THE SECURITIES TO WHICH THIS AGREEMENT RELATES HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT") OR ANY
STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO
U.S. PERSONS (AS DEFINED HEREIN) WITHOUT REGISTRATION UNDER THE 1933 ACT AND ANY
APPLICABLE STATE SECURITIES LAWS, UNLESS AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
TO: SEVEN SEAS PETROLEUM INC.
Suite 960, Three Post Oak Central
0000 Xxxx Xxx Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
PURCHASE OF SPECIAL NOTES
1. SUBSCRIPTION
1.1 Jasopt Pty Limited (A.C.N. 065 064 164)(the "Subscriber") hereby irrevocably
subscribes for and agrees to purchase from SEVEN SEAS PETROLEUM INC. (the
"Company") subject to the terms and conditions set forth herein 120,000
exchangeable notes (the "Special Notes") of the Company at par. The Special
Notes form part of a larger private placement (the "Private Placement") of an
aggregate of up to $25,000,000 of Special Notes, of which US$12,000,000 are
being sold hereunder and of which up to up to US$13,000,000 (the"Brokered
Portion") are being sold by the Company pursuant to an agency agreement dated as
of July 2, 1997 (the "Agency Agreement") between Yorkton Securities Inc. (the
"Agent") and the Company. Subject to the terms hereof, this subscription will be
effective upon its acceptance by the Company. By acceptance of this offer, the
Company covenants, agrees and confirms that the Subscriber will have the benefit
of the representations, warranties, covenants, agreements, terms and conditions
set forth herein.
1.2 All dollar amounts set out herein refer to United States dollars, unless
otherwise indicated.
2. DESCRIPTION OF SECURITIES
2.1 The Special Notes will be issued in registered form in multiples of US$100
and each Special Note will entitle the Subscriber to receive upon exchange, or
deemed exchange, a like principal amount of convertible redeemable (the
"Debentures") of the Company without the payment of any additional
consideration.
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2.2 The Special Notes will be exchangeable into Debentures at any time on or
before 5:00 p.m. (Vancouver time) on the date (the "Exchange Date") which is the
earlier of:
(i) the third business day following the date upon which all
Qualification and Registration Requirements (as hereinafter defined)
have been met; and
(ii) the first business day which is twelve (12) months from the Closing
Date (as hereinafter defined).
All Special Notes not exercised prior to the Exchange Date will be deemed
to be exchanged for Debentures on the Exchange Date without further action or
notice on the part of the holder.
2.3 The Debentures will be issued in registered form in multiples of US$100 and
will become due on the first business day following five (5) years from the
Closing Date (the "Due Date").
2.4 The Debentures will be convertible into units (the "Units") of the Company
by the holder on three (3) business days notice, in whole or in part, on the
basis of one Unit for each US$11.50 principal amount of Debentures outstanding.
Each Unit will consist of one (1) common share of the Company (collectively, the
"Shares") and one-half (1/2) of one common share purchase warrant (collectively,
the "Warrants"). Each whole Warrant will entitle the holder of one (1) common
share (collectively, the "Warrant Shares") of the Company at any time on or
before 5:00 p.m. (Vancouver time) on the first business day following one (1)
year from the Closing Date at a price of US$15 per share.
2.5 The Special Notes and Debentures will bear interest on the outstanding
principal amount at the rate of 6% per annum, payable semi-annually in arrears,
on December 31 and June 30 of each year and will be secured by a pledge of
shares of subsidiaries of the company. The Special Notes and the Debentures will
be subordinate in right of payment after default to any senior bank or financial
institution financing (whether currently existing or subsequently arising) and
will rank pari passu (including the security interest thereon) with any
subsequently issued non-convertible debentures.
2.6 If any time after the Exchange Date the Company's common shares have traded
at or over US$14.00 for twenty consecutive trading days on the Toronto Stock
Exchange (the "TSE"), the Company may, within ten days, cause the Debentures to
be converted on seven days notice provided that the 1933 Registration Statement
(as hereinafter defined), must remain in effect throughout such seven day notice
period. If the 1933 Registration Statement does not remain in effect throughout
such notice period the Company may again provide such seven day notice within
five days of resumption of the effectiveness of the 1933 Registration Statement,
provided that the Company's common shares have traded at or over US$14.00 on the
TSE for two consecutive trading days following such resumption.
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2.7 In this Agreement, "Securities" means the Special Notes, the Debentures, the
Units, the Shares, the Warrants, and the Warrant Shares. All of the Securities
will be transferable, subject to applicable law.
2.8 The foregoing description of Securities in subsections 2.1 to 2.7 is a
summary only. The terms and conditions governing the Notes and Debentures will
be contained in a trust indenture (the "Trust Indenture") between the Company
and Montreal Trust Company of Canada (the "Trustee") and the terms and
conditions governing the Warrants will be contained in a warrant indenture (the
"Warrant Indenture") between the Company and the Trustee. The Trust Indenture
and Warrant Indenture shall be mutually satisfactory to the Company, the
Subscriber and the Agent.
3. QUALIFICATION AND REGISTRATION REQUIREMENTS
3.1 The Company covenants that as soon as practicable following the Closing
Date, it will file the following documents:
(a) a preliminary prospectus (the "Preliminary Prospectus") with the
securities commissions (the "Securities Commissions") in all
Canadian provinces in which holders of Special Notes are resident
(the "Canadian Jurisdictions"), qualifying the distribution of the
Debentures upon exchange of the Special Notes;
(b) a registration statement or registration statements (the "1933
Registration Statement") under the United States Securities Act of
1933 (the "1933 Act") registering for resale the Shares, Warrants
and Warrant Shares;
(c) all required filings with state securities or "blue sky"
administrators where the Company or the holders of Securities
propose to offer and sell any of the Securities (the "Blue Sky
Filings"),
and will use its best efforts to:
(i) cause receipts for a (final) Prospectus (the "Prospectus") to
be issued by the Securities Commissions in the Canadian
Jurisdictions; and
(ii) cause the 1933 Registration Statement and Blue Sky Filings to
become effective
(collectively, the "Qualification and Registration Requirements") as
soon as practicably possible thereafter.
3.2 The Company will cause the 1933 Registration Statement to remain effective
until two (2) years following the date upon which all Debentures have been
redeemed, converted, or otherwise retired.
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3.3 Notwithstanding section 3.2 herein, the Company may, upon notice to the
holders of Debentures, temporarily suspend sales under the 1933 Registration
Statement during any reasonable period in which its board of directors
determines that because of material developments, it would not be practicable to
maintain a current prospectus, provided that in such event, the Company will
take all necessary steps to update the prospectus disclosure and notify the
holders that sales under the 1933 Registration Statement may resume as soon as
practicable.
3.4 The Company will, upon notice from any holder of Securities, make all
required filings with state securities or "blue sky" administrators in any state
in which such holder proposes to offer and sell any of the Securities provided
that (i) no alternative exemption is available for such offer and sale, (ii)
such holder provides the Company with all necessary information to enable the
Company to make such filings, and (iii) the required filing may only be made by
the Company.
