EXHIBIT 4.7
PACIFIC ENERGY RESOURCES LTD.
0000 X Xxxx X Xxxxxx
Xxxx Xxxxx, Xxxxxxxxxx 00000-0000
UNIT SUBSCRIPTION AGREEMENT
(CANADIAN RESIDENTS)
TO: Pacific Energy Resources Ltd. (the "Corporation")
AND TO: D & D Securities Company
AND TO: Octagon Capital Corporation (individually, the "Agent" or together,
the "Agents")
The undersigned (the "Subscriber") hereby irrevocably subscribes for and agrees
to purchase from the Corporation units of the Corporation (the "Units") in the
number set forth below at a subscription price equal to CAD$1.30 per Unit (the
"Share Price"). Each Unit consists of one (1) share of common stock of the
Corporation (a "Common Share") and one-half (1/2) Common Share purchase warrant
of the Corporation ("Warrants"). Each one (1) whole Warrant shall entitle the
holder to acquire one (1) Common Share (a "Warrant Share") at a price equal to
CAD$1.70 per Warrant Share for a period of three years from the date of issue of
the Units. The Subscriber agrees to be bound by the attached terms and
conditions of subscription (the "Terms and Conditions") and agrees that the
Agents and the Corporation, its agents and its attorneys may rely upon the
representations, warranties and covenants contained therein and in each of the
Subscriber Certificates (as hereinafter defined). This subscription, plus the
Terms and Conditions and each of the completed and executed Subscriber
Certificates are collectively referred to as the "Subscription Agreement" or the
"Agreement".
SUBSCRIPTION AND SUBSCRIBER INFORMATION
PLEASE PRINT ALL INFORMATION (OTHER THAN SIGNATURES), AS APPLICABLE,
IN THE SPACE PROVIDED BELOW
_____________________________________________
(Name of Subscriber - please print) NUMBER OF UNITS:____________________________
By:__________________________________________
(Authorized Signature)
AGGREGATE SUBSCRIPTION PRICE:_______________
_____________________________________________
(Official Capacity or Title - please print)
_____________________________________________ IF THE SUBSCRIBER IS SIGNING AS AGENT FOR A
(Please print name of individual whose signature PRINCIPAL AND IS NOT PURCHASING AS TRUSTEE OR
appears above if different than the name of the AGENT FOR ACCOUNTS FULLY MANAGED BY IT, COMPLETE
subscriber printed above.) THE FOLLOWING AND ENSURE THAT THE APPLICABLE
EXHIBIT(S) ARE COMPLETED ON BEHALF OF SUCH
_____________________________________________ PRINCIPAL:
(Subscriber's Address)
_____________________________________________
_____________________________________________ (Name of Principal)
(Subscriber's Address)
_____________________________________________
_____________________________________________ (Principal's Address)
(Telephone Number) (E-Mail Address)
_____________________________________________
_____________________________________________ (Social Insurance Number, Federal Corporate
(Social Insurance Number, Federal Corporate Tax Tax Account Number or Partnership Identification
Account Number or Partnership Identification Number)
Number)
THIS IS THE FIRST PAGE OF AN AGREEMENT COMPRISED OF 9 PAGES (NOT INCLUDING EXHIBITS 1 - 5).
REGISTER THE UNITS AS SET FORTH BELOW: DELIVER THE UNITS AS SET FORTH BELOW:
_____________________________________________ _____________________________________________
(Name) (Name)
_____________________________________________ _____________________________________________
(Account reference, if applicable) (Account reference, if applicable)
_____________________________________________ _____________________________________________
(Address) (Contact Name)
_____________________________________________ _____________________________________________
(Address) (Address)
_____________________________________________
(Address)
TYPE OF OWNERSHIP (CHECK ONE)
SUBSCRIBERS PRESENT HOLDINGS:
The Subscriber represents that securities of the Corporation presently owned
(beneficially, directly or indirectly) by the Subscriber are as follows (PLEASE
INDICATE "NIL" IF YOU DO NOT CURRENTLY OWN ANY SECURITIES OF THE CORPORATION):
NUMBER OR AMOUNT
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INDIRECT OWNERSHIP
TYPE OF SECURITIES PRESENTLY OWNED DIRECT OWNERSHIP (INCLUDING CONTROL
OR DIRECTION)
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ACCEPTANCE: The Corporation hereby accepts the subscription as set forth above
on the terms and conditions contained in this Subscription Agreement and the
Corporation represents and warrants to the Subscriber that the representations
and warranties made by the Corporation to the Agents in the Agency Agreement (as
defined herein) are true and correct in all material respects as of the AERA
Closing Deadline (as defined herein) (save and except as waived by the Agents)
and that the Subscriber is entitled to rely thereon and on the terms, conditions
and covenants contained in the Agency Agreement as if the Subscriber were a
party thereto.
_________________________, 2006
------------------------
PACIFIC ENERGY RESOURCES LTD. Subscription No:
By:_________________________________ ------------------------
THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK
TERMS AND CONDITIONS OF SUBSCRIPTION FOR UNITS
DEFINITIONS
1.1 In this Agreement, which includes the cover page and all of the
appendices, the following words have the following meanings unless
otherwise indicated:
(a) "Act" means Securities Act of 1933, as amended (the "1933 Act"), and
the rules and regulations promulgated thereunder;
(b) "AERA" means AERA Energy LLC;
(c) "AERA Closing" means the date on which all conditions to completion
of the closing under the Escrow Agreement have been satisfied;
(d) "AERA Closing Deadline" means not later than March 31, 2007 (unless
a later date is agreed to by the parties to the Escrow Agreement);
(e) "AERA Purchase and Sale Agreement" means the Purchase and Sale
Agreement between AERA and the Corporation which includes the
acquisition of certain offshore oil and gas fields including the
Eureka Platform located in Federal Waters in the San Xxxxx area,
California;
(f) "Agency Agreement" has the meaning ascribed to it in paragraph 6.4;
(g) "Agents" mean D & D Securities Company, as lead Agent, and Octagon
Capital Corporation, as co-Agent;
(h) "Closing" means the completion of the issue and sale of the Units to
the Subscriber hereunder;
(i) "Common Share" means a share of common stock in the capital of the
Corporation;
(j) "Corporation" means Pacific Energy Resources Ltd.;
(k) "Disclosure Document" has the meaning ascribed to it in paragraph
4.1(n);
(l) "Escrow Agent" means U.S. Bank National Association;
(m) "Escrow Agreement" means the Escrow Agreement by and among the
Corporation, X. Xxxx & Company, Laurus Master Fund, Ltd., Erato
Corp. and the Agent;
(n) "Exchange" means the Toronto Stock Exchange;
(o) "MMS" means the Minerals Management Service of the United States
Department of the Interior;
(p) "Offering" means this private placement;
(q) "Offering Memorandum" means the offering document of the Company
delivered to subscribers and prepared in accordance with Ontario
Securities Commission Rule 45-501;
(r) "Registration Rights Agreement" has the meaning ascribed to it in
paragraph 6.1;
(s) "Regulation S" means Regulation S of the 1933 Act;
(t) "SEC" means the United States Securities and Exchange Commission;
(u) "Securities" means collectively, the Common Shares and Warrants
comprising the Units and the Warrant Shares;
(v) "Subscriber" means the purchaser of Units hereunder;
(w) "Subscriber Certificates" means the Canadian accredited investor
certificate attached hereto as Exhibit "A" and the U.S. accredited
investor certificate attached hereto as Exhibit "B", collectively;
(x) "Units" means the units of the Corporation, each Unit consisting of
one (1) Common Share and one-half (1/2) Warrant;
(y) "U.S. Person" has the meaning attributed to it in Regulation S;
(z) "Warrants" means the Common Share purchase warrants of the
Corporation comprising part of the Units; and
(aa) "Warrant Shares" means the Common Shares issuable upon exercise of
the Warrants.
1.2 All capitalized terms in this Agreement not defined above have the
meanings ascribed to them in this Agreement.
2. PURCHASE AND SALE OF UNITS
2.1 The Common Shares and Warrants comprising the Units will be registered in
accordance with the registration instructions, and if no registration
instructions are provided, will be registered in the name of the
Subscriber.
