THE SECURITIES TO WHICH THIS AGREEMENT RELATE HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, ANY U.S. STATE SECURITIES
LAWS, ANY APPLICABLE CANADIAN SECURITIES LAWS, OR ANY SECURITIES LAWS OF ANY
OTHER JURISDICTION AND MAY NOT BE OFFERED OR RESOLD IN THE UNITED STATES OR IN
CANADA WITHOUT REGISTRATION UNDER SUCH APPLICABLE U.S. OR CANADIAN SECURITIES
LAWS, UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE AND ONLY UPON THE
HOLDER THEREOF FIRST HAVING OBTAINED THE WRITTEN OPINION OF COUNSEL TO THE
COMPANY, OR OTHER COUNSEL ACCEPTABLE TO THE COMPANY, THAT THE PROPOSED
DISPOSITION IS CONSISTENT WITH ALL APPLICABLE PROVISIONS OF SUCH ACT AS WELL AS
ANY OTHER APPLICABLE SECURITIES LAW.
PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
TO: AMERICAN GOLDFIELDS INC. (the "Company")
Re: Purchase of securities of the Company
DETAILS OF SUBSCRIPTION: The Subscriber (the "Subscriber") hereby irrevocably
subscribes for and agrees to purchase from the Company, on the terms and
conditions set forth herein and in the attached schedules, that number of units
of the Company set out below at a price of $2.50 per unit. Each unit shall
consist of one common share of the Company (a "Share") and three share purchase
warrants (collectively, the "Warrants"), each Warrant substantially in the form
attached hereto. Each Warrant shall entitle the Subscriber to purchase one
common share of the Company at the following prices:
a. Class A warrant - $1.50 per share b. Class B warrant - $2.00 per share c.
Class C warrant - $2.50 per share
The Class A, Class B, and Class C Warrants are not exercisable until 12 months,
18 months and 24 months, respectively, after issuance. The Warrants expire 5
years from the date the Warrants are first exercisable. The Company reserves the
right, in its sole and absolute discretion, to reduce the exercise price of the
warrants and/or to accelerate the exercise date of the Warrants.
NUMBER OF UNITS TO BE PURCHASED: 200,000 Units
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TOTAL SUBSCRIPTION PRICE:
($2.50 per Unit) $ $500,000
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NAME OF SUBSCRIBER:
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ADDRESS:
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(Street Address)
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(City and Province)
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(Country and Postal or Zip Code)
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(Contact Name)
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(Contact's Telephone Number)
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(Contact's e-mail Address)
IN WITNESS WHEREOF the Subscriber has executed, or caused its duly authorized
representative to execute, this agreement as of the _____ day of
_______________, 2004.
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Signature of Subscriber (if an individual) Name of Subscriber (if not an individual)
Per:
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Name of Subscriber (if an individual) (signature of authorized representative)
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Name and Title of Authorized Representative
ACCEPTANCE
The foregoing is accepted and agreed to as of the ____ day of ________________,
2004.
AMERICAN GOLDFIELDS INC.
BY: ________________________
Name:
Title:
SCHEDULE I
CONFIRMATION OF RELATIONSHIP
(For Directors, Senior Officers and Control Persons and
Their Close Personal Friends, Close Business Associates and Relatives)
The Subscriber represents and warrants to the Company that the Subscriber has
read the following definitions from Multilateral Instrument ▇▇-▇▇▇ ▇▇▇▇▇▇▇
RAISING EXEMPTIONS and certifies that the Subscriber has the relationship(s) to
the Company or its directors, senior officers or control persons by virtue of
the Subscriber being:
(INITIAL ONE OR MORE AS APPROPRIATE)
_____ (a) a director, senior officer or control person of the Company,
or of an affiliate of the Company;
_____ (b) a spouse, parent, grandparent, brother, sister or child of a
director, senior officer or control person of the Company, or
of an affiliate of the company;
_____ (c) a close personal friend of a director, senior officer or
control person of the Company, or of an affiliate of the
Company;
_____ (d) a close business associate of a director, senior officer or
control person of the Company, or of an affiliate of the
Company;
_____ (e) a person or company that is wholly-owned by any combination of
persons or companies described in paragraphs (a) to (d),
and if (b), (c), (d) or (e) is initialed the director, senior officer or control
person is:
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(PRINT NAME OF DIRECTOR, SENIOR OFFICER OR CONTROL PERSON)
The foregoing representations and warranties are true and accurate as of the
date of this certificate and will be true and accurate as of Closing. If any
such representations and warranties shall not be true and accurate prior to
Closing, the Subscriber shall give immediate written notice of such fact to the
Company.
