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
FINOVA MEZZANINE CAPITAL INC., a body corporate, incorporated pursuant
to the laws of the State of Tennessee (hereinafter referred to as the
"Vendor")
OF THE SECOND PART
WHEREAS the Vendor is the beneficial owner of the Debenture, the DTS
Preferred Shares, the DTS Warrants and the LinkaNet Warrants;
AND WHEREAS the Vendor has agreed to sell, transfer and assign and the
Purchaser has agreed to purchase and acquire, the Debenture, the DTS Warrants
and the LinkaNet Warrants and the Vendor has agreed to grant and the Purchaser
has agreed to acquire the Option with respect to the Vendor's DTS Preferred
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;
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(g) "Debenture" means the DTS debenture in the principal amount of U.S.
$2,000,000 which is convertible into 2,000,000 DTS Common Shares;
(h) "DTS Common Shares" means common shares in the capital stock of the
Corporation, as constituted on the date hereof;
(i) "DTS Preferred Shares" means 1,314,333 preferred shares in the capital
stock of the Corporation, as constituted on the date hereof;
(j) "DTS Warrants" means the Stock Purchase Warrant dated as of February 5,
1999 entitling the holder thereof to acquire 702,615 DTS Common Shares
at an exercise price of U.S. $1.00 per share until March 1, 2004;
(k) "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;
(l) "Escrow Agent" means Boult, Cummings, Xxxxxxx & Xxxxx PLC;
(m) "Escrow Release Date" means that date which is six months from the
Closing Date;
(n) "Exchange" means The Toronto Stock Exchange;
(o) "Floor Value" means the value of the Vendor's Wi-LAN Common Shares on a
certain date equal to:
the closing price of the Wi-LAN Common Shares on the Exchange on the
last trading day prior to the applicable valuation date X the United
States/Canadian currency base noon exchange rate at the Federal Reserve
Bank of New York on the last trading day prior to the applicable
valuation date
(p) "LinkaNet" means LinkaNet Labs, Inc., a body corporate incorporated
under the laws of Georgia;
(q) "LinkaNet Common Shares" means common shares in the capital stock of
LinkaNet, as constituted on the date hereof;
(r) "LinkaNet Warrants" means the Stock Purchase Warrant dated as of
February 5, 1999 entitling the holder thereof to acquire 538,461
LinkaNet Common Shares at an exercise price of 50% of the Fair Market
Value (as defined in the Stock Purchase Warrant) of the LinkaNet Common
Shares;
(s) "Option" means the option granted by the Vendor to the Purchaser at the
Closing Time which option will entitle the Purchaser to acquire from
the Vendor any or all of the DTS Preferred Shares owned by the Vendor
at an exercise price of U.S. $1.00 per share at any time and from time
to time for a term of two years from the Closing Date which option
shall, in addition, provide the Purchaser with a right of first refusal
to exercise the option in the event the Vendor wishes to sell or
convert all or some of the DTS Preferred Shares, and provide that the
Vendor agrees not to sell or convert the DTS Preferred Shares for a
period of one year from the Closing Date;
(t) "person" includes an individual, partnership, firm, trust, body
corporate, governmental authority, unincorporated body of persons or
association;
(u) "Public Record" means all information filed with the Securities
Commissions;
(v) "Purchaser" or "Wi-LAN" means Wi-LAN Inc., a body corporate
incorporated under the laws of the Province of Alberta;
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(w) "Purchaser's Counsel" means Burnet, Xxxxxxxxx & Xxxxxx or such other
legal counsel as may be designated by the Purchaser;
(x) "Related Agreements" means the agreements of even date herewith entered
into between the Purchaser and MicroTel International, Inc. and the
Purchaser and DTS;
(y) "Securities Commissions" means the securities commissions or similar
regulatory authority in the Provinces of Alberta, Manitoba and Ontario;
(z) "Vendor's Counsel" means Boult, Cummings, Xxxxxxx & Xxxxx PLC or such
other legal counsel as may be designated by the Vendor;
(aa) "Vendor's Wi-LAN Common Shares" means that number of Wi-LAN Common
Shares to be issued by the Purchaser to the Vendor at the Closing Time
equal to:
U.S. $2,000,000 + (0.10 X U.S. $2,000,000 per annum from February 5,
1999 until the Escrow Release Date) (the closing price of the Wi-LAN
Common Shares on the Exchange on the last trading day prior to the
Closing Date X the United States/Canadian currency base noon exchange
rate at the Federal Reserve Bank of New York on the last trading day
prior to the Closing Date)
(bb) "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 Vendor's Representation Letter
Schedule B The Toronto Stock Exchange Private Placement
Questionnaire and Undertaking
Schedule C Purchaser's Representation Letter
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.
