SUBSCRIPTION AGREEMENT FOR COMMON SHARES
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INSTRUCTIONS:
To properly complete this Subscription Agreement:
(1) All
subscribers must complete all boxes on this face page and page 2
to this
face page and sign this face page.
(2) All
subscribers must complete and sign Exhibit 1.
(3) If
the subscriber is a
fully managed account,
please complete the "Name of Subscriber" below in the following format:
"Account____ by [insert name of adviser, trust company or trust
corporation]".
(4) All
completed documents should be returned to the
Corporation,
at CanWest Petroleum Corporation, Suite 000,
000 - 0xx Xxxxxx X.X.,
Xxxxxxx, XX, X0X 0X0, Attention:
Xxxxx Xxxxxx; Fax Number: (000) 000-0000; email -
xxxxxxx@xxxxxxxxxxxxx.xxx no
later than August 11, 2006.
This
agreement is comprised of 15 pages (not including the Exhibit and
Schedule).
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TO: CanWest
Petroleum Corporation (the "Corporation")
The
undersigned (hereinafter referred to as the "Subscriber")
hereby
irrevocably subscribes for and agrees to purchase the number of common shares
of
the Corporation ("Common
Shares")
set
forth below for the aggregate subscription price set forth below (the
"Aggregate
Subscription Price"),
representing a subscription price of US$3.80 per Common Share, upon and subject
to the adjustments, terms and conditions set forth in "Terms and Conditions
of
Subscription for Common Shares of CanWest Petroleum Corporation" attached hereto
(together with the face pages and Exhibit and Schedule hereto, the "Subscription
Agreement").
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________________________________________
(Name
of Subscriber - please print)
By: _____________________________________
(Authorized
Signature)
________________________________________
(Official
Capacity or Title - please print)
________________________________________
(Please
print name of individual whose signature appears above if different
than
the name of the subscriber printed above.)
________________________________________
(Subscriber's
Address)
________________________________________
(Telephone
Number) (E-Mail
Address)
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Number
of Common Shares:
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Aggregate
Subscription Price:
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If
the Subscriber is signing as agent for a principal pursuant to paragraph
5(f), complete the following and ensure that Exhibit 1 is completed
in respect of each such principal:
________________________________________
(Name
of Principal)
________________________________________
(Principal's
Address)
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Register
the Common Shares as set forth below:
________________________________________
(Name)
________________________________________
(Account
reference, if applicable)
________________________________________
(Address)
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Deliver
the Common Shares as set forth below:
________________________________________
(Name)
________________________________________
(Account
reference, if applicable)
________________________________________
(Contact
Name)
________________________________________
(Address)
________________________________________
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(SUBSCRIBERS
MUST ALSO COMPLETE THE SECOND PAGE OF THIS FACE PAGE)
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Subscriber's
Present Holdings:
The
Subscriber represents that securities of the Corporation presently
owned
(beneficially, directly or indirectly) by the Subscriber are as follows
(please
indicate "nil" if you do not currently own any securities of the
Corporation):
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Type
of Securities Presently Owned
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Number
or Amount
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ACCEPTANCE:
The
Corporation hereby accepts the subscription as set forth above on the terms
and
conditions contained in this Subscription Agreement.
________________________________________,
2006
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CANWEST
PETROLEUM CORPORATION
By:________________________________________
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Subscription
No:
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2
TERMS
AND CONDITIONS OF SUBSCRIPTION FOR
COMMON
SHARES OF CANWEST PETROLEUM CORPORATION
Terms
of the Offering
1. The
Subscriber acknowledges (on its own behalf and, if applicable, on behalf of
each
person on whose behalf the Subscriber is contracting) that this subscription
is
subject to rejection or allotment by the Corporation in whole or in part and
is
effective only upon acceptance by the Corporation. If this subscription is
rejected or allotted in whole or in part, the Subscriber acknowledges that
the
unused portion of the Aggregate Subscription Price will be promptly returned
to
the Subscriber without interest or deduction.
2. The
Subscriber acknowledges (on its own behalf and, if applicable, on behalf of
each
person on whose behalf the Subscriber is contracting) that the Common Shares
subscribed for by it hereunder form part of a larger issuance and sale by the
Corporation of Common Shares at a subscription price of US$3.80 per Common
Share
for
aggregate gross proceeds of up to approximately CDN$20,000,000 (the
"Offering").
3. The
Subscriber acknowledges (on its own behalf and, if applicable, on behalf of
each
person on whose behalf the Subscriber is contracting) that the gross proceeds
of
the Offering will be used by the Corporation to purchase all of the shares
of
Stripper Energy Services Inc. (the "Acquisition")
which
holds a 2.5% gross overriding royalty on certain lands in the Province of
Saskatchewan held by Oilsands Quest Inc. ("OQI"),
a
subsidiary of the Corporation and for general working capital purposes.
4. The
Corporation will use its commercially reasonable best efforts to cause: (i)
the
Common Shares to be included in a shelf registration statement filed with the
U.S. Securities and Exchange Commission registering the Common Shares for resale
by the Subscriber; and (ii) such shelf registration statement to be declared
effective as soon as practicable, but no later than six months from the Closing
Time (as hereinafter defined); (iii) for the Corporation to become a reporting
issuer in Alberta by the Closing Date, or as soon thereafter as possible.
Representations,
Warranties and Covenants by Subscriber
5. The
Subscriber (on its own behalf and, if applicable, on behalf of each person
on
whose behalf the Subscriber is contracting) represents, warrants and covenants
to the Corporation and its counsel (and acknowledges that the Corporation and
its counsel are relying thereon) both at the date hereof and at the Closing
Time
(as defined herein) that:
| (a) |
it
acknowledges that the Corporation is not currently a reporting issuer
in
any jurisdiction and that the applicable "hold period" under applicable
securities laws will not commence to run until the Corporation becomes
a
reporting issuer in a jurisdiction of Canada and that it will only
be able
to resell the Common Shares in accordance with limited exemptions
under
applicable securities legislation and regulatory policy and it agrees
that
any certificates representing the Common Shares will bear a legend
indicating that the resale of such securities is restricted pursuant
to
applicable securities legislation and acknowledges that the Corporation
will not register any transfer of the Common Shares not made in accordance
with Regulation S, pursuant to registration under the U.S. Securities
Act
and applicable state securities laws or pursuant to an available
exemption
from registration requirements; and
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| (b) |
it
has been independently advised as to restrictions with respect to
trading
in the Common Shares imposed by applicable securities laws, confirms
that
no representation (written or oral) has been made to it by or on
behalf of
the Corporation with respect thereto, acknowledges that it is aware
of the
characteristics of the Common Shares and the risks relating to an
investment therein; and
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| (c) |
it
has not received or been provided with, nor has it requested, nor
does it
have any need to receive, any offering memorandum, any prospectus,
sales
or advertising literature, or any other document (other than an annual
report, annual information form, interim report, information circular
or
any other continuous disclosure document, other than an offering
memorandum, the content of which is prescribed by statute or regulation)
describing or purporting to describe the business and affairs of
the
Corporation which has been prepared for delivery to, and review by,
prospective purchasers in order to assist it in making an investment
decision in respect of the Common Shares;
and
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| (d) |
it
has not become aware of any advertisement in printed media of general
and
regular paid circulation (or other printed public media), radio,
television or telecommunications or other form of advertisement (including
electronic display) with respect to the distribution of the Common
Shares;
and
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| (e) |
unless
it is purchasing under paragraph 5(f) or (g), it is purchasing the
Common
Shares as principal for its own account, not for the benefit of any
other
person, for investment only and not with a view to the resale or
distribution of all or any of the Common Shares, it is resident in
or
otherwise subject to the applicable securities laws of British
Columbia, Alberta, Saskatchewan, Manitoba or Ontario and
it is an "accredited investor", as such term is defined in National
Instrument 45-106 - "Prospectus and Registration Exemptions"
("NI
45-106")
promulgated under the securities legislation of all of the provinces
of
Canada (other than Quebec), it was not created or used solely to
purchase
or hold securities as an "accredited investor" as described in paragraph
(m) of the definition of "accredited investor" in NI 45-106 and has
concurrently
executed and delivered a Representation Letter in the form attached
as
Exhibit 1 to this Subscription Agreement and has initialed in
Appendix "A" thereto indicating that the Subscriber satisfies (and
will satisfy at the Closing Time) one of the categories of "accredited
investor" set forth in such definition;
and
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| (f) |
if
it is purchasing the Common Shares and is acting as agent for one
or more
disclosed principals, each of such principals is purchasing as principal
for its own account, not for the benefit of any other person, for
investment only, and not with a view to the resale or distribution
of all
or any of the Common Shares, and
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| (i) |
each
of such principals complies with paragraph 5(e) hereof and the
Subscriber acknowledges the Corporation is required by law to disclose
to
certain regulatory authorities the identity of each beneficial purchaser
of Common Shares for whom it may be acting, it is resident in the
jurisdiction set out as the "Subscriber's Address" and each beneficial
purchaser is resident in the jurisdiction set out as the "Principal's
Address"; and
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| (ii) |
if
it is not an individual, it pre-existed the offering of the Common
Shares
and has a bona
fide
business purpose other than the investment in the Common Shares and
was
not created, formed or established solely or primarily to acquire
securities, or to permit purchases of securities without a prospectus,
in
reliance on an exemption from the prospectus requirements of applicable
securities legislation; and
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| (g) |
if
it is a resident of or otherwise subject to applicable securities
laws of
any
jurisdiction other than the Provinces of Alberta, British Columbia,
Manitoba, Ontario or Saskatchewan, it
is resident in the jurisdiction set out as the "Subscriber's address",
it
is an "accredited investor" as such term is defined in NI 45-106
and
has
concurrently executed and delivered a Representation Letter in the
form
attached as Exhibit 1 to this Subscription Agreement and has initialed
in
Appendix "A" thereto indicating that the Subscriber satisfies (and
will
satisfy at the Closing Time) one of the categories of "accredited
investor" set forth in such definition and,
it, or any beneficial purchaser for whom it is acting, complies with
the
requirements of all applicable securities legislation in the jurisdiction
of its residence and will provide such evidence of compliance with
all
such matters as the Corporation may request;
and
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| (h) |
it
is purchasing the Common
Shares
pursuant to paragraph 5(e), (f) or (g),
and:
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| (i) |
the
Common Shares have not been offered to the Subscriber in the United
States
and the Subscriber and the individuals making the order to purchase
the
Common Shares and executing and delivering this Subscription Agreement
on
behalf of the Subscriber were not in the United States when the order
was
placed and this Subscription Agreement was executed and delivered;
and
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| (ii) |
it
is not a U.S. person (a "U.S.
