EXHIBIT 4.137
This is page 1 of 1 pages of a subscription agreement and related appendixes,
schedules and forms. Collectively, these pages together are referred to as the
"Subscription Agreement".
XXXXXX GOLD CORP.
FLOW-THROUGH SUBSCRIPTION AGREEMENT
INSTRUCTIONS TO PURCHASER
1. All purchasers complete all the information in the boxes on page 2 and
sign where indicated with an "X".
2. If you are an "accredited investor" in British Columbia or Ontario,
then complete the "Accredited Investor Questionnaire" that starts on
page 5. The purpose of the questionnaire is to determine whether you
meet the standards for participation in a private placement under
section 2.3 of National Instrument 45-106.
3. If you are not an individual (that is, the Purchaser is a corporation,
partnership, trust or entity other than an individual or if you are a
portfolio manager), then complete and sign the "Corporate Placee
Registration Form" (Form 4C) that starts on page 8.
PRIVATE PLACEMENT
FLOW-THROUGH SUBSCRIPTION AGREEMENT
TO: XXXXXX GOLD CORP. (the "Issuer"), of Suite 000 - 000 Xxxx Xxxxxxxx
Xxxxxx, Xxxxxxxxx, X.X., X0X 0X0 Tel: (000) 000-0000; Fax: (604)
685-3764
Subject and pursuant to the terms set out in the Terms on pages 3 to 4, the
General Provisions on pages 10 to 20 and the other schedules and appendixes
incorporated by reference, the Purchaser hereby irrevocably subscribes for, and
on Closing will purchase from the Issuer, the following securities at the
following price:
SUBSCRIPTION AND SUBSCRIBER INFORMATION
PLEASE PRINT ALL INFORMATION (OTHER THAN SIGNATURES),
AS APPLICABLE, IN THE SPACE PROVIDED BELOW
--------------------------------------------------------------------------------
Number of Flow-Through Units: X $0.28
_________________________________ -------------
(Name of Subscriber)
=
Account Reference (if applicable):
_________________________________ Aggregate Subscription Price:_____________
(the "SUBSCRIPTION PRICE")
By: _____________________________
Authorized Signature
------------------------------------------
By signing, the Purchaser agrees Social Insurance Number
to disclosure of all information
contained herein to the Exchange
and the collection, use and __________________________________________
disclosure of the information
contained herein for the purposes
described in Appendix 6B of the
Exchange Rules or as otherwise
identified by the Exchange from
time to time.
--------------------------------------------------------------------------------
_____________________________________________________________________
(Official Capacity or Title - if the Subscriber is not an individual)
_____________________________________________________________________
(Name of individual whose signature appears above if different
than the name of the subscriber printed above.)
_____________________________________________________________________
(Subscriber's Address, including Municipality and Province)
_____________________________________________________________________
(Telephone Number) (Email Address)
--------------------------------------------------------------------------------
IF THE SUBSCRIBER IS SIGNING AS AGENT FOR A PRINCIPAL (BENEFICIAL PURCHASER) AND
IS NOT PURCHASING AS TRUSTEE OR AGENT FOR ACCOUNTS FULLY MANAGED BY IT, COMPLETE
THE FOLLOWING:
_____________________________________________________________________
(Name of Principal)
_____________________________________________________________________
(Principal's Address)
NUMBER AND KIND OF SECURITIES OF THE CORPORATION HELD, DIRECTLY (Subscriber's
Address, including Municipality and Province) OR INDIRECTLY, IF ANY:
________________________________________________________________________________
ACCOUNT REGISTRATION INFORMATION:
--------------------------------
____________________________________________________________________
(Name)
____________________________________________________________________
(Account Reference, if applicable)
____________________________________________________________________
(Address, including Postal Code)
____________________________________________________________________
DELIVERY INSTRUCTIONS AS SET FORTH BELOW:
----------------------------------------
____________________________________________________________________
(Name)
____________________________________________________________________
(Account Reference, if applicable)
____________________________________________________________________
(Address)
____________________________________________________________________
(Contact Name) (Telephone Number)
--------------------------------------------------------------------------------
The Company hereby accepts the subscription for Units as set forth herein
(including all applicable schedules) this ___ day of March, 2008.
XXXXXX GOLD CORP.
Per: _______________________________________________________________
Authorized Signing Officer
--------------------------------------------------------------------------------
1. State whether Subscriber is an insider of the Corporation:
Yes [_] No [_]
2. State whether Subscriber is a member of the Pro Group:
Yes [_] No [_]
--------------------------------------------------------------------------------
By signing this acceptance, the Issuer agrees to be bound by the Terms on pages
3 to 4, the General Provisions on pages 10 to 20 and the other schedules and
appendixes incorporated by reference.
2
Subscription Agreement (with related appendixes, schedules and forms)
TERMS
REFERENCE DATE OF
THIS AGREEMENT March 19, 2008 (the "Agreement Date")
THE OFFERING
THE ISSUER Xxxxxx Gold Corp.
THE OFFERING
The offering consists of flow-through units (the "Units") at a
price of $0.28 per Unit.
PURCHASED
SECURITIES The "Purchased Securities" herein are Units. Each Unit
consists of one previously unissued flow-through common share,
as presently constituted (a "Share") and one non flow-through
share purchase warrant (a "Warrant") of the Issuer. Each
Warrant will entitle the holder, on exercise, to purchase one
additional common share of the Issuer (a "Warrant Share") for
a period of two years from the date of issue of the warrant at
a price of CAD$0.30 per Warrant Share.
PRICE CAD $0.28 per Unit
WARRANTS The Warrants will be issued and registered in the name of the
purchasers or their nominees.
The Warrants will be non-transferable.
The certificates representing the Warrants will, among other
things, include provisions for the appropriate adjustment in
the class, number and price of the Warrant Shares issued upon
exercise of the Warrants upon the occurrence of certain
events, including any subdivision, consolidation or
reclassification of the Issuer's common shares, the payment of
stock dividends and the amalgamation of the Issuer.
