SUBSCRIPTION AGREEMENT
THIS
SUBSCRIPTION AGREEMENT (the “Agreement”) is made as of this [____] day of
__________ 2005, by and among Goldstrike, Inc., a Nevada corporation (the
“Company”),
Gran
Tierra Energy, Inc. (“Gran
Tierra”)
and
the investor identified on the signature page to this Agreement (the
“Investor”).
RECITALS:
WHEREAS,
the Company and Gran Tierra have agreed in principle to enter into a definitive
Agreement of Merger and Plan of Reorganization pursuant to which it is expected
that a newly organized, wholly-owned Canadian subsidiary of the Company will
merge with and into Gran Tierra (the “Merger”)
and
immediately after which (the “Merger
Effective Date”),
it is
currently expected that the Company will change its name to a name determined
by
Gran Tierra.
WHEREAS,
the Company is offering pursuant to Rule 506 of Regulation D of the Securities
Act of 1933, as amended (the “Securities
Act”),
to
“accredited investors” (as such term is defined in Rule 501(a) of Regulation D,)
units (the “Units”)
consisting of 1 share of the Company’s common stock, par value $.001 per share
(the “Common
Stock”),
and a
warrant exercisable for five years to purchase one-half of a share of Common
Stock at an exercise price of $.625 per one-half share (the “Investor
Warrants”)
at the
purchase price of $.80 per Unit (the “Offering”).
WHEREAS,
the closing of the offering is conditioned on the receipt of acceptable
subscriptions representing aggregate gross proceeds of at least $7,000,000
(the
“Minimum
Offering Amount”)
and
the receipt of a duly authorized certificate of the principal executive officer
of Gran Tierra Energy, Inc. (“Gran
Xxxxx”)
certifying that all conditions precedent to the closing of the acquisition
by
Gran Tierra of certain properties located in Argentina have been satisfied
(the
“Officer’s
Certificate”)
(the
Minimum Offering Amount and the Officer’s Certificate are collectively referred
to as the “Closing
Conditions”).
WHEREAS,
the Investor desires to subscribe for, purchase and acquire from the Company
and
the Company desires to sell and issue to the Investor the number of Units,
set
forth on the signature page of this Agreement (the “Investor’s
Units”)
upon
the terms and conditions and subject to the provisions hereinafter set
forth.
WHEREAS,
in connection with the purchase of the Investor’s Units, the Company and the
Investor will execute a Registration Rights Agreement dated as of the same
date
as this Agreement pursuant to which the Company will provide certain
registration rights to the Investor (the “Registration
Rights Agreement”).
WHEREAS,
The Company and McGuireWoods LLP (the “Escrow
Agent”)
have
entered into an Escrow Agreement (the “Escrow
Agreement”)
to
provide for the safekeeping of funds received and documents executed in
connection with the Offering.
NOW,
THEREFORE, for and in consideration of the mutual premises contained herein
and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Purchase
and Sale of the Units.
Subject
to the terms and conditions of this Agreement and the satisfaction of the
Closing Conditions, the Investor subscribes for and agrees to purchase and
acquire from the Company and the Company agrees to sell and issue to the
Investor the Investor’s Units at the purchase price of $0.80 per Unit (the
“Purchase
Price”).
2. The
Closing.
The
Offering will terminate on August 31, 2005 (the “Termination
Date”)
provided, that if at least $7,000,000 has been deposited in escrow by such
date
(i) an initial closing will be held on August 31, 2005, and (ii) the offering
will continue until the earlier of September 30, 2005 or the date on which
maximum proceeds of $9,600,000 have been deposited into escrow, unless otherwise
extended by Gran Tierra and the Company (the “Closing
Date”)
at the
offices of the Escrow Agent. On the Closing Date, the Escrow Agent shall deliver
the funds and Transaction Documents (as defined herein) held in escrow as of
the
Closing Date pursuant to the terms of the Escrow Agreement. As soon as
practicable after the Closing Date, the Company shall issue and deliver, or
shall cause the issuance and delivery of, a stock certificate, registered in
the
name of the Investor and representing the shares of Common Stock underlying
the
Investor’s Units and a warrant registered in the name of the Investor
representing the Investor’s right to purchase the number of shares of Common
Stock underlying the Investor’s Units.
3. Subscription
Procedure.
To
complete a subscription for Units, the Investor must fully comply with the
subscription procedure provided in this Section on or before 5:00 p.m. eastern
time on the Termination Date.
