SUBSCRIPTION AGREEMENT AND UNDERTAKING
(UNITS)
(U.S. Subscribers)
TO: St. Xxxx Minerals Inc.
0000-0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Dear Sirs:
re: SUMMO MINERALS CORPORATION (the "Company")
Subscription Agreement and Undertaking
1. ST. XXXX MINERALS INC. (the "Subscriber") hereby agrees to
purchase from the Company and the Company agrees to sell to the
Subscriber 616,090 common shares (the "Private Placement Shares")
in the capital stock of the Company at and for a price of $1.10
Cdn. per share, for a total purchase price of $677,700 Cdn.
($500,000 U.S.) (the "Subscription Proceeds"), subject to the
satisfaction of the sole condition that the purchase and sale
documentation be accepted for filing by applicable securities
regulatory authorities.
2. As further consideration for the purchase of the Private
Placement Shares, the Subscriber will be issued a non-transferable
Share Purchase Warrant (the "Warrant"), conferring on the
Subscriber the right to purchase up to an additional 616,090 common
shares (the "Warrant Shares") in the capital stock of the Company
exercisable at any time within two years of the date of this
agreement at a price of $1.10 Cdn. per share.
3. The Subscriber hereby represents and warrants to the Company
that:
(a) the Subscriber is purchasing the Private Placement Shares
and Warrants as principal;
(b) the Subscriber is purchasing the Private Placement Shares
and Warrants as an investment and not for the purpose of
resale or other disposition; and
(c) the Subscriber has received independent legal advice with
respect to this transaction.
4. The Subscriber acknowledges and confirms that:
(a) the Private Placement Shares and Warrants are being
issued pursuant to exemptions from prospectus and
registration requirements set out in the Securities Act
(British Columbia) and the Securities Rules thereunder
and the Securities Act (Ontario) and the regulations
thereunder (collectively the "Act");
(b) the Private Placement Shares, the Warrants and the
Warrant Shares (collectively the "Securities") have not
been registered under the United States Securities Act of
1933 (the "1933 Act") and may not be offered or sold in
the United States unless registered under the 1933 Act
and the securities laws of all applicable states of the
United States or an exemption from such registration
requirements is available, and that the Company has no
obligation or present intention of filing a registration
statement under the 1933 Act in respect of the
Securities;
(c) the Subscriber is a U.S. Person and represents and
warrants to the Company as set forth in Appendix A
hereto, or
(ii) represents and warrants that:
(1) the Subscriber is not a "U.S. Person" and is
not acquiring the Securities for the account
or benefit of a "U.S. Person". For the
purposes of this Subscription Agreement, a
"U.S. Person" means:
(A) a natural person resident in the United
States;
(B) a partnership or corporation organized or
incorporated under the laws of the United
States;
(C) an estate of which any executor or
administrator is a U.S. Person;
(D) a trust of which any trustee is a U.S.
Person;
(E) any agency or branch of a foreign entity
located in the United States;
(F) a non-discretionary account or similar
account (other than an estate or trust)
held by a dealer or other fiduciary for
the benefit or account of a U.S. Person;
(G) a discretionary account or similar
account (other than an estate or trust)
held by a dealer or other fiduciary
organized, incorporated, or (if an
individual) resident in the United
States; and
(H) a partnership or corporation if:
I. organized or incorporated under the
laws of any foreign jurisdiction;
and
II. formed by a U.S. Person principally
for the purpose of investing in
securities not registered under the
1933 Act, unless it is organized or
incorporated, and owned, by
accredited investors (as defined by
Regulation D under the 0000 Xxx) who
are not natural persons, estates or
trusts.
(2) the Subscriber acknowledges that the
certificates representing the Warrants will
bear a legend stating that the Warrants and
the Warrant Shares have not been registered
under the 1933 Act or the securities laws of
any state of the United States and the
Warrants may not be exercised in the United
States or by or on behalf of a U.S. Person
unless registered under the 1933 Act and the
securities laws or all applicable states of
the United States or an exemption from such
registration requirements is available;
(3) the Subscriber acknowledges that any person
who exercises a Warrant will be required to
provide to the Company:
(i) written certification that it is not a
U.S. Person and the Warrant is not being
exercised on behalf of a U.S. Person; or
(ii) a written opinion of counsel to the
effect that the Warrant and the Warrant
Shares have been registered under the
1933 Act or are exempt from registration
thereunder;
(4) no offers to sell the Securities were made by
any person to the Subscriber while the
Subscriber was in the United States; and
(5) the Subscriber was outside the United States
at the time of execution and delivery of this
Subscription Agreement.
