format
Primary Logo Location: http://quotescanada.com/img/bannersmall.gif
Online Copyright Notice: http://www.quotescanada.com/copyright.cfm
Full Copyright Notice: 1999 QuotesCanada.Com, All rights reserved.
EXACTTRADE.COM QUOTES CANADA FINANCIAL
NETWORK LTD.
By: By:
Name: Frank Abrams Name:
Title: VP Corporate Development Title:
Date: October 27, 1999 Date:
889 WEST PENDER STREET
VANCOUVER, BC
LEASE AGREEMENT
BETWEEN
S & B OCTAGON PROPERTIES CANADA LTD.
("LANDLORD")
AND
QUOTESCANADA FINANCIAL NETWORK INC.
("TENANT")
COLLIERS MACAULAY NICOLLS INC.
("Agent")
15th Floor, 200 Granville Street
Vancouver, BC V6C 2R6
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
ARTICLE 1 - DEMISE AND TERM 3
1.1 Demise and Term 3
1.2 Delay in Occupancy 3
1.3 Early Possession 3
ARTICLE 2 - RENTAL 3
2.1 Rental 3
2.2 Tenant's Portion 4
2.3 Payment of Rental 4
2.4 Reporting of Costs 4
2.5 Rental For Irregular Periods 5
2.6 Waiver of Offset 5
2.7 Rent Per Square Foot 5
2.8 Deposit Paid By Tenant 5
ARTICLE 3 - COMPLETION AND ACCEPTANCE OF LEASED PREMISES 5
3.1 Completion of Improvements 5
3.2 Acceptance of Leased Premises 5
ARTICLE 4 - LANDLORD'S COVENANTS 5
4.1 5
ARTICLE 5 - CONDUCT OF BUSINESS 6
5.1 6
ARTICLE 6 - REPAIRS 7
6.1 7
6.2 Landlord's Repairs 8
6.3 Damage or Destruction 8
ARTICLE 7 - ASSIGNMENT AND SUBLETTING 9
7.1 9
ARTICLE 8 - INSURANCE 9
8.1 10
8.2 Landlord to Insure 11
ARTICLE 9 - TENANT ALTERATIONS 11
9.1 Painting and Decorating 11
9.2 Landlord's Property 11
9.3 Prohibitions 11
9.4 No Liens 11
ARTICLE 10 - PUBLIC UTILITIES AND TAXES 11
10.1 Public Utilities Business Tax and Machinery Tax 12
10.2 Payment of Taxes 12
10.3 Allocation of Taxes 12
ARTICLE 11 - EXCLUSION OF LIABILITY AND INDEMNITY 12
11.1 12
11.2 Indemnification 13
ARTICLE 12 - LANDLORD'S RIGHTS AND REMEDIES 13
12.1 Default 13
12.2 Bankruptcy 13
12.3 Payment of Landlord's Expenses 13
12.4 Landlord's Right to Relet 13
12.5 Right of Landlord to Perform Tenant's Covenants 14
12.6 Interest on Arrears 14
12.7 Right of Landlord to Seize 14
12.8 Non-Waiver 15
12.9 Remedies Cumulative 15
ARTICLE 13 - MORTGAGES AND ASSIGNMENT BY LANDLORD 15
13.1 Sale or Financing of Building 15
13.2 Subordination 15
13.3 Certificate 15
13.4 Registration 15
13.5 Assignment By Landlord 15
ARTICLE 14 - OVERHOLDING TENANT 16
14.1 No Tacit Renewal 15
ARTICLE 15 - LEGAL RELATIONSHIP 15
15.1 No Partnership 16
15.2 Several Tenants 16
15.3 Successors, Etc. 16
ARTICLE 16 - NOTICE 16
16.1 Notice 16
ARTICLE 17 - GENERAL CONDITIONS 16
17.1 Garbage, Debris, Refuse 16
17.2 Compliance With Laws 16
17.3 Nuisance 17
17.4 Rules and Regulations 17
17.5 Delivery of Possession 17
17.6 Service Interruptions 17
<PAGE>
SECTION PAGE
ARTICLE 18 - MISCELLANEOUS PROVISIONS 17
18.1 No Offer 17
18.2 Management of Building 17
18.3 Showing Leased Premises 17
18.4 Option to Renew 18
18.5 Tenant Information Guideline 18
18.6 Time of Essence 18
18.7 Captions 18
18.8 Governing Law 18
18.9 Stratification 18
18.10 Entire Agreement 18
18.11 Area Certification 18
18.12 Improvements 18
18.13 Landlord's Work 18
18.14 Leasehold Improvements 19
ARTICLE 19 - DEFINITIONS 19
19.1 19
ARTICLE 20 - GUARANTEE 21
ARTICLE 21 - ADDITIONAL CLAUSES
21.1 Early Termination 21
21.2 Early Access 21
21.3 Surrender of Lease for Suite 701 21
SCHEDULE "A" - PLAN OF PREMISES 1
SCHEDULE "B" - DESCRIPTION OF LEASED PREMISES 1
SCHEDULE "C" - RULES AND REGULATIONS 1
SCHEDULE "D" - TENANT INFORMATION GUIDELINE 1
I. GENERAL 1
II. Base Building Construction 2
III. Tenant Drawing Requirements 3
IV. The Tenant Contractor(s) Requirements 4
V. Building Services Fee 6
VI. Landlord's Base Building and Finishes 7
VII. Tenant Construction Standards 11
VIII. Interior Design Guide 12
<PAGE>
THIS AGREEMENT dated the 9th day of November, 1999.
BETWEEN: S & B OCTAGON PROPERTIES CANADA LTD., a body corporate, duly
incorporated under the laws of the Province of British Columbia, having its
registered and records offices at Suite 308, 650 West 41st Avenue, in the City
of Vancouver, in the Province of British Columbia, V5Z 2M9
(hereinafter called the 'Landlord") OF THE FIRST PART
AND: QUOTESCANADA FINANCIAL NETWORK INC., DOING BUSINESS AS EARTHRAMP.COM, a
business having an office at #701 - 889 West Pender Street, in the City of
Vancouver, in the Province of British Columbia, V6B 1N2
(hereinafter called the "Tenant") OF THE SECOND PART
ARTICLE 1 - DEMISE AND TERM
1.1 DEMISE AND TERM
In consideration of the rents, covenants and agreements contained in this Lease
which rents, covenants and agreements are to be paid, observed and performed by
the Tenant, the Landlord does hereby demise and lease unto the Tenant the Leased
Premises, as described on Schedule "B" attached hereto, TO HAVE AND TO HOLD for
and during the Term of three (3) years commencing the 1st day of April, 2000
(the "Commencement Date"), and terminating the 31st day of March, 2003 unless
sooner terminated as hereinafter provided. The terms and conditions of the Offer
to lease dated the 10th day of December, 1999 between the Landlord and Tenant
shall not merge but shall form a part of this Lease, provided always that in the
event of a conflict between this Lease and the Offer to Lease, the latter shall
prevail.
1.2 DELAY IN OCCUPANCY
The Landlord shall not be liable for any loss, injury, damage or inconvenience
which the Tenant may sustain by reason of the failure of the Landlord to deliver
the Leased Premises ready for occupancy on the Commencement Date.
1.3 EARLY POSSESSION
The Tenant may, if it desires, but only with the Landlord's prior written
approval, begin to use and occupy the Leased Premises or portions thereof for
office purposes as such premises become ready for occupancy prior to the
Commencement Date, and the Tenant shall pay an occupation rent to the Landlord
for such use and occupancy. Such occupation rent shall be calculated on the
basis of the Annual Rental and all other charges payable by the Tenant under
this Lease, and shall be proportionate to the area of the Leased Premises
occupied. Possession shall be subject to the terms and conditions of this Lease,
except to the extent that such terms and conditions are inconsistent with this
clause.
ARTICLE 2 - RENTAL
2.1 RENTAL
The Tenant covenants and agrees to pay to the landlord, or as the Landlord may
in writing direct, in lawful money of Canada, on the days and at the times
hereinafter specified, rental and the applicable Federal Goods and Services Tax
(the "GST") thereon which shall be the aggregate of the sums specified in
clauses (a) through (c) below:
(a) Annual Rent
A rental per annum during each year of the Term beginning from April 1, 2000
payable in equal monthly installments on the first day of each month in advance,
all as set out in the table below:
Year of Term Per Sq.Ft. Annual Rent Monthly Installment
------------ ---------- ----------- -------------------
1-3 $11.00 $20,900.00 $1,741.66
(b) Additional Rental
TOGETHER WITH, in each year of the Term the Tenant's portion of the Building
Operating Cost and Municipal Tax Cost.
TOGETHER WITH the Tenant's proportionate share of Office Operating Costs and any
applicable Federal GST thereon.
TOGETHER WITH, in each year of the Term, the Tenant's proportionate share of any
Office Municipal Tax cost. Should the City of Vancouver render assessments
directly to the Tenant, any payment shall be made by the Tenant to the City
accordingly.
2.2 TENANT'S PORTION
The Tenant's portion of the Costs described in Article 2.1(b) shall be the sum
which is equal to the aggregate of the said costs multiplied by the fraction,
the numerator of which is the Area of the Leased Premises and the denominator of
which is the Gross office Leasable Area.
2.3 PAYMENT OF RENTAL
The items of rental provided for in this Article 2 shall be paid by the Tenant
as follows:
(a) Annual Rent
The first monthly installment of Annual Rent shall be paid by the Tenant on or
before the Commencement Date. Where the Commencement Date is the first day of a
calendar month such installment shall be in respect of such month. Where the
Commencement Date is not the first day of a calendar month, rental for the
period from the Commencement Date to the first day of the next ensuing calendar
month shall be pro rated on a per them basis and paid on the first day of such
month and the installment of Annual Rent paid upon the Commencement Date shall
be in respect of the Annual Rent for the first full calendar month of the Term;
thereafter in either case subsequent monthly installments shall be paid in
advance on the first day of each ensuing calendar month during the Term.
(b) Additional Rental Payments
The amount of Additional Rental which the Tenant is to pay shall be estimated by
the Landlord for such period as the Landlord may determine from time to time.
The Tenant agrees to pay to the Landlord such amount in monthly installments in
advance during each such period on the dates and at the times for payment of
Annual Rent provided for in this Lease; and an adjustment made, if necessary in
accordance with Article 2.4.
2.4 REPORTING OF COSTS
Within ninety (90) days after the end of each Lease Year, the Landlord shall
furnish to the Tenant a Statement of the actual Building Operating Cost and
Municipal Tax Cost during such Lease Year and the Tenant's portion there of
determined pursuant to this Article showing in reasonable detail the information
relevant and necessary to the exact calculation of these amounts. If the amount
payable by the Tenant as shown on such Statement is greater or less than the
aggregate of amounts paid on account of Additional Rental by the Tenant to the
Landlord for such lease Year pursuant to Article 2.3(b) the proper adjustment
shall be made within fourteen (14) days after delivery of the Statement. Any
payment made by the Landlord or made by the Tenant and accepted by the Landlord
in respect of any adjustment made hereunder, shall be without prejudice to the
right of the Landlord to claim a readjustment provided such claim is made within
twelve (12) months from the date of delivery of the Statement referred to in
this paragraph. If for any reason beyond the Landlord's control the landlord is
unable to deliver the Statement hereinbefore referred to within the said period
of ninety (90) days, the landlord shall take all reasonable steps as may be
necessary to deliver such Statement as soon thereafter as is reasonably possible
and the failure to provide such Statement within the said period shall not
entitle the Tenant to withhold any sum payable to the Landlord hereunder, or to
claim damages from the Landlord.
2.5 RENTAL FOR IRREGULAR PERIODS
All rental reserved herein, including, without limiting the generality of the
foregoing the Additional Rental shall be deemed to accrue from day to day, and
if for any reason it shall become necessary to calculate rental for irregular
periods of less than one (1) year an appropriate pro-rata adjustment shall be
made on a per them basis in order to compute rental for such irregular period.
2.6 WAIVER OF OFFSET
The Tenant hereby waives and renounces any and all existing and future claims,
offsets and compensation against any rental or other amounts due hereunder and
agrees to pay such rental and other amounts regardless of any claim, offset or
compensation which may be asserted by the Tenant or on its behalf.
2.7 RENT PER SQUARE FOOT
The Annual Rent as set out in sub-clause 2.1(a) is calculated by multiplying the
Rent per Square Foot by the estimated number of square feet in the Leased
Premises determined from the plan attached as Schedule "A". After construction,
the Area of the Leased Premises shall be certified pursuant to clause 18.11 and
the Annual Rent calculated accordingly, the amounts of Annual Rent and Monthly
Installment shown in sub-clause 2.1(a) shall be deemed to have been amended
accordingly, and an adjusting payment shall be made by the Landlord or the
Tenant as the case may be.
2.8 DEPOSIT PAID BY TENANT
The Tenant agrees that the Landlord, upon execution of this Lease, may retain
the sum of One Thousand Five Hundred Eighty-Three and 15/100 Dollars ($1,583.15)
remaining from the Tenant's deposit on Suite 701, to be applied as a portion of
the last months gross rents under this Lease.
ARTICLE 3 - COMPLETION AND
ACCEPTANCE OF LEASED PREMISES
3.1 COMPLETION OF IMPROVEMENTS
If applicable, the Landlord and Tenant each agree to complete in a diligent and
timely manner the improvements to the Leased Premises for which each is
responsible pursuant to the Offer to Lease made between them and dated December
10, 1999.
3.2 ACCEPTANCE OF LEASED PREMISES
The opening by the Tenant of its business in the Building shall constitute an
acknowledgment by the Tenant that the Leased Premises are in the condition
called for by this Lease and the Landlord has performed all of the Landlord's
work with respect thereto.
ARTICLE 4 - LANDLORD'S COVENANTS
4.1
The Landlord covenants with the Tenant:
(a) Quiet Enjoyment
That if the Tenant pays the rent hereby reserved and performs the covenants
herein on its part contained, it shall and may peaceably possess and enjoy the
Leased Premises for the Term hereby granted without any interruption or
disturbance from the Landlord or any other person or persons lawfully claiming
by, from or under the Landlord.
(b) Interior Climate Control
To provide to the Leased Premises during normal business hours by means of a
system for heating and cooling filtering and circulating air, processed air in
such quantities, at such temperatures as shall maintain in the Leased Premises
conditions of reasonable temperature and comfort in accordance with good
standards of interior climate control generally pertaining at the date of this
Lease applicable to normal occupancy of premises for office purposes, but the
Landlord shall have no responsibility for any inadequacy of performance of the
said system if this Leased Premises departs from the design criteria for such
system. If the use of the Leased Premises does not accord with the said design
criteria and changes in the system are feasible and desirable to accommodate
such use, the Landlord may, and at the written request of the Tenant shall, make
such changes and the entire expense of such changes will be reimbursed by the
Tenant to the Landlord.
(c) Elevators
Subject to the supervision of the Landlord and except when repairs are being
made thereto, to furnish for use by the Tenant and its employees and invitees in
common with other persons entitled thereto passenger elevator service to the
Leased Premises. The Landlord shall also furnish for the use of the Tenant in
common with others entitled thereto at reasonable intervals and at such hours as
the Landlord may select, elevator service to the Leased Premises for the
carriage of furniture, equipment, deliveries and supplies provided that if an
elevator operator is provided by the Landlord for this purpose, the Tenant shall
pay a reasonable rate for the use of the elevator.
(d) Entrances, Lobbies
To permit the Tenant and its employees and invitees to have the use in common
with others entitled thereto of the common entrances, lobbies, stairways,
elevators and corridors of the Building giving access to the Leased Premises
(subject to the Rules and Regulations referred to in clause 17.4 and such other
reasonable limitations as the Landlord may from time to time impose).
(e) Washrooms
To permit the Tenant and its employees and invitees, in common with others
entitled thereto to use the washrooms available to the Leased Premises of each
floor of the Building upon which any part of the Leased Premises is located.
(f) Janitor Service
To cause when reasonably necessary from time to time the floors and windows of
the Leased Premises to be swept and cleaned and the desks, tables and other
furniture of the Tenant to be dusted all in keeping with a first-class office
building but the Landlord shall not be responsible for any act or omission or
commission on the part of the person or persons employed to perform such work;
such work shall be done at the Landlord's direction without interference by the
Tenant, its servants or employees.
(g) Maintenance of Common Area
To cause the elevators, common entrances, lobbies, stairways, corridors,
washrooms and other parts of the Building from time to time provided for common
use and enjoyment to be swept, cleaned or otherwise maintained substantially in
keeping with a first-class office building.
ARTICLE 5 - CONDUCT OF BUSINESS
5.1
The Tenant covenants with the Landlord that:
(a) Use of Leased Premises
The Tenant will not use or occupy the Leased Premises or any part thereof for
any purpose other than the operation of an office for the conduct of the
Tenant's business. The Tenant shall not, at any time suffer, permit or allow
any person to occupy the Leased Premises as a residence and this Lease shall be
a lease for commercial purposes only.
(b) Signs and Directory
The Tenant will not erect or place, or suffer to be erected or placed, or
maintain any signs of any nature or kind whatsoever on the exterior walls of the
Building, on or visible from the exterior through the windows of the Leased
Premises, without first obtaining the Landlord's written approval and consent in
each instance. The Landlord shall establish a directory in the main lobby of
the Building and the Tenant may place its name in such directory at its expense
in a design, standard lettering, size and location acceptable to the Landlord.
The Landlord may specify standard lettering for signs on or outside the Leased
Premises.
(c) Control of Common Area
The Landlord will, at all times, have the right of control over the parts of the
Building provided for common use and enjoyment. Such control applies to signs
on the interior of and visible from the exterior of the Leased Premises, as well
as use made of entrances and lobbies, and the Landlord shall have the right to
close the Building to the public outside normal business hours.
(d) Floor Loading
The Tenant will not place a load on a floor which exceeds the load its floor was
designed to carry having regard to the loading of adjacent areas. The Landlord
reserves the right to prescribe the location of safes and heavy installations so
as to properly distribute the weight thereof.
(e) Lighting
For the better appearance of the Building, if the Landlord so requests the
Tenant shall maintain in an operating mode all of the lighting in those portions
of the Leased Premises within fifteen (15) feet of the exterior of the Building
during such hours as the Landlord may designate for the Tenant and other tenants
similarly situated in the Building.