2.2 Fractional Warrants will not be issued. Instead, the number of Warrants
issued to the Subscriber will be rounded down to the nearest whole number
of Warrants subscribed for pursuant to this Subscription Agreement.
2.3 The issue of the Units and the underlying securities will not restrict or
prevent the Corporation from obtaining any other financing, or from
issuing additional securities from time to time.
2.4 The Corporation shall have the right to reject this Subscription Agreement
if it reasonably believes for any reason that a Subscriber is not an
"accredited investor" within the meaning of Rule 501 of Regulation D
promulgated by the SEC as presently in effect, and, if a Subscriber is a
Canadian resident, that the Subscriber is not an "accredited investor"
within the meaning of applicable Canadian securities laws, or for any
other reason in its sole and absolute discretion acting reasonably.
Acceptance is evidenced only by execution of this Subscription Agreement
by the Corporation in the space provided above.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS BY THE CORPORATION
3.1 The Corporation hereby represents and warrants to the Subscriber (and
acknowledges that the Subscriber is relying thereon) that:
(a) the Corporation has the full corporate right, power and authority to
execute and deliver this Subscription Agreement and to issue the
Units, and at Closing the Common Shares and Warrants comprising the
Units will be duly and validly created, authorized and issued, and
all Warrant Shares issuable upon exercise of the Warrants will be
duly and validly authorized, allotted and reserved for issuance upon
exercise of the Warrants, and will, upon due exercise of the
Warrants, be issued as fully paid and non-assessable Common Shares;
(b) this Subscription Agreement, the Registration Rights Agreement, the
AERA Purchase and Sale Agreement and the Escrow Agreement, each
constitute a binding obligation of the Corporation enforceable in
accordance with its terms except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of
creditors' rights generally and as limited by laws relating to the
availability of specific performance, injunctive relief or other
equitable remedies;
(c) the execution and delivery of, and the performance of the terms of
this Subscription Agreement by the Corporation, including the issue
of the Common Shares and Warrants comprising the Units and the issue
of the Warrant Shares upon exercise of the Warrants, as the case may
be, does not and will not constitute a breach of or default under
the constating documents of the Corporation or any law, regulation,
order or ruling applicable to the Corporation or any agreement,
contract or indenture to which the Corporation is a party or by
which it is bound;
(d) the Corporation is a duly incorporated and validly subsisting
corporation under the laws of its jurisdiction of incorporation and
has full corporate power and authority to perform each of its
obligations as herein contemplated; and
(e) the Offering Memorandum contains full, true and plain disclosure
regarding the acquisition of certain offshore oil and gas fields
including the Eureka Platform located in Federal Waters in the San
Xxxxx area, California pursuant to the terms of the AERA Purchase
and Sale Agreement, all material facts and risks related thereto,
contains no untrue statement of a material fact and does not omit to
state a material fact that is required to be stated or that is
necessary to make a statement not misleading in light of the
circumstances in which it is made.
4. REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGEMENTS OF THE SUBSCRIBER
4.1 The Subscriber represents and warrants, as at the date of this Agreement
and at the AERA Closing, that:
(a) the Subscriber is purchasing the Units and the securities issuable
thereunder as principal for Subscriber's own account or for accounts
fully-managed by it, or for long-term investment, and not with a
view to, or for sale in connection with, the distribution thereof.
Subscriber has no present intention of selling, granting any
participation in, or otherwise distributing the Securities. The
Units and/or the securities issuable thereunder will not be resold
without registration under the Act and qualification under the
securities laws of all applicable states, unless such sale would be
exempt therefrom;
(b) the Subscriber is an "accredited investor" under Rule 501(a) of
Regulation D promulgated under the 1933 Act and if a Canadian
resident, the Subscriber is also an "accredited investor" as that
term is defined in National Instrument 45-106 PROSPECTUS AND
REGISTRATION EXEMPTIONS;
(c) the Subscriber has received, completed and returned to the
Corporation the Subscriber Certificates relating to the Subscriber's
general ability to bear the risks of an investment in the
Corporation and the Subscriber's suitability as an investor in a
private offering, and hereby affirms the correctness of the
Subscriber's answers in each of such Subscriber Certificates;
(d) the Subscriber (i) has adequate means of providing for his or her
current needs and possible personal contingencies, and has no need
for liquidity of his or her investment in the Corporation; (ii) can
bear the economic risk of losing his or her entire investment
herein; (iii) has such knowledge and experience in financial and
business matters that he or she is capable of evaluating the
relative risks and merits of this investment; and (iv) has an
overall commitment to investments which are not readily marketable
that is not disproportionate to his or her net worth and the
investment subscribed for herein will not cause such overall
commitment to become excessive;
(e) the Subscriber is aware that no prospectus has been prepared or
filed by the Corporation with any securities commission or similar
authority in connection with the Offering, and that:
(i) the Subscriber may be restricted from using most of the civil
remedies available under applicable securities legislation;
(ii) the Subscriber may not receive information that would
otherwise be required to be provided under applicable Canadian
securities legislation and the Corporation is relieved from
certain obligations that would otherwise be required to be
given if a prospectus were provided under applicable Canadian
securities legislation in connection with the Offering; and
(iii) the issue and sale of the Units to the Subscriber is subject
to such sale being exempt from the requirements of applicable
Canadian securities laws as to the filing of a prospectus;
(f) no prospectus or offering memorandum within the meaning of
applicable Canadian securities laws has been delivered to the
Subscriber in connection with the Offering, other than the Offering
Memorandum;
(g) the Subscriber's purchase of the Units has not been made through or
as a result of, and the distribution of the Units is not being
accompanied by and the Subscriber is not aware of, any advertisement
of the securities in printed media of general and regular paid
circulation, radio, television or telecommunications, including
electronic display (such as the Internet), or any other
advertisement or general solicitation with respect to the Units;
(h) no person has made to the Subscriber any written or oral
representation:
(i) that any person will resell or repurchase any of the
Securities;
(ii) that any person will refund the purchase price of the
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 a stock
exchange, other than the Exchange;
(i) none of the Units are being purchased by the Subscriber with
knowledge of any material fact about the Corporation that has not
been generally disclosed;
(j) it never has been represented, guaranteed or warranted to Subscriber
by the Corporation, its agents, or employees or any other person,
expressly or by implication, any of the following:
(i) the approximate or exact length of time that Subscriber will
be required to remain as owner of the Securities;
(ii) the profit or return, if any, to be realized as a result of
the Corporation's venture; or
(iii) that the past performance or experience on the part of the
Corporation or any affiliate, its agents, or employees or of
any other person, will in any way indicate the predictable
results of the ownership of the Securities or the overall
Corporation venture;
(k) while the Common Shares and Warrant Shares will be listed on the
Exchange, there is no trading market for the Warrants and no such
market is expected to develop;
(l) the Subscriber, if an individual, is at least twenty-one (21) years
of age;
(m) the Subscriber has no reason to anticipate any change in the
Subscriber's personal circumstances, financial or otherwise, which
may cause or require any sale or distribution by Subscriber of all
or any part of the Units subscribed for herein;
(n) the Subscriber has reviewed the documents (the "Disclosure
Documents") regarding the Corporation available on SEDAR
(xxx.xxxxx.xxx) and the Exchange's web site (xxx.xxx.xxx) carefully,
is fully familiar with and understands the contents thereof, and has
received no other written communication;
(o) the Subscriber confirms that all documents, records and books
pertaining to the Corporation and to the investment requested by the
Subscriber have been made available to the Subscriber and that the
Subscriber has been given an opportunity to make further inquiries
of the Corporation and its representatives in order to verify the
accuracy of the information contained in the Disclosure Documents
and has had the opportunity to review all facts concerning the
Corporation which the Subscriber deems pertinent;
(p) the Subscriber, if a partnership, corporation, trust, or other
entity, declares:
(i) the person executing this Subscription Agreement has the
necessary power and authority to do so; and
(ii) the Subscriber was not organized for the specific purpose of
acquiring the Units;