3.5 In the event that the Company does not obtain a receipt for the Prospectus
in any Canadian Jurisdiction, the Debentures, Shares, Warrants and Warrant
Shares will be subject to statutory hold periods during which these securities
may not be resold in such Canadian Jurisdiction. The Company is not a reporting
issuer in any jurisdiction other than Ontario, British Columbia and Alberta (the
"Reporting Jurisdictions"); accordingly, hold periods attaching to the
Securities in jurisdictions outside of the Reporting Jurisdictions may never
expire. In addition, any Special Notes that are exchanged prior to the issuance
of a receipt for the Prospectus by the Securities Commissions will result in
statutory restrictions on the resale of the Debentures, Shares and Warrant
Shares. Further, notwithstanding filing of a Prospectus in the Canadian
Jurisdictions, all Securities will be legended for a period of not less that one
year from the date of Closing pursuant to the 0000 Xxx. The Subscriber is
advised to consult its own legal advisors in connection with any applicable
resale restrictions.
4. PAYMENT
4.1 The aggregate Subscription Price shall be paid by cheque or by wire in
accordance with the following instructions:
Southwest Bank of Texas, N.A.
ABA Number:000000000
Account Name: Seven Seas Petroleum Inc.
Account Number: 172391
Attention: Xxxx Xxxxxx
Phone Number: 000-000-0000
5. QUESTIONNAIRE AND UNDERTAKING AND DIRECTION
5.1 The Subscriber must complete, sign and return the following documents along
with one (1) executed copy of this Subscription to the Company:
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(a) Schedule I, a direction to the Company with respect to registration
and delivery instructions;
(b) Schedule II, a questionnaire and undertaking required by The Toronto
Stock Exchange (the "TSE");
5.2 The Subscriber shall complete, sign and return to the Company as soon as
possible on request by the Company any other documents, questionnaire, notices
and undertakings as may be required by regulatory authorities, stock exchanges
and applicable law. The Subscriber acknowledges that the Company will file with
the TSE, the questionnaire and undertakings of the Subscriber.
6. CLOSING
6.1 Delivery and payment of the Special Notes will be completed at the offices
of XxXxxxxx Xxxxx, Barristers and Solicitors, 000 Xxx Xxxxxx, Xxxxx Xxxxx, Xxxxx
Xxxx Xxxxx, Xxxxxxx, Xxxxxxx, X0X 0X0, at 11:00 a.m. (Toronto Time) (the
"Closing Time") on July 30, 1997 or such earlier or later date(s) or time(s) as
each of the Company, the Subscriber and the Agent shall mutually agree (the
"Closing Date") at which time certificates representing the Special Notes
(collectively, the "Special Note Certificates") will be available for delivery
to the Subscriber.
7. CONDITIONS OF CLOSING
7.1 The purchase and sale of the Special Notes and the Closing shall be subject
to the following conditions:
(a) the Company having obtained all requisite regulatory approvals
required to be obtained by the Company in respect of the Private
Placement including, without limitation, the TSE's acceptance for
filing thereof, on terms mutually acceptable to the Company and the
Agent, acting reasonably;
(b) the Company having complied fully with all relevant statutory and
regulatory requirements required to be complied with prior to the
Closing Time in connection with the Private Placement;
(c) the Company having taken all necessary corporate action to authorize
and approve this Agreement, the subscription agreements pursuant to
the Brokered Portion (the "Brokered Subscriptions"), the Agency
Agreement, the Trust Indenture, the Warrant Indenture, the issuance
of the Special Notes and the Securities, and all other matters
relating thereto;
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(d) the Agent and the Subscriber having received at the Closing Time
favourable legal opinions of counsel to the Company addressed to the
Agent, the Agent's counsel, the Subscriber and the Subscriber's
counsel, acceptable in all reasonable respects to counsel to the
Agent and counsel to the Subscriber to the following effect:
(i) the Company and its Subsidiaries are corporations validly
existing and in good standing under the laws of their
respective jurisdictions of incorporation, continuation or
amalgamation and are qualified to carry on business and own
their assets under the laws of each jurisdiction in which they
respectively carry on business and own assets;
(ii) the Company and the Subsidiaries have all requisite corporate
capacity, power and authority to execute and deliver this
Agreement, the Agency Agreement, the Brokered Subscriptions,
the Trust Indenture, and the Warrant Indenture and to perform
all transactions contemplated hereby and thereby;
(iii) the authorized and issued capital of the Company consists of
an unlimited number of common shares without par value and an
unlimited number of Class A preference shares issuable in
series, of which 32,657,939 common shares are validly issued
and outstanding as fully paid and non-assessable and opinions
as to the authorized and issued capital of each of the
Subsidiaries;
(iv) each of this Agreement, the Agency Agreement, the Brokered
Subscriptions, the Trust Indenture, the Warrant Indenture and
the Pledge Agreement to be entered into by the Company has
been duly authorized, executed and delivered by the Company
and constitutes, and the certificates representing the Special
Notes, the Debentures and the Warrants have been duly
authorized and, when executed and delivered by the Company,
will constitute, legal, valid and binding obligations of the
Company enforceable in accordance with their terms, except
that;
A. the enforcement thereof may be limited by bankruptcy,
insolvency and other laws affecting the enforcement of
creditors' rights generally;
B. rights of indemnity, contribution and waiver of
contribution thereunder may be limited under applicable
law; and
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C. equitable remedies, including without limitation,
specific performance and injunctive relief, may be
granted only in the discretion of a court of competent
jurisdiction;
(v) all necessary corporate actions has been taken by the Company
to authorize the creation and issuance of the Special Notes
subject to the terms of the Trust Indenture;
(vi) the Shares and Warrants to be issued upon the conversion of
the Debentures have been allotted for issuance to the
Subscriber and the subscribers pursuant to the Brokered
Subscriptions and the Shares will, when issued upon the due
conversion of the Debentures in accordance with the terms of
the Trust Indenture, be validly issued to the holders thereof
without additional payment;
(vii) the Warrant Shares to be issued upon the exercise of the
Warrants have been allotted for issuance to the holders, from
time to time, of the Warrants and such securities will, when
issued upon the due exercise of the Warrants in accordance
with the terms of the Warrant Indenture, be validly issued to
the holders thereof as fully paid and non-assessable;
(viii)the issue and sale of the Special Notes has been effected in
such a manner as to be exempt, either by statute or regulation
or order, from the prospectus and registration requirements of
the securities legislation of the Canadian Jurisdictions,
subject to the filing of all necessary reports, certificates
or undertakings required to be filed under applicable
securities legislation in each of the Canadian Jurisdictions;
(ix) upon meeting the Qualification and Registration Requirements
the exchange or deemed exchange of the Special Notes, the
Securities will not be subject to any statutory hold period
under the laws of the Canadian Jurisdictions or the United
States federal securities laws and no other documents are
required to be filed, proceedings taken or approvals, permits,
consents, orders or authorizations of regulatory authorities
required to be obtained under the applicable securities
legislation, in connection with issuance of the Securities and
the first trade of the Securities through registrants
