Acknowledgments of the Subscriber. The Subscriber, on its own behalf and, if the Subscriber is acting as a trustee, agent, representative, nominee, custodian or in a similar agency capacity for another person or entity, on behalf of any underlying beneficial owner (an “Underlying Owner”), the term “Subscriber” being understood to refer as well to such Underlying Owner unless the context otherwise requires, acknowledges that: (a) The offer, sale and distribution of the Shares to the Subscriber is being effected by the Company in reliance on exemptions from the prospectus requirements under applicable Canadian securities laws (the “Applicable Canadian Securities Laws”). (b) No prospectus has been filed with any Canadian securities regulatory authority (“Regulator”) in connection with the offering of the Shares in Canada and no Regulator has made any finding or determination as to the merits of an investment in the Shares or has otherwise made any recommendation or endorsement with respect to the Shares. (c) The Company may be required to file a report of trade with all applicable Regulators containing certain personal information about the Subscriber. The report of trade will include, among other information, the full name, residential or business address and telephone number of the Subscriber, the number and type of Interests purchased, the total purchase price expressed in Canadian dollars, the prospectus exemption under Applicable Canadian Securities Laws relied upon by the Company to distribute the Shares to the Subscriber and the date of the distribution. By completing this Subscription Agreement, the Subscriber authorizes the indirect collection of the information described in this section by all applicable Regulators and consents to the disclosure of such information to the public through the filing of a report of trade with all applicable Regulators. (d) The Shares are being offered on a “private placement” basis only, will be subject to resale restrictions under Applicable Canadian Securities Laws and are restricted securities in Canada and, accordingly, any resale of such Shares will be required to be made in accordance with prospectus and registration requirements under Applicable Canadian Securities Laws, pursuant to statutory exemptions from the prospectus and registration requirements under Applicable Canadian Securities Laws or under a discretionary exemption from the prospectus and registration requirements under Applicable Canadian Securities Laws granted by the applicable Regulators. (e) The certificates, if any, representing the Shares (and any replacement certificates issued prior to the expiration of the applicable hold periods), or ownership statements issued under a direct registration system or other electronic book-entry system, may be required to bear a legend in accordance with Applicable Canadian Securities Laws and the Company will be deemed to have complied with such requirement upon the Subscriber’s receipt of the Canadian Memorandum containing disclosure pertaining to resale restrictions under Applicable Canadian Securities Laws.
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Acknowledgments of the Subscriber. The Subscriber, Subscriber (on its own behalf and, if the Subscriber is acting as a trustee, agent, representative, nominee, custodian or in a similar agency capacity for another person or entityapplicable, on behalf of any underlying beneficial owner (an “Underlying Owner”), the term “Subscriber” being understood to refer Disclosed Principal) acknowledges and agrees as well to such Underlying Owner unless the context otherwise requires, acknowledges thatfollows:
(a) The offer, sale and distribution Subscriber acknowledges that the aggregate gross proceeds of the Shares Offering will be up to US$5,000,000, that the Subscriber Corporation is being effected by effecting a concurrent private placement of up to US$6,500,000 aggregate principal amount of secured convertible debentures, convertible, subject to adjustment, at $1 per share, plus 3,076,190 common share purchase warrants convertible at prices from $1.25 to $1.75 for a period of 5 years from Closing, and that closing of the Company in reliance Offering is not conditional on exemptions from the prospectus requirements under applicable Canadian securities laws (the “Applicable Canadian Securities Laws”)completion of such concurrent placement.
(b) No prospectus or registration statement has been filed with any Canadian securities regulatory authority (“Regulator”) Securities Regulators or the SEC in connection with the offering of the Shares in Canada and no Regulator Offering.
(c) No securities commission, agency, governmental authority, regulatory body, stock exchange or other regulatory body has made any finding reviewed or determination as to passed on the merits of an investment in the Shares or has otherwise made any recommendation or endorsement with respect to the Shares.
(c) The Company may be required to file a report of trade with all applicable Regulators containing certain personal information about the Subscriber. The report of trade will include, among other information, the full name, residential or business address and telephone number of the Subscriber, the number and type of Interests purchased, the total purchase price expressed in Canadian dollars, the prospectus exemption under Applicable Canadian Securities Laws relied upon by the Company to distribute the Shares to the Subscriber and the date of the distribution. By completing this Subscription Agreement, the Subscriber authorizes the indirect collection of the information described in this section by all applicable Regulators and consents to the disclosure of such information to the public through the filing of a report of trade with all applicable RegulatorsSecurities.