(a) Transaction
Documents.
Prior
to 5:00 p.m. eastern time on the Termination Date, the Investor shall review,
complete and execute this Agreement, the Investor Questionnaire attached hereto
as Appendix A and the Registration Rights Agreement and deliver such agreements
and questionnaire to the Escrow Agent at the address provided below. Executed
agreements and questionnaire may be delivered to the Escrow Agent by facsimile
using the facsimile number provided below if the Investor immediately thereafter
confirms receipt of such transmission with the Escrow Agent and delivers the
original copies of the agreements and questionnaire to the Escrow Agent as
soon
as practicable thereafter.
Escrow
Agent - Mailing Address and Facsimile Number:
McGuireWoods
LLP
00
Xxxxx
Xxxxx Xxxxxx
Xxxxx
0000
Xxxxxxxxxxxx,
Xxxxxxx 00000
Facsimile
Number: (000) 000-0000
Attention:
Xxxxxxxx Xxxxxx
Telephone
Number: (000) 000-0000
2
(b) Purchase
Price.
Simultaneously with the delivery of the Transaction Documents to the Escrow
Agent as provided herein, and in any event on or prior to 5:00 p.m. eastern
time
on the Termination Date, the Investor shall deliver to the Escrow Agent the
full
Purchase Price for the Investor’s Units by wire transfer of immediately
available funds pursuant to wire transfer instructions provided
below:
Escrow
Agent - Wire Transfer Instructions:
BANK
OF
AMERICA - Jacksonville, FL
ABA:
000000000 (Domestic Wires)
Swift
Code: XXXXXX0X (International Wires)
Credit:
McGuireWoods LLP IOLTA Account
Account
Number: 2101206537
Reference:
Xxxxx Xxxxx - Gran Tierra Escrow - 2046112-0001
McGuireWoods
Accounting Contact: Xxxxx Xxxxx (000) 000-0000
Bank
Contact: Xxxxxxx Xxxxx (000) 000-0000, Opt. 2, Ext. 2160
(c) Purchaser
Representative.
If the
Investor has retained the services of a purchaser representative to assist
in
evaluating the merits and risks associated with investing in the Units, the
Investor must deliver along with the Transaction Documents a purchaser
representative certificate in a form acceptable to the Company.
4. Representations
and Warranties of the Company and Gran Tierra.
In
order to induce the Investor to enter into this Agreement, the Company and,
as
applicable, Gran Tierra represent and warrant to the Investor the
following:
(a) Authority.
The
Company and Gran Tierra each are a corporation duly organized, validly existing,
and in good standing under the laws of the state in which they were incorporated
or otherwise formed, and has all requisite right, power, and authority to
execute, deliver and perform this Agreement.
(b) Subsidiaries.
The
Company has no direct or indirect subsidiaries (each a “Subsidiary”
and
collectively the “Subsidiaries”)
other
than those set forth in the Exchange Act Documents (as defined in Section 3(f)).
Except as disclosed in the Exchange Act Documents, the Company owns, directly
or
indirectly, all of the capital stock of each Subsidiary free and clear of any
and all liens, and all the issued and outstanding shares of capital stock of
each Subsidiary are validly issued and are fully paid, non-assessable and free
of preemptive and similar rights.
(c) Enforceability.
The
execution, delivery, and performance of this Agreement by the Company have
been
duly authorized by all requisite corporate action. This Agreement has been
duly
executed and delivered by each of the Company and Gran Tierra, and, upon its
execution by the Investor, shall constitute the legal, valid, and binding
obligation of each of the Company and Gran Tierra, enforceable in accordance
with its terms, except to the extent that its enforceability is limited by
bankruptcy, insolvency, reorganization, or other laws relating to or affecting
the enforcement of creditors’ rights generally and by general principles of
equity.
3
(d) No
Violations.
The
execution, delivery, and performance of this Agreement by the Company or by
Gran
Tierra does not, and will not, violate or conflict with any provision of the
Company’s or Gran Tierra’s respective Certificate of Incorporation or Bylaws, or
other charter documents, and does not and will not, with or without the passage
of time or the giving of notice, result in the breach of, or constitute a
default, cause the acceleration of performance, or require any consent under,
or
result in the creation of any lien, charge or encumbrance upon any property
or
assets of the Company, or as applicable of Gran Tierra, pursuant to, any
material instrument or agreement to which the Company, or Gran Tierra, is a
party or by which the Company, or Gran Tierra, or its properties are
bound.