registered under the applicable securities laws who have
complied with such applicable laws (subject to control person
restrictions under securities legislation in each of the
Canadian Jurisdictions);
(x) in the event that receipts for the Prospectus are not issued
by the Commissions in the Canadian Jurisdictions, then the
issuance of the
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Securities and Warrant Shares will be exempt from the
registration and prospectus requirements of the applicable
securities laws of the Canadian Jurisdictions, and the
Securities and Warrant Shares shall be subject to certain
specified resale restrictions imposed under the securities
laws of the Canadian Jurisdictions;
(xi) the execution and delivery of this Agreement, the Agency
Agreement, the Brokered Subscriptions, the Trust Indenture and
the Warrant Indenture and the performance of the transactions
contemplated hereby and thereby do not and will not result in
a breach of, and do not create a state of facts which, after
notice or lapse of time or both, will result in a breach of,
and do not and will not conflict with, any of the terms,
conditions or provisions of the constating documents of the
Company;
(xii) the forms of certificate representing the Special Notes and
Warrants have been approved and adopted by the directors of
the Company and conform with all applicable corporate
legislation and requirements;
(xiii)at the Closing Time, the Trustee will have been duly appointed
by the Company as the registrar and transfer agent of the
Shares and the Trustee will be appointed as the trustee in
respect of the Special Notes and Warrants;
(xiv) the Company is a "reporting issuer" in the Provinces of
Ontario, British Columbia and Alberta within the meaning of
the applicable securities legislation in such Provinces and is
not included on the list of defaulting reporting issuers
maintained by the British Columbia, Ontario and Alberta
Securities Commissions;
(xv) based solely on a review of the share registers of the
Subsidiaries, the Company owns 100% of the issued and
outstanding shares of the Subsidiaries (except Cimarrona LLC
in which the Company, through Seven Seas Petroleum Colombia
Inc., holds a 62.963% membership interest) and, to the best of
counsel's knowledge, the shares of the Subsidiaries held
directly or indirectly by the Company are all owned free and
clear of all mortgages, liens, charges, pledges, security
interests, encumbrances, claims and demands whatsoever;
in giving the opinions contemplated above, counsel to the Company
and all local counsel shall be entitled to rely, as to matters of
fact, upon the representations, warranties and acknowledgments of
the Subscriber contained in this Agreement, and of subscribers
pursuant to the Brokered Subscriptions, representations, warranties
and covenants of the Agent contained in the Agency Agreement, a
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certificate of fact of the Company signed by an officer in a
position to have knowledge of such facts and their accuracy and
certificates of such public officials and other persons as are
necessary or desirable;
(e) the Agent and the Subscriber having received a certificate of the
Company dated the Closing Date signed by the Chief Executive Officer
of the Company and by such other officer or director acceptable to
the Agent and the Subscriber certifying as to certain matters
reasonably requested by the Agent and the Subscriber including
certification that:
(i) the Company has complied with all covenants and satisfied all
terms and conditions of this Agreement and the Agency
Agreement on its part to be complied with and satisfied up to
the Closing Time;
(ii) all of the representations and warranties contained in this
Agreement and in the Agency Agreement are true and correct as
of the Closing Date with the same force and effect as if made
at and as of the Closing Date, after giving effect to the
transactions contemplated hereby;
(iii) since the date hereof, there has been no material adverse
change (actual, proposed or prospective, whether financial or
otherwise) in the business, affairs, operations, assets,
liabilities (contingent or otherwise) or capital of the
Company and its Subsidiaries on a consolidated basis;
(iv) no order, ruling or determination having the effect of ceasing
or suspending trading in any securities of the Company
(including the Special Notes and the Securities) has been
issued and no proceedings for such purposes are pending, or,
to the knowledge of such officers, contemplated or threatened;
(v) the Company is a "reporting issuer" not in default under
securities laws of the Provinces of Ontario, British Columbia
and Alberta and no material change relating to the Company has
occurred with respect to which the requisite material change
statement has not been filed;
(vi) the Public Record does not contain a "misrepresentation" as
defined in the applicable securities legislation of the
Canadian Jurisdictions as at the date of such filing;
(vii) except for the matters disclosed in the Public Record, there
is no pending or threatened action or proceeding against the
Company or its Subsidiaries before any court, governmental
agency or arbitrator that is likely to have a
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materially adverse effect upon the financial condition or
operations of the Company or its Subsidiaries;
(viii)the execution and delivery of this Agreement, the Agency
Agreement, the Brokered Subscriptions, the Trust Indenture and
the Warrant Indenture and the performance of the transactions
contemplated thereby do not and will not result in a breach
of, and do not create a state of facts which, after notice, or
lapse of time or both, will result in a breach of, and do not
and will not conflict with, any of the terms, conditions or
provisions of the constating documents or by-laws of the
Company or any trust indenture, agreement, or instrument to
which the Company is contractually bound on the Closing Date;
and
(f) the Agent and the Subscriber having received a "blue-sky memorandum"
in relation to the Private Placement prepared by the Company's
United States counsel relating to compliance with state corporate
and securities laws in the United States.
8. ACKNOWLEDGMENTS OF SUBSCRIBER
8.1 The Subscriber acknowledges, and agrees that:
(a) the Securities have not been registered under the 1933 Act, or under
any state securities laws, and cannot be offered or resold without
registration under the 1933 Act and the securities laws of all
applicable states of the United States unless an exemption from
registration is available or registration is not required pursuant
to Regulation S under the 1933 Act;
(b) its decision to execute this Subscription and purchase the Special
Notes 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 that its decision is based entirely upon
its review (the receipt of which is acknowledged) of information
which has been filed by the Company with the Securities Commissions
or the United States Securities and Exchange Commission (the "SEC")
in compliance, or intended compliance, with applicable securities
legislation (collectively the "Public Record") including the
Company's unaudited financial statements for the three month period
ending March 31, 1997 and its audited financial statements for the
year ending December 31, 1996 (collectively the "Financial
Statements");
(c) no prospectus has been filed with respect to the Special Notes under
applicable Canadian securities legislation, and accordingly:
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(i) the Subscriber is restricted from using certain of the civil
remedies available under such legislation;
(ii) the Subscriber will not receive information that might
otherwise be required to be provided to it under such
legislation; and
(iii) the Company is relieved from certain obligations that would
otherwise apply under such legislation;
(d) it has been advised to consult its own legal 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 in no way responsible) for
compliance with applicable resale restrictions.