For the purposes hereof, the following definitions are included for convenience:
a. "close business associate" means an individual who has had sufficient
prior business dealings with the director, senior officer or control
person to be in a position to assess the capabilities and
trustworthiness of the director, senior officer or control person.
A casual business associate or a person introduced or solicited for the
purpose of purchasing securities is not a close business associate. An
individual is not a close business associate solely because the
individual is a client or former client. For example, an individual is
not a close business associate of a registrant or former registrant
solely because the individual is a client or former client of that
registrant or former registrant.
The relationship between the purchaser and the director, senior officer
or control person must be direct. For example, the exemption is not
available for a close business associate of a close business associate
or a director, senior officer or control person.
b. "close personal friend" means an individual who has known the director,
senior officer or control person for a sufficient period of time to be
in a position to assess the capabilities and trustworthiness of the
director, senior officer or control person.
An individual is not a close personal friend solely because
o the individual is a member of the same organization, association or
religious group, or
o the individual is a client or former client.
The relationship between the purchaser and the director, senior officer
or control person must be direct. For example, the exemption is not
available for a close personal friend or a close personal friend of the
director, senior officer or control person.
c. "company" means any corporation, incorporated association, incorporated
syndicate or other incorporated organization.
d. "person" means and individual, partnership, unincorporated association,
unincorporated syndicate, unincorporated organization, trust, trustee,
executor, administrator or other legal representative.
e. "spouse" means, in relation to an individual, another individual to
whom that individual is married, or another individual of the opposite
sex or the same sex with whom that individual is living in a conjugal
relationship outside marriage.
DATED at ____________________________ on ______________________________.
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Name of Purchaser - please print
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Authorized Signature
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Official Capacity - please print
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Please print name and
individual whose signature
appears above, if different
name of purchaser printed
above.
SCHEDULE II
ACCREDITED INVESTOR CONFIRMATION
(For accredited investors resident in British Columbia or Alberta)
The Subscriber represents and warrants to the Company that the Subscriber has
read the following definitions of an "accredited investor" from Multilateral
Instrument ▇▇-▇▇▇ ▇▇▇▇▇▇▇ RAISING EXEMPTIONS and certifies that the Subscriber
is an accredited investor by virtue of falling into one or more of the
categories indicated below (INITIAL AS APPROPRIATE):
_____ (a) a Canadian financial institution, or an authorized foreign
bank listed in Schedule III of the BANK ACT (Canada);
_____ (b) the Business Development Bank of Canada incorporated under the
BUSINESS DEVELOPMENT BANK OF CANADA ACT (Canada);
_____ (c) an association under the COOPERATIVE CREDIT ASSOCIATIONS ACT
(Canada) located in Canada;
_____ (d) a subsidiary of any person or company referred to in
paragraphs (a) to (c), if the person or company owns all of
the voting securities of the subsidiary, except the voting
securities required by law to be owned by directors of that
subsidiary;
_____ (e) a person or company registered under the securities
legislation of British Columbia or Alberta, or under the
securities legislation of another jurisdiction of Canada, as
an adviser or dealer, other than a limited market dealer
registered under the SECURITIES ACT (Ontario);
_____ (f) an individual registered or formerly registered under the
securities legislation of British Columbia or Alberta, or
under the securities legislation of another jurisdiction of
Canada, as a representative of a person or company referred to
in paragraph (e);
_____ (g) the government of Canada or a province, or any crown
corporation or agency of the government of Canada or a
province;
_____ (h) a municipality, public board or commission in Canada;
_____ (i) any national, federal, state, provincial, territorial or
municipal government of or in any foreign jurisdiction, or any
agency of that government;
_____ (j) a pension fund that is regulated by either the Office of the
Superintendent of Financial Institutions (Canada) or a
provincial pension commission or similar regulatory authority;
_____ (k) a registered charity under the INCOME TAX ACT (Canada)
_____ (l) an individual who, either alone or jointly 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 CDN$1,000,000;
_____ (m) an individual whose net income before taxes exceeded
CDN$200,000 in each of the two most recent years or whose net
