Contract
THIS
PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT (THE "SUBSCRIPTION AGREEMENT") RELATES
TO AN OFFERING OF SECURITIES IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE
NOT
U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933
ACT").
NONE
OF THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT RELATES HAVE BEEN
REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS
SO
REGISTERED, NONE MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED
STATES OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE
1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
AND PROVINCIAL LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE
SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933
ACT.
SUBSCRIPTION
AGREEMENT
THIS
SUBSCRIPTION AGREEMENT (the "Agreement") made as of October 1,
2007.
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BETWEEN:
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AVRO
ENERGY INC. (the
"Company")
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AND:
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PAINTERS
FOUNDATION (the
"Subscriber")
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WHEREAS:
The
Subscriber wishes to purchase
186,560 shares of common stock in the Company for a purchase
price of $46,640;
Avro
Energy Inc. has
agreed to sell certain shares of common stock to the Subscriber;
and
NOW
THEREFORE THIS AGREEMENT witnesses
that, for good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
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1.
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Interpretation
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1.1 In
this
Agreement, words importing the singular number only shall include the plural
and
vice versa, words importing gender shall include all genders and words importing
persons shall include individuals, corporations, partnerships, associations,
trusts, unincorporated organizations, governmental bodies and other legal or
business entities of any kind whatsoever.
1.2 Any
reference to currency is to the currency of the United States of America unless
otherwise indicated.
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2.
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Documents
Required from
Subscriber
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2.1 The
Subscriber must complete, sign and return to the Company:
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(a)
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an
executed copy of this Agreement,
and
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2.2 The
Subscriber shall
complete, sign and return to the Company as soon as possible, on request by
the
Company, any documents, questionnaires, notices and undertakings as may be
required by regulatory authorities, the National Association of Securities
Dealers Over-the-Counter Bulletin Board (the “OTC Bulletin Board”) and
applicable law.
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3.
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Closing
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3.1 Closing
of the
offering of the Shares (the "Closing") shall occur on or before October 1,
2007,
or on such other date as may be determined by the Company (the "Closing Date"),
payment shall be as follows:
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(a)
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46,640
upon signing of this subscription;
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4.
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Acknowledgements
of Subscriber
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4.1 The
Subscriber acknowledges and agrees that:
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(a)
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none
of the Shares have been or will be registered under the 1933 Act,
or under
any state securities or "blue sky" laws of any state of the United
States,
and, unless so registered, may not be offered or sold in the United
States
or, directly or indirectly, to U.S. Persons, as that term is defined
in
Regulation S under the 1933 Act ("Regulation S"), except in accordance
with the provisions of Regulation S, pursuant to an effective registration
statement under the 1933 Act, or pursuant to an exemption from, or
in a
transaction not subject to, the registration requirements of the
1933 Act
and in each case only in accordance with applicable state and provincial
securities laws;
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(b)
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the
Company has not undertaken, and will have no obligation, to register
any
of the Shares under the 1933 Act or any other securities
legislation;
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(c)
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he
has received and carefully read this
Agreement;
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(d)
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the
decision to execute this Agreement and purchase the Shares agreed
to be
purchased hereunder has not been based upon any oral or written
representation as to fact or otherwise made by or on behalf of the
Company
and such decision is based entirely upon a review of any public
information which has been filed by the Company with the Securities
and
Exchange Commission ("SEC") in compliance, or intended compliance,
with
applicable securities legislation;
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(e)
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he
and his advisor(s) have had a reasonable opportunity to ask questions
of
and receive answers from the Company in connection with the sale
of the
Shares hereunder, and to obtain additional information, to the extent
possessed or obtainable by the Company without unreasonable effort
or
expense;
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(f)
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the
books and records of the Company were available upon reasonable notice
for
inspection, subject to certain confidentiality restrictions, by the
Subscriber during reasonable business hours at its principal place
of
business and that all documents, records and books in connection
with the
sale of the Shares hereunder have been made available for inspection
by
him and his attorney and/or
advisor(s);
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(g)
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the
Company is entitled to rely on the representations and warranties
of the
Subscriber contained in this Agreement and the Subscriber will hold