(q) the exhibits to this Agreement will be completed truthfully and with
reasonable diligence;
(r) as to the source of subscription funds,
(i) to the best of the Subscriber's knowledge, none of the
subscription funds used for the purchase of the Subscriber's
Units (A) have been or will be derived from or related to any
activity that is deemed criminal under the laws of the United
States, Canada or any other jurisdiction, or (B) are being
tendered on behalf of a person or entity who has not been
identified to the Subscriber; and
(ii) the Subscriber will promptly notify the Corporation if the
Subscriber discovers that any of the representations in above
subparagraph (r)(i) above ceases to be true, and to provide
the Corporation with appropriate information in connection
therewith;
(s) the Subscriber understands that the foregoing representations and
warranties are to be relied upon by the Corporation as a basis for
exemption of the sale of the Units under applicable Canadian
securities laws and the 1933 Act, and for other purposes;
(t) the Subscriber has had an opportunity prior to entering into this
Agreement to ask questions of and receive answers from the
Corporation concerning the terms and conditions of the Offering and
to obtain additional information that the Corporation possesses or
can acquire without unreasonable effort or expense necessary to
verify the accuracy of other information furnished by the
Corporation to Subscriber and considers necessary or appropriate for
deciding whether to purchase the Units;
(u) the Subscriber, if an individual, has the legal capacity to enter
into and execute this Agreement and to take all actions required
pursuant to this Agreement;
(v) the offer was not made to the Subscriber when the Subscriber was in
the United States and, at the time the Subscriber's buy order was
made to the Agents, the Subscriber was outside the United States;
(w) the Corporation's U.S. counsel, Xxxxx & Xxxxxx LLP, and its Canadian
counsel, Xxxxxx Xxxxxx, are acting solely for the Corporation, and
the Agents' counsel, Stikeman, Xxxxxx, Xxxxxx & Xxxxxxx LLP, is
acting solely for the Agents, in connection with the Offering and
the Subscriber may not rely upon either such counsel in any respect;
(x) the Subscriber is not a U.S. Person;
(y) the Subscriber is not and will not be purchasing Securities for the
account or benefit of any U.S. Person;
(z) the entering into of this Agreement and the transactions
contemplated hereby will not result in the violation of any of the
terms and provisions of any law applicable to, or the constating
documents of, the Subscriber or of any agreement, written or oral,
to which the Subscriber may be a party or by which the Subscriber is
or may be bound;
(aa) this Agreement has been duly executed and delivered by the
Subscriber and constitutes a legal, valid and binding agreement of
the Subscriber enforceable against the Subscriber;
(bb) the Subscriber warrants that the information herein provided to the
Corporation by the Subscriber is true and correct as of the date
hereof, and the Subscriber agrees to advise the Corporation, prior
to its acceptance of this Subscription, of any material change in
any such information; and
(cc) the Subscriber agrees that the representations and warranties of the
Subscriber set forth in this Section 4 shall survive the acceptance
of this subscription, in the event the subscription is accepted.
4.2 The Subscriber understands and acknowledges that:
(a) (on its own behalf and, if applicable, on behalf of each person on
whose behalf the Subscriber is contracting) that the Common Shares
and Warrants subscribed for by it hereunder form part of a larger
issuance and sale by the Corporation of up to US$85 million,
comprised of approximately 60,000,000 common shares and
approximately 30,000,000 warrants to be issued by the Corporation,
and funds will be available for use subject to the terms of the
Escrow Agreement; in addition, concurrent with this Offering, a debt
facility in the amount of US$55 million will be established to fund
the closing of the transactions under the AERA Purchase and Sale
Agreement and will issue warrants to the lender(s) under the debt
facility at the time of any draw-downs under the debt facility;
(b) no federal or state agency has made any finding or determination as
to the fairness of the offering of Units for investment or any
recommendation or endorsement of the Offering and no Canadian
securities commission or similar regulatory authority has reviewed
or passed on the merits of the Securities;
(c) the Subscriber acknowledges being told that the Corporation is
relying on an exemption from the requirements to provide the
Subscriber with a prospectus and to sell the Securities through a
person registered to sell securities under applicable Canadian
securities laws and, as a consequence of acquiring the Securities
pursuant to this exemption, certain protections, rights and remedies
provided by applicable Canadian securities legislation, including
statutory rights of rescission or damages, will not be available to
the Subscriber;
(d) the Securities have not been registered under the 1933 Act or
qualified under any state securities laws in reliance on exemptions
from registration 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;
(e) the Corporation will undertake to file a Registration Statement in
accordance with the terms of Section 6 hereof;
(f) there are U.S. restrictions on the Subscriber's ability to resell
the Securities and it is the responsibility of the Subscriber to
find out what those restrictions are and to comply with them before
selling any of the Securities;
(g) the offer and sale of the Units has been made, and the issuance of
the Securities (and Warrant Shares issued prior to the effectiveness
of a registration statement to be filed with regard to such
issuance) will be made, in reliance upon Regulation S and Regulation
D. Regulation S requires that, for a one (1) year "distribution
compliance period" (as defined in Regulation S), no offer or sale of
a Security or Warrant Share issued in reliance on Regulation S may
be made to a U.S. Person or for the account or benefit of a U.S.
Person. Specifically, the offer or sale of a Security or Warrant
Share issued in reliance on Regulation S, if made prior to the
expiration of the one-year "distribution compliance period," must be
made pursuant to the following conditions:
(i) The purchaser of the Securities or Warrant Shares certifies
that it is not a U.S. person and is not acquiring the
Securities or Warrant Shares for the account or benefit of any
U.S. person or is a U.S. person who purchased Securities or
Warrant Shares in a transaction that did not require
registration under the 1933 Act;
(ii) The purchaser of the Securities or Warrant Shares agrees to
resell such securities only in accordance with the provisions
of Regulation S, Rule 144, pursuant to registration under the
1933 Act, or pursuant to an available exemption from
registration; and agrees not to engage in hedging transactions
with regard to such Securities or Warrant Shares unless in
compliance with the 1933 Act;
(iii) The certificate(s) representing the Securities or Warrant
Shares contain(s) a legend to the effect that transfer is
prohibited except in accordance with the provisions of
Regulation S, pursuant to registration under the 1933 Act, or
pursuant to an available exemption from registration; and that
hedging transactions involving the Securities may not be
conducted unless in compliance with the 1933 Act; such legend
is set forth in Section 7 hereof;
Regulation S also requires that each Warrant bear a legend stating
that the Warrant and the securities to be issued upon its exercise
have not been registered under the 1933 Act and that the Warrant may
not be exercised by or on behalf of any U.S. Person unless
registered under the 1933 Act or an exemption from such registration
is available. Each person exercising a Warrant must provide the
Corporation with either (i) written certification that it is not a
U.S. Person and that the Warrant is not being exercised on behalf of
a U.S. Person, or (ii) a written opinion of counsel satisfactory to
the Corporation that the Warrant and the issuance of securities upon
exercise thereof has been registered under the 1933 Act and any
securities laws of all applicable states of the United States, or
are exempt from such registration requirements.
The Securities and Warrant Shares may be resold only in compliance
with Regulation S or pursuant to an effective registration statement
under the 1933 Act or an exemption from the registration
requirements of the 1933 Act. Rule 904 of Regulation S provides that
a resale of an outstanding security may be made pursuant thereto if
the offer and sale of the security are made in an "offshore
transaction" and if no directed selling efforts are made in the
United States with regard to the securities to be sold by the
seller, an affiliate of the seller, or any person acting on their
behalf. An offer or sale of securities is made in an "offshore
transaction" if the offer is not made to a person in the United
States and either (i) at the time the buy order is originated, the
buyer is outside the United States, or the seller and any person
acting on its behalf have good reason to believe that the buyer is
outside the United States and (ii) the transaction is executed in,
on or through the facilities of a designated offshore securities
market and neither the seller nor any person acting on its behalf
knows that the transaction has been prearranged with a buyer in the
United States. Offers and sales of securities specifically targeted
at identifiable groups of United States citizens abroad shall, in no
event, be deemed to be made in an offshore transaction. Rule 904 of
Regulation S imposes additional limitations on resales by dealers
and persons receiving selling concessions and affiliates of the
issuer.
