SUBSCRIPTION AGREEMENT (for Ontario, Alberta and Non-Canadian/Non-U.S. Subscribers)
EXHIBIT
4.23
| ADB SYSTEMS INTERNATIONAL LTD. |
Series
(J) Debenture
Subscription
|
|
| TO SUBSCRIBE, EACH SUBSCRIBER MUST RETURN TO THE FOLLOWING: | ||
| a. | □ Duly completed and executed Subscription Agreement (complete cover page): | |
| b. | □ Subscription Funds by certified cheque, bank draft, money order or wire transfer; | |
| c. | □ Duly completed and executed Accredited Investor Certificate (attached as schedule “D”); and | |
| d. | □ Duly completed and executed Offshore Subscriber Certificate (attached as schedule “E”, if applicable). | |
(for
Ontario, Alberta and Non-Canadian/Non-U.S. Subscribers)
|
TO:
|
ADB
Systems International Ltd. (the “Corporation”)
|
|
RE:
|
Sale
of secured subordinate convertible debentures convertible into units
consisting of one common share in the capital of the Corporation
and one
common share purchase warrant exercisable into one common share in
the
capital of the Corporation.
|
Details
of Subscription
The
undersigned (the “Subscriber”)
hereby irrevocably subscribes, subject to the terms and conditions set forth
in
this subscription agreement, for secured subordinate convertible debentures
(the
“Debentures”)
of the Corporation with the following specific purchase instructions. The
particulars of the Debentures and the securities issuable upon conversion of
the
Debentures (together with certain other material covenants and acknowledgements)
are set out in Schedules “A” and “B” to this subscription agreement and certain
representations and warranties to be made by the Subscriber so that the
Corporation can ensure compliance with applicable securities laws are set out
in
Schedule “C” to this subscription agreement, all of which form part of and are
hereby incorporated as part of this subscription agreement.
Ontario
and Alberta Subscribers:
Complete
and sign the Subscription Agreement and the Accredited Investor Certificate
-
Schedule “D”.
Non
Canadian and Non U.S. Subscribers:
Complete
and sign the Subscription Agreement and the Offshore Subscriber Certificate
-
Schedule “E”.
Please
print all information (other than signatures), as applicable, in the spaces
provided below.
|
Principal
Amount of Debentures Subscribed for (to be issued at
par):___________________________________________________________________________________
|
| Subscriber
Details
__________________________________________________
Name
of Subscriber
By:
______________________________________________________
Authorized Signature __________________________________________________
Official
Capacity or Title (if Subscriber is not an individual)
__________________________________________________
Name
of individual whose signature appears above if
different from name of Subscriber printed above __________________________________________________________ ___________________________________________________
___________________________________________________ Address
of Subscriber, including province and postal
code
|
Registration
Instructions
(if different from name of
Subscriber and address set out in the box to the left): ______________________________________________
Name
______________________________________________
In
Trust For, if applicable
Account
Reference, if applicable
_______________________________________________
_______________________________________________ _______________________________________________ Address,
including postal code
|
|
|
Telephone
Number: __________________________________________
Fax Number: _______________________________________________ E-mail Address: _____________________________________________ |
Delivery
Instructions
(if different from name of Purchaser and address set out in the
box to the
left):
_______________________________________________
Name
_______________________________________________
Account
Reference, if
applicable
______________________________________________________ ______________________________________________________ ______________________________________________________ Address,
including province and postal code
|
|
|
Disclosed
Principal (please complete if purchasing as
agent or trustee for a disclosed principal Name
of Principal: _____________________________________________
Principal’s
Address: ___________________________________________ ______________________________________(Street Address) (City
and Province)
___________________________________________ (Postal
Code) |
The
Subscriber acknowledges its consent and request that this subscription agreement
(including all schedules hereto) and all other documents evidencing or relating
in any way to its purchase of Debentures be drawn up in the English language
only. Nous
reconnaissons par les présentes avoir consenti et demandé à ce que la présente
convention de souscription (et les annexes s’y rapportant) et tous les autres
documents faisant foi ou se rapportant de quelque manière à notre souscription
soient rédigés en anglais seulement.
IN
WITNESS WHEREOF
the Subscriber has executed, or caused its duly authorized representative to
execute, this subscription agreement on this
day of
,
2006.
|
_____________________________________
|
______________________________________
|
||
|
Signature
of Subscriber (if an individual)
|
Name
of Subscriber (if an individual)
|
||
|
_____________________________________
|
Per:
|
______________________________________
|
|
|
Name
of Subscriber (if an individual)
|
(signature
of authorized representative)
|
||
|
______________________________________
|
|||
|
Name
and Title of Authorized
Representative
|
|||
ACCEPTANCE
The
foregoing is acknowledged, accepted and agreed to this
day of
,
2006.
SCHEDULE
“A”
This
is Schedule “A” to the subscription agreement relating to the purchase of Series
(J) Debentures of ADB Systems International Ltd.
TERMS
OF THE OFFERING
1. Offering.
Secured subordinate convertible debentures (the “Debentures”)
of the Corporation subscribed for hereunder form the total sale by the
Corporation (the “Offering”)
of a maximum of $900,000 principal amount of Debentures. The Offering is being
made on a best efforts private placement basis.
The
Debentures will bear simple interest at an annual rate of 11% of the principal
amount of the Debentures outstanding from time to time, payable (i) for interest
owing in respect of the first 12 months following the Closing Date (as defined
herein) (the “Initial
Period”)
calculated and payable in arrears upon the earlier of Conversion (as defined
below) of the Debentures or the date which is 12 months following the Closing
Date; and (ii) on the earlier of Conversion of the Debentures or the fifth
anniversary of the Closing Date (the “Maturity Date”)
for interest owing in respect of the period commencing on the date that is
twelve months and one day following the Closing Date, and ending on the fifth
anniversary of the Closing Date (the “Subsequent
Period”).
Interest owing in respect of the Initial Period is payable in full by the
issuance of a number of Common Shares calculated pursuant to the following
formula:
A÷B,
where:
A=
the accrued interest payable (in dollars); and
B=
the volume weighted average trading price of the Common Shares over the 20
day
trading period ending at the close of business on the day prior to the date
on
which the interest payment is due, reduced by the maximum percentage discount
permitted by the Toronto Stock Exchange,
provided
that the maximum aggregate number of Common Shares issuable pursuant to the
above-noted calculation is 6,529,959 and in the event the Corporation is
obligated to, and cannot, issue any further Common Shares over and above
6,529,959, it shall satisfy the balance of the interest payment owing in cash
by
paying the amount calculated as (i) the total amount of accrued interest
payable, less (ii) the value of the Common Shares issued in satisfaction of
interest payments.
Interest
owing in respect of the Subsequent Period is payable in cash upon the earlier
of
i) Conversion (as defined below); or ii) the Maturity Date.
Interest
will continue to accrue until paid. At any time up to and including the Maturity
Date, all or any portion of the principal amount of the Debentures outstanding
from time to time will be convertible (“Conversion”),
at the option of the holder, provided that the holder complies with the notice
provision therefor, into units of securities of the Corporation (“Units”)
at a conversion price of $0.15 per Unit (the “Conversion
Price”),
subject to adjustments for stock splits, consolidations, other capital
reorganizations, extraordinary dividends or distributions among other
anti-dilution provisions providing adjustments for events that will affect all
security holders equally.
Each
Unit will consist of one common share in the capital of the Corporation (a
“Common
Share”)
and one Common Share purchase warrant (a “Warrant”).
Each Warrant will entitle the holder to acquire one Common Share at an exercise
price of $0.20 per share, any time prior to the earlier of (i) the third year
anniversary of the Closing Date and (ii) the date which is sixty (60) days
following the issuance of a notice by the Corporation to holders confirming
that
the closing price of the common shares of the Corporation on the Toronto Stock
Exchange was greater than or equal to $0.35 for any 10 consecutive trading
days,
following the 4 months and one day hold period from the date of issuance of
the
Warrant.