income before taxes combined with that of a spouse exceeded
CDN$300,000 in each of the two most recent years and who, in
either case, reasonably expects to exceed that net income
level in the current year;
_____ (n) a corporation, limited partnership, limited liability
partnership, trust or estate, other than a mutual fund or
non-redeemable investment fund, that had net assets of at
least CDN$ 5,000,000 as shown on its most recently prepared
financial statements;
_____ (o) a mutual fund or non-redeemable investment fund that, in
British Columbia or Alberta, distributes its securities only
to persons or companies that are accredited investors;
_____ (p) a mutual fund or non-redeemable investment fund that, in
British Columbia or Alberta, distributes its securities under
a prospectus for which the British Columbia or Alberta
Securities Commission, as the case may be, has issued a
receipt;
_____ (q) an entity organized in a foreign jurisdiction that is
analogous to any of the entities referred to in paragraphs (a)
through (e) and paragraph (j) in form and function; or
_____ (r) a person or company in respect of which all of the owners
of interests, direct or indirect, legal or beneficial, are
persons or companies that are accredited investors.
The foregoing representations and warranties are true and accurate as of the
date of this certificate and will be true and accurate as of Closing. If any
such representations and warranties shall not be true and accurate prior to
Closing, the Subscriber shall give immediate written notice of such fact to the
Company.
For the purposes hereof, the following definitions are included for convenience:
a. "company" means any corporation, incorporated association, incorporated
syndicate or other incorporated organization.
b. "entity" means a company, syndicate, partnership, trust or incorporated
organization. c. "financial assets" means cash and securities. d.
"mutual fund" indicates an issuer of securities that 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 a part of the net
assets, including a separate fund or trust account, of the issuer of
securities.
e. "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 for the purpose of exercising effective control,
seeking to exercise effective control, or being actively involved in
the management of the issuers in which it invests, other than other
mutual funds or non-redeemable investment funds; and
iii. that is not a mutual fund.
f. "person" means an individual, partnership, unincorporated association,
unincorporated syndicate, unincorporated organization, trust, trustee,
executor, administrator or other legal representative.
g. "related liabilities" means liabilities incurred or assumed for the
purpose of financing the acquisition or ownership of financial assets
and liabilities that are secured by financial assets.
h. "spouse" means, in relation to an individual, another individual to
whom that individual is married, or another individual or the opposite
sex or the same sex with whom that individual is living in a conjugal
relationship outside of marriage.
In Multilateral Instrument 45-103 a person or company is considered to be:
o an "affiliated entity" of another person or company if one is a
subsidiary entity of the other, or if both are subsidiary entities of
the same person of company, or if each of them is controlled by the
same person or company.
o "controlled" by a person or company if,
a. in the case of a person or company,
i. voting securities of the first-mentioned person or company
carrying more than 50% of the votes for the election of directors
are held, otherwise than by way of securities only, by or for the
benefit of the other person or company; and
ii. the votes carried by the securities are entitled, if exercised, to
elect a majority of the directors of the first-mentioned person or
company;
b. in the case of a partnership that does not have directors, other
than a limited partnership, the second-mentioned person or company
holds more than 50% of the interests in the partnership; or
c. in the case of a limited partnership, the general partner is the
second-mentioned person or company. o a "subsidiary entity" of
another person or company if: a. it is controlled by,
i. that other, or
ii. that other and one or more persons or companies each of which's
controlled by that other, or iii. two or more persons or
companies, each of which is controlled by that, or b. it is a
subsidiary entity of a person or company that is the other's
subsidiary entity.
DATED at ________________________ on ________________________________.
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Name of Purchaser - please print
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Authorized Signature
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Official Capacity - please print
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Please print name and
individual whose signature
appears above, if different
name of purchaser printed
above.