If the Securities or any Warrant Shares are being sold under Rule
904 of Regulation S of the 1933 Act, and applicable state securities
laws, any legend may be removed by (i) providing a certification to
the Corporation to the effect set out in attached Exhibit D (or in
such other form as the Corporation may prescribe from time to time);
(ii) causing a broker, dealer or any other person receiving a
selling concession, fee or other remuneration in connection with
such resale to provide a certification to the Corporation to the
effect set out in attached Exhibit E (or in such other form as the
Corporation may prescribe from time to time); (iii) obtaining the
Corporation's signed acknowledgement that, at the time of the
resale, there is no "substantial U.S. market interest" (as defined
under Regulation S of the 0000 Xxx) and (iv) obtaining a legal
opinion of the Corporation's counsel that such legend is no longer
required under applicable requirements of the 1933 Act or state
securities laws. The Corporation may instruct its transfer agent not
to record a transfer without first being notified by the Corporation
that it is satisfied that such transfer is exempt from or not
subject to registration under the 1933 Act or state securities laws.
Under Rule 905 of Regulation S, because the Corporation is a U.S.
corporation, the Securities and any Warrant Shares will be deemed to
be "restricted securities" (as defined in Rule 144 of the 0000 Xxx)
and as such may be resold or otherwise transferred only in
accordance with Regulation S or pursuant to a registration under the
1933 Act or an exemption from the registration requirements of the
1933 Act; the Securities and any Warrant Shares will continue to be
deemed to be restricted securities, notwithstanding that they are
acquired by another purchaser in a resale transaction made pursuant
to Rule 901 or Rule 904 of Regulation S. Subject to approval of the
Exchange, the trading symbol for the Securities and any Warrant
Shares shall bear an "S" designation and the CUSIP number for the
Securities and any Warrant Shares will be a different CUSIP number
than the CUSIP number for currently outstanding common shares to
indicate that they are restricted securities. Restricted securities
may have significantly less liquidity than unrestricted securities
that do not bear such "S" designation.
Rule 144 under the 1933 Act permits limited public resales of
securities acquired in non-public offerings, subject to the
satisfaction of certain conditions. Under Rule 144 the conditions
include, among other things: the availability of certain current
public information about the issuer, the resale occurring not fewer
than one (1) year or two (2) years, as applicable, after the party
has purchased and paid for the securities to be sold, the sale being
through a broker in an unsolicited "broker's transaction" and the
amount of securities being sold during any three-month period not
exceeding specified volume limitations. The Corporation may not be
satisfying the current public information requirement of Rule 144 at
the time the Subscriber wishes to sell any of the Securities or
Warrant Shares, or other conditions under Rule 144 which are
required of the Corporation.
(h) the Subscriber acknowledges being told that the Securities may not
be sold or otherwise disposed of in Canada for a period of four
months from the date of distribution of the Units and may be subject
to additional resale restrictions if such sale or other disposition
would be a "control distribution", as that term is defined in
Multilateral Instrument 45-102 RESALE OF SECURITIES;
(i) the Subscriber acknowledges and agrees with the Corporation that the
Corporation shall refuse to register any transfer of the Securities
not made pursuant to registration under the 1933 Act, or pursuant to
an available exemption from registration under the 1933 Act
(including Regulation S) or, if applicable, pursuant to an available
prospectus exemption under Canadian securities laws;
(j) the Subscriber acknowledges that there are risks associated with the
purchase of the Securities and that the Subscriber is aware that
there is no government or other insurance covering the Securities;
(k) the Corporation may be required to provide applicable securities
regulatory authorities with a list setting forth the identities of
the beneficial purchasers of the Units and the Subscriber
acknowledges and agrees that it will provide, on request,
particulars as to the identity of such beneficial purchasers as may
be required by the Corporation in order to comply with the
foregoing;
(l) if required by applicable securities laws or the Corporation, the
Subscriber will execute, deliver and file, or assist the Corporation
in filing, such reports, undertakings and other documents with
respect to the issue and/or sale of the Units as may be required by
any securities commission, stock exchange or other regulatory
authority;
(m) by providing personal information to the Corporation, the Subscriber
and each person for whom it is contracting hereunder, is consenting
to the Corporation's collection, use and disclosure of that
information for the purposes of the subscription of Units and the
offering in general, for corporate governance purposes and to
contact the Subscriber as an investor. The Subscriber, and each
person for whom it is contracting hereunder, acknowledges that, from
time to time, the Corporation may be required to disclose such
personal information and, by providing such personal information to
the Corporation, the Subscriber and each person for whom it is
contracting hereunder, hereby expressly consents to such disclosure,
and the Subscriber and each person for whom it is contracting agrees
and acknowledges that the Corporation may use and disclose personal
information as follows:
(i) for internal use with respect to managing the relationships
between and contractual obligations of the Corporation and the
Subscriber and each person for whom it is contracting;
(ii) for use and disclosure for income tax related purposes,
including without limitation, where required by law,
disclosure to the Internal Revenue Service;
(iii) disclosure to securities regulatory authorities and other
regulatory bodies with jurisdiction with respect to reports of
trades and similar regulatory filings;
(iv) disclosure to a governmental or other authority to which the
disclosure is required by court order or subpoena compelling
such disclosure and where there is no reasonable alternative
to such disclosure;
(v) disclosure to professional advisers of the Corporation in
connection with the performance of their professional
services;
(vi) disclosure to any person where such disclosure is necessary
for legitimate business reasons and is made with the prior
written consent of the Subscriber and each person for whom it
is contracting;
(vii) disclosure to a court determining the rights of the parties
under this Agreement; or
(viii) for use and disclosure as otherwise required or permitted by
law;
(n) if the Subscriber is resident in or otherwise subject to the
securities laws applicable in the Province of Ontario, the
information provided by the Subscriber on the face page of this
Subscription Agreement identifying the name, address and telephone
number of the Subscriber, the number of Units being purchased
hereunder and the total purchase price as well as the date of
Closing and the exemption that the Corporation is relying on in
selling the Units to the Subscriber will be disclosed to the Ontario
Securities Commission, and such information is being indirectly
collected by the Ontario Securities Commission under the authority
granted to it under securities legislation. This information is
being collected for the purposes of the administration and
enforcement of the securities legislation of the Province of
Ontario. Each Subscriber hereby authorizes the indirect collection
of such information by the Ontario Securities Commission. In the
event the Subscriber has any questions with respect to the indirect
collection of such information by the Ontario Securities Commission,
the Subscriber should contact the Ontario Securities Commission,
Administrative Assistant to the Director of Corporate Finance at
(000) 000-0000 or in person or writing at Xxxxx 0000, Xxx 00, 00
Xxxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx X0X 0X0; and
(o) the Agents and/or their directors, officers, employees, agents and
representatives assume no responsibility or liability of any nature
whatsoever for the accuracy or adequacy of the Offering Memorandum
or any such publicly available information concerning the
Corporation or as to whether all information concerning the
Corporation that is required to be disclosed or filed by the
Corporation under applicable securities laws has been so disclosed
or filed.
5. ESCROW AND ISSUANCE OF SECURITIES
5.1 The Subscriber agrees to deliver to the Agents, as soon as possible and,
in any event, not later than 2:00 p.m. (Pacific Standard time) on November
10, 2006: (a) this duly completed and executed Subscription Agreement; (b)
a duly executed Canadian Accredited Investor Certificate attached hereto
as Exhibit "A"; (c) a duly executed U.S. Accredited Investor Certificate
attached hereto as Exhibit "B"; (d) a duly executed Registration Rights
Agreement attached hereto as Exhibit "C", together with a duly completed
selling security holder questionnaire attached thereto as an exhibit; (e)
such other documents as may be required under applicable securities laws;
and (f) a certified cheque or bank draft payable to the Agent for the
aggregate subscription price or payment of the same amount in such other
manner as is acceptable to the Agent.
5.2 All of the Subscriber's funds shall be placed into an interest-bearing
escrow account with the Escrow Agent. At Closing, a notarial certified
copy of the certificates representing the Common Shares and Warrants
underlying the Units will be delivered to Subscribers, with the original
certificates representing the Units being placed with the Escrow Agent
pending the AERA Closing. At or immediately after the deemed time of AERA
Closing, the Corporation will cause the Escrow Agent to forward to the
Agents the original certificates representing the Units registered in the
names of the Subscribers or their nominees as per the directions of the
Subscriber on the face page of this Agreement. The Agents in turn will
forward the original certificates representing the Units to the respective
Subscribers. Following the AERA Closing, the Subscriber's funds will then
be either (a) used to purchase a treasury note to support the
Corporation's obligations to MMS to satisfy potential abandonment
liabilities or (b) placed into the Corporation's general banking account
to be used for working capital. If the AERA Closing does not occur on or
before the AERA Closing Deadline, the Subscriber's funds will be returned
promptly with interest.
