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EXHIBIT 10.19
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AGENCY AGREEMENT -- SPECIAL WARRANT PRIVATE PLACEMENT
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THIS AGREEMENT dated for reference June 18, 1999, is made
BETWEEN
INFOWAVE SOFTWARE, INC., Xxxxx 000, 0000 Xxxxxxxx Xxxxxxx, Xxxxxxx,
Xxxxxxx Xxxxxxxx, X0X 0X0
(the "Issuer");
AND
CANACCORD CAPITAL CORPORATION, Suite 2200, 000 Xxxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
AND
YORKTON SECURITIES INC., Suite 3100, 000 Xxx Xxxxxx, Xxxxxxx,
Xxxxxxx, X0X 0X0
AND
SPROTT SECURITIES LIMITED, Xxxxx 0000, Xxxxx Xxxx Xxxxx, Xxxxx
Xxxxx, Xxxxxxx, Xxxxxxx, X0X 0X0;
AND
TAURUS CAPITAL MARKETS LTD., Suite 3000, Scotia Plaza, 00 Xxxx
Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx, X0X 0X0
(individually, an "Agent" and collectively, the "Agents").
WHEREAS:
A. The Issuer wishes to privately place with purchasers up to 2,750,000
Special Warrants at a price of $3.25per Special Warrant;
B. The Issuer wishes to appoint the Agents to distribute the Special
Warrants, and the Agents are willing to accept such appointment on the terms and
conditions of this Agreement;
THE PARTIES to this Agreement therefore agree:
1. DEFINITIONS
1.1 In this Agreement and the Recitals hereto:
(a) "1933 Act" means the Securities Act of 1933 (United States), as
amended;
(b) "1934 Act" means the Securities and Exchange Act of 1934 (United
States),as amended;
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(c) "Acts" means the Securities Acts or comparable legislation of the
Selling Provinces;
(d) "Agents' Special Warrants" means special warrants of the Issuer
having the terms provided in this Agreement and in the certificates
representing such special warrants;
(e) "Agents' Warrants" means share purchase warrants of the Issuer
having the terms provided in this Agreement and the certificates
representing such share purchase warrants;
(f) "Agents' Warrant Shares" means previously unissued common shares in
the capital of the Issuer, as presently constituted, which will be
issued upon the exercise of the Agents' Warrants;
(g) "Applicable Legislation" means the Acts, the regulations and rules
made thereunder and all administrative policy statements, blanket
orders and rulings, notices, and other administrative directions
issued by the Commissions;
(h) "Clearing Date" means that day which falls 90 days from the date of
the first Closing;
(i) "Closing" means the completion of the sale of some or all of the
Special Warrants;
(j) "Commissions" means the securities regulatory authorities in the
Selling Provinces;
(k) "Directed Selling Efforts" means directed selling efforts as that
term is defined in Regulation S. Without limiting the foregoing, but
for greater clarity, it means, subject to the exclusions from the
definition of directed selling efforts contained in Regulation S,
any activity undertaken for the purpose of, or that could reasonably
be expected to have the effect of, conditioning the market in the
United States for any of the Securities, and includes the placement
of any advertisement in a publication with a general circulation in
the United States that refers to the offering of the Securities;
(l) "Disclosure Record" means all press releases, Material Change
reports, prospectuses, financial statements and other documents
which the Issuer is required to file with the securities regulatory
authorities in those jurisdictions where it is a "reporting issuer"
under the Acts or has equivalent status as at the date hereof;
(m) "Distribution" means the proposed issuance of Shares and Warrants to
the holders of the Special Warrants on the deemed exercise of the
Special Warrants, free of any resale restrictions in the Filing
Provinces other than those imposed on a "control person", as that
term is defined in Applicable Legislation;
(n) "Escrowed Funds" has the meaning defined in Section 9.3;
(o) "Exchange" means the Vancouver Stock Exchange;
(p) "Exemptions" means exemptions from the prospectus requirements of
Acts;
(q) "Filing Deadline" means the day the rules and policies of the
Exchange require that the subscription forms and other documentation
in connection with the Private Placement must be filed with the
Exchange, or any extension thereof;
(r) "Filing Provinces" means those of the Selling Provinces where the
Special Warrants are actually sold, provided that if, after the
final Closing, a Selling Province (other than British Columbia)
shall cease to be a Filing Province if, pursuant to a transfer of
Special Warrants by holders thereof, holders of Special Warrants no
longer reside in such province;
(s) "Foreign Issuer" means a foreign issuer as that term is defined in
Regulation S. Without limiting the foregoing, but for greater
clarity, it means any issuer which is:
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(i) the government of any foreign country or of any political
subdivision of a foreign country; or
(ii) a corporation or other organization incorporated under the
laws of any foreign country, except an issuer meeting the
following conditions:
(A) more than 50 percent of the outstanding voting
securities of such issuer are held of record either
directly or through voting trust certificates or
depository receipts by residents of the United States;
and
(B) any of the following:
(I) the majority of the executive
officers or directors are United
States citizens or residents;
(II) more than 50 percent of the assets of
the Issuer are located in the United
States, or
(III) the business of the Issuer is
administered principally in the United
States;
(t) "Institutional Accredited Investor" means an institutional
"accredited investor" as defined in Rule 501(a)(1), (2), (3) and (7)
of Regulation D;
(u) "Material Change" has the meaning defined in the Acts, as
supplemented by National Policy No. 40;
(v) "Material Fact" has the meaning defined in the Acts;
(w) "Misrepresentation" has the meaning defined in the Acts;
(x) "Offering Memorandum" has the meaning defined in Applicable
Legislation;
(y) "Private Placement" means the offering of the Special Warrants on
the terms and conditions of this Agreement;
(z) "Prospectus" means a preliminary and (final) prospectus, including
any amendments made thereto, which upon issuance of a receipt
therefore by the Commissions in the Filing Provinces, will qualify
the Distribution;
(aa) "Purchasers" means the purchasers of Special Warrants pursuant to
the Private Placement;
(ab) "Qualification Date" means the date on which a receipt for the
(final) Prospectus has been issued by the last of the Commissions to
do so ;
(ac) "Regulation D" means Regulation D adopted by the SEC under the 1933
Act;
(ad) "Regulation S" means Regulation S adopted by the SEC under the 1933
Act;
(ae) "Regulatory Authorities" means the Commissions and the Exchange;
(af) "SEC" means the United States Securities and Exchange Commission;
(ag) "Securities" means the Special Warrants, the Shares, the Warrants,
the Warrant Shares, ;
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(ah) "Selling Provinces" means British Columbia, Alberta, Ontario and
such other Canadian provinces as the Agents and the Company may
agree;
(ai) "Shares" means previously unissued common shares in the capital of
the Issuer, as presently constituted, which will be issued upon the
exercise or deemed exercise of the Special Warrants;
(aj) "Special Warrants" means special warrants of the Issuer having the
terms provided in the Special Warrant Indenture;
(ak) "Special Warrant Indenture" means an indenture to be made between
the Trustee and the Issuer providing for the issuance of Special
Warrants;
(al) "Substantial U.S. Market Interest" means substantial U.S. market
interest as that term is defined in Regulation S;
(am) "Trustee" means Montreal Trust Company of Canada;
(an) "United States" means the United States of America, its territories
and possessions, any state of the United States, and the District of
Columbia;
(ao) "Units" means units comprised of one Share and one half of one
Warrant;
(ap) "U.S. Person" means a U.S. person as that term is defined in
Regulation S;
(aq) "Warrant Shares" means previously unissued common shares in the
capital of the Issuer, as presently constituted, which will be
issued upon exercise of the Warrants; and
(ar) "Warrants" means share purchase warrants of the Issuer having the
terms provided in the certificates representing such warrants.
2. APPOINTMENT OF AGENTS
2.1 The Issuer appoints the Agents as its exclusive agents and the Agents
accept the appointment and agree to act as the exclusive agents of the Issuer to
use their commercially reasonable efforts to find and introduce to the Issuer
potential purchasers to purchase up to 2,750,000 Special Warrants, at a price of
$3.25 per Special Warrant, by way of private placement under the Exemptions.
2.2 The Special Warrants will be offered for sale to potential purchasers
residing in the Selling Provinces.
2.3 The rights and obligations of the Agents under this Agreement, including
but not limited to the right and obligation to offer the Special Warrants and
the entitlement to the Agents' Fee and Agents' Special Warrants, will be several
(as distinguished from joint) rights and obligations for each Agent.
2.4 Except as otherwise specifically provided in this Agreement, the rights
and obligations of the Agents will be divided in the proportions in which the
Agents participate in the Private Placement.
2.5 The Agents will participate in the Private Placement as follows:
Canaccord Capital Corporation 35%
("Canaccord")
Sprott Securities Limited 25%
Taurus Capital Markets Ltd. 5%
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Yorkton Securities Inc. 35%
2.6 This Agreement will be construed in relation to each Agent as if separate
agreements had been made between the Issuer and each Agent.
3. SPECIAL WARRANTS, WARRANTS, AGENTS' SPECIAL WARRANTS AND AGENTS' WARRANTS
SPECIAL WARRANTS
3.1 The Special Warrants will be issued and registered in the names of the
Purchasers or their nominees.
3.2 The Special Warrant Indenture will be satisfactory in form and substance
to the Agents.
3.3 The Issuer covenants with the Agents, and the Special Warrant Indenture
will provide (among other things):
(a) that each Special Warrant will entitle the holder to acquire one
Unit, without payment of further consideration, on the exercise or
deemed exercise of the Special Warrant;
(b) that each Special Warrant may be exercised by the holder in whole or
in part at any time after the Closing on which the Special Warrant
was issued. Any unexercised Special Warrants will be deemed to be
exercised on that day which falls on the earlier of;
(i) 330 days from the Closing on which such Special Warrants were
issued;
(ii) the fifth business day after the Qualification Date; and
(iii) the date on which all of the Special Warrants have been
exercised;
(c) that the Issuer will use its reasonable efforts to file and obtain
receipts for the preliminary and (final) Prospectus from the
Commissions on or before the Clearing Date;
(d) that if the Issuer has not obtained receipts for the (final)
Prospectus from each of the Commissions on or before the Clearing
Date, then:
(i) holders of Special Warrants will thenceforth receive upon
exercise or deemed exercise of Special Warrants, without
payment of further consideration, 1.1 Units; and
(ii) the Issuer will nevertheless continue to use its best efforts
to obtain a receipt for the (final) Prospectus from each of
the Commissions prior to that day which falls 330 days from
the date of the final Closing;
(e) that upon exercise or deemed exercise, the Special Warrants will be
automatically cancelled and will have no further force or effect.
(f) that the Special Warrants will be transferable, subject to
Applicable Legislation and the rules and policies of the Exchange;
(g) for the appropriate adjustment in the class and number of the
securities to be issued upon exercise of the Special Warrants upon
the occurrence of certain events, including any subdivision,
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consolidation or reclassification of the common shares of the
Issuer, the payment of stock dividends and the amalgamation of the
Issuer;
(h) that the Issuer will use its best efforts to remain a "reporting
issuer" in the Selling Provinces, not in default of Applicable
Legislation therein, for one year from the date of the final
Closing; and
(i) that the Trustee will hold the Escrowed Funds in escrow, and release
the Escrowed Funds to the Issuer upon that day which falls on the
earlier of
(i) issue of a receipt for the (final) Prospectus by the last of
the Commissions; and
(ii) 330 days from the final Closing.
3.4 The issuance of the Special Warrants will not restrict or prevent the
Issuer from obtaining any other financing, or from issuing additional securities
or rights prior to the deemed exercise of the Special Warrants.
WARRANTS
3.5 The Warrants will be registered in the names of the Purchasers or their
nominees.
3.6 The certificates representing the Warrants will be satisfactory in form
and substance to the Agents.
3.7 The Issuer covenants with the Agents, and the certificates representing the
Warrants will provide (among other things):
(a) that each whole Warrant will entitle the holder, on exercise, to
acquire one Warrant Share, at a price of $3.75 per Warrant Share;
(b) that each Warrant may be exercised by the holder in whole or in part
for one year after the first Closing;
(c) that the Warrants will not be transferable; and
(d) for the appropriate adjustment in the class and number of the
securities to be issued upon exercise of the Warrants upon the
occurrence of certain events, including any subdivision,
consolidation or reclassification of the common shares of the
Issuer, the payment of stock dividends and the amalgamation of the
Issuer.
3.8 The issuance of the Warrants will not restrict or prevent the Issuer from
obtaining any other financing, or from issuing additional securities or rights
prior to the expiry of the Warrants.
AGENTS' SPECIAL WARRANTS
3.9 The Agents' Special Warrants will be represented by certificates, and will
be registered in the names of the Agents or members of their selling group.
3.10 The certificates representing the Agents' Special Warrants will be
satisfactory in form and substance to the Agents, and will provide, among other
things,:
(a) that each Agent's Special Warrant will be exercisable, for no
additional consideration, to acquire one Agents' Warrant;
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(b) that the Agents' Special Warrants may be exercised by the holders
thereof in whole or in part at any time after the Closing on which
they are issued. Any unexercised Agents' Special Warrants will be
deemed to be exercised on the fifth business day after the
Qualification Date;
(c) that upon exercise or deemed exercise, the Agents' Special Warrants
will be automatically cancelled and will have no further force or
effect;
(d) that the Agents' Special Warrants will not be transferable, except
as provided any order issued by either of the Commissions; and
(e) for the appropriate adjustment in the class and number of the
securities to be issued upon exercise of the Agents' Special
Warrants upon the occurrence of certain events, including any
subdivision, consolidation or reclassification of the common shares
of the Issuer, the payment of stock dividends and the amalgamation
of the Issuer.
AGENT'S WARRANTS
3.11 The Agents' Warrants will be represented by certificates, and will be
issued and registered in the name of the Agents or members of their selling
group.
3.12 The certificates representing the Agents' Warrants will be satisfactory in
form and substance to the Agents, and will provide, among other things:
(a) that the right to purchase a Warrant Share upon exercise of an
Agents' Warrant may be exercised at any time until the close of
business on that day which falls 12 months from the Closing on which
the Agents' Special Warrant pursuant to which the Agents' Warrant
was acquired was issued;
(b) that one Agents' Warrant will entitle the holder, on exercise, to
purchase one Agents' Warrant Share at a price of $3.25 per Agents'
Warrant Share;
(c) that upon exercise or expiry, the Agents' Warrants will be
automatically cancelled and will have no further force and effect;
(d) that the Agents' Warrants will not be transferable, except in
accordance with any order which may be issued by any of the
Commissions; and
(e) for the appropriate adjustment in the class, number and price of the
Agents' Warrant Shares to be issued upon exercise of the Agents'
Warrants upon the occurrence of certain events, including any
subdivision, consolidation or reclassification of the Issuer's
common shares, the payment of stock dividends and the amalgamation
of the Issuer.
4. AGENTS' FEE AND AGENTS' SPECIAL WARRANTS
4.1 In consideration of the services performed by the Agents under this
Agreement, the Issuer agrees, on each Closing, to:
(a) pay to the Agents a commission equal to 7.5% of the gross proceeds
received by the Issuer from the sale of the Special Warrants on such
Closing (the "Agents' Fee"); and
(b) issue to the Agents a number of Agents' Special Warrants equal to
10% of the number of Special Warrants sold on such Closing.
4.2 The Issuer will not place a U.S. securities law restrictive legend on the
certificates representing the Agents' Special Warrants, the Agents' Warrants or
the Agents' Warrant Shares.
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4.3 In consideration of Canaccord's services with the co-ordination and review
of the Private Placement and its review of the subsequent qualification of the
Distribution by the Prospectus, the Issuer will pay to Canaccord on the earlier
of the first Closing or the termination of this Agreement, a fee of $5,000, plus
G.S.T. (the "Administration Fee").
5. OFFERING RESTRICTIONS
5.1 The sale of the Special Warrants to the Purchasers will be effected only
pursuant to Exemptions which do not require the delivery or filing of an
Offering Memorandum.
5.2 Each of the Agents acknowledges that the Securities have not been and will
not be registered under the 1933 Act and may not be offered or sold except in
accordance with Regulation S or, for offers and sales within the United States,
pursuant to an exemption from the registration requirements of the 1933 Act.
Accordingly, each of the Agents represents, warrants and covenants to the Issuer
that:
(a) it has offered and sold, and will offer and sell, Securities only in
accordance with Rule 903 of Regulation S or as provided in
subsections (b) through (f) below. Accordingly, neither the Agents,
their affiliates nor any persons acting on their behalf, has made or
will make (except as permitted in subsections (b) through (f)
below):
(i) any offer to sell, or any solicitation of an offer to buy, any
Securities to any person in the United States,
(ii) any sale of Securities to any purchaser unless, at the time
the buy order was or will have been originated, the purchaser
was outside the United States, or the Agent, its affiliate or
person acting on behalf of either reasonably believed that
such purchaser was outside the United States, or
(iii) any Directed Selling Efforts in the United States with respect
to the Securities.
