SUBSCRIPTION AGREEMENT (for Ontario, Alberta, British Columbia and Non- Canadian/Non-U.S. Subscribers)
Exhibit
99.3
NORTHCORE
TECHNOLOGIES
INC. Series
(L) Debenture Subscription Agreement
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TO SUBSCRIBE, EACH SUBSCRIBER
MUST RETURN THE FOLLOWING:
a. □
Duly completed and executed Subscription Agreement (complete Subscriber
Details and Signature Page):
b. □
Subscription Funds by direction, certified cheque, bank draft, money order
or wire transfer;
c. □
Duly completed and executed Accredited Investor Certificate (attached as
schedule “D”); and
d. □
Duly completed and executed Offshore Subscriber Certificate (attached as
schedule “E”, if applicable).
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(for
Ontario, Alberta, British Columbia and Non-Canadian/Non-U.S.
Subscribers)
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TO:
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Northcore
Technologies Inc. (the “Corporation”)
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RE:
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Offering
of Series (L) secured subordinate convertible debentures convertible into
units of the Corporation at a conversion price of $0.10 per unit. Each
unit is to consist of one common share in the capital of the Corporation
and one common share purchase warrant, with an exercise price of $0.15,
exercisable into one common share in the capital of the
Corporation.
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Details
of Subscription
The
undersigned (the “Subscriber”) hereby
irrevocably subscribes, subject to the terms and conditions set forth in this
subscription agreement, Series (L) secured subordinated convertible debentures
(the “Debentures”) of
the Corporation with the following specific purchase instructions. The
particulars of the Debentures and the securities issuable upon conversion of the
Debentures (together with certain other material covenants and acknowledgements)
are set out in Schedules “A” and “B” to this subscription agreement and certain
representations and warranties to be made by the Subscriber so that the
Corporation can ensure compliance with applicable securities laws are set out in
Schedule “C” to this subscription agreement, all of which form part of and are
hereby incorporated as part of this subscription agreement.
Ontario Alberta, and British Columbia
Subscribers:
Complete
and sign the Subscription Agreement and the Accredited Investor Certificate -
Schedule “D”.
Non Canadian and Non U.S.
Subscribers:
Complete
and sign the Subscription Agreement and the Offshore Subscriber Certificate -
Schedule “E”.
Please print all information
(other than signatures), as applicable, in the spaces provided
below.
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RE: Northcore Technologies Inc. - Subscription
Agreement for the Purchase of Series (L) Debentures
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Principal
Amount of Debentures Subscribed for (to be issued at
par):______________________________________________________________________________________________________
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Subscriber
Details
____________________________________________________________________
Name
of Subscriber
By: _______________________________________________________________
Authorized Signature ____________________________________________________________________
Official
Capacity or Title (if Subscriber is not an individual)
____________________________________________________________________
Name
of individual whose signature appears above if different from name of
Subscriber
printed above _____________________________________________________
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Registration
Instructions (if different from name of
Subscriber and address set out in the box to the left): _______________________________________________________________________
Name
_______________________________________________________________________
In Trust For, if applicable Account
Reference, if applicable
_______________________________________________________________________
_______________________________________________________
_______________________________________________________
Address,
including postal code
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| ____________________________________________________________________ Address of Subscriber, including province and postal code |
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Telephone
Number:
____________________________________________________
Fax
Number:
_________________________________________________________
E-mail
Address:
_______________________________________________________
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Delivery
Instructions (if different from name of
Purchaser and address set out in the box to the left): ________________________________________________________________________
Name
________________________________________________________
Account
Reference, if applicable
________________________________________________________
________________________________________________________
________________________________________________________
Address,
including province and postal code
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Disclosed Principal (please complete if purchasing
as agent or trustee
for a disclosed principal Name
of Principal:
_______________________________________________________
Principal’s
Address:
_____________________________________________________
(Street
Address)
_____________________________________________________
(City and
Province)
_____________________________________________________
(Postal
Code)
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The
Subscriber acknowledges its consent and request that this subscription agreement
(including all schedules hereto) and all other documents evidencing or relating
in any way to its purchase of Debentures be drawn up in the English language
only. Nous
reconnaissons par les présentes avoir consenti et demandé à ce que la présente
convention de souscription (et les annexes s’y rapportant) et tous les autres
documents faisant foi ou se rapportant de quelque manière à notre souscription
soient rédigés en anglais seulement.
IN WITNESS WHEREOF the
Subscriber has executed, or caused its duly authorized representative to
execute, this subscription agreement on this
day of
, 2008.
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Signature
of Subscriber (if an individual)
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Name
of Subscriber (if an individual)
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Per:
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Name
of Subscriber (if an individual)
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(signature
of authorized representative)
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Name
and Title of Authorized
Representative
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ACCEPTANCE
The
foregoing is acknowledged, accepted and agreed to this
day of
, 2008.
SCHEDULE
“A”
This
is Schedule “A” to the subscription agreement relating to the purchase of Series
(L) Debentures of Northcore Technologies Inc. (the “Corporation”).
TERMS
OF THE OFFERING
Offering. Series (L) secured
subordinate convertible debentures (the “Debentures”) of the
Corporation subscribed for hereunder form the total sale by the Corporation (the
“Offering”) of a maximum
of $525,000 principal amount of Debentures. The Offering is being made on a best
efforts private placement basis.
The
Debentures will bear interest at a rate of 10% per annum of the principal amount
of the Debentures outstanding from time to time, payable (A) for interest owing
in respect of the first 24 months following the Closing Date (as defined herein)
(the “Initial Period”),
calculated and payable in Common Shares upon the earlier of: i) Conversion (as
defined below) of the Debentures; or ii) each anniversary of the Closing Date;
and (B) for interest owing in respect of the period commencing on the date that
is 24 months and one day from the Closing Date, and ending on the fifth
anniversary of the Closing Date (the “Subsequent Period”),
calculated and payable upon the earlier of: i) Conversion of the Debentures; or
ii) each anniversary of the Closing Date; or iii) the fifth anniversary of the
Closing Date (the “Maturity
Date”).
Interest
owing in respect of the Initial Period is payable in full by the issuance of a
number of Common Shares calculated pursuant to the following
formula:
A÷B,
where:
A
= the amount of accrued interest payable, in dollars; and
B
= the greater of:
i) $0.10;
and
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ii)
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the
volume weighted average trading price of the Common Shares over the 20 day
trading period ending at the close of business on the day prior to the
date on which the interest payment is
due.
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Interest
owing in respect of the Subsequent Period is payable in cash upon the earlier
of: i) Conversion; or ii) each anniversary of the Closing Date; or iii) the
Maturity Date.
Interest
will continue to accrue until paid. At any time up to and including the Maturity
Date, all or any portion of the principal amount of Debentures outstanding will
be convertible (“Conversion”), at the option of
the holder, provided that the holder complies with the notice provision hereof,
into units of securities of the Corporation (“Units”) at a conversion price
of $0.10 per Unit (the “Conversion Price”), subject to
adjustments for stock splits, consolidations, other capital reorganizations,
extraordinary dividends or distributions among other anti-dilution provision
adjustments for events that will affect all security holders
equally.
Each
Unit will consist of one common share in the Capital of the Corporation (a
“Common Share”) and one
Common Share purchase warrant (a “Warrant”). Each Warrant is
exercisable into one Common Share at an exercise price of $0.15, any
time prior to the earlier of (i) 5 years from the Closing Date (as defined
below); and (ii) the date that is sixty (60) days following the issuance of a
notice by Northcore to holders confirming that the closing price of the Common
Shares on the Toronto Stock Exchange was greater than or equal to $0.36 for 10
consecutive trading days.
The
material terms of the Offering, the Debentures and the Underlying Securities (as
hereinafter defined) are set out in this schedule and in Schedule “B” to this
subscription agreement.
The
foregoing description of the Debentures is a summary only and the Subscriber
acknowledges that the definitive terms and conditions of the Debentures sold
under the Offering will be set forth in the Debenture Certificates (as
hereinafter defined).