Person")
(as defined in Regulation S under the United States Securities Act
of
1933, as amended (the "U.S.
Securities Act"),
which definition includes, but is not limited to, an individual resident
in the United States, an estate or trust of which any executor or
administrator or trustee, respectively, is a U.S. Person and any
partnership or corporation organized or incorporated under the laws
of the
United States and any partnership or corporation if organized or
incorporated under the laws of any foreign jurisdiction and formed
by a
U.S. Person principally for the purpose of investing in securities
not
registered under the U.S. Securities Act, unless it is organized
or
incorporated and owned by "accredited investors" (as such term is
defined
in Rule 501(a) of Regulation D under the U.S. Securities Act) who
are not
natural persons, estates or trusts) and is not purchasing the Common
Shares on behalf of, or for the account or benefit of, a person in
the
United States or a U.S. Person; and
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| (i) |
it
is aware that the Common Shares have not been and will not be registered
under the U.S. Securities Act or the securities laws of any state
and that
these securities are not being offered or sold in the United States,
it
understands that the Common Shares are "restricted securities" as
defined
in Rule 144 under the U.S. Securities Act and agrees that if it decides
to
offer, sell or otherwise transfer the Common Shares, such shares
may only
be offered, sold or otherwise transferred in accordance with the
provisions of Regulation S under the U.S. Securities Act, pursuant
to
registration under the U.S. Securities Act, or pursuant to an available
exemption from registration under the U.S. Securities Act and applicable
State securities laws and it agrees not to engage in hedging transactions
with regard to the Common Shares unless in compliance with the U.S.
Securities Act; and it acknowledges that the certificates representing
the
Common Shares (and all certificates issued in exchange therfor or
in
substitution thereof) will bear a legend to the effect that transfer
is
prohibited except in accordance with the provisions of Regulation
S,
pursuant to registration under the U.S. Securities Act, or pursuant
to an
available exemption from registration under the U.S. Securities Act
and
applicable State securities laws, and that hedging transactions involving
the securities may not be conducted unless in compliance with the
U.S.
Securities Act, until such time as such legend is no longer required
under
applicable requirements of the U.S. Securities Act or applicable
state
securities laws; and
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| (j) |
it
acknowledges that:
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| (i) |
no
securities commission or similar regulatory authority has reviewed
or
passed on the merits of the Common
Shares;
and
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| (ii) |
there
is no government or other insurance covering the Common
Shares;
and
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| (iii) |
there
are risks associated with the purchase of the Common
Shares;
and
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| (iv) |
there
are restrictions on the Subscriber's ability to resell the Common
Shares
and it is the responsibility of the Subscriber to find out what those
restrictions are and to comply with them before selling the Common
Shares;
and
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| (v) |
the
Corporation has advised the Subscriber that the Corporation is relying
on
an exemption from the requirements to provide the Subscriber with
a
prospectus and to sell securities through a person or company registered
to sell securities under the Securities
Act
(Alberta) and other applicable securities laws and, as a consequence
of
acquiring securities pursuant to this exemption, certain protections,
rights and remedies provided by the Securities
Act
(Alberta) and other applicable securities laws, including statutory
rights
of rescission or damages, will not be available to the Subscriber;
and
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| (k) |
if
a corporation, partnership, unincorporated association or other entity,
it
has the power, authority and legal capacity to enter into and be
bound by
this Subscription Agreement and take all action pursuant hereto and
further certifies that all necessary approvals of directors, shareholders
or otherwise have been given and obtained;
and
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| (l) |
if
an individual, it is of the full age of majority and is legally competent
to execute and deliver this Subscription Agreement and take all action
pursuant hereto; and
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| (m) |
the
entering into of this Subscription Agreement and the completion of
the
transactions contemplated hereby will not result in a violation of
any of
the terms or provisions of any law applicable to the Subscriber,
or if the
Subscriber is not a natural person, any of the Subscriber's constating
documents, or any agreement to which the Subscriber is a party or
by which
it is bound; and
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| (n) |
if
the Subscriber is a body corporate, it is duly incorporated and validly
subsisting under the laws of its jurisdiction of incorporation;
and
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| (o) |
this
Subscription Agreement has been duly and validly authorized, executed
and
delivered by and constitutes a legal, valid, binding and enforceable
obligation of the Subscriber; and
|
| (p) |
in
the case of a subscription by it for Common Shares acting as agent
for a
disclosed principal, it is duly authorized to execute and deliver
this
Subscription Agreement and all other necessary documentation in connection
with such subscription on behalf of such principal and this Subscription
Agreement has been duly authorized, executed and delivered by or
on behalf
of, and constitutes a legal, valid and binding agreement of, such
principal; and
|
| (q) |
it
has such knowledge in financial and business affairs as to be capable
of
evaluating the merits and risks of its investment and is able to
bear the
economic risk of loss of its investments or, where it is not purchasing
as
principal, each beneficial purchaser is able to bear the economic
risk of
loss of its investment; and
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| (r) |
the
Subscriber confirms that neither the Corporation nor any of its directors,
employees, officers or affiliates, have made any representations
(written
or oral) to the Subscriber: (i) regarding the future value of the
Common Shares; (ii) that any person will resell or repurchase the
Common Shares; or (iii) that any person will refund the purchase
price of the Common Shares other than as provided in this Subscription
Agreement; and
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| (s) |
except
for the representation and warranties made by the Corporation to
the
Subscriber herein, it has relied solely upon publicly available
information relating to the Corporation and not upon any verbal or
written
representation as to fact or otherwise made by or on behalf of the
Corporation and acknowledges that the Corporation's counsel is acting
as
counsel to the Corporation and not as counsel to the Subscriber;
and
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| (t) |
it
understands that the Common Shares are being offered for sale only
on a
"private placement" basis and that the sale and delivery of the Common
Shares is conditional upon such sale being exempt from the requirements
under applicable securities laws as to the filing of a prospectus
or
delivery of an offering memorandum 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
and, as a consequence (i) it is restricted from using most of the
civil
remedies available under securities legislation; (ii) it may not
receive
information that would otherwise be required to be provided to it
under
securities legislation; and (iii) the Corporation is relieved from
certain
obligations that would otherwise apply under securities legislation;
and
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| (u) |
if
required by applicable securities legislation, regulations, rules,
policies or orders or by any securities commission, stock exchange
or
other regulatory authority, the Subscriber will execute, deliver,
file and
otherwise assist the Corporation in filing such reports, undertakings
and
other documents with respect to the issue of the Common Shares (including,
without limitation, a Representation Letter in the form attached
as
Exhibit 1); and
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| (v) |
it
undertakes and agrees that it will not offer or sell the Common
Shares
in
the United States unless such securities are registered under the
U.S.
