EXHIBIT 10.25
SUBSCRIPTION AGREEMENT FOR SPECIAL WARRANTS
(FOR ESCROWED U.S. SUBSCRIBERS)
(THE "SUBSCRIPTION AGREEMENT")
THE SECURITIES SUBSCRIBED FOR HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933 AND, SUBJECT TO CERTAIN
EXCEPTIONS, MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO A U.S. PERSON
To: VOICE MOBILITY INTERNATIONAL, INC.
And to: Loewen, Ondaatje, XxXxxxxxxx Limited, Acumen Capital Finance Partners
Limited and Paradigm Capital Inc.
ONE COMPLETED AND ORIGINALLY EXECUTED COPY OF THIS SUBSCRIPTION AGREEMENT AND
APPLICABLE SCHEDULES MUST BE DELIVERED IN ACCORDANCE WITH SECTION 6 OF THIS
SUBSCRIPTION AGREEMENT AS SOON AS POSSIBLE, AND, IN ANY EVENT, NO LATER THAN
4:00 P.M. (TORONTO TIME) ON MARCH 26, 2001 TO:
ATTENTION: XXXXXXX XXXXXXX, LOEWEN, ONDAATJE, XXXXXXXXXX LIMITED,
XXXXXXXX LANES, EAST TOWER 00 XXXXXX XXXX, XXXXX 0000,
XXXXXXX, XX X0X 0X0, TEL (000) 000-0000, FAX (000) 000-0000
The undersigned (the "Subscriber" or "you") hereby confirms its irrevocable
subscription for and offer to purchase from Voice Mobility International, Inc.
("Voice Mobility" or the "Company") that number of special warrants of the
Company (the "Special Warrants") set out below, at a price of Cdn$2.00 per
Special Warrant (the "Issue Price"), pursuant to the terms and conditions of
this Subscription Agreement and in accordance with the Agency Agreement (as
defined below). The Subscriber agrees to be bound by the terms of this
Subscription Agreement and, without limitation, agrees that the Company and the
Agents (as defined below) may rely upon its covenants, representations and
warranties.
____________________________________________________________ _________________________________________________________________
NUMBER OF SPECIAL WARRANTS:
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(Name of Subscriber - please print)
Account Reference: AGGREGATE SUBSCRIPTION PRICE: $
------------------------------------ ---------------------------------
(the "Aggregate Subscription Price")
The Subscribers proceeds are to be deposited in escrow pending
By: a listing of the Company's common shares on The Toronto Stock
-------------------------------------------------- Exchange (the "Escrow Subscribers").
Authorized Signature
_________________________________________________________________
_________________________________________________________________
IF THE SUBSCRIBER IS SIGNING AS AGENT FOR A PRINCIPAL (BENEFICIAL
PURCHASER) AND IS NOT A TRUST COMPANY OR A PORTFOLIO MANAGER
----------------------------------------------------- PURCHASING AS TRUSTEE OR AGENT FOR ACCOUNTS FULLY MANAGED BY
(Official Capacity or Title - please print) IT, COMPLETE THE FOLLOWING:
----------------------------------------------------- ---------------------------------------------------------------
(Please print name of individual whose signature (Name of Principal)
appears above if different than the name of the
subscriber printed above.)
---------------------------------------------------------------
(Principal's Address)
----------------------------------------------------- ---------------------------------------------------------------
(Subscriber's Address)
---------------------------------------------------------------
_________________________________________________________________
_________________________________________________________________
------------------------------------------------------ DELIVER THE SPECIAL WARRANTS AS SET OUT BELOW:
(Telephone Number)
____________________________________________________________
---------------------------------------------------------------
(Name)
____________________________________________________________
REGISTER THE SPECIAL WARRANTS AS SET OUT BELOW: ---------------------------------------------------------------
(Account Reference, if applicable)
------------------------------------------------------
(Name) ---------------------------------------------------------------
(Address)
------------------------------------------------------
(Account Reference, if applicable) ---------------------------------------------------------------
(Contact Name) (Telephone Number)
------------------------------------------------------
(Address) __________________________________________________________________
------------------------------------------------------ __________________________________________________________________
(Telephone Number) NUMBER OF SHARES OF THE COMPANY HELD BY THE SUBSCRIBER EXCLUDING
THOSE BEING SUBSCRIBED FOR:
____________________________________________________________ _________________________________________________________________
ACCEPTANCE: The Company hereby accepts the above subscription and the Company represents and warrants to the Subscriber that the
representations and warranties made by the Company to the Agents in the agency agreement (the "Agency Agreement") are true and
correct in all material respects as of this date (save and except as waived by the Lead Agent, as defined below) and that the
Subscriber is entitled to rely thereon.
VOICE MOBILITY INTERNATIONAL, INC. , 2001
--------------------
________________________
By: No:
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NOTE: PLEASE ALSO COMPLETE AND SIGN SCHEDULE "B", IF YOU ARE AN INDIVIDUAL
THE TORONTO STOCK EXCHANGE
PRIVATE PLACEMENT QUESTIONNAIRE AND UNDERTAKING
To be completed by each proposed placement purchaser of listed securities or
securities which are convertible into listed securities.
QUESTIONNAIRE
1. DESCRIPTION OF TRANSACTION
(a) Name of issuer of the Securities VOICE MOBILITY INTERNATIONAL, INC.
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(b) Number and Class of Securities to be Purchased
--------------------------
(c) Purchase Price
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2. DETAILS OF PURCHASER
(a) Name of Purchaser
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(b) Address
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(c) Names and addresses of persons having a greater than 10% beneficial
interest in the purchaser
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3. RELATIONSHIP TO ISSUER
(a) Is the purchaser (or any person named in response to 2(c) above) an
insider of the issuer for the purposes of the Ontario Securities Act
(before giving effect to this private placement)? If so, state the
capacity in which the purchaser (or person named in response to 2(c))
qualifies as an insider
-------------------------------------------------
(b) If the answer to (a) is "no", are the purchaser and the issuer controlled
by the same person or company? If so, give details
-----------------------
4. DEALINGS OF PURCHASER IN SECURITIES OF THE ISSUER
Give details of all trading by the purchaser, as principal, in the securities
of the issuer (other than debt securities which are not convertible into
equity securities), directly or indirectly, within the 60 days preceding the
date hereof
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UNDERTAKING
TO: The Toronto Stock Exchange
The undersigned has subscribed for and agreed to purchase, as principal, the
securities described in Item 1 of this Private Placement Questionnaire and
Undertaking.
The undersigned undertakes not to sell or otherwise dispose of any of the said
securities so purchased or any securities derived therefrom for a period of six
months from the date of the closing of the transaction herein or for such period
as is prescribed by applicable securities legislation, whichever is longer,
without the prior consent of The Toronto Stock Exchange and other regulatory
body having jurisdiction.
DATED AT
------------------------------ ----------------------------------------
(Name of Purchaser - please print)
this day of , 2001
---- --------------- ----------------------------------------
(Authorized Signature)
----------------------------------------
(Official Capacity - please print)
(please print here name of individual
whose signature appears above, if
different from name of purchaser
printed above)
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TERMS AND CONDITIONS
1. SUBSCRIPTION
We confirm your agreement to purchase, on and subject to the terms and
conditions in this Subscription Agreement and in the Agency Agreement, from the
Company the number of Special Warrants as set out on the face page of this
Subscription Agreement at a price of Cdn.$2.00 per Special Warrant payable as
described in section 6 of this Subscription Agreement. The Special Warrants you
are purchasing form part of a larger offering (in the Canada, the United States
and elsewhere) of Special Warrants (the "OFFERING") by the Company pursuant to
an agency agreement (the "AGENCY AGREEMENT") to be entered into by Loewen,
Ondaatje, XxXxxxxxxx Limited ("LOM" or the "LEAD AGENT"), Acumen Capital Finance
Partners Limited, Paradigm Capital Inc. (collectively, the "AGENTS") and the
Company.
2. DESCRIPTION OF SPECIAL WARRANTS
(a) Attached as SCHEDULE "A" to this Subscription Agreement is a
term sheet (the "TERM SHEET") containing a summary of the
terms and conditions pertaining to the Special Warrants and
the Offering. The description of the Special Warrants
contained in the Term Sheet and this Subscription Agreement is
a summary only and is subject to the detailed provisions of a
special warrant indenture (the "SPECIAL WARRANT INDENTURE") to
be dated as of the Closing Date and to be entered into between
the Company and Computershare Trust Company of Canada (or
another trust company that may be agreed to by the Company and
the Lead Agent), in its capacity as special warrant agent and
trustee thereunder (the "TRUSTEE").
(b) Upon exercise (which term shall include deemed exercise) of
the Special Warrants, in accordance with their terms, the
holder will, without payment of any additional consideration,
be issued one unit ("UNIT") in respect of each Special Warrant
exercised. Each Unit will consist of one common share in the
capital of the Company, as presently constituted ("UNIT
SHARE"), and one half of one non-transferable share purchase
warrant ("WARRANT"). Each whole Warrant entitles the holder to
purchase one additional common share in the capital of the
Company, as presently constituted (a "WARRANT SHARE"), at a
price that is equal to $2.25 at any time on or before the date
which is two years from the Closing Date (as defined in
paragraph 4 below). The description of the Warrants contained
in the Term Sheet and this Subscription Agreement is a summary
only and is subject to the detailed provisions of a warrant
indenture (the "WARRANT INDENTURE") to be dated as of the
Closing Date and to be entered into between the Company and
Computershare Trust Company of Canada (or another trust
company that may be agreed to by the Company and the Lead
Agent), in its capacity as warrant agent and trustee
thereunder.
(c) The Special Warrants will be exercisable on any business day
during business hours during the period (the "EXERCISE
PERIOD") commencing on the Closing Date and ending at 4:30
p.m. (Toronto time) (the "TIME OF EXPIRY") on the business day
(the "QUALIFICATION DEADLINE") which is the latest of (i) the
date a registration statement (the "REGISTRATION STATEMENT")
with regard to the resale of the Special Warrants, Unit Shares
and Warrants and the issuance of the Warrant Shares is
declared effective by the United States Securities and
Exchange Commission (the "SEC") pursuant to the UNITED STATES
SECURITIES ACT OF 1933, as amended (the "1933 ACT"), and (ii)
the date a receipt is issued by the last of the securities
regulatory authorities in each of the jurisdictions in Canada
set out as Qualifying Jurisdictions in the Term Sheet where
purchasers of Special Warrants are resident as at the Closing
Date (the "CANADIAN JURISDICTIONS") for a final prospectus
(the "PROSPECTUS") qualifying the issuance of the Unit Shares
and the Warrants for distribution in the Canadian
Jurisdictions to holders of Special Warrants upon their
exercise; and (iii) THE DAY PRECEDING THE DATE THE LISTING OF
THE COMPANY'S COMMON SHARES ON THE TORONTO STOCK EXCHANGE
BECOMES EFFECTIVE, BEING THE TIME ITS COMMON SHARES ARE POSTED
FOR TRADING.
(d) If any Special Warrants have not been exercised by the holders
or repurchased by the Company during the Exercise Period, such
Special Warrants will be deemed to have been exercised by the
holders immediately prior to the Time of Expiry without any
further action on the part of such holders. If the
Qualification Deadline has not occurred on or prior to the
date that is 120 days following the Closing Date or such later
date as may be determined at the sole discretion of the Lead
Agent, each Special Warrant will be exercisable for 1.1 Units.
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(e) Immediately upon receipt, the net proceeds from the Offering
(gross proceeds less the Agents' fees and expenses), will be
deposited in escrow with the Trustee on the Closing Date, to
be held in escrow pursuant to the Special Warrant Indenture
and will be released to the Company on the exercise or deemed
exercise of the Special Warrants, provided that certain
subscribers ("NON-ESCROWED SUBSCRIBERS") may agree to permit
the release of their subscription proceeds to the Company on
the Closing Date. The subscription proceeds from the balance
of the Subscribers ("ESCROWED SUBSCRIBERS") shall be held in
escrow as provided above. Notwithstanding the above, net
proceeds that are required to be deposited in escrow for the
purpose of obtaining approval to list the Company's common
shares on The Toronto Stock Exchange shall not be released to
the Company on the Closing Date, but shall be deposited in
escrow as provided above.
(f) In the event that a listing of the Company's common shares on
The Toronto Stock Exchange has not become effective by the
date that is six months following the Closing Date, then each
of the Escrowed Subscribers will be entitled, at their option
(the "Repurchase Option") until the Time of Expiry, to require
the Company to repurchase the Special Warrants held by such
holder, from legally available funds, plus such holder's
portion of the interest earned by the Trustee under the
Special Warrant Indenture. If the funds of the Company legally
available for repurchase of such Special Warrants are
insufficient to repurchase the total number of Special
Warrants to be repurchased, those funds which are legally
available will be used to repurchase the maximum number of
such Special Warrants rateably among the Escrowed Subscribers
who have exercised the Repurchase Option. Thereafter, as
additional funds of the Company become legally available for
such repurchase, such funds shall be used quarterly to
repurchase the Special Warrants until all Special Warrants
covered by exercised Repurchase Options have been exercised.
(g) The Subscriber acknowledges and agrees that the specific
rights of the holders of Special Warrants and the detailed
terms of the Special Warrants will be set forth in and subject
to the Special Warrant Indenture.
(h) Since the Company is not currently a "reporting issuer" in any
of the Canadian Jurisdictions or elsewhere in Canada, the
Special Warrants and the Unit Shares and Warrants issuable
upon the exercise or deemed exercise of the Special Warrants
will be subject to resale restrictions under the applicable
securities laws, rules, regulations and policies of the
Province of British Columbia, the jurisdiction in which the
Subscriber is resident, and any jurisdiction in which a
subsequent trade may be proposed, until such time as: (i) the
Company becomes a "reporting issuer" under such laws and the
appropriate "hold periods", if any, under such laws have
expired; (ii) a further statutory exemption from the
registration and prospectus requirements of such laws may be
relied upon by the holder; or (iii) an appropriate
discretionary order or ruling is obtained under such laws to
permit the transfer by the Subscriber of its securities. The
resale or other transfer of the Special Warrants, Unit Shares,
Warrants and the issuance of the Warrant Shares will also be
restricted under the 1933 ACT until the Registration Statement
has become effective. The Company does not expect that the
Company's common shares will be listed on any exchange or that
the Company will become a "reporting issuer in any of the
Canadian Jurisdictions until the Registration Statement has
become effective.
The Company has agreed to use its reasonable best efforts to
file, clear, and obtain a receipt for the Prospectus in each
of the Canadian Jurisdictions set out as Qualifying
Jurisdictions in the Term Sheet. The Company has also agreed
to file and use its reasonable best efforts to prosecute to
effectiveness the Registration Statement. In the event that
the Company is unable to obtain a receipt for the Prospectus
in a Canadian Jurisdiction, the Special Warrants, Unit Shares,
Warrants and Warrant Shares (collectively the "SECURITIES")
will be subject to statutory resale restrictions under the
applicable securities legislation of that Canadian
Jurisdiction and the applicable hold period for such
Securities may never expire. Statutory restrictions may apply
on the resale of the Special Warrants, Unit Shares, Warrants
and Warrant Shares that are acquired prior to the issuance of
receipts for the Prospectus by the securities regulatory
authority in any of the Canadian Jurisdictions. In addition,
if the Company does not cause the Registration Statement to
become effective, the resale of the Special Warrants, Unit
Shares, Warrants and the issuance of the Warrant Shares will
continue to be restricted under the 1933 ACT and would be
permissible only in accordance with a statutory or regulatory
exemption from registration under the 1933 ACT. Subscribers
are advised to consult their own legal advisors in this
regard.
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3. ACCEPTANCE AND REJECTION OF SUBSCRIPTION BY THE COMPANY
The Subscriber understands and agrees that the Company reserves the right, in
its absolute discretion, to reject the Subscriber's subscription for Special
Warrants in whole or in part, in any order, at any time prior to the Closing
Time (as defined in section 4 below) notwithstanding prior receipt by the
Subscriber of notice of acceptance of the Subscriber's subscription and, if
accepted only in part, a proportionate amount of the Aggregate Subscription
Price will be returned to the Subscriber without interest.
4. CLOSING
The closing of the Offering (the "CLOSING") will be completed at the offices of
Catalyst Corporate Finance Lawyers, Suite 1400, 0000 Xxxx Xxxxxxxx Xxxxxx,
Xxxxxxxxx, XX, X0X 0X0, at 9:00 a.m. (Vancouver time) (the "CLOSING TIME") on
March 27, 2001 or such other place or date or time as the Company and the Lead
Agent may mutually agree (the "CLOSING DATE"), provided that delivery of the
signed Special Warrants and Special Compensation Options shall be made to Lead
Agent's counsel, Fraser Xxxxxx Casgrain LLP, Suite 4100, 0 Xxxxx Xxxxxxxx Xxxxx,
Xxxxxxx, Xxxxxxx X0X 0X0, at or prior to that time. If by the Closing Time, the
terms and conditions contained in this Subscription Agreement and the Agency
Agreement have been complied with to the satisfaction of the Agents or waived by
them, the Agents will deliver to the Company all completed Subscription
Agreements, and will deliver to or to the direction of the Company, the
subscription funds against delivery by the Company of the Special Warrants and
such other documentation as may be required. If by the Closing Time, the terms
and conditions contained in this Subscription Agreement and the Agency Agreement
have not been complied with to the satisfaction of the Agents or waived by them,
any cheques or bank drafts delivered by the Subscriber to the Agents
representing the purchase price for Special Warrants will be promptly returned
to the Subscriber without interest.
5. FACSIMILED SUBSCRIPTIONS
The Company and the Agents will be entitled to rely on delivery by facsimile of
an executed copy of this Subscription Agreement, and acceptance by the Company
of such facsimile copy will be legally effective to create a valid and binding
agreement between you and the Company in accordance with the terms hereof.
6. CONDITIONS OF CLOSING
The sale of the Special Warrants to the Subscriber is subject to the following
conditions:
(a) Payment of the "Aggregate Subscription Price", as defined on
the face page hereof, shall be paid by you as soon as possible
and in any event no later than 12:00 noon (Toronto time) on
March 27, 2001. Payment must be made by certified cheque or
bank draft in Canadian dollars drawn on a Canadian chartered
bank or U.S. banking association payable to one of "Loewen,
Ondaatje, XxXxxxxxxx Limited", "Acumen Capital Finance
Partners Limited", "Paradigm Capital Inc." or payable in such
other manner as may be specified by the Agents.
(b) One completed and signed copy of this Subscription Agreement
and one completed and signed Private Placement Questionnaire
and Undertaking for The Toronto Stock Exchange must be
delivered to Xxxxxxx Xxxxxxx at Loewen, Ondaatje, XxXxxxxxxx
Limited, Xxxxxxxx Lanes, East Tower, 00 Xxxxxx Xxxx, Xxxxx
0000, Xxxxxxx, XX X0X 0X0, Tel (000) 000-0000, Fax (416)
964-4333, as soon as possible, and in any event, no later than
4:00 p.m. (Toronto time) on March 26, 2001.
(c) If the Subscriber is an individual, the Subscriber must also
complete, sign and deliver the Form 20A (IP) in the form
annexed to this Subscription Agreement as SCHEDULE "B", as
required by the British Columbia Securities Commission to
Xxxxxxx Xxxxxxx at Loewen, Ondaatje, XxXxxxxxxx Limited,
Xxxxxxxx Lanes, East Tower, 00 Xxxxxx Xxxx, Xxxxx 0000,
Xxxxxxx, XX X0X 0X0, Tel (000) 000-0000, Fax (000) 000-0000,
as soon as possible, and in any event, no later than 4:00 pm
(Toronto time) on March 26, 2001. The Form 20A(IP) is required
to be delivered by the Agents to the Company at Closing.
(d) All necessary regulatory approvals must be obtained prior to
the Closing Date and all terms and conditions of this
Subscription Agreement, the Agency Agreement and Special
Warrant Indenture must be satisfied or waived on or prior to
the Closing Date.
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7. AUTHORIZATION OF LEAD AGENT
The Subscriber irrevocably authorizes the Lead Agent, in its discretion, to act
as its representative at the Closing, and hereby appoints the Lead Agent, with
full power of substitution, as its true and lawful attorney with full power and
authority in its place and stead:
(a) to receive certificates for the Special Warrants, to execute
in its name and on its behalf all closing receipts and
required documents, to complete and correct any documents
relating to the transactions contemplated by this Subscription
Agreement that have been signed by the Subscriber and require
completion or correction;
(b) to extend such time periods and to waive, in whole or in part,
any representations, warranties, covenants or conditions for
the benefit of the Subscriber contained in this Subscription
Agreement, the Agency Agreement or any ancillary or related
document;
(c) to terminate this Subscription Agreement if any condition
precedent to the Offering is not satisfied, in such manner and
on such terms and conditions as the Lead Agent may determine,
acting reasonably; and
(d) without limiting the generality of the foregoing, to
negotiate, settle, execute, deliver and amend the Agency
Agreement, Special Warrant Indenture and Warrant Indenture.
8. PROSPECTUS EXEMPTION
The Subscriber, on its own behalf and (if applicable) on behalf of others for
whom it is contracting hereunder, acknowledges and agrees that:
(a) the Special Warrants are being offered on a "private
placement" basis pursuant to an exemption under the 1933 ACT
and applicable state securities laws ("U.S. SECURITIES ACTS")
only to (i) "accredited investors" as defined in Section 2(15)
of the U.S. Securities Acts and Rule 501 of Regulation D
thereunder, and (ii) Qualified Institutional Buyers, as such
term is defined in Rule 144A of the U.S. Securities Acts
("QUALIFIED INSTITUTIONAL BUYERS");
(b) the sale and delivery of the Special Warrants to the
Subscriber or, if applicable, to any others on whose behalf it
is contracting hereunder, is conditional upon such sale being
exempt from the prospectus filing and registration
requirements of all applicable securities legislation,
including statutes, regulations, national instruments,
published rules, policies, blanket orders, rulings and stock
exchanges (collectively, "APPLICABLE SECURITIES LAWS")
relating to the sale of the Special Warrants;
(c) the Special Warrants, Unit Shares, Warrants and Warrant Shares
will be subject to resale restrictions under Applicable
Securities Laws and are otherwise subject to the terms,
conditions and provisions of the Agency Agreement and the
Subscriber, on its own behalf and, if applicable, on behalf of
others for whom it is contracting hereunder, agrees to comply
with all Applicable Securities Laws concerning any resale of
such Securities;
(d) the Subscriber, and, if applicable, the others for whom it is
contracting hereunder, have been advised to consult their own
legal advisors with respect to applicable resale restrictions
and that it (or others for whom it is contracting hereunder)
is solely responsible and neither the Company nor the Agents
are in any way responsible for compliance with applicable
resale restrictions;
(e) the Subscriber has not received, nor has it requested, nor
does it have any need to receive, any prospectus, sales or
advertising literature or any other document purporting to
describe the business and affairs of the Company which has
been prepared primarily for delivery to, and review by, a
prospective purchaser in order to assist it in making an
investment decision in respect of the Special Warrants and it
has not become aware of any advertisement in printed public
media, radio, television or telecommunications, including
electronic display, or any other form of advertising or as
part of a general solicitation with respect to the
distribution of the Special Warrants;
(f) in making its investment decision, the Subscriber, and, if
applicable, the others for whom it is contracting hereunder,
have relied solely upon publicly available information
relating to the Company and not upon any verbal or written
representation as to any fact or otherwise made by or on
behalf of the Company, the
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Agents or any employee, agent or affiliate thereof or any
other person associated therewith, and it, and, if applicable,
the others for whom it is contracting hereunder, agree that
the Agents assume no responsibility or liability of any nature
whatsoever for the accuracy, adequacy or completeness of the
publicly available information;
(g) the sale of the Special Warrants was not accompanied by any
advertisement in printed media of general and regular paid
circulation, radio, television or telecommunications,
including electronic display;
(h) in accepting this Agreement, the Agents and the Company are
relying upon the representations of the Subscriber set out
herein including, without limitation, in connection with
determining the eligibility of the Subscriber or, if
applicable, the eligibility of others on whose behalf the
Subscriber is contracting hereunder to purchase Special
Warrants under the Applicable Securities Laws. The Subscriber
hereby agrees to notify the Company immediately of any change
in any representation, warranty, covenant or other information
relating to the Subscriber or the beneficial purchaser
contained in this Agreement which takes place prior to the
Closing Date; and
(i) other than as provided for herein or in the Agency Agreement,
no person has made any written or oral representations that
any person will re-sell or re-purchase the Special Warrants,
Unit Shares, Warrants or Warrant Shares; as to the future
price or value of the Special Warrants, Unit Shares, Warrants
or Warrant Shares; or that any person will refund the purchase
price of the Special Warrants.
9. SUBSCRIBER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
By executing this Agreement, the Subscriber, on its own behalf
and, if applicable, on behalf of others for whom the Subscriber is contracting
hereunder, represents, warrants and covenants to the Agents and the Company (and
acknowledges that each of them and their respective legal counsel, are relying
thereon and that such representations, warranties and covenants shall survive
the Closing Date) that:
(a) by reason of the Subscriber's business or financial
experience, the Subscriber has the capacity to protect its
interests in connection with the purchase of the Special
Warrants, and the Subscriber has such knowledge and experience
in financial and business matters that it is capable of
evaluating the merits and risks of an investment in the
Company;
(b) the Subscriber is purchasing the Special Warrants for its own
account and for investment purposes only and has no present
intention, or arrangement for the distribution, transfer,
assignment or resale of the Special Warrants;
(c) 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 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 limited liability
company, partnership, syndicate or other form of
unincorporated organization, the Subscriber has the necessary
legal capacity and authority to execute and deliver this
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 attained the age of majority and is legally
competent to execute this Agreement and to take all actions
required pursuant thereto;
(d) whether the Subscriber is a natural person or a corporation,
partnership or other entity, upon acceptance by the Company
and the Agents, this Agreement will have been duly executed
and delivered and 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;
(e) as the Special Warrants, Unit Shares, Warrants and Warrant
Shares are subject to resale restrictions under the Applicable
Securities Laws and the U.S. Securities Acts, the Subscriber,
or in the case of a purchase by the Subscriber acting as agent
for a disclosed principal, each beneficial purchaser, shall
comply with all Applicable Securities Laws and the U.S.
Securities Acts concerning any resale of such Securities and
shall consult with its own legal advisors with respect to such
compliance;
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(f) the Subscriber will execute and deliver within the applicable
time periods all documentation as may be required by any
Applicable Securities Laws to permit the purchase of the
Special Warrants on the terms herein set forth;
(g) if required by any Applicable Securities Laws, the Subscriber
will execute, deliver and file and otherwise assist the
Company in filing reports, questionnaires, undertakings and
other documents with respect to the issue of the Special
Warrants;
(h) the Subscriber is resident of, or otherwise subject to, the
laws of the state set out in their address on the first page
of this Subscription Agreement, which address is the residence
or place of business of the Subscriber not created or used
solely for the purpose of acquiring Special Warrants;
(i) the Subscriber acknowledges that the Special Warrants, Unit
Shares, Warrants and Warrant Shares have not been and will not
be registered under the U.S. Securities Acts or any applicable
state securities laws and that the contemplated sale is being
made in reliance on Rule 144A to the U.S. Securities Acts to
Qualified Institutional Buyers or a private placement
exemption to accredited investors (as such term is defined in
Rule 501 of Regulation D under the U.S. Securities Acts,
"Accredited Investors") pursuant to Rule 506 of Regulation D
under the U.S. Securities Acts;
(j) the Subscriber (or, if applicable, each beneficial purchaser
for whom it is purchasing): (i) is a Qualified Institutional
Buyer (as defined in Rule 144A under the U.S. Securities Acts)
and is acquiring the Special Warrants for its own account or
for the account of a Qualified Institutional Buyer with
respect to which it exercises sole investment discretion, and
not with a view to any resale, distribution or other
disposition of the Special Warrants in violation of United
States federal and state securities laws, or (ii) an
"accredited investor" within the meaning under Rule 501 of
Regulation D under the U.S. Securities Acts;
(k) the Subscriber is acquiring the Special Warrants for its own
account and not with a view to any resale, distribution or
other disposition of the Special Warrants, Unit Shares,
Warrants or Warrant Shares in violation of the U.S. Securities
Act or applicable U.S. state securities laws;
(l) the Subscriber agrees that if it decides to offer, sell or
otherwise transfer any of the Special Warrants, Unit Shares,
Warrants or Warrant Shares, such Securities may be offered,
sold or otherwise transferred only (i) to the Company, (ii)
pursuant to an effective registration statement,, (iii) within
the United States in accordance with the exemption from
registration under the U.S. Securities Acts including pursuant
to Rule 144 thereunder, if applicable, and in compliance with
any applicable state securities laws or (iv) another exemption
from registration under the U.S. Securities Acts and any
applicable state securities laws;
(m) the Subscriber understands and acknowledges that, upon the
original issuance thereof, and until such time as the same is
no longer required under applicable requirements of the U.S.
Securities Acts or applicable state securities laws, the
Special Warrants, Unit Shares, Warrants and Warrant Shares, as
the case may be, will be "restricted securities" as defined in
Rule 144(a)(3) under the U.S. Securities Acts and each
certificate evidencing a Special Warrant, Unit Share or
Warrant (and each Warrant Share issued prior to Registration
Statement effectiveness) will bear the following legend until
the applicable securities as represented by the certificate
are sold pursuant to either (i) a registration statement with
respect to such securities which is effective under the 1933
ACT, (ii) Rule 144 under the 1933 ACT, or (iii) in reliance
upon Regulation S:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), NOR QUALIFIED UNDER OR PURSUANT TO THE
SECURITIES OR "BLUE SKY" LAWS OF ANY STATE NOR UNDER
OR PURSUANT TO THE SECURITIES LAWS OF ANY PROVINCE IN
CANADA. SUCH SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE
ASSIGNED, EXCEPT PURSUANT TO (i) A REGISTRATION
STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS
EFFECTIVE UNDER THE SECURITIES ACT, (ii) RULE 144 OR
RULE 144A UNDER THE SECURITIES ACT, IF AVAILABLE, OR
(iii)
8
ANY OTHER EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT AND FROM QUALIFICATION UNDER ANY
SECURITIES LAWS APPLICABLE IN CANADA, IF AVAILABLE,
AND IN EACH CASE, IN COMPLIANCE WITH ANY APPLICABLE
STATE OR PROVINCIAL SECURITIES LAWS.
and it also understands and acknowledges that upon the
original issuance thereof, and until such time as the same is
no longer required under applicable requirements of the U.S.
Securities Acts or applicable state securities laws, all
certificates representing the Unit Shares, Warrants and
Warrant Shares, and all certificates issued in exchange or in
substitution thereof, shall bear the foregoing legend.
If such securities are being sold under Rule 904 of Regulation
S under the U.S. Securities Acts, any legend may be removed by
providing a declaration to the Company, to the effect set out
in the attached SCHEDULE "D" (or in such other form as the
Company may prescribe from time to time); and provided,
further, that, if any such securities are being sold under
Rule 144 under the U.S. Securities Acts, the legend may be
removed by delivery to the registrar and transfer agent and
the Company of an opinion of counsel, of recognized standing
reasonably satisfactory to the Company, that such legends are
no longer required under applicable requirements of the U.S.
Securities Acts or state securities laws;
The Subscriber understands and acknowledges that the Company
may instruct its transfer agent not to record a transfer
without first being notified by the Company that it is
satisfied that such transfer is exempt from or not subject to
registration under the U.S. Securities Acts;
(n) the Subscriber understands that the Company and/or the Agents
may be required by law or otherwise to disclose to regulatory
authorities the Subscriber's identity and the identity of each
beneficial purchaser of Special Warrants for whom the
Subscriber may be acting, including without limitation, being
listed as a "Selling Shareholder" in the Registration
Statement and disclosing the number of Securities beneficially
owned, and the Subscriber further agrees to fully cooperate
with the Company and/or the Agents in this regard and to
provide the identity of each beneficial purchaser of Special
Warrants for whom the Subscriber may be acting, if required,
to the Company and/or the Agents.
(o) notwithstanding the foregoing, none of the Special Warrants or
Warrants may be offered, sold, transferred, pledged,
hypothecated or otherwise assigned, until the Registration
Statement becomes effective, without the prior written consent
of the Company and each certificate evidencing a Special
Warrant or Warrant will bear the following legend until either
(A) the Registration Statement becomes effective or (B) the
Special Warrant is sold pursuant to a transaction that is one
(1) year or greater subsequent to the Closing of the Offering,
in accordance with either (i) a registration statement with
respect to such securities which is effective under the 1933
ACT, (ii) Rule 144A under the 1933 ACT, or (iii) in reliance
upon Regulation S and in compliance with Applicable Securities
Laws:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN THE
SUBSCRIPTION AGREEMENT BETWEEN VOICE MOBILITY
INTERNATIONAL, INC. (THE "COMPANY") AND THE PURCHASE,
AND SPECIAL WARRANT INDENTURE AMONG THE COMPANY AND
THE TRUSTEE, AND SPECIFICALLY MAY NOT BE OFFERED,
SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE
ASSIGNED, PRIOR TO EFFECTIVENESS OF A REGISTRATION
STATEMENT UNDER THE 1933 ACT, EXCEPT WITH THE PRIOR
WRITTEN CONSENT OF THE COMPANY.
