<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )
PORTACOM WIRELESS, INC.
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(Name of Issuer)
COMMON STOCK, PAR VALUE $0.001
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(Title of Class of Securities)
735907107
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(CUSIP Number)
Michael A. Schwartz, Esq.
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street, New York, NY 10022
(212) 821-8000
--------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
January 28, 1997
--------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. / /
Check the following box if a fee is being paid with the statement / /. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-l(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 49 Pages
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SCHEDULE 13D
CUSIP No. 735907107 Page 2 of 49 Pages
- -------------------------------------------------------------------------------
1 NAME OF REPORT PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Will's Wei Corporation
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /X/
(b) / /
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED / /
PURSUANT TO ITEMS 2(d) or 2(e)
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Nevada
- -------------------------------------------------------------------------------
7 SOLE VOTING POWER
0
NUMBER --------------------------------------------------------
OF SHARES 8 SHARED VOTING POWER
BENEFICIALLY 654,652
OWNED BY --------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON WITH --------------------------------------------------------
10 SHARED DISPOSITIVE POWER
654,652
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
654,652
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES / /
CERTAIN SHARES*
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.80%
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 2 of 49
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP No. 735907107 Page 3 of 49 Pages
- -------------------------------------------------------------------------------
1 NAME OF REPORT PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Canmarc Trading Company
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /X/
(b) / /
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED / /
PURSUANT TO ITEMS 2(d) or 2(e)
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
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7 SOLE VOTING POWER
0
NUMBER --------------------------------------------------------
OF SHARES 8 SHARED VOTING POWER
BENEFICIALLY 20,000
OWNED BY --------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON WITH --------------------------------------------------------
10 SHARED DISPOSITIVE POWER
20,000
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
20,000
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES / /
CERTAIN SHARES*
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.14%
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 3 of 49
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP No. 735907107 Page 4 of 49 Pages
- -------------------------------------------------------------------------------
1 NAME OF REPORT PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Michael P. Marcus
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /x/
(b) / /
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED / /
PURSUANT TO ITEMS 2(d) or 2(e)
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
50,000
NUMBER --------------------------------------------------------
OF SHARES 8 SHARED VOTING POWER
BENEFICIALLY 674,652
OWNED BY --------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 50,000
PERSON WITH --------------------------------------------------------
10 SHARED DISPOSITIVE POWER
674,652
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
724,652
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES / /
CERTAIN SHARES*
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.31%
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 4 of 49
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
Item 1. Security and Issuer
This Statement on Schedule 13D (the "Statement") relates to the common
stock, par value $.001 per share (the "Common Stock"), of Portacom Wireless,
Inc. (the "Company"), the principal executive offices of which are located at
10061 Talbert Avenue, Suite 200, Fountain Valley, California 92708.
Item 2. Identity and Background
(a) This Statement is being filed jointly by (i) Will's Wei Corporation
("WWC"), a Nevada corporation, (ii) Canmarc Trading Company ("CTC"), a Cayman
Islands limited liability company, and (iii) Michael P. Marcus, an individual
who is the sole shareholder of WWC and owner of all of the outstanding Class A
ordinary shares (representing ownership of 99% of the outstanding interests) of
CTC (Mr. Marcus, together with WWC and CTC, to be sometimes referred to
collectively herein as the "Reporting Persons").
There are no directors or officers of CTC, and Mr. Marcus, as owner of
all of the outstanding Class A ordinary shares of CTC, has sole authority to act
on its behalf.
Set forth below are the names of the directors and officers of WWC:
Directors: Michael P. Marcus
Monte L. Miller
Officers: Michael P. Marcus - President and Treasurer
Monte L. Miller - Secretary
(b) The principal business address and the principal office of WWC is
330 South Fourth Street, Suite 1100, Las Vegas, NV 89101.
The principal business address and the principal office of CTC is P.O.
Box 309, Ugland House, South Church Street, Grand Cayman, Cayman Islands,
British West Indies.
The business address of Mr. Marcus is 1505 Rockcliff Drive, Austin, TX
78746.
The business address of Mr. Miller is c/o Will's Wei Corporation, 330
South Fourth Street, Suite 1100, Las Vegas, NV 89101.
(c) The present principal occupation of Mr. Marcus is that of investing
in securities.
Page 5 of 49
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The present principal occupation of Mr. Miller is that of serving as a
corporate officer and registered agent on behalf of several U.S. corporations,
not including the Company or any of its affiliates.
The principal business of each of WWC and CTC is that of investing in
securities.
(d) During the last five (5) years, none of WWC, CTC, Mr. Marcus and
Mr. Miller has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
(e) During the last five (5) years, none of WWC, CTC, Mr. Marcus and
Mr. Miller has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction which, as a result of such
proceeding, have subjected or would subject such party to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any
violations with respect to such laws.
(f) Each of Mr. Marcus and Mr. Miller is a United States citizen.
Item 3. Source and Amount of Funds or Other Consideration
The total amount of funds paid by WWC to purchase the 654,652 shares of
Common Stock it owns directly was $1,330,000, which was furnished solely from
available working capital of WWC.
The total amount of funds required by CTC to purchase the 20,000 shares
of Common Stock it owns directly was $65,820.34, which was furnished solely from
available working capital of CTC.
The total amount of funds required by Mr. Marcus to purchase the 50,000
shares of Common Stock he owns directly was $183,589.46, which was furnished
solely from available personal assets of Mr. Marcus.
Item 4. Purpose of Transaction
The Reporting Persons acquired the shares of Common Stock owned by them
as an investment. The Reporting Persons do not intend to acquire any additional
shares of Common Stock and intend to review on a continuing basis their
investment in the Common Stock in order to determine whether they should sell or
continue to hold shares of Common Stock in accordance with their investment
objectives. Any such decision would be based on an assessment by the Reporting
Persons of a number of different factors, including, without limitation, the
business, prospects and affairs of the Company, the market for the Common Stock,
the condition of the securities markets, general economic and
Page 6 of 49
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industry conditions and other opportunities available to the Reporting Persons.
Any dispositions of shares of Common Stock may be effected through open market
or other types of transactions.
Except as set forth above, none of the Reporting Persons nor Mr. Miller
has any plans or proposals that relate to or would result in any of the actions
specified in clauses (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer
(a) The Reporting Persons beneficially own an aggregate of 724,652
shares of Common Stock. Based on information contained in the Company's 1997
Annual Report on Form 10-K filed with the Securities and Exchange Commission on
April 15, 1998 (the "1997 Form 10-K"), the shares of Common Stock held by the
Reporting Persons represent approximately 5.31% of the outstanding shares.
WWC beneficially owns 654,652 shares of Common Stock, including 61,538
shares which are subject to currently exercisable warrants, representing 4.80%
of the issued and outstanding shares of Common Stock, based on information
contained in the 1997 Form 10-K.
CTC beneficially owns 20,000 shares of Common Stock, representing 0.14%
of the issued and outstanding shares of Common Stock, based on information
contained in the 1997 Form 10-K.
Mr. Marcus beneficially owns 50,000 shares of Common Stock,
representing 0.37% of the issued and outstanding shares of Common Stock, based
on information contained in the 1997 Form 10-K. In addition, as sole shareholder
of WWC and owner of all of the outstanding Class A ordinary shares of CTC, Mr.
Marcus may be deemed to be the beneficial owner of the 654,652 and 20,000 shares
respectively owned by them.
(b) Mr. Marcus has the sole power to vote or to direct the vote and the
sole power to dispose or to direct the disposition of the 50,000 shares of
Common Stock which he owns directly. In addition, as sole shareholder of WWC and
owner of all of the outstanding Class A ordinary shares of CTC, Mr. Marcus may
be deemed to share with WWC and CTC voting and dispositive power with respect to
the 654,652 and 20,000 shares respectively owned by them.
(c) Except as set forth in Item 6 of this schedule, WWC has had no
transactions in the Common Stock since November 29, 1996, the 60th day prior to
January 28, 1997. Except as set forth on Exhibit 1 to this schedule, CTC has had
no transactions in the Common Stock since November 29, 1996. Except as set forth
Page 7 of 49
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in Item 6 and on Exhibit 1 to this schedule, Mr. Marcus has had no transactions
in the Common Stock since November 29, 1996.
(d) Except as set forth in this Item 5, no person other than each
respective record owner referred to herein of securities is known to have the
right to receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of, such securities.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer
Mr. Marcus controls, in practice, the investment decisions of WWC and
CTC.
Pursuant to Rule 13d-1(f) promulgated under the Act, the Reporting
Persons have entered into an agreement with respect to the joint filing of this
statement, and any amendment or amendments hereto, which is attached hereto as
Exhibit 2 and is incorporated herein by reference.
