MANAS PETROLEUM CORPORATION SUBSCRIPTION AGREEMENT UNITS
EXHIBIT 10.3
XXXXX
PETROLEUM CORPORATION
UNITS
|
|
INSTRUCTIONS
|
All
Subscribers:
1. Complete
and sign pages 1, 2 and 3 of the Subscription Agreement.
2. Complete
and sign Schedule D attached to the Subscription Agreement.
CW1847202.2
THIS
SUBSCRIPTION AGREEMENT RELATES TO AN OFFERING OF SECURITIES IN AN OFFSHORE
TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO
REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“1933 ACT”).
NONE
OF THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT (THE “SUBSCRIPTION
AGREEMENT”) RELATES HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933 (THE “1933 ACT”), OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO
REGISTERED, NONE MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED
STATES OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY
NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT.
(Canadian
Subscribers)
|
TO:
|
Xxxxx
Petroleum Corp. (the “Company”)
|
|
|
Xxxxxxxxxxxxxx
0
|
|
|
0000
Xxxx
|
|
|
Xxxxxxxxxxx
|
|
|
Purchase of
Units
|
On the
basis of the representations and warranties and subject to the terms and
conditions set forth herein, the undersigned subscriber (the “Subscriber”) hereby
irrevocably subscribes for and agrees to purchase from the Company the number of
units (each a “Unit” and
collectively the “Units”) specified below at a
purchase price of U.S. $1,000 per Unit for the aggregate purchase price shown
below and otherwise on the terms and conditions set out in sections 1 to 19
below and in the applicable Schedules hereto (the agreement to purchase being
hereafter referred to as the “Subscription” and the
aggregate purchase price being hereafter referred to as the “Subscription
Proceeds”). Each Unit shall consist of one convertible
debenture (each a “Debenture” and collectively
the “Debentures”) in the
face (principal) amount of U.S. $1,000 and 250 share purchase warrants (each a
“Warrant” and
collectively the “Warrants”). Each
Debenture shall be substantially in the form attached to this Subscription
Agreement as Exhibit “A”. Each Warrant shall entitle the holder to
purchase one share of the Company’s common stock at an exercise price of U.S.
$2.10 for a period of two years from the Closing Date (as hereinafter defined)
and shall be substantially in the form attached to this Subscription Agreement
as Exhibit “B”. The terms of the offering pursuant to which this
Subscription is made are as set forth on the Term Sheet attached to this
Subscription Agreement as Exhibit “C”.
The Units
are immediately severable into their constituent Shares and Warrants upon
issuance. The Debentures, the shares of the Company’s common stock
that may be issued upon conversion of the Debentures (the “Conversion Shares”) and the
shares of the Company’s common stock that may be issued upon exercise of the
Warrants (the “Warrant
Shares”) may be hereafter referred to, collectively, as the “Securities”. The
Units are part of an offering (the “Offering”) of up to 1,000
Units for gross aggregate proceeds of up to U.S. $10,000,000.
DATED this _____ day of
___________________, 2008.
CW1847202.2
- -
|
Details of
Subscriber:
(Name of Subscriber - please
print)
By:
(Authorized
Signature)
(Official Capacity or Title -
please print)
(Please print name of individual
whose signature appears above if different than the name of the Subscriber
printed above.)
(Subscriber's
Address)
(Subscriber's
Address)
(Telephone
Number)
(E-Mail
Address)
|
Number of
Units:
|
|
|
Aggregate Subscription Price:
US$
(the “Subscription
Price”)
|
||
|
Details of Beneficial Purchaser
(if not the same as Subscriber):
(Name of Beneficial
Purchaser)
(Beneficial Purchaser’s
Address)
(Beneficial Purchaser’s Telephone
Number)
|
||
|
Register the Units as set forth
below:
(Name)
(Account reference, if
applicable)
(Address)
(Address)
|
Deliver the Units as set forth
below:
(Name)
(Account reference, if
applicable)
(Contact Name)
(Address)
(Address)
|
Note: The Subscriber must
either be:
(a) purchasing
the securities offered hereunder as principal or
(b) deemed
to be purchasing such securities as principal, by virtue of being:
|
|
(i)
a trust company or trust corporation described in paragraph (16) of the
definition of “accredited investor” in Schedule “D” (other than a trust
company or trust corporation registered under the laws of Xxxxxx Xxxxxx
Island that is not registered or authorized under the Trust and Loan
Companies Act (Canada) or under comparable legislation in another
jurisdiction of Canada); or
|
(ii) a person described in paragraph
(17) of the definition of “accredited investor” in Schedule “D”.
Present Ownership of
Securities
The
Subscriber either [check
appropriate box]:
|
owns
directly or indirectly, or exercises control or direction over, no common
shares of the Corporation (“Common Shares”) or
securities convertible into Common Shares;
or
|
|
owns
directly or indirectly, or exercises control or direction over,
____________ Common Shares of and/or convertible securities entitling the
Subscriber to acquire an additional ____________ Common
Shares.
|
Insider
Status
The
Subscriber either [check
appropriate box]:
|
|
is
an “Insider” of the Corporation,
meaning:
|
|
|
(a)
|
a
director or senior officer of the
Corporation;
|
|
|
(b)
|
a
director or senior officer of a person that is itself an insider or
subsidiary of the Corporation;
|
|
|
(c)
|
a
person that has
|
|
|
(i)
|
direct
or indirect beneficial ownership
of;
|
|
|
(ii)
|
control
or direction over; or
|
|
|
(iii)
|
a
combination of direct or indirect beneficial ownership of and of control
or direction over securities of the Corporation carrying more than 10% of
the voting rights attached to all the Corporation’s outstanding voting
securities, excluding, for the purpose of the calculation of the
percentage held, any securities held by the person as underwriter in the
course of a distribution, or
|
|
|
(d)
|
the
Corporation itself, if it has purchased, redeemed or otherwise acquired
any securities of its own issue, for so long as it continues to hold those
securities; or
|
is not an Insider of the
Corporation.