The
material terms of the Offering, the Debentures and the Underlying Securities
(as
hereinafter defined) are set out in this schedule and in Schedule “B” to this
subscription agreement.
The
foregoing description of the Debentures is a summary only and the Subscriber
acknowledges that the definitive terms and conditions of the Debentures sold
under the Offering will be set forth in the Debenture Certificates (as
hereinafter defined).
2. Definitions.
In this subscription agreement and the schedules to this subscription agreement
the defined terms set out in the first page of this subscription agreement
or as
set out in Section 1 above shall apply and, unless the context otherwise
requires:
“Applicable
Securities Laws”
means the applicable securities laws of the Provinces of Ontario and Alberta
as
the case may be, and the regulations and rules made and forms prescribed
thereunder, together with all applicable instruments, published policy
statements, blanket orders, notices, rulings and rules of the Ontario Securities
Commission and the Alberta Securities Commission.
“Business
Day”
means a day other than a Saturday, Sunday or statutory or banking holiday in
Toronto, Ontario;
“Closing
Date”
means on or about January 31, 2006, or such other date or dates as the
Corporation may designate;
“Closing
Time”
means 10:00 a.m. (Toronto time) on the Closing Date, or such other time on
the
Closing Date as the Corporation may designate;
“Corporation’s
Information Record”
means any statement contained in any press release, material change report,
financial statements or other document of the Corporation which has been or
is
publicly disseminated, whether pursuant to any Applicable Securities Laws or
otherwise, prior to the Closing Time;
“Hold
Period”
means four months and one day from the Closing Date and in the case of a
purchaser who is an insider of the Issuer for the purposes of the Securities
Act (Ontario)
means 6 months from the Closing Date;
“including”
means including without limitation;
“material”
means material in relation to the Corporation;
“material
change”
means any change in the business, operations, assets, liabilities, ownership
or
capital of the Corporation, on a consolidated basis, that would reasonably
be
expected to have a significant effect on the market price or value of the Common
Shares and includes a decision to implement such a change made by the board
of
directors of the Corporation or by senior management of the Corporation who
believe that confirmation of the decision by the board of directors is
probable;
“material
fact”
means any fact that significantly affects or would reasonably be expected to
have a significant effect on the market price or value of the Common
Shares;
“Material
Subsidiaries”
means the material direct or indirect subsidiaries of the Corporation, being,
ADB Systemer ASA (Norway), ADB Systems USA, Inc. (Delaware), and ADB Systems
International Limited (Ireland);
“misrepresentation”
means an untrue statement of material fact, or an omission to state a material
fact that is required to be stated or that is necessary to make a statement
not
misleading in the light of the circumstances in which it was made;
“Debenture
Certificates”
means the definitive certificates representing the Debentures;
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“Purchasers”
means those persons who subscribe for Debentures under the Offering, including
the Subscriber;
“Regulation
S”
means Regulation S under the U.S.
Securities Act;
“TSX”
means the Toronto Stock Exchange;
“Underlying
Securities”
means the Common Shares and Warrants comprising the Units issuable upon the
exercise of the conversion rights under the Debentures;
“United
States”
means the United States as that term is defined in Regulation S;
“U.S.
Person”
means a U.S. Person as that term is defined in Regulation S;
“U.S.
Securities Act”
means the Securities
Act of 1933,
as amended, of the United States of America;
“Warrant”
means a non-transferrable Common Share purchase warrant comprising part of
the
Units issuable upon exercise of the conversion rights under the Debentures
offered by the Corporation pursuant to this subscription agreement, each whole
warrant entitling the holder to purchase one Common Share at an exercise price
of $0.20, any time prior to the earlier of (i) the third year anniversary of
the
Closing Date and (ii) the date which is sixty (60) days following the issuance
of a notice by the Corporation to holders confirming that the closing price
of
the common shares of the Corporation on the Toronto Stock Exchange was greater
than or equal to $0.35 for any 10 consecutive trading days, following the 4
months and one day hold period from the date of issuance of the Warrant.
“Warrants
Shares”
means the Common Shares issuable upon exercise of the Warrants.
3. Currency.
All dollar amounts referred to in this subscription agreement and the schedules
thereto are expressed in Canadian funds.
4. Representations
and Warranties of the Corporation.
The Corporation hereby represents and warrants for the benefit of the
Subscribers as follows:
(a) the
Corporation is (and will be at the Closing Time) a reporting issuer in the
Provinces of Ontario, Alberta and British Columbia, and is in compliance with
all material obligations under Applicable Securities Laws of such
jurisdictions;
(b) the
Corporation has been duly incorporated
and
organized and is validly subsisting under the laws of the Province
of Ontario
and has all requisite corporate power and authority to own its assets and to
carry on its business as currently conducted;
(c) each
of the Material Subsidiaries has been duly incorporated and organized and is
validly subsisting under the laws of its jurisdiction of incorporation and
has
all requisite corporate power and authority to carry on its business as now
conducted and to own, lease and operate its properties and assets;
(d) the
Corporation and
each of the Material Subsidiaries
is conducting its business in material compliance with all applicable laws,
rules and regulations of each jurisdiction in which its business is carried
on
and is duly licensed, registered or qualified in all jurisdictions in which
it
owns, leases or operates its property or carries on business to enable its
business to be carried on as now conducted and its property and assets to be
owned, leased and operated and all such licences, registrations and
qualifications are and will at the Closing Time be valid, subsisting and in
good
standing, except in respect of matters which do not and will not result in
any
adverse material change in respect of the Corporation, and except for the
failure to be so qualified or the absence of any such license, registration
or
qualification which does not and will not have a material adverse effect on
the
assets or properties, business, results of operations, prospects or condition
(financial or otherwise) of the Corporation and its subsidiaries, on a
consolidated basis;
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(a) the
Corporation has all required corporate power and authority to enter into and
carry out the provisions of this subscription agreement and the transactions
contemplated hereby and all necessary corporate action has been taken or will
have been taken prior to the Closing Time by the Corporation to duly authorize
the execution and delivery of this subscription agreement and such other
agreements and instruments and the consummation of the transactions contemplated
thereby and so as to validly create, issue and deliver the Debentures subscribed
thereby and to validly create and irrevocably allot for issuance the Underlying
Securities and Warrant Shares;
(b) neither
the Corporation nor
any of its Material Subsidiaries
is in default or in breach in any material respect of, and the execution and
delivery of this subscription agreement by the Corporation, the performance
and
compliance with the terms of this subscription agreement, the issue and sale
of
the Debentures, and the issue of the Underlying Securities and Warrant Shares
will not result in any breach of, or be in conflict with or constitute a default
under, or create a state of facts which, after notice or lapse of time, or
both,
would constitute a default either directly or indirectly under any term or
provision of the constating documents, by-laws or resolutions of the Corporation
or
any of the Material Subsidiaries or
any material mortgage, note, indenture, contract, agreement, instrument, lease
or other document to which any of them is a party or by which any of them is
bound;
(c) the
Common Shares issuable upon exercise of the conversion rights under its
Debentures and the Warrant Shares, if and when issued in accordance with the
Debentures and Warrants, as applicable, will be validly issued and outstanding
as fully paid and non-assessable;
and
the Warrants issuable upon exercise of the conversion rights under its
Debentures, if and when issued, will be validly issued;
(d) no
approval, authorization, consent or other order of, and no filing, registration
or recording with, any governmental authority is required by the Corporation
in
connection with the execution and delivery or with the performance by the
Corporation of this subscription agreement except in compliance with and the
rules of the TSX;
(e) to
the best of the Corporation’s knowledge, information and belief, no portion of
the Corporation’s Information Record contained a misrepresentation as at its
date of public dissemination;
(f) there
has been no adverse material change in relation to the Corporation since
September 30, 2005, and no adverse material fact exists in relation to the
Corporation or its securities which, in either case, has not been generally
disclosed or disclosed in the Corporation’s Information Record;
(g) this
subscription agreement and all other agreements required in connection with
the
issue and sale of the Debentures have been or will be, at or prior to the
Closing Time, duly authorized, executed and delivered by the Corporation and
will be valid and binding obligations of the Corporation enforceable in
accordance with their respective terms (except as the enforceability thereof
may
be limited by (i) bankruptcy, insolvency or similar laws affecting creditors’
rights generally, (ii) general equitable principles or (iii) limitations under
applicable law in respect of rights of indemnity, contribution and waiver of
contribution); and
(h) the
Corporation intends that the net proceeds of the Offering will be used
substantially in the manner specified in Schedule “B” hereto.