(e) Capitalization.
The
authorized capital stock of the Company consists of: 75,000,000 shares of Common
Stock, of which as of June 30, 2005, 3,300,000 shares were issued and
outstanding. Upon issuance in accordance with the terms of this Agreement
against payment of the Purchase Price therefore, the shares of Common Stock
underlying the Investor’s Units will be duly and validly issued, fully paid, and
nonassessable and free and clear of all liens imposed by or through the Company,
and, assuming the accuracy of the representations and warranties of the Investor
and all other purchasers of Units in the Offering, will be issued in accordance
with a valid exemption from the registration or qualification provisions of
the
Securities Act, and any applicable state securities laws (the “State
Acts”).
(f) Exchange
Act Filing.
Other
than with respect to the quarterly reports on Form 10-QSB for the six months
ended June 30, 2005. During the 12 calendar months immediately preceding the
date of this Agreement, all reports and statements required to be filed by
the
Company with the Securities and Exchange Commission (the “Commission”)
under
the Securities Exchange Act of 1934, as amended (the “Exchange
Act”),
and
the rules and regulations thereunder, have been timely filed. Such filings,
together with all documents incorporated by reference therein, are referred
to
as “Exchange
Act Documents.”
Each
Exchange Act Document, as amended, conformed in all material respects to the
requirements of the Exchange Act and the rules and regulations thereunder,
and
no Exchange Act Document, as amended, at the time each such document was filed,
included any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(g) Company
Financial Statements.
The
audited financial statements, together with the related notes of the Company
at
December 31, 2004, included in the Company’s Annual Report on Form 10-KSB for
the fiscal year ended December 31, 2004 as filed with the Commission, and the
unaudited financial statements of the Company at June 30, 2005, for the six
months then ended, (collectively, the “Company
Financial Statements”)
included in the Company’s Quarterly Report on Form 10-QSB, fairly present in all
material respects, on the basis stated therein and on the date thereof, the
financial position of the Company at the respective dates therein specified
and
its results of operations and cash flows for the periods then ended (provided
that the unaudited financial statements are subject to normal year-end audit
adjustments and lack footnotes and other presentation items). Such statements
and related notes have been prepared in accordance with generally accepted
accounting principles in the United States applied on a consistent basis except
as expressly noted therein.
4
(h) No
Material Liabilities.
Except
for liabilities or obligations not individually in excess of $100,000, and
as
set forth in the Exchange Act Documents, since June 30, 2005, the Company has
not incurred any material liabilities or obligations, direct or contingent,
except in the ordinary course of business and except for liabilities or
obligations reflected or reserved against on the Company’s balance sheet as of
June 30, 2005, and there has not been any change, or to the knowledge of the
Company, development or effect (individually or in the aggregate) that is or
is
reasonably likely to be, materially adverse to the condition (financial or
otherwise), business, prospects, or results of operations of the Company and
the
Subsidiaries considered as a whole (a “Material
Adverse Effect”)
or any
change in the capital or material increase in the long-term debt of the Company,
nor has the Company declared, paid, or made any dividend or distribution of
any
kind on its capital stock.
(i) No
Disputes Against Company.
There
is no material pending or, to the knowledge of the Company, threatened (i)
action, suit, claim, proceeding, or investigation against the Company, at law
or
in equity, or before or by any Federal, state, municipal, or other governmental
department, commission, board, bureau, agency or instrumentality, domestic
or
foreign, (ii) arbitration proceeding against the Company, (iii) governmental
inquiry against the Company or (iv) any action or suit by or on behalf of the
Company pending or threatened against others.
(j) Approvals.
The
execution, delivery, and performance by the Company of this Agreement and the
offer and sale of the Shares require no consent of, action by or in respect
of,
or filing with, any person, governmental body, agency, or official other than
those consents that have been obtained prior to the Closing and those filings
required to be made pursuant to the Securities Act and any State Acts which
the
Company undertakes to file within the applicable time period.
(k) Compliance.