(e) the Company is a reporting issuer in the Reporting Jurisdictions
only and the Company cannot ensure that Qualification and
Registration Requirements will be met notwithstanding the Company's
efforts and that any Securities issued to a Subscriber other than
pursuant to a prospectus may be subject to indefinite resale
restrictions imposed under the laws of the Jurisdiction in which
such Subscriber is resident;
(f) to the knowledge of the Subscriber, the sale of the Special Notes
was not accompanied by any advertisement;
(g) the offer made by this Subscription is irrevocable (subject to the
right of the Subscriber to terminate this Subscription as provided
in section 21) and requires acceptance by the Company;
(h) this Subscription is not enforceable by the Subscriber unless it has
been accepted by the Company and the Subscriber waives any
requirement on the Company's behalf to communicate its acceptance
for this Subscription to the Subscriber;
(i) the Securities are speculative investments which involve a
substantial degree of risk;
(j) the Subscriber has had access to and has received all such
information concerning the Company that the Subscriber has
considered necessary in connection with the Subscriber's investment
decision;
(k) the Subscriber has not been provided with, nor has it requested, nor
does it have any need to receive an offering memorandum or any other
document describing the business and affairs of the Company in order
to assist it in making an investment decision in respect of the
Private Placement;
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(l) the subscription proceeds will be available to the Company on
closing of the Private Placement and will not be returned to the
Subscriber notwithstanding any delays or inability to meet the
Qualification and Registration Requirements;
(m) no agency, governmental authority, regulatory body, stock exchange
or other entity has made any finding or determination as to the
merit for investment of, nor have any such agencies or governmental
authorities made any recommendation or endorsement with respect to,
the Securities; and
(n) as the Subscriber is not a U.S. Person, the Subscriber further
acknowledges that:
(i) no offers to sell the Special Notes were made by any person to
the Subscriber while the Subscriber was in the United States;
(ii) the Subscriber was outside the United States at the time of
execution and delivery of this Subscription; and
(iii) any person who exercises a Special Note, Debenture or a
Warrant will be required to provide the Company with written
certification that it is not a U.S. Person and the Special
Note, Debenture or Warrant is not being exercised within the
United States by or on behalf of a U.S. Person.
9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SUBSCRIBER
9.1 The Subscriber hereby represents, warrants and covenants to the Company
(which representations, warranties and covenants shall survive closing) that:
(a) the Subscriber has no knowledge of a "material fact" or "material
change" (as those terms are defined in the applicable Canadian
securities legislation) in respect of the affairs of the Company
that has not been generally disclosed to the public;
(b) the Subscriber is purchasing the Special Notes as principal for its
own account and is resident in the jurisdiction set out under the
heading "Name and Address of Subscriber" on the execution page of
this Agreement;
(c) the Subscriber has the legal capacity and competence to enter into
and execute this Subscription 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 of this Subscription on behalf of the Subscriber;
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(d) the entering into of this Subscription and the transactions
contemplated hereby do 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;
(e) the Subscriber has duly and validly authorized, executed and
delivered this Subscription and except as specifically provided
otherwise herein, it constitutes a valid and binding agreement of
the Subscriber enforceable against the Subscriber,
(f) in connection with the Subscriber's investment in the Securities,
the Subscriber has not relied upon the Company or the Company's
legal counsel or advisers for investment, legal or tax advice, and
has, if desired, in all cases sought the advice of the Subscriber's
own personal investment advisor, legal counsel and tax advisers and
the Subscriber is either experienced in or knowledgeable with regard
to the affairs of the Company, or either alone or with its
professional advisors is capable, by reason of knowledge and
experience in financial and business matters in general, and
investments in particular, of evaluating the merits and risks of an
investment in the Special Notes and is able to bear the economic
risk of the investment and it can otherwise be reasonably assumed to
have the capacity to protect its own interest in connection with the
investment in the Special Notes;
(g) the Subscriber is not a U.S. Person and is not acquiring the
Securities offered hereby for the account or benefit of a U.S.
Person;
(h) no person has made to the Subscriber any written or oral
representations:
(i) that any person will resell or repurchase the Securities;
(ii) that any person will refund the purchase price for the
Securities; and
(iii) as to the future price or value of the Securities.
(i) the Securities are not being acquired directly or indirectly, for
the account or benefit of a U.S. Person or a person in the United
States, and the Subscriber does not have any agreement or
understanding (either written or oral) with any U.S. Person or a
person in the United States respecting:
(i) the transfer or assignment of any rights or interests in any
of the Securities;
(ii) the division of profits, losses, fees, commissions, or any
financial stake in connection with this Subscription; or
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(iii) the voting of the Shares or Warrant Shares;
(j) the current structure of this transaction and all transactions and
activities contemplated hereunder is not a scheme to avoid the
registration requirements of the 1933 Act;
(k) the Subscriber is entirely at arm's length with the Company and
following conversion of Debentures and Warrants into common shares
of the Company, the Subscriber, including any parties acting in
concert with the Subscriber, will not, directly or indirectly,
beneficially own or exercise control or direction over 10% or more
of the outstanding voting securities of the Company;
(l) the Subscriber will comply with the applicable provisions of all
relevant securities legislation concerning the purchase and holding
of the Special Notes and any resale of the Securities; and
(m) the Subscriber is resident of an International Jurisdiction (defined
in this Subscription to mean a country other than Canada or the
United States) and as such:
(i) the Subscriber is knowledgeable of, or has been independently
advised as to, the International Securities Laws (which is
defined in this Subscription to mean, in respect of each and
every offer or sale of Special Notes, the securities
legislation having application and the rules, policies,
notices and orders issued by the securities regulatory
authorities having jurisdiction over the Subscriber and the
Private Placement, other than the laws of Canada and the U.S.,
which would apply to this subscription, if there are any);
(ii) the Subscriber is purchasing the Special Notes pursuant to
exemptions from any prospectus, registration or similar
requirements under the International Securities Laws of the
International Jurisdiction and or, if such is not applicable,
the Subscriber is permitted to purchase the Special Notes
under the International Securities Laws of the International
Jurisdiction without the need to rely on exemptions;
(iii) the International Securities Laws do not require the Company
or to make any filings or seek any approvals of any kind
whatsoever from any regulatory authority of any kind
whatsoever in the International Jurisdiction;
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(iv) the Securities are being acquired for investment only and not
with a view to resale and distribution and the distribution of
the Securities to the Subscriber by the Company complies with
all International Securities Laws;
10. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
10.1 The Company represents and warrants to the Subscriber and acknowledges that
the Subscriber is relying upon such representations and warranties, as follows:
(a) the Company and its subsidiaries are valid and subsisting
corporations duly incorporated and in good standing under the laws
of the jurisdiction in which they are incorporated, continued or
amalgamated;
(b) the Company has complied, or will comply, with all applicable
corporate and securities laws and regulations in connection with the
offer, sale and issuance of the Securities;
(c) the Company and its subsidiaries are the beneficial owners of or
have the right to acquire the interests in the properties, business
and assets or the interests in the properties, business or assets
referred to in the Public Record and except as disclosed in the