WWC and the Company entered into three Subscription Agreements (the
"1996 Subscription Agreements") dated as of March 29, April 1 and May 7, 1996,
in connection with the purchases by WWC of 1.3, 3.0 and 5.0 private placement
Units of the Company, respectively. The 1996 Subscription Agreements, the form
of which is attached hereto as Exhibit 3 and is incorporated herein by
reference, provide for the sale of the Units at respective offering prices of
$130,000, $300,000 and $500,000. The respective Units consisted of (x) 10%
Convertible Promissory Notes (the "10% Notes"), dated as of March 29, April 1
and May 1, 1996, in principal amounts of $130,000, $300,000 and $500,000, each
with two-year terms and (y) Warrants (the "1996 Warrants") to purchase 20,800,
48,000 and 61,538 shares (the "Warrant Shares") of Common Stock at exercise
prices of $2.50, $2.50 and $3.25 per share (subject to increase according to
Vancouver Stock Exchange policy, if necessary), expiring April 1, April 2 and
May 14, 1998. On December 31, 1996, WWC converted the 10% Notes in accordance
with their terms into an aggregate of 325,846 shares of Common Stock (the "Note
Shares") and the 10% Notes were thereby canceled. As of the date of this
schedule, WWC continues to hold the 1996 Warrants expiring May 14, 1998 (which
are currently exercisable into 61,538 Warrant Shares) and all other 1996
Warrants have expired.
The 1996 Subscription Agreements, which are substantially similar and
are governed by the laws of the State of California, provide the terms,
conditions and resale restrictions of the subject Units. These agreements also
provide WWC with certain
Page 8 of 49
<PAGE>
registration rights with respect to the Note Shares and Warrant Shares in the
event that the Company engages in a public offering of Common Stock. In this
regard, WWC and the Company entered into separate Registration Rights
Agreements, the form of which is attached hereto as Exhibit 4 and is
incorporated herein by reference, which grant to WWC certain "piggyback"
registration rights on customary terms in the event that the Company proposes to
register any of its shares of Common Stock on Form S-1, S-2 or S-3 under the
Securities Act of 1933, as amended.
WWC and the Company entered into Subscription Agreements dated January
28, 1997 and February 11, 1997 (the "1997 Subscription Agreements"), which are
substantially similar, in connection with the purchases by WWC of private
placement Units in each case at an offering price of $200,000. The 1997
Subscription Agreements, the form of which is attached hereto as Exhibit 5 and
is incorporated herein by reference, are governed by the laws of British
Columbia, and provide the terms, conditions and resale restrictions of the
Units. The Units purchased on January 28, 1997 consisted of 72,993 shares of
Common Stock (representing a purchase price of $2.74 per share) and currently
exercisable Warrants to purchase 72,993 shares of Common Stock at an exercise
price of (x) $2.74 per share through January 28, 1998 and (y) $3.15 per share
from January 28, 1998 through January 28, 1999. The Units purchased on February
11, 1997 consisted of 60,241 shares of Common Stock (representing a purchase
price of $3.32 per share) and currently exercisable Warrants to purchase 60,241
shares of Common Stock at an exercise price of (x) $3.32 per share through
February 11, 1998 and (y) $3.82 per share from February 11, 1998 through
February 11, 1999.
Except as described herein and by reference to Items 3 and 4 above,
there are no contracts, arrangements, understandings or relationships among the
persons named in Item 2 or between such persons and any other person with
respect to any securities of the Company.
By virtue of the relationships among the Reporting Persons as described
in Item 2, the Reporting Persons may be deemed to be a "group" under the Federal
securities laws.
Item 7 Material to be Filed as Exhibits
Exhibit 1 - Schedule of transactions in the Common Stock by the
Reporting Persons since November 29, 1996
Exhibit 2 - Joint Filing Agreement, dated February 28, 1998, between
Will's Wei
Page 9 of 49
<PAGE>
Corporation, Canmarc Trading Company and Michael
G. Marcus
Exhibit 3 - Form of Subscription Agreements between Portacom Wireless,
Inc. and Will's Wei Corporation, executed as of March 29,
1996, April 1, 1996 and May 7, 1996
Exhibit 4 - Form of Registration Rights Agreements between Portacom
Wireless, Inc. and Michael Marcus of Will's Wei
Corporation, executed as of March 29, 1996, April 1, 1996
and May 7, 1996
Exhibit 5 - Form of Subscription Agreements between Portacom Wireless,
Inc. and Michael Marcus of Will's Wei Corporation, executed
on January 28, 1997 and February 11, 1997
Page 10 of 49
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned do and each hereby does certify that the information set forth
in this statement is true, complete and correct.
Dated: April 29, 1998
WILL'S WEI CORPORATION
By: /s/ Michael P. Marcus
------------------------
Name: Michael P. Marcus
Title: President
CANMARC TRADING COMPANY
By: /s/ Michael P. Marcus
------------------------
Name: Michael P. Marcus
Title: Controlling Partner
/s/ Michael P. Marcus
------------------------
Michael P. Marcus
Page 11 of 49
<PAGE>
Exhibit 1
Schedule of transactions in the Common Stock
by the Reporting Persons
since November 29, 1996(1)
(i) CTC
Number of Price
Shares Per
Date Acquired Share
- ---- --------- -----
1/27/97 20,000 $3.29
(ii) Mr. Marcus(2)
Number of
Shares Price
Acquired Per
Date (Disposed Of) Share
- ---- ------------- -----
1/27/97 3,000 $3.29
2/7/97 2,000 $3.98
7/15/97 (23,700) $1.58
7/24/97 16,000 $1.65
8/5/97 (10,000) $0.95
8/8/97 (16,000) $1.02
8/14/97 (10,000) $0.83
- -----------------
(1) All transactions listed on this Exhibit 1 were made through brokers in
open market transactions effected on the Vancouver Stock Exchange.
(2) Purchases and sales of these shares of Common Stock were made through
brokerage accounts in the name and on behalf of the children of Mr. Marcus.
As a result of the final sale on August 14, 1997 reported hereunder, these
brokerage accounts have been closed and Mr. Marcus' children no longer hold any
shares of Common Stock. Mr. Marcus disclaims beneficial ownership prior to
August 14, 1997 of any of the shares listed hereunder or otherwise traded
through such brokerage accounts pursuant to Rule 13d-4 under the Act and,
consequently, the filing of this schedule shall not be an admission that Mr.
Marcus was at any time the beneficial owner thereof.
Page 12 of 49
<PAGE>
Exhibit 2
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f), promulgated under the Securities
Exchange Act of 1934, as amended, the persons named below agree to the joint
filing on behalf of each of them of a Statement on Schedule 13D (including
amendments thereto) with respect to the Common Stock of Portacom Wireless, Inc.,
and further agree that this Joint Filing Statement be included as an Exhibit to
such joint filing.
In evidence thereof the undersigned, being duly authorized, hereby
execute this Agreement this 28th day of February 1998.
WILL'S WEI CORPORATION
By: /s/ Michael P. Marcus
------------------------
Name: Michael P. Marcus
Title: President
CANMARC TRADING COMPANY
By: /s/ Michael P. Marcus
------------------------
Name: Michael P. Marcus
Title: Controlling Partner
/s/ Michael P. Marcus
------------------------
Michael P. Marcus
Page 13 of 49
<PAGE>
Exhibit 3
FORM OF SUBSCRIPTION AGREEMENTS
SUBSCRIPTION AGREEMENT (the "Agreement") made as of the date specified on the
signature page hereto between PORTACOM WIRELESS, INC., a British Columbia
corporation having its corporate offices at 8055 W. Manchester Avenue, Suite
730, Playa del Rey, California 90293 (the "Company"), and the undersigned
investor (the "Investor").
The Company desires to sell in a private placement of securities, units (the
"Units"), each Unit consisting of a Convertible Promissory Note in the principal
amount of $100,000 bearing interest at the annual rate of 10%, due and payable
two (2) years from the subscription date, or at any time after six (6) months
upon demand of the holder, (the "Note") and a two-year Warrant (the "Warrant")
to purchase ____ shares of common stock of the Company (the "Common Stock") at a
price of $__________ per share, the number of warrant shares and exercise price
subject to adjustment. The purchase price of each Unit is $100,000. Except where
otherwise indicated, all dollar amounts in this Agreement, the Note and the
Warrant are denominated in United States dollars. The Company has reserved the
right to sell fractional Units. The forms of Note and Warrant are attached
hereto and are incorporated herein by reference. The Investor desires to
purchase the number of Units set forth on the signature page hereof.
NOW, THEREFORE, for and in consideration of the promises and the mutual
covenants hereinafter set forth, the parties hereto do hereby agree as follows:
1. SUBSCRIPTION FOR UNITS.
1.1. Subject to the terms and conditions hereinafter set forth, the
Investor hereby subscribes for and agrees to purchase the number of
Units from the Company set forth upon the signature page hereof and the
Company agrees to sell such Units to the Investor at a purchase price
equal to $100,000 per Unit (such aggregate purchase price shall be
referred to as the "Purchase Price"). The Purchase Price is payable by
bank wire transfer or cashier's check made payable to the order of
"PORTACOM WIRELESS, INC." delivered contemporaneously herewith.
Following the receipt of the Purchase Price and acceptance of this
Agreement by the Company, the Notes and Warrants will be issued by the
Company within ten (10) days after the Company receives final approval
of this subscription by the Vancouver Stock Exchange. The maturity date
of the Note shall be two (2) years after the date upon which the
Page 14 of 49
<PAGE>
Company is in receipt of the Purchase Price and accepts this Agreement.
