FORM OF SUBSCRIPTION AGREEMENT Personal and Confidential
EXHIBIT
10.29
FORM
OF SUBSCRIPTION AGREEMENT
Personal
and Confidential
THE
COMMON STOCK OF GRAN TIERRA ENERGY INC. ("GTRE") CONSTITUTES SECURITIES THAT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
APPLICABLE SECURITIES LAWS OF ANY STATE. THE COMMON STOCK MAY NOT, AT ANY TIME,
BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED WITHOUT REGISTRATION UNDER
THE ACT AND STATE LAWS, OR DELIVERY TO GTRE OF AN OPINION OF LEGAL COUNSEL
SATISFACTORY TO GTRE THAT SUCH REGISTRATION IS NOT REQUIRED. RESTRICTIONS ON
TRANSFER WILL BE IMPRINTED ON THE DOCUMENTS EVIDENCING THE COMMON STOCK TO
THE
FOREGOING EFFECTS.
THE
PURCHASE OF GTRE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK AND SHOULD BE
CONSIDERED ONLY BY PERSONS WHO CAN BEAR THE RISK OF LOSING THEIR ENTIRE
INVESTMENT.
GRAN
TIERRA ENERGY INC.
Units
consisting of (1) Common Stock, par value $.001 per share, and (2) Common Stock
Purchase Warrants
Gran
Tierra Energy Inc.
000,
000-00xx Xxxxxx X.X.
Xxxxxxx,
XX X0X 0X0
Attention:
Xxxxx Xxxx
Ladies
and Gentlemen:
This
will
confirm my agreement to become a stockholder of Gran Tierra Energy Inc. ("GTRE"
or the “Company”) and to purchase Units from GTRE, each “Unit” consisting of (1)
one share of common stock, par value $.001 per share (the “Common Stock”), and
(2) a warrant to purchase 0.5 shares of Common Stock ( the “Warrant”). I/we
hereby acknowledge receipt of the Preliminary Confidential Private Placement
Memorandum dated June 1, 2006 (together with the exhibits thereto, the
"Memorandum"), with respect to GTRE. The Memorandum describes the terms under
which the Units are being offered to subscribers.
1. Subscription
and Sale.
1.1 Subscription.
Subject
to the terms and conditions of this Subscription Agreement (this “Agreement”)
and the provisions of the Memorandum, I/we irrevocably subscribe for, and agree
to purchase the number of Units of from GTRE for the subscription price
indicated on the Signature Page. I am/we are tendering to GTRE (a) a completed,
signed, and dated copy of this Agreement, (b) a completed, signed, and dated
Purchaser's Questionnaire, and (c) I am/we are concurrently wire transferring
such amount to the Escrow Agent.
1.2 Acceptance
or Rejection of Subscription.
All
funds tendered by me/us will be held in a segregated escrow account for
subscribers pursuant to the private placement of Units made pursuant to the
Memorandum (the “Offering”) pending acceptance or rejection of this Agreement
and the closing of my/our purchase of the Units. This Agreement will either
be
accepted, in whole or in part, subject to the prior sale of the Units, or
rejected, by GTRE as promptly as practicable. If this Agreement is accepted
only
in part, I/we agree to purchase such smaller number of shares of Units as GTRE
determines to sell to me/us. If this Agreement is rejected for any reason or
no
reason, including, the termination of the offering of the Units by GTRE, this
Agreement and all funds tendered with it will be promptly returned to me/us,
without deduction of any kind, and this Agreement will be void and of no further
force or effect. Receipt of funds wired or delivered with this Agreement will
not constitute acceptance of this Agreement.
1.3 Closing.
Subscriptions will be accepted at one or more closings, as described in the
Memorandum. On closing, the subscription evidenced hereby, if not previously
rejected, will, in reliance on my/our representations and warranties, be
accepted, in whole or in part, and GTRE will execute a copy of this Agreement
and return it to me/us. If my/our subscription is accepted only in part, this
Agreement will be marked to indicate such fact, and GTRE will return to me/us
the portion of the funds tendered by me/us representing the unaccepted portion
of my/our subscription, without deduction of any kind. The Units subscribed
for
will not be deemed to be issued to, or owned by, me/us until GTRE has accepted
this Agreement.