1. Definitions. In
this subscription agreement and the schedules to this subscription agreement the
defined terms set out in the first page of this subscription agreement or as set
out in Section 1 above shall apply and, unless the context otherwise
requires:
“Applicable Securities Laws”
means the applicable securities laws of the Provinces of Ontario Alberta, and
British Columbia as the case may be, and the regulations and rules made and
forms prescribed thereunder, together with all applicable instruments, published
policy statements, blanket orders, notices, rulings and rules of the Ontario
Securities Commission, Alberta Securities Commission and the British Columbia
Securities Commission;
“Business Day” means a day
other than a Saturday, Sunday or statutory or banking holiday in Toronto,
Ontario;
“Closing Date” means on or
about March 28, 2008, or such other date or dates as the Corporation may
designate;
“Closing Time” means 10:00 a.m.
(Toronto time) on the Closing Date, or such other time on the Closing Date as
the Corporation may designate;
“Common Share” means one common
share in the capital of the Corporation;
“Corporation’s Information
Record” means any statement contained in any press release, material
change report, financial statements or other document of the Corporation which
has been or is publicly disseminated, whether pursuant to any Applicable
Securities Laws or otherwise, prior to the Closing Time;
“Debenture Certificates” means
the definitive certificates representing the Debentures;
“Hold Period” means four months
and one day from the Closing Date and in the case of a purchaser who is an
insider of the Issuer for the purposes of the Securities Act (Ontario)
means 6 months from the Closing Date;
“including” means including
without limitation;
“material” means material in
relation to the Corporation;
“material change” means any
change in the business, operations, assets, liabilities, ownership or capital of
the Corporation, on a consolidated basis, that would reasonably be expected to
have a significant effect on the market price or value of the Common Shares and
includes a decision to implement such a change made by the board of directors of
the Corporation or by senior management of the Corporation who believe that
confirmation of the decision by the board of directors is probable;
“material fact” means any fact
that significantly affects or would reasonably be expected to have a significant
effect on the market price or value of the Common Shares;
“misrepresentation” means an
untrue statement of material fact, or an omission to state a material fact that
is required to be stated or that is necessary to make a statement not misleading
in the light of the circumstances in which it was made;
“Purchasers” mean those persons
who subscribe for Debentures under the Offering, including the
Subscriber;
“Regulation S” means Regulation
S under the U.S. Securities Act;
“TSX” means the Toronto Stock
Exchange;
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“Underlying Securities” means
the Common Shares and Warrants comprising the Units issuable upon the exercise
of the conversion rights under the Debentures;
“United States” means the
United States as that term is defined in Regulation S;
“U.S. Person” means a U.S.
Person as that term is defined in Regulation S;
“U.S. Securities Act” means the
Securities Act of 1933,
as amended, of the United States of America;
“Warrant Certificates” means
the definitive certificates representing the Warrants;
“Warrant Shares” means the
Common Shares issuable upon exercise of the Warrants.
2. Currency. All
dollar amounts referred to in this subscription agreement and the schedules
thereto are expressed in Canadian funds.
3. Representations and Warranties of the
Corporation. The Corporation hereby represents and warrants
for the benefit of the Subscribers as follows:
(a) the
Corporation is (and will be at the Closing Time) a reporting issuer in the
Provinces of Ontario, Alberta and British Columbia, and is in compliance with
all material obligations under Applicable Securities Laws of such
jurisdictions;
(b) the
Corporation has been duly incorporated and organized and is validly subsisting
under the laws of the Province of Ontario and has all requisite corporate power
and authority to own its assets and to carry on its business as currently
conducted;
(c) the
Corporation is conducting its business in material compliance with all
applicable laws, rules and regulations of each jurisdiction in which its
business is carried on and is duly licensed, registered or qualified in all
jurisdictions in which it owns, leases or operates its property or carries on
business to enable its business to be carried on as now conducted and its
property and assets to be owned, leased and operated and all such licences,
registrations and qualifications are and will at the Closing Time be valid,
subsisting and in good standing, except in respect of matters which do not and
will not result in any adverse material change in respect of the Corporation,
and except for the failure to be so qualified or the absence of any such
license, registration or qualification which does not and will not have a
material adverse effect on the assets or properties, business, results of
operations, prospects or condition (financial or otherwise) of the Corporation
and its subsidiaries, on a consolidated basis;
(d) the
Corporation has all required corporate power and authority to enter into and
carry out the provisions of this subscription agreement and the transactions
contemplated hereby and all necessary corporate action has been taken or will
have been taken prior to the Closing Time by the Corporation to duly authorize
the execution and delivery of this subscription agreement and such other
agreements and instruments and the consummation of the transactions contemplated
thereby and so as to validly create, issue and deliver the Debentures and
Warrants subscribed thereby and to validly create and irrevocably allot for
issuance the Underlying Securities;
(e) the
Corporation is neither in default or in breach in any material respect of, and
the execution and delivery of this subscription agreement by the Corporation,
the performance and compliance with the terms of this subscription agreement,
the issue and sale of the Debentures and Warrants, and the issue of the
Underlying Securities will not result in any breach of, or be in conflict with
or constitute a default under, or create a state of facts which, after notice or
lapse of time, or both, would constitute a default either directly or indirectly
under any term or provision of the constating documents, by-laws or resolutions
of the Corporation or any material mortgage, note, indenture, contract,
agreement, instrument, lease or other document to which it is a party or by
which it is bound;
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(f) the
Common Shares issuable upon exercise of the conversion rights under its
Debentures, if and when issued in accordance with the Debentures, as applicable,
and the Common Shares issuable upon exercise of the Warrants, if and when issued
in accordance with the Warrants, as applicable, will be validly issued and
outstanding as fully paid and non-assessable;
(g) no
approval, authorization, consent or other order of, and no filing, registration
or recording with, any governmental authority is required by the Corporation in
connection with the execution and delivery or with the performance by the
Corporation of this subscription agreement except in compliance with and the
rules of the TSX;
(h) to
the best of the Corporation’s knowledge, information and belief, no portion of
the Corporation’s Information Record contained a misrepresentation as at its
date of public dissemination;
(i) there
has been no adverse material change in relation to the Corporation since March
23, 2007, and no adverse material fact exists in relation to the Corporation or
its securities which, in either case, has not been generally disclosed or
disclosed in the Corporation’s Information Record;
(j) this
subscription agreement and all other agreements required in connection with the
issue and sale of the Debentures have been or will be, at or prior to the
Closing Time, duly authorized, executed and delivered by the Corporation and
will be valid and binding obligations of the Corporation enforceable in
accordance with their respective terms (except as the enforceability thereof may
be limited by (i) bankruptcy, insolvency or similar laws affecting creditors’
rights generally, (ii) general equitable principles or (iii) limitations under
applicable law in respect of rights of indemnity, contribution and waiver of
contribution); and
(k) the
Corporation intends that the net proceeds of the Offering will be used
substantially in the manner specified in Schedule “B” hereto.
(l) Forthwith
after the Closing, the Corporation shall file such forms and documents as may be
required under the Applicable Securities Laws relating to the Offering and any
further documents as may be required by any applicable regulatory authority
which, without limiting the generality of the foregoing, shall include a Form
45-501F1 as prescribed by the Securities Act (Ontario) and a Form 45-106F1 as
prescribed by National Instrument 45-106.
4. Reliance upon Representations,
Warranties and Covenants of the Corporation. The Corporation
further agrees that, by delivering the Debentures to the Subscriber, the
Corporation will be representing and warranting that the representations,
warranties and covenants contained in this subscription agreement are true as at
the Closing Time with the same force and effect as if they had been made by the
Corporation at the Closing Time.
5. Closing of
Purchase. The Subscriber acknowledges and agrees that delivery
of and payment for the Debentures will be completed at the offices of the
Corporation at 10:00 a.m. (Toronto time) on the Closing Date.
