Exhibit 5
FORM OF SUBSCRIPTION AGREEMENTS
THIS AGREEMENT, dated for reference ___________________, 1997, is made BETWEEN:
PORTACOM WIRELESS, INC. of 0000 X. Xxxxxxxxxx Xxxxxx,
Xxxxx 000, Playa del Rey, California, U.S.A., 90293
(the "Company")
AND:
XXXXXXX XXXXXX of WILL'S WEI CORP.
----------------------------------
_________________________________________
(the "Investor")
WHEREAS:
A. The Company is offering for sale, on a private placement basis,
up to ___ units (the "Units") at a price of per Unit to raise aggregate
subscription proceeds of up to US$1,000,000; and
B. The Investor wishes to subscribe for ________ Units in the private
placement on the terms described below.
1. Definitions
1.1. In this Agreement:
(a) "Accredited Investor" means an "accredited investor" as defined
in Rule 501 of Regulation D and as described in Appendix 3 to this
Agreement;
(b) "Acts" means the B.C. Act and the U.S. Securities Act;
(c) "B.C. Act" means the Securities Act (British Columbia), as
amended;
(d) "Closing" means the closing of the Offering;
(e) "Closing Date" means the date on which the Units will be issued to
the Investor;
(f) "Commission" means the British Columbia Securities Commission;
(g) "Company" means PortaCom. Wireless, Inc. and any successor
corporation thereof;
Page 37 of 49
(h) "Loan" has the meaning given at subsection 4.1;
(i) "Exchange" means the Vancouver Stock Exchange;
(j) "Offering" means the offering of the Units;
(k) "Regulation D" means Regulation D under the U.S. Securities Act;
(l) "Regulation S" means Regulation S under the U.S. Securities Act;
(m) "Regulatory Authorities" means the Commission and the Exchange;
(n) "Rules and Regulations" means the rules and regulations
promulgated under the B.C. Act;
(o) "Securities" means the Shares, the Warrants and the Warrant
Shares;
(p) "Share" means a common share of the Company or any successor
thereof forming part of a Unit;
(q) "Subscription Price" has the meaning given at subsection 2.1;
(r) "Unit" means a unit of the Company or any successor thereof to be
sold at a price of US$___ per unit, each comprised of one Share
and one Warrant;
(s) "U.S. Person" has the meaning given under Regulation S;
(t) "U.S. Securities Act" means the United States Securities Act of
1933, as amended;
(u) "Warrant" means a non-transferable common share purchase warrant
of the Company or any successor corporation to the Company
substantially in the form attached as Appendix 4;
(v) "Warrant Share" means a common share issuable upon the exercise of
a whole Warrant;
1.2. All other capitalized terms in this Agreement not defined above have
the meanings ascribed to them in this Agreement.
1.3. For the purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
Page 38 of 49
(a) "this Agreement" means this subscription agreement;
(b) any reference in this Agreement to a designated "section",
"subsection", "paragraph" or other subdivision refers to the
designated section, subsection, paragraph or other subdivision of
this Agreement;
(c) the words "herein" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any
particular section or other subdivision of this Agreement;
(d) the word "including", when following any general statement, term
or matter, is not to be construed to limit such general statement,
term or matter to the specific items or matters set forth
immediately following such word or to similar items or matters,
whether or not non-limiting language (such as "without limitation"
or "but not limited to" or words of similar import) is used with
reference thereto but rather refers to all other items or matters
that could reasonably fall within the broadest possible scope of
such general statement, term or matter;
(e) any reference to a statute includes and, unless otherwise
specified herein, is a reference to such statute and to the
regulations made pursuant thereto, with all amendments made
thereto and in force from time to time, and to any statute or
regulations that may be passed which has the effect of
supplementing or superseding such statute or such regulation;
(f) any reference to "party" or "parties" means the Company, the
Investor, or both, as the context requires;
(g) the headings in this Agreement are for convenience Of reference
only and do not affect the interpretation of this Agreement;
(h) words importing the masculine gender include the feminine or
neuter gender and words in the singular include the plural, and
vice versa; and
(i) all references to currency refer to United States dollars.
Page 39 or 49
1.4. The appendices attached to this Agreement are incorporated by reference
in and form a part of this Agreement.
2. Subscription
2.1. The Investor, as principal, subscribes for and agrees to purchase,
on the Closing Date, Units of the Company at a price of US$ per Unit,
for an aggregate purchase price of US$200,000 (the "Subscription
Price") subject to the approval of the Exchange. Each Unit consists of
one Share and one Warrant. Each whole Warrant entitles the holder
thereof to purchase one (1) additional common share in the capital of
the company for two years at an exercise price of US$ at any time until
one year from the date of this Agreement and thereafter at a price of
US$ until two years from the date of this Agreement. No fractional
common shares of the Company will be issued.
