Exhibit 4.27
SUBSCRIPTION FOR UNITS
(BC, AB, ON, QUE, USA)
TO: SPECTRUM SIGNAL PROCESSING INC.
One Spectrum Court
200-0000 Xxxxxxxxxx Xxx
Xxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
AND TO: GMP SECURITIES LTD.
XXXXXXXXX XXXXXXXX & PARTNERS CORP.
XXXXXX MERCHANT GROUP INC.
The undersigned subscriber (the "SUBSCRIBER") hereby irrevocably subscribes for
and agrees to purchase ___________ units ("UNITS") of Spectrum Signal Processing
Inc. (the "CORPORATION"), each Unit consisting of one common share (a "COMMON
SHARE") and one-half of a common share purchase warrant (a "WARRANT") of the
Corporation, for an aggregate subscription price of $_________________,
representing a subscription price of $1.35 per Unit, on the terms and conditions
set out in paragraphs 1 through 26 attached. This subscription is subject to
acceptance by the Corporation and, subject to paragraph 2, may be accepted as to
the number of Units subscribed for above or such lesser number as may be
determined by the Corporation in its discretion.
DATED at ________________________, in the Province/State of
______________________ this _____ day of March, 2004.
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(Name of Subscriber - please print) (Subscriber's Address including Province/State)
By:
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Authorized Signature
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(Official Capacity or title - please print)
( )
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(Please print name of individual whose signature appears Telephone Number
above if different than the name of the subscriber printed
above)
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Email Address
Number and kind of securities of the Corporation directly or
indirectly held, if any:
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State whether Subscriber is an insider of the Corporation: Yes [ ]
No: [ ]
REGISTRATION INSTRUCTIONS: DELIVERY INSTRUCTIONS:
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Name Name
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Account reference, if applicable Account reference, if applicable
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Address Address
NOTE TO SUBSCRIBER:
YOU MUST: (1) READ THE SUBSCRIPTION AND COMPLETE PAGE ONE OF THIS SUBSCRIPTION;
(2) READ AND COMPLETE SCHEDULE A IF YOU LIVE IN OR ARE OTHERWISE SUBJECT TO THE SECURITIES
LAWS OF ONTARIO, QUEBEC, ALBERTA OR BRITISH COLUMBIA;
(3) IF YOU ARE SUBSCRIBING AS AN "ACCREDITED INVESTOR", READ AND COMPLETE ANNEX I TO SCHEDULE A IF
YOU LIVE IN OR ARE OTHERWISE SUBJECT TO THE SECURITIES LAWS OF ONTARIO, AND ANNEX II TO SCHEDULE A
IF YOU LIVE IN OR ARE OTHERWISE SUBJECT TO THE SECURITIES LAWS OF BRITISH COLUMBIA OR ALBERTA;
(4) IF THE SUBSCRIBER IS AN INDIVIDUAL TO WHOM SECTION (b)(i)(D)(IV), (V) OR (VII) OF
SCHEDULE A APPLIES, READ AND COMPLETE SCHEDULE B;
(5) READ AND COMPLETE SCHEDULE C IF THE SUBSCRIBER LIVES IN, OR OTHERWISE IS SUBJECT TO THE
SECURITIES LAWS OF, THE UNITED STATES OF AMERICA; AND/OR
(6) READ AND COMPLETE SCHEDULE D.
Please return all completed pages by facsimile with the full original by courier
to the following address by no later than March 19, 2004:
GMP Securities Ltd.
Attn: Xxxxxx Xxxxxxxxxx
000 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx, X0X 0X0
Fax: (000) 000-0000
1. Private Placement; Terms of Units: The Subscriber acknowledges (on its
own behalf and, if applicable, on behalf of each person on whose behalf
the Subscriber is contracting) that the Units will be issued in
connection with the issue and sale of up to 2,102,780 Units by the
Corporation on a private placement basis (the "OFFERING") pursuant to
an agency agreement (the "AGENCY AGREEMENT") to be dated the Closing
Date (as defined in paragraph 6 hereof) between the Corporation, GMP
Securities Ltd. ("GMP") and Xxxxxx Merchant Group Inc. ("XXXXXX"). Each
Unit consists of one Common Share and one-half of a Warrant. The
Warrants shall be issued pursuant to an indenture (the "WARRANT
INDENTURE") to be entered into at or prior to the Closing (as
hereinafter defined) between the Corporation and Computershare Trust
Company of Canada (the "WARRANT AGENT"). Each whole Warrant entitles
the holder thereof to acquire one additional Common Share for $1.50 for
a period of eighteen months from the Closing Date. By its acceptance of
this offer, the Corporation covenants, agrees and confirms that the
Subscriber will have the benefit of all of the representations,
warranties, covenants and conditions provided to or for the benefit of
the Subscriber under the Agency Agreement.
The Subscriber acknowledges and agrees that the rights of the holders
of Warrants may be modified under the and Warrant Indenture pursuant to
an extraordinary resolution approved either (i) by the holders of
Warrants that attend or are represented at a duly convened meeting of
the holders of Warrants representing not less than 66 2/3 percent of
the aggregate number of all Warrants then outstanding or (ii) by
written consent of the holders of Warrants representing not less than
66 2/3 percent of the aggregate number of all Warrants then
outstanding.
GMP and Xxxxxx are collectively referred to herein as the "AGENTS".
Pursuant to the terms of the Agency Agreement, the Agents shall be
entitled to receive as compensation for the sale of Units to
Subscribers other than Ventures West 7 Limited Partnership, Ventures
West 7 U.S. Limited Partnership and directors, officers and employees
of the Corporation a cash commission equal to seven and a half percent
(7.50%) of the subscription price paid for by such Subscribers. The
Agents shall be entitled to receive as cash compensation for the sale
of Units or Common Shares to Ventures West 7 Limited Partnership,
Ventures West 7 U.S. Limited Partnership and directors, officers and
employees of the Corporation a cash commission equal to three and
three-quarters percent (3.75%) of the subscription price paid for by
such Subscribers. In addition, the Agents are entitled to receive
compensation warrants exercisable for a period of one year from the
Closing Date to acquire that number of Units equal to four and a half
percent (4.5%) of the Units subscribed for by all Subscribers (the
"COMPENSATION WARRANTS"), with an exercise price of $1.50 per
Compensation Warrant.
2. Subscription for Units: The Subscriber hereby confirms (on its own
behalf and, if applicable, on behalf of each person on whose behalf the
Subscriber is contracting) its subscription for and agrees to take up
the Units as provided for on the initial page of this Subscription
Agreement and acknowledges that this subscription is subject to
acceptance by the Corporation and to the fulfilment of certain other
terms and conditions by the Subscriber. The Corporation will not accept
this subscription unless the Subscriber has confirmed to the
Corporation that the representations, warranties and covenants set out
in paragraph 4 and
(i) Schedule A if the Subscriber or the person on whose
behalf the Subscriber is contracting, lives in or is
otherwise subject to the securities laws of Ontario,
Quebec, British Columbia or Alberta; or
(ii) Schedule C if the subscriber, or the person on whose
behalf the Subscriber is contracting, lives in or is
otherwise subject to the securities laws of the
United States of America;
shall be true in respect of the purchase by the Subscriber of the
purchased Units following such acceptance.
3. Representations, Warranties and Covenants of Subscriber relating to
Availability of Prospectus Exemptions: By executing this Subscription
Agreement, the Subscriber (on its own behalf and, if applicable, on
behalf of each person on whose behalf the Subscriber is contracting)
makes the representations, warranties and covenants set out in
(i) Schedule A if the Subscriber or the person on whose
behalf the Subscriber is contracting, lives in or is
otherwise subject to the securities laws of Ontario,
Quebec, British Columbia or Alberta; or
(ii) Schedule C if the subscriber, or the person on whose
behalf the Subscriber is contracting, lives in or is
otherwise subject to the securities laws of the
United States of America;
to the Corporation (which representations, warranties and covenants
shall survive the closing of the purchase of the Units) and
acknowledges that the Corporation, the Agents and their respective
counsel are relying thereon.