Public Record, all agreements by which the Company or its
subsidiaries holds an interest in a property, business or asset are
in good standing according to their terms, and the properties are in
good standing under the applicable laws of the jurisdictions in
which they are situated;
(d) the Company has been duly incorporated, continued or amalgamated and
is validly existing under the laws of the jurisdiction of
incorporation and is duly qualified to carry on its business and is
in good standing in each jurisdiction in which it conducts its
business or in which the ownership, leasing or operation of its
property and assets requires such qualification and it has all
requisite corporate power and authority to carry on its business as
now conducted and as currently proposed to be conducted and to own,
lease and operate its property and assets;
(e) each of the Subsidiaries of the Company is properly described in
Schedule "A" hereto and has been duly incorporated, continued or
amalgamated and is validly existing under the laws of the
jurisdiction and is duly qualified to carry on its business and is
in good standing in each jurisdiction in which the manner in which
it conducts its business or the ownership, leasing or operation of
its property and assets requires such qualification and has all
requisite corporate
- 16 -
power and authority to carry on its business as now conducted and as
currently proposed to be conducted and to own, lease and operate its
property and assets;
(f) the Company is a reporting issuer in good standing under the
securities laws of Ontario, Alberta and British Columbia, and no
material change relating to the Company has occurred within the last
twelve (12) months with respect to which the requisite material
change report has not been filed under any applicable securities
laws and no such disclosure has been made on a confidential basis;
(g) the Company has (and in the case of the qualification for
distribution of the Securities by the Prospectus, will have) full
corporate power and authority to undertake the Offering and file the
Prospectus, and to issue the Special Notes, the Securities and the
Warrant Shares;
(h) at the Closing Time, the Special Notes will be duly and validly
created, authorized and issued and the Debentures, the Shares,
Warrants and Warrant Shares will be duly and validly authorized,
allotted and reserved for issuance upon the conversion of the
Special Notes or Debentures and the exercise of the Warrants,
respectively, and the Debentures, the Shares, Warrants and Warrant
Shares will, upon exercise in accordance with the respective terms
of the Trust Indenture and the Warrant Indenture, be issued as fully
paid and non-assessable securities;
(i) the authorized capital of the Company consists of an unlimited
number of common shares without par value and an unlimited number of
Class A preference shares issuable in series, of which 32,657,939
common shares are issued and outstanding as at the date hereof as
fully paid and non-assessable;
(j) the Company has full corporate power and authority to enter into
this Agreement, the Trust Indenture and the Warrant Indenture and to
perform its obligations set out herein and therein and each of this
Agreement, the Trust Indenture and the Warrant Indenture has been,
or will be upon execution and delivery thereof, duly authorized,
executed and delivered by the Company and constitutes, or will
constitute when executed and delivered, a legal, valid and binding
obligation of the Company enforceable in accordance with their
respective terms;
(k) neither the Company nor its Subsidiaries, is in default or breach
of, and the execution and delivery of each of this Agreement, the
Trust Indenture and the Warrant Indenture by the Company, and the
performance of the transactions contemplated thereby will not result
in a breach of, and do not create a state of facts which, after
notice or lapse of time or both, will result in a breach of, and do
not and will not conflict with, any of the terms, conditions or
provisions of
- 17 -
the constating documents, resolutions or by-laws of the Company or
any material indenture, contract, agreement (written or oral),
instrument, lease or other document to which the Company or its
Subsidiaries is a party or by which the Company or its Subsidiaries
is or will be contractually bound as of the Closing Time;
(l) neither the Company nor its Subsidiaries is a party to, and neither
the Company nor its Subsidiaries has granted any agreement, warrant,
option or right, or any privilege capable of becoming an agreement,
option or right for the purchase, subscription or issuance of any
common shares or securities convertible into or exchangeable for
common shares except as disclosed in the Public Record and as
summarized in Schedule "B" hereto;
(m) the audited annual financial statements of the Company as at and for
the year ended December 31, 1996 and the unaudited financial
statements of the Company as at and for the three month period ended
March 31, 1997 (collectively, the "Financial Statements") present
fairly, in all material respects, the financial position of the
Company and its Subsidiaries as at the dates set out therein and the
results of their operations and the changes in their financial
position for periods then ended, in accordance with generally
accepted Canadian accounting principles;
(n) except as disclosed in the Public Record, there has not been any
material change in the assets, liabilities or obligations (absolute,
accrued, contingent or otherwise) of the Company or its
Subsidiaries, as set forth in the Financial Statements and there has
not been any material adverse change in the business, operations or
condition (financial or otherwise) or results of the operations of
the Company or its Subsidiaries, since March 31, 1997 and since that
date there have been no material facts, transactions, events or
occurrences which could materially adversely affect the business of
the Company or its Subsidiaries;
(o) to the best of the knowledge of the Company, the Company and its
Subsidiaries have conducted and are conducting their business in all
material respects in compliance with all applicable laws, by-laws,
rules and regulations of each jurisdiction in which their business
is carried on and hold all material licences, registrations,
permits, consents or qualifications (whether governmental,
regulatory or otherwise) required in order to enable their business
to be carried on as now conducted and all such material licences,
registrations, permits, consents and qualifications are valid and
subsisting and in good standing and neither the Company nor its
Subsidiaries have received notice of proceedings relating to the
revocation or modification of any such material license,
registration, permit consent or qualification which, if the subject
of an unfavourable decision, ruling or finding, would materially
adversely affect the
- 18 -
conduct of the business, operations, condition (financial or
otherwise) or income of the Company or its Subsidiaries;
(p) the Company has not, directly or indirectly, declared or paid any
dividend or declared or made any other distribution on any of its
common shares or securities of any class, or, directly or
indirectly, redeemed, purchased or otherwise acquired any of its
common shares or securities or agreed to do any of the foregoing;
(q) there is not, in the constating documents or articles of the Company
or in any agreement, mortgage, note, debenture, indenture or other
instrument or document to which the Company is a party, any
restriction upon or impediment to the declaration or payment of
dividends by the directors of the Company or the payment of
dividends by the Company to the holders of its common shares;
(r) the issued and outstanding common shares of the Company are listed
and posted for trading on the TSE;
(s) the Trustee at its office in Toronto, Ontario has been duly
appointed as the transfer agent and registrar for all of the
outstanding common shares of the Company;
(t) this Agreement and any other written or oral representations made by
the Company to the Subscriber in connection with the Private
Placement will be accurate in all material respects and will omit no
fact, the omission of which will make such representation
misleading;
(u) the Company is not a "reporting issuer" or a reporting company in
any jurisdiction other than Ontario, British Columbia and Alberta;
(v) all filings made by the Company under which it has received or is
entitled to government loans or incentives, have been made in
accordance, in all material respects, with applicable legislation
and contain no misrepresentations of a material fact or omit to
state any material fact which could cause any amount previously paid
to the Company or previously accrued on the accounts thereof to be
recovered or disallowed;
(w) the minute books of the Company and its Subsidiaries are true and
correct and contain the minutes of all meetings and all resolutions
of the directors and shareholders thereof;
(x) the Company has taken all steps necessary to obtain the consent of
the TSE and has complied with all other regulatory requirements