(p) upon acceptance by the Company and the Agents, this
Subscription Agreement will not violate or conflict with the
terms of any restriction, agreement or undertaking respecting
purchasers of securities by the Subscriber and any such
beneficial purchaser;
(q) the Subscriber acknowledges that the Subscriber has had access
to such financial and other information and has had the
opportunity to ask questions of and receive answers from the
Company as the Subscriber has deemed necessary in connection
with the Subscriber's decision to purchase the Special
Warrants;
9
(r) it is responsible for obtaining such legal advice as it
considers necessary in connection with the execution, delivery
and performance by it of this Subscription Agreement and the
transactions contemplated hereunder and it represents and
warrants that such execution, delivery and performance shall
not contravene any applicable laws of the jurisdiction in
which it is resident;
(s) the legal counsel retained by the Agents (the "AGENTS'
COUNSEL") are acting as counsel to the Agents and not as
counsel to the Subscriber. The relationship of Agents' Counsel
with the Subscriber is limited solely to the provision of
customary commercial legal opinions at the Closing Time and to
responding to any questions which the Subscriber may have
regarding the terms of the documents to be delivered in
connection with this Special Warrant transaction;
(t) in the case of a purchase by it of Special Warrants as
principal, this Subscription Agreement has been duly and
validly authorized, executed and delivered by and constitutes
a legal, valid, binding and enforceable obligation of the
Subscriber;
(u) in the case of a purchase by it of Special Warrants acting as
a trustee or agent for a disclosed or undisclosed principal or
identified by account number only, it is duly authorized to
execute and deliver this Subscription Agreement and all other
necessary documentation in connection with such purchase on
behalf of such principal and this Subscription Agreement has
been duly authorized, executed and delivered by or on behalf
of, and constitutes a legal, valid, binding and enforceable
agreement of, such principal;
(v) it has such knowledge and experience in financial and business
affairs as to be capable of evaluating the merits and risks of
its investment hereunder and it, or, where it is not
purchasing as principal, each beneficial purchaser, is able to
bear the economic risk of loss of such investment;
(w) it is responsible for obtaining legal advice as to and will
comply in all respects with the prospectus delivery
requirements under Applicable Securities Laws in connection
with any sale by the Subscriber of the Unit Shares, the
Warrants and the Warrant Shares;
(x) in connection with its obligations under Section 11(a) of this
Subscription Agreement, the Company may require the Subscriber
to furnish to the Company such information regarding
Subscriber and the distribution of the securities covered by
the Registration Statement (the "Registrable Shares") as the
Company may from time to time reasonably request in writing
and such other information as may be legally required in
connection with such registration. The Subscriber agrees, by
its acquisition of Registrable Shares and acceptance of the
benefits provided to it hereunder, to furnish promptly to the
Company all information required to be disclosed in order to
make any previously furnished information not materially
misleading. The Subscriber agrees that upon receipt of any
notice from the Company of the happening of any event of the
kind described herein requiring the cessation of the
distribution of a prospectus or the distribution of a
supplemented or amended prospectus, the Subscriber will
forthwith discontinue disposition of Registrable Shares
pursuant to the Registration Statement covering such
Registrable Shares until the Subscriber's receipt of the
copies of the supplemented or amended prospectus, or until it
is advised in writing by the Company that the use of the
prospectus may be resumed, and, if so directed by the Company,
the Subscriber will deliver to the Company (at the Company's
expense) all copies, other than permanent file copies then in
the Subscriber's possession, of the prospectus covering such
Registrable Shares current at the time of receipt of such
notice. Except as set forth below, the Company agrees to
indemnify and hold harmless the Subscriber, and each of its
directors, officers, employees, agents, and each person, if
any, who controls the Subscriber within the meaning of the
1933 ACT, against any losses, claims, damages, or liabilities
to which such indemnified person may become subject under the
1933 ACT or otherwise, insofar as such losses, claims,
damages, or liabilities arise out of or are based upon any
untrue or alleged untrue statement of any material fact
contained in said Registration Statement, or any preliminary
prospectus, final prospectus, or amendment or supplement
related thereto, or arise out of or are based upon the
omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading. The Subscriber agrees to
indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed the
Registration Statement, employees, agents and each person, if
any, who controls the Company within the meaning of the 1933
ACT against any losses, claims, damages or liabilities to
which such indemnified person may become subject, under the
1933 ACT or otherwise, insofar as such losses, claims, damages
or liabilities arise out of or are based upon any untrue or
alleged untrue statement of any material fact contained in
said Registration Statement, or any preliminary
10
prospectus, final prospectus, or amendment or supplement
related thereto, or arise out of or are based upon the
omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein not misleading in each case, to
the extent, but only to the extent that such untrue
statement or alleged untrue statement or omission or
alleged omission was made in said registration statement,
said preliminary prospectus, said final prospectus or said
amendment or supplement in reliance upon and in conformity
with written information furnished by Subscriber
specifically for use in the preparation thereof, and
provided further that the Subscriber's liability pursuant
to this paragraph 9(x) shall be limited to the amount of
the Subscriber's investment in the Company as reflected in
the Registration Statement;
(y) the Subscriber acknowledges that it has been advised that as a
"selling shareholder" under the Registration Statement,
Subscriber might be deemed to be an underwriter within the
meaning of Section 2(11) of the 1933 ACT and any profit on the
resale of the securities might be deemed to be underwriting
discounts and commissions under the 1933 ACT; and
(z) the Subscriber acknowledges and agrees that in addition to any
other applicable laws or regulations, as a "selling
shareholder" under the Registration Statement, it will comply
with regulations relating to distributions by selling
shareholders, including Regulation M under the SECURITIES
EXCHANGE ACT OF 1934 (the "1934 ACT"). Regulation M prohibits
selling shareholders from offering to purchase and purchasing
the common stock of the Company at certain periods of time
surrounding their sales of securities under the Registration
Statement. Regulation M attempts to prevent selling
shareholders who are engaged in a distribution from
manipulating the market. In addition, Subscriber acknowledges
some U.S. States may require that registration, exemption from
registration or notification requirements be met before
selling shareholders may sell their common stock. Some states
may also require selling shareholders to sell their common
stock only through broker-dealers.
(aa) the Subscriber is purchasing the Special Warrants as principal
for its own account, and not for the benefit of any other
person or company and not with a view to the resale or
distribution of all or any of the Special Warrants, and this
Subscription Agreement has been authorized, executed and
delivered by the Subscriber, and constitutes a legal, valid
and binding agreement of the Subscriber and the Subscriber is
purchasing a sufficient number of Special Warrants such that
the aggregate acquisition cost to the Subscriber of such
Special Warrants is not less than $97,000.
(bb) if the Subscriber has been created or is being used primarily
to permit the purchase of the Special Warrants without a
prospectus, and it is a partnership, syndicate, unincorporated
organization, trust, company, fund or association or any other
organized group of persons, the share or portion of each
member or partner of the partnership, syndicate or
unincorporated organization, or each beneficiary of the trust,
or each shareholder or member of the company, fund or
association or other organized group of persons, as the case
may be, of the aggregate acquisition cost of the Special
Warrants is not less than $97,000.
(cc) subject to paragraph 9(bb) hereof, the Subscriber has not been
created or is not being used primarily to permit the purchase
of the Special Warrants without a prospectus.
(dd) the Subscriber is purchasing the Special Warrants for
investment only and not with a view to resale or distribution
and it will not resell or otherwise transfer or dispose of the
Special Warrants prior to the receipt for the Prospectus
except in accordance with the provisions of Applicable
Securities Laws.
(ee) the Subscriber will execute and deliver no later than 4:00
p.m. (Toronto time) on March 26, 2001, all documentation as
may be required by all Applicable Securities Laws to permit
the purchase of the Special Warrants hereunder on the terms as
set forth herein, including without limitation if the
Subscriber is an individual, the Form 20A (IP) in the form
attached as SCHEDULE "B", as required by the British Columbia
Securities Commission.
The Subscriber, on its own behalf and, if applicable, on behalf of others for
whom it is contracting hereunder, agrees that the above representations,
warranties and covenants will be true and correct both as of the execution of
this Subscription Agreement and as of the Closing Date and will survive the
completion of the issuance of the Special Warrants.
The Subscriber acknowledges on its own behalf, and if applicable, on behalf of
others it is contracting for hereunder that the foregoing representations and
warranties are made by it with the intent that they may be relied upon by the
Agents and
11
the Company in determining its eligibility or, if applicable, the eligibility of
others on whose behalf it is contracting hereunder to purchase the Special
Warrants under relevant securities legislation. The Subscriber agrees to
indemnify the Agents and the Company against all losses, claims, costs, expenses
and damages or liabilities which any of them may suffer or incur caused or
arising from reliance thereon. The Subscriber on its own behalf, and if
applicable, on behalf of others it is contracting for hereunder further agrees
that by accepting delivery of the Special Warrants on the Closing Date, it shall
be representing and warranting that the foregoing representations and warranties
are true as at the Closing Date with the same force and effect as if they had
been made by the Subscriber on its own behalf, and if applicable, on behalf of
others it is contracting for hereunder, at the time of closing on the Closing
Date and that they shall survive the purchase by it of the Special Warrants and
shall continue in full force and effect notwithstanding any subsequent
disposition by it of the Special Warrants, Unit Shares, Warrants or Warrant
Shares.
10. COMPANY'S REPRESENTATIONS AND WARRANTIES
Except as disclosed in writing to the Agents prior to the Closing, the Company
represents and warrants to the Subscriber (which representations and warranties
shall survive for a period of two (2) years following the Closing) as follows:
(a) ORGANIZATION AND STANDING. The Company is a corporation duly
organized and validly existing under the laws of the State of
Nevada and is in good standing under such laws. The Company
has the requisite corporate power and authority to own and
operate its properties and assets and to carry on its business
as currently conducted and as proposed to be conducted.
(b) CORPORATE POWER. The Company will have at the Closing Date all
requisite legal and corporate power and authority to execute
and deliver this Subscription Agreement, to sell and issue the
Special Warrants, and to carry out and perform its obligations
under the terms of this Subscription Agreement.
(c) AUTHORIZATION. All corporate action on the part of the
Company, its directors, and its shareholders necessary for the
authorization, execution, delivery, and performance of this
Subscription Agreement, the Special Warrant Indenture and the
Share Warrant Indenture (collectively, the "Transaction
Documents") by the Company will be taken prior to the Closing.
The Transaction Documents, when executed and delivered by the
Company, will, to the best of the Company's knowledge,
constitute valid and binding obligations of the Company
enforceable in accordance with their respective terms. The
Unit Shares issuable on exercise of the Special Warrants have
been or will be prior to the Closing allotted and, when
issued, will be validly issued, fully paid and non-assessable.
(d) NO CONFLICT. The issuance and sale of the Special Warrants by
the Company does not and will not conflict with and does not
and will not result in a breach of any of the terms,
conditions or provisions of its constating documents or any
material agreement or material instrument to which the Company
is a party.
(e) NO ACTIONS, SUITS OR PROCEEDINGS. As at the Closing Date, the
Company is not a party to any actions, suits or proceedings
which could reasonably be expected to materially affect its
business or financial condition, and to the best of the
Company's knowledge no such actions, suits or proceedings are
contemplated or have been threatened.
(f) NO JUDGMENTS. As at the Closing Date, there are no judgments
against the Company which are unsatisfied, nor are there any
consent decrees or injunctions to which the Company is
subject.
(g) NO DEFAULT. As at the Closing Date, the Company is in all
material respects, conducting its current activities in
compliance with all applicable laws, rules and regulations of
the SECURITIES ACT (British Columbia), the SECURITIES ACT
(Alberta), the SECURITIES ACT (Ontario), the 1933 ACT or the
1934 ACT.
(h) NO ORDER. No order ceasing or suspending trading in securities
of the Company nor prohibiting the sale of such securities has
been issued and remains outstanding against the Company or its
directors, officers or promoters and no investigations or
proceedings for such purposes are pending or threatened.
11. COMPANY'S COVENANTS
The Company hereby covenants and agrees and, in the Agency Agreement and/or the
Special Warrant Indenture, the Company will covenant and agree as follows:
12
(a) to use its commercially reasonable best efforts (i) to cause a
Registration Statement to be filed and prosecuted to
effectiveness, (ii) to cause the preliminary prospectus of the
Company relating to the distribution of the Unit Shares and
Warrants (the "PRELIMINARY PROSPECTUS") to be filed and (iii)
to obtain receipts for the final Prospectus, as expeditiously
as reasonably practicable after the Closing Date, in each case
in form and substance satisfactory to the Company and the
Agents, acting reasonably;
(b) to use its reasonable best efforts to promptly comply with all
filing and other requirements under all Applicable Securities
Laws, including, where required by the Agency Agreement or any
Applicable Securities Laws, the filing of amendments to the
Preliminary Prospectus and Prospectus in each of the Canadian
Jurisdictions; and
(c) to use its commercially reasonable best efforts to maintain
its status as a reporting issuer (or analogous entity) under
the Applicable Securities Laws of such provinces in which it
becomes a reporting issuer (or analogous entity) as a result
of filing the Prospectus as required under the Agency
Agreement and to continue to be in compliance with its
obligations thereunder, without default, for a period of at
least one year from the date of the filing of the Prospectus
in each Canadian Jurisdiction.
In addition, the covenants of and terms applicable to the Company described in
the Agency Agreement are hereby incorporated into this section as additional
covenants of the Company.
12. RESALE RESTRICTIONS
The Subscriber, on its own behalf and, if applicable, on behalf of others for
whom it is contracting hereunder, understands and acknowledges that the Special
Warrants, Unit Shares, Warrants and Warrant Shares will be subject to certain
resale restrictions under the Applicable Securities Laws (including United
States federal and state securities laws) and the Subscriber, on its own behalf
and, if applicable, on behalf of others for whom it is contracting hereunder,
agrees to comply with such restrictions. The Subscriber understands and
acknowledges that the resale of the Unit Shares and the Warrants and the
issuance of the Warrant Shares has not yet been registered with the SEC and
accordingly is restricted in the U.S. The Subscriber further understands and
acknowledges that the Company is not currently a "reporting issuer" in any
Canadian jurisdiction and that holders of securities of the Company may not be
able to sell such securities for an indefinite period of time without the
Prospectus being filed and a receipt obtained therefor. Subscribers are advised
to consult their own legal advisors in this regard. The Subscriber, on its own
behalf and, if applicable, on behalf of others for whom it is contracting
hereunder, 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 (and neither the Company nor
the Agents are in any manner responsible for ensuring compliance by the
Subscriber with such restrictions).
13. RELIANCE UPON REPRESENTATIONS AND WARRANTIES
The Subscriber acknowledges that the representations and warranties contained in
this Subscription Agreement are made by it with the intent that they may be
relied upon by the Company in determining the Subscriber's eligibility to
purchase the Special Warrants, and the Subscriber hereby agrees to indemnify the
Company and its directors, officers, employees and agents against all losses,
claims, costs, expenses and damages or liabilities that they may suffer or incur
caused or arising from their reliance thereon. The foregoing representations and
warranties survive the purchase by the Subscriber of the Special Warrants and
continue in full force and effect as set forth in section 14.
14. SURVIVAL
This Subscription Agreement, including without limitation the representations,
warranties and covenants contained herein, survives and continues in full force
and effect and is binding upon the Subscriber for a period of three years,
notwithstanding the completion of the purchase of the Special Warrants by the
Subscriber, the completion of the issue of the Special Warrants by the Company
and any subsequent disposition by the Subscriber of the Securities.
15. CONTRACTUAL RIGHTS OF ACTION
By its acceptance of this Subscription Agreement, the Company grants to each
Subscriber the contractual right of action for rescission in the form set out in
SCHEDULE "C" and the Subscriber agrees to assign and explicitly extend the
benefit of such right (but without liability to a purchaser) to any permitted
assignee or transferor of the Special Warrants. The above rights are in addition
to any other rights or remedies available to the Special Warrant holder under
section 130 of the SECURITIES ACT (Ontario), equivalent provisions of the
securities legislation of any other province of Canada in which purchasers of
Special Warrants are resident and otherwise at law, and are subject to the
defences described under such legislation. The Subscriber expressly waives and
releases the Company, to the fullest extent permitted by law, from all rights of
withdrawal
13
to which the Subscriber might otherwise be entitled pursuant to subsection 71(2)
of the SECURITIES ACT (Ontario) and equivalent provisions of the securities
legislation of any other province of Canada.
16. COMMISSION TO THE AGENTS
You understand that upon completion of the sale by the Company of the Special
Warrants, the Lead Agent, on behalf of the Agents, will receive from the Company
on the Closing Date a cash commission (the "Commission") equal to 7% of the
gross proceeds from the Offering.
In addition, subject to regulatory approval, the Company will grant to the
Agents a special compensation option (the "Special Compensation Option")
exercisable for a compensation option (the "Compensation Option") which, upon
exercise will entitle the Agents to purchase the number of Units equal to 10% of
the total number of Special Warrants sold at a price per Unit that is equal to
the Issue Price of each Special Warrant, for a period of two years from the
Closing Date.
17. COSTS
You acknowledge and agree that, except as specified in the Agency Agreement, all
costs and expenses incurred by you (including any fees and disbursements of any
special counsel retained by you) relating to the purchase of the Special
Warrants by you shall be borne by you.
18. ASSIGNMENT
None of the parties to this Subscription Agreement may assign any rights or
benefits under this Subscription Agreement, including the benefit of any
representation, warranty or covenant, without the prior written consent of the
other parties.
19. ENUREMENT
This Subscription Agreement enures to the benefit of and is binding upon the
parties and their respective heirs, executors, administrators and other legal
representatives, successors (including any successor by reason of amalgamation
or statutory arrangement of any party) and permitted assigns.
20. ENTIRE AGREEMENT
This Subscription Agreement constitutes the entire agreement of the parties
relating to the subject matter hereof and there are no representations,
covenants or other agreements relating to the subject matter hereof except as
stated or referred to in this Subscription Agreement.
21. LANGUAGE
The undersigned hereby acknowledges that it has consented and requested that all
documents evidencing or relating in any way to the sale of the Special Warrants
be drawn up in the English language only. Nous, soussignes, reconnaissons par
les presentes avoir consenti et demande que tous les documents faisant foi ou se
rapportant de quelque maniere a la vente de ces actions soient rediges en
anglais seulement.
22. TIME OF ESSENCE
Time is of the essence of this Subscription Agreement.
23. COUNTERPARTS, ETC.
This Subscription Agreement may be executed in several counterparts, each of
which when so executed is deemed to be an original and such counterparts
together constitute one and the same instrument. Counterparts may be executed
either in original or faxed form and the parties adopt any signatures received
by a receiving fax machine as original signatures of the parties.
24. EFFECT OF HEADINGS
The section and paragraph headings herein are for convenience only and do not
affect the construction hereof.
25. SEVERABILITY
The invalidity or enforceability of any provisions hereof in no way affect the
validity or enforceability of any other provision.
14
26. GOVERNING LAW
This Subscription Agreement is governed by the laws of the Province of British
Columbia and the laws of Canada applicable therein. The Subscriber irrevocably
attorns to the non-exclusive jurisdiction of the court of the Province of
British Columbia.
27. CURRENCY
All references in this Agreement to currency amounts are indicated in terms of
Canadian dollars.
15
SCHEDULE "A"
VOICE MOBILITY INTERNATIONAL, INC.
TERM SHEET
THE ISSUER: Voice Mobility International, Inc. (the "Company").
OFFERING: Special Warrants at a price of Cdn.$2.00 per Special Warrant
(the "Issue Price") for aggregate gross proceeds of up to Cdn.$15,000,000.
TERMS OF SPECIAL WARRANTS: Each Special Warrant is exercisable, without payment of additional
consideration, into one Unit of the Company (a "Unit"). Each Unit
consists of one Common Share (a "Unit Share") and one-half Warrant of
the Company. Each whole Warrant (a "Warrant") entitles the holder to
acquire one Common Share (a "Warrant Share") at a price of Cdn.$2.25
at any time on or before a date which is two years from the Closing Date.
The Units, Unit Shares, Warrants and Warrant Shares are collectively
referred to as the "Underlying Securities".
MINIMUM SUBSCRIPTION 75,000 Special Warrants (Cdn.$150,000) in the Province of Ontario and such
other minimum number of Special Warrants as is prescribed by securities
legislation in other Qualifying Jurisdictions.
CLOSING DATE: March 27, 2001, or such other date as is agreed upon by the Lead Agent and
the Company (the "Closing Date").
QUALIFYING JURISDICTIONS: Ontario, British Columbia, Alberta, the United States of America (and such other
jurisdictions as are agreed upon by the Company and the Lead Agent).
SPECIAL WARRANTS: The Special Warrants will be issued pursuant to a special warrant indenture containing
standard anti-dilution protections (including in the case of dividends paid in the
ordinary course), which protections will be operative from the Closing Date. The
Special Warrants are exercisable by the holders thereof at any time after their
issuance and, if not previously exercised or repurchased, will be deemed to be exercised
immediately prior to 4:30 p.m. (Toronto time) on the business day (the "Qualification
Deadline") which is the latest of: (i) the date a registration statement with regard
to the resale of the Special Warrants, Unit Shares and Warrants and the issuance of
the Warrant Shares is declared effective by the United States Securities and
Exchange Commission under the UNITED STATES SECURITIES ACT OF 1933, as amended,
and (ii) the date a receipt is issued by the last of the securities regulatory
authorities in each of the jurisdictions in Canada set out as Qualifying Jurisdictions
in the Term Sheet where purchasers of Special Warrants are resident as at the Closing
Date for a final prospectus qualifying the issuance of the Unit Shares and the Warrants
for distribution in the Canadian Jurisdictions; and (iii) the day preceding the date the
listing of the Company's common shares on The Toronto Stock Exchange becomes effective,
being the time its common shares are posted for trading.
ESCROW: The net proceeds (gross proceeds less Agents' fees and expenses) from the sale of the
Special Warrants will be deposited in escrow with a trust company mutually agreeable to
the Company and the Lead Agent, to be released to the Company on the exercise or deemed
exercise of the Special Warrants, provided that certain subscribers ("Non-Escrowed Subscribers")
may agree to permit the release of their subscription proceeds to the Company on the
Closing Date. The subscription proceeds from the balance of the Subscribers ("Escrowed
Subscribers") shall be held in escrow as provided above. Notwithstanding the above, net
proceeds that are required to be deposited in escrow for the purpose of obtaining
approval to list the Company's common shares on The Toronto Stock Exchange shall not be
released to the Company on the Closing Date, but shall be deposited in escrow as provided above.
A-1
EXCHANGE, PENALTY AND
REPURCHASE PROVISIONS: The Company will use its best efforts to file a prospectus qualifying the Unit Shares and
Warrants to be issued in exchange for the Special Warrants in Ontario (and such other
provinces as may be agreed to by the Company and the Lead Agent) as soon as practicable
after the Closing Date. If the Qualification Deadline has not occurred on or prior to the
date that is 120 days following the Closing Date or such later date as may be determined
at the sole discretion of the Lead Agent, each Special Warrant will be exercisable for 1.1
Units. The Company will continue to use all reasonable commercial efforts to obtain a
receipt for the prospectus after 120 days after the Closing Date.
In the event a TSE listing of the Company's Common Shares has not been achieved prior to
the date six (6) months following the Closing Date, the Escrowed Subscribers shall
be entitled, at their option (the "Repurchase Option"), until the Time of Expiry, to require
the Company to repurchase their Special Warrants from legally available funds at the
Issue Price plus accrued interest.
LEAD AGENT: Loewen, Ondaatje, XxXxxxxxxx Limited
CO-AGENTS: Acumen Capital Partners Limited
Paradigm Capital Inc.
AGENTS' COMMISSION: The Agents will be paid at the closing of the sale of Special Warrants a commission of 7%
of the gross proceeds of this Offering, which commission and the expenses of the Agents
(including the fees of the Agents' legal counsel) will be fully paid in cash on the
Closing Date out of the proceeds of the Offering. In addition, the Agents shall receive a
Special Compensation Option, exercisable for a Compensation Option which, in the
aggregate, upon exercise will entitle the Agents to purchase for a period of two years
from the Closing Date the number of Units that is equal to 10% of the number of Special
Warrants sold, at a price per Unit that is equal to the issue price of each Special
Warrant. The terms of the commission, the Special Compensation Option and the Compensation
Option shall be subject to regulatory approval.
SUBSCRIPTION: Persons wishing to subscribe for Special Warrants must complete and sign a Subscription
Form and deliver a cheque to the Lead Agent not later than one business day prior to the
Closing Date.
USE OF PROCEEDS: The proceeds from the sale of the Special Warrants will be expended by the Company to
finance its growth strategy. Specifically, the proceeds will be allocated to sales and
marketing, research and development, working capital purposes and potential acquisitions.
RESALE RESTRICTIONS: The Special Warrants will be issued pursuant to exemptions from prospectus requirements of
applicable securities legislation and will be subject to resale restrictions under that legislation.
If the Company is unable to obtain a receipt for a final prospectus in any Qualifying
Jurisdiction and an effective Registration Statement, the Underlying Securities will be
subject to statutory hold periods during which time these securities may not be resold in such
Qualifying Jurisdictions.
In addition, if any Special Warrants are exercised prior to the issuance of receipts for a
final prospectus and/or an effective Registration Statement by the securities commissions in
any of the Qualifying Jurisdictions, the Underlying Securities will be subject to statutory
restrictions on resale.
The Company intends to file a prospectus to qualify the Underlying Securities only in the
Qualifying Jurisdictions. Accordingly, the Underlying Securities that are acquired outside of
the Qualifying Jurisdictions may be subject to resale restrictions.
A-2
The Special Warrants are not transferable without the prior written consent of the Company.
This restriction shall not, however, restrict the exercise of the Special Warrants for the
Units. Absent an effective Registration Statement, the Warrants are not transferable without the
prior written consent of the Company.
FOREIGN SALES: The Special Warrants may be sold outside of Canada pursuant to applicable exemptions.
A-3
SCHEDULE "B"
FORM 20A (IP)
SECURITIES ACT (BRITISH COLUMBIA)
ACKNOWLEDGEMENT OF INDIVIDUAL PURCHASER
1. I have agreed to purchase from Voice Mobility International, Inc.
(the "Issuer")
Special Warrants (the "Securities") of the Issuer.
--------------------
[number of Special Warrants]
2. I am purchasing the Securities as principal and, on closing of the
agreement of purchase and sale, I will be the beneficial owner of the
Securities.
3. I [circle one] have/have not received an offering memorandum describing
the Issuer and the Securities.
4. I acknowledge that:
(a) no securities commission or similar regulatory authority has
reviewed or passed on the merits of the Securities, AND
(b) there is no government or other insurance covering the
Securities, AND
(c) I may lose all of my investment, AND
(d) there are restrictions on my ability to resell the Securities
and it is my responsibility to find out what those
restrictions are and to comply with them before selling the
Securities, AND
(e) I WILL NOT receive a prospectus that the BRITISH COLUMBIA
SECURITIES ACT (the "Act") would otherwise require be given to
me because the Issuer has advised me that it is relying on a
prospectus exemption, AND
(f) because I am not purchasing the Securities under a prospectus,
I will not have the civil remedies that would otherwise be
available to me, AND
(g) the Issuer has advised me that it is using an exemption from
the requirement to sell through a dealer registered under the
Act, except purchases referred to in paragraph 5(g), and as a
result I do not have the benefit of any protection that might
have been available to me by having a dealer act on my behalf.
5. I also acknowledge that: [CIRCLE ONE]
(a) I am purchasing Securities that have an aggregate acquisition
cost of $97,000 or more, OR
(b) my net worth, or my net worth jointly with my spouse at the
date of the agreement of purchase and sale of the securities,
is not less than $400,000, OR
(c) my annual net income before tax is not less than $75,000, or
my annual net income before tax jointly with my spouse is not
less than $125,000, in each of the two most recent calendar
years, and I reasonably expect to have annual net income
before tax of not less than $75,000 or annual net income
before tax jointly with my spouse of not less than $125,000 in
the current calendar year, OR
(d) I am registered under the Act, OR
(e) I am a spouse, parent, brother, sister or child of a senior
officer or director of the Issuer, or of an affiliate of the
Issuer, OR
(f) I am a close personal friend of a senior officer or director
of the Issuer, or of an affiliate of the Issuer, OR
B-1
(g) I am purchasing securities under section 128(c) ($25,000 -
registrant required) of the Rules, and I have spoken to a
person [NAME OF REGISTERED PERSON:] _________________________
(the "Registered Person") who has advised me that the
Registered Person is registered to trade or advise in the
Securities and that the purchase of the Securities is a
suitable investment for me.
6. If I am an individual referred to in paragraph 5(b), 5(c), or 5(d), I
acknowledge that, on the basis of information about the Securities
furnished by the Issuer, I am able to evaluate the risks and merits of
the Securities because: [CIRCLE ONE]
(a) of my financial, business or investment experience, OR
(b) I have received advice from a person [NAME OF ADVISER:]
(the "Adviser") who has
------------------------------------
advised me that the Adviser is:
(i) registered to advise, or exempted from the
requirement to be registered to advise, in respect of
the Securities, and
(ii) not an insider of, or in a special relationship with,
the Issuer.
The statements made in this report are true.
DATED , 2001. --------------------------------------------
----------------- Signature of Purchaser
--------------------------------------------
Name of Purchaser
--------------------------------------------
--------------------------------------------
Address of Purchaser
B-2
SCHEDULE "C"
CONTRACTUAL RIGHT OF ACTION FOR RESCISSION
(1) In the event that a holder of Special Warrants, who acquires Unit
Shares and Warrants of the Company upon the exercise of the Special
Warrants, is or becomes entitled under Applicable Securities Laws to
the remedy of rescission by reason of the Prospectus qualifying the
distribution of the Unit Shares and Warrants on exercise of the Special
Warrants, or any amendment thereto, containing a misrepresentation, the
Subscriber is entitled to rescission not only of the Subscriber's
exercise of its Special Warrants but also of the private placement
transaction pursuant to which the Special Warrants were initially
acquired, and is entitled in connection with such rescission to a full
refund of all consideration paid to the Company on the acquisition of
the Special Warrants. The provisions hereof are a direct contractual
right extended by the Company alone (but specifically not by the
directors or officers of the Company or by the Agent) to holders of
Special Warrants, permitted assignees of such holders and to holders of
Unit Shares and Warrants acquired by such holders on exercise of the
Special Warrants, and are in addition to any other right or remedy
available to a holder of Special Warrants under section 130 of the
SECURITIES ACT (Ontario), equivalent provisions of the securities
legislation of any other province of Canada in which Special Warrant
purchasers are resident, or otherwise at law, and are subject to the
provisions of section (2) below, and the defences, limitations and
other provisions described under the Applicable Securities Laws or
otherwise available.
(2) No action may be commenced to enforce the foregoing rights of action
for rescission more than 180 days after the Closing Date.
(3) The Company agrees that the benefit of the covenant contained in
section (1) above is deemed to pass with any permitted and lawful
assignment or transfer of Special Warrants in accordance with the
Special Warrant Indenture and the Subscriber agrees to extend
explicitly the benefit of such covenant (but without liability to the
Subscriber) to any permitted and lawful assignee or transferee of
Special Warrants registered in the name of the Subscriber.
(4) All capitalized terms in this Schedule that are defined in the
Subscription Agreement between the Subscriber and the Company have the
meanings given to them in the Subscription Agreement.
C-1
SCHEDULE "D"
FORM OF DECLARATION FOR REMOVAL OF LEGEND
TO: VOICE MOBILITY INTERNATIONAL, INC.
The undersigned (a) acknowledges that the sale of the securities of
Voice Mobility International, Inc. (the "Company") to which this declaration
relates is being made in reliance on Rule 904 of Regulation S under the United
States Securities Act of 1933, as amended (the "1933 Act") and (b) certifies
that (1) it is not an affiliate of the Company (as defined in Rule 405 under the
1933 Act), (2) the offer of such securities was not made to a person in the
United States and either (A) at the time the buy order was originated, the buyer
was outside the United States, or the seller and any person acting on its behalf
reasonably believe that the buyer was outside the United States, or (B) the
transaction was executed on or through the facilities of The Toronto Stock
Exchange or any other designated offshore securities market, as defined in
Regulation S, and neither the seller nor any person acting on its behalf knows
that the transaction has been prearranged with a buyer in the United States, (3)
neither the seller nor any affiliate of the seller nor any person acting on any
of their behalf has engaged or will engage in any directed selling efforts in
the United States in connection with the offer and sale of such securities, (4)
the sale is BONA FIDE and not for the purpose of "washing off" the resale
restrictions imposed because the securities are "restricted securities" (as such
term is defined in Rule 144(a)(3) under the 1933 Act), (5) the seller does not
intend to replace the securities sold in reliance on Rule 904 of the 1933 Act
with fungible unrestricted securities and (6) the contemplated sale is not a
transaction, or part of a series of transactions which, although in technical
compliance with Regulation S, is part of a plan or scheme to evade the
registration provisions of the 1933 Act. Terms used herein have the meanings
given to them by Regulation S.
Dated: By:
Name:
--------------------------------------
Title:
-------------------------------------
D-1
SCHEDULE "E"
CERTIFICATION BY FOREIGN PORTFOLIO MANAGER
The undersigned is purchasing securities of Voice Mobility International, Inc.
(the "Issuer").
The undersigned hereby certifies that:
(a) it is purchasing securities of the Issuer on behalf of managed
accounts for which it is making the investment decision to
purchase these securities and has full discretion to purchase
or sell securities for such accounts without requiring the
client's express consent to a transaction;
it carries on the business of managing the investment portfolios of
clients through discretionary authority granted by those clients (a
"portfolio manager" business) in _____________________ [jurisdiction],
and it is permitted by law to carry on a portfolio manager business in
that jurisdiction;
it was not created solely or primarily for the purpose of purchasing
securities of the Issuer;
the total asset value of the investment portfolios it manages on behalf
of clients is not less than $20,000,000; and
the Issuer has provided it with a list of the directors, senior
officers and other insiders of the Issuer, and the persons that carry
on investor relations activities for the Issuer (which list is attached
as a schedule to this Form), and it does not believe, and has no
reasonable grounds to believe, that any of those persons has a
beneficial interest in any of the managed accounts for which it is
purchasing, except as follows:
----------------------------------------------------------
(name of insider(s) or person(s) carrying on investor
relations activities for the Issuer that have a beneficial
interest in an account)
The undersigned acknowledges that it is bound by the provisions of the British
Columbia SECURITIES ACT including, without limitation, sections 87 and 111
concerning the filing of insider reports and reports of acquisitions.
Dated at
---------------------------------
this day of , 2001
------ -----------------
-----------------------------------------
(Name of Purchaser - please print)
-----------------------------------------
(Authorized Signature)
-----------------------------------------
(Official Capacity - please print)
-----------------------------------------
(please print name of individual whose
signature appears above, if different
from name of purchaser printed above)
E-1
SUBSCRIPTION AGREEMENT FOR SPECIAL WARRANTS
(FOR NON-ESCROWED U.S. SUBSCRIBERS)
(THE "SUBSCRIPTION AGREEMENT")
THE SECURITIES SUBSCRIBED FOR HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933 AND, SUBJECT TO CERTAIN
EXCEPTIONS, MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO A U.S. PERSON
To: VOICE MOBILITY INTERNATIONAL, INC.
And to: Loewen, Ondaatje, XxXxxxxxxx Limited, Acumen Capital Finance Partners
Limited and Paradigm Capital Inc.
ONE COMPLETED AND ORIGINALLY EXECUTED COPY OF THIS SUBSCRIPTION AGREEMENT AND
APPLICABLE SCHEDULES MUST BE DELIVERED IN ACCORDANCE WITH SECTION 6 OF THIS
SUBSCRIPTION AGREEMENT AS SOON AS POSSIBLE, AND, IN ANY EVENT, NO LATER THAN
4:00 P.M. (TORONTO TIME) ON MARCH 26, 2001 TO:
ATTENTION: XXXXXXX XXXXXXX, LOEWEN, ONDAATJE, XXXXXXXXXX LIMITED,
XXXXXXXX LANES, EAST TOWER
00 XXXXXX XXXX, XXXXX 0000, XXXXXXX, XX X0X 0X0,
TEL (000) 000-0000, FAX (000) 000-0000
The undersigned (the "Subscriber" or "you") hereby confirms its irrevocable
subscription for and offer to purchase from Voice Mobility International, Inc.
("Voice Mobility" or the "Company") that number of special warrants of the
Company (the "Special Warrants") set out below, at a price of Cdn$2.00 per
Special Warrant (the "Issue Price"), pursuant to the terms and conditions of
this Subscription Agreement and in accordance with the Agency Agreement (as
defined below). The Subscriber agrees to be bound by the terms of this
Subscription Agreement and, without limitation, agrees that the Company and the
Agents (as defined below) may rely upon its covenants, representations and
warranties.
____________________________________________________________ _________________________________________________________________
NUMBER OF SPECIAL WARRANTS:
------------------------------------------------------
(Name of Subscriber - please print)
Account Reference: AGGREGATE SUBSCRIPTION PRICE: $
------------------------------------ ---------------------------------
(the "Aggregate Subscription Price")
The Subscribers agrees to permit the release of its subscription
By: proceeds to the Company on closing ("Non-Escrowed Subscribers").
--------------------------------------------------
Authorized Signature
_________________________________________________________________
_________________________________________________________________
IF THE SUBSCRIBER IS SIGNING AS AGENT FOR A PRINCIPAL (BENEFICIAL
PURCHASER) AND IS NOT A TRUST COMPANY OR A PORTFOLIO MANAGER
----------------------------------------------------- PURCHASING AS TRUSTEE OR AGENT FOR ACCOUNTS FULLY MANAGED BY
(Official Capacity or Title - please print) IT, COMPLETE THE FOLLOWING:
----------------------------------------------------- ---------------------------------------------------------------
(Please print name of individual whose signature (Name of Principal)
appears above if different than the name of the
subscriber printed above.)
---------------------------------------------------------------
(Principal's Address)
----------------------------------------------------- ---------------------------------------------------------------
(Subscriber's Address)
---------------------------------------------------------------
_________________________________________________________________
_________________________________________________________________
------------------------------------------------------ DELIVER THE SPECIAL WARRANTS AS SET OUT BELOW:
(Telephone Number)
____________________________________________________________
---------------------------------------------------------------
(Name)
____________________________________________________________
REGISTER THE SPECIAL WARRANTS AS SET OUT BELOW: ---------------------------------------------------------------
(Account Reference, if applicable)
------------------------------------------------------
(Name) ---------------------------------------------------------------
(Address)
------------------------------------------------------
(Account Reference, if applicable) ---------------------------------------------------------------
(Contact Name) (Telephone Number)
------------------------------------------------------
(Address) __________________________________________________________________
------------------------------------------------------ __________________________________________________________________
(Telephone Number) NUMBER OF SHARES OF THE COMPANY HELD BY THE SUBSCRIBER EXCLUDING
THOSE BEING SUBSCRIBED FOR:
____________________________________________________________ _________________________________________________________________
ACCEPTANCE: The Company hereby accepts the above subscription and the Company represents and warrants to the Subscriber that the
representations and warranties made by the Company to the Agents in the agency agreement (the "Agency Agreement") are true and
correct in all material respects as of this date (save and except as waived by the Lead Agent, as defined below) and that the
Subscriber is entitled to rely thereon.
