SUBSCRIPTION AGREEMENT (RAB SPECIAL SITUATIONS (MASTER) FUND LIMITED) for CONVERTIBLE DEBENTURES and DEBENTURE WARRANTS INSTRUCTIONS
EXHIBIT
4.1
Please
ensure that you complete all required information in this Agreement
and
return a fully executed copy of this agreement as soon as possible
to:
Shoreline
Pacific LLC
000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxxxxxxx, XX 00000
Facsimile:
(000)- 000-0000
If
paying by wire transfer, wiring United States funds into as
follows:
Signature
Bank as Escrow Agent for Apollo Gold Corporation
000
Xxxxxxx Xxxxxx
Xxx
Xxxx, XX 00000
ABA
No. 000000000 for credit to
Signature
Bank, as Escrow Agent for Apollo Gold Corporation
Account
No. 500833641
Name:
[INSERT]
Tax
ID number: [INSERT]
Amount:
[INSERT]
|
APOLLO
GOLD CORPORATION
(RAB
SPECIAL SITUATIONS (MASTER) FUND LIMITED)
for
CONVERTIBLE
DEBENTURES
and
DEBENTURE
WARRANTS
INSTRUCTIONS
All
Subscribers:
Complete
and sign page (i) of the Subscription Agreement under the heading "Subscription
Details".
Read
the
"Terms and Conditions of Subscription for the Debentures" - Schedule
"A".
Read
the
“Registration Rights Agreement” - Schedule “B”.
Complete
and Sign Annex A of the Registration Rights Agreement - Schedule "B", under
the
heading “Selling Securityholder Notice and Questionnaire”.
Subscribers
resident in the United States:
Complete
and sign the United States Accredited Investor Certificate - Appendix
I.
THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933,
AS AMENDED (THE ‘‘SECURITIES ACT’’), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF,
THE
HOLDER (1) REPRESENTS THAT (A) IT IS AN ACCREDITED INVESTOR (AS DEFINED IN
REGULATION D UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND
IS
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION
S ADOPTED UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL NOT RESELL OR
OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE COMMON SHARES ISSUABLE
UPON EXERCISE OF SUCH SECURITY, EXCEPT (A) TO THE ISSUER OR A SUBSIDIARY
THEREOF; (B) TO PERSONS OTHER THAN U.S. PERSONS OUTSIDE THE UNITED STATES
IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT; (C) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 ADOPTED UNDER THE SECURITIES
ACT OR ANOTHER AVAILABLE EXEMPTION UNDER THE SECURITIES ACT (IF AVAILABLE);
OR
(D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT,
AND (3) AGREES THAT IT WILL, PRIOR TO ANY TRANSFER OF THIS SECURITY, FURNISH
TO
THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS MAY
BE
REQUIRED TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE
SECURITIES ACT. AS USED HEREIN, THE TERMS ‘‘OFFSHORE TRANSACTION,’’ ‘‘UNITED
STATES’’ AND ‘‘U.S. PERSON’’ HAVE THE MEANING GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT. IN ANY CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY
OR
INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THIS SECURITY
OR
ANY COMMON SHARES ISSUABLE UPON EXERCISE OF SUCH SECURITY, EXCEPT AS PERMITTED
BY THE SECURITIES ACT.
WARRANTS
PURCHASED PURSUANT TO THIS SUBSCRIPTION AGREEMENT HAVE NOT BEEN AND WILL
NOT BE
REGISTERED UNDER THE SECURITIES ACT. THE SECURITIES TO BE ISSUED UPON EXERCISE
OF SUCH WARRANTS WILL NOT BE INITIALLY REGISTERED AND MAY OR MAY NOT LATER
BECOME REGISTERED FOR RESALE UNDER THE SECURITIES ACT. NEITHER ANY WARRANT
PURCHASED HEREUNDER NOR ANY SECURITIES ISSUED UPON EXERCISE OF SUCH WARRANT
MAY
BE EXERCISED BY OR ON BEHALF OF ANY U.S. PERSON, AS SUCH TERM IS DEFINED
IN
REGULATION S PROMULGATED PURSUANT TO THE SECURITIES ACT, UNLESS REGISTERED
UNDER
THE SECURITIES ACT OR AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.
SUBSCRIPTION
DETAILS
To: |
Apollo
Gold Corporation
("Apollo")
|
0000
X.
Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx Xxxxxxx, Xxxxxxxx, X.X.X.
00000-3220
And
To:
|
Shoreline
Pacific LLC ("Shoreline Pacific" or the
"Agent")
|
000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, XX 00000
And
To:
|
Such
other agents or affiliates that participate in a syndicate with Shoreline
Pacific in connection with the Private Placement (as hereafter defined)
(collectively, with Shoreline Pacific, the "Agents")
|
The
undersigned (the "Subscriber")
hereby
irrevocably subscribes for and agrees to purchase from Apollo, on and subject
to
the terms and conditions set forth in this Agreement, that principal amount
of
the Debenture set forth below. Each US$1,000 principal amount of the Debenture
is convertible,
at the
option of the holder at any time before Maturity (hereinafter defined), into
2,000 common shares of Apollo, and will be accompanied by 2,000 common share
purchase warrants (the
"Debenture
Warrants")
of
Apollo,
on the
terms and conditions contained in this Agreement. The Debentures and the
Debentures Warrants are referred to collectively as the "Offered
Securities".
The
Subscriber agrees to be bound by the terms and conditions set forth in the
attached Schedule "A"-"Terms and Conditions of Subscription for Debentures"
and
the attached Schedule “B” - Registration Rights Agreement (the “Registration
Rights Agreement”,
including, without limitation, the representations, warranties and covenants
set
forth in the applicable appendices attached hereto.
Subscriber
Information:
See
Schedule "C"
(Name
of Subscriber - please print)
By:
(Authorized Signature) (Official
Capacity or Title - please print)
(Please
print name)
(Subscriber’s
Address)
(Telephone
Number) (Fax
Number)
(Email
Address)
Beneficial
Subscriber Information:
If
the Subscriber is acting as agent for a beneficial Subscriber, the
name
and address of such beneficial Subscriber is as follows:
(Name
of Principal)
(Address)
(Contact
Name)
(Alternate
Contact)
(Telephone
Number) (Fax Number)
(Email
Address)
|
Particulars
of Debenture Purchase:
Principal
Amount of Debenture: US$
Register
the Debenture and Debenture Warrants as set forth
below:
See
Schedule "C"
(Name)
(Account
reference, if applicable)
(Address)
Deliver
the Certificates representing the Debenture and the Debenture Warrants
as
set forth below:
See
Schedule "C"
(Name)
(Account
reference, if applicable)
(Contact
Name)
(Address)
|
-i-
Confirmation
and Acceptance.
Xxxxxx
hereby accepts the subscription as set forth above on the terms and conditions
contained in this Agreement and Apollo represents and warrants to the Subscriber
that the representations and warranties made by Apollo to Shoreline Pacific
in
the Agency Agreement (as defined herein) are true and correct in all material
respects as of the Closing Date (save and except as waived by Shoreline Pacific)
and that the Subscriber is entitled to rely thereon; and hereby agrees to be
bound by the terms of the Registration Rights Agreement.
DATED
as of
the __ day
of
____________,
2007.