2. Representations,
Warranties, and Covenants of the Purchaser.
I/we
represent, warrant, and covenant to GTRE that:
2.1 General:
(a) If
I am a
natural person, I have the legal capacity and all requisite authority to enter
into, execute, and deliver the (1) this Agreement and
any
other documents delivered in connection herewith and therewith (collectively,
the “Transaction
Documents”), to purchase the Units, and to perform all the obligations required
to be performed by me thereunder. If we are a corporation, partnership, limited
liability company, trust, estate, or other entity, we are authorized to purchase
the Units and otherwise to comply with our obligations under the Transaction
Documents. The person signing this Agreement on behalf of such entity is duly
authorized by such entity to do so. The Transaction Documents are (or when
executed pursuant to the power of attorney granted hereby, will be) my/our
valid
and binding agreements and enforceable against me/us in accordance with their
terms.
(b) My/our
principal residence is in the jurisdiction indicated herein, or if we are a
corporation, partnership, limited liability company, trust, estate, or other
entity, we are organized and qualified under the law of the state or foreign
jurisdiction indicated below and I/we have no intention of becoming a resident
or domiciliary of any jurisdiction other than the one indicated by our
address.
(c) I
am/we
are subscribing to purchase the Units solely for my/our own account, for
investment, and not with a view to, or for resale in connection with, any
distribution. I am/we are not acquiring the Units as an agent or otherwise
for
any other person.
2.2 Information
Concerning the Offering:
(a) I/we
have
received, carefully read, and understood the Memorandum. I/we have not been
furnished any offering literature other than the Memorandum and the Exhibits
attached thereto and have relied only on the information contained therein
and
my/our own due diligence efforts and inquiries with respect to the Offering.
The
Units were not offered to me/us by any means of general solicitation or general
advertising.
(b)
I/we
understand that the offering of the Units is being made without registration
of
the underlying shares of Common Stock under the Securities Act of 1933, as
amended (the "Act"), or any state securities or blue sky laws in reliance on
exemptions from such registration, and that such reliance is based in part
on my
representations and warranties set forth in this Section 2 and on the
information set forth in the Purchaser's Questionnaire tendered by me/us to
GTRE
with this Agreement.
(c) In
formulating a decision to invest in the Units and the underlying Common Stock,
I/we (and my/our Purchaser Representative (as defined in Rule 501(h) of
Regulation D under the Act for U.S. investors and Regulation S for investors
from other jurisdictions), if any) have been given the opportunity to ask
questions of, and to obtain any information necessary to permit me to verify
the
accuracy of the information set forth in the Memorandum from, representatives
of
GTRE and have been furnished all such information so requested. I/we have not
relied or acted on the basis of any representations or other information
purported to be given on behalf of GTRE except as set forth in the Memorandum
(it being understood that no person has been authorized by GTRE to furnish
any
representations or other information except as set forth in the
Memorandum).
(d) I/we
understand that the purchase of the Units involves various risks and that an
investment in GTRE should be regarded as speculative and involving a high degree
of risk. I am/we are fully aware of the nature of my investment in GTRE and
the
lack of liquidity of an investment in the Units and underlying shares of Common
Stock and Warrants to acquire Common Stock being offered pursuant to the
Offering, because the shares may not be sold, transferred, or otherwise disposed
of except pursuant to an effective registration statement under the Act or
an
exemption from such registration, and that in the absence of such registration
or exemption, the shares of Common Stock and Warrants must be held
indefinitely.
(e) I/we
understand that no federal or state agency has passed upon the Common Stock
or
Warrants of GTRE or made any finding or determination concerning the fairness
or
advisability of an investment in GTRE.
2.3 Status
of Subscriber, Additional Information:
(a) If
we are
a corporation, partnership, limited liability company, trust, estate, or other
entity, we are an "accredited investor," as that term is defined in Rule 501(a)
of Regulation D under the Act for U.S. investors (see the Purchaser's
Questionnaire for a list of the types of accredited investors) and meet the
experience standards set forth in Section 2.3(b) below. If I am a natural
person, I am at least 21 years of age and am an "accredited investor" and meet
the experience standards set forth in Section 2.3(b) below.