4. Additional Representations, Warranties and Covenants of Subscriber: By
executing this Subscription Agreement, the Subscriber further
represents, warrants and covenants (on its own behalf and, if
applicable, on behalf of each person on whose behalf the Subscriber is
contracting) to the Corporation (which representations, warranties and
covenants shall survive the closing of the purchase of the Units) and
acknowledges that the Corporation, the Agents and their respective
counsel are relying thereon that:
(a) the Subscriber has been independently advised as to and is
aware that applicable securities legislation may impose
restrictions on the resale of the Units and is aware of the
risks in purchasing and the other characteristics of the Units
and of the fact that the Subscriber may not be able to resell
the Units except in accordance with applicable securities
legislation and regulatory policy until expiry of the
applicable restricted period and compliance with other
requirements of applicable law;
(b) the certificates representing the Units will bear a legend
regarding restrictions on transfer which may apply under
applicable securities legislation;
(c) the Subscriber acknowledges and understands that (i) it has
been advised to, and should, consult its own legal advisors
with respect to applicable restrictions on the resale of the
Units purchased by the Subscriber, and (ii) it is solely
responsible (and the Corporation is not in any manner
responsible) for compliance with such restrictions, and (iii)
it will comply with such restrictions;
(d) the Subscriber is capable of assessing the proposed investment
as a result of its financial and investment experience or as a
result of advice received from a registered person other than
the Corporation or any affiliates thereof and is able to bear
the economic loss of its investment;
(e) the Subscriber acknowledges that it has been encouraged to
obtain independent legal, investment and tax advice with
respect to its subscription of Units and accordingly has had
the opportunity to acquire an understanding of the meanings of
all the terms contained herein relevant to the Subscriber for
the purposed of giving representations, warranties and
covenants under this Subscription Agreement and the
transactions contemplated hereunder;
(f) the Subscriber, in connection with this offering of Units, has
not received, nor has it requested, nor does it have any need
to receive, any offering memorandum or similar document
describing the business and affairs of the Corporation which
has been or appears or purports to have been prepared
primarily for delivery to, and review by, prospective
subscribers in order to assist them in making an investment
decision in respect of the Units;
(g) insofar as the Subscriber is aware, the offering of Units is
not being accompanied by any advertisement in the printed
media or on radio or television or by other means of
telecommunication including electronic display such as the
Internet or any other form of advertisement or general
solicitation with respect to the distribution;
(h) except for the representations and warranties to be made by
the Corporation to the Agents in the Agency Agreement, the
Subscriber has relied only upon the publicly available
information relating
to the Corporation and not upon any verbal representation as
to fact, or upon any written representations, warranties or
covenants otherwise made by or on behalf of the Corporation,
such publicly available information having been independently
obtained by the Subscriber, and agrees that the Agent and the
Agents' counsel assume no responsibility or liability of any
nature whatsoever for the accuracy, adequacy or completeness
of publicly available information or as to whether all
information concerning the Corporation required to be
disclosed by the Corporation has been generally disclosed by
the Corporation and acknowledges that the Corporation's
counsel and the Agents' counsel are acting as counsel to the
Corporation and the Agents respectively, and not as counsel to
the Subscriber;
(i) the Subscriber and any beneficial purchaser for whom the
Subscriber is acting as agent or trustee (a "BENEFICIAL
SUBSCRIBER") are resident in the province or state set out in
the "Subscriber's Address" on page one hereof, and the
purchase by and sale to the Subscriber of the Units, and any
act, solicitation, conduct or negotiation directly or
indirectly in furtherance of such purchase and sale (whether
with or with respect to the Subscriber or any beneficial
Subscriber) has occurred only in such province or state;
(j) this Subscription Agreement has been duly and validly executed
and delivered by the Subscriber, and, if the Subscriber is not
an individual, has been duly authorized by the Subscriber,
and, upon acceptance by the Corporation, this Subscription
Agreement will constitute a legal, valid and binding contract
of the Subscriber enforceable against the Subscriber, and any
beneficial Subscribers on whose behalf the Subscriber is
acting, in accordance with its terms;
(k) if an individual, the Subscriber has attained the age of
majority and is legally competent to execute this Subscription
Agreement and to take all actions required pursuant hereto;
(l) no person has made any written or oral representation (i) that
any person will resell or repurchase the Units; (ii) that any
person will refund the purchase price of the Units; and (iii)
as to future price or value of the Units;
(m) if the Subscriber is not purchasing as principal and is acting
as agent or trustee for a beneficial Subscriber, the
Subscriber represents and warrants that it is duly authorized
to enter into this Subscription Agreement for and on behalf of
such beneficial Subscriber and to execute all documentation in
connection with the purchase of the Units on behalf of such
beneficial Subscriber and acknowledges that the Corporation
may be required by law to disclose to certain regulatory
authorities the identity of each beneficial Subscriber of
Units for whom it may be acting;
(n) if required by applicable securities legislation or stock
exchange rules, the Subscriber will, with respect to this
Subscription Agreement, execute, deliver and file or assist
the Corporation in obtaining and filing such reports,
undertakings and other documents relating to the purchase of
the Units by the Subscriber as may be required by any
securities commission, stock exchange or other regulatory
authority including, without limitation, any applicable form
referred to in paragraph 7 of this Agreement;
(o) none of the funds the Subscriber is using to purchase the
Units are, to the knowledge of the Subscriber, proceeds
obtained or derived, directly or indirectly, as a result of
illegal activities;
(p) if the Subscriber has not completed Schedule C, the Subscriber
is not a U.S. Person or a person within the United States (as
such terms are defined in Rule 902 of Regulation S under the
United States Securities Act of 1933, as amended, (the "1933
ACT")) and it is not acquiring the Units for the account or
benefit of a U.S. Person or a person within the United States,
the Units were not offered to the Subscriber in the United
States and this Subscription Agreement has not been signed in
the United States, the Subscriber acknowledges that the Units
have not been and will not be registered under the 1933 Act or
the securities laws of any state and that these securities may
not
be offered or sold in the United States without registration
under the 1933 Act or compliance with requirements of an
exemption from registration under the 1933 Act;
(q) the Subscriber covenants that if the Subscriber decides to
offer, sell or otherwise transfer, pledge or hypothecate all
or any part of the Units, the Subscriber will not offer, sell
or otherwise transfer, pledge or hypothecate any of such Units
(other than pursuant to an effective registration statement
under the 1933 Act) directly or indirectly to a U.S. Person or
a person within the United States unless such offer and sale
or other disposition is part of a transaction that does not
require registration under the 1933 Act or any applicable
United States state laws, rules and regulations governing the
offer and sale of securities, and it has theretofore furnished
to the Corporation an opinion to that effect of counsel of
recognized standing reasonably satisfactory to the
Corporation; and
(r) the Subscriber covenants to indemnify the Corporation and the
Agents against all losses, claims, costs, expenses and damages
or liability which it may suffer or incur, caused or arising
from reliance upon the representations, warranties,
acknowledgements and covenants of the Subscriber contained
herein and the Subscriber further agrees that by accepting the
Units, the Subscriber shall be representing and warranting
that such representations, warranties, acknowledgements and
covenants are true as at the Closing Date with the same force
and effect as if they had been made by the Subscriber at the
Closing Date and that they shall survive the purchase by the
Subscriber of the Units and shall continue in full force and
effect notwithstanding any subsequent disposition by the
Subscriber of any of the Units.
5. Authorization of GMP: The Subscriber irrevocably authorizes GMP, in its
discretion, to act as the Subscriber's representative at the Closing
(as defined below), and hereby appoints GMP, with full power of
substitution, as its true and lawful attorney with full power and
authority in the Subscriber's place and stead: (a) to receive
certificates representing the Units, to execute in the Subscriber's
name and on its behalf all closing receipts and required documents, to
complete and correct any errors or omissions in any form or document
provided by the Subscriber in connection with the subscription for the
Units and to exercise any rights of termination contained in the Agency
Agreement; (b) to extend such time periods and to waive, in whole or in
part, any representations, warranties, covenants or conditions for the
Subscriber's benefit contained in this Subscription Agreement, and the
Agency Agreement or any ancillary or related document; (c) to terminate
this Subscription Agreement if any condition precedent is not
satisfied, in such manner and on such terms and conditions as GMP in
its sole discretion may determine; and (d) without limiting the
generality of the foregoing, to negotiate, settle, execute, deliver and
amend the Agency Agreement.