harmless the Company from any loss or damage it or they may suffer
as a
result of the Subscriber's failure to correctly complete this
Agreement;
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(h)
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the
Subscriber will indemnify and hold harmless the Company and, where
applicable, its respective directors, officers, employees, agents,
advisors and shareholders from and against any and all loss, liability,
claim, damage and expense whatsoever (including, but not limited
to, any
and all fees, costs and expenses whatsoever reasonably incurred in
investigating, preparing or defending against any claim, lawsuit,
administrative proceeding or investigation whether commenced or
threatened) arising out of or based upon any representation or warranty
of
the Subscriber contained herein or in any document furnished by the
Subscriber to the Company in connection herewith being untrue in
any
material respect or any breach or failure by the Subscriber to comply
with
any covenant or agreement made by the Subscriber to the Company in
connection therewith;
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(i)
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the
Subscriber has been advised to consult the Subscriber's own legal,
tax and
other advisors with respect to the merits and risks of an investment
in
the Shares and with respect to applicable resale restrictions, and
it is
solely responsible (and the Company is not in any way responsible)
for
compliance with:
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(i)
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any
applicable laws of the jurisdiction in which the Subscriber is resident
in
connection with the distribution of the Shares hereunder,
and
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(ii)
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applicable
resale restrictions;
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(j)
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in
addition to resale restrictions imposed under U.S. securities laws,
there
are additional restrictions on the Subscriber's ability to resell
the
Shares under the Securities Act (British Columbia) and Multilateral
Instrument 45-102 adopted by the British Columbia Securities
Commission;
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(k)
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the
Company has advised the Subscriber that the Company is relying on
an
exemption from the requirements to provide the Subscriber with a
prospectus to sell the Shares and, as a consequence of acquiring
the
Shares pursuant to such exemption certain protections, rights and
remedies
provided by the applicable securities legislation of British Columbia
including statutory rights of rescission or damages, will not be
available
to the Subscriber;
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(l)
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none
of the Shares are listed on any stock exchange or automated dealer
quotation system and no representation has been made to the Subscriber
that any of the Shares will become listed on any stock exchange or
automated dealer quotation system, except that currently certain
market
makers make market in the common shares of the Company on the OTC
Bulletin
Board;
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(m)
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the
Subscriber is outside the United States when receiving and executing
this
Agreement and is acquiring the Shares as principal for its own account,
for investment purposes only, and not with a view to, or for, resale,
distribution or fractionalization thereof, in whole or in part, and
no
other person has a direct or indirect beneficial interest in such
Shares;
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(n)
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noneof
the Shares may be offered or sold to a U.S. Person or for the account
or
benefit of a U.S. Person (other than a distributor) prior to the
end of
the Distribution Compliance Period (as defined
herein);
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(o)
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neither
the SEC nor any other securities commission or similar regulatory
authority has reviewed or passed on the merits of the
Shares;
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(p)
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no
documents in connection with the sale of the Shares hereunder have
been
reviewed by the SEC or any state securities
administrators;
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(q)
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there
is no government or other insurance covering any of the
Shares;
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(r)
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the
issuance and sale of the Shares to the Subscriber will not be completed
if
it would be unlawful or if, in the discretion of the Company acting
reasonably, it is not in the best interests of the
Company;
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(s)
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the
Subscriber is purchasing the Shares pursuant to an exemption from
the
registration and the prospectus requirements of applicable securities
legislation on the basis that the Subscriber is an accredited investor
of
the Company and, as a consequence:
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(i)
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is
restricted from using most of the civil remedies available under
securities legislation,
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(ii)
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may
not receive information that would otherwise be required to be provided
under securities legislation, and
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(iii)
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the
Company is relieved from certain obligations that would otherwise
apply
under securities legislation;
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(t)
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the
statutory and regulatory basis for the exemption claimed for the
offer and
sale of the Shares, although in technical compliance with Regulation
S,
would not be available if the offering is part of a plan or scheme
to
evade the registration provisions of the 1933 Act;
and
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(u)
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this
Agreement is not enforceable by the Subscriber unless it has been
accepted
by the Company.
