EXHIBIT 4.98
This is page 1 of 21 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 10.
Page 2 of 21
PRIVATE PLACEMENT
FLOW-THROUGH SUBSCRIPTION AGREEMENT
TO: XXXXXX GOLD CORP. (the "Issuer"), of Vancouver, B.C.
Subject and pursuant to the terms set out in the Terms on pages 13 to 21, the
General Provisions on pages 16 to 25 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
--------------------------------------------------------------------------------
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(Name of Subscriber)
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Account Reference (if applicable):
By:
---------------------------------
Authorized Signature
By signing, the Purchaser agrees 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.
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(Official Capacity or Title - if the Subscriber is not an individual)
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(Name of individual whose signature appears above if different than the name of
the subscriber printed above.)
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(Subscriber's Address, including Municipality and Province)
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(Telephone Number) (Email Address)
ACCOUNT REGISTRATION INFORMATION:
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(Name)
(Account Reference, if applicable)
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(Address, including Postal Code)
Number of Flow-Through Units: X $0.10
-------------------------
=
Aggregate Subscription Price:
--------------------------
(the "SUBSCRIPTION PRICE")
SOCIAL INSURANCE NUMBER
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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 OR INDIRECTLY,
IF ANY:
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DELIVERY INSTRUCTIONS AS SET FORTH BELOW:
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(Name)
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(Account Reference, if applicable)
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(Address)
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(Contact Name) (Telephone Number)
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 [ ]
The Company hereby accepts the subscription for Units as set forth herein
(including all applicable schedules) this day of December, 2005.
The Company hereby accepts the subscription for Units as set forth herein
(including all applicable schedules) this day of August, 2005.
XXXXXX GOLD CORP.
Per:
---------------------------------------------
Authorized Signing Officer
By signing this acceptance, the Issuer agrees to be bound by the Terms on pages
3 to 5, the General Provisions on pages 16 to 25 and the other schedules and
appendixes incorporated by reference.
Page 3 of 21
TERMS
REFERENCE DATE OF THIS AGREEMENT November 30, 2005 (the "Agreement Date")
THE OFFERING
THE ISSUER XXXXXX GOLD CORP.
THE OFFERING The offering consists of:
(a) flow-through units (the "FT Units") comprised of
flow-through shares and non flow-through warrants at
a price of $0.10 per FT Unit; and
(b) non flow-through units (the "Units") comprised of non
flow-through shares and non flow-through warrants at
a price of $0.10 per Unit.
PURCHASED The "Purchased Securities" herein are FT Units. Each FT Unit
SECURITIES 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 $0.10 per Warrant Share at any time until the
close of business on the day which is 24 months from the date
of issue of the Warrant.
PRICE CAD $0.10 per FT 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.
SELLING The FT Units may be sold in British Columbia, Ontario and in
JURISDICTIONS 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).
Page 4 of 21
RESALE The Securities will be subject to a four month hold period
RESTRICTIONS that starts to run on Closing.
AND LEGENDS
(ALL PURCHASERS) 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 In the Subscription Agreement, the following words have the
DEFINITIONS 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 The Issuer is incorporated under the laws of British Columbia.
ORGANIZATION
AUTHORIZED The authorized capital of the Issuer consists of an unlimited
CAPITAL number of common shares without par value.
STOCK EXCHANGE Shares of the Issuer are listed on the TSX Venture Exchange
LISTINGS (the "Exchange").
"SECURITIES The "Securities Legislation Applicable to the Issuer" are the
LEGISLATION SECURITIES ACT (British Columbia) and the SECURITIES ACT
APPLICABLE TO (Alberta) and the "Commissions with Jurisdiction over the
THE ISSUER" Issuer" are the British Columbia Securities Commission and the
Alberta Securities Commission.
END OF TERMS
Page 5 of 21
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
____ 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
Page 6 of 21
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 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
____ 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
Page 7 of 21
____ 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 _______________ 2005.
X
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Signature of individual (if Purchaser IS an individual)
X
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Authorized signatory (if Purchaser is NOT an individual)
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Name of Purchaser (PLEASE PRINT)
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Name of authorized signatory (PLEASE PRINT)
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Official capacity of authorized signatory (PLEASE PRINT)
Page 8 of 21
PROVISIONS APPLICABLE TO A PURCHASERS RESIDENT IN
ONTARIO AND BRITISH COLUMBIA
APPLICABLE EXEMPTIONS
IN ADDITION to the representations and warranties in the General Provisions (on
pages 13 to 21), the Purchaser represents and warrants to the Issuer that, as at
the Agreement Date and at the Closing, the Purchaser satisfies one or more of
the following categories:
(a) "ACCREDITED INVESTOR" (S. 2.3, NATIONAL INSTRUMENT 45-106):
the Purchaser is an Accredited Investor and it is purchasing
the Purchased Securities as principal or, if not purchasing
the Purchased Securities as principal, it is duly authorized
to enter into this subscription and to execute all
documentation in connection with the purchase on behalf of
each beneficial purchaser, it acknowledges that the Issuer may
in the future be required by law to disclose on a confidential
basis to securities regulatory authorities the identity of
each beneficial purchaser of Purchased Securities for whom it
may be acting, and it is acting as agent for one or more
disclosed principals, each of which principals is purchasing
as principal for its own account, not for the benefit of any
other person, and not with a view to the resale or
distribution of all or any of the Purchased Securities and
each of which principals is an Accredited Investor;
(b) "FAMILY, FRIENDS AND BUSINESS ASSOCIATES" (S. 2.5, NATIONAL
INSTRUMENT 45-106): the Purchaser is a person or company who
is purchasing the Purchased Securities as principal as is:
(i) a director, executive officer or control person of
the Issuer, or an affiliate of the Issuer;
(ii) 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;
(iii) 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;
(iv) 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;
(v) 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;
(vi) 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;
Page 9 of 21
(vii) a parent grandparent, brother, sister or child of a
spouse of a founder of the Issuer;
(viii) 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
(ix) 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).