This
subscription is accepted by XXXXX PETROLEUM CORP. this
_____ day of ______________,
2008.
|
XXXXX
PETROLEUM CORP.
Per:
Authorized
Signatory
|
CW1847202.2
- -
Payment
1.1 The
Subscription Proceeds pertaining to the purchase of the Units shall be paid
before the Closing Date (as defined in Section 3.1, below) by wire transfer to
the Company pursuant to the instructions provided below:
Wire
Transfer to:
Bank: Credit
Suisse Winterthur
Xxxxxxxxxxxx
0
0000
Xxxxxxxxxx, Xxxxxxxxxxx
IBAN
No.: XX00
0000 0000 0000 0000 0
Swift
No.: XXXXXXXX00X
Account
No.: 244189-72
Title of
Account: Xxxxx
Petroleum Corporation
Reference: Debenture
Financing
1.2 All
references herein to monetary amounts are to lawful money of the United States,
unless otherwise specified.
|
2.
|
Documents Required
from Subscriber
|
2.1 Prior to
the Closing Date the Subscriber must complete, sign and return to the Company an
executed copy of this Subscription Agreement, a completed and duly executed copy
of the Accredited Investor Status Certificate which is attached hereto as
Exhibit “D” and any other transaction documents necessary to the completion of
the purchase of the Units. This Subscription Agreement shall be
binding on the Subscriber upon delivery to the Company of a copy of this
Subscription Agreement executed by the Subscriber.
2.2 The
Subscriber shall complete, sign and return to the Company as soon as possible,
on request by the Company, any documents, questionnaires, notices and
undertakings as may be required by regulatory authorities, the OTC Bulletin
Board or applicable law.
2.3 Subject
to the terms hereof, the Subscription will be effective upon its acceptance by
the Company.
|
3.
|
Closing
|
3.1 The sale
of the Debenture shall be completed (the “Closing”) at 9:00 a.m.
(Pacific Standard Time) on _________________________, 2008 (the “Closing Date”) or such other
date as the parties may agree upon. Closing will be held at the
offices of _____________________________.
3.2 At each
Closing:
|
(a)
|
the
Subscriber will deliver the Subscription Proceeds to the extent not
previously delivered; and
|
|
(b)
|
the
Company will deliver certificates for the Debentures and the Warrants
registered as provided in this Subscription
Agreement.
|
3.3 After the
Closing but within the time prescribed by regulation, the Company shall file
with the applicable authorities any documents required in order to report the
completion of the Subscription and the sale of the securities to the
Subscriber.
|
4.
|
Acknowledgements of
Subscriber
|
4.1 The
Subscriber acknowledges and agrees that:
|
(a)
|
none
of the Securities have been or will be registered under the 1933 Act, or
under any state securities or “blue sky” laws of any state of the United
States, and, unless so registered, may not be offered or sold in the
United States or, directly or indirectly, to U.S. Persons, as that term is
defined in Regulation S under the 1933 Act (“Regulation S”), except
in accordance with the provisions of Regulation S, pursuant to an
effective registration statement under the 1933 Act, or pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the 1933 Act and in each case only in accordance with
applicable state securities laws;
|
|
(b)
|
the
Company has not undertaken, and will have no obligation, to register any
of the Securities under the 1933 Act or any other securities
legislation;
|
|
(c)
|
it
has received and carefully read this Subscription
Agreement;
|
|
(d)
|
the
decision to execute this Subscription Agreement and purchase the
Securities agreed to be purchased hereunder has not been based upon any
oral or written representation as to fact or otherwise made by or on
behalf of the Company and such decision is based entirely upon a review of
any public information which has been filed by the Company with the
Securities and Exchange Commission (“SEC”) in compliance, or
intended compliance, with applicable securities
legislation;
|
|
(e)
|
it
and its advisor(s) have had a reasonable opportunity to ask questions of
and receive answers from the Company in connection with the sale of the
Securities hereunder, and to obtain additional information, to the extent
possessed or obtainable by the Company without unreasonable effort or
expense;
|
|
(f)
|
the
books and records of the Company were available upon reasonable notice for
inspection, subject to certain confidentiality restrictions, by the
Subscriber during reasonable business hours at its principal place of
business and that all documents, records and books in connection with the
sale of the Securities hereunder have been made available for inspection
by it and its attorney and/or
advisor(s);
|
|
(g)
|
the
financial statements of the Company have been prepared in accordance with
generally accepted accounting principles of the United States, which
differ in some respects from generally accepted accounting principles of
Canada, and thus may not be comparable to financial statements of Canadian
companies;
|
|
(h)
|
all
information which the Subscriber has provided to the Company is correct
and complete as of the date the Subscription Agreement is signed, and if
there should be any change in such information prior to this Subscription
Agreement being executed by the Company, the Subscriber will immediately
provide the Company with such
information;
|
|
(i)
|
the
Company is entitled to rely on the representations and warranties of the
Subscriber contained in this Subscription Agreement and the Subscriber
will hold the Company harmless from any loss or damage it may suffer as a
result of the Subscriber’s failure to correctly complete this Subscription
Agreement;
|
|
(j)
|
the
Subscriber has been advised to consult the Subscriber’s own legal, tax and
other advisors with respect to the merits and risks of an investment in
the Securities and with respect to applicable resale restrictions, and it
is solely responsible (and the Company is not in any way responsible) for
compliance with:
|
|
(i)
|
any
applicable laws of the jurisdiction in which the Subscriber is resident in
connection with the distribution of the Securities hereunder,
and
|
|
(ii)
|
applicable
resale restrictions;
|
|
(k)
|
none
of the Securities are listed on any stock exchange or automated dealer
quotation system and no representation has been made to the Subscriber
that any of the Securities will become listed on any stock exchange or
automated dealer quotation system, except that currently certain market
makers make market in the common shares of the Company on the OTC Bulletin
Board operated by the Financial Industry Regulatory Authority
(“FINRA”);
|
|
(l)
|
none
of the Securities may be offered or sold by the Subscriber to a U.S.