Terms used in this paragraph have the meanings given to them
by Regulation S;
(b) the Agent, acting through a U.S. broker-dealer, may only offer the
Securities in the United States to Institutional Accredited
Investors with which such Agent has a pre-existing relationship;
(c) immediately prior to soliciting such offerees, the Agent had
reasonable grounds to believe and did believe that each offeree was
an Institutional Accredited Investor;
(d) no form of general solicitation or general advertising (as those
terms are used in Regulation D) has been or will be used, including
advertisements, articles, notices or other communications published
in any newspaper, magazine, or similar media or broadcast over radio
or television, or any seminar or meeting whose attendees had been
invited by general solicitation or general advertising, in
connection with the offer or sale of the Securities in the United
States;
(e) any offer, sale or solicitation of an offer to buy Securities that
has been made or will be made in the United States was or will be
made only to Institutional Accredited Investors that are exempt or
in transactions that are exempt from registration under applicable
state securities laws; and
(f) it will not solicit offers for, offer to sell, or sell, the
Securities in any state or other jurisdiction where it is not
registered as a broker-dealer or otherwise exempt from such
registration.
(g) the subscription forms to be executed by Purchasers in the United
States will contain the representations and warranties of such
Purchasers set forth in Schedule "B" hereto; and
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(h) at each Closing, each Agent with a U.S. broker-dealer affiliate
which sells Special Warrants in the United States will provide a
certificate, substantially in the form of Exhibit I attached hereto,
relating to the manner of the offer and sale of the Securities in
the United States.
5.3 The Issuer represents, warrants, covenants and agrees with the Agents
that:
(a) the Issuer is a Foreign Issuer with no Substantial U.S. Market
Interest in the Securities;
(b) except with respect to offers and sales to Institutional Accredited
Investors who are in the United States in reliance upon an exemption
from registration under Section 4(2) of the 1933 Act, neither the
Issuer nor any of its affiliates, nor any person acting on their
behalf, has made or will make:
(i) any offer to sell, or any solicitation of an offer to buy, any
Securities to a person in the United States; or
(ii) any sale of Securities unless, at the time the buy order was
or will have been originated, the purchaser is:
(A) outside the United States; or
(B) the Issuer, its affiliates, and any person acting on
their behalf reasonably believe that the purchaser is
outside the United States;
(c) during the period in which the Securities are offered for sale,
neither it nor any of its affiliates, nor any person acting on their
behalf has made or will make any Directed Selling Efforts in the
United States, or has taken or will take any action that would cause
the exemption afforded by Section 4(2) of the U.S. Securities Act or
Regulation S to be unavailable for offers and sales of the
Securities, pursuant to this Agreement;
(d) none of the Issuer, its affiliates or any person acting on its or
their behalf have engaged or will engage in any form of general
solicitation or general advertising (as those terms are used in
Regulation D) with respect to offers or sales of the Securities in
the United States, including advertisements, articles, notices or
other communications published in any newspaper, magazine or similar
media, or broadcast over radio, or television, or any seminar or
meeting whose attendees have been invited by general solicitation or
general advertising.
5.4 The Agents will only sell the Special Warrants to persons who represent
themselves as being persons:
(a) purchasing as principal or persons who are deemed by law or
discretionary order to be purchasing as principal; and
(b) qualified to purchase the Special Warrants under the Exemptions.
5.5 The Private Placement has not been and will not be advertised in any way.
5.6 No selling or promotional expenses will be paid or incurred in connection
with the Private Placement, except for professional services or for services
performed by a registered dealer.
6. SUBSCRIPTIONS
The Agents shall consult with the Issuer with respect to the acceptability to
the Issuer of prospective Purchasers and shall advise the Issuer within a
reasonable period of time prior to each Closing as to the proposed final list of
Purchasers. The Issuer shall, in its sole and absolute discretion, be entitled
to accept or reject any proposed Purchasers. The Agents will use their best
efforts to obtain from each Purchaser introduced by the Agents, and deliver to
the Issuer, on or before the Filing Deadline duly completed and signed
subscriptions in the form attached
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xx Xxxxxxxx "X" (Xxxxxxx Xxxxxxxx, Xxxxxxx and Ontario Residents), Schedule "B"
(United States Residents) or in such other form consented to by the Issuer and
the Agents and executed by the Purchaser.
7. FILINGS WITH THE REGULATORY AUTHORITIES
7.1 The Issuer will forthwith give to the Exchange written notice of the terms
of this Agreement and the proposed Private Placement and all other information
required by the rules and policies of the Exchange (the "Notice").
7.2 The Issuer will forthwith provide the Agents and their solicitors with a
copy of the Notice, and, forthwith on receipt, a copy of the preliminary and
final letters from the Exchange accepting the Notice.
7.3 The Issuer will file all required documents, pay all required filing fees
and undertake any other reasonable actions required by the rules and policies of
the Exchange in order to obtain the approval of the Exchange for the Private
Placement.
7.4 Within 10 days of each Closing, the Issuer will:
(a) file with the Commissions any report required to be filed by
Applicable Legislation in the required form; and
(b) provide the Agents' solicitors with copies of the report or reports.
8. CLOSINGS
8.1 In this Section:
(a) "Certificates" means the certificates representing the Special
Warrants sold on a Closing in the names and denominations reasonably
requested by the Agents or the Purchasers; and
(b) "Net Proceeds" means the gross proceeds of the sale of Special
Warrants on a Closing, less:
(i) the Agents' Fee;
(ii) on the first Closing, the Administration Fee;
(iii) the reasonable expenses of the Agents in connection with the
Private Placement which have not been paid by the Issuer
subject to section 15.1 hereof; and
(iv) any amount which has been attached by garnishing order or
other form of attachment.
8.2 Closings will take place on such dates as may be agreed between the
Issuer and the Agent.
8.3 The Issuer will, on each Closing, issue and deliver the Certificates to
the Agents, or at the Agents' request, to the Purchasers, against payment of:
(a) 40% of the Net Proceeds (the "Escrowed Funds") to the Trustee to be
held in escrow under the Special Warrant Indenture; and
(b) the balance of the Net Proceeds to the Issuer.
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8.4 If the Issuer has satisfied all of its material obligations under this
Agreement, the Agents will, on each Closing, pay the Escrowed Funds to the
Trustee and the balance of the Net Proceeds to the Issuer, against delivery of
the Certificates.
8.5 Where required by Applicable Legislation, the Issuer will endorse the
Certificates, and the certificates representing any Shares, Warrants, Warrant
Shares, issued prior to the earlier of the Qualification Date and the expiry of
the hold period applicable to such Securities in the Filing Jurisdictions, with
a statement that:
(a) the securities represented by the certificate are subject to a hold
period and may not be traded until the expiry of the hold period
except as permitted by Applicable Legislation; and
(b) specifies the date the hold period expires.
9. CONDITIONS OF CLOSINGS
9.1 The obligations of the Agents and the obligations of the Purchasers under
the Subscription Agreements on each Closing will be subject always to the
following:
(a) receipt by the Agents of subscriptions for a minimum of 1,230,770
Special Warrants on or before June 30, 1999. The Agents will hold
subscriptions and subscription funds pending receipt of
subscriptions for such number of Special Warrants. If subscriptions
for 1,230,770 Special Warrants have not been received by the Agents
on or before June 30, 1999, no Closing will take place and the
Agents will return subscriptions and subscription funds to
subscribers, without interest, penalty or other deduction;
(b) the Issuer will take all necessary corporate action in order to
validly, issue and sell the Special Warrants, the Shares, the
Warrants and the Warrant Shares to the Purchasers and the Agents'
Special Warrants, the Agents' Warrants and the Agents' Warrant
Shares to the Agents;
(c) the Issuer will make all necessary filings and obtain all necessary
approvals of the Regulatory Authorities, subject only to conditions
imposed by the rules and policies of the Exchange, to issue and sell
the Special Warrants to the Purchasers and the Agents' Special
Warrants to the Agents;
(d) the issue and sale of the Special Warrants and the Agents' Special
Warrants will be exempt from the prospectus requirement of the Acts
and the registration requirement of the 1933 Act;
(e) the issue of Units upon exercise of the Special Warrants, the issue
of Warrant Shares upon exercise of the Warrants, and the issue of
Agents' Warrant Shares upon exercise of the Agents' Warrants, will
be exempt from the prospectus requirement of the Acts and the
registration requirement of the 1933 Act;
(f) the Issuer will deliver to the Agents and their solicitors
favourable opinions of the Issuer's Canadian and United States
solicitors dated as of the date of such Closing, in form and
substance acceptable to the Agents and their solicitors, acting
reasonably, as to all legal matters reasonably requested by the
Agents relating to the business of the Issuer and the creation,
issuance and sale of the Securities;
(g) the Issuer will deliver to the Agents and their solicitors such
other certificates, comfort letters or opinions of its auditors or
other experts or other documents relating to the Private Placement
or the affairs of the Issuer as the Agents and their solicitors may
reasonably request; and
(h) each representation and warranty of the Issuer herein shall be true,
and the Issuer will perform or comply with all of its covenants and
obligations hereunder.
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9.2 Each Closing and the obligations of the Issuer and the Agents to complete
the issue and sale of the Securities are subject to:
(a) receipt of all required regulatory approval for or acceptance of the
Private Placement;
(b) compliance by the Issuer with all relevant statutory and regulatory
requirements in connection with the Private Placement; and
(c) the removal or partial revocation of any cease trading order or
trading suspension made by any competent authority to the extent
necessary to complete the Private Placement.
10. MATERIAL CHANGES
10.1 The Issuer agrees that if, between the date of this Agreement and that day
which falls five days after the Qualification Date, a Material Change, or a
change in a Material Fact occurs, the Issuer will:
(a) as soon as practicable notify the Agents in writing, setting forth
the particulars of such change;
(b) as soon as practicable, issue and file with the Regulatory
Authorities a press release that is authorized by a senior officer
disclosing the nature and substance of the change;
(c) as soon as practicable file with the applicable Commissions the
report required by the Acts and in any event no later than 10 days
after the date on which the change occurs;
(d) provide copies of that press release, when issued, and that report,
when filed, to the Agents and their solicitors;
(e) if required under Applicable Legislation, amend the Prospectus to
reflect the change, provided it has first obtained the approval of
the Agents for the form and substance of the amendment, such
approval not to be unreasonably withheld; and
(f) if an amendment is prepared to the Prospectus, file such amendment
with each of the Commissions in the time limited by Applicable
Legislation, and provide the Agents without charge with as many
commercial copies of such amendment as it may reasonably require.
10.2 If the Issuer is uncertain as to whether there has been a Material Change,
or a change in a Material Fact, it will promptly provide the Agents with full
particulars of the event giving rise to the uncertainty, and will consult with
the Agents as to whether such event constitutes a Material Change, or a change
in a Material Fact.
11. PROSPECTUS
11.1 The Issuer will use its reasonable efforts to file a (final) Prospectus
with the Commissions in the Filing Provinces qualifying the Distribution and
obtain a receipt therefor within 90 days immediately following the first
Closing.
11.2 If the Qualification Date does not occur by the first business day 90 days
immediately following the first Closing, then the Issuer will continue to use
its reasonable efforts to have the Qualification Date occur prior to the date
which is 330 days after the first Closing.
11.3 The Prospectus will be satisfactory in form and substance to the Agents
and their solicitors, acting reasonably.
11.4 The Issuer will permit the Agents and their solicitors to participate in
the preparation of the Prospectus, to discuss the Issuer's business with its
corporate officials and auditors and to conduct such full and
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comprehensive review and investigation of the Issuer's business, affairs,
capital and operations as the Agents and their solicitors reasonably consider to
be necessary to establish a due diligence defence under Applicable Legislation
to an action based on an allegation that the Prospectus contained a
Misrepresentation and to enable the Agents to responsibly execute the
underwriter's certificate in the Prospectus.
11.5 The Prospectus will contain a contractual right of rescission granted by
the Issuer to the Purchasers for Misrepresentations in the Prospectus.
11.6 Provided the Agents and their solicitors, acting reasonably, are satisfied
that the Prospectus contains full, true and plain disclosure of all Material
Facts relating to the Issuer and the Securities, and provided the Issuer has
delivered to the Agents the documents described in this Section to be delivered
on the date of the (final) Prospectus, the Agents will execute the underwriter's
certificate in the (final) Prospectus.
11.7 On the date of the (final) Prospectus, the Issuer will deliver the
following documents to the Agents and their solicitors, each of which will be in
form and substance satisfactory to the Agents and their solicitors, acting
reasonably:
(a) an opinion of the auditors of the Issuer, dated as of the date of
the (final) Prospectus and addressed to the Agents and their
solicitors, relating to the accuracy of the financial statements
included in the Prospectus and verification of the accuracy of the
financial, numerical and certain other information disclosed in the
Prospectus;
(b) a certificate of the Issuer issued to the Agents and their
solicitors, dated as of the date of the (final) Prospectus and
executed by the President of the Issuer or by another officer
approved by the Agents, certifying certain facts relating to the
Issuer and its affairs; and
(c) any other certificates, comfort letters or opinions in connection
with any matter related to the Prospectus which are reasonably
requested by the Agents or their solicitor.
11.8 On the Qualification Date, the Issuer will deliver the following documents
to the Agents and their solicitors, each of which will be in a form and
substance satisfactory to the Agents and their solicitors, acting reasonably:
(a) an opinion of counsel of the Issuer, dated as of the Qualification
Date and addressed to the Agents and their solicitors, relating to
any legal matters in connection with the Issuer and the Distribution
for which the Agents or their solicitor may reasonably request an
opinion; and
(b) any other certificates, comfort letters or opinions in connection
with any matter related to the Prospectus or the Distribution which
are reasonably requested by the Agents or their solicitors.
11.9 The Issuer will furnish to the Agents such number of copies of the
Prospectus and each amendment and supplement thereto and such other relevant
documents as the Agents may reasonably request.
11.10 The delivery by the Issuer to the Agents of the Prospectus and any
amendment or supplement thereto will constitute the Issuer's representation and
warranty to the Agents that all material information and statements contained
therein (other than information and statements supplied by or relating solely to
the Agents) is contained in the Prospectus, that the Prospectus does not contain
any Misrepresentation, and the Prospectus constitutes full, true and plain of
all Material Facts relating to the Issuer and the Securities.
11.11 When each of the Commissions has issued a receipt for the (final)
Prospectus, and the Issuer has delivered to the Agents copies of such receipts
and all documents required to be delivered to the Agents on the date of the
(final) Prospectus and the Qualification Date, the Agents will deliver, or cause
to be delivered as soon as practical, one copy of the Prospectus to each Special
Warrant holder.
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12. TERMINATION
12.1 The Agents may terminate their obligations under this Agreement by notice
in writing to the Issuer at any time before the final Closing if:
(a) an adverse Material Change, or an adverse change in a Material Fact
relating to any of the Securities, occurs or is announced by the
Issuer;
(b) there is an event, accident, governmental law or regulation or other
occurrence of any nature which, in the opinion of the Agents,
seriously affects or will seriously affect the financial markets,
the market for the Issuer's securities in particular, the business
of the Issuer, the ability of the Agents to perform their
obligations under this Agreement, or a Purchaser's decision to
purchase the Special Warrants;
(c) following a consideration of the history, business, products,
property or affairs of the Issuer or its principals and promoters,
or of the state of the financial markets in general, or the state of
the market for the Issuer's securities in particular, the Agents
determine, in their sole discretion, that it is not in the interest
of the Purchasers to complete the purchase and sale of the Special
Warrants;
(d) an enquiry or investigation (whether formal or informal) in relation
to the Issuer, or the Issuer's directors, officers or promoters, is
commenced or threatened by an officer or official of any competent
authority;
(e) any order to cease, halt or suspend trading (including an order
prohibiting communications with persons in order to obtain
expressions of interest) in the securities of the Issuer prohibiting
or restricting the Private Placement or the Distribution is made by
a competent regulatory authority and that order is still in effect;
(f) the Issuer is in breach of any material term of this Agreement; or
(g) the Agents determine that any of the representations or warranties
made by the Issuer in this Agreement is false or has become false.
12.2 The Agents' obligations hereunder will terminate if the first Closing does
not occur within 90 days of the reference date of this Agreement, unless
otherwise agreed in writing by the Agents.