6. Payment and
Delivery. The Subscriber acknowledges and agrees to deliver to
the Corporation’s offices at 000 Xxx Xxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx X0X
0X0, (Attention: Xxx Xxxxxx, Fax number: (000)-000-0000) , prior to the Closing
Time:
(a) his
or her duly completed and executed subscription agreement (including Schedule
“D” or Schedule “E”, as applicable);
(b) a
certified cheque or bank draft payable to “Dundee Securities Corporation”, or
wire transfer in Canadian Funds to Northcore Technologies Inc. for
the principal amount of the Debentures subscribed for under this subscription
agreement, or payment of the same amount in such other manner as is acceptable
to the Corporation; and
(c) such
other documents as may be required pursuant to the terms of this subscription
agreement.
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7. Conditions of
Closing. This subscription is subject to acceptance by the
Corporation (as described below). The Offering is conditional upon, among other
things, the Corporation obtaining TSX approval and the Underlying Securities not
being subject to a hold period of more than four months and one day from the
Closing Date and the Common Shares being freely tradable on the TSX following
the expiration of such hold period.
The
Subscriber acknowledges and agrees that the obligations of the Corporation
hereunder are conditional on the accuracy of the representations and warranties
of the Subscriber contained in this subscription agreement as of the date of
this subscription agreement, and as of the Closing Time as if made at and as of
the Closing Time, and the fulfillment of the following additional conditions as
soon as possible and in any event not later than the Closing Time unless other
arrangements acceptable to the Corporation have been made:
(a) the
Corporation shall have received all necessary approvals and consents, including
all necessary regulatory approvals and consents (including the approval of the
TSX) required for the completion of the transaction contemplated by this
subscription agreement;
(b) the
representations and warranties of the Corporation contained herein being true
and correct as of the Closing Time with the same force and effect as if made at
and as of the Closing Time after giving effect to the transactions contemplated
hereby;
(c) the
Corporation having complied with all covenants, and satisfied all terms and
conditions contained herein to be complied with and satisfied by the Corporation
at or prior to the Closing;
(d) the
Subscriber having completed this subscription agreement in full and having paid
the principal amount of the Debentures subscribed for hereunder to the
Corporation in the manner contemplated in this subscription
agreement.
If,
at the Closing Time, the terms and conditions contained herein have been
complied with, this completed subscription agreement has been delivered to the
Corporation and accepted by the Corporation and, unless other arrangements
acceptable to the Corporation have been made, the aggregate subscription proceeds
representing the principal amount of Debentures subscribed for hereunder have
been paid in accordance with Section 7 hereof, unless other arrangements have
been made with the Corporation, Debenture Certificates endorsed by the
Corporation representing the Debentures subscribed for hereunder will be
available for delivery to the Subscriber in Toronto, Ontario at the Closing
Time. The Corporation will deliver such Debenture Certificates to the address
set out for delivery on page 2 of this subscription agreement promptly after the
closing of its Offering.
8. Acceptance or
Rejection. The Corporation will have the right to accept or
reject in its sole discretion (in whole or in part) this subscription at any
time at or prior to the Closing Time, and the right is reserved to the
Corporation to allot to any Purchaser less than the principal amount of
Debentures subscribed for. If this subscription is rejected in whole,
any cheques or other forms of payment delivered to the Corporation representing
the principal amount of the Debentures subscribed for will be promptly returned
to the Subscriber without interest or deduction. If this subscription
is accepted only in part, a cheque representing any refund of the principal
amount of the Debentures for that portion of the subscription for the Debentures
which is not accepted, will be promptly delivered to the Subscriber without
interest or deduction. The Subscriber acknowledges and agrees that
the acceptance of this subscription agreement will be conditional upon the sale
of the Debentures to the Subscriber being exempt from any prospectus and
registration requirements of Applicable Securities Laws. The
Corporation will be deemed to have accepted this subscription agreement upon the
delivery at closing of the Debenture Certificates referred to in Section 7 above
in accordance with the provisions hereof.
9. Information and
Documents. The Subscriber acknowledges that pursuant to
Applicable Securities Laws, the Subscriber may be required to file a report with
a Securities Commission in the required form within 10 days of each disposition
of all or any of the Debentures purchased hereunder or any of the Underlying
Securities issued upon the exercise of the conversion rights under such
Debentures and, if so required, the Subscriber, undertakes to file the required
report. The Corporation is not in any way responsible for such
filings or the payment of any related fees.
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10. Resale
Restrictions. The Subscriber understands and acknowledges that
the Debentures and in certain circumstances the Underlying Securities and
Warrant Shares will be subject to certain resale restrictions under Applicable
Securities Laws and the Subscriber agrees to comply with such
restrictions. Subscribers are advised to consult their own legal
advisors in this regard and no representations have been made to the Subscriber
by the Corporation with respect to such matters. The Subscriber also
acknowledges that it has been advised to consult its own legal advisors with
respect to applicable resale restrictions and that it is solely responsible for
complying with such restrictions (the Corporation is not in any manner
responsible for ensuring compliance by the Subscriber with such
restrictions).
11. No Revocation. The
Subscriber agrees that this offer is made for valuable consideration and may not
be withdrawn, cancelled, terminated or revoked by the Subscriber.
12. Indemnity. The
Subscriber agrees to indemnify and hold harmless the Corporation, and its
directors, officers, employees, agents, advisers and shareholders from and
against any and all loss, liability, claim, damage and expense whatsoever
(including, any and all fees, costs and expenses whatsoever reasonably incurred
in investigating, preparing or defending against any claim, lawsuit,
administrative proceeding or investigation whether commenced or threatened)
arising out of or based upon any representation, warranty or covenant of the
Subscriber contained herein or in any document furnished by the Subscriber to
the Corporation in connection herewith being untrue in any material respect or
any breach or failure by the Subscriber to comply with any covenant or agreement
made by the Subscriber herein or in any document furnished by the Subscriber to
the Corporation in connection herewith.
13. Modification. Neither
this subscription agreement nor any provision hereof shall be modified, changed,
discharged or terminated except by an instrument in writing signed by the party
against whom any waiver, change, discharge or termination is
sought.
14. Miscellaneous.
(a) The
agreement resulting from the acceptance of this subscription agreement by the
Corporation contains the whole agreement between the parties hereto in respect
of the subject matter hereof and there are no warranties, representations,
terms, conditions or collateral agreements, express, implied or statutory, other
than as expressly set forth herein and in any amendments hereto.
(b) All
representations, warranties, agreements and covenants made or deemed to be made
by the Subscriber in this subscription agreement will survive the execution and
delivery, and acceptance, of this subscription agreement and the closing of the
Offering.
(c) Time
shall be of the essence of this subscription agreement.
(d) This
subscription agreement may be executed in any number of counterparts, each of
which when delivered, either in original or facsimile form, shall be deemed to
be an original and all of which together shall constitute one and the same
document.
(e) This
subscription agreement shall be construed and enforced in accordance with, and
the rights and obligations of the parties shall be governed by, the laws of the
province of Ontario and the laws of Canada applicable therein. Any and all
disputes arising under this subscription agreement, whether as to
interpretation, performance or otherwise, shall be subject to the non-exclusive
jurisdiction of the courts of the province of Ontario and each of the parties
hereto hereby irrevocably attorns to the jurisdiction of the courts of such
province.
(f) This
subscription agreement shall be construed and enforced in accordance with, and
the rights and obligations of the parties shall be governed by, the laws of the
province of Ontario and the laws of Canada applicable therein. Any and all
disputes arising under this subscription agreement, whether as to
interpretation, performance or otherwise, shall be subject to the non-exclusive
jurisdiction of the courts of the province of Ontario and each of the parties
hereto hereby irrevocably attorns to the jurisdiction of the courts of such
province.
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15. Notices.