ADDITIONAL REPRESENTATIONS
IN ADDITION to the representations and warranties in the General Provisions (on
pages 13 to 21), the Purchaser also represents and warrants to the Issuer that,
as at the Agreement Date and at the Closing:
(a) the Purchaser is not a "control person" of the Issuer as
defined in the SECURITIES ACT (B.C.) or SECURITIES ACT
(Ontario), will not become a "control person" by virtue of
this purchase of any of the Securities, and does not intend to
act in concert with any other person to form a control group
of the Issuer;
(b) the offer was not made to the Purchaser when the Purchaser was
in the United States and, at the time the Purchaser's buy
order was made to the Issuer, the Purchaser was outside the
United States;
(c) the Purchaser is not a U.S. Person;
(d) the Purchaser is not and will not be purchasing Purchased
Securities for the account or benefit of any U.S. Person.
Page 10 of 21
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) with the Exchange.
1. Placee Information:
(a) Name:
-----------------------------------------------------
(b) Complete Address:
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(c) Jurisdiction of Incorporation or Creation:
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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
Page 11 of 21
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).
Dated at on _________________, 2005.
X
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(Name of Purchaser - PLEASE PRINT)
X
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(Authorized Signature)
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(Official Capacity -PLEASE PRINT)
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Name of authorized signatory (PLEASE PRINT)
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(Name of individual whose signature appears above -
PLEASE PRINT)
THIS IS NOT A PUBLIC DOCUMENT
Page 12 of 21
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 _________________, 2005.
X
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(Name of Purchaser - PLEASE PRINT)
X
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(Authorized Signature)
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(Official Capacity -PLEASE PRINT)
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Name of authorized signatory (PLEASE PRINT)
-------------------------------------------------------
(Name of individual whose signature appears above -
PLEASE PRINT)
THIS IS NOT A PUBLIC DOCUMENT
Page 13 of 21
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 13 to 21 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 5) 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 5) 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 13 to 21;
(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;
Page 14 of 21
(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) "Subscription Agreement" means the first (cover)
page, the Terms on pages 3 to 5, the General
Provisions on pages 13 to 21 and the other schedules
and appendixes incorporated by reference; and
(w) "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;
Page 15 of 21
(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;
Page 16 of 21
(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) this subscription has not been solicited in any other
manner contrary to the Applicable Legislation or the
1933 Act;
(e) the Purchaser is at arm's length (as that term is
customarily defined) with the Issuer;
(f) 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;
(g) 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;
(h) 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;
(i) 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;
(j) 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;
(k) 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;
(l) 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;
(m) 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
(n) 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.
Page 17 of 21
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 13 to 21, the General Provisions on pages
16 to 25 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 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 13 to 21, the General Provisions on pages
16 to 25 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
Page 18 of 21
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;
(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 properties are in good
standing under the applicable laws of the
jurisdictions in which they are situated;
(i) all expenditures renounced by the Issuer to the
Purchaser pursuant to this Agreement will be Canadian
Exploration Expense;
(j) 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;
(k) 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;
(l) 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;
(m) 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;
(n) 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;
(o) 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
(p) 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.
Page 19 of 21
3.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties contained in this Section will survive the
Closing.
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.
5.4 After Closing, the Issuer will deposit that portion of the
proceeds to be allocated as flow-through Shares upon
conversion of the FT Units in an interest bearing account (the
"Exploration Account") with a Canadian chartered bank, and all
interest earned xxxxxxx will accrue to the benefit of the
Company.
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:
Page 20 of 21
(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 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.
Page 21 of 21
7. MISCELLANEOUS
7.1 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.
7.2 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.
7.3 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.
7.4 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.
7.5 This agreement is not assignable or transferable by the
parties hereto without the express written consent of the
other party to this Agreement.
7.6 Time is of the essence of this Agreement and will be
calculated in accordance with the provisions of the
INTERPRETATION ACT (British Columbia).
7.7 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.
7.8 The parties to this Agreement may amend this Agreement only in
writing.
7.9 This Agreement enures to the benefit of and is binding upon
the parties to this Agreement and their successors and
permitted assigns.
7.10 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.
7.11 This Agreement is to be read with all changes in gender or
number as required by the context.
7.12 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