The issue of the Warrants will not restrict or prevent the
Issuer from obtaining any other financing, or from issuing
additional securities or rights, during the period within
which the Warrants may be exercised.
Once resale restrictions on the shares having expired and upon
the Company's shares trading at or above a weighted average
trading price of $1.00 for 30 consecutive trading days the
Company may give notice that the Warrants will expire 30 days
from the date of providing such notice in writing to Warrant
holders and via a news release.
SELLING
JURISDICTIONS The Units may be sold in British Columbia, Ontario and in
certain "offshore" jurisdictions outside Canada and the United
States (the "Selling Jurisdictions") in accordance with the
provisions of this Subscription Agreement.
EXEMPTIONS The Offering will be made in accordance with the "Accredited
Investor" exemption from the prospectus requirements (section
2.3 of National Instrument 45-106) or the "Family, Friends and
Business Associates" exemption from the prospectus
requirements (section 2.5 of National Instrument 45-106).
RESALE
RESTRICTIONS AND
LEGENDS (ALL The Securities will be subject to a four month hold
period that starts to PURCHASERS) run on Closing.
3
The Purchaser acknowledges that the certificates representing
the Securities will bear the following legends:
"UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE
HOLDER OF THE SECURITIES SHALL NOT TRADE THE
SECURITIES BEFORE [date that is four months and a day
after the Closing.]."
"Without prior written approval of the TSX Venture
Exchange and compliance with all applicable
securities legislation, the securities presented by
this certificate may not be sold, transferred,
hypothecated or otherwise traded on or through the
facilities of the TSX Venture Exchange or otherwise
in Canada or to or for the benefit of a Canadian
resident until [insert the date following the fourth
month after the distribution]."
Purchasers are advised to consult with their own legal counsel
or advisors to determine the resale restrictions that may be
applicable to them.
CLOSING DATE The closing of the Offering (the "Closing") will take place in
one or more Closings, at the discretion of the Issuer. The
Closing will take place within 5 days after approval by the
TSX Venture Exchange, unless otherwise agreed between the
Issuer and the Purchaser.
ADDITIONAL
DEFINITIONS In the Subscription Agreement, the following words have the
following meanings unless otherwise indicated:
(a) "Securities" means the Shares, the Warrants
and the Warrant Shares;
(b) "Warrants" includes the certificates
representing the Warrants.
THE ISSUER
JURISDICTION OF
ORGANIZATION The Issuer is incorporated under the laws of the British
Columbia.
AUTHORIZED
CAPITAL The authorized capital of the Issuer consists of an unlimited
number of common shares without par value.
STOCK EXCHANGE
LISTINGS Shares of the Issuer are listed on the TSX Venture Exchange
(the "Exchange").
"SECURITIES
LEGISLATION
APPLICABLE TO
THE ISSUER" The "Securities Legislation Applicable to the Issuer" are the
SECURITIES ACT (British Columbia) and the SECURITIES ACT
(Alberta) and the "Commissions with Jurisdiction over the
Issuer" are the British Columbia Securities Commission and the
Alberta Securities Commission.
END OF TERMS
4
ACCREDITED INVESTOR QUESTIONNAIRE
(Capitalized terms not specifically defined in this Questionnaire have the
meaning ascribed to them in the Subscription Agreement to which this Schedule is
attached.)
In connection with the execution of the Subscription Agreement to which this
Schedule is attached, the undersigned (the "Purchaser") represents and warrants
to the Issuer that:
IF I AM AN INDIVIDUAL (THAT IS, A NATURAL PERSON AND NOT A CORPORATION,
PARTNERSHIP, TRUST OR OTHER ENTITY), THEN I SATISFY ONE OR MORE OF THE
CATEGORIES INDICATED BELOW (PLEASE PLACE AN "X" ON THE APPROPRIATE LINES):
____ Category 1 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, where "financial
assets" means cash, securities, or a contract of insurance, a
deposit or an evidence of a deposit that is not a security for
the purposes of securities legislation and "related
liabilities" means (i) liabilities incurred or assumed for the
purpose of financing the acquisition or ownership of financial
assets, or (ii) liabilities that are secured by financial
assets
____ Category 2 an individual whose net income before taxes exceeded $200,000
in each of the two most recent calendar years or whose net
income before taxes combined with that of a spouse exceeded
$300,000 in each of the two most recent calendar years and
who, in either case, reasonably expects to exceed that net
income level in the current calendar year
____ Category 3 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 registered
under one or both of the SECURITIES ACT (Ontario) or the
SECURITIES ACT (Newfoundland and Labrador)
____ Category 4 an individual registered or formerly registered under the
securities legislation of a jurisdiction of Canada as a
representative of a person referred to in Category 3
____ Category 5 an individual who, either alone or with a spouse, has net
assets of at least $5,000,000
____ Category 6 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 and British Columbia
____ Category 7 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
5
IF THE PURCHASER IS NOT AN INDIVIDUAL (THAT IS, THE PURCHASER IS A CORPORATION,
PARTNERSHIP, TRUST OR OTHER ENTITY OTHER THAN AN INDIVIDUAL), THEN THE PURCHASER
SATISFIES ONE OR MORE OF THE CATEGORIES INDICATED BELOW (PLEASE PLACE AN "X" ON
THE APPROPRIATE LINES):
INSTITUTIONAL INVESTORS
____ Category 8 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
____ Category 9 An association governed by the COOPERATIVE CREDIT ASSOCIATION
S ACT (Canada) or a central cooperative credit society for
which an order has been made under section 473(1) of that Act,
or 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 of Canada, or a bank named in Schedule I, II or
III of the BANK Act (Canada)
____ Category 10 the Business Development Bank of Canada incorporated under the
BUSINESS DEVELOPMENT BANK OF CANADA ACT (Canada)
____ Category 11 a subsidiary of any person referred to in Categories 9 or 10,
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
____ Category 12 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
____ Category 13 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
GOVERNMENT ORGANIZATIONS
____ Category 14 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
____ Category 15 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 intermunicipal
management board in Quebec
____ Category 16 any national, federal, state, provincial, territorial or
municipal government of or in any foreign jurisdiction, or any
agency of that government
OTHER CORPORATIONS, PARTNERSHIPS, TRUSTS & CHARITIES
____ Category 17 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
6
____ Category 18 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
____ Category 19 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]of National
Instrument 45-106, or (iii) a person described in paragraph
(i) or (ii) that acquires or acquired securities under section
2.8 [INVESTMENT FUND REINVESTMENT] of National Instrument
45-106
____ Category 20 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, as issued a receipt
____ Category 21 an investment fund that is advised by a person registered as
an advisor or a person that is exempt from registration as an
advisor
____ Category 22 any entity organized in a foreign jurisdiction that is
analogous to any of the entities referred to in Category 3 and
Categories 9 through 12 in form and function
The statements made in this Questionnaire are true and accurate to the best of
my information and belief and I will promptly notify the Issuer of any changes
in the answers.