(b) I
(together with my Purchaser Representative, if any), or if we are a corporation,
partnership, limited liability company, trust, estate, or other entity, we
by
and through our officers, directors, trustees, managers, partners, employees,
or
other advisors, (i) are experienced in evaluating companies such as GTRE, (ii)
have determined that the Units are a suitable investment for me/us, and (iii)
have such knowledge, skill, and experience in business, financial, and
investment matters so that I am/we are capable of evaluating the merits and
risks of an investment in the Units. To the extent necessary, I/we have
retained, at my/our expense, and relied upon, appropriate professional advice
regarding the investment, tax, and legal merits and consequences of this
Agreement and owning the Units, and I/we and my/our advisers or representatives
have investigated my/our investment in GTRE to the extent I/we and they have
deemed advisable. I/we have the financial ability to bear the economic risks
of
our entire investment for an indefinite period and no need for liquidity with
respect to our investment in GTRE, and, if I am a natural person, I have
adequate means for providing for my current needs and personal
contingencies.
(c) I/we
agree to furnish any additional information requested to assure compliance
with
the Act and state securities laws in connection with the purchase and sale
of
the Units. If there is any material change in the information I/we are
furnishing hereunder prior to the date this Agreement is accepted, I/we will
immediately furnish such revised or corrected information to GTRE.
2.4 Restrictions
on Transfer or Sale of the Common Stock:
(a) I
/we
will not sell, assign, pledge, give, transfer, or otherwise dispose of any
the
Units or any interest therein, or make any offer or attempt to do any of the
foregoing, except pursuant to a registration of the Common Stock and Warrants
under the Act and applicable state securities laws or in a transaction that
is
exempt from the registration provisions of the Act and any applicable state
securities laws. I/we understand that GTRE will not be under any obligation
to
register the Common Stock under the Act or any state securities law (except
as
provided in the Registration Rights Agreement (as hereinafter defined)) or
to
comply with the terms of any exemption provided under the Act or any state
securities law with respect to the Common Stock and Warrants.
(b) I/we
have
not offered or sold any portion of my/our Units and have no present intention
of
dividing my/our Units with others or of reselling or otherwise disposing of
any
portion of my/our shares of Units either currently or after the passage of
a
fixed or determinable period of time or upon the occurrence or nonoccurrence
of
any predetermined event or circumstance.
(c) I/we
acknowledge that Canadian securities laws impose additional resale restrictions
with respect to the resale of the Common Stock and Warrants and I am/we are
aware of the risk of the investment in the Units and of the fact that I/we
may
not be able to resell the Common Stock and Warrants except in accordance with
applicable Canadian securities legislation and regulatory policies. GTRE agrees
for my/our benefit that GTRE will use its best efforts to ensure that Canadian
residents holding Common Stock and Warrants will be able to trade such
securities without resale restrictions under Canadian securities legislation
no
later than four months from the completion of the sale of the Units subscribed
for hereunder, including if necessary, the filing and completion of a prospectus
by the Company to qualify the resale of the securities under Canadian securities
law.
2.5 Independent
Nature of Investor's Obligations and Rights.
My/our
obligations under this Agreement and any other Transaction Documents are several
and not joint with the obligations of any other purchaser of Units, and I/we
shall not be responsible in any way for the performance of the obligations
of
any other purchaser of Units under any Transaction Document. My/our decision
to
purchase Units pursuant to the Transaction Documents has been made by me/us
independently of any other purchaser of Units. Nothing contained herein or
in
any Transaction Document, and no action taken by any purchaser of Units pursuant
thereto, shall be deemed to constitute such purchasers as a partnership, an
association, a joint venture, or any other kind of entity, or create a
presumption that the purchasers of Units are in any way acting in concert or
as
a group with respect to such obligations or the transactions contemplated by
the
Transaction Document. I/we acknowledge that no other purchaser of Units has
acted as agent for me/us in connection with making my/our investment hereunder
and that no other purchaser of Units will be acting as my/our agent in
connection with monitoring my/our investment in the Units or enforcing my/our
rights under the Transaction Documents. I/we shall be entitled to independently
protect and enforce my/our rights, including without limitation the rights
arising out of this Agreement or out of the other Transaction Documents, and
it
shall not be necessary for any other purchaser of Units to be joined as an
additional party in any proceeding for such purpose.