Person (as defined in Section 5.2, below, or
for the account or benefit of a U.S. Person (other than a distributor)
prior to the end of the Distribution Compliance Period (as defined
herein);
|
|
(m)
|
the
Company will refuse to register any transfer of the Securities not made in
accordance with the provisions of Regulation S, pursuant to an effective
registration statement under the 1933 Act or pursuant to an available
exemption from the registration requirements of the 1933 Act and in each
case in accordance with applicable securities
laws;
|
|
(n)
|
neither
the SEC nor any other securities commission or similar regulatory
authority has reviewed or passed on the merits of the
Securities;
|
|
(o)
|
no
documents in connection with the sale of the Securities hereunder have
been reviewed by the SEC or any state securities
administrators;
|
|
(p)
|
there
is no government or other insurance covering any of the
Securities;
|
|
(q)
|
the
Subscriber is purchasing the Securities pursuant to an exemption from the
registration and the prospectus requirements of applicable securities
legislation on the basis that the Subscriber is not a resident of the
United States and that it is an “accredited investor” in Canada (as that
term is defined in Canada’s National Instrument 45-106) and, as a
consequence, that:
|
|
(i)
|
the
Subscriber is restricted from using most of the civil remedies available
under securities legislation,
|
|
(ii)
|
the
Subscriber may not receive information that would otherwise be required to
be provided under securities legislation,
and
|
|
(iii)
|
the
Company is relieved from certain obligations that would otherwise apply
under securities legislation;
|
|
(r)
|
because
the Subscriber is not purchasing the Units under a prospectus, the
Subscriber will not have the civil protections, rights and remedies that
would otherwise be available to the Subscriber under the securities laws
in any Province of Canada, including statutory rights of rescission or
damages;
|
|
(s)
|
the
certificates evidencing the Shares and Warrants will bear a legend, and
the Warrant Shares may bear a legend, regarding restrictions on transfer
as required pursuant to applicable securities
laws;
|
|
(t)
|
the
statutory and regulatory basis for the exemption claimed for the offer and
sale of the Securities, although in technical compliance with Regulation
S, would not be available if the offering is part of a plan or scheme to
evade the registration provisions of the 1933 Act;
and
|
|
(u)
|
this
Subscription Agreement is not enforceable by the Subscriber unless it has
been accepted by the Company.
|
|
5.
|
Representations,
Warranties and Covenants of the
Subscriber
|
5.1 The
Subscriber hereby represents and warrants to and covenants with the Company
(which representations, warranties and covenants shall survive the Closing)
that:
|
(a)
|
the
Subscriber is not a U.S. Person;
|
|
(b)
|
the
Subscriber is not acquiring the Securities for the account or benefit of,
directly or indirectly, any U.S.
Person;
|
|
(c)
|
the
Subscriber is resident in the jurisdiction set out under the heading
“Details of Subscriber” on the page 2 of this Subscription Agreement and
the sale of the Securities to the Subscriber as contemplated in this
Subscription Agreement complies with or is exempt from the applicable
securities legislation of the jurisdiction of residence of the
Subscriber;
|
|
(d)
|
the
Subscriber is an “accredited investor” within the meaning of the Canadian
National Instrument 45-106 (“NI 45-106”)
and:
|
|
(i)
|
is
either purchasing the Securities (A) as principal and not for the benefit
of any other person, or is deemed under NI 45-106 to be purchasing the
Securities as principal, or (B) as agent for a beneficial purchaser
disclosed in this Subscription Agreement, and is an agent or trustee with
proper authority to execute all documents required in connection with the
purchase of the Securities on behalf of such disclosed beneficial
purchaser and such disclosed beneficial purchaser for whom the Subscriber
is contracting hereunder is purchasing as principal and not for the
benefit of any other person, or is deemed under NI 45-106 to be purchasing
the Securities as principal, and such disclosed beneficial purchaser is an
“accredited investor” within the meaning of NI
45-106;
|
|
(ii)
|
if
the Subscriber is, or the beneficial purchaser for whom the Subscriber is
contracting hereunder is, as the case may be, a person, other than an
individual or investment fund, that has net assets of at least
CDN$5,000,000, the Subscriber was not, or the beneficial purchaser for
whom the Subscriber is contracting hereunder was not, as the case may be,
created or used solely to purchase or hold securities as an accredited
investor; and
|
|
(iii)
|
the
Subscriber has concurrently executed and delivered a certificate in the
form attached as Exhibit “D”
hereto;
|
|
(e)
|
the
Subscriber has the legal capacity and competence to enter into and execute
this Subscription Agreement and to take all actions required pursuant
hereto and, if the Subscriber is a corporation, it is duly incorporated
and validly subsisting under the laws of its jurisdiction of incorporation
and all necessary approvals by its directors, shareholders and others have
been obtained to authorize execution and performance of this Subscription
Agreement on behalf of the
Subscriber;
|
|
(f)
|
if
the Subscriber is a corporation or other entity, the entering into of this
Subscription Agreement and the transactions contemplated hereby do not and
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;
|
|
(g)
|
the
Subscriber has duly executed and delivered this Subscription Agreement and
it constitutes a valid and binding agreement of the Subscriber enforceable
against the Subscriber;
|
|
(h)
|
the
Subscriber is acquiring the Securities as principal for its own account
for investment purposes only and not for the account of any other person
and not for distribution, assignment or resale to others, and no other
person has a direct or indirect beneficial interest in such Securities,
and it has not subdivided its interest in the Securities with any other
person;
|
|
(i)
|
the
Subscriber is outside the United States when receiving and executing this
Subscription Agreement and except as otherwise expressly set forth on page
2 of this Subscription Agreement is acquiring the Securities as principal
for the Subscriber’s own account for investment purposes only, and not
with a view to, or for, resale, distribution or fractionalisation thereof,
in whole or in part, and no other person has a direct or indirect
beneficial interest in the
Securities;
|
|
(j)
|
the