2. REPRESENTATIONS, AGREEMENTS AND COVENANTS OF THE INVESTOR.
2.1. The Investor recognizes that the purchase of Units involves a high
degree of speculative risk and is suitable only for persons of adequate
financial means who have no need for liquidity in this investment in
that (i) the Company is in the early stages of development and requires
substantial funds in addition to this private placement; (ii) he may
not be able to liquidate his investment; (iii) transferability is
extremely limited; and (iv) he could sustain a complete loss of his
entire investment. The Investor further represents that (i) he or she
can bear the economic risk of loss of his or her entire investment;
(ii) the Investor has adequate means for providing for his or her
current needs and personal contingencies; and (iii) the Investor has no
need for liquidity with respect to his or her investment in the Units.
2.2. The Investor acknowledges that: (i) he must be a qualified investor,
as described herein, to qualify for the purchase of the Units; (ii) he
and/or his purchaser representative is competent to understand and does
understand the nature of the investment; and (iii) he must be able to
bear the economic risk of this investment.
2.3. The Investor represents that he or she is an "accredited investor"
as such term is defined in Rule 501 of Regulation D promulgated under
the Securities Act of 1933, as amended (the "1933 Act").
2.4. The Investor represents that he or she has such knowledge and
experience in financial and business matters as to be capable of
evaluating the merits and risks of an investment in the Company based
upon the information furnished to him or her (including without
limitation the Disclosure Documents); his or her personal knowledge of
the business and affairs of the Company; the records, files and plans
of the Company to all of which the purchaser has had full access; such
additional information as the purchaser may have requested and has
received from the Company; and the independent inquiries and
investigations undertaken by the purchaser. The Investor understands
that no governmental agency has passed on or made any recommendation or
endorsement of the Securities.
Page 15 of 49
<PAGE>
2.5. The Investor hereby represents that he has been furnished by the
Company during the course of this transaction with a copy of (i) the
Company's Private Placement Memorandum dated November 10, 1995 (the
"PPM"); (ii) the Private Placement Memorandum Supplement--Units dated
February 23, 1996 (the "PPM Supplement"); (iii) the Subscription
Agreement including forms of the Company's Convertible Promissory Note,
Warrant and Registration Rights Agreement; (iv) the Company's Audited
Consolidated Financial Statements for the three months ending June 30,
1995 and the three years ending March 31, 1995, 1994, 1993; and (v) the
Company's unaudited Condensed Financial Statements for the three months
ending September 30, 1995 which were prepared by management (all of
which are hereinafter collectively referred to as the "Offering
Documents"), and with all information regarding the Company which the
Investor had requested or desired to know; that all documents which
could be reasonably provided have been made available for his
inspection and review; and that he has been afforded the opportunity to
ask questions of and receive answers from duly authorized officers or
other representatives of the Company concerning the terms and
conditions of the offering, and any additional information which he had
requested. The purchaser has carefully reviewed and fully considered
the contents of the Disclosure Documents, including, without
limitation, the material set forth in the PPM under "INVESTMENT
CONSIDERATIONS" and in the PPM Supplement under "ADDITIONAL INVESTMENT
CONSIDERATIONS."
2.6. The Investor understands that no governmental agency, whether state,
federal or provincial, has passed on, reviewed or made any endorsement
of the Units or the sufficiency of the Offering Documents.
2.7. The Investor hereby acknowledges that this offering of Units has not
been reviewed by the Securities and Exchange Commission (the "SEC").
The Investor further understands that no prospectus or other
information has been filed by the Company with the British Columbia
Securities Commission in connection with the issuance of the Units,
that the issuance is exempted from the prospectus requirements of the
Securities Act (British Columbia) (the "B.C. Act") or any regulations
(the "Regulations") promulgated pursuant to the B.C. Act, and that (i)
the Investor is restricted from using most of the civil remedies
available under the B.C. Act and the Regulations; (ii) the Investor may
not receive information that would otherwise be required to be provided
to the Investor under the B.C. Act and the Regulations; and (iii) the
Company is relieved from
Page 16 of 49
<PAGE>
certain obligations that would otherwise apply under the B.C. Act and
the Regulations.
2.8. The Investor represents that his Units are being purchased for his own
account, for investment and not for distribution, resale or
fractionalization thereof, in whole or in part, to others and that no
other person has any direct or indirect interest in the Units. The
Investor agrees that he will not sell or otherwise transfer the Units
unless such sale or transfer is not in violation of the 1933 Act and
applicable U.S. state securities laws (collectively the "Securities
Laws") and Canadian provincial securities laws or they are registered
under the Securities Laws or unless an exemption from such registration
is available. The Investor is aware that the Units are and will be,
when issued, "restricted securities" as that term is defined in Rule
144 under the 1933 Act ("Rule 144") and under applicable state
securities laws.
2.9. The Investor understands that the Units are unregistered and must be
held indefinitely unless they are subsequently registered under the
Securities Laws or an exemption from such registration is available.
The Investor further acknowledges that he or she is fully aware of the
applicable limitations on the resale of the Units. The Investor further
acknowledges that (i) Rule 144 restricts sales of "restricted
securities" for at least two years after acquisition and imposes other
restrictions on the sale of such securities; (ii) if Rule 144 is
available to the Investor, the Investor may only make routine sales of
the securities comprising the Units in limited amounts in accordance
with the terms and conditions of Rule 144; (iii) the Company is the
only person which may register its securities under the Securities Laws
and it currently is not contemplating registering any of its
securities; and (iv) the Company has not made any representations,
warranties or covenants to the Investor regarding the registration of
the Units or compliance with exemptions under the Securities Laws
except as set forth herein.
2.10. The Investor understands that the Units and the securities comprising
the Units have not been registered under the Securities Laws by reason
of a claimed exemption under the provisions of the Securities Laws
which depends, in part, upon his investment intention and his related
representations, warranties and agreements made herein. In this
connection, the Investor understands that it is the position of the SEC
and certain state securities regulatory agencies that the statutory
basis for such exemption would not be present if his present intention
were to hold such securities for
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<PAGE>
a short period, for a deferred sale, for a market rise, assuming that a
market develops, or for any other fixed period. The Investor realizes
that, in the view of such position, a purchase now with an intent to
resell would represent a purchase with an intent inconsistent with his
representation to the Company, and that the SEC and certain state
securities regulatory agencies might regard such a sale or disposition
as a deferred sale to which the exemption is not available.
2.11. The Investor shall not be permitted to transfer the securities
compromising the Units and the Common Stock issuable upon the
conversion or exercise thereof out of his name unless his request for
transfer is accompanied by an opinion of counsel satisfactory to the
Company that neither the sale nor the proposed transfer results in a
violation of the Securities Laws. The Investor agrees to hold the
Company and its directors, officers and controlling persons and their
respective heirs, representatives, successors and assigns harmless and
to indemnify them against all liabilities, costs and expenses incurred
by them as a result of any sale or distribution by the Investor in
violation of any Securities Laws.
2.12. The Investor consents to the placement of a legend on the securities
comprising the Units, stating that they have not been registered under
the Securities Laws and setting forth or referring to the restrictions
on the transferability and sale thereof. The Investor further consents
to the placement of a further legend on the securities comprising the
Units, stating that the securities are also subject to a hold period
under the B.C. Act and may not be traded in British Columbia until the
expiry of the hold period except as permitted by the B.C. Act and
regulations thereunder with a statement that specifies the date the
hold period expires. The Investor is aware that the Company will make a
notation in its appropriate records with respect to the restrictions on
the transferability of such securities and that the Company will inform
its transfer agent as to said restrictions on transferability.
2.13. The Investor undertakes not to sell or otherwise dispose of any of the
securities comprising the Units for a period of 12 months from the date
of payment without the prior consent of the Vancouver Stock Exchange
and any other regulatory body having jurisdiction. The Investor hereby
certifies that the Units are not being purchased as a result of any
material information about the Company's affairs that has not been
publicly disclosed. The Investor acknowledges that it is aware that the
removal from the securities comprising the Units of any
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<PAGE>
resale restriction after 12 months that is imposed solely as a
requirement of the Vancouver Stock Exchange will not entitle it to sell
the securities comprising the Units if such sale would contravene any
other applicable securities legislation or regulation.
2.14. The Investor understands that the offer and sale of the Securities are
(i) not being registered under the 1933 Act in reliance on the
so-called "private offering" exemption provided by Section 4 (2) of the
Act and/or Regulation D promulgated pursuant to the Act; and (ii) not
being registered under any applicable state securities laws based on
similar exemptions thereunder, and that the Company is basing its
reliance on these exemptions in part on the representations,
warranties, statements and agreements contained herein and those of
other investors contained in similar subscription agreements. The
Investor acknowledges and agrees that the Company is relying on the
Investor's representations contained in this Agreement and the related
subscription documents in determining whether to accept this
subscription. The Investor hereby gives the Company authority to call
his bank or place of employment or otherwise review the financial
standing of the Investor, and it is further agreed that the Company
reserves the unrestricted right to reject or limit any subscription.