DETAILS AND CONDITIONS OF THE SUBSCRIPTION
1. DESCRIPTION OF SECURITIES
The securities subscribed for hereunder shall be units, each unit consisting of
one (1) share of common stock of the Company (collectively, the "Shares") and
three (3) common share purchase warrants (collectively, the "Warrants"). Each
Warrant shall entitle the holder thereof to purchase one share of common stock
of the Company (collectively, the "Warrant Shares"), during the period and for
the prices described on the first page of this Private Placement Subscription
Agreement (this "Agreement") and as more further specified in the attached forms
of the Warrant Agreements. The foregoing description of the Warrants is a
summary only and is subject to the detailed provisions of the Warrant
Agreements. The Shares and Warrants are herein collectively referred to as the
"Units". The Units, Shares, Warrants and Warrant Shares are herein collectively
referred to as the "Securities".
THE SECURITIES WILL BE SUBJECT TO STATUTORY HOLD PERIODS DURING WHICH THEY MAY
NOT BE TRANSFERRED OR RESOLD. SUBSCRIBERS ARE ADVISED TO CONSULT THEIR OWN LEGAL
ADVISERS IN CONNECTION WITH ANY APPLICABLE RESALE RESTRICTIONS.
2. PAYMENT OF SUBSCRIPTION PRICE
The total Subscription Price set out on the first page of this Agreement must be
paid by money order, certified cheque or bank draft payable to the Company prior
to the Closing Date.
3. DOCUMENTS REQUIRED
The Subscriber must complete, sign and deliver to the company and executed copy
of this Agreement together with the attached applicable Schedules:
a. Schedule I, a Confirmation of Relationship, if the Subscriber is a
director, senior officers or control person of the Company or a close
personal friend, close business associate, spouse, parent, grandparent,
sibling or child of a director, senior officer or control person of the
Company.
b. Schedule II, a British Columbia or Alberta Accredited Investor
Confirmation, if the Subscriber is an accredited investor resident in
British Columbia or Alberta.
The Subscriber shall complete, sign and deliver to the Company as soon as
possible such further documents, questionnaires, notices and undertakings as may
be required by regulatory authorities, stock exchanges and applicable law.
4. CLOSING
Delivery and payment for the Units (the "Closing) will be completed at the
offices of American Goldfields Inc., ▇▇▇-▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇.
Upon receipt by the Company of executed Agreement and payment for an aggregate
of _______ Units (the "Closing Date").
Certificates representing the Shares and Warrants will be available for delivery
five business days after the Closing Date.
5. ACKNOWLEDGEMENTS BY ALL SUBSCRIBERS
The Subscriber, irrespective of their jurisdiction of residency, acknowledges
that:
(a) The Subscriber is acquiring the Securities for his
own account as principal, not as a nominee or agent,
for investment purposes only, and not with a view to,
or for, resale, distribution or fractionalization
thereof in whole or in part and no other person has a
direct or indirect beneficial interest in such
Securities or any portion thereof. Further, the
Subscriber does not have any contract, undertaking,
agreement or arrangement with any person to sell,
transfer or grant participations to such person or to
any third person, with respect to the Securities for
which the Subscriber is subscribing or any part of
the Securities.
(b) The Subscriber has full power and authority to enter
into this Agreement, the execution and delivery of
this Agreement has been duly authorized, if
applicable, and this Agreement constitutes a valid
and legally binding obligation of the Subscriber.
(c) The Subscriber is not subscribing for the Securities
as a result of or subsequent to any advertisement,
article, notice or other communication published in
any newspaper, magazine or similar media or broadcast
over television or radio, or presented at any seminar
or meeting, or any solicitation of a subscription by
person previously not known to the Subscriber in
connection with investment securities generally.
(d) The Subscriber understands that the Company is under
no obligation to register the Securities under the
Securities Act, or to assist the Subscriber in
complying with the Securities Act or the securities
laws of any state of the United States or of any
foreign jurisdiction.
(e) The Subscriber is (i) experienced in making
investments of the kind described in this Agreement
and the related documents, (ii) able, by reason of
the business and financial experience of its officers
(if an entity) and professional advisors (who are not
affiliated with or compensated in any way by the
Company or any of its affiliates or selling agents),
to protect its own interests in connection with the
transactions described in this Agreement, and the
related documents, and (iii) able to afford the
entire loss of its investment in the Securities.