5.3 The Subscriber hereby irrevocably authorizes the Agents, in its
discretion: (a) to act as its representative at the Closing and to execute
in its name and on its behalf all Closing receipts and documents required;
(b) to complete or correct any errors or omissions in any form or document
provided by the Subscriber; (c) to waive, in whole or in part, any
representation, warranty, covenant or condition for the benefit of the
Subscriber and contained in any agreement between the Corporation and the
Agents; (d) to receive on its behalf certificates representing the Common
Shares and Warrants comprising the Units subscribed for under this
subscription; and (e) to approve any opinions, certificates or other
documents addressed to the Subscriber.
5.4 The Subscriber acknowledges that the Agents have been appointed by the
Corporation to act as the Agents of the Corporation to offer the Units on
a private placement basis and, in connection therewith, the Corporation
and the Agents have entered into an agreement (the "Agency Agreement")
pursuant to which the Agents, in connection with the issue and sale of the
Units, will receive a fee and compensation options from the Corporation.
5.5 The Subscriber expressly waives and releases the Corporation from, to the
fullest extent permitted by law, all rights of withdrawal to which it
might otherwise be entitled pursuant to the provisions of securities laws
of the jurisdiction in which the Subscriber is resident.
5.6 The Subscriber shall not be required to complete this Agreement and may
withdraw therefrom if, within 48 hours of Closing, a credit facility in
the amount of US$45 million has not been made unconditionally available
for drawdown by X. Xxxx & Company to fund the acquisition transactions
under the AERA Purchase and Sale Agreement.
6. REGISTRATION STATEMENT
6.1 The Corporation will prepare and file with the SEC a registration
statement (the "Registration Statement") covering 110% of the Common
Shares and 110% of the Warrant Shares within 120 trading days of the
Closing and in accordance with the terms of the Registration Rights
Agreement executed by the Corporation and attached hereto as Exhibit "C".
The Corporation will use its reasonable best efforts to have the
Registration Statement declared effective by the SEC within 210 trading
days of the Closing.
7. LEGENDS
7.1 The certificates representing the Common Shares, Warrants and Warrant
Shares upon exercise of the Warrants, will bear a legend denoting the
restrictions on transfer. The Subscriber agrees to sell, assign or
transfer the Common Shares, Warrants and Warrant Shares only in accordance
with such restrictions.
The legend for certificates for Common Shares and Warrant Shares will be
in substantially the following form:
(i) "UNLESS PERMITTED UNDER SECURITIES LEGISLATIONS, THE HOLDER OF
THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE [THE DATE
THAT IS FOUR MONTHS AND ONE DAY FOLLOWING THE CLOSING]."
and
(ii) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON
THE TORONTO STOCK EXCHANGE ("TSX"). HOWEVER, THE SAID
SECURITIES CANNOT BE TRADED THROUGH THE FACILITIES OF TSX
SINCE THEY ARE NOT FREELY TRANSFERABLE AND CONSEQUENTLY ANY
CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT "GOOD
DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON TSX."
and
(iii) "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("U.S. SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS. THE SECURITIES MAY BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE U.S.
SECURITIES ACT ONLY (A) TO THE CORPORATION, (B) OUTSIDE THE
UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S
UNDER THE U.S. SECURITIES ACT, IN COMPLIANCE WITH APPLICABLE
STATE SECURITIES LAWS AND IN ACCORDANCE WITH A SUBSCRIPTION
AGREEMENT BETWEEN THE HOLDER AND PACIFIC ENERGY RESOURCES LTD.
(THE "COMPANY") THAT IS ON FILE WITH THE COMPANY, OR (C) WITH
THE PRIOR WRITTEN CONSENT OF THE COMPANY, PURSUANT TO AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED; HEDGING TRANSACTIONS
INVOLVING THESE SECURITIES AND THE SECURITIES ISSUABLE UPON
EXERCISE OF THE WARRANTS MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE U.S. SECURITIES ACT."
The legend for each Warrant will be in substantially the following form:
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED ("U.S. SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. THIS WARRANT AND THE SECURITIES ISSUABLE UPON
EXERCISE OF THIS WARRANT ARE SUBJECT TO RESTRICTIONS ON
TRANSFER SET FORTH IN A SUBSCRIPTION AGREEMENT BETWEEN THE
HOLDER AND PACIFIC ENERGY RESOURCES LTD. (THE "COMPANY") THAT
IS ON FILE WITH THE COMPANY, AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED,
PRIOR TO THE EFFECTIVENESS OF A REGISTRATION STATEMENT UNDER
THE U.S. SECURITIES ACT, EXCEPT WITH THE PRIOR WRITTEN CONSENT
OF THE COMPANY. THIS WARRANT MAY NOT BE EXERCISED BY OR ON
BEHALF OF ANY U.S. PERSON UNLESS REGISTERED UNDER THE U.S.
SECURITIES ACT, OR AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.
8. RELIANCE UPON REPRESENTATIONS, WARRANTIES AND COVENANTS
8.1 The Subscriber acknowledges that the representations and warranties and
covenants and acknowledgements contained in this Agreement are made with
the intent that they may be relied upon by the Corporation in determining
the Subscriber's eligibility to purchase the Units and the Subscriber
hereby agrees to indemnify the Corporation against all losses, claims,
costs, expenses and damages or liabilities which it may suffer or incur
caused or arising from its reliance thereon. The Subscriber further agrees
that by accepting the Units the Subscriber shall be representing and
warranting that the foregoing representations and warranties are true as
at the date of AERA Closing with the same force and effect as if they had
been made by the Subscriber on the date of AERA Closing and that they
shall survive the purchase by the Subscriber of the Units and shall
continue in full force and effect notwithstanding any subsequent
disposition by the Subscriber of any of the Securities.
9. MISCELLANEOUS
9.1 The Corporation shall be entitled to rely on delivery by facsimile machine
of an executed copy of this subscription, and acceptance by the
Corporation of such facsimile copy shall be equally effective to create a
valid and binding agreement between the Subscriber and the Corporation in
accordance with the terms hereof. Notwithstanding the foregoing, the
Subscriber shall deliver originally executed copies of the documents
listed in paragraph 5.1 above to the Agent as soon as possible and, in any
event, not later than 2:00 p.m. (Pacific Standard time) on November 10,
2006.
9.2 Without limitation, this subscription and the transactions contemplated
hereby are conditional upon and subject to the Corporation receiving
Exchange approval of this subscription and the transactions contemplated
hereby.
9.3 This Agreement is not assignable or transferable by the parties hereto
without the express written consent of the other party hereto.
9.4 Time is of the essence of this Agreement.
9.5 Except as expressly provided in this Agreement and in the agreements,
instruments and other documents contemplated or provided for herein, this
Agreement contains the entire agreement between the parties with respect
to the Units and there are no other terms, conditions, representations or
warranties whether expressed, implied, oral or written, by statute, by
common law, by the Corporation or by anyone else.
9.6 The parties to this Agreement may amend this Agreement only in writing.
9.7 This Agreement inures to the benefit of and is binding upon the parties to
this Agreement and their successors and permitted assigns.
9.8 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
above.
9.9 This Agreement will be governed by and construed in accordance with the
laws of the State of California, without regard to choice of law
principles.
9.10 This Agreement, including without limitation the representations,
warranties and covenants contained herein and in each of the Subscriber
Certificates, shall survive and continue in full force and effect and be
binding upon the Corporation and the Subscriber, notwithstanding the
completion of the purchase of the Units by the Subscriber pursuant hereto,
the completion of the Offering and any subsequent disposition by the
Subscriber of the Common Shares, Warrants or Warrant Shares.