Dated _______________ 2008.
X
---------------------------------------------------------
Signature of individual (if Purchaser IS an individual)
X
---------------------------------------------------------
Authorized signatory (if Purchaser is NOT an individual)
---------------------------------------------------------
Name of Purchaser (PLEASE PRINT)
---------------------------------------------------------
Name of authorized signatory (PLEASE PRINT)
---------------------------------------------------------
Official capacity of authorized signatory (PLEASE PRINT)
7
FORM 4C
CORPORATE PLACEE REGISTRATION FORM
Where subscribers to a Private Placement are not individuals, the following
information about the placee must be provided. This Form will remain on file
with the Exchange. The corporation, trust, portfolio manager or other entity
(the "Placee") need only file it on one time basis, and it will be referenced
for all subsequent Private Placements in which it participates. If any of the
information provided in this Form changes, the Placee must notify the Exchange
prior to participating in further placements with Exchange listed companies. If
as a result of the Private Placement, the Placee becomes an Insider of the
Issuer, Insiders of the Placee are reminded that they must file a Personal
Information Form (2A) or, if applicable, Declarations, with the Exchange.
1. Placee Information:
(a) Name:
---------------------------------------------------------
(b) Complete Address:
---------------------------------------------------------
---------------------------------------------------------
(c) Jurisdiction of Incorporation or Creation:
---------------------------------------------------------
2. (a) Is the Placee purchasing securities as a portfolio manager
(Yes/No)?
---------------------------------------------------------
(b) Is the Placee carrying on business as a portfolio manager
outside of Canada (Yes/No)?
---------------------------------------------------------
3. If the answer to 2(b) above was "Yes", the undersigned certifies that:
(a) It is purchasing securities of an Issuer on behalf of managed
accounts for which it is making the investment decision to
purchase the securities and has full discretion to purchase or
sell securities for such accounts without requiring the
client's express consent to a transaction;
(b) it carries on the business of managing the investment
portfolios of clients through discretionary authority granted
by those clients (a "portfolio manager" business) in
____________________ [jurisdiction], and it is permitted by
law to carry on a portfolio manager business in that
jurisdiction;
(c) it was not created solely or primarily for the purpose of
purchasing securities of the Issuer;
(d) the total asset value of the investment portfolios it manages
on behalf of clients is not less than $20,000,000; and
(e) it has no reasonable grounds to believe, that any of the
directors, senior officers and other insiders of the Issuer,
and the persons that carry on investor relations activities
for the Issuer has a beneficial interest in any of the managed
accounts for which it is purchasing.
8
4. If the answer to 2(a). above was "No", please provide the names and
addresses of control persons of the Placee:
----------------------- ------------------- ------------------- ----------------
Name City Province or State Country
----------------------- ------------------- ------------------- ----------------
----------------------- ------------------- ------------------- ----------------
----------------------- ------------------- ------------------- ----------------
----------------------- ------------------- ------------------- ----------------
The undersigned acknowledges that it is bound by the provisions of applicable
Securities Law, including provisions concerning the filing of insider reports
and reports of acquisitions (See for example, sections 87 and 111 of the
SECURITIES ACT (British Columbia) and sections 176 and 182 of the SECURITIES ACT
(Alberta).
ACKNOWLEDGEMENT - PERSONAL INFORMATION
"Personal Information" means any information about an identifiable individual,
and includes information contained in sections 1, 2 and 4, as applicable, of
this Form.
The undersigned hereby acknowledges and agrees that it has obtained the express
written consent of each individual to:
(a) the disclosure of Personal Information by the undersigned to
the Exchange (as defined in Appendix 6B) pursuant to this
Form; and
(b) the collection, use and disclosure of Personal Information by
the Exchange for the purposes described in Appendix 6B or as
otherwise identified by the Exchange, from time to time.
Dated at on .