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5.
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Representations,
Warranties and Covenants of the
Subscriber
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5.1 The
Subscriber hereby
represents and warrants to and covenants with the Company (which
representations, warranties and covenants shall survive the Closing)
that:
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(a)
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the
Subscriber is not a U.S. Person;
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(b)
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by
completing the Questionnaire, the Subscriber is representing and
warranting that the Subscriber is an “Accredited Investor”, as that term
is defined in National Instrument 45-106 adopted by the British Columbia
Securities Commission;
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(c)
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the
Subscriber is not acquiring the Shares for the account or benefit
of,
directly or indirectly, any U.S.
Person;
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(d)
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the
Subscriber is resident in the jurisdiction set out under the heading
"Name
and Address of Subscriber" on the signature page of this Agreement
and the
sale of the Shares to the Subscriber as contemplated in this Agreement
complies with or is exempt from the applicable securities legislation
of
the jurisdiction of residence of the
Subscriber;
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(e)
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the
Subscriber is purchasing the Shares as principal for investment purposes
only and not with a view to resale or distribution and, in particular,
the
Subscriber has no intention to distribute, either directly or indirectly,
any of the Shares in the United States or to U.S.
Persons;
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(f)
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the
Subscriber is outside the United States when receiving and executing
this
Agreement;
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(g)
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the
Subscriber is aware that an investment in the Company is speculative
and
involves certain risks, including the possible loss of the entire
investment;
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(h)
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the
Subscriber has made an independent examination and investigation
of an
investment in the Shares and the Company and has depended on the
advice of
its legal and financial advisors and agrees that the Company will
not be
responsible in any way whatsoever for the Subscriber's decision to
invest
in the Shares and the Company;
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(i)
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the
Subscriber (i) has adequate net worth and means of providing for
its
current financial needs and possible personal contingencies, (ii)
has no
need for liquidity in this investment, (iii) is able to bear the
economic
risks of an investment in the Shares for an indefinite period of
time and
can afford the complete loss of such investment and (iv) 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
Shares
and the Company;
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(j)
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the
Subscriber understands and agrees that the Company and others will
rely
upon the truth and accuracy of the acknowledgements, representations
and
agreements contained in this Agreement and agrees that if any of
such
acknowledgements, representations and agreements are no longer accurate
or
have been breached, the Subscriber shall promptly notify the
Company;
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(k)
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the
Subscriber has the legal capacity and competence to enter into and
execute
this Agreement and to take all actions required pursuant
hereto;
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(l)
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the
Subscriber has duly executed and delivered this Agreement and it
constitutes a valid and binding agreement of the Subscriber enforceable
against the Subscriber in accordance with its
terms;
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(m)
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the
Subscriber is not an underwriter of, or dealer in, the common shares
of
the Company, nor is the Subscriber participating, pursuant to a
contractual agreement or otherwise, in the distribution of the
Shares;
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(n)
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the
Subscriber understands and agrees that none of the Shares have been
registered under the 1933 Act, or under any state securities or "blue
sky"
laws of any state of the United States, and, unless so registered,
may not
be offered or sold in the United States or, directly or indirectly,
to
U.S. Persons except in accordance with the provisions of Regulation
S,
pursuant to an effective registration statement under the 1933 Act,
or
pursuant to an exemption from, or in a transaction not subject to,
the
registration requirements of the 1933 Act and in each case only in
accordance with applicable state and provincial securities
laws;
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(o)
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it
is not an underwriter of, or dealer in, the common shares of the
Company,
nor is the Subscriber participating, pursuant to a contractual agreement
or otherwise, in the distribution of the
Shares;
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(p)
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the
Subscriber understands and agrees that offers and sales of any of
the
Shares prior to the expiration of a period of one year after the
date of
original issuance of the Shares (the one year period hereinafter
referred
to as the "Distribution Compliance Period") shall only be made in
compliance with the safe harbor provisions set forth in Regulation
S,
pursuant to the registration provisions of the 1933 Act or an exemption
therefrom, and that all offers and sales after the Distribution Compliance