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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:
(a) the Debenture;
(b) the Option;
(c) the DTS Warrants; and
(d) the LinkaNet Warrants,
in exchange for the Vendor's Wi-LAN Common Shares.
2.2 Execution of Purchase and Sale
At the Closing Time, the Purchaser shall deliver to the Vendor a share
certificate representing the Vendor's Wi-LAN Common Shares against delivery by
the Vendor to the Purchaser of:
(a) the Debenture owned by the Vendor, duly endorsed in blank for transfer,
or accompanied by duly executed powers of attorney for transfer in
blank;
(b) a duly executed option agreement in respect of the Option in a form
satisfactory to the Purchaser and the Purchaser's Counsel;
(c) the DTS Warrants owned by the Vendor, duly endorsed in blank for
transfer, or accompanied by duly executed powers of attorney for
transfer in blank; and
(d) the LinkaNet Warrants owned by the Vendor, duly endorsed in blank for
transfer, or accompanied by duly executed powers of attorney for
transfer in blank.
2.3 Deposit of Wi-LAN Common Shares in Escrow
At the Closing Time, the Vendor shall deliver to the Escrow Agent the
share certificate representing the Vendor's Wi-LAN Common Shares issued by the
Purchaser which shares shall be held by the Escrow Agent in escrow and released
on the Escrow Release Date.
2.4 Purchase Price Protection
If the Floor Value of the Vendor's Wi-LAN Common Shares on the Escrow
Release Date is less than the Floor Value of the Vendor's Wi-LAN Common Shares
on the Closing Date, Wi-LAN shall pay the difference to Finova in U.S. cash on
the Escrow Release Date.
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2.5 Purchase Price Upside Limitation
If the Floor Value of the Vendor's Wi-LAN Common Shares on the Escrow
Release Date is greater than 125% of the Floor Value of the Vendor's Wi-LAN
Common Shares on the Closing Date Finova shall be entitled to retain the
increase up to 25% of the Floor Value of the Vendor's Wi-LAN Common Shares on
the Closing Date with the balance of the increase over this threshold being
retained by Wi-LAN. In the event this clause is applicable, the Escrow Agent
shall forthwith sell that number of the Vendor's Wi-LAN Common Shares to enable
the Escrow Agent to deliver to the Purchaser the proceeds representing any
increase over 25% of the Floor Value of the Vendor's Wi-LAN Common Shares on the
Closing Date.
2.6 Listing of Wi-LAN Common Shares
The Purchaser agrees to use its reasonable best efforts to ensure that
the Wi-LAN Common Shares will continue to be listed on the Exchange for a
minimum of nine months after the Closing Date to enable the Vendor to sell the
Vendor's Wi-LAN Common Shares under Regulation S of the Securities Act of 1933,
as amended.