--------- ----------------------------------------
---------------------------------------------------------
(Name of Purchaser - please print)
---------------------------------------------------------
(Authorized Signature)
---------------------------------------------------------
(Official Capacity - please print)
---------------------------------------------------------
(please print name of individual whose signature appears
above)
THIS IS NOT A PUBLIC DOCUMENT
9
GENERAL PROVISIONS
1. DEFINITIONS
1.1 In the Subscription Agreement (including the first (cover)
page, the Terms on pages 3 to 4, the General Provisions on pages 10 to 20 and
the other schedules and appendixes incorporated by reference), the following
words have the following meanings unless otherwise indicated:
(a) "1933 Act" means the United States Securities Act of 1933, as
amended;
(c) "Applicable Legislation" means the Securities Legislation
Applicable to the Issuer (as defined on page 4) and all
legislation incorporated in the definition of this term in
other parts of the Subscription Agreement, together with the
regulations and rules made and promulgated under that
legislation and all administrative policy statements, blanket
orders and rulings, notices and other administrative
directions issued by the Commissions;
(d) "Canadian Exploration Expense" means Canadian exploration
expense as defined in section 66.1(6) of the INCOME TAX ACT
other than expenses that are prescribed Canadian exploration
and development overhead expense for the purpose of subsection
66(12.6) of the INCOME TAX ACT;
(e) "Closing" means the completion of the sale and purchase of the
Purchased Securities;
(f) "Closing Date" has the meaning assigned in the Terms;
(g) "Commissions" means the Commissions with Jurisdiction over the
Issuer (as defined on page 4) and the securities commissions
incorporated in the definition of this term in other parts of
the Subscription Agreement;
(h) "Exchange" has the meaning assigned in the Terms;
(i) "Final Closing" means the last closing under the Private
Placement;
(j) "General Provisions" means those portions of the Subscription
Agreement headed "General Provisions" and contained on pages
10 to 20;
(k) "INCOME TAX ACT" means the INCOME TAX ACT (Canada), as
amended;
(l) "Offering Memorandum" means any offering memorandum prepared
by the Issuer in connection with the Private Placement, as it
may be amended from time to time;
(m) "Prescribed Form" means a form prescribed under the INCOME TAX
ACT for a particular purpose;
(n) "Private Placement" means the offering of the Purchased
Securities on the terms and conditions of this Subscription
Agreement;
(o) "Purchased Securities" has the meaning assigned in the Terms;
(p) "Qualified Expenditures" means Canadian Exploration Expense
required to be incurred and renounced pursuant to this
Agreement;
(q) "Qualified Shares" means shares that are not prescribed shares
for the purposes of the definition of "flow-through share" in
section 66(15) of the INCOME TAX ACT;
(r) "Regulation S" means Regulation S promulgated under the 1933
Act;
10
(s) "Regulatory Authorities" means the Commissions and the
Exchange;
(t) "Related Corporation" means a corporation that is related to
the Issuer within the meaning of subsection 251(2), 251(3) or
251(3.1) of the INCOME TAX ACT;
(u) "Securities" has the meaning assigned in the Terms;
(v) "Securities" has the meaning assigned in the Terms;
(w) "Subscription Agreement" means the first (cover) page, the
Terms on pages 3 to 4, the General Provisions on pages 10 to
20 and the other schedules and appendixes incorporated by
reference; and
(x) "Terms" means those portions of the Subscription Agreement
headed "Terms" and contained on pages 3 to 4.
1.2 In the Subscription Agreement, the following terms have the
meanings defined in Rule 902 of Regulation S: "Directed Selling Efforts",
"Foreign Issuer", "Substantial U.S. Market Interest", "U.S. Person" and "United
States".
1.3 In the Subscription Agreement, unless otherwise specified,
currencies are indicated with the ISO 4217 currency code so that, as examples,
Canadian dollars are indicated with the prefix "CAD", United States dollars are
indicated with the prefix "USD", British pounds sterling are indicated with the
prefix "GBP" and the euro is indicated with the prefix "EUR".
1.4 In the Subscription Agreement, other words and phrases that
are capitalized have the meaning assigned in the Subscription
Agreement.
2. REPRESENTATIONS AND WARRANTIES OF PURCHASER
2.1 ACKNOWLEDGEMENTS CONCERNING OFFERING
The Purchaser acknowledges that:
(a) no securities commission or similar regulatory authority has
reviewed or passed on the merits of the Securities;
(b) there is no government or other insurance covering the
Securities;
(c) there are risks associated with the purchase of the
Securities;
(d) there are restrictions on the Purchaser's ability to resell
the Securities and it is the responsibility of the Purchaser
to find out what those restrictions are and to comply with
them before selling the Securities;
(e) the Issuer has advised the Purchaser that the Issuer is
relying on an exemption from the requirements to provide the
Purchaser with a prospectus and to sell securities through a
person registered to sell securities under the Applicable
Legislation and, as a consequence of acquiring securities
pursuant to this exemption, certain protections, rights and
remedies provided by the Applicable Legislation, including
statutory rights of rescission or damages, will not be
available to the Purchaser;
11
(f) no prospectus has been filed by the Issuer with the
Commissions in connection with the issuance of the Purchased
Securities, the issuance is exempted from the prospectus and
registration requirements of the Applicable Legislation and:
(i) the Purchaser is restricted from using most of the
civil remedies available under the Applicable
Legislation;
(ii) the Purchaser may not receive information that would
otherwise be required to be provided to the Purchaser
under the Applicable Legislation; and
(iii) the Issuer is relieved from certain obligations that
would otherwise apply under the Applicable
Legislation;
(g) the Purchaser acknowledges that the Securities have not been
registered under the 1933 Act and may not be offered or sold
in the United States unless registered under the 1933 Act and
the securities laws of all applicable states of the United
States or an exemption from such registration requirements is
available, and that the Issuer has no obligation or present
intention of filing a registration statement under the 1933
Act in respect of the Purchased Securities or any of the
Securities;
(h) the Purchaser acknowledges that the Warrants have not been
registered under the 1933 Act and may not be exercised by or
on behalf of a person in the United States unless the Warrant
and the underlying Warrant Shares have been registered under
the 1933 Act and the securities laws of all applicable states
of the United States or an exemption from such registration
requirements is available;
(i) the Purchaser acknowledges that certificates representing the
Warrants, as well as all certificates issued in exchange for
or in substitution of the foregoing, until such time as is no
longer required under the applicable requirements of the 1933
Act or applicable state securities laws, will bear, on the
face of such certificate, the following legend:
"THIS WARRANT AND THE SECURITIES DELIVERABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES
ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. THIS WARRANT MAY NOT BE EXERCISED BY OR ON BEHALF OF A
PERSON IN THE UNITED STATES UNLESS THE WARRANT AND THE
UNDERLYING SECURITIES HAVE BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT AND THE APPLICABLE SECURITIES LEGISLATION OF
ANY SUCH STATE OR AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS IS AVAILABLE. "UNITED STATES" AND "U.S. PERSON"
ARE AS DEFINED BY REGULATION S UNDER THE U.S. SECURITIES ACT."
