SHARE PURCHASE AGREEMENT made the 29th day of December, 1999.
BETWEEN:
WI-LAN INC., a body corporate, incorporated pursuant to the laws of the
Province of Alberta (hereinafter referred to as the "Purchaser")
OF THE FIRST PART
AND
MICROTEL INTERNATIONAL, INC., a body corporate, incorporated pursuant
to the laws of the State of Delaware (hereinafter referred to as the
"Vendor")
OF THE SECOND PART
WHEREAS the Vendor is the beneficial owner of the DTS Shares;
AND WHEREAS the Vendor has agreed to sell, transfer and assign and the
Purchaser has agreed to purchase and acquire, the DTS Shares upon the terms and
conditions set forth herein;
In consideration of the premises, covenants and agreements herein and
other good and valuable consideration (the receipt and sufficiency of which is
hereby acknowledged), the parties hereto covenant and agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions
In this Agreement, unless the context otherwise requires:
a. "Agreement" means this agreement, including the recitals, as amended or
supplemented from time to time, and "hereby", "hereof", "herein",
"hereunder", "herewith", "hereto" and similar terms refer to this
Agreement and not to any particular provision of this Agreement;
b. "business day" means a day, other than a Saturday, Sunday or statutory
holiday, when banks are generally open for the transaction of banking
business in the City of Calgary;
c. "Closing" means the closing of the transactions contemplated herein;
d. "Closing Date" means January 7, 2000 or such later date upon which the
transactions contemplated by the Related Agreements have been completed
or such other date as may be agreed upon by the parties hereto;
e. "Closing Time" means 2:00 p.m. (Calgary time), or such other time as
may be agreed upon by the parties hereto, on the Closing Date;
f. "Corporation" or "DTS" means Digital Transmission Systems, Inc., a body
corporate incorporated under the laws of the State of Delaware;
g. "DTS Shares" means 1,738,159 common shares in the capital stock of the
Corporation, as constituted on the date hereof;
2
h. "Encumbrance" includes, without limitation, any mortgage, pledge,
assignment, charge, lien, security interest, claim, trust, royalty,
carried, working, participation, net profits interest or other third
party interest and any agreement, option, right or privilege (whether
by law, contract or otherwise) capable of becoming any of the
foregoing;
i. "Exchange" means The Toronto Stock Exchange;
j. "person" includes an individual, partnership, firm, trust, body
corporate, governmental authority, unincorporated body of persons or
association;
k. "Purchaser" or "Wi-LAN" means Wi-LAN Inc., a body corporate
incorporated under the laws of the Province of Alberta;
l. "Purchaser's Counsel" means Burnet, Xxxxxxxxx & Xxxxxx or such other
legal counsel as may be designated by the Purchaser;
m. "Related Agreements" means the agreements of even date herewith entered
into between the Purchaser and Finova Mezzanine Capital Inc. and the
Purchaser and DTS; and
n. "Wi-LAN Common Shares" means common shares of the Purchaser as a class,
as constituted on the date hereof.
1.2 Schedules
The following Schedules form part of this Agreement:
Schedule A Representation Letter
Schedule B The Toronto Stock Exchange Private Placement
Questionnaire and Undertaking
1.3 Headings
The division of this Agreement into articles, sections and paragraphs
and the insertion of headings are for convenience of reference only and shall
not affect in any way the meaning or interpretation of this Agreement.
1.4 Section References
Unless the context otherwise requires, references in this Agreement to
an article, section, paragraph, clause, subclause or schedule by number, letter
or otherwise refer to the article, section, subsection, paragraph, clause,
subclause or schedule, respectively, bearing that designation in this Agreement.
1.5 Gender, Plural
In this Agreement, unless the contrary intention appears, words
importing the singular include the plural and vice versa; words importing gender
shall include all genders.
1.6 Date for Actions
In the event that the date on which any action is required to be taken
hereunder by any of the parties is not a business day in the place where the
action is required to be taken, such action shall be required to be taken on the
next succeeding day which is a business day in such place.
3
1.7 Enforceability
All representations and warranties in or contemplated by this Agreement
as to the enforceability of any agreement or document are subject to
enforceability being limited by applicable bankruptcy, insolvency,
reorganization and other laws affecting creditors' rights generally and the
discretionary nature of certain remedies (including specific performance and
injunctive relief).