APOLLO
GOLD CORPORATION
Per:
Authorized
Signing Officer
-ii-
SCHEDULE
"A"
TERMS
AND CONDITIONS OF SUBSCRIPTION FOR THE DEBENTURES
1.0 |
INTERPRETATION
|
1.1 |
In
this Agreement, unless the context otherwise
requires:
|
(a)
|
"Agency
Agreement"
means the agency agreement to be entered into between Shoreline Pacific,
on its own behalf and as agent for the Subscribers, and Apollo in
connection with the Private Placement and the private placement of
the
Debentures;
|
(b)
|
"Agent"
means Shoreline Pacific LLC, and such other agents or affiliates
that
participate in a syndicate with Shoreline
Pacific;
|
(c)
|
"Agreement"
means this Subscription Agreement to be entered into between Apollo
and
the Subscriber and to be acknowledged on behalf of the Agent, and
includes
all schedules and appendices attached hereto, in each case as they
may be
amended or supplemented from time to
time;
|
(d)
|
"Apollo"
means Apollo Gold Corporation;
|
(e)
|
"Applicable
Securities Laws"
means, in respect of each and every offer and sale of the Debentures
and
the Debenture Warrants, the securities legislation and exchange rules
having application thereto and the rules, policies, notices and orders
issued by applicable securities regulatory authorities having application
thereto;
|
(f)
|
"Business
Day"
means any day except Saturday, Sunday or a statutory holiday in Toronto,
Ontario or Denver, Colorado;
|
(g)
|
"Closing"
means the closing of the purchase of the Debentures and Debenture
Warrants
by the Subscriber;
|
(h)
|
"Closing
Date"
means February *, 2007 or such other date or dates as Apollo and
the Agent
may mutually agree upon in writing;
|
(i)
|
"Closing
Time"
means 10:00 a.m. (Toronto time) on the Closing Date or such other
time as
Xxxxxx and the Agent may mutually agree upon in
writing;
|
(j)
|
"Common
Share"
means a common share in the share capital of
Apollo;
|
(k)
|
"Compensation
Warrants"
has the meaning attributed to it in Section 8.1;
|
(l)
|
"Compensation
Warrant Shares"
has the meaning attributed to it in Section 8.1;
|
(m)
|
"Debentures"
means the aggregate principal amount of up to $8,580,000 convertible
debentures of Apollo, convertible into Common Shares during its term
at
$0.50 per share;
|
(n)
|
"Debenture
Warrants"
means purchase warrants of Apollo issuable on purchase of the Debentures
at the rate of 2,000 Debenture Warrants for each $1,000 of Debentures,
with each Debenture Warrant entitling the holder to purchase one
Common
Shares for a two year period from the date of issue at $0.50 per
share;
|
(o)
|
"Distribution
Compliance Period"
means the distribution compliance period as defined in Regulation
S,
|
(p)
|
"Dollar"
or "$"
means the lawful currency of the United States of America, unless
otherwise specifically
indicated;
|
A-1
(q)
|
"Exemptions"
means the exemptions from prospectus and registration requirements
under
Applicable Securities Laws;
|
(r)
|
"Expiry
Time"
has the meaning attributed to it in Section
3.2;
|
(s)
|
"Maturity"
means 2 years from the date of issue of the
Debentures;
|
(t)
|
"NI
45-106"
means National Instrument 45-106 - Prospectus
and Registration Exemptions of
the Canadian Securities
Administrators;
|
(u)
|
"Offered
Securities"
means the Debentures and Debenture Warrants of
Apollo;
|
(v)
|
"Off
Shore Transaction"
means an off shore transaction as defined in Regulation
S;
|
(w)
|
"Private
Placement"
means the offering by Xxxxxx for sale on a private placement basis
of the
Debentures;
|
(x)
|
"Registration
Rights Agreement"
means the Registration Rights Agreement attached hereto as Schedule
"B";
|
(y)
|
"Registration
Statement"
means the registration statement that Xxxxxx agrees to file with
the SEC
pursuant to the Registration Rights Agreement to register the Underlying
Shares for resale pursuant to the terms of the Registration Rights
Agreement attached hereto as
Schedule"B";
|
(z)
|
“Regulation
D”
means Regulation D promulgated by the SEC pursuant to the U.S. Securities
Act;
|
(aa)
|
“Regulation
S”
means Regulation S promulgated by the SEC pursuant to the U.S. Securities
Act;
|
(bb)
|
"SEC"
means the United States Securities and Exchange
Commission;
|
(cc)
|
"Subscription
Price"
means the aggregate subscription price paid by each Subscriber for
the
Debentures;
|
(dd)
|
"Underlying
Shares"
means, collectively, the Common Shares issuable upon the conversion
of the
Debentures, and upon the exercise of the Debenture
Warrants;
|
(ee)
|
"United
States"
means the United States as defined in Regulation
S;
|
(ff)
|
"U.S.
Persons"
means U.S. persons as defined in Regulation S;
and
|
(gg)
|
"U.S.
Securities Act"
means the United States Securities Act of 1933, as
amended.
|
1.2 Time
is
of the essence of this Agreement.
1.3 This
Agreement is to be read with all changes in gender or number as required by
the
context.
1.4 The
headings in this Agreement are for convenience of reference only and do not
affect the interpretation of this Agreement.
1.5 All
monetary amounts specified in this Agreement are in the lawful currency of
the
United States of America, unless otherwise specified.
1.6 This
Agreement is governed by, subject to and interpreted in accordance with the
laws
prevailing in the Province of Ontario and the federal laws of Canada applicable
therein, and the courts of the Province of Ontario will have the exclusive
jurisdiction over any dispute arising in connection with this
Agreement.
A-2
2.0 |
SUBSCRIPTION
FOR THE DeBENTURES AND DEBENTURE
WARRANTS
|
2.1 The
Subscriber hereby confirms its irrevocable subscription for and offer to
purchase the Offered Securities from Apollo, on and subject to the terms and
conditions set out in this Agreement.
3.0 |
DESCRIPTION
OF THE DEBENTURES,
DEBENTURE WARRANTS, ETC.
|
3.1 The
Debentures and the Debenture Warrants will be issued and registered in the
name
of the Subscriber or its nominee as per the instructions on page (i) of this
Agreement.
3.2 Each
$1,000 principal amount of Debentures will be convertible at the option of
the
Subscriber, for no additional consideration, into 2,000 Common Shares, at any
time up until 5:00 pm (Toronto time) (the "Expiry
Time")
on the
Maturity Date.
3.3 Filing
Registration Statement
Apollo
will use its commercially reasonable best efforts:
(a)
|
to
file the Registration Statement in respect of the Underlying Shares
and
obtain additional listing approval of the Underlying Shares on the
American Stock Exchange as more fully set forth in the Registration
Rights
Agreement, attached hereto as Schedule "B";
and
|
(b)to
obtain
the conditional listing of the Underlying Shares on the Toronto Stock
Exchange.
