7th Nov 2005 17:44
NETeller PLC07 November 2005 FOR IMMEDIATE RELEASE OUTSIDE THE UNITED STATES AND CANADA ONLY NOT FOR DISTRIBUTION IN OR INTO JAPAN, AUSTRALIA OR THE REPUBLIC OF IRELAND 7 November 2005 NETELLER Plc ("NETELLER" or the "Company") Underwritten Placing by Founder Shareholders of 35,000,000 Existing Ordinary Shares NETELLER announces that certain of the Company's founder shareholders, CorvinaInternational Ltd., Eagle Medallion Fortress Investment Corporation ("EagleMedallion") and 1098853 Alberta Ltd. (collectively the "Sellers"), areundertaking an underwritten placing of 35,000,000 existing ordinary shares (the"Placing Shares") exclusively through the Company's brokers, Canaccord Capital(Europe) Limited (the "Placing"). The underwritten placing is to be completed at625 pence per share. The Sellers have agreed to an additional market lock-in arrangement withCanaccord which among other things will restrict their ability to sell anyfurther shares for 12 months from 7 November 2005. The Placing will result inthe founder shareholders holding less than 30 per cent of the issued sharecapital of the Company and hence no longer be deemed to exercise control, asdefined by the City Code. Confirmed buyers in the placing include two members ofthe Company's senior management team. In advance of the placing today, Corvina International Ltd. ("Corvina")transferred 16,111,603 shares, representing 13.4% of the Company's sharecapital, to Eagle Medallion, reflecting the ultimate beneficial interest of JohnLeFebvre, non-executive director of the Company. John LeFebvre is the soleshareholder of Eagle Medallion, holding 100% of the issued share capital. EagleMedallion is selling 9,473,509 shares as part of the Placing. Stephen Lawrence, chairman of the Company, is a shareholder of Corvina, holding95.8% of the issued share capital of Corvina, which prior to the Placing andafter the transfer to Eagle Medallion is the registered holder of 27,431,380ordinary shares in the Company, representing 22.8% of the Company's issued sharecapital. Corvina is selling 17,345,839 shares as part of the Placing The Placing Shares are already admitted to trading on AIM. Following the PlacingCorvina will continue to hold 10,085,541 ordinary shares of the Company, EagleMedallion will continue to hold 6,638,094 ordinary shares of the Company and1098853 Alberta Ltd. will continue to hold 8,144,765 ordinary shares of theCompany (representing approximately 8.4%, 5.5% and 6.8%, respectively, of theissued and outstanding ordinary shares of the Company). This announcement ("Announcement") is for informational purposes only. TheAppendix to this Announcement is directed only at residents of the United Statesand Canada and the Placing to persons in the United States and Canada will beconducted in accordance with the terms and conditions set out in the Appendix. Enquiries to: NETeller PLCGord Herman, Chief Executive Officer Tel: 01293 897 515Andrew Gilchrist, Vice President, Communications Canaccord Capital (Europe) LimitedNeil Johnson Tel: 020 7518 2777Mark AshurstChris Bowman Citigate Dewe RogersonSarah Gestetner Tel: 020 7638 9571Seb HoyleGeorge Cazenove This Announcement is not an offer of securities for sale in the United States.Securities may not be offered or sold in the United States absent registrationor an exemption from registration under the US Securities Act of 1933, asamended (the "US Securities Act"). The Company or Sellers do not intend toregister any securities under the US Securities Act and does not intend to offerany securities to the public in the United States. No money, securities or otherconsideration from any person inside the United States is being solicited and,if sent in response to the information contained in this announcement, will notbe accepted. This Announcement is not an offer for sale of securities in or into Japan,Australia or the Republic of Ireland or in any other jurisdiction. Canaccord is acting exclusively for the Sellers in connection with the Placingand no one else and will not be responsible to anyone other than the Sellers forproviding the protections afforded to clients of Canaccord nor for providingadvice in relation to the Placing or any transaction or arrangement referred toherein. Canaccord can be contacted at 27 Upper Brook Street, London W1K 7QF. ThePlacing is conditional upon, inter alia, the letter agreement between theSellers and Canaccord not being terminated prior to 14 November 2005 the datewhen settlement is expected to occur in CREST. APPENDIX IMPORTANT INFORMATION ON THE PLACING FOR PERSONS IN THE US AND PERSONS RESIDENT IN CANADA ONLY Eligible Participants in the Placing This Appendix and the terms and conditions set out herein are directed