(a) Any
notice, direction or other instrument required or permitted to be given to
Corporation shall be in writing and shall be sufficiently given if delivered
personally, or transmitted by facsimile tested prior to transmission to the
Corporation, as follows:
(i)
in the case of the Corporation to:
000
Xxx Xxxx Xxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxx
X0X
0X0
Attention: Xxxxxx
Xxxxxxxx
Fax: 000-000-0000
(ii)
in the case of the Subscriber, at the address specified on the face page
hereof.
(b) Any
such notice, direction or other instrument, if delivered personally, shall be
deemed to have been given and received on the day on which it was delivered,
provided that if such day is not a Business Day then the notice, direction or
other instrument shall be deemed to have been given and received on the first
Business Day next following such day and if transmitted by fax, shall be deemed
to have been given and received on the day of its transmission, provided that if
such day is not a Business Day or if it is transmitted or received after the end
of normal business hours then the notice, direction or other instrument shall be
deemed to have been given and received on the first Business Day next following
the day of such transmission.
(c) Any
party hereto may change its address for service from time to time by notice
given to each of the other parties hereto in accordance with the foregoing
provisions.
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SCHEDULE
“B”
This
is Schedule “B” to the subscription agreement relating to the purchase of Series
(L) Debentures of Northcore Technologies Inc. (the “Corporation”). Capitalized
terms used but not defined in this schedule are intended to have the meanings
ascribed thereto, as applicable, on the first page of this subscription
agreement and sections 1 and 2 of Schedule “A” to this subscription
agreement
Summary
of Proposed Terms
Offering
of Series (L) Secured Subordinate Convertible Debentures
by
way of Private Placement
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Issuer:
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Northcore
Technologies Inc. (“Northcore” or the “Corporation”)
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Offering:
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Offering
of up to $525,000
principal amount of Series (L) Secured Subordinate Convertible Debentures
(the “Debentures”) to be issued by way of private placement exemptions
from prospectus and registration requirements in the Provinces of Ontario,
Alberta, British Columbia and such applicable Non-Canadian/Non-U.S.
jurisdictions, subject to the receipt of any applicable regulatory and
stock exchange approvals.
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Offered
Securities
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The
Debentures will have the following material terms:
a) The
debentures will be issued at par in integral multiples of $1,000.
b) At any
time up to and including the Maturity Date (as defined below), all or any
portion of the principal amount of the Debentures will be convertible
(“Conversion”) into one unit (a “Unit”) at the option of the holder at a
conversion price of $0.10 per Unit, subject
to adjustments for any stock splits, consolidations, or other capital
reorganizations, extraordinary dividends or distributions among other
anti-dilution provisions providing adjustment for events that will affect
all security holders equally (the “Conversion Price”). Holders converting
their Debentures will receive accrued and unpaid interest thereon to the
date of conversion.
c) Each
Unit is to consist of one common share (“Common Share”) and one common
share purchase warrant (“Warrant”).
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Warrants:
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Each
Warrant is exercisable into one Common Share at an exercise price
of $0.15, any time prior to
the earlier of (i) 5 years from the Closing Date (as defined below); and
(ii) the date that is sixty (60) days following the issuance of a notice
by Northcore to holders confirming that the closing price of the Common
Shares on the Toronto Stock Exchange was greater than or equal to $0.36 for 10 consecutive
trading days, adjusted for any stock splits and/or share consolidations,
at any time following Closing of the Issue.
|
|
Interest:
|
The
Debentures will bear interest at a rate of 10% per annum, payable
annually on the anniversary of the Closing Date in each year commencing
one year from the Closing Date. In lieu of cash payments from
interest owing in respect of the period commencing on the Closing Date and
ending on the date that is two (2) years from Closing Date, Northcore will
issue Common Shares calculated on the basis of A÷B, where:
A
= the amount of accrued interest payable, in dollars; and
B
= the greater of:
i)$0.10; and
ii)the
volume-weighted average trading price of the Common Shares over the 20 day
trading period ending at the close of business on the day prior to the
date on which the interest payment is
due.
|
|
Maturity
Date:
|
Five
years from the Closing Date (as defined below).
|
|
Redemption:
|
The
Debentures will not be redeemable before Maturity.
|
|
Purchase
for Cancellation:
|
Northcore
will have the right at any time to purchase the Debentures in the market,
by tender or by private contract.
|
|
Rank:
|
The
Debentures will be secured against all of Northcore’s assets and will be
subordinate in right of payment of principal and interest to all senior
debt obligations of Northcore (including bank debt) as at the Closing
Date.
|
|
Use
of Proceeds:
|
The
net proceeds from this offering will be used to fund working capital
requirements and for general corporate purposes.
|
|
Listing:
|
The
Debentures and Warrants will not be listed. Northcore Shares are listed on
the TSX under the symbol “NTI”.
|
|
Resale
Restrictions:
|
The
Corporation will be a “reporting issuer” on the Closing Date, such that it
is expected that the Debentures, Common Shares, Warrants and common shares
issuable upon the exercise of the Warrants, will be subject to a
restricted period expiring four months and one day following the Closing
Date.
|
|
Broker
Fee:
|
4%
of gross proceeds of the Offering.
|
|
Closing
Date:
|
On
or before March 28, 2008 or such earlier or later date as the Corporation
may determine.
|
B-2
SCHEDULE
“C”
SUBSCRIBER’S
REPRESENTATIONS AND WARRANTIES
This
is Schedule “C” to the subscription agreement relating to the purchase of Series
(L) Debentures of Northcore Technologies Inc. (the “Corporation”). Capitalized
terms used but not defined in this schedule are intended to have the meanings
ascribed thereto, as applicable, on the first page of this subscription
agreement and sections 1 and 2 of Schedule “A” to this subscription
agreement.
By
executing this subscription agreement, the Subscriber represents and warrants to
the Corporation, which representations and warranties are true as of the date of
this subscription agreement and will be true as of the Closing Date,
that:
|
1.
|
Representations and
Warranties
|
|
|
(a)
|
Authorization and
Effectiveness. If the Subscriber is a corporation, the
Subscriber is a valid and subsisting corporation, has the necessary
corporate capacity and authority to execute and deliver this subscription
agreement and to observe and perform its covenants and obligations
hereunder and has taken all necessary corporate action in respect
thereof. If the Subscriber is a partnership, syndicate or other
form of unincorporated organization, the Subscriber has the necessary
legal capacity and authority to execute and deliver this subscription
agreement and to observe and perform its covenants and obligations
hereunder and has obtained all necessary approvals in respect
thereof. If the Subscriber is a natural person, he or she has
obtained the age of majority and is legally competent to execute this
subscription agreement and to take all actions required pursuant
thereto.
|
Whether
the Subscriber is a natural person or a corporation, partnership or other
entity, upon acceptance by the Corporation, this subscription agreement will
constitute a legal, valid and binding contract of the Subscriber, and any
beneficial purchaser for whom it is purchasing, enforceable against the
Subscriber and any such beneficial purchaser in accordance with its
terms.
|
|
(b)
|
Residence. The
Subscriber or any beneficial purchaser on whose behalf the Subscriber is
acting hereunder is a resident of, or otherwise subject to, the
jurisdiction referred to under “Name and Address of Subscriber” on the
first page of this subscription agreement, which address is the residence
or place of business of the Subscriber or such beneficial purchaser and
has not been created or used solely for the purpose of acquiring
Debentures, and neither the Subscriber or such beneficial
purchaser:
|
|
|
(i)
|
is (or is
purchasing Debentures for the account or benefit of) a U.S.