4.0
|
REPRESENTATIONS,
WARRANTIES, COVENANTS AND ACKNOWLEDGEMENTS OF THE
SUBSCRIBER
|
4.1 The
Subscriber represents, warrants, covenants and acknowledges, as applicable,
to
and with Xxxxxx and the Agent, on the Subscriber’s own behalf and on behalf of
any disclosed principal for whom the Subscriber is acting as agent (and
acknowledges that Xxxxxx and the Agent, and their respective counsel, are
relying thereon), as at the date hereof and as at the Closing Time:
(a)
|
the
Agent has been retained by Xxxxxx to sell the Offered Securities
pursuant
to the Private Placement to which this Agreement relates on an agency
"best efforts" basis in the United States such that the total principal
amount of the Debentures that may be issued by Apollo pursuant to
the
Private Placement is not expected to exceed $8,580,000. The Subscriber
understands that the Private Placement is not subject to any minimum
subscription level and therefore any funds invested are available
to and
will be paid to Apollo in accordance with the provisions of this
Agreement
and need not be refunded to the
Subscriber;
|
(b)
|
the
Offered Securities are being offered for sale only on a "private
placement" basis and that the sale and delivery of the Offered Securities
is conditional upon such sale being exempt from the requirements
as to the
filing of a prospectus under the Applicable Securities Laws or upon
the
issuance of such orders, consents or approvals as may be required
to
permit such sale without the requirement of filing a prospectus or
delivering an offering memorandum, that no prospectus has been filed
by
Apollo with any of the applicable securities regulatory authorities
in
connection with the issuance of the Offered Securities, and
that:
|
(i)
|
as
a result, certain protections, rights and remedies provided by the
Applicable Securities Laws including statutory rights of rescission
or
damages, will not be available to the
Subscriber;
|
(ii)
|
no
securities commission or similar regulatory authority has reviewed
or
passed on the merits of the Offered
Securities;
|
(iii)
|
there
is no government or other insurance covering the Debentures, the
Debenture
Warrants or the Underlying
Shares;
|
A-3
(iv)
|
the
Subscriber may not receive information that would otherwise be required
to
be provided to the Subscriber under the Applicable Securities Laws;
and
|
(v)
|
Apollo
is relieved from certain obligations that would otherwise apply under
the
Applicable Securities Laws;
|
(c)
|
the
Subscriber certifies that it is or, if the Subscriber is acting as
agent
for a disclosed principal, such principal is, resident in the jurisdiction
set out on the first page of this Agreement under the heading "Subscriber
Information" and "Beneficial Subscriber Information", as the case
may be,
which address is the residence or place of business of the Subscriber
or
such disclosed principal, and that such address was not obtained
or used
solely for the purpose of subscribing for the Offered
Securities;
|
(d)
|
if
the Subscriber is not a resident of the United States, the Subscriber
represents and agrees that:
|
it
is acquiring the Offered Securities in an Off Shore
Transaction;
|
it
is not a "U.S." person (as defined in Regulation S) and is not acquiring
the Offered
Securities
for the account or benefit of any U.S.
person;
|
it
will not engage in hedging transactions with regard to the Apollo's
securities unless conducted in compliance with the U.S. Securities
Act;
|
it
will not resell any of Apollo's securities unless in accordance with
the
provisions of Regulation S and in accordance with applicable state
securities laws in the United States, pursuant to an effective
registration statement under the U.S. Securities Act with respect
to such
securities or pursuant to an available exemption from registration
under
the U.S. Securities Act; provided that the Subscriber provides an
opinion
of counsel or other evidence of exemption, in form reasonably satisfactory
to U.S. counsel to Apollo; and
|
Xxxxxx
will refuse to register any transfer of any of the Debentures, the
Debenture Warrants and the Underlying Shares not made in accordance
with
the provisions of Regulation S, pursuant to registration under the
U.S.
Securities Act, pursuant to an effective registration statement under
the
U.S. Securities Act with respect to such securities or pursuant to
an
available exemption from
registration;
|
(e)
|
the
Subscriber is purchasing the Offered
Securities:
|
(i)
|
as
principal for its own account and not for the benefit of any other
person
or is deemed under the Applicable Securities Laws to be purchasing
the
Offered Securities as principal, and in either case, is purchasing
the
Offered Securities for investment only and not with a view to the
resale
or distribution of all or any of the Offered Securities;
or
|
(ii)
|
as
agent for a disclosed principal and is not deemed under the Applicable
Securities Laws to be purchasing the Offered Securities as principal,
and
it is duly authorized to enter into this Agreement and to execute
and
deliver all documentation in connection with the purchase on behalf
of
such disclosed principal, who is purchasing as principal for its
own
account and not for the benefit of any other person and for investment
only and not with a view to the resale or distribution of all or
any of
the Offered Securities;
|
(f)
|
if
the Subscriber or its disclosed principal is a resident of the United
States, or is a U.S. Person or purchasing on behalf or for the benefit
of
a U.S. Person, such Subscriber or disclosed principal, as the case
may be,
falls within one or more of the sub-paragraphs of the definition
of
"accredited investor" under the U.S. Securities Act, as set out in
Appendix II hereto (the Subscriber having checked and initialled
the
applicable subparagraph(s));
|
A-4
(g)
|
no
person has made to the Subscriber any written or oral
representations:
|
that
any person will resell or repurchase any of the Debentures, the Debenture
Warrants and the Underlying Shares;
|
that
any person will refund the purchase price of any of the Debentures;
or
|
as
to the future price or value of any of the Debentures, the Debenture
Warrants and the Underlying Shares;
|
(h)
|
the
Subscriber, and any beneficial purchaser for whom it is acting, is
at
arm's length (within the meaning of the Applicable Securities Laws)
with
Xxxxxx, except as disclosed in writing by the Subscriber to Xxxxxx
and the
Agent;
|
(i)
|
the
Subscriber is not (other than if the Subscriber is an officer or
director
of Apollo or any of its affiliates) and will not become a "control
person"
of Apollo by virtue of the purchase of the Offered Securities and
does not
intend to act in concert with any other person to form a control
group of
Apollo;
|
(j)
|
this
Subscription has not been solicited in any manner contrary to the
Applicable Securities Laws;
|
(k)
|
the
Subscriber (other than if the Subscriber is an officer or director
of
Apollo or any of its affiliates) has no knowledge of a "material
fact" or
"material change" (as those terms are defined in the Applicable Securities
Laws) in respect of the affairs of Apollo that has not been generally
disclosed to the public;
|
(l)
|
the
offer made by this subscription is
irrevocable;
|
(m)
|
Xxxxxx
will have the right to accept this subscription in whole or in part
and
the acceptance of this subscription offer will be conditional upon
the
sale of the Offered Securities to the Subscriber being exempt from
the
prospectus and registration requirements of the Applicable Securities
Laws;
|
(n)
|
the
Subscriber has the legal capacity and competence to enter into and
execute
this Agreement and to take all actions required pursuant hereto and,
if an
individual, is of full age of majority, and if the Subscriber is
a
corporation, it is duly incorporated and validly subsisting under
the laws
of its jurisdiction of incorporation, and all necessary approvals
by its
directors, shareholders and others have been given to authorize the
execution of this Agreement on behalf of the
Subscriber;
|
(o)
|
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, or the constating documents of, the Subscriber
or of
any agreement, written or oral, to which the Subscriber may be a
party or
by which it is or may be bound;
|
(p)
|
this
Agreement has been duly executed and delivered by the Subscriber
and
constitutes a legal, valid and binding obligation of the Subscriber
enforceable against the Subscriber;
|
(q)
|
in
the case of a subscription by it for the Offered Securities acting
as
agent for a disclosed principal, it is duly authorized to execute
and
deliver this Agreement and all other necessary documentation in connection
with such subscription on behalf of such principal and this Agreement
has
been duly authorized, executed and delivered by or on behalf of,
and
constitutes a legal, valid and binding agreement of, such
principal;
|
(r)
|
the
delivery of this subscription, the acceptance hereof by Xxxxxx and
the
issuance of the Offered Securities to the Subscriber complies with
all
applicable laws of the Subscriber’s jurisdiction of residence and domicile
and will not cause Apollo or any of its officers or directors to
become
subject to or require any disclosure, prospectus or other reporting
requirement to which Apollo is not currently
subject;
|
A-5
(s)
|
if
required by the Applicable Securities Laws, policy or order or by
any
securities commission, stock exchange or other regulatory authority,