6. Closing: The sale of the Units (the "CLOSING") will be completed at the
Vancouver offices of the Corporation's counsel at 8:00 a.m. (Vancouver
time) or such other time as the Corporation may determine (the "CLOSING
TIME") on March 23, 2004, or such other date or dates as the
Corporation may determine (the "CLOSING DATE"). The Offering is
conditional upon the Corporation obtaining conditional approval from
the Toronto Stock Exchange and the Nasdaq Small Cap Market for the
Offering.
7. Delivery of Documentation and Payment of Subscription Price: In order
to subscribe for the Units indicated in this Subscription Agreement,
the Subscriber shall deliver to GMP no later than 4:00 p.m. local time
at 000 Xxxx Xxxxxx Xxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx, X0X 0X0, Fax
(000) 000-0000 Attention: Xxxxxx Xxxxxxxxxx on March 19, 2004, or on
such date that is two business days before the Closing Date in the
event that the closing date is changed in accordance with paragraph 6
above:
(a) if the Subscriber, or the person on whose behalf the
Subscriber is contracting, lives in or is otherwise subject to
the securities laws of Ontario, Quebec, British Columbia or
Alberta:
(i) this completed and duly executed Subscription
Agreement including the applicable Annexes to
Schedule A hereto;
(ii) such other documents as may be required pursuant to
Schedule A hereto;
(iii) where the Subscriber is an individual to whom section
(b)(D)(IV), (V) or (VII) of Schedule A applies,
Schedule B hereto; and
(iv) Schedule D hereto; or
(b) if the Subscriber, or the person on whose behalf the
Subscriber is contracting, lives in or is otherwise subject to
the securities laws of the United States of America:
(i) this completed and duly executed Subscription
Agreement;
(ii) Schedule C hereto;
(iii) such other documents as may be required pursuant to
Schedule C hereto; and
(iv) Schedule D hereto.
The Subscriber shall deliver to GMP before the Closing Time a certified
cheque or bank draft payable to GMP, for the aggregate subscription
price of the Units subscribed for hereby unless alternative
arrangements satisfactory to GMP for payment of the aggregate
subscription price have been made.
8. Accuracy: The Subscriber acknowledges that it has carefully read this
Subscription Agreement, and each of the representations and warranties
set forth herein will be true and correct both as of the time of
execution of this Subscription Agreement and as of the date of
acceptance hereof (if accepted) by the Corporation and as of the time
of issuance of the Units subscribed for.
9. Representations, Warranties and Covenants of the Corporation: The
Corporation represents and warrants to the Subscriber, and acknowledges
that the Subscriber is relying upon such representations and
warranties, that:
(a) the Corporation has the full corporate power and authority to
execute and deliver this Subscription Agreement and to issue
the Units;
(b) this Subscription Agreement constitutes a binding obligation
of the Corporation enforceable in accordance with its terms;
(c) the execution and delivery of, and the performance of the
terms of, this Subscription Agreement by the Corporation,
including the issue of the Units pursuant hereto does not and
will not constitute a breach of or default under the
constating documents of the Corporation or any law,
regulation, order or ruling applicable to the Corporation or
any agreement, contract or indenture to which the Corporation
is a party or by which it is bound;
10. Survival of Representations, etc.: The representations, warranties and
covenants of the Subscriber herein are made by the Subscriber with the
knowledge and intent that they are being and will be relied upon by the
Corporation and the Agents in connection with the transactions
contemplated hereby, including for purposes of determining the
suitability of the Subscriber as a purchaser of Units and the
availability of prospectus exemptions in connection with the offering
and sale to the Subscriber or the beneficial Subscriber, as the case
may be, of the Units, and the Subscriber hereby agrees to indemnify the
Corporation and the Agents and each of their directors, officers,
employees, agents and control persons against all losses, claims,
costs, expenses, damages and liabilities which any of them may suffer
or incur caused or arising from any inaccuracy therein or breach
thereof. The Subscriber hereby undertakes to notify the Corporation (at
the address of the Corporation set forth above) immediately of any
change in any representation, warranty or covenant set forth herein or
any other information set forth herein relating to the Subscriber that
arises prior to the Closing Time. The representations, warranties and
covenants contained herein shall survive the closing of the
transactions contemplated hereby.
11. Headings: The division of this Subscription Agreement into paragraphs
and the insertion of headings are for convenience of reference only and
shall not effect the construction or interpretation of this
Subscription Agreement. The terms "HEREOF", "HEREUNDER" and similar
expressions refer to this Subscription Agreement and not to any
particular paragraph or any portion hereof and include any agreement
supplemental hereto. Unless something in the subject matter or context
is inconsistent therewith, references hereinto paragraphs and
subparagraphs are to paragraphs and subparagraphs of this Subscription
Agreement.
12. Extended Meanings: In this Subscription Agreement words importing the
singular number only include the plural and vice versa, words importing
any gender include all genders and words importing persons include
individuals, partnerships, associations, trusts, unincorporated
associations and corporations.
13. Costs and Expenses: All costs and expenses (including, without
limitation, the fees and disbursements of legal counsel) incurred in
connection with this Subscription Agreement and the transactions herein
contemplated shall be paid and borne by the party incurring such costs
and expenses.
14. Counterparts: This Subscription Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original and
all of which together shall constitute one and the same Subscription
Agreement. Counterparts may be executed either in original or faxed
form and the parties adopt any signature received by a receiving fax
machine as original signatures of the parties.
15. Currency: Unless otherwise indicated, all references to currency herein
are to lawful money of Canada.
16. Schedules: The schedules attached hereto are incorporated by reference
and deemed to be part hereof.
17. Further Assurances: Each of the parties hereto will from time to time
execute and deliver all such further documents and instruments and do
all acts and things as the other party may, either before or after the
closing of the transactions contemplated hereby, reasonably require to
effectively carry out or better evidence or perfect the full intent and
meaning of this Subscription Agreement.
18. Time of the Essence: Time shall be of the essence of this Subscription
Agreement.
19. Benefit of the Agreement: This Subscription Agreement will enure to the
benefit of and be binding upon the respective heirs, executors,
administrators, successors and permitted assigns of the parties hereto.
20. Entire Agreement: This Subscription 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 with respect thereto. There are no
representations, warranties, terms, conditions, undertakings or
collateral agreements, expressed, implied or statutory, between the
parties hereto other than as expressly set forth in this Subscription
Agreement.
21. Amendments and Waivers: No amendment to this Subscription Agreement
will be valid or binding unless set forth in writing and duly executed
by the parties hereto. No waiver of any breach of any provision of this
Subscription Agreement will be effective or binding unless made in
writing and signed by the party purporting to give the same and, unless
otherwise provided, will be limited to the specific breach waived.
22. Assignment: The terms of this Subscription Agreement shall be binding
upon and enure to the benefit of the Subscriber and its respective
heirs, executors, administrators, successors and assigns, provided
that, except for the assignment by the Subscriber who is acting as
nominee or agent to the beneficial owner and as otherwise herein
provided, this Subscription Agreement may not be assigned by either
party without the prior written consent of the other party.
23. Governing Law: This Subscription Agreement is governed by and shall be
construed in accordance with the laws of the Province of British
Columbia and the laws of Canada applicable therein.
24. Attornment: For the purpose of all legal proceedings this Subscription
Agreement will be deemed to have been performed in British Columbia and
the Courts of British Columbia will have jurisdiction to entertain any
action arising under this Subscription Agreement. The parties hereto
each hereby attorns to the jurisdiction of the Courts of British
Columbia.
25. Facsimiled Subscription Agreements: The Corporation shall be entitled
to rely on delivery by facsimile of an executed copy of this
Subscription Agreement, and acceptance by the Corporation of such
facsimile copy shall be legally effective to create a valid and binding
agreement between the Subscriber and the Corporation in accordance with
the terms hereof.
26. Language: The parties hereby request that this Subscription Agreement
and any related documents be drafted only in the English language. Les
parties demandent par les presentes que la presente souscription ainsi
que tous les documents y afferents soient rediges en langue anglaise
seulement.
ACCEPTANCE
The undersigned hereby accepts the above subscription as of this 23 day of
March, 2004.
SPECTRUM SIGNAL PROCESSING INC.