2.15. If the Investor is a corporation, partnership, trust, or other
entity, (i) it is authorized and qualified to become a stockholder in,
and authorized to make its investment in, the Company; (ii) it has not
been formed for the purpose of acquiring an interest in the Company;
(iii) it has not been in existence for less than 90 days prior to the
date hereof and (iv) the person signing this Agreement on behalf of
such entity has been authorized to do so.
2.16. The Investor warrants and represents that all representations made by
the Investor hereunder are true and correct in all material respects as
of the date of this execution hereof, and the Investor further warrants
and represents that he shall inform the Company immediately of any
changes in any of the representations provided by the Investor
hereunder.
2.17. The Investor warrants and represents that neither the Company nor any
other person has made any representations to the Investor not contained
in the Offering Documents. The Investor understands and agrees that any
information or representation not contained therein must not, and will
not, be relied upon and that nothing contained
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therein should be construed as legal or tax advice to the purchaser.
2.18. The Investor warrants and represents that neither the Company nor any
other person has made any direct or indirect representation or warranty
of any kind to the Investor with respect to the economic return which
may accrue to the Investor. The Investor has consulted with his own tax
counsel and other advisors with respect to an investment in the
Company.
3. INDEMNIFICATION.
The Investor understands and acknowledges the meaning and legal
consequences of the representations, warranties and covenants contained
herein and in the Investor Questionnaire and hereby agrees to indemnify
and hold the Company and its agents, employees, officers, directors,
shareholders, representatives, affiliates, advisors and controlling
persons harmless from and against any and all loss, damage or liability
(including, without limitation, attorneys' fees and disbursements) due
to or arising out of a breach of any such representation, warranty,
covenant, acknowledgment or agreement, and this indemnification shall
survive the purchase and sale of the Units subscribed for herein. No
waiver by the Company of any breach by the Investor of any such
representation, warranty, covenants, acknowledgment or agreement shall
in any manner be deemed to be the waiver of any rights granted in
federal or state securities laws.
4. REPRESENTATIONS BY THE COMPANY.
The Company represents and warrants to the Investor as follows:
4.1. The Company is a corporation duly organized, existing and in good
standing under the laws of the province of British Columbia, Canada and
has the corporate power to conduct its proposed business.
4.2. The execution, delivery and performance of this agreement by the
Company has been duly approved by the Board of Directors of the
Company, and all other actions required to authorize and effect the
offer and sale of the Units have been or will be duly taken and
approved.
4.3. Subject only to approval by the Vancouver Stock Exchange, the Notes
have been duly and validly authorized and, when issued in accordance
with the terms hereof, will be duly and validly binding obligations of
the Company, enforceable in accordance with their terms.
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4.4. Subject only to approval by the Vancouver Stock Exchange, the
Warrants have been duly and validly authorized and, when issued in
accordance with the terms hereof, will be duly and validly binding
obligations of the Company, enforceable in accordance with their terms.
4.5. Subject only to approval by the Vancouver Stock Exchange, the
Common Stock issuable upon exercise of the Warrants and conversion of
the Notes, if ever, have been duly and validly authorized and, when
paid for and issued in accordance with the terms of the Warrants or
converted according to the terms of the Notes, will be duly and validly
issued, fully paid and non-assessable. The Company will at all times
during the term of the Warrants and the Notes have reserved a
sufficient number of shares of Common Stock to provide for exercise of
the Warrants and/or the conversion of the Notes.
5. TERMS OF THE OFFERING.
5.1. The Investor hereby agrees to purchase the number of Units from
the Company set forth upon the signature page hereof payable by bank
wire transfer, or a certified or bank cashier's check made payable to
"Portacom Wireless, Inc." The Investor understands and agrees that the
Company shall have the right, in its absolute and sole discretion, to
accept or reject this subscription in whole or in part; that the same
shall be deemed to have been accepted by the Company only in writing;
and that the Company shall have the right to revoke its acceptance of
the subscription, in whole or in part, at any time prior to the closing
of the sale of the Units. It is further understood that, except as
provided under any applicable state securities laws, this Agreement is
and shall be irrevocable on the part of the Investor, except that the
Investor shall not have any obligations hereunder in the event and to
the extent that this Subscription is rejected for any reason by the
Company. The minimum subscription per Investor shall be one (1) Unit.
However, the Company hereby reserves the right to accept subscriptions
for fractional Units.
5.2. The Investor hereby agrees that the Purchase Price may be used by
the Company for its general corporate purposes pending the approval of
this Agreement by all securities regulatory authorities having
jurisdiction over this private placement. Any interest income from the
Purchase Price shall be for the account of the Company regardless of
whether this Agreement is approved by such regulatory authorities or
not. The Investor further acknowledges and agrees that should such
regulatory authorities not approve this Agreement the Investor's
subscription funds shall be converted as of such date into a loan
payable on
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demand by the Company with a principal amount equal to the
Purchase Price and with simple interest of 10%.
5.3. The Units will be offered directly by the Company. Commissions or
placement fees of up to 10.0% may be paid by the Company to registered
broker-dealers or finders in connection with the placement of these
securities. The Company may additionally compensate broker-dealers and
placement agents in connection with this Offering through the issuance
of warrants to purchase Common Stock as permitted by Vancouver Stock
Exchange regulations.
6. REGISTRATION OF SECURITIES.
The Investor understands that there is no public market for the Notes
or the Warrants and only a limited public market for the Common Stock
issuable upon exercise of the Warrants or conversion of the Notes, if
ever, and that the Company makes no representations of any kind
concerning its intent or ability to offer or sell any thereof in a
public offering or otherwise. Subject to the exercise of the Warrants
and/or the conversion of the Notes, if ever, the Company is granting to
holders of the Warrants and to the holders of the Notes certain limited
registration rights with respect to the Common Stock issuable upon
exercise of the Warrants or conversion of the Notes. Such registration
rights are more specifically set forth in that certain Registration
Rights Agreement, a copy of which is attached hereto. The Investor
understands that if a public market for any of the Notes, Warrants or
the Common Stock should ever develop (as to which there is no
assurance), Rule 144 promulgated under the 1933 Act, permits, subject
to all of its terms and conditions, the public resale (in limited
amounts) of securities acquired in non-public offerings such as the
securities contemplated hereby without having to satisfy the
registration requirements of the 1933 Act. The Investor further
understands that the Company has failed to make certain required
filings under, and makes no representation or warranty regarding its
ability to fulfill in the future any reporting requirements under, the
Securities Exchange Act of 1934, as amended, or its future
dissemination to the public of any current financial or other
information concerning the Company, as is required by Rule 144 as one
of the conditions of its availability. Accordingly, the Investor
recognizes that, notwithstanding the existence of a public market for
the Notes, Warrants and Common Stock, he may not be able to take
advantage of the resale provisions of Rule 144 and may be unable to
publicly offer or sell any thereof.
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<PAGE>
7. MISCELLANEOUS.
7.1. Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail,
return receipt requested, addressed to the Company at 8055 W.
Manchester Avenue, Suite 730, Playa del Rey, California 90293,
Attention: Douglas MacLellan, President, and to the Investor at his
address indicated on the last page of this Agreement. Notices shall be
deemed to have been given on the date of mailing, except notices of
change of address, which shall be deemed to have been given when
received.
7.2. This Agreement shall not be changed, modified or amended except by a
writing signed by the parties to be charged, and this Agreement may not
be discharged except by performance in accordance with its terms or by
a writing signed by the party to be charged.
7.3. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and to their respective permitted heirs, legal
representatives, successors and assigns. This Agreement sets forth the
entire agreement and understanding between the parties as to the
subject matter thereof and merges and supersedes all prior discussions,
agreements and understandings of any and every nature among them.
7.4. This Agreement and its validity, construction and performance shall be
governed in all respects by the laws of the State of California.
Notwithstanding the place where this Agreement may be executed by any
of the parties hereto, the parties expressly agree that all the terms
and provisions hereof shall be construed in accordance with and
governed by the laws of the State of California. The parties hereby
agree that any dispute which may arise between them arising out of or
in connection with this Agreement shall be adjudicated before a court
located in Los Angeles and they hereby submit to the exclusive
jurisdiction of the courts of the State of California and of the
federal courts in the district of Los Angeles with respect to any
action or legal proceeding commenced by any party, and irrevocably
waive any objection they now or hereafter may have respecting the venue
of any such action or proceeding brought in such a court or respecting
the fact that such court is an inconvenient forum, relating to or
arising out of this Agreement or any acts or omissions relating to the
sale of the securities hereunder, and consent to the service of process
in any such action or legal proceeding by means of registered or
certified mail, return receipt requested, in care of the address set
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forth below or such other address as the undersigned shall furnish in
writing to the other.
7.5. This Agreement may be executed in counterparts. Upon the execution of
this Agreement by the Investor, this Agreement shall become a binding
obligation of the Investor; subject, however, to the rights hereby
reserved to the Company to enter into the same agreement with other
Investors, to delete other persons as Investors, to sell fractional
Units and to sell Units in amounts less than the minimum investment as
set forth herein.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto dated as of this ____ day of ___________________, 1996.