the
Subscriber will execute, deliver, file and otherwise assist Apollo
in
filing such reports, undertakings and other documents as may be
required;
|
(t)
|
the
Subscriber has not purchased the Offered Securities as a result of
any
form of general solicitation or general advertising, including
advertisements, articles, notices or other communication published
in any
newspaper, magazine or similar media or broadcast over radio, television
or internet or any seminar or meeting whose attendees have been invited
by
general solicitation or general
advertising;
|
(u)
|
The
funds representing the Subscription Price which will be advanced
by the
Subscriber to the Corporation hereunder will not represent proceeds
of
crime for the purposes of the Proceeds
of Crime (Money Laundering) Act
(Canada) (the "PCMLA")
and the Subscriber acknowledges that the Corporation may in the future
be
required by law to disclose the Subscriber's name and other information
relating to this Subscription Agreement and the Subscriber's subscription
hereunder, on a confidential basis, pursuant to the PCMLA. To the
best of
its knowledge: none of the subscription funds to be provided by the
Subscriber (i) have been or will be derived from or related to any
activity that is deemed criminal under the law of Canada, the United
States of America, or any other jurisdiction, or (ii) are being tendered
on behalf of a person or entity who has not been identified to the
Subscriber, and it shall promptly notify the Corporation if the Subscriber
discovers that any of such representations ceases to be true and
provide
the Corporation with appropriate information in connection
therewith;
|
(v)
|
The
Subscriber is not purchasing the Offered Securities with knowledge
of
material information concerning the Corporation which has not been
generally disclosed;
|
(w)
|
No
person has made any written or oral
representations:
|
(i)
|
that
any person will resell or repurchase the Offered
Securities;
|
(ii)
|
that
any person will refund the Subscription Price;
or
|
(iii)
|
as
to the future price or value of the Offered
Securities;
|
(x)
|
the
Subscriber and each beneficial purchaser for whom it is acting
acknowledges that the Offered Securities are speculative in nature
and
that there are risks associated with the purchase of the Offered
Securities and the Subscriber and each beneficial purchaser for whom
it is
acting has such knowledge, sophistication and experience in business
and
financial matters as to be capable of evaluating the merits and risks
of
its investment in the Offered Securities, fully understands the
speculative nature of the Offered Securities and is able to bear
the
economic risk of loss of its entire
investment;
|
(y)
|
Apollo
may be required by law or otherwise to disclose to regulatory authorities
the identity of the Subscriber and each beneficial purchaser for
whom the
Subscriber may be acting;
|
(z)
|
the
Subscriber has not received, nor has it requested, nor does it have
any
need to receive, any offering memorandum or any other document from
Apollo
describing the business and affairs of Apollo with respect to the
offering
and purchase of the Offered
Securities;
|
(aa)
|
this
subscription is not enforceable by the Subscriber unless it has been
accepted by Xxxxxx and the Subscriber waives any requirement on Xxxxxx’s
behalf to immediately communicate its acceptance of this subscription
to
the Subscriber;
|
(bb)
|
in
connection with the Subscriber’s subscription, the Subscriber has not
relied upon Apollo for investment, legal or tax advice, and has in
all
cases sought or elected not to seek the advice of the Subscriber’s own
personal investment advisers, legal counsel and tax advisers and
the
Subscriber is able, without impairing its financial condition, to
hold the
Debentures, the Debenture Warrants and the Underlying Shares for
an
indefinite period of time and to bear the economic risk of, and withstand
a complete loss of, the investment and it
can
|
A-6
otherwise
be reasonably assumed to have the capacity to protect its own interest in
connection with its investment;
(cc)
|
it
has relied solely upon publicly available information relating to
Apollo
and not upon any verbal or written representation as to fact or otherwise
made by or on behalf of Apollo or the Agent, such publicly available
information having been delivered to the Subscriber without independent
investigation or verification by the Agent and agrees that the Agent,
the
Agent's counsel and their respective directors, officers, employees,
agents and representatives assume no responsibility or liability
of any
nature whatsoever for the accuracy, adequacy or completeness of the
publicly available information or as to whether all information concerning
Xxxxxx required to be disclosed by Xxxxxx has been generally disclosed
and
acknowledges that the Agent's counsel and Xxxxxx’s counsel are acting as
counsel to the Agent and Xxxxxx, respectively, and not as counsel
to the
Subscriber;
|
(dd)
|
all
costs and expenses incurred by the Subscriber (including any fees
and
disbursements of any special counsel or other advisors retained by
the
Subscriber) relating to the purchase of the Offered Securities shall
be
borne by the Subscriber; and
|
(ee)
|
none
of the funds the Subscriber is using to purchase the Offered Securities
is, to the knowledge of the Subscriber, proceeds obtained or derived,
directly or indirectly, as a result of illegal
activities.
|
4.2 The
Subscriber acknowledges and agrees that the foregoing representations and
warranties are made by the Subscriber with the intent that they may be relied
upon by Xxxxxx and the Agent in determining its eligibility as a purchaser
of
the Offered Securities under Applicable Securities Laws and the Subscriber
hereby agrees to indemnify and hold harmless Apollo, the Agent and their
representatives, directors, officers, employees and underwriters from and
against all losses, liability, claims, costs, expenses and damages from reliance
thereon in the event that such representations and warranties are untrue in
any
material respect, such agreement regarding indemnification to survive the
Closing and to continue in full force and effect for the benefit of the Agents
notwithstanding any subsequent disposition by the Subscriber of the Debentures,
the Debenture Warrants or the Underlying Shares. The Subscriber further agrees
that by accepting the Offered Securities, the Subscriber shall be representing
and warranting that the foregoing representations and warranties contained
herein or in any document furnished by the Subscriber to Apollo or the Agent
are
true as at the Closing with the same force and effect as if they had been made
by the Subscriber as at the Closing and shall survive the Closing and continue
in full force and effect for the benefit of Apollo and the Agent notwithstanding
any subsequent disposition by the Subscriber of the Debentures, the Debenture
Warrants or the Underlying Shares. The Subscriber undertakes to immediately
notify Apollo at the address specified on page (i) of this Agreement of any
change in any statement or other information relating to the Subscriber set
forth herein which takes place prior to the Closing Time.
5.0 |
BENEFIT
OF AGENCY AGREEMENT
|
5.1 By
execution of this Agreement, Xxxxxx hereby agrees that the Subscriber shall
have
the benefit of the representations and warranties made by Xxxxxx to the Agent
as
set forth in the Agency Agreement. Such representations and warranties shall
form an integral part of this Agreement and shall survive the Closing and
continue in full force and effect for the benefit of the Subscriber in
accordance with the Agency Agreement. The Subscriber acknowledges and agrees
that the Agent and Apollo may vary, amend, alter or waive, in whole or in part,
one or more terms to be set forth in the Agency Agreement in such manner and
on
such terms and conditions as they may determine, acting reasonably, and that
any
such variation, amendment, alteration or waiver shall not affect in any way
the
obligations of the Subscribers or such others for whom the Subscriber is
contracting hereunder, provided, however, that the Agent shall not vary, amend,
alter or waive any such term or condition where to do so would result in a
material change to any of the material attributes of the Offered Securities
and
(b) provide notice thereof to the Subscriber.
5.2 Apollo
agrees to indemnify, defend and hold the Subscriber (which term shall, for
the
purposes of this provision, include the Subscriber or its shareholders,
managers, partners, directors, officers, members, employees, direct or indirect
investors, agents and affiliates and assignees and the stockholders, partners,
directors, members, managers, officers, employees direct or indirect investors
and agents of such affiliates and assignees) harmless against any and all
liabilities, loss, cost or damage, together with all reasonable costs and
expenses related thereto (including reasonable legal and accounting fees and
expenses), arising from, relating to, or connected with the untruth, inaccuracy
or breach of any statement, representation, warranty or covenant of Apollo
contained in this Agreement or in the Agency Agreement.
A-7
Xxxxxx
undertakes to notify the Agent immediately of any change in any representation,
warranty or other information relating to Apollo set forth in this Agreement
or
in the Agency Agreement which takes place prior to Closing.