By: "Xxxxx Xxxxxxx"
-----------------------------
Signature /s/XXXXX XXXXXXX
Name: XXXXX XXXXXXX
Chief Financial Officer
NOTE TO SUBSCRIBER:
YOU MUST: (1) READ THE SUBSCRIPTION AND COMPLETE PAGE ONE OF THIS SUBSCRIPTION;
(2) READ AND COMPLETE SCHEDULE A IF YOU LIVE IN OR ARE OTHERWISE SUBJECT TO THE SECURITIES
LAWS OF ONTARIO, QUEBEC, ALBERTA OR BRITISH COLUMBIA;
(3) IF YOU ARE SUBSCRIBING AS AN "ACCREDITED INVESTOR", READ AND COMPLETE ANNEX I TO SCHEDULE A IF
YOU LIVE IN OR ARE OTHERWISE SUBJECT TO THE SECURITIES LAWS OF ONTARIO, AND ANNEX II TO SCHEDULE A
IF YOU LIVE IN OR ARE OTHERWISE SUBJECT TO THE SECURITIES LAWS OF BRITISH COLUMBIA OR ALBERTA;
(4) IF THE SUBSCRIBER IS AN INDIVIDUAL TO WHOM SECTION (b)(i)(D)(IV), (V) OR (VII) OF
SCHEDULE A APPLIES, READ AND COMPLETE SCHEDULE B;
(5) READ AND COMPLETE SCHEDULE C IF THE SUBSCRIBER LIVES IN, OR OTHERWISE IS SUBJECT TO THE
SECURITIES LAWS OF, THE UNITED STATES OF AMERICA; AND/OR
(6) READ AND COMPLETE SCHEDULE D.
SCHEDULE A
SUBSCRIBER QUALIFICATIONS, REPRESENTATIONS, WARRANTIES AND COVENANTS
By executing this Subscription Agreement, the Subscriber represents,
warrants and covenants (on its own behalf, or if applicable on behalf of those
for whom the Subscriber is contracting hereunder) to and in favour of the
Corporation (which representations, warranties and covenants shall survive the
closing of the purchase of the Units) and acknowledges that the Corporation, the
Agents and their respective counsel are relying thereon that:
(a) either (i) the Subscriber is purchasing the Units as principal
for its own account and not for the benefit of any other
person, and not with a view to the resale or distribution of
all or any of the Units and the Subscriber complies with such
of the subparagraphs in paragraph (b) below as are applicable
to it by virtue of the place of residence or by virtue of it
being subject to the applicable securities legislation of such
province; or (ii) if the Subscriber is acting as agent or
trustee for one or more beneficial Subscribers whose identity
is disclosed or undisclosed or identified by account number
only, each beneficial Subscriber is purchasing as principal
for its own account and not for the benefit of any other
person, and not with a view to the resale or distribution of
all or any of the Units, and each beneficial Subscriber
complies with such of the subparagraphs in paragraph (b) below
as are applicable to it by virtue of its place of residence or
by virtue of it being subject to the applicable securities
legislation of such province; or (iii) the Subscriber complies
with such of the subparagraphs in paragraph (b) below as are
applicable to it by virtue of its place of residence or by
virtue of it being subject to the applicable securities
legislation of such province and is deemed to be purchasing as
principal pursuant to applicable securities legislation and
regulatory policy by virtue of the fact that the Subscriber is
a resident of or otherwise subject to the securities
legislation of:
(A) British Columbia, and it is (I) a trust company or
extra-provincial trust corporation authorized under
the Financial Institutions Act (British Columbia) to
carry on trust business or deposit business or both,
or an insurance company or extra-provincial insurance
corporation authorized to carry on insurance business
under the Financial Institutions Act (British
Columbia), or a portfolio manager that is registered
as a portfolio manager under the Securities Act
(British Columbia), and in each case is purchasing as
an agent or trustee for accounts that are fully
managed by it; or (II) a trust company authorized
under the laws of a province or territory of Canada
other than British Columbia to carry on business in
that province or territory or an insurance company
authorized under the laws of a province or territory
of Canada other than British Columbia to carry on
business in that province or territory, or a
portfolio manager exempt from registration under the
Securities Act (British Columbia) or registered or
exempt from registration in a province or territory
of Canada other than British Columbia, and in each
case is purchasing Units that have an aggregate
acquisition cost of not less than $97,000 as an agent
or trustee for accounts that are fully managed by it;
provided that, as used herein, an account is "fully
managed" by a person only if the person makes the
investment decisions for the account and has full
discretion to purchase or sell securities for the
account without requiring the client's express
consent to a transaction; or
(B) Alberta, and it is trading for accounts fully managed
by it and it is (I) a trust company or trust
corporation trading as a trustee or agent on behalf
of a fully managed account; or (II) a portfolio
manager trading as agent on behalf of a fully managed
account; or (III) a person or company trading as
agent on behalf of a fully managed account that,
except for an exemption under the Securities Act
(Alberta) or the regulations thereunder, is required
to be registered as a portfolio manager; or
(C) Quebec, and it is a trust company licensed under the
Trust Companies and Savings Companies Act (Quebec),
an insurance company holding a license under the Act
respecting insurance (Quebec) or a dealer or adviser
appropriately registered under the
Securities Act (Quebec) and is purchasing the Units
as trustee or as agent for the portfolio of a third
person managed solely by the Subscriber;
(b) the offering and sale of the Units to the Subscriber or beneficial
Subscriber is exempt from the prospectus requirements of applicable
securities legislation by virtue of the fact that the Subscriber or
beneficial Subscriber, as the case may be, is a resident of or
otherwise subject to the securities legislation of:
(i) British Columbia, and:
(A) it is designated as an exempt Subscriber in an order
that the executive director made for the purposes of
paragraph 74(2)(3) of the Securities Act (British
Columbia); or
(B) if it is an individual, the aggregate acquisition
cost of the Units to it is not less than $97,000; and
if it is a corporation, partnership, trust, fund,
association or any other organized group of persons,
it has not been created solely, or used primarily, to
permit the group of individuals to purchase the Units
without a prospectus unless each of the individuals
is purchasing Units having an aggregate acquisition
cost of at least $97,000 to each individual; or
(C) it is an "accredited investor" as defined in
Multilateral Instrument 45-103 - Capital Raising
Exemptions such that one or more of the categories
set forth in Annex II to this Schedule A correctly
and in all respects describes the Subscriber, and the
Subscriber has so indicated by checking the box
opposite each category on such Annex II which so
describes it or the beneficial Subscriber, as
applicable, and the Subscriber acknowledges that by
signing this Agreement it is certifying that the
statements made by checking the appropriate
accredited investor categories are true and correct;
or
(D) it is one of the following and has so indicated by
initialling the applicable paragraph:
__________ (I) a director, senior officer or control person of the Corporation, or of an
affiliate of the Corporation;
__________ (II) a spouse, parent, grandparent, brother, sister or child of a director,
senior officer or control person of the Corporation, or of an affiliate of
the Corporation;
__________ (III) a parent, grandparent, brother, sister or child of the spouse of a director,
senior officer or control person of the Corporation or of an affiliate of
the Corporation;
__________ (IV) a close personal friend of a director, senior officer or control person of the
Corporation, or of an affiliate of the Corporation, and has concurrently
executed and delivered a Questionnaire in the form attached as SCHEDULE B to this
Subscription Agreement;
__________ (V) a close business associate of a director, senior officer or control person of the
Corporation, or of an affiliate of the Corporation, and has concurrently
executed and delivered a Questionnaire in the form attached as SCHEDULE B to this
Subscription Agreement;
__________ (VI) a founder of the Corporation or a spouse, parent, grandparent, brother, sister or
child of a founder of the Corporation;
__________ (VII) a close personal friend or close business associate of a founder of the
Corporation, and has concurrently executed and delivered a Questionnaire in the
form attached as SCHEDULE B to this Subscription Agreement; or
__________ (VIII) a parent, grandparent, brother, sister or child of the spouse of a founder of
the Corporation;
__________ (IX) a person or company of which a majority of the voting securities are beneficially
owned by, or a majority of the directors are, persons or companies described in
paragraphs (I) to (VIII);
__________ (X) a trust or estate of which all of the beneficiaries or a majority of the trustees
are persons or companies described in paragraphs (I) to (IX); or
__________ (XI) an employee, senior officer, director or consultant of the Corporation or of an
affiliated entity of the Corporation provided that, in the case of an employee,
senior officer or consultant, its participation in the trade is voluntary, meaning
it is not induced to participate in the trade by expectation of employment or
continued employment with, or engagement to provide services or continued
engagement to provide services to, as applicable, the Corporation or an affiliated
entity of the Corporation; or
(ii) Alberta, and:
(A) it is an "accredited investor" (as that term is