ARTICLE 6 - REPAIRS
6.1
The Tenant covenants with the Landlord that:
(a) Tenant's Repairs
The Tenant shall at all times during the Term at its own cost and expense,
repair, maintain and keep the Leased Premises, all equipment, fixtures and
mechanical, electrical and plumbing systems within the Leased Premises or
elsewhere if such equipment, fixtures or system are provided exclusively for the
use or benefit of the Leased Premises and any improvements now or hereafter made
to the Leased Premises in good order and repair, as a careful owner would do,
reasonable wear and tear, and repairs for which the Landlord is responsible for
under Article 6.2 and damage by Insured Hazards only excepted, and the Tenant
covenants to perform such maintenance to effect such repairs and replacements
and to decorate at its own cost and expense as and when necessary or reasonably
required to do by the Landlord. The Tenant will not deposit any material in the
plumbing system and will maintain it free of obstruction to the trunk servicing
all office space.
(b) Plate Glass
That the Tenant shall promptly repair and make whole with materials of at least
equivalent quality all damaged glass, plate glass, doors and windows in the
Leased Premises.
(c) Landlord's Examinations of Leased Premises
The Landlord and any employee, servant or agent of the Landlord shall be
entitled, at any reasonable time during normal business hours and during any
emergency, from time to time, enter and examine the state of maintenance,
repair, decoration and order of the Leased Premises, all equipment and fixtures
within the Leased Premises and any improvements now or hereafter made to the
Leased Premises and the Landlord may give notice to the Tenant requiring that
the Tenant perform such maintenance or effect such repairs replacements or
decorations as may be found necessary from such examination.
(d) Repair at End of Term
At the determination of this Lease (unless the Term is terminated by the
Landlord pursuant to Article 6.3(b), the Tenant will deliver to the Landlord
vacant possession of the Leased Premises in condition in which the Tenant is
required to maintain the Leased Premises.
(e) Landlord's Right to Enter for Repair
The servants, agents and representatives of the Landlord shall have the right to
enter the Leased Premises at all times during business hours to make alterations
or repairs as they shall deem necessary for the safety or preservation or proper
administration or improvement of the Leased Premises, the Building or any
premises adjoining the Leased Premises.
6.2 LANDLORD'S REPAIRS
The Landlord covenants with the Tenant to repair, normal wear and tear only
excepted, the roof, foundations, sub-floors and outer walls of the Building and
the mechanical and electrical works included within the Building for use in
common by the tenants. The costs of all such work other than structural repairs
shall be part of Building Operating Costs.
6.3 DAMAGE OR DESTRUCTION
(a) Partial
In the event of damage to or destruction of the Building so that the Leased
premises are wholly or partially unfit for the business of the Tenant for any
period in excess of ten (10) days, the Leased shall not be rescinded or
terminated but the Annual Rental provided to be paid hereunder or a
proportionate part thereof shall be abated until the Building shall have been
rebuilt or the Leased Premises made fit for the business of the Tenant,
whichever is earlier. Such abatement shall be proportional to the area of the
Leased Premises reasonably decided by the Landlord to be unfit for the purposes
permitted hereunder for the Tenant.
(b) Total
-----
In the event of destruction of the Building or damage to fifty percent (50%) or
more of the floor area of the Building, whether or not the Leased Premises are
damaged, the Lease may be terminated, at the option of the Landlord, by the
Landlord giving to the Tenant, within ninety (90) days after the occurrence of
such damage to or destruction of the Building notice in writing of the
termination of the Lease and thereupon rental and all other payments for which
the Tenant is liable under the Lease shall be apportioned and paid to the date
of termination (subject to any abatement under 6.3(a)) and the Tenant shall upon
receipt of such notice make the payment required and deliver up possession of
the Leased Premises to the Landlord as soon as reasonably possible but in any
event within forty-five (45) days; provided, however, that such termination
shall not affect the obligations of the Tenant, or any guarantor of the
obligations of the Tenant, to the Landlord arising from obligations of the
Tenant existing prior to the date such notice of termination is given.
(c) The Building, for the purposes of this Article 6.3 shall be deemed not
to include the improvements installed in the Leased Premises by the Tenant. The
certificate of the Landlord certifying that damage or destruction has occurred
to the extent set out in Article 6.3 shall be binding and conclusive on the
Tenant.
(d) Expropriation
In the event that at any time prior to or during the Term of the Lease the
Leased Premises are acquired or expropriated by any lawful expropriating
authority or authorities, then, in any of such events, at the option of the
Landlord, this Lease shall cease and terminate as of the date of title vesting
in such proceeding and the Tenant shall have no claim against the Landlord for
the value of any unexpired Term of this Lease or for damages or for any
unexpired portion of the Term of this Lease or for damages or for any reason
whatsoever. In the event that not all of the Leased Premises are taken, this
Lease shall continue in full force and effect. Both the Landlord and the Tenant
agree to cooperate one with the other in respect of any expropriation of all or
any part of the Leased Premises or the Building, so that each may receive the
maximum award in the case of any expropriation to which they are respectively
entitled in law. In the event and to the extent that any portion or portions of
the Building other than the Leased Premises shall be expropriated, then the full
proceeds accruing therefrom or awarded as a result thereof, shall enure to the
benefit of, and belong to the Landlord.
ARTICLE 7 - ASSIGNMENT AND SUBLETTING
7.1
The Tenant covenants with the Landlord that:
(a) Not to Assign
The rights of the Tenant under this Lease shall not be transferred, assigned or
sold and the Tenant shall not sublet the whole or any part of the Leased
Premises nor grant any concession or license within or with respect to the
Leased Premises to any party without in any case the prior written consent of
the Landlord. The Landlord may require as a condition of its consent that the
party to who rights are to be granted enter into a covenant with, and in form
satisfactory to, the Landlord, to perform, observe, keep and fulfill each of the
obligations of the Tenant hereunder. Notwithstanding any such consent being
given by the Landlord and such transfer, assignment, sale, subletting or grant
being effected, the original Tenant hereunder shall remain bound to the Landlord
for the fulfillment of all of its obligations hereunder. No consent by the
Landlord hereunder shall be construed to mean that the Landlord has consented or
will consent to any further transfer, assignment, sale, subletting or grant, and
the acceptance of rent from or the performance of any obligation hereunder by a
person other than the Tenant shall not be construed, in the absence of an
express consent of the Landlord, as an admission by the Landlord of any right,
title or interest of such person as a transferee, assignee, subtenant or
otherwise in the place of or from the Tenant. If the Landlord shall not
exercise its first right of refusal set out below consent hereunder shall not
unreasonably be withheld;
(b) Change in Control of Tenant
If the Tenant Is a private corporation and if by the sale or other disposition
of its shares or securities the control of the beneficial ownership of such
corporation is changed at any time after the execution of this Lease or during
the Term, such change shall be deemed to be an assignment of the Lease within
the meaning of this Article. If such control or beneficial ownership Is changed
without the prior written consent of the Landlord, the Landlord may, at its
option, cancel the Lease and the Term hereby granted upon the giving of sixty
(60) days notice to the Tenant of its intention to cancel and this Lease and the
Term shall thereupon be cancelled;
(c) First Right of Refusal
If the Tenant requests the Landlord's consent to an assignment of this Lease or
to a subleasing of the whole or any part of the Leased Premises, the Tenant
shall submit to the Landlord the name of the proposed assignee or subtenant, the
most recent financial statement of the proposed assignee or subtenant, the terms
and conditions of such assignment or subletting, and any further information as
to the nature of its business and its financial responsibility and standing as
the Landlord may reasonably require and shall offer to assign or sublease to the
Landlord on the same terms. Upon the receipt of such request and all of such
information from the Tenant, the Landlord shall have the right, exercisable in
writing within fifteen (15) days after such receipt, to accept such assignment
or sublease if the request is to assign this Lease or to sublet all of the
Leased Premises or, if the request is to sublet a portion of the Leased Premises
only, to accept such assignment or sublease with respect to such portion, in
each case as of the date set forth in the Landlord's notice of exercise of such
right, which shall be neither less than sixty (60) days nor more than one
hundred twenty (120) days following the service of such notice; and
(d) Surrender
If the Landlord shall exercise the right set forth in the previous paragraph,
the Tenant shall surrender possession of the entire Leased Premises or the
portion which is the subject of the right, as the case may be, on the date set
forth in such notice in accordance with the provisions of this Lease relating to
surrender of the Leased Premises at the expiration of the Term. If this Lease
shall be assigned or sublet as to a portion of the leased Premises only, the
Annual Rent and Additional Rent shall be abated proportionately.
ARTICLE 8 - INSURANCE
8.1
The Tenant covenants with the Landlord that:
(a) Tenant to Insure
The Tenant shall take out and keep in force from the time the Tenant begins
improvements to the Leased Premises or the Commencement Date, whichever first
occurs, and thereafter till the end of the Term:
(i) fire insurance with extended coverage endorsements and vandalism and
malicious damages endorsements, including water leakage, plus such additional
coverage as the Tenant may deem necessary; to cover the furniture, fixtures,
equipment, machinery, improvements and all other contents of the Leased
Premises, for amounts sufficient to replace these items; and
(ii) comprehensive general liability insurance in an amount not less than
$1,000,000.00 per occurrence inclusive limits;
and if the Landlord shall require the same from time to time then also:
(iii) Tenant's fire legal liability insurance in an amount not less than the
actual cash value of the Leased Premises; and
(iv) insurance or a maintenance contract upon all plate glass in or which
forms a boundary of the Leased Premises in an amount sufficient to replace all
such glass;
all in amounts which may be higher than the minimum amounts set out above, with
insurers and with policies satisfactory to the Landlord from time to time. Each
such policy shall include the Landlord as a named insured. The cost or premium
for each and every such policy shall be paid by the Tenant. The Tenant shall
obtain from the insurers under such policies undertakings to notify the Landlord
in writing at least thirty (30) days prior to any cancellation thereof. The
Tenant agrees that if the Tenant fails to take out or keep in force such
insurance the Landlord will have the right to do so and to pay the premium
therefor and in such event the Tenant shall repay to the Landlord the amount
paid as premium, which repayment shall be deemed to be Additional Rental payable
on the first day of the next month following the said payment by the Landlord.
The Tenant agrees to provide the Landlord with certificates of such insurance
policies as described herein and each renewal and replacement thereof and each
endorsement thereto.
PROVIDED THAT the Landlord shall not require the same from time to time, if such
insurance coverage under an insurance policy for the Building and such cost of
insurance is included in Building Operating Costs.
(b) Not to Affect Landlord's Insurance
The Tenant will not upon the Leased Premises do or permit to be done, or omit to
do anything which shall cause or have the effect of causing the rate of
insurance upon the Building or any part thereof to be increased above the rate
for the least hazardous use or occupancy legally permitted in the Leased
Premises and if the rate is so increased the Tenant shall pay to the Landlord as
Additional Rental the amount by which the insurance premiums shall be so
increased. The Tenant will not store or permit to be stored upon or in the
Leased Premises anything of a dangerous, inflammable or explosive nature nor
anything which would have the effect of increasing the Landlord's insurance
costs or of leading to the cancellation of such insurance. It is agreed that if
any insurance policy upon the Leased Premises shall be cancelled by the insurer
by reason of the use or occupation of the Leased Premises or any part thereof by
the Tenant or by any assignee, subtenant, concessionaire or licensee of the
Tenant, or by anyone permitted by the Tenant to be upon the Leased Premises, and
the Tenant shall not immediately correct such condition and cause the insurance
to be restored then the Landlord may at its option terminate this Lease by
notice in writing of such termination and thereupon rental and any other
payments for which the Tenant is liable under this Lease shall be apportioned
and paid in full to the date of such notice of termination of the Lease and the
Tenant shall immediately deliver up vacant possession of the Leased Premises to
the Landlord. The Landlord may at any time and at the expense of the Tenant
enter upon the Leased Premises and rectify the situation causing such
cancellation or rate increase whether notice of termination of this Lease has
given or not. The Tenant shall abide by the requirements of the Landlord's
insurance companies having policies governing the Building which are
communicated to the Tenant.
8.2 LANDLORD TO INSURE
The Landlord covenants and agrees with the Tenant that throughout the Term of
this Lease and any renewal, it will carry fire insurance with normal extended
coverage endorsements in respect of the Building and improvements (other than
tenants' improvements) forming part of the insurance, or such broader coverage
as the Landlord may from time to time deem necessary to carry for amounts, with
insurers and with policies which the Landlord in its discretion deems
appropriate or adequate.
ARTICLE 9 - TENANT ALTERATIONS
9.1 PAINTING AND DECORATING
The Tenant may at any time and from time to time at its expense, paint and
decorate the interior of the Leased Premises, install trade fixtures and
equipment, and make such changes, alterations, additions and improvements in and
to the Leased Premises, all as will in the judgment of the Tenant better the
Leased Premises for the purposes for which the same are permitted to be used
hereunder; provided, however, that no changes, alterations, additions or
improvements to the structure, any perimeter wall, the heating, ventilating,
air-conditioning, plumbing, electrical or mechanical equipment or the concrete
floor or the roof shall be made without the prior written consent of the
Landlord, and without the use of contractors or other qualified workmen to be
approved by the Landlord. All changes, alterations, additions and improvements,
whether structural or otherwise, shall comply with all applicable statutes,
regulations or by-laws of any municipal, provincial or other governmental
authority. The Tenant shall pay to the Landlord the Landlord's reasonable
engineering fees in reviewing such plans and the amount of the increase for any
action by the Tenant pursuant to this paragraph; and the Tenant covenants that
such insurance shall not thereby be made liable to avoidance or cancellation by
the insurer by reason of such changes, alterations, additions or improvements.
9.2 LANDLORD'S PROPERTY
The Tenant agrees that at the expiration or earlier termination of this Lease
all changes, alterations, additions and improvements made to or installed upon
or in the Leased premises whether made pursuant to this Article or otherwise and
which in any manner are attached in, to, on or under the floors, walls or
ceilings other than unattached movable trade fixtures shall remain upon and be
surrendered to the Landlord with the Leased Premises as a part thereof, without
disturbance, molestation or injury and shall be and become the absolute property
of the Landlord without any payment or indemnity by the Landlord or any third
party to the Tenant, unless the Landlord shall by notice in writing require the
Tenant to remove any change, alteration, addition or improvement, in which event
the Tenant covenants and agrees to remove such item and shall make good any
damage or injury caused to the Leased Premises or the Building resulting from
such installation or removal, reasonable wear and tear only excepted.
9.3 PROHIBITIONS
The Tenant shall not make any repairs, opening or additions to any part of the
exterior of the Leased Premises, nor place any attachments, decorations, signs
or displays in or upon any area outside the Lease Premises
9.4 NO LIENS
The Tenant covenants with the Landlord that it will not permit, do, or cause
anything to be done to the Leased Premises during the period of construction or
at any other time which would allow any lien, lis pendens, judgment or
certificate of any court or any mortgage, charge or encumbrances of any nature
whatsoever to be imposed or to remain upon the Leased Premises or the Building.
In the event of the registration of any lien or other encumbrance by a
contractor or subcontractor of the Tenant, the Tenant shall at its own expense
immediately cause the same to be discharged and if the Tenant shall not
immediately discharge the lien the Landlord may pay such lien and collect the
amount so paid as rent.
ARTICLE 10 - PUBLIC UTILITIES AND TAXES
10.1 PUBLIC UTILITIES BUSINESS TAX AND MACHINERY TAX
The Tenant covenants with the Landlord that the Tenant shall pay promptly for
its telephone, for all business taxes, license fees, and all other charges,
taxes, license fees and rates levied or assessed on or in respect of or in
relation to the business carried on by and/or the assets of the Tenant within
the Leased Premises (or elsewhere in the Building) by the Tenant including
Municipal Taxes on improvements made by the Tenant to the Leased Premises
whether such taxes, licenses, charges or rates are charged to the Landlord or to
the Tenant.
The Tenant shall pay throughout the Term promptly to the Landlord when demanded:
(a) the cost of electrical light and power supplied to the Leased Premises
monthly based on the electric light and power requirements of the Tenant on a
pro rata basis as determined from time to time during the Term and billed by the
Landlord;
(b) the cost of cleaning, maintaining and servicing in all respects all
electric lighting fixtures in the Leased Premises including the cost of
replacement of electric light bulbs, tubes, starters and ballasts used to
replace those installed at the commencement of the said Term. Such cleaning,
maintaining, servicing and replacement shall be within the exclusive right of
the Landlord.
10.2 PAYMENT OF TAXES
The Landlord covenants with the Tenant to pay all Municipal Taxes except hose
covenanted to be paid by the Tenant hereunder or by other tenants of the
Building.
10.3 ALLOCATION OF TAXES
If a separate allocation of Municipal Taxes is not issued by the relevant taxing
authority with respect to any Tenant improvements to the Leased Premises, the
Landlord or the Tenant may from time to time apply to the taxing authority for a
determination of the portion of Municipal Taxes attributable to such Tenant
improvement, which determination shall be conclusive for the purposes of this
Article. In the event that no such determination may be obtained from the
taxing authority, the Landlord shall establish the portion of the Municipal
Taxes attributable to such Tenant improvement using the then current established
principles of assessment used by the taxing authority, or such other method
which is fair, reasonable and equitable as determined by the Landlord.
ARTICLE 11 - EXCLUSION OF LIABILITY AND INDEMNITY
11.1
It is agreed between the Landlord and Tenant that notwithstanding any negligence
on the part of the Landlord or any person for whom the Landlord is responsible:
(a) Tenant's Property
Excepting gross negligence, the Landlord, its agents, servants and employees
shall not be liable for damage or injury to any property of the Tenant of the
Building, even if such property is entrusted to the care or control of the
Landlord or any person for whom the Landlord is responsible.
(b) Personal or Consequential Injury
Excepting gross negligence, the Landlord, its agents, servants and employees
shall not be liable nor responsible in any way for any personal or consequential
injury of any nature whatsoever, including death, that may be suffered or
sustained by the Tenant or any other person arising out of or in connection with
the Leased Premises or the operations of the Tenant of the Building, or for any
loss of or damage or injury to any property belonging to the Tenant or any other
person while such property is on the Leased Premises. In particular (but
without limiting the generality of the foregoing) the Landlord shall not be
liable for any damage or damages of any nature whatsoever to any such person or
property caused by the failure to supply adequate drainage or to remove snow or
ice, or by the interruption of any public utility or service or by steam, water,
rain or snow which may leak into, issue, or flow from any part of the Building,
but the Landlord after notice thereof shall use all reasonable diligence to
remedy such condition, failure or interruption of service when not directly or
indirectly attributable to the Tenant, when it is within its power and
obligation so to do. The Tenant shall not be entitled to any abatement of
rental in respect of any such condition, failure or interruption of service.
11.2 INDEMNIFICATION
The Tenant covenants with the Landlord to indemnify and save harmless the
Landlord against and from any and all claims, demands, causes of action,
actions, proceedings, losses, damages, expenses, costs and legal fees on a
solicitor and client basis which may arise out of or be in any way connected
with any errors or omissions, negligent conduct or willful misconduct of the
Tenant and any of its agents and servants.