12.3 In addition to the other termination rights of the Agents, the Agents may
terminate their obligations under this Agreement with respect to the
Distribution and the Prospectus at anytime prior to the Qualification Date if:
(a) any order to cease trading (including an order prohibiting
communications with persons in order to obtain expressions of
interest) in the securities of the Issuer is made by a competent
regulatory authority and that order is still in effect;
(b) the Issuer is in breach of any material term of this Agreement; or
(c) the Agents determine that any of the representations or warranties
made by the Issuer in this Agreement is false or has become false.
13. WARRANTIES, REPRESENTATIONS AND COVENANTS
13.1 The Issuer warrants and represents to and covenants with the Agents that:
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(a) the Issuer is a valid and subsisting corporation duly amalgamated
and in good standing under the laws of British Columbia, is a
"reporting issuer" under the Acts, and
(i) is in good standing and up to date with all filings required
under the Company Act (British Columbia);
(ii) is not in default of any provision of Applicable Legislation;
and
(iii) has the corporate power and capacity to enter into this
Agreement and to carry out the transactions herein
contemplated;
(b) as at the date hereof, the Issuer has no "subsidiaries" or
"affiliated" companies, each within the meaning of the Securities
Act (British Columbia), and does not otherwise own or control,
directly or indirectly, any equity interest in any corporation,
partnership or other form of business association.
(c) the Issuer is duly registered and licenced to carry on business in
the jurisdictions in which it carries on business or owns property
where so required by the laws of that jurisdiction, and holds all
material licences and permits that are required for carrying on its
business in the manner and in the jurisdictions in which such
business is presently being carried on;
(d) as at the date hereof, the authorized capital of the Issuer consists
of 100 million common shares of which 15,517,865 common shares are
issued and outstanding as fully paid and non-assessable;
(e) the Issuer will reserve or set aside sufficient shares in its
treasury to issue the Shares, the Warrant Shares and the Agents'
Warrant Shares, and all such shares will be duly and validly issued
as fully paid and non-assessable;
(f) the minute books of the Issuer contain all records of the
proceedings of the meetings of the Issuer's directors, shareholders
and committees of directors since its date of amalgamation;
(g) since the Audited Financial Statements, the business of the Issuer
has been carried on in the usual and ordinary course and the Issuer
has entered into no transaction out of the usual and ordinary course
of business;
(h) the Issuer has filed all documents which it is required to file
under the continuous disclosure provisions of the Acts, and the
Issuer has filed no Material Change reports on a confidential basis
with the securities regulatory authorities in these jurisdictions
where it is a "reporting issuer" which remain confidential;
(i) the Issuer's outstanding common shares are listed for trading on the
Exchange, and the Issuer is not in material breach of its Listing
Agreement with the Exchange;
(j) the Issuer is subject to no material mortgage, lien, lease,
agreement, instrument or any other restriction of any kind or
character which would prevent the consummation of the transactions
contemplated herein;
(k) except as qualified by the Disclosure Record, the Issuer is the
beneficial owner of the properties, business and assets or the
interests in the properties, business or assets referred to in the
Disclosure Record, all agreements by which the Issuer holds an
interest in a property, business or assets are in good standing
according to their terms and the properties are in good standing
under the applicable laws of the jurisdictions in which they are
situated;
(l) the Disclosure Record, subscription agreements and all other written
or oral representations made by the Issuer to a Purchaser or
potential Purchaser in connection with the Private Placement will be
accurate in all material respects and will omit no fact, the
omission of which will make such representations misleading or
incorrect at the time made;
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(m) the audited financial statements of the Issuer for its fiscal year
ended December 31, 1998 (the "Audited Financial Statements) and the
unaudited interim financial statements of the Issuer for the period
ended March 31, 1999 (the "Interim Financial Statements") have been
prepared in accordance with Canadian generally accepted accounting
principles, accurately reflect the financial position and all
material liabilities (accrued, absolute, contingent or otherwise) of
the Issuer as at the date thereof, and there have been no adverse
Material Changes in the financial position or condition of the
Issuer or any damage, loss or other change of any kind whatsoever in
circumstances materially affecting the business or assets of the
Issuer or the right or capacity of the Issuer to carry on its
business since the date of the Audited Financial Statements, except
as recorded in the books of the Issuer and fully and plainly
disclosed in the Disclosure Record;
(n) no financial statements of the Issuer are publicly available as at
any date or for any period subsequent to the Interim Financial
Statements;
(o) all of the material transactions of the Issuer have been promptly
and properly recorded or filed in or with the books or records of
the Issuer;
(p) all of the material contracts of the Issuer are described in the
Disclosure Record and are in good standing in all material respects,
and the Issuer is not in default in any material respect thereof,
and the Issuer is not aware of any default in any material respect
by any other party to such contracts;
(q) the Issuer is party to no agreement, option, understanding or
commitment, or any right or privilege capable of becoming an
agreement, option, understanding or commitment, for the purchase of
any of the businesses, properties or assets or interests in the
businesses properties or assets referred to in the Disclosure
Record, except as may be disclosed in the Disclosure Record;
(r) the Issuer has complied and will comply fully with the requirements
of all applicable corporate and securities laws and administrative
policies and directions, including, without limitation, Applicable
Legislation, the Company Act (British Columbia), the 1933 Act and
the 1934 Act in relation to the issue and trading of its securities
and in all matters relating to the Private Placement and the
Distribution;
(s) there is not presently, and will not be until the closing of the
Distribution, any Material Change or change in any Material Fact
relating to the Issuer which has not been or will not be fully
disclosed to the Agents and in the Disclosure Record;
(t) the issue and sale of the Securities by the Issuer and the Agents
and the execution and delivery of this Agreement and the
Subscription Agreements and the performance of the transactions
contemplated thereby does not and will not conflict with, and does
not and will not result in a breach of, any of the terms of its
incorporating documents or any agreement or instrument to which the
Issuer is a party;
(u) as at the date hereof, the Issuer is not a party to any actions,
suits or proceedings which could materially affect its business or
financial condition, and to the best of the Issuer's knowledge no
such actions, suits or proceedings are contemplated or have been
threatened which are not disclosed in the Disclosure Record;
(v) as at the date hereof, there are no judgments against the Issuer
which are unsatisfied, nor are there any consent decrees or
injunctions to which the Issuer is subject;
(w) as at the date hereof, no order ceasing, halting or suspending
trading in securities of the Issuer nor prohibiting the sale of such
securities has been issued to and is outstanding against the Issuer
or its directors, officers or promoters or against any other
companies that have common directors, officers or promoters and no
investigations or proceedings for such purposes are pending or
threatened;
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(x) the Issuer satisfies and will satisfy all necessary requirements of
the Issuer under the Exemptions in order to permit the sale of the
Special Warrants to Purchasers who are qualified to purchase the
Special Warrants under the Exemptions, pursuant to this Private
Placement;
(y) as at the date hereof, except as disclosed in Schedule "C" hereto,
no person has any right, agreement or option, present or future,
contingent or absolute, or any right capable of becoming such a
right, agreement or option, for the issue or allotment of any
unissued shares in the capital of the Issuer or any other security
convertible into or exchangeable for any such shares, or to require
the Issuer to purchase, redeem or otherwise acquire any of the
issued and outstanding shares in its capital;
(z) as at the date hereof, the Issuer has filed all federal, provincial,
local and foreign tax returns which are required to be filed, or has
requested extensions thereof, and has paid all taxes required to be
paid by it and any other assessment, fine or penalty levied against
it, to the extent that any of the foregoing is due and payable,
except for such assessments, fines and penalties which are currently
being contested in good faith;
(aa) as at the date hereof, the Issuer has established on its books and
records reserves which are adequate for the payment of all taxes not
yet due and payable and there are no liens for taxes on the assets
of the Issuer except for taxes not yet due, and there are no audits
of any of the tax returns of the Issuer which are known by the
Issuer's management to be pending, and there are no claims which
have been or may be asserted relating to any such tax returns which,
if determined adversely, would result in the assertion by any
governmental agency of any deficiency which would have a material
adverse effect on the properties, business or assets of the Issuer;
(ab) other than the Agents, no person, firm or corporation acting or
purporting to act at the request of the Issuer is entitled to any
brokerage, agency or finder's fee in connection with the
transactions described herein;
(ac) the Issuer will allow the Agents and their counsel to conduct all
due diligence investigations in connection with the Private
Placement and the Distribution which the Agents may reasonably
require;
(ad) this Agreement is, and the Special Warrant Indenture, the
certificates representing the Warrants, and the certificates
representing the Agents' Special Warrants and the Agents' Warrants
will be, upon execution and delivery by the Issuer, legal, valid and
binding agreements of the Issuer, enforceable against the Issuer in
accordance with their terms, subject only to customary
qualifications regarding the availability of equitable remedies; and
(ae) the Issuer owns or possesses adequate rights to use all material
patents, trademarks, service marks, trade names, copyrights, trade
secrets, information, proprietary rights and processes necessary for
the business of the Issuer as now conducted, without any conflict
with or infringement of the rights of others. The Issuer has
received no communication alleging that the Issuer has violated or,
by conducting its business as proposed, would violate any of the
patents, trademarks, service marks, trade names, copyrights, or
trade secrets or other proprietary rights of any other person or
entity. Neither the execution or delivery of this Agreement nor the
carrying on of the business of the Issuer by the employees of the
Issuer, nor the conduct of the business of the Issuer will conflict
with or result in a breach of the terms, conditions, or provisions
of or constitute a default under, any contract, covenant, or
instrument under which any of such employees is now obligated.
13.2 The representations and warranties of the Issuer contained herein will be
true and correct at each Closing, will survive each Closing, and no
investigation by or on behalf of the Agents will diminish in any respect their
right to rely on such representations and warranties.
13.3 Each of the Agents warrants and represents to the Issuer that:
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(a) it is a valid and subsisting corporation under the law of the
jurisdiction in which it was incorporated;
(b) it is:
(i) registered as a dealer and an underwriter in British Columbia;
and
(ii) registered as a dealer and classified as a broker in Alberta
and Ontario;
(c) it is a member in good standing of the Exchange; and
(d) it will sell the Special Warrants in compliance with Applicable
Legislation.
14. EXPENSES OF AGENTS
14.1 The Issuer will pay all of the expenses of the Private Placement, the
Prospectus and the Distribution and all the expenses reasonably incurred by the
Agents in connection with the Private Placement, the Prospectus and the
Distribution including, without limitation, the reasonable fees and expenses of
the solicitors for the Agents. However, the Issuer and the Agents agree that the
Issuer will only pay the expenses of the Agents incurred in respect of legal and
travel costs in connection with the Private Placement, the Prospectus and the
Distribution to a maximum of $35,000 in fees (excepting taxes and disbursements,
all of which the Issuer shall pay) in respect of the fees and expenses of the
solicitors for the Agents and $20,000 in respect of the Agents' travel expenses.
14.2 The Issuer will pay the expenses referred to in the previous Subsection
even if the transactions contemplated by this Agreement are not completed or
this Agreement is terminated, unless the failure of acceptance or completion or
the termination is the result of a breach of this Agreement by the Agents.
14.3 The Agents may, from time to time, render accounts for their expenses in
connection with the Private Placement, the Prospectus and the Distribution to
the Issuer for payment on or before the dates set out in the accounts.
14.4 The Issuer authorizes the Agents to deduct their reasonable expenses in
connection with the Private Placement from the gross proceeds of the Private
Placement and any advance payments made by the Issuer, including expenses for
which an account has not yet been rendered.
15. GARNISHING ORDERS
15.1 If at any time, up to and including the final Closing, the Agents receive
a garnishing order or other form of attachment purporting to attach or garnish a
part or all of the sale price of any of the Special Warrants, the Agents will be
free to pay the amount purportedly attached or garnished into court.
15.2 Any payment by the Agents into court pursuant to a garnishing order will
be deemed to have been received by the Issuer as payment by the Agents against
the sale price of the Securities to the extent of the amount paid, and the
Issuer will be bound to issue and deliver the Securities proportionately to the
amount paid by the Agents.
15.3 The Agents will not be bound to ascertain the validity of any garnishing
order or attachment, or whether in fact it attaches any moneys held by the
Agents, and the Agents will be free to act with impunity in replying to any
garnishing order or attachment.
15.4 The Issuer will release, indemnify and save harmless the Agents in respect
of all damages, costs, expenses or liability arising from any acts of the Agents
under this Section.
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16. INDEMNITY
16.1 The Issuer will indemnify the Agents and each of the Agents' agents,
directors, officers and employees (individually, an "Indemnified Party" and
collectively, the "Indemnified Parties") and save them harmless against all
losses, claims, damages or liabilities:
(a) existing by reason of an untrue statement contained in the
Disclosure Record, subscription agreement or other written or oral
representation made by the Issuer to a Purchaser or potential
Purchaser in connection with the Private Placement, or in the
Prospectus or other written or oral representation made by the
Issuer in connection with the Distribution, or by reason of the
omission to state any fact necessary to make such statements or
representations not misleading (except for information and
statements supplied by or relating solely to the Agents);
(b) arising directly or indirectly out of any order made by any
regulatory authority based upon an allegation that any such untrue
statement or representation, or omission exists (except information
and statements supplied by or relating solely to the Agents), that
trading in or distribution of any of the Securities is to cease;
(c) resulting from the failure by the Issuer to obtain the requisite
regulatory approval to the Private Placement or the Prospectus
unless the failure to obtain such approval is the result of a breach
of this Agreement by the Agents;
(d) resulting from any failure by the Issuer to file Prospectus, or an
amendment or supplement thereto;
(e) resulting from the breach by the Issuer of any of the terms of this
Agreement;
(f) resulting from any representation or warranty made by the Issuer
herein not being true or ceasing to be true;
(g) if the Issuer fails to issue and deliver the certificates
representing the Securities in the form and denominations
satisfactory to the Agents at the time and place required by the
Agents with the result that any completion of a sale of the
Securities does not take place; or
(h) if, following the completion of a sale of any of the Securities, a
determination is made by any competent authority setting aside the
sale, unless that determination arises out of an act or omission by
the Agents.
16.2 If any action or claim is brought against an Indemnified Party in respect
of which indemnity may be sought from the Issuer pursuant to this Agreement, the
Indemnified Party will promptly notify the Issuer in writing.
16.3 The Issuer will assume the defence of the action or claim, including the
employment of counsel and the payment of all expenses.
16.4 The Indemnified Party will have the right to employ separate counsel, and
the Issuer will pay the fees and expenses of such counsel.
16.5 The indemnity provided for in this Section will not be limited or
otherwise affected by any other indemnity obtained by the Indemnified Party from
any other person in respect of any matters specified in this Agreement and will
continue in full force and effect until all possible liability of the
Indemnified Parties arising out of the transactions contemplated by this
Agreement has been extinguished by the operation of law.
16.6 If indemnification under this Agreement is found in a final judgment (not
subject to further appeal) by a court of competent jurisdiction not to be
available for reason of public policy, the Issuer and the Indemnified Parties
will contribute to the losses, claims, damages, liabilities or expenses (or
actions in respect thereof) for which such indemnification is held unavailable
in such proportion as is appropriate to reflect the relative benefits to and
fault of the Issuer, on the one hand, and the Indemnified Parties on the other
hand, in connection with the matter
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giving rise to such losses, claims, damages, liabilities or expenses (or actions
in respect thereof). No person found liable for a fraudulent Misrepresentation
will be entitled to contribution from any person who is not found liable for
such fraudulent Misrepresentation.
16.7 To the extent that any Indemnified Party is not a party to this Agreement,
the Agents will obtain and hold the right and benefit of this section in trust
for and on behalf of such Indemnified Party.
17. ASSIGNMENT AND SELLING GROUP PARTICIPATION
17.1 The Agents will not assign this Agreement or any of their rights under
this Agreement or, with respect to the Securities, enter into any agreement in
the nature of an option or a sub-option unless and until, for each intended
transaction, the Agents have obtained the consent of the Issuer, and any
required notice has been given to and accepted by the Regulatory Authorities.
17.2 The Agents may offer selling group participation in the normal course of
the brokerage business to selling groups of other licensed dealers, brokers and
investments dealers, who may or who may not be offered part of the Agents' Fee
or Agents' Special Warrants.
18. NOTICE
18.1 Any notice under this Agreement will be given in writing and must be
delivered, sent by facsimile transmission or mailed by prepaid post and
addressed to the party to which notice is to be given at the address indicated
above, or at another address designated by the party in writing.
18.2 If notice is sent by facsimile transmission or is delivered, it will be
deemed to have been given at the time of transmission or delivery.
18.3 If notice is mailed, it will be deemed to have been received 48 hours
following the date of mailing of the notice.
18.4 If there is an interruption in normal mail service due to strike, labour
unrest or other cause at or prior to the time a notice is mailed the notice will
be sent by facsimile transmission or will be delivered.
19. TIME
Time is of the essence of this Agreement and will be calculated in accordance
with the provisions of the Interpretation Act (British Columbia).
20. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations, warranties, and covenants of the Issuer contained in this
Agreement will survive the final Closing for a period of two years.
21. LANGUAGE
This Agreement is to be read with all changes in gender or number as required by
the context.
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22. ENUREMENT
This Agreement enures to the benefit of and is binding on the parties to this
Agreement and their successors and permitted assigns.
23. HEADINGS
The headings in this Agreement are for convenience of reference only and do not
affect the interpretation of this Agreement.
24. COUNTERPARTS
This Agreement may be executed in two or more counterparts and may be delivered
by facsimile transmission, each of which will be deemed to be an original and
all of which will constitute one agreement, effective as of the reference date
given above.
25. LAW
This Agreement is governed by the law of British Columbia, and the parties
hereto irrevocably attorn and submit to the jurisdiction of the courts of
British Columbia with respect to any dispute related to this Agreement.
This document was executed and delivered as of the date given above:
The common seal of INFOWAVE )
SOFTWARE, INC. )
was hereunto affixed in the presence of: )
)
/s/ G.A. Xxxxxx
-------------------- )
Authorized Signatory ) c/s
)
)
Authorized Signatory )
The common seal of CANACCORD CAPITAL )
CORPORATION was hereunto affixed in the )
presence of: )
)
/s/ illegible
-------------------- )
Authorized Signatory ) c/s
)
)
Authorized Signatory )
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The common seal of YORKTON SECURITIES )
INC. was hereunto affixed in the presence of: )
)
/s/ Xxxxx Xxxxxxxx )
-------------------- )
Authorized Signatory ) c/s
)
)
Authorized Signatory )
The common seal of SPROTT SECURITIES )
LIMITED was hereunto affixed in the presence of: )
)
)
Authorized Signatory ) c/s
)
/s/ illegible )
-------------------- )
Authorized Signatory )
The common seal of TAURUS CAPITAL )
MARKETS LTD. was hereunto affixed in )
the presence of: )
)
)
Authorized Signatory ) c/s
)
/s/ illegible )
-------------------- )
Authorized Signatory )
23
SCHEDULE "A"
SUBSCRIPTION AGREEMENT FOR NON-U.S. SUBSCRIBERS
24
SCHEDULE "A"
SUBSCRIPTION FOR SPECIAL WARRANTS
(NON-UNITED STATES RESIDENTS)
TO: INFOWAVE SOFTWARE, INC.
(the "Corporation")
AND TO: CANACCORD CAPITAL CORPORATION
YORKTON SECURITIES INC.
SPROTT SECURITIES INC.
TAURUS CAPITAL MARKETS INC.
(collectively, the "Agents")
The undersigned (the "Subscriber") hereby irrevocably (subject to Section
3(w) hereof) subscribes for and agrees to purchase _______________________
special warrants (the "Special Warrants") of the Corporation for an aggregate
consideration of Cdn.$ ___________________ (the "Subscription Price"),
representing a subscription price of Cdn.$3.25 per Special Warrant, on the terms
and conditions set out in sections 1 to 15 below. Each Special Warrant shall
entitle the holder thereof to acquire, at no additional cost, one common share
in the capital of the Corporation (a "Common Share") and one-half of one
non-transferrable common share purchase warrant (each whole such warrant a
"Purchase Warrant"). Each Purchase Warrant will entitle the holder to purchase
one Common Share (a "Warrant Share") at $3.75 per Warrant Share for 12 months
from the Closing Date (as hereinafter defined). The Special Warrants shall have
the attributes described in Schedule "A" attached to and forming part of this
subscription.
DATED at the City of ____________________________, in the
_________________ of ___________________________, this _________ day of
_________ , 1999.
--------------------------------------- ------------------------------------
(Name of Subscriber - please print) Subscriber's Address
--------------------------------------- ------------------------------------
(Subscriber's Address)
by:
----------------------------------- ------------------------------------
(Official Capacity or Title -
please print)
--------------------------------------- ------------------------------------
Authorized Signature (Telephone Number)
--------------------------------------- ------------------------------------
(Please print name of individual whose (Facsimile Number)
signature appears above if different
than the name of the Subscriber
printed above).
DETAILS OF BENEFICIAL PURCHASER IF NOT SAME AS SUBSCRIBER:
--------------------------------------- ------------------------------------
(Name - please print) (Beneficial Purchaser's Address)
--------------------------------------- ------------------------------------
--------------------------------------- ------------------------------------
(if space is inadequate please attach a
schedule containing the necessary
information)
25
-2-
REGISTRATION INSTRUCTIONS: DELIVERY INSTRUCTIONS:
--------------------------------------- ------------------------------------
Name Name
--------------------------------------- ------------------------------------
Account reference, if applicable Account reference, if applicable
--------------------------------------- ------------------------------------
Address Contact Name
--------------------------------------- ------------------------------------
Address
--------------------------------------- ------------------------------------
Telephone Number
--------------------------------------- ------------------------------------
Facsimile Number
* * * *
1. TERMS OF SPECIAL WARRANTS. The Special Warrants shall have the attributes
described in Schedule "A" hereto and shall be duly and validly created and
issued in the name of the Subscriber or the Subscriber's nominee pursuant to the
terms of a Special Warrant Indenture (the "SPECIAL WARRANT INDENTURE") to be
entered into between the Corporation and Montreal Trust Company of Canada, as
warrant agent (the "WARRANT AGENT").
2. AGENCY AGREEMENT. The Subscriber acknowledges that the Agents and the
Corporation are currently negotiating, or intend to negotiate, an agreement (the
"AGENCY AGREEMENT") under which the Corporation will appoint the Agents to act
as agents to use their commercially reasonable efforts to offer the Special
Warrants on a private placement basis. The acceptance of this subscription by
the Corporation and the closing of the transactions contemplated hereby are
subject to the negotiation and entering into of the Agency Agreement. Provided
that the Agency Agreement is entered into, the transactions contemplated in this
Agreement will occur in accordance with the terms of the Agency Agreement.
3. SUBSCRIBER'S REPRESENTATIONS AND WARRANTIES. By executing this subscription,
the Subscriber represents, warrants and covenants to the Corporation and the
Agents (and acknowledges that the Corporation and the Agents are relying
thereon) that:
(a) the Subscriber has been independently advised as to the applicable
hold period imposed in respect of the Special Warrants by securities
legislation in the jurisdiction in which it resides and confirms
that no representation has been made respecting the applicable hold
periods for the Special Warrants and is aware of the risks and other
characteristics of the Special Warrants and of the fact that the
Subscriber may not be able to resell the Special Warrants, Common
Shares, Purchase Warrants and Warrant Shares except in accordance
with the applicable securities legislation and regulatory policy;
26
-3-
(b) the Subscriber has not received, nor has it requested, nor does it
have any need to receive, any offering memorandum, or any other
document (other than 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, prospective purchasers in order to
assist them in making an investment decision in respect of the
Special Warrants and it has not become aware of any advertisement in
printed media of general and regular paid circulation, radio,
television or otherwise with respect to the distribution of the
Special Warrants;
(c) the Subscriber has relied solely upon the publicly available
information relating to the Corporation and not upon any verbal or
written representation as to fact or otherwise made by or on behalf
of the Corporation or the Agents, such publicly available
information having been delivered to the Subscriber without
independent investigation or verification by the Corporation or the
Agents, and agrees that the Corporation and the Agents assume no
responsibility or liability of any nature whatsoever for the
accuracy, adequacy or completeness of the publicly available
information;
(d) the Subscriber acknowledges that the Agents are acting as agents in
this transaction and the Subscriber hereby acknowledges that all
warranties, conditions, representations or stipulations, whether
express or implied and whether arising hereunder or under prior
agreement or statement or by statute or at common law are expressly
those of the Corporation, other than those relating solely to the
Agents. The Subscriber acknowledges that no information or
representation concerning the Corporation has been provided to the
Subscriber by the Corporation or the Agents other than those
contained in this Agreement and in all press releases, prospectuses
and filing statements filed with any regulatory authorities (the
"DISCLOSURE RECORD") and that the Subscriber is relying entirely
upon this Agreement and the Disclosure Record. Any information given
or statement made is given or made without liability or
responsibility howsoever arising on the part of the Agents. No
person in the employment of, or acting as agent of, the Agents has
any authority to make or give any representation or warranty
whatsoever in relation to the Corporation or the Special Warrants.
Any information given or statement made is given or made without
liability or responsibility howsoever arising on the part of the
Agents, and the Corporation and the Subscriber hereby release the
Agents from any claims that may arise in respect thereof;
(e) the Subscriber and any beneficial purchaser for whom it is acting
are resident in the province or jurisdiction set out on the first
page of this subscription above as the "Subscriber's Address" or the
"Beneficial Purchaser's Address", as the case may be;
(f) the Subscriber:
27
-4-
(i) is not, and is not purchasing Special Warrants for the account
or benefit of, a U.S. Person (as that term is defined in
Regulation S under the United States Securities Act of 1933
("REGULATION S"));
(ii) was not offered the Special Warrants in the United States (as
that term is defined in Regulation S), (the "UNITED STATES");
and
(iii) did not execute or deliver this subscription in the United
States.
(g) the Subscriber:
(i) A. is purchasing the Special Warrants 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 all or any of the Special Warrants; or
B. if it is not purchasing as principal, it is duly
authorized to enter into this subscription and to
execute all documentation in connection with the
purchase on behalf of each beneficial purchaser, it
acknowledges that the Corporation may be required by law
to disclose on a confidential basis to certain
regulatory authorities the identity of each beneficial
purchaser of Special Warrants for whom it may be acting;
and
I. it is resident in British Columbia, is (a) a trust
company, insurance company or financial
institution that has been authorized to do
business under the Financial Institutions Act
(British Columbia) (b) an adviser who manages the
investment portfolio of clients through
discretionary authority granted by one or more
clients and who is registered as a portfolio
manager under the Securities Act (British
Columbia) or is exempt from such registration, and
it is purchasing the Special Warrants as an agent
or trustee for accounts that are fully managed by
it; or
II. it is resident in Alberta, is trading for accounts
fully managed by it and is a trust corporation
trading as trustee or an agent, a portfolio
manager trading as an agent, or a person or
company trading as an agent that, except for an
exemption under the Securities Act (Alberta) or
the rules and regulations thereunder, is required
to be registered as a portfolio manager; or
III. it is resident in Ontario, is a trust company
registered under the Loan and Trust Corporations
Act (Ontario), and is purchasing the Special
Warrants as trustee or as agent for accounts fully
managed by it; or
28
-5-
IV. it is a resident outside of Canada and is a
portfolio manager in a jurisdiction other than
Canada and has provided the "Additional
Undertaking and Certification - Foreign Portfolio
Manager" in the Corporate Placee Registration Form
in Schedule "B" hereto, the certifications made
therein being repeated to the Corporation and the
Agents herein; or
V. it is acting as agent for one or more disclosed
principals, each of which principals is purchasing
as a principal for its own account, not for the
benefit of any other person, and not with a view
to the resale or distribution of all or any of the
Special Warrants and each of which principals
complies with one of paragraphs (ii), (iii), (iv),
or (v) below, as applicable;
(ii) if it is an individual or corporation, it would have an
aggregate acquisition cost of purchasing the Special
Warrants of not less than $97,000 ($150,000 if resident
in Ontario);
(iii) if it is a resident in British Columbia or outside of
Canada and is not a corporation or an individual but is
a syndicate, partnership or other form of unincorporated
organization, every participant in the syndicate,
partnership or unincorporated organization would have an
aggregate acquisition cost of not less than $97,000 for
the Special Warrants purchased if the participant were
acquiring its proportionate interest in the Special
Warrants purchased;
(iv) if it is resident in Alberta and is a corporation,
syndicate, partnership or other form of unincorporated
organization, it pre-existed the offering of the Special
Warrants and has a bona fide purpose other than
investment in the Special Warrants or, if created to
permit such investment, the individual share of the
aggregate acquisition cost for each participant is not
less than $97,000;
(v) if it is resident in Ontario and is a corporation, it
was not incorporated solely to permit the purchase of
the Special Warrants without the need for the filing of
a prospectus or if it is a corporation incorporated or
created for such a purpose and a resident in Ontario,
each shareholder of the corporation is an individual who
has contributed at least $150,000 to the corporation for
the purpose of investment by the corporation in the
Special Warrants;
(vi) if it is a resident in Ontario and is not a corporation
or an individual but is a syndicate, partnership, trust
or other unincorporated organization, it is purchasing
as principal for its own account; and
29
-6-
A. each member of the syndicate, partnership, trust
or other unincorporated organization or each
beneficiary of the trust, as the case may be, is
an individual who has contributed at least
$150,000 for the Special Warrants purchased; or
B. the acquisition cost to such syndicate,
partnership, trust or other unincorporated
organization of the Special Warrants subscribed
for hereunder is not less than $150,000 and the
syndicate, partnership, trust or other
unincorporated organization falls within one of
the following categories: (i) pensions plans; (ii)
groups of pension plans under common management;
(iii) organizations of members of a family fund
formed to make investments of family funds; (iv)
testamentary trusts and estates; (v) organizations
which have primary ongoing business activities
other than investing in securities; (vi) mutual
funds other than private mutual funds within the
meaning of paragraph (a) of the definition of
"private mutual fund" in subsection 1(1) of the
Securities Act (Ontario); (vii) group registered
retirement savings plans or group deferred profit
sharing plans; or (viii) partnerships, interests
in which are offered by prospectus, where the
partnership invests in securities in reliance upon
section 72(1)(d) of the Securities Act (Ontario)
and section 27 of the Regulation made thereunder;
but subject nevertheless to the requirement that
it will not resell the Special Warrants or Common
Shares issued pursuant thereto, except in
accordance with the provisions of applicable
securities legislation and stock exchange rules;
(h) it is not a corporation, partnership, trust, fund, association, or
any other organized group of persons created solely, or used
primarily, to permit the purchase of Special Warrants (or similar
purchases) by a group of individuals whose individual share of the
aggregate acquisition cost of the Special Warrants is less than
$97,000;
(i) if an individual, the Subscriber has attained the age of majority
and is legally competent to execute this subscription and to take
all actions required pursuant hereto;
(j) if the Subscriber is a corporation it is duly incorporated and
validly subsisting under the laws of its jurisdiction of
incorporation and all necessary approvals by its directors,
shareholders and others have been given to authorize execution of
this Agreement on behalf of the Subscriber;
(k) the Subscriber is capable of assessing the proposed investment as a
result of the Subscriber's financial experience or as a result of
advice received from a registered person other than the Corporation
or any affiliates thereof;
30
-7-
(l) if required by applicable securities legislation, policy or order or
by any securities commission, stock exchange or other regulatory
authority, the Subscriber will execute, deliver, file and otherwise
assist the Corporation in filing, such reports, undertakings and
other documents with respect to the issue of the Special Warrants,
Common Shares, Purchase Warrants and Warrant Shares issued pursuant
thereto, as may be required, including, without limitation:
(i) if the Subscriber is not an individual, the Corporate Placee
Registration Form required by the Vancouver Stock Exchange if
it has not already filed the same with the Vancouver Stock
Exchange attached hereto as Schedule "B"; and
(ii) if the Subscriber is an individual, the Form 20A(IP) attached
hereto as Schedule "C";
(m) this subscription has been duly and validly authorized, executed and
delivered by and constitutes a legal, valid, binding and enforceable
obligation of the Subscriber;
(n) the delivery of this subscription, the acceptance of it by the
Corporation, the issuance of the Special Warrants to the Subscriber
and the acquisition of the Common Shares and Purchase Warrants upon
the exercise of the Special Warrants and the acquisition of the
Warrant Shares upon exercise of the Purchase Warrants complies with
all applicable laws of the Subscriber's jurisdiction of residence or
domicile and all other applicable laws and will not cause the
Corporation to become subject to or comply with any disclosure,
prospectus or reporting requirements under any such applicable laws;
(o) if the Subscriber is not purchasing in accordance with subparagraph
(g) above, it is purchasing pursuant to an exemption from prospectus
or registration requirements (particulars of which are disclosed
herewith) available to it under applicable securities legislation
and shall deliver to the Corporation and the Agents such further
particulars of the exemption(s) and the Subscriber's qualification
thereunder as the Corporation and the Agents may reasonably request;
(p) the Subscriber acknowledges that no prospectus has been filed by the
Corporation with the British Columbia, Alberta or Ontario Securities
Commission (the "COMMISSIONS") in connection with the issuance of
the Special Warrants, the issuance is exempted from the prospectus
requirements of the Securities Acts of British Columbia, Alberta and
Ontario and the rules and regulations thereunder (the "APPLICABLE
LEGISLATION") and that:
(i) the Subscriber is restricted from using most of the civil
remedies available under the Applicable Legislation;
(ii) the Subscriber may not receive information that would
otherwise be required to be provided to him under the
Applicable Legislation; and
31
-8-
(iii) the Corporation is relieved from certain obligations that
would otherwise apply under the Applicable Legislation;
(q) no person has made to the Subscriber any written or oral
representations:
(i) that any person will resell or repurchase the Special
Warrants, Common Shares or Warrant Shares issuable upon
exercise of the Purchase Warrants (the "SECURITIES");
(ii) that any person will refund the purchase price of the Special
Warrants;
(iii) as to the future price or value of any of the Securities; or
(iv) that the Securities will be listed and posted for trading on a
stock exchange or that application has been made to list and
post the Securities for trading on a stock exchange, other
than the Vancouver Stock Exchange;
(r) the Subscriber is not a "control person" of the Corporation as
defined in the Applicable Legislation, will not become a "control
person" by virtue of this purchase of any of the Securities, and
does not intend to act in concert with any other person to form a
control group of the Corporation;
(s) the Subscriber is at arm's length (as that term is customarily
defined) with the Corporation;
(t) the Subscriber acknowledges that the Securities have not been
registered under the United States Securities Act of 1933 (the "1933
ACT") and may not be offered or sold in the United States unless
registered under the 1933 Act and the securities laws of all
applicable states of the United States or an exemption from such
registration requirements is available, and that the Corporation has
no obligation or present intention of filing a registration
statement under the 1933 Act in respect of the Special Warrants,
Common Shares, Purchase Warrants or Warrant Shares;
(u) the Subscriber (or others for whom it is contracting hereunder) has
been advised to consult its own legal and tax advisors with respect
to applicable resale restrictions and tax considerations, and it (or
others for whom it is contracting hereunder) is solely responsible
for compliance with applicable resale restrictions and applicable
tax legislation;
(v) the Subscriber has no knowledge of a "material fact" or "material
change" (as those terms are defined in the Applicable Legislation)
in the affairs of the Corporation that has not been generally
disclosed to the public, save knowledge of this particular
transaction;
(w) the offer made by this subscription is irrevocable (subject to the
Subscriber's right to withdraw his subscription and to terminate his
obligations as set out in this Agreement) and requires acceptance by
the Corporation and approval of the Vancouver Stock Exchange;
32
-9-
(x) the entering into of this Agreement and the transactions
contemplated hereby will not result in the violation of any of the
terms and provisions of any law applicable to, or the constating
documents of, the Subscriber or of any agreement, written or oral,
to which the Subscriber may be a party or by which he is or may be
bound;
(y) the Subscriber acknowledges that the Agents will receive a
commission from the Corporation in connection with this offering;
(z) the Subscriber acknowledges that the offering of Special Warrants is
restricted to purchasers in Canada that are resident in British
Columbia, Alberta and Ontario only, and in such other jurisdictions
outside of Canada and the United States, where such securities may
be lawfully offered for sale; and
(aa) if resident in Ontario or Alberta, the Subscriber acknowledges that
they are required to file a first trade report prepared in the
required form, within 10 days of the first trade in any of the
Securities.
