Exhibit 10.1
SUBSCRIPTION AGREEMENT
(RAB Special Situations, LP)
THIS SUBSCRIPTION AGREEMENT (this "Agreement") dated as of the 31st day of
December, 2004,
BETWEEN:
WESTERN GOLDFIELDS, INC., a Idaho (U.S.A.) corporation with an address at
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ (U.S.A.) (the "Issuer" or
"Company")
AND:
RAB SPECIAL SITUATIONS, LP, a Delaware limited partnership, with its
principal business address at c/o RAB Capital Limited, No. ▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "Investor")
WITNESSES THAT WHEREAS:
A. The Issuer is subject to the regulatory jurisdiction of the U.S.
Securities and Exchange Commission (the "Commission") and any other
securities commission of any State of the United States in which the Units
of the Issuer are offered.
B. The Investor has agreed to purchase Units of the Issuer with respect to
the Issuer's private placement of the Units (the "Offering"), on the terms
and conditions set forth herein at a price of U.S. $0.50 per Unit
(including any interest or portion thereof, any securities into which the
Units, the Shares, the Warrants (as defined below) or the Warrant Shares
(as defined below) are convertible into or exchangeable for, the "Units").
Each Unit consists of one share of Series "A-1" Convertible Preferred
Stock, par value $0.01 per share (the "Preferred Stock"), of the Issuer
(the "Shares"), the terms of which are set forth in the form of Articles
of Amendment to the Articles of Incorporation of the Company attached
hereto as Exhibit A hereto (the "Articles of Amendment"), and one half
Series "A" warrant (the "Warrants"), the terms of which are set forth in
the Warrant Agreement in the form attached hereto as Exhibit B (the
"Warrant Agreement"). Each whole Series "A" warrant entitling the holder
to acquire one additional share of Preferred Stock (the "Warrant Shares")
at any time for a period of two years from the date of this Agreement at a
price of $0.60. The Shares are convertible into shares of common stock of
the Company (the "Common Shares") under the terms set forth in the
Articles of Amendment and Warrant Agreement.
C. Such investment will be made in reliance upon the provisions of Regulation
S, Section 4(2), Section 4(6) and/or Regulation D of the Securities Act of
1933, as amended (the "Securities Act"), and the other rules and
regulations promulgated thereunder, and/or upon such other exemption from
the registration requirements of the Securities Act as may be available
with respect to any or all of the investments in securities to be made
hereunder.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements herein contained, the parties agree as follows:
1. PURCHASE AND SALE OF UNITS
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1.1 The Investor hereby subscribes for and pays for in accordance with the
terms of this Agreement, 1,000,000 Units at a price of U.S. $0.50 per
Unit.
1.2 The Investor shall deliver the sum of U.S. $500,000 to the Issuer (the
"Aggregate Purchase Price").
1.3 Each whole Warrant will be exercisable for $0.60 per share for a period of
two years from the date of issuance.
1.4 Delivery and payment for the Units will be completed at the offices of the
Company at 11:00 a.m. (Reno time) (the "Closing Time") on December 3, 2004
or such earlier or later date or time as the Company may determine, but in
no event later than December 15, 2004 (the "Closing Date").
2. CONDITIONS OF CLOSING
2.1 Investor Closing Deliveries. The obligation of the Company to consummate
the transactions contemplated by this Agreement is subject to the
satisfaction of the following conditions precedent or execution and
delivery to the Company of the following agreements, documents or
instruments, as the case may be:
(a) Payment by the Investor to the Company of the Aggregate Purchase
Price pursuant to Section 7 below;
(b) the representations and warranties made by the Investor in this
Agreement shall be true and correct as of the Closing Date and the
covenants of the Investor shall have been performed, satisfied and
complied with, where applicable, on or before the Closing Date; and
(c) an executed copy of the Registration Rights Agreement in the form
attached hereto as Exhibit C (the "Registration Rights Agreement").
2.2 Company Closing Deliveries. The obligation of the Investor to consummate
the transactions contemplated by this Agreement is subject to the
satisfaction of the following conditions precedent or execution and
delivery to the Investor of the following agreements, documents or
instruments, as the case may be:
(a) the representations and warranties made by the Company in this
Agreement shall be true and correct as of the Closing Date (except
for representations and warranties that speak as of a specific date)
and the covenants of the Company shall have been performed,
satisfied and complied with, where applicable, on or before the
Closing Date;
(b) a certificate representing the Shares to the Investor;
(c) an executed copy of the Warrant Agreement;
(d) an executed copy of the Registration Rights Agreement;
(e) the Company shall have amended its Articles of Incorporation to
authorize the issuance of the Preferred Stock with terms set forth
in the Articles of Amendment;
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(f) a certificate executed by the chief executive officer or the chief
financial officer of the Company, dated the Closing Date, in form
and substance reasonably satisfactory to the Subscriber, confirming
the satisfaction of paragraph 2.2(a) and such other matters as may
be reasonably requested by the Investor or its counsel; and
(g) the Company's legal counsel issues an opinion that (i) the Company
has the requisite corporate power and authority to issue the Shares,
(ii) the execution and delivery of this Agreement and the agreements
contemplated by this Agreement have been duly authorized by all
necessary action on the part of the Company and no further consent
or action is required by the Company, its Board of Directors or its
stockholders; and (iii) the Shares and Warrants, when issued and
paid for in accordance with this agreement, will be duly and validly
issued, fully paid and non-assessable, are not subject to preemptive
rights or similar rights of stockholders.