Securities Act and the securities laws of all applicable states of
the
United States or an exemption from such registration requirements
is
available; and
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| (w) |
it
will not resell the Common
Shares
except in accordance with the provisions of applicable securities
legislation and stock exchange rules;
and
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| (x) |
the
acquisition of the Common Shares hereunder by the Subscriber will
not
result in the Subscriber becoming a "control person", as defined
under
applicable securities laws; and
|
| (y) |
the
Subscriber does not act jointly or in concert with any other person
or
company for the purposes of acquiring securities of the Corporation;
and
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| (z) |
the
Subscriber acknowledges that the Corporation may complete additional
equity financings in the future which may have a dilutive effect
on the
Subscriber's shareholdings in the Corporation;
and
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| (aa) |
the
funds representing the Aggregate Subscription Price which will be
advanced
by the Subscriber hereunder will not represent proceeds of crime
for the
purposes of the Proceeds
of Crime (Money Laundering) and Terrorist Financing Act
(Canada) 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
Proceeds
of Crime (Money Laundering) and Terrorist Financing Act
(Canada) and to the best of the Subscriber's knowledge (i) none of
the
subscription funds to be provided by the Subscriber (A) 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 (B) are being tendered on behalf of a person or
entity
who has not been identified to the Subscriber, and (ii) it shall
promptly
notify the Corporation if the Subscriber discovers that any of such
representations ceases to be true, and to provide the Corporation
with
appropriate information in connection therewith;
and
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| (bb) |
it
acknowledges that this Subscription Agreement and the Exhibit hereto
require the Subscriber (or any beneficial purchaser for whom the
Subscriber is contracting) to provide certain personal information
to the
Corporation. Such information is being collected by the Corporation
for
the purposes of completing the offering of Common Shares, which includes,
without limitation, determining the Subscriber's (or any beneficial
purchaser for whom the Subscriber is contracting) eligibility to
purchase
the Common Shares under applicable securities legislation, preparing
and
registering any certificates representing Common Shares to be issued
to
the Subscriber and completing filings required by any stock exchange
or
securities regulatory authority. The Subscriber's (or any beneficial
purchaser for whom the Subscriber is contracting) personal information
may
be disclosed by the Corporation to: (a) stock exchanges or securities
regulatory authorities, (b) the Corporation's registrar and transfer
agent, and (c) any of the other parties involved in the offering,
including legal counsel to the Corporation. By executing this Subscription
Agreement, the Subscriber (or any beneficial purchaser for whom the
Subscriber is contracting) consents to the foregoing collection,
use and
disclosure of the Subscriber's (or any beneficial purchaser for whom
the
Subscriber is contracting) personal information. The Subscriber (or
any
beneficial purchaser for whom the Subscriber is contracting) also
consents
to the filing of copies or originals of any of the Subscriber's (or
any
beneficial purchaser for whom the Subscriber is contracting) documents
described in Section 7 below as may be required to be filed with any
stock exchange or securities regulatory authority in connection with
the
transactions contemplated hereby. Without limiting the generality
of the
foregoing, the Subscriber (or any beneficial purchaser for whom the
Subscriber is contracting) (if resident in the Province of Ontario)
further acknowledges that: (a) the Corporation will deliver to the
Ontario
Securities Commission (the "OSC")
the Subscriber's (or any beneficial purchaser for whom the Subscriber
is
contracting) full name, residential address and telephone number,
the
number of Common Shares purchased by the Subscriber (or any beneficial
purchaser for whom the Subscriber is contracting) hereunder, the
total
purchase price paid by the Subscriber (or any beneficial purchaser
for
whom the Subscriber is contracting) hereunder, the exemption under
applicable securities laws relied upon in respect of the Subscriber's
(or
any beneficial purchaser for whom the Subscriber is contracting)
purchase
of Common Shares hereunder and the date the Common Shares subscribed
for
hereunder were distributed to the Subscriber (or any beneficial purchaser
for whom the Subscriber is contracting); (b) the information set
forth in
(a) immediately above is being collected indirectly by the OSC under
the
authority granted to it under securities legislation for the purposes
of
the administration and enforcement of the securities legislation
of
Ontario; and (c) the title, business address and telephone number
of the
public official in Ontario who can answer questions about the OSC's
indirect collection of the information is as follows: Administrative
Assistant to the Director of Corporate Finance, Suite 1903, Box 0000
Xxxxx
Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx, X0X 0X0, Telephone (000) 000-0000.
The
Subscriber (or any beneficial purchaser for whom the Subscriber is
contracting) (if resident in the Province of Ontario) hereby authorizes
the indirect collection of the information set forth in (a) immediately
above by the OSC; and
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| (cc) |
the
Subscriber acknowledges that it has been encouraged to obtain independent
legal, income tax and investment advice with respect to its subscription
for the Common Shares and accordingly, has had the opportunity to
acquire
an understanding of the meanings of all terms contained herein relevant
to
the Subscriber for purposes of giving representations, warranties
and
covenants under this Subscription Agreement.