Neither
the Company nor Gran Tierra, nor any their respective Subsidiaries, (i) is
in
default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default
by
the Company nor Gran Tierra, or any of their respective Subsidiaries under),
nor
has the Company nor Gran Tierra, or any of their respective Subsidiaries
received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement, or any other agreement
or
instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in
violation of any order of any Court, arbitrator, or governmental body or (iii)
is or has been in violation of any statute, rule or regulation of any
governmental authority, including without limitation all foreign, federal,
state
and local laws relating to taxes, environmental protection, occupational health
and safety, product quality and safety and employment and labor matters, except
in each case as could not, individually or in the aggregate, have or reasonably
be expected to result in a Material Adverse Effect. The Company is in compliance
with the applicable requirements of the Xxxxxxxx-Xxxxx Act of 2002, as amended,
and the rules and regulations thereunder, except where such noncompliance could
not have or reasonably be expected to result in a Material Adverse
Effect.
5
(l) Patents
and Trademarks.
The
Company and Gran Tierra, or any of their respective Subsidiaries have, or have
rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses, and other
similar rights that are necessary or material for use in connection with their
respective businesses as described in the Exchange Act Documents and which
the
failure to so have could, individually or in the aggregate, have or reasonably
be expected to result in a Material Adverse Effect (collectively, the
“Intellectual
Property Rights”).
Neither the Company nor Gran Tierra, or any of their respective Subsidiaries,
has received a written notice that the Intellectual Property Rights used by
the
Company or Gran Tierra, or any of their respective Subsidiaries, violates or
infringes upon the rights of any person. Except as set forth in the Exchange
Act
Documents, to the knowledge of the Company, all such Intellectual Property
Rights are enforceable and there is no existing infringement by another person
of any of the Intellectual Property Rights, except where such infringement
could
not have or reasonably be expected to result in a Material Adverse
Effect.
(m) Transactions
With Affiliates and Employees.
Except
as set forth in the Exchange Act Documents, none of the officers or directors
of
the Company and, to the knowledge of the Company, none of the employees of
the
Company is presently a party to any transaction with the Company or any
Subsidiary (other than for services as employees, officers, and directors),
including any contract, agreement, or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director, or such employee or, to the knowledge of the Company, any entity
in
which any officer, director, or any such employee has a substantial interest
or
is an officer, director, trustee, or partner.
(n) Internal
Accounting Controls.
The
Company and the Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed
in
accordance with management’s general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and
to
maintain asset accountability, (iii) access to assets is permitted only in
accordance with management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. The Company has established disclosure controls and procedures
(as
defined in Exchange Act rules 13a-15(e) and 15d-15(e)) for the Company and
designed such disclosure controls and procedures to ensure that material
information relating to the Company and its Subsidiaries is made known to the
Company’s certifying officers by others within those entities, particularly
during the period in which the Company’s Form 10-KSB or 10-QSB, as the case may
be, are being prepared. The Company’s certifying officers have evaluated the
effectiveness of the Company’s controls and procedures as of the end of the
reporting period covered by the Company’s Form 10-KSB and each of the Company’s
Forms 10-QSB filed with the Commission (each such date, the “Evaluation
Date”)
and
presented in each such report their conclusions about the effectiveness of
the
Company’s disclosure controls and procedures based on their evaluations as of
the applicable Evaluation Date. Since the Evaluation Date of the Company’s most
recently filed Form 10-KSB or Form 10-QSB, there have been no significant
changes in the Company’s disclosure controls and procedures, the Company’s
internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) or 15d-15(f) or, to the Company’s knowledge, in other factors that
could significantly affect the Company’s internal controls over financial
reporting.
6
(o) Solvency.
Based
on the financial condition of the Company as of the Closing Date (and assuming
that the Closing shall have occurred), (i) the Company’s fair saleable value of
its assets exceeds the amount that will be required to be paid on or in respect
of the Company’s existing debts and other liabilities (including known
contingent liabilities) as they mature; (ii) the Company’s assets do not
constitute unreasonably small capital to carry on its business for the current
fiscal year as now conducted and as proposed to be conducted including its
capital needs taking into account the particular capital requirements of the
business conducted by the Company, and projected capital requirements and
capital availability thereof; and (iii) the current cash flow of the Company,
together with the proceeds the Company would receive, were it to liquidate
all
of its assets, after taking into account all anticipated uses of the cash,
would
be sufficient to pay all amounts on or in respect of its debt when such amounts
are required to be paid. The Company does not intend to incur debts beyond
its
ability to pay such debts as they mature (taking into account the timing and
amounts of cash to be payable on or in respect of its debt).
(p) Certain
Fees.