defined in Multilateral Instrument 45-103 - Capital
Raising Exemptions) such that one or more of the
categories set forth in Annex II to this Schedule A
correctly and in all respects describes the
Subscriber or the beneficial Subscriber, as
applicable, and the Subscriber has so indicated by
checking the box opposite each category on such Annex
II which so describes it or the beneficial
Subscriber, as applicable, and the Subscriber
acknowledges that by signing this Subscription
Agreement it is certifying that the statements made
by checking the appropriate accredited investor
categories are true and correct; or
(B) if it is an individual, the aggregate acquisition
cost of the Units to it is not less than $97,000; and
if it is a corporation, syndicate, partnership or
other form of unincorporated organization, it
pre-existed the offering of the Units and has a bona
fide purpose other than investment in the Units or,
if created to permit such investment, the individual
share of the aggregate acquisition cost for each
participant is not less than $97,000;
(C) it is one of the following and has so indicated by
initialling the applicable paragraph:
__________ (I) an employee, senior officer, director or consultant of the Corporation or of an
affiliated entity of the Corporation; or
__________ (II) a trustee, custodian or administrator acting on behalf, or for the benefit of
an individual referred to in clause (a) above or a holding entity of or a
registered retirement savings plan or registered retirement income fund of an
individual referred to in clause (A) above; or
__________ (III) the spouse or a holding entity, registered retirement savings plan or registered
retirement income fund of the spouse of an individual referred to in clause (A)
above;
provided that, in the case of an employee, senior officer or consultant, its
participation in the trade is voluntary, meaning it is not induced to participate
in the trade by expectation of employment or continued employment with, or
engagement to provide services or continued engagement to provide services to, as
applicable, the Corporation or an affiliated entity of the Corporation; or
(iii) Ontario, and it is an "accredited investor" (as that term is
defined in Ontario Securities Commission Rule 45-501 - Exempt
Distributions) such that one or more of the categories set
forth in Annex I to this Schedule A correctly and in all
respects describes the Subscriber or the beneficial
Subscriber, as applicable, and the Subscriber has so indicated
by checking the box opposite each category on such Annex I
which so describes it or the beneficial Subscriber, as
applicable, and the Subscriber acknowledges that by signing
this Subscription Agreement it is certifying that the
statements made by checking the appropriate accredited
investor categories are true and correct; or
(iv) Quebec, and
(A) it is a "sophisticated purchaser" within the meaning
of Section 43, 44 or 45 of the Securities Act
(Quebec) and is purchasing the Units for its own
account, or if it is a trust company licensed under
the Act respecting trust companies and savings
companies (Quebec) or an insurance company holding a
license under the Act respecting insurance (Quebec)
or a dealer or adviser registered in conformity with
Section 148 of the Securities Act (Quebec), it is
purchasing the Units for the portfolio of a third
person managed solely by that company, dealer or
adviser; or
(B) the total cost of the Units to it exceeds $150,000
and it is acting for its own account and, if a
company, was not established solely to acquire the
Units;
(c) it and any beneficial Subscriber for whom it is acting:
(i) is not a U.S. Person as defined in the United States
Securities Act of 1933, as amended (the "1933 Act") and is not
purchasing the Units for the account of or the benefit of a
U.S. Person;
(ii) was not offered the Units in the United States (as defined in
Regulation S under the 1933 Act);
(iii) did not execute or deliver this agreement in the United
States; and
(iv) is resident in Alberta, British Columbia, Quebec or Ontario
and it is not a non-resident of Canada for the purposes of the
Income Tax Act (Canada); and
(d) it and any beneficial Subscriber, as the case may be, is aware that the
Corporation is only a reporting issuer in the Provinces of Alberta,
British Columbia and Ontario.
ANNEX I TO SCHEDULE A
TO BE COMPLETED BY ONTARIO SUBSCRIBERS
The Subscriber is a resident of or otherwise subject to the securities
legislation of Ontario and is an "accredited investor", as such term is defined
in Ontario Securities Commission Rule 45-501 - Exempt Distributions ("OSC Rule
45-501"), and as at the Time of Closing, the Subscriber falls within one or more
of the following categories (Please check one or more, as applicable):
_______ (a) a bank listed in Schedule I or II of the Bank Act (Canada), or an authorized foreign bank listed in
Schedule III of the Bank Act (Canada);
_______ (b) the Business Development Bank incorporated under the Business Development Bank Act (Canada);
_______ (c) a loan corporation or trust corporation registered under the Loan and Trust Corporations Act
(Ontario) or under the Trust and Loan Companies Act (Canada), or under comparable legislation in any other
jurisdiction;
_______ (d) a co-operative credit society, credit union central, federation of caisses populaires, credit union or
league, or regional caisse populaire, or an association under the Cooperative Credit Associations Act
(Canada), in each case, located in Canada;
_______ (e) a company licensed to do business as an insurance company in any jurisdiction;
_______ (f) a subsidiary entity of any person or company referred to in paragraph (a), (b), (c), (d) or (e),
where the person or company owns all of the voting shares of the subsidiary entity;
_______ (g) a person or company registered under the Securities Act (Ontario) or securities legislation in another
jurisdiction as an adviser or dealer, other than a limited market dealer;
_______ (h) the government of Canada or of any jurisdiction, or any crown corporation, instrumentality or agency of a
Canadian federal, provincial or territorial government;
_______ (i) any Canadian municipality or any Canadian provincial or territorial capital city;
_______ (j) any national, federal, state, provincial, territorial or municipal government of or in any foreign
jurisdiction, or any instrumentality or agency thereof;
_______ (k) a pension fund that is regulated by either the Office of the Superintendent of Financial Institutions
(Canada) or a provincial pension commission or similar regulatory authority;
_______ (l) a registered charity under the Income Tax Act (Canada);
_______ (m) an individual who beneficially owns, or who together with a spouse beneficially own, financial assets having
an aggregate realizable value that, before taxes but net of any related liabilities, exceeds $1,000,000;
_______ (n) an individual whose net income before taxes exceeded $200,000 in each of the two most recent years or whose
net income before taxes combined with that of a spouse exceeded $300,000 in each of those years and who, in
either case, has a reasonable expectation of exceeding the same net income level in the current year;
_______ (o) an individual who has been granted registration under the Securities Act (Ontario) or securities legislation
in another jurisdiction as a representative of a person or company referred to in paragraph (g), whether or
not the individual's registration is still in effect;
_______ (p) a promoter of the issuer or an affiliated entity of a promoter of the issuer;
_______ (q) a spouse, parent, brother, sister, grandparent or child of an officer, director or promoter of the issuer;
_______ (r) a person or company that, in relation to the issuer, is an affiliated entity or a person or company referred
to in clause (c) of the definition of distribution in subsection 1(1) of the Securities Act (Ontario);
_______ (s) an issuer that is acquiring securities of its own issue;
_______ (t) a company, limited liability company, limited partnership, limited liability partnership, trust or estate,
other than a mutual fund or non-redeemable investment fund, that had net assets of at least $5,000,000 as
reflected in its most recently prepared financial statements;
_______ (u) a person or company that is recognized by the Ontario Securities Commission as an accredited investor;
_______ (v) a mutual fund or non-redeemable investment fund that, in Ontario, distributes its securities only to
persons or companies that are accredited investors;
_______ (w) a mutual fund or non-redeemable investment fund that, in Ontario, distributes its securities under a
prospectus for which a receipt has been granted by the Director (as defined in the Securities Act (Ontario))
or, if it has ceased distribution of its securities, has previously distributed its securities in
this manner;
_______ (x) a fully managed account if it is acquiring a security that is not a security of a mutual fund or
non-redeemable investment fund;
_______ (y) an account that is fully managed by a trust corporation registered under the Loan and Trust Corporations Act
(Ontario) or under the Trust and Loan Companies Act (Canada), or under comparable legislation in any other
jurisdiction;
_______ (z) an entity organized outside of Canada that is analogous to any of the entities referred to in paragraphs (a)
through (g) and paragraph (k) in form and function; and
_______ (aa) a person or company in respect of which all of the owners of interests, direct or indirect, legal or
beneficial, are persons or companies that are accredited investors.