only topersons who are outside the United Kingdom and that are either (i) persons thatare in the United States and "qualified institutional buyers" ("QIBs") asdefined in Rule 144A under the US Securities Act; or (ii) resident in Alberta,British Columbia or Ontario and "accredited investors" as defined in NationalInstrument 45-106 Prospectus and Registration Exemptions ("NI 45-106")("Relevant Persons"). This Appendix must not be acted on or relied on by personswho are not Relevant Persons. Any investment or investment activity to whichthis Appendix and the terms and conditions set out herein relates is availableonly to Relevant Persons and will be engaged in only with Relevant Persons. ThisAppendix does not in itself constitute an offer for sale or subscription of anysecurities in the Company. Relevant Persons who choose to participate in the Placing ("Placees" or "Participants") will be deemed to have read and understood the Announcement andthis Appendix in its entirety and to be participating on the terms andconditions contained therein and herein, and to be providing therepresentations, warranties, agreements, acknowledgements and undertakings, ineach case as contained in this Appendix. Neither of the Announcement nor this Appendix constitute an offer to sell orissue or the solicitation of an offer to buy or subscribe for ordinary shares inthe capital of the Company in the United States, or in any jurisdiction in whichsuch offer or solicitation is unlawful and the information contained herein isnot for publication or distribution to persons in the United States or anyjurisdiction in which such publication or distribution is unlawful. Personsreceiving the Announcement and this Appendix (including, without limitation,custodians, nominees and trustees) must not distribute, mail or send it in, intoor from the United States, or use the United States mails, directly orindirectly, in connection with the Placing, and so doing may invalidate anyrelated purported application for Placing Shares. The Placing Shares have notbeen and will not be registered under the US Securities Act or under thesecurities laws of any state or other jurisdiction of the United States, and,subject to certain exceptions from the appropriate requirements of suchjurisdiction, may not be offered or sold, resold or delivered, directly orindirectly in or into the United States, or to, or for the account or benefitof, US persons (within the meaning of Regulation S under the US Securities Act).No public offering of the Placing Shares is being made in the United States. ThePlacing Shares are being offered and sold outside the United States in relianceon Regulation S of the US Securities Act. Until the expiration of 40 days afterthe closing of the Placing, an offer or sale of the Placing Shares sold inreliance upon Regulation S within the United States or to, or for the account orbenefit of, US persons may violate the registration requirements of the USSecurities Act. The distribution of the Announcement and this Appendix and the Placing ofordinary shares in the capital of the Company in certain other jurisdictions maybe restricted by law. No action has been taken by the Company, the Sellers orCanaccord that would permit an offer of such ordinary shares or possession ordistribution of the Announcement or this Appendix or any other offering orpublicity material relating to such ordinary shares in any jurisdiction whereaction for that purpose is required. Persons into whose possession theAnnouncement and this Appendix comes are required by the Company, the Sellersand Canaccord to inform themselves about and to observe any such restrictions. Details of the Letter Agreement and the Placing SharesCanaccord has entered into a letter agreement (the "Letter Agreement") with theSellers whereby Canaccord, as broker for the Sellers, will as agent of theSellers procure placees for 35,000,000 Placing Shares at the Placing Price of£6.25 per share and, if necessary, will itself purchase the Placing Shares forwhich it has not procured purchasers at the Placing Price. Admission to Trading The Placing Shares are already admitted to trading on AIM. Principal Terms of the Placing 1. Canaccord, directly or through an affiliate or sub-agent,is arranging the Placing as agent for the Sellers. For that portion of thePlacing Shares which Canaccord does not procure purchasers itself at the PlacingPrice, Canaccord, directly or through an affiliate or sub-agent, will purchaseshares as principal. 