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 Debenture, the DTS Preferred Shares, the DTS
Warrants and the LinkaNet Warrants and has full power and authority to
transfer the Debenture, the DTS Warrants and the LinkaNet Warrants to
the Purchaser, to grant the Option to the Purchaser and to receive the
Wi-LAN Common Shares therefor and to agree to the terms, conditions and
provisions herein contained;
(d) all of the Debenture, the DTS Warrants and the LinkaNet Warrants
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 or on account of the Purchaser);
(e) all of the DTS Preferred Shares which are the subject of the Option 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 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;
(f) except pursuant to this Agreement and the rights granted to the
Corporation in the documents being transferred, 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 Debenture, DTS
Preferred Shares, DTS Warrants or LinkaNet Warrants, or any interest
therein;
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(g) neither the Debenture, the DTS Preferred Shares, the DTS Warrants, the
LinkaNet Warrants nor the DTS Common Shares issuable upon conversion of
the Debenture, the DTS Preferred Shares and the DTS Warrants are
subject to any trading restrictions under federal or state laws in the
United States, other than those of general application to unregistered
securities;
(h) other than unregistered securities trading restrictions under federal
and state laws of the United States and the Debenture which may not be
transferred to a "competitor" of DTS without DTS's consent, the
Debenture, the DTS Preferred Shares, the DTS Warrants and the LinkaNet
Warrants are transferable, are freely exercisable by the Purchaser and
no third party consent is required in connection with any such
exercise;
(i) there are no actions, suits or proceedings commenced, pending or
threatened against the Vendor with respect to the Debenture, the DTS
Preferred Shares, the DTS Warrants or the LinkaNet Warrants;
(j) 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;
(k) 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;
(l) 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;
(m) 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;
(n) 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 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); and
(o) 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 validly and duly incorporated, organized and validly
existing under the law of the jurisdiction of its incorporation;
(b) the information and statements set forth in the Public Record, as it
relates to the Purchaser, were true, correct and complete and did not
contain any misrepresentation, as of the respective dates of such
information or statements and no material adverse change has occurred
in relation to the Purchaser which is not disclosed in the Public
Record;
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(c) at the Closing Time the Vendor's Wi-LAN Common Shares will be listed
and posted for trading on the Exchange and will be duly issued and
non-assessable and 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 or on account of the Vendor);
(d) 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;
(e) 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 Purchaser is
a party;
(f) the Purchaser has executed this Agreement in Canada, and it has
concurrently executed and delivered the Representation Letter attached
as Schedule C to this Agreement;
(g) it acknowledges that the Vendor has made no representation or warranty
regarding the financial condition, assets, operation or prospects of
DTS or of LinkaNet to the Purchaser, which has performed its own due
diligence on these entities;
(h) assuming that the Vendor will not own any Wi-LAN Common Shares other
than the Vendor's Wi-LAN Common Shares to be issued at the Closing
Time, under current Canadian securities laws the Vendor's Wi-LAN Common
Shares will be freely tradeable by the Vendor on the Exchange on the
Escrow Release Date and no further registration, notice or filings on
the part of the Vendor are required pursuant to applicable Canadian
securities laws;
(i) the Purchaser will have full power and authority to issue the number of
Wi-LAN Common Shares in accordance with Article 2 hereof to the Vendor
upon receipt of the required regulatory approval, which the Purchaser
shall obtain by the Closing Time, and has full power and authority to
receive the consideration therefor and to agree to the terms,
conditions and provisions herein contained; and
(j) 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
VENDOR'S CLOSING CONDITIONS
5.1 Conditions Precedent
The obligations of the Vendor to complete the transactions contemplated
herein is subject to:
(a) the Vendor being satisfied in its sole discretion with its due
diligence review of the Purchaser and its assets and operations;
(b) the Vendor shall have received the opinion of Burnet, Xxxxxxxxx &
Xxxxxx, counsel for the Purchaser dated the Closing Date, addressed to
the Vendor, in form and substance satisfactory to the Vendor's Counsel;
(c) the Vendor, having completed, executed and delivered the Representation
Letter attached as Schedule C hereto;
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(d) 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 the Purchaser;
(e) there will be no actions, suits or proceedings, whether or not
purportedly on behalf of the Purchaser, outstanding, pending or
threatened by or against the Purchaser at law or in equity or before or
by any federal, provincial, municipal or other governmental department,
commission, bureau, agency or instrumentality;
(f) all necessary steps and proceedings shall have been taken to allow the
Vendor's Wi-LAN Common Shares to be duly transferred from the Purchaser
to the Vendor and to vest in the Vendor good and marketable title in
the Vendor's Wi-LAN Common 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 Vendor);
(g) any consents or approvals required to be obtained from any third party,
including any holder of indebtedness or any outstanding security of the
Purchaser, 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 Vendor and the Vendor's
Counsel; and
(h) the representations and warranties made by the Purchaser herein shall
be true at the Closing Time as if made at and as of such time and the
Purchaser shall have complied with its covenants herein and the Vendor
shall have received a certificate signed by the Chief Executive Officer
of the Purchaser confirming same.