Subscriber is aware that an investment in the Company is speculative and
involves certain risks, including the possible loss of the entire
investment and it has carefully read and considered the matters set forth
under the heading “Risk Factors” appearing in the Company’s Forms 10-KSB,
10-QSB, 8-K and any other filings filed with the
SEC;
|
|
(k)
|
the
Subscriber has made an independent examination and investigation of an
investment in the Securities and the Company and has depended on the
advice of its legal and financial advisors and agrees that the Company
will not be responsible in any way whatsoever for the Subscriber’s
decision to invest in the Securities and the
Company;
|
|
(l)
|
the
Subscriber (i) has adequate net worth and means of providing for its
current financial needs and possible personal contingencies, (ii) has no
need for liquidity in this investment, and (iii) is able to bear the
economic risks of an investment in the Securities for an indefinite period
of time;
|
|
(m)
|
the
Subscriber understands and agrees that the Company and others will rely
upon the truth and accuracy of the acknowledgements, representations and
agreements contained in this Subscription Agreement and agrees that if any
of such acknowledgements, representations and agreements are no longer
accurate or have been breached, the Subscriber shall promptly notify the
Company;
|
|
(n)
|
the
Subscriber has the legal capacity and competence to enter into and execute
this Subscription Agreement and to take all actions required pursuant
hereto;
|
|
(o)
|
the
Subscriber has duly executed and delivered this Subscription Agreement and
it constitutes a valid and binding agreement of the Subscriber enforceable
against the Subscriber in accordance with its
terms;
|
|
(p)
|
the
Subscriber is not an underwriter of, or dealer in, the common shares of
the Company, nor is the Subscriber participating, pursuant to a
contractual agreement or otherwise, in the distribution of any of the
Securities;
|
|
(q)
|
the
Subscriber understands and agrees that none of the Securities have been or
will be registered under the 1933 Act or under any state securities or
“blue sky” laws of any state of the United States and, unless so
registered, may not be offered or sold in the United States or directly or
indirectly to U.S. Persons, except in accordance with the provisions of
Regulation S (“Regulation “S” promulgated under the 1933 Act, pursuant to
an effective registration statement under the 1933 Act, or pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the 1933 Act and in each case only in accordance with
applicable state securities laws;
|
|
(r)
|
the
Subscriber understands and agrees that offers and sales of any of the
Securities prior to the expiration of a period of six months after the
date of original issuance of the Securities (the six month period
hereinafter referred to as the “Distribution Compliance
Period”) shall only be made in compliance with the safe harbor
provisions set forth in Regulation S, pursuant to the registration
provisions of the 1933 Act or an exemption therefrom, and that all offers
and sales after the Distribution Compliance Period shall be made only in
compliance with the registration provisions of the 1933 Act or an
exemption therefrom and in each case only in accordance with applicable
state securities laws;
|
|
(s)
|
the
Subscriber has not acquired the Securities as a result of, and it
covenants that it will not itself engage in, any “directed selling
efforts” (as defined in Regulation S) in the United States in respect of
any 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 any of
the Securities; provided, however, that the Subscriber may sell or
otherwise dispose of any of the Securities pursuant to registration of any
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;
|
|
(t)
|
the
Subscriber agrees not to engage in any hedging transactions involving any
of the Securities unless such transactions are in compliance with the
provisions of the 1933 Act and in each case only in accordance with
applicable state securities laws;
|
|
(u)
|
the
Subscriber understands and agrees that the Company will refuse to register
any transfer of the Securities not made in accordance with the provisions
of Regulation S, pursuant to an effective registration statement under the
1933 Act or pursuant to an available exemption from the registration
requirements of the 1933 Act;
|
|
(v)
|
the
Subscriber (i) is able to fend for itself in the Subscription; (ii) has
such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of its investment in the
Securities and the Company; and (iii) has the ability to bear the economic
risks of its prospective investment and can afford the complete loss of
such investment;
|
|
(w)
|
the
Subscriber will indemnify the Company against, and will hold the Company
and, where applicable, its respective directors, officers, employees,
agents, advisors and shareholders harmless from, any and all loss,
liability, claim, damage and expense whatsoever (including, but not
limited to, any and all fees, costs and expenses whatsoever reasonably
incurred in investigating, preparing or defending against any claim,
lawsuit, administrative proceeding or investigation whether commenced or
threatened) arising out of or based upon any representation or warranty of
the Subscriber contained herein or in any document furnished by the
Subscriber to the Company in connection herewith being untrue in any
material respect or any breach or failure by the Subscriber to comply with
any covenant or agreement made by the Subscriber to the Company in
connection therewith;
|
|
(x)
|
the
Subscriber is not aware of any advertisement of any of the Securities and
is not acquiring the Securities 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;
|
|
(y)
|
for
so long as the Subscriber owns any of the Securities it will not sell any
securities of the Company “short” (and this covenant shall survive the
Closing until the Subscriber has sold or converted, or the Company has
redeemed, all of the Securities, as applicable);
and
|
|
(z)
|
no
person has made to the Subscriber any written or oral
representations:
|
|
(i)
|
that
any person will resell or repurchase any of the
Securities,
|
|
(ii)
|
that
any person will refund the purchase price of any 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 any stock
exchange or automated dealer quotation system or that application has been
made to list and post any of the Securities of the Company on any stock
exchange or automated dealer quotation system, except that currently the
Company’s common shares are quoted on the over-the-counter market operated
by the Over-The-Counter Bulletin Board operated by
FINRA.