2. Participation will only be available to Relevant Personsinvited to participate by Canaccord, directly or through the relevant affiliate,and who communicate their wish to participate in the Placing to Canaccord,directly or through the relevant affiliate, in accordance with paragraph 4 belowand who are able to participate in accordance with the terms and conditions setout herein. Canaccord, directly or through an affiliate, is entitled to enterbids as principals in the Placing. 3. The Placing Price is £6.25 per Placing Share. 4. A Relevant Person that wishes to participate in the Placingshould communicate its order by telephone to Canaccord's relevant affiliate. Theorder should state the number of Placing Shares which the Relevant Person wishesto purchase at the Placing Price. 5. Any order will be made on the terms and conditions in thisAppendix and will not be capable of variation or revocation after the close ofthe Placing. 6. Canaccord reserves the right not to accept bids or toaccept orders in part rather than in whole. The acceptance of orders shall be atCanaccord's absolute discretion. 7. The Placing will close no later than 8am (London time) on 8November 2005, but may be closed earlier at the sole discretion of Canaccord.Canaccord may, in its sole discretion, accept orders that are received after thePlacing has closed. Conditions of the Letter AgreementThe Placing is conditional on the Letter Agreement becoming unconditional in allrespects and not being terminated in accordance with its terms. Canaccord reserves the right to waive or to extend the time and/or date forfulfilment of the conditions in the Letter Agreement. Any such extension orwaiver will not affect Placees' commitments. Neither Canaccord nor the Sellersshall have any liability to any Placee (or to any other person whether actingfor or on behalf of a Placee or otherwise) in respect of any decision it or theymay make as to whether or not to waive or to extend the time and/or date for thesatisfaction of any condition in the Letter Agreement. If any condition is not satisfied in all respects or (where applicable) waived,in whole or in part, by Canaccord or becomes incapable of being satisfied (andis not so waived) by the required time, the Sellers will procure that theCompany promptly make a public announcement through a Regulatory InformationService to that effect. If: (a) any of the conditions above are not satisfied (or, where relevant,waived); (b) the Letter Agreement is terminated; or (c) the Letter Agreementdoes not otherwise become unconditional in all respects, the Placing will lapseand Placees' rights and obligations hereunder shall cease and determine at suchtime and no claim shall be made by Placees in respect thereof. Each Participant in the Placing agrees that its rights and obligations hereunderterminate only in the circumstances described above and will not be capable ofrescission or termination by it. Right to Terminate Under the Letter AgreementCanaccord is entitled in its absolute discretion by notice in writing to theSellers to terminate the Letter Agreement if, inter alia, prior to completion ofthe Placing: (a) there shall occur any material adverse change in the financialmarkets in the Canada, United States, the UK, any member of the European Unionor the international financial markets, any outbreak of hostilities orescalation of hostilities or other calamity or crisis or any change ordevelopment involving a prospective change in national or internationalpolitical, financial or economic conditions, or currency exchange rates, in eachcase the effect of which is such as to make it, in the reasonable judgment ofCanaccord acting in good faith, impracticable or inadvisable to market thePlacing Shares or to enforce contracts for the sale of the Placing Shares; or (b) in the opinion of Canaccord, there shall have been anymaterial adverse change (whether or not foreseeable at the date of thisagreement) in, or any development reasonably likely to involve a prospectivematerial adverse change in the condition (financial, operational, legal orotherwise) or the earnings, business affairs or business prospects of theCompany and its subsidiaries taken as a whole, whether or not arising in theordinary course of business. Each Participant in the Placing agrees with Canaccord that the exercise byCanaccord of any right of termination or other right or discretion under theLetter Agreement shall be at the absolute discretion of Canaccord and thatCanaccord need make no reference to Participants and shall have no liability toParticipants whatsoever in connection therewith. Placing Documents The Placees' commitments will be made solely on the basis of the informationcontained in the Announcement and this Appendix and any information publiclyannounced to a Regulatory Information Service by or on behalf of the Companyprior to the date of this Announcement. Each Placee agrees and confirms that ithas neither received nor relied