The Subscriber agrees that the above representations, warranties and
covenants will be true and correct both as of the execution of this
subscription and as of the Closing Time and will survive the completion of
the issuance of the Special Warrants.
4. ACKNOWLEDGEMENT. The foregoing representations, warranties and covenants are
made by the Subscriber with the intent that they be relied upon by the
Corporation and the Agents in determining its suitability as a purchaser of
Special Warrants and the Subscriber hereby agrees to indemnify the Corporation
and the Agents against all losses, claims, costs, expenses and damages or
liabilities which any of them may suffer or incur caused or arising from
reliance thereon. The Subscriber undertakes to notify the Corporation
immediately at facsimile number (000) 000-0000 (Attention: Xxxx Xxxxxx) and the
Agents at facsimile number (000) 000-0000 (Attention: Xxxxx Xxxxxx) and
(000)000-0000 (Attention: Xxxxx Xxxxxxx), of any change in any representation,
warranty or other information relating to the Subscriber set forth herein which
takes place prior to the Closing Time (as hereinafter defined).
The Subscriber acknowledges that a legend will be placed on the
certificates representing the Special Warrants (and any Common Shares or Warrant
Shares in the event the Special Warrants are exercised prior to the
Qualification Date (as defined in Schedule "A")) to the effect that the
securities represented by the certificates are subject to a hold period and may
not be traded in British Columbia until the expiry of such hold period except as
permitted by applicable securities legislation.
The Subscriber acknowledges that, although Special Warrants may be issued
to other purchasers under this offering concurrently with the Closing Date,
there may be other sales of Special Warrants under this offering, some or all of
which may close after the Closing Date. The Subscriber further acknowledges that
there is a risk that insufficient funds may be raised on the Closing Date to
fund the Corporation's objectives and that further closings may not take place
after the Closing Date.
5. CLOSING. The sale of the Special Warrants will be completed at the offices
of Blake, Xxxxxxx & Xxxxxxx, the Corporation's counsel, in Vancouver, British
Columbia at 10:00
33
-10-
a.m. (Vancouver time), or such other time as the Agents and the Corporation may
agree (the "Closing Time") on June 22, 1999, or such other date or time as the
Agents and the Corporation may agree (the "Closing Date"). If by the Closing
Time, the terms and conditions contained in the Agency Agreement for the benefit
of the Agents have been complied with to the satisfaction of the Agents or
waived by the Agents, the Agents shall deliver to the Corporation all completed
subscriptions, including this subscription, against delivery by the Corporation
of the Special Warrants.
6. DELIVERY OF SUBSCRIPTION AGREEMENT. The Subscriber agrees to deliver to the
Agents not later than 9:00 a.m. (Vancouver time) on June 18, 1999 (or two days
before the Closing Date if such date is changed in accordance with paragraph 5
above and communicated to the Subscriber) the following:
(a) this duly completed and executed Subscription;
(b) if the Subscriber is not an individual, a manually signed and
completed copy of the Corporate Placee Registration Form required by
the Vancouver Stock Exchange as attached hereto as Schedule "B"
unless such form has already been provided to the Vancouver Stock
Exchange, in which case the Subscriber represents and warrants that
the information contained therein is accurate at the date hereof;
(c) if the Subscriber is an individual, a manually signed and completed
copy of the Form 20A (IP) as attached hereto as Schedule "C"; and
(d) such other documents as may be required as contemplated by
paragraph 3(l) hereof.
In addition, the Subscriber will arrange for the payment of the Subscription
Price in a manner acceptable to the Agents on or before 9:00 a.m. (Vancouver
time) on June 21, 1999 (or one day before the Closing Date if such date is
changed in accordance with paragraph 5 above and communicated to the
Subscriber).
This subscription is irrevocable except that the Subscriber reserves
the right to withdraw this subscription and to terminate its obligations
hereunder at any time before the Closing Date if the Agency Agreement is not
entered into or if the Agents terminate their obligations with respect to this
offering under the Agency Agreement and the Subscriber hereby appoints the
Agents as its agent for the purpose of notifying the Corporation of the
withdrawal or termination of this subscription.
7. RIGHTS OF RESCISSION. In the event that a holder of a Special Warrant who
acquires Common Shares and Purchase Warrants upon the exercise of the Special
Warrant, is or becomes entitled under applicable securities legislation to the
remedy of rescission by reason of a misrepresentation in the prospectus filed in
connection with the qualification of the Common Shares and Purchase Warrants to
be issued on exercise of the Special Warrants or any amendment thereto, such
holder shall, subject to available defenses and any limitation period under
applicable securities legislation, be entitled to rescission not only of the
holder's exercise of its Special Warrant(s) but also of the private placement
transaction pursuant to which the
34
-11-
Special Warrant was initially acquired, and shall be entitled in connection with
such rescission to a full refund from the Corporation of all consideration paid
on the acquisition of the Special Warrant. In the event such holder is a
permitted assignee of the interest of the original Special Warrant Subscriber,
such permitted assignee shall be entitled to exercise the rights of rescission
and refund granted hereunder as if such permitted assignee was such original
Subscriber. The foregoing is in addition to any other right or remedy available
to a holder of the Special Warrant under the Applicable Legislation or otherwise
at law.
8. AUTHORITY OF AGENTS. The Subscriber hereby irrevocably authorizes each of
the Agents, individually or together, in its or their sole discretion:
(a) to act as the Subscriber's representative at the closing, to receive
certificates for Special Warrants subscribed for and to execute in
its name and on its behalf all closing receipts and documents
required;
(b) to negotiate and approve, among other things, the Special Warrant
Indenture, a Purchase Warrant Indenture (if any), the terms relating
to the escrow of net proceeds as further described in the Term Sheet
attached hereto as Schedule "A", and any related documents and any
opinions, certificates or other documents addressed to the
Subscriber; and
(c) to waive, in whole or in part, any representations, warranties,
covenants or conditions for the benefit of the Subscriber contained
herein or in any agreement or document ancillary or related thereto.
9. EXECUTION OF SUBSCRIPTION AGREEMENT. The Corporation and the Agents shall be
entitled to rely on delivery by facsimile machine of an executed copy of this
subscription, and acceptance by the Corporation of such facsimile copy shall be
equally effective to create a valid and binding agreement between the Subscriber
and the Corporation in accordance with the terms hereof.
10. CONDITIONAL UPON ACCEPTANCE BY CORPORATION. The Corporation reserves the
right to review and accept or reject any subscription for any reason, in its
sole and absolute discretion.
11. CONDITIONAL UPON VSE APPROVAL. Without limitation, this subscription and
the transactions contemplated hereby are conditional upon and subject to the
Corporation receiving the Vancouver Stock Exchange's approval of this
subscription and the transactions contemplated hereby.
12. GOVERNING LAW. The contract arising out of this subscription shall be
governed by and construed in accordance with the laws of the province of British
Columbia and the laws of Canada applicable therein.
13. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The covenants, representations
and warranties contained herein shall survive the closing of the transactions
contemplated hereby.
35
-12-
14. ASSIGNMENT. This agreement is not assignable or transferable by the parties
hereto without the express written consent of the other party hereto.
15. TIME OF ESSENCE. Time shall be of the essence of this subscription.
ACCEPTANCE
INFOWAVE SOFTWARE, INC. hereby accepts the above subscription as of this
________ day of ________ 1999, and represents and warrants to the Subscriber
that the covenants, representations and warranties made by it to the Agents in
the Agency Agreement are true and correct as of this date and that the
Subscriber is entitled to rely thereon as if they were embodied herein. The
Corporation will, upon request by the Subscriber, provide the Subscriber with an
extract from the Agency Agreement setting forth such covenants, representations
and warranties, without charge.
INFOWAVE SOFTWARE, INC.
By: ____________________________________
Title: _________________________________
36
SCHEDULE "A"
TERM SHEET
SUMMARY OF PRINCIPAL TERMS OF AN OFFERING
OF SPECIAL WARRANTS EXERCISABLE FOR COMMON SHARES
ISSUER: Infowave Software, Inc.
OFFERING: A minimum of 1,230,770 Special Warrants.
AMOUNT: A minimum of $4,000,000 at a price of $3.25 per
Special Warrant.
TERMS OF SPECIAL Each Special Warrant shall entitle the holder thereof to
WARRANTS: acquire, at no additional cost, one unit comprised of
one common share in the capital of the Corporation (a
"COMMON SHARE") and one-half of a non-transferrable
common share purchase warrant (each whole such warrant a
"PURCHASE WARRANT").
MINIMUM SUBSCRIPTION: $97,000 in the Provinces of British Columbia and Alberta
and $150,000 in the Province of Ontario.
CLOSING DATE: June 22, 1999, or such other date as is agreed upon by
the Agents and the Corporation (the "CLOSING DATE").
Subscription funds and subscription agreements will be
held by the Agents pending closing of the Offering. In
the event subscriptions for a minimum of 1,230,770
Special Warrants are not received on or before June 30,
1999, no subscriptions will be accepted and all
subscription funds will be returned to the subscribers
without interest or deduction.
SELLING AND QUALIFYING British Columbia, Alberta and Ontario (collectively, the
JURISDICTIONS: "QUALIFYING JURISDICTIONS") and offshore.
SPECIAL WARRANTS: The Special Warrants will be issued pursuant to a
special warrant indenture. The Special Warrants are
exercisable by the holders thereof at any time after
their issuance and, if not previously exercised, will be
deemed to be exercised immediately prior to 4:00 p.m.
(Vancouver time) on the earlier of: (i) the fifth
business day after a receipt is issued by the last of
the securities regulatory authorities in each of the
Qualifying Jurisdictions for a (final) prospectus
qualifying the issuance of the Common Shares and the
Purchase Warrants (the "UNDERLYING SECURITIES") upon
37
-2-
exercise of the Special Warrants; and (ii) the date
which is 330 days after the Closing Date (the "EXPIRY
DATE"). The Special Warrants are transferable.
PURCHASE WARRANT Each Purchase Warrant will entitle the holder to
TERMS: purchase one Common Share (a "Warrant Share") at $3.75
per Warrant Share for 12 months from the Closing Date.
PROSPECTUS FILING: The Corporation will use its reasonable efforts to file
a preliminary prospectus qualifying the Underlying
Securities to be issued upon exercise of the Special
Warrants in all Qualifying Jurisdictions as soon as
practicable after the Closing Date. The Corporation will
use reasonable efforts to obtain a receipt for the
(final) prospectus (the "FINAL PROSPECTUS") within 90
days after the Closing Date. If the Corporation does not
obtain such receipt for the Final Prospectus within 90
days after the Closing Date, Special Warrants exercised
after that date shall, subject to regulatory approval,
entitle the holder to receive 1.1 Common Shares without
payment of any further consideration.
ESCROW: 40% of the net proceeds from the sale of the Special
Warrants will be held in escrow by Montreal Trust
Company of Canada, to be released on the earlier of: (a)
the day the last of the securities regulatory
authorities in each of the Qualifying Jurisdictions have
issued a receipt for the Final Prospectus; and (b) 330
days from the Closing Date.
AGENTS: Canaccord Capital Corporation, Yorkton Securities Inc.,
Sprott Securities Inc. and Taurus Capital Markets Inc.
(the "Agents") are acting as agents of the Corporation
for this commercially reasonable efforts offering and
will be paid at the closing of the sale of Special
Warrants a commission of 7.5% of the gross proceeds of
the offering. In addition, the Agents shall receive a
Special Agent's Warrant, exercisable to acquire an
Agent's Warrant which, upon exercise will entitle the
Agents to purchase such number of Common Shares equal to
10% of the number of Special Warrants sold by the
Agents, for a period of 12 months from the Closing Date,
at a price of $3.25 per Common Share. The issuance of
the Special Agent's Warrant is subject to regulatory
approval.
SUBSCRIPTION: Persons wishing to subscribe for Special Warrants must
complete and sign a Subscription Form and deliver a
cheque in the amount of $3.25 per Special Warrant to
either
38
-3-
of the Agents not later than two business days prior to
the Closing Date. The Corporation shall be entitled to
accept or reject any subscription, in its sole and
absolute discretion.
39
-4-
USE OF PROCEEDS: The proceeds from the sale of the Special Warrants will
be used by the Corporation to expand product development
and market development of the Corporation's wireless
computing business and for working capital purposes.
RESALE RESTRICTIONS: The Special Warrants will be issued pursuant to
exemptions from prospectus requirements of applicable
securities legislation and will be subject to resale
restrictions under that legislation.
If the Corporation is unable to obtain a receipt for the
Final Prospectus in any Qualifying Jurisdiction, the
Underlying Securities will be subject to statutory hold
periods during which time these securities may not be
resold in such Qualifying Jurisdictions. In addition, if
any Special Warrants are exercised prior to the day of
issuance of receipts for a Final Prospectus by the
securities commissions (the "QUALIFICATION DATE") in any
of the Qualifying Jurisdictions, the Underlying
Securities will be subject to statutory restrictions on
resale. The Special Warrants and the Underlying
Securities are also subject to restrictions on resale
imposed by the Vancouver Stock Exchange. Investors are
advised to consult their own legal advisers in this
regard.
The Corporation intends to file a prospectus to qualify
the Underlying Securities only in the Qualifying
Jurisdictions. Accordingly, Underlying Securities that
are acquired outside of the Qualifying Jurisdictions may
be subject to additional resale restrictions. Investors
are advised to consult their own legal advisers in this
regard.
40
SCHEDULE "B"
CORPORATE PLACEE REGISTRATION FORM
Where subscribers to a private placement are not individuals, the Exchange
requires that the following information about the placee be provided.
This Form will remain on file with the Exchange, therefore the corporation or
other entity (the "corporation") need only file it once, and it will be
referenced for all subsequent private placements in which it participates. If
any of the information provided in this Form changes, the corporation must
notify the Exchange prior to participating in further placements with Exchange
listed companies.
