EXHIBIT 10.2
(REFERENCE DATE: FEBRUARY 5TH, 2007)
WORLDSTAR ENERGY, CORP. (THE "COMPANY")
OUTSIDE US TRANSACTION
SECURITIES SUBSCRIPTION AGREEMENT
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION ("SEC") UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") OR THE SECURITIES COMMISSION OF ANY STATE OR UNDER ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S.
PERSONS (AS DEFINED HEREIN) WITHOUT REGISTRATION UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS, UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE. THIS
SUBSCRIPTION AGREEMENT DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.
This Subscription Agreement (this "Agreement") when executed by the undersigned
(the "Subscriber") and the Company is made in connection with the subscription
by the Subscriber for the number of shares of common stock (the "Securities"),
no par value of WorldStar Energy, Corp., a company organized under the laws of
the State of Nevada (the "Company"). The Company is offering the Securities to
the Subscriber, (per Term Sheet attached as Exhibit A) at the price (the
Purchase Price") of $0.25 per Common Share (all figures herein are US dollars) .
Completion of the sale of the Securities hereunder will occur at the Company's
offices on a date (the "Closing date") which will be determined by the Company
and occur within 3 days of (i) the date of receipt of this Agreement duly
completed and executed by the Subscriber together with confirmation that funds
equal to the number of Subscribed Shares times the Purchase Price (the Total
Purchase Price") has been paid to the Company's subsidiary Bulgan Gold
Investments Ltd. ("BGI"), a Hong Kong corporation and (2) the receipt of
executed Subscription Agreements from other Subscribers, which when aggregated
with this agreement, will provide for the issuance and sale of total 22 million
Common Shares representing cash proceeds of $5.5 million received by BGI.
1. EXEMPT OFFERING. The Company is offering the Securities pursuant to an
exemption from the registration requirements of the Act to parties who are not
U.S. Persons as defined in Rule 902(k) of Regulation S ("Regulation S")
promulgated under the United States Securities Act of 1933 (the "Act"). The
Subscriber hereby subscribes for the above number of Securities in consideration
for the payment of $025 per Common Shares such aggregate amount being herein the
Total Purchase Price such amount being payable to BGI.
..;
2. REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER. The Subscriber represents
and warrants to and covenants with the Company as follows:
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(a) The Subscriber, if a corporation, partnership, trust or other legal
entity has been duly formed and validly exists in good standing under
the laws of its jurisdiction of formation set forth on the signature
page to this Agreement or is an individual not a citizen or resident of
the United States. The Subscriber is not organized under the laws of the
United States, is not a "U.S. Person" as that term is defined in Rule
902(k) of Regulation S ("Regulation S"), is not a "distributor" as that
term is defined in Rule 902(d) of Regulation S and is not an "affiliate"
of the Company as that term is used in regulations promulgated under the
Act, nor associated with any individual or entity that may be deemed an
"affiliate" of the Company as of the date hereof.
(b) The Subscriber was not formed for the purpose of investing in
Regulation S securities or formed for the purpose of entering into this
Agreement and investing in the Securities of the Company. The Subscriber
is not registered as an issuer under the Securities Act and is not
required to be registered with the U.S. Securities and Exchange
Commission under the Investment Company Act of 1940, as amended. The
Subscriber is entering into this Agreement and is participating in the
offering for its own account, and not on behalf of any U.S. Person as
defined in Rule 902(k) of Regulation S.
(c) No offer to enter into this Agreement has been made by the Company
to the Subscriber in the United States other than as permitted in the
case of an account managed by a professional fiduciary resident in the
United States within the meaning of Section 902(k)(2) of Regulation S.
At the times of the offer and execution of this Agreement and, to the
best knowledge of the Subscriber, at the time the offering originated,
the Subscriber was located and resident outside the United States, other
than as permitted in the case of an account managed by a professional
fiduciary resident in the United States within the meaning of Section
902(k)(2) of Regulation S.