|
5.2 In this
Subscription Agreement, the term “U.S. Person” shall have the meaning ascribed
thereto in Regulation S.
|
6.
|
Representations and
Warranties will be Relied Upon by the
Company
|
6.1 The
Subscriber acknowledges that the representations and warranties contained herein
are made by it with the intention that such representations and warranties may
be relied upon by the Company and its legal counsel in determining the
Subscriber’s eligibility to purchase the Securities under applicable securities
legislation. The Subscriber further agrees that by accepting delivery
of the certificates representing any of the Securities, it will be representing
and warranting that the representations and warranties contained herein are true
and correct as at the Closing Date with the same force and effect as if they had
been made by the Subscriber on the date of this Subscription Agreement and that
they will survive the purchase by the Subscriber of the Units and any conversion
into Conversion Shares or Warrant Shares and will continue in full force and
effect notwithstanding any subsequent disposition by the Subscriber of such
Securities.
|
7.
|
Resale
Restrictions
|
7.1 The
Subscriber acknowledges that the Debentures and the Warrants are not
transferable and that any resale of any of the other Securities will be subject
to resale restrictions contained in the securities legislation applicable to
each Subscriber or proposed transferee. The Subscriber acknowledges
that the Securities have not been registered under the 1933 Act or the
securities laws of any state of the United States and that none of the
Securities may be offered or sold in the United States unless registered in
accordance with United States federal securities laws and all applicable state
securities laws or exemptions from such registration requirements are
available.
7.2 The
Subscriber acknowledges that restrictions on the transfer, sale or other
subsequent disposition of the Securities by the Subscriber may be imposed by
securities laws in addition to any restrictions referred to in Section 7.1 above, and, in particular, the
Subscriber acknowledges and agrees that none of the Securities may be offered or
sold to a U.S. Person or for the account or benefit of a U.S. Person (other than
a distributor) prior to the end of the Distribution Compliance
Period.
7.3 The
Subscriber acknowledges that the Securities are subject to resale restrictions
in Canada and may not be traded in Canada except as permitted by the Ontario Act
and the Alberta Act and the rules made thereunder.
7.4 Pursuant
to NI 45-102, a subsequent trade in the Securities will be a distribution
subject to the prospectus and registration requirements of applicable Canadian
securities legislation unless certain conditions are met, which conditions
include the requirement that the hold period mandated by NI 45-102 (the "Canadian Hold Period") shall
have elapsed and, during the currency of the Canadian Hold Period, any
certificate representing the Securities is to be imprinted with a restrictive
legend (the "Canadian
Legend").
7.5 By
executing and delivering this Subscription Agreement, the Subscriber will have
directed the Company not to include the Canadian Legend on any certificates
representing the Securities to be issued to the Subscriber.
7.6 As a
consequence, the Subscriber may not be able to rely on the resale provisions of
NI 45-102, and any subsequent trade in any of the Securities during or after the
Canadian Hold Period may be a distribution subject to the prospectus and
registration requirements of Canadian securities legislation, to the extent that
the trade is at that time subject to any such Canadian securities
legislation.
|
8.
|
Acknowledgement and
Waiver
|
8.1 The
Subscriber has acknowledged that the decision to purchase the Securities was
solely made on the basis of information available to the Subscriber in this
Subscription Agreement or on the XXXXX database maintained by the SEC at xxx.xxx.xxx. The
Subscriber hereby waives, to the fullest extent permitted by law, any rights of
withdrawal, rescission or compensation for damages to which the Subscriber might
be entitled in connection with the distribution of the Securities.
|
9.
|
Legending of Subject
Securities
|
9.1 The
Subscriber hereby acknowledges that that upon the issuance thereof, and until
such time as the same is no longer required under the applicable securities laws
and regulations, the certificates representing any of the Securities will bear a
legend in substantially the following form:
|
|
“THESE
SECURITIES WERE ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT
U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933
ACT”). ACCORDINGLY, NONE OF THE SECURITIES TO WHICH THIS
CERTIFICATE RELATES HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S.
STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR
SOLD IN THE UNITED STATES OR, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS (AS
DEFINED HEREIN) EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING
TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN
ACCORDANCE WITH THE 1933 ACT.”
|
9.2 The
Subscriber hereby acknowledges and agrees to the Company making a notation on
its records or giving instructions to the registrar and transfer agent of the
Company in order to implement the restrictions on transfer set forth and
described in this Subscription Agreement.
|
10.
|
Costs
|
10.1 The
Subscriber acknowledges and agrees that all costs and expenses incurred by the
Subscriber (including any fees and disbursements of any special counsel retained
by the Subscriber) relating to the purchase of the Debenture or to the
conversion of the Debenture shall be borne by the Subscriber.
|
11.
|
Commission or Finder’s
Fee.
|
11.1 The
Subscriber understands that, in connection with the issue and sale of Units
pursuant to the Offering, the Company may be obligated to pay a commission or a
finder’s fee to an agent or a finder equal to seven percent (7%) of the gross
proceeds derived from the sale of the Units.
|
12.
|
Governing
Law
|
12.1 This
Subscription Agreement is governed by the laws of the Province of British
Columbia and the federal laws of Canada applicable therein.
|
13.
|
Collection of Personal
Information.
|
13.1 The
Subscriber acknowledges and consents to the fact that the Company is collecting
the Subscriber’s personal information for the purpose of fulfilling this
Subscription Agreement and completing the Offering. The Subscriber's
personal information (and, if applicable, the personal information of those on
whose behalf the Subscriber is contracting hereunder) may be disclosed by the
Company to (a) stock exchanges or securities regulatory authorities (including
the British Columbia Securities Commission, the Ontario Securities Commission
and the Securities and Exchange Commission), (b) the Company's registrar and
transfer agent, (c) Canadian tax authorities, (d) authorities pursuant to the
Proceeds of Crime (Money
Laundering) and Terrorist Financing Act (Canada), (e) any of the other
parties involved in the offering of the Units, including legal counsel and may
be included in record books in connection with the Subscription. By
executing this Subscription Agreement, the Subscriber is deemed to be consenting
to the foregoing collection, use and disclosure of the Subscriber's personal
information (and, if applicable, the personal information of those on whose
behalf the Subscriber is contracting hereunder) and to the retention of such
personal information for as long as permitted or required by law or business
practice. Notwithstanding that the Subscriber may be purchasing Units
as agent on behalf of an undisclosed principal, the Subscriber agrees to
provide, on request, particulars as to the nature and identity of such
undisclosed principal, and any interest that such undisclosed principal has in
the Company, all as may be required by the Company in order to comply with the
foregoing.
Furthermore,
the Subscriber is hereby notified that:
|
(a)
|
the
Company may deliver to the British Columbia Securities Commission, the
Ontario Securities Commission, the SEC and/or any other securities
commission certain personal information pertaining to the Subscriber or
the beneficial owner (if applicable), including such Subscriber’s (or
beneficial owner’s, if applicable) full name, residential address and
telephone number, the number of shares or other securities of the Company
owned by the Subscriber or the beneficial owner (if applicable), the
number of Units purchased by the Subscriber or the beneficial owner (if
applicable) and the total purchase price paid for such Units, the
prospectus exemption relied on by the Company and the date of distribution
of the Units,
|
|
(b)
|
the
personal information is being collected indirectly by, among others, the
Ontario Securities Commission under the authority granted to it in
securities legislation,
|
|
(c)
|
such
information is being collected for the purposes of the administration and
enforcement of the securities legislation of Ontario and other applicable
jurisdictions, and
|
|
(d)
|
the
Subscriber may contact the following public official in Ontario with
respect to questions about the Ontario Securities Commission’s indirect
collection of such information at the following address and telephone
number:
|
Administrative
Assistant to the Director of Corporate Finance
Ontario
Securities Commission
Xxxxx
0000, Xxx 00, 00 Xxxxx Xxxxxx Xxxx
Xxxxxxx,
Xxxxxxx, X0X 0X0
Telephone: (000)
000-0000
|
14.
|
Survival
|
14.1 This
Subscription Agreement, including without limitation the representations,
warranties and covenants contained herein, shall survive and continue in full
force and effect and be binding upon the parties hereto notwithstanding the
completion of the purchase of the Securities by the Subscriber pursuant
hereto.
|
15.
|
Assignment
|
15.1 This
Subscription Agreement is not transferable or assignable.
|
16.
|
Severability
|
16.1 The
invalidity or unenforceability of any particular provision of this Subscription
Agreement shall not affect or limit the validity or enforceability of the
remaining provisions of this Subscription Agreement.
|
17.
|
Entire
Agreement
|
17.1 Except as
expressly provided in this Subscription Agreement and in the agreements,
instruments and other documents contemplated or provided for herein, this
Subscription Agreement contains the entire agreement between the parties with
respect to the sale of the Securities and there are no other terms, conditions,
representations or warranties, whether expressed, implied, oral or written, by
statute or common law, by the Company or by anyone else.
|
18.
|
Notices
|
18.1 All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Subscriber shall be directed to the
address on the signature page of this Subscription Agreement and notices to the
Company shall be directed to it at Xxxxxxxxxxxxxx 0, 0000 Xxxx, Xxxxxxxxxxx,
Attention: President.
|
19.
|
Counterparts and
Electronic Means
|
19.1 This
Subscription Agreement may be executed in any number of counterparts, each of
which, when so executed and delivered, shall constitute an original and all of
which together shall constitute one instrument. Delivery of an
executed copy of this Subscription Agreement by electronic facsimile
transmission or other means of electronic communication capable of producing a
printed copy will be deemed to be execution and delivery of this Subscription
Agreement as of the date hereinafter set forth.
IN WITNESS WHEREOF the
Subscriber has duly executed this Subscription Agreement as of the date of
acceptance by the Company.