2.2. The Investor acknowledges that this Subscription is an offer only
and requires acceptance by the Company, approval from the Exchange and,
until accepted by the Company as evidenced by execution hereof and
written approval to this Subscription is received from the Exchange,
the Company will not be bound by any provision of this Subscription. A
reference in this Subscription to "this Agreement" refers to the
agreement formed on acceptance by the Company and Exchange approval of
this Subscription.
2.3. The terms and conditions which govern the Warrants will be referred to
on the certificates representing the Warrants and will contain, among
other things, provisions for the appropriate adjustment in the class,
number and price of the shares to be issued on the exercise of the
Warrants upon the occurrence of certain events including any
subdivision, consolidation or reclassification of the shares or
amalgamation or merger of the Company or the payment of stock
dividends.
2.4. The issue of the Warrants will not restrict or prevent the Company from
obtaining any other financing, nor from issuing additional securities
or rights during the period within which the Warrants are exercisable.
3. Payment of Subscription Price and Delivery of Documents
The Investor will, on execution of this Subscription, deliver the following
to the Company:
Page 40 of 49
(a) this fully completed Subscription duly executed by the Investor:
(b) the full amount of the Subscription Price payable to the Company by
cheque, wire transfer or bank draft;
(c) a fully completed and duly executed Private Placement Questionnaire
and Undertaking prescribed by the Exchange and attached to this
Agreement as Appendix 1;
(d) if the Investor is an individual (i.e., not a corporation, partnership,
unincorporated association, unincorporated syndicate, unincorporated
organization or trust), a fully completed Form 20A Acknowledgment of
Individual Purchaser attached to this Agreement as Appendix 2; and
(e) if the Investor is a U.S. Person, a fully completed and duly executed
Accredited Investor Questionnaire attached to this Agreement as
Appendix 3.
4. Closing
4.1. Until the Investor's Subscription is accepted by the Exchange the
Subscription Price for the Units will be advanced by the Investor to
the Company as an irrevocable non-interest bearing loan (the "Loan") to
the Company pending Closing.
4.2. The Closing will occur within five business days following the date
on which the Company receives final acceptance from the Exchange of
this Agreement.
4.3. The Company's obligation to complete the sale of the Units to the
Investor is subject to the following conditions:
(a) the Company having received final acceptance from the Exchange
of this Agreement;
(b) the Investor having delivered to the Company the Subscription
Price and documents in a form duly executed and completed, as
required in section 3;
(c) the Investor having delivered all such other documentation
as may be required by the applicable securities legislation and
securities regulatory authorities in order to complete the
purchase and sale of the Units; and
Page 41 of 49
(d) all representations and warranties of the Investor contained in
this Agreement being true as of the Closing Date.
4.4. At Closing, the Company will deliver to the Investor certificates
representing the Shares and the Warrants registered in the name of the
Investor.
4.5. At Closing, the Company will deliver to the Investor such copies of
approvals or other documents evidencing acceptance of the Subscription
by the Company and the Regulatory Authorities, as the Investor may
reasonably request.
5. Regulatory Approval
5.1. Upon receipt of the Subscription Price by the Company, and upon this
Subscription being fully executed and delivered to the Company and
accepted by the Company, the Company will use its reasonable efforts to
obtain the acceptance of the Exchange to the issue and sale of the
Units to the Investor.
6. Acknowledgments, Representations and Warranties of the Investor
The Investor acknowledges, represents and warrants to the Company, as at
the date stated above and at the Closing Date, that:
(a) no prospectus has been filed by the Company with the Commission in
connection with the issuance of Units, the issuance is exempted
from the registration and prospectus requirements of the B.C.