ARTICLE 2
PURCHASE AND SALE
2.1 Agreement to Purchase and Sell
At the Closing Time, the Vendor agrees to sell, transfer and assign to
the Purchaser or its nominee, and the Purchaser or its nominee agree to purchase
and acquire from the Vendor, the DTS Shares, in exchange for an aggregate of
U.S. $520,000 and 28,340 Wi-LAN Common Shares.
2.2 Execution of Purchase and Sale
At the Closing Time, the Purchaser shall deliver to the Vendor a
certified cheque or bank draft in the amount of U.S. $520,000 and a share
certificate representing 28,340 Wi-LAN Common Shares against delivery by the
Vendor to the Purchaser of share certificates representing the DTS Shares owned
by the Vendor, duly endorsed in blank for transfer, or accompanied by duly
executed powers of attorney for transfer in blank.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE VENDOR
3.1 Representations and Warranties of the Vendor
The Vendor represents and warrants to the Purchaser that:
a. the Vendor is duly and validly incorporated, organized and existing
under the laws of its jurisdiction of incorporation;
b. the Vendor has all requisite power and authority to enter into this
Agreement and all documents to be delivered pursuant hereto and to
perform its obligations hereunder and thereunder;
c. the Vendor owns the DTS Shares and has full power and authority to
transfer the DTS Shares to the Purchaser and to receive U.S. $520,000
and the Wi-LAN Common Shares therefor and to agree to the terms,
conditions and provisions herein contained;
d. all of the DTS Shares transferred hereunder are owned by the Vendor as
the sole beneficial owner with good, valid and marketable title and
good, valid and marketable title to such securities will vest in the
Purchaser as a result of the consummation of the transactions
contemplated herein free and clear of any Encumbrances, voting trusts,
unanimous or other shareholder agreements, proxies and other interests,
claims or demands of every kind or nature whatsoever (other than such
as may be created by the Purchaser);
e. except pursuant to this Agreement, no person has any agreement, option,
right or privilege (including, without limitation, whether by law,
pre-emptive right, contract or otherwise) to purchase, convert into,
exchange for or otherwise acquire, nor any agreement, option, right or
privilege capable of becoming any such agreement, option, right or
privilege, any of the Vendor's DTS Shares, or any interest therein;
4
f. the DTS Shares are not subject to any trading restrictions under
federal or state laws in the United States;
g. the DTS shares are listed on the Nasdaq Over-The-Counter Market;
h. there are no actions, suits or proceedings commenced, pending or
threatened against the Vendor with respect to the DTS Shares;
i. the execution and delivery of this Agreement does not and will not
result in a breach of, or constitute a default under, any term or
provision of any agreement or other documents to which the Vendor is a
party;
j. the Vendor has not incurred any obligation or liability, contingent or
otherwise, for brokerage fees, finders' fees, agents' commission or
similar forms of compensation with respect to the transactions
contemplated herein;
k. the Vendor will not resell the Wi-LAN Common Shares it receives
hereunder except in accordance with the provisions of applicable
securities legislation and the rules of the Exchange;
l. the Vendor has executed this Agreement in the United States, and it has
concurrently executed and delivered the Representation Letter attached
as Schedule A to this Agreement;
m. if required by applicable securities legislation, policy or order or by
any securities commission, stock exchange or other regulatory
authority, the Vendor will execute, deliver, file and otherwise assist
the Corporation in filing, such reports, undertakings and other
documents with respect to the issue of the 28,340 Wi-LAN Common Shares
to the Vendor (including, without limitation, any undertaking required
by the Exchange in the form attached as Schedule B to this Agreement);
n. to the best of the Vendor's knowledge, information and belief, the
representations and warranties of the Corporation contained in the
Convertible Debenture Purchase Agreement dated December 28, 1999
between the Corporation and the Vendor are true and correct in all
material respects;
o. the Vendor has no information or knowledge of any fact relating to the
business of the Corporation or the DTS Shares which if known to the
Purchaser, might reasonably be expected to deter the Purchaser from
completing the transactions of purchase and sale contemplated herein;
and
p. this Agreement has been duly executed and delivered by the Vendor and
all documents to be delivered by the Vendor pursuant hereto will be
duly executed and delivered and this Agreement does and such documents
will constitute legal, valid and binding obligations of the Vendor
enforceable in accordance with their respective terms.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
4.1 Representations and Warranties of the Purchaser
The Purchaser represents and warrants to the Vendor that:
a. the Purchaser is duly organized and validly existing under the law of
the jurisdiction of its incorporation;
b. the Wi-LAN Common Shares are listed and posted for trading on the
Exchange;
c. the Purchaser has all requisite power and authority to enter into this
Agreement and all documents to be delivered pursuant hereto and to
perform its obligations hereunder and thereunder;
5
d. the Purchaser will have full power and authority to pay U.S. $520,000
to the Vendor and to issue the 28,340 Wi-LAN Common Shares to the
Vendor upon receipt of the required regulatory approval and has full
power and authority to receive the DTS Shares therefor and to agree to
the terms, conditions and provisions herein contained; and
e. this Agreement has been duly authorized, executed and delivered by the
Purchaser and all documents to be delivered by the Purchaser pursuant
hereto will be duly executed and delivered and this Agreement does and
such documents will constitute legal, valid and binding obligations of
the Purchaser enforceable in accordance with their respective terms.