VOICE MOBILITY INTERNATIONAL, INC. , 2001
--------------------
________________________
By: No:
---------------------------------------- ________________________
NOTE: PLEASE ALSO COMPLETE AND SIGN SCHEDULE "B", IF YOU ARE AN INDIVIDUAL
THE TORONTO STOCK EXCHANGE
PRIVATE PLACEMENT QUESTIONNAIRE AND UNDERTAKING
To be completed by each proposed placement purchaser of listed securities or
securities which are convertible into listed securities.
QUESTIONNAIRE
1. DESCRIPTION OF TRANSACTION
(a) Name of issuer of the Securities VOICE MOBILITY INTERNATIONAL, INC.
----------------------------------------
-------------------------------------------------------------------------
(b) Number and Class of Securities to be Purchased
--------------------------
(c) Purchase Price
----------------------------------------------------------
-------------------------------------------------------------------------
2. DETAILS OF PURCHASER
(a) Name of Purchaser
--------------------------------------------------------
(b) Address
------------------------------------------------------------------
(c) Names and addresses of persons having a greater than 10% beneficial
interest in the purchaser
------------------------------------------------
-------------------------------------------------------------------------
3. RELATIONSHIP TO ISSUER
(a) Is the purchaser (or any person named in response to 2(c) above) an
insider of the issuer for the purposes of the Ontario Securities Act
(before giving effect to this private placement)? If so, state the
capacity in which the purchaser (or person named in response to 2(c))
qualifies as an insider
-------------------------------------------------
(b) If the answer to (a) is "no", are the purchaser and the issuer controlled
by the same person or company? If so, give details
-----------------------
4. DEALINGS OF PURCHASER IN SECURITIES OF THE ISSUER
Give details of all trading by the purchaser, as principal, in the securities
of the issuer (other than debt securities which are not convertible into
equity securities), directly or indirectly, within the 60 days preceding the
date hereof
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
UNDERTAKING
TO: The Toronto Stock Exchange
The undersigned has subscribed for and agreed to purchase, as principal, the
securities described in Item 1 of this Private Placement Questionnaire and
Undertaking.
The undersigned undertakes not to sell or otherwise dispose of any of the said
securities so purchased or any securities derived therefrom for a period of six
months from the date of the closing of the transaction herein or for such period
as is prescribed by applicable securities legislation, whichever is longer,
without the prior consent of The Toronto Stock Exchange and other regulatory
body having jurisdiction.
DATED AT
------------------------------ ----------------------------------------
(Name of Purchaser - please print)
this day of , 2001
---- --------------- ----------------------------------------
(Authorized Signature)
----------------------------------------
(Official Capacity - please print)
(please print here name of individual
whose signature appears above, if
different from name of purchaser
printed above)
2
TERMS AND CONDITIONS
1. SUBSCRIPTION
We confirm your agreement to purchase, on and subject to the terms and
conditions in this Subscription Agreement and in the Agency Agreement, from the
Company the number of Special Warrants as set out on the face page of this
Subscription Agreement at a price of Cdn.$2.00 per Special Warrant payable as
described in section 6 of this Subscription Agreement. The Special Warrants you
are purchasing form part of a larger offering (in the Canada, the United States
and elsewhere) of Special Warrants (the "OFFERING") by the Company pursuant to
an agency agreement (the "AGENCY AGREEMENT") to be entered into by Loewen,
Ondaatje, XxXxxxxxxx Limited ("LOM" or the "LEAD AGENT"), Acumen Capital Finance
Partners Limited, Paradigm Capital Inc. (collectively, the "AGENTS") and the
Company.
2. DESCRIPTION OF SPECIAL WARRANTS
(a) Attached as SCHEDULE "A" to this Subscription Agreement is a
term sheet (the "TERM SHEET") containing a summary of the
terms and conditions pertaining to the Special Warrants and
the Offering. The description of the Special Warrants
contained in the Term Sheet and this Subscription Agreement is
a summary only and is subject to the detailed provisions of a
special warrant indenture (the "SPECIAL WARRANT INDENTURE") to
be dated as of the Closing Date and to be entered into between
the Company and Computershare Trust Company of Canada (or
another trust company that may be agreed to by the Company and
the Lead Agent), in its capacity as special warrant agent and
trustee thereunder (the "TRUSTEE").
(b) Upon exercise (which term shall include deemed exercise) of
the Special Warrants, in accordance with their terms, the
holder will, without payment of any additional consideration,
be issued one unit ("UNIT") in respect of each Special Warrant
exercised. Each Unit will consist of one common share in the
capital of the Company, as presently constituted ("UNIT
SHARE"), and one half of one non-transferable share purchase
warrant ("WARRANT"). Each whole Warrant entitles the holder to
purchase one additional common share in the capital of the
Company, as presently constituted (a "WARRANT SHARE"), at a
price that is equal to $2.25 at any time on or before the date
which is two years from the Closing Date (as defined in
paragraph 4 below). The description of the Warrants contained
in the Term Sheet and this Subscription Agreement is a summary
only and is subject to the detailed provisions of a warrant
indenture (the "WARRANT INDENTURE") to be dated as of the
Closing Date and to be entered into between the Company and
Computershare Trust Company of Canada (or another trust
company that may be agreed to by the Company and the Lead
Agent), in its capacity as warrant agent and trustee
thereunder.
(c) The Special Warrants will be exercisable on any business day
during business hours during the period (the "EXERCISE
PERIOD") commencing on the Closing Date and ending at 4:30
p.m. (Toronto time) (the "TIME OF EXPIRY") on the business day
(the "QUALIFICATION DEADLINE") which is the latest of (i) the
date a registration statement (the "REGISTRATION STATEMENT")
with regard to the resale of the Special Warrants, Unit Shares
and Warrants and the issuance of the Warrant Shares is
declared effective by the United States Securities and
Exchange Commission (the "SEC") pursuant to the UNITED STATES
SECURITIES ACT OF 1933, as amended (the "1933 ACT"), and (ii)
the date a receipt is issued by the last of the securities
regulatory authorities in each of the jurisdictions in Canada
set out as Qualifying Jurisdictions in the Term Sheet where
purchasers of Special Warrants are resident as at the Closing
Date (the "CANADIAN JURISDICTIONS") for a final prospectus
(the "PROSPECTUS") qualifying the issuance of the Unit Shares
and the Warrants for distribution in the Canadian
Jurisdictions to holders of Special Warrants upon their
exercise; and (iii) THE DAY PRECEDING THE DATE THE LISTING OF
THE COMPANY'S COMMON SHARES ON THE TORONTO STOCK EXCHANGE
BECOMES EFFECTIVE, BEING THE TIME ITS COMMON SHARES ARE POSTED
FOR TRADING.
(d) If any Special Warrants have not been exercised by the holders
or repurchased by the Company during the Exercise Period, such
Special Warrants will be deemed to have been exercised by the
holders immediately prior to the Time of Expiry without any
further action on the part of such holders. If the
Qualification Deadline has not occurred on or prior to the
date that is 120 days following the Closing Date or such later
date as may be determined at the sole discretion of the Lead
Agent, each Special Warrant will be exercisable for 1.1 Units.
3
(e) Immediately upon receipt, the net proceeds from the Offering
(gross proceeds less the Agents' fees and expenses), will be
deposited in escrow with the Trustee on the Closing Date, to
be held in escrow pursuant to the Special Warrant Indenture
and will be released to the Company on the exercise or deemed
exercise of the Special Warrants, provided that certain
subscribers ("NON-ESCROWED SUBSCRIBERS") may agree to permit
the release of their subscription proceeds to the Company on
the Closing Date. The subscription proceeds from the balance
of the Subscribers ("ESCROWED SUBSCRIBERS") shall be held in
escrow as provided above. Notwithstanding the above, net
proceeds that are required to be deposited in escrow for the
purpose of obtaining approval to list the Company's common
shares on The Toronto Stock Exchange shall not be released to
the Company on the Closing Date, but shall be deposited in
escrow as provided above.
(f) In the event that a listing of the Company's common shares on
The Toronto Stock Exchange has not become effective by the
date that is six months following the Closing Date, then each
of the Escrowed Subscribers will be entitled, at their option
(the "Repurchase Option") until the Time of Expiry, to require
the Company to repurchase the Special Warrants held by such
holder, from legally available funds, plus such holder's
portion of the interest earned by the Trustee under the
Special Warrant Indenture. If the funds of the Company legally
available for repurchase of such Special Warrants are
insufficient to repurchase the total number of Special
Warrants to be repurchased, those funds which are legally
available will be used to repurchase the maximum number of
such Special Warrants rateably among the Escrowed Subscribers
who have exercised the Repurchase Option. Thereafter, as
additional funds of the Company become legally available for
such repurchase, such funds shall be used quarterly to
repurchase the Special Warrants until all Special Warrants
covered by exercised Repurchase Options have been exercised.
(g) The Subscriber acknowledges and agrees that the specific
rights of the holders of Special Warrants and the detailed
terms of the Special Warrants will be set forth in and subject
to the Special Warrant Indenture.
(h) Since the Company is not currently a "reporting issuer" in any
of the Canadian Jurisdictions or elsewhere in Canada, the
Special Warrants and the Unit Shares and Warrants issuable
upon the exercise or deemed exercise of the Special Warrants
will be subject to resale restrictions under the applicable
securities laws, rules, regulations and policies of the
Province of British Columbia, the jurisdiction in which the
Subscriber is resident, and any jurisdiction in which a
subsequent trade may be proposed, until such time as: (i) the
Company becomes a "reporting issuer" under such laws and the
appropriate "hold periods", if any, under such laws have
expired; (ii) a further statutory exemption from the
registration and prospectus requirements of such laws may be
relied upon by the holder; or (iii) an appropriate
discretionary order or ruling is obtained under such laws to
permit the transfer by the Subscriber of its securities. The
resale or other transfer of the Special Warrants, Unit Shares,
Warrants and the issuance of the Warrant Shares will also be
restricted under the 1933 ACT until the Registration Statement
has become effective. The Company does not expect that the
Company's common shares will be listed on any exchange or that
the Company will become a "reporting issuer in any of the
Canadian Jurisdictions until the Registration Statement has
become effective.
The Company has agreed to use its reasonable best efforts to
file, clear, and obtain a receipt for the Prospectus in each
of the Canadian Jurisdictions set out as Qualifying
Jurisdictions in the Term Sheet. The Company has also agreed
to file and use its reasonable best efforts to prosecute to
effectiveness the Registration Statement. In the event that
the Company is unable to obtain a receipt for the Prospectus
in a Canadian Jurisdiction, the Special Warrants, Unit Shares,
Warrants and Warrant Shares (collectively the "SECURITIES")
will be subject to statutory resale restrictions under the
applicable securities legislation of that Canadian
Jurisdiction and the applicable hold period for such
Securities may never expire. Statutory restrictions may apply
on the resale of the Special Warrants, Unit Shares, Warrants
and Warrant Shares that are acquired prior to the issuance of
receipts for the Prospectus by the securities regulatory
authority in any of the Canadian Jurisdictions. In addition,
if the Company does not cause the Registration Statement to
become effective, the resale of the Special Warrants, Unit
Shares, Warrants and the issuance of the Warrant Shares will
continue to be restricted under the 1933 ACT and would be
permissible only in accordance with a statutory or regulatory
exemption from registration under the 1933 ACT. Subscribers
are advised to consult their own legal advisors in this
regard.
4
3. ACCEPTANCE AND REJECTION OF SUBSCRIPTION BY THE COMPANY
The Subscriber understands and agrees that the Company reserves the right, in
its absolute discretion, to reject the Subscriber's subscription for Special
Warrants in whole or in part, in any order, at any time prior to the Closing
Time (as defined in section 4 below) notwithstanding prior receipt by the
Subscriber of notice of acceptance of the Subscriber's subscription and, if
accepted only in part, a proportionate amount of the Aggregate Subscription
Price will be returned to the Subscriber without interest.
4. CLOSING
The closing of the Offering (the "CLOSING") will be completed at the offices of
Catalyst Corporate Finance Lawyers, Suite 1400, 0000 Xxxx Xxxxxxxx Xxxxxx,
Xxxxxxxxx, XX, X0X 0X0, at 9:00 a.m. (Vancouver time) (the "CLOSING TIME") on
March 27, 2001 or such other place or date or time as the Company and the Lead
Agent may mutually agree (the "CLOSING DATE"), provided that delivery of the
signed Special Warrants and Special Compensation Options shall be made to Lead
Agent's counsel, Fraser Xxxxxx Casgrain LLP, Suite 4100, 0 Xxxxx Xxxxxxxx Xxxxx,
Xxxxxxx, Xxxxxxx X0X 0X0, at or prior to that time. If by the Closing Time, the
terms and conditions contained in this Subscription Agreement and the Agency
Agreement have been complied with to the satisfaction of the Agents or waived by
them, the Agents will deliver to the Company all completed Subscription
Agreements, and will deliver to or to the direction of the Company, the
subscription funds against delivery by the Company of the Special Warrants and
such other documentation as may be required. If by the Closing Time, the terms
and conditions contained in this Subscription Agreement and the Agency Agreement
have not been complied with to the satisfaction of the Agents or waived by them,
any cheques or bank drafts delivered by the Subscriber to the Agents
representing the purchase price for Special Warrants will be promptly returned
to the Subscriber without interest.
5. FACSIMILED SUBSCRIPTIONS
The Company and the Agents will be entitled to rely on delivery by facsimile of
an executed copy of this Subscription Agreement, and acceptance by the Company
of such facsimile copy will be legally effective to create a valid and binding
agreement between you and the Company in accordance with the terms hereof.
6. CONDITIONS OF CLOSING
The sale of the Special Warrants to the Subscriber is subject to the following
conditions:
(a) Payment of the "Aggregate Subscription Price", as defined on
the face page hereof, shall be paid by you as soon as possible
and in any event no later than 12:00 noon (Toronto time) on
March 27, 2001. Payment must be made by certified cheque or
bank draft in Canadian dollars drawn on a Canadian chartered
bank or U.S. banking association payable to one of "Loewen,
Ondaatje, XxXxxxxxxx Limited", "Acumen Capital Finance
Partners Limited", "Paradigm Capital Inc." or payable in such
other manner as may be specified by the Agents.
(b) One completed and signed copy of this Subscription Agreement
and one completed and signed Private Placement Questionnaire
and Undertaking for The Toronto Stock Exchange must be
delivered to Xxxxxxx Xxxxxxx at Loewen, Ondaatje, XxXxxxxxxx
Limited, Xxxxxxxx Lanes, East Tower, 00 Xxxxxx Xxxx, Xxxxx
0000, Xxxxxxx, XX X0X 0X0, Tel (000) 000-0000, Fax (416)
964-4333, as soon as possible, and in any event, no later than
4:00 p.m. (Toronto time) on March 26, 2001.
(c) If the Subscriber is an individual, the Subscriber must also
complete, sign and deliver the Form 20A (IP) in the form
annexed to this Subscription Agreement as SCHEDULE "B", as
required by the British Columbia Securities Commission to
Xxxxxxx Xxxxxxx at Loewen, Ondaatje, XxXxxxxxxx Limited,
Xxxxxxxx Lanes, East Tower, 00 Xxxxxx Xxxx, Xxxxx 0000,
Xxxxxxx, XX X0X 0X0, Tel (000) 000-0000, Fax (000) 000-0000,
as soon as possible, and in any event, no later than 4:00 pm
(Toronto time) on March 26, 2001. The Form 20A(IP) is required
to be delivered by the Agents to the Company at Closing.
(d) All necessary regulatory approvals must be obtained prior to
the Closing Date and all terms and conditions of this
Subscription Agreement, the Agency Agreement and Special
Warrant Indenture must be satisfied or waived on or prior to
the Closing Date.
5
7. AUTHORIZATION OF LEAD AGENT
The Subscriber irrevocably authorizes the Lead Agent, in its discretion, to act
as its representative at the Closing, and hereby appoints the Lead Agent, with
full power of substitution, as its true and lawful attorney with full power and
authority in its place and stead:
(a) to receive certificates for the Special Warrants, to execute
in its name and on its behalf all closing receipts and
required documents, to complete and correct any documents
relating to the transactions contemplated by this Subscription
Agreement that have been signed by the Subscriber and require
completion or correction;
(b) to extend such time periods and to waive, in whole or in part,
any representations, warranties, covenants or conditions for
the benefit of the Subscriber contained in this Subscription
Agreement, the Agency Agreement or any ancillary or related
document;
(c) to terminate this Subscription Agreement if any condition
precedent to the Offering is not satisfied, in such manner and
on such terms and conditions as the Lead Agent may determine,
acting reasonably; and
(d) without limiting the generality of the foregoing, to
negotiate, settle, execute, deliver and amend the Agency
Agreement, Special Warrant Indenture and Warrant Indenture.
8. PROSPECTUS EXEMPTION
The Subscriber, on its own behalf and (if applicable) on behalf of others for
whom it is contracting hereunder, acknowledges and agrees that:
(a) the Special Warrants are being offered on a "private
placement" basis pursuant to an exemption under the 1933 ACT
and applicable state securities laws ("U.S. SECURITIES ACTS")
only to (i) "accredited investors" as defined in Section 2(15)
of the U.S. Securities Acts and Rule 501 of Regulation D
thereunder, and (ii) Qualified Institutional Buyers, as such
term is defined in Rule 144A of the U.S. Securities Acts
("QUALIFIED INSTITUTIONAL BUYERS");
(b) the sale and delivery of the Special Warrants to the
Subscriber or, if applicable, to any others on whose behalf it
is contracting hereunder, is conditional upon such sale being
exempt from the prospectus filing and registration
requirements of all applicable securities legislation,
including statutes, regulations, national instruments,
published rules, policies, blanket orders, rulings and stock
exchanges (collectively, "APPLICABLE SECURITIES LAWS")
relating to the sale of the Special Warrants;
(c) the Special Warrants, Unit Shares, Warrants and Warrant Shares
will be subject to resale restrictions under Applicable
Securities Laws and are otherwise subject to the terms,
conditions and provisions of the Agency Agreement and the
Subscriber, on its own behalf and, if applicable, on behalf of
others for whom it is contracting hereunder, agrees to comply
with all Applicable Securities Laws concerning any resale of
such Securities;
(d) the Subscriber, and, if applicable, the others for whom it is
contracting hereunder, have been advised to consult their own
legal advisors with respect to applicable resale restrictions
and that it (or others for whom it is contracting hereunder)
is solely responsible and neither the Company nor the Agents
are in any way responsible for compliance with applicable
resale restrictions;
(e) the Subscriber has not received, nor has it requested, nor
does it have any need to receive, any prospectus, sales or
advertising literature or any other document purporting to
describe the business and affairs of the Company which has
been prepared primarily for delivery to, and review by, a
prospective purchaser in order to assist it in making an
investment decision in respect of the Special Warrants and it
has not become aware of any advertisement in printed public
media, radio, television or telecommunications, including
electronic display, or any other form of advertising or as
part of a general solicitation with respect to the
distribution of the Special Warrants;
(f) in making its investment decision, the Subscriber, and, if
applicable, the others for whom it is contracting hereunder,
have relied solely upon publicly available information
relating to the Company and not upon any verbal or written
representation as to any fact or otherwise made by or on
behalf of the Company, the
6
Agents or any employee, agent or affiliate thereof or any
other person associated therewith, and it, and, if applicable,
the others for whom it is contracting hereunder, agree that
the Agents assume no responsibility or liability of any nature
whatsoever for the accuracy, adequacy or completeness of the
publicly available information;
(g) the sale of the Special Warrants was not accompanied by any
advertisement in printed media of general and regular paid
circulation, radio, television or telecommunications,
including electronic display;
(h) in accepting this Agreement, the Agents and the Company are
relying upon the representations of the Subscriber set out
herein including, without limitation, in connection with
determining the eligibility of the Subscriber or, if
applicable, the eligibility of others on whose behalf the
Subscriber is contracting hereunder to purchase Special
Warrants under the Applicable Securities Laws. The Subscriber
hereby agrees to notify the Company immediately of any change
in any representation, warranty, covenant or other information
relating to the Subscriber or the beneficial purchaser
contained in this Agreement which takes place prior to the
Closing Date; and
(i) other than as provided for herein or in the Agency Agreement,
no person has made any written or oral representations that
any person will re-sell or re-purchase the Special Warrants,
Unit Shares, Warrants or Warrant Shares; as to the future
price or value of the Special Warrants, Unit Shares, Warrants
or Warrant Shares; or that any person will refund the purchase
price of the Special Warrants.
9. SUBSCRIBER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
By executing this Agreement, the Subscriber, on its own behalf
and, if applicable, on behalf of others for whom the Subscriber is contracting
hereunder, represents, warrants and covenants to the Agents and the Company (and
acknowledges that each of them and their respective legal counsel, are relying
thereon and that such representations, warranties and covenants shall survive
the Closing Date) that:
(a) by reason of the Subscriber's business or financial
experience, the Subscriber has the capacity to protect its
interests in connection with the purchase of the Special
Warrants, and the Subscriber has such knowledge and experience
in financial and business matters that it is capable of
evaluating the merits and risks of an investment in the
Company;
(b) the Subscriber is purchasing the Special Warrants for its own
account and for investment purposes only and has no present
intention, or arrangement for the distribution, transfer,
assignment or resale of the Special Warrants;
(c) 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 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 limited liability
company, partnership, syndicate or other form of
unincorporated organization, the Subscriber has the necessary
legal capacity and authority to execute and deliver this
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 attained the age of majority and is legally
competent to execute this Agreement and to take all actions
required pursuant thereto;
(d) whether the Subscriber is a natural person or a corporation,
partnership or other entity, upon acceptance by the Company
and the Agents, this Agreement will have been duly executed
and delivered and 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;
(e) as the Special Warrants, Unit Shares, Warrants and Warrant
Shares are subject to resale restrictions under the Applicable
Securities Laws and the U.S. Securities Acts, the Subscriber,
or in the case of a purchase by the Subscriber acting as agent
for a disclosed principal, each beneficial purchaser, shall
comply with all Applicable Securities Laws and the U.S.
Securities Acts concerning any resale of such Securities and
shall consult with its own legal advisors with respect to such
compliance;
7
(f) the Subscriber will execute and deliver within the applicable
time periods all documentation as may be required by any
Applicable Securities Laws to permit the purchase of the
Special Warrants on the terms herein set forth;
(g) if required by any Applicable Securities Laws, the Subscriber
will execute, deliver and file and otherwise assist the
Company in filing reports, questionnaires, undertakings and
other documents with respect to the issue of the Special
Warrants;
(h) the Subscriber is resident of, or otherwise subject to, the
laws of the state set out in their address on the first page
of this Subscription Agreement, which address is the residence
or place of business of the Subscriber not created or used
solely for the purpose of acquiring Special Warrants;
(i) the Subscriber acknowledges that the Special Warrants, Unit
Shares, Warrants and Warrant Shares have not been and will not
be registered under the U.S. Securities Acts or any applicable
state securities laws and that the contemplated sale is being
made in reliance on Rule 144A to the U.S. Securities Acts to
Qualified Institutional Buyers or a private placement
exemption to accredited investors (as such term is defined in
Rule 501 of Regulation D under the U.S. Securities Acts,
"Accredited Investors") pursuant to Rule 506 of Regulation D
under the U.S. Securities Acts;
(j) the Subscriber (or, if applicable, each beneficial purchaser
for whom it is purchasing): (i) is a Qualified Institutional
Buyer (as defined in Rule 144A under the U.S. Securities Acts)
and is acquiring the Special Warrants for its own account or
for the account of a Qualified Institutional Buyer with
respect to which it exercises sole investment discretion, and
not with a view to any resale, distribution or other
disposition of the Special Warrants in violation of United
States federal and state securities laws, or (ii) an
"accredited investor" within the meaning under Rule 501 of
Regulation D under the U.S. Securities Acts;
(k) the Subscriber is acquiring the Special Warrants for its own
account and not with a view to any resale, distribution or
other disposition of the Special Warrants, Unit Shares,
Warrants or Warrant Shares in violation of the U.S. Securities
Act or applicable U.S. state securities laws;
(l) the Subscriber agrees that if it decides to offer, sell or
otherwise transfer any of the Special Warrants, Unit Shares,
Warrants or Warrant Shares, such Securities may be offered,
sold or otherwise transferred only (i) to the Company, (ii)
pursuant to an effective registration statement,, (iii) within
the United States in accordance with the exemption from
registration under the U.S. Securities Acts including pursuant
to Rule 144 thereunder, if applicable, and in compliance with
any applicable state securities laws or (iv) another exemption
from registration under the U.S. Securities Acts and any
applicable state securities laws;
(m) the Subscriber understands and acknowledges that, upon the
original issuance thereof, and until such time as the same is
no longer required under applicable requirements of the U.S.
Securities Acts or applicable state securities laws, the
Special Warrants, Unit Shares, Warrants and Warrant Shares, as
the case may be, will be "restricted securities" as defined in
Rule 144(a)(3) under the U.S. Securities Acts and each
certificate evidencing a Special Warrant, Unit Share or
Warrant (and each Warrant Share issued prior to Registration
Statement effectiveness) will bear the following legend until
the applicable securities as represented by the certificate
are sold pursuant to either (i) a registration statement with
respect to such securities which is effective under the 1933
ACT, (ii) Rule 144 under the 1933 ACT, or (iii) in reliance
upon Regulation S:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), NOR QUALIFIED UNDER OR PURSUANT TO THE
SECURITIES OR "BLUE SKY" LAWS OF ANY STATE NOR UNDER
OR PURSUANT TO THE SECURITIES LAWS OF ANY PROVINCE IN
CANADA. SUCH SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE
ASSIGNED, EXCEPT PURSUANT TO (i) A REGISTRATION
STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS
EFFECTIVE UNDER THE SECURITIES ACT, (ii) RULE 144 OR
RULE 144A UNDER THE SECURITIES ACT, IF AVAILABLE, OR
(iii)
8
ANY OTHER EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT AND FROM QUALIFICATION UNDER ANY
SECURITIES LAWS APPLICABLE IN CANADA, IF AVAILABLE,
AND IN EACH CASE, IN COMPLIANCE WITH ANY APPLICABLE
STATE OR PROVINCIAL SECURITIES LAWS.
and it also understands and acknowledges that upon the
original issuance thereof, and until such time as the same is
no longer required under applicable requirements of the U.S.
Securities Acts or applicable state securities laws, all
certificates representing the Unit Shares, Warrants and
Warrant Shares, and all certificates issued in exchange or in
substitution thereof, shall bear the foregoing legend.
If such securities are being sold under Rule 904 of Regulation
S under the U.S. Securities Acts, any legend may be removed by
providing a declaration to the Company, to the effect set out
in the attached SCHEDULE "D" (or in such other form as the
Company may prescribe from time to time); and provided,
further, that, if any such securities are being sold under
Rule 144 under the U.S. Securities Acts, the legend may be
removed by delivery to the registrar and transfer agent and
the Company of an opinion of counsel, of recognized standing
reasonably satisfactory to the Company, that such legends are
no longer required under applicable requirements of the U.S.
Securities Acts or state securities laws;
The Subscriber understands and acknowledges that the Company
may instruct its transfer agent not to record a transfer
without first being notified by the Company that it is
satisfied that such transfer is exempt from or not subject to
registration under the U.S. Securities Acts;
(n) the Subscriber understands that the Company and/or the Agents
may be required by law or otherwise to disclose to regulatory
authorities the Subscriber's identity and the identity of each
beneficial purchaser of Special Warrants for whom the
Subscriber may be acting, including without limitation, being
listed as a "Selling Shareholder" in the Registration
Statement and disclosing the number of Securities beneficially
owned, and the Subscriber further agrees to fully cooperate
with the Company and/or the Agents in this regard and to
provide the identity of each beneficial purchaser of Special
Warrants for whom the Subscriber may be acting, if required,
to the Company and/or the Agents.
(o) notwithstanding the foregoing, none of the Special Warrants or
Warrants may be offered, sold, transferred, pledged,
hypothecated or otherwise assigned, until the Registration
Statement becomes effective, without the prior written consent
of the Company and each certificate evidencing a Special
Warrant or Warrant will bear the following legend until either
(A) the Registration Statement becomes effective or (B) the
Special Warrant is sold pursuant to a transaction that is one
(1) year or greater subsequent to the Closing of the Offering,
in accordance with either (i) a registration statement with
respect to such securities which is effective under the 1933
ACT, (ii) Rule 144A under the 1933 ACT, or (iii) in reliance
upon Regulation S and in compliance with Applicable Securities
Laws:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN THE
SUBSCRIPTION AGREEMENT BETWEEN VOICE MOBILITY
INTERNATIONAL, INC. (THE "COMPANY") AND THE PURCHASE,
AND SPECIAL WARRANT INDENTURE AMONG THE COMPANY AND
THE TRUSTEE, AND SPECIFICALLY MAY NOT BE OFFERED,
SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE
ASSIGNED, PRIOR TO EFFECTIVENESS OF A REGISTRATION
STATEMENT UNDER THE 1933 ACT, EXCEPT WITH THE PRIOR
WRITTEN CONSENT OF THE COMPANY.
(p) upon acceptance by the Company and the Agents, this
Subscription Agreement will not violate or conflict with the
terms of any restriction, agreement or undertaking respecting
purchasers of securities by the Subscriber and any such
beneficial purchaser;
(q) the Subscriber acknowledges that the Subscriber has had access
to such financial and other information and has had the
opportunity to ask questions of and receive answers from the
Company as the Subscriber has deemed necessary in connection
with the Subscriber's decision to purchase the Special
Warrants;
9
(r) it is responsible for obtaining such legal advice as it
considers necessary in connection with the execution, delivery
and performance by it of this Subscription Agreement and the
transactions contemplated hereunder and it represents and
warrants that such execution, delivery and performance shall
not contravene any applicable laws of the jurisdiction in
which it is resident;
(s) the legal counsel retained by the Agents (the "AGENTS'
COUNSEL") are acting as counsel to the Agents and not as
counsel to the Subscriber. The relationship of Agents' Counsel
with the Subscriber is limited solely to the provision of
customary commercial legal opinions at the Closing Time and to
responding to any questions which the Subscriber may have
regarding the terms of the documents to be delivered in
connection with this Special Warrant transaction;
(t) in the case of a purchase by it of Special Warrants as
principal, this Subscription Agreement has been duly and
validly authorized, executed and delivered by and constitutes
a legal, valid, binding and enforceable obligation of the
Subscriber;
(u) in the case of a purchase by it of Special Warrants acting as
a trustee or agent for a disclosed or undisclosed principal or
identified by account number only, it is duly authorized to
execute and deliver this Subscription Agreement and all other
necessary documentation in connection with such purchase on
behalf of such principal and this Subscription Agreement has
been duly authorized, executed and delivered by or on behalf
of, and constitutes a legal, valid, binding and enforceable
agreement of, such principal;
(v) it has such knowledge and experience in financial and business
affairs as to be capable of evaluating the merits and risks of
its investment hereunder and it, or, where it is not
purchasing as principal, each beneficial purchaser, is able to
bear the economic risk of loss of such investment;
(w) it is responsible for obtaining legal advice as to and will
comply in all respects with the prospectus delivery
requirements under Applicable Securities Laws in connection
with any sale by the Subscriber of the Unit Shares, the
Warrants and the Warrant Shares;
(x) in connection with its obligations under Section 11(a) of this
Subscription Agreement, the Company may require the Subscriber
to furnish to the Company such information regarding
Subscriber and the distribution of the securities covered by
the Registration Statement (the "Registrable Shares") as the
Company may from time to time reasonably request in writing
and such other information as may be legally required in
connection with such registration. The Subscriber agrees, by
its acquisition of Registrable Shares and acceptance of the
benefits provided to it hereunder, to furnish promptly to the
Company all information required to be disclosed in order to
make any previously furnished information not materially
misleading. The Subscriber agrees that upon receipt of any
notice from the Company of the happening of any event of the
kind described herein requiring the cessation of the
distribution of a prospectus or the distribution of a
supplemented or amended prospectus, the Subscriber will
forthwith discontinue disposition of Registrable Shares
pursuant to the Registration Statement covering such
Registrable Shares until the Subscriber's receipt of the
copies of the supplemented or amended prospectus, or until it
is advised in writing by the Company that the use of the
prospectus may be resumed, and, if so directed by the Company,
the Subscriber will deliver to the Company (at the Company's
expense) all copies, other than permanent file copies then in
the Subscriber's possession, of the prospectus covering such
Registrable Shares current at the time of receipt of such
notice. Except as set forth below, the Company agrees to
indemnify and hold harmless the Subscriber, and each of its
directors, officers, employees, agents, and each person, if
any, who controls the Subscriber within the meaning of the
1933 ACT, against any losses, claims, damages, or liabilities
to which such indemnified person may become subject under the
1933 ACT or otherwise, insofar as such losses, claims,
damages, or liabilities arise out of or are based upon any
untrue or alleged untrue statement of any material fact
contained in said Registration Statement, or any preliminary
prospectus, final prospectus, or amendment or supplement
related thereto, or arise out of or are based upon the
omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading. The Subscriber agrees to
indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed the
Registration Statement, employees, agents and each person, if
any, who controls the Company within the meaning of the 1933
ACT against any losses, claims, damages or liabilities to
which such indemnified person may become subject, under the
1933 ACT or otherwise, insofar as such losses, claims, damages
or liabilities arise out of or are based upon any untrue or
alleged untrue statement of any material fact contained in
said Registration Statement, or any preliminary
10
prospectus, final prospectus, or amendment or supplement
related thereto, or arise out of or are based upon the
omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein not misleading in each case, to
the extent, but only to the extent that such untrue
statement or alleged untrue statement or omission or
alleged omission was made in said registration statement,
said preliminary prospectus, said final prospectus or said
amendment or supplement in reliance upon and in conformity
with written information furnished by Subscriber
specifically for use in the preparation thereof, and
provided further that the Subscriber's liability pursuant
to this paragraph 9(x) shall be limited to the amount of
the Subscriber's investment in the Company as reflected in
the Registration Statement;
(y) the Subscriber acknowledges that it has been advised that as a
"selling shareholder" under the Registration Statement,
Subscriber might be deemed to be an underwriter within the
meaning of Section 2(11) of the 1933 ACT and any profit on the
resale of the securities might be deemed to be underwriting
discounts and commissions under the 1933 ACT; and
(z) the Subscriber acknowledges and agrees that in addition to any
other applicable laws or regulations, as a "selling
shareholder" under the Registration Statement, it will comply
with regulations relating to distributions by selling
shareholders, including Regulation M under the SECURITIES
EXCHANGE ACT OF 1934 (the "1934 ACT"). Regulation M prohibits
selling shareholders from offering to purchase and purchasing
the common stock of the Company at certain periods of time
surrounding their sales of securities under the Registration
Statement. Regulation M attempts to prevent selling
shareholders who are engaged in a distribution from
manipulating the market. In addition, Subscriber acknowledges
some U.S. States may require that registration, exemption from
registration or notification requirements be met before
selling shareholders may sell their common stock. Some states
may also require selling shareholders to sell their common
stock only through broker-dealers.
(aa) the Subscriber is purchasing the Special Warrants as principal
for its own account, and not for the benefit of any other
person or company and not with a view to the resale or
distribution of all or any of the Special Warrants, and this
Subscription Agreement has been authorized, executed and
delivered by the Subscriber, and constitutes a legal, valid
and binding agreement of the Subscriber and the Subscriber is
purchasing a sufficient number of Special Warrants such that
the aggregate acquisition cost to the Subscriber of such
Special Warrants is not less than $97,000.
(bb) if the Subscriber has been created or is being used primarily
to permit the purchase of the Special Warrants without a
prospectus, and it is a partnership, syndicate, unincorporated
organization, trust, company, fund or association or any other
organized group of persons, the share or portion of each
member or partner of the partnership, syndicate or
unincorporated organization, or each beneficiary of the trust,
or each shareholder or member of the company, fund or
association or other organized group of persons, as the case
may be, of the aggregate acquisition cost of the Special
Warrants is not less than $97,000.