6.0 |
WITHDRAWAL
OF
SUBSCRIPTION
|
6.1 If
the
Agent terminates its obligations with respect to the Private Placement and/or
under the Agency Agreement before the Closing, the Subscriber reserves the
right
to withdraw this subscription and to terminate its obligations hereunder at
any
time before Closing and the Subscriber hereby appoints the Agent as its agent
for the purpose of notifying Apollo of the withdrawal or termination of its
subscription.
6.2 If
the
Closing does not occur on or before February 28, 2007 or such later date as
agreed to by Xxxxxx, the Agent and the Subscriber, notwithstanding any
provisions to the contrary in this Agreement or in the Agency Agreement, the
Subscription Price will be returned to the Subscriber without interest or
deduction and the Subscriber will have the right to withdraw this subscription
and to terminate its obligations hereunder.
7.0 |
CLOSING
|
7.1 Subject
to the receipt of all completed items in accordance with Section 7.4, the
Closing will take place as contemplated in the Agency Agreement on the Closing
Date.
7.2 If,
prior
to the Closing, the terms and conditions contained in this Agreement and the
Agency Agreement have been complied with to the satisfaction of the Agent,
or
waived by them, the Agent shall deliver to Apollo all completed Agreements
and
cause payment of the aggregate Subscription Price for all of the Offered
Securities sold pursuant to the Agency Agreement from the escrow account held
by
Signature Bank against delivery by Apollo of certificates representing the
Offered Securities and such other documentation as may be required pursuant
to
this Agreement and the Agency Agreement. If, prior to the Closing, the terms
and
conditions contained in this Agreement (other than delivery by Xxxxxx to the
Subscriber of certificate representing the Offered Securities) and the Agency
Agreement have not been complied with to the satisfaction of the Agent, or
waived by them, the Agent, Apollo and the Subscriber will have no further
obligations under this Agreement.
7.3 The
Closing of the Private Placement is conditional upon the following:
(a)
|
Xxxxxx
and the Agent having entered into the Agency Agreement on mutually
satisfactory terms, to include customary warranties and indemnities
and
rights of termination in favour of the Agent, and such agreement
having
become unconditional in all respects and not having been terminated;
and
|
(b)
|
the
issue and sale of the Offered Securities being exempt from the requirement
to file a prospectus, registration statement or similar document
under the
Applicable Securities Laws relating to the sale of the Offered Securities,
or Apollo having received such orders, consents or approvals as may
be
required to permit such sale without the requirement of filing a
prospectus, registration statement or similar
document.
|
7.4 The
Subscriber acknowledges and agrees that the obligations of Apollo hereunder
are
conditional on the accuracy of the representations and warranties of the
Subscriber contained in this Agreement as of the date of this Agreement, and
as
of the Closing Time as if made at and as of the time of Closing, and the
fulfillment of the following additional conditions as soon as possible and
in
any event not later than the Closing Time:
(a)
|
payment
by the Subscriber of the Subscription Price by certified cheque,
bank
draft or wire transfer (in accordance with the instructions set forth
on
the first page hereto) payable as the Agent may
direct;
|
(b)
|
the
Subscriber having properly completed, signed and delivered this
Agreement;
|
(c)
|
the
Subscriber having properly completed, signed and delivered the “Selling
Securityholder Notice and Questionnaire” attached as Annex A to the
Registration Rights Agreement attached hereto as Appendix II;
and
|
A-8
(d)
|
the
Subscriber having properly completed, signed and delivered any further
documentation as required under Applicable Securities Laws or by
any
applicable stock exchange or other regulatory authority and the Subscriber
covenants and agrees to do so upon request by
Xxxxxx.
|
7.5 The
Subscriber acknowledges that the Private Placement may be completed in one
or
more partial closings at the agreement of Apollo and the Agent and that the
Closing as contemplated in this Agreement may be effected at one or more of
such
partial closings.
7.6 Apollo
acknowledges and agrees that the obligations of the Subscriber hereunder are
conditional on the accuracy of the representations and warranties of Apollo
contained in this Agreement and in the Agency Agreement as of the date of such
agreements, and as of the Closing Time as if made at and as of the time of
Closing, and the fulfillment of the following additional
conditions:
(a)
|
the
covenants of Apollo have been performed, satisfied and complied with,
where applicable, as at the closing
Time;
|
(b)
|
Xxxxxx
has delivered to the Agent's counsel and counsel to the Subscriber
the
following items:
|
(i)
|
a
copy of the certificates representing the Offered Securities purchased
by
the Subscriber registered in the name of the Subscriber or its
nominee;
|
(ii)
|
a
copy of this Agreement duly executed by
Xxxxxx;
|
(iii)
|
a
copy of a certificate executed by the chief executive officer or
the chief
financial officer of Xxxxxx, dated as of Closing Date, as required
under
Section 6(g) of the Agency Agreement and such other matters as may
be
reasonably requested by the Agent or their counsel;
and
|
(iv)
|
such
other documents relating to the transactions contemplated by this
Agreement as the Agent or their counsel may reasonably
request.
|
8.0 |
APPOINTMENT
OF
AGENT
|
8.1 Compensation
of Agent
(a)
|
The
Subscriber understands that the Agent will receive a commission from
Apollo in connection with the Private Placement payable in cash equal
to
7.0% of the subscription price received by Xxxxxx from the sale of
the
Offered Securities, together with compensation warrants (the "Compensation
Warrants")
equal to that number of Common Shares purchasable by an amount equal
to
7.0% of the gross proceeds raised by the Agents from the Private
Placement
at $0.50 per Common Share. Each Compensation Warrant will entitle
the
holder to purchase one Common Share (a "Compensation
Warrant Share")
during a two year period from the date of issue at $0.50 per share.
|
(b)
|
No
other fee or commission is payable by Apollo in connection with the
sale
of the Offered Securities; however, Xxxxxx will pay certain fees
and
expenses of the Agent in connection with the Private Placement as
set out
in the Agency Agreement, and in any agreement with Regent Securities
Capital Corporation (or an affiliate thereof) and
Apollo.
|
8.2 The
Subscriber on its own behalf or (if applicable) on behalf of others for whom
the
Subscriber is contracting hereunder, hereby irrevocably authorizes the
Agent:
(a)
|
in
their sole discretion, to act as the Subscriber’s representative at the
Closing, to receive certificates representing the Offered Securities
and
to execute in its name and on its behalf all Closing receipts and
documents required;
|
A-9
(b)
|
to
swear, accept, execute, file and record any documents (including
receipts)
necessary to accept delivery of the Offered Securities on the Closing
and
to terminate this subscription on behalf of the Subscriber pursuant
to the
terms of the Agency Agreement; and
|
(c)
|
to
correct any minor errors in, or complete any minor information missing
from the appendices attached hereto which have been executed by the
Subscriber and delivered to Apollo.
|
9.0 |
HOLD
PERIOD AND RESALE
RESTRICTIONS
|
9.1 The
Subscriber understands and hereby acknowledges that:
(a)
|
the
Offered Securities issuable pursuant to the Private Placement will
be
subject to certain resale restrictions imposed under Applicable Securities
Laws and the rules of regulatory bodies having jurisdiction including,
without limiting the generality of the foregoing, the requirement
that the
Offered Securities issuable pursuant to the Private Placement not
be
traded for a period of four months from the Closing Date as required
under
the Applicable Securities Laws in Canada, and the applicable restrictions
under the U.S. Securities Act, except as permitted by Applicable
Securities Laws, and that the Offered Securities and all securities
issued
in exchange or conversion thereof are “restricted securities” as defined
under Rule 144 and may be resold only
if:
|
(i)
|
the
sale is to Apollo;
|
(ii)
|
the
sale is made outside the United States in a transaction meeting the
requirements of Rule 904 of Regulation S (or such successor rule
or
regulation then in effect), if available, and in compliance with
applicable state securities laws;
|
(iii)
|
the
sale is made pursuant to an exemption from the registration requirements
under the U.S. Securities Act provided by Rule 144 thereunder, if
available, and in accordance with any applicable state securities
laws,
and it has prior to such sale furnished to Apollo an opinion of counsel
to
that effect reasonably satisfactory to Apollo;
or
|
(iv)
|
the
sale is a transaction that does not require registration under the
U.S.