(j) the Purchaser acknowledges that the Warrants are
non-transferable.
2.2 REPRESENTATIONS BY ALL PURCHASERS
The Purchaser represents and warrants to the Issuer that, as at the
Agreement Date and at the Closing:
(a) the Purchaser has received a copy of the Offering Memorandum,
if any;
(b) to the best of the Purchaser's knowledge, the Securities were
not advertised;
(c) no person has made to the Purchaser any written or oral
representations:
(i) that any person will resell or repurchase the
Securities;
12
(ii) that any person will refund the purchase price of the
Purchased Securities;
(iii) as to the future price or value of any of the
Securities; or
(iv) that any of the Securities will be listed and posted
for trading on a stock exchange or that application
has been made to list and post any of the Securities
for trading on any stock exchange, other than the
Exchange;
(d) the Purchaser is either:
(i) an accredited investor and has properly completed and
delivered an Accredited Investor Questionnaire; or
(ii) a person or company who is purchasing the Securities
as principal and is:
(A) a director, executive officer or control
person of the Issuer, or an affiliate of the
Issuer;
(B) a spouse, parent, grandparent, brother,
sister or child of a director, executive
officer or control person of the Issuer, or
of an affiliate of the Issuer;
(C) a parent, grandparent, brother, sister or
child of the spouse of a director, executive
officer or control person of the Issuer, or
of an affiliate of the Issuer;
(D) a direct close personal friend of a
director, executive officer or control
person of the Issuer, or of an affiliate of
the Issuer and has known such person well
enough and for a sufficient period of time
to be in a position to assess the
capabilities and trustworthiness of that
person and is not a close personal friend
solely because the individual is a relative,
a member of the same organization,
association or religious group nor because
the individual is a client, customer, former
client or former customer;
(E) a direct close business associate of a
director, executive officer or control
person of the Issuer, or of an affiliate of
the Issuer and has had sufficient prior
business dealings with such person to be in
a position to assess the capabilities and
trustworthiness of that person and is not a
close business associate solely because the
individual is a client, customer, former
client or former customer;
(F) a founder of the Issuer or a spouse, parent,
grandparent, brother, sister, child, close
personal friend or close business associate
of a founder of the Issuer provided the
friend or business associate has had
sufficient prior dealings or has knows such
person well enough for a sufficient period
of time to be in a position to assess the
capabilities and trustworthiness of the
founder and is not a close personal friend
or business associate solely because the
individual is a relative, a member of the
same organization, association or religious
group nor because the individual is a
client, customer, former client or former
customer;
(G) a parent grandparent, brother, sister or
child of a spouse of a founder of the
Issuer;
(H) a person of which a majority of the voting
securities are beneficially owned by, or a
majority of the directors are , persons
described in paragraphs (i) to (vii), or
(I) a trust or estate of which all of the
beneficiaries or a majority of the trustees
or executors are persons described in
paragraphs (a) to (g);
(e) this subscription has not been solicited in any other manner
contrary to the Applicable Legislation or the 1933 Act;
(f) the Purchaser is at arm's length (as that term is customarily
defined) with the Issuer;
(g) the Purchaser (or others for whom it is contracting hereunder)
has been advised to consult its own legal and tax advisors
with respect to applicable resale restrictions and tax
considerations, and it (or others for whom it is contracting
hereunder) is solely responsible for compliance with
applicable resale restrictions and applicable tax legislation;
(h) the Purchaser has no knowledge of a "material fact" or
"material change" (as those terms are defined in the
Applicable Legislation) in the affairs of the Issuer that has
not been generally disclosed to the public, except knowledge
of this particular transaction;
(i) the offer made by this subscription is irrevocable (subject to
the Purchaser's right to withdraw the subscription and to
terminate the obligations as set out in this Agreement) and
requires acceptance by the Issuer and approval of the
Exchange;
(j) the Purchaser has the legal capacity and competence to enter
into and execute this Agreement and to take all actions
required pursuant to the Subscription Agreement and, if the
Purchaser 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 execution
of this Agreement on behalf of the Purchaser;
(k) 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 Purchaser or of any agreement,
written or oral, to which the Purchaser may be a party or by
which the Purchaser is or may be bound;
(l) this Agreement has been duly executed and delivered by the
Purchaser and constitutes a legal, valid and binding agreement
of the Purchaser enforceable against the Purchaser;
(m) the Purchaser has been independently advised as to the
applicable hold period imposed in respect of the Securities by
securities legislation in the jurisdiction in which the
Purchaser resides and confirms that no representation has been
made respecting the applicable hold periods for the Securities
and is aware of the risks and other characteristics of the
Securities and of the fact that the Purchaser may not be able
to resell the Securities except in accordance with the
applicable securities legislation and regulatory policies;
(n) the Purchaser is capable of assessing the proposed investment
as a result of the Purchaser's financial and business
experience or as a result of advice received from a registered
person other than the Issuer or any affiliates of the Issuer;
and
(o) if required by applicable securities legislation, policy or
order or by any securities commission, stock exchange or other
regulatory authority, the Purchaser will execute, deliver,
file and otherwise assist the Issuer in filing, such reports,
undertakings and other documents with respect to the issue of
the Securities as may be required.