on any other information, representation,warranty or statement made by or on behalf of Canaccord, the Sellers or theCompany and neither the Company, Sellers nor Canaccord will be liable for anyPlacee's decision to participate in the Placing based on any other information,representation, warranty or statement. Each Placee acknowledges and agrees thatit has relied on its own investigation of the business, financial and tradingposition of the Company in accepting a participation in the Placing. Nothing inthis paragraph shall exclude the liability of any person for fraudulentmisrepresentation. Registration, Settlement and Stamp DutyPlacees will be sent a conditional contract note which shall state the number ofPlacing Shares acquired by such Placee at the Placing Price. It is expected thatthese conditional contract notes will be despatched on 7 November 2005. Settlement of transactions in the Placing Shares (ISIN: GB0034264548) to Placeeswill take place in uncertificated form against payment within the CREST systemvia CREST Participant 805. If a Placee resident in US, Alberta, British Columbia or Ontario is unable tosettle the purchase of the Placing Shares within the CREST system, settlementwill occur in certificated form (i.e. paper share certificates). If a Placeeresident in United States, Alberta, British Columbia or Ontario settles thepurchase of Placing Shares in certificated form, the Placee acknowledges andunderstands that: (i) such certificate(s) will bear a legend in accordance withapplicable Canadian and U.S. securities laws; and (ii) settlement of its PlacingShares will be delayed beyond the expected date for settlement in CREST. See"Notice to Canadian Investors" and "Notice to US investors". Settlement in CREST is expected to occur on or about 14 November 2005. Interest is chargeable and will accrue daily on all amounts due from the Placeesto the extent that value is received after the due date at the rate of 5percentage points above prevailing LIBOR. In the event that a Participant does not comply with its settlement obligations,Canaccord may sell the Placing Shares allocated to such Participant and retainthe sale proceeds (net of any expenses of sale in relation to such PlacingShares). Such Participant will, however, remain liable for any shortfall betweenthe net proceeds of such sale and the Placing Price in respect of such PlacingShares and may be required to bear any stamp duty or stamp duty reserve tax(together with any interest or penalties) which may arise upon the sale of suchParticipant's Placing Shares on its behalf. If Placing Shares are to be delivered to a custodian or settlement agent, eachParticipant opting to have its Placing Shares so delivered should ensure thatthe conditional contract note is copied and delivered immediately to therelevant person within that organisation. Stamp duty or stamp duty reserve tax will be payable by Placees at the rate of0.5% of the aggregate Placing Price paid by the Placee in connection with thepurchase of the Placing Shares and Placees undertake to Company, the Sellers andCanaccord that they are responsible for and will pay the stamp duty or stampduty reserve tax arising from their purchase of the Placing Shares. No Participant will be entitled to receive any fee or commission in connectionwith the Placing. Representations, Warranties and AcknowledgementsIn addition to making the following representations, warranties andacknowledgements, Placees in the US make the representations, warranties andacknowledgements set out under the heading "Notice to US Investors" below andPlacees resident in Alberta, British Columbia and Ontario make therepresentations, warranties and acknowledgements set out under the heading"Notice to Canadian Investors" below. By participating in the Placing each Placee represents, warrants andacknowledges that: 1. it has read the Announcement and this Appendix; 2. the only information upon which it has relied in committingto acquire the Placing Shares is that contained in the Announcement and thisAppendix and any information publicly announced to a Regulatory InformationService by or on behalf of the Company prior to the date of this announcementand confirms that it has neither received nor relied on any other information,representation, warranty or statement made by or on behalf of the Company,Sellers or Canaccord; 3. stamp duty or stamp duty reserve tax will be payable by itin connection with the purchase of the Placing Shares and the Placee undertaketo Company, the Sellers and Canaccord that it is responsible for and will paythe stamp duty or stamp duty reserve tax arising from its purchase of thePlacing Shares; 4. the Placing Shares have not been and will not be registeredunder