(cc) subject to paragraph 9(bb) hereof, the Subscriber has not been
created or is not being used primarily to permit the purchase
of the Special Warrants without a prospectus.
(dd) the Subscriber is purchasing the Special Warrants for
investment only and not with a view to resale or distribution
and it will not resell or otherwise transfer or dispose of the
Special Warrants prior to the receipt for the Prospectus
except in accordance with the provisions of Applicable
Securities Laws.
(ee) the Subscriber will execute and deliver no later than 4:00
p.m. (Toronto time) on March 26, 2001, all documentation as
may be required by all Applicable Securities Laws to permit
the purchase of the Special Warrants hereunder on the terms as
set forth herein, including without limitation if the
Subscriber is an individual, the Form 20A (IP) in the form
attached as SCHEDULE "B", as required by the British Columbia
Securities Commission.
The Subscriber, on its own behalf and, if applicable, on behalf of others for
whom it is contracting hereunder, agrees that the above representations,
warranties and covenants will be true and correct both as of the execution of
this Subscription Agreement and as of the Closing Date and will survive the
completion of the issuance of the Special Warrants.
The Subscriber acknowledges on its own behalf, and if applicable, on behalf of
others it is contracting for hereunder that the foregoing representations and
warranties are made by it with the intent that they may be relied upon by the
Agents and
11
the Company in determining its eligibility or, if applicable, the eligibility of
others on whose behalf it is contracting hereunder to purchase the Special
Warrants under relevant securities legislation. The Subscriber agrees to
indemnify the Agents and the Company against all losses, claims, costs, expenses
and damages or liabilities which any of them may suffer or incur caused or
arising from reliance thereon. The Subscriber on its own behalf, and if
applicable, on behalf of others it is contracting for hereunder further agrees
that by accepting delivery of the Special Warrants on the Closing Date, it shall
be representing and warranting that the foregoing representations and warranties
are true as at the Closing Date with the same force and effect as if they had
been made by the Subscriber on its own behalf, and if applicable, on behalf of
others it is contracting for hereunder, at the time of closing on the Closing
Date and that they shall survive the purchase by it of the Special Warrants and
shall continue in full force and effect notwithstanding any subsequent
disposition by it of the Special Warrants, Unit Shares, Warrants or Warrant
Shares.
10. COMPANY'S REPRESENTATIONS AND WARRANTIES
Except as disclosed in writing to the Agents prior to the Closing, the Company
represents and warrants to the Subscriber (which representations and warranties
shall survive for a period of two (2) years following the Closing) as follows:
(a) ORGANIZATION AND STANDING. The Company is a corporation duly
organized and validly existing under the laws of the State of
Nevada and is in good standing under such laws. The Company
has the requisite corporate power and authority to own and
operate its properties and assets and to carry on its business
as currently conducted and as proposed to be conducted.
(b) CORPORATE POWER. The Company will have at the Closing Date all
requisite legal and corporate power and authority to execute
and deliver this Subscription Agreement, to sell and issue the
Special Warrants, and to carry out and perform its obligations
under the terms of this Subscription Agreement.
(c) AUTHORIZATION. All corporate action on the part of the
Company, its directors, and its shareholders necessary for the
authorization, execution, delivery, and performance of this
Subscription Agreement, the Special Warrant Indenture and the
Share Warrant Indenture (collectively, the "Transaction
Documents") by the Company will be taken prior to the Closing.
The Transaction Documents, when executed and delivered by the
Company, will, to the best of the Company's knowledge,
constitute valid and binding obligations of the Company
enforceable in accordance with their respective terms. The
Unit Shares issuable on exercise of the Special Warrants have
been or will be prior to the Closing allotted and, when
issued, will be validly issued, fully paid and non-assessable.
(d) NO CONFLICT. The issuance and sale of the Special Warrants by
the Company does not and will not conflict with and does not
and will not result in a breach of any of the terms,
conditions or provisions of its constating documents or any
material agreement or material instrument to which the Company
is a party.
(e) NO ACTIONS, SUITS OR PROCEEDINGS. As at the Closing Date, the
Company is not a party to any actions, suits or proceedings
which could reasonably be expected to materially affect its
business or financial condition, and to the best of the
Company's knowledge no such actions, suits or proceedings are
contemplated or have been threatened.
(f) NO JUDGMENTS. As at the Closing Date, there are no judgments
against the Company which are unsatisfied, nor are there any
consent decrees or injunctions to which the Company is
subject.
(g) NO DEFAULT. As at the Closing Date, the Company is in all
material respects, conducting its current activities in
compliance with all applicable laws, rules and regulations of
the SECURITIES ACT (British Columbia), the SECURITIES ACT
(Alberta), the SECURITIES ACT (Ontario), the 1933 ACT or the
1934 ACT.
(h) NO ORDER. No order ceasing or suspending trading in securities
of the Company nor prohibiting the sale of such securities has
been issued and remains outstanding against the Company or its
directors, officers or promoters and no investigations or
proceedings for such purposes are pending or threatened.
11. COMPANY'S COVENANTS
The Company hereby covenants and agrees and, in the Agency Agreement and/or the
Special Warrant Indenture, the Company will covenant and agree as follows:
12
(a) to use its commercially reasonable best efforts (i) to cause a
Registration Statement to be filed and prosecuted to
effectiveness, (ii) to cause the preliminary prospectus of the
Company relating to the distribution of the Unit Shares and
Warrants (the "PRELIMINARY PROSPECTUS") to be filed and (iii)
to obtain receipts for the final Prospectus, as expeditiously
as reasonably practicable after the Closing Date, in each case
in form and substance satisfactory to the Company and the
Agents, acting reasonably;
(b) to use its reasonable best efforts to promptly comply with all
filing and other requirements under all Applicable Securities
Laws, including, where required by the Agency Agreement or any
Applicable Securities Laws, the filing of amendments to the
Preliminary Prospectus and Prospectus in each of the Canadian
Jurisdictions; and
(c) to use its commercially reasonable best efforts to maintain
its status as a reporting issuer (or analogous entity) under
the Applicable Securities Laws of such provinces in which it
becomes a reporting issuer (or analogous entity) as a result
of filing the Prospectus as required under the Agency
Agreement and to continue to be in compliance with its
obligations thereunder, without default, for a period of at
least one year from the date of the filing of the Prospectus
in each Canadian Jurisdiction.
In addition, the covenants of and terms applicable to the Company described in
the Agency Agreement are hereby incorporated into this section as additional
covenants of the Company.
12. RESALE RESTRICTIONS
The Subscriber, on its own behalf and, if applicable, on behalf of others for
whom it is contracting hereunder, understands and acknowledges that the Special
Warrants, Unit Shares, Warrants and Warrant Shares will be subject to certain
resale restrictions under the Applicable Securities Laws (including United
States federal and state securities laws) and the Subscriber, on its own behalf
and, if applicable, on behalf of others for whom it is contracting hereunder,
agrees to comply with such restrictions. The Subscriber understands and
acknowledges that the resale of the Unit Shares and the Warrants and the
issuance of the Warrant Shares has not yet been registered with the SEC and
accordingly is restricted in the U.S. The Subscriber further understands and
acknowledges that the Company is not currently a "reporting issuer" in any
Canadian jurisdiction and that holders of securities of the Company may not be
able to sell such securities for an indefinite period of time without the
Prospectus being filed and a receipt obtained therefor. Subscribers are advised
to consult their own legal advisors in this regard. The Subscriber, on its own
behalf and, if applicable, on behalf of others for whom it is contracting
hereunder, 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 (and neither the Company nor
the Agents are in any manner responsible for ensuring compliance by the
Subscriber with such restrictions).
13. RELIANCE UPON REPRESENTATIONS AND WARRANTIES
The Subscriber acknowledges that the representations and warranties contained in
this Subscription Agreement are made by it with the intent that they may be
relied upon by the Company in determining the Subscriber's eligibility to
purchase the Special Warrants, and the Subscriber hereby agrees to indemnify the
Company and its directors, officers, employees and agents against all losses,
claims, costs, expenses and damages or liabilities that they may suffer or incur
caused or arising from their reliance thereon. The foregoing representations and
warranties survive the purchase by the Subscriber of the Special Warrants and
continue in full force and effect as set forth in section 14.
14. SURVIVAL
This Subscription Agreement, including without limitation the representations,
warranties and covenants contained herein, survives and continues in full force
and effect and is binding upon the Subscriber for a period of three years,
notwithstanding the completion of the purchase of the Special Warrants by the
Subscriber, the completion of the issue of the Special Warrants by the Company
and any subsequent disposition by the Subscriber of the Securities.
15. CONTRACTUAL RIGHTS OF ACTION
By its acceptance of this Subscription Agreement, the Company grants to each
Subscriber the contractual right of action for rescission in the form set out in
SCHEDULE "C" and the Subscriber agrees to assign and explicitly extend the
benefit of such right (but without liability to a purchaser) to any permitted
assignee or transferor of the Special Warrants. The above rights are in addition
to any other rights or remedies available to the Special Warrant holder under
section 130 of the SECURITIES ACT (Ontario), equivalent provisions of the
securities legislation of any other province of Canada in which purchasers of
Special Warrants are resident and otherwise at law, and are subject to the
defences described under such legislation. The Subscriber expressly waives and
releases the Company, to the fullest extent permitted by law, from all rights of
withdrawal
13
to which the Subscriber might otherwise be entitled pursuant to subsection 71(2)
of the SECURITIES ACT (Ontario) and equivalent provisions of the securities
legislation of any other province of Canada.
16. COMMISSION TO THE AGENTS
You understand that upon completion of the sale by the Company of the Special
Warrants, the Lead Agent, on behalf of the Agents, will receive from the Company
on the Closing Date a cash commission (the "Commission") equal to 7% of the
gross proceeds from the Offering.
In addition, subject to regulatory approval, the Company will grant to the
Agents a special compensation option (the "Special Compensation Option")
exercisable for a compensation option (the "Compensation Option") which, upon
exercise will entitle the Agents to purchase the number of Units equal to 10% of
the total number of Special Warrants sold at a price per Unit that is equal to
the Issue Price of each Special Warrant, for a period of two years from the
Closing Date.
17. COSTS
You acknowledge and agree that, except as specified in the Agency Agreement, all
costs and expenses incurred by you (including any fees and disbursements of any
special counsel retained by you) relating to the purchase of the Special
Warrants by you shall be borne by you.
18. ASSIGNMENT
None of the parties to this Subscription Agreement may assign any rights or
benefits under this Subscription Agreement, including the benefit of any
representation, warranty or covenant, without the prior written consent of the
other parties.
19. ENUREMENT
This Subscription Agreement enures to the benefit of and is binding upon the
parties and their respective heirs, executors, administrators and other legal
representatives, successors (including any successor by reason of amalgamation
or statutory arrangement of any party) and permitted assigns.
20. ENTIRE AGREEMENT
This Subscription Agreement constitutes the entire agreement of the parties
relating to the subject matter hereof and there are no representations,
covenants or other agreements relating to the subject matter hereof except as
stated or referred to in this Subscription Agreement.
21. LANGUAGE
The undersigned hereby acknowledges that it has consented and requested that all
documents evidencing or relating in any way to the sale of the Special Warrants
be drawn up in the English language only. Nous, soussignes, reconnaissons par
les presentes avoir consenti et demande que tous les documents faisant foi ou se
rapportant de quelque maniere a la vente de ces actions soient rediges en
anglais seulement.
22. TIME OF ESSENCE
Time is of the essence of this Subscription Agreement.
23. COUNTERPARTS, ETC.
This Subscription Agreement may be executed in several counterparts, each of
which when so executed is deemed to be an original and such counterparts
together constitute one and the same instrument. Counterparts may be executed
either in original or faxed form and the parties adopt any signatures received
by a receiving fax machine as original signatures of the parties.
24. EFFECT OF HEADINGS
The section and paragraph headings herein are for convenience only and do not
affect the construction hereof.
25. SEVERABILITY
The invalidity or enforceability of any provisions hereof in no way affect the
validity or enforceability of any other provision.
14
26. GOVERNING LAW
This Subscription Agreement is governed by the laws of the Province of British
Columbia and the laws of Canada applicable therein. The Subscriber irrevocably
attorns to the non-exclusive jurisdiction of the court of the Province of
British Columbia.
27. CURRENCY
All references in this Agreement to currency amounts are indicated in terms of
Canadian dollars.
15
SCHEDULE "A"
VOICE MOBILITY INTERNATIONAL, INC.
TERM SHEET
THE ISSUER: Voice Mobility International, Inc. (the "Company").
OFFERING: Special Warrants at a price of Cdn.$2.00 per Special Warrant (the "Issue Price") for aggregate
gross proceeds of up to Cdn.$15,000,000.
TERMS OF SPECIAL WARRANTS: Each Special Warrant is exercisable, without payment of additional consideration, into one
Unit of the Company (a "Unit"). Each Unit consists of one Common Share (a "Unit Share") and
one-half Warrant of the Company. Each whole Warrant (a "Warrant") entitles the holder to
acquire one Common Share (a "Warrant Share") at a price of Cdn.$2.25 at any time on or before
a date which is two years from the Closing Date. The Units, Unit Shares, Warrants and Warrant
Shares are collectively referred to as the "Underlying Securities").
MINIMUM SUBSCRIPTION 75,000 Special Warrants (Cdn.$150,000) in the Province of Ontario and such other minimum number
of Special Warrants as is prescribed by securities legislation in other Qualifying Jurisdictions.
CLOSING DATE: March 27, 2001, or such other date as is agreed upon by the Lead Agent and the (the "Closing Date").
QUALIFYING JURISDICTIONS: Ontario, British Columbia, Alberta, the United States of America (and such other jurisdictions
as are agreed upon by the Company and the Lead Agent).
SPECIAL WARRANTS: The Special Warrants will be issued pursuant to a special warrant indenture containing standard
anti-dilution protections (including in the case of dividends paid in the ordinary course), which
protections will be operative from the Closing Date. The Special Warrants are exercisable by the
holders thereof at any time after their issuance and, if not previously exercised or repurchased,
will be deemed to be exercised immediately prior to 4:30 p.m. (Toronto time) on the business day
(the "Qualification Deadline") which is the latest of: (i) the date a registration statement with
regard to the resale of the Special Warrants, Unit Shares and Warrants and the issuance of the
Warrant Shares is declared effective by the United States Securities and Exchange Commission under
the UNITED STATES SECURITIES ACT OF 1933, as amended, and (ii) the date a receipt is issued by the
last of the securities regulatory authorities in each of the jurisdictions in Canada set out as
Qualifying Jurisdictions in the Term Sheet where purchasers of Special Warrants are resident as at
the Closing Date for a final prospectus qualifying the issuance of the Unit Shares and the
Warrants for distribution in the Canadian Jurisdictions; and (iii) the day preceding the date
the listing of the Company's common shares on The Toronto Stock Exchange becomes effective, being
the time its common shares are posted for trading.
ESCROW: The net proceeds (gross proceeds less Agents' fees and expenses) from the sale of the Special
Warrants will be deposited in escrow with a trust company mutually agreeable to the Company and the
Lead Agent, to be released to the Company on the exercise or deemed exercise of the Special
Warrants, provided that certain subscribers ("Non-Escrowed Subscribers") may agree to permit the
release of their subscription proceeds to the Company on the Closing Date. The subscription proceeds
from the balance of the Subscribers ("Escrowed Subscribers") shall be held in escrow as provided
above. Notwithstanding the above, net proceeds that are required to be deposited in escrow for the
purpose of obtaining approval to list the Company's common shares on The Toronto Stock Exchange
shall not be released to the Company on the Closing Date, but shall be deposited in escrow as
provided above.
A-1
EXCHANGE, PENALTY AND
REPURCHASE PROVISIONS: The Company will use its best efforts to file a prospectus qualifying the Unit Shares and Warrants
to be issued in exchange for the Special Warrants in Ontario (and such other provinces as may be
agreed to by the Company and the Lead Agent) as soon as practicable after the Closing Date. If the
Qualification Deadline has not occurred on or prior to the date that is 120 days following the
Closing Date or such later date as may be determined at the sole discretion of the Lead Agent, each
Special Warrant will be exercisable for 1.1 Units. The Company will continue to use all reasonable
commercial efforts to obtain a receipt for the prospectus after 120 days after the Closing Date.
In the event a TSE listing of the Company's Common Shares has not been achieved prior to the date
six (6) months following the Closing Date, the Escrowed Subscribers shall be entitled, at their
option (the "Repurchase Option"), until the Time of Expiry, to require the Company to repurchase
their Special Warrants from legally available funds at the Issue Price plus accrued interest.
LEAD AGENT: Loewen, Ondaatje, XxXxxxxxxx Limited
CO-AGENTS: Acumen Capital Partners Limited
Paradigm Capital Inc.
AGENTS' COMMISSION: The Agents will be paid at the closing of the sale of Special Warrants a commission of 7% of the
gross proceeds of this Offering, which commission and the expenses of the Agents (including the fees
of the Agents' legal counsel) will be fully paid in cash on the Closing Date out of the proceeds
of the Offering. In addition, the Agents shall receive a Special Compensation Option, exercisable
for a Compensation Option which, in the aggregate, upon exercise will entitle the Agents to purchase
for a period of two years from the Closing Date the number of Units that is equal to 10% of the
number of Special Warrants sold, at a price per Unit that is equal to the issue price of each Special
Warrant. The terms of the commission, the Special Compensation Option and the Compensation Option
shall be subject to regulatory approval.
SUBSCRIPTION: Persons wishing to subscribe for Special Warrants must complete and sign a Subscription Form and
deliver a cheque to the Lead Agent not later than one business day prior to the Closing Date.
USE OF PROCEEDS: The proceeds from the sale of the Special Warrants will be expended by the Company to finance its
growth strategy. Specifically, the proceeds will be allocated to sales and marketing, research and
development, working capital purposes and potential acquisitions.
RESALE RESTRICTIONS: The Special Warrants will be issued pursuant to exemptions from prospectus requirements of applicable
securities legislation and will be subject to resale restrictions under that legislation.
If the Company is unable to obtain a receipt for a final prospectus in any Qualifying Jurisdiction
and an effective Registration Statement, the Underlying Securities will be subject to statutory hold
periods during which time these securities may not be resold in such Qualifying Jurisdictions.
In addition, if any Special Warrants are exercised prior to the issuance of receipts for a final
prospectus and/or an effective Registration Statement by the securities commissions in any of the
Qualifying Jurisdictions, the Underlying Securities will be subject to statutory restrictions on
resale.
The Company intends to file a prospectus to qualify the Underlying Securities only in the Qualifying
Jurisdictions. Accordingly, the Underlying Securities that are acquired outside of the Qualifying
Jurisdictions may be subject to resale restrictions.
A-2
The Special Warrants are not transferable without the prior written consent of the Company. This
restriction shall not, however, restrict the exercise of the Special Warrants for the Units. Absent
an effective Registration Statement, the Warrants are not transferable without the prior written
consent of the Company.
FOREIGN SALES: The Special Warrants may be sold outside of Canada pursuant to applicable exemptions.
A-3
SCHEDULE "B"
FORM 20A (IP)
SECURITIES ACT (BRITISH COLUMBIA)
ACKNOWLEDGEMENT OF INDIVIDUAL PURCHASER
1. I have agreed to purchase from Voice Mobility International, Inc.
(the "Issuer")
Special Warrants (the "Securities")
---------------------------------- of the Issuer.
[number of Special Warrants]
2. I am purchasing the Securities as principal and, on closing of the
agreement of purchase and sale, I will be the beneficial owner of the
Securities.
3. I [circle one] have/have not received an offering memorandum describing
the Issuer and the Securities.
4. I acknowledge that:
(a) no securities commission or similar regulatory authority has
reviewed or passed on the merits of the Securities, AND
(b) there is no government or other insurance covering the
Securities, AND
(c) I may lose all of my investment, AND
(d) there are restrictions on my ability to resell the Securities
and it is my responsibility to find out what those
restrictions are and to comply with them before selling the
Securities, AND
(e) I WILL NOT receive a prospectus that the BRITISH COLUMBIA
SECURITIES ACT (the "Act") would otherwise require be given to
me because the Issuer has advised me that it is relying on a
prospectus exemption, AND
(f) because I am not purchasing the Securities under a prospectus,
I will not have the civil remedies that would otherwise be
available to me, AND
(g) the Issuer has advised me that it is using an exemption from
the requirement to sell through a dealer registered under the
Act, except purchases referred to in paragraph 5(g), and as a
result I do not have the benefit of any protection that might
have been available to me by having a dealer act on my behalf.
5. I also acknowledge that: [CIRCLE ONE]
(a) I am purchasing Securities that have an aggregate acquisition
cost of $97,000 or more, OR
(b) my net worth, or my net worth jointly with my spouse at the
date of the agreement of purchase and sale of the securities,
is not less than $400,000, OR
(c) my annual net income before tax is not less than $75,000, or
my annual net income before tax jointly with my spouse is not
less than $125,000, in each of the two most recent calendar
years, and I reasonably expect to have annual net income
before tax of not less than $75,000 or annual net income
before tax jointly with my spouse of not less than $125,000 in
the current calendar year, OR
(d) I am registered under the Act, OR
(e) I am a spouse, parent, brother, sister or child of a senior
officer or director of the Issuer, or of an affiliate of the
Issuer, OR
(f) I am a close personal friend of a senior officer or director
of the Issuer, or of an affiliate of the Issuer, OR
B-1
(g) I am purchasing securities under section 128(c) ($25,000 -
registrant required) of the Rules, and I have spoken to a
person [NAME OF REGISTERED PERSON:] --------------------------
(the "Registered Person") who has advised me that the
Registered Person is registered to trade or advise in the
Securities and that the purchase of the Securities is a
suitable investment for me.
6. If I am an individual referred to in paragraph 5(b), 5(c), or 5(d), I
acknowledge that, on the basis of information about the Securities
furnished by the Issuer, I am able to evaluate the risks and merits of
the Securities because: [CIRCLE ONE]
(a) of my financial, business or investment experience, OR
(b) I have received advice from a person [NAME OF ADVISER:]
(the "Adviser") who has advised me
-------------------------
that the Adviser is:
(i) registered to advise, or exempted from the
requirement to be registered to advise, in respect of
the Securities, and
(ii) not an insider of, or in a special relationship with,
the Issuer.
The statements made in this report are true.
DATED , 2001. --------------------------------------
------------------ Signature of Purchaser
--------------------------------------
Name of Purchaser
--------------------------------------
--------------------------------------
Address of Purchaser
B-2
SCHEDULE "C"
CONTRACTUAL RIGHT OF ACTION FOR RESCISSION
(1) In the event that a holder of Special Warrants, who acquires Unit
Shares and Warrants of the Company upon the exercise of the Special
Warrants, is or becomes entitled under Applicable Securities Laws to
the remedy of rescission by reason of the Prospectus qualifying the
distribution of the Unit Shares and Warrants on exercise of the Special
Warrants, or any amendment thereto, containing a misrepresentation, the
Subscriber is entitled to rescission not only of the Subscriber's
exercise of its Special Warrants but also of the private placement
transaction pursuant to which the Special Warrants were initially
acquired, and is entitled in connection with such rescission to a full
refund of all consideration paid to the Company on the acquisition of
the Special Warrants. The provisions hereof are a direct contractual
right extended by the Company alone (but specifically not by the
directors or officers of the Company or by the Agent) to holders of
Special Warrants, permitted assignees of such holders and to holders of
Unit Shares and Warrants acquired by such holders on exercise of the
Special Warrants, and are in addition to any other right or remedy
available to a holder of Special Warrants under section 130 of the
SECURITIES ACT (Ontario), equivalent provisions of the securities
legislation of any other province of Canada in which Special Warrant
purchasers are resident, or otherwise at law, and are subject to the
provisions of section (2) below, and the defences, limitations and
other provisions described under the Applicable Securities Laws or
otherwise available.
(2) No action may be commenced to enforce the foregoing rights of action
for rescission more than 180 days after the Closing Date.
(3) The Company agrees that the benefit of the covenant contained in
section (1) above is deemed to pass with any permitted and lawful
assignment or transfer of Special Warrants in accordance with the
Special Warrant Indenture and the Subscriber agrees to extend
explicitly the benefit of such covenant (but without liability to the
Subscriber) to any permitted and lawful assignee or transferee of
Special Warrants registered in the name of the Subscriber.
(4) All capitalized terms in this Schedule that are defined in the
Subscription Agreement between the Subscriber and the Company have the
meanings given to them in the Subscription Agreement.
C-1
SCHEDULE "D"
FORM OF DECLARATION FOR REMOVAL OF LEGEND
TO: VOICE MOBILITY INTERNATIONAL, INC.
The undersigned (a) acknowledges that the sale of the securities of
Voice Mobility International, Inc. (the "Company") to which this declaration
relates is being made in reliance on Rule 904 of Regulation S under the United
States Securities Act of 1933, as amended (the "1933 Act") and (b) certifies
that (1) it is not an affiliate of the Company (as defined in Rule 405 under the
1933 Act), (2) the offer of such securities was not made to a person in the
United States and either (A) at the time the buy order was originated, the buyer
was outside the United States, or the seller and any person acting on its behalf
reasonably believe that the buyer was outside the United States, or (B) the
transaction was executed on or through the facilities of The Toronto Stock
Exchange or any other designated offshore securities market, as defined in
Regulation S, and neither the seller nor any person acting on its behalf knows
that the transaction has been prearranged with a buyer in the United States, (3)
neither the seller nor any affiliate of the seller nor any person acting on any
of their behalf has engaged or will engage in any directed selling efforts in
the United States in connection with the offer and sale of such securities, (4)
the sale is BONA FIDE and not for the purpose of "washing off" the resale
restrictions imposed because the securities are "restricted securities" (as such
term is defined in Rule 144(a)(3) under the 1933 Act), (5) the seller does not
intend to replace the securities sold in reliance on Rule 904 of the 1933 Act
with fungible unrestricted securities and (6) the contemplated sale is not a
transaction, or part of a series of transactions which, although in technical
compliance with Regulation S, is part of a plan or scheme to evade the
registration provisions of the 1933 Act. Terms used herein have the meanings
given to them by Regulation S.
Dated: By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
D-1
SUBSCRIPTION AGREEMENT FOR SPECIAL WARRANTS
(FOR ESCROWED CANADIAN AND NON-U.S. SUBSCRIBERS)
(THE "SUBSCRIPTION AGREEMENT")
THE SECURITIES SUBSCRIBED FOR HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933 AND, SUBJECT TO CERTAIN
EXCEPTIONS, MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO A U.S. PERSON
To: VOICE MOBILITY INTERNATIONAL, INC.
And to: Loewen, Ondaatje, XxXxxxxxxx Limited, Acumen Capital Finance Partners
Limited and Paradigm Capital Inc.
ONE COMPLETED AND ORIGINALLY EXECUTED COPY OF THIS SUBSCRIPTION AGREEMENT AND
APPLICABLE SCHEDULES MUST BE DELIVERED IN ACCORDANCE WITH SECTION 6 OF THIS
SUBSCRIPTION AGREEMENT AS SOON AS POSSIBLE, AND, IN ANY EVENT, NO LATER THAN
4:00 P.M. (TORONTO TIME) ON MARCH 26, 2001 TO:
ATTENTION: XXXXXXX XXXXXXX, LOEWEN, ONDAATJE, XXXXXXXXXX LIMITED,
XXXXXXXX LANES, EAST TOWER
00 XXXXXX XXXX, XXXXX 0000, XXXXXXX, XX X0X 0X0,
TEL (000) 000-0000, FAX (000) 000-0000
The undersigned (the "Subscriber" or "you") hereby confirms its irrevocable
subscription for and offer to purchase from Voice Mobility International, Inc.
("Voice Mobility" or the "Company") that number of special warrants of the
Company (the "Special Warrants") set out below, at a price of Cdn$2.00 per
Special Warrant (the "Issue Price"), pursuant to the terms and conditions of
this Subscription Agreement and in accordance with the Agency Agreement (as
defined below). The Subscriber agrees to be bound by the terms of this
Subscription Agreement and, without limitation, agrees that the Company and the
Agents (as defined below) may rely upon its covenants, representations and
warranties.
____________________________________________________________ _________________________________________________________________
NUMBER OF SPECIAL WARRANTS:
------------------------------------------------------
(Name of Subscriber - please print)
Account Reference: AGGREGATE SUBSCRIPTION PRICE: $
------------------------------------ ---------------------------------
(the "Aggregate Subscription Price")
The Subscribers proceeds are to be deposited in escrow pending
By: a listing of the Company's common shares on The Toronto Stock
-------------------------------------------------- Exchange (the "Escrow Subscribers").
Authorized Signature
_________________________________________________________________
_________________________________________________________________
IF THE SUBSCRIBER IS SIGNING AS AGENT FOR A PRINCIPAL (BENEFICIAL
PURCHASER) AND IS NOT A TRUST COMPANY OR A PORTFOLIO MANAGER
----------------------------------------------------- PURCHASING AS TRUSTEE OR AGENT FOR ACCOUNTS FULLY MANAGED BY
(Official Capacity or Title - please print) IT, COMPLETE THE FOLLOWING:
----------------------------------------------------- ---------------------------------------------------------------
(Please print name of individual whose signature (Name of Principal)
appears above if different than the name of the
subscriber printed above.)
---------------------------------------------------------------
(Principal's Address)
----------------------------------------------------- ---------------------------------------------------------------
(Subscriber's Address)
---------------------------------------------------------------
_________________________________________________________________
_________________________________________________________________
------------------------------------------------------ DELIVER THE SPECIAL WARRANTS AS SET OUT BELOW:
(Telephone Number)
____________________________________________________________
---------------------------------------------------------------
(Name)
____________________________________________________________
REGISTER THE SPECIAL WARRANTS AS SET OUT BELOW: ---------------------------------------------------------------
(Account Reference, if applicable)
------------------------------------------------------
(Name) ---------------------------------------------------------------
(Address)
------------------------------------------------------
(Account Reference, if applicable) ---------------------------------------------------------------
(Contact Name) (Telephone Number)
------------------------------------------------------
(Address) __________________________________________________________________
------------------------------------------------------ __________________________________________________________________
(Telephone Number) NUMBER OF SHARES OF THE COMPANY HELD BY THE SUBSCRIBER EXCLUDING
THOSE BEING SUBSCRIBED FOR:
____________________________________________________________ _________________________________________________________________
ACCEPTANCE: The Company hereby accepts the above subscription and the Company represents and warrants to the Subscriber that the
representations and warranties made by the Company to the Agents in the agency agreement (the "Agency Agreement") are true and
correct in all material respects as of this date (save and except as waived by the Lead Agent, as defined below) and that the
Subscriber is entitled to rely thereon.
VOICE MOBILITY INTERNATIONAL, INC. , 2001
--------------------
________________________
By: No:
---------------------------------------- ________________________
NOTE: PLEASE ALSO COMPLETE AND SIGN SCHEDULE "B", IF YOU ARE AN INDIVIDUAL
THE TORONTO STOCK EXCHANGE
PRIVATE PLACEMENT QUESTIONNAIRE AND UNDERTAKING
To be completed by each proposed placement purchaser of listed securities or
securities which are convertible into listed securities.
QUESTIONNAIRE
1. DESCRIPTION OF TRANSACTION
(a) Name of issuer of the Securities VOICE MOBILITY INTERNATIONAL, INC.
----------------------------------------
-------------------------------------------------------------------------
(b) Number and Class of Securities to be Purchased
--------------------------
(c) Purchase Price
----------------------------------------------------------
-------------------------------------------------------------------------
2. DETAILS OF PURCHASER
(a) Name of Purchaser
--------------------------------------------------------
(b) Address
------------------------------------------------------------------
(c) Names and addresses of persons having a greater than 10% beneficial
interest in the purchaser
------------------------------------------------
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3. RELATIONSHIP TO ISSUER
(a) Is the purchaser (or any person named in response to 2(c) above) an
insider of the issuer for the purposes of the Ontario Securities Act
(before giving effect to this private placement)? If so, state the
capacity in which the purchaser (or person named in response to 2(c))
qualifies as an insider
-------------------------------------------------
(b) If the answer to (a) is "no", are the purchaser and the issuer controlled
by the same person or company? If so, give details
-----------------------
4. DEALINGS OF PURCHASER IN SECURITIES OF THE ISSUER
Give details of all trading by the purchaser, as principal, in the securities
of the issuer (other than debt securities which are not convertible into
equity securities), directly or indirectly, within the 60 days preceding the
date hereof
----------------------------------------------------------------------------
----------------------------------------------------------------------------
UNDERTAKING
TO: The Toronto Stock Exchange
The undersigned has subscribed for and agreed to purchase, as principal, the
securities described in Item 1 of this Private Placement Questionnaire and
Undertaking.
The undersigned undertakes not to sell or otherwise dispose of any of the said
securities so purchased or any securities derived therefrom for a period of six
months from the date of the closing of the transaction herein or for such period
as is prescribed by applicable securities legislation, whichever is longer,
without the prior consent of The Toronto Stock Exchange and other regulatory
body having jurisdiction.
DATED AT
------------------------------ ----------------------------------------
(Name of Purchaser - please print)
this day of , 2001
---- --------------- ----------------------------------------
(Authorized Signature)
----------------------------------------
(Official Capacity - please print)
(please print here name of individual
whose signature appears above, if
different from name of purchaser
printed above)
2
TERMS AND CONDITIONS
1. SUBSCRIPTION
We confirm your agreement to purchase, on and subject to the terms and
conditions in this Subscription Agreement and in the Agency Agreement, from the
Company the number of Special Warrants set out on the face page of this
Subscription Agreement at a price of $2.00 per Special Warrant payable as
described in section 6 of this Subscription Agreement. The Special Warrants you
are purchasing form part of a larger offering (in Canada, the United States and
elsewhere) of Special Warrants (the "OFFERING") by the Company pursuant to an
agency agreement (the "AGENCY AGREEMENT") to be entered into by Loewen,
Ondaatje, XxXxxxxxxx Limited ("LOM" or the "LEAD AGENT"), Acumen Capital Finance
Partners Limited, Paradigm Capital Inc. (collectively the "AGENTS"), and the
Company.
2. DESCRIPTION OF SPECIAL WARRANTS
(a) Attached as SCHEDULE "A" to this Subscription Agreement is a
term sheet (the "TERM SHEET") containing a summary of the
terms and conditions pertaining to the Special Warrants and
the Offering. The description of the Special Warrants
contained in the Term Sheet and this Subscription Agreement is
a summary only and is subject to the detailed provisions of a
special warrant indenture (the "Special Warrant Indenture") to
be dated as of the Closing Date and to be entered into between
the Company and Computershare Trust Company of Canada (or
another trust company that may be agreed to by the Company and
the Lead Agent), in its capacity as special warrant agent and
trustee thereunder (the "TRUSTEE").
(b) Upon exercise (which term shall include deemed exercise) of
the Special Warrants, in accordance with their terms, the
holder will, without payment of any additional consideration,
be issued one unit ("UNIT") in respect of each Special Warrant
exercised. Each Unit will consist of one common share in the
capital of the Company, as presently constituted ("UNIT
SHARE"), and one half of one non-transferable share purchase
warrant ("Warrant"). Each whole Warrant entitles the holder to
purchase one additional common share in the capital of the
Company, as presently constituted (a "WARRANT SHARE"), at a
price that is equal to $2.25 at any time on or before the date
which is two years from the Closing Date (as defined in
paragraph 4 below). The description of the Warrants contained
in the Term Sheet and this Subscription Agreement is a summary
only and is subject to the detailed provisions of a warrant
indenture (the "WARRANT INDENTURE") to be dated as of the
Closing Date and to be entered into between the Company and
Computershare Trust Company of Canada (or another trust
company that may be agreed to by the Company and the Lead
Agent), in its capacity as warrant agent and trustee
thereunder.