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Representations,
Warranties and Covenants by the Corporation
6. The
Corporation represents, warrants and covenants to the Subscriber (and
acknowledges that the Subscriber is relying thereon) both at the date hereof
and
at the Closing Time (as defined herein) that:
| (a) |
the
Corporation and each of its subsidiaries has been duly incorporated
and is
validly existing under the laws of the jurisdiction of its incorporation
and has all requisite corporate capacity, power and authority to
carry on
its business, as now conducted and as presently proposed to be conducted
by it, and to own its properties and
assets;
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| (b) |
the
Corporation is qualified to carry on business under the laws of each
jurisdiction in which it carries on a material portion of its
business;
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| (c) |
the
Corporation has conducted and is conducting and will conduct its
business
in compliance in all material respects with all applicable laws,
rules and
regulations and, in particular, all applicable licensing and environmental
legislation, regulations or by-laws or other lawful requirements
of any
governmental or regulatory bodies applicable to it of each jurisdiction
in
which it carries on a material portion of its business and holds
all
licences, registrations and qualifications in all jurisdictions in
which
it carries on a material portion of its business which are necessary
or
desirable to carry on the business of the Corporation as now conducted
and
as presently proposed to be conducted, all such licences, registrations
or
qualifications are valid and existing and in good standing and none
of
such licences, registrations or qualifications contains any burdensome
term, provision, condition or limitation which has or is likely to
have
any material adverse effect on the business of the Corporation as
now
conducted or as proposed to be conducted, and the Corporation is
not aware
of any legislation, regulation, rule or lawful requirements presently
in
force or proposed to be brought into force which the Corporation
anticipates the Corporation will be unable to comply with without
materially adversely affecting the Corporation;
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| (d) |
the
information and statements set forth in the audited financial statements
of the Corporation as at and for the year ended April 30, 2006, together
with the report of the Corporation's auditors thereon and notes thereto
including the management's discussion and analysis of the Corporation's
financial condition and results of operations related thereto (the
"Financial
Statements")
and press releases of the Corporation subsequent to April 30, 2006
(collectively the "Documents")
were true, correct, and complete and did not contain any
misrepresentation, as of the date of such information or statement,
and
were prepared in accordance with and complied with all applicable
securities and corporate laws, rules, regulations, instruments, notices,
blanket orders, statements, procedures and policies (the "Applicable
Securities Laws");
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| (e) |
the
Corporation does not have any material subsidiaries other than OQI,
Anhydride Petroleum (USA) Inc., Township Petroleum Corporation and
Western
Petrochemicals Corporation, the Corporation is not "affiliated" with
or a
"holding corporation" of any other body corporate (within the meaning
of
those terms in the Business
Corporations Act (Alberta)
(the "ABCA")),
nor is it a partner of any partnerships (other than participating
in
industry partnerships in the ordinary course of business) or limited
partnerships, and the Corporation has no material shareholdings in
any
other corporation or business
organization;
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8
| (f) |
the
minute books of the Corporation contain full, true and correct copies
of
the constating documents of the Corporation and contain copies of
all
minutes of all meetings and all consent resolutions of the directors,
committees of directors and shareholders of the Corporation and all
such
meetings were duly called and properly held and all consent resolutions
were properly adopted;
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| (g) |
the
books of account and other records of the Corporation, whether of
a
financial or accounting nature or otherwise, have been maintained
in
accordance with prudent business
practices;
|
| (h) |
the
Corporation has duly and timely filed, in proper form, returns in
respect
of taxes under the income tax legislation of the United States and
Canada
and any state of the United States and province or territory of Canada
or
any foreign country having jurisdiction over affairs of the Corporation
for all periods in respect of which such filings have heretofore
been
required, if any, and all taxes shown thereon, if any, have been
paid or
accrued on the books of the Corporation and there are no outstanding
agreements or waivers extending the statutory period of limitations
applicable to any federal, state, provincial or other income tax
return
for any period, and all payments by the Corporation to any non-resident
of
the United States or Canada have been made in accordance with applicable
legislation in respect of withholding tax; there are no assessments
or
reassessments respecting the Corporation pursuant to which there
are
amounts owing or discussions in respect thereof with any taxing authority
and the Corporation has withheld from each payment made to any of
its
officers, directors, former directors and employees the amount of
all
taxes (including, without limitation, income tax) and other deductions
required to be withheld therefrom and has paid the same to the proper
tax
or other authority within the time required under any applicable
tax
legislation;
|
| (i) |
all
filings made by the Corporation under which the Corporation has received
or is entitled to government incentives, have been made in accordance,
in
all material respects, with all applicable legislation and contain
no
misrepresentations of material fact or omit to state any material
fact
which could cause any amount previously paid to the Corporation or
previously accrued on the accounts thereof to be recovered or
disallowed;
|
| (j) |
except
to the extent that any violation or other matter referred to in this
subparagraph does not have a material adverse effect on the business,
financial condition, assets, properties, liabilities or operations
of the
Corporation:
|
| (i) |
the
Corporation is not in violation of any applicable federal, provincial,
state, municipal or local laws, regulations, orders, government decrees
or
ordinances with respect to environmental, health or safety matters
(collectively, "Environmental
Laws");
|
| (ii) |
the
Corporation has operated its business at all times and has received,
handled, used, stored, treated, shipped and disposed of all contaminants
without violation of Environmental
Laws;
|
| (iii) |
except
as have been disclosed in the Documents, there have been no spills,
releases, deposits or discharges of hazardous or toxic substances,
contaminants or wastes into the earth, air or into any body of water
or
any municipal or other sewer or drain water systems by the Corporation
that have not been remedied;
|
| (iv) |
no
orders, directions or notices have been issued and remain outstanding
pursuant to any Environmental Laws relating to the business or assets
of
the Corporation;
|
| (v) |
the
Corporation has not failed to report to the proper federal, provincial,
municipal or other political subdivision, government, department,
commission, board, bureau, agency or instrumentality, domestic or
foreign
("Government
Authority")
the occurrence of any event which is required to be so reported by
any
Environmental Law; and
|
9
| (vi) |
the
Corporation holds, or will hold at the required time, all licences,
permits and approvals required under any Environmental Laws in connection
with the operation of its business and the ownership and use of its
assets, all such licences, permits and approvals are in full force
and
effect, and except for notifications and conditions of general application
to assets of the type owned by the Corporation and the Corporation
has not
received any notification pursuant to any Environmental Laws that
any
work, repairs, constructions or capital expenditures are required
to be
made by it as a condition of continued compliance with any Environmental
Laws, or any licence, permit or approval issued pursuant thereto,
or that
any licence, permit or approval referred to above is about to be
reviewed,
made subject to limitation or conditions, revoked, withdrawn or
terminated;
|
| (k) |
any
and all operations of the Corporation and, to the knowledge of the
Corporation, any and all operations by third parties, on or in respect
of
the assets and properties of the Corporation, have been conducted
in
accordance with good oil and gas and mining industry practices and
in
material compliance with applicable laws, rules, regulations, orders
and
directions of governmental and other competent
authorities;
|
| (l) |
in
respect of the assets and properties of the Corporation that are
operated
by it, if any, the Corporation holds all valid licences, permits
and
similar rights and privileges that are required and necessary under
applicable law to operate the assets and properties of the Corporation
as
presently operated;
|
| (m) |
the
Corporation has full corporate capacity, power and authority to enter
into
this Subscription Agreement and to perform its obligations set out
herein
(including, without limitation, to create, issue and sell the Common
Shares) and this Subscription Agreement will be, on the Closing Date,
duly
authorized, executed and delivered by the Corporation and this
Subscription Agreement will on the Closing Date be a legal, valid
and
binding obligation of the Corporation enforceable against the Corporation
in accordance with its terms, subject to laws relating to creditors'
rights generally and except as rights to indemnity may be limited
by
applicable law;
|
| (n) |
at
the Closing Time, the Common Shares will be duly and validly created,
authorized, allotted and reserved for issuance and, upon receipt
of the
purchase price therefor, will be issued as fully paid and non-assessable
Common Shares;
|
| (o) |
the
Corporation is not in default or breach of, and the execution and
delivery
of, and the performance of and compliance with the terms of, this
Subscription Agreement by the Corporation or any of the transactions
contemplated hereby, does not and will not result in any breach of,
or be
in conflict with or constitute a default under, or create a state
of facts
which, after notice or lapse of time, or both, would result in a
breach of
or constitute a default under, any term or provision of the constating
documents, by-laws or resolutions of the directors and shareholders
of the
Corporation, or any mortgage, note, indenture, contract, agreement
(written or oral), instrument, lease or other document to which the
Corporation is a party or by which it is bound or any judgment, decree,