1. Name of Corporation:
________________________________________________________________________________
2. Address of Corporation's Head Office:
________________________________________________________________________________
3. Jurisdiction of Incorporation:
________________________________________________________________________________
4. (a) If the corporation will be purchasing securities as principal, [ ]
please check the box at right and include the names and addresses
of person/s having a greater than 10% beneficial interest in the
corporation:
_______________________________________________________________________
_______________________________________________________________________
(b) If the corporation will be purchasing as a portfolio manager, [ ]
please check the box at right and complete the Additional
Undertaking and Certification set out below.
ADDITIONAL UNDERTAKING AND CERTIFICATION - PORTFOLIO MANAGER
If the undersigned is a portfolio manager purchasing as agent for accounts that
are fully managed by it, the undersigned acknowledges that it is bound by the
provisions of the Securities Act (British Columbia) (the "Act"), and undertakes
to comply with all provisions of the Act relating to ownership of, and trading
in, securities including, without limitation, the filing of insider reports and
reports pursuant to Section 111 of the Act.
If the undersigned carries on business as a portfolio manager in a jurisdiction
outside of Canada, the undersigned certifies that:
a) it is purchasing securities of the Issuer on behalf of managed
accounts over which it has absolute discretion as to purchasing and
selling, and in respect of which it
41
-2-
receives no instructions from any person beneficially interested in
such accounts or from any other person;
b) it carries on the business of managing the investment portfolios of
clients through discretionary authority granted by those clients (a
"portfolio manager" business) in ______________________
[jurisdiction], and it is permitted by law to carry on a portfolio
manager business in that jurisdiction;
c) it was not created solely or primarily for the purpose of purchasing
securities of the Issuer;
d) the total asset value of the investment portfolios it manages on
behalf of clients is not less than $20,000,000;
e) it does not believe, and has no reasonable grounds to believe, that
any resident of British Columbia has a beneficial interest in any of
the managed accounts for which it is purchasing; and
f) the Company has provided it with a list of the directors, senior
officers and other insiders of the Company and the persons that
carry on investor relations activities for the Company:
Xxxx Xxxxxxxxx
Xxx Xxxxxxxxx
Xxxx Land
Xxxxx Xxxxx
Xxxxx Xxxxx
Xxxxxxx Xxxxxxxxxx
Xxxxxx Xxxxxx
Xxxxx Xxxxx
Xxxx Xxxxxx
Xxx Xxxxxx
Xxxxx Xxxxxxx
The Investor Relations Group
and it does not believe, and has no reasonable grounds to believe,
that any of those persons has a beneficial interest in any of the
managed accounts for which it is purchasing, except as follows:
_______________________________________________________________________
_______________________________________________________________________
(Name of insider(s) or person(s) carrying on investor relations
activities for the Company that have a beneficial interest in an
account)
42
-3-
5. The undersigned acknowledges that it is bound by the provisions of the
British Columbia Securities Act including, without limitation, sections 87
and 111 concerning the filing of insider reports and reports of
acquisitions.
Dated at ___________________ this _____ day of ____________________ 19___
--------------------------------------
(Name of Purchaser - please print)
--------------------------------------
(Authorized Signature)
--------------------------------------
(Official Capacity - please print)
--------------------------------------
(please print name of individual whose
signature appears above, if different
from name of purchaser printed above)
THIS IS NOT A PUBLIC DOCUMENT
43
SCHEDULE "C"
FORM 20A (IP)
SECURITIES ACT (BRITISH COLUMBIA)
ACKNOWLEDGEMENT OF INDIVIDUAL PURCHASER
1. I have agreed to purchase from Infowave Software, Inc. (the
"Issuer") _________________________________________ [number of
securities] Special Warrants (the "Securities") of the Issuer. Each
Special Warrant is exercisable to acquire one common share and
one-half of one common share purchase warrant, subject to adjustment
in certain events.
2. I am purchasing the Securities as principal and, on closing of the
agreement of purchase and sale, I will be the beneficial owner of
the Securities.
3. I have not received an offering memorandum describing the Issuer and
the Securities.
4. I acknowledge that:
(a) no securities commission or similar regulatory authority has
reviewed or passed on the merits of the Securities, AND
(b) there is no government or other insurance covering the Securities,
AND
(c) I may lose all of my investment, AND
(d) there are restrictions on my ability to resell the Securities and it
is my responsibility to find out what those restrictions are and to
comply with them before selling the Securities, AND
(e) I will not receive a prospectus that the British Columbia Securities
Act (the "Act") would otherwise require be given to me because the
Issuer has advised me that it is relying on a prospectus exemption,
AND
(f) because I am not purchasing the Securities under a prospectus, I
will not have the civil remedies that would otherwise be available
to me, AND
(g) the Issuer has advised me that it is using an exemption from the
requirement to sell through a dealer registered under the Act,
except purchases referred to in paragraph 5(g), and as a result I do
not have the benefit of any protection that might have been
available to me by having a dealer act on my behalf.
5. I also acknowledge that: [circle one]
(a) I am purchasing Securities that have an aggregate acquisition cost
of $97,000 or more, OR
(b) my net worth, or my net worth jointly with my spouse at the date of
the agreement of purchase and sale of the securities, is not less
than $400,000, OR
44
-2-
(c) my annual net income before tax is not less than $75,000, or my
annual net income before tax jointly with my spouse is not less than
$125,000, in each of the two most recent calendar years, and I
reasonably expect to have annual net income before tax of not less
than $75,000 or annual net income before tax jointly with my spouse
of not less than $125,000 in the current calendar year, OR
(d) I am registered under the Act, OR
(e) I am a spouse, parent, brother, sister or child of a senior officer
or director of the Issuer, or of an affiliate of the Issuer, OR
(f) I am a close personal friend of a senior officer or director of the
Issuer, or of an affiliate of the Issuer, OR
(g) I am purchasing securities under section 128(c) ($25,000 -
registrant required) of the Rules, and I have spoken to a person
[NAME OF REGISTERED PERSON: N/A (THE "REGISTERED PERSON")] who has
advised me that the Registered Person is registered to trade or
advise in the Securities and that the purchase of the Securities is
a suitable investment for me.
6. If I am an individual referred to in paragraph 5(b), 5(c), or
5(d), I acknowledge that, on the basis of information about the Securities
furnished by the Issuer, I am able to evaluate the risks and merits of the
Securities because: [circle one]
(a) of my financial, business or investment experience, OR
(b) I have received advice from a person [NAME OF ADVISER: N/A (THE
"ADVISER")] who has advised me that the Adviser is:
(i) registered to advise, or exempted from the requirement to be
registered to advise, in respect of the Securities, and
(ii) not an insider of, or in a special relationship with, the
Issuer.
The statements made in this report are true.
DATED ______________________________, 1999.
------------------------------------
Signature of Purchaser
------------------------------------
Name of Purchaser
------------------------------------
------------------------------------
45
SCHEDULE "B"
SUBSCRIPTION AGREEMENT FOR U.S. SUBSCRIBERS
46
SCHEDULE "B"
SUBSCRIPTION FOR SPECIAL WARRANTS
(UNITED STATES RESIDENTS)
TO: INFOWAVE SOFTWARE, INC.
(the "Corporation")
AND TO: THE U.S. AGENT THROUGH WHICH
THIS SUBSCRIPTION IS BEING MADE
The undersigned (the "Subscriber") hereby irrevocably (subject
to Section 3(o) below) subscribes for and agrees to purchase through the U.S.
Agent _______________________ special warrants (the "Special Warrants") of the
Corporation for an aggregate consideration of Cdn.$ ___________________ (the
"Subscription Price"), representing a subscription price of Cdn.$3.25 per
Special Warrant, on the terms and conditions set out in sections 1 to 15 below.
Each Special Warrant shall entitle the holder thereof to acquire, at no
additional cost, one common share in the capital of the Corporation (a "Common
Share") and one-half of one non-transferrable common share purchase warrant
(each whole such warrant a "Purchase Warrant"). Each Purchase Warrant will
entitle the holder to purchase one Common Share (a "Warrant Share") at $3.75 per
Warrant Share for 12 months from the Closing Date (as hereinafter defined). The
Special Warrants shall have the attributes described in Schedule "A" attached to
and forming part of this subscription.
DATED at the City of ____________________________, in the of
___________________________, this _________ day of _________ , 1999.
_________________________________ __________________________________
(Name of Subscriber - please print) Subscriber's Address
_________________________________ __________________________________
(Subscriber's Address)
by: _____________________________
(Official Capacity or Title
- please print)
_________________________________ __________________________________
Authorized Signature (Telephone Number)
_________________________________ __________________________________
(Please print name of individual (Facsimile Number)
whose signature appears above
if different than the name of
the Subscriber printed above).
DETAILS OF BENEFICIAL PURCHASER IF NOT SAME AS SUBSCRIBER:
_________________________________ __________________________________
(Name - please print) (Beneficial Purchaser's Address)
_________________________________ __________________________________
_________________________________ __________________________________
(if space is inadequate please
attach a schedule containing
the necessary information)
47
-2-
REGISTRATION INSTRUCTIONS: DELIVERY INSTRUCTIONS:
_________________________________ __________________________________
Name Name
_________________________________ __________________________________
Account reference, if applicable Account reference, if applicable
_________________________________ __________________________________
Address Contact Name
_________________________________ __________________________________
Address
_________________________________ __________________________________
Telephone Number
_________________________________ __________________________________
Facsimile Number
* * * *
1. TERMS OF SPECIAL WARRANTS. The Special Warrants shall have the attributes
described in Schedule "A" hereto and shall be duly and validly created and
issued in the name of the Subscriber or the Subscriber's nominee pursuant to the
terms of a Special Warrant Indenture (the "SPECIAL WARRANT INDENTURE") to be
entered into between the Corporation and Montreal Trust Company of Canada, as
warrant agent (the "WARRANT AGENT").
2. AGENCY AGREEMENT. The Subscriber acknowledges that Canaccord Capital
Corporation, Yorkton Securities Inc., Sprott Securities Inc.
and Taurus Capital Markets Inc. (collectively the "Agents") and the Corporation
are currently negotiating, or intend to negotiate, an agreement (the "AGENCY
AGREEMENT") under which the Corporation will appoint the Agents to act as agents
to use their commercially reasonable efforts to offer the Special Warrants on a
private placement basis. The acceptance of this subscription by the Corporation
and the closing of the transactions contemplated hereby are subject to the
negotiation and entering into of the Agency Agreement. Provided that the Agency
Agreement is entered into, the transactions contemplated in this Agreement will
occur in accordance with the terms of the Agency Agreement. A portion of the
Special Warrants are being offered in the United States by U.S. registered
broker dealers (the "U.S. Agents"), as authorized agent in the United States for
the Agents, in reliance on exemptions from the registration requirements of the
United States Securities Act of 1933, as amended (the "U.S. Securities Act").
3. SUBSCRIBER'S REPRESENTATIONS AND WARRANTIES. By executing this
subscription, the Subscriber represents, warrants and covenants to the
Corporation, the Agents and the U.S. Agents (and acknowledges that the
Corporation, the Agents and the U.S. Agents are relying thereon) that:
48
-3-
(a) the Subscriber has been independently advised as to the applicable hold
period imposed in respect of the Special Warrants by securities
legislation in Canada and confirms that no representation has been made
respecting the applicable hold periods for the Special Warrants and is
aware of the risks and other characteristics of the Special Warrants
and of the fact that the Subscriber may not be able to resell the
Special Warrants, Common Shares, Purchase Warrants and Warrant Shares
in Canada except in accordance with the applicable securities
legislation and regulatory policy;
(b) the Subscriber has not received, nor has it requested, nor does it have
any need to receive, any offering memorandum, or any other document
(other than 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, prospective purchasers in order to assist them in making
an investment decision in respect of the Special Warrants and it has
not become aware of any advertisement in printed media of general and
regular paid circulation, radio, television or otherwise with respect
to the distribution of the Special Warrants;
(c) the Subscriber has relied solely upon the publicly available
information relating to the Corporation and not upon any verbal or
written representation as to fact or otherwise made by or on behalf of
the Corporation, the Agents or the U.S. Agents, such publicly available
information having been delivered to the Subscriber without independent
investigation or verification by the Corporation, the Agents and the
U.S. Agents, and agrees that the Corporation, the Agents and the U.S.
Agents assume no responsibility or liability of any nature whatsoever
for the accuracy, adequacy or completeness of the publicly available
information;
(d) the Subscriber acknowledges that the Agents and the U.S. Agents are
acting as agents in this transaction and the Subscriber hereby
acknowledges that all warranties, conditions, representations or
stipulations, whether express or implied and whether arising hereunder
or under prior agreement or statement or by statute or at common law
are expressly those of the Corporation, other than those relating
solely to the Agents or the U.S. Agents. The Subscriber acknowledges
that no information or representation concerning the Corporation has
been provided to the Subscriber by the Corporation, the Agents or the
U.S. Agents other than those contained in this Agreement and in all
press releases, prospectuses and filing statements filed with any
regulatory authorities (the "DISCLOSURE RECORD") and that the
Subscriber is relying entirely upon this Agreement and the Disclosure
Record. Any information given or statement made is given or made
without liability or responsibility howsoever arising on the part of
the Agents or the U.S. Agents. No person in the employment of, or
acting as agent of, the Agents or the U.S. Agents has any authority to
make or give any representation or warranty whatsoever in relation to
the Corporation or the Special Warrants. Any information given or
statement made is given or made without liability or responsibility
howsoever arising on the part of the Agents or the U.S. Agents, and
49
-4-
the Corporation and the Subscriber hereby release the Agents and the
U.S. Agents from any claims that may arise in respect thereof;
(e) the Subscriber:
(i) A. is purchasing the Special Warrants as principal having an
aggregate acquisition cost of at least $97,000 either: (i)
for its own account, not for the benefit of any other
person, and not with a view to the resale or distribution of
all or any of the Special Warrants; or (ii) for one or more
accounts as to which it exercises sole investment discretion
and each such account is purchasing Special Warrants having
such an aggregate acquisition cost; or
B. if it is not purchasing as principal, it is duly authorized
to enter into this subscription and to execute all
documentation in connection with the purchase on behalf of
each beneficial purchaser, it acknowledges that the
Corporation may be required by law to disclose on a
confidential basis to certain regulatory authorities the
identity of each beneficial purchaser of Special Warrants
for whom it may be acting; and
I. it is a portfolio manager in a jurisdiction other than
Canada and has provided the "Additional Undertaking and
Certification - Foreign Portfolio Manager" in the
Corporate Placee Registration Form in Schedule "B"
hereto, the certifications made therein being repeated
to the Corporation, the Agents and the U.S. Agents; or
II. it is acting as agent for one or more disclosed
principals, each of which principals is purchasing as a
principal for its own account, not for the benefit of
any other person, and not with a view to the resale or
distribution of all or any of the Special Warrants and
each of which principals complies with one of
paragraphs (ii) or (iii) below, as applicable;
(ii) if it is an individual or corporation, it would have an
aggregate acquisition cost of purchasing the Special
Warrants of not less than $97,000; and
(iii) if it is not a corporation or an individual but is a
syndicate, partnership or other form of unincorporated
organization, every participant in the syndicate,
partnership or unincorporated organization would have an
aggregate acquisition cost of not less than $97,000 for the
Special Warrants purchased if the participant were acquiring
its proportionate interest in the Special Warrants
purchased;
50
-5-
(f) if the Subscriber is a corporation it is duly incorporated and validly
subsisting under the laws of its jurisdiction of incorporation and all
necessary approvals by its directors, shareholders and others have been
given to authorize execution of this Agreement on behalf of the
Subscriber;
(g) the Subscriber is capable of assessing the proposed investment as a
result of the Subscriber's financial experience or as a result of
advice received from a registered person other than the Corporation or
any affiliates thereof;
(h) if required by applicable securities legislation, policy or order or by
any securities commission, stock exchange or other regulatory
authority, the Subscriber will execute, deliver, file and otherwise
assist the Corporation in filing, such reports, undertakings and other
documents with respect to the issue of the Special Warrants, Common
Shares, Purchase Warrants and Warrant Shares issued pursuant thereto,
as may be required, including, without limitation:
(i) if the Subscriber is not an individual, the Corporate Placee
Registration Form required by the Vancouver Stock Exchange
attached hereto as Schedule "B" if it has not already filed
the same with the Vancouver Stock Exchange; and
(ii) if the Subscriber is an individual, the Form 20A(IP)
attached hereto as Schedule "C";
(i) this subscription has been duly and validly authorized, executed and
delivered by and constitutes a legal, valid, binding and enforceable
obligation of the Subscriber;
(j) no person has made to the Subscriber any written or oral
representations:
(i) that any person will resell or repurchase the Special
Warrants, Common Shares or Warrant Shares issuable upon
exercise of the Purchase Warrants (the "SECURITIES");
(ii) that any person will refund the purchase price of the
Special Warrants;
(iii) as to the future price or value of any of the Securities; or
(iv) that the Securities will be listed and posted for trading on
a stock exchange or that application has been made to list
and post the Securities for trading on a stock exchange,
other than the Vancouver Stock Exchange;
(k) the Subscriber is not a "control person" of the Corporation as defined
in the Securities Act (British Columbia), will not become a "control
person" by virtue of this purchase of any of the Securities, and does
not intend to act in concert with any other person to form a control
group of the Corporation;
51
-6-
(l) the Subscriber is at arm's length (as that term is customarily defined)
with the Corporation;
(m) the Subscriber (or others for whom it is contracting hereunder) has
been advised to consult its own legal and tax advisors with respect to
applicable resale restrictions and tax considerations, and it (or
others for whom it is contracting hereunder) is solely responsible for
compliance with applicable resale restrictions and applicable tax
legislation;
(n) the Subscriber has no knowledge of a "material fact" or "material
change" (as those terms are defined in the applicable legislation) in
the affairs of the Corporation that has not been generally disclosed to
the public, save knowledge of this particular transaction;
(o) the offer made by this subscription is irrevocable (subject to the
Subscriber's right to withdraw his subscription and to terminate his
obligations as set out in this Agreement) and requires acceptance by
the Corporation and approval of the Vancouver Stock Exchange;
(p) the entering into of this Agreement and the transactions contemplated
hereby will not result in the violation of any of the terms and
provisions of any law applicable to, or the constating documents of,
the Subscriber or of any agreement, written or oral, to which the
Subscriber may be a party or by which he is or may be bound;
(q) the Subscriber acknowledges that the Agents and the U.S. Agent will
receive a commission from the Corporation in connection with this
offering;
(r) it understands that the Special Warrants and the Common Shares and the
Warrant Shares have not been and will not be registered under the U.S.