(c) The Special Warrants will be exercisable on any business day
during business hours during the period (the "Exercise
Period") commencing on the Closing Date and ending at 4:30
p.m. (Toronto time) (the "Time of Expiry") on the business day
(the "QUALIFICATION DEADLINE") which is the latest of (i) the
date a registration statement (the "REGISTRATION STATEMENT")
with regard to the resale of the Special Warrants, Unit Shares
and Warrants and the issuance of the Warrant Shares is
declared effective by the United States Securities and
Exchange Commission (the "SEC") pursuant to the UNITED STATES
SECURITIES ACT OF 1933, as amended (the "1933 ACT"), and (ii)
the date a receipt is issued by the last of the securities
regulatory authorities in each of the jurisdictions in Canada
set out as Qualifying Jurisdictions in the Term Sheet where
purchasers of Special Warrants are resident as at the Closing
Date (the "CANADIAN JURISDICTIONS") for a final prospectus
(the "PROSPECTUS") qualifying the issuance of the Unit Shares
and the Warrants for distribution in the Canadian
Jurisdictions to holders of Special Warrants upon their
exercise; and (iii) THE DAY PRECEDING THE DATE THE LISTING OF
THE COMPANY'S COMMON SHARES ON THE TORONTO STOCK EXCHANGE
BECOMES EFFECTIVE, BEING THE TIME ITS COMMON SHARES ARE POSTED
FOR TRADING.
(d) If any Special Warrants have not been exercised by the holders
or repurchased by the Company during the Exercise Period, such
Special Warrants will be deemed to have been exercised by the
holders immediately prior to the Time of Expiry without any
further action on the part of such holders. If the
Qualification Deadline has not occurred on or prior to the
date that is 120 days following the Closing Date or such later
date as may be determined at the sole discretion of the Lead
Agent, each Special Warrant will be exercisable for 1.1 Units.
3
(e) Immediately upon receipt, the net proceeds from the Offering
(gross proceeds less the Agents' fees and expenses), will be
deposited in escrow with the Trustee on the Closing Date, to
be held in escrow pursuant to the Special Warrant Indenture
and will be released to the Company on the exercise or deemed
exercise of the Special Warrants, provided that certain
subscribers ("NON-ESCROWED SUBSCRIBERS") may agree to permit
the release of their subscription proceeds to the Company on
the Closing Date. The subscription proceeds from the balance
of the Subscribers ("ESCROWED SUBSCRIBERS") shall be held in
escrow as provided above. Notwithstanding the above, net
proceeds that are required to be deposited in escrow for the
purpose of obtaining approval to list the Company's common
shares on The Toronto Stock Exchange shall not be released to
the Company on the Closing Date, but shall be deposited in
escrow as provided above.
(f) In the event that a listing of the Company's common shares on
The Toronto Stock Exchange has not become effective by the
date that is six months following the Closing Date, then each
of the Escrowed Subscribers will be entitled, at their option
(the "Repurchase Option") until the Time of Expiry, to require
the Company to repurchase the Special Warrants held by such
holder, from legally available funds, plus such holder's
portion of the interest earned by the Trustee under the
Special Warrant Indenture. If the funds of the Company legally
available for repurchase of such Special Warrants are
insufficient to repurchase the total number of Special
Warrants to be repurchased, those funds which are legally
available will be used to repurchase the maximum number of
such Special Warrants rateably among the Escrowed Subscribers
who have exercised the Repurchase Option. Thereafter, as
additional funds of the Company become legally available for
such repurchase, such funds shall be used quarterly to
repurchase the Special Warrants until all Special Warrants
covered by exercised Repurchase Options have been exercised.
(g) The Subscriber acknowledges and agrees that the specific
rights of the holders of Special Warrants and the detailed
terms of the Special Warrants will be set forth in and subject
to the Special Warrant Indenture.
(h) Since the Company is not currently a "reporting issuer" in any
of the Canadian Jurisdictions or elsewhere in Canada, the
Special Warrants and the Unit Shares and Warrants issuable
upon the exercise or deemed exercise of the Special Warrants
will be subject to resale restrictions under the applicable
securities laws, rules, regulations and policies of the
Province of British Columbia, the jurisdiction in which the
Subscriber is resident, and any jurisdiction in which a
subsequent trade may be proposed, until such time as: (i) the
Company becomes a "reporting issuer" under such laws and the
appropriate "hold periods", if any, under such laws have
expired; (ii) a further statutory exemption from the
registration and prospectus requirements of such laws may be
relied upon by the holder; or (iii) an appropriate
discretionary order or ruling is obtained under such laws to
permit the transfer by the Subscriber of its securities. The
resale or other transfer of the Special Warrants, Unit Shares,
Warrants and the issuance of the Warrant Shares will also be
restricted under the 1933 ACT until the Registration Statement
has become effective. The Company does not expect that the
Company's common shares will be listed on any exchange or that
the Company will become a "reporting issuer" in any of the
Canadian Jurisdictions until the Registration Statement has
become effective.
The Company has agreed to use its reasonable best efforts to
file, clear, and obtain a receipt for the Prospectus in each
of the Canadian Jurisdictions set out as Qualifying
Jurisdictions in the Term Sheet. The Company has also agreed
to file and use its reasonable best efforts to prosecute to
effectiveness the Registration Statement. In the event that
the Company is unable to obtain a receipt for the Prospectus
in a Canadian Jurisdiction, the Special Warrants, Unit Shares,
Warrants and Warrant Shares (collectively the "SECURITIES")
will be subject to statutory resale restrictions under the
applicable securities legislation of that Canadian
Jurisdiction and the applicable hold period for such
Securities may never expire. Statutory restrictions may apply
on the resale of the Special Warrants, Unit Shares, Warrants
and Warrant Shares that are acquired prior to the issuance of
receipts for the Prospectus by the securities regulatory
authority in any of the Canadian Jurisdictions. In addition,
if the Company does not cause the Registration Statement to
become effective, the resale of the Special Warrants, Unit
Shares, Warrants and the issuance of the Warrant Shares will
continue to be restricted under the 1933 ACT and would be
permissible only in accordance with a statutory or regulatory
exemption from registration under the 1933 ACT. Subscribers
are advised to consult their own legal advisors in this
regard.
4
3. ACCEPTANCE AND REJECTION OF SUBSCRIPTION BY THE COMPANY
The Subscriber understands and agrees that the Company reserves the right, in
its absolute discretion, to reject the Subscriber's subscription for Special
Warrants in whole or in part, in any order, at any time prior to the Closing
Time (as defined in section 4 below) notwithstanding prior receipt by the
Subscriber of notice of acceptance of the Subscriber's subscription and, if
accepted only in part, a proportionate amount of the Aggregate Subscription
Price will be returned to the Subscriber without interest.
4. CLOSING
The closing of the Offering (the "CLOSING") will be completed at the offices of
Catalyst Corporate Finance Lawyers, Suite 1400, 0000 Xxxx Xxxxxxxx Xxxxxx,
Xxxxxxxxx, XX, X0X 0X0, at 9:00 a.m. (Vancouver time) (the "CLOSING TIME") on
March 27, 2001 or such other place or date or time as the Company and the Lead
Agent may mutually agree (the "Closing Date"), provided that delivery of the
signed Special Warrants and Special Compensation Options shall be made to the
Lead Agent's counsel, Fraser Xxxxxx Casgrain LLP, Suite 4100, 0 Xxxxx Xxxxxxxx
Xxxxx, Xxxxxxx, Xxxxxxx X0X 0X0, at or prior to that time. If by the Closing
Time, the terms and conditions contained in this Subscription Agreement and the
Agency Agreement have been complied with to the satisfaction of the Agents or
waived by them, the Agents will deliver to the Company all completed
Subscription Agreements, and will deliver to or to the direction of the Company,
the subscription funds against delivery by the Company of the Special Warrants
and such other documentation as may be required. If by the Closing Time, the
terms and conditions contained in this Subscription Agreement and the Agency
Agreement have not been complied with to the satisfaction of the Agents or
waived by them, any cheques or bank drafts delivered by the Subscriber to the
Agents representing the purchase price for Special Warrants will be promptly
returned to the Subscriber without interest.
5. FACSIMILED SUBSCRIPTIONS
The Company and the Agents will be entitled to rely on delivery by facsimile of
an executed copy of this Subscription Agreement, and acceptance by the Company
of such facsimile copy will be legally effective to create a valid and binding
agreement between you and the Company in accordance with the terms hereof.
6. CONDITIONS OF CLOSING
The sale of the Special Warrants to the Subscriber is subject to the following
conditions:
(a) Payment of the "Aggregate Subscription Price", as defined on
the face page hereof, shall be paid by you as soon as possible
and in any event no later than 12:00 noon (Toronto time) on
March 27, 2001. Payment must be made by certified cheque or
bank draft in Canadian dollars payable to "Loewen, Ondaatje,
XxXxxxxxxx Limited", "Acumen Capital Finance Partners
Limited", "Paradigm Capital Inc." or payable in such other
manner as may be specified by the Agents.
(b) One completed and signed copy of this Subscription Agreement
and one completed and signed Private Placement Questionnaire
and Undertaking for The Toronto Stock Exchange must be
delivered to Xxxxxxx Xxxxxxx at Loewen, Ondaatje, XxXxxxxxxx
Limited, Xxxxxxxx Lanes, East Tower, 00 Xxxxxx Xxxx, Xxxxx
0000, Xxxxxxx, XX X0X 0X0, Tel (000) 000-0000, Fax (416)
964-4333, as soon as possible, and in any event, no later than
4:00 p.m. (Toronto time) on March 26, 2001.
(c) If the Subscriber is an individual to whom paragraph 9(A)(3)
applies, the Subscriber must also complete, sign and deliver
the Form 20A(IP) in the form annexed to this Subscription
Agreement as SCHEDULE "B", as required by the British Columbia
Securities Commission to Xxxxxxx Xxxxxxx at Loewen, Ondaatje,
XxXxxxxxxx Limited, Xxxxxxxx Lanes, East Tower, 00 Xxxxxx
Xxxx, Xxxxx 0000, Xxxxxxx, XX X0X 0X0, Tel (000) 000-0000, Fax
(000) 000-0000, as soon as possible, and in any event, no
later than 4:00 p.m. (Toronto time) on March 26, 2001. The
Form 20A(IP) is required to be delivered by the Agents to the
Company at Closing.
(d) All necessary regulatory approvals must be obtained prior to
the Closing Date and all terms and conditions of this
Subscription Agreement, the Agency Agreement and Special
Warrant Indenture must be satisfied or waived on or prior to
the Closing Date.
5
7. AUTHORIZATION OF LEAD AGENT
The Subscriber irrevocably authorizes the Lead Agent, in its discretion, to act
as its representative at the Closing, and hereby appoints the Lead Agent, with
full power of substitution, as its true and lawful attorney with full power and
authority in its place and stead:
(a) to receive certificates for the Special Warrants, to execute
in its name and on its behalf all closing receipts and
required documents, to complete and correct any documents
relating to the transactions contemplated by this Subscription
Agreement that have been signed by the Subscriber and require
completion or correction;
(b) to extend such time periods and to waive, in whole or in part,
any representations, warranties, covenants or conditions for
the benefit of the Subscriber contained in this Subscription
Agreement, the Agency Agreement or any ancillary or related
document;
(c) to terminate this Subscription Agreement if any condition
precedent to the Offering is not satisfied, in such manner and
on such terms and conditions as the Lead Agent may determine,
acting reasonably; and
(d) without limiting the generality of the foregoing, to
negotiate, settle, execute, deliver and amend the Agency
Agreement, Special Warrant Indenture and Warrant Indenture.
8. PROSPECTUS EXEMPTION
The Subscriber acknowledges and agrees that the sale and delivery of the
purchased Special Warrants to the Subscriber is conditional upon such sale being
exempt from the prospectus and registration requirements of all Applicable
Securities Laws (as defined below) or upon the issuance of such orders, consents
or approvals of securities regulatory authorities as may be required to permit
such sale without the requirement for registration or filing a prospectus. The
Subscriber agrees to execute and deliver all documentation required by
Applicable Securities Laws to permit the purchase of the Special Warrants under
the terms of this Subscription Agreement.
You, on your own behalf (or on behalf of others for whom you are contracting)
acknowledge and agree that:
(a) you have received a term sheet in the form attached as
SCHEDULE "A" setting out the principal terms of this
Subscription Agreement and the Offering;
(b) the sale and delivery of the Special Warrants to the
Subscriber or, if applicable, to any others on whose behalf it
is contracting hereunder, is conditional upon such sale being
exempt from the prospectus filing and registration
requirements of all applicable securities legislation,
including statutes, regulations, national instruments,
published rules, policies, blanket orders, rulings and stock
exchanges (collectively, "APPLICABLE SECURITIES LAWS")
relating to the sale of the Special Warrants;
(c) the Special Warrants, Unit Shares, Warrants and Warrant Shares
will be subject to resale restrictions under Applicable
Securities Laws and are otherwise subject to the terms,
conditions and provisions of the Agency Agreement and the
Subscriber, on its own behalf and, if applicable, on behalf of
others for whom it is contracting hereunder, agrees to comply
with all Applicable Securities Laws concerning any resale of
such Securities;
(d) you have not requested or been provided with, nor do you have
any need to receive a prospectus or an offering memorandum as
defined in the Applicable Securities Laws or any similar
document in connection with your purchase of the Special
Warrants;
(e) your decision to execute this Subscription Agreement and
purchase Special Warrants (on your own behalf or on behalf of
others for whom you are contracting hereunder) has not been
based upon any verbal or written representations as to fact or
otherwise made by or on behalf of the Agents or the Company
and that your decision (or the decision of others for whom you
are contracting hereunder) is based entirely upon publicly
available information concerning the Company (any such
information having been obtained by you without independent
investigation or verification by the Agents);
6
(f) the Agents and their directors, officers, employees, agents
and representatives assume no responsibility or liability of
any nature whatsoever for the accuracy or adequacy of any such
publicly available information or as to whether all
information concerning the Company required to be disclosed by
them has been disclosed;
(g) the sale of the Special Warrants was not accompanied by any
advertisement in printed media of general and regular paid
circulation, radio, television or telecommunications,
including electronic display;
(h) you (or others for whom you are contracting hereunder) have
been advised to consult your own legal advisors with respect
to trading in the Securities and with respect to resale
restrictions imposed by the Applicable Securities Laws in the
jurisdiction in which you reside, that no representation has
been made respecting the applicable hold periods or other
resale restrictions applicable to such Securities, that you
(or others for whom you are contracting hereunder) are solely
responsible (and neither the Company nor the Agents are in any
way responsible) for compliance with applicable resale
restrictions and you are aware that you (or the beneficial
purchaser for whom you are contracting hereunder) may not be
able to resell such Securities except in accordance with
limited exemptions under Applicable Securities Laws;
(i) the Special Warrants will otherwise be subject to the terms,
conditions and provisions of the Agency Agreement and the
Special Warrant Indenture, and the Warrants will otherwise be
subject to the terms, conditions and provisions of the Agency
Agreement and the Warrant Indenture;
(j) for non-"U.S. PERSONS" (as defined in Regulation S under the
1933 ACT ("REGULATION S")) the offer and sale of Special
Warrants has been made, and the issuance of the Unit Shares
and Warrants (and Warrant Shares issued prior to the
effectiveness of a registration statement to be filed with
regard to such issuance) will be made, in reliance upon
Regulation S. Therefore, the Special Warrants, Unit Shares,
and Warrants, as well any such Warrant Shares, will be
"restricted securities" and as such may be resold or otherwise
transferred only in accordance with Regulation S or pursuant
to a registration under the 1933 ACT or an exemption from the
registration requirements of the 1933 ACT. Regulation S
requires that, for a period of one (1) year following the
Closing of the Offering, no offer or sale of a Special
Warrant, Unit Share, Warrant, or Warrant Share issued in
reliance on Regulation S may be made to a U.S. Person (which
has the meaning ascribed to that term in Regulation S) or for
the account of a U.S. Person. Regulation S also requires that
each Special Warrant, Unit Share, and Warrant (and each
Warrant Share issued prior to the effectiveness of a
Registration Statement to be filed with regard to the resale
of the Special Warrants, Unit Shares and Warrants and the
issuance of the Warrant Shares) bear a legend stating that the
Special Warrant, Unit Share or Warrant, or any such Warrant
Share, as the case may be, has not been registered under the
1933 ACT. Regulation S also requires that each Special Warrant
or Warrant bear a legend stating that the Special Warrant or
Warrant, and the securities to be issued upon its exercise,
have not been registered under the 1933 ACT and that the
Special Warrant or Warrant may not be exercised by or on
behalf of any U.S. Person unless registered under the 1933 ACT
or an exemption from such registration is available.
Each person exercising a Special Warrant or Warrant must
provide the Company with either (i) written certification that
it is not a U.S. Person and that the Warrant is not being
exercised on behalf of a U.S. Person, or (ii) a written
opinion of counsel satisfactory to the Company that the
issuance of securities upon exercise of the Special Warrant or
Warrant has been registered under the 1933 ACT and any
applicable State securities law or is exempt from
registration.
Regulation S also provides for the resale of securities which
are issued and outstanding. As noted above, the Special
Warrants, Unit Shares, Warrants, and Warrant Shares may be
resold only in compliance with Regulation S or pursuant to an
effective registration statement under the 1933 ACT or an
exemption from the registration requirements of the 1933 ACT.
Rule 904 of Regulation S provides that a resale of an
outstanding security may be made pursuant thereto if the offer
and sale of the security are made in an offshore transaction
and if no directed selling effort is made in the United States
with regard to the securities to be sold by the seller, an
affiliate of the seller, or any person acting on their behalf.
An offer or sale of securities is made in an "offshore
transaction" if the offer is not made to a person in the
United States and either (i) at the time the buy order is
originated, the buyer is outside the United States, or the
seller and any person acting on its behalf have good reason to
believe that the buyer is outside the United States and (ii)
the transaction is executed in, on or through the facilities
of a designated offshore securities
7
market and neither the seller nor any person acting on its
behalf knows that the transaction has been prearranged with a
buyer in the United States. Offers and sales of securities
specifically targeted at identifiable groups of United States
citizens abroad shall, in no event, be deemed to be made in an
offshore transaction. Rule 904 imposes additional limitations
on resales by dealers and persons receiving selling
concessions and affiliates of the issuer.
You are aware that Rule 144 under the 1933 ACT permits limited
public resales of securities acquired in non-public offerings,
subject to the satisfaction of certain conditions. You
understand that under Rule 144 the conditions include, among
other things: the availability of certain current public
information about the issuer, the resale occurring not fewer
than one (1) year or two (2) years, as applicable, after the
party has purchased and paid for the securities to be sold,
the sale being through a broker in an unsolicited "broker's
transaction" and the amount of securities being sold during
any three-month period not exceeding specified volume
limitations. You acknowledge and understand that the Company
may not be satisfying the current public information
requirement of Rule 144 at the time you wish to sell any of
the Securities, or other conditions under Rule 144 which are
required of the Company.
Each certificate evidencing a Special Warrant, Unit Share or
Warrant (and each Warrant Share issued prior to Registration
Statement effectiveness) will bear the following legend until
the applicable securities as represented by the certificate
are sold pursuant to either (i) a registration statement with
respect to such securities which is effective under the 1933
ACT, (ii) Rule 144 under the 1933 ACT, or (iii) Regulation S:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), NOR QUALIFIED UNDER OR PURSUANT TO THE
SECURITIES OR "BLUE SKY" LAWS OF ANY STATE NOR UNDER
OR PURSUANT TO THE SECURITIES LAWS OF ANY PROVINCE IN
CANADA. SUCH SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE
ASSIGNED, EXCEPT PURSUANT TO (i) A REGISTRATION
STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS
EFFECTIVE UNDER THE SECURITIES ACT, (ii) RULE 144 OR
RULE 144A UNDER THE SECURITIES ACT, IF AVAILABLE, OR
(iii) ANY OTHER EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT AND FROM QUALIFICATION UNDER ANY
SECURITIES LAWS APPLICABLE IN CANADA, IF AVAILABLE,
AND IN EACH CASE, IN COMPLIANCE WITH ANY APPLICABLE
STATE OR PROVINCIAL SECURITIES LAWS.
If such securities are being sold under Rule 904 of Regulation
S under the 1933 ACT and applicable state securities laws
("U.S. SECURITIES ACTS"), any legend may be removed by
providing a declaration to the Company, to the effect set out
in the attached SCHEDULE "D" (or in such other form as the
Company may prescribe from time to time); and provided,
further, that, if any such securities are being sold under
Rule 144 under the U.S. Securities Acts, the legend may be
removed by delivery to the registrar and transfer agent and
the Company of an opinion of counsel, of recognized standing
reasonably satisfactory to the Company, that such legends are
no longer required under applicable requirements of the U.S.
Securities Acts or state securities laws.
You understand and acknowledge that the Company may instruct
its transfer agent not to record a transfer without first
being notified by the Company that it is satisfied that such
transfer is exempt from or not subject to registration under
the U.S. Securities Acts;
(k) you agree that the Company and/or the Agents may be required
by law or otherwise to disclose to regulatory authorities your
identity and the identity of each beneficial purchaser of
Special Warrants for whom you may be acting, including without
limitation, being listed as a "Selling Shareholder" in the
Registration Statement and disclosing the number of Securities
beneficially owned, and you further agree to fully cooperate
with the Company and/or the Agents in this regard and to
provide the identity of each
8
beneficial purchaser of Special Warrants for whom you may be
acting, if required, to the Company and/or the Agents; and
(l) notwithstanding the foregoing, none of the Special Warrants or
Warrants may be offered, sold, transferred, pledged,
hypothecated or otherwise assigned, until the Registration
Statement becomes effective, without the prior written consent
of the Company and each certificate evidencing a Special
Warrant or Warrant will bear the following legend until either
(A) the Registration Statement becomes effective or (B) the
Special Warrant is sold pursuant to a transaction that is one
(1) year or greater subsequent to the Closing of the Offering,
in accordance with either (i) a registration statement with
respect to such securities which is effective under the 1933
ACT, (ii) Rule 144A under the 1933 ACT, or (iii) in reliance
upon Regulation S and in compliance with Applicable Securities
Laws:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN THE
SUBSCRIPTION AGREEMENT BETWEEN VOICE MOBILITY
INTERNATIONAL, INC. (THE "COMPANY") AND THE
PURCHASER, AND THE SPECIAL WARRANT INDENTURE AMONG
THE COMPANY AND THE TRUSTEE AND SPECIFICALLY MAY NOT
BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED
OR OTHERWISE ASSIGNED, PRIOR TO EFFECTIVENESS OF A
REGISTRATION STATEMENT UNDER THE 1933 ACT, EXCEPT
WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
9. SUBSCRIBERS' REPRESENTATIONS, WARRANTIES AND COVENANTS
By your acceptance of this Subscription Agreement, you hereby represent, warrant
and covenant to each of the Agents and the Company (which representations,
warranties and covenants shall survive Closing) that:
A. You are purchasing the Special Warrants as principal for your
own account, and not for the benefit of any other person or
company and not with a view to the resale or distribution of
all or any of the Special Warrants, and this Subscription
Agreement has been authorized, executed and delivered by you,
and constitutes your legal, valid and binding agreement, and
you are:
(1) one of the following:
(i) if subject to applicable securities
legislation of the Province of Alberta:
(a) a bank, loan corporation, trust
corporation, treasury branch or
credit union or a subsidiary of
such an entity where such entity
owns beneficially all of the voting
securities of that subsidiary; or
(b) an insurance company licensed under
the INSURANCE ACT (Alberta) or a
subsidiary of such insurance
company where such insurance
company owns beneficially all of
the voting securities of the
subsidiary;
(ii) if subject to applicable securities
legislation of the Province of Ontario:
(a) a loan corporation or trust
corporation registered under the
LOAN AND TRUST CORPORATIONS ACT
(Ontario); or
(b) an insurance company licensed under
the INSURANCE ACT (Ontario); or
(c) a bank listed in Schedule I or II
to the BANK ACT (Canada);
(iii) if subject to applicable securities
legislation of the Province of British
Columbia:
(a) a bank to which the BANK ACT
(Canada) applies or a credit union
authorized to carry on business
under the FINANCIAL INSTITUTIONS
ACT (British Columbia);
9
(b) a trust company, or
extra-provincial trust corporation
authorized to carry on deposit
business under the FINANCIAL
INSTITUTIONS ACT (British
Columbia);
(c) a corporation that is a subsidiary
of a bank and is a loan company to
which the TRUST AND LOAN COMPANIES
ACT (Canada) applies;
(d) an insurance company or an
extra-provincial insurance
corporation authorized to carry on
insurance business under the
FINANCIAL INSTITUTIONS ACT (British
Columbia); or
(e) a subsidiary of any of the above if
that person owns beneficially all
of the voting securities of the
subsidiary except the voting
securities required by law to be
owned by directors of that
subsidiary; or
(2) recognized or designated as an exempt purchaser under
applicable securities legislation of the provinces of
British Columbia, Alberta or Ontario, and, if subject
to the securities legislation of the Province of
Ontario or British Columbia, you are not an
individual; or
(3) an individual or a corporation and are purchasing a
sufficient number of Special Warrants such that the
aggregate acquisition cost to you of such Special
Warrants is not less than $150,000 if subject to the
securities legislation of the province of Ontario or
$97,000 if subject to the securities legislation of
the provinces of Alberta or British Columbia.
B. In the case of the purchase by you of Special Warrants as
agent for a disclosed principal, each beneficial purchaser of
the Special Warrants for whom you are acting is purchasing as
principal for its own account and not for the benefit of any
other person; you are an agent with due and proper authority
to execute this Subscription Agreement and all other
documentation in connection with the purchase of the Special
Warrants on behalf of the beneficial purchaser; this
Subscription Agreement has been duly authorized, executed and
delivered by or on behalf of, and constitutes the legal, valid
and binding agreement of, the disclosed principal and the
beneficial purchaser:
(1) is recognized or designated as an exempt purchaser
under applicable Canadian provincial securities
legislation and, if subject to the securities
legislation of the Province of Ontario or British
Columbia, is not an individual; or
(2) is purchasing a sufficient number of Special Warrants
such that the aggregate acquisition cost to each
beneficial purchaser of such Special Warrants is not
less than $150,000 if subject to the securities
legislation of the province of Ontario or $97,000 if
subject to the securities legislation of the
provinces of Alberta or British Columbia.
C. In the case of the purchase by you of Special Warrants as
trustee or as agent for a principal where you cannot make the
representation set forth in subparagraph 9(B) of this
Subscription Agreement (an undisclosed principal), this
Subscription Agreement has been duly authorized, executed and
delivered by you, and constitutes your legal, valid and
binding agreement, acting in such capacity, and either:
(1) (i) if subject to applicable securities legislation
of the Province of Alberta, you are:
(a) a trust corporation, as defined in such
securities legislation, trading as a trustee
or an agent; or
(b) a portfolio manager, as defined in such
securities legislation, trading as an agent;
or
(c) a person or a company trading as an agent
that, except for an exemption under Alberta
securities laws, is required to be
registered as a portfolio manager under
Applicable Securities Laws,
10
trading for accounts that are fully managed
by you and you are purchasing a sufficient
number of Special Warrants such that the
aggregate acquisition cost to you of such
Special Warrants is not less than $97,000;
(ii) if resident in or otherwise subject to the securities
legislation of the Province of British Columbia, you
are purchasing Special Warrants having an aggregate
acquisition cost of not less than $97,000 and you are
acting as:
(a) a trust company or an extra-provincial trust
corporation authorized under the FINANCIAL
INSTITUTIONS ACT (British Columbia) or the
laws of a province of Canada other than
British Columbia to carry on trust business,
deposit business or both; or
(b) an insurance company or an extra-provincial
insurance corporation authorized to carry on
insurance business under the FINANCIAL
INSTITUTIONS ACT (British Columbia) or the
laws of a province of Canada other than
British Columbia; or
(c) either (i) an advisor who manages the
investment portfolio of clients through
discretionary authority granted by one or
more clients and who is registered as a
portfolio manager under the SECURITIES ACT
(British Columbia) or the laws of a province
of Canada other than British Columbia or is
exempt from such registration, or (ii) a
person that carries on business as a
portfolio manager in a jurisdiction other
than Canada and the total asset value of the
investment portfolios you manage on behalf
of clients is not less than $20,000,000 and
you complete and file the form attached as
SCHEDULE "E" with the British Columbia
Securities Commission on or before the 10th
day after the Closing;
as trustee or agent for accounts fully managed by you
in respect of which accounts you make the investment
decisions for the account and have full discretion to
purchase or sell securities for the account without
requiring your client's express consent to the
transaction; and (iii) if subject to the applicable
securities legislation of the Province of Ontario,
you are:
(a) a trust company registered under the LOAN
AND TRUST CORPORATIONS ACT (Ontario) and are
purchasing the Purchased Warrants as trustee
or as agent for accounts that are fully
managed by you; or
(b) a portfolio adviser purchasing the Special
Warrants on behalf of a managed account in
accordance with Ontario Securities
Commission Rule 45-504;
D. If you are an individual, or any beneficial purchaser for whom
you are acting is an individual, you have attained the age of
majority and are legally competent to execute this
Subscription Agreement and to take all actions required
pursuant to this Subscription Agreement and if you, or any
beneficial purchaser for whom you are acting, is a
corporation, partnership, unincorporated association or other
entity, you, or such beneficial purchaser, as the case may be,
have the legal capacity and competence to enter into and be
bound by this Subscription Agreement and you further certify
that all necessary approvals of directors, shareholders or
otherwise have been given and obtained.
E. If you are not a resident of or are not otherwise subject to
the securities legislation of Alberta and if you or a party on
whose behalf you are acting has been created or is being used
primarily to permit the purchase of the Special Warrants
without a prospectus, and you or any such party is a
partnership, syndicate, unincorporated organization, trust,
company, fund or association or any other organized group of
persons, the share or portion of each member or partner of the
partnership, syndicate or unincorporated organization, or each
beneficiary of the trust, or each shareholder or member of the
company, fund or association or the organized group of
persons, as the case may be, of the aggregate acquisition cost
of the Special Warrants is not less than $150,000 if subject
to the securities legislation of the province of Ontario or
$97,000 if subject to the securities legislation of the
province of British Columbia.
11
F. If you or any party on whose behalf you are acting is an
investment club resident in the province of Ontario, the share
or portion of each member of the investment club of the
aggregate acquisition cost of the Special Warrants to the
investment club is not less than $150,000.
G. Subject to paragraph 9(E) or 9(H) hereof, neither you nor any
party on whose behalf you are acting has been created or is
being used primarily to permit the purchase of the Special
Warrants without a prospectus.
H. If you are a resident of, or are otherwise subject to the
securities legislation of Alberta and you are a corporation,
syndicate, partnership or other form of unincorporated
organization, you pre-existed the offering of the Special
Warrants and have a bona fide purpose other than investment in
the Special Warrants or, if created to permit such investment,
the individual share of the aggregate acquisition cost for
each participant is not less than $97,000.
I. As the Securities are subject to resale restrictions under
Applicable Securities Laws in Canada, you, or in the case of a
purchase by you acting as agent for a disclosed or undisclosed
principal, each beneficial purchaser, shall comply with all
Applicable Securities Laws concerning any resale of the
Securities (and neither the Company nor the Agents are in any
way responsible for such compliance) and shall consult with
your own legal advisors with respect to such compliance, and
if you are a resident of, or are otherwise subject to the
securities legislation of Alberta, you acknowledge that you
must file a report on Form 21 with the Alberta Securities
Commission within 10 days of each disposition of all or any
part of the Special Warrants, Warrants, Unit Shares or Warrant
Shares.
J. You (or, if applicable, others for whom you are contracting
hereunder) will execute and deliver within the applicable time
periods all documentation as may be required by Applicable
Securities Laws in Canada to permit the purchase of the
Special Warrants on the terms set out in this Subscription
Agreement.
K. You are purchasing the Special Warrants for investment only
and not with a view to resale or distribution and you will not
resell or otherwise transfer or dispose of the Special
Warrants prior to the receipt for a final prospectus (as
defined above) except in accordance with the provisions of
Applicable Securities Laws.
L. If required by any Applicable Securities Laws, policy or order
of a securities regulatory authority, stock exchange or other
regulatory authority, you will promptly upon request by the
Company or any of the Agents execute, deliver, file and
otherwise assist the Company in filing such reports,
undertakings and other documents with respect to the issuance
of the Securities as may be required.
M. You will execute and deliver no later than 4:00 p.m. (Toronto
time) on March 26, 2001, all documentation as may be required
by all Applicable Securities Laws to permit the purchase of
the Special Warrants hereunder on the terms as set forth
herein, including without limitation if the Subscriber is an
individual to whom paragraph 9(A)3 applies, the Form 20A (IP)
in the form attached as SCHEDULE "B", as required by the
British Columbia Securities Commission.
N. You and each beneficial purchaser for whom you are acting: (i)
are resident in the province set out on the face page of this
Subscription Agreement, or (ii) are a citizen or resident of
Canada, or a corporation, partnership or other entity created
in or organized under the laws of Canada or any province or
territory thereof (collectively, a "CANADIAN PERSON"), or
(iii) are resident outside of Canada and the United States, or
(iv) are a corporation, partnership or other entity
incorporated and resident outside of Canada and the United
States.
O. If you, or any beneficial purchaser for whom you are
contracting hereunder, with the consent of the Company, sell
or otherwise dispose of the Special Warrants, you, or the
beneficial purchaser for whom you are contracting hereunder,
shall obtain from the subsequent purchaser thereof the same
representations, warranties and covenants as given by you
hereunder, and the subsequent purchaser shall provide such
representations or warranties and covenants for the benefit of
the Company.
P. If you, or each beneficial purchaser for whom you are acting
hereunder, are not a Canadian person, the purchase of the
Special Warrants by you, or such beneficial purchaser, does
not contravene any of the
12
Applicable Securities Laws in the jurisdiction in which you
and such beneficial purchaser are resident and does not
trigger (i) any obligation to prepare and file a prospectus or
similar document, or any other report with respect to such
purchase, and (ii) any registration or other obligation on the
part of the Agents.
Q. The delivery of this Subscription Agreement, the acceptance of
it by the Company, the issuance of the Special Warrants to the
Subscriber and the acquisition of the Unit Shares and Warrants
upon exercise of the Special Warrants comply with all
applicable laws of the Subscriber's jurisdiction of residence
or domicile and all other applicable laws and will not cause
the Company to become subject to or comply with any
disclosure, prospectus or reporting requirements under any
such applicable laws.
R. You hereby acknowledge that no prospectus has been filed by
the Company with a securities commission or other securities
regulatory authorities in any province of Canada or any other
jurisdiction in connection with the issuance of the Special
Warrants and such issuance is exempted from the prospectus
requirements available under the provisions of Applicable
Securities Laws and as a result:
(i) you are restricted from using most of the civil
remedies available under the Applicable Securities
Laws in respect of your purchase of the Special
Warrants;
(ii) you may not receive information that would otherwise
be required to be provided to you under the
Applicable Securities Laws or contained in a
prospectus prepared in accordance with the Applicable
Securities Laws; and
(iii) the Company is relieved from certain obligations that
would otherwise apply under the Applicable Securities
Laws.
S. No person has made to you any written or oral representations:
(i) that any person will resell or repurchase the Special
Warrants or the Unit Shares or Warrants;
(ii) that any person will refund the purchase price of the
Special Warrants; or
(iii) as to the future price of the Special Warrants or the
Unit Shares or Warrants.
T. The Securities will be subject to the following resale or
transfer restrictions:
(i) the Securities will be subject to resale restrictions
under Applicable Securities Laws;
(ii) you will not be able to resell, assign or otherwise
dispose of the Securities unless they are
subsequently distributed under a prospectus or in
compliance with all Applicable Securities Laws;
(iii) the Company may be required to legend the
certificates representing the Securities regarding
these and any other restrictions on resale.
U. If, for any reason, the offering of Special Warrants is
terminated or your subscription is rejected, you will have
no claims against the Company, its directors and officers,
shareholders, agents, advisors, and affiliates and shall
have no interest in the Company or any property or assets
of the Company.