the US Securities Act, or under the securities laws of any state of theUnited States, and, subject to the conditions contained under the heading in"Notice to US Investors" below, are being offered and sold on behalf of theSellers only outside the United States in accordance with Rule 903 of RegulationS under the US Securities Act; 5. the Placing Shares have not been and will not be registeredunder the securities legislation of Japan, Australia or the Republic of Irelandand, subject to certain exceptions, may not be offered, sold, taken up,renounced or delivered or transferred, directly or indirectly, within Japan,Australia or the Republic of Ireland; 6. it has complied with its obligations in connection withmoney laundering under the Criminal Justice Act 1993, the Money LaunderingRegulations 2003 (the "Regulations") and, if it is making payment on behalf of athird party, that satisfactory evidence has been obtained and recorded by it toverify the identity of the third party as required by the Regulations; 7. it has all necessary capacity and has obtained allnecessary consents and authorities to enable it to commit to its participationin the Placing and to perform its obligations in relation thereto (including,without limitation, in the case of any person on whose behalf it is acting, allnecessary consents and authorities to agree to the terms set out or referred toin this announcement); 8. it will purchase and pay for the Placing Shares acquired byit in accordance with the Announcement and this Appendix on the due time anddate set out herein, and acknowledges that should it fail to do so, the relevantPlacing Shares may be sold at such price as Canaccord determine, and that itwill remain liable for any shortfall between the net proceeds of such sale andthe placing proceeds of such Placing Shares; 9. participation in the Placing is on the basis that it is notand will not be a client of Canaccord and that Canaccord does not have duties orresponsibilities to it for providing the protections afforded to theirrespective clients or for providing advice in relation to the Placing; 10. it undertakes that the person who it specifies forregistration as the holder of the Placing Shares will be (i) the Placee or (ii)a nominee of the Placee, as the case may be. Neither Canaccord, the Company northe Sellers will be responsible for any liability to stamp duty or stamp dutyreserve tax resulting from a failure to observe this requirement. Each Placeeand any person acting on behalf of the Placee agrees to purchase on the basisthat the Placing Shares will be allocated to the CREST stock accounts ofCanaccord who will hold the Placing Shares as nominee on behalf of the Placeeuntil settlement in accordance with its standing settlement instructions; and 11. it acknowledges that any agreements entered into by the Placeepursuant to the Announcement and this Appendix shall be governed by andconstrued in accordance with the laws of England and it hereby irrevocablysubmits (on behalf of itself and on behalf of any Placee on whose behalf it isacting) to the jurisdiction of the English courts as regards any claim, disputeor matter arising out of any such agreement. The Company, Sellers and Canaccord will rely upon the truth and accuracy of theforegoing representations, warranties and acknowledgements. The Company, Sellersand Canaccord reserve the right to waive any of the foregoing representationsand warranties in individual circumstances as they deem appropriate and inaccordance with applicable law. Notice to US Investors The following information amends and supplements this Announcement with respectto those persons that are in the United States and that are "qualifiedinstitutional buyers" (or QIBs) as defined in Rule 144A under the US SecuritiesAct. The Placing Shares have not been and will not be registered under the USSecurities Act. The Placing Shares may not be offered or sold within the UnitedStates, except to QIBs in transactions exempt from the registration requirementsof the US Securities Act and to certain persons in offshore transactions inreliance on Regulation S under the US Securities Act. Canaccord, through an affiliate, at its sole discretion, may invite certain QIBsto participate in the Placing described in the Announcement and this Appendix.In addition to the representations, warranties and acknowledgements contained inthis Appendix under the heading "Representations and Warranties", all QIBsparticipating in the Placing will also be deemed to have given therepresentations, warranties and acknowledgements contained below (and thosecontained in this Appendix under the heading "Representations and Warranties"shall be deemed amended accordingly). Terms used herein that are