(d) Neither the Subscriber, nor any of its affiliates, nor any person
acting on its behalf or any behalf of on such affiliate has engaged or
will engage in any activity undertaken for the purpose of, or that
reasonably could be expected to have the effect of, conditioning the
markets in the United States for the Securities or for any securities
that are convertible into or exercisable for the Common Stock of the
Company, including but not limited to effecting any sale or short sales
of the Company's securities through the Subscriber or any of its
affiliates prior to the expiration of any restricted period contained in
Regulation S (any such activity being defined herein as a "Directed
Selling Effort"). To the best knowledge of the undersigned, this
Agreement and the transactions contemplated herein are not part of a
plan or scheme to evade the registration provisions of the Act, and the
Securities are being purchased for investment purposes by the
Subscriber. The Subscriber and, to the best knowledge of the Subscriber,
each distributor, if any, participating in this offering of Securities
have agreed that all offers and sales of any Securities included in the
offering prior to the date hereof and through the expiration of the any
restricted period set forth in Rule 903 of Regulation S (as the same may
be amended from time to time hereafter) shall not be made to U.S.
Persons and shall otherwise be made in compliance with the provisions of
Regulation S and any other applicable provisions of the Securities Act.
The Subscriber and its representatives have not conducted any Directed
Selling Effort as that term is used and defined in Rule 902 of
Regulation S and will not engage in any such Directed Selling Effort
within the United States through the expiration of any restricted period
set forth in Rule 903 of Regulation S.
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(e) The Subscriber acknowledges that the Subscriber has been furnished
with the Summary of Principal Offering Terms, attached hereto as Exhibit
A, which sets forth certain of the relevant terms of this investment.
The Company agrees hereby to waive the accelerated expiry provisions
during the period, the Subscriber's Shares or Warrant Shares remain
subject to a hold period or other restriction under the laws of the
Subscriber's jurisdiction of residence. The Subscriber acknowledges that
the Company has made available to Subscriber all of the Company's annual
reports and reports on Form 10-K filed with the SEC pursuant to the
United States Securities Exchange Act of 1934, as amended (the "Exchange
Act") since January 1, 2000, and all press releases of the Company
issued subsequent to the date of the most recent of such reports,
through the date hereof, as well as such other documents, materials and
information as the Subscriber deems necessary or appropriate for
evaluating an investment in the Company. The Subscriber confirms that
the Subscriber has had the opportunity to ask questions of, and receive
answers from, the Company and persons acting on its behalf concerning
the terms and conditions of the offering and the information contained
in such materials, and all such questions have been answered to the
Subscriber's full satisfaction. The Subscriber acknowledges that the
Company has not and need not provide a prospectus, offering memorandum
or other specific disclosure document in connection with this
Subscription.
(f) The Subscriber has such experience in business and financial matters
that it is capable of evaluating merits and risks of an investment in
the Securities and determining the suitability of its investment.
(g) The Subscriber is not a resident or subject to the laws of Ontario;
(h) The Subscriber is purchasing the Securities beneficially for
himself/herself as principal, or is a trust company, an insurer or a
portfolio manager which is purchasing the Securities for accounts that
are fully managed by the Subscriber.
(i) The Subscriber confirms that no person has made any written or oral
representation to the Subscriber:
(i) that any person will resell or repurchase the Securities;
(ii) relating to the future price or value of the Securities;
(iii) that the Securities will be listed and posted for trading on
a stock exchange or that application has been made to list and post
the Securities for trading on a stock exchange, other than the OTC
Bulletin Board; and
(iv) the Subscriber is ordinarily resident at the address set out
in this subscription.
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(j) The Subscriber will promptly notify the Company of any material
change in any representation or warranty of the Subscriber in this
Agreement between the time this Agreement is made and the completion of
the purchase and sale of the Securities.
(k) The Subscriber is not a resident of, and will not make any direct
selling or marketing efforts with respect to the Securities within,
Canada.
(l) The Subscriber understands and acknowledges that an investment in
the Securities involves a high degree of risk, including a possible
total loss of investment. The Subscriber represents that the Subscriber
is able to bear the economic risk of an investment in the Securities. In
making this statement the Subscriber hereby represents and warrants that
the Subscriber has adequate means of providing for the Subscriber's
current needs and contingencies, and that the Subscriber is able to
afford to hold the Securities for an indefinite period. Further, the
Subscriber represents that the Subscriber has no present need for
liquidity in the Securities; the Subscriber can afford a complete loss
of its investment in the Securities; and the Subscriber is willing to
accept such investment risks. The Subscriber confirms that the
Subscriber is acquiring the Securities solely for the Subscriber's own
account, for investment, and not with a view to the distribution or
resale of such Securities.
(m) The Subscriber understands that no United States federal or state
agency or Canadian federal or provincial agency or similar agency of any
other jurisdiction has passed upon or made any recommendation or
endorsement of the Company, this transaction or the Securities.
(n) The Subscriber knows of no public solicitation or advertisement of
an offer in connection with the proposed issuance and sale of the
Securities.