(i) Forthwith
after the Closing, the Corporation shall file such forms and documents as may
be
required under the Applicable Securities Laws relating to the Offering and
any
further documents as may be required by any applicable regulatory authority
which, without limiting the generality of the foregoing, shall include a Form
45-501F1 as prescribed by the Securities
Act
(Ontario) and a Form 45-103F4 as prescribed by Multilateral Instrument
45-103.
5. Reliance
upon Representations, Warranties and Covenants of the
Corporation.
The Corporation further agrees that, by delivering the Debentures to the
Subscriber, the Corporation will be representing and
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warranting
that the representations, warranties and covenants
contained in this subscription agreement are true as at the Closing Time with
the same force and effect as if they had been made by the Corporation at the
Closing Time.
6. Closing
of Purchase.
The Subscriber acknowledges and agrees that delivery of and payment for the
Debentures will be completed at the offices of the
Corporation or its legal counsel at
10:00 a.m. (Toronto time) on the Closing Date.
7. Payment
and Delivery.
The Subscriber acknowledges and agrees to deliver to the Corporation at the
Valhalla Executive Centre, 000 Xxx Xxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx X0X
0X0, (Attention: Xxxxxx Xxxxxxxx), (fax number: (000) 000-0000), prior to the
Closing Time:
(a) his
or her duly completed and executed subscription agreement (including Schedule
“D” or Schedule “E”, as applicable);
(b) payment
for the principal amount of Debentures subscribed for under this subscription
agreement, in the form of either (i) a certified cheque or bank draft payable
to
“ADB Systems International Ltd.” or its designate, as instructed by the
Corporation, or (ii) wire transfer in Canadian funds to the Corporation as
per
the following wire instructions (Account: 102-4090 Transit: 00472 Institution:
003 Swift Code XXXXXXX0 - Royal Bank of Canada Bramalea & Xxxxxx Xxxxxx,
Bramalea Ontario, L6T 2W8) or its designate, as instructed by the Corporation
for the principal amount of the Units subscribed for under this subscription
agreement or payment of the same amount in such other manner as is acceptable
to
the Corporation; and
(c) such
other documents as may be required pursuant to the terms of this subscription
agreement.
8. Conditions
of Closing. This
subscription is subject to acceptance by the Corporation (as described below)
and the receipt of consents from certain prior investors. The Offering is
conditional upon, among other things, the Corporation obtaining TSX approval
and
the Underlying Securities not being subject to a hold period of more than four
months and one day from the Closing Date and the Common Shares being freely
tradable on the TSX following the expiration of such hold period.
The
Subscriber acknowledges and agrees that the obligations of the Corporation
hereunder are conditional on the accuracy of the representations and warranties
of the Subscriber contained in this subscription agreement as of the date of
this subscription agreement, and as of the Closing Time as if made at and as
of
the Closing Time, and the fulfillment of the following additional conditions
as
soon as possible and in any event not later than the Closing Time unless other
arrangements acceptable to the Corporation have been made:
(a) the
Corporation shall have received all necessary approvals and consents, including
all necessary regulatory approvals and consents (including the approval of
the
TSX) required for the completion of the transaction contemplated by this
subscription agreement;
(b) the
representations and warranties of the Corporation contained herein being true
and correct as of the Closing Time with the same force and effect as if made
at
and as of the Closing Time after giving effect to the transactions contemplated
hereby;
(c) the
Corporation having complied with all covenants, and satisfied all terms and
conditions contained herein to be complied with and satisfied by the Corporation
at or prior to the Closing;
(d) the
Subscriber having completed this subscription agreement in full and having
paid
the principal amount of the Debentures subscribed for hereunder to the
Corporation in the manner contemplated in this subscription
agreement.
If,
at the Closing Time, the terms and conditions contained herein have been
complied with, this completed subscription agreement has been delivered to
the
Corporation and accepted by the Corporation and, unless other arrangements
acceptable to the Corporation have been made, the aggregate subscription
proceeds representing
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the
principal amount of Debentures subscribed for hereunder have been paid in
accordance with Section 7 hereof, unless other arrangements have been made
with
the Corporation, Debenture Certificates endorsed by the Corporation representing
Debentures subscribed for hereunder will be available for delivery to the
Subscriber in Toronto, Ontario at the Closing Time. The Corporation will deliver
such Debenture Certificates to the address set out for delivery on page
2
of this subscription agreement promptly after the closing of its
Offering.
9. Acceptance
or Rejection.
The Corporation will have the right to accept or reject in its sole discretion
(in whole or in part) this subscription at any time at or prior to the Closing
Time, and the right is reserved to the Corporation to allot to any Purchaser
less than the principal amount of Debentures subscribed for. If this
subscription is rejected in whole, any cheques or other forms of payment
delivered to the Corporation representing the principal amount of the Debentures
subscribed for will be promptly returned to the Subscriber without interest
or
deduction. If this subscription is accepted only in part, a cheque representing
any refund of the principal amount of the Debentures for that portion of the
subscription for the Debentures which is not accepted, will be promptly
delivered to the Subscriber without interest or deduction. The Subscriber
acknowledges and agrees that the acceptance of this subscription agreement
will
be conditional upon the sale of the Debentures to the Subscriber being exempt
from any prospectus and registration requirements of Applicable Securities
Laws.
The Corporation be deemed to have accepted this subscription agreement upon
the
delivery at closing of the Debenture Certificate referred to in Section 8 above
in accordance with the provisions hereof.
10. Information
and Documents.
The Subscriber acknowledges that pursuant to Applicable Securities Laws, the
Subscriber may be required to file a report with a Securities Commission in
the
required form within 10 days of each disposition of all or any of the Debentures
purchased hereunder or any of the Underlying Securities issued upon the exercise
of the conversion rights under such Debentures and, if so required, the
Subscriber, undertakes to file the required report. The Corporation is not
in
any way responsible for such filings or the payment of any related
fees.
11. Resale
Restrictions.
The Subscriber understands and acknowledges that the Debentures and in certain
circumstances the Underlying Securities and Warrant Shares will be subject
to
certain resale restrictions under Applicable Securities Laws and the Subscriber
agrees to comply with such restrictions. Subscribers are advised to consult
their own legal advisors in this regard and no representations have been made
to
the Subscriber by the Corporation with respect to such matters. The Subscriber
also acknowledges that it has been advised to consult its own legal advisors
with respect to applicable resale restrictions and that it is solely responsible
for complying with such restrictions (the Corporation is not in any manner
responsible for ensuring compliance by the Subscriber with such restrictions).
12. No
Revocation.
The Subscriber agrees that this offer is made for valuable consideration and
may
not be withdrawn, cancelled, terminated or revoked by the Subscriber.
(a) Indemnity.
The Subscriber agrees to indemnify and hold harmless the Corporation, and its
directors, officers, employees, agents, advisers and shareholders from and
against any and all loss, liability, claim, damage and expense whatsoever
(including, any and all fees, costs and expenses whatsoever reasonably incurred
in investigating, preparing or defending against any claim, lawsuit,
administrative proceeding or investigation whether commenced or threatened)
arising out of or based upon any representation, warranty or covenant of the
Subscriber contained herein or in any document furnished by the Subscriber
to
the Corporation in connection herewith being untrue in any material respect
or
any breach or failure by the Subscriber to comply with any covenant or agreement
made by the Subscriber herein or in any document furnished by the Subscriber
to
the Corporation in connection herewith.