NOTE: THE SUBSCRIBER MUST INITIAL BESIDE THE APPLICABLE CATEGORY OR
CATEGORIES OF THE ABOVE DEFINITION. ALL MONETARY REFERENCES ARE IN
CANADIAN DOLLARS.
FOR THE PURPOSES HEREOF:
(a) "COMPANY" means any corporation, incorporated association,
incorporated syndicate or other incorporated organization;
(b) "DIRECTOR" where used in relation to a person, includes a
person acting in a capacity similar to that of a director of a
company;
(c) "ENTITY" means a company, syndicate, partnership, trust or
unincorporated organization;
(d) "FINANCIAL ASSETS" means cash, securities, or any contract of
insurance or deposit or evidence thereof that is not a
security for the purposes of the Securities Act (Ontario);
(e) "INDIVIDUAL" means a natural person, but does not include a
partnership, unincorporated association, unincorporated
syndicate, unincorporated organization, trust, or a natural
person in his or her capacity as trustee, executor,
administrator or other legal personal representative;
(f) "MANAGED ACCOUNT" means an investment portfolio account of a
client established in writing with a portfolio adviser who
makes investment decisions for the account and has full
discretion to trade in securities of the account without
requiring the client's express consent to a transaction;
(g) "MUTUAL FUND" includes an issuer whose primary purpose is to
invest money provided by its security holders and whose
securities entitle the holder to receive on demand, or within
a specified period after demand, an amount computed by
reference to the value of a proportionate interest in the
whole or in a part of the net assets, including a separate
fund or trust account, of the issuer of the securities;
(h) "NON-REDEEMABLE INVESTMENT FUND" means an issuer:
(i) whose primary purpose is to invest money provided by
its security holders;
(ii) that does not invest for the purpose of exercising
effective control, seeking to exercise effective
control, or being actively involved in the management
of the issuers in which it invests, other than other
mutual funds or non-redeemable investment funds; and
(iii) that is not a mutual fund;
(i) "OFFICER" means the chair, any vice-chair of the board of
directors, the president, any vice president, the secretary,
the assistant secretary, the treasurer, the assistant
treasurer, and the general manager of a company, and any other
person designated an officer of a company by by-law or similar
authority, or any individual acting in a similar capacity on
behalf of an issuer or registrant;
(j) "PERSON" means an individual, partnership, unincorporated
association, unincorporated syndicate, unincorporated
organization, trust, trustee, executor, administrator, or
other legal representative;
(k) "PORTFOLIO ADVISER" means
(i) a portfolio manager; or
(ii) a broker or investment dealer exempted from
registration as an adviser under subsection 148(1) of
the Regulation made under the Securities Act
(Ontario) if that broker or investment dealer is not
exempt from the by-laws or regulations of the Toronto
Stock Exchange or the Investment Dealers' Association
of Canada referred to in that subsection;
(l) "PROMOTER" means (a) a person or company who, acting alone or
in conjunction with one or more other persons, companies or a
combination thereof, directly or indirectly, has taken the
initiative in founding, organizing or substantially
reorganizing the business of the issuer, or (b) a person or
company who, in connection with the founding, organizing or
substantial reorganizing of the business of the issuer,
directly or indirectly, receives in consideration of services
or property, or both services and property, 10% or more of any
class of securities of the issuer or 10% or more of the
proceeds from the sale of any class of securities of a
particular issue, but a person or company who receives such
securities or proceeds either solely as underwriting
commissions or solely in consideration of property shall not
be deemed a promoter within the meaning of this definition if
such person or company does not otherwise take part in
founding, organizing or substantially reorganizing the
business;
(m) "RELATED LIABILITIES" means liabilities incurred or assumed
for the purpose of financing the acquisition or ownership of
financial assets and liabilities that are secured by financial
assets; and
(n) "SPOUSE", in relation to an individual, means another
individual to whom that individual is married, or another
individual of the opposite sex or the same sex with whom that
individual is living in a conjugal relationship outside
marriage.
AFFILIATED ENTITIES, CONTROL AND SUBSIDIARIES
A person or company is considered to be an affiliated entity of another person
or company if one is a subsidiary entity of the other, or if both are subsidiary
entities of the same person or company, or if each of them is controlled by the
same person or company.
A person or company is considered to be controlled by a person or company if
(a) in the case of a person or company,
(ii) voting securities of the first mentioned person or company
carrying more than 50% of the votes for the election of
directors are held, otherwise than by way of security only, by
or for the benefit of, the other person or company, and
(iii) the votes carried by the securities are entitled, if
exercised, to elect a majority of the directors of the
first-mentioned person or company.
(b) in the case of a partnership that does not have directors, other than a
limited partnership, the second-mentioned person or company holds more
than 50% of the interests in the partnership; or
(c) in the case of a limited partnership, the general partner is the
second-mentioned person or company.
A person or company is considered to be a subsidiary entity of another person or
company if
(a) it is controlled by,
(ii) that other, or
(iii) that other and one or more persons or companies each of which
is controlled by that other, or
(iv) two or more persons or companies, each of which is controlled
by that other, or
(b) it is a subsidiary entity of a person or company that is the other's
subsidiary entity.
ANNEX II TO SCHEDULE A
TO BE COMPLETED BY BRITISH COLUMBIA AND ALBERTA SUBSCRIBERS
The Subscriber and each beneficial Subscriber is a resident of or otherwise
subject to the securities legislation of British Columbia or Alberta and each
is, as at the Time of Closing an "accredited investor", as such term is defined
in Multilateral Instrument 45-103 - Capital Raising Exemptions ("MI45-103"), by
virtue of falling within one or more of the following categories (Please check
one or more, as applicable):
[ ] (a) a Canadian financial institution, or an authorized foreign bank listed in Schedule III of the Bank Act (Canada);
(b) the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada);
[ ] (c) an association under the Cooperative Credit Associations Act (Canada) located in Canada, or a central cooperative
credit society for which an order has been made under subsection 473(1) of that Act;
[ ] (d) a subsidiary of any person or company referred to in paragraphs (a) to (c), if the person or company owns all of the
voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that
subsidiary;
[ ] (e) a person or company registered under the securities legislation of a jurisdiction of Canada, as an adviser or
dealer, other than a limited market dealer registered under the Securities Act (Ontario) or the Securities Act
(Newfoundland and Labrador);
[ ] (f) an individual registered or formerly registered under the securities legislation of a jurisdiction of Canada, as a
representative of a person or company referred to in paragraph (e);
[ ] (g) the government of Canada or a jurisdiction of Canada, or any crown corporation, agency or wholly owned entity of the
government of Canada or a jurisdiction of Canada.
[ ] (h) a municipality, public board or commission in Canada;
[ ] (i) any national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction, or
any agency of that government;
[ ] (j) a pension fund that is regulated by either the Office of the Superintendent of Financial Institutions (Canada) or a
pension commission or similar regulatory authority of a jurisdiction of Canada;
[ ] (k) an individual who, either alone or with a spouse, beneficially owns, directly or indirectly, financial assets having
an aggregate realizable value that before taxes, but net of any related liabilities, exceeds $1,000,000;
[ ] (l) an individual whose net income before taxes exceeded $200,000 in each of the two most recent years or whose net
income before taxes combined with that of a spouse exceeded $300,000 in each of the two most recent years and who,
in either case, reasonably expects to exceed that net income level in the current year;
[ ] (m) a person or company, other than a mutual fund or non redeemable investment fund, that, either alone or with a
spouse, has net assets of at least $5,000,000, and, unless the person or company is an individual, that amount is
shown on its most recently prepared financial statements;
[ ] (n) a mutual fund or non-redeemable investment fund that, in the local jurisdiction, distributes its securities only to
persons or companies that are accredited investors;
[ ] (o) a mutual fund or non-redeemable investment fund that, in the local jurisdiction, is distributing or has distributed
its securities under one or more prospectuses for which the regulator has issued a receipt;
[ ] (p) a trust company or trust corporation registered or authorized to carry on business under the Trust and Loan
Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction,
trading as a trustee or agent on behalf of a fully managed account;
[ ] (q) a person or company trading as agent on behalf of a fully managed account if that person or company is registered or
authorized to carry on business under the securities legislation of a jurisdiction of Canada or a foreign
jurisdiction as a portfolio manager or under an equivalent category of advisor or is exempt from registration as a
portfolio manager of equivalent category of advisor;
[ ] (r) a registered charity under the Income Tax Act (Canada) that, in regard to the trade, has obtained advice from an
eligibility adviser or other adviser registered to provide advice on the securities being traded;
[ ] (s) an entity organized in a foreign jurisdiction that is analogous to any of the entities referred to in paragraphs (a)
through (e) and paragraph (j) in form and function; or
[ ] (t) a person or company in respect of which all of the owners of interests, direct or indirect, legal or beneficial,
except the voting securities required by law to be owned by directors, are persons or companies that are accredited
investors.