ARTICLE 5
PURCHASER'S CLOSING CONDITIONS
5.1 Conditions Precedent
The obligations of the Purchaser to complete the transactions
contemplated herein is subject to:
a. the Purchaser being satisfied in its sole discretion with its due
diligence review of DTS and its assets and operations including,
without limitation, the financial statements of DTS, the obligations
and liabilities of DTS, the products and revenue stream of DTS and the
material agreements of DTS;
b. since December 20, 1999 DTS shall have carried on its business in the
ordinary course of business consistent with past practices and shall
not have engaged in any material transactions outside the ordinary
course of business (including increasing long-term debt) except as
disclosed to and approved by Wi-LAN in writing;
c. DTS's issued and outstanding share capital at the Closing Time
consisting of an aggregate of 4,646,221 common shares, 1,314,333
preferred shares, warrants entitling the holders thereof to acquire an
aggregate of 2,433,315 common shares at exercise prices ranging from
U.S. $0.12 to U.S. $9.00 per share, options entitling the holders
thereof to acquire an aggregate of 1,019,880 common shares at exercise
prices ranging from U.S. $0.47 to U.S. $13.75 per share and a U.S.
$2,000,000 convertible debenture entitling the holder thereof to
acquire 2,000,000 common shares at an exercise price of U.S. $1.00 per
share;
d. since December 20, 1999 DTS shall not have declared or paid any
dividends or made any other distributions of any of its shares or
granted any further options or warrants or any right or privilege
capable of becoming an option or agreement in respect of its shares;
e. the Purchaser having obtained all consents, approvals and
authorizations necessary or required in connection with the
transactions contemplated herein, including without limitation the
approval of The Toronto Stock Exchange on terms and conditions
reasonably satisfactory to the Purchaser on or before the Closing Time;
f. the Purchaser shall have received the opinion of Xxxxxxxx, Xxxxxx &
Xxxxxx, counsel for the Vendor dated the Closing Date, addressed to the
Purchaser, in form and substance satisfactory to the Purchaser's
Counsel;
g. the transactions contemplated by the Related Agreements shall have been
completed;
h. the Vendor, having completed, executed and delivered the Representation
Letter attached as Schedule A hereto;
6
i. the Vendor, having completed, executed and delivered The Toronto Stock
Exchange Private Placement Questionnaire and Undertaking attached as
Schedule B hereto in a form satisfactory to the Exchange;
j. the board of directors of DTS being comprised of a majority of Wi-LAN
representatives at the Closing Time;
k. all MicroTel representatives resigning from the board of directors of
DTS at the Closing Time;
l. except as contemplated by this Agreement, there shall not have occurred
any material change, change of material fact or any development that
could result in a material change or change of a material fact in the
business, operations or affairs of DTS;
m. there will be no actions, suits or proceedings, whether or not
purportedly on behalf of DTS, outstanding, pending or threatened by or
against DTS at law or in equity or before or by any federal,
provincial, municipal or other governmental department, commission,
bureau, agency or instrumentality;
n. all necessary steps and proceedings shall have been taken to allow the
DTS Shares to be duly transferred from the Vendor to the Purchaser and
to vest in the Purchaser good and marketable title in the DTS Shares
free and clear of any Encumbrances, voting trusts, unanimous or other
shareholder agreements, proxies and other interests, claims or demands
of every kind or nature whatsoever (other than such as may be created
by the Purchaser);
o. any consents or approvals required to be obtained from any third party,
including any holder of indebtedness or any outstanding security of
DTS, and any amendments of agreements which shall be necessary to
permit the consummation of the transactions contemplated hereby shall
have been obtained and all such consents or amendments shall be
satisfactory in form and substance to the Purchaser and the Purchaser's
Counsel; and
p. the representations and warranties made by the Vendor herein shall be
true at the Closing Time as if made at and as of such time and the
Vendor shall have complied with its covenants herein and the Purchaser
shall have received a certificate signed by the President of the Vendor
confirming same.