13. Modification.
Neither this subscription agreement nor any provision hereof shall be modified,
changed, discharged or terminated except by an instrument in writing signed
by
the party against whom any waiver, change, discharge or termination is
sought.
14. Miscellaneous.
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(a) The
agreement resulting from the acceptance of this subscription agreement by the
Corporation contains the whole agreement between the parties hereto in respect
of the subject matter hereof and there are no warranties, representations,
terms, conditions or collateral agreements, express, implied or statutory,
other
than as expressly set forth herein and in any amendments hereto.
(b) All
representations, warranties, agreements and covenants made or deemed to be
made
by the Subscriber in this subscription agreement will survive the execution
and
delivery, and acceptance, of this subscription agreement and the closing of
the
Offering.
(c) Time
shall be of the essence of this subscription agreement.
(d) This
subscription agreement and the rights and obligations of the parties hereunder
will be governed by and construed according to the laws of the Province of
Ontario and the laws of Canada applicable therein.
(e) This
subscription agreement may be executed in any number of counterparts, each
of
which when delivered, either in original or facsimile form, shall be deemed
to
be an original and all of which together shall constitute one and the same
document.
(f) This
subscription agreement shall be construed and enforced in accordance with,
and
the rights of the parties shall be governed by, the laws of the province of
Ontario and the laws of Canada applicable therein. Any and all disputes arising
under this subscription agreement, whether as to interpretation, performance
or
otherwise, shall be subject to the non-exclusive jurisdiction of the courts
of
the province of Ontario and each of the parties hereto hereby irrevocably
attorns to the jurisdiction of the courts of such province.
15. Notices.
(a) Any
notice, direction or other instrument required or permitted to be given to
Corporation shall be in writing and shall be sufficiently given if delivered
personally, or transmitted by facsimile tested prior to transmission to the
Corporation, as follows:
(i)
in the case of the Corporation to:
000
Xxx Xxxx Xxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxx
X0X
0X0
Attention: Xxxxxx
Xxxxxxxx
Fax:
000-000-0000
(ii)
in the case of the Subscriber, at the address specified on the face page
hereof.
(b) Any
such notice, direction or other instrument, if delivered personally, shall
be
deemed to have been given and received on the day on which it was delivered,
provided that if such day is not a Business Day then the notice, direction
or
other instrument shall be deemed to have been given and received on the first
Business Day next following such day and if transmitted by fax, shall be deemed
to have been given and received on the day of its transmission, provided that
if
such day is not a Business Day or if it is transmitted or received after the
end
of normal business hours then the notice, direction or other instrument shall
be
deemed to have been given and received on the first Business Day next following
the day of such transmission.
(c) Any
party hereto may change its address for service from time to time by notice
given to each of the other parties hereto in accordance with the foregoing
provisions.
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SCHEDULE
“B”
This
is Schedule “B” to the subscription agreement relating to the purchase of Series
(J) Debentures of ADB Systems International Ltd. (the “Corporation”).
Capitalized terms used but not defined in this schedule are intended to have
the
meanings ascribed thereto, as applicable, on the first page of this subscription
agreement and sections 1 and 2 of Schedule “A” to this subscription
agreement
Summary
of Proposed Terms
Offering
of Series (J) Secured Subordinate Convertible Debentures
by
way of Private Placement
January
2006
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Issuer:
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ADB
Systems International Ltd. (“ADB” or the “Corporation”)
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|
Offered
Securities:
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Secured
subordinate convertible debentures (the “Debentures”) to be issued at par
in integral multiples of $1,000. At any time up to and including
the
Maturity Date (as defined below), all or any portion of the principal
amount of the Debentures will be convertible (“Conversion”) into one unit
(a “Unit”) at the option of the holder at a conversion price of $0.15 per
Unit, subject to adjustments for any stock splits, consolidations,
or
other capital reorganizations, extraordinary dividends or distributions
among other anti-dilution provisions providing adjustment for events
that
will affect all security holders equally (the “Conversion Price”). Each
Unit is to consist of one common share (“Common Share”) and one common
share purchase warrant (“Warrant”). Each Warrant is exercisable into one
Common Share at an exercise price of $0.20, any time prior to the
earlier
of (i) the third year anniversary of the Closing Date and (ii)
the date
which is sixty (60) days following the issuance of a notice by
the
Corporation to holders confirming that the closing price of the
common
shares of the Corporation on the Toronto Stock Exchange was greater
than
or equal to $0.35 for any 10 consecutive trading days, following
the 4
months and one day hold period from the date of issuance of the
Warrant.
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|
Size
of Offering:
|
Offering
of up to $900,000 principal amount of Debentures.
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|
Interest:
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Interest
payable on the Debentures shall be simple interest calculated at
11% per
annum and payable as follows:
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|
(a)
interest owing in respect of the period commencing on the Closing
Date and
ending on the date that is twelve months following the Closing
Date shall
be calculated and payable in arrears upon the earlier of (i) Conversion;
and (ii) the date which is 12 months following the Closing Date,
and such
interest shall be satisfied by the issuance of the number of Common
Shares
calculated on the basis of:
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|
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A÷B,
where:
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A
= the amount of accrued interest payable, in dollars; and
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|
B
= the volume weighted average trading price of the Common Shares
over the
20 day trading period ending at the close of business on the day
prior to
the date on which the interest payment is due, reduced by the maximum
percentage discount permitted by the Toronto Stock Exchange,
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|
provided
that the maximum aggregate number of common shares issuable pursuant
to
the above-noted calculation is 6,529,959 and in the event the Corporation
is obligated to, and cannot, issue any further Common Shares over
and
above 6,529,959, it shall satisfy the balance of the interest payment
owing in cash by paying the amount calculated as (i) the total
amount of
accrued interest payable, less (ii) the value of the Common Shares
issued
in satisfaction of interest payments; and
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(b)
interest owing in respect of the period commencing on the date
that is
twelve months and one day following the Closing Date and ending
on the
date that is five years following the Closing Date shall be calculated
and
payable in cash upon the earlier of (i) Conversion; or (ii) the
Maturity Date.
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|
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Security:
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The
Debentures will provide general security over the Corporation’s assets.
Such security will be subordinate to the liabilities of the Corporation
to
current secured creditors, but will rank in priority over all unsecured
liabilities of the Corporation.
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Agreements:
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Subscription
Agreement, Secured Subordinate Convertible Debenture Certificate,
Warrant
Certificate, and Security Agreement.
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Maturity
Date:
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Five
years from the Closing Date (as defined below).
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Resale
Restrictions:
|
The
Corporation will be a “reporting issuer” on the Closing Date, such that it
is expected that the Debentures, Common Shares, Warrants and common
shares
issuable upon the exercise of the Warrants, will be subject to
a
restricted period expiring four months and one day following the
Closing
Date.
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|
Form
of Offering:
|
Best
efforts private placement to accredited investors in Ontario under
OSC
Rule 45-501 or in such other jurisdictions in Canada, and outside
North
America under
equivalent rules.
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Agent:
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As
this will be a non-brokered Private Placement PowerOne Capital
Markets
Limited agrees to waive their right of first refusal to act as
Agent in
this offering.
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Closing
Date:
|
On
or about January 31, 2006 or such other date or dates as the Corporation
may determine (the “Closing Date”).
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Agent’s
Commission:
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Not
applicable
|
B-2
SCHEDULE
“C”
SUBSCRIBER’S
REPRESENTATIONS AND WARRANTIES
This
is Schedule “C” to the subscription agreement relating to the purchase of Series
(J) Debentures of ADB Systems International Ltd. (the “Corporation”).
Capitalized terms used but not defined in this schedule are intended to have
the
meanings ascribed thereto, as applicable, on the first page of this subscription
agreement and sections 1 and 2 of Schedule “A” to this subscription
agreement.