(o) The Subscriber covenants that Subscriber will not make any sale,
transfer or other disposition of the Securities in violation of the
Act, the Exchange Act, or the rules and regulations of the SEC
promulgated thereunder.
(p) The Subscriber acknowledges that the Securities have not been
registered under the Act, and are "restricted securities" within the
meaning of Rule 144 of the Act. Accordingly, the Subscriber undertakes
and agrees that it will not knowingly offer or sell the Securities in
the United States or to a U.S. Person unless the Securities are
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. The Subscriber understands that the Company
has no obligation or present intention of filing a registration
statement under the 1933 Act in respect of the Securities;
(q) The Subscriber acknowledges and agrees that the Subscriber will
offer, sell, pledge or otherwise transfer the Securities only (i) in
accordance with Rule 904 of Regulation S of the Act; (ii) pursuant to
registration under the Act; or (iii) pursuant to an exemption from the
registration requirements of the Act. The Subscriber further
acknowledges and agrees that the Securities and the Warrant Shares will
continue to be "restricted securities" within the meaning of Rule 144 of
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the Act notwithstanding any resale pursuant to Rule 904 of Regulation S.
The Subscriber acknowledges that this Agreement and the Securities have
not been registered under the Securities Act or qualified under state
securities laws of the United States and that the transferability hereof
and thereof within the jurisdiction of the United States is restricted
by the Securities Act as well as such state laws. The Subscriber
acknowledges that the Securities are being sold in reliance upon the
transaction exemption afforded by Regulation S in connection with an
offshore offer and sale of securities of the Company not within or
subject to the jurisdiction of the United States markets.
(r) The Subscriber has the full power and authority to execute, deliver
and perform this Agreement, and to perform its obligations hereunder.
This Agreement has been duly approved by all necessary action of
Subscriber, including any necessary shareholder and director approval,
has been executed by persons duly authorized by Subscriber, and
constitutes a valid and legally binding obligation of Subscriber,
enforceable in accordance with its terms except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or affecting creditors' rights generally
from time to time in effect, and except that equitable remedies may not
in all cases be available (regardless or whether enforceability is
considered in a proceeding at law or in equity) (collectively, the
"Remedies Exception"). The Subscriber hereby agrees that this once
executed and delivered by the Subscriber to the Company subscription is
irrevocable.
(s) The Subscriber acknowledges that Subscriber has been advised to
consult with its own attorney regarding legal matters concerning the
Company and this transaction, and to consult with its tax advisor
regarding the tax consequences of investing in the Securities.
(t) The Subscriber understands that all certificates evidencing the
Securities and the Warrant Shares will bear the following legend and any
other legend, if such legend or legends are reasonably required by the
Company to comply with state, federal or foreign law:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT
BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE "U.S. SECURITIES ACT") AND MAY NOT BE
EXERCISED, OFFERED OR SOLD WITHIN THE UNITED STATES OR TO OR
FOR THE ACCOUNT OF A "U.S. PERSON" EXCEPT (A) TO THE COMPANY,
(B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF
REGULATION S UNDER THE U.S. SECURITIES ACT IF APPLICABLE, (C)
INSIDE THE UNITED STATES (1) PURSUANT TO THE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (2)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT PURSUANT TO
THE U.S. SECURITIES ACT, AND THE HOLDER HAS PRIOR TO SUCH SALE
FURNISHED TO THE COMPANY AN OPINION OF COUNSEL, OF RECOGNIZED
STANDING, REASONABLY SATISFACTORY TO THE COMPANY. HEDGING
TRANSACTIONS MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH
THE U.S. SECURITIES ACT.
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(u) The Subscriber agrees not to engage in hedging transactions
regarding the Securities unless in compliance with the Act.
(v) The Subscriber acknowledges and agrees that the Company will refuse
to register any transfer of the Securities not completed in accordance
with the provision of Regulation S of the Act, pursuant to registration
under the Act or pursuant to an available exemption registration.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to and covenants with the Subscriber as follows:
(a) each of the Company and BGI is a corporation or other legal entity
duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or organization, as applicable;
(b) the certificates evidencing the Securities are in due and proper
legal form and have been duly authorized for issuance by the Company.