order, statute, rule or regulation applicable to the Corporation
which
default or breach might reasonably be expected to materially adversely
affect the business, operations, capital or condition (financial
or
otherwise) of the Corporation or its properties or assets or would
impair
the ability of the Corporation to consummate the transactions contemplated
hereby or to duly observe and perform its obligations contained in
this
Subscription Agreement;
|
| (p) |
there
has not been any material change in the assets, liabilities or obligations
(absolute, accrued, contingent or otherwise) of the Corporation from
the
position set forth in the Documents (other than as have been disclosed
in
the Documents), and there has not been any material adverse change
in the
capital, assets, liabilities (absolute, accrued, contingent or otherwise),
business, operations, capital or condition (financial or otherwise)
of the
Corporation since April 30, 2006 and since that date there have been
no
material facts, transactions, events or occurrences which, to the
knowledge of the Corporation, could materially adversely affect the
capital, assets, liabilities (absolute, accrued, contingent or otherwise),
business, operations or condition (financial or otherwise) or results
of
the operations of the Corporation;
|
10
| (q) |
the
Financial Statements fairly present, in all material respects and
in
accordance with generally accepted accounting principles in the United
States, consistently applied, the financial position and condition,
the
results of the operations, cash flows and other information purported
to
be shown therein of the Corporation as at the dates thereof and for
the
periods then ended and reflect all assets, liabilities and obligations
(absolute, accrued, contingent or otherwise) of the Corporation as
at the
dates thereof required to be disclosed in accordance with generally
accepted accounting principles in the United States, and include
all
adjustments necessary for a fair
presentation;
|
| (r) |
no
officer, director, employee or any other person not dealing at arm's
length with the Corporation or, to the knowledge of the Corporation,
any
associate or affiliate of any such person, owns, has or is entitled
to any
royalty, net profits interest, carried interest, licensing fee or
any
other encumbrances or claims of any nature whatsoever which are based
on
the Corporation's revenues;
|
| (s) |
there
has not been any material disagreement with the auditors of the
Corporation;
|
| (t) |
the
Corporation is not a party to or bound by any agreement of guarantee,
indemnification (other than an indemnification of directors and officers
in accordance with the by-laws of the Corporation and applicable
laws,
indemnification agreements or covenants that are entered into arising
in
the ordinary course of business, including operating and similar
agreements, indemnification and contribution provisions in agency
and
underwriting agreements and in transfer agency agreements) or any
other
like commitment of the obligations, liabilities (contingent or otherwise)
or indebtedness of any other
person;
|
| (u) |
other
than as set forth in the Financial Statements, the Corporation does
not
have any loans or other indebtedness outstanding which have been
made to
or from any of its shareholders, officers, directors or employees
or any
other person not dealing at arm's length with the Corporation that
are
currently outstanding;
|
| (v) |
there
are no actions, suits, proceedings or inquiries in existence or,
to the
knowledge of the Corporation, pending or threatened against or affecting
the Corporation at law or in equity or before or by any federal,
provincial, municipal or other governmental department, commission,
board,
bureau, agency or instrumentality which in any way materially adversely
affects, or may in any way materially adversely affect, the business,
operations, capital or condition (financial or otherwise) or assets
of the
Corporation or which affects or may affect the distribution of the
Common
Shares or which would impair the ability of the Corporation to consummate
the transactions contemplated hereby or to duly observe and perform
any of
its covenants or obligations contained in this Subscription Agreement
and
the Corporation is not aware of any existing ground on which such
action,
suit, proceeding or inquiry might by commenced with any reasonable
likelihood of success;
|
| (w) |
the
authorized share capital of the Corporation consists of 260,000,000
shares
of common stock, par value U.S. $0.001 per share, of which 250,000,000
are
shares of common stock and 10,000,000 are shares of preferred
stock;
|
| (x) |
none
of the directors, officers or employees of the Corporation, any person
who
owns, directly or indirectly, more than 10% of any class of securities
of
the Corporation, or any associate or affiliate of any of the foregoing,
had or has any material interest, direct or indirect, in any material
transaction or any proposed material transaction with the Corporation
which, as the case may be, materially affects, is material to or
will
materially affect the Corporation;
|
| (y) |
no
securities commissions (the "Securities
Commission")
or similar regulatory authorities in the provinces of Alberta, British
Columbia, Saskatchewan, Manitoba and Ontario and such other provinces
and
other foreign jurisdictions in which there are Subscribers which
are
acceptable to the Corporation (the "Selling
Jurisdictions"),
other securities commission or similar regulatory authority, or any
stock
exchange in Canada or the United States has issued any order which
is
currently outstanding preventing or suspending trading in any securities
of the Corporation, no such proceeding is, to the knowledge of the
Corporation, pending, contemplated or threatened and the Corporation
is
not in default of any material requirement of Applicable Securities
Laws
of the Selling Jurisdictions or securities laws in the United
States;
|
11
| (z) |
the
Corporation has filed all reports required to be filed with the United
States Securities and Exchange Commission (the "SEC")
pursuant to Section 13 of the United States Securities Exchange Act
of
1934, as amended, and the Common Shares are quoted on the OTC Bulletin
Board;
|
| (aa) |
to
the knowledge of the Corporation, no insider of the Corporation has
a
present intention to sell any securities of the Corporation held
by
it;
|
| (bb) |
no
authorization, approval or consent of any court or governmental authority
or agency is required to be obtained by the Corporation in connection
with
the sale and delivery of the Common Shares except as contemplated
hereby;
|
| (cc) |
the
Corporation has not incurred any obligation or liability, contingent
or
otherwise, or brokerage fees, finder's fees, underwriter's or agent's
commission or other similar forms of compensation with respect to
the
transactions contemplated hereby;
|
| (dd) |
the
form and terms of definitive certificates representing the Common
Shares
have been duly approved and adopted by the Corporation and comply
with all
legal requirements relating
thereto;
|
| (ee) |
the
Corporation does not have any reason to believe that the representations
and warranties of OQI in the agreement dated June 9, 2006 between
the
Corporation and OQI respecting the proposed reorganization (the
"Reorganization")
involving the Corporation and OQI (the "Reorganization
Agreement")
are not true and correct as of the date hereof or that OQI is in
breach of
any covenants of OQI in the Reorganization Agreement except such
as would
not have a material adverse effect on the business, operations, capital,
properties, assets, liabilities (absolute, accrued, contingent or
otherwise) or results of operations of OQI or the Corporation, as
applicable;
|
| (ff) |
the
representations and warranties of the Corporation in the Reorganization
Agreement are true and correct as of the date hereof, except as such
would
not have a material adverse effect on the business, operations, capital,
properties, assets, liabilities (absolute, accrued, contingent or
otherwise), condition (financial or otherwise) or results of operations
of
the Corporation;
|
| (gg) |
the
Corporation is insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts that are customary
in
the business in which it is engaged; to the best of the Corporation's
knowledge, all policies of insurance and fidelity or surety bonds
insuring
the Corporation or its business, assets, employees, officers and
directors
are in full force and effect, the Corporation is in compliance with
the
terms of such policies and instruments in all material respects and
there
are no material claims by the Corporation under any such policy or
instrument as to which any insurance company is denying liability
or
defending under a reservation of rights clause; the Corporation has
no
reason to believe that it will not be able to renew its existing
insurance
coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business
at a
cost that would not have a material adverse effect on the condition
(financial or otherwise) prospects, earnings, business or properties
of
the Corporation;
|
| (hh) |
to
the knowledge of the Corporation, none of its directors or officers
are
subject to an order or ruling of any securities regulatory authority
or
stock exchange prohibiting such individual from acting as a director
or
officer of a public company or of a company listed on a particular
stock
exchange;
|
| (ii) |
the
Corporation has taken or will take prior to the Closing Date all
such
steps as may be necessary to comply with such requirements of Applicable
Securities Laws such that the Common Shares, may, in accordance with
Applicable Securities Laws, be offered for sale and sold on a private
placement basis in the Selling Jurisdictions and the Corporation
agrees
that it will refuse to register any transfer of the Common Shares
not made
in accordance with Regulation S, pursuant to registration under the
U.S.
Securities Act and applicable state securities laws or pursuant to
an
available exemption from registration
requirements;
|
| (jj) |
other
than as set forth in the Corporation's disclosure documents as publicly
filed with the United States Securities and Exchange Commission and
available for viewing on the Electronic Data Gathering, Analysis,
and
Retrieval System (the "Disclosure
Record"),
there are no material contracts or agreements to which the Corporation
is
a party or by which it is bound and each of the contracts and agreements
set forth in the Corporation's Disclosure Record constitutes a legally
valid and binding agreement of the Corporation enforceable in accordance
with their respective terms and, to the knowledge of the Corporation,
no
party thereto is in default
thereunder;
|
12
| (kk) |
except
as set forth in the Corporation's Disclosure Record, the Corporation
is
not a party to any contracts of employment which may not be terminated
on
one month's notice or which provide for payments occurring on a change
of
control of the Corporation;
|
| (ll) |
the
Corporation adopted a shareholder rights plan in March 2006 and reserved
250,000 shares of Series A Junior Participating Preferred Stock.