defined in Rule144A or Regulation S under the US Securities Act are used as defined therein. By participating in the Placing each Placee that is a person in the UnitedStates represents, warrants and acknowledges that: (a) it (A)(i) is a QIB, (ii) is aware that the sale to it is beingmade in reliance on an exemption from the registration requirements of the USSecurities Act and (iii) is acquiring the Placing Shares for its own account orfor the account of another QIB or (B) is outside the United States and ispurchasing the Placing Shares in an offshore transaction pursuant to RegulationS; (b) it understands that the Placing Shares are being offered in atransaction not involving any public offering in the United States within themeaning of the US Securities Act, that the Placing Shares have not been and willnot be registered under the US Securities Act and that (A) if in the future itdecides to offer, resell, pledge or otherwise transfer any of the PlacingShares, such Placing Shares may be offered, resold, pledged or otherwisetransferred only (i) in the United States if the Placing Shares have been orregistered or to a person whom the seller reasonably believes is a QIB in atransaction meeting the requirements of Rule 144A; (ii) outside the UnitedStates in a transaction complying with the provisions of Rule 904 of RegulationS; or (iii) to the issuer of the Placing Shares, in each case in accordance withany applicable securities laws of any state of the United States, and that (B)the Placee will, and each subsequent holder is required to, notify anysubsequent purchaser of the Placing Shares from it of the resale restrictionsreferred to in (A) above. Notice to Canadian Investors General The following information amends and supplements the Announcement and thisAppendix with respect to those persons that are resident in Alberta, BritishColumbia or Ontario and that are "accredited investors" as defined in NI 45-106.Persons resident in Alberta, British Columbia or Ontario must confirm at thetime that they communicate an order to purchase Placing Shares which category of"accredited investor" set out in NI 45-106 they fall into. Canaccord, through an affiliate, at its sole discretion, may invite certainaccredited investors to participate in the Placing described in the Announcementand this Appendix. In addition to the representations, warranties andacknowledgements contained in this Appendix under the heading "Representationsand Warranties", all accredited investors participating in the Placing will alsobe deemed to have given the representations, warranties and acknowledgementscontained below (and those contained in this Appendix under the heading"Representations and Warranties" shall be deemed amended accordingly). Termsused herein that are defined in NI 45-106 are used as defined therein. Representations, Warranties and Acknowledgements By participating in the Placing, each Placee that is resident in Alberta,British Columbia and Ontario represents, warrants and acknowledges that: (a) it and each beneficial purchaser, if any, for whom it isacting as trustee or agent, is resident in Alberta, British Columbia or Ontario; (b) it is purchasing the Placing Shares as principal for its ownaccount, not for the benefit of any other person, and it is an "accreditedinvestor" as defined in NI 45-106 by virtue of being a person, company or otherentity of the type indicated in the list of accredited investors contained in NI45-106; (c) in the case of the purchase by the Placee of its PlacingShares as agent or trustee for any principal whose identity is disclosed orundisclosed or identified by account number only, each beneficial purchaser ofthe Placee's Placing Shares for whom it is acting is purchasing the Placee'sPlacing Shares as principal for its own account, and not for the benefit of anyother person, for investment only and not with a view to resale or distribution,and the Placee complies with and meets the criteria set forth in subsection (b)above in respect of the subscription provided hereby, and the Placee has due andproper authority to act as agent or trustee for and on behalf of such beneficialpurchaser in connection with the transactions contemplated hereby and the uponacceptance of the Placee's bid by Canaccord or an affiliate, the agreement tosell the Placing Shares to the Placee constitutes a legal, valid and bindingagreement of, such beneficial purchaser, and the Placee acknowledges that theCompany or Sellers may be required by law to disclose to certain regulatoryauthorities the identity of the beneficial purchaser of Placing Shares for whomit may be acting as agent or trustee, and(i)it is an "accredited investor" as defined in paragraph (p) of the definitionof "accredited investor" in NI 45-106, provided, however that it is not a trustcompany or trust corporation registered under the laws of Prince Edward Islandthat is not registered under the Trust and Loan Companies Act (Canada) or undercomparable legislation in another jurisdiction of Canada; or(ii)the Placee is acting as agent for one or more disclosed principals, each ofwhich principal is purchasing as a principal for its own account, not for thebenefit of any other person, and not with a view to the resale or distributionof all or any of the Placing Shares, and each of which principals complies withsubsection (b) above; or(iii)if the Placee is purchasing Placing Shares as an "accredited investor" asdefined in paragraph (m) of the definition of "accredited investor" in NI 45-106it is not a person created or used solely to purchase or hold securities as an"accredited investor"; (d) the Placee and each beneficial purchaser, if any, for whomthe Placee is acting as trustee or agent, is purchasing the Placing Shares forinvestment only and not with a view to resale or distribution of all or any ofthe Placing Shares; (e) the Placee and each beneficial purchaser, if any, for whomthe Placee is acting as trustee or agent, is an investor who, by virtue of hisnet worth and investment experience or by virtue of consultation with or advicefrom a person who is not an insider of the Company, but who is a registeredadvisor or registered dealer, is able to evaluate the merits and risks of aninvestment in the Placing Shares and is able to bear the economic risk of lossof such investment; (f) the Placee and each beneficial purchaser, if any, for whomit is acting as trustee or agent,(i)acknowledges that, it has not (nor, if applicable, has any person on whosebehalf the Placee is contracting) received a prospectus, an offering memorandum(including, without limitation, as such term is defined in the Securities Act(Ontario)), sales or advertising literature or similar document (other thanfinancial statements or any other document, other than an offering memorandum,the content of which is prescribed by statute or regulation) in connection withthe Placing, and has not received, nor has the Placee requested, nor does thePlacee (or, if applicable, any person on whose behalf the Placee is contracting)need to receive, any other document; and(ii)agrees that Canaccord, its affiliates and their representatives are notliable for any information given or statement made to them in connection withthe Company or the transactions contemplated by this Announcement, and herebyreleases Canaccord, its affiliates and their representatives from any claimsthat may arise in respect of t the Announcement and this "Notice for CanadianPurchasers" or the transactions contemplated by it; (g) the Placing Shares are not being purchased by the Placee orany beneficial purchaser for whom the Placee is acting as trustee or agent, as aresult of any material information concerning the Company that has not beenpublicly disclosed and the decision to tender this offer and purchase thePlacing Shares has not been made as a result of any verbal or writtenrepresentation as to fact or otherwise (including that any person will resell orrepurchase the Placee Shares or refund all or any of the purchase price of thePlacee Shares other than in accordance with their terms, that the Placee Shareswill be admitted and posted for trading on a stock exchange or that applicationhas been made for such admission or as to the future price or value of thePlacing Shares) made by or on behalf of the Company, Sellers, Canaccord, itsaffiliates or any other person; (h) the Placee and each beneficial purchaser, if any, for whomthe Placee is acting as trustee or agent, acknowledges that because this bid isbeing made pursuant to prospectus exemptions available under applicablesecurities laws:(i)it is restricted from using certain of the civil remedies available under theapplicable securities laws;(ii)it may not receive information that might otherwise be required to beprovided to it under the applicable securities laws if the exemptions were notbeing used; and(iii)the Company and Sellers are relieved from certain obligations that wouldotherwise apply under the applicable securities laws if the exemptions were notbeing used; (i) the Placee and each beneficial purchaser, if any, for whomit is acting as trustee or agent:(i)acknowledges that the Placing Shares are subject to resale restrictionsimposed under applicable securities laws and the rules of regulatory bodieshaving jurisdiction;(ii)the Placee understands and acknowledges that the Placing Shares may besubject to certain resale restrictions under the securities laws in Canada andacknowledges that the