5.2 Waiver of Conditions
The conditions precedent set forth in Section 5.1 are for the benefit
of the Purchaser and may be waived, in whole or in part, by the Purchaser at any
time. If any of the said conditions precedent shall not be complied with or
waived as aforesaid on or before the date required for the fulfilment thereof,
the Purchaser may, in addition to the other remedies it may have at law or in
equity, rescind and terminate this Agreement by notice to the other party.
ARTICLE 6
CLOSING
6.1 Place of Closing
Closing shall take place at the offices of the Purchaser's Counsel at
the Closing Time, or at such other place as may be agreed upon by the parties
hereto.
7
ARTICLE 7
INDEMNITY
7.1 Vendor Indemnity
a. The Vendor shall indemnify and save the Purchaser harmless against and
from all liabilities, claims, demands, losses, costs (including,
without limitation, legal fees and disbursements on a full indemnity
basis), damages and expenses to which the Purchaser may be subject or
which the Purchaser may suffer or incur, whether under the provisions
of any statute or otherwise, in any way caused by, or arising directly
or indirectly from or in consequence of any breach of, default under or
non-compliance by the Vendor with any representation, warranty, term,
covenant or condition of this Agreement or in any certificate or other
document delivered by or on behalf of the Vendor hereunder or pursuant
hereto.
b. The rights and remedies of the Purchaser set forth in paragraph 7.1(a)
are to the fullest extent possible in law cumulative and not
alternative and the election by the Purchaser to exercise any such
right or remedy shall not be, and shall not be deemed to be, a waiver
of any other rights and remedies. The Purchaser shall not be obligated
to pursue any claim or remedy against any third party including,
without limitation, DTS or Finova Mezzanine Capital Inc. before being
entitled to obtain full indemnification from the Vendor pursuant to
paragraph 7.1(a).
c. Any liability of the Vendor under paragraph 7.1(a) shall be limited to
U.S. $1,000,000.
ARTICLE 8
NOTICES
8.1 Notices
Any notice, consent, waiver, direction or other communication required
or permitted to be given under this Agreement by a party to any other party
shall be in writing and shall be delivered by hand delivery, facsimile
transmission or (provided that the mailing party does not know and should not
reasonably have known of any disruption or anticipated disruption of postal
service which might affect delivery of the mail) by registered mail (postage
prepaid), addressed to the party to whom the notice is to be given, at its
address for service herein. Any notice, consent, waiver, direction or other
communication aforesaid shall, if hand delivered or delivered by telex or
facsimile transmission, be deemed to have been given and received on the date on
which its was hand delivered or delivered by facsimile transmission to the
address provided herein (if a business day and, if not, the next succeeding
business day) and if sent by registered mail be deemed to have been given and
received on the third business day at the point of delivery following the date
on which it was so sent.
8.2 Address for Service
The address for service of each of the parties hereto shall be as
follows:
if to the Purchaser:
Wi-LAN Inc.
Xxxxx 000, 000 Xxxxxxx Xxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx Xxxxxxxx, Chairman and Chief Executive Officer
Telecopy: (000) 000-0000
8
if to the Vendor:
MicroTel International, Inc.
0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Chairman and Chief Executive Officer
Telecopy: (000) 000-0000
or such other address as may be designated by notice to the other parties
hereto.