The Subscribed Shares, when issued and sold pursuant to this Agreement,
will be duly and validly issued, fully paid and non-assessable and none
of them will be issued in violation of any preemptive or other similar
right;
(c) all necessary corporate action has been duly and validly taken by
the Company to authorize the execution, delivery and performance of this
Agreement and the issuance and sale of the Securities by the Company;
(d) no approval, consent, order, authorization, designation, declaration
or filing of, by or with any regulatory, administrative or other
governmental body is necessary in connection with the execution and
delivery by the Company of this Agreement except for filings to made
after the Closing Date;
(e) no person, firm or corporation will be entitled to receive any
brokerage fee, commission or other payment from the Company in
connection with the consummation of the transactions contemplated
hereby, and the Company shall not make any such payment to any person,
firm or corporation; and
(f) the Company is a public reporting issuer in the US trading on the
OTC Bulletin Board and is not a reporting issuer in any province in
Canada.
4. COVENANTS OF THE COMPANY.
(a) The Company shall timely file all reports and other documents
required to be filed under the Exchange Act and, upon request, will
provide Subscriber copies of all such filings.
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(b) The Company shall take reasonable steps to protect the privacy of
the Subscriber and not disclose the terms of this Agreement or the
Warrant, however a publicly accessible filing identifying the Subscriber
and the amount invested may be required to be made.
5. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE COMPANY. The obligation
hereunder of the Company to issue and/or sell the Securities to the Subscriber
on the Closing Date is subject to the satisfaction, at or before the Closing
Date, of each of the conditions set forth below. These conditions are for the
Company's sole benefit and may be waived by the Company at any time in its sole
discretion:
(a) The Company shall have become the registered and beneficial owner of
at least 98% of BGI and there shall be no dilutive securities of BGI
which the Company does not own. The representations and warranties of
the Subscriber shall be true and correct as of the date hereof and as of
the Closing Date, as though made at such time (except for
representations and warranties as of an earlier date, which shall be
true and correct in all material respects
as of such date).
(b) The Subscriber shall have executed this Agreement and performed all
agreements and satisfied all conditions required to be performed or
satisfied by the Subscriber at or prior to the Closing Date.
(c) No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by
any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by
this Agreement.
6. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SUBSCRIBER. The
obligation hereunder of the Subscriber to acquire and pay for the Securities on
the Closing Date is subject to the satisfaction, at or before the Closing Date,
of each of the conditions set forth below. These conditions are for the
Subscriber's sole benefit and may be waived by the Subscriber at any time in its
sole discretion:
(a) The representations and warranties of the Company shall be true and
correct as of the date hereof and as of the Closing Date, as though made
at such time (except for representations and warranties as of an earlier
date, which shall be true and correct in all material respects as of
such date).
(b) The Company shall have performed all agreements and satisfied all
conditions required to be performed or satisfied by the Company at or
prior to the Closing Date.
(c) No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by
any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by
this Agreement.
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7. SURVIVAL OF TERMS. The Subscriber and the Company agree that the
representations, warranties and covenants set forth in this Agreement shall
survive the acceptance of the Agreement and the closing of the transactions.
8. ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the full and
entire understanding and agreement between the parties with regard to the
subject matter hereof and thereof, and no party shall be liable or bound to any
other party in any manner by any warranties, representations or covenants except
as specifically set forth herein or therein. Except as expressly provided
herein, neither this Agreement nor any term hereof may be amended, waived,
discharged or terminated other than by a written instrument signed by the party
against whom enforcement of any such amendment, waiver, discharge or termination
is sought.
9. NO ASSIGNMENT. The Subscriber agrees not to transfer or assign this
Agreement or any interest of the undersigned therein. This Agreement and the
representations and warranties contained herein shall be binding upon the heirs,
executors, administrators and other successors of the Subscriber, and this
Agreement shall inure to the benefit of and be enforceable by the Company and
its successors and assigns.
10. GOVERNING LAW. This Subscription Agreement shall be governed by, and
construed in accordance with, the laws of the State of Nevada, without regard to
principles of conflicts of law. Any action brought to enforce, or otherwise
arising out of, this Agreement shall be heard and determined in court sitting in
the State of Nevada.
11. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
12. SEVERABILITY. In the event that any provision of this Agreement becomes
or is declared by a court of competent jurisdiction to be illegal, unenforceable
or void, this Agreement shall continue in full force and effect without said
provision; provided that no such severability shall be effective if it
materially changes the economic benefit of this Agreement to any party.
13. TITLES. The titles used in this Agreement are used for convenience only
and are not to be considered in construing or interpreting this Agreement.
[SIGNATURE PAGE FOLLOWS]
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The undersigned Subscriber acknowledges that this subscription shall not be
effective unless and until accepted by the Company as indicated below.