applicable on the offering
- 19 -
and sale of the Special Notes on a "private placement" basis as
contemplated by the Offering;
(y) the shares of the Subsidiaries held directly or indirectly by the
Company are all owned free and clear of all mortgages, liens,
charges, pledges, security interests, encumbrances, claims and
demands whatsoever;
(z) the auditors of the Company who audited the consolidated financial
statements of the Company most recently delivered to the security
holders of the Company and delivered their report with respect
thereto, are independent public accountants;
(aa) the Company and each of the Subsidiaries has established on its
books and records reserves that they are adequate for the payment of
all taxes not yet due and payable and there are no liens for taxes
on the assets of the Company or the Subsidiaries; there are no
audits known by the Company's management to be pending of the tax
returns of the Company or the Subsidiaries (whether federal,
provincial, local or foreign) and there are no claims which have
been or may be asserted relating to any such tax returns, which
audits and claims, if determined adversely, would result in the
assertion by any government agency of any deficiency that would have
a material adverse effect on the assets, properties, business,
results of operations, prospects or condition (financial or
otherwise) of the Company or the Subsidiaries, considered as a
single enterprise;
(bb) neither Revenue Canada, Customs, Taxation and Excise, the Internal
Revenue Service of the United States or any other taxation authority
has asserted or, to the best of the Company's knowledge, threatened
to assert any assessment, claim or liability for taxes due or to
become due in connection with anyy review or examination of the tax
returns of the Company or the Subsidiaries filed for any year would
have a material adverse effect on the assets, properties, business,
results of operations, prospects or condition (financial or
otherwise) of the Company or the Subsidiaries, considered as a
single enterprise;
(cc) each of the material contracts referred to in the Public Record to
which the Company is a party have been duly authorized, executed and
delivered by the parties thereto and is a legal, valid and binding
obligation of the parties thereto enforceable in accordance with its
respective terms and the Company is not in default in any material
respect thereunder;
(dd) the Company is not a party to any material contracts other than as
disclosed in Schedule "C" hereto;
- 20 -
(ee) the Company and its Subsidiaries own all right, title and benefit to
all registered or unregistered trademarks, trade or brand names,
copyrights, copyright applications, designs, industrial designs,
patents, patent applications and all other intellectual or
industrial property of or pertaining to the business of the Company
and its Subsidiaries;
(ff) to the best of the Company's knowledge, the conduct of the business
of the Company and its respective Subsidiaries does not infringe
upon the trademarks, trade names, service marks or copyrights, trade
secrets, know-how, designs, patents, or other proprietary rights or
technology, domestic or foreign, of any other person, firm or
corporation;
(gg) all of the representations and warranties made by the Company in
this Agreement will continue to be true and correct as of the
Closing Time;
(hh) the Public Record together with this Subscription and any other
written representations made by the Company to an investor or
potential investor in connection with the offer and sale of Special
Notes are accurate in all material respects and omit no fact, the
omission of which would make such representation misleading in light
of the circumstances in which such representation was made;
(ii) the creation, issuance and sale of the Securities by the Company
does not and will not conflict with and does not and will not result
in a breach of any of the terms, conditions or provisions of its
constating documents or any agreement or instrument to which the
Company is a party;
(jj) the Company and its subsidiaries are duly registered or licensed to
carry on business in the jurisdictions in which they carry on
business or own property or assets;
(kk) neither the Company nor any of its subsidiaries is a party to any
actions, suits or proceedings which could materially affect its
business or financial condition, and to the best of the Company's
knowledge no such actions, suits or proceedings have been threatened
as at the date hereof, except as disclosed in the Public Record;
(ll) no order ceasing or suspending trading in the securities of the
Company or prohibiting sale of such securities has been issued to
the Company or its directors, officers or promoters and to the best
of the Company's knowledge no investigations or proceedings for such
purposes are pending or threatened;
- 21 -
(mm) at the Closing Date, every consent, approval, authorization or order
that is required for the transactions herein contemplated to occur
at Closing will have been obtained and will be in effect;
(nn) the Company will reserve sufficient shares in the treasury of the
Company to enable it to issue the Shares and Warrant Shares;
(oo) all the information and statements to be contained in the Prospectus
and Registration Statement relating to the Securities (except
information and statements relating solely to the Agent) will be
true and correct except as modified or superseded by any amendment
or supplement thereto and together will constitute full, true and
plain disclosure of all material facts relating to the Company and
the Securities as required by applicable securities laws, will
contain no misrepresentations and will not omit any information
which is necessary to make any statement contained therein not
misleading in light of the circumstances in which it was made; and
(pp) other than as disclosed in the Public Record, no person has any
right, agreement or option, present or future, contingent or
absolute, or any right capable of becoming a right, agreement or
option for the issue or allotment of any unissued common shares of
the Company or any other security convertible or exchangeable for
any such shares or to require the Company to purchase, redeem or
otherwise acquire any of the issued or outstanding shares of the
Company.
11. COVENANTS OF THE COMPANY
The Company hereby covenants to and with the Subscriber that it will:
(a) allow the Subscriber Agent and its counsel to conduct all due
diligence in connection with the Private Placement which the
Subscriber may reasonably require;
(b) use its best efforts to obtain any necessary regulatory consents to
the Private Placement on such terms as are mutually acceptable to
the Subscriber and the Company, acting reasonably;
(c) duly, punctually and faithfully fulfil all legal requirements to
permit the creation, issuance, offering and sale of the Special
Notes including, without limitation, compliance with all applicable
securities legislation in the Canadian Jurisdictions to enable the
Special Notes to be offered for sale and sold in accordance with
this Agreement;
- 22 -
(d) ensure that the offer, sale and distribution of the Special Notes
and the distribution of the Securities will fully comply with the
requirements of applicable securities legislation in the Canadian
Jurisdictions;
(e) ensure that at the respective times of filing and at all times
subsequent to the filing thereof during the distribution of the
Securities, the Preliminary Prospectus, and the Prospectus will
fully comply with the requirements of applicable securities
legislation;
(f) upon obtaining Receipts for the Prospectus in the Canadian
Jurisdictions, cause the Trustee to deliver one copy of the
Prospectus and the certificates representing the Securities to each
person who is to acquire the Securities pursuant to the Prospectus;
(g) duly and punctually perform all the obligations to be performed by
it under this Agreement, the Trust Indenture and the Warrant
Indenture;
(h) during the period commencing on the date hereof and ending on the
conclusion of the distribution of the Securities, give the
Subscriber prompt written notice of:
(i) any material change (actual, proposed, anticipated, or
threatened) in or affecting the business, affairs, operations,
assets, liabilities (contingent or otherwise), capital or
control of the Company;
(ii) any material change in or misrepresentation of a material fact
contained or referred to in the Preliminary Prospectus or the
Prospectus; and
(iii) the occurrence of a material fact, which, in any such case,
is, or may be, of such nature as to result in a
misrepresentation in the Preliminary Prospectus; or result in
the Preliminary Prospectus or the Prospectus not complying
with applicable securities laws;
provided that if the Company is uncertain as to whether a material
change, change, occurrence or event of the nature referred to in
this subparagraph has occurred, the Company shall promptly inform
the Agent of the full particulars of the occurrence giving rise to
the uncertainty and shall consult with the Agent as to whether the
occurrence is of such nature.