Securities Act or any applicable state securities laws and that the
sale contemplated hereby is being made in reliance on an exemption from
such registration requirements and exemptions from registration under
applicable state securities laws;
(s) it understands that the offers and sales of the Special Warrants in the
United States are being made in reliance on a private placement
exemption to a limited number of institutional "accredited investors"
as defined in Rule 501(a)(1), (2), (3) and (7) under the U.S.
Securities Act through a U.S. Agent or other United States registered
broker/dealers;
(t) it has had access to such additional information, if any, concerning
the Corporation as it has considered necessary in connection with its
investment decision to acquire the Special Warrants, Common Shares and
Purchase Warrants and it has not received, nor has it requested, nor
does it have any need to receive any offering memorandum, or any other
document (other than 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, prospective purchasers in order to assist
52
-7-
them in making an investment decision in respect of the Special
Warrants, Common Shares and Purchase Warrants;
(u) it 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 Special Warrants, Common Shares and Purchase Warrants and is
able to bear the economic risks of such investment;
(v) it and any beneficial purchaser for which it is purchasing Special
Warrants, Common Shares and Purchase Warrants are resident in the
United States at the address or addresses set forth on the first page
hereof;
(w) it is an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) and (7), under the U.S. Securities Act), and is
acquiring the Special Warrants for its own account or an institutional
"accredited investor", as to which the Subscriber exercises sole
investment discretion and as to which the Subscriber has the authority
to make the statements set forth in this Agreement, and not with a view
to any resale, distribution or other disposition of the Special
Warrants in any transaction that would be in violation of the United
States securities laws, subject to the disposition of the Subscriber's
property being at all times within its control;
(x) it acknowledges that it has not purchased Special Warrants as a result
of any "general solicitation" or "general advertising", as such terms
are used in Rule 502(c) under the U.S. Securities Act, including
advertisements, articles, notices or other communications published in
any newspaper, magazine or similar media or broadcast over radio or
television, or any seminar or meeting whose attendees have been invited
by general solicitation or general advertising;
(y) it agrees that if it decides to offer, sell or otherwise transfer any
of the Special Warrants, Common Shares or Warrant Shares, it will not
offer, sell or otherwise transfer any of such securities, directly or
indirectly, unless:
(i) the sale is to the Corporation; or
(ii) (A) the sale is to an Institutional Accredited Investor and
is of a number of Special Warrants, Common Shares or Warrant
Shares having an aggregate market value at the time of such
sale of not less than $97,000, and (B) a purchaser's letter
containing representations, warranties and agreements
substantially similar to those contained in this Agreement
(except that such purchaser's letter need not contain the
representation set forth in paragraph 3(t) above), and
satisfactory to the U.S. Agent and the Corporation, is
executed by the purchaser and delivered to the U.S. Agent
and the Corporation prior to the sale; or
(iii) the sale is made outside the United States in compliance
with the requirements of Rule 904 of Regulation S and in
compliance with applicable local laws and regulations; or
53
-8-
(iv) the sale is made pursuant to an exemption from registration
under the U.S. Securities Act provided by Rule 144
thereunder, if available; or
(v) the Special Warrants, Common Shares or Warrant Shares 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 it has therefore furnished to the
U.S. Agent and the Corporation an opinion of counsel of
recognized standing reasonably satisfactory to the U.S.
Agent and the Corporation;
(z) it understands and acknowledges that upon the original issuance
thereof, and until such time as the same is no longer required under
the U.S. Securities Act or applicable state securities laws, the
certificates representing the Special Warrants, the Common Shares and
the Warrant 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 "U.S. SECURITIES ACT") OR UNDER
ANY STATE SECURITIES LAWS. 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 OF REGULATION S UNDER THE
U.S. SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION
FROM REGISTRATION UNDER THE U.S. SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, OR (D)
IN COMPLIANCE WITH CERTAIN OTHER PROCEDURES
SATISFACTORY 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 U.S. SECURITIES ACT";
54
-9-
provided, that if any such securities are being sold under
paragraph (y)(iii) above, any such legend may be removed by
providing a declaration to the registrar and transfer agent
for such securities, to the effect set forth in Schedule "D"
hereto (or as the Corporation may prescribe from time to time)
and provided, further, that, if any Special Warrants, Common
Shares or Warrant Shares are being sold under paragraph
(y)(iv) above, the legend may be removed by delivery to the
registrar and transfer agent of an opinion of counsel, of
recognized standing reasonably satisfactory to the
Corporation, that such legend is no longer required under
applicable requirements of the U.S. Securities Act or state
securities laws;
(aa) it consents to the Corporation making a notation on its
records or giving instructions to any transfer agent of the
Special Warrants, Common Shares or Warrant Shares in order to
implement the restrictions on transfer set forth and described
herein;
The Subscriber agrees that the above representations, warranties and
covenants will be true and correct both as of the execution of this
subscription and as of the Closing Time and will survive the completion
of the issuance of the Special Warrants.
4. ACKNOWLEDGEMENT. The foregoing representations, warranties and covenants are
made by the Subscriber with the intent that they be relied upon by the
Corporation, the Agents and the U.S. Agents in determining its suitability or
(if applicable) the suitability of others on whose behalf it is contracting
hereunder as a purchaser of Special Warrants and the Subscriber hereby agrees to
indemnify the Corporation, the Agents and the U.S. Agents against all losses,
claims, costs, expenses and damages or liabilities which any of them may suffer
or incur caused or arising from reliance thereon. The Subscriber undertakes to
notify the Corporation, the Agents and the U.S. Agents immediately of any change
in any representation, warranty or other information relating to the Subscriber
set forth herein which takes place prior to the Closing Time (as hereinafter
defined).
The Subscriber acknowledges that a legend will be placed on
the certificates representing the Special Warrants (and any Common Shares or
Warrant Shares in the event the Special Warrants are exercised prior to the
Qualification Date (as defined in Schedule "A")) to the effect that the
securities represented by the certificates are subject to a hold period and may
not be traded in British Columbia until the expiry of such hold period except as
permitted by applicable securities legislation.
The Subscriber acknowledges that, although Special Warrants
may be issued to other purchasers under this offering concurrently with the
Closing Date, there may be other sales of Special Warrants under this offering,
some or all of which may close after the Closing Date. The Subscriber further
acknowledges that there is a risk that insufficient funds may be raised on the
Closing Date to fund the Corporation's objectives and that further closings may
not take place after the Closing Date.
5. CLOSING. The sale of the Special Warrants will be completed at the offices of
Blake, Xxxxxxx & Xxxxxxx, the Corporation's counsel, in Vancouver, British
Columbia at 10:00 a.m. (Vancouver time), or such other time as the Agents and
the Corporation may agree (the
55
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"Closing Time") on June 22, 1999, or such other date or time as the Agents and
the Corporation may agree (the "Closing Date"). If by the Closing Time, the
terms and conditions contained in the Agency Agreement for the benefit of the
Agents have been complied with to the satisfaction of, or waived by the Agents,
the Agents and the U.S. Agents shall deliver to the Corporation all completed
subscriptions, including this subscription, against delivery by the Corporation
of the Special Warrants.
6. DELIVERY OF SUBSCRIPTION AGREEMENT. The Subscriber agrees to deliver to the
U.S. Agent not later than 9:00 a.m. (Vancouver time) on June 18, 1999 (or two
days before the Closing Date if such date is changed in accordance with
paragraph 5 above and communicated to the Subscriber) the following:
(a) this duly completed and executed Subscription;
(b) if the Subscriber is not an individual, a manually signed and completed
copy of the Corporate Placee Registration Form required by the
Vancouver Stock Exchange attached hereto as Schedule "B" unless such
form has already been provided to the Vancouver Stock Exchange, in
which case the Subscriber represents and warrants that the information
contained therein is accurate at the date hereof;
(c) if the Subscriber is an individual, a manually signed and completed
copy of the Form 20A (IP) as attached hereto as Schedule "C"; and
(d) such other documents as may be required as contemplated by paragraph
3(h) hereof.
In addition, the Subscriber will arrange for the payment of the Subscription
Price in a manner acceptable to the U.S. Agent on or before 9:00 a.m. (Vancouver
time) on June 21, 1999 (or one day before the Closing Date if such date is
changed in accordance with paragraph 5 above and communicated to the
Subscriber).
This subscription is irrevocable except that the Subscriber
reserves the right to withdraw this subscription and to terminate its
obligations hereunder at any time before the Closing Date if the Agency
Agreement is not entered into or if the Agents terminate their obligations with
respect to this offering under the Agency Agreement and the Subscriber hereby
appoints each of the Agents and the U.S. Agents, individually or together, as
its agent for the purpose of notifying the Corporation of the withdrawal or
termination of this subscription.
56
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7. RIGHTS OF RESCISSION. In the event that a holder of a Special Warrant who
acquires Common Shares and Purchase Warrants upon the exercise of the Special
Warrant, is or becomes entitled under applicable securities legislation to the
remedy of rescission by reason of a misrepresentation in the prospectus filed in
connection with the qualification of the Common Shares and Purchase Warrants to
be issued on exercise of the Special Warrants or any amendment thereto, such
holder shall, subject to available defenses and any limitation period under
applicable securities legislation, be entitled to rescission not only of the
holder's exercise of its Special Warrant(s) but also of the private placement
transaction pursuant to which the Special Warrant was initially acquired, and
shall be entitled in connection with such rescission to a full refund from the
Corporation of all consideration paid on the acquisition of the Special Warrant.
In the event such holder is a permitted assignee of the interest of the original
Special Warrant Subscriber, such permitted assignee shall be entitled to
exercise the rights of rescission and refund granted hereunder as if such
permitted assignee was such original Subscriber. The foregoing is in addition to
any other right or remedy available to a holder of the Special Warrant under the
Applicable Legislation or otherwise at law.
8. AUTHORITY OF AGENTS. The Subscriber hereby irrevocably authorizes each of the
Agents and the U.S. Agents, individually or together, in its or their sole
discretion:
(a) to act as the Subscriber's representative at the closing, to
receive certificates for Special Warrants subscribed for and
to execute in its name and on its behalf all closing receipts
and documents required;
(b) to negotiate and approve, among other things, the Special
Warrant Indenture, a Purchase Warrant Indenture (if any), the
terms relating to the escrow of net proceeds as further
described in the Term Sheet attached hereto as Schedule "A",
and any related documents and any opinions, certificates or
other documents addressed to the Subscriber; and
(c) to waive, in whole or in part, any representations,
warranties, covenants or conditions for the benefit of the
Subscriber contained herein or in any agreement or document
ancillary or related thereto.
9. EXECUTION OF SUBSCRIPTION AGREEMENT. The Corporation, the Agents and the U.S.
Agents shall be entitled to rely on delivery by facsimile machine of an executed
copy of this subscription, and acceptance by the Corporation of such facsimile
copy shall be equally effective to create a valid and binding agreement between
the Subscriber and the Corporation in accordance with the terms hereof.
10. CONDITIONAL UPON ACCEPTANCE BY CORPORATION. The Corporation reserves the
right to review and accept or reject any subscription for any reason, in its
sole and absolute discretion.
11. CONDITIONAL UPON VSE APPROVAL. Without limitation, this subscription and the
transactions contemplated hereby are conditional upon and subject to the
Corporation receiving the Vancouver Stock Exchange's approval of this
subscription and the transactions contemplated hereby.
57
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12. GOVERNING LAW. The contract arising out of this subscription shall be
governed by and construed in accordance with the laws of the province of British
Columbia and the laws of Canada applicable therein.
13. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The covenants, representations
and warranties contained herein shall survive the closing of the transactions
contemplated hereby.
14. ASSIGNMENT. This agreement is not assignable or transferable by the parties
hereto without the express written consent of the other party hereto.
15. TIME OF ESSENCE. Time shall be of the essence of this subscription.
ACCEPTANCE
INFOWAVE SOFTWARE, INC. hereby accepts the above subscription as of this
________ day of ________ 1999, and represents and warrants to the Subscriber
that the covenants, representations and warranties made by it to the Agents in
the Agency Agreement are true and correct as of this date and that the
Subscriber is entitled to rely thereon as if they were embodied herein. The
Corporation will, upon request by the Subscriber, provide the Subscriber with an
extract from the Agency Agreement setting forth such covenants, representations
and warranties, without charge.
INFOWAVE SOFTWARE, INC.
By: _________________________________
Title: ______________________________
58
SCHEDULE "A"
TERM SHEET
SUMMARY OF PRINCIPAL TERMS OF AN OFFERING
OF SPECIAL WARRANTS EXERCISABLE FOR COMMON SHARES
ISSUER: Infowave Software, Inc.
OFFERING: A minimum of 1,230,770 Special Warrants.
AMOUNT: A minimum of $4,000,000 at a price of $3.25 per
Special Warrant.
TERMS OF SPECIAL Each Special Warrant shall entitle the
WARRANTS: holder thereof to acquire, at no additional
cost, one unit comprised of one common share in the
capital of the Corporation (a "COMMON SHARE") and
one-half of a non-transferrable common share purchase
warrant (each whole such warrant a "PURCHASE
WARRANT").
MINIMUM SUBSCRIPTION: $97,000 in the Provinces of British Columbia and
Alberta and $150,000 in the Province of Ontario.
CLOSING DATE: June 22, 1999, or such other date as is agreed
upon by the Agents and the Corporation (the "CLOSING
DATE").
Subscription funds and subscription agreements will
be held by the Agents pending closing of the
Offering. In the event subscriptions for a minimum of
1,230,770 Special Warrants are not received on or
before June 30, 1999, no subscriptions will be
accepted and all subscription funds will be returned
to the subscribers without interest or deduction.
SELLING AND QUALIFYING British Columbia, Alberta and Ontario
JURISDICTIONS: (collectively, the "QUALIFYING JURISDICTIONS")
and offshore.
SPECIAL WARRANTS: The Special Warrants will be issued pursuant to a
special warrant indenture. The Special Warrants are
exercisable by the holders thereof at any time after
their issuance and, if not previously exercised, will
be deemed to be exercised immediately prior to 4:00
p.m. (Vancouver time) on the earlier of: (i) the
fifth business day after a receipt is issued by the
last of the securities regulatory authorities in each
of the Qualifying Jurisdictions for a (final)
prospectus qualifying the issuance of the Common
Shares and the Purchase Warrants (the "UNDERLYING
SECURITIES") upon
59
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exercise of the Special Warrants; and (ii) the date
which is 330 days after the Closing Date (the "EXPIRY
DATE"). The Special Warrants are transferable.
PURCHASE WARRANT TERMS: Each Purchase Warrant will entitle the holder
to purchase one Common Share (a "WARRANT SHARE")
at $3.75 per Warrant Share for 12 months from
the Closing Date.