ARTICLE 12 - LANDLORD'S RIGHTS AND REMEDIES
12.1 DEFAULT
If and whenever:
(a) the rent hereby reserved or any part thereof shall not be paid on the
day appointed for payment thereof, whether lawfully demanded or not;
(b) any of the covenants, agreements, provisos, conditions or rules and
regulations on the part of the Tenant to be kept, observed or performed are not
so kept, observed and performed;
(c) the Leased Premises shall be vacated or remain closed for business or
unoccupied for fifteen (15) days or more while capable of being occupied,
without the written consent of the Landlord;
(d) the Leased Premises shall be used by any person other than the Tenant,
the Tenant's permitted assigns or permitted sublessee, or for any other purpose
than that for which the Leased Premises were let;
(e) a receiver of the Tenant's goods and chattels or leasehold interest
hereunder shall be appointed;
then and in every such case, it shall be lawful for the Landlord at any time
thereafter with or without process of law and by forcible entry if necessary, to
levy distress against the goods and chattels of the Tenant, and to enter into
and upon the Leased Premises or any part thereof in the name of the whole and to
terminate this Lease, anything in this Lease contained to the contrary
notwithstanding, provided that the Landlord shall give three (3) working days
notice of default in writing to the Tenant.
12.2 BANKRUPTCY
If the Term or any of the goods and chattels of the Tenant shall be at any time
seized in execution or attachment by any creditor of the Tenant; or if a
receiver of the Tenant's leasehold interest hereunder is appointed; or if the
Tenant shall make any assignment for the benefit of creditors or any bulk sale
or become bankrupt or insolvent, or take the benefit of any Act now or hereafter
in force for bankrupt or insolvent debtors; or, if the Tenant is a corporation
and any order shall be made for the winding-up of the Tenant, or other
termination of the corporate existence of the Tenant; then in any such case this
Lease shall, at the option of the Landlord, cease and determine and the Term
shall immediately become forfeited and void and the then current month's rent
and the next ensuing three (3) months Annual Rent and the Landlord's reasonable
estimate of three (3) months Additional Rent shall immediately become due and be
paid and the Landlord may immediately claim the same together with any arrears
then unpaid and any other amount owing to the Landlord by the Tenant, and the
Landlord may without notice or any form of legal process forthwith re-enter upon
and take possession of the Leased Premises and remove the Tenant's effects
therefrom, any statute or law to the contrary notwithstanding.
12.3 PAYMENT OF LANDLORD'S EXPENSES
If at any time the Landlord brings an action for recovery of possession of the
Leased Premises, for the recovery of rental or any other amount due under the
provisions of this Lease, or because of a breach by act or omission of any other
covenant herein contained on the part of the Tenant, and the Landlord succeeds,
the Tenant shall pay to the Landlord all expenses incurred therefor, including
without limitation, solicitor and client costs in connection therewith.
12.4 LANDLORD'S RIGHT TO RELET
If the Landlord becomes entitled to re-enter the Leased Premises the Landlord
shall have the right, if it thinks fit, to enter the same, as the agent of the
Tenant either by force or otherwise without being liable for any prosecution
therefor, and to relet the Leased Premises or any part or parts thereof as the
agent and at the risk of the Tenant and to receive the rent therefor. Such rent
shall be allocated first to the Landlord's costs of so entering and reletting,
then to interest on sums due by the Tenant to the Landlord hereunder and unpaid,
and then to the payment of such unpaid sums. The balance of such rent, if any,
may be held by the Landlord as security for the fulfillment of the Tenant's
obligations hereunder.
12.5 RIGHT OF LANDLORD TO PERFORM TENANT'S COVENANTS
It is hereby expressly understood and agreed that if at any time and so often as
the same shall happen, the Tenant shall make default in the observance or
performance of any of the Tenant's covenants herein contained, then the Landlord
may, but shall not be obligated so to do, without waiving or releasing the
Tenant from its obligations under the terms of this Lease, itself observe and
perform the covenant or covenants in respect of which the Tenant has made
default, and in that connection may pay such monies as may be required or as the
Landlord may reasonably deem expedient, and the Landlord may thereupon charge
all monies so paid out and expended by it to the Tenant together with interest
thereon from the date upon which the Landlord shall have paid out the same at a
rate equal to three percent (3%) per annum above the prevailing prime rate being
charged by the Landlord's principal bank at the time the Landlord shall have
paid out the same, and the Tenant covenants to repay any such monies paid out by
the Landlord as aforesaid, together with interest thereon forthwith on demand as
additional rent, and the Tenant hereby covenants and agrees with the Landlord
that the Landlord shall have the same rights and remedies and may take the same
steps for the recovery of monies so paid out by the Landlord, together with
interest as aforesaid as the Landlord could have or might have taken for
recovery of rent In arrears.
12.6 INTEREST ON ARREARS
The Tenant shall pay to the Landlord interest at a rate equal to three percent
(3%) per annum above the prevailing prime rate being charged by the Landlord's
principal bank on all payments of rent and other sums required to be paid to the
Landlord under the provisions of this Lease from the date such money becomes
payable hereunder until the Landlord is fully paid therefor.
12.7 RIGHT OF LANDLORD TO SEIZE
The Tenant waives and renounces the benefit of any present or future law taking
away or limiting the Landlord's rights against the property of the Tenant and
notwithstanding any such law, the Landlord may seize and sell all the Tenant's
goods and property, whether within the Leased Premises or not and apply the
proceeds of such sale upon rental and all other amounts outstanding hereunder
and upon the costs of the seizure and sale in the same manner as might have been
done if such law had not been passed. The Tenant further agrees that if it
leaves the Leased Premises leaving any rental or other amounts provided to be
paid under this Lease unpaid, the Landlord, in addition to any remedy otherwise
provided by law, may seize and sell the goods and chattels of the Tenant at any
place to which the Tenant or any other person may have removed them, in the same
manner as if such goods and chattels had remained upon the Leased Premises.
12.8 NON-WAIVER
No condoning, excusing or overlooking by the Landlord of any default, breach or
non-observance by the Tenant at any time or times in respect of any covenant,
proviso, condition or rule and regulation herein contained shall operate as a
waiver of the Landlord's rights hereunder in respect of any continuing or
subsequent default, breach or non-observance, or so as to defeat or affect in
any way the rights of the Landlord herein in respect of any such continuing or
subsequent default or breach, and no waiver shall be inferred from or implied by
anything done or omitted by the Landlord save only express waiver in writing.
The acceptance by the Landlord of a part payment of any sum required to be paid
hereunder shall not constitute a waiver or release of its right to payment in
full of such sum.
12.9 REMEDIES CUMULATIVE
All rights and remedies of the Landlord in this Lease contained, or conferred by
statute or common law, shall be cumulative and not alternative.
ARTICLE 13 - MORTGAGES AND ASSIGNMENT BY LANDLORD
13.1 SALE OR FINANCING OF BUILDING
The rights of the Landlord under this Lease may be mortgaged, charged,
transferred or assigned to a purchaser or to a mortgagee, or trustee for
bondholders and in the event of a sale or of default by the Landlord under any
mortgage, trust deed or trust indenture and the purchaser, mortgagee or trustee,
as the case may be, duly entering into possession of the Building or the Leased
Premises, the Tenant agrees to attorn to and become the Tenant of such
purchaser, mortgagee or trustee under the terms of this Lease.
13.2 SUBORDINATION
This Lease is subject and subordinate to all mortgages, trust deeds or trust
indentures granted by the Landlord which may not or at any time hereafter
affect in whole or in part the Leased Premises or the Building and whether or
not any such mortgage, trust deed or trust indenture shall affect only the
Leased Premises of the Building or shall be a blanket mortgage, trust deed or
trust indenture affecting other premises as well. This Lease shall also be
subject and subordinate to all renewals, modifications, consolidations,
replacements and extensions of each such mortgage, trust deed or trust
indenture. In confirmation of such subordination and agreement to attorn, the
Tenant shall execute promptly upon request by the Landlord any certificate,
instruments of postponement or attornment or other instruments which may from
time to time be requested to give effect thereto; provided that the person in
favour of which such postponement or attornment has been made shall recognize
this Lease and the rights of the Tenant hereunder so long as the Tenant shall
not be in default of its obligations in this Lease.
13.3 CERTIFICATE
Within ten (10) days after request therefor by the Landlord, the Tenant
covenants and agrees with the Landlord to deliver in written from, a certificate
to any proposed mortgagee (including a trustee under a trust deed) or purchaser,
or to the Landlord, certifying as to the then status of this Lease, including as
to whether it is in full force and effect, is modified or unmodified, confirming
the rental payable and the state of accounts between the Landlord and Tenant,
the existence or non-existence of defaults, and any other matters pertaining to
this Lease as to which the Landlord shall request a certificate.
13.4 REGISTRATION
The Tenant covenants and agrees with the Landlord not to register this Lease or
any offer to lease.
13.5 ASSIGNMENT 13Y LANDLORD
In the event of the sale or lease by the Landlord of the Building or a portion
thereof containing the Leased Premises or the assignment by the Landlord of this
Lease or any interest of the Landlord hereunder, and to the extent that such
purchaser, lessee under such lease or assignee has assumed the covenants and
obligations of the Landlord hereunder, the Landlord shall, without further
written agreement, be freed and relieved of liability upon such covenants and
obligations.
ARTICLE 14 - OVERHOLDING TENANT
14.1 NO TACIT RENEWAL
In the event the Tenant remains in possession of the Leased Premises after the
end of the Term and without the execution and delivery of a new lease, there
shall be no tacit renewal of this Lease or the Term hereby granted and the
Tenant shall be deemed to be occupying the Leased Premises as a Tenant from
month to month, at a monthly rent payable in advance on the first day of each
month equal to the sum of:
(a) 12.5% of the portion of Annual Rent payable during the last month of the
Term;
(b) a proportionate part of the Additional Rent;
and otherwise upon the terms, conditions and provisos as are set forth in this
Lease insofar as the same are applicable to a month to month tenancy.
ARTICLE 15 - LEGAL RELATIONSHIP
15.1 NO PARTNERSHIP
It is understood and agreed that nothing contained in the Lease nor in any acts
of the parties hereto shall be deemed to create any relationship between the
parties hereto other than the relationship of landlord and tenant.
15.2 SEVERAL TENANTS
Should the Tenant comprise two or more persons each of them and not one for the
other or others, shall be jointly and severally bound with the other or others,
for the due performance of the obligations of the Tenant hereunder. Where
required by the context hereof the singular shall include the plural and the
masculine gender shall include either the feminine or neuter genders, as the
case may be, and vice-versa.
15.3 SUCCESSORS, ETC.
Subject to the provisions of the Lease respecting assignment by the Tenant, this
indenture shall enure to the benefit of and be binding upon the Landlord, its
successors and assigns and the heirs, executors, administrators and other
personal legal representatives, successors and assigns of the Tenant.
ARTICLE 16 - NOTICE
16.1 NOTICE
Any notice, demand, request, consent or objection required or contemplated to be
given or made by any provision of this Lease shall be given or made in writing
and may be delivered personally or sent by registered mail posted in Canada,
postage prepaid, addressed to the Landlord at:
c/o Colliers Macaulay Nicolls Inc.
15th Floor, Granville Square
200 Granville Street
Vancouver, BC V6C 3B2
or addressed to the Tenant at:
Quotescanada Financial Network Inc.
#701-889 W. Pender St.
Vancouver, B.C. V6B 1N2
or to such other address of which either party may from time to time notify the
other in writing. At the option of the Landlord any notice may be delivered to
the Tenant at the Leased Premises. The time of giving or making such notice,
demand, request, consent or objection shall be if delivered, when delivered, and
if mailed in any city in British Columbia as aforesaid, then on the second
business day after the day of mailing thereof (exclusive of Saturdays, Sundays
and statutory holidays and on any day on which mail is not regularly picked up,
transmitted or otherwise dealt within the locality in which the notice is posted
or is not regularly dealt with or delivered in the locality to which it is
addressed or is not regularly transported between such localities). If in this
Lease two or more persons are named as Tenant such notice, demand, request,
consent or objection shall be sufficiently given or made if and when the same
shall be given to any one of such persons. All payments required to be made by
this Lease shall be addressed as provided for in this Article unless otherwise
directed by the Landlord.
ARTICLE 17 - GENERAL CONDITIONS
17.1 GARBAGE, DEBRIS, REFUSE
No debris, garbage, trash or refuse shall be placed or left, or be permitted to
be placed or left in, or upon any part of the Building outside of the Leased
Premises.
17.2 COMPLIANCE WITH LAWS
At the sole cost and expense of the Tenant, the Tenant shall abide by and comply
with all applicable laws, by-laws and regulations of competent governmental
authorities and the Leased premises shall be kept by the Tenant in a clean and
sanitary condition in accordance with the laws of the municipality in which the
Building is located and in accordance with all directions, rules and regulations
of the health officer, fire marshal, building inspector or other proper officers
of that municipality, other agencies and governments having jurisdiction and the
insurer of the Landlord; in the event that the Tenant fails to comply with the
foregoing provisions the Landlord may rectify the situation and collect the
expense for such work from the Tenant in the same manner as arrears of rent.
17.3 NUISANCE
The Tenant shall not use or permit any part of the Leased Premises to be used in
such manner as to cause a nuisance nor to cause or permit annoying noises or
vibrations or offensive odours.
17.4 RULES AND REGULATIONS
The Tenant covenants that it will abide by any and all reasonable rules and
regulations which may from time to time be established by the Landlord for the
Building. The Landlord shall communicate such rules and regulations to the
Tenant in writing and after such communication such rules and regulations shall
be deemed to be an integral part of the Lease. The rules and regulations set
forth in Schedule "C" annexed hereto shall be the rules and regulations in force
until amended by the Landlord and notice thereof is given to the Tenant in
writing.
17.5 DELIVERY OF POSSESSION
If this Lease is terminated prior to the end of the Term then the rental and any
other payments for which the Tenant is liable under this Lease shall be
apportioned and paid in full to the date of such termination, and the Tenant
shall immediately deliver up vacant possession of the Leased Premises to the
Landlord.
17.6 SERVICE INTERRUPTIONS
The Landlord does not warrant that any service or facility provided by the
Landlord hereunder will be free from interruptions caused or required by
maintenance, repairs, renewals, modifications, strikes, riots, insurrections,
labour controversies, force majeure, Acts of God or other cause or causes beyond
the Landlord's care or control. No such interruption shall be deemed an eviction
nor disturbance of the Tenant's enjoyment of the Leased Premises or any other
part of the Building nor render the parties from their obligations under this
Lease, provided that the Landlord shall without delay take all reasonable and
practical steps within its power to remove the cause of such interruptions. The
Tenant shall not connect electrical equipment for heating, ventilating or
conditioning constitution a load greater than one watt per square foot without
the consent of the Landlord.
ARTICLE 18 - MISCELLANEOUS PROVISIONS
18.1 NO OFFER
Notwithstanding that the Tenant is permitted to go upon the Leased Premises,
that this Lease may be presented to the Tenant otherwise than fully executed, or
that an installment of Annual Rent may be received by the Landlord, no option,
reservation or other right shall be created for the benefit of the Tenant until
such time as the Landlord shall have delivered to the Tenant either its written
acceptance of the Tenant's offer to lease or a fully executed copy of this
Lease.
18.2 MANAGEMENT OF BUILDING
The Tenant acknowledges to the Landlord that the Building may be managed by such
party as the Landlord may in writing designate and to all intents and purposes
the manager of the Building shall be the party at the Building authorized to
deal with the Tenant on behalf of the Landlord, though no such dealing shall
modify or affect the terms of this Lease unless such dealing is confirmed in
writing by the Landlord and the Tenant.
18.3 SHOWING LEASED PREMISES
The Landlord may at any time within six (6) months before the end of the Term
enter the Leased Premises and bring others at all reasonable hours for the
purposes of offering the same for rent and the Landlord may place upon the
Leased Premises or elsewhere in or on the Building a notice that the Leased
Premises are available for lease.
18.4 OPTION TO RENEW
Intentionally deleted.
18. 5 TENANT INFORMATION GUIDELINE
The Tenant acknowledges having received from the Landlord a copy of the Tenant
Information Guideline, a copy of which is attached hereto and marked Schedule
"D" to this agreement and covenants with the Landlord to abide by the Tenant
Information Guideline or any amendments which may be made thereto from time to
time.
18.6 TIME OF ESSENCE
Time shall be of the essence of this Lease.
18. 7 CAPTIONS
The captions appearing in the margin of this Lease and the descriptions of
articles have been inserted as a matter of convenience and for reference only
and in no way define, limit or enlarge the scope of meaning of this Lease or any
provisions hereof.
18.8 GOVERNING LAW
This Lease shall be construed and governed by the laws of the Province of
British Columbia. Should any provision or provisions of the Lease and/or its
conditions be illegal or not enforceable it or they shall be considered separate
and severable from the Lease and its remaining provisions and conditions shall
remain in force and be binding upon the parties hereto as though the said
provision or provisions or conditions had never been included.
18.9 STRATIFICATION
The Tenant consents and agrees to the proposed stratification of the Building in
which the Leased Premises are situate and covenants with the Landlord to execute
all necessary waivers, consents or documents as may be required by the Landlord
in order to achieve complete stratification aforesaid under the Condominium Act,
Land Title Act and all other relevant statutes governing the process of
stratification, including those regulations and policies as may be required by
the Office of the Superintendent of Insurance, Brokers and Real Estate, Ministry
of Corporate Affairs, Province of British Columbia, The Tenant further covenants
to execute a consent to stratification of the Building in which the Leased
Premises are situate if and when required by the City of Vancouver.
18.10 ENTIRE AGREEMENT
The Tenant acknowledges that there are no representations made by the Landlord
which are not set out in the Lease and the Offer to Lease. The Tenant further
acknowledges that the Lease and the Offer to Lease constitute the entire
agreement between the Landlord and the Tenant and may not be modified except as
herein explicitly provided or except by subsequent agreement n writing duly
signed by the Landlord and the Tenant.
18.11 AREA CERTIFICATION
The size of the Area of the Leased Premises and the Gross Leasable Area shall be
that area certified by the architect or surveyor for the Building determined by
the Landlord from time to time.
18.12 IMPROVEMENTS
Where, after substantial completion of the Building, the Landlord is required by
law or a competent authority to make improvements to the Leased Premises, then
in each Lease Year of the Term after completion of such improvements (but not
after the cost thereof has been repaid to the Landlord), the Tenant shall pay
ten percent (10%) of the cost of the Landlord of making such improvements, and
if the Landlord is required to make similar improvements to other premises of
the Building at the same time, the cost of so doing shall be reasonably
apportioned by the Landlord to each of the premises so improved.
18.13 LANDLORD'S WORK
The Landlord shall provide at its expense to base building standard:
(a) Ensure all T-bar ceiling tiles are in good repair.