In this Agreement, the terms "material change", "material fact",
"misrepresentation" and "distribution" have the meanings ascribed
thereto in the applicable securities legislation of the Canadian
Jurisdictions;
- 23 -
(i) during the period commencing on the date hereof and ending on the
conclusion of the distribution of the Securities, promptly inform
the Subscriber of:
(i) any request of any securities commission, stock exchange, or
similar regulatory authority for any amendment to the
Preliminary Prospectus, the Prospectus or any part of the
Public Record or for any additional information;
(ii) the issuance by a securities commission, stock exchange or
similar regulatory authority or by any other competent
authority of any order to cease or suspend trading of any
securities of the Company or of the institution or threat of
institution of any proceedings for that purpose; and
(iii) the receipt by the Company of any communication from any
securities commission, stock exchange, or similar regulatory
authority relating to the Preliminary Prospectus, the
Prospectus, any other part of the Public Record or the
distribution of the Special Notes or the Securities; and
(j) unless it would be unlawful to do so, accept this Agreement within
one business day of the Agreement being submitted to it by the
Subscriber;
(k) take all steps necessary prior to the Closing Time to obtain the
consent of the TSE and comply with all other regulatory requirements
applicable on the offering and sale of the Special Notes as
contemplated by the Private Placement prior to the Closing Time;
(l) prepare and file promptly at the Subscriber's request any amendment
to the Preliminary Prospectus or Prospectus which in the reasonable
opinion of the Agent, the Subscriber and the Company may be
necessary or advisable; and
(m) use its best efforts to obtain from the Ontario Securities
Commission forthwith after the Closing Time a ruling exempting from
the prospectus requirements of the SECURITIES ACT (Ontario) the
first trade in Warrant Shares acquired upon exercise of the
Warrants.
12. ACKNOWLEDGEMENT AND WAIVER
12.1 The Subscriber acknowledges that the decision to purchase the special Notes
and to acquire the Units issuable on exercise thereof was made solely on the
basis of publicly available information. The Subscriber hereby waives to the
fullest extent permitted by law, any rights of withdrawal, rescission or
compensation for damages (other than as expressly described herein and in the
Prospectus) to which the Subscriber might otherwise be entitled in
- 24 -
connection with the distribution of the Securities issuable upon exercise of the
Special Notes pursuant to the Prospectus to be filed in each of the Qualifying
Jurisdictions.
13. CONTRACTUAL RIGHT OF ACTION FOR RESCISSION
13.1 In the event that a holder of Special Notes, who acquires Debentures upon
the exercise of the Special Notes as provided for in the Prospectus, is or
becomes entitled under the securities legislation of any Canadian Jurisdiction
to the remedy of rescission by reason of the Prospectus or any amendment thereto
containing a misrepresentation, the Subscriber shall be entitled to rescission
not only of the exercise of the Special Notes but also pursuant to the Private
Placement pursuant to which the Special Notes were initially acquired, and shall
be entitled in connection with such rescission to a full refund of all
consideration paid on the acquisition of the Special Notes. In the event such
holder is a permitted assignee of the interest of the Subscriber, such permitted
assignee shall be entitled to exercise the rights of rescission and refund
granted hereunder as if such permitted assignee were the Subscriber. The
foregoing is in addition to any other right or remedy available to a holder of
Special Notes under Section 121 of the BRITISH COLUMBIA SECURITIES ACT, or the
equivalent provisions of the securities legislation of any other Canadian
Jurisdiction, or otherwise at law.
14. RESALE RESTRICTIONS AND LEGENDING OF SECURITIES
14.1 The Subscriber acknowledges that any resale of the Securities will be
subject to resale restrictions contained in the securities legislation
applicable to the Subscriber or to the proposed transferee. The Company is not a
reporting issuer in any province or territory of Canada other than the Reporting
Jurisdictions and, accordingly, any applicable hold periods under the laws of
such other jurisdictions may never expire. The Subscriber acknowledges that if
the Company is unable to obtain a receipt for the Prospectus in the
jurisdictions in which the Subscriber resides, the Securities maybe subject to
restrictions on resale for an additional or an indefinite period of time.
14.2 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. The
Securities may not be offered or sold in the United States unless registered in
accordance with federal securities laws and all applicable State securities laws
or exemptions from such requirements are available. The Special Notes may bear a
legend denoting the foregoing and, in addition, if the Subscriber is a U.S.
Person or person in the United States, the Debentures, Shares and Warrant Shares
may bear a legend denoting the foregoing.
14.3 The Subscriber hereby acknowledges that in the event that:
(a) the Company is unable to obtain a receipt for the Prospectus in any
of the Canadian Jurisdictions; or
- 25 -
(b) any Special Notes are exercised by the Subscriber prior to the
issuance of a receipt for the Prospectus by the securities
commission in any of the Canadian Jurisdictions,
a legend may be placed on the certificates representing the Debentures, Shares
and Warrant Shares to the effect that the securities represented by such
certificates are subject to a hold period and may not be traded until the expiry
of such hold period except as permitted by applicable securities legislation.
15. GOVERNING LAW
15.1 This Subscription is governed by the laws of the Province of Ontario and
the federal laws of Canada applicable therein. The Subscriber irrevocably
attorns to the jurisdiction of the courts of the Province of Ontario.
16. SURVIVAL
16.1 This Subscription, including, without limitation, the representations,
warranties, acknowledgements and covenants contained herein, shall survive and
continue in full force and effect and be binding upon the Subscriber
notwithstanding the completion of the purchase of the Special Notes by the
Subscriber pursuant hereto, the completion of the issue of Special Notes of the
Company and any subsequent disposition by the Subscriber of the Securities.
17. ASSIGNMENT
17.1 This Subscription is not transferable or assignable.
18. EXECUTION
18.1 The Company shall be entitled to rely on delivery by facsimile machine of
an executed copy of this Subscription and acceptance by the Company of such
facsimile copy shall be equally effective to create a valid and binding
agreement between the Subscriber and the Company in accordance with the terms
hereof.
19. SEVERABILITY
19.1 The invalidity or unenforceability of any particular provision of this
Subscription shall not affect or limit the validity or enforceability of the
remaining provisions of this Subscription.
- 26 -
20. TERMINATION RIGHTS
(a) The Subscriber shall be entitled, at its option, to terminate all of
its obligations under this Agreement, by notice to that effect
delivered to the Company at any time prior to the Closing Time in
the event that:
(i) there shall occur or come into effect any event, condition or
circumstance which constitutes a material change financial or
otherwise (actual, proposed or prospective) in the business,
affairs, operations, assets, liabilities (contingent or
otherwise), prospects, condition or capital of the Company or
its Subsidiaries, considered as a single enterprise, which
would reasonably be expected to have a material adverse effect
on the business of the Company or its Subsidiaries or the
market price or value of the Special Notes or the Securities;
(ii) there is an enquiry or investigation (whether formal or
informal) by any securities regulatory authority in relation
to the Company or any of the Company's directors or officers
which in the opinion of the Subscriber seriously affects or
may seriously affect the Private Placement;
(iii) any order to cease trading in the securities of the Company is
made by a competent securities regulatory authority and that
order is still in effect; or
(iv) there should develop, occur or come into effect any
catastrophe of national or international consequence or any
action, governmental law or regulation, inquiry or other
occurrence of any nature whatsoever which, in the opinion of
the Subscriber, seriously affects or may seriously affect the
financial markets or the business of the Company or its
Subsidiaries.