5.2 Waiver of Conditions
The conditions precedent set forth in Section 5.1 are for the benefit
of the Vendor and may be waived, in whole or in part, by the Vendor 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 Vendor
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
PURCHASER'S CLOSING CONDITIONS
6.1 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
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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 Boult, Cummings,
Xxxxxxx & Xxxxx PLC, 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;
(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) 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;
(l) 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;
(m) 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);
(n) 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
(o) 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 a Vice-President of the
Vendor confirming same.
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6.2 Waiver of Conditions
The conditions precedent set forth in Section 6.1 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 7
CLOSING
7.1 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.
ARTICLE 8
INDEMNITIES
8.1 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 8.1(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 MicroTel International, Inc. before being
entitled to obtain full indemnification from the Vendor pursuant to
paragraph 8.1(a).
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(c) Any liability of the Vendor under paragraph 8.1(a) shall be limited to
U.S. $2,000,000.
8.2 Purchaser Indemnity
(a) The Purchaser shall indemnify and save the Vendor 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 Vendor may be subject or
which the Vendor 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 Purchaser 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 Purchaser hereunder or
pursuant hereto.
(b) The rights and remedies of the Vendor set forth in paragraph 8.2(a) are
to the fullest extent possible in law cumulative and not alternative
and the election by the Vendor 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 Vendor shall not be obligated to pursue any
claim or remedy against any third party before being entitled to obtain
full indemnification from the Purchaser pursuant to paragraph 8.2(a).
(c) Any liability of the Purchaser under paragraph 8.2(a) shall be limited
to U.S. $2,000,000.
ARTICLE 9
NOTICES
9.1 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.
9.2 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
if to the Vendor:
Finova Mezzanine Capital Inc.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Vice-President
Telecopy: (000) 000-0000
or such other address as may be designated by notice to the other parties
hereto.
ARTICLE 10
MISCELLANEOUS
10.1 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.
12
10.2 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.
10.3 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.
10.4 Time
Time shall be of the essence in this Agreement.
10.5 Amendments
This Agreement may only be amended by a written instrument signed by
the parties hereto.
10.6 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.
10.7 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.
10.8 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.
10.9 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.
10.10 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.
10.11 Enurement
This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns.
10.12 Assignment
This Agreement may not be assigned by any party hereto without the
prior consent of the other parties hereto.
14
10.13 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
FINOVA MEZZANINE CAPITAL INC.
Per: /s/ Xxxxxx X. Xxxxxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxxxxx
Vice-President
ACKNOWLEDGEMENT
DTS hereby (i) 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, (ii) agrees to afford the Vendor the visitation rights to the
board of directors of DTS on the terms set out in the Debenture until the Escrow
Release Date, and (iii) consents to all matters provided for in this Agreement
to the extent that such consent may be required under Section 12.4 of the
debenture purchase agreement executed by the Vendor and DTS with respect to the
Debenture or under any other provision of any agreement to which DTS is a party.
Digital Transmission Systems, Inc.
Per: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx
Chief Executive Officer
SCHEDULE A
VENDOR'S REPRESENTATION LETTER
TO: Wi-LAN Inc. (the "Corporation").
In connection with the acquisition by Finova Mezzanine Capital Inc.
("Finova") of common shares (the "Common Shares") of the Corporation. Finova
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 Finova 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
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED
BY
A-2
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):
"Finova: (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;
8. it is an "accredited investor" within the meaning of Rule 501 of Regulation D
under the U.S. Securities Act;
A-3
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 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;
12. it is a resident of and was offered the Common Shares in Nashville,
Tennessee.
13. 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;
14. 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;
15. 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 Finova to determine and assess such tax consequences
as may apply to its particular circumstances;
16. 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
17. 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.