Securities Act or any applicable state securities laws, and it has
prior
to such sale furnished to Apollo an opinion of counsel to that effect
reasonably satisfactory to Apollo;
|
(b)
|
while
Apollo has agreed to file the Registration Statement (as described
in the
Registration Rights Agreement attached hereto as Schedule "B") registering
the Underlying Shares for resale and cause it to be declared effective
by
the SEC, there is no assurance that Apollo will be able to cause
the
Registration Statement to be declared effective by the SEC, and if
the
Registration Statement is not declared effective by the SEC, the
Underlying Shares (as well as the Debentures and the Debenture Warrants,
which will not be registered by the Registration Statement in any
event)
may not be resold by the Subscriber, except pursuant to an exemption
contained in the Applicable Securities Laws, which may not be available,
and even if the Registration Statement is declared effective, the
Debentures, the Debenture Warrants and the Underlying Shares remain
restricted securities under the U.S. Securities Act and may only
be sold
pursuant to an effective registration requirements of the U.S. Securities
Act or in the case of the sale of the Underlying Shares in the manner
provided in the Registration Statement for the resale of such Common
Shares; and
|
(c)
|
Legends
on Certificates
|
For
the period under the U.S. Securities Act when the Debentures, the
Debenture Warrants and the Underlying Shares are restricted securities
as
defined in Rule 144 under the U.S. Securities Act, each certificate
representing such security shall bear the following
legend:
|
THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933,
AS AMENDED (THE ‘‘SECURITIES ACT’’), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT (A) IT IS AN ACCREDITED
A-10
INVESTOR
(AS DEFINED IN REGULATION D UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S.
PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S ADOPTED UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL
NOT
RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED, EXCEPT (A) TO THE ISSUER
OR
A SUBSIDIARY THEREOF; (B) TO PERSONS OTHER THAN U.S. PERSONS OUTSIDE THE UNITED
STATES IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT; (C) PURSUANT
TO
THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 ADOPTED UNDER THE
SECURITIES ACT OR ANOTHER AVAILABLE EXEMPTION UNDER THE SECURITIES ACT (IF
AVAILABLE); OR (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, AND (3) AGREES THAT IT WILL, PRIOR TO ANY TRANSFER OF THIS
SECURITY, FURNISH TO THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS MAY BE REQUIRED TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
‘‘OFFSHORE TRANSACTION,’’ ‘‘UNITED STATES’’ AND ‘‘U.S. PERSON’’ HAVE THE MEANING
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. IN ANY CASE, THE HOLDER
HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION
WITH
REGARD TO THIS, EXCEPT AS PERMITTED BY THE SECURITIES ACT.
For
so long as the Debenture Warrants are restricted securities as defined
in
Rule 144 under the U.S. Securities Act, each certificate representing
a
Debenture Warrant if not sold in the United States in the original
offering pursuant to Regulation D will also bear the following
legend:
|
THIS
WARRANT HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE SECURITIES TO
BE
ISSUED UPON EXERCISE OF THIS WARRANT WERE NOT INITIALLY REGISTERED AND MAY
OR
MAY NOT HAVE BEEN REGISTERED FOR RESALE UNDER THE SECURITIES ACT. THIS WARRANT
MAY NOT BE EXERCISED BY OR ON BEHALF OF ANY U.S. PERSON, AS SUCH TERM IS DEFINED
IN REGULATION S PROMULGATED PURSUANT TO THE SECURITIES ACT, UNLESS REGISTERED
UNDER THE SECURITIES ACT OR AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.
the
certificates representing the Debentures and the Debenture Warrants
will
bear a legend denoting the restrictions on transfer under Applicable
Securities Laws (including, but not limited to, National Instrument
45-102
("NI
45-102")).
|
if
at the date of the conversion or exercise of the Debentures or the
Debenture Warrants, respectively, the applicable restriction period
has
not expired, the certificates representing the Underlying Shares
will bear
a legend as prescribed by NI
45-102;
|
In
addition to the foregoing legends, the certificates representing
the
Underlying Shares, if issued prior to such time as the restrictive
legends
set forth in clauses 9.1(c)(i) and (ii) are no longer required under
applicable requirements of the U.S. Securities Act and all restrictions
are removed with respect to such securities pursuant to applicable
state
securities laws, shall bear, in addition to any legend(s) required
by
Canadian securities laws and policies, the following legend:
|
"THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK
EXCHANGE; HOWEVER, THE SAID SECURITIES CAN NOT BE TRADED THROUGH THE FACILITIES
OF SUCH EXCHANGE SINCE THEY ARE NOT FREELY TRANSFERABLE, AND CONSEQUENTLY ANY
CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT "GOOD DELIVERY" IN SETTLEMENT
OF
TRANSACTIONS ON THE TORONTO STOCK EXCHANGE.".
A-11
Certificates
representing the Debenture, the Debenture Warrants, and the Underlying Shares
will bear a legend containing restrictions under the conformity with the U.S.
Securities Act with respect to the resale of the securities of the type set
forth in clauses 9.1(c)(i) and (ii) above. Until the earlier of (1) in the
case
of the Underlying Shares, such shares sold pursuant to an effective Registration
Statement and the seller shall have provided evidence acceptable to U.S.
securities counsel for Apollo that the seller has complied with the prospectus
delivery requirements under the U.S. Securities Act; and (2) the holder of
the
applicable security has furnished to Apollo an opinion of U.S. securities
counsel reasonably acceptable to Apollo that the securities represented by
such
certificates are no longer “restricted securities” as defined in Rule 144 under
the U.S. Securities Act. Certificates representing the Debenture Warrants and
the Underlying Shares will bear a legend containing restrictions in conformity
with the U.S. Securities Act with respect to the resale of the securities of
the
type set forth in clauses 9.1(c)(i) and (ii) above;
(d)
|
the
Subscriber will not sell, assign or transfer the Debentures, the
Debenture
Warrants or the Underlying Shares except in accordance with the provisions
of Applicable Securities Laws and stock exchange rules, if applicable,
in
the future.
|
9.2 The
Subscriber also acknowledges that it has been advised to consult its own legal
advisors with respect to applicable resale restrictions and that it is solely
responsible (and Apollo is not in any manner responsible) for complying with
such restrictions, including, without limitation of the foregoing, as long
as
the Debentures, the Debenture Warrants and the Underlying Shares are restricted
securities under the U.S. Securities Act, such securities may only be resold
(a)
to Apollo, (b) pursuant to Regulation S, (c) pursuant to another exemption
from
registration under the U.S. Securities Act or (d) pursuant to a registration
statement declared effective under the U.S. Securities Act.
9.3 Apollo
shall indemnify, defend and hold the Subscriber (which term shall, for the
purposes of this section, include the Subscriber or its shareholders, managers,
partners, directors, officers, members, employees, direct or indirect investors,
agents and affiliates and assignees and the stockholders, partners, directors,
members, managers, officers, employees direct or indirect investors and agents
of such affiliates and assignees) harmless against any and all liabilities,
loss, cost or damage, together with all reasonable costs and expenses related
thereto (including reasonable legal and accounting fees and expenses), arising
from, relating to, or connected with an untrue, inaccurate or breached
statement, representation, warranty or covenant of Apollo contained herein
or in
the Agency Agreement, as the case may be. Xxxxxx undertakes to notify the
Subscriber immediately of any change in any representation, warranty or other
material information relating to Apollo set forth in this Subscription Agreement
which takes place prior to the Closing Time.