For the purposes hereof, the following definitions are included for convenience:
"AFFILIATE" means an issuer connected with another issuer because
(a) one of them is the subsidiary of the other, or
(b) each of them is controlled by the same person or
company;
"BENEFICIAL OWNERSHIP" of securities by a person occurs
(a) for the purposes of British Columbia securities law,
when such securities are beneficially owned by
(i) an issuer controlled by that person, or
(ii) an affiliate of that person or an affiliate
of an issuer controlled by that person;
(b) for the purposes of Alberta securities law, when such
securities are beneficially owned by
(i) a company controlled by that person or an
affiliate of that company,
(ii) an affiliate of that person, or
(iii) through a trustee, legal representative,
agent or other intermediary of that person;
"CANADIAN FINANCIAL INSTITUTION" means a bank, loan corporation, trust
company, insurance company, treasury branch, credit union or caisse
populaire that, in each case, is authorized to carry on business in
Canada or a jurisdiction, or the Confederation des caisses populaires
et d'economie Xxxxxxxxxx du Quebec;
"CONTROL" occurs if
(a) for the purposes of British Columbia securities law,
(i) voting securities of a first party (person
or company) are held, other than by way of
security only, by or for the benefit of a
second party (person or company), and
(ii) the voting rights attached to those voting
securities are entitled, if exercised, to
elect a majority of the directors of the
first party; and
(b) for the purposes of Alberta securities law,
(i) voting securities of a first party (person
or company) carrying more than 50% of the
votes that may be cast to elect directors
are held, other than for the purpose of
giving collateral for a bona fide debt, by
or for the benefit of a second party (person
or company); and
(ii) the votes carried by the securities referred
to in (a) are sufficient, if exercised, to
elect a majority of the board of directors
of the first party.
"DIRECTOR" means
(a) for the purpose of British Columbia securities law, a
director of a corporation or an individual occupying
or performing, with respect to a corporation or any
other person, a similar position or similar
functions; and
(b) for purposes of Alberta law, a person acting in a
capacity similar to that of a director of a company;
"FINANCIAL ASSETS" means cash and securities;
"FOREIGN JURISDICTION" means a country other than Canada or a political
subdivision of a country other than Canada;
"JURISDICTION" means a province or territory of Canada except when used
in the term "foreign jurisdiction";
"LOCAL JURISDICTION" means the jurisdiction in which the applicable
securities regulatory authority is situate;
"MUTUAL FUND" includes an issuer of securities that entitles the holder
to receive on demand, or within a specified period after demand, an
amount computed by reference to the value of a proportionate interest
in the whole or in a part of the net assets, including a separate fund
or trust account, of the issuer of the securities;
"PERSON OR COMPANY" includes
(c) for the purposes of British Columbia securities law,
an individual, corporation, partnership, party,
trust, fund, association and any other organized
group of persons and the personal or other legal
representative of a person to whom the context can
apply according to law, and
(d) for the purposes of Alberta, an individual,
corporation, partnership, unincorporated or
incorporated association, unincorporated or
incorporated syndicate, unincorporated or
incorporated organization, trust, trustee, executor,
administrator or other legal representative;
"REGULATOR" means
(e) the Executive Director, as defined under section 1 of
the Securities Act (Alberta),
(f) the Executive Director, as defined under section 1 of
the Securities Act (British Columbia) and
(g) such other person as is referred to in Appendix D of
National Instrument 14-101 - Definitions;
"RELATED LIABILITIES" means
(h) liabilities incurred or assumed for the purpose of
financing the acquisition or ownership of financial
assets, or
(i) liabilities that are secured by financial assets;
"SECURITIES LEGISLATION" means
(j) for British Columbia, the Securities Act (British
Columbia) and the regulations, rules and forms under
such Act and the blanket rulings and orders issued by
the British Columbia Securities Commission,
(k) for Alberta, the Securities Act (Alberta) and the
regulations and rules under such Act and the blanket
rulings and orders issued by the Alberta Securities
Commission, and
(l) for other Canadian jurisdictions, such other statutes
and instruments as are listed in Appendix B of
National Instrument 14-101 - Definitions;
"SECURITIES REGULATORY AUTHORITY" means
(m) the British Columbia Securities Commission,
(n) the Alberta Securities Commission, and
(o) in respect of any local jurisdiction other than
Alberta or British Columbia, means the securities
commission or similar regulatory authority listed in
Appendix C of National Instrument 14-101 -
Definitions;
"VOTING SECURITY" means any security which:
(p) is not a debt security; and
(q) carries a voting right either under all circumstances
or under some circumstances that have occurred and
are continuing.
BRITISH COLUMBIA SPECIFIC DEFINITIONS
"SPOUSE", means, for the purposes of British Columbia securities law, a
person who
(r) is married to another person and is not living
separate and apart, within the meaning of the Divorce
Act (Canada), from the other person, or
(s) is living and cohabitating with another person in a
marriage-like relationship, including a marriage-like
relationship between persons of the same gender.
SCHEDULE B
CLOSE PERSONAL FRIEND AND/OR CLOSE BUSINESS ASSOCIATE QUESTIONNAIRE
To be completed by Subscribers to whom section (b)(i)(D)(IV), (V) or
(VII) of Schedule A of the Subscription Agreement applies.
Name of director, senior officer, control person or founder:
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Length of Relationship:
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Prior Business Dealings:
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Details of Relationship:
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The undersigned understands that the Corporation and the Agents are relying
on this information in determining to sell securities to the undersigned in
a manner exempt from the prospectus and registration requirements of
applicable securities laws.
The undersigned has executed this Questionnaire as of the ____ day of
March, 2004.
If a Corporation, Partnership or other Entity: If an Individual:
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Name of Entity Signature
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Type of Entity Name of Individual
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Signature of Person Signing
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Title of Person Signing
SCHEDULE C
U.S. REPRESENTATION LETTER
TO: Spectrum Signal Processing Inc.
AND TO: GMP Securities Ltd.
Xxxxxxxxx XxXxxxxx & Partners Corp.
Ladies and Gentlemen:
In connection with the acquisition by the subscriber (the "Subscriber")
of units ("Units") consisting of one common share (a "Common Share") and
one-half of a warrant (a "Warrant") of Spectrum Signal Processing Inc. (the
"Corporation"), the Subscriber or the undersigned on behalf of the Subscriber,
as the case may be, hereby represents and agrees for the benefit of each of you
that:
1. The Subscriber is an institution or an individual that is an
"accredited investor" as defined in Rule 501(a) of Regulation D under the
United States Securities Act of 1933, as amended (the "1933 Act"), because
it is:
[PLEASE CHECK ONE]
[ ] A bank (as defined in Section 3(a)(2) of the 1933 Act) or a
savings and loan association or other institution (as defined
in Section 3(a)(5)(A) of the 1933 Act), acting either in its
individual capacity or in a fiduciary capacity.
[ ] A broker or dealer registered under Section 15 of the
Securities Exchange Act of 1934, as amended.
[ ] An insurance company (as defined in Section 2(13) of the
1933 Act).
[ ] An investment company registered under the Investment
Company Act.
[ ] A business development company (as defined in Section
2(a)(48) of the Investment Company Act).
[ ] A private business development company (as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940).
[ ] A tax-exempt organization described in Section 501(c)(3) of
the Internal Revenue Code of 1986, as amended, not formed for
the specific purpose of acquiring the Units with total assets
of more than U.S. $5 million.
[ ] A corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring
the Units, with total assets of more than U.S. $5 million.
[ ] An employee benefit plan not subject to ERISA, with total
assets of more than U.S. $5 million, established and
maintained by a state of the United States, a political
subdivision of a state, or any agency or instrumentality of a
state or its political subdivisions for the benefit of its
employees.