(b) If the Subscriber terminates this agreement pursuant to this section
20, there shall be no further liability on the part of the
Subscriber or of the Company to the Subscriber; and
(c) The right of the Subscriber to terminate its obligations under this
Agreement is in addition to such other remedies as it may have or
has in respect of any default, act or failure to act of the Company
in respect of any of the matters contemplated by this Agreement.
21. ENTIRE AGREEMENT
21.1 Except as expressly provided in this Agreement and in the agreements,
instruments and other documents contemplated or provided for herein, this
Agreement contains the entire
- 27 -
agreement between the parties with respect to the sale of the Special Notes and
there are no other terms, conditions, representations or warranties, whether
expressed, implied, oral or written, by statute, by common law, by the Company,
by the Subscriber or by anyone.
22. LANGUAGE
23. The undersigned hereby acknowledges that it has consented to and requested
that the documents relating in any way to the purchase and sale of the
Securities be drawn up in the English language only. Le soussigne reconnait
avoir consenti et requis que la documentation relative a l'achat et la vente des
valeurs mobilireres soit redigee en langue anglaise seulement.
IN WITNESS WHEREOF the Subscriber has duly executed this Subscription as of the
date first above mentioned.
JASOPT PTY LIMITED
(A.C.N. 065 064 164)
________________________________
Name:
Office:
________________________________
(Address of Subscriber)
________________________________
(City, Province, Postal Code of Subscriber)
- 28 -
ACCEPTANCE
This Agreement is hereby accepted by SEVEN SEAS PETROLEUM INC.
DATED at ________________________________, the __________ day of ______________
________________, 1997.
SEVEN SEAS PETROLEUM INC.
Per: ____________________________
Authorized Signing Officer
SCHEDULE I TO THE PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
Seven Seas Petroleum Inc.
Suite 960, Three Post Oak Central
0000 Xxxx Xxx Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Dear Sirs:
Re: SEVEN SEAS PETROLEUM INC. - PRIVATE PLACEMENT OF SPECIAL NOTES
1. DELIVERY - please deliver the Special Notes certificates(s) to:
______________________________________________________________
______________________________________________________________
2. REGISTRATION - registration of the single certificate which is to be
delivered at closing should be made as follows:
______________________________________________________________ (name)
______________________________________________________________ (address)
3. The undersigned hereby acknowledges that it will deliver to Seven Seas
Petroleum Inc. all such additional completed forms in respect of the
Subscriber's purchase of Special Notes of Seven Seas Petroleum Inc. as may
be required for filing with the appropriate securities commissions and
regulatory authorities and stock exchanges.
DATED: 1997.
JASOPT PTY LIMITED
(A.C.N. 065 064 164)
Per. ____________________________
(Signature)
____________________________
(position)
1
SCHEDULE II TO THE PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
THE TORONTO STOCK EXCHANGE
PRIVATE PLACEMENT QUESTIONNAIRE AND UNDERTAKING
To be completed by each proposed private placement purchaser of listed
securities or securities which are convertible into listed securities.
QUESTIONNAIRE
1. DESCRIPTION OF TRANSACTION
(a) NAME OF THE ISSUER OF THE SECURITIES
Seven Seas Petroleum Inc.
(b) NUMBER AND DESCRIPTION OF SECURITIES TO BE PURCHASED
____________________ Special Notes, each Special Note entitling the
holder thereof to receive upon exchange, or deem exchange, a like
principal amount of convertible redeemable debentures (the
"Debentures) of the Company without payment of any additional
consideration. The Special Notes will be exchangeable into
Debentures at any time on or before 5.00 p.m (Vancouver time) on the
date (the "Exchange Date") which is the earlier of: (i) the third
business day following the date upon which all Qualification and
Registration Requirements (as defined in the Subscription Agreement)
have been met; and (ii) the first business day following twelve (12)
months from the Closing Date (as defined in the Subscription
Agreement). All Special Notes not exchanged prior to the Exchange
Date will be deemed to be exchanged for Debentures on the Exchange
Date without further action or notice on the part of the holders
thereof.
The Debentures will be convertible into units (the "Units") of the
Company by holders on three (3) business days notice, in whole or in
part, on the basis of one Unit for each US$11.50 principal amount of
Debentures outstanding. Each Unit will consist of one common share
of the Company and one-half of one common share purchase warrant
(collectively, the "Warrants"). Each whole Warrant will entitle the
holder thereof to acquire one additional common share of the Company
at any time on or before 5:00 p.m. (Vancouver time) on the first
business day following one (1) year from the Closing Date at a price
of US$15 per share.
2
(c) PURCHASE PRICE
The Special Notes will be issued in multiples of US$100.
2. DETAILS OF PURCHASER
(a) NAME OF PURCHASER:
_____________________________________________________________
(b) ADDRESS:
_____________________________________________________________
_____________________________________________________________
(c) IF THE PURCHASER IS A CORPORATION, STATE THE JURISDICTION OF
INCORPORATION:
_____________________________________________________________
(d) GENERAL NATURE OF BUSINESS:
_____________________________________________________________
_____________________________________________________________
(e) NAMES AND ADDRESSES OF PERSONS HAVING A GREATER THAN 5% BENEFICIAL
INTEREST IN THE PURCHASER:
_____________________________________________________________
_____________________________________________________________
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3. DEALINGS OF PURCHASER IN SECURITIES OF THE ISSUER
Give details of all trading by the purchaser in the securities of the
issuer (other than debt securities which are not convertible into equity
securities), directly or indirectly, within the 60 days preceding the date
hereof:
3
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
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4. RELATIONSHIP TO ISSUER
(a) State if purchaser has any relationship with Issuer, direct or
indirect:
_____________________________________________________________
(b) If the answer to (a) is "yes", give details:
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
(c) Does the purchase own any securities of the issuer at the date
hereof (other than debt securities which are not convertible into
equity securities); if so, give particulars:
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
4
UNDERTAKING
TO: THE TORONTO STOCK EXCHANGE
The undersigned has subscribed for and agreed to purchase, as principal, the
securities described in Item 1 of this Private Placement Questionnaire and
Undertaking.
The undersigned undertakes not to sell or otherwise dispose of any of the said
securities so purchased or any securities derived therefrom for the lessor of:
1. a period of six months from the date of the closing of the
transaction herein or for such period as is prescribed by applicable
securities legislation, whichever is longer; and
2. a period ending on the date that a receipt for a final prospectus
relating to the said securities or any securities derived therefrom
has been issued by the Ontario Securities Commission.
without the prior consent of The Toronto Stock Exchange and any other regulatory
body having jurisdiction.
DATED at this day of 199 .
JASOPT PTY LIMITED
(A.C.N. 065 064 164)
_________________________________
(Authorized Signature)
_________________________________
(Please print here name of individual whose
signature appears above, if different from
name of purchaser printed above)