ARTICLE 9
MISCELLANEOUS
9.1 Entire Agreement
This Agreement, together with documents to be delivered pursuant
hereto, constitutes the entire agreement between the parties hereto, and cancels
and supersedes all prior agreements and understandings between the parties
hereto, with respect to the subject matter hereof.
9.2 Further Assurances
Each party hereto shall, from time to time, and at all times hereafter,
at the request of the other party hereto, but without further consideration, do
all such further acts and execute and deliver all such further documents and
instruments as shall be reasonably required in order to fully perform and carry
out the terms and intent hereof.
9.3 Survival
The representations, warranties, covenants and agreements herein and in
any document delivered pursuant hereto shall survive the Closing and remain in
full force and effect provided that no party hereto shall be liable in respect
of any representation or warranty unless the party seeking to rely upon such
representation or warranty shall have given notice to the party who made such
representation or warranty of its intention to make such claim on or before the
date 24 months following the Closing Date.
9.4 Time
Time shall be of the essence in this Agreement.
9.5 Amendments
This Agreement may only be amended by a written instrument signed by
the parties hereto.
9.6 Governing Law
This Agreement shall be governed by, and be construed in accordance
with, the laws of the Province of Alberta and applicable laws of Canada but the
reference to such laws shall not, by conflict of laws rules or otherwise,
require the application of the law of any jurisdiction other than the Province
of Alberta.
9
9.7 Attornment
Each party hereto hereby irrevocable attorns to the jurisdiction of the
Courts of the Province of Alberta in respect of all matters arising under or in
relation to this Agreement.
9.8 Severability
If any one or more of the provisions or parts thereof contained in this
Agreement should be or become invalid, illegal or unenforceable in any respect
in any jurisdiction, the remaining provisions or parts thereof contained herein
shall be and shall be conclusively deemed to be, as to such jurisdiction,
severable therefrom and:
a. the validity, legality or enforceability of such remaining provisions
or parts thereof shall not in any way be affected or impaired by the
severance of the provisions or parts thereof severed; and
b. the invalidity, illegality or unenforceability of any provision or
party thereof contained in this Agreement in any jurisdiction shall not
affect or impair such provision or part thereof or any other provisions
of this Agreement in any other jurisdiction.
9.9 Execution in Counterpart
This Agreement may be executed in any number of counterparts with the
same effect as if all signatures to the counterparts had signed one document,
all such counterparts shall together constitute, and be construed as, one
instrument and each of such counterparts shall, notwithstanding the date of its
execution, be deemed to bear the date first above written.
9.10 Waiver
No waiver by any party hereto shall be effective unless in writing and
any waiver shall affect only the matter, and the occurrence thereof,
specifically identified and shall not extend to any other matter or occurrence.
9.11 Enurement
This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns.
9.12 Assignment
This Agreement may not be assigned by any party hereto without the
prior consent of the other parties hereto.
10
9.13 Reliance
The parties hereto acknowledge and agree that they have entered into
this Agreement in reliance upon each of the representations, warranties,
covenants and agreements herein of the other party hereto.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as
of the date first above written.
WI-LAN INC.
Per: /s/ Xxxxx Xxxxxxxx
----------------------------------
Xxxxx Xxxxxxxx
Chairman and Chief Executive Officer
MICROTEL INTERNATIONAL, INC.
Per: /s/ Xxxxxxx X. Xxxxx
----------------------------------
Xxxxxxx X. Xxxxx
Chairman and Chief Executive Officer
ACKNOWLEDGEMENT
DTS hereby acknowledges that it is aware of the terms and conditions of
this Agreement and DTS is entering into the Convertible Debenture Purchase
Agreement dated December 29, 1999 between DTS and the Purchaser as material
consideration for and as an inducement to the Purchaser to enter into this
Agreement.
Digital Transmission Systems, Inc.
Per: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx
Chief Executive Officer
SCHEDULE A
REPRESENTATION LETTER
TO: Wi-LAN Inc. (the "Corporation").
In connection with the acquisition by MicroTel International, Inc.
("MicroTel") of 28,340 common shares (the "Common Shares") of the Corporation.