Placing Shares are subject to the applicable hold periodrequired under Canadian securities law and may not be sold, transferred,hypothecated or otherwise traded until the expiry of such hold period except aspermitted by applicable securities legislation and stock exchange rules. Inparticular, the Placee understands and acknowledges that the Company is not areporting issuer in any province or territory of Canada and, therefore, thePlacing Shares will be subject to a hold period which will be of an indefiniteduration and during such hold period none of the Placing Shares may be resold inCanada except pursuant to a statutory exemption or discretionary ruling issuedby the securities regulatory authority in the transferee's jurisdiction ofresidence;(iii)acknowledges that it has been advised by the Company and Sellers that itshould consult its own legal adviser before trading in, or disposing of, all orany part of Placing Shares that may be issued to the Placee pursuant to thisSubscription Agreement to avoid breach of relevant securities legislation andstock exchange rules; and(iv)it acknowledges that it may be required to file reports in prescribed forms,together with prescribed fees, with the Ontario Securities Commission withrespect to each disposition of all or any part of the Placing Shares; (j) the Placee and each beneficial purchaser, if any, for whomthe Placee is acting as trustee or agent, acknowledges that:(i)no securities commission or similar regulatory authority has reviewed orpassed on the merits of the Placing Shares;(ii)there is no government or other insurance covering the Placing Shares;(iii)there are risks associated with the purchase of the Placing Shares; and(iv)there are restrictions on its ability to resell the Placing Shares and it isits responsibility to find out what those restrictions are and agrees not toresell the Placing Shares, except in accordance with the provisions ofapplicable securities legislation and stock exchange rules; and (k) the Placee and each beneficial purchaser, if any, for whomthe Placee is acting as trustee or agent, will execute, deliver, file andotherwise assist the Company and the Sellers in filing, such reports,undertakings and other documents required by applicable securities legislation,policy or order or by any securities commission, stock exchange or otherregulatory authority with respect to the issue of the Placing Shares. Further Consents and Acknowledgements By participating in the Placing:(a) each Placee that is resident in Alberta, British Columbia orOntario and each beneficial purchaser if any, for whom the Placee is acting astrustee or agent, consents to the filing of any such documents as may berequired to be filed with any securities regulatory authority or stock exchangein connection with the transactions contemplated hereby; and (b) each Placee that is resident in Alberta, British Columbia orOntario and each beneficial purchaser if any, for whom the Placee is acting astrustee or agent, acknowledges that foregoing representations, warranties andcovenants are made by the Placee on its behalf and on behalf of each beneficialpurchaser, if any, for whom it is acting as trustee or agent, with the intentthat they be relied upon by the Company, the Sellers and Canaccord and itsaffiliates in determining the eligibility of the Placee and each such beneficialpurchaser as a purchaser of Placing Shares and the Placee and others for whomthe Placee is contracting hereunder hereby agrees to indemnify the Company, theSellers and Canaccord and its affiliates against all losses, claims, costs,expenses and damages or liabilities which any of them may suffer or incur,caused or arising from reliance thereon. The Placee undertakes to notify theCompany, the Sellers and Canaccord and its affiliates immediately of any changein any representation, warranty or other information relating to the Placee orsuch beneficial purchaser set forth herein which takes place prior tocompletion. Resale Restrictions The Placing Shares are subject to certain resale restrictions under thesecurities laws in Canada and may not be sold, transferred, hypothecated orotherwise traded until the expiry of the applicable hold period except aspermitted by applicable Canadian securities laws. The Company is not a reportingissuer in any province or territory of Canada and, therefore, the Placing Shareswill be subject to a hold period which will be of an indefinite duration andduring such hold period none of the Placing Shares may be resold in Canadaexcept pursuant to a statutory exemption or discretionary ruling issued by thesecurities regulatory authority in the transferee's jurisdiction of residence. 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