By
executing this subscription agreement, the Subscriber represents and warrants
to
the Corporation, which representations and warranties are true as of the date
of
this subscription agreement and will be true as of the Closing Date,
that:
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1.
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Representations
and Warranties
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(a)
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Authorization
and Effectiveness.
If the Subscriber is a corporation, the Subscriber is a valid and
subsisting corporation, has the necessary corporate capacity and
authority
to execute and deliver this subscription agreement and to observe
and
perform its covenants and obligations hereunder and has taken all
necessary corporate action in respect thereof. If the Subscriber
is a
partnership, syndicate or other form of unincorporated organization,
the
Subscriber has the necessary legal capacity and authority to execute
and
deliver this subscription agreement and to observe and perform its
covenants and obligations hereunder and has obtained all necessary
approvals in respect thereof. If the Subscriber is a natural person,
he or
she has obtained the age of majority and is legally competent to
execute
this subscription agreement and to take all actions required pursuant
thereto.
|
Whether
the Subscriber is a natural person or a corporation, partnership or other
entity, upon acceptance by the Corporation, this subscription agreement will
constitute a legal, valid and binding contract of the Subscriber, and any
beneficial purchaser for whom it is purchasing, enforceable against the
Subscriber and any such beneficial purchaser in accordance with its
terms.
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(b)
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Residence.
The Subscriber or any beneficial purchaser on whose behalf the Subscriber
is acting hereunder is a resident of, or otherwise subject to, the
jurisdiction referred to under “Name and Address of Subscriber” on the
first page of this subscription agreement, which address is the residence
or place of business of the Subscriber or such beneficial purchaser
and
has not been created or used solely for the purpose of acquiring
Debentures, and neither the Subscriber or such beneficial
purchaser:
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(i)
|
is
(or is purchasing Debentures for the account or benefit of) a U.S.
Person;
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(ii)
|
was
offered the Debentures in the United States;
and
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(iii)
|
executed
or delivered this agreement in the United
States.
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(c)
|
Investment
Intent.
The Subscriber on its own behalf and on behalf of any beneficial
purchaser
on whose behalf the Subscriber is acting hereunder is acquiring Debentures
to be held for investment only and not with a view to resale or
distribution.
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|
(d)
|
Prospectus
Exemptions.
The Subscriber or any beneficial purchaser on whose behalf the Subscriber
is acting hereunder acknowledges and agrees that the sale and delivery
of
the Debentures to the Subscriber is conditional upon such sale being
exempt from the requirements under Applicable Securities Laws requiring
the filing of a prospectus in connection with the distribution of
the
Debentures and as a result, certain rights and remedies provided
by
Applicable Securities Laws (including statutory rights of rescission
or
damages) will not be available to the Subscriber or any beneficial
purchaser on whose behalf the Subscriber is acting
hereunder.
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(e)
|
Offering
Documents.
The Subscriber has not received, nor does the Subscriber need to
receive,
any document purporting to describe the business and affairs of the
Corporation that has been prepared for delivery to and review by
prospective investors (including a prospectus or offering memorandum)
so
as to assist those investors to make an investment decision in respect
of
securities being sold in a distribution of securities of the
Corporation.
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(f)
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No
Solicitation or Advertising.
The Subscriber on its own behalf and on behalf of any beneficial
purchaser
on whose behalf the Subscriber is acting hereunder acknowledges that
it
has not purchased the Debentures as a result of any general solicitation
or general advertising, including advertisements, articles, notices
or
other communications published in any newspaper, magazine or similar
media
or broadcast over radio or television or other telecommunications
(including electronic display), or any seminar or meeting whose attendees
have been invited by any general solicitation or general
advertising.
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(g)
|
No
Undisclosed Information.
The Debentures are not being purchased by the Subscriber as a result
of
any material information concerning the Corporation that has not
been
publicly disclosed and the Subscriber’s decision to tender this offer and
acquire Debentures has not been made as a result of any verbal or
written
representation as to fact or otherwise made by or on behalf of the
Corporation, or any other person and is based entirely upon the currently
available public information concerning the
Corporation.
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(h)
|
Investment
Suitability.
The Subscriber and any beneficial purchaser on whose behalf the Subscriber
is acting hereunder have such knowledge and experience in financial
and
business affairs as to be capable of evaluating the merits and risks
of
the investment hereunder in Debentures (and the Underlying Securities
and
Warrant Shares in respect thereof) and are able to bear the economic
risk
of loss of such investment. The Subscriber and any beneficial purchaser
on
whose behalf the Subscriber is acting hereunder acknowledge and agree
that
the Subscriber and such beneficial purchaser are responsible for
obtaining
such legal advice as the Subscriber or such beneficial purchaser
considers
appropriate in connection with the execution, delivery and performance
by
the Subscriber of this agreement and the transactions contemplated
hereunder.
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(i)
|
Subscription
Agreement.
The Subscriber on its own behalf and on behalf of any beneficial
purchaser
on whose behalf the Subscriber is acting hereunder has read and
understands the contents of this agreement (including the Schedules
hereto) and agrees to be legally bound
hereby.
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|
(j)
|
No
Conversion or Transfer of Debentures, Underlying Securities or Warrant
Shares in U.S.
The Subscriber on its own behalf and on behalf of any beneficial
purchaser
on whose behalf the Subscriber is acting hereunder acknowledges that
the
Debentures, Underlying Securities and Warrant Shares may not be offered,
sold or otherwise transferred to persons in the United States or
to U.S.
Persons and may not be exercised in the United States or by or on
behalf
of a U.S. Person and the Subscriber and such beneficial purchaser
understand that certificates representing the Debentures, Underlying
Securities and Warrant Shares issued to it will so
indicate.
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|
(k)
|
Ontario
and Alberta Subscribers.
If the Subscriber or any beneficial purchaser on whose behalf the
Subscriber is acting hereunder is a resident of Ontario or Alberta,
the
Subscriber or its disclosed principal is an “accredited investor” within
the meaning of National Instrument 45-106 - Prospectus and Registration
Exemptions and falls within one or more of the sub-paragraphs of
the
definition of “Accredited Investor” set out in Schedule “D” hereto and the
Subscriber or such beneficial purchaser has concurrently executed
and
delivered to the Corporation a certificate in the form attached as
Schedule “D” (the Subscriber having checked the applicable
subparagraph(s)).
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(l)
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Non-Canadian
/ Non-US Subscriber.
If the Subscriber, or any beneficial purchaser for whom it is acting,
is a
resident of a non-Canadian/non-US jurisdiction, the Subscriber and
its
disclosed principal, if applicable, is recognized by the securities
regulatory authority of such jurisdiction as an exempt subscriber,
the
subscription for the Debentures by the Subscriber, or such beneficial
purchaser, does not contravene any of the applicable securities
legislation in the jurisdiction in
|
C-2
| which the Subscriber or such beneficial purchaser resides and does not give rise to any obligation of the Corporation to prepare and file a prospectus or similar document or to register the Debentures or to be registered with or to file any report or notice with any governmental or regulatory authority, and the Subscriber or its disclosed principal has concurrently executed and delivered to the Corporation a certificate in the form attached as Schedule “E”. |
|
(m)
|
The
execution and delivery of this subscription agreement, the performance
and
compliance with the terms hereof, the subscription for the Debentures
and
the completion of the transactions described herein by the Subscriber
will
not result in any material breach of, or be in conflict with or constitute
a material default under, or create a state of facts which, after
notice
or lapse of time, or both, would constitute a material default under
any
term or provision of the constating documents, by-laws or resolutions
of
the Subscriber, the Applicable Securities Laws or any other laws
applicable to the Subscriber, any agreement to which the Subscriber
is a
party, or any judgment, decree, order, statute, rule or regulation
applicable to the Subscriber.