Pursuant
to the Reorganization Agreement, approximately 73,901,500 Common
Shares
will be issuable (on a fully-diluted basis, subject to adjustment
in
certain circumstances) upon exchange of the exchangeable shares issued
to
OQI shareholders;
|
| (mm) |
neither
the Corporation nor any of its shareholders is a party to any unanimous
shareholders agreement, pooling agreement, voting trust or other
similar
type of arrangements in respect of outstanding securities of the
Corporation other than the Voting and Exchange Trust Agreement
contemplated by the Reorganization
Agreement;
|
| (nn) |
the
closing of the Reorganization is scheduled to take place on or prior
to
5:00 p.m. (Calgary time) on August 14, 2006, and to the knowledge
of the
Corporation no event has occurred or condition exists which may prevent
the Reorganization from being completed pursuant to and in accordance
with
the terms and conditions of the Reorganization Agreement;
and
|
| (oo) |
the
obligations of the Subscribers hereunder shall be conditional upon
the
Subscribers receiving, and the Subscribers shall have the right on
the
Closing Date to withdraw all Subscription Agreements delivered and
not
previously withdrawn by Subscribers unless the Subscribers receive,
on the
Closing Date a legal opinion of the Corporation's counsel addressed
to the
Subscribers, in form and substance satisfactory to the Subscribers
relating to the offering, issuance and sale of the Common Shares,
including, without limitation, the matters set forth in Schedule
"A" and
as to all other legal matters, including compliance with Applicable
Securities Laws of the Selling Jurisdictions in Canada in which Common
Shares were sold, in any way connected with the offering, issuance,
sale
and delivery of the Common Shares, it being understood that such
counsel
may rely on the opinions of local counsel acceptable to them as to
matters
governed by the laws of jurisdictions other than the jurisdictions
of
residence of such counsel and on certificates of officers of the
Corporation, public officials and the auditors of the Corporation
as to
relevant matters of fact.
|
13
Closing
7. The
Subscriber agrees to deliver to CanWest Petroleum Corporation, 205, 000 - 0xx
Xxxxxx X.X., Xxxxxxx, Xxxxxxx, X0X 0X0, Attention: Xxxxx Xxxxxx not later than
4:00 p.m. (Calgary time) on August 11, 2006: (a) this duly completed and
executed Subscription Agreement; (b) a fully executed and completed
Representation Letter in the form of Exhibit 1;
and
(c) a certified cheque or bank draft payable to the Corporation for the
Aggregate Subscription Price or payment of the same amount in such other manner
as is acceptable to the Corporation, including by wire transfer as provided
below. The Subscriber may pay the Aggregate Subscription Price in Canadian
currency, converted using the “noon spot rate” for currency exchange as quoted
by the Bank of Canada in Ottawa, Ontario, at or near 12:00 noon (Ottawa time),
on such business day immediately preceding the payment, or using such other
currency exchange rate agreed to in writing between the Subscriber and the
Corporation. The Subscriber may also pay the Aggregate Subscription Price by
way
of wire transfer to Xxxxxxx Xxxxx llp,
the
Corporation's counsel, at the coordinates set out in Schedule "B".
8. The
sale
of the Common Shares pursuant to this Subscription Agreement will be completed
at the offices of Xxxxxxx Xxxxx llp,
the
Corporation's counsel, in Calgary, Alberta at 1:00 p.m. (Calgary time) or
such other time as the Corporation may agree (the "Closing
Time")
on
August 14, 2006 or such other date as the Corporation may agree (the
"Closing
Date").
At
the Closing Time, the Subscriber shall deliver to the Corporation this
Subscription Agreement, and the aggregate subscription amount against delivery
by the Corporation of the certificate representing the Common
Shares.
9. The
Corporation shall be entitled to rely on delivery of a facsimile copy of
executed subscriptions, and acceptance by the Corporation of such facsimile
subscriptions shall be legally effective to create a valid and binding agreement
between the Subscriber and the Corporation in accordance with the terms hereof.
In addition, this Subscription Agreement may be executed in counterparts, each
of which shall be deemed to be an original and all of which shall constitute
one
and the same document.
General
10. The
Subscriber agrees that the representations, warranties and covenants of the
Subscriber herein will be true and correct both as of the execution of this
Subscription Agreement and as of the Closing Time and will survive the
completion of the issuance of the Common Shares. The representations, warranties
and covenants of the Subscriber herein are made with the intent that they be
relied upon by the Corporation and its counsel in determining the eligibility
of
a purchaser of Common Shares and the Subscriber (on its own behalf and, if
applicable, on behalf of each person on whose behalf the Subscriber is
contracting) agrees to indemnify and hold harmless the Corporation and
its
affiliates, shareholders, directors, officers, partners, employees, legal
counsel and agents,
from and
against all losses, claims, costs, expenses and damages or liabilities
whatsoever which any of them may suffer or incur which are caused or arise
from
a breach thereof. The Subscriber undertakes to immediately notify the
Corporation at CanWest Petroleum Corporation, 205, 000 - 0xx Xxxxxx X.X.,
Xxxxxxx, XX, X0X 0X0, Attention:
X. Xxxxxx Xxxxxx (Fax Number: (000)
000-0000),
of any
change in any statement or other information relating to the Subscriber set
forth herein which takes place prior to the Closing Time.
11. The
Subscriber acknowledges and agrees that all costs incurred by the Subscriber
(including any fees and disbursements of any special counsel retained by the
Subscriber) relating to the purchase of the Common Shares by the Subscriber
shall be borne by the Subscriber.
12. The
obligations of the parties hereunder are subject to all required regulatory
approvals being obtained.
13. The
Subscriber acknowledges that it has consented to and requested that all
documents evidencing or relating in any way to the sale of the Common Shares
be
drawn up in the English language only. Le
soussigné reconna t par les présentes avoir consenti et exigé que tous les
documents faisant foi ou se repportant de quelque manière à la vente de ces
actions soient rédigés en anglais seulement.
14. The
contract arising out of this Subscription Agreement and all documents relating
thereto shall be governed by and construed in accordance with the laws of the
Province of Alberta and the federal laws of Canada applicable therein. The
parties irrevocably attorn to the exclusive jurisdiction of the courts of the
Province of Alberta. Time shall be of the essence hereof.
14
15. This
Subscription Agreement represents the entire agreement of the parties hereto
relating to the subject matter hereof and there are no representations,
covenants or other agreements relating to the subject matter hereof except
as
stated or referred to herein.
16. The
terms
and provisions of this Subscription Agreement shall be binding upon and enure
to
the benefit of the Subscriber and the Corporation and their respective heirs,
executors, administrators, successors and assigns; provided that, except for
the
assignment by a Subscriber who is acting as nominee or agent to the beneficial
owner and as otherwise herein provided, this Subscription Agreement shall not
be
assignable by any party without prior written consent of the other parties.
17. The
Subscriber, on its own behalf and, if applicable, on behalf of others for whom
it is contracting hereunder, agrees that this subscription 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.
18. Neither
this Subscription Agreement nor any provision hereof shall be modified, changed,
discharged or terminated except by an instrument in writing signed by the party
against whom any waiver, change, discharge or termination is
sought.
19. The
invalidity, illegality or unenforceability of any provision of this Subscription
Agreement shall not affect the validity, legality or enforceability of any
other
provision hereof.
20. The
headings used in this Subscription Agreement have been inserted for convenience
of reference only and shall not affect the meaning or interpretation of this
Subscription Agreement or any provision hereof.
21. The
covenants, representations and warranties contained herein shall survive the
closing of the transactions contemplated hereby. In this Subscription Agreement
(including attachments), references to "$" are to Canadian dollars.
15
EXHIBIT
1
REPRESENTATION
LETTER
(ALL
SUBSCRIBERS MUST COMPLETE THIS EXHIBIT 1)
TO: CanWest
Petroleum Corporation (the "Corporation")
In
connection with the purchase of common shares of the Corporation ("Common
Shares")
by the
undersigned subscriber or, if applicable, the disclosed principal on whose
behalf the undersigned is purchasing as agent (the "Subscriber"
for the
purposes of this Exhibit 1), the Subscriber hereby represents, warrants,
covenants and certifies to the Corporation that:
1. The
Subscriber is resident in one of the Provinces of British Columbia, Alberta,
Saskatchewan, Manitoba or Ontario or is otherwise subject to applicable
securities laws of one of the Provinces of British Columbia, Alberta,
Saskatchewan, Manitoba or Ontario;
2. The
Subscriber is purchasing the Common Shares as principal (NOTE: For this purpose,
a trust company or trust corporation described in paragraph (p) in Appendix
"A"
to this Representation Letter (other than a trust company or trust corporation
registered under the laws of Xxxxxx Xxxxxx Island that is not registered or
authorized under the Trust
and Loan Companies Act
(Canada)
or under comparable legislation in another jurisdiction of Canada) and a person
described in paragraph (q) in Appendix "A" to this Representation Letter is
deemed to be purchasing as principal);
3. The
Subscriber is (and will be at the Closing Time) an "accredited investor" within
the meaning of National Instrument 45-106 entitled "Prospectus and Registration
Exemptions" by virtue of satisfying the indicated criterion as set out in
Appendix "A" to this Representation Letter; and
4. Upon
execution of this Exhibit 1 by or on behalf of the Subscriber, this
Exhibit 1 shall be incorporated into and form a part of the Subscription
Agreement to which this Exhibit is attached.