V. The Special Warrants are not being purchased by you as a
result of you being aware of any material information
concerning the Company that has not been publicly disclosed
and the Subscriber's decision to tender this offer and
purchase the Special Warrants has not been made as a result of
any verbal or written representation as to fact or otherwise
(including that any person will resell or repurchase, or
refund the purchase price of, the Special Warrants other than
in accordance with their terms or as to the future price or
value of the Special Warrants, Unit Shares, Warrants or
Warrant Shares) made by or on behalf of the Company, the
Agents or any other person and is based entirely upon
currently available public information concerning the Company.
13
W. In evaluating the merits and risks of an investment in the
Special Warrants, you have relied solely upon publicly
available information relating to the Company and the advice
of your legal, tax and investment advisors and not in any way
upon Catalyst Corporate Finance Lawyers or any oral or written
statement made by, or on behalf of, the Company or its
advisors.
X. YOU ARE RESPONSIBLE FOR OBTAINING YOUR OWN LEGAL, INVESTMENT
AND TAX ADVICE.
Y. You are capable of assessing the proposed investment as a
result of your financial or investment experience or as a
result of advice received from a registered person other than
the Company or an affiliate thereof, and are able to bear the
economic loss of your investment.
Z. The execution and delivery of this Subscription Agreement and
the performance and compliance with the terms hereof will not
result in any breach, 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, will constitute a default under, any
term or provision of your constating documents, by-laws or
resolutions (if you are a corporation) or any indenture,
contract, agreement (whether written or oral), instrument or
other document to which you are a party or to which you are
subject, or any judgement, decree, order, statute, rule or
regulation applicable to you.
AA. You are not a U.S. Person, as defined in Regulation S of the
SEC; you will resell the Securities only in accordance with
the provisions of Regulation S, pursuant to a registration
under the 1933 ACT or pursuant to an available exemption from
registration; and you will not engage in hedging transactions
with regard to the Securities other than in compliance with
the 1933 ACT.
BB. You are responsible for obtaining legal advice as to and will
comply in all respects with the prospectus delivery
requirements under applicable securities laws in connection
with any sale by you of the Unit Shares, the Warrants and the
Warrant Shares.
CC. In connection with its obligations under Section 11(a) of this
Subscription Agreement, the Company may require you to furnish
to the Company such information regarding you and the
distribution of the securities covered by the Registration
Statement (the "REGISTRABLE SHARES") as the Company may from
time to time reasonably request in writing and such other
information as may be legally required in connection with such
registration. You agree, by your acquisition of Registrable
Shares and acceptance of the benefits provided to it
hereunder, to furnish promptly to the Company all information
required to be disclosed in order to make any previously
furnished information not materially misleading. You agree
that upon receipt of any notice from the Company of the
happening of any event of the kind described herein requiring
the cessation of the distribution of a prospectus or the
distribution of a supplemented or amended prospectus, you will
forthwith discontinue disposition of Registrable Shares
pursuant to the Registration Statement covering such
Registrable Shares until your receipt of the copies of the
supplemented or amended prospectus, or until it is advised in
writing by the Company that the use of the prospectus may be
resumed, and, if so directed by the Company, you will deliver
to the Company (at the Company's expense) all copies, other
than permanent file copies then in your possession, of the
prospectus covering such Registrable Shares current at the
time of receipt of such notice. Except as set forth below, the
Company agrees to indemnify and hold you harmless, and each of
your directors, officers, employees, agents, and each person,
if any, who controls the Subscriber within the meaning of the
1933 ACT, against any losses, claims, damages, or liabilities
to which such indemnified person may become subject under the
1933 ACT or otherwise, insofar as such losses, claims,
damages, or liabilities arise out of or are based upon any
untrue or alleged untrue statement of any material fact
contained in said Registration Statement, or any preliminary
prospectus, final prospectus, or amendment or supplement
related thereto, or arise out of or are based upon the
omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading. You agree to indemnify and
hold harmless the Company, each of its directors, each of its
officers who have signed the Registration Statement,
employees, agents and each person, if any, who controls the
Company within the meaning of the 1933 ACT against any losses,
claims, damages or liabilities to which such indemnified
person may become subject, under the 1933 ACT or otherwise,
insofar as such losses, claims, damages or liabilities arise
out of or are based upon any untrue or alleged untrue
statement of any material fact contained in said Registration
Statement, or any preliminary
14
prospectus, final prospectus, or amendment or supplement
related thereto, or arise out of or are based upon the
omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein not misleading in each case, to
the extent, but only to the extent that such untrue
statement or alleged untrue statement or omission or
alleged omission was made in said registration statement,
said preliminary prospectus, said final prospectus or said
amendment or supplement in reliance upon and in conformity
with written information furnished by you specifically for
use in the preparation thereof, and provided further that
your liability pursuant to this paragraph 9(CC) shall be
limited to the amount of your investment in the Company as
reflected in the Registration Statement.
DD. You acknowledge that you have been advised that as a "selling
shareholder" under the Registration Statement, you might be
deemed to be an underwriter within the meaning of Section
2(11) of the 1933 ACT and any profit on the resale of the
securities might be deemed to be underwriting discounts and
commissions under the 1933 ACT.
EE. You acknowledge and agree that in addition to any other
applicable laws or regulations, as a "selling shareholder"
under the Registration Statement, you will comply with
regulations relating to distributions by selling shareholders,
including Regulation M under the SECURITIES EXCHANGE ACT OF
1934 (the "1934 ACT"). Regulation M prohibits selling
shareholders from offering to purchase and purchasing the
common stock of the Company at certain periods of time
surrounding their sales of Securities under the Registration
Statement. Regulation M attempts to prevent selling
shareholders who are engaged in a distribution from
manipulating the market. In addition, you acknowledge some
U.S. States may require that registration, exemption from
registration or notification requirements be met before
selling shareholders may sell their common stock. Some states
may also require selling shareholders to sell their common
stock only through broker-dealers.
10. COMPANY'S REPRESENTATIONS AND WARRANTIES
Except as disclosed in writing to the Agents prior to the Closing, the Company
represents and warrants to the Subscriber (which representations and warranties
shall survive for a period of two (2) years following the Closing) as follows:
(a) ORGANIZATION AND STANDING. The Company is a corporation duly
organized and validly existing under the laws of the State of
Nevada and is in good standing under such laws. The Company
has the requisite corporate power and authority to own and
operate its properties and assets and to carry on its business
as currently conducted and as proposed to be conducted.
(b) CORPORATE POWER. The Company will have at the Closing Date all
requisite legal and corporate power and authority to execute
and deliver this Subscription Agreement, to sell and issue the
Special Warrants, and to carry out and perform its obligations
under the terms of this Subscription Agreement.
(c) AUTHORIZATION. All corporate action on the part of the
Company, its directors, and its shareholders necessary for the
authorization, execution, delivery, and performance of this
Subscription Agreement, the Special Warrant Indenture and the
Warrant Indenture (collectively, the "TRANSACTION DOCUMENTS")
by the Company will be taken prior to the Closing. The
Transaction Documents, when executed and delivered by the
Company, will, to the best of the Company's knowledge,
constitute valid and binding obligations of the Company
enforceable in accordance with their respective terms. The
Unit Shares issuable on exercise of the Special Warrants have
been or will be prior to the Closing allotted and, when
issued, will be validly issued, fully paid and non-assessable.
(d) NO CONFLICT. The issuance and sale of the Special Warrants by
the Company does not and will not conflict with and does not
and will not result in a breach of any of the terms,
conditions or provisions of its constating documents or any
material agreement or material instrument to which the Company
is a party.
(e) NO ACTIONS, SUITS OR PROCEEDINGS. As at the Closing Date, the
Company is not a party to any actions, suits or proceedings
which could reasonably be expected to materially affect its
business or financial condition, and to the best of the
Company's knowledge no such actions, suits or proceedings are
contemplated or have been threatened.
15
(f) NO JUDGMENTS. As at the Closing Date, there are no judgments
against the Company which are unsatisfied, nor are there any
consent decrees or injunctions to which the Company is
subject.
(g) NO DEFAULT. As at the Closing Date, the Company is not in
default of any material requirements of the SECURITIES ACT
(British Columbia), the SECURITIES ACT (Alberta), the
SECURITIES ACT (Ontario), the 1933 ACT or the 1934 ACT.
(h) NO ORDER. No order ceasing or suspending trading in securities
of the Company nor prohibiting the sale of such securities has
been issued and remains outstanding against the Company or its
directors, officers or promoters and no investigations or
proceedings for such purposes are pending or threatened.
11. COMPANY'S COVENANTS
The Company hereby covenants and agrees and, in the Agency Agreement and/or the
Special Warrant Indenture, the Company will covenant and agree as follows:
(a) to use its commercially reasonable best efforts (i) to cause a
Registration Statement to be filed and prosecuted to
effectiveness, (ii) to cause the preliminary prospectus of the
Company relating to the distribution of the Unit Shares and
Warrants (the "PRELIMINARY PROSPECTUS") to be filed and (iii)
to obtain receipts for the final Prospectus, as expeditiously
as reasonably practicable after the Closing Date, in each case
in form and substance satisfactory to the Company and the
Agents, acting reasonably;
(b) to use its reasonable best efforts to promptly comply with all
filing and other requirements under all Applicable Securities
Laws, including, where required by the Agency Agreement or any
Applicable Securities Laws, the filing of amendments to the
Preliminary Prospectus and Prospectus in each of the Canadian
Jurisdictions; and
(c) to use its commercially reasonable best efforts to maintain
its status as a reporting issuer (or analogous entity) under
the Applicable Securities Laws of such provinces in which it
becomes a reporting issuer (or analogous entity) as a result
of filing the Prospectus as required under the Agency
Agreement and to continue to be in compliance with its
obligations thereunder, without default, for a period of at
least one year from the date of the filing of the Prospectus
in each Canadian Jurisdiction.
In addition, the covenants of and terms applicable to the Company set out in the
Agency Agreement are hereby incorporated into this section as additional
covenants of the Company.
12. RESALE RESTRICTIONS
The Subscriber, on its own behalf and, if applicable, on behalf of others for
whom it is contracting hereunder, understands and acknowledges that the Special
Warrants, Unit Shares, Warrants and Warrant Shares will be subject to certain
resale restrictions under the Applicable Securities Laws (including United
States federal and state securities laws) and the Subscriber, on its own behalf
and, if applicable, on behalf of others for whom it is contracting hereunder,
agrees to comply with such restrictions. The Subscriber understands and
acknowledges that the resale of the Unit Shares and the Warrants and the
issuance of the Warrant Shares has not yet been registered with the SEC and
accordingly is restricted in the U.S. The Subscriber further understands and
acknowledges that the Company is not currently a "reporting issuer" in any
Canadian jurisdiction and that holders of securities of the Company may not be
able to sell such securities for an indefinite period of time without the
Prospectus being filed and a receipt obtained therefor. Subscribers are advised
to consult their own legal advisors in this regard. The Subscriber, on its own
behalf and, if applicable, on behalf of others for whom it is contracting
hereunder, 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 (and neither the Company nor
the Agents are in any manner responsible for ensuring compliance by the
Subscriber with such restrictions).
13. RELIANCE UPON REPRESENTATIONS AND WARRANTIES
The Subscriber acknowledges that the representations and warranties contained in
this Subscription Agreement are made by it with the intent that they may be
relied upon by the Company in determining the Subscriber's eligibility to
purchase the Special Warrants, and the Subscriber hereby agrees to indemnify the
Company and its directors, officers, employees and agents against all losses,
claims, costs, expenses and damages or liabilities that they may suffer or incur
caused or arising from their reliance thereon. The foregoing representations and
warranties survive the purchase by the Subscriber of the Special Warrants and
continue in full force and effect as set forth in section 14.
16
14. SURVIVAL
This Subscription Agreement, including without limitation the representations,
warranties and covenants contained herein, survives and continues in full force
and effect and is binding upon the Subscriber for a period of three years,
notwithstanding the completion of the purchase of the Special Warrants by the
Subscriber, the completion of the issue of the Special Warrants by the Company
and any subsequent disposition by the Subscriber of the Securities.
15. CONTRACTUAL RIGHTS OF ACTION
By its acceptance of this Subscription Agreement, the Company grants to each
Subscriber the contractual right of action for rescission in the form set out in
SCHEDULE "C" and the Subscriber agrees to assign and explicitly extend the
benefit of such right (but without liability to a purchaser) to any permitted
assignee or transferor of the Special Warrants. The above rights are in addition
to any other rights or remedies available to the Special Warrant holder under
section 130 of the SECURITIES ACT (Ontario), equivalent provisions of the
securities legislation of any other province of Canada in which purchasers of
Special Warrants are resident and otherwise at law, and are subject to the
defences described under such legislation. The Subscriber expressly waives and
releases the Company, to the fullest extent permitted by law, from all rights of
withdrawal to which the Subscriber might otherwise be entitled pursuant to
subsection 71(2) of the SECURITIES ACT (Ontario) and equivalent provisions of
the securities legislation of any other province of Canada.
16. COMMISSION TO THE AGENTS
You understand that upon completion of the sale by the Company of the Special
Warrants, the Lead Agent, on behalf of the Agents, will receive from the Company
on the Closing Date a cash commission (the "COMMISSION") equal to 7% of the
gross proceeds from the Offering.
In addition, subject to regulatory approval, the Company will grant to the
Agents a special compensation option (the "SPECIAL COMPENSATION OPTION")
exercisable for a compensation option (the "COMPENSATION OPTION") which, upon
exercise will entitle the Agent to purchase the number of Units equal to 10% of
the total number of Special Warrants sold at a price per Unit that is equal to
the Issue Price of each Special Warrant, for a period of two years from the
Closing Date.
17. COSTS
You acknowledge and agree that, except as specified in the Agency Agreement, all
costs and expenses incurred by you (including any fees and disbursements of any
special counsel retained by you) relating to the purchase of the Special
Warrants by you shall be borne by you.
18. ASSIGNMENT
None of the parties to this Subscription Agreement may assign any rights or
benefits under this Subscription Agreement, including the benefit of any
representation, warranty or covenant, without the prior written consent of the
other parties.
19. ENUREMENT
This Subscription Agreement enures to the benefit of and is binding upon the
parties and their respective heirs, executors, administrators and other legal
representatives, successors (including any successor by reason of amalgamation
or statutory arrangement of any party) and permitted assigns.
20. ENTIRE AGREEMENT
This Subscription Agreement constitutes the entire agreement of the parties
relating to the subject matter hereof and there are no representations,
covenants or other agreements relating to the subject matter hereof except as
stated or referred to in this Subscription Agreement.
21. LANGUAGE
The undersigned hereby acknowledges that it has consented and requested that all
documents evidencing or relating in any way to the sale of the Special Warrants
be drawn up in the English language only. Nous, soussignes, reconnaissons par
les presentes avoir consenti et demande que tous les documents faisant foi ou se
rapportant de quelque maniere a la vente de ces actions soient rediges en
anglais seulement.
17
22. TIME OF ESSENCE
Time is of the essence of this Subscription Agreement.
23. COUNTERPARTS, ETC.
This Subscription Agreement may be executed in several counterparts, each of
which when so executed is deemed to be an original and such counterparts
together constitute one and the same instrument. Counterparts may be executed
either in original or faxed form and the parties adopt any signatures received
by a receiving fax machine as original signatures of the parties.
24. EFFECT OF HEADINGS
The section and paragraph headings herein are for convenience only and do not
affect the construction hereof.
25. SEVERABILITY
The invalidity or enforceability of any provisions hereof in no way affect the
validity or enforceability of any other provision.
26. GOVERNING LAW
This Subscription Agreement is governed by the laws of the Province of British
Columbia and the laws of Canada applicable therein. The Subscriber irrevocably
attorns to the non-exclusive jurisdiction of the court of the Province of
British Columbia.
27. CURRENCY
All references in this Agreement to currency amounts are indicated in terms of
Canadian dollars.
18
SCHEDULE "A"
VOICE MOBILITY INTERNATIONAL, INC.
TERM SHEET
THE ISSUER: Voice Mobility International, Inc. (the "Company").
OFFERING: Special Warrants at a price of Cdn.$2.00 per Special Warrant (the "Issue Price") for aggregate gross
proceeds of up to Cdn. $15,000,000.
TERMS OF SPECIAL WARRANTS: Each Special Warrant is exercisable, without payment of additional consideration, into one Unit of
the Company (a "Unit"). Each Unit consists of one Common Share (a "Unit Share") and one-half Warrant
of the Company. Each whole Warrant (a "Warrant") entitles the holder to acquire one Common Share
(a "Warrant Share") at a price of Cdn.$2.25 at any time on or before a date which is two years
from the Closing Date. The Units, Unit Shares, Warrants and Warrant Shares are collectively referred
to as the "Underlying Securities").
MINIMUM SUBSCRIPTION 75,000 Special Warrants (Cdn.$150,000) in the Province of Ontario and such other minimum number of
Special Warrants as is prescribed by securities legislation in other Qualifying Jurisdictions.
CLOSING DATE: March 27, 2001, or such other date as is agreed upon by the Lead Agent and the Company
(the "Closing Date").
QUALIFYING JURISDICTIONS: Ontario, British Columbia, Alberta, the United States of America (and such other jurisdictions as are
agreed upon by the Company and the Lead Agent).
SPECIAL WARRANTS: The Special Warrants will be issued pursuant to a special warrant indenture containing standard
anti-dilution protections (including in the case of dividends paid in the ordinary course), which
protections will be operative from the Closing Date. The Special Warrants are exercisable by the
holders thereof at any time after their issuance and, if not previously exercised or repurchased,
will be deemed to be exercised immediately prior to 4:30 p.m. (Toronto time) on the business day
(the "Qualification Deadline") which is the latest of: (i) the date a registration statement with
regard to the resale of the Special Warrants, Unit Shares and Warrants and the issuance of the Warrant
Shares is declared effective by the United States Securities and Exchange Commission under the
UNITED STATES SECURITIES ACT OF 1933, as amended, and (ii) the date a receipt is issued by the last
of the securities regulatory authorities in each of the jurisdictions in Canada set out as Qualifying
Jurisdictions in the Term Sheet where purchasers of Special Warrants are resident as at the Closing
Date for a final prospectus qualifying the issuance of the Unit Shares and the Warrants for
distribution in the Canadian Jurisdictions; and (iii) the day preceding the date the listing of the
Company's common shares on The Toronto Stock Exchange becomes effective, being the time its common
shares are posted for trading.
ESCROW: The net proceeds (gross proceeds less Agents' fees and expenses) from the sale of the Special Warrants
will be deposited in escrow with a trust company mutually agreeable to the Company and the Lead Agent,
to be released to the Company on the exercise or deemed exercise of the Special Warrants, provided
that certain subscribers ("Non-Escrowed Subscribers") may agree to permit the release of their
subscription proceeds to the Company on the Closing Date. The subscription proceeds from the balance
of the Subscribers ("Escrowed Subscribers") shall be held in escrow as provided above. Notwithstanding
the above, net proceeds that are required to be deposited in escrow for the purpose of obtaining
approval to list the Company's common shares on The Toronto Stock Exchange shall not be released to
the Company on the Closing Date, but shall be deposited in escrow as provided above.
A-1
EXCHANGE, PENALTY AND
REPURCHASE PROVISIONS: The Company will use its best efforts to file a prospectus qualifying the Unit Shares and Warrants to
be issued in exchange for the Special Warrants in Ontario (and such other provinces as may be agreed
to by the Company and the Lead Agent) as soon as practicable after the Closing Date. If the
Qualification Deadline has not occurred on or prior to the date that is 120 days following the
Closing Date or such later date as may be determined at the sole discretion of the Lead Agent, each
Special Warrant will be exercisable for 1.1 Units. The Company will continue to use all reasonable
commercial efforts to obtain a receipt for the prospectus after 120 days after the Closing Date.
In the event a TSE listing of the Company's Common Shares has not been achieved prior to the date
six (6) months following the Closing Date, the Escrowed Subscribers shall be entitled, at their option
(the "Repurchase Option"), until the Time of Expiry, to require the Company to repurchase their
Special Warrants from legally available funds at the Issue Price plus accrued interest.
LEAD AGENT: Loewen, Ondaatje, XxXxxxxxxx Limited
CO-AGENTS: Acumen Capital Finance Partners Limited
Paradigm Capital Inc.
AGENTS' COMMISSION: The Agents will be paid at the closing of the sale of Special Warrants a commission of 7% of the gross
proceeds of this Offering, which commission and the expenses of the Agents (including the fees of the
Agents' legal counsel) will be fully paid in cash on the Closing Date out of the proceeds of the
Offering. In addition, the Agents shall receive a Special Compensation Option, exercisable for a
Compensation Option which, in the aggregate, upon exercise will entitle the Agents to purchase for a
period of two years from the Closing Date the number of Units that is equal to 10% of the number of
Special Warrants sold, at a price per Unit that is equal to the issue price of each Special Warrant.
The terms of the commission, the Special Compensation Option and the Compensation Option shall be
subject to regulatory approval.
SUBSCRIPTION: Persons wishing to subscribe for Special Warrants must complete and sign a Subscription Form and
deliver a cheque to the Lead Agent not later than one business day prior to the Closing Date.
USE OF PROCEEDS: The proceeds from the sale of the Special Warrants will be expended by the Company to finance its
growth strategy. Specifically, the proceeds will be allocated to sales and marketing, research and
development, working capital purposes and potential acquisitions.
RESALE RESTRICTIONS: The Special Warrants will be issued pursuant to exemptions from prospectus requirements of applicable
securities legislation and will be subject to resale restrictions under that legislation.
If the Company is unable to obtain a receipt for a final prospectus in any Qualifying Jurisdiction and
an effective Registration Statement, the Underlying Securities will be subject to statutory hold
periods during which time these securities may not be resold in such Qualifying Jurisdictions.
In addition, if any Special Warrants are exercised prior to the issuance of receipts for a final
prospectus and/or an effective Registration Statement by the securities commissions in any of the
Qualifying Jurisdictions, the Underlying Securities will be subject to statutory restrictions on
resale.
The Company intends to file a prospectus to qualify the Underlying Securities only in the Qualifying
Jurisdictions. Accordingly, the Underlying Securities that are acquired outside
A-2
of the Qualifying Jurisdictions may be subject to resale restrictions.
The Special Warrants are not transferable without the prior written consent of the Company. This
restriction shall not, however restrict the exercise of the Special Warrants for the Units. Absent an
effective Registration Statement, the Warrants are not transferable without the prior written
consent of the Company.
FOREIGN SALES: The Special Warrants may be sold outside of Canada pursuant to applicable exemptions.
A-3
SCHEDULE "B"
FORM 20A (IP)
SECURITIES ACT (BRITISH COLUMBIA)
ACKNOWLEDGEMENT OF INDIVIDUAL PURCHASER
1. I have agreed to purchase from Voice Mobility International, Inc.
(the "Issuer")
Special Warrants (the "Securities") of
------------------------------- the Issuer.
[number of Special Warrants]
2. I am purchasing the Securities as principal and, on closing of the
agreement of purchase and sale, I will be the beneficial owner of the
Securities.
3. I [circle one] have/have not received an offering memorandum describing
the Issuer and the Securities.
4. I acknowledge that:
(a) no securities commission or similar regulatory authority has
reviewed or passed on the merits of the Securities, AND
(b) there is no government or other insurance covering the
Securities, AND
(c) I may lose all of my investment, AND
(d) there are restrictions on my ability to resell the Securities
and it is my responsibility to find out what those
restrictions are and to comply with them before selling the
Securities, AND
(e) I WILL NOT receive a prospectus that the BRITISH COLUMBIA
SECURITIES ACT (the "Act") would otherwise require be given to
me because the Issuer has advised me that it is relying on a
prospectus exemption, AND
(f) because I am not purchasing the Securities under a prospectus,
I will not have the civil remedies that would otherwise be
available to me, AND
(g) the Issuer has advised me that it is using an exemption from
the requirement to sell through a dealer registered under the
Act, except purchases referred to in paragraph 5(g), and as a
result I do not have the benefit of any protection that might
have been available to me by having a dealer act on my behalf.
5. I also acknowledge that: [CIRCLE ONE]
(a) I am purchasing Securities that have an aggregate acquisition
cost of $97,000 or more, OR
(b) my net worth, or my net worth jointly with my spouse at the
date of the agreement of purchase and sale of the securities,
is not less than $400,000, OR
(c) my annual net income before tax is not less than $75,000, or
my annual net income before tax jointly with my spouse is not
less than $125,000, in each of the two most recent calendar
years, and I reasonably expect to have annual net income
before tax of not less than $75,000 or annual net income
before tax jointly with my spouse of not less than $125,000 in
the current calendar year, OR
(d) I am registered under the Act, OR
(e) I am a spouse, parent, brother, sister or child of a senior
officer or director of the Issuer, or of an affiliate of the
Issuer, OR
(f) I am a close personal friend of a senior officer or director
of the Issuer, or of an affiliate of the Issuer, OR
B-1
(g) I am purchasing securities under section 128(c) ($25,000 -
registrant required) of the Rules, and I have spoken to a
person [NAME OF REGISTERED PERSON:] -------------------------
(the "Registered Person") who has advised me that the
Registered Person is registered to trade or advise in the
Securities and that the purchase of the Securities is a
suitable investment for me.
6. If I am an individual referred to in paragraph 5(b), 5(c), or 5(d), I
acknowledge that, on the basis of information about the Securities
furnished by the Issuer, I am able to evaluate the risks and merits of
the Securities because: [CIRCLE ONE]
(a) of my financial, business or investment experience, OR (b) I
have received advice from a person [NAME OF ADVISER:]
(the "Adviser") who has advised me
-------------------------
that the Adviser is:
(i) registered to advise, or exempted from the
requirement to be registered to advise, in respect of
the Securities, and
(ii) not an insider of, or in a special relationship with,
the Issuer.
The statements made in this report are true.
DATED , 2001.
-----------------
-------------------------------
Signature of Purchaser
-------------------------------
Name of Purchaser
-------------------------------
-------------------------------
Address of Purchaser
B-2
SCHEDULE "C"
CONTRACTUAL RIGHT OF ACTION FOR RESCISSION
(1) In the event that a holder of Special Warrants, who acquires Unit
Shares and Warrants of the Company upon the exercise of the Special
Warrants, is or becomes entitled under Applicable Securities Laws to
the remedy of rescission by reason of the Prospectus qualifying the
distribution of the Unit Shares and Warrants on exercise of the Special
Warrants, or any amendment thereto, containing a misrepresentation, the
Subscriber is entitled to rescission not only of the Subscriber's
exercise of its Special Warrants but also of the private placement
transaction pursuant to which the Special Warrants were initially
acquired, and is entitled in connection with such rescission to a full
refund of all consideration paid to the Company on the acquisition of
the Special Warrants. The provisions hereof are a direct contractual
right extended by the Company alone (but specifically not by the
directors or officers of the Company or by the Agent) to holders of
Special Warrants, permitted assignees of such holders and to holders of
Unit Shares and Warrants acquired by such holders on exercise of the
Special Warrants, and are in addition to any other right or remedy
available to a holder of Special Warrants under section 130 of the
SECURITIES ACT (Ontario), equivalent provisions of the securities
legislation of any other province of Canada in which Special Warrant
purchasers are resident, or otherwise at law, and are subject to the
provisions of section (2) below, and the defences, limitations and
other provisions described under the Applicable Securities Laws or
otherwise available.
(2) No action may be commenced to enforce the foregoing rights of action
for rescission more than 180 days after the Closing Date.
(3) The Company agrees that the benefit of the covenant contained in
section (1) above is deemed to pass with any permitted and lawful
assignment or transfer of Special Warrants in accordance with the
Special Warrant Indenture and the Subscriber agrees to extend
explicitly the benefit of such covenant (but without liability to the
Subscriber) to any permitted and lawful assignee or transferee of
Special Warrants registered in the name of the Subscriber.
(4) All capitalized terms in this Schedule that are defined in the
Subscription Agreement between the Subscriber and the Company have the
meanings given to them in the Subscription Agreement.
C-1
SCHEDULE "D"
FORM OF DECLARATION FOR REMOVAL OF LEGEND
TO: VOICE MOBILITY INTERNATIONAL, INC.
The undersigned (a) acknowledges that the sale of the securities of
Voice Mobility International, Inc. (the "Company") to which this declaration
relates is being made in reliance on Rule 904 of Regulation S under the United
States Securities Act of 1933, as amended (the "1933 Act") and (b) certifies
that (1) it is not an affiliate of the Company (as defined in Rule 405 under the
1933 Act), (2) the offer of such securities was not made to a person in the
United States and either (A) at the time the buy order was originated, the buyer
was outside the United States, or the seller and any person acting on its behalf
reasonably believe that the buyer was outside the United States, or (B) the
transaction was executed on or through the facilities of The Toronto Stock
Exchange or any other designated offshore securities market, as defined in
Regulation S, and neither the seller nor any person acting on its behalf knows
that the transaction has been prearranged with a buyer in the United States, (3)
neither the seller nor any affiliate of the seller nor any person acting on any
of their behalf has engaged or will engage in any directed selling efforts in
the United States in connection with the offer and sale of such securities, (4)
the sale is BONA FIDE and not for the purpose of "washing off" the resale
restrictions imposed because the securities are "restricted securities" (as such
term is defined in Rule 144(a)(3) under the 1933 Act), (5) the seller does not
intend to replace the securities sold in reliance on Rule 904 of the 1933 Act
with fungible unrestricted securities and (6) the contemplated sale is not a
transaction, or part of a series of transactions which, although in technical
compliance with Regulation S, is part of a plan or scheme to evade the
registration provisions of the 1933 Act. Terms used herein have the meanings
given to them by Regulation S.
Dated: By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
D-1
SCHEDULE "E"
CERTIFICATION BY FOREIGN PORTFOLIO MANAGER
The undersigned is purchasing securities of Voice Mobility International, Inc.
(the "Issuer").
The undersigned hereby certifies that:
(a) it is purchasing securities of the Issuer on behalf of managed
accounts for which it is making the investment decision to
purchase these securities and has full discretion to purchase
or sell securities for such accounts without requiring the
client's express consent to a transaction;
(b) it carries on the business of managing the investment
portfolios of clients through discretionary authority granted
by those clients (a "portfolio manager" business) in --------
[jurisdiction], and it is permitted by law to carry on a
portfolio manager business in that jurisdiction;
(c) it was not created solely or primarily for the purpose of
purchasing securities of the Issuer;
(d) the total asset value of the investment portfolios it manages
on behalf of clients is not less than $20,000,000; and
(e) the Issuer has provided it with a list of the directors,
senior officers and other insiders of the Issuer, and the
persons that carry on investor relations activities for the
Issuer (which list is attached as a schedule to this Form),
and it does not believe, and has no reasonable grounds to
believe, that any of those persons has a beneficial interest
in any of the managed accounts for which it is purchasing,
except as follows:
----------------------------------------------------------
(name of insider(s) or person(s) carrying on investor
relations activities for the Issuer that have a beneficial
interest in an account)
The undersigned acknowledges that it is bound by the provisions of the British
Columbia SECURITIES ACT including, without limitation, sections 87 and 111
concerning the filing of insider reports and reports of acquisitions.
Dated at
----------------------------
this day of , 2001
---- --------------
-------------------------------------
(Name of Purchaser - please print)
-------------------------------------
(Authorized Signature)
-------------------------------------
(Official Capacity - please print)
-------------------------------------
(please print name of individual
whose signature appears above, if
different from name of purchaser
printed above)
E-1
SUBSCRIPTION AGREEMENT FOR SPECIAL WARRANTS
(FOR NON-ESCROWED CANADIAN AND NON-U.S. SUBSCRIBERS)
(THE "SUBSCRIPTION AGREEMENT")
THE SECURITIES SUBSCRIBED FOR HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933 AND, SUBJECT TO CERTAIN
EXCEPTIONS, MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO A U.S. PERSON
To: VOICE MOBILITY INTERNATIONAL, INC.
And to: Loewen, Ondaatje, XxXxxxxxxx Limited, Acumen Capital Finance Partners
Limited and Paradigm Capital Inc.
ONE COMPLETED AND ORIGINALLY EXECUTED COPY OF THIS SUBSCRIPTION AGREEMENT AND
APPLICABLE SCHEDULES MUST BE DELIVERED IN ACCORDANCE WITH SECTION 6 OF THIS
SUBSCRIPTION AGREEMENT AS SOON AS POSSIBLE, AND, IN ANY EVENT, NO LATER THAN
4:00 P.M. (TORONTO TIME) ON MARCH 26, 2001 TO:
ATTENTION: XXXXXXX XXXXXXX, LOEWEN, ONDAATJE, XXXXXXXXXX LIMITED,
XXXXXXXX LANES, EAST TOWER
00 XXXXXX XXXX, XXXXX 0000, XXXXXXX, XX X0X 0X0,
TEL (000) 000-0000, FAX (000) 000-0000
The undersigned (the "Subscriber" or "you") hereby confirms its irrevocable
subscription for and offer to purchase from Voice Mobility International, Inc.
("Voice Mobility" or the "Company") that number of special warrants of the
Company (the "Special Warrants") set out below, at a price of Cdn$2.00 per
Special Warrant (the "Issue Price"), pursuant to the terms and conditions of
this Subscription Agreement and in accordance with the Agency Agreement (as
defined below). The Subscriber agrees to be bound by the terms of this
Subscription Agreement and, without limitation, agrees that the Company and the
Agents (as defined below) may rely upon its covenants, representations and
warranties.
____________________________________________________________ _________________________________________________________________
NUMBER OF SPECIAL WARRANTS:
------------------------------------------------------
(Name of Subscriber - please print)
Account Reference: AGGREGATE SUBSCRIPTION PRICE: $
------------------------------------ ---------------------------------
(the "Aggregate Subscription Price")
The Subscribers agrees to permit the release of its subscription
By: proceeds to the Company on closing ("Non-Escrowed Subscribers").
--------------------------------------------------
Authorized Signature
_________________________________________________________________
_________________________________________________________________
IF THE SUBSCRIBER IS SIGNING AS AGENT FOR A PRINCIPAL (BENEFICIAL
PURCHASER) AND IS NOT A TRUST COMPANY OR A PORTFOLIO MANAGER
----------------------------------------------------- PURCHASING AS TRUSTEE OR AGENT FOR ACCOUNTS FULLY MANAGED BY
(Official Capacity or Title - please print) IT, COMPLETE THE FOLLOWING:
----------------------------------------------------- ---------------------------------------------------------------
(Please print name of individual whose signature (Name of Principal)
appears above if different than the name of the
subscriber printed above.)
---------------------------------------------------------------
(Principal's Address)
----------------------------------------------------- ---------------------------------------------------------------
(Subscriber's Address)
---------------------------------------------------------------
_________________________________________________________________
_________________________________________________________________
------------------------------------------------------ DELIVER THE SPECIAL WARRANTS AS SET OUT BELOW:
(Telephone Number)
____________________________________________________________
---------------------------------------------------------------
(Name)
____________________________________________________________
REGISTER THE SPECIAL WARRANTS AS SET OUT BELOW: ---------------------------------------------------------------
(Account Reference, if applicable)
------------------------------------------------------
(Name) ---------------------------------------------------------------
(Address)
------------------------------------------------------
(Account Reference, if applicable) ---------------------------------------------------------------
(Contact Name) (Telephone Number)
------------------------------------------------------
(Address) __________________________________________________________________
------------------------------------------------------ __________________________________________________________________
(Telephone Number) NUMBER OF SHARES OF THE COMPANY HELD BY THE SUBSCRIBER EXCLUDING
THOSE BEING SUBSCRIBED FOR:
____________________________________________________________ _________________________________________________________________
ACCEPTANCE: The Company hereby accepts the above subscription and the Company represents and warrants to the Subscriber that the
representations and warranties made by the Company to the Agents in the agency agreement (the "Agency Agreement") are true and
correct in all material respects as of this date (save and except as waived by the Lead Agent, as defined below) and that the
Subscriber is entitled to rely thereon.
VOICE MOBILITY INTERNATIONAL, INC. , 2001
--------------------
________________________
By: No:
---------------------------------------- ________________________
NOTE: PLEASE ALSO COMPLETE AND SIGN SCHEDULE "B", IF YOU ARE AN INDIVIDUAL
THE TORONTO STOCK EXCHANGE
PRIVATE PLACEMENT QUESTIONNAIRE AND UNDERTAKING
To be completed by each proposed placement purchaser of listed securities or
securities which are convertible into listed securities.