(f) The Subscriber acknowledges his understanding that
the offering and sale of the Securities is intended
to be exempt from registration under the Securities
Act. In furtherance thereof, in addition to the other
representations and warranties of the Subscriber made
herein, the Subscriber further represents and
warrants to and agrees with the Company and its
affiliates as follows:
(i) The Subscriber realizes that the basis for the
exemption may not be present if, notwithstanding such
representations, the Subscriber has in mind merely
acquiring the Securities for a fixed or determinable
period in the future, or for a market rise, or for
sale if the market does not rise. The Subscriber does
not have any such intention;
(ii) The Subscriber has the financial ability to bear the
economic risk of his investment, has adequate means
for providing for his current needs and personal
contingencies and has no need for liquidity with
respect to his investment in the Company; and
(iii) The Subscriber has such knowledge and experience in
financial and business matters as to be capable of
evaluating the merits and risks of the prospective
investment in the Securities. The Subscriber also
represents it has not been organized for the purpose
of acquiring the Securities; and
(iv) The Subscriber has been provided an opportunity for a
reasonable period of time prior to the date hereof to
obtain additional information concerning the offering
of the Securities, the Company and all other
information to the extent the Company possesses such
information or can acquire it without unreasonable
effort or expense.
(v) The Subscriber has carefully reviewed all of the
Company's filings under the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
(g) The Subscriber is not relying on the Company, or its
affiliates or agents with respect to economic
considerations involved in this investment. The
Subscriber has relied solely on its own advisors.
(h) No representations or warranties have been made to
the Subscriber by the Company, or any officer,
employee, agent, affiliate or subsidiary of the
Company, other than the representations of the
Company contained herein, and in subscribing for
Securities the Subscriber is not relying upon any
representations other than those contained herein.
(i) Any resale of the Securities during the `distribution compliance period' as
defined in Rule 902(f) to Regulation S shall only be made in compliance with
exemptions from registration afforded by Regulation S. Further, any such sale of
the Securities in any jurisdiction outside of the United States will be made in
compliance with the securities laws of such jurisdiction. The Investor will not
offer to sell or sell the Securities in any jurisdiction unless the Investor
obtains all required consents, if any.
(j) The Subscriber understands that the Securities are being
offered and sold to him in reliance on an exemption from the registration
requirements of United States federal and state securities laws under Regulation
S promulgated under the Securities Act and that the Company is relying upon the
truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of the Investor set forth herein in order to
determine the applicability of such exemptions and the suitability of the
Investor to acquire the Securities. In this regard, the Subscriber represents,
warrants and agrees that:
1. The Subscriber is not a U.S. Person (as defined
below) and is an affiliate (as defined in Rule
501(b) under the Securities Act) of the Company
and is not acquiring the Securities for the
account or benefit of a U.S. Person. A U.S. Person
means any one of the following:
o ANY NATURAL PERSON RESIDENT IN THE UNITED STATES OF AMERICA;
o ANY PARTNERSHIP OR CORPORATION ORGANIZED OR INCORPORATED UNDER THE LAWS
OF THE UNITED STATES OF AMERICA;
o ANY ESTATE OF WHICH ANY EXECUTOR OR ADMINISTRATOR IS A U.S. PERSON;
o ANY TRUST OF WHICH ANY TRUSTEE IS A U.S. PERSON;
o ANY AGENCY OR BRANCH OF A FOREIGN ENTITY LOCATED IN THE UNITED STATES
OF AMERICA;
o ANY NON-DISCRETIONARY ACCOUNT OR SIMILAR ACCOUNT (OTHER THAN AN ESTATE
OR TRUST) HELD BY A DEALER OR OTHER FIDUCIARY FOR THE BENEFIT OR
ACCOUNT OF A U.S. PERSON;
o ANY DISCRETIONARY ACCOUNT OR SIMILAR ACCOUNT (OTHER THAN AN ESTATE OR
TRUST) HELD BY A DEALER OR OTHER FIDUCIARY ORGANIZED, INCORPORATED OR
(IF AN INDIVIDUAL) RESIDENT IN THE UNITED STATES OF AMERICA; AND
o ANY PARTNERSHIP OR CORPORATION IF:
(A) organized or
incorporated under the laws of any
foreign jurisdiction; and
(B) formed by a U.S. person
principally for the purpose of
investing in securities not
registered under the Securities Act,
unless it is organized or
incorporated, and owned, by
accredited investors (as defined in
Rule 501(a) under the Securities
Act) who are not natural persons,
estates or trusts.