A-4
18. The foregoing representations, warranties and covenants are made by Finova
with the intent that they be relied upon in determining its suitability as a
purchaser of Common Shares and Finova 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. Finova 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 Finova set forth herein which takes place prior to the Closing Time.
Date: December _____, 1999 Finova Mezzanine Capital Inc.
-----------------------------
Print name of Purchaser
By: ______________________________
Xxxxxx X. Xxxxxxxxxx
Vice-President
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 - __________ Common
Shares
c. Purchase Price: Deemed Price of U.S. $_______________ per Common Share
2. DETAILS OF PURCHASER
a. Name of Purchaser - Finova Mezzanine Capital Inc.
-----------------------------
b. Address -
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, 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 Nashville, Tennessee Finova Mezzanine Capital Inc.
----------------------------------
this ____ day of December, 1999. (Name of Purchaser)
----------------------------------
(Authorized Signature)
Vice-President
----------------------------------
(Official Capacity)
Xxxxxx X. Xxxxxxxxxx
----------------------------------
(please print here name of individual
whose signature appears above, if
different from name of purchaser
printed above)
SCHEDULE C
PURCHASER'S REPRESENTATION LETTER
To: Finova Mezzanine Capital Inc. ("Finova")
In connection with the acquisition by Wi-LAN Inc. ("Wi-LAN") of
securities issued by Digital Transmission Systems, Inc. and LinkaNet Labs, Inc.
(the "Corporations") (as described in that Purchase Agreement dated as of
December 29, 1999 between Wi-LAN and Finova) (herein the "Securities"), Wi-LAN
hereby certifies and agrees for the benefit of Finova that:
1. it is authorized to consummate the purchase of the Securities;
2. it understands that the sale of the Securities has 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 Securities for its own account and not with a view to
any resale, distribution or other disposition of the Securities, 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 Securities, it will not offer, sell or
otherwise transfer, pledge or hypothecate any or any part of such Securities
(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 respective Corporation which issued the Securities
being sold; 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 Securities 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 Wi-LAN has furnished to the Corporation
which issued the Securities being sold an opinion to that effect of
counsel of recognized standing reasonably satisfactory to such
Corporation;
5. it understands and acknowledges that the Securities 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 Securities, 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
EXEMPTION FROM REGISTRATION UNDER THE
C-2
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.
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 Corporations
concerning the terms and conditions of the issuance of the Securities and the
financial condition, results of operations and business prospects of the
Corporations;
7. it is experienced in evaluating companies such as the Corporations, 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 Securities and has the
ability to suffer the total loss of its Investment in the Securities;
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 Securities 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 Corporations with respect thereto, acknowledges
that it is aware of the characteristics of the Securities, the risks relating to
an investment therein and of the fact that it may not be able to resell the
Securities 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 Securities 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 describing the business and affairs of the Corporations 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 Securities 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 Securities;
11. 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 Securities
and it is able to bear the economic risk of loss of its entire Investment;
12. it is a resident of and was offered the Securities in the Province of
Alberta, Canada;
13. it understands and acknowledges that the Corporations have the right to
instruct the transfer agent for the Securities not to record a transfer by any
person in the United States without first being notified by the respective
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;
14. it understands that the investment in the Securities may have tax
consequences under the laws of the United States and of Canada and that it is
the sole responsibility of Wi-LAN to determine and assess such tax consequences
as may apply to its particular circumstances; and
15. 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 purchase of the Securities.
C-3
16. The foregoing representations, warranties and covenants are made by Wi-LAN
with the intent that they be relied upon in determining its suitability as a
purchaser of Securities and Wi-LAN agrees to indemnify Finova against all
losses, claims, costs, expenses and damages or liabilities which Finova may
suffer or incur caused or arising from reliance thereon. Wi-LAN undertakes to
immediately notify Finova in writing of any change in any statement or other
information relating to Wi-LAN set forth herein which takes place prior to the
Closing Time.
Date: December _____, 1999 Wi-LAN Inc.
----------------------------------
Print name of Purchaser
By:
------------------------------
Xxxxx Xxxxxxxx
Chairman and Chief Executive Officer