QUESTIONNAIRE
1. DESCRIPTION OF TRANSACTION
(a) Name of issuer of the Securities VOICE MOBILITY INTERNATIONAL, INC.
----------------------------------------
-------------------------------------------------------------------------
(b) Number and Class of Securities to be Purchased
--------------------------
(c) Purchase Price
----------------------------------------------------------
-------------------------------------------------------------------------
2. DETAILS OF PURCHASER
(a) Name of Purchaser
--------------------------------------------------------
(b) Address
------------------------------------------------------------------
(c) Names and addresses of persons having a greater than 10% beneficial
interest in the purchaser
------------------------------------------------
-------------------------------------------------------------------------
3. RELATIONSHIP TO ISSUER
(a) Is the purchaser (or any person named in response to 2(c) above) an
insider of the issuer for the purposes of the Ontario Securities Act
(before giving effect to this private placement)? If so, state the
capacity in which the purchaser (or person named in response to 2(c))
qualifies as an insider
-------------------------------------------------
(b) If the answer to (a) is "no", are the purchaser and the issuer controlled
by the same person or company? If so, give details
-----------------------
4. DEALINGS OF PURCHASER IN SECURITIES OF THE ISSUER
Give details of all trading by the purchaser, as principal, in the securities
of the issuer (other than debt securities which are not convertible into
equity securities), directly or indirectly, within the 60 days preceding the
date hereof
-----------------------------------------------------------------
-----------------------------------------------------------------
UNDERTAKING
TO: The Toronto Stock Exchange
The undersigned has subscribed for and agreed to purchase, as principal, the
securities described in Item 1 of this Private Placement Questionnaire and
Undertaking.
The undersigned undertakes not to sell or otherwise dispose of any of the said
securities so purchased or any securities derived therefrom for a period of six
months from the date of the closing of the transaction herein or for such period
as is prescribed by applicable securities legislation, whichever is longer,
without the prior consent of The Toronto Stock Exchange and other regulatory
body having jurisdiction.
DATED AT
------------------------------ ----------------------------------------
(Name of Purchaser - please print)
this day of , 2001
---- --------------- ----------------------------------------
(Authorized Signature)
----------------------------------------
(Official Capacity - please print)
(please print here name of individual
whose signature appears above, if
different from name of purchaser
printed above)
2
TERMS AND CONDITIONS
1. SUBSCRIPTION
We confirm your agreement to purchase, on and subject to the terms and
conditions in this Subscription Agreement and in the Agency Agreement, from the
Company the number of Special Warrants set out on the face page of this
Subscription Agreement at a price of $2.00 per Special Warrant payable as
described in section 6 of this Subscription Agreement. The Special Warrants you
are purchasing form part of a larger offering (in Canada, the United States and
elsewhere) of Special Warrants (the "OFFERING") by the Company pursuant to an
agency agreement (the "AGENCY AGREEMENT") to be entered into by Loewen,
Ondaatje, XxXxxxxxxx Limited ("LOM" or the "LEAD AGENT"), Acumen Capital Finance
Partners Limited, Paradigm Capital Inc. (collectively the "AGENTS"), and the
Company.
2. DESCRIPTION OF SPECIAL WARRANTS
(a) Attached as SCHEDULE "A" to this Subscription Agreement is a
term sheet (the "TERM SHEET") containing a summary of the
terms and conditions pertaining to the Special Warrants and
the Offering. The description of the Special Warrants
contained in the Term Sheet and this Subscription Agreement is
a summary only and is subject to the detailed provisions of a
special warrant indenture (the "Special Warrant Indenture") to
be dated as of the Closing Date and to be entered into between
the Company and Computershare Trust Company of Canada (or
another trust company that may be agreed to by the Company and
the Lead Agent), in its capacity as special warrant agent and
trustee thereunder (the "TRUSTEE").
(b) Upon exercise (which term shall include deemed exercise) of
the Special Warrants, in accordance with their terms, the
holder will, without payment of any additional consideration,
be issued one unit ("UNIT") in respect of each Special Warrant
exercised. Each Unit will consist of one common share in the
capital of the Company, as presently constituted ("UNIT
SHARE"), and one half of one non-transferable share purchase
warrant ("Warrant"). Each whole Warrant entitles the holder to
purchase one additional common share in the capital of the
Company, as presently constituted (a "WARRANT SHARE"), at a
price that is equal to $2.25 at any time on or before the date
which is two years from the Closing Date (as defined in
paragraph 4 below). The description of the Warrants contained
in the Term Sheet and this Subscription Agreement is a summary
only and is subject to the detailed provisions of a warrant
indenture (the "WARRANT INDENTURE") to be dated as of the
Closing Date and to be entered into between the Company and
Computershare Trust Company of Canada (or another trust
company that may be agreed to by the Company and the Lead
Agent), in its capacity as warrant agent and trustee
thereunder.
(c) The Special Warrants will be exercisable on any business day
during business hours during the period (the "Exercise
Period") commencing on the Closing Date and ending at 4:30
p.m. (Toronto time) (the "Time of Expiry") on the business day
(the "QUALIFICATION DEADLINE") which is the latest of (i) the
date a registration statement (the "REGISTRATION STATEMENT")
with regard to the resale of the Special Warrants, Unit Shares
and Warrants and the issuance of the Warrant Shares is
declared effective by the United States Securities and
Exchange Commission (the "SEC") pursuant to the UNITED STATES
SECURITIES ACT OF 1933, as amended (the "1933 ACT"), and (ii)
the date a receipt is issued by the last of the securities
regulatory authorities in each of the jurisdictions in Canada
set out as Qualifying Jurisdictions in the Term Sheet where
purchasers of Special Warrants are resident as at the Closing
Date (the "CANADIAN JURISDICTIONS") for a final prospectus
(the "PROSPECTUS") qualifying the issuance of the Unit Shares
and the Warrants for distribution in the Canadian
Jurisdictions to holders of Special Warrants upon their
exercise; and (iii) THE DAY PRECEDING THE DATE THE LISTING OF
THE COMPANY'S COMMON SHARES ON THE TORONTO STOCK EXCHANGE
BECOMES EFFECTIVE, BEING THE TIME ITS COMMON SHARES ARE POSTED
FOR TRADING.
(d) If any Special Warrants have not been exercised by the holders
or repurchased by the Company during the Exercise Period, such
Special Warrants will be deemed to have been exercised by the
holders immediately prior to the Time of Expiry without any
further action on the part of such holders. If the
Qualification Deadline has not occurred on or prior to the
date that is 120 days following the Closing Date or such later
date as may be determined at the sole discretion of the Lead
Agent, each Special Warrant will be exercisable for 1.1 Units.
3
(e) Immediately upon receipt, the net proceeds from the Offering
(gross proceeds less the Agents' fees and expenses), will be
deposited in escrow with the Trustee on the Closing Date, to
be held in escrow pursuant to the Special Warrant Indenture
and will be released to the Company on the exercise or deemed
exercise of the Special Warrants, provided that certain
subscribers ("NON-ESCROWED SUBSCRIBERS") may agree to permit
the release of their subscription proceeds to the Company on
the Closing Date. The subscription proceeds from the balance
of the Subscribers ("ESCROWED SUBSCRIBERS") shall be held in
escrow as provided above. Notwithstanding the above, net
proceeds that are required to be deposited in escrow for the
purpose of obtaining approval to list the Company's common
shares on The Toronto Stock Exchange shall not be released to
the Company on the Closing Date, but shall be deposited in
escrow as provided above.
(f) In the event that a listing of the Company's common shares on
The Toronto Stock Exchange has not become effective by the
date that is six months following the Closing Date, then each
of the Escrowed Subscribers will be entitled, at their option
(the "Repurchase Option") until the Time of Expiry, to require
the Company to repurchase the Special Warrants held by such
holder, from legally available funds, plus such holder's
portion of the interest earned by the Trustee under the
Special Warrant Indenture. If the funds of the Company legally
available for repurchase of such Special Warrants are
insufficient to repurchase the total number of Special
Warrants to be repurchased, those funds which are legally
available will be used to repurchase the maximum number of
such Special Warrants rateably among the Escrowed Subscribers
who have exercised the Repurchase Option. Thereafter, as
additional funds of the Company become legally available for
such repurchase, such funds shall be used quarterly to
repurchase the Special Warrants until all Special Warrants
covered by exercised Repurchase Options have been exercised.
(g) The Subscriber acknowledges and agrees that the specific
rights of the holders of Special Warrants and the detailed
terms of the Special Warrants will be set forth in and subject
to the Special Warrant Indenture.
(h) Since the Company is not currently a "reporting issuer" in any
of the Canadian Jurisdictions or elsewhere in Canada, the
Special Warrants and the Unit Shares and Warrants issuable
upon the exercise or deemed exercise of the Special Warrants
will be subject to resale restrictions under the applicable
securities laws, rules, regulations and policies of the
Province of British Columbia, the jurisdiction in which the
Subscriber is resident, and any jurisdiction in which a
subsequent trade may be proposed, until such time as: (i) the
Company becomes a "reporting issuer" under such laws and the
appropriate "hold periods", if any, under such laws have
expired; (ii) a further statutory exemption from the
registration and prospectus requirements of such laws may be
relied upon by the holder; or (iii) an appropriate
discretionary order or ruling is obtained under such laws to
permit the transfer by the Subscriber of its securities. The
resale or other transfer of the Special Warrants, Unit Shares,
Warrants and the issuance of the Warrant Shares will also be
restricted under the 1933 ACT until the Registration Statement
has become effective. The Company does not expect that the
Company's common shares will be listed on any exchange or that
the Company will become a "reporting issuer" in any of the
Canadian Jurisdictions until the Registration Statement has
become effective.
The Company has agreed to use its reasonable best efforts to
file, clear, and obtain a receipt for the Prospectus in each
of the Canadian Jurisdictions set out as Qualifying
Jurisdictions in the Term Sheet. The Company has also agreed
to file and use its reasonable best efforts to prosecute to
effectiveness the Registration Statement. In the event that
the Company is unable to obtain a receipt for the Prospectus
in a Canadian Jurisdiction, the Special Warrants, Unit Shares,
Warrants and Warrant Shares (collectively the "SECURITIES")
will be subject to statutory resale restrictions under the
applicable securities legislation of that Canadian
Jurisdiction and the applicable hold period for such
Securities may never expire. Statutory restrictions may apply
on the resale of the Special Warrants, Unit Shares, Warrants
and Warrant Shares that are acquired prior to the issuance of
receipts for the Prospectus by the securities regulatory
authority in any of the Canadian Jurisdictions. In addition,
if the Company does not cause the Registration Statement to
become effective, the resale of the Special Warrants, Unit
Shares, Warrants and the issuance of the Warrant Shares will
continue to be restricted under the 1933 ACT and would be
permissible only in accordance with a statutory or regulatory
exemption from registration under the 1933 ACT. Subscribers
are advised to consult their own legal advisors in this
regard.
4
3. ACCEPTANCE AND REJECTION OF SUBSCRIPTION BY THE COMPANY
The Subscriber understands and agrees that the Company reserves the right, in
its absolute discretion, to reject the Subscriber's subscription for Special
Warrants in whole or in part, in any order, at any time prior to the Closing
Time (as defined in section 4 below) notwithstanding prior receipt by the
Subscriber of notice of acceptance of the Subscriber's subscription and, if
accepted only in part, a proportionate amount of the Aggregate Subscription
Price will be returned to the Subscriber without interest.
4. CLOSING
The closing of the Offering (the "CLOSING") will be completed at the offices of
Catalyst Corporate Finance Lawyers, Suite 1400, 0000 Xxxx Xxxxxxxx Xxxxxx,
Xxxxxxxxx, XX, X0X 0X0, at 9:00 a.m. (Vancouver time) (the "CLOSING TIME") on
March 27, 2001 or such other place or date or time as the Company and the Lead
Agent may mutually agree (the "Closing Date"), provided that delivery of the
signed Special Warrants and Special Compensation Options shall be made to the
Lead Agent's counsel, Fraser Xxxxxx Casgrain LLP, Suite 4100, 0 Xxxxx Xxxxxxxx
Xxxxx, Xxxxxxx, Xxxxxxx X0X 0X0, at or prior to that time. If by the Closing
Time, the terms and conditions contained in this Subscription Agreement and the
Agency Agreement have been complied with to the satisfaction of the Agents or
waived by them, the Agents will deliver to the Company all completed
Subscription Agreements, and will deliver to or to the direction of the Company,
the subscription funds against delivery by the Company of the Special Warrants
and such other documentation as may be required. If by the Closing Time, the
terms and conditions contained in this Subscription Agreement and the Agency
Agreement have not been complied with to the satisfaction of the Agents or
waived by them, any cheques or bank drafts delivered by the Subscriber to the
Agents representing the purchase price for Special Warrants will be promptly
returned to the Subscriber without interest.
5. FACSIMILED SUBSCRIPTIONS
The Company and the Agents will be entitled to rely on delivery by facsimile of
an executed copy of this Subscription Agreement, and acceptance by the Company
of such facsimile copy will be legally effective to create a valid and binding
agreement between you and the Company in accordance with the terms hereof.
6. CONDITIONS OF CLOSING
The sale of the Special Warrants to the Subscriber is subject to the following
conditions:
(a) Payment of the "Aggregate Subscription Price", as defined on
the face page hereof, shall be paid by you as soon as possible
and in any event no later than 12:00 noon (Toronto time) on
March 27, 2001. Payment must be made by certified cheque or
bank draft in Canadian dollars payable to "Loewen, Ondaatje,
XxXxxxxxxx Limited", "Acumen Capital Finance Partners
Limited", "Paradigm Capital Inc." or payable in such other
manner as may be specified by the Agents.
(b) One completed and signed copy of this Subscription Agreement
and one completed and signed Private Placement Questionnaire
and Undertaking for The Toronto Stock Exchange must be
delivered to Xxxxxxx Xxxxxxx at Loewen, Ondaatje, XxXxxxxxxx
Limited, Xxxxxxxx Lanes, East Tower, 00 Xxxxxx Xxxx, Xxxxx
0000, Xxxxxxx, XX X0X 0X0, Tel (000) 000-0000, Fax (416)
964-4333, as soon as possible, and in any event, no later than
4:00 p.m. (Toronto time) on March 26, 2001.
(c) If the Subscriber is an individual to whom paragraph 9(A)(3)
applies, the Subscriber must also complete, sign and deliver
the Form 20A(IP) in the form annexed to this Subscription
Agreement as SCHEDULE "B", as required by the British Columbia
Securities Commission to Xxxxxxx Xxxxxxx at Loewen, Ondaatje,
XxXxxxxxxx Limited, Xxxxxxxx Lanes, East Tower, 00 Xxxxxx
Xxxx, Xxxxx 0000, Xxxxxxx, XX X0X 0X0, Tel (000) 000-0000, Fax
(000) 000-0000, as soon as possible, and in any event, no
later than 4:00 p.m. (Toronto time) on March 26, 2001. The
Form 20A(IP) is required to be delivered by the Agents to the
Company at Closing.
(d) All necessary regulatory approvals must be obtained prior to
the Closing Date and all terms and conditions of this
Subscription Agreement, the Agency Agreement and Special
Warrant Indenture must be satisfied or waived on or prior to
the Closing Date.
5
7. AUTHORIZATION OF LEAD AGENT
The Subscriber irrevocably authorizes the Lead Agent, in its discretion, to act
as its representative at the Closing, and hereby appoints the Lead Agent, with
full power of substitution, as its true and lawful attorney with full power and
authority in its place and stead:
(a) to receive certificates for the Special Warrants, to execute
in its name and on its behalf all closing receipts and
required documents, to complete and correct any documents
relating to the transactions contemplated by this Subscription
Agreement that have been signed by the Subscriber and require
completion or correction;
(b) to extend such time periods and to waive, in whole or in part,
any representations, warranties, covenants or conditions for
the benefit of the Subscriber contained in this Subscription
Agreement, the Agency Agreement or any ancillary or related
document;
(c) to terminate this Subscription Agreement if any condition
precedent to the Offering is not satisfied, in such manner and
on such terms and conditions as the Lead Agent may determine,
acting reasonably; and
(d) without limiting the generality of the foregoing, to
negotiate, settle, execute, deliver and amend the Agency
Agreement, Special Warrant Indenture and Warrant Indenture.
8. PROSPECTUS EXEMPTION
The Subscriber acknowledges and agrees that the sale and delivery of the
purchased Special Warrants to the Subscriber is conditional upon such sale being
exempt from the prospectus and registration requirements of all Applicable
Securities Laws (as defined below) or upon the issuance of such orders, consents
or approvals of securities regulatory authorities as may be required to permit
such sale without the requirement for registration or filing a prospectus. The
Subscriber agrees to execute and deliver all documentation required by
Applicable Securities Laws to permit the purchase of the Special Warrants under
the terms of this Subscription Agreement.
You, on your own behalf (or on behalf of others for whom you are contracting)
acknowledge and agree that:
(a) you have received a term sheet in the form attached as
SCHEDULE "A" setting out the principal terms of this
Subscription Agreement and the Offering;
(b) the sale and delivery of the Special Warrants to the
Subscriber or, if applicable, to any others on whose behalf it
is contracting hereunder, is conditional upon such sale being
exempt from the prospectus filing and registration
requirements of all applicable securities legislation,
including statutes, regulations, national instruments,
published rules, policies, blanket orders, rulings and stock
exchanges (collectively, "APPLICABLE SECURITIES LAWS")
relating to the sale of the Special Warrants;
(c) the Special Warrants, Unit Shares, Warrants and Warrant Shares
will be subject to resale restrictions under Applicable
Securities Laws and are otherwise subject to the terms,
conditions and provisions of the Agency Agreement and the
Subscriber, on its own behalf and, if applicable, on behalf of
others for whom it is contracting hereunder, agrees to comply
with all Applicable Securities Laws concerning any resale of
such Securities;
(d) you have not requested or been provided with, nor do you have
any need to receive a prospectus or an offering memorandum as
defined in the Applicable Securities Laws or any similar
document in connection with your purchase of the Special
Warrants;
(e) your decision to execute this Subscription Agreement and
purchase Special Warrants (on your own behalf or on behalf of
others for whom you are contracting hereunder) has not been
based upon any verbal or written representations as to fact or
otherwise made by or on behalf of the Agents or the Company
and that your decision (or the decision of others for whom you
are contracting hereunder) is based entirely upon publicly
available information concerning the Company (any such
information having been obtained by you without independent
investigation or verification by the Agents);
6
(f) the Agents and their directors, officers, employees, agents
and representatives assume no responsibility or liability of
any nature whatsoever for the accuracy or adequacy of any such
publicly available information or as to whether all
information concerning the Company required to be disclosed by
them has been disclosed;
(g) the sale of the Special Warrants was not accompanied by any
advertisement in printed media of general and regular paid
circulation, radio, television or telecommunications,
including electronic display;
(h) you (or others for whom you are contracting hereunder) have
been advised to consult your own legal advisors with respect
to trading in the Securities and with respect to resale
restrictions imposed by the Applicable Securities Laws in the
jurisdiction in which you reside, that no representation has
been made respecting the applicable hold periods or other
resale restrictions applicable to such Securities, that you
(or others for whom you are contracting hereunder) are solely
responsible (and neither the Company nor the Agents are in any
way responsible) for compliance with applicable resale
restrictions and you are aware that you (or the beneficial
purchaser for whom you are contracting hereunder) may not be
able to resell such Securities except in accordance with
limited exemptions under Applicable Securities Laws;
(i) the Special Warrants will otherwise be subject to the terms,
conditions and provisions of the Agency Agreement and the
Special Warrant Indenture, and the Warrants will otherwise be
subject to the terms, conditions and provisions of the Agency
Agreement and the Warrant Indenture;
(j) for non-"U.S. PERSONS" (as defined in Regulation S under the
1933 ACT ("REGULATION S")) the offer and sale of Special
Warrants has been made, and the issuance of the Unit Shares
and Warrants (and Warrant Shares issued prior to the
effectiveness of a registration statement to be filed with
regard to such issuance) will be made, in reliance upon
Regulation S. Therefore, the Special Warrants, Unit Shares,
and Warrants, as well any such Warrant Shares, will be
"restricted securities" and as such may be resold or otherwise
transferred only in accordance with Regulation S or pursuant
to a registration under the 1933 ACT or an exemption from the
registration requirements of the 1933 ACT. Regulation S
requires that, for a period of one (1) year following the
Closing of the Offering, no offer or sale of a Special
Warrant, Unit Share, Warrant, or Warrant Share issued in
reliance on Regulation S may be made to a U.S. Person (which
has the meaning ascribed to that term in Regulation S) or for
the account of a U.S. Person. Regulation S also requires that
each Special Warrant, Unit Share, and Warrant (and each
Warrant Share issued prior to the effectiveness of a
Registration Statement to be filed with regard to the resale
of the Special Warrants, Unit Shares and Warrants and the
issuance of the Warrant Shares) bear a legend stating that the
Special Warrant, Unit Share or Warrant, or any such Warrant
Share, as the case may be, has not been registered under the
1933 ACT. Regulation S also requires that each Special Warrant
or Warrant bear a legend stating that the Special Warrant or
Warrant, and the securities to be issued upon its exercise,
have not been registered under the 1933 ACT and that the
Special Warrant or Warrant may not be exercised by or on
behalf of any U.S. Person unless registered under the 1933 ACT
or an exemption from such registration is available.
Each person exercising a Special Warrant or Warrant must
provide the Company with either (i) written certification that
it is not a U.S. Person and that the Warrant is not being
exercised on behalf of a U.S. Person, or (ii) a written
opinion of counsel satisfactory to the Company that the
issuance of securities upon exercise of the Special Warrant or
Warrant has been registered under the 1933 ACT and any
applicable State securities law or is exempt from
registration.
Regulation S also provides for the resale of securities which
are issued and outstanding. As noted above, the Special
Warrants, Unit Shares, Warrants, and Warrant Shares may be
resold only in compliance with Regulation S or pursuant to an
effective registration statement under the 1933 ACT or an
exemption from the registration requirements of the 1933 ACT.
Rule 904 of Regulation S provides that a resale of an
outstanding security may be made pursuant thereto if the offer
and sale of the security are made in an offshore transaction
and if no directed selling effort is made in the United States
with regard to the securities to be sold by the seller, an
affiliate of the seller, or any person acting on their behalf.
An offer or sale of securities is made in an "offshore
transaction" if the offer is not made to a person in the
United States and either (i) at the time the buy order is
originated, the buyer is outside the United States, or the
seller and any person acting on its behalf have good reason to
believe that the buyer is outside the United States and (ii)
the transaction is executed in, on or through the facilities
of a designated offshore securities
7
market and neither the seller nor any person acting on its
behalf knows that the transaction has been prearranged with a
buyer in the United States. Offers and sales of securities
specifically targeted at identifiable groups of United States
citizens abroad shall, in no event, be deemed to be made in an
offshore transaction. Rule 904 imposes additional limitations
on resales by dealers and persons receiving selling
concessions and affiliates of the issuer.
You are aware that Rule 144 under the 1933 ACT permits limited
public resales of securities acquired in non-public offerings,
subject to the satisfaction of certain conditions. You
understand that under Rule 144 the conditions include, among
other things: the availability of certain current public
information about the issuer, the resale occurring not fewer
than one (1) year or two (2) years, as applicable, after the
party has purchased and paid for the securities to be sold,
the sale being through a broker in an unsolicited "broker's
transaction" and the amount of securities being sold during
any three-month period not exceeding specified volume
limitations. You acknowledge and understand that the Company
may not be satisfying the current public information
requirement of Rule 144 at the time you wish to sell any of
the Securities, or other conditions under Rule 144 which are
required of the Company.
Each certificate evidencing a Special Warrant, Unit Share or
Warrant (and each Warrant Share issued prior to Registration
Statement effectiveness) will bear the following legend until
the applicable securities as represented by the certificate
are sold pursuant to either (i) a registration statement with
respect to such securities which is effective under the 1933
ACT, (ii) Rule 144 under the 1933 ACT, or (iii) Regulation S:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), NOR QUALIFIED UNDER OR PURSUANT TO THE
SECURITIES OR "BLUE SKY" LAWS OF ANY STATE NOR UNDER
OR PURSUANT TO THE SECURITIES LAWS OF ANY PROVINCE IN
CANADA. SUCH SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE
ASSIGNED, EXCEPT PURSUANT TO (i) A REGISTRATION
STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS
EFFECTIVE UNDER THE SECURITIES ACT, (ii) RULE 144 OR
RULE 144A UNDER THE SECURITIES ACT, IF AVAILABLE, OR
(iii) ANY OTHER EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT AND FROM QUALIFICATION UNDER ANY
SECURITIES LAWS APPLICABLE IN CANADA, IF AVAILABLE,
AND IN EACH CASE, IN COMPLIANCE WITH ANY APPLICABLE
STATE OR PROVINCIAL SECURITIES LAWS.
If such securities are being sold under Rule 904 of Regulation
S under the 1933 ACT and applicable state securities laws
("U.S. SECURITIES ACTS"), any legend may be removed by
providing a declaration to the Company, to the effect set out
in the attached SCHEDULE "D" (or in such other form as the
Company may prescribe from time to time); and provided,
further, that, if any such securities are being sold under
Rule 144 under the U.S. Securities Acts, the legend may be
removed by delivery to the registrar and transfer agent and
the Company of an opinion of counsel, of recognized standing
reasonably satisfactory to the Company, that such legends are
no longer required under applicable requirements of the U.S.
Securities Acts or state securities laws.
You understand and acknowledge that the Company may instruct
its transfer agent not to record a transfer without first
being notified by the Company that it is satisfied that such
transfer is exempt from or not subject to registration under
the U.S. Securities Acts;
(k) you agree that the Company and/or the Agents may be required
by law or otherwise to disclose to regulatory authorities your
identity and the identity of each beneficial purchaser of
Special Warrants for whom you may be acting, including without
limitation, being listed as a "Selling Shareholder" in the
Registration Statement and disclosing the number of Securities
beneficially owned, and you further agree to fully cooperate
with the Company and/or the Agents in this regard and to
provide the identity of each
8
beneficial purchaser of Special Warrants for whom you may
be acting, if required, to the Company and/or the Agents;
and
(l) notwithstanding the foregoing, none of the Special Warrants
or Warrants may be offered, sold, transferred, pledged,
hypothecated or otherwise assigned, until the Registration
Statement becomes effective, without the prior written
consent of the Company and each certificate evidencing a
Special Warrant or Warrant will bear the following legend
until either (A) the Registration Statement becomes
effective or (B) the Special Warrant is sold pursuant to a
transaction that is one (1) year or greater subsequent to
the Closing of the Offering, in accordance with either (i)
a registration statement with respect to such securities
which is effective under the 1933 ACT, (ii) Rule 144A under
the 1933 ACT, or (iii) in reliance upon Regulation S and in
compliance with Applicable Securities Laws:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN THE
SUBSCRIPTION AGREEMENT BETWEEN VOICE MOBILITY
INTERNATIONAL, INC. (THE "COMPANY") AND THE
PURCHASER, AND THE SPECIAL WARRANT INDENTURE AMONG
THE COMPANY AND THE TRUSTEE AND SPECIFICALLY MAY NOT
BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED
OR OTHERWISE ASSIGNED, PRIOR TO EFFECTIVENESS OF A
REGISTRATION STATEMENT UNDER THE 1933 ACT, EXCEPT
WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
9. SUBSCRIBERS' REPRESENTATIONS, WARRANTIES AND COVENANTS
By your acceptance of this Subscription Agreement, you hereby represent, warrant
and covenant to each of the Agents and the Company (which representations,
warranties and covenants shall survive Closing) that:
A. You are purchasing the Special Warrants as principal for your
own account, and not for the benefit of any other person or
company and not with a view to the resale or distribution of
all or any of the Special Warrants, and this Subscription
Agreement has been authorized, executed and delivered by you,
and constitutes your legal, valid and binding agreement, and
you are:
(1) one of the following:
(i) if subject to applicable securities
legislation of the Province of Alberta:
(a) a bank, loan corporation, trust
corporation, treasury branch or
credit union or a subsidiary of
such an entity where such entity
owns beneficially all of the voting
securities of that subsidiary; or
(b) an insurance company licensed under
the INSURANCE ACT (Alberta) or a
subsidiary of such insurance
company where such insurance
company owns beneficially all of
the voting securities of the
subsidiary;
(ii) if subject to applicable securities
legislation of the Province of Ontario:
(a) a loan corporation or trust
corporation registered under the
LOAN AND TRUST CORPORATIONS ACT
(Ontario); or
(b) an insurance company licensed under
the INSURANCE ACT (Ontario); or
(c) a bank listed in Schedule I or II
to the BANK ACT (Canada);
(iii) if subject to applicable securities
legislation of the Province of British
Columbia:
(a) a bank to which the BANK ACT
(Canada) applies or a credit union
authorized to carry on business
under the FINANCIAL INSTITUTIONS
ACT (British Columbia);
9
(b) a trust company, or
extra-provincial trust corporation
authorized to carry on deposit
business under the FINANCIAL
INSTITUTIONS ACT (British
Columbia);
(c) a corporation that is a subsidiary
of a bank and is a loan company to
which the TRUST AND LOAN COMPANIES
ACT (Canada) applies;
(d) an insurance company or an
extra-provincial insurance
corporation authorized to carry on
insurance business under the
FINANCIAL INSTITUTIONS ACT (British
Columbia);or
(e) a subsidiary of any of the above if
that person owns beneficially all
of the voting securities of the
subsidiary except the voting
securities required by law to be
owned by directors of that
subsidiary; or
(2) recognized or designated as an exempt purchaser under
applicable securities legislation of the provinces of
British Columbia, Alberta or Ontario, and, if subject
to the securities legislation of the Province of
Ontario or British Columbia, you are not an
individual; or
(3) an individual or a corporation and are purchasing a
sufficient number of Special Warrants such that the
aggregate acquisition cost to you of such Special
Warrants is not less than $150,000 if subject to the
securities legislation of the province of Ontario or
$97,000 if subject to the securities legislation of
the provinces of Alberta or British Columbia.
B. In the case of the purchase by you of Special Warrants as
agent for a disclosed principal, each beneficial purchaser of
the Special Warrants for whom you are acting is purchasing as
principal for its own account and not for the benefit of any
other person; you are an agent with due and proper authority
to execute this Subscription Agreement and all other
documentation in connection with the purchase of the Special
Warrants on behalf of the beneficial purchaser; this
Subscription Agreement has been duly authorized, executed and
delivered by or on behalf of, and constitutes the legal, valid
and binding agreement of, the disclosed principal and the
beneficial purchaser:
(1) is recognized or designated as an exempt purchaser
under applicable Canadian provincial securities
legislation and, if subject to the securities
legislation of the Province of Ontario or British
Columbia, is not an individual; or
(2) is purchasing a sufficient number of Special Warrants
such that the aggregate acquisition cost to each
beneficial purchaser of such Special Warrants is not
less than $150,000 if subject to the securities
legislation of the province of Ontario or $97,000 if
subject to the securities legislation of the
provinces of Alberta or British Columbia.
C. In the case of the purchase by you of Special Warrants as
trustee or as agent for a principal where you cannot make the
representation set forth in subparagraph 9(B) of this
Subscription Agreement (an undisclosed principal), this
Subscription Agreement has been duly authorized, executed and
delivered by you, and constitutes your legal, valid and
binding agreement, acting in such capacity, and either:
(1) (i) if subject to applicable securities legislation
of the Province of Alberta, you are:
(a) a trust corporation, as defined in such
securities legislation, trading as a trustee
or an agent; or
(b) a portfolio manager, as defined in such
securities legislation, trading as an agent;
or
(c) a person or a company trading as an agent
that, except for an exemption under Alberta
securities laws, is required to be
registered as a portfolio manager under
Applicable Securities Laws,
10
trading for accounts that are fully managed by you
and you are purchasing a sufficient number of
Special Warrants such that the aggregate
acquisition cost to you of such Special Warrants
is not less than $97,000;
(ii) if resident in or otherwise subject to the securities
legislation of the Province of British Columbia, you
are purchasing Special Warrants having an aggregate
acquisition cost of not less than $97,000 and you are
acting as:
(a) a trust company or an extra-provincial trust
corporation authorized under the FINANCIAL
INSTITUTIONS ACT (British Columbia) or the
laws of a province of Canada other than
British Columbia to carry on trust business,
deposit business or both; or
(b) an insurance company or an extra-provincial
insurance corporation authorized to carry on
insurance business under the FINANCIAL
INSTITUTIONS ACT (British Columbia) or the
laws of a province of Canada other than
British Columbia; or
(c) either (i) an advisor who manages the
investment portfolio of clients through
discretionary authority granted by one or
more clients and who is registered as a
portfolio manager under the SECURITIES ACT
(British Columbia) or the laws of a province
of Canada other than British Columbia or is
exempt from such registration, or (ii) a
person that carries on business as a
portfolio manager in a jurisdiction other
than Canada and the total asset value of the
investment portfolios you manage on behalf
of clients is not less than $20,000,000 and
you complete and file the form attached as
SCHEDULE "E" with the British Columbia
Securities Commission on or before the 10th
day after the Closing;
as trustee or agent for accounts fully managed by you
in respect of which accounts you make the investment
decisions for the account and have full discretion to
purchase or sell securities for the account without
requiring your client's express consent to the
transaction; and (iii) if subject to the applicable
securities legislation of the Province of Ontario,
you are:
(a) a trust company registered under the LOAN
AND TRUST CORPORATIONS ACT (Ontario) and are
purchasing the Purchased Warrants as trustee
or as agent for accounts that are fully
managed by you; or
(b) a portfolio adviser purchasing the Special
Warrants on behalf of a managed account in
accordance with Ontario Securities
Commission Rule 45-504;
D. If you are an individual, or any beneficial purchaser for whom
you are acting is an individual, you have attained the age of
majority and are legally competent to execute this
Subscription Agreement and to take all actions required
pursuant to this Subscription Agreement and if you, or any
beneficial purchaser for whom you are acting, is a
corporation, partnership, unincorporated association or other
entity, you, or such beneficial purchaser, as the case may be,
have the legal capacity and competence to enter into and be
bound by this Subscription Agreement and you further certify
that all necessary approvals of directors, shareholders or
otherwise have been given and obtained.
E. If you are not a resident of or are not otherwise subject to
the securities legislation of Alberta and if you or a party on
whose behalf you are acting has been created or is being used
primarily to permit the purchase of the Special Warrants
without a prospectus, and you or any such party is a
partnership, syndicate, unincorporated organization, trust,
company, fund or association or any other organized group of
persons, the share or portion of each member or partner of the
partnership, syndicate or unincorporated organization, or each
beneficiary of the trust, or each shareholder or member of the
company, fund or association or the organized group of
persons, as the case may be, of the aggregate acquisition cost
of the Special Warrants is not less than $150,000 if subject
to the securities legislation of the province of Ontario or
$97,000 if subject to the securities legislation of the
province of British Columbia.
11
F. If you or any party on whose behalf you are acting is an
investment club resident in the province of Ontario, the share
or portion of each member of the investment club of the
aggregate acquisition cost of the Special Warrants to the
investment club is not less than $150,000.
G. Subject to paragraph 9(E) or 9(H) hereof, neither you nor any
party on whose behalf you are acting has been created or is
being used primarily to permit the purchase of the Special
Warrants without a prospectus.
H. If you are a resident of, or are otherwise subject to the
securities legislation of Alberta and you are a corporation,
syndicate, partnership or other form of unincorporated
organization, you pre-existed the offering of the Special
Warrants and have a bona fide purpose other than investment in
the Special Warrants or, if created to permit such investment,
the individual share of the aggregate acquisition cost for
each participant is not less than $97,000.
I. As the Securities are subject to resale restrictions under
Applicable Securities Laws in Canada, you, or in the case of a
purchase by you acting as agent for a disclosed or undisclosed
principal, each beneficial purchaser, shall comply with all
Applicable Securities Laws concerning any resale of the
Securities (and neither the Company nor the Agents are in any
way responsible for such compliance) and shall consult with
your own legal advisors with respect to such compliance, and
if you are a resident of, or are otherwise subject to the
securities legislation of Alberta, you acknowledge that you
must file a report on Form 21 with the Alberta Securities
Commission within 10 days of each disposition of all or any
part of the Special Warrants, Warrants, Unit Shares or Warrant
Shares.