Other
than those finder’s fees payable in shares of common stock of the Company on the
closing of the Offering and the cash commission payable on the closing as
indicated in the Confidential Private Placement Memorandum provided to Investor
in connection with the Offering, no brokerage or finder’s fees or commissions
are or will be payable by the Company to any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank, or other person
with respect to the transactions contemplated by this Agreement. The Investor
shall have no obligation with respect to any claims (other than such fees or
commissions owed by an Investor pursuant to written agreements executed by
the
Investor which fees or commissions shall be the sole responsibility of such
Investor) made by or on behalf of other persons for fees of a type contemplated
in this Section that may be due in connection with the transactions contemplated
by this Agreement.
(q) Certain
Registration Matters.
Assuming the accuracy of the Investor’s representations and warranties set forth
in this Agreement and the Transaction Documents and the representations and
warranties made by all other purchasers of Units in the Offering, no
registration under the Securities Act is required for the offer and sale of
the
Investor’s Units by the Company to the Investor hereunder.
(r) Listing
and Maintenance Requirements.
Except
as specified in the Exchange Act Documents, the Company has not, in the two
years preceding the date hereof, received notice from any automated dealer
quotation system or stock exchange to the effect that the Company is not in
compliance with the listing or maintenance requirements thereof. The Company
is,
and has no reason to believe that it will not in the foreseeable future continue
to be, in compliance with the listing and maintenance requirements for continued
listing of the Common Stock on the NASD Over the Counter Bulletin
Board.
(s) Investment
Company.
The
Company and Gran Tierra are not, and are not an “affiliate” of, an “investment
company” within the meaning of the Investment Company Act of 1940, as
amended.
(t) No
Additional Agreements.
The
Company and Gran Tierra do not have any agreement or understanding with any
other purchasers of the Units in the Offering with respect to the transactions
contemplated by this Agreement on terms that differ substantially from those
set
forth in this Agreement.
7
(u) Disclosure.
Except
as provided in Section 9, the Company and Gran Tierra confirm that neither
they
nor any person acting on their behalf has provided the Investor, or its agents
or counsel, with any information that the Company or Gran Tierra believes would
constitute material, nonpublic information following the announcement of the
Closing and the transactions contemplated thereby. The Company understands
and
confirms that the Investor will rely on the foregoing representations and
covenants in effecting transactions in securities of the Company. All disclosure
provided to the Investor regarding the Company and Gran Tierra, their respective
businesses and the transactions contemplated hereby, furnished by or on behalf
of the Company or, as applicable, Gran Tierra (including the Company’s and Gran
Tierra’s representations and warranties set forth in this Agreement) are true
and correct and do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.
5. Representations
and Warranties of the Investor.
In
order to induce the Company to enter into this Agreement, the Investor
represents and warrants to the Company and Gran Tierra the
following:
(a) Authority.
If a
corporation, partnership, limited partnership, limited liability company, or
other form of entity, the Investor is duly organized or formed, as the case
may
be, validly existing, and in good standing under the laws of its jurisdiction
of
organization or formation, as the case may be. The Investor has all requisite
individual or entity right, power, and authority to execute, deliver, and
perform this Agreement.
(b) Enforceability.
The
execution, delivery, and performance of this Agreement by the Investor have
been
duly authorized by all requisite partnership, corporate or other entity action,
as the case may be. This Agreement has been duly executed and delivered by
the
Investor, and, upon its execution by the Company, shall constitute the legal,
valid, and binding obligation of the Investor, enforceable in accordance with
its terms, except to the extent that its enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium, or other laws relating
to or
affecting the enforcement of creditors’ rights generally and by general
principles of equity.
(c) No
Violations.
The
execution, delivery, and performance of this Agreement by the Investor do not
and will not, with or without the passage of time or the giving of notice,
result in the breach of, or constitute a default, cause the acceleration of
performance, or require any consent under, or result in the creation of any
lien, charge or encumbrance upon any property or assets of the Investor pursuant
to, any material instrument or agreement to which the Investor is a party or
by
which the Investor or its properties may be bound or affected, and, do not
or
will not violate or conflict with any provision of the articles of incorporation
or bylaws, partnership agreement, operating agreement, trust agreement, or
similar organizational or governing document of the Investor, as
applicable.
(d) Knowledge
of Investment and its Risks.