Person;
|
|
|
(ii)
|
was
offered the Debentures in the United States;
and
|
|
|
(iii)
|
executed
or delivered this agreement in the United
States.
|
|
|
(c)
|
Investment
Intent. The Subscriber on its own behalf and on behalf
of any beneficial purchaser on whose behalf the Subscriber is acting
hereunder is acquiring Debentures to be held for investment only and not
with a view to resale or
distribution.
|
|
|
(d)
|
Prospectus
Exemptions. The Subscriber or any beneficial purchaser
on whose behalf the Subscriber is acting hereunder acknowledges and agrees
that:
|
the
sale and delivery of the Debentures and the Warrants to the Subscriber is
conditional upon such sale being exempt from the requirements under Applicable
Securities Laws requiring the filing of a prospectus in connection with the
distribution of the Debentures. The Subscriber acknowledges that it is aware
that it is purchasing the Debenture pursuant to an exemption from the prospectus
requirement under applicable securities legislation and, as a consequence, (i)
it is restricted from using most of the civil remedies available under
securities legislation; (ii) it may not receive information that would otherwise
be required to be provided to it under securities legislation; and (iii) the
Corporation is relieved from certain obligations that would otherwise apply
under securities legislation.
|
|
(e)
|
Offering
Documents. The Subscriber has not received, nor does the
Subscriber need to receive, any document purporting to describe the
business and affairs of the Corporation that has been prepared for
delivery to and review by prospective investors (including a prospectus or
offering memorandum) so as to assist those investors to make an investment
decision in respect of securities being sold in a distribution of
securities of the Corporation.
|
|
|
(f)
|
No Solicitation or
Advertising. The Subscriber on its own behalf and on
behalf of any beneficial purchaser on whose behalf the Subscriber is
acting hereunder acknowledges that it has not purchased the Debentures as
a result of any general solicitation or general advertising, including
advertisements, articles, notices or other communications published in any
newspaper, magazine or similar media or broadcast over radio or television
or other telecommunications (including electronic display), or any seminar
or meeting whose attendees have been invited by any general solicitation
or general advertising.
|
|
|
(g)
|
No Undisclosed
Information. The Debentures are not being purchased by
the Subscriber as a result of any material information concerning the
Corporation that has not been publicly disclosed and the Subscriber’s
decision to tender this offer and acquire Debentures has not been made as
a result of any verbal or written representation as to fact or otherwise
made by or on behalf of the Corporation, or any other person and is based
entirely upon the currently available public information concerning the
Corporation.
|
|
|
(h)
|
Investment
Suitability. The Subscriber and any beneficial purchaser
on whose behalf the Subscriber is acting hereunder have such knowledge and
experience in financial and business affairs as to be capable of
evaluating the merits and risks of the investment hereunder in Debentures
and Warrants (and the Underlying Securities in respect thereof) and are
able to bear the economic risk of loss of such investment. The
Subscriber and any beneficial purchaser on whose behalf the Subscriber is
acting hereunder acknowledge and agree that the Subscriber and such
beneficial purchaser are responsible for obtaining such legal advice as
the Subscriber or such beneficial purchaser considers appropriate in
connection with the execution, delivery and performance by the Subscriber
of this agreement and the transactions contemplated
hereunder.
|
|
|
(i)
|
Subscription
Agreement. The Subscriber on its own behalf and on
behalf of any beneficial purchaser on whose behalf the Subscriber is
acting hereunder has read and understands the contents of this agreement
(including the Schedules hereto) and agrees to be legally bound
hereby.
|
|
|
(j)
|
No Conversion or Transfer of
Debentures or Underlying Securities in U.S. The
Subscriber on its own behalf and on behalf of any beneficial purchaser on
whose behalf the Subscriber is acting hereunder acknowledges that the
Debentures, Warrants and Underlying Securities may not be offered, sold or
otherwise transferred to persons in the United States or to U.S. Persons
and may not be exercised in the United States or by or on behalf of a U.S.
Person and the Subscriber and such beneficial purchaser understand that
certificates representing the Debentures, Warrants and Underlying
Securities issued to it will so
indicate.
|
|
|
(k)
|
Ontario Alberta and British
Columbia Subscribers. If the Subscriber or any
beneficial purchaser on whose behalf the Subscriber is acting hereunder is
a resident of Ontario, Alberta, or British Columbia, the Subscriber or its
disclosed principal is an “accredited investor” within the meaning of
National Instrument 45-106 - Prospectus and Registration Exemptions and
falls within one or more of the sub-paragraphs of the definition of
“Accredited Investor” set out in Schedule “D” hereto and the Subscriber or
such beneficial purchaser has concurrently executed and delivered to the
Corporation a certificate in the form attached as Schedule “D” (the
Subscriber having checked the applicable
subparagraph(s)).
|
C-2
|
|
(l)
|
Non-Canadian / Non-US
Subscriber. If the Subscriber, or any beneficial purchaser for whom
it is acting, is a resident of a non-Canadian/non-US jurisdiction, the
Subscriber and its disclosed principal, if applicable, is recognized by
the securities regulatory authority of such jurisdiction as an exempt
subscriber, the subscription for the Debentures by the Subscriber, or such
beneficial purchaser, does not contravene any of the applicable securities
legislation in the jurisdiction in which the Subscriber or such beneficial
purchaser resides and does not give rise to any obligation of the
Corporation to prepare and file a prospectus or similar document or to
register the Debentures and Warrants, or to be registered with or to file
any report or notice with any governmental or regulatory authority, and
the Subscriber or its disclosed principal has concurrently executed and
delivered to the Corporation a certificate in the form attached as
Schedule “E”.
|
|
|
(m)
|
The
execution and delivery of this subscription agreement, the performance and
compliance with the terms hereof, the subscription for the Debentures and
the completion of the transactions described herein by the Subscriber will
not result in any material breach of, or be in conflict with or constitute
a material default under, or create a state of facts which, after notice
or lapse of time, or both, would constitute a material default under any
term or provision of the constating documents, by-laws or resolutions of
the Subscriber, the Applicable Securities Laws or any other laws
applicable to the Subscriber, any agreement to which the Subscriber is a
party, or any judgment, decree, order, statute, rule or regulation
applicable to the Subscriber.
|
|
|
(n)
|
The
Subscriber is subscribing for the Debentures as principal for its own
account and not for the benefit of any other person (within the meaning of
Applicable Securities Laws) and not with a view to the resale or
distribution of all or any of the Debentures, Warrants or Underlying
Securities or if it is not subscribing as principal, it acknowledges that
the Corporation may be required by law to disclose to certain regulatory
authorities the identity of each beneficial purchaser of the Debentures
for whom it is acting.
|
|
|
(o)
|
In
the case of a subscription for the Debentures by the Subscriber acting as
trustee or agent (including, for greater certainty, a portfolio manager or
comparable adviser) for a principal, the Subscriber is duly authorized to
execute and deliver this subscription agreement and all other necessary
documentation in connection with such subscription on behalf of each such
beneficial purchaser, each of whom is subscribing as principal for its own
account, not for the benefit of any other person and not with a view to
the resale or distribution of the Debentures, Warrants or Underlying
Securities, and this subscription agreement has been duly authorized,
executed and delivered by or on behalf of and constitutes a legal, valid
and binding agreement of, such principal, and the Subscriber acknowledges
that the Corporation may be required by law to disclose the identity of
each beneficial purchaser for whom the Subscriber is
acting.
|
|
|
(p)
|
In
the case of a subscription for the Debentures by the Subscriber acting as
principal, this subscription agreement has been duly authorized, executed
and delivered by, and constitutes a legal, valid and binding agreement of,
the Subscriber. This subscription agreement is enforceable in
accordance with its terms against the Subscriber and any beneficial
purchasers on whose behalf the Subscriber is
acting.
|
|
|
(q)
|
There
is no person acting or purporting to act in connection with the
transactions contemplated herein who is entitled to any brokerage or
finder’s fee. If any person establishes a claim that any such
fee or other compensation is payable in connection with this subscription
for the Debentures, the Subscriber covenants to indemnify and hold
harmless the Corporation with respect thereto and with respect to all
costs reasonably incurred in the defence
thereof.
|
|
|
(r)
|
The
Subscriber is not, with respect to the Corporation or any of its
affiliates, a control person (as defined in Applicable Securities
Laws).