(d) The Shares are being offered on a “private placement” basis only, Securities will be subject to statutory resale restrictions under Applicable Canadian the Securities Laws and under other applicable securities laws, and the Subscriber covenants that it will not resell any Securities except in compliance with such laws and the Subscriber acknowledges that it is solely responsible (and neither the Corporation nor the Agent are restricted securities in Canada andany way responsible) for such compliance. There is currently no market for the Securities in Canada, and accordingly, the Securities offered hereunder may be subject to indefinite resale restrictions in Canada. The Corporation may make a notation on its records or give instructions to any transfer agent of the Common Shares or Warrants in order to implement such resale of such Shares will be required to be made in accordance with prospectus and registration requirements under Applicable Canadian Securities Laws, pursuant to statutory exemptions from the prospectus and registration requirements under Applicable Canadian Securities Laws or under a discretionary exemption from the prospectus and registration requirements under Applicable Canadian Securities Laws granted by the applicable Regulators.restrictions;
(e) The certificatesCorporation may complete additional financings in the future in order to develop the business of the Corporation and fund its ongoing development, and such future financings may have a dilutive effect on current securityholders of the Corporation, including the Subscriber but there is no assurance that such financing will be available, on reasonable terms or at all, and if anynot available, representing the Shares Corporation may be unable to fund its ongoing development;
(f) (A) The Securities have not been registered under the U.S. Securities Act, are being sold in reliance upon an exemption from registration afforded by Regulation S promulgated under the U.S. Securities Act; and the Securities have not been registered with any state securities commission or authority; (B) pursuant to the requirements of Regulation S, the Securities may not be transferred, sold or otherwise exchanged unless in compliance with the provisions of Regulation S and/or pursuant to registration under the U.S. Securities Act, or pursuant to an available exemption thereunder; and (C) the Corporation is under no obligation to register the Securities under the U.S. Securities Act or any state securities law, or to take any action to make any exemption from any such registration provisions available;
(g) The certificates (and any replacement certificates issued prior to the expiration of the applicable hold periods), periods or ownership statements issued under a direct registration registry system or other electronic book-book entry system) representing the Shares and Warrants will bear, as of the Closing Date, legends substantially in the following form and with the necessary information inserted:
(h) In the event that holders of Warrants convert or exercise such securities prior to the expiry of the hold periods applicable thereto in Canada, the Warrant Shares will bear legends substantially in the following form and with the necessary information inserted:
(i) The certificates representing the Shares, Warrants and Warrant Shares originally issued to a person, other than a U.S. Person, a person in the United States or a person for the account or benefit of a U.S. Person or a person in the United States, as well as all certificates issued in exchange for or in substitution of the foregoing securities, shall bear the following additional legend:
(j) The Subscriber (on its own behalf and, if applicable, on behalf of the Disclosed Principal) shall execute, deliver, file and otherwise assist the Corporation and the Agent with filing all documentation required by the Securities Laws to permit the subscription for the Units and the issuance of the Shares, Warrants or Warrant Shares, as may be required required.
(k) The Corporation and the Agent are relying on the representations, warranties and covenants contained herein and in one of Schedule “A” or Schedule “B” attached hereto to bear a legend in accordance with Applicable Canadian determine the Subscriber’s eligibility to subscribe for the Units under the Securities Laws and the Company securities laws of the United States and the Subscriber agrees to indemnify the Corporation, the Agent and each of their respective directors and officers against all losses, claims, costs, expenses, damages or liabilities which any of them may suffer or incur as a result of or arising from reliance thereon. The Subscriber undertakes to immediately notify the Corporation and the Agent of any change in any statement or other information relating to the Subscriber set forth in such applicable Schedule which takes place prior to the Closing Time.
(l) The Agent and/or its directors, officers, employees, agents and representatives assume no responsibility or liability of any nature whatsoever for the accuracy or adequacy of any publicly available information concerning the Corporation that is required to be disclosed or filed by the Corporation under the Securities Laws or any other applicable laws has been so disclosed or filed.
(m) The Corporation is relying on an exemption from the requirement to provide the Subscriber with a prospectus under the Securities Laws and the securities laws of the United States and, as a consequence of acquiring the Units pursuant to such exemption, certain information, protections, rights and remedies provided by such securities laws will not be deemed available to have complied with such requirement upon the Subscriber’s receipt .
(n) The Subscriber and, if applicable, the Disclosed Principal are responsible for obtaining such legal and tax advice as they consider appropriate in connection with the execution, delivery and performance of this Subscription Agreement and the transactions contemplated under this Subscription Agreement. The Subscriber and, if applicable, the Disclosed Principal, are not relying on the Corporation, the Agent or their respective affiliates or counsel in this regard.
(o) There is no government or other insurance covering the Securities.
(p) There are risks associated with the purchase of the Canadian Memorandum containing disclosure pertaining to resale restrictions under Applicable Canadian Securities Lawsand the Subscriber and any beneficial purchaser for whom it is acting, including any Disclosed Principal, may lose his, her or its entire investment.
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