(b) Ensure all exterior window coverings are in good repair.
(c) Replace or clean all damaged or dirty light fixtures.
(d) Steam clean carpets.
18.14 LEASEHOLD IMPROVEMENTS
The Leased Premises are leased on an "as is" basis. Any alterations the Tenant
wishes to carry out shall comply with the terms of the Lease and the Tenant
shall obtain any applicable approvals of the local Municipal Authority and of
the Landlord's architects, mechanical, electrical, and structural consultants,
at the Tenant's cost.
ARTICLE 19 - DEFINITIONS
19.1
In this Lease (including this Article) unless there is something in the subject
matter or in the context inconsistent therewith, the parties hereto agree that:
(a) "Additional Rent" means the rental payable by the Tenant pursuant to
clauses 2.1(b), (c), (d) and 18.12.
(b) "Annual Rent" means the annual rental payable by the Tenant pursuant to
clause 2.1(a).
(c) "Area of the Leased Premises" means the area (expressed in square feet)
of the Leased Premises calculated as follows:
(i) in the case of a multi-tenant floor, the Net Rentable Area plus an
amount equal to the product of the fraction having as its numerator the Net
Rentable Area of the Leased Premises on the floor and as its denominator the sum
of the Net Rentable Areas of such floor, multiplied by the total area of the
Service Area of such floor;
(ii) in the case of a single-tenant floor, measured from the inside finish
of permanent outer walls or the glass line if at least fifty percent (50%) of
the outer Building wall is glass, and including all space inside such walls less
stairs, shafts, flues, and vertical ducts within their enclosing walls, without
deduction for columns and projections necessary to the Building, and in
additional one hundred percent (100%) of the area of all balconies on such
floor.
(d) "Building" means the Property and all buildings, improvements and
facilities located thereon from time to time.
(e) "Building Operating Cost" means:
(i) the total of all reasonable expenses in the complete operation and
maintenance of the Building and the Property and shall include, without limiting
the generality of the foregoing, the cost of providing cleaning, garbage
removal, janitor, supervisory and maintenance services, the cost of operating
elevators and escalators, the cost of the heating cooling and ventilating all
space, the cost of hot and cold water, electricity, telephone and other
utilities and services, to all space, the cost of all repairs and replacements
to the Building or services including elevators, cost of window cleaning, cost
of security and supervision, cost of all insurance for loss of income, liability
or fire or other casualty, accounting costs incurred in connection with
maintenance and operating including computations required for the imposition of
charges to tenants and audit charges for the reporting of charges hereunder, the
reasonable rental value of office space (not larger than 250 square feet in
area) utilized by the Landlord in connection with the operation and maintenance
of the Building, the amount of all salaries, wages and fringe benefits paid to
employees engaged in the operation and maintenance of the Building, amounts paid
to independent contractors for any services in connection with such operation
and maintenance, the cost of direct supervision and of management and other
expenses to the extent allocable to the operation and maintenance of the
Building, the cost of any management fees and managing agents' fees and all
other expenses of every nature incurred in connection with the operation and
maintenance of the Building;
(ii) but shall not include Municipal Tax Cost, debt service, depreciation,
expenses properly chargeable to capital account, and fees in connection with
leasing and rental advertising;
(iii) and there shall be allowed as a deduction the proceeds of insurance
relating to Insured Hazards actually recovered by the Landlord, and the amount
of any charges for services and utilities actually received by the Landlord
where such charges are recovered from tenants.
(f) "Current Office Municipal Tax Cost" means Office Municipal Tax Cost for
any Lease Year.
(g) "Current Office Operating Cost" means Office Operating Cost for any
Lease Year.
(h) "Gross Office Leasable Area" means the aggregate floor area (expressed
in square feet) which may be rented for office purposes whether rented or not
calculated as if the office area were fully rented and each floor had a single
tenant in the manner set out in the definition of Area of the Leased Premises.
(i) "Insured Hazards" means fire and such other perils which are covered by
insurance policies taken out by or on behalf of the Landlord in connection with
the Building and which policies are in force at the time of any incident in
relation thereto.
(j) "Lease" means this indenture and all schedules attached hereto, and the
rules and regulations made from time to time by the Landlord under the
provisions of Article 17.4.
(k) "Lease Year" means a twelve (12) month period commencing with the first
day of January in one calendar year and ending on the last day of December in
that calendar year, providing that the first Lease Year shall commence on the
Commencement Date of the Term and end on the last day of December next following
and the last Lease Year shall end on the last day of the Term or a renewal term,
if any, of this Lease and commence on the first day of January preceding that
date. The Landlord may change the beginning and ending dates of the Lease Year
from time to time and create Lease Years containing less than twelve (12)
calendar months, costs shall be pro-rated as determined by the Landlord, to make
any calculation required hereunder.
(l) "Leased Premises" means that portion of the Building, which portion is
shown outlined in red on the plan annexed hereto as Schedule "A".
(m) "Municipal Tax Cost" means the total, without duplication, of sums paid
by the Landlord in respect of Municipal Taxes, and where the Lease Year is not
coterminous with the period for calculation of Municipal Taxes, Municipal Taxes
shall be allocated to Municipal Tax Cost on a monthly basis.
(n) "Municipal Taxes" means the aggregate of all taxes, local improvements
or similar rates, duties, assessments and charges, municipal realty taxes, water
taxes, school taxes, or any other taxes, rates, duties, assessments, both
general and special, levied or imposed by any level of government whether
municipal, provincial or federal upon or in respect of the Building.
(o) "Net Rentable Area" means in the case of a floor with more than one
tenant, the area expressed in square feet measured from the inside finish of
permanent outer walls or the glass line if at least fifty percent (50%) of the
outer Building wall is glass, to the office side of corridors or other permanent
partitions, and to the centre of partitions that separate the Leased Premises
from adjoining rentable areas, without deduction for columns and projections
necessary to the Building, and, in addition, one hundred percent (100%) of the
area of all balconies adjoining the Leased Premises, if any.
(p) "Normal Business Hours" means the hours from 8:00 a.m. to 6:00 p.m.
Monday to Friday and the hours from 8:00 a.m. to 1:00 p.m. Saturdays, holidays
excepted.
(q) "Office Operating Cost" means utilities and other expenses attributable
to the operation and use of leased premises that are not included under
Operation Building Cost. If such utilities and other expenses were attributable
to a group of tenants in the Building the Landlord shall determine the
proportion for each tenant on a reasonable and consistent basis in accordance
with sound accounting principles.
(r) "Office Municipal Tax Cost" means that part of Municipal Tax Cost
attributable to the Leased premises but without limiting the generality of the
foregoing, any business tax, machinery tax and such other taxes as may be levied
and assessed by the City of Vancouver, provided that the same are not included
or payable under Municipal Taxes. In the event that the foregoing Municipal Tax
Cost is attributable to a number of tenants in the Building, the Landlord shall
pro-rate the same to each tenant on a reasonable and consistent basis in
accordance with sound accounting principles.
(s) "Property" means the lands in the Province of British Columbia, more
particularly described in Schedule "B" annexed hereto.
(t) "Structural" means pertaining only to foundation, beams and columns (but
not including exterior cladding of brick, concrete or any other material) and
roof structure (but not including any roofing or roof membrane).
(u) "Service Area" means the area of corridors, elevator lobbies, washrooms,
air-cooling rooms, janitor's closets, telephone and electrical closets, and
other areas serving the Leased Premises.
(v) "Taxing Authority" means any duly constituted government authority
whether federal, provincial, municipal or otherwise legally empowered to impose
taxes, rates, assessments or charges on, upon or in respect of the Building.
(w) "Term" means the term of this Lease set forth in clause 1. I and any
extension thereof.
ARTICLE 20 - GUARANTEE
20.1
Intentionally deleted.
ARTICLE 21 ADDITIONAL CLAUSES
21.1 EARLY TERMINATION
The Tenant shall have the one time only option to cancel this Lease during the
month of September, 2001. This option may be exercised by giving the Landlord
six (6) months prior written notice of its intention to terminate the Lease. If
this option is exercised, the Tenant will pay to the Landlord one (1) month of
the then gross rent, plus GST, for the Premises at the time of giving notice.
21.2 EARLY ACCESS
The Tenant shall have access to the Leased Premises seventy-six (76) days prior
to the Commencement Date. During this period, the Tenant shall not be obligated
to pay any Basic Rent or Additional Rent, but shall abide by all other terms of
this Lease.
21.3 SURRENDER OF LEASE FOR SUITE 701
The lease dated the 9th day of November, 1999 between the Landlord and
Quotescanada.com, a subsidiary company to the Tenant, shall be surrendered at of
midnight on January 14, 2000, and the execution of this lease shall be
sufficient to effect that surrender and its acceptance by the Landlord.
IN WITNESS WHEREOF the parties have executed this Lease as of the date first
above written, and in the case of each corporate party its seal was affixed in
the presence of its duly authorized officers.
)
)
The Corporate Seal of S & B OCTAGON PROPERTIES CANADA LTD. was hereunto affixed
in the presence of: )
)
)
Authorized Signatory )
)
)
Authorized Signatory ) C/S
)
)
The Corporate Seal of QUOTESCANADA FINANCIAL NETWORK INC. was hereunto affixed
in the presence of: )
)
)
Authorized Signatory )
)
)
Authorized Signatory ) C/S
<PAGE>
889 WEST PENDER STREET
VANCOUVER, BC V6P 3Y5
SCHEDULE "A" - PLAN OF PREMISES
<PAGE>
889 WEST PENDER STREET
VANCOUVER, BC V6P 3Y5
SCHEDULE "B" - DESCRIPTION OF LEASED PREMISES
The Leased Premises have an area of approximately one thousand nine hundred
(1,900) square feet, and are located on the sixth (6th) floor of that Building
with a civic address of 889 West Pender Street, Vancouver, British Columbia,
which Building is located on that Property legally described as:
City of Vancouver
Lots 19 and 20, Block 21, District Lot 541, Plan 210
<PAGE>
889 WEST PENDER STREET
VANCOUVER, BC V6P 3Y5
SCHEDULE "C" - RULES AND REGULATIONS
The Tenant shall observe the following Rules and Regulations (as amended,
modified or supplemented from time to time by the Landlord as provided in the
Lease):
1. The Tenant shall not use or permit the use of the Leased Premises in such
manner as to create any objectionable noises or other nuisance or hazard, or
breach any applicable provisions of municipal bylaws or other lawful
requirements applicable thereto or any requirement of the Landlord's insurers,
shall not permit the Leased Premises to be used for cooking (except with the
Landlord's prior written consent) or for sleeping, shall keep the Leased
Premises tidy and free of rubbish, shall keep the Leased Premises free from
rodents, insects and pests of all types, shall deposit rubbish in receptacles
which are either designated or clearly intended for waste and shall have the
Leased Premises at the end of each business day in a condition such as to
facilitate the performance of the Landlord's janitor services in the Leased
Premises.
2. The Tenant shall not abuse, misuse or damage the Leased Premises or any
of the improvements or facilities therein, and in particular shall not deposit
material in any plumbing apparatus or use it for other than purposes for which
it is intended, and shall not deface or mark any walls or other parts of the
Leased Premises.
3. The Tenant shall not perform, patronize or (to the extent under its
control) permit any canvassing, soliciting or peddling in the Building, shall
not install in the Leased Premises any machines vending or dispensing
refreshments or merchandise and shall not permit food or beverages to be brought
to -the Leased Premises except by such means, at such times and by such persons
as have been authorized by the Landlord.
4. The entrances, lobbies, elevators, staircases and other facilities of the
Building are for use only for access to the Leased Premises and other parts of
the Building and the Tenant shall not obstruct or misuse such facilities or
permit them to be obstructed or misused by its agents, employees, invitees or
others under its control.
5. No safe or heavy office equipment shall be moved by or for the Tenant
unless the consent of the Landlord is first obtained and unless all due care is
taken. Such equipment shall be moved upon the appropriate steelbearing plates,
skids or platforms and subject to the Landlord's direction, and at such times,
by such means and by such persons as the Landlord shall have approved. Hand
trucks and similar appliances shall be equipped with rubber tires and other
safeguards approved by the Landlord, and shall be used only by prior arrangement
with the Landlord.
6. The Tenant shall permit and facilitate the entry of the Landlord, or
those designated by it, into the Leased Premises for the purpose of inspection,
repair, window cleaning and the performance of other janitor services, and shall
not permit access to main heater ducts, janitor and electrical closets and other
necessary means of access to mechanical, electrical and other facilities to be
obstructed by the placement of furniture or otherwise. The Tenant shall not
place any additional locks or other security devices upon any doors of the
Leased Premises without the imposed by the Landlord for the maintenance of
necessary access.
7. The Landlord may require that all or any persons entering and leaving the
Building at any time other than normal business hours satisfactorily identify
themselves and register in books kept for the purpose and may prevent any person
from entering the Leased Premises unless provided with a key thereto and a pass
or other authorization from the Tenant in a form satisfactory to the Landlord
any may prevent any person removing any goods therefrom without written
authorization.
8. The Tenant shall refer to the Building only by the name from time to time
designated by the Landlord for it and shall use such name only for the business
address of the Leased Premises and not for any promotion or other purpose.
9. The Tenant shall not interfere with window coverings installed upon
exterior windows, and shall close or (if such window covers are remotely
controlled) permit to be closed such window coverings during such hours from
dusk to dawn as the Landlord may require, and shall not install or operate any
interior drapes installed by the Tenant so as to interfere with the exterior
appearance of the Building.
10. The foregoing Rules and Regulations, as from time to time amended, are
not necessarily of uniform application, but may be waived in whole or in part in
respect of other tenants without affecting their enforceability with respect to
the Tenant and the Leased Premises, and may be waived in whole or in part with
respect to the Leased Premises without waiving them as to future application to
the Leased Premises, and the imposition of such Rules and Regulations shall not
create or imply any obligation of the Landlord to enforce them or create any
liability of the Landlord for their non-enforcement.
<PAGE>
889 WEST PENDER STREET
VANCOUVER, BC V6P 3Y5
SCHEDULE "D" - TENANT INFORMATION GUIDELINE
I. GENERAL
1. This Tenant Information Guideline is prepared to assist and introduce the
Tenant and his architect or contractor to the basic 889 West Pender Street
building design, systems and building regulations. The utilization of these
guidelines will enable the Tenant and his agents to avoid unnecessary delays,
alterations and expenses, thus resulting in an earlier occupancy schedule.
This Tenant Information Guideline is to be read in conjunction with and forms
part of the Lease document. In the event of any conflict between the
Information Guideline and the Lease, the provisions of the Lease shall prevail.
2. The Landlord: The Landlord is:
S & B OCTAGON PROPERTIES CANADA LTD.
Suite 3 08, 65 0 West 41 St Avenue
Vancouver, BC V5Z 2M9
Tel: (604) 266-1988
3. Tenant Co-ordination:
The Tenant and his agents shall address all requests for information and
approvals to:
Tenant Co-ordinator
S & B Octagon Properties Canada Ltd.
c/o Mr. William H. Lim
Suite 308, 650 West 41st Avenue
Vancouver, BC V5Z 2M9
Tel: (604) 266-1988
4. Landlord Consultants:
Project Management Consultants:
E. W. HAMILTON LTD.
Suite 205, No. 1 Alexander Street
Vancouver, BC V6A 1B2
Tel: (604) 669-8994
Interior Design Consultants:
GROUP 5 DESIGN CONSULTANTS
1305 West Georgia Street
Vancouver, BC V6E 3K6
Tel: (604) 681-8155
Architect (Base Building):
HAMILTON DOYLE ARCHITECTS
1200 Burrard Street
Vancouver, BC V6Z 2C7
Tel: (604) 669-2621
Structural Engineers:
MARTIN GLOTMAN ENGINEERING LTD.
1008 Homer Street
Vancouver, BC V6B 2X1
Tel: (604) 684-2568
Mechanical Engineers:
STERLING COOPER & ASSOCIATES
1777 West 8th Avenue
Vancouver, BC V6J 1V8
Tel: (604) 734-9338
Electrical Engineers:
ARNOLD NEMETZ ENGINEERING LTD.
2083 West 4th Avenue
Vancouver, BC V6J 1N3
Tel: (604) 736-6562
II. BASE BUILDING CONSTRUCTION
1. The base building construction shall consist of all the structural,
mechanical systems, electrical systems and architectural finishes, included in
the basic constructions contract between the Landlord and his contractor.
2. Any alterations or additions to the base building construction that may
be required to accommodate Tenant office layout shall be subject to the approval
of the Landlord and shall then be carried out by the Landlord's designated
contractor, under the supervision of the Landlord's Consultants, at the Tenant's
expense. The cost of such work shall include labour, material, applicable
taxes, all architectural, engineering and contractors' fees and such reasonable
fee for supervision as the Landlord may charge.
3. Tenant Information Drawings
The Landlord shall provide one set of base building information drawings
indicating all the major elements of a typical floor to the Tenant. Any
additional drawings that may be required by a Tenant shall be provided, upon
request, at the Tenant's expense.
4. Work Done By Landlord For Tenant
Any work, equipment or services provided by the Landlord on behalf of the Tenant
shall be authorized in writing by the Tenant on the form provided by the
Landlord and shall be paid by the Tenant as follows:
(a) Thirty-five (35%) percent of the amount payable by the Tenant as
estimated by the Landlord shall be paid to the Landlord by the Tenant at the
time the Tenant authorized the Landlord's assistance;
(b) The Tenant shall pay the balance of the amount payable by the Tenant for
Landlord's assistance forthwith upon receipt of monthly invoices rendered by the
Landlord in connection with such Landlord's assistance; and
(c) The Tenant shall pay interest at a rate of two (2%) percent per month
[twenty-four (24%) percent per annum], calculated monthly, on any amount for
which the Landlord has issued an invoice and the Tenant has not paid in fifteen
(15) days.
III. TENANT DRAWING REQUIREMENTS
1. Tenant Designer
(a) The Tenant shall engage an architect or a certified designer to prepare
all and tiny drawings which are necessary for the construction of the Tenant's
leasehold Improvements and the approval of the Landlord or any other regulatory
bodies having jurisdiction. The Landlord may request the Tenant or his agent to
produce additional drawings and information which in the Landlord's opinion may
be necessary to identify and describe the nature of the intended improvements,
(b) The Tenant and his agent shall inform himself regarding by-law and code
requirements before preparing drawings.
(c) By giving approval to such plans, the Landlord or his consultants do not
waive the Tenant's responsibility to ensure that any and all Tenant improvements
meet building standard and authorities having jurisdiction with respect to
design and construction.
2. Approval Of Tenant Drawings
(a) Submission of Preliminary Drawings
The Tenant or his agent shall submit two (2) prints of his preliminary drawings
showing proposed office layout for the preliminary approval of the Landlord.