10.0 |
MISCELLANEOUS
|
10.1 Subject
to Section 6, the Subscriber, on its own behalf and, if applicable, on behalf
of
others for whom it is contracting hereunder, agrees that this subscription
for
and offer to purchase the Offered Securities is made for valuable consideration
and may not be withdrawn, cancelled, terminated or revoked by the Subscriber,
on
its own behalf and, if applicable, on behalf of others for whom it is
contracting hereunder.
10.2 The
Subscriber consents to the filing of such documents and any other documents
as
may be required to be filed with any stock exchange or securities regulatory
authority in connection with the Private Placement.
10.3 This
Agreement, which includes any interest granted or right arising under this
Agreement, may not be assigned or transferred.
10.4 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 Offered Securities
and
there are no other terms, conditions, representations or warranties whether
expressed, implied, oral or written, by statute, by common law, by Xxxxxx,
or by
anyone else.
10.5 The
parties may amend this Agreement only in writing.
10.6 This
Agreement enures to the benefit of and is binding upon the parties and, as
the
case may be, their respective heirs, executors, administrators and,
successors.
A-12
10.7 A
party
will give all notices or other written communications to the other party
concerning this Agreement by hand or by registered mail addressed to such other
party’s respective address which is noted on the cover page of this
Agreement.
10.8 The
parties hereto each covenant and agree to execute and deliver such further
agreements, documents and writings and provide such further assurances as may
be
required by the parties to give effect to this Agreement and without limiting
the generality of the foregoing to do all acts and things, execute and deliver
all documents, agreements and writings and provide such assurances,
undertakings, information and investment letters as may be required from time
to
time by all regulatory or governmental bodies or stock exchanges having
jurisdiction over Xxxxxx’s affairs or as may be required from time to time under
the Applicable Securities Laws, including without limitation to the Toronto
Stock Exchange and the American Stock Exchange.
10.9 This
Agreement may be executed in counterparts, each of which when delivered will
be
deemed to be an original and all of which together will constitute one and
the
same document and Xxxxxx will be entitled to rely on delivery by facsimile
machine of an executed copy of this Agreement, and acceptance by Xxxxxx of
such
facsimile copy will be equally effective to create a valid and binding agreement
between the Subscriber and Xxxxxx as if Xxxxxx had accepted the Agreement
originally executed by the Subscriber.
10.10 Each
of
the parties hereby acknowledges that it has consented and requested that all
documents evidencing or relating in any way to the Offered Securities and this
Agreement be drawn in the English language only. Les parties reconnaissent
par
les présentes avoir consenti et demandé que tous les documents faisant foi ou se
rapportant de quelque manière aux bons de sousciciption spéciaux et soient
rédigés en anglais seulement.
A-13
SCHEDULE
"B"
REGISTRATION
RIGHTS AGREEMENT
[to
be
inserted]
B-1
APPENDIX
I
UNITED
STATES ACCREDITED INVESTOR CERTIFICATE
(for
Subscribers Resident in the United States)
(TO
BE COMPLETED BY U.S. PURCHASERS ONLY)
To:
|
Apollo
Gold Corporation
|
Dear
Sirs:
This
letter is given to you in connection with the attached Subscription Agreement
(the "Subscription Agreement")
for
Debentures and Debenture Warrants ("Offered
Securities")
of
Apollo Gold Corporation (the "Company").
All
terms defined in the Subscription Agreement and not otherwise defined herein
are
used herein as defined in the Subscription Agreement. In connection with its
purchase of the Offered Securities of the Company, the undersigned represents,
warrants and certifies to you that:
(a) the
undersigned is duly authorized and empowered to enter into, execute and deliver
and perform this Subscription Agreement and related documents, and the person
executing and delivering this Subscription Agreement and the Appendices thereto
on behalf of the undersigned is duly authorized and empowered to do so. This
Subscription Agreement and related documents have been duly and validly
executed, issued, and delivered and constitutes the legal, valid and binding
obligations of the undersigned, enforceable in accordance with their
terms.
(b) it
(he or
she, as applicable) is an "accredited investor" as that term is defined under
Rule 501(a) under the Securities Act of 1933 ("U.S.
Securities Act")
for
one or more of the following reasons (Please check one or more reasons, as
applicable):
_______
|
(A)
|
If
an individual, his/her individual net worth, or joint net worth with
his/her spouse, at the time of this purchase exceeds
US$1,000,000
|
_______
|
(B)
|
If
an individual, he/she had an individual income in excess of US$200,000
in
each of the two most recent years or joint income with his/her spouse
in
excess of US$300,000 in each of those years and has a reasonable
expectation of reaching the same income level in the current
year
|
_______
|
(C)
|
If
an individual, he/she is an executive officer or director of the
Company
|
_______
|
(D)
|
It
is an organization described in section 501(c)(3) of the U.S. Internal
Revenue Code, corporation, Massachusetts or similar business trust,
or
partnership, not formed for the specific purpose of acquiring the
securities offered, with total assets in excess of
US$5,000,000
|
_______
|
(E)
|
It
is a trust, with total assets in excess of US$5,000,000, not formed
for
the specific purpose of acquiring the securities offered, whose purchase
is directed by a sophisticated person who, either alone or with his
purchaser representative(s), has such knowledge, sophistication and
experience in financial and business matters that he is capable of
evaluating the merits and risks of the prospective investment (Please
describe basis):
|
_______
|
(F)
|
It
is a bank as defined in section 3(a)(2) of the U.S. Securities Act,
or any
savings and loan association or other institution as defined in section
3(a)(5)(A) of the U.S. Securities Act whether acting in its individual
or
fiduciary capacity; a broker or dealer registered pursuant to section
15
of the U.S. Securities Exchange Act of 1934 ("Exchange Act"); an
insurance
company as defined in section 2(13) of the U.S. Securities Act; an
investment company registered under the U.S. Investment Company Act
of
1940 or a business development company as defined in section 2(a)(48)
of
that Act; a Small Business Investment Company licensed by the U.S.
Small
Business Administration under section 301(c) or (d) of the U.S. Small
Business Investment Act of 1958; a plan established and maintained
by a
state, its political subdivisions, or any agency or instrumentality
of a
state or its political subdivisions, for the benefit of its employees,
if
such plan has total assets in excess of US$5,000,000; an employee
benefit
plan within the meaning of the U.S. Employee Retirement Income Security
Act of 1974 if the investment decision is made by a plan fiduciary,
as
defined in section 3(21) of such Act, which is either a bank, savings
and
loan association, insurance company, or registered investment adviser,
or
if the employee benefit plan has total assets in excess of U.S. $5,000,000
or, if a self-directed plan, with investment decisions made solely
by
persons that are accredited
investors
|
I-1
_______
|
(G)
|
It
is a private business development company as defined in section 202(a)(22)
of the U.S. Investment Advisers Act of 1940
|
_______
|
(H)
|
It
is an entity in which all of the equity owners are accredited
investors
|
(c) It
is
purchasing the Offered Securities for its own account and not with a view to
any
resale, distribution or other disposition of the Debentures, the Debenture
Warrants or the Underlying Shares in any transaction that would be in violation
of the securities laws of the United States or any state thereof;
(d) The
undersigned was not formed for the specific purpose of acquiring the Offered
Securities.