PORTACOM WIRELESS, INC.
a British Columbia corporation
By:
-------------------------------
Douglas C. MacLellan, President
TO BE COMPLETED BY
INDIVIDUAL PURCHASER(S)
- -----------------------------------------
Signature of Investor(s)
- -----------------------------------------
Name of Investor(s) (please print)
- -----------------------------------------
Address
- -----------------------------------------
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<PAGE>
- ------------------------------------------
Social Security or Taxpayer Identification
Number of Investor
- ------------------------------------------
Number of Units Subscribed for at
$100,000 per Unit
- ------------------------------------------
Total Purchase Price
Page 25 of 49
<PAGE>
Exhibit 4
FORM OF REGISTRATION RIGHTS AGREEMENTS
AGREEMENT, dated as of the date specified on the signature page hereto (the
"Agreement") between the person(s) who is designated as the holder on the
signature page hereto (the "Holder") and PortaCom Wireless, Inc., a corporation
incorporated under the laws of British Columbia and having its corporate
headquarters at 8055 W. Manchester Avenue, Suite 730, Playa del Rey, California
90293 (the "Company").
WHEREAS, simultaneously with the execution and delivery of this Agreement, the
Holder is purchasing from the Company certain securities of the Company pursuant
to a subscription agreement which entitle the Holder to receive, under certain
conditions, shares of common stock of the Company (the "Common Stock"). (The
shares received by the Holder, if any, pursuant to such Subscription Agreement
shall be referred to herein as the "Shares").
WHEREAS, the Company has agreed to provide the Holder with certain registration
rights as set forth herein.
NOW THEREFORE, in consideration of the premises, obligations and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and subject to and on the terms
and conditions set forth herein, the parties hereto agree as follows:
1. "Piggyback" Registration Rights.
If the Company proposes to register any of its shares of Common Stock under the
Securities Act of 1933, as amended (the "Act") by registration on Form S-1, S-2
or S-3 or any successor forms thereto (other than in connection with a merger,
acquisition, exchange offer or dividend reinvestment plan) either on its behalf
or on behalf of any selling shareholder of the Company where the Company is
responsible for payment of all expenses of such selling shareholder, it shall
give written notice by registered mail, at least twenty (20) days prior to the
filing of each such registration statement, to the Holder of its intention to do
so and shall inquire whether the Holder desires to include any of his Shares in
such registration. Upon written request from the Holder which is received by the
Company within ten (10) days after the date of any notice described in the
previous sentence, which request shall state the maximum amount of Shares
intended to be disposed of by the Holder, the Company shall (subject to the
provisions of Sections 2 and 3 below) use its best efforts to effect the
registration under the Act of such Shares at the Company's sole cost and
expense. Notwithstanding the foregoing, the Holder shall pay any underwriting
discounts or commissions in connection with the registration of the Shares,
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any taxes arising as a result of such registration, the fees and costs of any
attorney or other advisor representing the Holder in connection with such
registration and any telephone, telecopy, travel, messenger, courier or other
direct expenses incurred by the Holder in connection with such registration.
2. No Obligation.
Notwithstanding the provisions of Section 1 hereof, the Company shall have the
right at any time after it shall have given written notice pursuant to Section 1
(irrespective of whether a written request for inclusion of any Shares shall
have been made by the Holder) to elect not to file any such proposed
registration statement, or to withdraw the same after the filing but prior to
the effective date thereof.
3. Underwriter's "Hold Back."
Notwithstanding the provisions of Section 1 hereof, if the Company's managing
underwriter for the offering contemplated by a registration statement advises
the Company that in its good faith judgment the inclusion of all or a portion of
the Shares requested to be registered by the Holder, when added to the
securities being registered by the Company or any selling shareholder, will
exceed the maximum amount of the Company's securities which can be marketed (the
"Maximum Sale Amount") (i) in an orderly manner within a price range acceptable
to the Company and any other selling shareholders, or (ii) without otherwise
materially adversely affecting the entire offering, then the Company will
include in such registration:
(x) first, the securities the Company proposes to sell;
(y) second, to the extent the Maximum Sale Amount is not exceeded, any
securities proposed to be sold by security holders exercising contractual
"demand" registration rights; and
(z) third, to the extent the Maximum Sale Amount is not exceeded, any
Shares requested to be included in such registration by the Holder and any other
securities of the Company requested to be included in such registration by other
security holders of the Company with contractual "piggy back" registration
rights on a pro rata basis, in proportion to the number of securities originally
requested to be included in such registration by the Holder or such other
security holder.
4. Termination of Registration Rights.
The Holder's right to participate in a registration pursuant to this Agreement
shall terminate after the Company has made an offering of shares of Common Stock
to the public on Form S-1 (or any replacement or similar form) and the Holder's
Shares may be sold pursuant to Rule 144 under the Act (ignoring any holding
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period limitations set forth therein). Once the Holder's registration rights
have been terminated in accordance with this Section 4, such rights shall not be
thereafter reinstated.
5. Hold Back Agreements.
Each Holder agrees not to sell, make any short sale of, loan, grant any option
for the purchase of, or otherwise dispose of any equity securities of the
Company, or any securities convertible into or exchangeable or exercisable for
such securities, during the 180 day period beginning on the effective date of
the registration statement for any underwritten offering in which shares of
Common Stock are included (except as part of such underwritten registration),
unless the managing underwriters for the registered public offering otherwise
agree.
6. Registration Procedures.
Whenever the Company is required to register Shares pursuant to this Agreement,
the Company shall:
(a) Comply with all material federal securities laws and regulations relating to
the registration statement and the offering and sale of shares thereunder,
including filing any necessary amendments to the registration statement or other
supplemental documents required for such compliance;
(b) Furnish to the Holder such number of copies of such registration statement,
each amendment and post-effective amendment thereto, the prospectus included in
such registration statement (including each preliminary prospectus and any
supplement to such prospectus) and such other documents as the Holder may
reasonably request in order to facilitate the disposition of the Shares owned by
the Holder; it being understood that the Company hereby consents to the use, in
accordance with all applicable laws, of each such registration statement (or
amendment or post-effective amendment thereto) and each such prospectus (or
preliminary prospectus or supplement thereto) by the Holder, if any, in
connection with the offering and sale of the Shares covered by such registration
statement or prospectus);
(c) Use reasonable efforts to (i) register or qualify such Shares under the
securities or blue sky laws of such jurisdictions as the Holder reasonably
requests, except in the case of an underwritten offering, where such
registration or qualification shall be determined solely by agreement between
the Company and the managing underwriter, (ii) keep such registration or
qualification in effect for so long as such registration statement remains in
effect, and (iii) do any and all other acts and things which may be reasonably
necessary or advisable to enable the Holder to consummate the disposition in
such jurisdictions of the Shares owned by the Holder; provided that
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<PAGE>
the Company will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph, (ii) subject itself to taxation in any such jurisdiction or (iii)
consent to general service of process in any such jurisdiction;
(d) In the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Shares included in such registration statement for sale in any jurisdiction,
use reasonable efforts to obtain the withdrawal of such order;
(e) Notify the Holder,
(i) when the prospectus or any supplement or post-effective
amendment has been filed, and, with respect to the registration
statement or any post-effective amendment thereto, when the same has
become effective,
(ii) of the issuance by the Securities and Exchange Commission of
any stop order suspending the effectiveness of the registration
statement or the initiation of any proceedings for that purpose,
(iii) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale
in any jurisdiction or the initiation or threatening of any proceeding
of such purpose, and
(iv) at any time when the prospectus is required to be delivered
under the Act, of the discovery that, or of the happening of any event
as a result of which, the registration statement, the prospectus or any
document incorporated therein by reference contains an untrue statement
of a material fact or omits any material fact required to be stated
therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made, and, at the
reasonable request of the Holder, the Company will prepare a supplement
or amendment to such prospectus so that, as thereafter delivered to the
purchasers of such Shares, such prospectus will not contain an untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
The Holder agrees that upon receipt of any notice from the Company of
the happening of any event of the kind described
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<PAGE>
in Section 6(e)(ii) or (iv), each will, to the extent appropriate, discontinue
its disposition of Shares pursuant to the registration statement relating to
such Shares until, in the case of Section 6(e)(iv), its receipt of the copies of
the supplemented or amended prospectus contemplated by such Section and, if so
directed by the Company, will deliver to the Company all copies, other than
permanent file copies, then in its possession, of the prospectus relating to
such Shares current at the time of receipt of such notice.
7. Indemnification.
(a) Indemnification by the Company. The Company agrees that in the event of
any registration of any securities of the Company under the Act, the Company
will, and hereby does, indemnify and hold harmless the Holder (and its
respective directors, officers, partners, agents and affiliates and each other
person, if any, who controls the Holder within the meaning of the Act) if the
Holder offers Shares covered by such registration statement, against any losses,
claims, damages or liabilities, joint or several, (or actions or proceedings,
whether commenced or threatened, in respect thereof) to which the Holder or any
such director, officer, partner, agent or affiliate or controlling person may
become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities, arise out of or are based upon (i) any untrue statement
or alleged untrue statement of any material fact contained in any registration
statement under which such securities were registered under the Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto or (ii) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances in which
they were made not misleading, and the Company will reimburse such indemnified
party for any reasonable legal or any other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, liability,
action or proceeding; provided that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such indemnified party specifically for inclusion therein or any disclosure
directly relating to such person that was contained in the last draft of any
such document provided to such person for such person's review, except to the
extent that such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises as a result of the failure of the Company to
make any change in such disclosure requested by
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such person following such review. Such indemnity shall remain in full force
regardless of any investigation made by or on behalf of such Holder or any such
director, officer, partner, agent or affiliate or controlling person and shall
survive the transfer of such securities by such indemnified party.