Tenant preliminary drawings will be checked from the standpoint of physical
compatibility and any problems encountered shall be returned to the Tenant or
his agent for solution. Preliminary approval shall be obtained from the
Landlord prior to commencement of final design and tender documents.
(b) Submission of Final Drawings and Specifications
The Tenant or his agent shall submit five (5) copies of complete working
drawings and specifications for final approval by the Landlord at least sixty
(60) days prior to the Tenant's occupancy date. The drawing sheet size shall be
a minimum of 24" x 36" consistent.
Documents to be submitted by the Tenant will be required to show all appropriate
and necessary details so as to fully describe and accurately specify all aspects
of Tenant's Work in relationship to Landlord's Work and will consist of the
following:
(i) Floor Plan at 1/8" = 1'0" scale, indicate the Tenant area in
relationship to the corridors, stairs, elevators, partitions, doors, etc.
(ii) Telephone and Power Outlet Plan at 1/8" - 1'0" scale indicate with
dimensions, location of all telephone and power outlets.
(iii) Reflected Ceiling Plan at 1/8" - 1'0" scale, indicate partition
layout, baffles, supply air diffusers, lights, sprinklers, etc.
(iv) Sections & Details at 3" - 1'0" scale, indicate partition details,
baffles, doors, etc.
(v) Specifications: Indicate all elements.
(vi) Room Finish, Door & Hardware Schedule - Indicate all elements including
keying which must be to building standard.
(vii) Mechanical Drawings & Specifications: compatible with the above.
(viii) Electrical Drawings & Specifications: compatible with the above.
(c) Indicate the number of persons who shall occupy each office and state
the functions of each room to guide the Landlord's consultants, especially
regarding mechanical modifications.
(d) The design live floor load is 70 pounds per square foot (including
partitions) for typical floors and any special floor loadings must be identified
for review by the Landlord's Consultants.
(e) The Tenant or his agent is responsible for obtaining all necessary
permits and approvals; such as Building Department, Health Department, Fire
Marshall and Ministry of Labour. The Tenant or his agent shall post evidence
with the Landlord, proof of building permit and approvals as received from all
regulatory bodies having jurisdiction prior to the commencement of Tenant's
construction.
(f) The Landlord shall engage the base building mechanical and electrical
consultants to design and supervise all mechanical and electrical modifications
and additions to the base building systems to accommodate the Tenant office
layout requirements, at the Tenant's expense.
(g) The Landlord shall engage, at the Tenant's expense, the Landlord's
designated contractors, for any mechanical and electrical modifications and
additions; all in accordance to base building consultants supplementary drawings
to ensure physical compatibility, guarantees and warrantees to base building
elements.
IV. THE TENANT CONTRACTOR(S) REQUIREMENTS
1. The Tenant shall engage his own contractor(s) except for mechanical and
electrical modifications to base building elements as noted above, to execute
the Tenant leasehold improvements.
2. The Tenant contractor(s) are subject to the following conditions:
(a) The Landlord reserves the right to approve all construction work carried
out by the Tenant's contractors to ensure its compliance with approved drawings
and building standards.
(b) Be approved by the Landlord prior to award of contract(s).
(c) Prior to start of work, furnish evidence that they are adequately and
properly covered by insurance according to the following terms:
(i) The Landlord, the City of Vancouver and all contractors and
subcontractors and trades of those insured, engaged in or connected with the
construction of the project known as 889 West Pender Street are listed as
additional named insureds on all policies;
(ii) A Comprehensive General Liability policy be in force covering the work,
with a limit to any one occurrence of $3,000,000.00. The policy shall contain a
cross liability clause and shall be extended to include non-owned automobiles
and blanket contractual liability;
(iii) An "all risk" of physical loss or damage policy be provided covering
the total contract price for the Tenant's work;
(iv) An automobile policy be in force covering all owned vehicles, with a
minimum limit of $500,000,00;
(v) All policies of insurance relating to Tenant work must be in amounts and
in form and with insurers acceptable to the Landlord, including an undertaking
by the insurers to give at least thirty (30) days written notice of cancellation
or material changes;
(vi) Evidence of the existence of insurance covered referred to in this
section must be submitted to the Landlord by means of a Certificate of Insurance
from the Contractors' insurers or by a certified copy of the actual policy
documents before commencement of Tenant's construction;
(vii) The Tenant may, if he so wishes, provide the aforementioned insurances
but shall be bound by the same terms and conditions as herein described.
(d) Furnish written evidence of good standing with the Workers' Compensation
Board.
(e) The Tenant contractor(s) shall be restricted to the area of the Leased
Premises for all work and storage of materials and equipment.
(f) Arrange for the security of the Tenant leased area and equipment,
materials, etc. during the construction period as required.
(g) Enforce safety regulations during the construction period.
(h) Observe normal working hours, 7:30 a.m. to 4:00 p.m., Monday to Friday,
unless permission is obtained in writing from the Landlord.
(i) Provide and maintain adequate first aid and fire prevention facilities
during the construction period.
(j) The Tenant contractor(s) shall give the Landlord, at least forty-eight
(48) hours advance noticed to reserve the use of the Landlord's elevator
facilities for tenant's construction materials and equipment. Provide adequate
protection to all finished surfaces of elevators; upon completion of each use
clean down and make good any damage to all surfaces. All materials and
deliveries must be scheduled and delivered at parking deck level. No deliveries
will be allowed at ground floor entrance or at loading dock level at grade off
lane.
(k) Remove all garbage and debris from the Tenant premises in sealed
containers.
(l) Do not penetrate or fix to the exterior wall or windows.
(m) Protect all finishes to basic building elements and reimburse the
Landlord the cost to make good any damages.
(n) Stack drywall over main beams at column lines. Piles not to exceed 12"
in height.
(o) All noisy work such as coring and drilling must be carried out during
non-business hours and the tenant contractor(s) shall obtain the Landlord's
approval in advance of such work.
3. Commencement of Tenant's Work
Tenant's work in the leased premises shall commence subject to the following
conditions!
(a) The Tenant's final working drawings shall have been approved by the
Landlord,
(b) The Tenant shall have obtained all necessary approvals and permits from
all regulatory bodies having jurisdiction over Tenant's work and evidence of all
such approvals and permits shall be provided to the Landlord's tenant
coordination office,
(c) The Tenant's contractor and sub-contractors shall have been approved by
the Landlord's tenant co-ordination office prior to commencement of Tenant's
work.
(d) The Tenant's contractor shall furnish proof of insurance as noted above.
(e) The Tenant shall be provided a turnover document outlining regulations
and procedures for Tenant contractors and sub-contractors on the jobsite.
4. Damage to Base Building
Any damage or deterioration to the base building structure, services or finishes
both inside or outside, above grade or below grade as a result of Tenant
improvements caused by Tenants' contractors or sub-contractors shall be
repaired, replaced or made good to the complete satisfaction of the Landlord,
Alternatively the Landlord shall make good any and all damaged areas and charge
the Tenant accordingly.
V. BUILDING SERVICES FEE
The Tenant and his agent shall include in their Tenant leasehold improvement
budget an allowance for building services for the use of the following
Landlord's facilities:
- - elevator facilities;
- - hydro consumption;
- - water;
- - toilets.
The building services fee shall be computed at the rate of $0.50 per square foot
of leased area and payable to the Landlord within ten (10) calendar days of
turnover of this leased area.
The facilities shall be limited to the following terms and conditions:
(a) Elevator facilities - operational during normal working hours (7:30 a.m.
to 4:00 p.m.); forty-eight (48) hours advance reservation required. After
hours, elevator use available by advance reservation only.
(b) Hydro Consumption - 15 amp. duplex receptacles are available in the main
building core.
(c) Water - available at locations designated by Landlord.
(d) Toilet - available at locations designated by Landlord.
VI. LANDLORD'S BASE BUILDING AND FINISHES
1. Ceiling
Ceilings in typical rental areas shall be a suspended T-Bar system on a 5'0" x
5'0" grid for ceiling tile and l'0" x 5'0" recessed fluorescent light fixtures.
The Landlord shall install the acoustic tile:
Fluorescent light fixtures removed by the tenant or tenant's contractor remain
the property of the landlord and shall be stored in a location oil the site
designated by the Landlord.
Floor to Ceiling Heights - 2nd to 8th Floors - 8'6
2. Floors
The floor shall be smooth troweled concrete ready for finish by Tenant.
3. Doors (on Multiple Tenant Floor Only)
The Landlord shall provide demising building standard doors (solid core oak
veneer wood 3'0" x full height) in solid oak 20 minute rated wood frames. All
doors shall be equipped with building standard lockset keyed to the building
standard key-code and master-key System. Doors are to be completed with the
following hardware:
1 only lockset - 8G05 x 0B x C10B GMK
2 only pair butts - BB179-C-20 x 4.5 x 4
1 only closer - EB 1230-0
1 only floor stop - 200 x C10B
As an alternative to the standard single door application, the Landlord will
install a combination wood door and glazed sidelight in wood frames at Tenant's
cost.
4. Keys & Cylinders
The Landlord shall provide building standard cylinders and two keys for each
demising door key-coded to the building's master key system. Additional keys
shall be ordered from the Building Manager at Tenant's cost.
5. Demising Partitions (On Multiple Tenant Floor only)
The Landlord shall provide building standard demising partitions to delineate
the Tenant's leased premises which shall be composed of 2.5" steel studs, 2.5"
batt insulation fill, 1 only 0.5" layer of drywall each side; taped, filled and
ready for Tenant's finish. Deviations will be allowed in finishes on the
Tenant's side of the demising partitions, subject to the Landlord's approval and
at the Tenant's expense.
6. Core Wall & Columns
Finish on core walls and columns shall be drywall ready for painting or wall
covering.
7. Exterior Wall
Finish on exterior walls shall be drywall ready for paint finish.
Tenants shall not fix to or puncture the exterior drywall membrane for the
installation of partitions, furniture, electrical outlets, etc.
8. Venetian Blinds
Horizontal venetian blinds to all exterior windows from 2nd to 8th floor,
mounted to head of window frame.
9. Exterior Glazing
Suncool bronze float double-glazed thermal units in aluminum frames.
10. Parking
Underground parking at the base of the tower, with access off the lane is
available on a limited basis. This parking is secured with a key operated
overhead rolling gate at the entry. Access to both tower elevators is available
from the parking level.
II. Heating & Ventilation
(a) The building is fully air conditioned by a system of water-to-water heat
pumps designed to maintain the building at 74 deg. F. and 50% relative humidity
in summer, and 70 deg. F. in winter.
(b) The system is designed with eight heat pumps per floor, each with
individual thermostat control.
(c) The Central Equipment Room at the roof of the tower contains the Boiler
Room and immediately adjacent, the heat extractor or cooling tower.
(d) It may be necessary to provide additional heat pumps and thermostats if
required for detailed tenant requirements in office arrangement.
(e) Any equipment generating heat loads in excess of the normal office loads
shall be separately serviced by the Tenant by means of individual air
conditioning units and/or additional heat pump units.
(f) The ceiling space functions as a return air plenum and recirculation air
path must be maintained to all heat pump unit. The fresh air is injected into
the ceiling space of each floor and is picked up by the heat pump units for
distribution within the space. It is essential that the fresh air supply duct
is allowed to supply into all areas of the ceiling, and that the recirculation
air from the Tenant areas is not obstructed.
(g) Each of the heat pumps is controlled by an automatic heating cooling
thermostat which shall switch the unit from heating to cooling as required. The
heat pump blower fan runs continuously during the day. A single time switch
shall switch off all heat pumps at 7:00 p.m. (or at any other set time) and they
shall cycle as required at night to maintain a night set back temperature. The
time switch contains a manual override switch. The night setback thermostat is
a tamper-poof design and provided with a label "Night Set-Back" Thermostat".
Both the time switch and the override timer are located adjacent to the core.
(h) Any tenant that requires to have operation of the heat pump during the
night hours should arrange to be disconnected from the time switch which would
allow the heat pump to run on an individual basis.
(i) It should be noted that the fresh air supply fan is also controlled by
an automatic time clock and it may not be possible to have a fresh air make-up
for any individual tenant area during the night hours.
(j) It is brought to the attention of tenants that the air conditioning
system cannot operate at full efficiency until adjustments have been made to the
system following tenant partition installations. The comfort level for which
the building has been designed may therefore not be fully available in the first
period of tenants' occupancy and every effort will be made to bring the systems
to their ultimate condition as soon as possible.
(k) A general exhaust system is available for tenant connections at each
floor for small exhaust requirements such as interior Conference Rooms, Staff
Rooms, etc. Connection to general exhaust system and associated ductwork is to
be at tenant's expense.
12. Office Tower Plumbing
A sanitary plumbing connection is stubbed off in the core of each floor.
Connections to this capped-off sanitary stack should be maintained as close to
the core as possible.
Valved hot and cold water are also provided at the core to service tenant
plumbing. (2 sinks and I water closet per floor)
13. Ground Floor Retail Areas
The design incorporates 4 heat pump units to provide heating and cooling for the
retail spaces of the ground floor.
14. Roof Top Equipment Room
The Fan Room/Boiler Room on the roof contains the following equipment:
- - Gas-fired automatic hot water boiler.
- - Domestic hot water tank for public lavatories.
- - Main pumps.
The fresh air supply unit provides the ventilation requirements for all office
floors by delivering a fixed amount of air into the ceiling space. This air
supply provides approximately 0.10 CFM of fresh air per square foot of office
space.
15. Life Safety
(a) The building has been designed under Measure "A" of the Measures for
Fire Safety in High Buildings.
(b) The building is fully sprinklered and provided with stand-pipes and hose
valves at each floor. Sprinklers are flush type with chrome plates to typical
areas.
(c) A smoke shaft has been provided with motorized louvre damper openings
into the ceiling space of each floor and a motorized discharge damper at the
tope of the shaft.
(d) All fans and louvre dampers are controlled from the central fire control
and alarm panel.
(e) Pull stations, fire alarm, heat detectors, smoke detectors and sprinkler
flow switches have been provided at each floor. An annunciator panel is located
on the ground floor which is monitored 24 hours per day by phone line to outside
source.
(f) Emergency lighting has been installed in public areas and is powered by
a roof mounted emergency generator. The emergency generator also power other
life safety items as noted above.
16. Lighting
(a) Typical office floor light fixtures shall be a lay-in fluorescent type
to suite the 5' x 5' ceiling grid.
(b) Lighting fixtures utilize a system which provides for the least costly
method for future additions and/or relocations and affords maximum flexibility.
Voltage will be 347,
(c) Basic design lighting level shall be an average minimum of 70 foot
candies at desk level on an open floor basis.
(d) Light fixtures shall be 60" x 12" to provide maximum flexibility for
location in 5' x 5' grid system. The fixture may be located at 90 or within
different modules of ceiling grid, all fluorescent fixtures have K 12 acrylic
lens.
17. Typical Floor Power
A ceiling junction boy. grid system at approximately 500 SF is provided
throughout the floor areas for Tenant outlet requirements at 120/208 volt, 3
phase, 4 wire. This grid system allows for approximately 1.5 watts of power per
500 SF.
18. Telephone System
(a) Tenants are required to make arrangements directly with B.C. Telephone
Co. or others, for the supply and installation of telephone services to their
premises.
(b) A roughed-in empty conduit is provided for Tenant telephone system on
each office floor from ceiling area into telephone closet for easy access.
Distribution of telephone cables within Tenant lease space will be the
responsibility of the Tenant. The Tenant has the option of utilizing special
fire rated telephone cabling or installing a conduit distribution system.
(c) A telephone room is provided on each floor in the building core. Any
additional space of this nature, which the Tenant requires for his use or
equipment, must be provided within the leased premises. Any special cooling or
ventilation required to accommodate the Tenant telephone equipment shall be
provided and paid for by the Tenant.
(d) The main telephone cable entry room is located in the tower basement.
(e) Note that B.C. Telephone Co. will not life or replace carpet, ceiling
tile, etc. and the Tenant contractor must provide for this.
19. Structural
General floor framing systems are included in the set of drawings supplied by
the Landlord. Unusual loading situation such as filing rooms, safes, computer
installations, etc. Must be brought to the attention of the Landlord. The
Landlord will not be responsible for any partitioning layout revisions
necessitated by unusual loading conditions.
Design loads are as follows:
Live Load - 70 lbs. per square foot (inclusive of partitions)
20. Mail Room
The building mail room is located on the main floor with easy access from the
elevator lobby.
21. Tenant Signage
(a) A building standard identification sign for Tenant's entrance door shall
be provided by the Landlord at Tenant's expense.
(b) Tenant identification shall be provided in the main floor lobby
directory by the Landlord at Tenant's cost.
(c) Standard base building elevator lobby directional signs shall be
provided by the Landlord.
(d) All other Tenant's signage must be approved by the Landlord before
installation.
VII. TENANT CONSTRUCTION STANDARDS
1. Interior Partitions
The Tenant shall install a partition composed of 2.5" steel studs; 2.5" batt
insulation and 0.5" drywall taped, filled and painted, as minimum standard.
2. Interior Doors
The Tenant shall install solid core wood full height doors. Variations to suite
individual decor shall be subject to Landlord approval.
3. Locks
Tenants requiring locksets to any offices within the Leased Premises shall
ensure the lockset will receive a cylinder with keys coded to the Building's
master-key system. The Tenant's designer shall note on the required hardware
schedule the appropriate designations for interior locksets and key
requirements, subject to the Landlord's approval.
4. Power
(a) Refer to Landlord information drawings for general location of conduit
and wire distribution system in the ceiling space.
(b) All power shall originate from circuits in panels on the typical floor.
(c) Extra 120/208 volt, 3 phase, 4 wire power other than that provided
through the ceiling junction box system can be installed by the Landlord, if
available, at Tenant's expense.
5. Flooring
The Tenant, where desirable, shall install carpet and special approval surfaces
in service areas.
6. Copying Machines
Xerox, IBM, or other types of photo copying machines must be non-toxic type and
will, usually, require special circuitry and power hook-up. Due to specific
nature of such machines, heat generated by these types of equipment require an
exhaust duct to be installed. The Tenant shall advise and provide
specifications of photo copying machines.
7. Coffee Machines
Coffee machines usually require special circuitry and power hook-up. The Tenant
shall advise and provide specifications.
8. Light Switches
Where a local light switch is desirable to a private office or boardroom, the
Tenant shall advise and specify.
9. Pot and Track Lights
In order to conserve energy, tenants will be permitted to install incandescent
pot or track lights to a maximum average of 3 watts inclusive of fluorescent and
track lighting per square foot of the leased area. All such lights shall be
controlled by local switching.