5. The Subscriber acknowledges and confirms that:
(a) the Act and/or the current policies of The Toronto Stock
Exchange and the Vancouver Stock Exchange (collectively
the "Exchanges") provide that the Private Placement
Shares and Warrant Shares may not be sold or otherwise
disposed of for a period of 12 months from the date of
this agreement (the "Hold Period") except where such
disposition takes place pursuant to an exemption from
prospectus and registration requirements under the Act or
pursuant to a written Order of the applicable
governmental securities regulatory body;
(b) a legend indicating the Hold Period will be imprinted on
the share certificate(s) issued for the Private Placement
Shares and Warrant Shares;
(c) notwithstanding that it may lawfully dispose of the
Private Placement Shares and Warrant Shares during the
Hold Period, it may not do so until it has obtained the
prior approval of the Exchanges;
(d) the purchase of the Private Placement Shares and Warrants
is a highly speculative investment but the Subscriber has
a net worth sufficient to permit it to afford a total
loss of its investment hereunder without a material
effect on its financial position;
(e) this transaction has not been reviewed by any securities
regulatory body other than the Exchanges and then only to
ensure compliance with its policies relating to the terms
of the sale;
(f) it is in possession of all of the information relating to
the Company that is necessary in order to make an
informed investment decision;
(g) it is not acquiring the Private Placement Shares and
Warrants as a result of being aware of any information
about the material affairs of the Company that is not
generally known to the public save knowledge of this
particular transaction; and
(h) upon the obtaining of "Regulatory Approval" (as
hereinafter defined), the Company will have unconditional
access to the Subscription Proceeds and accrued interest
thereon.
6. The Company hereby represents and warrants to the Subscriber
that:
(a) it is a company duly incorporated under the laws of the
Province of British Columbia and is up-to-date with
respect to its filings with the applicable corporate
registration agency;
(b) it is a reporting issuer within the meaning of the Act;
(c) to the best of its knowledge, it is not in default of its
listing agreement with the Exchanges;
(d) its common shares are listed for trading on the
Exchanges; and
(e) the common shares to be issued to the Subscriber
hereunder will, when issued, be issued and allotted as
fully paid and non-assessable common shares, free and
clear of all liens, charges and encumbrances and free of
all pooling or escrow restrictions.
7. The Company covenants and agrees with the Subscriber as
follows:
(a) it shall use its best efforts to have this agreement
accepted for filing by the Exchanges (such acceptance
being referred to hereinafter as the "Regulatory
Approval") as quickly as reasonably practicable; PROVIDED
THAT if Regulatory Approval has not been obtained within
180 days of the date of this agreement, the Subscription
Proceeds, together with accrued interest thereon, will be
immediately returned by the Company to the Subscriber,
and this agreement will be void ab initio, and the
Subscriber will have no claim, right or action against
the Company;
(b) within 10 business days of the obtaining of Regulatory
Approval, it will issue the Private Placement Shares and
Warrants to the Subscriber;
(c) until Regulatory Approval has been obtained, it will not
deal with the Subscription Proceeds in any way.
8. The Subscriber hereby agrees to execute any and all further
documentation which may be required by the applicable securities
regulatory authorities with respect to this transaction.
9. The Subscriber hereby confirms that, in the event it is not a
resident of British Columbia, it will ensure that the applicable
securities legislation, order or regulatory policy concerning the
purchase, holding or resale of the securities herein subscribed for
is complied with.
10. This letter agreement may be executed in several parts in the
same form and such parts as so executed will together form one
original agreement and such parts, if more than one, will be read
together and construed as if all the signing parties hereto had
executed one copy of this letter agreement.
DATED as of the 17th day of October, 1996.
Yours very truly,
SUMMO MINERALS CORPORATION
Per: c/s
Director
ST. XXXX MINERALS INC. hereby agrees to the foregoing as of the
17th day of October, 1996.
ST. XXXX MINERALS INC.
Per:
(signature)
(name - please print)
(title - please print)
Appendix "A" to Subscription Agreement and Undertaking (Units) with
SUMMO MINERALS CORPORATION (the "Company")
ONLY U.S. SUBSCRIBERS NEED TO SIGN THIS
All capitalized terms herein, unless otherwise defined, have the meaning
ascribed thereto in the Private Placement Subscription Agreement.
The Subscriber covenants, represents and warrants to the Company that:
(a) it is a "U.S. Person" as defined in Regulation S under the
Securities Act of 1933 (United States) (as amended) (the "1933
Act");
(b) it has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of the
investment and it is able to bear the economic risk of loss of the
investment;
(c) it is purchasing the Units for investment only and not with a view
to resale or distribution and, in particular, it has no intention
to distribute either directly or indirectly any of the Units,
Shares, Warrants or Warrant Shares in the United States or to "U.S.
Persons"; provided however that the Subscriber may sell or otherwise
dispose of any of the Shares or Warrant Shares pursuant to
registration thereof pursuant to the 1933 Act and any applicable
State securities laws or under an exemption from such registration
requirements;
(d) it understands that the Securities have not been and will not be
registered under the 1933 Act and that the sale contemplated hereby
is being made in reliance on an exemption from such registration
requirements;
(e) it is acquiring the Securities for its own account or for the
account of an "accredited investor" as to which it exercises sole
investment discretion, and not with a view to any resale,
distribution or other disposition of the Securities in violation of
the United States securities laws;
(f) it satisfies one or more of the categories indicated below (please
place an "X" on the appropriate line:
____ Category 1 An organization described in Section
501(c)(3) of the United States Internal Revenue
Code, a corporation, a Massachusetts or similar
business trust or partnership, nor formed for the
specific purpose of acquiring the Securities, with
total assets of $5,000,000 U.S.