Act or the Rules and Regulations and that:
(i) the Investor is restricted from using most of the civil
remedies available under the B.C. Act and the Rules
and Regulations;
(ii) the Investor may not receive information that would
otherwise be required to be provided to the Investor under
the B.C. Act and the Rules and Regulations; and
(iii) the Company is relieved from certain obligations that would
otherwise apply under the B.C. Act and the Rules and
Regulations;
(b) the Investor is purchasing Units as principal for his own account,
and not for the benefit of any other person or company, and the
acquisition cost of the Units to the Investor is not less than
Page 42 of 49
CDN$97,000 and, if the Investor is an individual, the Investor
has completed, executed and delivered to the Company a Form 20A
Acknowledgment of Individual Purchaser attached to this Agreement
as Appendix 2;
(c) the Investor is not purchasing Units with a view to resale;
(d) the offer and sale of the Units were not accompanied by an
advertisement;
(e) the Investor either:
(i) is a U.S. Person, is an Accredited Investor, and the
information contained in the Investor's Accredited
Investor Questionnaire in the form attached to this
Agreement as Appendix 3 is true and correct; or
(ii) is not a U.S. Person and is not acquiring the Units for
the account or benefit of any U.S. Person;
(f) no person has made to the Investor any written or oral
representations:
(i) that any person will resell or repurchase the Units;
(ii) that any person will refund the purchase price of Units;
(iii) as to the future price or value of the Units; or
(iv) that the securities forming the Units will be listed and
posted for trading on a stock exchange or that application
has been made to list and post the securities forming the
Units for trading on a stock exchange other than the
Exchange;
(g) if the Securities are at any time hereafter listed for trading on
an exchange in the United States or through a market in the United
States, further resale restrictions may apply to the Units;
(h) this subscription has not been solicited in any manner contrary to
the Acts or the Rules and Regulations;
Page 43 of 49
(i) the Investor is not a "control person" of the Company as
defined in the B.C. Act, will not become a "control person"
by virtue of this purchase of the Units and does not intend to
act in concert with any other person to form a control group;
(j) the Investor is at arm's length to the Company;
(k) the Investor has no knowledge of, and the Units are not being
purchased as a result of, any "material fact" (as that term is
defined in the B.C. Act) in the affairs of the Company that has
not been generally disclosed to the public, except for knowledge
of this particular transaction;
(l) the offer made by this subscription is irrevocable and requires
acceptance by the Company and the approval of the Exchange;
(m) the Investor has sought and obtained independent legal advice
regarding the purchase and resale of the Securities under the Acts
and the Rules and Regulations and any other applicable securities
laws;
(n) in purchasing Units, the Investor has relied on no representations
or warranties of the Company other than those contained in this
Agreement;
(o) unless the Investor is otherwise exempted under the B.C. Act or
the Rules and Regulations and the applicable rules or policies
of the Exchange, the Securities must be unconditionally held for a
period of twelve months from the Closing Date in accordance with
the B.C. Act the Rules and Regulations and the undertaking being
given by the Investor to the Exchange by virtue of the
Investor executing and delivering the Private Placement
Questionnaire and Undertaking attached as Appendix 1 to this
Agreement and, if the Investor is not a resident of British
Columbia and is a U.S. Person, the Securities may also be subject
to a minimum hold period of two years from the Closing Date
(in addition to any Warrant Shares which may be acquired
being subject to additional hold periods from the date of their
issuance), along with any additional resale restrictions as may be
applicable to the Investor by virtue of his jurisdiction of
residency;
(p) the certificates representing the Shares, Warrants and Warrant
Shares will contain a legend denoting restrictions on transfer as
referred to herein;
Page 44 of 49
(q) the Investor has received a copy of the Company's most recent
financial statements;
(r) the Investor has the legal capacity and competence to enter into
and execute this Agreement and to take all actions required
pursuant hereto;
(s) 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, the Investor or of
any agreement, written or oral, to which the Investor may be a
party or by which the Investor is or may be bound;
(t) this Agreement has been duly executed and delivered by the
Investor and constitutes a valid obligation of the Investor
legally binding upon the Investor and enforceable against the
Investor in accordance with its terms;
(u) the Investor has not purchased the Units 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 any similar meeting whose
attendees have been invited by general solicitation or general
advertising;
(v) the Investor 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 Units and is able to bear the
economic risks of such investment;
(w) the Investor has had an opportunity to ask questions and receive
answers concerning the Company and its proposed business, and that
any request for such information has been complied with to the
Investor's satisfaction; and
(x) the Company is currently incorporated under the laws of British
Columbia, however, it is undergoing a reorganization that may
result in the Company being merged with its wholly-owned Delaware
subsidiary, thereby becoming a Delaware corporation.
7. Compliance with Securities Laws
7.1. The Investor acknowledges that, pursuant to the B.C. Act, the Rules and
Regulations and the policies of the Exchange, the Warrants are
non-transferable and the
Page 45 of 49
Shares and the Warrant Shares may not be traded for a period of one
year from the Closing Date. The Investor accordingly agrees to sell,
assign or transfer the Shares and Warrant Shares only in accordance
with the B.C. Act, the Rules and Regulations and the policies of the
Exchange.