2. At the time of the origination of contact
concerning this Agreement and the date of the
execution and delivery of this Agreement, the
Subscriber was outside of the United States.
3. The Subscriber will not, during the period
commencing on the date of issuance of the
Securities and ending on the first anniversary of
such date, or such shorter period as may be
permitted by Regulation S or other applicable
securities law (the "Restricted Period"), offer,
sell, pledge or otherwise transfer the Securities
in the United States, or to a U.S. Person for the
account or for the benefit of a U.S. Person, or
otherwise in a manner that is not in compliance
with Regulation S.
4. The Subscriber will, after expiration of the
Restricted Period, offer, sell, pledge or
otherwise transfer the Securities only pursuant to
registration under the Securities Act or an
available exemption therefrom and, in accordance
with all applicable state and foreign securities
laws.
5. The Subscriber was not in the United States,
engaged in, and prior to the expiration of the
Restricted Period will not engage in, any short
selling of or any hedging transaction with respect
to the Securities, including without limitation,
any put, call or other option transaction, option
writing or equity swap.
6. Neither the Subscriber nor or any person acting on
his behalf has engaged, nor will engage, in any
directed selling efforts to a U.S. Person with
respect to the Securities and the Investor and any
person acting on his behalf have complied and will
comply with the "offering restrictions"
requirements of Regulation S under the Securities
Act.
7. The transactions contemplated by this Agreement
have not been pre-arranged with a buyer located in
the United States or with a U.S. Person, and are
not part of a plan or scheme to evade the
registration requirements of the Securities Act.
8. Neither the Subscriber nor any person acting on his behalf has
undertaken or carried out any activity for the purpose of, or that
could reasonably be expected to have the effect of, conditioning the
market in the United States, its territories or possessions, for any of
the Securities. The Subscriber agrees not to cause any advertisement of
the Securities to be published in any newspaper or periodical or posted
in any public place and not to issue any circular relating to the
Securities, except such advertisements that include the statements
required by Regulation S under the Securities Act, and only offshore
and not in the U.S. or its territories, and only in compliance with any
local applicable securities laws.
9. Each certificate representing the Securities shall be endorsed with the
following legends, in addition to any other legend required to be
placed thereon by applicable federal or state securities laws:
(A) "THE SHARES ARE BEING OFFERED TO
INVESTORS WHO ARE NOT U.S. PERSONS (AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT OF 1933, AS
AMENDED ("THE SECURITIES ACT")) AND WITHOUT
REGISTRATION WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES ACT IN
RELIANCE UPON REGULATION S PROMULGATED UNDER THE
SECURITIES ACT."
(B) "TRANSFER OF THESE SHARES IS PROHIBITED,
EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
REGULATION S, PURSUANT TO REGISTRATION UNDER THE
SECURITIES ACT, OR PURSUANT TO AVAILABLE EXEMPTION
FROM REGISTRATION. HEDGING TRANSACTIONS MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES
ACT."
10. The Subscriber consents to the Company making a
notation on its records or giving instructions to
any transfer agent of the Company in order to
implement the restrictions on transfer of the
Securities set forth herein.
(k) The Subscriber is an "accredited investor" as that term is
defined within the meaning of Rule 501 " as that term is defined in Rule 501 of
the General Rules and Regulations under the Securities Act by reason of Rule
501(a)(3).
(l) The Subscriber understands that an investment in the
Securities is a speculative investment which involves a high degree of risk and
the potential loss of his entire investment.
(m) The Subscriber's overall commitment to investments which
are not readily marketable is not disproportionate to the Subscriber's net
worth, and an investment in the Securities will not cause such overall
commitment to become excessive.