MicroTel hereby certifies and agrees for the benefit of the Corporation that:
1. it is authorized to consummate the purchase of the Common Shares;
2. it understands that the Common Shares have not been and will not be
registered under the Securities Act of 1933, as amended (the "U.S. Securities
Act") or under the securities ("blue sky") laws of any State of the United
States and that the sale contemplated hereunder is being made in reliance on a
private placement exemption to accredited investors;
3. it is purchasing the Common Shares for its own account and not with a view to
any resale, distribution or other disposition of the Common Shares, or any part
thereof in any transaction that would be in violation of the securities laws of
the United States or any State thereof, subject, nevertheless, to the
disposition of its property being at all times within its control;
4. it agrees that if it decides to offer, sell or otherwise transfer, pledge or
hypothecate all or any part of the Common Shares, it will not offer, sell or
otherwise transfer, pledge or hypothecate any or any part of such Common Shares
(other than pursuant to an effective registration statement under the U.S.
Securities Act and in compliance with any applicable State securities laws of
the United States), directly or indirectly unless:
a. the sale is to the Corporation; or
b. the sale is made outside the United States in accordance with the
requirements of Rule 904 of Regulation S under the U.S. Securities Act
and in compliance with applicable local rules and regulations; or
c. the sale is made pursuant to the exemption from registration under the
U.S. Securities Act provided by Rule 144 thereunder and local rules; or
d. the Common Shares or any part thereof are sold in a transaction that
does not require registration under the U.S. Securities Act or any
applicable United States state laws and regulations governing the offer
and sale of securities, and MicroTel has furnished to the Corporation
an opinion to that effect of counsel of recognized standing reasonably
satisfactory to the Corporation;
5. it understands and acknowledges that the Common Shares are "restricted
securities" as defined in Rule 144 under the U.S. Securities Act, and that upon
the original issuance thereof, and until such time as the same is no longer
required under applicable requirements of the U.S. Securities Act or state
securities laws, the certificates representing the Common Shares, and all
certificates issued in exchange therefor or in substitution thereof, shall bear
the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES. THE HOLDER HEREOF, BY PURCHASING SUCH
SECURITIES, AGREES FOR THE BENEFIT OF THE CORPORATION THAT
SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
ONLY: (A) TO THE CORPORATION; (B) OUTSIDE THE UNITED STATES
IN ACCORDANCE WITH RULE 904 AND, IF APPLICABLE, RULE 905 OF
REGULATION S UNDER THE SECURITIES ACT; (C) PURSUANT TO THE
A-2
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED
BY RULE 144 THEREUNDER AND IN COMPLIANCE WITH ANY APPLICABLE
STATE SECURITIES LAWS OF THE UNITED STATES; OR (D) PURSUANT
TO ANOTHER EXEMPTION FROM REGISTRATION AFTER PROVIDING A
SATISFACTORY LEGAL OPINION TO THE CORPORATION. DELIVERY OF
THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN
SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA. A
NEW CERTIFICATE, BEARING NO LEGEND, DELIVERY OF WHICH WILL
CONSTITUTE "GOOD DELIVERY" MAY BE OBTAINED FROM MONTREAL
TRUST COMPANY OF CANADA UPON DELIVERY OF THIS CERTIFICATE AND
A DULY EXECUTED DECLARATION, IN A FORM SATISFACTORY TO
MONTREAL TRUST COMPANY OF CANADA AND THE CORPORATION, TO THE
EFFECT THAT THE SALE OF THE SECURITIES REPRESENTED HEREBY IS
BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER
THE SECURITIES ACT;
provided that if the Corporation is a "foreign corporation" within the meaning
of Regulation S at the time of sale, and if the Common Shares or any part
thereof are being sold under paragraph 4(b) above, the legend may be removed by
providing a declaration to the transfer agent for the Common Shares to the
following effect (or as the Corporation may prescribe from time to time):
"MicroTel: (A) acknowledges that the sale of the securities
to which this declaration relates is being made in reliance
on Rule 904 of Regulation S under the United States
Securities Act of 1933, as amended; and (B) certifies that:
(1) the offer of such securities was not made to a person in
the United States and either: (a) at the time the buy order
was originated, the buyer was outside the United States, or
the seller and any person acting on its behalf reasonably
believes that the buyer was outside the United States; or (b)
the transaction was executed on or through the facilities of
The Toronto Stock Exchange and neither the seller nor any
person acting on its behalf knows that the transaction has
been prearranged with a buyer in the United States; (2)
neither the seller nor any person acting on its behalf
engaged in any directed selling efforts in connection with
the offer and sale of such securities; (3) the sale is bona
fide and not for the purpose of "washing off" the resale
restrictions imposed because the securities are "restricted
securities" (as such term is defined in Rule 144(a)(3) under
the 0000 Xxx); (4) the seller does not intend to replace the
securities sold in reliance on Rule 904 of the 1933 Act with
fungible unrestricted securities; and (5) the contemplated
sale is not a transaction, or part of a series of
transactions which, although in technical compliance with
Regulation S, is part of a plan or scheme to evade the
registration provisions of the 1933 Act. Terms used herein
have the meanings given to them by Regulation S";
provided, further, that if any such Common Shares are being sold pursuant to
Rule 144 of the U.S. Securities Act, the legend may be removed by delivery to
Montreal Trust Company of Canada of an opinion of counsel, of recognized
standing reasonably satisfactory to the Corporation, to the effect that such
legend is no longer required under applicable requirements of the U.S.