|
C-3
|
|
(s)
|
If
required by Applicable Securities Laws or the Corporation, the Subscriber
will execute, deliver and file or assist the Corporation in filing such
reports, undertakings and other documents with respect to the issue of the
Debentures, Warrants or Underlying Securities as may be required by any
securities commission, stock exchange or other regulatory
authority.
|
|
|
(t)
|
The
Subscriber acknowledges that no representation has been made respecting
the applicable hold periods imposed by the Applicable Securities Laws or
other resale restrictions applicable to the Debentures, Warrants or
Underlying Securities which restrict the ability of the Subscriber (or
others for whom it is contracting hereunder) to resell such securities,
that the Subscriber (or others for whom it is contracting hereunder) is
solely responsible to find out what these restrictions are and the
Subscriber is solely responsible (and the Corporation is not in any way
responsible) for compliance with applicable resale restrictions and the
Subscriber is aware that it (or beneficial purchasers for whom it is
contracting hereunder) may not be able to resell such securities except in
accordance with limited exemptions under the Applicable Securities Laws
and other applicable laws.
|
|
|
(u)
|
No
person has made any written or oral
representations:
|
|
|
(i)
|
that
any person will resell or repurchase the Debentures, Warrants or the
Underlying Securities;
|
(ii) that
any person will refund the purchase price of the Debentures; or
|
|
(iii)
|
as
to the future price or value of the Debentures, Warrants or the Underlying
Securities.
|
|
|
(v)
|
The
Subscriber, on its own behalf and, if applicable, on behalf of others for
whom it is acting hereunder, acknowledges and agrees as
follows:
|
|
|
(i)
|
No
securities commission, agency, governmental authority, regulatory body,
stock exchange or other regulatory body has reviewed or passed on the
merits of the Debentures, Warrants or the Underlying
Securities.
|
|
|
(ii)
|
The
Subscriber’s ability to transfer the Debentures, Warrants or Underlying
Securities is limited by, among other things, Applicable Securities
Laws.
|
|
|
(iii)
|
The
certificates representing the Debentures and Warrants will bear, as of the
Closing Date, legends substantially in the following form and with the
necessary information inserted:
|
UNLESS PERMITTED UNDER
SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY
BEFORE <INSERT DATE THAT IS FOUR (4) MONTHS AND ONE (1) DAY AFTER CLOSING
DATE>.”
|
|
(iv)
|
In
the event that holders of the Debentures or Warrants convert such
Debentures, or exercise such warrants, prior to the expiry of the hold
periods applicable to the Underlying Securities, the Underlying
Securities, as applicable, will bear legends substantially in the
following form and with the necessary information
inserted:
|
“UNLESS PERMITTED UNDER
SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY
BEFORE <INSERT DATE THAT IS FOUR (4) MONTHS AND ONE (1) DAY AFTER CLOSING
DATE>.
|
|
(v)
|
In
addition, the Common Shares will also bear a legend substantially in the
following form:
|
C-4
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK
EXCHANGE (THE “TSX”); HOWEVER THE SAID SECURITIES CANNOT BE TRADED THROUGH THE
FACILITIES OF THE TSX SINCE THEY ARE NOT FREELY TRANSFERABLE, AND CONSEQUENTLY
ANY CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT “GOOD DELIVERY” IN
SETTLEMENT OF TRANSACTIONS ON THE TSX.”
|
|
(vi)
|
There
is no government or other insurance covering the Debentures, Warrants or
Underlying Securities.
|
|
|
(vii)
|
There
are risks associated with the purchase of the Debentures, Warrants or the
Underlying Securities.
|
|
2.
|
Reliance Upon Representations,
Warranties and Covenants. The Subscriber acknowledges that the
representations and warranties contained herein are made by the Subscriber
with the intention that they may be relied upon by the Corporation in
determining the Subscriber’s eligibility to purchase Debentures under
Applicable Securities Laws. The Subscriber agrees that by
accepting delivery of the Debentures and the Warrants on the Closing Date,
the Subscriber will be representing and warranting that the foregoing
representations and warranties are true and correct as at the Closing Time
with the same force and effect as if they had been made by the Subscriber
at the Closing Time and that they will survive the purchase by the
Subscriber of Debentures and will continue in full force and effect
notwithstanding any subsequent disposition by the Subscriber of such
Debentures.
|
|
3.
|
Personal
Information. The Subscriber and (if applicable) each
disclosed principal understands that the Corporation may be required to
provide any one or more of the Canadian securities regulators, stock
exchanges, or other regulatory
agencies or the Corporation’s transfer agent with the name, residential
address, telephone number and e-mail address of the Subscriber and (if
applicable) any disclosed principals as well as information regarding the
number, aggregate purchase price and type of Debenture, Underlying
Securities and/or Common Shares purchased under this subscription
agreement and the identities of any beneficial purchasers of the,
Debentures, Underlying Securities and/or Common Shares (collectively, the
"Information"),
and may make any other filings of the Information as the Corporation or
the Corporation’s counsel deems appropriate. In addition, the Information
may be used by the Corporation for the purposes
of:
|
|
|
(a)
|
completing
the purchase of the Debentures pursuant to this subscription
agreement;
|
|
|
(b)
|
complying
with all corporate governance and continuous disclosure requirements under
applicable securities laws; and
|
|
|
(c)
|
contacting
the Subscriber in its capacity as an
investor.
|
The
Subscriber and (if applicable) any disclosed principals hereby consent to and
authorize the foregoing use and disclosure of such
Information. Notwithstanding that the Subscriber may be purchasing
the Debentures as agent on behalf of one or more undisclosed principals, the
Subscriber agrees to provide, on request, all particulars as to the identity of
such undisclosed principals as may be required by the Corporation in order to
comply with the foregoing.
Each
Subscriber of Debentures in Ontario authorizes the indirect collection of
Information by the Ontario Securities Commission and confirms that it has been
notified by the Corporation: (i) that the Corporation will be delivering the
Information to the Ontario Securities Commission; (ii) that such Information is
being collected indirectly by the Ontario Securities Commission under the
authority granted to it in Applicable Securities Laws; (iii) that such
Information is being collected for the purpose of the administration and
enforcement of Applicable Securities Laws; and (iv) that the title, business
address and business telephone number of the public official in the Province of
Ontario, who can answer questions about the Ontario Securities Commission’s
indirect collection of the Information as follows:
C-5
|
|
Administrative
Assistant to the Director of Corporate
Finance
|
|
|
Ontario
Securities Commission
|
|
|
18th
Floor, 00 Xxxxx Xxxxxx Xxxx
|
|
|
Xxxxxxx,
Xxxxxxx X0X 0X0
|
|
|
Telephone:
(000) 000-0000
|
|
4.
|
Proceeds of Crime. The
funds representing the Subscription Amount which will be advanced by the
Subscriber to the Corporation hereunder will not represent proceeds of
crime for the purposes of the Proceeds of Crime (Money Laundering) Act
(Canada) (the "PCMLA") and the
Subscriber acknowledges that the Corporation may in the future be required
by law to disclose the Subscriber’s name and other information relating to
this Subscription Agreement and the Subscriber's subscription hereunder,
on a confidential basis, pursuant to the PCMLA. To the best of its
knowledge (a) none of the subscription funds to be provided by the
Subscriber (i) have been or will be derived from or related to any
activity that is deemed criminal under the law of Canada, the United
States of America, or any other jurisdiction, or (ii) are being tendered
on behalf of a person or entity who has not been identified to the
Subscriber, and (b) it shall promptly notify the Corporation if the
Subscriber discovers that any of such representations ceases to be true,
and to provide the Corporation with appropriate information in connection
therewith.
|
C-6
SCHEDULE
“D”
This
is Schedule “D” to the subscription agreement relating to the purchase of Series
(L) Debentures of Northcore Technologies Inc. (the “Corporation”). Capitalized
terms used but not defined in this Schedule are intended to have the meanings
ascribed thereto, as applicable, on the first page of this subscription
agreement and section 1 and 2 of Schedule “A” to this Subscription
Agreement.