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(n)
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The
Subscriber is subscribing for the Debentures as principal for its
own
account and not for the benefit of any other person (within the meaning
of
Applicable Securities Laws) and not with a view to the resale or
distribution of all or any of the Debentures, Underlying Securities
or
Warrant Shares or if it is not subscribing as principal, it acknowledges
that the Corporation may be required by law to disclose to certain
regulatory authorities the identity of each beneficial purchaser
of the
Debentures for whom it is acting.
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(o)
|
In
the case of a subscription for the Debentures by the Subscriber acting
as
trustee or agent (including, for greater certainty, a portfolio manager
or
comparable adviser) for a principal, the Subscriber is duly authorized
to
execute and deliver this subscription agreement and all other necessary
documentation in connection with such subscription on behalf of each
such
beneficial purchaser, each of whom is subscribing as principal for
its own
account, not for the benefit of any other person and not with a view
to
the resale or distribution of the Debentures, Underlying Securities
or
Warrant Shares, and this subscription agreement has been duly authorized,
executed and delivered by or on behalf of and constitutes a legal,
valid
and binding agreement of, such principal, and the Subscriber acknowledges
that the Corporation may be required by law to disclose the identity
of
each beneficial purchaser for whom the Subscriber is
acting.
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(p)
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In
the case of a subscription for the Debentures by the Subscriber acting
as
principal, this subscription agreement has been duly authorized,
executed
and delivered by, and constitutes a legal, valid and binding agreement
of,
the Subscriber. This subscription agreement is enforceable in accordance
with its terms against the Subscriber and any beneficial purchasers
on
whose behalf the Subscriber is
acting.
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(q)
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There
is no person acting or purporting to act in connection with the
transactions contemplated herein who is entitled to any brokerage
or
finder’s fee. If any person establishes a claim that any such fee or other
compensation is payable in connection with this subscription for
the
Debentures, the Subscriber covenants to indemnify and hold harmless
the
Corporation with respect thereto and with respect to all costs reasonably
incurred in the defence thereof.
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(r)
|
The
Subscriber is not, with respect to the Corporation or any of its
affiliates, a control person (as defined in Applicable Securities
Laws).
|
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(s)
|
If
required by Applicable Securities Laws or the Corporation, the Subscriber
will execute, deliver and file or assist the Corporation in filing
such
reports, undertakings and other documents with respect to the issue
of the
Debentures, Underlying Securities or Warrant Shares as may be required
by
any securities commission, stock exchange or other regulatory
authority.
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(t)
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The
Subscriber acknowledges that no representation has been made respecting
the applicable hold periods imposed by the Applicable Securities
Laws or
other resale restrictions applicable to the Debentures, Underlying
Securities or Warrant Shares which restrict the ability of the Subscriber
|
C-3
| (or others for whom it is contracting hereunder) to resell such securities, that the Subscriber (or others for whom it is contracting hereunder) is solely responsible to find out what these restrictions are and the Subscriber is solely responsible (and the Corporation is not in any way responsible) for compliance with applicable resale restrictions and the Subscriber is aware that it (or beneficial purchasers for whom it is contracting hereunder) may not be able to resell such securities except in accordance with limited exemptions under the Applicable Securities Laws and other applicable laws. |
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(u)
|
No
person has made any written or oral
representations:
|
|
(i)
|
that
any person will resell or repurchase the Debentures, Underlying Securities
or the Warrant Shares;
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|
(ii)
|
that
any person will refund the purchase price of the Debentures;
or
|
|
(iii)
|
as
to the future price or value of the Debentures, Underlying Securities
or
the Warrant Shares.
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|
(v)
|
The
Subscriber, on its own behalf and, if applicable, on behalf of others
for
whom it is acting hereunder, acknowledges and agrees as
follows:
|
|
(i)
|
No
securities commission, agency, governmental authority, regulatory
body,
stock exchange or other regulatory body has reviewed or passed on
the
merits of the Debentures, Underlying Securities or the Warrant
Shares.
|
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(ii)
|
The
Subscriber’s ability to transfer the Debentures, Underlying Securities and
Warrant Shares is limited by, among other things, Applicable Securities
Laws.
|
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(iii)
|
The
certificates representing the Debentures will bear, as of the Closing
Date, legends substantially in the following form and with the necessary
information inserted:
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|
|
UNLESS
PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY
MUST
NOT TRADE THE SECURITY BEFORE <INSERT DATE THAT IS FOUR (4) MONTHS AND
ONE (1) DAY AFTER CLOSING
DATE>.”
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(iv)
|
In
the event that holders of Debentures convert such Debentures and/or
exercise the Warrants prior to the expiry of the hold periods applicable
to the Underlying Securities, the Underlying Securities and/or
Warrant
Shares, as applicable, will bear legends substantially in the following
form and with the necessary information
inserted:
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|
|
“UNLESS
PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY
MUST
NOT TRADE THE SECURITY BEFORE <INSERT DATE THAT IS FOUR (4) MONTHS AND
ONE (1) DAY AFTER CLOSING DATE>.
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|
(v)
|
In
addition, the Common Shares (and Warrant Shares, if applicable) will
also
bear a legend substantially in the following
form:
|
|
|
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO
STOCK
EXCHANGE (THE “TSX”); HOWEVER THE SAID SECURITIES CANNOT BE TRADED THROUGH
THE FACILITIES OF THE TSX SINCE THEY ARE NOT FREELY TRANSFERABLE,
AND
CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT
“GOOD
DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON THE
TSX.”
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C-4
|
(vi)
|
There
is no government or other insurance covering the Debentures, Underlying
Securities or the Warrant Shares.
|
|
(vii)
|
There
are risks associated with the purchase of the Debentures, Underlying
Securities and/or the Warrant
Shares.
|
|
2.
|
Reliance
Upon Representations, Warranties and Covenants.
The Subscriber acknowledges that the representations and warranties
contained herein are made by the Subscriber with the intention that
they
may be relied upon by the Corporation in determining the Subscriber’s
eligibility to purchase Debentures under Applicable Securities Laws.
The
Subscriber agrees that by accepting delivery of the Debentures on
the
Closing Date, the Subscriber will be representing and warranting
that the
foregoing representations and warranties are true and correct as
at the
Closing Time with the same force and effect as if they had been made
by
the Subscriber at the Closing Time and that they will survive the
purchase
by the Subscriber of Debentures and will continue in full force and
effect
notwithstanding any subsequent disposition by the Subscriber of such
Debentures.
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|
3.
|
Personal
Information.
The Subscriber and (if applicable) each disclosed principal understands
that the Corporation may be required to provide any one or more of
the
Canadian securities regulators, stock exchanges, or other
regulatory agencies or the Corporation’s transfer agent with the name,
residential address, telephone number and e-mail address of the Subscriber
and (if applicable) any disclosed principals as well as information
regarding the number, aggregate purchase price and type of Common
Shares
and Warrants purchased under this subscription agreement and the
identities of any beneficial purchasers of the Common Shares and
Warrants
(collectively, the "Information"),
and may make any other filings of the Information as the Corporation
or
the Corporation’s counsel deems appropriate. In addition, the Information
may be used by the Corporation for
the purposes of:
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(a)
|
completing
the purchase of the Units pursuant to this subscription
agreement;
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|
(b)
|
complying
with all corporate governance and continuous disclosure requirements
under
applicable securities laws; and
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|
(c)
|
contacting
the Subscriber in its capacity as an
investor.
|
The
Subscriber and (if applicable) any disclosed principals hereby consent to and
authorize the foregoing use and disclosure of such Information. Notwithstanding
that the Subscriber may be purchasing Units as agent on behalf of one or more
undisclosed principals, the Subscriber agrees to provide, on request, all
particulars as to the identity of such undisclosed principals as may be required
by the Corporation in order to comply with the foregoing.