Securities Act or state securities laws;
6. it has been afforded the opportunity to ask such questions as it has deemed
necessary of, and to receive answers from, representatives of the Corporation
concerning the terms and conditions of the issuance of the Common Shares;
7. it is experienced in evaluating companies such as the Corporation, has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of its investment in the Common Shares and has
the ability to suffer the total loss of its investment in the Common Shares;
A-3
8. it is an "accredited investor" within the meaning of Rule 501 of Regulation D
under the U.S. Securities Act;
9. it has been independently advised as to restrictions with respect to trading
in the Common Shares imposed by applicable securities legislation in the
jurisdiction in which it resides, confirms that no representation has been made
to it by or on behalf of the Corporation with respect thereto, acknowledges that
it is aware of the characteristics of the Common Shares, the risks relating to
an investment therein and of the fact that it may not be able to resell the
Common Shares except in accordance with limited exemptions under applicable
securities legislation and regulatory policy until expiry of the applicable hold
period and compliance with the other requirements of applicable law;
10. it understands that the sale and delivery of the Common Shares is
conditional upon such sale being exempt from the requirements as to the filing
of a prospectus and as to the delivery of an offering memorandum or upon the
issuance of such orders, consents or approvals as may be required to permit such
sale without the requirement of filing a prospectus or delivering an offering
memorandum; and it has not received or been provided with, nor has it requested,
nor does it have any need to receive, any offering memorandum, or any other
document (other than financial statements, interim financial statements or any
other document the content of which is prescribed by statute or regulation)
describing the business and affairs of the Corporation which has been prepared
for delivery to, and review by, it in order to assist it in making an investment
decision in respect of the Common Shares and it has not become aware of any
advertisement in printed media of general and regular paid circulation, radio or
television with respect to the distribution of the Common Shares;
11. it has relied solely upon the publicly available information relating to the
Corporation and not upon any verbal or written representation as to fact or
otherwise made by or on behalf of the Corporation;
12. it has such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of an investment in the Common
Shares and it is able to bear the economic risk of loss of its entire
investment;
13. it is a resident of and was offered the Common Shares in Ontario,
California;
14. it is purchasing Common Shares having an aggregate acquisition cost of not
less than Cdn. $97,000 and if it is a corporation, syndicate, partnership or
other form of unincorporated organization, it pre-existed the acquisition of the
Common Shares and has a bona fide purpose other than investment in the Common
Shares having an aggregate acquisition cost of not less than Cdn. $97,000 or, if
created to permit such investment, the individual share of the aggregate
acquisition cost for each participant is not less than Cdn. $97,000;
15. it understands and acknowledges that the Corporation has the right to
instruct the transfer agent for the Common Shares not to record a transfer by
any person in the United States without first being notified by the Corporation
that it is satisfied that such transfer is exempt from or not subject to
registration under the U.S. Securities Act and any applicable state securities
laws;
16. it understands that the investment in the Common Shares may have tax
consequences under the laws of the United States and of Canada and that it is
the sole responsibility of MicroTel to determine and assess such tax
consequences as may apply to its particular circumstances;
17. it understands and acknowledges that the Corporation (i) is under no
obligation to be or to remain a "foreign issuer", (ii) may not, at the time we
sell the Common Shares or at any other time, be a "foreign issuer", and (iii)
may engage in one or more transactions which could cause the Corporation not to
be a "foreign issuer"; and
A-4
18. it agrees that the above representations, warranties and covenants will be
true and correct both as of the execution of this Agreement and as of the
Closing Time and will survive the completion of the issuance of the Common
Shares.