10. Tenant Construction Clean-up
Upon completion of the Tenant's improvements and before occupancy the Tenant's
contractor(s) shall thoroughly vacuum and clean up the Leased Premises, windows
(interior only), repair damaged ceiling tiles, etc.
The Landlord recommends the use of the building cleaning contractor to ensure
physical compatibility of cleaning materials and standards.
VIII. INTERIOR DESIGN GUIDE
Tenant designers are urged to take maximum advantage of the basic building and
its systems and to avoid expense and delay to Tenants when creating their
improvement sand restoring them at termination of lease.
This is intended as a guide to Tenants and their designers and contractors:
1. Take full advantage of the 5'0" x 5'0" grid to which the ceiling is built
and light fixtures.
2. Keep ceilings at standard height.
3. Do not request changes to the partitions, doors, ceiling heights or
finishes in the rooms in the core (i.e. male and female toilets, vestibules,
stairs, janitor, electrical and telephone closets).
4. Ensure that any wall finishing material introduced by a full floor tenant
in the elevator lobby does not require changes to the elevator door frames, call
buttons or signals. Cladding of door frames with special approved finishes will
be permitted to full floor Tenants.
5. Ensure that any floor finish material introduced by a full floor tenant
in the elevator lobby does not require changes to the elevator door thresholds.
6. Locate additional washrooms, sinks, etc., as close as possible to the
soil stacks to ensure adequate slope of drains.
7. Advise Landlord as soon as possible, and in writing, of any changes
required to the base building elements.
8. Do not permit the drilling of holes in the aluminum frames of the
windows.
9. Arrange for air return openings in every sound baffle in ceiling plenum
above a partition, to permit return of air through the ceiling space to the-
return air ducts at the core.
10. Comply with City regulations, with respect to access to Fire Department
valve cabinets and acceptable routing through the tenant's premises for person
with hose and maximum distance of water throw.
REPUBLISHING AGREEMENT
THIS REPUBLISHING AGREEMENT dated as of 11/23, 1999
BETWEEN:
EARTHRAMP.COM,
having an office at
701 - 889 W. Pender
Vancouver, BC
("Licensor")
AND:
MOSTACTIVES.COM, (Benson York Group)
having an office at: 8723 4th Ave., Brooklyn, NY 11209
("MOSTACTIVES.COM")
(each of EARTHRAMP.COM and MOSTACTIVES.COM are referred to herein as a
"Party")
WHEREAS:
A. Licensor is the owner or licensee of rights to certain financial content
more particularly described in Schedule A attached hereto and incorporated
herein by reference (the "Material");
B. MOSTACTIVES.COM owns, operates and maintains a Web site located at
WWW.MOSTACTIVES.COM and other sites located at other domain names (the
"MOSTACTIVES.COM Site")
C. Licensor desires to grant to MOSTACTIVES.COM, and MOSTACTIVES.COM desires
to accept from Licensor, the right to republish the Material, in whole or in
part on the MOSTACTIVES.COM Site.
NOW THEREFORE the Parties have agreed to the following terms and conditions:
1. License. Licensor hereby grants to MOSTACTIVES.COM a non-exclusive,
worldwide license for the term set out below to use the Material subject to the
following provisions. The License granted pursuant to this Section 1 shall
include the non-exclusive right to (i) publish, publicly display and otherwise
exploit and utilize, the Material, and all or any portions, adaptions or updates
thereof, and (ii) make use of such trademarks and names of Licensor as are
associated with the material with such quality control requirements as Licensor
may reasonably specify.
2. Delivery. Licensor shall provide MOSTACTIVES.COM the Material at such
time and in such formats as are set forth in Schedule A. The parties may agree
to add content to the Material by executing an additional document in the form
of Schedule A and any such document shall constitute an addition to the
Agreement and shall be subject to all the terms thereof.
3. Content and Style. Licensor shall be the exclusive owner of the Material
and all intellectual property rights related thereto. MOSTACTIVES.COM covenants
that it shall not, either during the term of this Agreement or thereafter,
directly or indirectly, contest, or assist any third party to contest, the
Licensor's ownership of the Material. Notwithstanding the foregoing, neither
Party shall be responsible for the content of the other Party's Web site.
4. Linking. MOSTACTIVES.COM shall display a logo, no larger than 164 pixels
wide and 35 pixels tall, supplied by the Licensor and hyper linked to a URL
specified by the Licensor (the "Link Logos") on every page of the
MOSTACTIVES.COM Site containing the Materials. The placement Link Logos shall
be at MOSTACTIVES.COM's reasonable discretion.
5. Trade-Mark License.
(1) Licensor hereby grants to MOSTACTIVES.COM a non-exclusive,
non-transferable, limited license to use only those trade-marks of the Licensor
to create links to the Licensor's site.
(2) MOSTACTIVES.COM agrees that:
(a) they will not alter the appearance of the other Licensor's trade-marks;
(b) MOSTACTIVES.COM will use only the approved graphical image of the Link
Logo supplied by the Licensor;
(c) the Link Logos may not be reduced in size beyond what is electronically
provided by the Licensor provided, however, that Link Logo shall not be larger
in size than 164 pixels wide and 35 pixels high;
(d) the Link Logo must stand by itself and must include a minimum amount or
[30] pixels of empty space around it so as to avoid unintended associations with
other objects, including without limitation, type, photography, borders and
edges;
(e) MOSTACTIVES.COM will comply with any other reasonable trade-mark usage
policies established by the Licensor from time to time;
(f) all goodwill associated with the Licensor's Link Logos shall accrue to
the Licensor;
(g) MOSTACTIVES.COM will not use any other logos, slogans, copyright
material or trade-marks of the Licensor as set forth herein.
(h) MOSTACTIVES.COM will not use the Licensor's Link Logo more prominently
than its own company, product or Web site name or Logo; and
(j) MOSTACIVES.COM will include a notice on its Web site to the effect that
the Licensor's Link Logo is a trade-mark of the Licensor and is used under
license.
(4) MOSTACTIVES.COM acknowledges the Licensor's worldwide ownership of
its Link Logos and will not contest such ownership.
6. Approvals. The initial location and appearance, and any subsequent
change in location or appearance, of the Link shall be subject to prior approval
by the Licensor which approval may be conditional upon the inclusion of notices
or statements as required by the Licensor.
7. Appropriate Conduct. Neither Party will use the Link Logos in any manner
that implies sponsorship or product endorsement by the other Party. Neither
Party will place the other Party's Web pages in a "frame" within its own site,
or otherwise cause a user's browser to frame the other Party's Web site such
that both Party's sites appear on the same screen, without prior written
permission from the other Party. Each Party agrees that its Web site will to
the best of either party's knowledge not contain material that is obscene,
pornographic, excessively violent or which breaches any Canadian federal or
provincial statute or regulation. Subject to the foregoing, each Party reserves
the right to alter, modify or discontinue its Web site at any time.
8. Warranties. MOSTACTIVES.COM represents and warrants to the Licensor that
(i) it has duly registered the domain name of its respective Web site with all
applicable authorities and possesses all rights necessary to use such domain
name, and (ii) the content and material (other than the Material) which it has
placed on its Web site to the best of MOSTACTIVES.COM's knowledge does not
infringe upon or violate any (a) copyright, patent, trade-mark or proprietary
right of a third party, or (b) any applicable law, regulation or non-proprietary
third-party right.
Licensor represents and warrants to MOSTACTIVES.COM that (i) the Material does
not infringe upon or violate any (a) copyright, patent, trade-mark or
proprietary right of a third party, or (b) any applicable law, regulation or
non-proprietary third-party right.
9. Indemnity. Each Party (the "First Party") agrees to indemnify, defend
and hold harmless the other Party and its directors, officers, employees and
agents from any and all actions, claims, costs, damages, demands, expenses,
liabilities, losses and suits (including reasonable legal fees) arising from, in
whole or in part, (i) a breach by the First Party of the warranties, (ii) a
claim that the First Party's Link Logos infringe or violate the intellectual
property rights of a third party, or (iii) any acts or omissions of the First
Party or its employees or agents in performing under this Agreement.
10. Term and Termination.
(1) This Agreement shall remain in effect for the period of one year after
which the term shall be reviewed automatically for additional one year periods
unless either party gives written notice not to renew no later than 60 days
before the end of the then-current term. In the event that either Party has
breached a material provision of this Agreement and such breach hasn't been
corrected within 5 business days after notice from the First Party, the other
Party may terminate this agreement immediately by written notice.
(2) Upon termination of this Agreement MOSTACTIVES.COM shall (i) immediately
remove all Link Logos from its Web site; and (ii) MOSTACTIVES.COM will delete
the Materials from the MOSTACTIVES.COM Site and cease offering visitors to the
site access to the Materials as soon as possible; and (iii) neither Party shall
under any circumstances provide any link from its Web site to the other Party's
Web site nor shall either Party represent or otherwise take any action which
could be construed as suggesting that such Party has any relationship with or is
otherwise associated with the other Party.
11. Limitation of Liability. Neither Party shall be liable to the other
Party for any special or punitive damages, damages for lost profits or revenues,
or for any other types of economic loss or consequential damages.
12. Confidential and Restricted Information.
(1) Each Party acknowledges that the other Party (the "Discloser") may
disclose to such Party (the "Recipient"), or allow the Recipient access to,
trade secrets and other information, in the possession of the Discloser and
owned by the Discloser or entities affiliated, associated or related to the
Discloser, or by their respective suppliers, customers or other business
partners, that is not generally known to the public including, without
limitation, financial information, legal, corporate, marketing, product,
technical, personnel, customer and supplier information and any other
information, in whatever form or media, specifically identified as confidential
by the Discloser, or the nature of which is such that it would generally be
considered confidential in the industry of the Discloser, or which the Discloser
is obligated to treat as confidential or proprietary (collectively,
"Confidential Information"). The Recipient acknowledges that this information
is of significant value to the Discloser.
(2) The non-disclosure obligations of the Recipient under this Section
12 shall not apply to Confidential Information which the Recipient can
establish:
(a) is, or becomes, readily available to the pubic other than through a
breach of this Section;
(b) is disclosed, lawfully and not in breach of any contractual or other
legal obligation, to the Recipient by a third party; or
(c) through written records, was known to the Recipient, prior to the date
of first disclosure of the Confidential Information to the Recipient by the
Discloser.
(3) The Recipient acknowledges that Confidential Information is and
shall be the sole and exclusive property of the Discloser or its designate and
that the Recipient shall not acquire any right, title or interest in or to any
Confidential Information.
(4) The Recipient shall keep all Confidential Information strictly
confidential and shall take all necessary precautions against unauthorized
disclosure of the Confidential Information during the term of this Agreement and
thereafter. Without limitation, the Recipient shall not, and shall take all
reasonable steps to ensure that its employees do not, directly or indirectly,
disclose, allow access to, transmit or transfer the Confidential Information to
a third party without the Discloser's consent, or use or reproduce Confidential
Information, in any manner, except as reasonably required to fulfill the
purposes of this Agreement. Notwithstanding the foregoing, to the extent that
the Recipient can establish it is required by law to disclose any Confidential
Information, it shall be permitted to do so, provided that notice of this
requirement to disclose is first delivered to the Discloser, so that it may
contest this potential disclosure. The Recipient shall ensure that all copies
of Confidential Information are clearly marked, or otherwise identified as
confidential and proprietary to the Discloser, and are stored in a secure
location while in the Recipient's possession, control, charge or custody.
(5) Notwithstanding any other provision of this Section 12 or any other
term of this Agreement, there is certain information which the Licensor is
prohibited by law from disclosing to third parties including, without
limitation, financial and personal information relating to its customers
(collectively, "Restricted Information MOSTACTIVES.COM therefore covenants and
agrees that it shall not either directly or indirectly take any steps or actions
which result in or which could have the effect of resulting in MOSTACTIVES.COM
having access to any Restricted Information and MOSTACTIVES.COM shall take all
reasonable steps to ensure that none of its employees or users of the
MOSTACTIVES.COM Site obtain access to Restricted Information.
13. General
(1) Entire Agreement. This Agreement constitutes the entire agreement
and understanding between the Parties on the subject hereof and supersedes any
and all prior oral or written agreements, statements, representations,
warranties or understandings by any Party, and all of which are merged herein
and superseded hereby. Neither Party shall be bound by any definition,
warranty, condition or representation other than as expressly set forth in this
Agreement or as may be set forth in a writing signed by the Party to be bound
thereby. This Agreement may not be modified except by a written agreement
signed by the Parties hereto.
(2) Interpretation. In construing this Agreement or determining the
rights of the Parties hereto, no Party shall be deemed to have drafted or
created this Agreement.
(3) Governing Law. This Agreement is made and entered into under the
laws of the state of the defending party and shall be interpreted, applied and
enforced under those laws.
(4) Severability. The provisions of this Agreement are severable, and
if any one or more provisions is determined to be illegal, indefinite, invalid
or otherwise unenforceable, in whole or in part, the remaining provisions of
this Agreement shall continue in full force and effect and shall be binding and
enforceable.
(5) Assignment. Neither this Agreement nor any right or duty hereunder
shall be assignable or delegable by either Party without the express consent of
the other Party, and nothing in this Agreement, express or implied, is intended
to confer upon any person other than the Parties hereto any rights or remedies
under or by reason of this Agreement. This Agreement shall be binding upon and
shall inure to the benefit of the Parties hereto and their respective heirs,
administrators, executors, legal representatives, successors in interest and
permitted assigns.
(6) Waiver. No wavier of any provision of this Agreement shall be
deemed to be or shall constitute a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing waiver. No wavier shall
be binding unless executed in writing by the Party making the wavier. The
failure of any Party to object any act, omission or breach by the other Party or
to declare the other Party in default, irrespective of how long such failure
continues, shall not constitute a waiver by such Party of any rights or remedies
hereunder or otherwise provided at law or in equity.
(7) Notices. All notices, requests, demands and other communications
to be given hereunder shall be in writing and shall be deemed to have been duly
given on the date of personal service or on the fifth day after mailing by
certified or registered mail or on the date sent by facsimile addressed to the
Parties at the addresses noted on page one or at such other address as either
Party may hereafter indicate by appropriate notice.
(8) No Agency. Nothing in this Agreement creates a relationship of
agency, partnership, joint venture, or the like between the Parties, and neither
Party shall be entitled to, or purport to, bind or represent the other Party.
Neither party shall do or allow any act which would imply apparent authority to
act for the other Party.
IN WITNESS WHEREOF the Parties have signed this Agreement as of the date first
above written.
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<PAGE>
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MOSTACTIVES.COM EARTHRAMP.COM
By: By:
Name: Name:
Title: Title:
Date: Date:
THIS AMENDMENT AGREEMENT MADE THE 30TH DAY OF NOVEMBER, 1999
BETWEEN:
GLEN DICKSON and PAUL DICKSON, 1409 - 675 West Hastings Street, Vancouver, B.C.
V6B 1N2
(the "Vendors")
AND:
CARTA RESOURCES LTD., 1075 Duchess Avenue, West Vancouver, B.C. V7T 1G8
("Carta")
WHEREAS the Vendors and Carta entered into a letter agreement dated May 28,
1999, as amended the 29th day of July, 1999 (the "Agreement") for the
acquisition by Carta of a 100% interest in Quotes Canada Financial Network Ltd.;
AND WHEREAS the Agreement provides for a purchase price of $240,000.
payable by the issuance of 1,000,000 shares of Carta at $0.19 per share and a
cash payment of $50,000.;
AND WHEREAS the parties wish to amend the Agreement;
WITNESSES THAT in consideration of the premises and the mutual covenants
and agreements herein set forth, the parties hereto covenant and agree with each
other to amend the Amendment Agreement as follows:
1. All terms defined in the Agreement will have the same meaning as in this
amendment agreement.
2. Paragraph 3(a) of the Agreement be amended so as to read as follows:
"3.(a) the purchase price for the Shares shall be $190,000 to be paid by the
issuance of 1,000,000 shares of Carta at a deemed price of $0.19 per share."
3. Paragraph 3(g) be added to the Agreement as follows:
"(g) $50,000 is to be paid on acceptance of this offer by Carta to reimburse
the shareholders' loans owing to the Vendors by QC."
4. Paragraph 5 of the Agreement be amended to read as follows:
"5. Except for the payment of $50,000 referred to in sub-paragraph 3(g),
which payment is unconditional, this agreement is subject to it being accepted
for filing by the VSE and subject to Carta's review and acceptance, acting
<PAGE>
reasonably, of QC's audited financial statements. Carta shall advise the
Vendors as to the acceptability of the said financial statements within two
business days of Carta's receipt of them. Carta shall use its good faith best
efforts to obtain VSE acceptance of this agreement as quickly as possible;
provided that if the Effective Date has not occurred on or before July 31, 1999,
this agreement shall terminate at the election of the Vendors at any time
thereafter, and the Vendors shall be entitled to retain, as liquidated damages,
the sum of $50,000 paid pursuant to subparagraph 3(g) hereof.
5. Paragraph 6 of the Agreement be amended to read as follows:
"6. The shares to be issued to the Vendors under sub-paragraph 3(a) hereof
shall be free-trading and non-assessable shares in the capital of Carta, subject
to no pooling or escrow restrictions or hold periods other than those required
by law or the policies of any securities regulatory body having jurisdiction."
6. Except as amended hereby, the Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF the parties hereto have hereunto set their hands and
seals effective as of the date first above written.
GLEN DICKSON PAUL DICKSON
CARTA RESOURCES LTD.
Per:
Authorized Signatory
EMPLOYMENT AND CONFIDENTIALITY AGREEMENT
THIS AGREEMENT is made as of the "1st" day of "December", 1999.
BETWEEN:
CARTA RESOURCES LTD., a company incorporated under the laws of British Columbia
and having its registered and records office at 1488 - 1090 Georgia Street,
Vancouver, B.C. V6E 3V7
(the "Company")
OF THE FIRST PART
AND:
GLEN DICKSON, of 322 - 1989 Marine Drive, North Vancouver, B.C. V7P 3N5
("Dickson")
OF THE SECOND PART
WHEREAS:
The Company wishes to engage Dickson to provide services as an
employee of the Company as further set out herein-,
NOW THEREFORE this Agreement witnesses that in consideration of the mutual
premises herein contained, the receipt and sufficiency of which is hereby
acknowledged by the parties, the parties hereto agree as follows:
1. Interpretation For purposes of this Agreement, "employment" means
the provision of services to the Company as a consultant and independent
contractor. This Agreement applies in respect of all services provided or to be
provided by Dickson to the Company or any of its affiliates from time to time.
2. Employment The Company hereby employs Dickson as a consultant and
independent contractor and Dickson hereby undertakes such employment by the
Company upon and subject to the terms and conditions of this Agreement.
3. Termination The Company may, after two years from the date of this
Agreement, terminate Dickson's employment hereunder at any time for any reason
on one-month's written notice to Dickson, and may terminate Dickson's employment
hereunder at any time by written notice for just cause.