2.3 RELIANCE, INDEMNITY AND NOTIFICATION OF CHANGES
The representations and warranties in the Subscription Agreement (including the
first (cover) page, the Terms on pages 3 to 4, the General Provisions on pages
10 to 20 and the other schedules and appendixes incorporated by reference) are
made by the Purchaser with the intent that they be relied upon by the Issuer in
determining its suitability as a purchaser of Purchased Securities, and the
Purchaser hereby agrees to indemnify the Issuer against all losses, claims,
costs, expenses and damages or liabilities which any of them may suffer or incur
as a result of
13
reliance thereon. The Purchaser undertakes to notify the Issuer immediately of
any change in any representation, warranty or other information relating to the
Purchaser set forth in the Subscription Agreement (including the first (cover)
page, the Terms on pages 3 to 4, the General Provisions on pages 10 to 20 and
the other schedules and appendixes incorporated by reference) which takes place
prior to the Closing.
2.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties contained in this Section will survive the
Closing.
3. REPRESENTATIONS AND WARRANTIES OF THE ISSUER
3.1 REPRESENTATIONS AND WARRANTIES OF THE ISSUER
(a) the Issuer is a corporation duly incorporated and validly
subsisting under the laws of British Columbia and has the
corporate power and authority to enter into this Agreement and
complete the transactions contemplated hereby and to own and
lease its properties and assets and to conduct its business as
currently conducted;
(b) the Issuer shall do all acts and things necessary to reserve
or set aside sufficient shares in the treasury of the Issuer
to enable it to issue to the Purchaser the Shares and the
Warrant Shares;
(c) the common shares of the Company are duly listed and posted
for trading on the Exchange;
(d) no order ceasing or suspending trading in securities of the
Issuer nor prohibiting the sale of such securities has been
issued to the Issuer or its directors, officers or promoters
or against any other companies that have common directors,
officers or promoters and no investigations or proceedings for
such purposes are pending or threatened of which the Issuer is
or ought to be aware;
(e) the Issuer is a reporting issuer and an exchange issuer under
the SECURITIES ACT (B.C.) and is not in material default of
any of the requirements of the SECURITIES ACT (B.C.) or the
Rules thereunder, or of any rule or requirement of the
Exchange;
(f) the execution, delivery and performance by the Issuer of this
Agreement and the transactions herein contemplated:
(i) have or will have been prior to the Closing duly
authorized by all necessary corporate action of the
Issuer and by all necessary action of the
shareholders thereof;
(ii) do not contravene, conflict with or cause the Issuer
to be in breach or default of its memorandum or
articles, or articles or by-laws, as the case may be,
or of any resolution of its respective directors or
shareholders, any trust deeds, debenture, loan
agreements or any of its other agreements or
undertakings or any judgement, decree or order to or
by which it is a party to or is bound;
(g) at the Closing, upon payment of the purchase price, the Shares
shall be duly issued and outstanding as fully paid and
non-assessable, the Warrants shall be duly granted and
enforceable against the Company, upon exercise of the Warrants
and payment of the exercise price therefore, the Warrant
Shares shall be duly issued and outstanding as fully paid and
non-assessable; and
(h) except as qualified by the disclosure in all prospectuses,
filing statements and press releases filed with the
Commissions or the Exchange or the Offering Memorandum, if
any, (the "Disclosure Record"), the Company is the beneficial
owner of the properties, business and assets or the interests
in the properties, business or assets referred to in the
Disclosure Record, and the
14
properties are in good standing under the applicable laws of
the jurisdictions in which they are situated;
(c) all expenditures renounced by the Issuer to the Purchaser
pursuant to this Agreement will be Canadian Exploration
Expense;
(d) the Shares will, at the time of issue, be Qualified Shares and
flow-through shares, as defined in section 66.(15) of the
INCOME TAX ACT;
(e) on the date provided as the effective date in each
renunciation of Canadian Exploration Expense pursuant to this
Agreement, the Issuer will have cumulative Canadian
Exploration Expense, within the meaning of section 66.1(6) of
the INCOME TAX ACT, in an amount sufficient to make the
renunciation to the Purchaser valid;
(f) in respect of each renunciation made by the Issuer pursuant to
this Agreement, the Issuer will file all Prescribed Forms and
other documents necessary to ensure valid and effective
renunciation with the Minister of Finance on or before the
last day of the month after the month in which the
renunciation is made or, where the renunciation is made
pursuant to subsection 66(12.66) of the INCOME TAX ACT to be
effective as at December 31 of a particular year, on or before
March 31 of a subsequent year, and concurrently deliver to the
Purchaser a copy of form T101 and copies 2 and 3 of form T101
Supplementary and any other documents so filed;
(g) the Issuer will comply with the provisions of the INCOME TAX
ACT relating to the filing of this Agreement and any Offering
Memorandum delivered to the Purchaser in connection therewith;
(h) the Issuer, and any Related Corporation which incurs Qualified
Expenditures, is and will at all material times remain a
"principal-business corporation" as that expression is defined
in section 66(15) of the INCOME TAX ACT;
(i) if any Qualified Expenditures are to be incurred by a Related
Corporation:
(i) the consideration to be given to the Issuer by such
Related Corporation will be shares of the Related
Corporation that are flow-through shares and the
renunciation of Canadian Exploration Expense to the
Issuer in respect of such Qualified Expenditures; and
(ii) the Related Corporation will, on or before the date
upon which any renunciation of Canadian Exploration
Expense is made by the Issuer pursuant to this
Agreement in respect of the Qualified Expenditures so
incurred by the Related Corporation, renounce to the
Issuer pursuant to subsection 66(12.6) of the INCOME
TAX ACT in Prescribed Form, with effective date on or
before the effective date of the renunciation so made
by the Issuer, Canadian Exploration Expense in an
amount not less than the amount so renounced by the
Issuer not subject to any reduction under subsection
66(12.73) of the INCOME TAX ACT; and
(j) the Issuer will not, other than as required by this Agreement,
renounce any Canadian Exploration Expense or otherwise do
anything that will reduce its cumulative Canadian Exploration
Expense until it has renounced to the Purchaser the full
amount of Qualified Expenditures required to be so renounced
pursuant to this Agreement.
3.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties contained in this Section will survive the
Closing.