7.2. The Investor acknowledges that the Securities have not been and will
not be registered under the U.S. Securities Act or the securities laws
of any state of the United States, that although the Company intends to
register the Securities under the U.S. Securities Act or the securities
laws of any state that it has no obligation to do so, and that the
Securities may not be offered or sold within the United States unless
registered under the U.S. Securities Act and the securities laws of all
applicable states or an exemption from registration requirements is
available. In the event that the Investor proposes to sell the Shares
or Warrant Shares in reliance on an exemption from registration
requirements, the Investor shall cause to be delivered to the Company a
legal opinion, in a form satisfactory to the Company, confirming the
ability of the Investor to rely on such exemption.
7.3. The Investor acknowledges that the following legend, in addition to
other legends which may be required, will be placed on each of the
certificates issued for the Shares, the Warrants and, as applicable,
the Warrant Shares:
"The securities represented by this certificate are subject to a
hold period and may not be traded in British Columbia until (
except as permitted by the Securities Act (British Columbia) and
regulations made under the Act."
Notwithstanding anything to the contrary, the following restriction on
transferability shall apply to any U.S. Person and shall appear on
certificates issued for the Shares, the Warrants and, if applicable,
the Warrant Shares:
"The securities represented hereby have not been registered under
the United States Securities Act of 1933, as amended (the "U.S.
Securities Act"), and may not be offered for sale, sold or
otherwise transferred or assigned, directly or indirectly, without
registration of such securities under the U.S. Securities Act and
all applicable state securities laws or
Page 46 of 49
compliance with an applicable exemption therefrom or with
Regulation S under the U.S. Securities Act, such compliance,
at the option of the Company, to be evidenced by an opinion of
shareholder's counsel, in form acceptable to the Company, that no
violation of such registration provisions would result from any
proposed transfer or assignment."
8. Acknowledgments, Representations and Warranties of the Company
The Company represents and warrants to the Investor, as at the date stated above
and at the Closing Date, that:
(a) the Company is a valid and subsisting corporation duly
incorporated and in good standing under the laws of its
incorporation or reorganization;
(b) the Company will reserve or set aside sufficient shares in the
treasury of the Company to issue the Shares and the Warrant
Shares;
(c) the Company is an "exchange issuer" as defined in the B.C. Act,
is recognized as such by the Commission and the Exchange, and is
not on the list of defaulting issuers maintained by the
Commission;
(d) the issuance and sale of the Units by the Company do not and will
not conflict with and do not and will not result in a breach of
any of the terms, conditions or provisions of its constating
documents or any agreement or instrument to which the Company is a
party; and
(e) this Agreement has been duly authorized by all necessary corporate
action on the part of the Company and upon and subject to its
execution by the Company will constitute a valid obligation of the
Company legally binding upon it and enforceable in accordance with
its terms.
9. Miscellaneous
9.1. This Agreement is Governed by the laws of British Columbia and the
parties hereby irrevocably attorn to the non-exclusive jurisdiction of
the courts of British Columbia for the resolution of all disputes
arising under this Agreement.
Page 47 of 49
9.2. Any notice, payment, or other communication to a party under this
Agreement may be made, given or served by telecopier, hand delivery,
courier or by mail. Notices sent by telecopier, hand delivery or
courier shall be deemed to be received at the time of transmission or
delivery. Notices sent by mail shall be deemed to be received five
business days following mailing. Each party may change his or its
address for service at any time by notice in writing to the other.
9.3. Time is of the essence of the Agreement and will be calculated in
accordance with the Interpretation Act (British Columbia).
9.4. This Agreement and the rights and obligations contained in this
Agreement may not be assigned by the Investor.
9.5. The parties will execute and deliver all such further documents and
instruments and do all such further acts and things as the other party
may reasonably require to carry out the full intent of this Agreement.
9.6. This Agreement contains the whole agreement between the Company
and the Investor in respect of the purchase and sale contemplated and
there are no warranties, representations, terms, conditions or
collateral agreements, express, implied or statutory, other than those
expressly set forth in this Agreement.
9.7. The parties to this Agreement may amend this Agreement only in writing
signed by both parties.
9.8. This Agreement ensures to the benefit of and is binding upon the
parties to this Agreement and their successors and permitted assigns.
9.9. This Agreement may be executed by the parties in counterparts, in
original or telecopy format and all of which counterparts will be
construed as one and the same document.
Page 48 of 49
IN WITNESS WHEREOF the Investor has executed this Agreement and has agreed to be
bound by the terms thereof on January 28, 1997.
Signature of Investor or Authorized
Signatory if Investor is not an
individual
c/s ____________________________________
[if Investor is not an individual] Name of Investor
Name and Title of signatory if
Investor is not an individual
This subscription for _______ Units of the Company has been accepted by the
Company as at the ____ day of __________________________, 1997.
PORTACOM WIRELESS, INC.
__________________________
Authorized signatory
Page 49 of 49