___________________________________________
(Name of Subscriber – Please type or
print)
(Signature and, if applicable,
Office)
(Address of Subscriber)
___________________________________________
(City, State or Province, Postal Code
of Subscriber)
___________________________________________
(Country of Subscriber)
CW1847202.2
A
C C E P T A N C E
The
above-mentioned Subscription Agreement in respect of the Units is hereby
accepted by Xxxxx Petroleum Corp.
DATED at
________________________ as of the ___________ day of _______,
2008.
XXXXX
PETROLEUM CORP.
Per:
Authorized Signatory
CW1847202.2
EXHIBIT
“A”
FORM
OF CONVERTIBLE DEBENTURE
CW1847202.2
- A
-
EXHIBIT
“B”
FORM
OF WARRANT
- A
-
EXHIBIT
“C”
TERM
SHEET
- A
-
EXHIBIT
D
ACCREDITED
INVESTOR STATUS CERTIFICATE
The
undersigned Subscriber, a resident of, or otherwise subject to the securities
laws of a province of Canada hereby represents, warrants and certifies, as an
integral part of the attached Subscription Agreement, that he, she or it is and
at Closing will be, correctly and in all respects described by the category or
categories set forth directly next to which the Subscriber has marked
below.
q (1) a
Canadian financial institution, or a Schedule III bank.
|
q (2)
|
the
Business Development Bank of Canada incorporated under the Business Development Bank of
Canada Act (Canada).
|
|
q (3)
|
a
subsidiary of any person referred to in paragraphs (1) or (2), if the
person owns all of the voting securities of the subsidiary, except the
voting securities required by law to be owned by directors of that
subsidiary.
|
|
q (4)
|
a
person 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).
|
|
q (5)
|
an
individual registered or formerly registered under the securities
legislation of a jurisdiction of Canada as a representative of a person
referred to in paragraph (4).
|
|
q (6)
|
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.
|
|
q (7)
|
a
municipality, public board or commission in Canada and a metropolitan
community, school board, the Comité de gestion de la taxe scolaire de
l’île de Montréal or an intermunicipal management board in
Québec.
|
|
q (8)
|
any
national, federal, state, provincial, territorial or municipal government
of or in any foreign jurisdiction, or any agency of that
government.
|
|
q (9)
|
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.
|
|
q (10)
|
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
$1,000,000.
|
|
q (11)
|
an
individual whose net income before taxes exceeded $200,000 in each of the
2 most recent calendar years or whose net income before taxes combined
with that of a spouse exceeded $300,000 in each of the 2 most recent
calendar years and who, in either case, reasonably expects to exceed that
net income level in the current calendar
year.
|
q (12) an
individual who, either alone or with a spouse, has net assets of at least
$5,000,000.
|
q (13)
|
a
person, other than an individual or investment fund, that has net assets
of at least $5,000,000 as shown on its most recently prepared financial
statements.
|
q (14) an
investment fund that distributes or has distributed its securities only
to
|
(a)
|
a
person that is or was an accredited investor at the time of the
distribution,
|
|
(b)
|
a
person that acquires or acquired securities in the circumstances referred
to in sections 2.10 [Minimum amount
investment], and 2.19 [Additional investment in
investment funds] of NI 45-106,
or
|
|
(c)
|
a
person described in paragraph (i) or (ii) that acquires or acquired
securities under section 2.18 [Investment fund
reinvestment] of NI 45-106.
|
|
q (15)
|
an
investment fund that distributes or has distributed securities under a
prospectus in a jurisdiction of Canada for which the regulator or, in
Québec, the securities regulatory authority, has issued a
receipt.
|
|
q (16)
|
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 (17) a
person acting on behalf of a fully managed account managed by that person, if
that person
|
(a)
|
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
|
|
(b)
|
in
Ontario, is purchasing a security that is not a security of an investment
fund.
|
|
q (18)
|
a
registered charity under the Income Tax Act (Canada)
that, in regard to the trade, has obtained advice from an eligibility
adviser or an adviser registered under the securities legislation of the
jurisdiction of the registered charity to give advice on the securities
being traded.
|
|
q (19)
|
an
entity organized in a foreign jurisdiction that is analogous to any of the
entities referred to in paragraphs (1) to (4) or paragraph (9) in form and
function.
|
|
q (20)
|
a
person 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 that are accredited
investors.
|
|
q (21)
|
an
investment fund that is advised by a person registered as an adviser or a
person that is exempt from registration as an
adviser.
|
|
q (22)
|
a
person that is recognized or designated by the securities regulatory
authority or, except in Ontario and Québec, the regulator
as
|
|
(a)
|
an
accredited investor, or
|
|
(b)
|
an
exempt subscriber in Alberta or British Columbia after NI 45-106 comes
into force.
|
- A
-
Note: A
summary of the meanings of some of the terms used in this Accredited Investor
Status Certificate follows the signature block below.