PROSPECTUS FILING: The Corporation will use its reasonable
efforts to file a preliminary prospectus qualifying
the Underlying Securities to be issued upon exercise
of the Special Warrants in all Qualifying
Jurisdictions as soon as practicable after the
Closing Date. The Corporation will use reasonable
efforts to obtain a receipt for the (final)
prospectus (the "FINAL PROSPECTUS") within 90 days
after the Closing Date. If the Corporation does not
obtain such receipt for the Final Prospectus within
90 days after the Closing Date, Special Warrants
exercised after that date shall, subject to
regulatory approval, entitle the holder to receive
1.1 Common Shares without payment of any further
consideration.
ESCROW: 40% of the net proceeds from the sale of the Special
Warrants will be held in escrow by Montreal Trust
Company of Canada, to be released on the earlier of:
(a) the day the last of the securities regulatory
authorities in each of the Qualifying Jurisdictions
have issued a receipt for the Final Prospectus; and
(b) 330 days from the Closing Date.
AGENTS: Canaccord Capital Corporation and Yorkton Securities
Inc., Sprott Securities Inc. and Taurus Capital
Markets Inc. (the "Agents") are acting as agents of
the Corporation for this commercially reasonable
efforts offering and will be paid at the closing of
the sale of Special Warrants a commission of 7.5% of
the gross proceeds of the offering. In addition, the
Agents shall receive a Special Agent's Warrant,
exercisable to acquire an Agent's Warrant which, upon
exercise will entitle the Agents to purchase such
number of Common Shares equal to 10% of the number of
Special Warrants sold by the Agents, for a period of
12 months from the Closing Date, at a price of $3.25
per Common Share. The issuance of the Special Agent's
Warrant is subject to regulatory approval.
60
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SUBSCRIPTION: Persons wishing to subscribe for Special Warrants
must complete and sign a Subscription Form and
deliver a cheque in the amount of $3.25 per Special
Warrant to either of the Agents not later than two
business days prior to the Closing Date. The
Corporation shall be entitled to accept or reject any
subscription, in its sole and absolute discretion.
USE OF PROCEEDS: The proceeds from the sale of the Special Warrants
will be used by the Corporation to expand product
development and market development of the
Corporation's wireless computing business and for
working capital purposes.
RESALE RESTRICTIONS: The Special Warrants will be issued pursuant to
exemptions from prospectus requirements of applicable
securities legislation and will be subject to resale
restrictions under that legislation.
If the Corporation is unable to obtain a receipt for
the Final Prospectus in any Qualifying Jurisdiction,
the Underlying Securities will be subject to
statutory hold periods during which time these
securities may not be resold in such Qualifying
Jurisdictions. In addition, if any Special Warrants
are exercised prior to the day of issuance of
receipts for the Final Prospectus by the securities
commissions (the "QUALIFICATION DATE") in any of the
Qualifying Jurisdictions, the Underlying Securities
will be subject to statutory restrictions on resale.
The Special Warrants and the Underlying Securities
are also subject to restrictions on resale imposed by
the Vancouver Stock Exchange. Investors are advised
to consult their own legal advisers in this regard.
The Corporation intends to file a prospectus to
qualify the Underlying Securities only in the
Qualifying Jurisdictions. Accordingly, Underlying
Securities that are acquired outside of the
Qualifying Jurisdictions may be subject to additional
resale restrictions. Investors are advised to consult
their own legal advisers in this regard.
U.S. PURCHASERS: Sales to U.S. accredited investors will be made
pursuant to the registration exemptions provided by
Section 4(2) of the U.S. Securities Act of 1933 and
Rule 506 made thereunder.
61
SCHEDULE "B"
CORPORATE PLACEE REGISTRATION FORM
Where subscribers to a private placement are not individuals, the Exchange
requires that the following information about the placee be provided.
This Form will remain on file with the Exchange, therefore the corporation or
other entity (the "corporation") need only file it once, and it will be
referenced for all subsequent private placements in which it participates. If
any of the information provided in this Form changes, the corporation must
notify the Exchange prior to participating in further placements with Exchange
listed companies.
1. Name of Corporation:
_______________________________________________________________________________
2. Address of Corporation's Head Office:
_______________________________________________________________________________
3. Jurisdiction of Incorporation:
_______________________________________________________________________________
4. (a) If the corporation will be purchasing securities as [ ]
principal, please check the box at right and include the
names and addresses of person/s having a greater than 10%
beneficial interest in the corporation:
______________________________________________________________
______________________________________________________________
(b) If the corporation will be purchasing as a portfolio [ ]
manager, please check the box at right and complete the
Additional Undertaking and Certification set out below.
ADDITIONAL UNDERTAKING AND CERTIFICATION - PORTFOLIO MANAGER
If the undersigned is a portfolio manager purchasing as agent for accounts that
are fully managed by it, the undersigned acknowledges that it is bound by the
provisions of the Securities Act (British Columbia) (the "Act"), and undertakes
to comply with all provisions of the Act relating to ownership of, and trading
in, securities including, without limitation, the filing of insider reports and
reports pursuant to Section 111 of the Act.
If the undersigned carries on business as a portfolio manager in a jurisdiction
outside of Canada, the undersigned certifies that:
62
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a) it is purchasing securities of the Issuer on behalf of managed accounts
over which it has absolute discretion as to purchasing and selling, and
in respect of which it receives no instructions from any person
beneficially interested in such account or from any other person;
b) it carries on the business of managing the investment portfolios of
clients through discretionary authority granted by those clients (a
"portfolio manger" business) in ______________________ [jurisdiction],
and it is permitted by law to carry on a portfolio manager business in
that jurisdiction;
c) it was not created solely or primarily for the purpose of purchasing
securities of the Issuer;
d) the total asset value of the investment portfolios it manages on behalf
of clients is not less than $20,000,000;
e) it does not believe, and has no reasonable grounds to believe, that any
resident of British Columbia has a beneficial interest in any of the
managed accounts for which it is purchasing; and
f) the Company has provided it with a list of the directors, senior
officers and other insiders of the Company and the persons that carry
on investor relations activities for the Company:
Xxxx Xxxxxxxxx
Xxx Xxxxxxxxx
Xxxx Land
Xxxxx Xxxxx
Xxxxx Xxxxx
Xxxxxxx Xxxxxxxxxx
Xxxxxx Xxxxxx
Xxxxx Xxxxx
Xxxx Xxxxxx
Xxx Xxxxxx
Xxxxx Xxxxxxx
The Investor Relations Group
and it does not believe, and has no reasonable grounds to believe, that
any of those persons has a beneficial interest in any of the managed
accounts for which it is purchasing, except as follows:
_______________________________________________________________________________
_______________________________________________________________________________
(Name of insider(s) or person(s) carrying on investor relations activities for
the Company that have a beneficial interest in an account)
63
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5. The undersigned acknowledges that it is bound by the provisions of the
British Columbia Securities Act including, without limitation, sections 87
and 111 concerning the filing of insider reports and reports of
acquisitions.
Dated at ___________________ this _____ day of ____________________ 19___
_________________________________________
(Name of Purchaser - please print)
_________________________________________
(Authorized Signature)
_________________________________________
(Official Capacity - please print)
_________________________________________
(please print name of individual
whose signature appears above, if
different from name of purchaser
printed above)
THIS IS NOT A PUBLIC DOCUMENT
64
SCHEDULE "C"
FORM 20A (IP)
SECURITIES ACT
ACKNOWLEDGEMENT OF INDIVIDUAL PURCHASER
1. I have agreed to purchase from Infowave Software, Inc. (the "Issuer")
_________________________________________ [number of securities] Special
Warrants (the "Securities") of the Issuer. Each Special Warrant is
exercisable to acquire one common share and one-half of one common share
purchase warrant, subject to adjustment in certain events.
2. I am purchasing the Securities as principal and, on closing of the
agreement of purchase and sale, I will be the beneficial owner of the
Securities.
3. I have not received an offering memorandum describing the Issuer and the
Securities.
4. I acknowledge that:
(a) no securities commission or similar regulatory authority has reviewed
or passed on the merits of the Securities, AND
(b) there is no government or other insurance covering the Securities, AND
(c) I may lose all of my investment, AND
(d) there are restrictions on my ability to resell the Securities and it
is my responsibility to find out what those restrictions are and to
comply with them before selling the Securities, AND
(e) I will not receive a prospectus that the British Columbia Securities
Act (the "Act") would otherwise require be given to me because the
Issuer has advised me that it is relying on a prospectus exemption,
AND
(f) because I am not purchasing the Securities under a prospectus, I will
not have the civil remedies that would otherwise be available to me,
AND
(g) the Issuer has advised me that it is using an exemption from the
requirement to sell through a dealer registered under the Act, except
purchases referred to in paragraph 5(g), and as a result I do not have
the benefit of any protection that might have been available to me by
having a dealer act on my behalf.
5. I also acknowledge that: [circle one]
(a) I am purchasing Securities that have an aggregate acquisition cost of
$97,000 or more, OR
(b) my net worth, or my net worth jointly with my spouse at the date of
the agreement of purchase and sale of the securities, is not less than
$400,000, OR
65
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(c) my annual net income before tax is not less than $75,000, or my annual
net income before tax jointly with my spouse is not less than
$125,000, in each of the two most recent calendar years, and I
reasonably expect to have annual net income before tax of not less
than $75,000 or annual net income before tax jointly with my spouse of
not less than $125,000 in the current calendar year, OR
(d) I am registered under the Act, OR
(e) I am a spouse, parent, brother, sister or child of a senior officer or
director of the Issuer, or of an affiliate of the Issuer, OR
(f) I am a close personal friend of a senior officer or director of the
Issuer, or of an affiliate of the Issuer, OR
(g) I am purchasing securities under section 128(c) ($25,000 - registrant
required) of the Rules, and I have spoken to a person [NAME OF
REGISTERED PERSON: N/A (THE "REGISTERED PERSON")] who has advised me
that the Registered Person is registered to trade or advise in the
Securities and that the purchase of the Securities is a suitable
investment for me.
6. If I am an individual referred to in paragraph 5(b), 5(c), or 5(d), I
acknowledge that, on the basis of information about the Securities furnished by
the Issuer, I am able to evaluate the risks and merits of the Securities
because: [circle one]
(a) of my financial, business or investment experience, OR
(b) I have received advice from a person [NAME OF ADVISER: N/A (THE
"ADVISER")] who has advised me --------- that the Adviser is:
(i) registered to advise, or exempted from the requirement to be
registered to advise, in respect of the Securities, and
(ii) not an insider of, or in a special relationship with, the Issuer.
The statements made in this report are true.
DATED ______________________________, 1999.
------------------------------------
Signature of Purchaser
------------------------------------
Name of Purchaser
66
SCHEDULE "D"
FORM OF DECLARATION FOR REMOVAL OF LEGEND
Montreal Trust Company of Canada
as registrar and transfer agent
for the Special Warrants
and the Common Shares (the "Securities")
for Infowave Software, Inc.
The undersigned (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 (the "U.S. Securities
Act") and (b) certifies that (1) the undersigned is not an "affiliate" (as
defined in Rule 405 under the U.S. Securities Act) of Infowave Software, Inc.,
(2) 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
believe that the buyer was outside the United states or (B) the transaction was
executed on or through the facilities of the Vancouver 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, and (3)
neither the seller nor any person acting on its behalf engaged or will engage
in any directed selling efforts in connection with the offer and sale of such
securities. Terms used herein have the meanings given to them by Regulation S.
Dated:______________________________
By: __________________________________
Name:
Title:
67
SCHEDULE "C"
OUTSTANDING OPTIONS
68
SCHEDULE "C"
OUTSTANDING OPTIONS
AS AT JUNE 30, 1999
NUMBER OF COMMON EXERCISE MARKET VALUE ON
DESIGNATION OF OPTIONEE SHARES UNDER OPTION PRICE(8) EXPIRY DATE DATE OF GRANT
------------------------ ------------------- -------- ----------- ---------------
Executive Officers
(1 person)(1) 350,043 $1.00 September 8, 2002 $1.00
(2 persons)(2) 168,505 $1.00 September 8, 2002 $1.00
(1 person)(5) 80,000 $1.00 September 23, 2002 $1.00
(1 person)(2) 23,624 $1.00 October 10, 2002 $1.00
(1 person)(7) 33,000 $2.55 May 21, 2003 $2.50
(3 persons) (2) 194,000 $1.21 October 26, 2003 $1.43
(1 person)(2) 40,000 $1.56 January 21, 2004 $1.68
Directors not
Executive Officers
(1 person)(2) 100,000 $1.00 October 10, 2002 $1.00
(1 person)(3) 100,000 $2.55 May 27, 2003 $2.50
(1 person)(4) 35,000 $2.55 May 27, 2003 $2.50
(1 person)(4) 35,000 $1.39 April 7, 2004 $1.38
Employees
(29 persons)(2) 218,818 $1.00 September 8, 2002 $1.00
(1 person)(2) 9,668 $1.58 December 15, 2002 $2.50
(1 person)(2) 20,000 $1.55 December 17, 2002 $2.50
(1 person)(2) 12,890 $1.81 January 5, 2003 $2.50
(1 person)(2) 6,445 $2.91 February 9, 2003 $2.80
(1 person)(2) 9,668 $2.91 March 27, 2003 $2.80
(1 person)(2) 6,000 $2.55 May 27, 2003 $2.50
(4 persons)(2) 28,558 $1.97 July 15, 2003 $1.75
(8 persons) (2) 25,784 $1.28 September 21, 2003 $1.57
(2 persons) (2) 19,336 $1.56 January 21, 2004 $1.68
(3 persons) (2) 16,114 $1.39 April 7, 2004 $1.38
(7 persons) (2) 59,005 $3.97 June 1, 2004 $4.02
Consultants
(1 person)(6) 58,000 $1.81 January 5, 2003 $2.50
(2 person)(6) 56,500 $2.91 March 27, 2003 $2.80
---------
Total: 1,705,958
=========
Notes:
(1) These options vest as follows: a total of 200,043 of the options
vest on September 8, 1998 with 1/8th of the remaining options
vesting each three months thereafter so that all such options will
be vested by September 8, 2000, three years after the date of grant.
(2) These options vest as follows: 30% of the options vest one year
after the date of grant, with 1/8th of the remaining options vesting
each three months thereafter so that all such options will be vested
by three years after the date of grant.
(3) These options vest at a rate of 1/36th per month commencing as of
the date of grant.
(4) These options vest at a rate of 1/12th per month commencing as of
the date of grant.
(5) These options vest at a rate of 1/36th per month commencing as of
October 14, 1997.
(6) These options are fully vested.
(7) These options vest at a rate of 1/36th per month commencing as of
January 1, 1998.
(8) All options exercisable at $1.00 per share were issued prior to the
initial public offering at the Corporation but the exercise price
was set at the offering price of $1.00. The exercise price on the
date of grant for all other options is determined in accordance with
the rules of the Vancouver Stock Exchange.
69
EXHIBIT I
AGENTS' CERTIFICATE
In connection with the private placement of Special Warrants of Infowave
Software, Inc. (the "Corporation"), with U.S. institutional investors ("U.S.
Private Placees") pursuant to U.S. Subscription Agreements dated as of various
dates and accepted by the corporation July 8, 1999, the undersigned does hereby
certify that:
(a) Yorkton Securities Inc. is a duly registered broker or dealer with
the United States Securities and Exchange Commission and is a member
of, and in good standing with, the National Association of
Securities Dealers, Inc. on the date hereof;
(b) all offers and sales of the Securities in the United States were
made to __________________ institutional "accredited investors" (as
defined below) by all Agents;
(c) all offers and sales of the Securities in the United States have
been effected in accordance with all applicable U.S. broker-dealer
requirements;
(d) immediately prior to our transmitting the U.S. Subscription
Agreement to such offerees, we had reasonable grounds to believe and
did believe that each offeree was an institutional "accredited
investor" as defined in Rule 501(a)(1), (2), (3) and (7) under the
United States Securities Act of 1933, as amended (the "U.S.
Securities Act"), and, on the date hereof, we continue to believe
that each U.S. Private Placee is an institutional accredited
investor within the meaning of Regulation D under the U.S.
Securities Act ("Regulation D"); and
(e) no form of general solicitation or general advertising (as those
terms are used in Regulation D) was used by us, including
advertisements, articles, notices or other communications published
in any newspaper, magazine or similar media or broadcast over radio
or television, or any seminar or meeting whose attendees had been
invited by general solicitation or general advertising, in
connection with the offer or sale of the Securities in the United
States or to U.S. persons.
Terms used in this Certificate have the meanings given to them in the Agency
Agreement unless otherwise defined herein.
Dated this 8th day of July, 1999.
Yorkton Securities Inc. Yorkton Capital Inc.
By: /s/ Xxxxx Xxxxxxxx By: /s/ illegible
------------------ -------------
Name: Name:
Title: Director Title: President