Number of Common Shares Subscribed for:__________________________
By:
____________________________________
(Subscriber's signature)
____________________________________
(Signer's printed name)
____________________________________
(Signer's title, if applicable)
____________________________________
(Corporate entity name, if applicable,
and title of signatory)
Date:
____________________________________
Address:
____________________________________
____________________________________
____________________________________
Email:
____________________________________
THE SECURITIES WILL BE REGISTERED AS PER ABOVE UNLESS THE SUBSCRIBER OTHERWISE
DIRECTS THE COMPANY IN WRITING AT THE SAME TIME AS SIGNING THIS SUBSCRIPTION.
WorldStar Energy, Corp. hereby accepts the foregoing subscription.
WORLDSTAR ENERGY, CORP.
By:
____________________________________
Name: XXXXXXX XXX
____________________________________
Title: DIRECTOR
____________________________________
Date:
____________________________________
Address: WORLDSTAR ENERGY, CORP.
00 - 000 Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X. Xxxxxx X0X 0X0
EXHIBIT A
Summary of Principal Offering Terms
WORLDSTAR ENERGY, CORP.
SUMMARY OF PRINCIPAL OFFERING TERMS
December 15, 2006
NOTE: THESE TERMS DO NOT CONSTITUTE AN OFFER TO SELL ANY SECURITIES OR ANY FORM
OF BINDING CONTRACT, AND CREATE NO OBLIGATIONS OR THE BASIS OF ANY CLAIMS
AGAINST ANY PARTY BUT RATHER ARE SOLELY FOR THE PURPOSE OF DISCUSSING AN
OFFERING AND OUTLINING THE TERMS PURSUANT TO WHICH A DEFINITIVE AGREEMENT MAY
ULTIMATELY BE ENTERED INTO. THE CONSUMMATION OF THE OFFERING CONTEMPLATED HEREIN
BY THE PARTIES IS IN ALL RESPECTS CONTINGENT UPON AND SUBJECT TO, AMONG OTHER
THINGS, THE NEGOTIATION AND EXECUTION OF SATISFACTORY DOCUMENTATION, INCLUDING A
SUBSCRIPTION AGREEMENT CONTAINING, AMONG OTHER PROVISIONS, MUTUALLY AGREEABLE
CLOSING CONDITIONS, COVENANTS, INDEMNIFICATIONS AND REPRESENTATIONS AND
WARRANTIES.
(all amounts in US $)
COMPANY: WorldStar Energy, Corp., a corporation organized
under the laws of the State of Nevada, United
States of America (the "Company")
TOTAL OFFERING SIZE: Up to US$5.5 million (up to 22 million shares).
There is no minimum number of shares and no
maximum number offered. Up to 30 million
additional shares will be issued as part of the
acquisition transaction described below.
SECURITIES OFFERED: Common Stock $.001 value
OFFERING PRICE: $0.25 per Common Share .
ISSUANCE OF SECURITIES: The Company will issue the
appropriate number of Securities to the Subscriber
within three (3) business days following the
closing date as determined below. The Securities
will be registered and delivered as per the
Subscription Agreement
RESALE RESTRICTIONS: The Subscribed Shares will be issued subject to
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available registration exemptions in the
jurisdiction of the Investor which is outside of
US.
The Securities are being sold in reliance upon the
transaction exemption afforded by Regulation S
promulgated under the Securities Act of 1933 (the
"Act") in connection with an offshore offer and
sale of securities of the Company not within or
subject to the jurisdiction of the United States
markets. Securities will be "restricted
securities" within the meaning of the Act and may
be resold only (1) pursuant to Rule 904 of
Regulation S; (2) pursuant to registration under
the Act; or (3) pursuant to an exemption from the
registration requirements of the Act, and in each
case in accordance with state securities laws.
USE OF PROCEEDS: The use of proceeds of this offering will be used
to fund via loan and equity investment, the
acquisition of an approximately 50% indirect
interest in Mongolian mineral licenses through
subsidiary companies.
SUBSCRIPTION DOCUMENTS: The Company's Subscription Agreement is attached
to this Exhibit.
CLOSING DATE(S): The Closing will occur at a time determined by the
Company after receipt of signed subscriptions and
receipt of funds
CONTACT INFORMATION: XXXXXXX XXXXXX, PRESIDENT AT (000) 000-0000
Email: xxxxxxxxxxxx@xxxx.xx