15
4. WITHDRAWAL OF SUBSCRIPTION AND CONTRACTUAL RIGHTS
The Purchaser reserves the right to withdraw this subscription and to terminate
its obligations hereunder at any time before Closing.
5. CLOSING
5.1 The Purchaser acknowledges that, although Purchased Securities
may be issued to other purchasers under the Private Placement concurrently with
the Closing, there may be other sales of Purchased Securities under the Private
Placement, some or all of which may close before or after the Closing. The
Purchaser further acknowledges that there is a risk that insufficient funds may
be raised on the Closing to fund the Issuer's objectives described in the
Offering Memorandum, if any, and that further closings may not take place after
the Closing.
5.2 On or before the end of the fifth business day before the
Closing Date, the Purchaser will deliver to the Issuer the Subscription
Agreement and all applicable schedules and required forms, duly executed, and
payment in full for the total price of the Purchased Securities to be purchased
by the Purchaser.
5.3 After Closing, the Issuer will deliver to the Purchaser the
certificates representing the Purchased Securities purchased by the Purchaser
registered in the name of the Purchaser or its nominee.
6. TAX MATTERS
6.1 The Issuer will after the Closing, have the right to draw on
the Exploration Account and will apply 100% of the principal of the Exploration
Account to:
(a) carry out and complete a program (the "Program") of
exploration on a resource property or properties in Canada
beneficially owned by the Issuer or in which the Issuer has an
interest or the right to acquire an interest; or
(b) where permitted by this Agreement, cause a Related Corporation
to carry out and complete the Program on a resource property
or properties in Canada beneficially owned by the Related
Corporation or in which the Related Corporation has an
interest or the right to acquire an interest; or
(c) where permitted by this Agreement, carry out and complete the
Program in conjunction with a Related Corporation on a
resource property or properties in Canada beneficially owned
by the Issuer or the Related Corporation, or by the Issuer and
the Related Corporation or on any resource property in Canada
in which the Issuer or the Related Corporation has, or in
which the Issuer and the Related Corporation each have, an
interest or the right to acquire an interest.
6.2 In carrying out or causing a Related Corporation to carry out
a Program the Issuer will use its best efforts to incur, or
cause a Related Corporation to incur, after the Closing but on
or before:
(a) the expiry of the 60th day after the end of the year in which
this Agreement was made, if the Issuer and the Purchaser are
dealing at "arm's length", as that term is defined in the
INCOME TAX ACT; or
(b) the end of the year in which this Agreement was made if the
Issuer and the Purchaser are not dealing at "arm's length", as
that term is defined in the INCOME TAX ACT;
Canadian Exploration Expense totalling, in the aggregate, the principal of the
Exploration Account, not subject to any reduction under subsection 66(12.73) of
the INCOME TAX ACT, and if any balance of such principal remains in the
Exploration Account at that date, such balance will be spent by the Issuer to
fund Canadian Exploration Expense as
16
soon as is practical in the circumstances and, in any event, prior to the last
day of the 24th month following the date of this Agreement.
6.3 The Issuer will use its best efforts to renounce to the
Purchaser pursuant to subsection 66(12.6) and, where
applicable, subsection 66(12.66) of the INCOME TAX ACT in
Prescribed Form, not later than:
(a) March 31 in the year following the year of this Agreement if
the Issuer and the Purchaser are dealing at "arm's length", as
that term is defined in the INCOME TAX ACT; and
(b) January 30 in the year following the year of this Agreement if
the Issuer and the Purchaser are not dealing at "arm's
length", as that term is defined in the INCOME TAX ACT;
and, in any event, will renounce with an effective date or effective dates after
the Closing and not later than December 31 in the second year following year of
this Agreement, Canadian Exploration Expense in the aggregate amount equal to
the principal of the Exploration Account not subject to any reduction under
subsection 66(12.73) of the INCOME TAX ACT. Any unrenounced balance remaining in
the Exploration Account shall be renounced effective on or before the last day
of the 24th month following the date of this Agreement. In the case of any such
renunciations, the Issuer shall concurrently file, in Prescribed Form and within
the time limits provided for such purpose, with the Minister of Finance, all
forms and other documents required to give full effect to such renunciation for
the purposes of the INCOME TAX ACT, and deliver copies of all such forms and all
other documents as so filed to the Purchaser. For the purposes of determining
the extent to which the portion of the proceeds allocated to the flow-through
Shares has been the subject of renunciation under the INCOME TAX ACT, the total
amount spent from the Exploration Account on Canadian Exploration Expense shall
be allocated among the Purchaser and those other persons who have contributed to
the Exploration Account on a basis pro rata to the relative amounts of their
respective contributions to the Exploration Account.
6.4 If, before the Issuer renounces the full amount of Qualified
Expenditures to the Purchaser in accordance with section 6.3 of this Agreement,
the Issuer proposes to effect an amalgamation, merger or reorganization which
will or may impair the ability of the Issuer to renounce Qualified Expenditures
incurred after such amalgamation, merger or reorganization to the Purchaser, the
Issuer:
(a) will immediately before the amalgamation, merger or
reorganization, renounce to the Purchaser, in accordance with
subsection 66(12.6) and, where applicable, 66(12.66) of the
INCOME TAX ACT, all Qualified Expenditures incurred by the
Issuer to that time that have not been previously so
renounced; and
(b) will, or will cause and procure that any successor to the
Issuer will, immediately after the amalgamation, merger or
reorganization, execute and deliver a novation of this
Agreement in substantially the same form as this Agreement and
use its best efforts to ensure that an amount equal to the
portion of the proceeds allocated to the flow-through Shares,
less the aggregate of all amounts previously renounced to the
Purchaser in accordance with section 6.3 of this Agreement,
will be validly and effectively renounced to the Purchaser
effective on or before December 31 in the second year
following the date of this agreement.