(b) Indemnification by the Holder. As a condition to including any Shares
in any registration statement, the Company shall have received an undertaking
reasonably satisfactory to it from each Holder so including any Shares to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in Section 7(a)) the Company, and each director of the Company, each
officer of the Company and each other person, if any, who controls the Company
within the meaning of the Act, and any underwriter, with respect to any untrue
statement or alleged untrue statement in or omission or alleged omission from
such registration statement, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement thereto,
but only to the extent such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by the Holder specifically for
inclusion therein or any disclosure directly relating to such person that was
contained in the last draft of any such document provided to such person for
such person's review, except to the extent that such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises as a
result of the failure of the Company to make any change in such disclosure
requested by such person following such review. Such indemnity shall remain in
full force and effect, regardless of any investigation made by or on behalf of
the Company or any such director, officer or controlling person and shall
survive the transfer of such securities by such indemnifying party.
(c) Notices of Claims, etc. Promptly after receipt by an indemnified party
of notice of the commencement of any action or proceeding involving a claim
referred to in the preceding subsections of this Section 7, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party, give written notice to the latter of the commencement of such action or
proceeding; provided, however, that the failure of any indemnified party to give
notice as provided herein shall not relieve the indemnifying party of its
obligations under the preceding subsections of this Section 7, except to the
extent that the indemnifying party is prejudiced by such failure to give notice,
and shall not relieve the indemnifying party from any liability which it may
have to the indemnified party otherwise than under this Section 7. In case any
such action or proceeding is brought against an indemnified party, the
indemnifying party shall be entitled to participate therein and, unless in the
opinion of outside counsel to the indemnified party a conflict of interest
between such indemnified and indemnifying parties may
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exist in respect of such claim, to assume the defense thereof, jointly with any
other indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party; provided, however,
that if the defendants in any such action or proceeding include both the
indemnified party and the indemnifying party and if in the opinion of outside
counsel to the indemnified party there may be legal defenses available to such
indemnified party and/or other indemnified parties which are different from or
in addition to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to defend such action
or proceeding on behalf of such indemnified party or parties, provided, however,
that the indemnifying party shall be obligated to pay for only one counsel for
all indemnified parties (including, when the Company is the indemnifying party,
any parties indemnified by the Company under agreements similar to this
Agreement). After notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof and approval by the indemnified
party of such counsel, the indemnifying party shall not be liable to such
indemnified party for any legal expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of investigation
(unless the first proviso in the preceding sentence shall be applicable). No
indemnifying party shall be liable for any settlement of any action or
proceeding effected without its written consent. No indemnifying party shall,
without the consent of the indemnified party, consent to entry of any judgment
or enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect to such claim or litigation.
(d) Contribution. If the indemnification provided for in this Section 7
shall for any reason be held by a court to be unavailable to an indemnified
party under Section 7(a) or (b) hereof in respect to any loss, claim, damage or
liability, or any action in respect thereof, then, in lieu of the amount paid or
payable under Section 7(a) or (b), the indemnified party and the indemnifying
party shall contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating the same), (i) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand, and the indemnified
party on the other, which resulted in such loss, claim, damage or liability, or
action in respect thereof, with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations, or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law or if
the allocation provided in this clause (ii) provides a greater amount to the
indemnified party than clause (i) above, in such proportion as shall be
appropriate to
Page 32 of 49
<PAGE>
reflect not only the relative fault but also the relative benefits received by
the indemnifying party and the indemnified party from the offering of the
securities covered by such registration statement as well as any other relevant
equitable considerations. The parties hereto agree that it would not be just and
equitable if contributions pursuant to this Section 7(d) were to be determined
by pro rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to in the preceding sentence
of this Section 7(d). No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. No person
shall be obligated to contribute hereunder any amounts in payment for any
settlement of any action or claim effected without such person's consent, which
consent shall not be unreasonably withheld. Notwithstanding anything in this
Section 7(d) to the contrary, the aggregate liability of any indemnifying party
under this Section 7(d) shall be limited to the amount of net proceeds received
by such party from the sale of the shares in the offering to which the losses,
claims, damages or liabilities of the indemnified parties relate.
(e) Other Indemnification. Indemnification and contribution similar to that
specified in the preceding subsections of this Section 7 (with appropriate
modifications) shall be given by the Company and the Holder with respect to any
required registration or other qualification of securities under any federal,
state or blue sky law or regulation of any governmental authority other than the
Act. The indemnification agreement contained in this Section 7 shall be in
addition to any other rights to indemnification or contribution which any
indemnified party may have pursuant to law or contract and shall remain
operative and in full force and effect regardless of any investigation made by
and or on behalf of any indemnified party and shall survive the transfer of any
of the Shares of the Holder.
(f) Indemnification Payments. The indemnification and contribution required
by this Section 7 shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as and when bills are
received or expense, loss, damage or liability is incurred.
8. Underwritten Offerings.
In the case of the registration pursuant to Section 1 hereof, if the Company
shall have determined to enter into any underwriting agreements in connection
therewith, all of the Holder's Shares to be included in such registration shall
be subject to such underwriting agreements and the Holder shall execute such
underwriting agreements. If the Company shall have determined not to enter into
any such underwriting agreements, no Holder
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<PAGE>
shall have the right to compel the Company to enter into any such agreement.
9. Miscellaneous.
(a) Specific Performance. The parties hereto agree that money damages or
other remedy at law would not be sufficient or adequate remedy for any breach or
violation of, or a default under, this Agreement by them and that in addition to
all other remedies available to them, each of them shall be entitled to an
injunction restraining such breach, violation or default or threatened breach,
violation or default and to any other equitable relief, including without
limitation specific performance, without bond or other security being required.
(b) Amendments and Waivers. This Agreement may be amended, modified,
supplemented or waived only upon the written agreement of the party against whom
enforcement of such amendment, modification, supplement or waiver is sought.
(c) Binding Effect; Assignment. This Agreement shall inure to the benefit
of and shall be binding upon the parties hereto and their respective heirs,
legal representatives, successors and assigns; provided, however, the Holder's
rights under this Agreement may not be assigned except to the transferee of
Shares in connection with an assignment of such Shares which (i) takes place
prior to the registration of such Shares under the Act, and (ii) is not a
transaction exempt from registration under Rule 144 under the Act.
(d) Headings; References; Execution in Counterparts. The headings and
captions contained herein are for convenience only and shall not control or
affect the meaning or construction of any provision hereof. All article,
section, schedule, exhibit and paragraph references are to this Agreement,
unless otherwise expressly provided. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and
which together shall constitute one and the same instrument.
(e) Notices. All notices and other communications hereunder shall be in
writing and, unless otherwise provided herein, shall be deemed to have been
given when delivered by hand or mailed by registered or certified mail, postage
prepaid, return receipt requested, as follows:
(i) If to the Holder, to its address set forth on the signature
page to this Agreement, or such other address as shall be specified by
notice given in accordance with this Agreement.
(ii) If to the Company, to its address set forth on the first
page of this Agreement, or such other
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<PAGE>
address as shall be specified by notice given in accordance with this
Agreement.
(f) Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of California, without giving
effect to the principles of conflicts of law thereof.
(g) Invalidity of Provision. The invalidity or unenforceability of any
provision of this Agreement in any jurisdiction shall not affect the validity or
enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of this Agreement, including that provision, in any
other jurisdiction.
(h) Further Assurances. Each party hereto shall do and perform or cause to
be done and performed all further acts and things and shall execute and deliver
all other agreements, certificates, instruments and documents as any other party
hereto reasonably may request in order to carry out the intent and accomplish
the purposes of this Agreement.
(i) Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof, and
supersedes all prior agreements and understandings of the parties, oral and
written, with respect to the subject matter hereof.
(j) Definition of "Person". For the purpose of this Agreement, "person"
means an individual, corporation, partnership, association, trust,
unincorporated organization, other entity or group.
(k) Execution and Delivery by Spouse. If the Holder resides in a community
property state, any provision hereunder which requires the Holder to execute and
deliver any agreement, certificate, instrument or document shall be deemed to
also require the Holder's spouse to execute and deliver such agreement,
certificate, instrument or document.
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<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
Parties hereto dated as of the _____ day of __________, 1996.
PORTACOM WIRELESS, INC.
By:
------------------------------------
Its:
------------------------------------
HOLDER
----------------------------------------
Signature
----------------------------------------
Print Name
----------------------------------------
Address
----------------------------------------
----------------------------------------
----------------------------------------
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<PAGE>
Exhibit 5
FORM OF SUBSCRIPTION AGREEMENTS
THIS AGREEMENT, dated for reference ___________________, 1997, is made BETWEEN:
PORTACOM WIRELESS, INC. of 8055 W. Manchester Avenue,
Suite 730, Playa del Rey, California, U.S.A., 90293
(the "Company")
AND:
MICHAEL MARCUS of WILL'S WEI CORP.