9.11 Without limitation, each Subscriber's obligations hereunder are
conditional upon and subject to the delivery by the Corporation's counsel
to each Subscriber a legal opinion to the effect that the Securities and
any Warrant Shares are eligible for resale under Rule 904 and 905 of
Regulation S after the expiration of the holding period prescribed by
Canadian laws but subject to the requirements set forth in Section 4.2(f)
hereunder.
EXHIBIT "A"
CANADIAN ACCREDITED INVESTOR CERTIFICATE
----------------------------------------
The undersigned ("SUBSCRIBER"), in connection with the acquisition of units
("UNITS") of Pacific Energy Resources Ltd. ("PERL" or the "CORPORATION")
pursuant to that certain subscription agreement (the "AGREEMENT"), hereby makes
the following representations and warranties:
Subscriber understands that the Corporation is relying on this information in
determining to offer Units to the undersigned in a manner exempt from the
registration requirements of applicable Canadian securities laws.
The Subscriber covenants, represents and warrants to the Corporation that the
Subscriber is an "accredited investor" as defined in National Instrument 45-106
PROSPECTUS AND REGISTRATION EXEMPTIONS ("NI 45-106"), by reason of the fact that
the undersigned Purchaser is, as defined in NI 45-106 or National Instrument
14-101 DEFINITIONS (place an "X" on the appropriate line or lines):
_____ (a) a Canadian financial institution, or an authorized foreign
bank listed in Schedule III of the BANK ACT (Canada);
_____ (b) the Business Development Bank of Canada incorporated under the
BUSINESS DEVELOPMENT BANK OF CANADA ACT (Canada);
_____ (c) a subsidiary of any person or company referred to in
paragraphs 1.(a) or 1.(b), if the person or company owns all
of the voting securities of the subsidiary, except the voting
securities required by law to be owned by directors of that
subsidiary;
_____ (d) a person or company registered under the securities
legislation of a jurisdiction of Canada, as an adviser or
dealer, other than a person registered solely as a limited
market dealer under one or both of the SECURITIES ACT
(Ontario) or the SECURITIES ACT (Newfoundland and Labrador);
_____ (e) an individual registered or formerly registered under the
securities legislation of a jurisdiction of Canada, as a
representative of a person or company referred to in paragraph
1.(d);
_____ (f) 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;
_____ (g) a municipality, public board or commission in Canada;
_____ (h) any national, federal, state, provincial, territorial or
municipal government of or in any foreign jurisdiction, or any
agency of that government;
_____ (i) 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;
_____ (j) 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 CAD$1,000,000;
_____ (k) an individual whose net income before taxes exceeded
CAD$200,000 in each of the two most recent calendar years or
whose net income before taxes combined with that of a spouse
exceeded CAD$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;
_____ (l) an individual who, either alone or with a spouse, has net
assets of at least CAD$5,000,000;
_____ (m) a person or company, other than an individual or investment
fund, that has net assets of at least CAD$5,000,000, as shown
on its most recently prepared financial statements;
_____ (n) an investment fund that distributes or has distributed its
securities only to
(i) a person or company that is or was an accredited
investor at the time of the distribution;
(ii) a person or company that acquires or acquired
securities in the minimum amount of CAD$150,000 or
additional investments as allowed under section 2.19
of NI 45-106; or
(iii) a person or company that acquires or acquired
securities under section 2.18 of NI 45-106;
_____ (o) an investment fund that distributes or has distributed
securities under a prospectus in a jurisdiction of Canada for
which the regulator or, in Quebec, the securities regulatory
authority, has issued a receipt;
_____ (p) 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;
_____ (q) a person or company acting on behalf of a fully managed
account managed by that person or company, if that person or
company
(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) Ontario, is purchasing a security that is not a
security of an investment fund;
2
_____ (r) a registered charity under the INCOME TAX ACT (Canada) that,
in regard to the trade, has obtained advice from an
eligibility advisor or an adviser registered under the
securities legislation of the jurisdiction of the registered
charity to give advice on the securities being traded;
_____ (s) an entity organized in a foreign jurisdiction that is
analogous to any of the entities referred to in paragraphs
1.(a) through 1.(d) or paragraph 1.(i) in form and function;
_____ (t) a person or company 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 or companies that are accredited investors;
_____ (u) an investment fund that is advised by a person registered as
an adviser or a person that is exempt from registration as an
adviser, or
_____ (v) a person or company that is recognized or designated by the
securities regulatory authority or, except in Ontario and
Quebec, the regulator, as
(i) an accredited investor, or
(ii) an exempt purchaser in Alberta or British Columbia.
IN WITNESS WHEREOF, Subscriber has executed this Certificate as of
_______, 2006.
SUBSCRIBER
_____________________________________
(Signature and office, if applicable)
_____________________________________
(Print Name)
_____________________________________
(Address)
_____________________________________
(City/Province/Postal Code)
_____________________________________
(Area Code/Telephone Number)
3
EXHIBIT "B"
U.S. ACCREDITED INVESTOR CERTIFICATE
------------------------------------
The undersigned ("SUBSCRIBER"), in connection with the acquisition of
units ("UNITS") of Pacific Energy Resources Ltd. ("PERL" or the "CORPORATION")
pursuant to that certain subscription agreement (the "AGREEMENT"), hereby makes
the following representations and warranties:
Subscriber understands that the Corporation is relying on this
information in determining to offer Units to the undersigned in a manner exempt
from the registration requirements of the Securities Act of 1933, as amended
(the "1933 ACT"), and applicable state securities laws.
1. ACCREDITED INVESTOR
-------------------
Subscriber represents and warrants that he, she or it falls within the
category (or categories) marked. PLEASE INDICATE EACH CATEGORY OF ACCREDITED
INVESTOR THAT YOU, THE SUBSCRIBER, SATISFY, BY PLACING YOUR INITIALS ON THE
APPROPRIATE LINE BELOW.
_____ Category 1. A bank, as defined in Section 3(a)(2) of the 1933
Act, whether acting in its individual or fiduciary
capacity; or
_____ Category 2. A savings and loan association or other institution
as defined in Section 3(a) (5) (A) of the 1933 Act,
whether acting in its individual or fiduciary
capacity; or
_____ Category 3. A broker or dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934; or
_____ Category 4. An insurance company as defined in Section 2(13) of
the Act; or
_____ Category 5. An investment company registered under the Investment
Company Act of 1940; or
_____ Category 6. A business development company as defined in Section
2(a) (48) of the Investment Company Act of 1940; or
_____ Category 7. A small business investment company licensed by the
U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act of
1958; or
_____ Category 8. A plan established and maintained by a state, its
political subdivision or any agency or
instrumentality of a state or its political
subdivisions, for the benefit of its employees, with
assets in excess of US$5,000,000; or
_____ Category 9. An employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974 in
which the investment decision is made by a plan
fiduciary, as defined in Section 3(21) of such Act,
which is either a bank, savings and loan association,
insurance company or registered investment advisor,
or an employee benefit plan with total assets in
excess of US$5,000,000 or, if a self-directed plan,
the investment decisions are made solely by persons
who are accredited investors; or
_____ Category 10. A private business development company as defined in
Section 202(a) (22) or the Investment Advisors Act of
1940; or
_____ Category 11. An organization described in Section 501(c)(3) of the
Internal Revenue Code, a corporation, a Massachusetts
or similar business trust, or a partnership, not
formed for the specific purpose of acquiring the
Units, with total assets in excess of US$5,000,000;
or
_____ Category 12. A director, executive officer or general partner of
the Corporation; or
_____ Category 13. A natural person whose individual net worth, or joint
net worth with that person's spouse, at the time of
this purchase exceeds US$1,000,000; or
_____ Category 14. A natural person who had an individual income in
excess of US$200,000 in each of the two most recent
years or joint income with that person's spouse in
excess of US$300,000 in each of those years and has a
reasonable expectation of reaching the same income
level in the current year; or
_____ Category 15. A trust, with total assets in excess of US$5,000,000,
not formed for the specific purpose of acquiring the
Units, whose purchase is directed by a sophisticated
person as described in SEC Rule 506(b)(2)(ii); or
_____ Category 16. An entity in which all of the equity owners are
accredited investors.