The
Investor has knowledge and experience in financial and business matters as
to be
capable of evaluating the merits and risks of Investor’s investment in the
Units. The Investor understands that an investment in the Company represents
a
high degree of risk and there is no assurance that the Company’s business or
operations will be successful. The Investor has considered carefully the risks
attendant to an investment in the Company, and that, as a consequence of such
risks, the Investor could lose Investor’s entire investment in the
Company.
8
(e) Investment
Intent.
The
Investor hereby represents and warrants that (i) the Investor’s Units are being
acquired for investment for the Investor’s own account, and not as a nominee or
agent and not with a view to the resale or distribution of all or any part
of
the Investor’s Units, and the Investor has no present intention of selling,
granting any participation in, or otherwise distributing any of the Investor’s
Units within the meaning of the Securities Act, (ii) the Investor’s Units are
being acquired in the ordinary course of the Investor’s business, and (iii) the
Investor does not have any contracts, understandings, agreements, or
arrangements, directly or indirectly, with any person and/or entity to
distribute, sell, transfer, or grant participations to such person and/or entity
with respect to, any of the Investor’s Units. The Investor is not purchasing the
Investor’s Units as a result of any advertisement, article, notice or other
communication regarding the Investor’s Units published in any newspaper,
magazine or similar media or broadcast over television or radio or presented
at
any seminar or any other general solicitation or general
advertisement.
(f) Investor
Status.
The
Investor is an “accredited investor” as that term is defined by Rule 501 of
Regulation D promulgated under the Securities Act and the information provided
by the Investor in the Investor Questionnaire, attached hereto as Appendix
A,
is
truthful, accurate, and complete. The Investor is not registered as a
broker-dealer under Section 15 of the Exchange Act or an affiliate of such
broker-dealer.
(g) Disclosure.
The
Investor has reviewed the information provided to the Investor by the Company
in
connection with the Investor’s decision to purchase the Investor’s Units,
including the Company’s Confidential Private Placement Memorandum distributed in
connection with the Offering and the Company’s publicly available filings with
the Commission and the information contained therein. The Company has provided
the Investor with all the information that the Investor has requested in
connection with the decision to purchase the Investor’s Units. The Investor
further represents that the Investor has had an opportunity to ask questions
and
receive answers from the Company regarding the business, properties, prospects,
and financial condition of the Company. All such questions have been answered
to
the full satisfaction of the Investor. Neither such inquiries nor any other
investigation conducted by or on behalf of the Investor or its representatives
or counsel shall modify, amend, or affect the Investor’s right to rely on the
truth, accuracy, and completeness of the disclosure materials and the Company’s
representations and warranties contained herein.
(h) No
Registration.
The
Investor understands that Investor may be required to bear the economic risk
of
Investor’s investment in the Company for an indefinite period of time. The
Investor further understands that (i) neither the offering nor the sale of
the
Investor’s Units has been registered under the Securities Act or any applicable
State Acts in reliance upon exemptions from the registration requirements of
such laws, (ii) the Investor’s Units must be held by the Investor indefinitely
unless the sale or transfer thereof is subsequently registered under the
Securities Act and any applicable State Acts, or an exemption from such
registration requirements is available, (iii) except as set forth in the
Registration Rights Agreement, dated as of the date hereof, between the Company
and the Investor, the Company is under no obligation to register any of the
shares of Common Stock underlying the Investor’s Units on the Investor’s behalf
or to assist the Investor in complying with any exemption from registration,
and
(iv) the Company will rely upon the representations and warranties made by
the
Investor in this Agreement and the Transaction Documents in order to establish
such exemptions from the registration requirements of the Securities Act and
any
applicable State Acts.
9
(i) Transfer
Restrictions.
The
Investor will not transfer any of the Investor’s Units or the shares of Common
Stock underlying the Investor’s Units or the Investor Warrants unless such
transfer is registered or exempt from registration under the Securities Act
and
such State Acts, and, if requested by the Company in the case of an exempt
transaction, the Investor has furnished an opinion of counsel reasonably
satisfactory to the Company that such transfer is so exempt. The Investor
understands and agrees that (i) the certificates evidencing the shares of Common
Stock underlying the Investor’s Units and the Investor Warrants will bear
appropriate legends indicating such transfer restrictions placed upon the Units
and shares of Common Stock and Investor Warrants, (ii) the Company shall have
no
obligation to honor transfers of any of the Investor’s Units, Investor Warrants
or shares of Common Stock underlying the Investor’s Units or Investor Warrants
in violation of such transfer restrictions, and (iii) the Company shall be
entitled to instruct any transfer agent or agents for the securities of the
Company to refuse to honor such transfers.