2.3 Notwithstanding the foregoing, in the event the Company has not accepted
the Investor's subscription and this Agreement on or before December 15,
2004, this Agreement and any other documents delivered in connection
herewith will be returned to the Investor at the address set forth on the
first page of this Agreement and any subscription funds that were provided
will be returned in the same manner without interest or deduction.
3. REPRESENTATIONS AND WARRANTIES
3.1 The Investor represents and warrants to the Issuer that:
(a) The Investor is duly organized and in good standing under the laws
of its jurisdiction of its organization.
(b) The Investor has the requisite corporate or other organizational
power and authority to enter into and to consummate the transactions
contemplated by this Agreement. The execution and delivery by the
Investor of the this Agreement and the other documents contemplated
hereby have been duly authorized by all necessary action on the part
of the Investor, and no further consent or action is required by the
Investor.
(c) The Investor is knowledgeable and experienced in making investments
of this type, and able to bear the economic risk of loss of its
investment in the Company. The Investor is an "accredited investor,"
as that term is defined in Rule 501(a) of Regulation D under the
Securities Act.
(d) There are no claims for brokerage commissions, finder's fees or
similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement
made by the Investor.
(e) The Investor is acting on its own behalf in connection with the
investigation and examination of the Company and its decision to
execute the agreement and the other documents, agreements and
instruments contemplated hereby.
(f) The Investor is not acquiring the Units as a result or any
information about the affairs of the Issuer that is not generally
known to the public.
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3.2 The Issuer represents and warrants to the Investor that:
(a) Validity of Existence. The Issuer is a corporation duly incorporated
and in good standing under the laws of the State of Idaho, and has
the requisite corporate power and authority to conduct its business
as it is currently being conducted.
(b) Subsidiaries. The Company has two direct, wholly owned subsidiaries,
Western Mesquite Mines Inc. ("WMMI"), a Nevada corporation, and
Calumet Mining Company ("Calumet"), an Idaho corporation. Except as
otherwise provided by that certain Facility Agreement, dated as of
November 5, 2003, between Western Mesquite Mines, Inc., each party
listed in schedule 1 thereto as a Guarantor, RMB International
(Dublin) Limited and RMB Resources Limited, and the other documents,
agreements and instruments related thereto, the Company owns
directly all of the capital stock or comparable equity interests of
WMMI and Calumet free and clear of any lien. All of the issued and
outstanding shares of capital stock of each of WMMI and Calumet are
validly issued and are fully paid, non-assessable and free of
preemptive and similar rights. Each of WMMI and Calumet are
corporations duly incorporated and in good standing in their
respective jurisdictions of organization, and each has the requisite
corporate power and authority to conduct its business as it is
currently being conducted.
c) Authorization; Enforcement. The Company has the requisite corporate
power and authority to enter into and to consummate the transactions
contemplated by this Agreement. The execution and delivery by the
Company of this Agreement and the other documents contemplated
hereby (collectively, the "Transaction Documents") have been duly
authorized by all necessary action on the part of the Company, and
no further consent or action is required by the Company, its Board
of Directors or its stockholders. Each of the Transaction Documents,
when duly authorized, executed and delivered by all parties thereto
other than the Company, will constitute, a valid and binding
obligation of the Company, enforceable against the Company in
accordance with the terms thereof, except that (i) the enforcement
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally, (ii) equitable remedies, including, without
limitation, specific performance and injunction, may be granted only
in the discretion of a court of competent jurisdiction, (iii) rights
of indemnity, contribution and the waiver of contribution provided
for herein, and any provisions exculpating a party from a liability
or duty otherwise owed by it, may be limited under applicable law,
and (iv) the enforceability of provisions in any Transaction
Document which purport to sever any provision which is prohibited or
unenforceable under applicable law.
d) No Conflicts. The execution, delivery and performance of the
transactions contemplated hereunder by the Company do not and will
not (i) conflict with or violate any provision of the Company's or
its subsidiaries' certificate or articles of incorporation, bylaws
or other organizational or charter documents, (ii), to the knowledge
of the Company, conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time
or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or debt or otherwise) to which the
Company or any subsidiary is a party or by which any property or
asset of the Company or any subsidiary is bound or affected, except
to the extent that such conflict, default or termination right could
not reasonably be expected to have a Material Adverse Effect (as
defined in Section 3.2(g) below), or (iii), to the knowledge of the
Company, result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company or its subsidiaries are
subject (including federal and state securities laws and
regulations, assuming the accuracy and completeness of the
representations and warranties of the Investor in this Agreement),
or by which any property or asset of the Company or its subsidiaries
is bound or affected. As used herein, the words "knowledge of the
Company" (or any substantially similar phrase) means the active
knowledge (without investigation) of the President of the Company
and its executive officers.