2.6 Due
Authority, Etc.
If we
are a corporation, partnership, limited liability company, trust, estate, or
other entity: (a) we are duly organized, validly existing, and in good standing
under the laws of the jurisdiction of our formation and have all requisite
power
and authority to own our properties and assets and to carry on our business,
and
at GTRE's request, will furnish it with copies of our organizational documents,
(b) we have the requisite power and authority to execute the Transaction
Documents and to carry out the transactions contemplated hereby, (c) our
execution and performance of the Transaction Documents do not and will not
result in any violation of, or conflict with, any term of our charter, bylaws,
partnership agreement, operating agreement or regulations, or indenture of
trust, as the case may be, or any instrument to which we are a party or by
which
we are bound or any law or regulation applicable to us, (d) our execution and
performance of the Transaction Documents has been duly authorized by all
necessary corporate, partnership, or other action, (e) we were not specifically
formed to invest in GTRE, and (f) the individual who has executed the
Transaction Documents on our behalf was duly authorized to do so by all
requisite corporate, partnership, or other action and, on request of GTRE,
we
will furnish appropriate evidence of the authority of such individual to act
on
our behalf.
2.7 Valid
Obligation.
This
Agreement has been duly executed and delivered me/us or on our behalf and,
if
and when accepted by GTRE, in whole or in part, will constitute my/our legal,
valid, and binding obligation, enforceable in accordance with its terms (except
as limited by principles of equity or bankruptcy, insolvency, or other similar
laws affecting enforcement of creditors' rights generally).
2.8 ERISA
Matters.
If we
are an employee benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"):
(a) We
and
our plan fiduciaries are not affiliated with, and are independent of GTRE,
and
are informed of and understand GTRE's investment objectives, policies, and
strategies.
(b) We
represent that the purchase of the Units will not involve any transaction that
is subject to the prohibition of Section 406 of ERISA or in connection with
which a penalty could be imposed under Section 502(i) of ERISA or a tax could
be
imposed pursuant to Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code").
(c)
The
trustee or other plan fiduciary directing the investment:
(i) in
making
the proposed investment, is aware of and has taken into consideration the
diversification requirements of Section 404(a)(1)(C) of ERISA; and
(ii) has
concluded that the proposed investment in GTRE is prudent and is consistent
with
the other applicable fiduciary responsibilities under ERISA.
(d) This
Agreement has been duly executed on our behalf by a duly designated Named
Fiduciary (within the meaning of Section 402(a)(2) of ERISA).
(e) If
we are
an individual retirement account (XXX) or employee benefit plan not subject
to
Title I of ERISA, such as a governmental or church plan, the owner of the
individual retirement account or other fiduciary directing the investment of
the
plan has concluded that the proposed investment in Units is prudent and
consistent with its fiduciary responsibilities, if any.
2.9 Fees
and Commissions.
Other
than Canaccord Capital Corporation, I/we have not retained, utilized or been
represented by any broker or finder in connection with the transactions
contemplated by this Agreement.
3. Purchase
Agreement.
The
Company agrees that it makes in my favour the representations, warranties,
covenants and indemnities set out in the Securities Purchase Agreement, a form
of which is attached to the Memorandum (the “Purchase Agreement). I/we hereby
acknowledge and agree that I am/we are making the representations and warranties
set forth in the Purchase Agreement in addition to the representations and
warranties contained in this Agreement.
4. Waiver,
Amendment, Binding Effect.
Neither
this Agreement nor any provisions hereof shall be modified, changed, discharged,
or terminated except by an instrument in writing, signed by the party against
whom any waiver, change, discharge, or termination is sought. The provisions
of
this Agreement shall be binding upon and accrue to the benefit of the parties
hereto and their respective heirs, legal representatives, successors, and
assigns.
5. Assignability.
Neither
this Agreement nor any right, remedy, obligation, or liability arising hereunder
or by reason hereof shall be assignable by GTRE or me/us without the prior
written consent of the other.
6. Applicable
Law.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
TEXAS, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.
7.
Counterparts.