____ Category 2 A natural person whose individual net worth,
or joint net worth with that person's spouse, at
the date hereof exceeds $1,000,000 U.S.;
____ Category 3 A natural person who had an individual income
in excess of $200,000 U.S. in each of the two most
recent years or joint income with that person's
spouse in excess of $300,000 U.S. in each of those
years and has a reasonable expectation of reaching
the same income level in the current year; or
____ Category 4. A "bank" as defined under Section (3)(a)(2)
of the 1933 Act or savings and loan association or
other institution as defined in Section 3(a)(5)(A)
of the 1933 Act acting in its individual or
fiduciary capacity; a broker dealer registered
pursuant to Section 15 of the Securities Exchange
Act of 1934; an insurance company as defined in
Section 2(13) of the 1933 Act; an investment
company registered under the Investment Company Act
of 1940 or a business development company as
defined in Section 2(a)(48) of such act; 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; a plan with total assets in excess of
$5,000,000 U.S. established and maintained by a
state, a political subdivision thereof, or an
agency or instrumentality of a state or a political
subdivision thereof, for the benefit of its
employees; an employee benefit plan within the
meaning of the Employee Retirement Income Security
Act of 1974 whose investment decisions 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 adviser, or if the employee benefit plan
has total assets in excess of $5,000,000 U.S., or,
if a self-directed plan, whose investment decisions
are made solely by persons that are accredited
investors;
____ Category 5. A private business development company as
defined in Section 202(a)(22) of the Investment
Advisers Act of 1940;
____ Category 6. A director or executive officer of the
Company;
____ Category 7. A trust with total assets in excess of
$5,000,000 U.S., not formed for the specific
purpose of acquiring the Shares, whose purchase is
directed by a sophisticated person as described in
Rule 506(b)(2)(ii) under the 1933 Act; or
____ Category 8. An entity in which all of the equity owners
satisfy the requirements of one or more of the
foregoing categories.
(g) it acknowledges that it has not purchased the Units as a result of
any form of general solicitation or general advertising including
advertisements, articles, notices or other communications published
in any newspaper, magazine or similar media or broadcast over radio,
or television, or any seminar or meeting whose attendees have been
invited by general solicitation or general advertising;
(h) it agrees that if it decides to offer, sell or otherwise transfer
any of the Securities, it will not offer, sell or otherwise transfer
any of such Securities directly or indirectly, unless:
(i) the sale is to the Company;
(ii) the sale is made outside the United States in a transaction
meeting the requirements of Rule 904 of Regulation S under the
1933 Act and in compliance with applicable local laws and
regulations;
(iii) the sale is made pursuant to the exemption from the
registration requirements under the 1933 Act provided by Rule
144 thereunder and in accordance with any applicable state
securities or "Blue Sky" laws; or
(iv) the Securities are sold in a transaction that does not require
registration under the 1933 Act or any applicable U.S. state
laws and regulations governing the offer and sale of
securities, and it has prior to such sale furnished to the
Company an opinion of counsel reasonable satisfactory to the
Company;
(i) the Subscriber acknowledges that it has not purchased the Securities
as a result of, and will not itself engage in, any "directed selling
efforts" (as defined in Regulation S under the 0000 Xxx) in the
United States in respect of the Securities which would include any
activities undertaken for the purpose of, or that could reasonably
be expected to have the effect of, conditioning the market in the
United States for the resale of the Units; provided however that the
Subscriber may sell or otherwise dispose of any of the Securities
pursuant to registration of the Securities pursuant to the 1933 Act
and any applicable state securities laws or under an exemption from
such registration requirements and as otherwise provided herein;
(j) the Subscriber understands and acknowledges that upon the issuance
thereof, and until such time as the same is no longer required under
the applicable requirements of the 1933 Act or applicable U.S. state
laws and regulations, the certificates representing any of the
Securities will bear a legend and that certificates representing
Securities issued in exchange therefor or in substitution thereof
will also bear a legend; provided that if the Securities are being
sold under clause 8(b) above, the legend may be removed by providing
a declaration or legal opinion satisfactory to counsel to the
Company to the registrar and transfer agent of the Company to the
effect that the requirements of Rule 904 of Regulation S under the
1933 Act and applicable local laws and regulations have been
complied with;
(k) the Subscriber consents to the Company making a notation on its
records or giving instruction to the registrar and transfer agent
of the Company in order to implement the restrictions on transfer
set forth and described herein; and
(l) the Subscriber, if an individual, is a resident of the State or
other jurisdiction in its address on Subscription Agreement and
Undertaking, or if the Subscriber is not an individual, the office
of the Subscriber at which the Subscriber received and accepted the
offer to purchase the Securities is the address listed on the
Subscription Agreement and Undertaking.
Date Duly authorized signatory for
Subscriber
Print name of Subscriber