(n) The Subscriber has received all documents, records, books
and other information pertaining to the Subscriber's investment in the Company
that has been requested by the Subscriber. The Subscriber has reviewed or
received copies of all reports and other documents filed by the Company with the
Securities and Exchange Commission, including without limitation, the Company's
Form 10-KSB and most recently filed Form 10-QSB (the "SEC Documents").
(o) The Subscriber represents and warrants to the Company that
all information that the Subscriber has provided to the Company is correct and
complete as of the date hereof.
(p) Other than as set forth herein, the Subscriber is not
relying upon any other information, representation or warranty by the Company or
any officer, director, stockholder, agent or representative of the Company in
determining to invest in the Securities. The Subscriber has consulted, to the
extent deemed appropriate by the Subscriber, with the Subscriber's own advisers
as to the financial, tax, legal and related matters concerning an investment in
the Securities and on that basis believes that his or its investment in the
Securities is suitable and appropriate for the Subscriber.
(q) The Subscriber is aware that no federal or state agency
has (i) made any finding or determination as to the fairness of this investment,
(ii) made any recommendation or endorsement of the Securities or the Company, or
(iii) guaranteed or insured any investment in the Securities or any investment
made by the Company.
(p) The Subscriber understands that the price of the
Securities offered hereby bear no relation to the assets, book value or net
worth of the Company and were determined arbitrarily by the Company. The
Subscriber further understands that there is a substantial risk of further
dilution on his or its investment in the Company.
(q) The Company has advised the Subscriber that the Company is
relying on exemptions from the requirements to provide the Subscriber with a
prospectus and to sell securities through a person registered to sell securities
under the SECURITIES ACT (British Columbia) (together with the rules, policies,
instruments and orders thereunder, the "BC Act"), and regulations of the 1933
Act (together with the rules, policies, instruments and orders thereunder, the
"US Securities Act"), as the case may be, and, as a consequence of acquiring
securities pursuant to these exemptions, certain protections, rights and
remedies provided by the BC Act and US Securities Act, including statutory
rights of rescission or damages, will not be available to the Subscriber.
(r) The Subscriber is aware that the Securities will be
offered and sold pursuant to certain exemptions under the BC Act, U.S.
Securities Act and other applicable securities legislation and the Subscriber is
not acquiring the Securities as a result of any information about the affairs of
the Company that is not generally known to the public save knowledge of this
particular transaction.
(s) This subscription by the Subscriber has not been induced
by any representations or warranties by any person whatsoever with regard to the
future value of the Securities.
The foregoing representations, warranties and covenants are made by the
Subscriber with the intent that they be relied upon by the Company in
determining its suitability as a purchaser of the Securities and the Subscriber
hereby agrees to indemnify the Company against all losses, claims, costs,
expenses and damages or liabilities which it may suffer or incur as a result of
reliance thereon. The Subscriber undertakes to notify the Company immediately of
any change in any representation, warranty or other information relating to the
Subscriber set forth herein.
7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Subscriber that, as of the date of
this Agreement: a. The Company is a valid and subsisting corporation duly
incorporated, continued or amalgamated and in
good standing under the laws of the State of Nevada;
b. The Company has complied and will comply with all applicable
corporate and securities laws and regulations in connection with
the offer, sale and issuance of the Securities;
c. The filings made by the Company with the Securities and Exchange
Commission (the "SEC Documents") and the representations
contained in this Agreement are accurate in all material
respects and omit no fact, the omission of which would make such
representations misleading in light of the circumstances in
which such representation was made;
d. The 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
constituent documents or any agreement or instrument to which
the Company is a party;
e. The Agreement has been duly authorized by all necessary
corporate action on the part of the Company and, subject to
acceptance by the Company, constitutes a valid obligation of the
Company legally binding upon it and enforceable in accordance
with its terms;
f. The issuance of the Shares and Warrants, at the time of their
issue, will have been approved by all requisite corporate action
and, upon issue and delivery, will be validly issued, fully paid
and non-assessable. The Warrant Shares to be issued upon the due
exercise of the Warrants are reserved for issuance and, upon
exercise of the Warrants in accordance with its terms, will be
validly issued, fully paid and non-assessable;
g. The Company is not a party to any actions, suits or proceedings
which could materially affect its business or financial
condition, and, as at the date hereof, no such actions, suits or
proceedings have been threatened or, to the best of the
Company's knowledge, are pending, except as disclosed in the SEC
Documents; and
h. No other ceasing or suspending trading in the Securities nor
prohibiting sale of the Securities has been issued to and is
outstanding against the Company or its directors, officers or
promoters and to the best of the Company's knowledge no
investigations of proceedings for such purposes are pending or
threatened.