Period shall be made only in compliance with the registration provisions
of the 1933 Act or an exemption therefrom and in each case only in
accordance with applicable state and provincial securities
laws;
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(q)
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the
Subscriber understands and agrees not to engage in any hedging
transactions involving any of the Shares unless such transactions
are in
compliance with the provisions of the 1933 Act and in each case only
in
accordance with applicable state and provincial securities
laws;
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(r)
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the
Subscriber understands and agrees that the Company will refuse to
register
any transfer of the Shares not made in accordance with the provisions
of
Regulation S, pursuant to an effective registration statement under
the
1933 Act or pursuant to an available exemption from the registration
requirements of the 1933 Act;
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(s)
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the
Subscriber acknowledges that it has not acquired the Shares as a
result
of, and will not itself engage in, any "directed selling efforts"
(as
defined in Regulation S under the 0000 Xxx) in the United States
in
respect of any of the Shares which would include any activities undertaken
for the purpose of, or that could reasonably be expected to have
the
effect of, conditioning the market in the United States for the resale
of
any of the Shares; provided, however, that the Subscriber may sell
or
otherwise dispose of any of the Shares pursuant to registration of
any of
the Shares pursuant to the 1933 Act and any applicable state securities
laws or under an exemption from such registration requirements and
as
otherwise provided herein;
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(t)
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the
Subscriber is not aware of any advertisement of any of the Shares
and is
not acquiring the Shares as a result of any form of 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 seminar or meeting
whose
attendees have been invited by general solicitation or general
advertising; and
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(u)
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no
person has made to the Subscriber any written or oral
representations:
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(i)
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that
any person will resell or repurchase any of the
Shares;
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(ii)
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that
any person will refund the purchase price of any of the
Shares;
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(iii)
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as
to the future price or value of any of the Shares;
or
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(iv)
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that
any of the Shares will be listed and posted for trading on any stock
exchange or automated dealer quotation system or that application
has been
made to list and post any of the Shares of the Company on any stock
exchange or automated dealer quotation
system.
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5.2 In
this Agreement,
the term "U.S. Person" shall have the meaning ascribed thereto in
Regulation S.
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6.
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Representations
and Warranties will be Relied Upon by the
Company
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6.1 The
Subscriber
acknowledges that the representations and warranties contained herein are made
by it with the intention that such representations and warranties may be relied
upon by the Company and its legal counsel in determining the Subscriber's
eligibility to purchase the Shares under applicable securities legislation,
or
(if applicable) the eligibility of others on whose behalf it is contracting
hereunder to purchase the Shares under applicable securities
legislation. The Subscriber further agrees that by accepting delivery
of the certificates representing the Shares on the Closing Date, it will be
representing and warranting that the representations and warranties contained
herein are true and correct as at the Closing Date with the same force and
effect as if they had been made by the Subscriber on the Closing Date and that
they will survive the purchase by the Subscriber of Shares and will continue
in
full force and effect notwithstanding any subsequent disposition by the
Subscriber of such Shares.
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7.
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Resale
Restrictions
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7.1 The
Subscriber
acknowledges that any resale of the Shares will be subject to resale
restrictions contained in the securities legislation applicable to each
Subscriber or proposed transferee. The Subscriber acknowledges that
the Shares have not been registered under the 1933 Act of the securities laws
of
any state of the United States. The Shares may not be offered or sold
in the United States unless registered in accordance with United States federal
securities laws and all applicable state and provincial securities laws or
exemptions from such registration requirements are available.
7.2 The
Subscriber
acknowledges that restrictions on the transfer, sale or other subsequent
disposition of the Shares by the Subscriber may be imposed by securities laws
in
addition to any restrictions referred to in Section 7.1 above, and, in
particular, the Subscriber acknowledges and agrees that:
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(a)
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none
of the Shares may be offered or sold to a U.S. Person or for the
account
or benefit of a U.S. Person (other than a distributor) prior to the
end of
the Distribution Compliance Period;
and
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(b)
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the
Company is not a reporting issuer in any of the Provinces of Canada
and
therefore resale of any of the Shares in Canada is restricted except
pursuant to an exemption from applicable securities
legislation.