7. USE OF PERSONAL INFORMATION
7.1 The Purchaser (on its own behalf and, if applicable, on behalf
of any person for whose benefit the Purchaser is subscribing) acknowledges and
consents to the fact the Issuer is collecting the Purchaser's (and any
beneficial purchaser's) personal information for the purpose of completing the
Purchaser's subscription. The Purchaser (on its own behalf and, if applicable,
on behalf of any person for whose benefit the Purchaser is subscribing)
acknowledges and consents to the Issuer retaining the personal information for
as long as permitted or required by applicable law or business practices. The
Purchaser (on its own behalf and, if applicable, on behalf of any person for
whose benefit the Purchaser is subscribing) further acknowledges and consents to
the fact the Issuer may be required by applicable securities laws, stock
exchange rules, and Investment Dealers Association rules to provide
17
regulatory authorities any personal information provided by the Purchaser
respecting itself (and any beneficial purchaser). The Purchaser represents and
warrants that it has the authority to provide the consents and acknowledgements
set out in this paragraph on behalf of all beneficial purchasers.
7.2 The Purchaser hereby acknowledges and consents to: (i) the
disclosure by the Purchaser and the Issuer of Personal Information (defined in
section 9.5) concerning the Purchaser to the Commissions or other regulatory
authority, or to the Exchange and its affiliates, authorized agent, subsidiaries
and divisions; and (ii) the collection, use and disclosure of Personal
Information by the Exchange for the following purposes (or as otherwise
identified by the Exchange, from time to time):
(a) to conduct background checks;
(b) to verify the Personal Information that has been provided
about the Purchaser;
(c) to consider the suitability of the Purchaser as a holder of
securities of the Issuer;
(d) to consider the eligibility of the Issuer to continue to list
on the Exchange;
(e) to provide disclosure to market participants as the security
holdings of the Issuer's shareholders, and their involvement
with any other reporting issuers, issuers subject to a cease
trade order or bankruptcy, and information respecting
penalties, sanctions or personal bankruptcies, and possible
conflicts of interest with the Issuer;
(f) to detect and prevent fraud;
(g) to conduct enforcement proceedings; and
(h) to perform other investigations as required by and to ensure
compliance with all applicable rules, policies, rulings and
regulations of the Exchange, securities legislation and other
legal and regulatory requirements governing the conduct and
protection of the public markets in Canada.
7.3 The Purchaser also acknowledges that: (i) the Exchange also
collects additional Personal Information from other sources, including
securities regulatory authorities in Canada or elsewhere, investigative law
enforcement or self-regulatory organizations, and regulations service providers
to ensure that the purposes set forth above can be accomplished; (ii) the
Personal Information the Exchange collects may also be disclosed to the agencies
and organizations referred to above or as otherwise permitted or required by
law, and they may use it in their own investigations for the purposes described
above; (iii) the Personal Information may be disclosed on the Exchange's website
or through printed materials published by or pursuant to the direction of the
Exchange; and (iv) the Exchange may from time to time use third parties to
process information and provide other administrative services, and may share the
information with such providers.
7.4 If the Purchaser is resident in Ontario, the public official
who can answer questions about the Ontario Securities Commissin's indirect
collection of Personal Information is the Administrative Assistant to the
Director of Corporate Finance, Ontario Securities Commission, Suite 1903, Box
00, 00 Xxxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx, X0X 0X0, Telephone 000-000-0000.
7.5 Herein, "Personal Information" means any information about the
Purchaser required to be disclosed to the Commission or the Exchange, whether
pursuant to a Commission or Exchange form or a request made by a Commission or
the Exchange, including the Corporate Placee Registration Form attached hereto.
8. MISCELLANEOUS
8.1 The Purchaser agrees to sell, assign or transfer the
Securities only in accordance with the requirements of applicable securities
laws and any legends placed on the Securities as contemplated by the
Subscription Agreement.
8.2 The Purchaser hereby authorizes the Issuer to correct any
minor errors in, or complete any minor information missing from any part of the
Subscription Agreement and any other schedules, forms, certificates or documents
executed by the Purchaser and delivered to the Issuer in connection with the
Private Placement.
8.3 The Issuer may rely on delivery by fax machine of an executed
copy of this subscription, and acceptance by the Issuer of such faxed copy will
be equally effective to create a valid and binding agreement between the
Purchaser and the Issuer in accordance with the terms of the Subscription
Agreement.
8.4 Without limitation, this subscription and the transactions
contemplated by this Agreement are conditional upon and subject to the Issuer's
having obtained such regulatory approval of this subscription and the
transactions contemplated by this Agreement as the Issuer considers necessary.
8.5 This agreement is not assignable or transferable by the
parties hereto without the express written consent of the other party to this
Agreement.
8.6 Time is of the essence of this Agreement and will be
calculated in accordance with the provisions of the INTERPRETATION ACT (British
Columbia).
8.7 Except as expressly provided in this Agreement and in the
agreements, instruments and other documents contemplated or provided for in this
Agreement, this Agreement contains the entire agreement between the parties with
respect to the Securities and there are no other terms, conditions,
representations or warranties whether expressed, implied, oral or written, by
statute, by common law, by the Issuer, or by anyone else.
8.8 The parties to this Agreement may amend this Agreement only in
writing.
8.9 This Agreement enures to the benefit of and is binding upon
the parties to this Agreement and their successors and permitted assigns.
8.10 A party to this Agreement will give all notices to or other
written communications with the other party to this Agreement concerning this
Agreement by hand or by registered mail addressed to the address given on page
1.
8.11 This Agreement is to be read with all changes in gender or
number as required by the context.
8.12 This Agreement will be governed by and construed in accordance
with the internal laws of British Columbia (without reference to its rules
governing the choice or conflict of laws), and the parties hereto irrevocably
attorn and submit to the exclusive jurisdiction of the courts of British
Columbia with respect to any dispute related to this Agreement.
END OF GENERAL PROVISIONS
END OF SUBSCRIPTION AGREEMENT
18