Each
Subscriber of Units in Ontario authorizes the indirect collection of Information
by the Ontario Securities Commission and confirms that it has been notified
by
the Corporation: (i) that the Corporation will be delivering the Information
to
the Ontario Securities Commission; (ii) that such Information is being collected
indirectly by the Ontario Securities Commission under the authority granted
to
it in Applicable Securities Laws; (iii) that such Information is being collected
for the purpose of the administration and enforcement of Applicable Securities
Laws; and (iv) that the title, business address and business telephone number
of
the public official in the Province of Ontario, who can answer questions about
the Ontario Securities Commission’s indirect collection of the Information as
follows:
Administrative
Assistant to the Director of Corporate Finance
Ontario
Securities Commission
18th
Floor, 00 Xxxxx Xxxxxx Xxxx
Xxxxxxx,
Xxxxxxx X0X 0X0
Telephone:
(000) 000-0000
C-5
SCHEDULE
“D”
This
is Schedule “D” to the subscription agreement relating to the purchase of Series
(J) Debentures of ADB Systems International Ltd. (the “Corporation”).
Capitalized terms used but not defined in this Schedule are intended to have
the
meanings ascribed thereto, as applicable, on the first page of this subscription
agreement and section 1 and 2 of Schedule “A” to this Subscription Agreement.
ACCREDITED
INVESTOR CERTIFICATE
In
connection with the purchase of Units, the undersigned hereby represents,
warrants and certifies to the Corporation that the undersigned (and each
disclosed principal, if applicable) is an “accredited investor” as defined in
Section 1.1 of National Instrument 45-106 - Prospectus
and Registration Exemptions
and is purchasing the Units as principal.
The
undersigned has indicated below the categories that the undersigned (or the
disclosed principal) satisfies to qualify as an “accredited
investor”.
The
undersigned understands that the Corporation and its counsel are relying on
the
information contained in this certificate in order to determine whether the
Corporation may sell Units to the undersigned in a manner exempt from the
prospectus and registration requirements of Applicable Securities
Laws.
ACCREDITED
INVESTOR STATUS
The
undersigned represents, warrants and certifies that it, he or she (or the
disclosed principal) is: [initial
each applicable item]:
|
_____
|
(a)
|
a
Canadian financial institution, or a Schedule III bank;
|
|
_____
|
(b)
|
the
Business Development Bank of Canada incorporated under the Business
Development Bank of Canada Act (Canada);
|
|
_____
|
(c)
|
a
subsidiary of any person referred to in paragraphs (a) to (b), if the
person owns all of the voting securities of the subsidiary, except
the
voting securities required by law to be owned by directors of that
subsidiary;
|
|
_____
|
(d)
|
a
person registered under the securities legislation of a jurisdiction
of
Canada as an adviser or dealer, other than a person registered solely
as a
limited market dealer under one or both of the Securities
Act
(Ontario) or the Securities
Act
(Newfoundland and Labrador);
|
|
_____
|
(e)
|
an
individual registered or formerly registered under the securities
legislation of a jurisdiction of Canada, as a representative of a
person
referred to in paragraph (d);
|
|
_____
|
(f)
|
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;
|
|
_____
|
(g)
|
a
municipality, public board or commission in Canada and a metropolitan
community, school board, the Comité de gestion de la taxe scolaire de
l'île de Montréal or an intermunicipal management board in
Québec;
|
|
_____
|
(h)
|
any
national, federal, state, provincial, territorial or municipal government
of or in any foreign jurisdiction, or any agency of that
government;
|
D-1
|
_____
|
(i)
|
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;
|
|
_____
|
(j)
|
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;
|
|
_____
|
(k)
|
an
individual whose net income before taxes exceeded $200,000 in each
of the
two most recent calendar years or whose net income before taxes combined
with that of a spouse exceeded $300,000 in each of the two most recent
calendar years and who, in either case, reasonably expects to exceed
that
net income level in the current calendar year;
|
|
_____
|
(l)
|
an
individual who, either alone or with a spouse, has net assets of
at least
$5,000,000;
|
|
_____
|
(m)
|
a
person, other than an individual or investment fund, that has net
assets
of at least $5,000,000 as shown on its most recently prepared financial
statements;
|
|
_____
|
(n)
|
an
investment fund that distributes or has distributed its securities
only
to
(i) a person that is or was an accredited investor at the time of the distribution, (ii) a
person that acquires or acquired securities in the circumstances
referred
to under sections 2.10 [Minimum
Amount Investment]
and 2.19 [Additional
Investment in Investment Funds]
of National Instrument 45-106, or
(iii) a
person described in paragraph (i) or (ii) that acquires or acquired
securities under section 2.18 [Investment
Fund Reinvestment] of
National Instrument 45-106;
|
|
_____
|
(o)
|
an
investment fund that distributes or has distributed securities under
a
prospectus in a jurisdiction of Canada for which the regulator or,
in
Québec, the securities regulatory authority, 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, acting on behalf of a fully managed account
managed
by the trust company or trust corporation, as the case may
be;
|
|
_____
|
(q)
|
a
person acting on behalf of a fully managed account managed by that
person,
if that person
(i) is registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction, and (ii) in Ontario, is purchasing a security that is not a security of an investment fund; |
|
_____
|
(r)
|
a
registered charity under the Income
Tax Act
(Canada) that, in regard to the trade, has obtained advice from an
eligibility adviser or an adviser registered under the securities
legislation of the jurisdiction of the registered charity to give
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 (d) or paragraph (i)
in form and function;
|
D-2
|
_____
|
(t)
|
a
person in respect of which all of the owners of interests, direct,
indirect or beneficial, except the voting securities required by
law to be
owned by directors, are persons that are accredited
investors;
|
|
_____
|
(u)
|
an
investment fund that is advised by a person registered as an adviser
or a
person that is exempt from registration as an adviser; or
|
|
_____
|
(v)
|
a
person that is recognized or designated by the securities regulatory
authority or, except in Ontario and Québec, the regulator as
i. an accredited investor, or ii. an exempt purchaser in Alberta or British Columbia after National Instrument 45-106 comes into force. |
For
the purposes hereof, the following terms shall have the following
meanings:
"Affiliate"
- a person is an affiliate of another person if:
|
(d)
|
one
of them is the subsidiary of the other, or
|
|
(e)
|
each
of them is controlled by the same person.
|
"Canadian
financial institution"
means:
|
(f)
|
an
association governed by the Cooperative
Credit Associations Act (Canada)
or a central cooperative credit society for which an order has been
made
under section 473(1) of that Act; or
|
|
(g)
|
a
bank named in Schedule I or II of the Bank
Act (Canada),
loan corporation, trust company, trust corporation, insurance company,
treasury branch, credit union, caisse populaire, financial services
cooperative, or league that, in each case, is authorized by an enactment
of Canada or a jurisdiction of Canada to carry on business in Canada
or a
jurisdiction in Canada.
|
"control
person"
means any person that holds or is one of a combination of persons that
holds:
|
(h)
|
a
sufficient number of any of the securities of an issuer so as to
affect
materially the control of the issuer, or
|
|
(i)
|
more
than 20% of the outstanding voting securities of an issuer except
where
there is evidence showing that the holding of those securities does
not
affect materially the control of the issuer.
|
"director"
means:
|
(j)
|
a
member of the board of directors of a company or an individual who
performs similar functions for a company, and
|
|
(k)
|
with
respect to a person that is not a company, an individual who performs
functions similar to those of a director of a company.
|
"eligibility
adviser"
means:
|
(l)
|
a
person that is registered as an investment dealer or in an equivalent
category of registration under the securities legislation of the
jurisdiction of a purchaser and authorized to give advice with respect
to
the type of security being distributed; and
|
D-3
|
(m)
|
in
Saskatchewan or Manitoba, also means a lawyer who is a practising
member
in good standing with a law society of a jurisdiction of Canada or
a
public accountant who is a member in good standing of an institute
or
association of chartered accountants, certified general accountants
or
certified management accountants in a jurisdiction of Canada provided
that
the lawyer or public accountant must not:
|
|
(i)
|
have
a professional, business or personal relationship with the issuer,
or any
of its directors, executive officers, founders of control persons;
and
|
|
(ii)
|
have
acted for or been retained personally or otherwise as an employee,
executive officer, director, associate or partner of a person that
has
acted for or been retained by the issuer or any of its directors,
executive officers, founders or control persons within the previous
12
months.