(e) The
purchase of the Offered Securities has not been made through or as a result
of,
and the distribution of the Offered Securities is not being accompanied by,
any
general advertising or solicitation (as defined in Regulation D) in the United
States, including, without limitation, any advertisement in printed public
media, radio, television or telecommunications including electronic display
such
as the Internet, any general mailing, leaflet, public promotional meeting,
newspaper or magazine article, radio or television advertisement, or any other
form of general advertising or general solicitation in connection with the
issuance. Prior to its consideration of the transactions contemplated hereby,
the undersigned had a pre-existing personal or business relationship with either
the Company or with a broker or agent (or a principal thereof) acting on behalf
of the Company.
(f) No
prospectus or "offering memorandum" has been delivered to the undersigned in
connection with the purchase of the Offered Securities.
(g) In
purchasing the Offered Securities, the undersigned has relied solely upon
publicly available information relating to the Company and not upon any verbal
or written representation as to any fact or otherwise made by or on behalf
of
the Company or any other person associated therewith. The undersigned, other
than directors or officers of the Company, acknowledges that the decision to
purchase the Offered Securities was made solely on the basis of publicly
available information, and it is not purchasing the Offered Securities with
knowledge of material information concerning the Company which has not been
generally disclosed. The undersigned acknowledges that the Company has made
available to the undersigned the opportunity to examine such additional
documents from the Company and to ask questions of, and receive full answers
from, the Company concerning, among other things, the Company, its financial
condition, its management, its prior activities and any other information which
the undersigned considers relevant or appropriate in connection with entering
into this Agreement.
(h) The
undersigned agrees that if it decides to offer, sell or otherwise transfer
any
of the Debenture, Debenture Warrants or Underlying Shares, it will not offer,
sell or otherwise transfer any of such securities directly or indirectly,
unless:
(i)
|
the
sale is to the Company;
|
(ii)
|
the
sale is made outside the United States in a transaction meeting the
requirements of Rule 904 of Regulation S under the U.S. Securities
Act
("Regulation
S")
(or such successor rule or regulation then in effect), if available,
and
in compliance with applicable state securities
laws;
|
I-2
(iii)
|
the
sale is made pursuant to an exemption from the registration requirements
under the U.S. Securities Act provided by Rule 144 thereunder, if
available, and in accordance with any applicable state securities
laws,
and it has prior to such sale furnished to the Company an opinion
of
counsel to that effect reasonably satisfactory to the Company;
or
|
(iv)
|
the
sale is a transaction that does not require registration under the
U.S.
Securities Act or any applicable state securities laws, and it has
prior
to such sale furnished to the Company an opinion of counsel to that
effect
reasonably satisfactory to the Company;
or
|
(v)
|
the
sale is made pursuant to a registration statement that has been declared
effective under the U.S. Securities Act with respect to the securities
being sold.
|
(i) The
Purchaser understands and acknowledges that upon the issuance thereof, the
certificates representing the Debentures, the Debenture Warrants and the
Underlying Shares, shall be restricted securities under United States and state
securities laws, and until such securities cease to be restricted securities
or
sold in a transaction that allows for the removal of such legend from the
certificate representing such securities in the hands of the transferee, such
as
pursuant to a resale pursuant to an effective registration statement or sale
pursuant to Rule 144, such certificates shall bear, in addition to any legend(s)
required by Canadian securities laws and policies, a legend:
"THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933,
AS AMENDED (THE " SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS
DEFINED IN RULE 144A ADOPTED UNDER THE SECURITIES ACT); (B) IT IS AN ACCREDITED
INVESTOR (AS DEFINED IN REGULATION D UNDER THE SECURITIES ACT); OR (C) IT IS
NOT
A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATIONS ADOPTED UNDER THE SECURITIES ACT; (2) AGREES THAT
IT
WILL NOT RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE
COMMON SHARES ISSUABLE UPON EXERCISE OF SUCH SECURITY, EXCEPT, (A) TO THE ISSUER
OR A SUBSIDIARY THEREOF; (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A ADOPTED UNDER THE SECURITIES ACT (IF AVAILABLE); (C) TO PERSONS
OTHER THAN U.S. PERSONS OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION
S UNDER THE SECURITIES ACT; (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 ADOPTED UNDER THE SECURITIES ACT OR ANOTHER AVAILABLE
EXEMPTION UNDER THE SECURITIES ACT (IF AVAILABLE); OR (E) PURSUANT TO AN
EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT, AND (3) AGREES THAT IT WILL,
PRIOR TO ANY TRANSFER OF THIS SECURITY, FURNISH TO THE ISSUER SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS MAY BE REQUIRED TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR
IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OR THE SECURITIES
ACT.
AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION”, “UNITED STATES” AND “U.S.
PERSON” HAVE THE MEANING GIVEN TO THEM BY REGULATIONS UNDER THE SECURITIES ACT.
IN ANY CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN
ANY
HEDGING TRANSACTION WITH REGARD TO THIS SECURITY OR ANY COMMON SHARES ISSUABLE
UPON EXERCISE OF SUCH SECURITY, EXCEPT AS PERMITTED BY THE SECURITIES
ACT."
and
that,
in addition to the foregoing legend, the certificates representing the
Underlying Shares, if issued prior to such time as the restrictive period is
no
longer required under applicable requirements of the U.S. Securities Act or
applicable state securities laws, shall bear, in addition to any legend(s)
required by Canadian securities laws and policies, the following
legend:
I-3
"THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK
EXCHANGE; HOWEVER, THE SAID SECURITIES CAN NOT BE TRADED THROUGH THE FACILITIES
OF SUCH EXCHANGE SINCE THEY ARE NOT FREELY TRANSFERABLE, AND CONSEQUENTLY ANY
CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT "GOOD DELIVERY" IN SETTLEMENT
OF
TRANSACTIONS ON THE TORONTO STOCK EXCHANGE."
(j) Each
of
its covenants, agreements, representations, and warranties contained in the
Subscription Agreement is true and correct and is incorporated
herein.
(k) It
is
fully aware of the Company’s current and proposed business and prospects, has
reviewed the Company’s public filings, and the undersigned has had a sufficient
opportunity to ask questions of the Company’s executive officers and review all
material concerning the Company that it deems necessary in order to make an
informed investment decision to acquire the securities.
(l) It
acknowledges that the Debenture, Debenture Warrants and the Underlying Shares
have not been registered under the U.S. Securities Act or applicable state
securities laws on the ground that the sale of the securities to the undersigned
is exempt from registration thereunder. The undersigned further acknowledges
that the Company’s reliance on such exemptions is, in part, based upon the
representations, warranties, confirmations and statements of the undersigned
in
this Appendix II and the Subscription Agreement and that the residence and
principal office of the undersigned is at the location listed on the signature
page to the Subscription Agreement. The undersigned xxxxxx agrees to indemnify
the Company, the Agent, the U.S. Affiliate (if any), their directors, officers
and agents from and against all losses, claims, costs, expenses, damages and
liabilities which they may incur or suffer caused by prior reliance
thereon.
(m) It
is
fully aware that the Registration Statement (if it is declared effective by
the
SEC) will only cover the resale of the Underlying Shares and will not include
any of the Offered Securities.
(n) It
(i) is
able to bear the economic risk of its investment in the Debentures, the
Debenture Warrants and the Underlying Shares, (ii) is able to hold the
Debentures, the Debenture Warrants and the Underlying Shares for an indefinite
period of time, (iii) can afford a complete loss of its investment in the
Debentures, the Debenture Warrants and the Underlying Shares and (iv) has
adequate means of providing for its current needs.
(o)
All
of
the information, representations, warranties, covenants, confirmations, and
statements provided by or on behalf of the undersigned in the Subscription
Agreement and in this Appendix shall survive the closing of the offering of
the
Offered Securities.
Dated
as
of the __________ day of ___________, 2007.
Name
of Purchaser
|
||
Name:
|
||
Title: |
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