Dated:
_________________________, 2006
________________________________________
Print
name of Subscriber, or person signing as agent on
behalf
of
Subscriber
By:________________________________________
Signature
________________________________________
Print
name of Signatory (if different from Subscriber or agent, as
applicable)
________________________________________
Title
*
If
the Subscriber is a
fully managed account,
please complete in the following format: "Account____ by [insert name of
adviser, trust company or trust corporation]"
**
PLEASE INITIAL THE APPLICABLE PROVISION IN APPENDIX "A" ON THE FOLLOWING PAGES
**
16
APPENDIX
"A"
TO
EXHIBIT 1
NOTE:
THE INVESTOR MUST INITIAL BESIDE THE APPLICABLE PORTION OF THE DEFINITION
BELOW.
Accredited
Investor
-
(defined in National Instrument 45-106) means:
| ___________ |
a
Canadian financial institution, or a Schedule III bank; or
|
| ___________ |
the
Business Development Bank of Canada incorporated under the Business
Development Bank of Canada Act
(Canada); or
|
| ___________ |
a
subsidiary of any person referred to in paragraphs (a) or (b), if
the
person owns all of the voting securities of the subsidiary, except
the
voting securities required by law to be owned by directors of that
subsidiary; or
|
| ___________ |
a
person registered under the securities legislation of a jurisdiction
of
Canada as an adviser or dealer, other than a person registered solely
as a
limited market dealer under one or both of the Securities
Act
(Ontario) or the Securities
Act
(Newfoundland and Labrador); or
|
| ___________ |
an
individual registered or formerly registered under the securities
legislation of a jurisdiction of Canada as a representative of a
person
referred to in paragraph (d); or
|
| ___________ |
the
Government of Canada or a jurisdiction of Canada, or any crown
corporation, agency or wholly owned entity of the Government of Canada
or
a jurisdiction of Canada; or
|
| ___________ |
a
municipality, public board or commission in Canada and a metropolitan
community, school board, the Comite de gestion de la taxe scolaire
de
l'ile de Montreal or an intermuncipal management board in Quebec;
or
|
| ___________ |
any
national, federal, state, provincial, territorial or municipal government
of or in any foreign jurisdiction, or any agency of that government;
or
|
| ___________ |
a
pension fund that is regulated by either the Office of the Superintendent
of Financial Institutions (Canada) or a pension commission or similar
regulatory authority of a jurisdiction of Canada; or
|
| ___________ |
an
individual who, either alone or with a spouse, beneficially owns,
directly
or indirectly, financial assets having an aggregate realizable value
that
before taxes, but net of any related liabilities, exceeds $1,000,000;
or
**Note:
if individual accredited investors wish to purchase through wholly-owned
holding companies or similar entities, such purchasing entities must
qualify under (t) below, which must be initialed.
|
| ___________ |
an
individual whose net income before taxes exceeded $200,000 in each
of the
2 most recent calendar years or whose net income before taxes combined
with that of a spouse exceeded $300,000 in each of the 2 most recent
calendar years and who, in either case, reasonably expects to exceed
that
net income level in the current calendar year; or
**Note:
if individual accredited investors wish to purchase through wholly-owned
holding companies or similar entities, such purchasing entities must
qualify under (t) below, which must be initialed.
|
| ___________ |
an
individual who, either alone or with a spouse, has net assets of
at least
$5,000,000; or
**Note:
if individual accredited investors wish to purchase through wholly-owned
holding companies or similar entities, such purchasing entities must
qualify under (t) below, which must be initialed.
|
| ___________ |
a
person, other than an individual or investment fund, that has net
assets
of at least $5,000,000 as shown on its most recently prepared financial
statements; or
|
17
| ___________ |
an
investment fund that distributes or has distributed its securities
only
to:
(i)
a person that is or was an accredited investor at the time of the
distribution,
(ii)
a person that acquires or acquired securities in the circumstances
referred to in sections 2.10 [Minimum
amount investment],
and 2.19 [Additional
investment in investment funds],
or
(iii)
a person described in paragraph (i) or (ii) that acquires or acquired
securities under section 2.18 [Investment
fund reinvestment];
or
|
| ___________ |
an
investment fund that distributes or has distributed securities under
a
prospectus in a jurisdiction of Canada for which the regulator or,
in
Quebec, the securities regulatory authority, has issued a receipt;
or
|
| ___________ |
a
trust company or trust corporation registered or authorized to carry
on
business under the Trust
and Loan Companies Act
(Canada) or under comparable legislation in a jurisdiction of Canada
or a
foreign jurisdiction, acting on behalf of a fully managed account
managed
by the trust company or trust corporation, as the case may be;
or
|
| ___________ |
a
person acting on behalf of a fully managed account managed by that
person,
if that person:
(i)
is registered or authorized to carry on business as an adviser or
the
equivalent under the securities legislation of a jurisdiction of
Canada or
a foreign jurisdiction, and
(ii)
in Ontario, is purchasing a security that is not a security of an
investment fund; or
|
| ___________ |
a
registered charity under the Income
Tax Act
(Canada) that, in regard to the trade, has obtained advice from an
eligibility adviser or an adviser registered under the securities
legislation of the jurisdiction of the registered charity to give
advice
on the securities being traded; or
|
| ___________ |
an
entity organized in a foreign jurisdiction that is analogous to any
of the
entities referred to in paragraphs (a) to (d) or paragraph (i) in
form and
function; or
|
| ___________ |
a
person in respect of which all of the owners of interests, direct,
indirect or beneficial, except the voting securities required by
law to be
owned by directors, are persons that are accredited
investors;
|
| ___________ |
an
investment fund that is advised by a person registered as an adviser
or a
person that is exempt from registration as an adviser; or
|
| ___________ |
a
person that is recognized or designated by the securities regulatory
authority or, except in Ontario and Quebec, the regulator as:
(i)
an accredited investor, or
(ii)
an exempt purchaser in Alberta or British Columbia after National
Instrument 45-106 came into force.