ACCREDITED
INVESTOR CERTIFICATE
In
connection with the purchase of Debentures, the undersigned hereby represents,
warrants and certifies to the Corporation that the undersigned (and each
disclosed principal, if applicable) is an “accredited investor” as defined in
Section 1.1 of National Instrument 45-106 - Prospectus and Registration
Exemptions and is purchasing the Debentures as principal.
The
undersigned has indicated below the categories that the undersigned (or the
disclosed principal) satisfies to qualify as an “accredited
investor”.
The
undersigned understands that the Corporation and its counsel are relying on the
information contained in this certificate in order to determine whether the
Corporation may sell Debentures to the undersigned in a manner exempt from the
prospectus and registration requirements of Applicable Securities
Laws.
ACCREDITED
INVESTOR STATUS
The
undersigned represents, warrants and certifies that it, he or she (or the
disclosed principal) is: [initial each
applicable item]:
|
_____
|
(a)
|
a
Canadian financial institution, or a Schedule III
bank;
|
|
_____
|
(b)
|
the
Business Development Bank of Canada incorporated under the Business Development Bank of
Canada Act (Canada);
|
|
_____
|
(c)
|
a
subsidiary of any person referred to in paragraphs (a) to (b), if the
person owns all of the voting securities of the subsidiary, except the
voting securities required by law to be owned by directors of that
subsidiary;
|
|
_____
|
(d)
|
a
person registered under the securities legislation of a jurisdiction of
Canada as an adviser or dealer, other than a person registered solely as a
limited market dealer under one or both of the Securities Act
(Ontario) or the Securities Act
(Newfoundland and Labrador);
|
|
_____
|
(e)
|
an
individual registered or formerly registered under the securities
legislation of a jurisdiction of Canada, as a representative of a person
referred to in paragraph (d);
|
|
_____
|
(f)
|
the
Government of Canada or a jurisdiction of Canada, or any crown
corporation, agency or wholly owned entity of the Government of Canada or
a jurisdiction of Canada;
|
|
_____
|
(g)
|
a
municipality, public board or commission in Canada and a metropolitan
community, school board, the Comité de gestion de la taxe scolaire de
l'île de Montréal or an intermunicipal management board in
Québec;
|
|
_____
|
(h)
|
any
national, federal, state, provincial, territorial or municipal government
of or in any foreign jurisdiction, or any agency of that
government;
|
|
_____
|
(i)
|
a
pension fund that is regulated by either the Office of the Superintendent
of Financial Institutions (Canada) or a pension commission or similar
regulatory authority of a jurisdiction of Canada;
|
|
_____
|
(j)
|
an
individual who, either alone or with a spouse, beneficially owns, directly
or indirectly, financial assets having an aggregate realizable value that
before taxes, but net of any related liabilities, exceeds
$1,000,000;
|
|
_____
|
(k)
|
an
individual whose net income before taxes exceeded $200,000 in each of the
two most recent calendar years or whose net income before taxes combined
with that of a spouse exceeded $300,000 in each of the two most recent
calendar years and who, in either case, reasonably expects to exceed that
net income level in the current calendar year;
|
|
_____
|
(l)
|
an
individual who, either alone or with a spouse, has net assets of at least
$5,000,000;
|
|
_____
|
(m)
|
a
person, other than an individual or investment fund, that has net assets
of at least $5,000,000 as shown on its most recently prepared financial
statements;
|
|
_____
|
(n)
|
an investment fund that distributes or has distributed its securities only to | |
| (i) | a person that is or was an accredited investor at the time of the distribution, | ||
| (ii) | a person that acquires or acquired securities in the circumstances referred to under sections 2.10 [Minimum Amount Investment] and 2.19 [Additional Investment in Investment Funds] of National Instrument 45-106, or | ||
|
|
|
(iii) |
a
person described in paragraph (i) or (ii) that acquires or acquired
securities under section 2.18 [Investment Fund Reinvestment]
of National Instrument 45-106;
|
|
_____
|
(o)
|
an
investment fund that distributes or has distributed securities under a
prospectus in a jurisdiction of Canada for which the regulator or, in
Québec, the securities regulatory authority, has issued a
receipt;
|
|
_____
|
(p)
|
a
trust company or trust corporation registered or authorized to carry on
business under the Trust
and Loan Companies Act (Canada) or under comparable legislation in
a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a
fully managed account managed by the trust company or trust corporation,
as the case may be;
|
|
_____
|
(q)
|
a person acting on behalf of a fully managed account managed by that person, if that person | |
| (i) | is registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction, and | ||
| (ii) |
in
Ontario, is purchasing a security that is not a security of an investment
fund;
|
||
|
_____
|
(r)
|
a
registered charity under the Income Tax Act (Canada)
that, in regard to the trade, has obtained advice from an eligibility
adviser or an adviser registered under the securities legislation of the
jurisdiction of the registered charity to give advice on the securities
being traded;
|
|
_____
|
(s)
|
an
entity organized in a foreign jurisdiction that is analogous to any of the
entities referred to in paragraphs (a) through (d) or paragraph (i)
in form and function;
|
D-2
|
_____
|
(t)
|
a
person in respect of which all of the owners of interests, direct,
indirect or beneficial, except the voting securities required by law to be
owned by directors, are persons that are accredited
investors;
|
|
_____
|
(u)
|
an
investment fund that is advised by a person registered as an adviser or a
person that is exempt from registration as an adviser;
or
|
|
_____
|
(v)
|
a
person that is recognized or designated by the securities regulatory
authority or, except in Ontario and Québec, the regulator as
i.an
accredited investor, or
ii.an
exempt purchaser in Alberta or British Columbia after National Instrument
45-106 comes into force.
|
For
the purposes hereof, the following terms shall have the following
meanings:
"Affiliate" - a person is an
affiliate of another person if:
|
|
(a)
|
one
of them is the subsidiary of the other,
or
|
|
|
(b)
|
each
of them is controlled by the same
person.
|
"Canadian financial
institution" means:
|
|
(c)
|
an
association governed by the Cooperative Credit
Associations Act (Canada) or a central cooperative credit society
for which an order has been made under section 473(1) of that Act;
or
|
|
|
(d)
|
a
bank named in Schedule I or II of the Bank Act (Canada), loan
corporation, trust company, trust corporation, insurance company, treasury
branch, credit union, caisse populaire, financial services cooperative, or
league that, in each case, is authorized by an enactment of Canada or a
jurisdiction of Canada to carry on business in Canada or a jurisdiction in
Canada.
|
"control person" means any
person that holds or is one of a combination of persons that holds:
|
|
(e)
|
a
sufficient number of any of the securities of an issuer so as to affect
materially the control of the issuer,
or
|
|
|
(f)
|
more
than 20% of the outstanding voting securities of an issuer except where
there is evidence showing that the holding of those securities does not
affect materially the control of the
issuer.
|
"director" means:
|
|
(g)
|
a
member of the board of directors of a company or an individual who
performs similar functions for a company,
and
|
|
|
(h)
|
with
respect to a person that is not a company, an individual who performs
functions similar to those of a director of a
company.
|
"eligibility adviser"
means:
|
|
(i)
|
a
person that is registered as an investment dealer or in an equivalent
category of registration under the securities legislation of the
jurisdiction of a purchaser and authorized to give advice with respect to
the type of security being distributed;
and
|
D-3
|
|
(j)
|
in
Saskatchewan or Manitoba, also means a lawyer who is a practising member
in good standing with a law society of a jurisdiction of Canada or a
public accountant who is a member in good standing of an institute or
association of chartered accountants, certified general accountants or
certified management accountants in a jurisdiction of Canada provided that
the lawyer or public accountant must
not:
|
|
|
(i)
|
have
a professional, business or personal relationship with the issuer, or any
of its directors, executive officers, founders of control persons;
and
|
|
|
(ii)
|
have
acted for or been retained personally or otherwise as an employee,
executive officer, director, associate or partner of a person that has
acted for or been retained by the issuer or any of its directors,
executive officers, founders or control persons within the previous 12
months.