4. Specific Duties Dickson will perform all technical duties for and on
behalf of Quotes Canada Financial Network Ltd., a subsidiary of Carta Resources
Ltd.
<PAGE>
5. Remuneration In consideration for the services to be provided by
Dickson hereunder, the Company will, subject to any applicable policies and
approvals of the Vancouver Stock Exchange, pay Dickson $2,500 per month during
the teri-n of his employment, such employment commencing the beginning of the
month following the date that regulatory approval to the Company's acquisition
of Quotes Canada Financial Network Ltd. is received. Neither the Company nor
any affiliate of the Company will be obliged to pay Dickson any other
remuneration or compensation for his services to be provided hereunder and will
not be responsible for providing Dickson with any employee benefits or costs.
The parties agree that bonuses may be paid to Dickson from time to time upon the
successful performance of Quotes Canada Financial Network Ltd.
6. Reimbursement Upon presentation of detailed and reasonable invoices
in format and on a timely basis as required from time to time by the Company and
on such further terms as communicated from time to time by the Company, the
Company will reimburse Dickson for all reasonable out-of-pocket expenses as may
be incurred by him in connection with his services under this Agreement, such
reimbursement to include but not be restricted to travel, long distance
telephone and fax charges and required entertainment.
7. Confidential Information In this Agreement, "Confidential
Information" means any information (including, without limitation, any formula,
pattern, device, plan, process, or compilation of information) which
(a) is, or is designed to be, or is capable of being, used in the business
of the Company including financial or tax-related information, or which results
from the research or development activities of the Company, and
(b) is private or confidential in that either it is not generally known or
available to the public or is identified by the Company by notation thereon or
other sufficient means to be Confidential Information or was otherwise
understood or should reasonably have been taken to be confidential,
including, without limiting the generality of the foregoing,
(c) all proprietary information licenced to or acquired, used or developed
by the Company including but not restricted to information in respect of
concepts, designs, know-how, formulas, processes, research data and proprietary
rights in the nature of trade secrets, copyrights, patents, trademarks and
industrial designs, and
(d) all information relating to the Corporation's business, and to all other
aspects of the Corporations' structure, personnel, and operations, including
financial or tax information, marketing, advertising and commercial strategies,
customer and supplier lists, agreements and contractual records, correspondence,
and any other information, records, files, drawings, tapes, documents, tools,
and data that may not be generally known.
8. Use of Confidential Information Dickson will not, without the prior
written consent of the Company, either during the term of his employment (except
in the course of his employment) or thereafter:
<PAGE>
(a) use any Confidential Information, other than as is necessary to perform
Dickson's services hereunder, or disclose any Confidential Information or remove
or aid in the removal of Confidential Information or any communications,
property or material which relates thereto from the premises of the Company; and
(b) permit, and will take all reasonable precautions necessary or prudent to
prevent, communications, property or material containing or referring to
Confidential Information from being disclosed to or discovered, used or copied
by any third party-,
whether such communication, property or material containing, referring to or
relating to Confidential Information was received by Dickson after or before the
date of this Agreement.
9. Property of the Company All right, title and interest in and to
Confidential Information is and will remain the Corporation's, and all right,
title and interest in and to inventions, improvements or tangible discoveries,
patentable or not ("Inventions"), relating to or useful in the business of the
Company or which, in the opinion of the Company, may become the subject of
experimentation, investigation, research, development, manufacture or sale by
the Company, is and will be the sole and exclusive property of the Company, and
Dickson hereby transfers, assigns and quit-claims any right to or interest in
all such Inventions and Confidential Information, howsoever or whenever acquired
by Dickson, to and in favour of the Company and their successors and assigns.
10. Idem Dickson and Dickson's personal representatives will at any and
all times hereafter, whenever requested to do so by the Company and at the
expense of the Company, and whether or not then in the employ of the Company, do
all such acts and things, execute and deliver all such documents, applications,
assignments and other writings and participate in all such proceedings, whether
litigious or otherwise, as are properly and reasonably required to vest fully in
the Company or its successors or assigns title to all such Inventions and
Confidential Information and to enable the Company or its successors or assigns
to apply for, obtain, maintain and enforce, in Canada and in all or any other
countries, patents relating to such Inventions or any portion thereof
11. Deliveries on Termination Immediately upon termination of Dickson's
employment with the Company, or at any previous time when so requested, Dickson
will deliver to the Company all records, files, drawings, tapes, equipment,
materials and other documents of whatever kind and any copies thereof (including
personal notes or memoranda) which contain or in any way relate to any
Confidential Information or Inventions and which are in Dickson's possession or
control.
12. Non-Competition As and from the commencement date of Dickson's
employment with the Company Dickson will not, directly or indirectly:
(a) advise any person not to do business with the Company,
(b) solicit customers of the Company, or
(c) induce or attempt to persuade any person to terminate an employment or
consulting relationship with the Company.
<PAGE>
13. Equitable Remedies Dickson acknowledges and agrees that a breach by
Dickson of any of the obligations under this Agreement would result in damages
to the Company that could not be adequately compensated for by monetary award.
Accordingly, in the event of any such breach by Dickson, in addition to all
other remedies available to the Company at law or in equity, the Company will be
entitled as a matter of right to apply to a court of competent jurisdiction for
such relief by way of restraining order, injunction, decree or otherwise, as may
be appropriate to ensure compliance with the provisions of this Agreement.
14. No Conflicting Obligations Dickson has no agreements with or
obligations to others with respect to the matters covered by this Agreement or
concerning the Confidential Information or Inventions that are in conflict with
anything in this Agreement.
15. Further Assurances Each party will execute and deliver such further
agreements, deeds, instruments and documents and do such further acts and things
as the other party may reasonably request to evidence, carry out or give full
force and effect to the intent of this Agreement.
16. Severability Each provision of this Agreement is declared to be a
separate and distinct provision and to be severable from all other such separate
and distinct provisions. If any provision herein is determined to be void or
unenforceable in whole or in part, it will not be deemed to affect or impair the
enforceability of validity of any other provision of this Agreement or any part
thereof
17. Binding Agreement Dickson agrees that this Agreement will be
binding upon his successors, heirs and administrators.
18. Assignability This Agreement and all benefits hereunder may be
assigned by the Company.
19. Governing Law This Agreement will be construed and enforced in
accordance with the laws of British Columbia and the laws of Canada applicable
thereto.
IN WITNESS WHEREOF the parties have executed this Agreement as of the day and
year first above written.
CARTA RESOURCES LTD.
Per:
Authorized Signatory
<PAGE>
Signed, Sealed and Delivered
by Glen Dickson in the presence of: )
)
)
Witness (Signature) )
)
)
Name (please print) )
)
)
Address )
)
)
City, Province ) GLEN DICKSON
EMPLOYMENT AND CONFIDENTIALITY AGREEMENT
THIS AGREEMENT is made as of the "1st" day of "December", 1999.
BETWEEN:
CARTA RESOURCES LTD., a company incorporated under the laws of British Columbia
and having its registered and records office at 1488 - 1090 Georgia Street,
Vancouver, B.C. V6E 3V7
(the "Company")
OF THE FIRST PART
AND:
PAUL DICKSON, of 1004 - 1122 Gilford Avenue, Vancouver, B.C. V6B 1N2
("Dickson")
OF THE SECOND PART
WHEREAS:
The Company wishes to engage Dickson to provide services as an
employee of the Company as further set out herein-,
NOW THEREFORE this Agreement witnesses that in consideration of the mutual
premises herein contained, the receipt and sufficiency of which is hereby
acknowledged by the parties, the parties hereto agree as follows:
1. Interpretation For purposes of this Agreement, "employment" means
the provision of services to the Company as a consultant and independent
contractor. This Agreement applies in respect of all services provided or to be
provided by Dickson to the Company or any of its affiliates from time to time.
2. Employment The Company hereby employs Dickson as a consultant and
independent contractor and Dickson hereby undertakes such employment by the
Company upon and subject to the terms and conditions of this Agreement.
3. Termination The Company may, after two years from the date of this
Agreement, terminate Dickson's employment hereunder at any time for any reason
on one-month's written notice to Dickson, and may terminate Dickson's employment
hereunder at any time by written notice for just cause.
4. Specific Duties Dickson will perform all technical duties for and on
behalf of Quotes Canada Financial Network Ltd., a subsidiary of Carta Resources
Ltd.
<PAGE>
5. Remuneration In consideration for the services to be provided by
Dickson hereunder, the Company will, subject to any applicable policies and
approvals of the Vancouver Stock Exchange, pay Dickson $2,500 per month during
the teri-n of his employment, such employment commencing the beginning of the
month following the date that regulatory approval to the Company's acquisition
of Quotes Canada Financial Network Ltd. is received. Neither the Company nor
any affiliate of the Company will be obliged to pay Dickson any other
remuneration or compensation for his services to be provided hereunder and will
not be responsible for providing Dickson with any employee benefits or costs.
The parties agree that bonuses may be paid to Dickson from time to time upon the
successful performance of Quotes Canada Financial Network Ltd.
6. Reimbursement Upon presentation of detailed and reasonable invoices
in format and on a timely basis as required from time to time by the Company and
on such further terms as communicated from time to time by the Company, the
Company will reimburse Dickson for all reasonable out-of-pocket expenses as may
be incurred by him in connection with his services under this Agreement, such
reimbursement to include but not be restricted to travel, long distance
telephone and fax charges and required entertainment.
7. Confidential Information In this Agreement, "Confidential
Information" means any information (including, without limitation, any formula,
pattern, device, plan, process, or compilation of information) which
(a) is, or is designed to be, or is capable of being, used in the business
of the Company including financial or tax-related information, or which results
from the research or development activities of the Company, and
(b) is private or confidential in that either it is not generally known or
available to the public or is identified by the Company by notation thereon or
other sufficient means to be Confidential Information or was otherwise
understood or should reasonably have been taken to be confidential,
including, without limiting the generality of the foregoing,
(c) all proprietary information licenced to or acquired, used or developed
by the Company including but not restricted to information in respect of
concepts, designs, know-how, formulas, processes, research data and proprietary
rights in the nature of trade secrets, copyrights, patents, trademarks and
industrial designs, and
(d) all information relating to the Corporation's business, and to all other
aspects of the Corporations' structure, personnel, and operations, including
financial or tax information, marketing, advertising and commercial strategies,
customer and supplier lists, agreements and contractual records, correspondence,
and any other information, records, files, drawings, tapes, documents, tools,
and data that may not be generally known.
8. Use of Confidential Information Dickson will not, without the prior
written consent of the Company, either during the term of his employment (except
in the course of his employment) or thereafter:
<PAGE>
(a) use any Confidential Information, other than as is necessary to perform
Dickson's services hereunder, or disclose any Confidential Information or remove
or aid in the removal of Confidential Information or any communications,
property or material which relates thereto from the premises of the Company; and
(b) permit, and will take all reasonable precautions necessary or prudent to
prevent, communications, property or material containing or referring to
Confidential Information from being disclosed to or discovered, used or copied
by any third party-,
whether such communication, property or material containing, referring to or
relating to Confidential Information was received by Dickson after or before the
date of this Agreement.
9. Property of the Company All right, title and interest in and to
Confidential Information is and will remain the Corporation's, and all right,
title and interest in and to inventions, improvements or tangible discoveries,
patentable or not ("Inventions"), relating to or useful in the business of the
Company or which, in the opinion of the Company, may become the subject of
experimentation, investigation, research, development, manufacture or sale by
the Company, is and will be the sole and exclusive property of the Company, and
Dickson hereby transfers, assigns and quit-claims any right to or interest in
all such Inventions and Confidential Information, howsoever or whenever acquired
by Dickson, to and in favour of the Company and their successors and assigns.
10. Idem Dickson and Dickson's personal representatives will at any and
all times hereafter, whenever requested to do so by the Company and at the
expense of the Company, and whether or not then in the employ of the Company, do
all such acts and things, execute and deliver all such documents, applications,
assignments and other writings and participate in all such proceedings, whether
litigious or otherwise, as are properly and reasonably required to vest fully in
the Company or its successors or assigns title to all such Inventions and
Confidential Information and to enable the Company or its successors or assigns
to apply for, obtain, maintain and enforce, in Canada and in all or any other
countries, patents relating to such Inventions or any portion thereof
11. Deliveries on Termination Immediately upon termination of Dickson's
employment with the Company, or at any previous time when so requested, Dickson
will deliver to the Company all records, files, drawings, tapes, equipment,
materials and other documents of whatever kind and any copies thereof (including
personal notes or memoranda) which contain or in any way relate to any
Confidential Information or Inventions and which are in Dickson's possession or
control.
12. Non-Competition As and from the commencement date of Dickson's
employment with the Company Dickson will not, directly or indirectly:
(a) advise any person not to do business with the Company,
(b) solicit customers of the Company, or
(c) induce or attempt to persuade any person to terminate an employment or
consulting relationship with the Company.
<PAGE>
13. Equitable Remedies Dickson acknowledges and agrees that a breach by
Dickson of any of the obligations under this Agreement would result in damages
to the Company that could not be adequately compensated for by monetary award.
Accordingly, in the event of any such breach by Dickson, in addition to all
other remedies available to the Company at law or in equity, the Company will be
entitled as a matter of right to apply to a court of competent jurisdiction for
such relief by way of restraining order, injunction, decree or otherwise, as may
be appropriate to ensure compliance with the provisions of this Agreement.
14. No Conflicting Obligations Dickson has no agreements with or
obligations to others with respect to the matters covered by this Agreement or
concerning the Confidential Information or Inventions that are in conflict with
anything in this Agreement.
15. Further Assurances Each party will execute and deliver such further
agreements, deeds, instruments and documents and do such further acts and things
as the other party may reasonably request to evidence, carry out or give full
force and effect to the intent of this Agreement.
16. Severability Each provision of this Agreement is declared to be a
separate and distinct provision and to be severable from all other such separate
and distinct provisions. If any provision herein is determined to be void or
unenforceable in whole or in part, it will not be deemed to affect or impair the
enforceability of validity of any other provision of this Agreement or any part
thereof
17. Binding Agreement Dickson agrees that this Agreement will be
binding upon his successors, heirs and administrators.
18. Assignability This Agreement and all benefits hereunder may be
assigned by the Company.
19. Governing Law This Agreement will be construed and enforced in
accordance with the laws of British Columbia and the laws of Canada applicable
thereto.
IN WITNESS WHEREOF the parties have executed this Agreement as of the day and
year first above written.
CARTA RESOURCES LTD.
Per:
Authorized Signatory
<PAGE>
Signed, Sealed and Delivered
by Paul Dickson in the presence of: )
)
)
Witness (Signature) )
)
)
Name (please print) )
)
)
Address )
)
)
City, Province ) PAUL DICKSON
ESCROW AGREEMENT
THIS AGREEMENT IS DATED FOR REFERENCE DECEMBER 6, 1999 AND MADE:
AMONG:
PACIFIC CORPORATE TRUST COMPANY, of 830 - 625 Howe Street, Vancouver, British
Columbia V6C 3B8
(the "Escrow Agent")
AND:
CARTA RESOURCES LTD., a British Columbia company having its registered and
records office at 1488 - 1090 West Georgia Street, Vancouver, British Columbia
V6E 3V7
(the "Issuer")
AND:
EACH PRINCIPAL, as defined in this Agreement
(collectively, the "Parties")
WHEREAS pursuant to the Escrow Agreement among the Escrow Agent, the Issuer and
the Initial Principals, the Initial Principals acquired 750,000 Shares at an
issue price of $0.01 per share;
AND WHEREAS 151,200 Initial Shares were subsequently released from escrow,
resulting in an aggregate of 598,800 Initial Shares remaining subject to the
Escrow Agreement;
AND WHEREAS as a result of acquiring the outstanding shares of Quotes Canada
Financial Network Ltd., the Issuer has Additional Principals;
AND WHEREAS the Issuer has agreed to issue Additional Shares to the Principals;
AND WHEREAS the Issuer wishes to cancel the Escrow Agreement and to convert the
Initial Shares to this Agreement which will cover both the Initial Shares and
the Additional Shares;
AND WHEREAS the Escrow Agent has agreed to act as escrow agent in respect of the
initial Shares and Additional Shares issued to the Principals upon the
acquisition of such shares by the Principals;
NOW THEREFORE in consideration of the covenants contained in this Agreement and
other good and valuable consideration (the receipt and sufficiency of which is
acknowledged), the Parties agree (the "Agreement") as follows:
<PAGE>
1. Interpretation
In this Agreement:
(a) "Acknowledgment" means the acknowledgment and agreement to be bound in
the form attached as Schedule "A" to this Agreement;
(b) "Act" means the Securities Act, S.B.C. 1997, c.418;
(c) "Additional Principals" means holders of Additional Shares who execute
this Agreement or an Acknowledgment and did not execute the Escrow Agreement;
(d) "Additional Shares" means the shares of the principals described in
Schedule "C" to this Agreement, as amended from time to time in accordance with
section 9 and, for greater clarification, does not include the Initial Shares;
(e) "Escrow agreement" means the escrow agreement dated July 11, 1996 among
the Escrow Agent, the Issuer and the Initial Principals;
(f) "Escrow Shares" means the Initial Shares and the Additional Shares;
(g) "Executive Director" means the Executive Director appointed under the
Act;
(h) "Executive Director or the Exchange" means the Executive Director, if
the shares of the Issuer are not listed on the Exchange, or the Exchange, if the
shares of the Issuer are listed on the Exchange;
(i) "Initial Principals" means holders of shares of the Issuer who executed
the Escrow Agreement;
(j) "Initial Shares" means the shares of the Initial Principals subject to
the Escrow Agreement;
(k) "Local Policy Statement 3-07" means the Local Policy Statement 3-07 in
effect as of the date of reference of this Agreement and attached as Schedule
"B" to this Agreement;
(l) "Principals" means, together, the Initial Principals and the Additional
Principals.
2. Placement Of Shares In Escrow
The Principals place the Escrow Shares in escrow with the Escrow Agent and shall
deliver the certificates representing the Additional Shares to the Escrow Agent
as soon as practicable.
3. Voting Of Shares In Escrow
Except as provided by section 4(a), the Principals may exercise all voting
rights attached to the Escrow Shares.
<PAGE>
4. Waiver Of Shareholder's Rights
The Principals waive the rights attached to the Escrow Shares:
(a) to vote the Escrow Shares on a resolution to cancel any of the Escrow
Shares;
(b) to receive dividends; and
(c) to participate in the assets and property of the Issuer on a winding up
or dissolution of the Issuer.
5. Abstention From Voting As A Director
A Principal that is or becomes a director of the Issuer shall abstain from
voting on a directors' resolution to cancel any of the Escrow Shares.