|
For
the purposes hereof:
an
issuer
is an "affiliate"
of
another issuer if
(a) one
of
them is the subsidiary of the other, or
(b) each
of
them is controlled by the same person;
"bank"
means a
bank named in Schedule I or II of the Bank
Act
(Canada);
"beneficial
ownership"
of
securities by a person has the meaning given thereto under securities laws
of
the applicable province of Canada;
18
"Canadian
financial institution"
means
|
(a)
|
an
association governed by the Cooperative
Credit Associations Act
(Canada) or a central cooperative credit society for which an order
has
been made under section 473(1) of that Act,
or
|
|
(b)
|
a
bank, loan corporation, trust company, trust corporation, insurance
company, treasury branch, credit union, caisse populaire, financial
services cooperative, or league that, in each case, is authorized
by an
enactment of Canada or a jurisdiction of Canada to carry on business
in
Canada or a jurisdiction in Canada;
|
a
person
(first person) is considered to "control"
another
person (second person) if
|
(a)
|
the
first person, directly or indirectly, beneficially owns or exercises
control or direction over securities of the second person carrying
votes
which, if exercised, would entitle the first person to elect a majority
of
the directors of the second person, unless that first person holds
the
voting securities only to secure an
obligation,
|
|
(b)
|
the
second person is a partnership, other than a limited partnership,
and
first person holds more than 50% of the interests of the partnership,
or
|
|
(c)
|
the
second person is a limited partnership and the general partner of
the
limited partnership is the first
person;
|
"director"
means
|
(a)
|
a
member of the board of directors of a company or an individual who
performs similar functions for a company,
and
|
|
(b)
|
with
respect to a person that is not a company, an individual who performs
functions similar to those of a director of a
company;
|
"financial
assets"
means
(a) cash,
(b) securities,
or
|
(c)
|
a
contract of insurance, a deposit or an evidence of a deposit that
is not a
security for the purposes of securities
legislation;
|
"foreign
jurisdiction"
means a
country other than Canada or a political subdivision of a country other than
Canada;
"fully
managed account"
means
an account of a client for which a person makes the investment decisions if
that
person has full discretion to trade in securities for the account without
requiring the client's express consent to a transaction;
"investment
fund"
means a
mutual fund or non-redeemable investment fund, and, for greater certainty,
in
British Columbia includes an employee venture capital corporation that does
not
have a restricted constitution , and is registered under Part 2 of the
Employee
Investment Act
(British
Columbia), R.S.B.C. 1996 c. 112, and whose business objective is making multiple
investments and a venture capital corporation registered under Part 1 of the
Small
Business Venture Capital Act
(British
Columbia), R.S.B.C. 1996 c.429 whose business objective is making multiple
investments;
"jurisdiction"
means a
province or territory of Canada except when used in the term "foreign
jurisdiction";
"individual"
means a
natural person, but does not include
|
(a)
|
a
partnership, unincorporated association, unincorporated syndicate,
unincorporated organization or a trust,
or
|
|
(b)
|
a
natural person in the person's capacity as trustee, executor,
administrator or other legal
representative;
|
19
"mutual
fund"
includes an issuer of securities that entitles the holder to receive on demand,
or within a specified period after demand, an amount computed by reference
to
the value of a proportionate interest in the whole or in part of the net assets,
including a separate fund or trust account, of the issuer of the securities,
and, for the purposes of British Columbia securities law, also
includes
|
(a)
|
an
issuer described in an order that the British Columbia Securities
Commission may make pursuant to section 3.2 of the Securities
Act (British
Columbia); and
|
|
(b)
|
an
issuer that is in a class of prescribed issuers,
|
but
does
not include an issuer, or a class of issuers, described in an order that the
British Columbia Securities Commission may make under section 3.1 of the
Securities
Act (British
Columbia);
"non-redeemable
investment fund"
means
an issuer,
(a) whose
primary purpose is to invest money provided by its securityholders,
(b) that
does
not invest,
|
(A)
|
for
the purpose of exercising or seeking to exercise control of an issuer,
other than an issuer that is a mutual fund or a nonredeemable investment
fund, or
|
|
(B)
|
for
the purpose of being actively involved in the management of any issuer
in
which it invests, other than an issuer that is a mutual fund or a
non-redeemable investment fund, and
|
(c) that
is
not a mutual fund;
"person"
includes
(a) an
individual,
(b) a
corporation,
|
(c)
|
a
partnership, trust, fund and an association, syndicate, organization
or
other organized group of persons, whether incorporated or not,
and
|
|
(d)
|
an
individual or other person in that person’s capacity as a trustee,
executor, administrator or personal or other legal
representative;
|
"regulator"
means,
for the local jurisdiction, the Executive Director or Director as defined under
securities legislation of the local jurisdiction;
"related
entity"
means,
for an issuer, a person that controls or is controlled by the issuer or that
is
controlled by the same person that controls the issuer;
"related
liabilities"
means:
|
(a)
|
liabilities
incurred or assumed for the purpose of financing the acquisition
or
ownership of financial assets; or
|
(b) liabilities
that are secured by financial assets;
"Schedule
III bank"
means
an authorized foreign bank named in Schedule III of the
Bank
Act
(Canada);
"securities
legislation"
means
the securities act, regulations, rules, blanket rulings and orders of the
applicable province of Canada;
"securities
regulatory authority"
means
the securities commission or similar authority of the applicable province of
Canada;
20
"spouse"
means
an individual who,
|
(a)
|
is
married to another individual and is not living separate and apart
within
the meaning of the Divorce
Act (Canada),
from the other individual,
|
|
(b)
|
is
living with another individual in a marriage-like relationship, including
a marriage-like relationship between individuals of the same gender,
or
|
|
(c)
|
in
Alberta, is an individual referred to in paragraph (a) or (b), or
is an
adult interdependent partner within the meaning of the Adult
Interdependent Relationships Act (Alberta);
|
"subsidiary"
means
an issuer that is controlled directly or indirectly by another issuer and
includes a subsidiary of that subsidiary; and
"voting
security"
means
any security which:
(a) is
not a
debt security; and
|
(b)
|
carries
a voting right either under all circumstances or under some contingency
that has occurred and is
continuing.
|
21
SCHEDULE
"A"
1. The
Corporation has been duly incorporated under the laws of Colorado, is a
corporation existing under the laws of Colorado, and has not been dissolved.
The
Corporation has all requisite corporate power and capacity to carry on its
business as now conducted by it and to own its properties and assets, and is
qualified to carry on business in British Columbia and Alberta.
2. The
Corporation has full corporate power and authority to enter into the
Subscription Agreements and the Subscription Agreements have been duly
authorized, executed and delivered by the Corporation and constitute legal,
valid and binding obligations of the Corporation enforceable against the
Corporation in accordance with their terms, subject to laws relating to
creditors rights generally and except as rights to indemnity may be limited
by
applicable laws.
3. The
execution and delivery of the Subscription Agreements and the fulfillment of
the
terms thereof by the Corporation, and the performance of and compliance with
the
terms of the Subscription Agreements by the Corporation, do not and will not
result in a breach of, or constitute a default under, and do not and will not
create a state of facts which, after notice or lapse of time or both, will
result in a breach of or constitute a default under:
| (a) |
any
applicable laws of the Province of Alberta or the federal laws of
Canada
applicable therein;
|
| (b) |
any
term or provision of the articles or by-laws of the Corporation;
|
| (c) |
any
resolutions of the directors (or any committee thereof) or the
shareholders of the Corporation;
|
| (d) |
of
which counsel is aware, any mortgage, note, indenture, contract,
agreement
(written or oral), instrument, lease or other document to which the
Corporation is a party or by which the Corporation is bound as at
the
Closing Date; or
|
| (e) |
of
which counsel is aware, any judgment, decree or order, of any court,
governmental agency or body or regulatory authority having jurisdiction
over the Corporation or its properties or
assets,
|
which
default or breach might reasonably be expected to materially adversely affect
the business, operations, capital or condition (financial or otherwise) of
the
Corporation or its properties or assets.
4. The
Common Shares have been reserved and allotted for issuance and have been validly
issued as fully paid and non-assessable Common Shares.
5. The
form
of the definitive Common Share certificates have been approved by the board
of
directors of the Corporation and comply with all legal requirements relating
thereto.
6. The
offering, issuance and sale of the Common Shares by the Corporation to
Subscribers in the Selling Jurisdictions in accordance with and pursuant to
the
Subscription Agreements is exempt from the prospectus and registration
requirements of Applicable Securities Laws and no documents are required to
be
filed, proceedings taken or approvals, permits, consents or authorizations
of
regulatory authorities in the Selling Jurisdictions obtained under Applicable
Securities Laws to permit such offering, issuance, sale and delivery, other
than
the execution and filing by or on behalf of the Corporation of reports of the
trade required to be filed under Applicable Securities Laws, together with
the
requisite filing fees.
7. The
first
trade of the Common Shares is exempt from the prospectus requirements of
Applicable Securities Laws, and no documents are required to be filed,
proceedings taken or approvals, permits, consents, orders or authorizations
of
regulatory authorities required to be obtained under the Applicable Securities
Laws in connection with the first trade by the Subscribers in each of the
Selling Jurisdictions of the Common Shares through registrants registered under
the Applicable Securities Laws of such Selling Jurisdiction who have complied
with such Applicable Securities Laws or in circumstances in which there is
an
exemption from the registration requirements of the Applicable Securities Laws
of such Selling Jurisdiction, subject to certain qualifications.
8. The
authorized and issued capital of the Corporation.
22
SCHEDULE
"B"
CanWest
Petroleum Corporation Wire Transfer Instructions:
|
Canadian
Currency:
|
US
Currency:
|
|
Xxxxxxx
Xxxxx LLP
TD
Canada Trust
000
- 0xx Xxxxxx XX
Xxxxxxx,
Xxxxxxx
Xxxxxxx
#: 80609-004
Account
#: 0805-0637591
SWIFT:
XXXXXXXXXXX
Ref:
Please provide Xxxxxxx Xxxxx LLP file number 251838 when wiring
funds
|
Xxxxxxx
Xxxxx LLP
TD
Canada Trust
000
- 0xx Xxxxxx XX
Xxxxxxx,
Xxxxxxx
Xxxxxxx
#: 00000-004
Account
#: 0805-7301780
ABA#:
000-000-000
Bank
of America, New York
Ref:
Please provide Xxxxxxx Xxxxx LLP file number 251838 when wiring
funds
|
Please
contact Xxxxx Xxxxxx at Xxxxxxx Xxxxx llp
with any
questions (000) 000-0000.