2. PURCHASING ENTIRELY FOR OWN ACCOUNT
-----------------------------------
Subscriber represents and warrants that he, she or it is purchasing
the Units solely for Subscriber's own account for investment and not with a view
to or for sale or distribution of the Units or any portion thereof and without
any present intention of selling, offering to sell or otherwise disposing of or
distributing the Units or any portion thereof in any transaction other than a
transaction complying with the registration requirements of the 1933 Act, and
applicable state securities or "blue sky" laws, or pursuant to an exemption
therefrom. Subscriber also represents that the entire legal and beneficial
interest of the Common Shares and Warrants is being purchased for, and will be
held for, Subscriber's account only, and neither in whole nor in part for any
other person or entity.
3. ECONOMIC RISK AND SUITABILITY
-----------------------------
Subscriber represents and warrants as follows:
(a) Subscriber realizes that Subscriber's purchase of the Units
involves a high degree of risk and will be a highly
speculative investment, and that he, she or it is able,
without impairing Subscriber's financial condition, to hold
the Common Shares and Warrants for an indefinite period of
time.
(b) Subscriber alone, or with the assistance of professional
advisors, has such knowledge and experience in financial and
business matters that the undersigned is capable of evaluating
the merits and risks of Subscriber's purchase of the Units, or
has a pre-existing personal or business relationship with the
Corporation or any of its officers, directors, or controlling
persons, of a duration and nature that enables the undersigned
to be aware of the character, business acumen and general
business and financial circumstances of the Corporation or
such other person.
2
(c) If Subscriber is a partnership, trust, corporation or other
entity, its principal place of business and principal office
are located within the state set forth in its address below.
(d) Subscriber has relied solely upon the documents and materials
submitted therewith, advice of his or her representatives, if
any, and independent investigations made by Subscriber and/or
his or her Subscriber representatives, if any, in making the
decision to purchase the Units subscribed for herein and
acknowledges that no representations or agreements other than
those set forth in the Disclosure Documents have been made to
the Subscriber in respect thereto.
(e) Subscriber confirms that Subscriber has received no general
solicitation or general advertisement and has attended no
seminar or meeting (whose attendees have been invited by any
general solicitation or general advertisement) and has
received no advertisement in any newspaper, magazine, or
similar media, broadcast on television or radio regarding the
offering of the Units.
4. RESTRICTED SECURITIES
---------------------
Subscriber acknowledges that the Corporation has hereby disclosed to
Subscriber in writing:
(a) The Units have not been registered under the 1933 Act, or the
securities laws of any state of the United States, and the
Units and their underlying securities must be held
indefinitely unless a transfer of them is subsequently
registered under the Act or an exemption from such
registration is available; and
(b) The Corporation will make a notation in its records of the
above-described restrictions on transfer.
IN WITNESS WHEREOF, Subscriber has executed this Certificate as of
________, 2006.
SUBSCRIBER
_____________________________________
(Signature and office, if applicable)
_____________________________________
(Print Name)
_____________________________________
(Address)
_____________________________________
_____________________________________
(Area Code/Telephone Number)
3
Annex A
Plan of Distribution
The selling security holders and any of their pledgees, donees,
assignees and successors-in-interest may, from time to time, sell any or all of
their shares of common stock being offered under this prospectus on any stock
exchange, market or trading facility on which shares of our common stock are
traded or in private transactions. These sales may be at fixed or negotiated
prices. The selling security holders may use any one or more of the following
methods when disposing of shares:
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o block trades in which the broker-dealer will attempt to sell
the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resales by the
broker-dealer for its account;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o privately negotiated transactions;
o to cover short sales made after the date that the registration
statement of which this prospectus is a part is declared
effective by the Securities and Exchange Commission;
o broker-dealers may agree with the selling security holders to
sell a specified number of such shares at a stipulated price
per share;
o a combination of any of these methods of sale; and
o any other method permitted pursuant to applicable law.
The shares may also be sold under Rule 144 under the Securities Act, if
available, rather than under this prospectus. The selling security holders have
the sole and absolute discretion not to accept any purchase offer or make any
sale of shares if they deem the purchase price to be unsatisfactory at any
particular time.
The selling security holders may pledge their shares to their brokers
under the margin provisions of customer agreements. If a selling security holder
defaults on a margin loan, the broker may, from time to time, offer and sell the
pledged shares.
Broker-dealers engaged by the selling security holders may arrange for
other broker-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling security holders (or, if any
broker-dealer acts as agent for the purchaser of shares, from the purchaser) in
amounts to be negotiated, which commissions as to a particular broker or dealer
may be in excess of customary commissions to the extent permitted by applicable
law.
If sales of shares offered under this prospectus are made to
broker-dealers as principals, we would be required to file a post-effective
amendment to the registration statement of which this prospectus is a part. In
the post-effective amendment, we would be required to disclose the names of any
participating broker-dealers and the compensation arrangements relating to such
sales.
The selling security holders and any broker-dealers or agents that are
involved in selling the shares offered under this prospectus may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with these
sales. Commissions received by these broker-dealers or agents and any profit on
the resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Any broker-dealers or agents
that are deemed to be underwriters may not sell shares offered under this
prospectus unless and until we set forth the names of the underwriters and the
material details of their underwriting arrangements in a supplement to this
prospectus or, if required, in a replacement prospectus included in a
post-effective amendment to the registration statement of which this prospectus
is a part.
The selling security holders and any other persons participating in the
sale or distribution of the shares offered under this prospectus will be subject
to applicable provisions of the Exchange Act, and the rules and regulations
under that act, including Regulation M. These provisions may restrict activities
of, and limit the timing of purchases and sales of any of the shares by, the
selling security holders or any other person. Furthermore, under Regulation M,
persons engaged in a distribution of securities are prohibited from
simultaneously engaging in market making and other activities with respect to
those securities for a specified period of time prior to the commencement of
such distributions, subject to specified exceptions or exemptions. All of these
limitations may affect the marketability of the shares.
If any of the shares of common stock offered for sale pursuant to this
prospectus are transferred other than pursuant to a sale under this prospectus,
then subsequent holders could not use this prospectus until a post-effective
amendment or prospectus supplement is filed, naming such holders. We offer no
assurance as to whether any of the selling security holders will sell all or any
portion of the shares offered under this prospectus.
We have agreed to pay all fees and expenses incident to the
registration of the shares being offered under this prospectus. However, each
selling security holder and purchaser is responsible for paying any discounts,
concessions and similar selling expenses they incur.
We and certain of the selling security holders have agreed to indemnify
one another against certain losses, damages and liabilities arising in
connection with this prospectus, including liabilities under the Securities Act.
2
EXHIBIT D
RULE 904 OFFSHORE RESALE
SELLER CERTIFICATION
[DATE]
The undersigned, is the beneficial owner (the "Seller") of ___________ shares
Common Stock (the "Shares") of Pacific Energy Resources Ltd. (the
"Corporation"), which Shares are represented by stock certificate number ______.
The undersigned desires to resell the Shares in, on or through the facilities of
the Toronto Stock Exchange (the "Resale") in accordance with Rule 904 of
Regulation S ("Regulation S") under the United States Securities Act of 1933, as
amended (the "Securities Act").
The undersigned desires to effectuate the Resale, and as a condition thereto,
hereby certifies to the Corporation, [name of law firm], and the custodian, if
applicable, who has custody of the Shares (the "Custodian"), as follows:
1. The Seller is the beneficial owner of the Shares, having acquired and
fully paid for the Shares by [purchase of/exercise of a warrant to
purchase] the Shares on [date].
2. The undersigned has notified the Corporation's transfer agent (the
"Transfer Agent") in writing of his, her or its desire to resell the
Shares in, on or through the facilities of the Toronto Stock Exchange.
3. The undersigned has delivered or caused to be delivered the
certificates covering Shares to the Transfer Agent.
4. The undersigned certifies that (a) the Resale of the Shares was not and
is not being made to a person in the United States; and (b) the
transaction was or will be executed in, or through the facilities of
the Toronto Stock Exchange, and neither the undersigned nor any person
acting on his behalf knows that the transaction has been pre-arranged
with a buyer in the United States.
5. None of the undersigned, the undersigned's affiliates, or any person
acting on his, her or its behalf has engaged or will engage in any
"directed selling efforts", as defined in Rule 902 of Regulation S of
the Securities Act. "Directed selling efforts" include activities that
are intended and could reasonably be expected to condition the market
in the United States with respect to the Resale of the Shares.