|
"executive
officer"
means, for an issuer, an individual who is:
|
(n)
|
a
chair, vice-chair or president,
|
|
(o)
|
a
vice-president in charge of a principal business unit, division,
or
function including sales, finance or production,
|
|
(p)
|
an
officer of the issuer or any of its subsidiaries and who performs
a
policy-making function in respect of the issuer,
or
|
|
(q)
|
performing
a policy-making function in respect of the issuer.
|
"financial
assets"
means:
|
(r)
|
cash;
|
|
(s)
|
securities;
or
|
|
(t)
|
a
contract of insurance, a deposit or an evidence of a deposit that
is not a
security for the purposes of securities
legislation;
|
"founder"
means, in respect of an issuer, a person who:
|
(u)
|
acting
alone, in conjunction, or in concert with one or more persons, directly
or
indirectly, takes the initiative in founding, organizing or substantially
reorganizing the business of the issuer, and
|
|
(v)
|
at
the time of the trade is actively involved in the business of the
Issuer.
|
"fully
managed account"
means an account for which a person makes the investment decisions if that
person has full discretion to trade in securities for the account without
requiring the client's express consent to a transaction.
"investment
fund"
means a mutual fund or a non-redeemable investment fund;
"mutual
fund
"
means an issuer whose primary purpose is the invest money provided by its
securityholders 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 part of the net assets,
including a separate fund or trust account, of the issuer;
"non-redeemable
investment fund"
means an issuer:
|
(w)
|
whose
primary purpose is to invest money provided by its security
holders;
|
D-4
|
(x)
|
that
does not invest:
|
|
(i)
|
for
the purpose of exercising or seeking to exercise control of an issuer,
other than an issuer that is a mutual fund or a non-redeemable investment
fund, or
|
|
(ii)
|
for
the purpose of being actively involved in the management of any issuer
in
which it invests, other than an issuer that is a mutual fund or a
non-redeemable investment fund, and
|
|
(y)
|
that
is not a mutual fund.
|
"person"
includes:
|
(z)
|
an
individual;
|
|
(aa)
|
a
corporation;
|
|
(bb)
|
a
partnership, trust, fund and an association, syndicate, organization
or
other organized group of person, whether incorporated or not; and
|
|
(cc)
|
an
individual or other person in that person's capacity as a trustee,
executor, administrator, or personal or other legal representative.
|
"related
liabilities"
means:
|
(dd)
|
liabilities
incurred or assumed for the purpose of financing the acquisition
or
ownership of financial assets, or
|
|
(ee)
|
liabilities
that are secured by financial
assets.
|
"spouse"
means an individual who:
|
(ff)
|
is
married to another individual and is not living separate and apart
within
the meaning of the Divorce
Act
(Canada), from the other
individual;
|
|
(gg)
|
is
living with another individual in a marriage-like relationship, including
a marriage-like relationship between individuals of the same gender;
or
|
|
(hh)
|
in
Alberta, is an individual referred to in paragraph (a) or (b), or
is in an
adult interdependent partner within the meaning of the Adult
Interdependent Relationships Act
(Alberta).
|
"subsidiary"
means an issuer that is controlled directly or indirectly by another issuer
an
includes a subsidiary of that subsidiary.
For
purposes of the definitions of “affiliates” and “subsidiary” a person (first
person) is considered to control another person (second person) if:
|
(ii)
|
the
first person, directly or indirectly, beneficially owns or exercises
control or direction over securities of the second person carrying
votes
which, if exercised, would entitle the first person to elect a majority
of
the directors of the second person, unless that first person holds
the
voting securities only the secure an
obligation;
|
|
(jj)
|
the
second person is a partnership, other than a limited partnership,
and the
first person holds more than 50% of the interests of the partnership;
or
|
D-5
|
(kk)
|
the
second person is a limited partnership and the general partner of
the
limited partnership is the first
person.
|
EXECUTED
by the Subscriber at
this
day of
,
2006.
|
If
a corporation, partnership or other entity:
|
If
an individual:
|
|
|
__________________________________________
|
______________________________________________
|
|
|
(Print
Name of Subscriber)
|
(Print
Name)
|
|
|
__________________________________________
|
______________________________________________
|
|
|
(Signature
of Authorized Signatory)
|
(Signature)
|
|
|
__________________________________________
|
______________________________________________
|
|
|
(Name
and Position of Authorized Signatory)
|
(Jurisdiction
of Residence)
|
|
|
__________________________________________
|
______________________________________________
|
|
|
(Jurisdiction
of Residence)
|
(Print
Name of Witness)
|
|
|
__________________________________________
|
______________________________________________
|
|
|
(Signature
of Witness)
|
||
D-6
SCHEDULE
“E”
This
is Schedule “E” to the subscription agreement relating to the purchase of Series
(J) Debentures of ADB Systems International Ltd. (the “Corporation”).
Capitalized terms used but not defined in this Schedule are intended to have
the
meanings ascribed thereto, as applicable, on the first page of this subscription
agreement and section 1 and 2 of Schedule “A” to this Subscription
Agreement
OFFSHORE
SUBSCRIBER CERTIFICATE
NON-CANADIAN
SUBSCRIBERS
(OTHER
THAN U.S SUBSCRIBERS)
We,
on our own behalf and (if applicable) on behalf of others for whom we are
contracting hereunder, represent, warrant, covenant and certify to and with
the
Corporation (and acknowledge that the Corporation is relying thereon) that
we
are, and (if applicable) any beneficial subscriber for whom we are contracting
hereunder is, a resident of, or otherwise subject to, the securities legislation
of a jurisdiction other
than Canada or the United States,
and:
|
(a)
|
we,
and (if applicable) any other subscriber for whom we are contracting
hereunder, are:
|
|
(i)
|
a
subscriber that is recognized by the securities regulatory authority
in
the jurisdiction in which we are resident, or otherwise subject to
the
securities laws of such jurisdiction, as an exempt subscriber and
are
purchasing the Units as principal for our, or (if applicable) each
such
other subscriber’s, own account, and not for the benefit of any other
person, for investment only and not with a view to resale or distribution;
or
|
|
(ii)
|
a
subscriber which is purchasing Units pursuant to an exemption from
any
prospectus or securities registration requirements (particulars of
which
are enclosed herewith) available to us and the Corporation, and any
such
other subscriber, under applicable securities laws of our jurisdiction
of
residence or to which we and any such other subscriber are otherwise
subject to, and we and any such other subscriber shall deliver to
the
Corporation such further particulars of the exemption and our
qualification thereunder as the Corporation may reasonably
request;
|
|
(b)
|
the
purchase of Units by us, and (if applicable) each such other subscriber,
does not contravene any of the applicable securities laws in such
jurisdiction and does not trigger: (i) any obligation to prepare
and file
a prospectus, an offering memorandum or similar document, or any
other
ongoing reporting requirements with respect to such purchase or otherwise;
or (ii) any registration or other obligation on the part of the
Corporation; and
|
|
(c)
|
we,
and (if applicable) any other subscriber for whom we are contracting
hereunder will not sell or otherwise dispose of any Units, Common
Shares
or Warrants, except in accordance with applicable Canadian securities
laws
and in accordance with the rules and regulations of the TSX, and
if we, or
(if applicable) such beneficial subscriber, sell or otherwise dispose
of
any Units, Common Shares or Warrants to a person other than a resident
of
Canada or the United States , we, and (if applicable) such beneficial
subscriber, will obtain from such subscriber representations, warranties
and covenants in the same form as provided in this Schedule “E” and shall
comply with such other requirements as the Corporation may reasonably
require.
|
Dated
at
this
day of
,
2006.
|
_____________________________________________
|
||
|
(Signature
of Subscriber)
|
||
|
_____________________________________________
|
||
|
(Print
Name)
|
||
E-1