J. You (or, if applicable, others for whom you are contracting
hereunder) will execute and deliver within the applicable time
periods all documentation as may be required by Applicable
Securities Laws in Canada to permit the purchase of the
Special Warrants on the terms set out in this Subscription
Agreement.
K. You are purchasing the Special Warrants for investment only
and not with a view to resale or distribution and you will not
resell or otherwise transfer or dispose of the Special
Warrants prior to the receipt for a final prospectus (as
defined above) except in accordance with the provisions of
Applicable Securities Laws.
L. If required by any Applicable Securities Laws, policy or order
of a securities regulatory authority, stock exchange or other
regulatory authority, you will promptly upon request by the
Company or any of the Agents execute, deliver, file and
otherwise assist the Company in filing such reports,
undertakings and other documents with respect to the issuance
of the Securities as may be required.
M. You will execute and deliver no later than 4:00 p.m. (Toronto
time) on March 26, 2001, all documentation as may be required
by all Applicable Securities Laws to permit the purchase of
the Special Warrants hereunder on the terms as set forth
herein, including without limitation if the Subscriber is an
individual to whom paragraph 9(A)3 applies, the Form 20A (IP)
in the form attached as SCHEDULE "B", as required by the
British Columbia Securities Commission.
N. You and each beneficial purchaser for whom you are acting: (i)
are resident in the province set out on the face page of this
Subscription Agreement, or (ii) are a citizen or resident of
Canada, or a corporation, partnership or other entity created
in or organized under the laws of Canada or any province or
territory thereof (collectively, a "CANADIAN PERSON"), or
(iii) are resident outside of Canada and the United States, or
(iv) are a corporation, partnership or other entity
incorporated and resident outside of Canada and the United
States.
O. If you, or any beneficial purchaser for whom you are
contracting hereunder, with the consent of the Company, sell
or otherwise dispose of the Special Warrants, you, or the
beneficial purchaser for whom you are contracting hereunder,
shall obtain from the subsequent purchaser thereof the same
representations, warranties and covenants as given by you
hereunder, and the subsequent purchaser shall provide such
representations or warranties and covenants for the benefit of
the Company.
P. If you, or each beneficial purchaser for whom you are acting
hereunder, are not a Canadian person, the purchase of the
Special Warrants by you, or such beneficial purchaser, does
not contravene any of the
12
Applicable Securities Laws in the jurisdiction in which you
and such beneficial purchaser are resident and does not
trigger (i) any obligation to prepare and file a prospectus or
similar document, or any other report with respect to such
purchase, and (ii) any registration or other obligation on the
part of the Agents.
Q. The delivery of this Subscription Agreement, the acceptance of
it by the Company, the issuance of the Special Warrants to the
Subscriber and the acquisition of the Unit Shares and Warrants
upon exercise of the Special Warrants comply with all
applicable laws of the Subscriber's jurisdiction of residence
or domicile and all other applicable laws and will not cause
the Company to become subject to or comply with any
disclosure, prospectus or reporting requirements under any
such applicable laws.
R. You hereby acknowledge that no prospectus has been filed by
the Company with a securities commission or other securities
regulatory authorities in any province of Canada or any other
jurisdiction in connection with the issuance of the Special
Warrants and such issuance is exempted from the prospectus
requirements available under the provisions of Applicable
Securities Laws and as a result:
(i) you are restricted from using most of the civil
remedies available under the Applicable Securities
Laws in respect of your purchase of the Special
Warrants;
(ii) you may not receive information that would otherwise
be required to be provided to you under the
Applicable Securities Laws or contained in a
prospectus prepared in accordance with the Applicable
Securities Laws; and
(iii) the Company is relieved from certain obligations that
would otherwise apply under the Applicable Securities
Laws.
S. No person has made to you any written or oral representations:
(i) that any person will resell or repurchase the Special
Warrants or the Unit Shares or Warrants;
(ii) that any person will refund the purchase price of the
Special Warrants; or
(iii) as to the future price of the Special Warrants or the
Unit Shares or Warrants.
T. The Securities will be subject to the following resale or
transfer restrictions:
(i) the Securities will be subject to resale restrictions
under Applicable Securities Laws;
(ii) you will not be able to resell, assign or otherwise
dispose of the Securities unless they are
subsequently distributed under a prospectus or in
compliance with all Applicable Securities Laws;
(iii) the Company may be required to legend the
certificates representing the Securities regarding
these and any other restrictions on resale.
U. If, for any reason, the offering of Special Warrants is
terminated or your subscription is rejected, you will have no
claims against the Company, its directors and officers,
shareholders, agents, advisors, and affiliates and shall have
no interest in the Company or any property or assets of the
Company.
V. The Special Warrants are not being purchased by you as a
result of you being aware of any material information
concerning the Company that has not been publicly disclosed
and the Subscriber's decision to tender this offer and
purchase the Special Warrants has not been made as a result of
any verbal or written representation as to fact or otherwise
(including that any person will resell or repurchase, or
refund the purchase price of, the Special Warrants other than
in accordance with their terms or as to the future price or
value of the Special Warrants, Unit Shares, Warrants or
Warrant Shares) made by or on behalf of the Company, the
Agents or any other person and is based entirely upon
currently available public information concerning the Company.
13
W. In evaluating the merits and risks of an investment in the
Special Warrants, you have relied solely upon publicly
available information relating to the Company and the advice
of your legal, tax and investment advisors and not in any way
upon Catalyst Corporate Finance Lawyers or any oral or written
statement made by, or on behalf of, the Company or its
advisors.
X. YOU ARE RESPONSIBLE FOR OBTAINING YOUR OWN LEGAL, INVESTMENT
AND TAX ADVICE.
Y. You are capable of assessing the proposed investment as a
result of your financial or investment experience or as a
result of advice received from a registered person other than
the Company or an affiliate thereof, and are able to bear the
economic loss of your investment.
Z. The execution and delivery of this Subscription Agreement and
the performance and compliance with the terms hereof will not
result in any breach, 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, will constitute a default under, any
term or provision of your constating documents, by-laws or
resolutions (if you are a corporation) or any indenture,
contract, agreement (whether written or oral), instrument or
other document to which you are a party or to which you are
subject, or any judgement, decree, order, statute, rule or
regulation applicable to you.
AA. You are not a U.S. Person, as defined in Regulation S of the
SEC; you will resell the Securities only in accordance with
the provisions of Regulation S, pursuant to a registration
under the 1933 ACT or pursuant to an available exemption from
registration; and you will not engage in hedging transactions
with regard to the Securities other than in compliance with
the 1933 ACT.
BB. You are responsible for obtaining legal advice as to and will
comply in all respects with the prospectus delivery
requirements under applicable securities laws in connection
with any sale by you of the Unit Shares, the Warrants and the
Warrant Shares.
CC. In connection with its obligations under Section 11(a) of this
Subscription Agreement, the Company may require you to furnish
to the Company such information regarding you and the
distribution of the securities covered by the Registration
Statement (the "REGISTRABLE SHARES") as the Company may from
time to time reasonably request in writing and such other
information as may be legally required in connection with such
registration. You agree, by your acquisition of Registrable
Shares and acceptance of the benefits provided to it
hereunder, to furnish promptly to the Company all information
required to be disclosed in order to make any previously
furnished information not materially misleading. You agree
that upon receipt of any notice from the Company of the
happening of any event of the kind described herein requiring
the cessation of the distribution of a prospectus or the
distribution of a supplemented or amended prospectus, you will
forthwith discontinue disposition of Registrable Shares
pursuant to the Registration Statement covering such
Registrable Shares until your receipt of the copies of the
supplemented or amended prospectus, or until it is advised in
writing by the Company that the use of the prospectus may be
resumed, and, if so directed by the Company, you will deliver
to the Company (at the Company's expense) all copies, other
than permanent file copies then in your possession, of the
prospectus covering such Registrable Shares current at the
time of receipt of such notice. Except as set forth below, the
Company agrees to indemnify and hold you harmless, and each of
your directors, officers, employees, agents, and each person,
if any, who controls the Subscriber within the meaning of the
1933 ACT, against any losses, claims, damages, or liabilities
to which such indemnified person may become subject under the
1933 ACT or otherwise, insofar as such losses, claims,
damages, or liabilities arise out of or are based upon any
untrue or alleged untrue statement of any material fact
contained in said Registration Statement, or any preliminary
prospectus, final prospectus, or amendment or supplement
related thereto, or arise out of or are based upon the
omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading. You agree to indemnify and
hold harmless the Company, each of its directors, each of its
officers who have signed the Registration Statement,
employees, agents and each person, if any, who controls the
Company within the meaning of the 1933 ACT against any losses,
claims, damages or liabilities to which such indemnified
person may become subject, under the 1933 ACT or otherwise,
insofar as such losses, claims, damages or liabilities arise
out of or are based upon any untrue or alleged untrue
statement of any material fact contained in said Registration
Statement, or any preliminary
14
prospectus, final prospectus, or amendment or supplement
related thereto, or arise out of or are based upon the
omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein not misleading in each case, to
the extent, but only to the extent that such untrue
statement or alleged untrue statement or omission or
alleged omission was made in said registration statement,
said preliminary prospectus, said final prospectus or said
amendment or supplement in reliance upon and in conformity
with written information furnished by you specifically for
use in the preparation thereof, and provided further that
your liability pursuant to this paragraph 9(CC) shall be
limited to the amount of your investment in the Company as
reflected in the Registration Statement.
DD. You acknowledge that you have been advised that as a "selling
shareholder" under the Registration Statement, you might be
deemed to be an underwriter within the meaning of Section
2(11) of the 1933 ACT and any profit on the resale of the
securities might be deemed to be underwriting discounts and
commissions under the 1933 ACT.
EE. You acknowledge and agree that in addition to any other
applicable laws or regulations, as a "selling shareholder"
under the Registration Statement, you will comply with
regulations relating to distributions by selling shareholders,
including Regulation M under the SECURITIES EXCHANGE ACT OF
1934 (the "1934 ACT"). Regulation M prohibits selling
shareholders from offering to purchase and purchasing the
common stock of the Company at certain periods of time
surrounding their sales of Securities under the Registration
Statement. Regulation M attempts to prevent selling
shareholders who are engaged in a distribution from
manipulating the market. In addition, you acknowledge some
U.S. States may require that registration, exemption from
registration or notification requirements be met before
selling shareholders may sell their common stock. Some states
may also require selling shareholders to sell their common
stock only through broker-dealers.
10. COMPANY'S REPRESENTATIONS AND WARRANTIES
Except as disclosed in writing to the Agents prior to the Closing, the Company
represents and warrants to the Subscriber (which representations and warranties
shall survive for a period of two (2) years following the Closing) as follows:
(a) ORGANIZATION AND STANDING. The Company is a corporation duly
organized and validly existing under the laws of the State of
Nevada and is in good standing under such laws. The Company
has the requisite corporate power and authority to own and
operate its properties and assets and to carry on its business
as currently conducted and as proposed to be conducted.
(b) CORPORATE POWER. The Company will have at the Closing Date all
requisite legal and corporate power and authority to execute
and deliver this Subscription Agreement, to sell and issue the
Special Warrants, and to carry out and perform its obligations
under the terms of this Subscription Agreement.
(c) AUTHORIZATION. All corporate action on the part of the
Company, its directors, and its shareholders necessary for the
authorization, execution, delivery, and performance of this
Subscription Agreement, the Special Warrant Indenture and the
Warrant Indenture (collectively, the "TRANSACTION DOCUMENTS")
by the Company will be taken prior to the Closing. The
Transaction Documents, when executed and delivered by the
Company, will, to the best of the Company's knowledge,
constitute valid and binding obligations of the Company
enforceable in accordance with their respective terms. The
Unit Shares issuable on exercise of the Special Warrants have
been or will be prior to the Closing allotted and, when
issued, will be validly issued, fully paid and non-assessable.
(d) NO CONFLICT. The issuance and sale of the Special Warrants by
the Company does not and will not conflict with and does not
and will not result in a breach of any of the terms,
conditions or provisions of its constating documents or any
material agreement or material instrument to which the Company
is a party.
(e) NO ACTIONS, SUITS OR PROCEEDINGS. As at the Closing Date, the
Company is not a party to any actions, suits or proceedings
which could reasonably be expected to materially affect its
business or financial condition, and to the best of the
Company's knowledge no such actions, suits or proceedings are
contemplated or have been threatened.
15
(f) NO JUDGMENTS. As at the Closing Date, there are no judgments
against the Company which are unsatisfied, nor are there any
consent decrees or injunctions to which the Company is
subject.
(g) NO DEFAULT. As at the Closing Date, the Company is not in
default of any material requirements of the SECURITIES ACT
(British Columbia), the SECURITIES ACT (Alberta), the
SECURITIES ACT (Ontario), the 1933 ACT or the 1934 ACT.
(h) NO ORDER. No order ceasing or suspending trading in securities
of the Company nor prohibiting the sale of such securities has
been issued and remains outstanding against the Company or its
directors, officers or promoters and no investigations or
proceedings for such purposes are pending or threatened.
11. COMPANY'S COVENANTS
The Company hereby covenants and agrees and, in the Agency Agreement and/or the
Special Warrant Indenture, the Company will covenant and agree as follows:
(a) to use its commercially reasonable best efforts (i) to cause a
Registration Statement to be filed and prosecuted to
effectiveness, (ii) to cause the preliminary prospectus of the
Company relating to the distribution of the Unit Shares and
Warrants (the "PRELIMINARY PROSPECTUS") to be filed and (iii)
to obtain receipts for the final Prospectus, as expeditiously
as reasonably practicable after the Closing Date, in each case
in form and substance satisfactory to the Company and the
Agents, acting reasonably;
(b) to use its reasonable best efforts to promptly comply with all
filing and other requirements under all Applicable Securities
Laws, including, where required by the Agency Agreement or any
Applicable Securities Laws, the filing of amendments to the
Preliminary Prospectus and Prospectus in each of the Canadian
Jurisdictions; and
(c) to use its commercially reasonable best efforts to maintain
its status as a reporting issuer (or analogous entity) under
the Applicable Securities Laws of such provinces in which it
becomes a reporting issuer (or analogous entity) as a result
of filing the Prospectus as required under the Agency
Agreement and to continue to be in compliance with its
obligations thereunder, without default, for a period of at
least one year from the date of the filing of the Prospectus
in each Canadian Jurisdiction.
In addition, the covenants of and terms applicable to the Company set out in the
Agency Agreement are hereby incorporated into this section as additional
covenants of the Company.
12. RESALE RESTRICTIONS
The Subscriber, on its own behalf and, if applicable, on behalf of others for
whom it is contracting hereunder, understands and acknowledges that the Special
Warrants, Unit Shares, Warrants and Warrant Shares will be subject to certain
resale restrictions under the Applicable Securities Laws (including United
States federal and state securities laws) and the Subscriber, on its own behalf
and, if applicable, on behalf of others for whom it is contracting hereunder,
agrees to comply with such restrictions. The Subscriber understands and
acknowledges that the resale of the Unit Shares and the Warrants and the
issuance of the Warrant Shares has not yet been registered with the SEC and
accordingly is restricted in the U.S. The Subscriber further understands and
acknowledges that the Company is not currently a "reporting issuer" in any
Canadian jurisdiction and that holders of securities of the Company may not be
able to sell such securities for an indefinite period of time without the
Prospectus being filed and a receipt obtained therefor. Subscribers are advised
to consult their own legal advisors in this regard. The Subscriber, on its own
behalf and, if applicable, on behalf of others for whom it is contracting
hereunder, 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 (and neither the Company nor
the Agents are in any manner responsible for ensuring compliance by the
Subscriber with such restrictions).
13. RELIANCE UPON REPRESENTATIONS AND WARRANTIES
The Subscriber acknowledges that the representations and warranties contained in
this Subscription Agreement are made by it with the intent that they may be
relied upon by the Company in determining the Subscriber's eligibility to
purchase the Special Warrants, and the Subscriber hereby agrees to indemnify the
Company and its directors, officers, employees and agents against all losses,
claims, costs, expenses and damages or liabilities that they may suffer or incur
caused or arising from their reliance thereon. The foregoing representations and
warranties survive the purchase by the Subscriber of the Special Warrants and
continue in full force and effect as set forth in section 14.
16
14. SURVIVAL
This Subscription Agreement, including without limitation the representations,
warranties and covenants contained herein, survives and continues in full force
and effect and is binding upon the Subscriber for a period of three years,
notwithstanding the completion of the purchase of the Special Warrants by the
Subscriber, the completion of the issue of the Special Warrants by the Company
and any subsequent disposition by the Subscriber of the Securities.
15. CONTRACTUAL RIGHTS OF ACTION
By its acceptance of this Subscription Agreement, the Company grants to each
Subscriber the contractual right of action for rescission in the form set out in
SCHEDULE "C" and the Subscriber agrees to assign and explicitly extend the
benefit of such right (but without liability to a purchaser) to any permitted
assignee or transferor of the Special Warrants. The above rights are in addition
to any other rights or remedies available to the Special Warrant holder under
section 130 of the SECURITIES ACT (Ontario), equivalent provisions of the
securities legislation of any other province of Canada in which purchasers of
Special Warrants are resident and otherwise at law, and are subject to the
defences described under such legislation. The Subscriber expressly waives and
releases the Company, to the fullest extent permitted by law, from all rights of
withdrawal to which the Subscriber might otherwise be entitled pursuant to
subsection 71(2) of the SECURITIES ACT (Ontario) and equivalent provisions of
the securities legislation of any other province of Canada.
16. COMMISSION TO THE AGENTS
You understand that upon completion of the sale by the Company of the Special
Warrants, the Lead Agent, on behalf of the Agents, will receive from the Company
on the Closing Date a cash commission (the "COMMISSION") equal to 7% of the
gross proceeds from the Offering.
In addition, subject to regulatory approval, the Company will grant to the
Agents a special compensation option (the "SPECIAL COMPENSATION OPTION")
exercisable for a compensation option (the "COMPENSATION OPTION") which, upon
exercise will entitle the Agent to purchase the number of Units equal to 10% of
the total number of Special Warrants sold at a price per Unit that is equal to
the Issue Price of each Special Warrant, for a period of two years from the
Closing Date.
17. COSTS
You acknowledge and agree that, except as specified in the Agency Agreement, all
costs and expenses incurred by you (including any fees and disbursements of any
special counsel retained by you) relating to the purchase of the Special
Warrants by you shall be borne by you.
18. ASSIGNMENT
None of the parties to this Subscription Agreement may assign any rights or
benefits under this Subscription Agreement, including the benefit of any
representation, warranty or covenant, without the prior written consent of the
other parties.
19. ENUREMENT
This Subscription Agreement enures to the benefit of and is binding upon the
parties and their respective heirs, executors, administrators and other legal
representatives, successors (including any successor by reason of amalgamation
or statutory arrangement of any party) and permitted assigns.
20. ENTIRE AGREEMENT
This Subscription Agreement constitutes the entire agreement of the parties
relating to the subject matter hereof and there are no representations,
covenants or other agreements relating to the subject matter hereof except as
stated or referred to in this Subscription Agreement.
21. LANGUAGE
The undersigned hereby acknowledges that it has consented and requested that all
documents evidencing or relating in any way to the sale of the Special Warrants
be drawn up in the English language only. Nous, soussignes, reconnaissons par
les presentes avoir consenti et demande que tous les documents faisant foi ou se
rapportant de quelque maniere a la vente de ces actions soient rediges en
anglais seulement.
17
22. TIME OF ESSENCE
Time is of the essence of this Subscription Agreement.
23. COUNTERPARTS, ETC.
This Subscription Agreement may be executed in several counterparts, each of
which when so executed is deemed to be an original and such counterparts
together constitute one and the same instrument. Counterparts may be executed
either in original or faxed form and the parties adopt any signatures received
by a receiving fax machine as original signatures of the parties.
24. EFFECT OF HEADINGS
The section and paragraph headings herein are for convenience only and do not
affect the construction hereof.
25. SEVERABILITY
The invalidity or enforceability of any provisions hereof in no way affect the
validity or enforceability of any other provision.
26. GOVERNING LAW
This Subscription Agreement is governed by the laws of the Province of British
Columbia and the laws of Canada applicable therein. The Subscriber irrevocably
attorns to the non-exclusive jurisdiction of the court of the Province of
British Columbia.
27. CURRENCY
All references in this Agreement to currency amounts are indicated in terms of
Canadian dollars.
18
SCHEDULE "A"
VOICE MOBILITY INTERNATIONAL, INC.
TERM SHEET
THE ISSUER: Voice Mobility International, Inc. (the "Company").
OFFERING: Special Warrants at a price of Cdn.$2.00 per Special Warrant (the "Issue Price") for aggregate gross
proceeds of up to Cdn. $15,000,000.
TERMS OF SPECIAL WARRANTS: Each Special Warrant is exercisable, without payment of additional consideration, into one Unit of the
Company (a "Unit"). Each Unit consists of one Common Share (a "Unit Share") and one-half Warrant of
the Company. Each whole Warrant (a "Warrant") entitles the holder to acquire one Common Share (a
"Warrant Share") at a price of Cdn.$2.25 at any time on or before a date which is two years from the
Closing Date. The Units, Unit Shares, Warrants and Warrant Shares are collectively referred to as the
"Underlying Securities").
MINIMUM SUBSCRIPTION 75,000 Special Warrants (Cdn.$150,000) in the Province of Ontario and such other minimum number of
Special Warrants as is prescribed by securities legislation in other Qualifying Jurisdictions.
CLOSING DATE: March 27, 2001, or such other date as is agreed upon by the Lead Agent and the Company
(the "Closing Date").
QUALIFYING JURISDICTIONS: Ontario, British Columbia, Alberta, the United States of America (and such other jurisdictions as are
agreed upon by the Company and the Lead Agent).
SPECIAL WARRANTS: The Special Warrants will be issued pursuant to a special warrant indenture containing standard
anti-dilution protections (including in the case of dividends paid in the ordinary course), which
protections will be operative from the Closing Date. The Special Warrants are exercisable by the
holders thereof at any time after their issuance and, if not previously exercised or repurchased,
will be deemed to be exercised immediately prior to 4:30 p.m. (Toronto time) on the business day
(the "Qualification Deadline") which is the latest of: (i) the date a registration statement with
regard to the resale of the Special Warrants, Unit Shares and Warrants and the issuance of the Warrant
Shares is declared effective by the United States Securities and Exchange Commission under the UNITED
STATES SECURITIES ACT OF 1933, as amended, and (ii) the date a receipt is issued by the last of the
securities regulatory authorities in each of the jurisdictions in Canada set out as Qualifying
Jurisdictions in the Term Sheet where purchasers of Special Warrants are resident as at the Closing
Date for a final prospectus qualifying the issuance of the Unit Shares and the Warrants for
distribution in the Canadian Jurisdictions; and (iii) the day preceding the date the listing of the
Company's common shares on The Toronto Stock Exchange becomes effective, being the time its common
shares are posted for trading.
ESCROW: The net proceeds (gross proceeds less Agents' fees and expenses) from the sale of the Special Warrants
will be deposited in escrow with a trust company mutually agreeable to the Company and the Lead Agent,
to be released to the Company on the exercise or deemed exercise of the Special Warrants, provided
that certain subscribers ("Non-Escrowed Subscribers") may agree to permit the release of their
subscription proceeds to the Company on the Closing Date. The subscription proceeds from the balance
of the Subscribers ("Escrowed Subscribers") shall be held in escrow as provided above. Notwithstanding
the above, net proceeds that are required to be deposited in escrow for the purpose of obtaining
approval to list the Company's common shares on The Toronto Stock Exchange shall not be released to
the Company on the Closing Date, but shall be deposited in escrow as provided above.
A-1
EXCHANGE, PENALTY AND
REPURCHASE PROVISIONS: The Company will use its best efforts to file a prospectus qualifying the Unit Shares and Warrants to
be issued in exchange for the Special Warrants in Ontario (and such other provinces as may be agreed
to by the Company and the Lead Agent) as soon as practicable after the Closing Date. If the
Qualification Deadline has not occurred on or prior to the date that is 120 days following the
Closing Date or such later date as may be determined at the sole discretion of the Lead Agent, each
Special Warrant will be exercisable for 1.1 Units. The Company will continue to use all reasonable
commercial efforts to obtain a receipt for the prospectus after 120 days after the Closing Date.
In the event a TSE listing of the Company's Common Shares has not been achieved prior to the date
six (6) months following the Closing Date, the Escrowed Subscribers shall be entitled, at their option
(the "Repurchase Option"), until the Time of Expiry, to require the Company to repurchase their
Special Warrants from legally available funds at the Issue Price plus accrued interest.
LEAD AGENT: Loewen, Ondaatje, XxXxxxxxxx Limited
CO-AGENTS: Acumen Capital Finance Partners Limited
Paradigm Capital Inc.
AGENTS' COMMISSION: The Agents will be paid at the closing of the sale of Special Warrants a commission of 7% of the gross
proceeds of this Offering, which commission and the expenses of the Agents (including the fees of the
Agents' legal counsel) will be fully paid in cash on the Closing Date out of the proceeds of the
Offering. In addition, the Agents shall receive a Special Compensation Option, exercisable for a
Compensation Option which, in the aggregate, upon exercise will entitle the Agents to purchase for a
period of two years from the Closing Date the number of Units that is equal to 10% of the number of
Special Warrants sold, at a price per Unit that is equal to the issue price of each Special Warrant.
The terms of the commission, the Special Compensation Option and the Compensation Option shall be
subject to regulatory approval.
SUBSCRIPTION: Persons wishing to subscribe for Special Warrants must complete and sign a Subscription Form and
deliver a cheque to the Lead Agent not later than one business day prior to the Closing Date.
USE OF PROCEEDS: The proceeds from the sale of the Special Warrants will be expended by the Company to finance its
growth strategy. Specifically, the proceeds will be allocated to sales and marketing, research and
development, working capital purposes and potential acquisitions.
RESALE RESTRICTIONS: The Special Warrants will be issued pursuant to exemptions from prospectus requirements of applicable
securities legislation and will be subject to resale restrictions under that legislation.
If the Company is unable to obtain a receipt for a final prospectus in any Qualifying Jurisdiction and
an effective Registration Statement, the Underlying Securities will be subject to statutory hold
periods during which time these securities may not be resold in such Qualifying Jurisdictions.
In addition, if any Special Warrants are exercised prior to the issuance of receipts for a final
prospectus and/or an effective Registration Statement by the securities commissions in any of the
Qualifying Jurisdictions, the Underlying Securities will be subject to statutory restrictions on
resale.
The Company intends to file a prospectus to qualify the Underlying Securities only in the Qualifying
Jurisdictions. Accordingly, the Underlying Securities that are acquired outside
A-2
of the Qualifying Jurisdictions may be subject to resale restrictions.
The Special Warrants are not transferable without the prior written consent of the Company. This
restriction shall not, however restrict the exercise of the Special Warrants for the Units. Absent an
effective Registration Statement, the Warrants are not transferable without the prior written consent
of the Company.
FOREIGN SALES: The Special Warrants may be sold outside of Canada pursuant to applicable exemptions.
A-3
SCHEDULE "B"
FORM 20A (IP)
SECURITIES ACT (BRITISH COLUMBIA)
ACKNOWLEDGEMENT OF INDIVIDUAL PURCHASER
1. I have agreed to purchase from Voice Mobility International, Inc.
(the "Issuer")
Special Warrants (the "Securities")
------------------------------- of the Issuer.
[number of Special Warrants]
2. I am purchasing the Securities as principal and, on closing of the
agreement of purchase and sale, I will be the beneficial owner of the
Securities.
3. I [circle one] have/have not received an offering memorandum describing
the Issuer and the Securities.
4. I acknowledge that:
(a) no securities commission or similar regulatory authority has
reviewed or passed on the merits of the Securities, AND
(b) there is no government or other insurance covering the
Securities, AND
(c) I may lose all of my investment, AND
(d) there are restrictions on my ability to resell the Securities
and it is my responsibility to find out what those
restrictions are and to comply with them before selling the
Securities, AND
(e) I WILL NOT receive a prospectus that the BRITISH COLUMBIA
SECURITIES ACT (the "Act") would otherwise require be given to
me because the Issuer has advised me that it is relying on a
prospectus exemption, AND
(f) because I am not purchasing the Securities under a prospectus,
I will not have the civil remedies that would otherwise be
available to me, AND
(g) the Issuer has advised me that it is using an exemption from
the requirement to sell through a dealer registered under the
Act, except purchases referred to in paragraph 5(g), and as a
result I do not have the benefit of any protection that might
have been available to me by having a dealer act on my behalf.
5. I also acknowledge that: [CIRCLE ONE]
(a) I am purchasing Securities that have an aggregate acquisition
cost of $97,000 or more, OR
(b) my net worth, or my net worth jointly with my spouse at the
date of the agreement of purchase and sale of the securities,
is not less than $400,000, OR
(c) my annual net income before tax is not less than $75,000, or
my annual net income before tax jointly with my spouse is not
less than $125,000, in each of the two most recent calendar
years, and I reasonably expect to have annual net income
before tax of not less than $75,000 or annual net income
before tax jointly with my spouse of not less than $125,000 in
the current calendar year, OR
(d) I am registered under the Act, OR
(e) I am a spouse, parent, brother, sister or child of a senior
officer or director of the Issuer, or of an affiliate of the
Issuer, OR
(f) I am a close personal friend of a senior officer or director
of the Issuer, or of an affiliate of the Issuer, OR
B-1
(g) I am purchasing securities under section 128(c) ($25,000 -
registrant required) of the Rules, and I have spoken to a
person [NAME OF REGISTERED PERSON:] --------------------------
(the "Registered Person") who has advised me that the
Registered Person is registered to trade or advise in the
Securities and that the purchase of the Securities is a
suitable investment for me.
6. If I am an individual referred to in paragraph 5(b), 5(c), or 5(d), I
acknowledge that, on the basis of information about the Securities
furnished by the Issuer, I am able to evaluate the risks and merits of
the Securities because: [CIRCLE ONE]
(a) of my financial, business or investment experience, OR
(b) I have received advice from a person [NAME OF ADVISER:]
(the "Adviser") who has advised me
---------------------------
that the Adviser is:
(i) registered to advise, or exempted from the
requirement to be registered to advise, in respect of
the Securities, and
(ii) not an insider of, or in a special relationship with,
the Issuer.
The statements made in this report are true.
DATED , 2001.
---------------------
----------------------------------
Signature of Purchaser
----------------------------------
Name of Purchaser
----------------------------------
----------------------------------
Address of Purchaser
B-2
SCHEDULE "C"
CONTRACTUAL RIGHT OF ACTION FOR RESCISSION
(1) In the event that a holder of Special Warrants, who acquires Unit
Shares and Warrants of the Company upon the exercise of the Special
Warrants, is or becomes entitled under Applicable Securities Laws to
the remedy of rescission by reason of the Prospectus qualifying the
distribution of the Unit Shares and Warrants on exercise of the Special
Warrants, or any amendment thereto, containing a misrepresentation, the
Subscriber is entitled to rescission not only of the Subscriber's
exercise of its Special Warrants but also of the private placement
transaction pursuant to which the Special Warrants were initially
acquired, and is entitled in connection with such rescission to a full
refund of all consideration paid to the Company on the acquisition of
the Special Warrants. The provisions hereof are a direct contractual
right extended by the Company alone (but specifically not by the
directors or officers of the Company or by the Agent) to holders of
Special Warrants, permitted assignees of such holders and to holders of
Unit Shares and Warrants acquired by such holders on exercise of the
Special Warrants, and are in addition to any other right or remedy
available to a holder of Special Warrants under section 130 of the
SECURITIES ACT (Ontario), equivalent provisions of the securities
legislation of any other province of Canada in which Special Warrant
purchasers are resident, or otherwise at law, and are subject to the
provisions of section (2) below, and the defences, limitations and
other provisions described under the Applicable Securities Laws or
otherwise available.
(2) No action may be commenced to enforce the foregoing rights of action
for rescission more than 180 days after the Closing Date.
(3) The Company agrees that the benefit of the covenant contained in
section (1) above is deemed to pass with any permitted and lawful
assignment or transfer of Special Warrants in accordance with the
Special Warrant Indenture and the Subscriber agrees to extend
explicitly the benefit of such covenant (but without liability to the
Subscriber) to any permitted and lawful assignee or transferee of
Special Warrants registered in the name of the Subscriber.
(4) All capitalized terms in this Schedule that are defined in the
Subscription Agreement between the Subscriber and the Company have the
meanings given to them in the Subscription Agreement.
C-1
SCHEDULE "D"
FORM OF DECLARATION FOR REMOVAL OF LEGEND
TO: VOICE MOBILITY INTERNATIONAL, INC.
The undersigned (a) acknowledges that the sale of the securities of
Voice Mobility International, Inc. (the "Company") to which this declaration
relates is being made in reliance on Rule 904 of Regulation S under the United
States Securities Act of 1933, as amended (the "1933 Act") and (b) certifies
that (1) it is not an affiliate of the Company (as defined in Rule 405 under the
1933 Act), (2) the offer of such securities was not made to a person in the
United States and either (A) at the time the buy order was originated, the buyer
was outside the United States, or the seller and any person acting on its behalf
reasonably believe that the buyer was outside the United States, or (B) the
transaction was executed on or through the facilities of The Toronto Stock
Exchange or any other designated offshore securities market, as defined in
Regulation S, and neither the seller nor any person acting on its behalf knows
that the transaction has been prearranged with a buyer in the United States, (3)
neither the seller nor any affiliate of the seller nor any person acting on any
of their behalf has engaged or will engage in any directed selling efforts in
the United States in connection with the offer and sale of such securities, (4)
the sale is BONA FIDE and not for the purpose of "washing off" the resale
restrictions imposed because the securities are "restricted securities" (as such
term is defined in Rule 144(a)(3) under the 1933 Act), (5) the seller does not
intend to replace the securities sold in reliance on Rule 904 of the 1933 Act
with fungible unrestricted securities and (6) the contemplated sale is not a
transaction, or part of a series of transactions which, although in technical
compliance with Regulation S, is part of a plan or scheme to evade the
registration provisions of the 1933 Act. Terms used herein have the meanings
given to them by Regulation S.
Dated: By:
--------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
D-1
SCHEDULE "E"
CERTIFICATION BY FOREIGN PORTFOLIO MANAGER
The undersigned is purchasing securities of Voice Mobility International, Inc.
(the "Issuer").
The undersigned hereby certifies that:
(a) it is purchasing securities of the Issuer on behalf of managed
accounts for which it is making the investment decision to
purchase these securities and has full discretion to purchase
or sell securities for such accounts without requiring the
client's express consent to a transaction;
(b) it carries on the business of managing the investment
portfolios of clients through discretionary authority granted
by those clients (a "portfolio manager" business) in --------
[jurisdiction], and it is permitted by law to carry on a
portfolio manager business in that jurisdiction;
(c) it was not created solely or primarily for the purpose of
purchasing securities of the Issuer;
(d) the total asset value of the investment portfolios it manages
on behalf of clients is not less than $20,000,000; and
(e) the Issuer has provided it with a list of the directors,
senior officers and other insiders of the Issuer, and the
persons that carry on investor relations activities for the
Issuer (which list is attached as a schedule to this Form),
and it does not believe, and has no reasonable grounds to
believe, that any of those persons has a beneficial interest
in any of the managed accounts for which it is purchasing,
except as follows:
----------------------------------------------------------
(name of insider(s) or person(s) carrying on investor
relations activities for the Issuer that have a beneficial
interest in an account)
The undersigned acknowledges that it is bound by the provisions of the British
Columbia SECURITIES ACT including, without limitation, sections 87 and 111
concerning the filing of insider reports and reports of acquisitions.
Dated at
---------------------------
this day of , 2001
---- ------------
-----------------------------------
(Name of Purchaser - please print)
-----------------------------------
(Authorized Signature)
-----------------------------------
(Official Capacity - please print)
-----------------------------------
(please print name of individual
whose signature appears above,
if different from name of
purchaser printed above)
E-1