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8.
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Acknowledgement
and Waiver
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8.1 The
Subscriber has
acknowledged that the decision to purchase the Shares was solely made on the
basis of publicly available information. The Subscriber hereby
waives, to the fullest extent permitted by law, any rights of withdrawal,
rescission or compensation for damages to which the Subscriber might be entitled
in connection with the distribution of any of the Shares.
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9.
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Legending
and Registration of Subject
Shares
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9.1 The
Subscriber hereby
acknowledges that a legend may be placed on the certificates representing any
of
the Shares to the effect that the Shares represented by such certificates are
subject to a hold period and may not be traded until the expiry of such hold
period except as permitted by applicable securities legislation.
9.2 The
Subscriber hereby
acknowledges and agrees to the Company making a notation on its records or
giving instructions to the registrar and transfer agent of the Company in order
to implement the restrictions on transfer set forth and described in this
Agreement.
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10.
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Costs
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10.1 The
Subscriber
acknowledges and agrees that all costs and expenses incurred by the Subscriber
(including any fees and disbursements of any special counsel retained by the
Subscriber) relating to the purchase of the Shares shall be borne by the
Subscriber.
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11.
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Governing
Law
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11.1 This
Agreement is
governed by the laws of the State of Nevada applicable
herein.
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12.
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Survival
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12.1 This
Agreement,
including without limitation the representations, warranties and covenants
contained herein, shall survive and continue in full force and effect and be
binding upon the parties hereto notwithstanding the completion of the purchase
of the Shares by the Subscriber pursuant hereto.
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13.
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Assignment
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13.1 This
Agreement is not
transferable or assignable.
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14.
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Execution
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14.1 The
Company shall be
entitled to rely on delivery by facsimile machine of an executed copy of this
Agreement and acceptance by the Company of such facsimile copy shall be equally
effective to create a valid and binding agreement between the Subscriber and
the
Company in accordance with the terms hereof.
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15.
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Severability
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15.1 The
invalidity or
unenforceability of any particular provision of this Agreement shall not affect
or limit the validity or enforceability of the remaining provisions of this
Agreement.
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16.
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Entire
Agreement
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16.1 Except
as expressly
provided in this Agreement and in the agreements, instruments and other
documents contemplated or provided for herein, this Agreement contains the
entire agreement between the parties with respect to the sale of the Shares
and
there are no other terms, conditions, representations or warranties, whether
expressed, implied, oral or written, by statute or common law, by the Company
or
by anyone else.
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17.
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Notices
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17.1 All
notices and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Subscriber shall be directed to the
address on page [INSERT PAGE NUMBER] and notices to the Company shall be
directed to it at the address set forth on page 1 of this
Agreement.
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18.
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Counterparts
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18.1 This
Agreement may be
executed in any number of counterparts, each of which, when so executed and
delivered, shall constitute an original and all of which together shall
constitute one instrument.
IN
WITNESS WHEREOF the Subscriber has duly executed this Agreement as of
the date first above mentioned.
DELIVERY
INSTRUCTIONS
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1.
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Delivery
- please deliver the certificates
to:
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2.
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Registration
- registration of the certificates which are to be delivered at closing
should be made as follows:
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(name)
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(address)
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3.
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Theundersigned
hereby acknowledges that it will deliver to the Company all such
additional completed forms in respect of the Subscriber's purchase
of the
Shares as may be required for filing with the appropriate securities
commissions and regulatory
authorities.
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PAINTERS
FOUNDATION
(Name
of Subscriber – Please type or
print)
/s/
________________________
(Signature
and, if applicable,
Office)
Address:
A
C C E P T A N C E
The
above-mentioned Agreement in respect of the Shares is hereby accepted by AVRO
ENERGY, INC.
DATED
,
the 1st day of
October, 2007.
Per: /s/
Xxxx Xxxxxxxxx
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