[ ] A trust, with total assets in excess of U.S. $5 million, not
formed for the specific purpose of acquiring the Units, whose
purchase is directed by a sophisticated person as described in
Rule 506(b)(2)(ii) of Regulation D under the 1933 Act.
[ ] A director or executive officer of the Corporation.
[ ] A natural person with individual net worth, or joint net
worth with his or her spouse, at the time of purchase in
excess of US$1,000,000.
[ ] A natural person with an individual income in excess of
US$200,000 in each of the last two years or joint income with
his or her spouse in excess of US$300,000 in each of those
years, and who reasonably expects to reach the same income
level in the current year.
[ ] An entity in which all of the equity owners are accredited
investors.
(As used herein, the term "net worth" means the excess of total assets over
total liabilities. In computing net worth, the principal residence of the
investor must be valued at cost, including cost of improvements, or at recently
appraised value by an institutional lender making a secured loan, net of
encumbrances. In determining income, an investor should add to adjusted gross
income any amount attributable to tax exempt income received, losses claimed as
a limited partner in any limited partnership, deductions claimed for depletion,
contributions to an IRA or Xxxxx retirement plan, alimony payments, and any
amount by which income from long-term capital gains has been reduced in arriving
at adjusted gross income.)
2. The Subscriber is acquiring the Units for its own account and not with
a view to resale, distribution or other disposition thereof or with any present
intention of offering or selling the Units or any interest therein.
3. The Subscriber understands and acknowledges that neither the Units nor
any interest therein has been or will be registered under the 1933 Act or the
securities laws of any state or other political subdivision of the United
States.
4. The Subscriber further acknowledges and agrees that, because the Units
have not been registered under the 1933 Act and the Units are being offered and
sold in a private offering exempt from registration under the 1933 Act: (a) the
Units are "restricted securities" within the meaning of Rule 144(a)(3) under the
1933 Act and cannot be reoffered or resold unless they are subsequently
registered under the 1933 Act or an exemption from registration thereunder is
available; and (b) and that the Subscriber will continue to bear the economic
risk of its investment in the Securities for an indefinite period of time.
5. The Subscriber agrees that it will not re-offer, resell, pledge,
hypothecate or otherwise transfer any of the Units (or securities that may be
received in replacement thereof or in exchange therefor) except: (a) to the
Corporation; (b) in a transaction outside the United States meeting the
requirements of Rule 904 of Regulation S under the 1933 Act; or (c) in a
transaction exempt from registration under the 1933 Act and any applicable state
securities ("blue sky") laws. The Subscriber agrees that, in connection with any
transaction pursuant to the foregoing clause (c), it will furnish to the
Corporation a written opinion of counsel acceptable to the Corporation to the
effect that such offer, sale, pledge, hypothecation or other transfer is exempt
from the registration requirements of all applicable United States federal and
state securities laws. The Subscriber also agrees that each certificate for the
Units (and any certificate issued in replacement thereof or in exchange
therefor) shall bear a restrictive legend in substantially the following form
and that an appropriate stop transfer order implementing the same shall be
lodged with the Transfer Agent for the Units:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES
ACT"). THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY (A) TO THE CORPORATION, (B) IN A TRANSACTION OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT, OR (C)
IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS UNDER THE U.S.
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. IN CONNECTION WITH ANY
TRANSFER PURSUANT TO THE FOREGOING CLAUSE (C), THERE MUST BE FURNISHED TO THE
CORPORATION A WRITTEN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE
CORPORATION TO THE EFFECT THAT SUCH TRANSFER IS EXEMPT FROM THE REGULATION
REQUIREMENTS OF ALL APPLICABLE UNITED STATES FEDERAL AND STATE SECURITIES LAWS.
DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF
TRANSACTIONS ON STOCK EXCHANGES
IN CANADA AND, IN CONNECTION WITH ANY SALE OF SUCH SECURITIES PURSUANT TO THE
FOREGOING CLAUSE (B) AT A TIME WHEN THE CORPORATION IS A "FOREIGN ISSUER" AS
DEFINED IN RULE 902 UNDER THE U.S. SECURITIES ACT, THE LEGEND MAY BE REMOVED BY
PROVIDING A DECLARATION TO THE CORPORATION'S TRANSFER AGENT IN SUCH FORM AS THE
CORPORATION MAY REASONABLY PRESCRIBE, TO THE EFFECT THAT THE SALE OF THE
SECURITIES IS BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE
U.S. SECURITIES ACT."
6. The Subscriber represents that 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 Units. The Subscriber acknowledges that it has had
access to such information concerning the Corporation as it has deemed necessary
to make an informed decision to purchase the Units, and has been afforded the
opportunity to ask questions and receive answers from representatives of the
Corporation regarding the Corporation and the terms and conditions relating to
investment in the Corporation, and all such questions have been answered to its
full satisfaction.
7. The Subscriber is not purchasing the Units: (a) as a result of or
subsequent to becoming aware of any advertisement, article, notice or other
communication published in any newspaper, magazine or similar medium or
broadcast over television or radio; or (b) as a result of or subsequent to
attendance at a seminar or meeting called by any of the means set forth in (a);
or (c) as a result of or subsequent to any solicitation by a person not
previously known to it in connection with investments in securities generally.
8. If required by applicable securities legislation, regulatory policy or
order by any securities commission, stock exchange or other regulatory
authority, the Subscriber will execute, deliver and file and otherwise assist
the Corporation in filing reports, questionnaires, undertakings and other
documents with respect to the issue of the Units.
9. The Subscriber further acknowledges and agrees that the sale and
delivery of the Units is conditional upon such sale being exempt from the
registration requirement under the 1933 Act and the requirement to file a
prospectus and to sell through a person registered to sell securities under the
Securities Act (British Columbia) and the requirement to deliver an offering
memorandum under any applicable securities, rules and policies in both British
Columbia and the jurisdiction in which the Subscriber is subject to applicable
securities legislation. The Subscriber acknowledges and agrees that you and/or
the Corporation may be required to provide applicable Canadian provincial and
U.S. state or federal securities regulatory authorities with a list setting
forth the identities of the beneficial Subscribers of the Units. Notwithstanding
that the Subscriber may be purchasing Units as agent on behalf of an undisclosed
principal, the Subscriber agrees to provide, on request, particulars as to the
identity of such undisclosed principal as may be required by you and/or the
Corporation in order to comply with the foregoing or to comply with Canadian or
United States securities laws.
The Subscriber acknowledges that the representations and warranties and
agreements contained herein are made by it with the intent that they may be
relied upon by you and your counsel in determining its eligibility to purchase
the Units. By this letter the Subscriber represents and warrants that the
foregoing representations and warranties are true and that they shall survive
the purchase by it of the Units and shall continue in full force and effect
notwithstanding any subsequent disposition by the Subscriber of Units.
You are irrevocably authorized to produce this letter or a copy hereof
to any interested party. in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby. The Subscriber's investment
decision with respect to the Units was made on or prior to the date set forth
below.
Dated: March _____, 2004
________________________________________
(Print name of Subscriber)
By: ____________________________________
Name:
Title:
SCHEDULE D
TORONTO STOCK EXCHANGE
PRIVATE PLACEMENT QUESTIONNAIRE AND UNDERTAKING
To be completed by each proposed private placement purchaser of listed
securities or securities which are convertible into listed securities.
QUESTIONNAIRE
1. DESCRIPTION OF TRANSACTION
(a) Name of Issuer of the Securities
Spectrum Signal Processing Inc.
(b) Number and Class of Securities to be Purchased
Units
(c) Purchase Price
$1.35 per Unit
2. DETAILS OF PURCHASER
(a) Name of Purchaser
(b) Address
______________________________________________________________
______________________________________________________________
(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 any 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
______________________________________________________________
______________________________________________________________
______________________________________________________________
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 for a period of four
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,
without the prior consent of the Toronto Stock Exchange and any other regulatory
body having jurisdiction.
DATED AT _______, ______________ this __________________________________
______ day of March, 2004 (Name of Purchaser - please print)
__________________________________
(Authorized Signature)
__________________________________
(Official Capacity - please print)
__________________________________
(please print here name of
individual whose signature appears
above, if different from name of
purchaser printed above)