(j) Principal
Address.
The
Investor’s principal residence, if an individual, or principal executive office,
if an entity, is set forth on the signature page of this Subscription
Agreement.
(k) Canadian
Investors.
All
Investors who are Canadian residents for Canadian tax purposes acknowledge
that
they have received a Canadian Offering Memorandum in connection with the
Offering and that such memorandum provided that each Canadian Investor
purchasing Units in Canada is deemed to have represented to the Company that
the
Investor:
(i) is
resident in one of the Private Placement Provinces (as defined in the Canadian
Offering Memorandum) and is entitled under applicable provincial securities
laws
to purchase the Units without the benefit of a prospectus qualified under those
securities laws and, in the case of Investors in provinces other than Ontario,
without the services of a dealer registered pursuant to those securities
laws;
(ii) has
reviewed and acknowledges the terms including in such memorandum under the
heading “Resale Restrictions”;
(iii) if
in
Ontario, is an “accredited investor” as defined in Ontario Securities Commission
Rule 45-501 (“Rule 45-501”), and is not an individual unless purchasing from a
fully registered dealer within the meaning of Section 204 of the Regulation
to
the Securities Act (Ontario);
(iv) if
in
Quebec, is (i) a government, department or agency referred to in Section 43
of
the Securities Act (Quebec); (ii) a “sophisticated purchaser” within the meaning
of Section 44 of the Securities Act (Quebec); or (iii) a “sophisticated
purchaser” within the meaning of Section 45 of the Securities Act (Quebec)
purchasing for the portfolio of a person managed solely by it;
10
(v) if
in
British Columbia, Alberta, Saskatchewan, Manitoba or Xxxxxx Xxxxxx Island,
is an
“accredited investor” as defined in Multilateral Instrument 00-000 (“XX 00000”);
and
(vi) is
either
purchasing Units as principal for its own account, or is deemed to be purchasing
Units as principal for its own account in accordance with the applicable
securities laws of the province in which such purchaser is resident, by virtue
of being either: (i) a designated trust company; (ii) a designated insurance
company; (iii) a portfolio manager; or (iv) another entity similarly deemed
by
those laws to be purchasing as principal for its own account when purchasing
on
behalf of other beneficial purchasers.
(vii) By
purchasing the Units, the Investor further acknowledges that its name and other
specified information, including the number of Units it has purchased, may
be
disclosed to Canadian securities regulatory authorities and become available
to
the public in accordance with the requirements of applicable laws and the
Investor consents to the disclosure of that information.
6. Independent
Nature of Investor’s Obligations and Rights.
The
obligations of the Investor under this Agreement and the Transaction Documents
are several and not joint with the obligations of any other purchaser of Units
in the Offering, and the Investor shall not be responsible in any way for the
performance of the obligations of any other purchaser of Units in the Offering
under any Transaction Document. The decision of the Investor to purchase the
Investor’s Units pursuant to the Transaction Documents has been made by the
Investor independently of any other purchaser of Units in the Offering. 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 Documents. The Investor
acknowledges that no other purchaser of Units has acted as agent for the
Investor in connection with making its investment hereunder and that no other
purchaser of Units will be acting as agent of the Investor in connection with
monitoring its investment in the Units or enforcing its rights under the
Transaction Documents. The Investor shall be entitled to independently protect
and enforce its 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.
7. Prospectus
Delivery Requirement.
The
Investor hereby covenants with the Company not to make any sale of the
Investor’s Units or the shares of Common Stock underlying the Investor’s Units
or the Investor Warrants or the shares of Common Stock underlying the Investor
Warrants without complying with the provisions hereof and of the Registration
Rights Agreement, and without effectively causing the prospectus delivery
requirement under the Securities Act to be satisfied (unless the Investor is
selling in a transaction not subject to the prospectus delivery requirement).
.
11
8. Shareholder
Approval.
The
Company represents and warrants to the Investor that a vote of the stockholders
of the Company will not be required to approve the issuance of the Investor’s
Units.
9. Indemnification
of Investor.