6. The undersigned certifies that he, she or it is not, and was not at the
time of the Resale, an "affiliate" of, or a person "affiliated" with,
the Corporation (except solely by virtue of being an officer or
director of the Corporation). An "affiliate" of, or person "affiliated"
with, a specified person includes a person or entity that directly, or
indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the person or entity
specified.
7. If the undersigned is an affiliate of the Corporation solely by virtue
of being an officer or director of the Corporation, he, she or it
certifies that no selling concession, fee, or other remuneration has
been or shall be paid in connection with the Resale of the Shares other
than the usual and customary broker's commission that would be received
by a person executing such transaction as agent.
8. The undersigned certifies that neither he, she or it nor any person
acting on his, her or its behalf knows that the purchaser of the Shares
is or will be a "dealer" or is or will be a person receiving a selling
concession, fee or other remuneration in respect of the Resale of the
Shares. A "dealer" shall mean any person who engages either for all or
part of his, her or its time, directly or indirectly, as agents,
broker, or principal, in the business of offering, buying, selling, or
otherwise dealing or trading in securities issued by another person.
9. The undersigned acknowledges and understands that the Shares may not be
offered to U.S. persons or resold in the United States without
registration or pursuant to an exemption under the Securities Act.
10. The undersigned certifies that the Shares shall not be offered or sold
in or through the facilities of any United States stock exchange
without registration or pursuant to an exemption under the Securities
Act.
11. The Resale is not a transaction, or part of a series of transaction
which, although in technical compliance with Regulation S, is part of a
plan or scheme to evade the registration provisions of the Securities
Act.
12. The Resale is bona fide and not for the purpose of "washing off" the
resale restrictions imposed because the securities are restricted
securities (as such term is defined in Rule 144(a)(3) under the
Securities Act).
13. The undersigned agrees to immediately notify the Corporation of any
facts or circumstances that may hereafter come to the undersigned's
attention which would render any of the above statements to be
inaccurate.
Tax Id. No.:
_____________________________________ ____________________________________
Signature Advisor (if applicable):
_____________________________________ ____________________________________
Name of Seller Custodian:
_____________________________________ ____________________________________
Name and Title of Signatory Account No.:
(if applicable) ____________________________________
Address:
_____________________________________
_____________________________________
Dated:
IMPORTANT - READ CAREFULLY SIGNATURE GUARANTEED BY:
The signature(s) to this Certification must
correspond with the name(s) as written upon
the face of this certificate(s) or bond(s) Sign here_____________________
in every particular without alteration or
enlargement or any change whatever.
Signature guarantee should be made by a
member or member organization of the New ______________________________
York Stock Exchange, members of other (PERSON(S) EXECUTING THE POWER
Exchanges having signatures on file with SIGN(S) HERE)
transfer agent or by a commercial bank or
trust company having its principal office or
correspondent in the City of New York
EXHIBIT E
RULE 904 OFFSHORE RESALE
BROKER CERTIFICATION
[DATE]
The undersigned is the authorized broker appointed by ___________ (the "Seller")
to handle the offshore resale of _________ shares of Common Stock (the
"Shares"), of Pacific Energy Resources Ltd. (the "Corporation"), beneficially
owned by the Seller and represented by stock certificate number _____. The
Seller has instructed the undersigned to resell the Shares in, on or through the
facilities of the Toronto Stock Exchange (the "Resale") in accordance with Rule
904 of Regulation S ("Regulation S") under the United States Securities Act of
1933, as amended (the "Securities Act").
The Seller has advised the undersigned of the following:
o The Seller is the beneficial owner of the Shares, having acquired and
fully paid for the Shares by [purchase of/exercise of a warrant to
purchase] the Shares on [date].
o The Seller wishes to sell the Shares in, on or through the facilities
of the Toronto Stock Exchange in accordance with Rule 904 of Regulation
S.
The undersigned desires to effectuate the Resale in, on or through the
facilities of the Toronto Stock Exchange, and as a condition thereto, hereby
certifies to the Corporation, [name of law firm], and the custodian, if
applicable, who has custody of the Shares (the "Custodian"), as follows:
1. The Seller has submitted written instructions to the undersigned to
sell the Shares on Seller's behalf in, on or through the facilities of
the Toronto Stock Exchange.
2. The undersigned has notified _______________, the Corporation's
transfer agent (the "Transfer Agent") in writing of its desire to
resell the Shares in, on or through the facilities of the Toronto Stock
Exchange.
3. The undersigned has delivered or caused to be delivered the Shares to
the Transfer Agent.
4. The undersigned certifies that (a) the Resale of the Shares was not and
is not being made to a person in the United States; and (b) the
transaction was or will be executed in, or through the facilities of
the Toronto Stock Exchange, and neither the undersigned nor any person
acting on its behalf knows that the transaction has been pre-arranged
with a buyer in the United States.
5. The undersigned, or an affiliate of the undersigned is, a member of the
Toronto Stock Exchange.
6. Neither the undersigned, the undersigned's affiliates, nor any person
acting on its behalf has engaged or will engage in any "directed
selling efforts", as defined in Rule 902 of Regulation S of the
Securities Act. "Directed selling efforts" include activities that are
intended and could reasonably be expected to condition the market in
the United States with respect to the Resale of the Shares.
7. The undersigned certifies that it is not, and at the time of the Resale
was not, an "affiliate" of, or a person "affiliated" with, the
Corporation, except the undersigned may be an officer or director of
the Corporation who is an affiliate solely by virtue of holding such
position. An "affiliate" of, or person "affiliated" with, a specified
person includes a person or entity that directly, or indirectly through
one or more intermediaries, controls or is controlled by, or is under
common control with, the person or entity specified.
8. The undersigned certifies that if Seller is an affiliate of the
Corporation solely by virtue of being an officer or director of the
Corporation, no selling concession, fee, or other remuneration has been
or shall be paid in connection with the Resale of the Shares other than
the usual and customary broker's commission that would be received by a
person executing such transaction as agent.
9. The undersigned certifies that neither it nor any person acting on its
behalf knows that the purchaser of the Shares is a "dealer" or is a
person receiving a selling concession, fee or other remuneration in
respect of the Resale of the Shares. A "dealer" shall mean any person
who engages either for all or part of his, her or its time, directly or
indirectly, as agent, broker, or principal, in the business of
offering, buying, selling, or otherwise dealing or trading in
securities issued by another person.
10. The undersigned acknowledges and understands that the Shares may not be
offered to U.S. persons or resold in the United States without
registration or pursuant to an exemption under the Securities Act.
11. The undersigned certifies that the Shares shall not be offered or sold
in or through the facilities of any United States stock exchange or
otherwise without registration under the Securities Act or pursuant to
an exemption under the Securities Act.
12. The Resale is not a transaction, or part of a series of transaction
which, although in technical compliance with Regulation S, is part of a
plan or scheme to evade the registration provisions of the Securities
Act.
13. The Resale is bona fide and not for the purpose of "washing off" the
resale restrictions imposed because the securities are restricted
securities (as such term is defined in Rule 144(a)(3) under the
Securities Act).
14. The undersigned agrees to immediately notify the Corporation of any
facts or circumstances that may hereafter come to the undersigned's
attention which would render any of the above statements to be
inaccurate.
[NAME OF BROKER]
Tax Id. No.:
By:__________________________________ ___________________________________
Advisor (if applicable):
Name:
___________________________________
Title: Custodian:
Address: ___________________________________
Account No.:
_____________________________________
___________________________________
_____________________________________
Dated:
IMPORTANT - READ CAREFULLY SIGNATURE GUARANTEED BY:
The signature(s) to this Certification must
correspond with the name(s) as written upon
the face of this certificate(s) or bond(s) Sign here_____________________
in every particular without alteration or
enlargement or any change whatever.
Signature guarantee should be made by a
member or member organization of the New ______________________________
York Stock Exchange, members of other (PERSON(S) EXECUTING THE POWER
Exchanges having signatures on file with SIGN(S) HERE)
transfer agent or by a commercial bank or
trust company having its principal office or
correspondent in the City of New York