19. The foregoing representations, warranties and covenants are made by MicroTel
with the intent that they be relied upon in determining its suitability as a
purchaser of Common Shares and MicroTel agrees to indemnify the Corporation
against all losses, claims, costs, expenses and damages or liabilities which it
may suffer or incur caused or arising from reliance thereon. MicroTel undertakes
to immediately notify the Corporation at Wi-LAN Inc., Xxxxx 000, 000 Xxxxxxx
Xxxx X.X., Xxxxxxx, Xxxxxxx X0X 0X0, Attention: Xxxxx Xxxxxxxx, Chairman and
Chief Executive Officer of any change in any statement or other information
relating to MicroTel set forth herein which takes place prior to the Closing
Time.
Date: December ____, 1999 MicroTel International, Inc.
----------------------------------
Print name of Purchaser
By:_______________________________
Xxxxxxx X. Xxxxx
Chairman and Chief Executive Officer
SCHEDULE B
THE TORONTO STOCK EXCHANGE
PRIVATE PLACEMENT QUESTIONNAIRE AND UNDERTAKING
QUESTIONNAIRE
1. DESCRIPTION OF TRANSACTION
a. Name of Issuer of the Securities - Wi-LAN Inc.
b. Number and Class of Securities to be Purchased - 28,340 Common
Shares
c. Purchase Price: Deemed Price of U.S. $_____ per Common Share
2. DETAILS OF PURCHASER
a. Name of Purchaser - MicroTel International, Inc.
----------------------------
b. Address -
0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
______________________________________________________________
c. Names and addresses of persons having a greater than 10%
beneficial interest in the purchaser -
______________________________________________________________
______________________________________________________________
3. RELATIONSHIP TO ISSUER
a. Is the purchaser (or any person named in response to 2(c)
above) an insider of the issuer for the purposes of the
Ontario Securities Act (before giving effect to this private
placement)? If so, state the capacity in which the purchaser
(or person named in response to 2(c)) qualifies as an insider
-
______________________________________________________________
______________________________________________________________
______________________________________________________________
b. If the answer to (a) is "no", are the purchaser and the issuer
controlled by the same person or company? If so, give details.
______________________________________________________________
______________________________________________________________
4. DEALINGS OF PURCHASER IN SECURITIES OF THE ISSUER
Give details of all trading by the purchaser, as principal, in the
securities of the issuer (other than debt securities which are not
convertible into equity securities), directly or indirectly, within the
60 days preceding the date hereof -
______________________________________________________________
______________________________________________________________
______________________________________________________________
B-2
UNDERTAKING
TO: The Toronto Stock Exchange
The undersigned has subscribed for and agreed to purchase, as principal, the
securities described in Item 1 of this Private Placement Questionnaire and
Undertaking.
The undersigned undertakes not to sell or otherwise dispose of any of the said
securities so purchased or any securities derived therefrom until either:
i. a period of six months from the date of the closing of the transaction
herein or for such period as is prescribed by applicable securities
legislation, whichever is longer; or
ii. a period ending on the date that a receipt for a final prospectus
relating to the said securities or any securities derived therefrom has
been issued by the Ontario Securities Commission,
without the prior consent of The Toronto Stock Exchange and any other regulatory
body having jurisdiction.
DATED AT Ontario, California MicroTel International, Inc.
------------------------------------
this ____ day of December, 1999. (Name of Purchaser)
------------------------------------
(Authorized Signature)
------------------------------------
Chairman and Chief Executive Officer
(Official Capacity)
Xxxxxxx X. Xxxxx
------------------------------------
(please print here name of individual
whose signature appears above, if
different from name of purchaser
printed above)