8. LEGENDING OF SECURITIES
The Subscriber hereby acknowledges that legends will be placed upon the
certificates representing the Securities to the effect that the securities
represented thereby are subject to hold periods and may not be traded until the
expiry thereof except as permitted under applicable securities rules and
regulations.
9. COSTS
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 acquisition of the Securities shall
be borne by the Subscriber.
10. GOVERNING LAW
This Agreement is governed by the laws of the State of Nevada, the federal laws
of the United States and the province of British Columbia and the federal laws
of Canada applicable herein. The Subscriber, in its personal or corporate
capacity and, if applicable, on behalf of each beneficial purchaser for whom it
is acting, irrevocably attorn to the jurisdiction of the courts of the province
of British Columbia or the State of Nevada, as determined in the sole discretion
of the Company.
11. SURVIVAL
This 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 notwithstanding the completion of the
purchase of the Units by the Subscriber and any subsequent disposition by the
Subscriber or the Securities.
12. ASSIGNMENT
This Agreement is not transferable or assignable.
13. EXECUTION
The Company shall be entitled to rely on delivery by facsimile machine of an
executed copy of this Agreement 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. This
Agreement may be executed through the use of separate signature pages or in any
number of counterparts, and each of such counterparts shall, for all purposes,
constitute one agreement binding on all parties, notwithstanding that all
parties are not signatories to the same counterpart.
14. SEVERABILITY
The invalidity or unenforceability of any particular provision of this Agreement
shall not affect or limit the validity or enforceability of the remaining
provisions of the Agreement.
15. ENTIRE AGREEMENT
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 agreement between the parties with respect to the
sale of the Units 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 any third party.
16. NOTICE
Unless otherwise provided herein, any notice or other communication to a party
under this Agreement may be made, given or served by registered mail, postage
pre-paid, by telecopy or by delivery to the parties at the addresses as set out
in this Agreement. Any notice or other communication:
a. Mailed shall be deemed to have been received on the fifth business day
following its mailing; b. Telecopied shall be deemed to have been received on
the business day following the date of transmission;
and
c. Delivered shall be deemed to have been received on the date of delivery.
In the event of a postal strike or delay affecting mail delivery, the date of
receipt of any notice by mail is deemed to be extended by the length of such
strike or delay. Each party may change its address for service at any time by
providing notice in writing of such change to the other party.
17. BINDING EFFECT
This Agreement shall be binding upon and inure to the benefit of the parties and
their heirs, executors, administrators, successors, legal representatives and
assigns. If the Subscriber is more than one person, the obligation of the
Subscriber shall be joint and several and the agreements, representations,
warranties and acknowledgments herein contained shall be deemed to be made by
and be binding upon each such person and his heirs, executors, administrators
and successors.
19. FURTHER ASSURANCES
The Subscriber agrees that he shall, from time to time after the Closing, upon
the request of the Company, duly execute, acknowledge and deliver, or cause to
be executed, acknowledged and delivered, all such further documents and
instruments and take such other actions, as may be requested by the Company.
20. PRONOUNS.
The use herein of the masculine pronouns "him" or "his" or similar terms shall
be deemed to include the feminine and neuter genders as well and the use herein
of the singular pronoun shall be deemed to include the plural as well.
[Remainder of Page Intentionally Omitted; Signature Pages to Follow]
ACCEPTANCE
The foregoing details and conditions are accepted and agreed to as of the ____
day of ________________, 2004.
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Name of Purchaser - please print
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Authorized Signature
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Official Capacity - please print
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Please print name and
individual whose signature
appears above, if different
name of purchaser printed
above.