----------------------------------
_________________________________________
(the "Investor")
WHEREAS:
A. The Company is offering for sale, on a private placement basis,
up to ___ units (the "Units") at a price of per Unit to raise aggregate
subscription proceeds of up to US$1,000,000; and
B. The Investor wishes to subscribe for ________ Units in the private
placement on the terms described below.
1. Definitions
1.1. In this Agreement:
(a) "Accredited Investor" means an "accredited investor" as defined
in Rule 501 of Regulation D and as described in Appendix 3 to this
Agreement;
(b) "Acts" means the B.C. Act and the U.S. Securities Act;
(c) "B.C. Act" means the Securities Act (British Columbia), as
amended;
(d) "Closing" means the closing of the Offering;
(e) "Closing Date" means the date on which the Units will be issued to
the Investor;
(f) "Commission" means the British Columbia Securities Commission;
(g) "Company" means PortaCom. Wireless, Inc. and any successor
corporation thereof;
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<PAGE>
(h) "Loan" has the meaning given at subsection 4.1;
(i) "Exchange" means the Vancouver Stock Exchange;
(j) "Offering" means the offering of the Units;
(k) "Regulation D" means Regulation D under the U.S. Securities Act;
(l) "Regulation S" means Regulation S under the U.S. Securities Act;
(m) "Regulatory Authorities" means the Commission and the Exchange;
(n) "Rules and Regulations" means the rules and regulations
promulgated under the B.C. Act;
(o) "Securities" means the Shares, the Warrants and the Warrant
Shares;
(p) "Share" means a common share of the Company or any successor
thereof forming part of a Unit;
(q) "Subscription Price" has the meaning given at subsection 2.1;
(r) "Unit" means a unit of the Company or any successor thereof to be
sold at a price of US$___ per unit, each comprised of one Share
and one Warrant;
(s) "U.S. Person" has the meaning given under Regulation S;
(t) "U.S. Securities Act" means the United States Securities Act of
1933, as amended;
(u) "Warrant" means a non-transferable common share purchase warrant
of the Company or any successor corporation to the Company
substantially in the form attached as Appendix 4;
(v) "Warrant Share" means a common share issuable upon the exercise of
a whole Warrant;
1.2. All other capitalized terms in this Agreement not defined above have
the meanings ascribed to them in this Agreement.
1.3. For the purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
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<PAGE>
(a) "this Agreement" means this subscription agreement;
(b) any reference in this Agreement to a designated "section",
"subsection", "paragraph" or other subdivision refers to the
designated section, subsection, paragraph or other subdivision of
this Agreement;
(c) the words "herein" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any
particular section or other subdivision of this Agreement;
(d) the word "including", when following any general statement, term
or matter, is not to be construed to limit such general statement,
term or matter to the specific items or matters set forth
immediately following such word or to similar items or matters,
whether or not non-limiting language (such as "without limitation"
or "but not limited to" or words of similar import) is used with
reference thereto but rather refers to all other items or matters
that could reasonably fall within the broadest possible scope of
such general statement, term or matter;
(e) any reference to a statute includes and, unless otherwise
specified herein, is a reference to such statute and to the
regulations made pursuant thereto, with all amendments made
thereto and in force from time to time, and to any statute or
regulations that may be passed which has the effect of
supplementing or superseding such statute or such regulation;
(f) any reference to "party" or "parties" means the Company, the
Investor, or both, as the context requires;
(g) the headings in this Agreement are for convenience Of reference
only and do not affect the interpretation of this Agreement;
(h) words importing the masculine gender include the feminine or
neuter gender and words in the singular include the plural, and
vice versa; and
(i) all references to currency refer to United States dollars.
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<PAGE>
1.4. The appendices attached to this Agreement are incorporated by reference
in and form a part of this Agreement.
2. Subscription
2.1. The Investor, as principal, subscribes for and agrees to purchase,
on the Closing Date, Units of the Company at a price of US$ per Unit,
for an aggregate purchase price of US$200,000 (the "Subscription
Price") subject to the approval of the Exchange. Each Unit consists of
one Share and one Warrant. Each whole Warrant entitles the holder
thereof to purchase one (1) additional common share in the capital of
the company for two years at an exercise price of US$ at any time until
one year from the date of this Agreement and thereafter at a price of
US$ until two years from the date of this Agreement. No fractional
common shares of the Company will be issued.
2.2. The Investor acknowledges that this Subscription is an offer only
and requires acceptance by the Company, approval from the Exchange and,
until accepted by the Company as evidenced by execution hereof and
written approval to this Subscription is received from the Exchange,
the Company will not be bound by any provision of this Subscription. A
reference in this Subscription to "this Agreement" refers to the
agreement formed on acceptance by the Company and Exchange approval of
this Subscription.
2.3. The terms and conditions which govern the Warrants will be referred to
on the certificates representing the Warrants and will contain, among
other things, provisions for the appropriate adjustment in the class,
number and price of the shares to be issued on the exercise of the
Warrants upon the occurrence of certain events including any
subdivision, consolidation or reclassification of the shares or
amalgamation or merger of the Company or the payment of stock
dividends.
2.4. The issue of the Warrants will not restrict or prevent the Company from
obtaining any other financing, nor from issuing additional securities
or rights during the period within which the Warrants are exercisable.
3. Payment of Subscription Price and Delivery of Documents
The Investor will, on execution of this Subscription, deliver the following
to the Company:
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<PAGE>
(a) this fully completed Subscription duly executed by the Investor:
(b) the full amount of the Subscription Price payable to the Company by
cheque, wire transfer or bank draft;
(c) a fully completed and duly executed Private Placement Questionnaire
and Undertaking prescribed by the Exchange and attached to this
Agreement as Appendix 1;
(d) if the Investor is an individual (i.e., not a corporation, partnership,
unincorporated association, unincorporated syndicate, unincorporated
organization or trust), a fully completed Form 20A Acknowledgment of
Individual Purchaser attached to this Agreement as Appendix 2; and
(e) if the Investor is a U.S. Person, a fully completed and duly executed
Accredited Investor Questionnaire attached to this Agreement as
Appendix 3.
4. Closing
4.1. Until the Investor's Subscription is accepted by the Exchange the
Subscription Price for the Units will be advanced by the Investor to
the Company as an irrevocable non-interest bearing loan (the "Loan") to
the Company pending Closing.
4.2. The Closing will occur within five business days following the date
on which the Company receives final acceptance from the Exchange of
this Agreement.
4.3. The Company's obligation to complete the sale of the Units to the
Investor is subject to the following conditions:
(a) the Company having received final acceptance from the Exchange
of this Agreement;
(b) the Investor having delivered to the Company the Subscription
Price and documents in a form duly executed and completed, as
required in section 3;
(c) the Investor having delivered all such other documentation
as may be required by the applicable securities legislation and
securities regulatory authorities in order to complete the
purchase and sale of the Units; and
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<PAGE>
(d) all representations and warranties of the Investor contained in
this Agreement being true as of the Closing Date.
4.4. At Closing, the Company will deliver to the Investor certificates
representing the Shares and the Warrants registered in the name of the
Investor.
4.5. At Closing, the Company will deliver to the Investor such copies of
approvals or other documents evidencing acceptance of the Subscription
by the Company and the Regulatory Authorities, as the Investor may
reasonably request.
5. Regulatory Approval
5.1. Upon receipt of the Subscription Price by the Company, and upon this
Subscription being fully executed and delivered to the Company and
accepted by the Company, the Company will use its reasonable efforts to
obtain the acceptance of the Exchange to the issue and sale of the
Units to the Investor.
6. Acknowledgments, Representations and Warranties of the Investor
The Investor acknowledges, represents and warrants to the Company, as at
the date stated above and at the Closing Date, that:
(a) no prospectus has been filed by the Company with the Commission in
connection with the issuance of Units, the issuance is exempted
from the registration and prospectus requirements of the B.C.