DATED ,
200__
Signature
of Subscriber
Name of
Subscriber
Address
of Subscriber
For the
purposes of this Accredited Investor Status Certificate, the following
definitions are included for convenience:
|
(a)
|
“affiliate”
means that an issuer is an affiliate of another issuer
if:
|
|
(i)
|
one
of them is the subsidiary of the other,
or
|
|
(ii)
|
each
of them is controlled by the same
person.
|
|
(b)
|
“Canadian
financial institution” means
|
|
(i)
|
an
association governed by the Cooperative Credit Associations Act (Canada)
or a central cooperative credit society for which an order has been made
under section 473(1) of that Act,
or
|
|
(ii)
|
a
bank, loan corporation, trust company, trust corporation, insurance
company, treasury branch, credit union, caisse populaire, financial
services cooperative, or league that, in each case, is authorized by an
enactment of Canada or a jurisdiction of Canada to carry on business in
Canada or a jurisdiction of Canada.
|
|
(c)
|
“company”
means any corporation, incorporated association, incorporated syndicate or
other incorporated organization;
|
|
(d)
|
“control
person” has the same meaning as in securities legislation except in
Manitoba, Newfoundland and Labrador, Northwest Territories, Nova Scotia,
Nunavut, Ontario, Xxxxxx Xxxxxx Island and Quebec where control person
means any person that holds or is one of a combination of persons that
holds
|
|
(i)
|
a
sufficient number of any of the securities of an issuer so as to affect
materially the control of the issuer,
or
|
|
(ii)
|
more
than 20% of the outstanding voting securities of an issuer except where
there is evidence showing that the holding of those securities does not
affect materially the control of the
issuer.
|
|
(e)
|
“entity”
means a company, syndicate, partnership, trust or unincorporated
organization;
|
|
(f)
|
“financial
assets” means cash, securities, or any contract of insurance or deposit or
evidence thereof that is not a security for the purposes of the securities
legislation;
|
|
(g)
|
“fully
managed account” means an account of a client for which a person makes the
investment decisions if that person has full discretion to trade in
securities for the account without requiring the client’s express consent
to a transaction;
|
|
(h)
|
“mutual
fund” means:
|
|
(i)
|
for
the purposes of British Columbia
law,
|
|
(A)
|
an
issuer of a security that entitles the holder to receive on demand, or
within a specified period after demand, an amount computed by reference to
the value of a proportionate interest in the whole or in a part of the net
assets, including a separate fund or trust account, of the issuer of the
security,
|
|
(B)
|
an
issuer described in an order that the commission may make under section
3.2 of the Securities Act (B.C.),
and
|
|
(C)
|
an
issuer that is in a class of prescribed
issuers,
|
but does
not include an issuer, or a class of issuers, described in an order that the
commission may make under section 3.1 of the Securities Act (B.C.);
|
(ii)
|
for
the purposes of Alberta law,
|
|
(A)
|
an
issuer whose primary purpose is to invest money provided by its security
holders and whose securities entitle the holder to receive on demand, or
within a specified period after demand, an amount computed by reference to
the value of a proportionate interest in the whole or in part of the net
assets, including a separate fund or trust account, of the issuer,
or
|
|
(B)
|
an
issuer that is designated as a mutual fund under section 10 of the Alberta
Securities Act (Alberta) or in accordance with the
regulations,
|
but does
not include an issuer, or class of issuers, that is designated under section 10
of the Alberta Securities Act (Alberta) not to be a mutual fund;
|
(iii)
|
for
the purposes of Ontario law, an issuer whose primary purpose is to invest
money provided by its security holders and whose securities entitle the
holder to receive on demand, or within a specified period after demand, an
amount computed by reference to the value as a proportionate interest in
the whole or in part of the net assets, including a separate fund or trust
account, of the issuer;
|
|
(iv)
|
for
the purposes of Quebec law, a company issuing shares which must, on
request of the holder, redeem them at their net asset
value;
|
|
(i)
|
“non-redeemable
investment fund” means an issuer:
|
|
(i)
|
whose
primary purpose is to invest money provided by its security
holders;
|
|
(ii)
|
that
does not invest,
|
|
(A)
|
for
the purpose of exercising or seeking to exercise control of an issuer,
other than an issuer that is a mutual fund or a non-redeemable investment
fund, or
|
|
(B)
|
for
the purpose of being actively involved in the management of any issuer in
which it invests, other than an issuer that is a mutual fund or a
non-redeemable investment fund, and
|
|
(iii)
|
that
is not a mutual fund;
|
|
(j)
|
“person”
includes
|
|
(i)
|
an
individual,
|
|
(ii)
|
a
corporation,
|
|
(iii)
|
a
partnership, trust, fund and an association, syndicate, organization or
other organized group of persons, whether incorporated or not,
and
|
|
(iv)
|
an
individual or other person in that person's capacity as a trustee,
executor, administrator or personal or other legal
representative;
|
|
(k)
|
“portfolio
adviser” means:
|
|
(i)
|
a
portfolio manager; or
|
|
(ii)
|
a
broker or investment dealer exempted from registration as an adviser under
section 148 of the regulation made under the Securities Act (Ontario) if
that broker or investment dealer is not exempt from the by-laws or
regulations of the Toronto Stock Exchange or the Investment Dealers’
Association of Canada referred to in that
section;
|
|
(l)
|
“related
liabilities” means liabilities incurred or assumed for the purpose of
financing the acquisition or ownership of financial assets or liabilities
that are secured by financial assets;
and
|
|
(m)
|
“spouse”
means an individual who:
|
|
(i)
|
is
married to another individual and is not living separate and apart within
the meaning of the Divorce Act (Canada) from the other
individual,
|
|
(ii)
|
is
living with another individual in a marriage-like relationship, including
a marriage-like relationship between individuals of the same gender,
or
|
|
(iii)
|
in
Alberta, is an individual referred to in paragraph (i) or (ii), or is an
adult interdependent partner within the meaning of the Adult
Interdependent Relationships Act
(Alberta);
|
|
(n)
|
“subsidiary”
means an issuer that is controlled directly or indirectly by another
issuer and includes a subsidiary of that subsidiary.
|