|
"executive officer" means, for
an issuer, an individual who is:
|
|
(k)
|
a
chair, vice-chair or president,
|
|
|
(l)
|
a
vice-president in charge of a principal business unit, division, or
function including sales, finance or
production,
|
|
|
(m)
|
an
officer of the issuer or any of its subsidiaries and who performs a
policy-making function in respect of the issuer,
or
|
|
|
(n)
|
performing
a policy-making function in respect of the
issuer.
|
"financial assets"
means:
|
|
(o)
|
cash;
|
|
|
(p)
|
securities;
or
|
|
|
(q)
|
a
contract of insurance, a deposit or an evidence of a deposit that is not a
security for the purposes of securities
legislation;
|
"founder" means, in respect of
an issuer, a person who:
|
|
(r)
|
acting
alone, in conjunction, or in concert with one or more persons, directly or
indirectly, takes the initiative in founding, organizing or substantially
reorganizing the business of the issuer,
and
|
|
|
(s)
|
at
the time of the trade is actively involved in the business of the
Issuer.
|
"fully managed account" means
an account for which a person makes the investment decisions if that person has
full discretion to trade in securities for the account without requiring the
client's express consent to a transaction.
"investment fund" means a
mutual fund or a non-redeemable investment fund;
"mutual fund " means an issuer
whose primary purpose is the invest money provided by its security holders and
whose securities entitle the holder to receive on demand, or within a specified
period after demand, an amount computed by reference to the value of a
proportionate interest in the whole or in part of the net assets, including a
separate fund or trust account, of the issuer;
"non-redeemable investment
fund" means an issuer:
|
|
(t)
|
whose
primary purpose is to invest money provided by its security
holders;
|
D-4
|
|
(u)
|
that
does not invest:
|
|
|
(i)
|
for
the purpose of exercising or seeking to exercise control of an issuer,
other than an issuer that is a mutual fund or a non-redeemable investment
fund, or
|
|
|
(ii)
|
for
the purpose of being actively involved in the management of any issuer in
which it invests, other than an issuer that is a mutual fund or a
non-redeemable investment fund, and
|
|
|
(v)
|
that
is not a mutual fund.
|
"person" includes:
|
|
(w)
|
an
individual;
|
|
|
(x)
|
a
corporation;
|
|
|
(y)
|
a
partnership, trust, fund and an association, syndicate, organization or
other organized group of person, whether incorporated or not;
and
|
|
|
(z)
|
an
individual or other person in that person's capacity as a trustee,
executor, administrator, or personal or other legal
representative.
|
"related liabilities"
means:
|
|
(aa)
|
liabilities
incurred or assumed for the purpose of financing the acquisition or
ownership of financial assets, or
|
|
|
(bb)
|
liabilities
that are secured by financial
assets.
|
"spouse" means an individual
who:
|
|
(cc)
|
is
married to another individual and is not living separate and apart within
the meaning of the Divorce Act (Canada),
from the other individual;
|
|
|
(dd)
|
is
living with another individual in a marriage-like relationship, including
a marriage-like relationship between individuals of the same gender;
or
|
|
|
(ee)
|
in
Alberta, is an individual referred to in paragraph (a) or (b), or is in an
adult interdependent partner within the meaning of the Adult Interdependent
Relationships Act (Alberta).
|
"subsidiary" means an issuer
that is controlled directly or indirectly by another issuer an includes a
subsidiary of that subsidiary.
For
purposes of the definitions of “affiliates” and “subsidiary” a person (first
person) is considered to control another person (second person) if:
|
|
(ff)
|
the
first person, directly or indirectly, beneficially owns or exercises
control or direction over securities of the second person carrying votes
which, if exercised, would entitle the first person to elect a majority of
the directors of the second person, unless that first person holds the
voting securities only the secure an
obligation;
|
|
|
(gg)
|
the
second person is a partnership, other than a limited partnership, and the
first person holds more than 50% of the interests of the partnership;
or
|
D-5
|
|
(hh)
|
the
second person is a limited partnership and the general partner of the
limited partnership is the first
person.
|
EXECUTED by the Subscriber at
this
day of
, 2007.
|
If
a corporation, partnership or other entity:
|
If
an individual:
|
|
|
|
|
|
|
(Print
Name of Subscriber)
|
(Print
Name)
|
|
|
|
|
|
|
(Signature
of Authorized Signatory)
|
(Signature)
|
|
|
|
|
|
|
(Name
and Position of Authorized Signatory)
|
(Jurisdiction
of Residence)
|
|
|
|
|
|
|
(Jurisdiction
of Residence)
|
(Print
Name of Witness)
|
|
|
|
|
|
|
(Signature
of Witness)
|
||
D-6
SCHEDULE
“E”
This is Schedule “E” to the
subscription agreement relating to the purchase of Series (L) Debentures of
Northcore Technologies Inc.. (the “Corporation”). Capitalized terms
used but not defined in this Schedule are intended to have the meanings ascribed
thereto, as applicable, on the first page of this subscription agreement and
section 1 and 2 of Schedule “A” to this Subscription
Agreement
OFFSHORE
SUBSCRIBER CERTIFICATE
NON-CANADIAN
SUBSCRIBERS
(OTHER
THAN U.S SUBSCRIBERS)
We,
on our own behalf and (if applicable) on behalf of others for whom we are
contracting hereunder, represent, warrant, covenant and certify to and with the
Corporation (and acknowledge that the Corporation is relying thereon) that we
are, and (if applicable) any beneficial subscriber for whom we are contracting
hereunder is, a resident of, or otherwise subject to, the securities legislation
of a jurisdiction other than
Canada or the United States, and:
|
|
(a)
|
we,
and (if applicable) any other subscriber for whom we are contracting
hereunder, are:
|
|
|
(i)
|
a
subscriber that is recognized by the securities regulatory authority in
the jurisdiction in which we are resident, or otherwise subject to the
securities laws of such jurisdiction, as an exempt subscriber and are
purchasing the Debenture(s) as principal for our, or (if applicable) each
such other subscriber’s, own account, and not for the benefit of any other
person, for investment only and not with a view to resale or distribution;
or
|
|
|
(ii)
|
a
subscriber which is purchasing the Debenture(s) pursuant to an exemption
from any prospectus or securities registration requirements (particulars
of which are enclosed herewith) available to us and the Corporation, and
any such other subscriber, under applicable securities laws of our
jurisdiction of residence or to which we and any such other subscriber are
otherwise subject to, and we and any such other subscriber shall deliver
to the Corporation such further particulars of the exemption and our
qualification thereunder as the Corporation may reasonably
request;
|
|
|
(b)
|
the
purchase of the Debenture(s) by us, and (if applicable) each such other
subscriber, does not contravene any of the applicable securities laws in
such jurisdiction and does not trigger: (i) any obligation to prepare and
file a prospectus, an offering memorandum or similar document, or any
other ongoing reporting requirements with respect to such purchase or
otherwise; or (ii) any registration or other obligation on the part of the
Corporation; and
|
|
|
(c)
|
we,
and (if applicable) any other subscriber for whom we are contracting
hereunder will not sell or otherwise dispose of any Debentures, Underlying
Securities or Common Shares, except in accordance with applicable Canadian
securities laws and in accordance with the rules and regulations of the
TSX, and if we, or (if applicable) such beneficial subscriber, sell or
otherwise dispose of any Debentures, Underlying Securities or Common
Shares, to a person other than a resident of Canada or the United States ,
we, and (if applicable) such beneficial subscriber, will obtain from such
subscriber representations, warranties and covenants in the same form as
provided in this Schedule “E” and shall comply with such other
requirements as the Corporation may reasonably
require.
|
Dated
at
this
day of
, 2008.
|
|
||
|
(Signature
of Subscriber)
|
||
|
|
||
|
(Print
Name)
|
||
E-1