Act or the Rules and Regulations and that:
(i) the Investor is restricted from using most of the civil
remedies available under the B.C. Act and the Rules
and Regulations;
(ii) the Investor may not receive information that would
otherwise be required to be provided to the Investor under
the B.C. Act and the Rules and Regulations; and
(iii) the Company is relieved from certain obligations that would
otherwise apply under the B.C. Act and the Rules and
Regulations;
(b) the Investor is purchasing Units as principal for his own account,
and not for the benefit of any other person or company, and the
acquisition cost of the Units to the Investor is not less than
Page 42 of 49
<PAGE>
CDN$97,000 and, if the Investor is an individual, the Investor
has completed, executed and delivered to the Company a Form 20A
Acknowledgment of Individual Purchaser attached to this Agreement
as Appendix 2;
(c) the Investor is not purchasing Units with a view to resale;
(d) the offer and sale of the Units were not accompanied by an
advertisement;
(e) the Investor either:
(i) is a U.S. Person, is an Accredited Investor, and the
information contained in the Investor's Accredited
Investor Questionnaire in the form attached to this
Agreement as Appendix 3 is true and correct; or
(ii) is not a U.S. Person and is not acquiring the Units for
the account or benefit of any U.S. Person;
(f) no person has made to the Investor any written or oral
representations:
(i) that any person will resell or repurchase the Units;
(ii) that any person will refund the purchase price of Units;
(iii) as to the future price or value of the Units; or
(iv) that the securities forming the Units will be listed and
posted for trading on a stock exchange or that application
has been made to list and post the securities forming the
Units for trading on a stock exchange other than the
Exchange;
(g) if the Securities are at any time hereafter listed for trading on
an exchange in the United States or through a market in the United
States, further resale restrictions may apply to the Units;
(h) this subscription has not been solicited in any manner contrary to
the Acts or the Rules and Regulations;
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<PAGE>
(i) the Investor is not a "control person" of the Company as
defined in the B.C. Act, will not become a "control person"
by virtue of this purchase of the Units and does not intend to
act in concert with any other person to form a control group;
(j) the Investor is at arm's length to the Company;
(k) the Investor has no knowledge of, and the Units are not being
purchased as a result of, any "material fact" (as that term is
defined in the B.C. Act) in the affairs of the Company that has
not been generally disclosed to the public, except for knowledge
of this particular transaction;
(l) the offer made by this subscription is irrevocable and requires
acceptance by the Company and the approval of the Exchange;
(m) the Investor has sought and obtained independent legal advice
regarding the purchase and resale of the Securities under the Acts
and the Rules and Regulations and any other applicable securities
laws;
(n) in purchasing Units, the Investor has relied on no representations
or warranties of the Company other than those contained in this
Agreement;
(o) unless the Investor is otherwise exempted under the B.C. Act or
the Rules and Regulations and the applicable rules or policies
of the Exchange, the Securities must be unconditionally held for a
period of twelve months from the Closing Date in accordance with
the B.C. Act the Rules and Regulations and the undertaking being
given by the Investor to the Exchange by virtue of the
Investor executing and delivering the Private Placement
Questionnaire and Undertaking attached as Appendix 1 to this
Agreement and, if the Investor is not a resident of British
Columbia and is a U.S. Person, the Securities may also be subject
to a minimum hold period of two years from the Closing Date
(in addition to any Warrant Shares which may be acquired
being subject to additional hold periods from the date of their
issuance), along with any additional resale restrictions as may be
applicable to the Investor by virtue of his jurisdiction of
residency;
(p) the certificates representing the Shares, Warrants and Warrant
Shares will contain a legend denoting restrictions on transfer as
referred to herein;
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<PAGE>
(q) the Investor has received a copy of the Company's most recent
financial statements;
(r) the Investor has the legal capacity and competence to enter into
and execute this Agreement and to take all actions required
pursuant hereto;
(s) the entering into of this Agreement and the transactions
contemplated hereby will not result in the violation of any of the
terms and provisions of any law applicable to, the Investor or of
any agreement, written or oral, to which the Investor may be a
party or by which the Investor is or may be bound;
(t) this Agreement has been duly executed and delivered by the
Investor and constitutes a valid obligation of the Investor
legally binding upon the Investor and enforceable against the
Investor in accordance with its terms;
(u) the Investor has not purchased the Units as a result of any
general solicitation or general advertising, including
advertisements, articles, notices, or other communications
published in any newspaper, magazine, or similar media or
broadcast over radio or television, or any similar meeting whose
attendees have been invited by general solicitation or general
advertising;
(v) the Investor has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and
risks of its investment in the Units and is able to bear the
economic risks of such investment;
(w) the Investor has had an opportunity to ask questions and receive
answers concerning the Company and its proposed business, and that
any request for such information has been complied with to the
Investor's satisfaction; and
(x) the Company is currently incorporated under the laws of British
Columbia, however, it is undergoing a reorganization that may
result in the Company being merged with its wholly-owned Delaware
subsidiary, thereby becoming a Delaware corporation.
7. Compliance with Securities Laws
7.1. The Investor acknowledges that, pursuant to the B.C. Act, the Rules and
Regulations and the policies of the Exchange, the Warrants are
non-transferable and the
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<PAGE>
Shares and the Warrant Shares may not be traded for a period of one
year from the Closing Date. The Investor accordingly agrees to sell,
assign or transfer the Shares and Warrant Shares only in accordance
with the B.C. Act, the Rules and Regulations and the policies of the
Exchange.
7.2. The Investor acknowledges that the Securities have not been and will
not be registered under the U.S. Securities Act or the securities laws
of any state of the United States, that although the Company intends to
register the Securities under the U.S. Securities Act or the securities
laws of any state that it has no obligation to do so, and that the
Securities may not be offered or sold within the United States unless
registered under the U.S. Securities Act and the securities laws of all
applicable states or an exemption from registration requirements is
available. In the event that the Investor proposes to sell the Shares
or Warrant Shares in reliance on an exemption from registration
requirements, the Investor shall cause to be delivered to the Company a
legal opinion, in a form satisfactory to the Company, confirming the
ability of the Investor to rely on such exemption.
7.3. The Investor acknowledges that the following legend, in addition to
other legends which may be required, will be placed on each of the
certificates issued for the Shares, the Warrants and, as applicable,
the Warrant Shares:
"The securities represented by this certificate are subject to a
hold period and may not be traded in British Columbia until (
except as permitted by the Securities Act (British Columbia) and
regulations made under the Act."
Notwithstanding anything to the contrary, the following restriction on
transferability shall apply to any U.S. Person and shall appear on
certificates issued for the Shares, the Warrants and, if applicable,
the Warrant Shares:
"The securities represented hereby have not been registered under
the United States Securities Act of 1933, as amended (the "U.S.
Securities Act"), and may not be offered for sale, sold or
otherwise transferred or assigned, directly or indirectly, without
registration of such securities under the U.S. Securities Act and
all applicable state securities laws or
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<PAGE>
compliance with an applicable exemption therefrom or with
Regulation S under the U.S. Securities Act, such compliance,
at the option of the Company, to be evidenced by an opinion of
shareholder's counsel, in form acceptable to the Company, that no
violation of such registration provisions would result from any
proposed transfer or assignment."
8. Acknowledgments, Representations and Warranties of the Company
The Company represents and warrants to the Investor, as at the date stated above
and at the Closing Date, that:
(a) the Company is a valid and subsisting corporation duly
incorporated and in good standing under the laws of its
incorporation or reorganization;
(b) the Company will reserve or set aside sufficient shares in the
treasury of the Company to issue the Shares and the Warrant
Shares;
(c) the Company is an "exchange issuer" as defined in the B.C. Act,
is recognized as such by the Commission and the Exchange, and is
not on the list of defaulting issuers maintained by the
Commission;
(d) the issuance and sale of the Units by the Company do not and will
not conflict with and do not and will not result in a breach of
any of the terms, conditions or provisions of its constating
documents or any agreement or instrument to which the Company is a
party; and
(e) this Agreement has been duly authorized by all necessary corporate
action on the part of the Company and upon and subject to its
execution by the Company will constitute a valid obligation of the
Company legally binding upon it and enforceable in accordance with
its terms.
9. Miscellaneous
9.1. This Agreement is Governed by the laws of British Columbia and the
parties hereby irrevocably attorn to the non-exclusive jurisdiction of
the courts of British Columbia for the resolution of all disputes
arising under this Agreement.
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<PAGE>
9.2. Any notice, payment, or other communication to a party under this
Agreement may be made, given or served by telecopier, hand delivery,
courier or by mail. Notices sent by telecopier, hand delivery or
courier shall be deemed to be received at the time of transmission or
delivery. Notices sent by mail shall be deemed to be received five
business days following mailing. Each party may change his or its
address for service at any time by notice in writing to the other.
9.3. Time is of the essence of the Agreement and will be calculated in
accordance with the Interpretation Act (British Columbia).
9.4. This Agreement and the rights and obligations contained in this
Agreement may not be assigned by the Investor.
9.5. The parties will execute and deliver all such further documents and
instruments and do all such further acts and things as the other party
may reasonably require to carry out the full intent of this Agreement.
9.6. This Agreement contains the whole agreement between the Company
and the Investor in respect of the purchase and sale contemplated and
there are no warranties, representations, terms, conditions or
collateral agreements, express, implied or statutory, other than those
expressly set forth in this Agreement.
9.7. The parties to this Agreement may amend this Agreement only in writing
signed by both parties.
9.8. This Agreement ensures to the benefit of and is binding upon the
parties to this Agreement and their successors and permitted assigns.
9.9. This Agreement may be executed by the parties in counterparts, in
original or telecopy format and all of which counterparts will be
construed as one and the same document.
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<PAGE>
IN WITNESS WHEREOF the Investor has executed this Agreement and has agreed to be
bound by the terms thereof on January 28, 1997.
Signature of Investor or Authorized
Signatory if Investor is not an
individual
c/s ____________________________________
[if Investor is not an individual] Name of Investor
Name and Title of signatory if
Investor is not an individual
This subscription for _______ Units of the Company has been accepted by the
Company as at the ____ day of __________________________, 1997.
PORTACOM WIRELESS, INC.
__________________________
Authorized signatory
Page 49 of 49