6. Transfer Within Escrow
(a) The Principals shall not transfer any of the Escrow Shares except in
accordance with Local Policy Statement 3-07 and with the consent of the
Executive Director or the Exchange;
(b) The Escrow Agent shall not effect a transfer of the Escrow Shares within
escrow unless the Escrow Agent has received:
(i) a copy of an Acknowledgment executed by the person to whom the Escrow
Shares are to be transferred; and
(ii) a letter from the Executive Director or the Exchange consenting to the
transfer;
(c) Upon the death or bankruptcy of a Principal, the Escrow Agent shall hold
the Escrow Shares subject to this Agreement for the person that is legally
entitled to become the registered owner of the Escrow Shares;
(d) the Principals acknowledge to, and agree with, the Issuer that the
Principals will continue to be involved in the business affairs of the Issuer,
or an operating subsidiary thereof, as a director or senior officer of one or
both such companies, or by providing key services, whether management services
or otherwise to one or both such companies. If the Principals for any reason
cease to be directors or senior officers of such companies, or ceases to provide
such services, then the Escrow Shareholders shall be entitled to retain their
Escrow Shares and remain bound by the terms of this Agreement. For further
clarity the Principals shall be entitled to a release or releases of the Escrow
Shares pursuant to the provisions of section 7(b) hereof.
<PAGE>
7. Release From Escrow
(a) the Principals irrevocably direct the Escrow Agent to retain the Escrow
Shares until the Escrow Shares are released from escrow pursuant to subsection
(b) or surrendered for cancellation pursuant to section 8;
(b) the Escrow Agent shall not release the Escrow Shares from escrow unless
the Escrow Agent has received a letter from the Executive Director or the
Exchange consenting to the release; and
(c) the approval of the Executive Director or the Exchange to a release from
escrow of any of the Escrow Shares shall terminate this Agreement only in
respect of the Escrow Shares so released.
8. Surrender For Cancellation
The Principals shall surrender the Escrow Shares for cancellation and the Escrow
Agent shall deliver the certificates representing the Escrow Shares to the
Issuer:
(a) at the time of a major reorganization of the Issuer, if required as a
condition of the consent to the reorganization by the Executive Director or the
Exchange;
(b) where the Issuer's shares have been subject to a cease trade order
issued under the Act for a period of 2 consecutive years;
(c) 10 years from the later of the date of issue of the Escrow Shares and
the date of the receipt for the Issuer's prospectus on its initial public
offering; or
(d) where required by section 6(d).
9. Amendment Of Agreement
(a) Subject to subsection (b), this Agreement may be amended only by a
written agreement among the Parties and with the written consent of the
Executive Director or the Exchange;
(b) Schedule "C" to this Agreement shall be amended upon:
(i) a transfer of Escrow Shares pursuant to section 6;
(ii) a release of Escrow Shares from escrow pursuant to section 7; or
(iii) a surrender of Escrow Shares for cancellation pursuant to section 8;
and the Escrow Agent shall note the amendment on the Schedule "C" in its
possession.
10. Indemnification Of Escrow Agent
The Issuer and the Principals, jointly and severally, release, indemnify and
save harmless the Escrow Agent from all costs, charges, claims, demands,
damages, losses and expenses resulting from the Escrow Agent's compliance in
good faith with this Agreement.
11. Resignation Of Escrow Agent
(a) If the Escrow Agent wishes to resign as escrow agent in respect of the
Escrow Shares, the Escrow Agent shall give notice to the Issuer;
(b) if the Issuer wishes the Escrow Agent to resign as escrow agent in
respect of the Escrow Shares, the Issuer shall give notice to the Escrow Agent;
(c) a notice referred to in subsection (1) or (2) shall be in writing and
delivered to:
(i) the Issuer at its address appearing on the cover page of this Agreement;
or
(ii) the Escrow Agent at its address appearing on the cover page of this
Agreement;
and the notice shall be deemed to have been received on the date of delivery.
The Issuer or the Escrow Agent may change its address for notice by giving
notice to the other party in accordance with this subsection.
(d) a copy of a notice referred to in subsection (a) or (b) shall
concurrently be delivered to the Executive Director or the Exchange;
(e) the resignation of the Escrow Agent shall be effective and the Escrow
Agent shall cease to be bound by this Agreement on the date that is 180 days
after the date of receipt of the notice referred to in subsection (a) r (b) or
on such other date as the Escrow Agent and the Issuer may agree upon (the
"resignation date");
(f) the Issuer shall, before the resignation date and with the written
consent of the Executive Director or the Exchange, appoint another escrow agent
and that appointment shall be binding on the Issuer and the Principals.
12. Entire Agreement
This Agreement supersedes and replaces all other escrow agreements applying to
the Escrow Shares required by securities regulators and all such Agreements are
terminated and of no further force and effect from the reference date of this
Agreement.
13. Further Assurances
The Parties shall execute and deliver any documents and perform any acts
necessary to carry out the intent of this Agreement.
<PAGE>
14. Time
Time is of the essence of this Agreement.
15. Governing Laws
This Agreement shall be construed in accordance with and governed by the laws of
British Columbia and the laws of Canada applicable in British Columbia.
16. Counterparts
This Agreement may be executed in two or more counterparts, each of which shall
be deemed to be an original and al of which shall constitute one agreement.
17. Language
Wherever a singular expression is used in this Agreement, that expression is
deemed to include the plural or the body corporate where required by the
context.
18. Enurement
This Agreement enures to the benefit of and is binding on the Parties and their
heirs, executors, administrators, successors and permitted assigns.
The Parties have executed and delivered this Agreement as of the date of
reference of this Agreement.
THE COMMON SEAL of )
CARTA RESOURCES LTD. )
was hereunto affixed in )
the presence of: )
)
)
Authorized Signatory )
)
)
Authorized Signatory ) C/S
PACIFIC CORPORATE TRUST COMPANY
Per:
Authorized Signatory
SIGNED, SEALED AND DELIVERED by )
JOHN E. CHARLESWORTH in the presence of: )
)
Name of )
Witness: )
)
Address of )
Witness: )
)
)
)
Occupation )
of Witness: ) JOHN E. CHARLESWORTH
)
SIGNED, SEALED AND DELIVERED by )
PENELOPE CHARLESWORTH in the presence of: )
)
Name of )
Witness: )
)
Address of )
Witness: )
)
)
)
Occupation )
of Witness: ) PENELOPE CHARLESWORTH
)
SIGNED, SEALED AND DELIVERED by )
THOMAS BOYCHUK in the presence of: )
)
Name of )
Witness: )
)
Address of )
Witness: )
)
)
)
Occupation )
of Witness: ) THOMAS BOYCHUK
)
SIGNED, SEALED AND DELIVERED by )
H. LEO KING in the presence of: )
)
Name of )
Witness: )
)
Address of )
Witness: )
)
)
)
Occupation )
of Witness: ) H. LEO KING
)
SIGNED, SEALED AND DELIVERED by )
PAUL DICKSON in the presence of: )
)
Name of )
Witness: )
)
Address of )
Witness: )
)
)
)
Occupation )
of Witness: ) PAUL DICKSON
)
SIGNED, SEALED AND DELIVERED by )
GLEN DICKSON in the presence of: )
)
Name of )
Witness: )
)
Address of )
Witness: )
)
)
)
Occupation )
of Witness: ) GLEN DICKSON
)
<PAGE>
SCHEDULE "C" TO ESCROW AGREEMENT
SCHEDULE "C" TO ESCROW AGREEMENT
<TABLE>
<CAPTION>
Number of Additional Shares Number of Initial Shares held
held in escrow pursuant to this in escrow pursuant to this
Number of Shareholder Escrow Agreement Escrow Agreement
<S> <C> <C>
JOHN E. CHARLESWORTH. 25,400 199,600
PENELOPE
CHARLESWORTH . . . . 225,000
THOMAS BOYCHUK. . . . 250,400 199,600
H. LEO KING . . . . . 25,400 199,600
PAUL DICKSON. . . . . 500,000
GLEN DICKSON. . . . . 500,000
</TABLE>
<PAGE>
SCHEDULE "D" TO THE ESCROW AGREEMENT
Earn-Out Formula for Release of Performance Shares
The release of performance shares is based upon cumulative cash flow
---------------------
earn-out price
where:
earn-out price = IPO price multiplied by earn-out factor
earn-out factor = (performance share percentage )2 x 4
IPO Price = $0.38
performance share percentage = 2,125,000 = .25
---------
8,232,342
earn-out factor - (.25)2 x 4 - .25
earn-out price = $0.38 x .25 - .095
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT MADE AS OF THE 18TH DAY OF JANUARY, 2000 (the
"Effective Date").
BETWEEN:
EARTHRAMP.COM COMMUNICATIONS INC., formerly Carta Resources Ltd., a company duly
incorporated under the laws of the Province of British Columbia, having an
office at 601 - 889 West Pender Street, Vancouver, British Columbia, V6C 3B2;
(hereinafter referred to as the "Assignor")
AND:
H. LEO KING & ASSOCIATES INC., a company duly incorporated under the laws of the
Province of British Columbia, having an office at 4747 Marguerite Street,
Vancouver, B.C.;
(hereinafter referred to as the "Assignee")
WHEREAS:
A. By an agreement dated April 29, 1999 (the "Option Agreement'), a
copy of which is attached hereto as Schedule "A", the Assignor was granted the
exclusive right to acquire a 100% interest and all rights appurtenant thereto in
20 mineral claims known as the MUG 1 to 8 and OM 1 to 12 Claims, located in the
Dawson Mining Division, Yukon (the "Property");
B. The Assignor wishes to assign its right, title and interest in and
to the Option Agreement to the Assignee;
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the
covenants and agreements herein contained, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto covenant and agree each with the
other (the "Agreement") as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE ASSIGNOR
1.1 The Assignor represents and warrants to the Assignee that:
(a) It is a company duly incorporated under the laws of the Province of
British Columbia, validly exists as a company in good standing under the laws of
the Province of British Columbia;
(b) It is the registered and beneficial owner of the Property and the
Property is free and clear of all liens, charges and encumbrances of any kind
whatsoever.
2. REPRESENTATIONS AND WARRANTIES OF THE ASSIGNEE
2.1 The Assignee represents and warrants to the Assignor that it has
been duly incorporated and validly exists as a company in good standing under
the laws of the Province of British Columbia and has full power and absolute
authority and capacity to enter into this Agreement and to carry out the
transactions contemplated hereby.
3. TERMS AND CONDITIONS
3.1 The Assignor, subject to the terms and conditions of this
Agreement, hereby assigns to the Assignee 100% of its right, title and interest
in and to the Option Agreement, in consideration of the following:
(a) the payment of One Dollar ($1.00);
(b) the payment of 100% of all future expenses for the Property, including
option payments and exploration and development costs; and
(c) subject to the following, the assumption by the Assignee of 100% of the
Assignor's obligations to Peter Ledwidge, pursuant to the Option Agreement.
4. TERMINATION
4.1 This Agreement shall terminate as expressly provided in this
Agreement unless earlier terminated as follows:
(a) by written agreement of the parties; or
(b) by withdrawal of a party to this Agreement, the effective date of such
withdrawal to be at least 7 days after notice of the withdrawal has been given
by the withdrawing party. Any withdrawal under this provision shall not relieve
the withdrawing party of its share of expenses and obligations (whether such
accrue before or after such withdrawal) arising out of duties, obligations and
liabilities assumed prior to such withdrawal; or
(c) by the failure of a party to perform its obligations or pay its portion
of expenses as required by this Agreement. Upon such event the party who is not
in default may give notice to the defaulting party, which notice shall specify
details of such failure. If within 30 days after receipt of such notice the
defaulting party has not cured such failure or begun corrective action to cure
such failure then the party who is not in default may terminate this Agreement
by giving written notice of such termination to the defaulting party and the
defaulting party shall be deemed to have withdrawn from this Agreement pursuant
to paragraph (b) of this section 4.1. Any default under this provision shall
not relieve the defaulting party of its share of expenses and obligations
(whether such accrue before or after such default) arising out of duties,
obligations and liabilities assumed prior to such default.
5. GENERAL
5.1 The parties hereby agree to do or cause to be done all acts or
things necessary to implement and carry into effect this Agreement to its full
extent.
5.2 This Agreement is subject to the approval of the Canadian Venture
Exchange.
5.3 If there is any disagreement, dispute or controversy (hereinafter
collectively called a "dispute") between the parties with respect to any matter
arising under this Agreement or the construction hereof, the dispute shall be
determined by arbitration in accordance with the procedures set out in the
Arbitration Act of British Columbia RSBC 1996, Chapter 55 (the "Act").
5.4 Any notice to be given hereunder shall be sufficiently given if
delivered or sent by registered or certified mail, postage prepaid to the
parties hereto to the addresses set out on page 1 hereof, or such other address
as the parties may from time to time designate for themselves in writing and
such notice delivered by hand, facsimile, or mail shall be deemed to have been
received at the time of delivery or at the latest on the third business day
following the delivery thereof.
5.5 This Agreement shall be construed in accordance with the laws of
the Province of British Columbia.
5.6 Time shall be of the essence of this Agreement.
5.7 This Agreement embodies the entire agreement and understanding
among the parties hereto and supersedes all prior agreements and undertakings,
whether oral or written, relative to the subject matter hereof.
5.8 This Agreement shall enure to the benefit of and be binding upon
each of the parties hereto and their respective successors and permitted
assigns.
IN WITNESS WHEREOF the parties have caused this Agreement to be executed as of
the day and year first above written.
EARTHRAMP.COM COMMUNICATIONS INC.
Authorized Signatory
H. LEO KING & ASSOCIATES INC.
Authorized Signatory
AFFINITY GROUP MARKETING AGREEMENT
This Agreement made between Quotescanada.com (hereinafter called the
"Quotescanada") having a principal place of business at 601 - 889 West Pender
St., Vancouver, BC, V6C 3B2 and Vector Insurance Network (Ontario) Limited
(hereinafter called "Vector") having a principal place of business at 4120 Yonge
Street, Suite 312, Toronto, Ontario, M2P 2B8.
Whereas Vector carries on business as an insurance broker offering a wide range
of Insurance and financial services from some of Canada's leading insurers and
is part of the Canada wide Vector Insurance Network;
And whereas Quotescanada has among its members individuals who would be
interested in purchasing Home & Auto Insurance who are presently not purchasing
Home & Auto Insurance from Vector ("Customers").
Now therefore for good and valuable consideration the parties agree as follows:
PROGRAM OFFERING - It is the intention of this Agreement for Vector to market
Quotescanada Members Home & Auto Insurance and other related Insurance products
and/or services as may be mutually agreed upon by the parties in the future.
RESPONSIBILITY OF PARTIES
(a) Vector shall be responsible for operating sales and services locations
to enable Members to contact it through the telephone, internet and at its
retail locations. Vector will be responsible for all expenses related to
carrying out its responsibilities as set out in this paragraph.
(b) Quotescanada shall be responsible for promoting these programs to its
members through the use of existing and proposed marketing initiatives including
the establishment of an insurance channel or button exclusively for Quotescanada
Members, e-mail announcement of special programs and other methods deemed
suitable for this program. Quotescanada will be responsible for all costs
related to carrying out its responsibilities as set out in this paragraph.
(c) Quotescanada and Vector will jointly design marketing materials and
advertising initiatives for these programs. All marketing material will require
the final written approval of both Vector and Quotescanada in order to ensure
compliance with regulatory guidelines.
MARKETING FEES - Vector will pay to Quotescanada marketing fee of 1.25% of
premium written and settled for both new and renewal policies in respect of
Members who purchase policies from Vector. Marketing fees will be paid
quarterly in respect of marketing fees earned by Quotescanada in the prior
quarter. Fees paid to Quotescanada may be adjusted from time to time based on
review of the program and its overall performance.
<PAGE>
CLIENT OWNERSHIP - Vector agrees that it will not market any of its products to
Members except as may be contemplated by this Agreement. It is understood by
both parties and an individual who purchases insurance through Vector is
contacting directly with the insurer(s) and that Quotescanada does not have the
authority to make decisions on behalf of an insured individual with respect to
coverage or participation or change of Agent of Record without written consent
of the insured.
Following the termination of this Agreement, Vector shall not make any use of
any list of Members for any purpose except to fulfill its obligations in respect
of policies or any renewals thereof.
AUTHORITY - Quotescanada shall have no authority to make any binding agreement
or incur any obligations on behalf of Vector. Nothing herein contained shall be
construed to constitute the relationship hereby created between the parties as
an agency, a partnership, a joint venture or otherwise.
TERM - The term of this Agreement shall be for a period of three (3) years from
the date of the Agreement. Such Agreement shall automatically renew for a
subsequent (1) year period on the subsequent expiry date, unless terminated by
either party upon giving three (3) months prior written notice of its intent to
terminate.
TERMINATION
(a) This Agreement may be terminated by Vector in the event that it is not
satisfied with the profitability of the programs contemplated by the Agreement.
In that event, Vector must deliver 90 days written notice to Quotescanada o fits
intention to terminate this Agreement.
(b) Quotescanada may terminate this Agreement in the event that Vector does
not provide satisfactory service and competitive prices for its services and
products. Quotescanada must act reasonably and shall first give written notice
to Vector of the deficiencies in service and price and allow Vector 90 days to
remedy the deficiencies. In the event that Vector is unable to satisfy
Quotescanada, acting reasonably, this Agreement shall terminate 30 days after
Quotescanada has given written notice to Vector of its failure to remedy the
deficiencies.
EXCLUSIVITY - Throughout the duration of this Agreement and subsequent renewal
terms, Quotescanada endorses Vector as the exclusive broker and distributor of
personal insurance products as described in this Agreement.
ENTIRE AGREEMENT - This Agreement, including any attached schedules,
supplements, or amendments, represents the entire agreement between Quotescanada
and Vector. Vector will not be bound by any promise, agreement or understanding
or representation unless it is made in this Agreement, or in a written document
signed by an authorized official of Vector which is meant to amend, alter or add
to this Agreement.
<PAGE>
GOVERNING LAW - This Agreement shall be governed by and interpreted in
accordance with the laws of the Province of Ontario.
Executed at Earthramp.com this 28th day of March, 2000
-------------- ------ --------------
/s/ Dylan Crawshan" /s/ Ralph Brown
- ----------------- --------------
Quotescanada.com Vector Insurance Network (Ontario) Limited
<PAGE>
SCHEDULE "A"
MARKETING FEES
--------------
Issued First Year & Renewal Fees are based on 1.25%
NOTE:
The above fees are to be paid monthly to Earthramp.com.
Marketing fees paid for business issued is subject to review by Vector in the
event that there is a change in compensation paid to Vector by the Carrier.
Carriers may be substituted from time to time by Vector at the sole discretion
of Vector.