In
addition to the indemnity provided in the Registration Rights Agreement, the
Company will indemnify and hold the Investor and its directors, officers,
shareholders, members, managers, partners, employees and agents (each, an
“Investor Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs, and reasonable attorneys’ fees and
costs of investigation (collectively, “Losses”) that any such Investor Party may
suffer or incur as a result of or relating to any misrepresentation, breach,
or
inaccuracy of any representation, warranty, covenant, or agreement made by
the
Company in any Transaction Document. In addition to the indemnity contained
herein, the Company will reimburse each Investor Party for its reasonable legal
and other expenses (including the cost of any investigation, preparation, and
travel in connection therewith) incurred in connection therewith, as such
expenses are incurred.
10. Non-Public
Information.
Subsequent to the Closing, the Company covenants and agrees that neither it
nor
any other person acting on its behalf will provide Investor or its agents or
counsel with any information that the Company believes constitutes material
non-public information, unless prior thereto Investor shall have executed a
written agreement regarding the confidentiality and use of such information.
The
Company understands and confirms that Investor shall be relying on the foregoing
representations in effecting transactions in securities of the
Company.
11. Further
Assurances.
The
parties hereto will, upon reasonable request, execute and deliver all such
further assignments, endorsements and other documents as may be necessary in
order to perfect the purchase by the Investor of the Investor’s
Units.
12. Entire
Agreement; No Oral Modification.
This
Agreement and the other Transaction Documents contain the entire agreement
among
the parties hereto with respect to the subject matter hereof and supersede
all
prior agreements and understandings with respect thereto and this Agreement
may
not be amended or modified except in a writing signed by both of the parties
hereto.
13. Binding
Effect; Benefits.
This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, successors and assigns; however, nothing in this
Agreement, expressed or implied, is intended to confer on any other person
other
than the parties hereto, or their respective heirs, successors or assigns,
any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
14. Counterparts.
This
Agreement may be executed in any number of counterparts, for each of which
shall
be deemed to be an original and all of which together shall be deemed to be
one
and the same instrument. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.
12
15. Governing
Law.
This
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the United States of America and the State of New York, both
substantive and remedial. Any judicial proceeding brought against either of
the
parties to this agreement or any dispute arising out of this Agreement or any
matter related hereto shall be brought in the courts of the State of New York,
New York County, or in the United States District Court for the Southern
District of New York and, by its execution and delivery of this agreement,
each
party to this Agreement accepts the jurisdiction of such courts.
16. Prevailing
Parties.
In any
action or proceeding brought to enforce any provision of this Agreement, or
where any provision hereof is validly asserted as a defense, the prevailing
party shall be entitled to receive and the nonprevailing party shall pay upon
demand reasonable attorneys’ fees in addition to any other remedy.
17. Notices.
All
communication hereunder shall be in writing and shall be mailed, delivered,
telegraphed or sent by facsimile or electronic mail, and such delivery shall
be
confirmed to the addresses as provided below:
if
to the
Investor:
to
the
address set forth on the signature page of this Agreement
if
to the
Company to:
Goldstrike,
Inc.
0000
Xxxx
Xxxxxxxx Xxxxxx
Xxxxx
0000
Xxxxxxxxx,
Xxxxxxx Xxxxxxxx
Xxxxxx
X0X 0X0
Telephone
number (000) 000-0000
if
to
Gran Tierra to:
Xxxxx
Xxxxx
00
- 0xx
Xxxxxx X.X.
Xxxxxxx,
Xxxxxxx, Xxxxxx X0X 1 G5
Attention:
Xxxxx Xxxx
Telephone
number (000) 000-0000
with
a
copy to:
McGuireWoods
LLP
Attention:
Xxxxx X. Xxxxx
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Telephone
number (000) 000-0000
13
18. Headings.
The
section headings herein are included for convenience only and are not to be
deemed a part of this Agreement.
[SIGNATURE
PAGES FOLLOW]
14
IN
WITNESS WHEREOF, the parties hereto have executed this Subscription Agreement
as
of the date first written above.
|
COMPANY
|
|
|
Goldstrike,
Inc.
|
|
|
By:________________________________________
|
|
|
Name:______________________________________
|
|
|
Its:________________________________________
|
[SIGNATURE
PAGES OF GRAN TIERRA AND INVESTOR FOLLOW]
15
IN
WITNESS WHEREOF, the parties hereto have executed this Subscription Agreement
as
of the date first written above.
|
By:________________________________________
|
|
|
Name:______________________________________
|
|
|
Its:________________________________________
|
[SIGNATURE
PAGE OF INVESTOR FOLLOWS]
16
APPENDIX
A
Investor
Questionnaire