This
Agreement may be executed in any number of counterparts and by facsimile, each
of which when so executed and delivered shall be deemed to be an original and
all of which together shall be deemed to be one and the same
agreement.
8. Notices.
All
notices and other communications provided for herein shall be in writing and
shall be deemed to have been duly given if delivered personally or sent by
registered or certified mail, return receipt requested, postage
prepaid:
(a) If
to
GTRE, to it at the following address:
Gran
Tierra Energy Inc.
000,
000-00xx Xxxxxx X.X.
Xxxxxxx,
Xxxxxxx, Xxxxxx, X0X 0X0
Attn:
Xxxxx Xxxx
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(b)
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If
to me/us at the address
set
forth on the signature page hereto;
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or
at
such other address as either party shall have specified by notice in writing
to
the other.
9. Survival.
All
representations, warranties, and covenants contained in this Agreement shall
survive (i) the acceptance of the Subscription by GTRE, (ii) changes in the
transactions, documents and instruments described in the Memorandum, and (iii)
my death or disability, in each case in accordance with Section 8.12 of the
Purchase Agreement.
10. Notification
of Changes.
I/we
hereby covenant and agree to notify GTRE upon the occurrence of any event prior
to the closing of the purchase of the Units pursuant to this Agreement, which
would cause any representation, warranty, or covenant by me/us contained in
this
Agreement to be false or incorrect.
11. Purchase
Payment.
The
purchase price is being paid herewith by wire transfer. All payments made as
provided in this Paragraph 11 shall be deposited as soon as practicable and
held
in a segregated escrow account until the earlier to occur of (a) the sale of
all
of the securities in this Offering or (b) the termination of this
Offering.
12. Return
of Funds from Escrow Account.
In the
event that the purchase price paid herewith is rejected or otherwise not
accepted in full, the undersigned hereby authorizes and directs that the Company
and /or Escrow Agent return such funds to the address set forth on the signature
page hereto or by wire transfer as set forth in writing by notice to the
Company.
GRAN
TIERRA ENERGY INC.
Signature
Page
IN
WITNESS WHEREOF, the undersigned has executed this Subscription Agreement on
_____________, 2006.
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NUMBER
OF UNITS SUBSCRIBED FOR:
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________________________
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AMOUNT
OF SUBSCRIPTION ($1.50 PER UNIT):
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$
________________________
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NAME
OF SUBSCRIBER(S):
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(1)
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___________________________________
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Signature:
______________________________
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(Please
print name)
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Date:____________________________
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Name:___________________________
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Title:____________________________
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Joint
Tenant/Tenant in Common (if applicable):
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(2)
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___________________________________
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Signature:
______________________________
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(Please
print name)
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Date:
___________________________
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ADDRESS
(including mailing address, if applicable):
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_______________________________
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_________________________________
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_______________________________
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_________________________________
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_______________________________
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_________________________________
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TAXPAYER
I.D. NUMBER OR SOCIAL SECURITY
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NUMBER
OF EACH SUBSCRIBER:
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________________________________
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________________________________
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TYPE
OF
OWNERSHIP:
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(
)
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Individual
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(
)
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Tenants
in common
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(
)
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Joint
tenants with right of survivorship
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(
)
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Community
property (check only if resident of community property
state)
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(
)
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Partnership
(1)
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(
)
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Corporation
(2)
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(
)
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Trust
(3)
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(
)
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Limited
Liability Company (4)
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(
)
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Employee
Benefit Plan under ERISA
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(
)
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Other
(please
specify:____________________)
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________________
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1.
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Please
enclose a copy of the partnership agreement and a current list of
all
partners.
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2.
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Please
enclose a copy of the articles or certificate of incorporation, bylaws,
and a resolution authorizing this investment and indicating the authority
of the signatory hereto.
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3.
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Please
enclose a copy of the trust
instrument.
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4.
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Please
enclose a copy of the articles of formation and members' agreement
or
regulations.
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GRAN
TIERRA ENERGY INC.
Acceptance
of Subscription
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Agreed
and accepted as to $___________________
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Dated:___________________
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GRAN
TIERRA ENERGY INC.
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By:______________________________________
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Name:____________________________________
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Its:
______________________________________
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