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e) Issuance of the Securities. The Preferred Stock and Warrants, when
issued and paid for in accordance with this Agreement, will be duly
and validly issued, fully paid and non-assessable, free and clear of
all liens and, except as otherwise set forth herein or in the
instruments representing such securities or describing the rights
and obligations relating thereto, shall not be subject to preemptive
rights or similar rights of stockholders. The Common Shares issuable
upon conversion of the Preferred Stock or exercise of the Warrants,
when issued in accordance with the Articles of Amendment or Warrant
Agreement, as applicable, will be duly and validly issued, fully
paid and non-assessable, free and clear of all liens and shall not
be subject to preemptive rights or similar rights of stockholders.
f) Capitalization. All outstanding shares of capital stock of the
Company are duly authorized, validly issued, fully paid and
non-assessable. The Company has the authorized capitalization as set
forth in its statements, reports, prospectuses and registration
statements filed with the Commission (the "SEC Filings") as of the
respective dates set forth therein. As of December 31, 2004, the
Company had 38,722,309 Common Shares issued and outstanding, options
exercisable to acquire 3,183,084 Common Shares at an average
exercise price of $0.761, and warrants exercisable to acquire
16,676,335 Common Shares at an average exercise price of $0.948.
Except as contemplated in this Agreement or described in the SEC
Filings, the Company has no preferred shares or convertible debt
outstanding as of the Closing Date.
g) Material Changes. Since September 30, 2004, except as set forth in
the SEC Filings, the Company has not suffered any change that has
had, or could reasonably be expected to have, a Material Adverse
Effect. "Material Adverse Effect" shall mean any event, occurrence
or development that, individually or in the aggregate, has had or
that could reasonably have, a material adverse affect on (A) the
validity or enforceability of this Agreement, (B) the results of
operations, assets, prospects, business or condition (financial or
otherwise) of the Company and its subsidiaries, taken as a whole, or
(C) the Company's ability to perform fully on a timely basis its
obligations under this Agreement. Since September 30, 2004, and
except as set forth in the SEC Filings, the Company has not incurred
any liabilities (contingent or otherwise) other than (x) trade
payables and accrued expenses incurred in the ordinary course of
business consistent with past practice and expenses incurred in
connection with the Offering and sale of the Shares and Warrant
Shares and the preparation of a registration statement to be filed
in connection therewith and (y) liabilities not required to be
reflected in the Company's financial statements pursuant to GAAP or
required to be disclosed in filings made with the Commission. Since
September 30, 2004, except as set forth in the SEC Filings, the
Company has not altered its method of accounting or the identity of
its auditors. Since September 30, 2004, except as set forth in the
SEC Filings, the Company has not declared or made any dividend or
distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any
shares of its capital stock.
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h) Absence of Litigation. There is no action, suit, claim, proceeding,
inquiry or investigation before or by any court, public board,
government agency or body pending or, to the knowledge of the
Company, threatened against or affecting the Company or any of its
subsidiaries that could, individually or in the aggregate, have a
Material Adverse Effect.
i) Compliance. Neither the Company nor any subsidiary, to the knowledge
of the Company, (i) is in default under or in violation of (and no
event has occurred that has not been waived that, with notice or
lapse of time or both, would result in a default by the Company or
any subsidiary under), nor has the Company or any subsidiary
received notice of a claim that it is in default under or that it is
in violation of, any indenture, loan or credit agreement or any
other agreement or instrument to which it is a party or by which it
or any of its properties is bound (whether or not such default or
violation has been waived), (ii) is in violation of any order of any
court, arbitrator or governmental body, or (iii) is in violation of
any statute, rule or regulation of any governmental authority,
including without limitation all federal, state and local laws
relating to taxes, environmental protection, occupational health and
safety, product quality and safety and employment and labor matters
(assuming the accuracy and completeness of the representations and
warranties of the Investor in this Agreement), except in each case
as could not, individually or in the aggregate, have or result in a
Material Adverse Effect.
j) Title to Assets. The Company and its subsidiaries have good and
marketable title in all property owned by them that is material to
their respective businesses, in each case free and clear of all
liens, except as set forth in the SEC Filings and except for liens
which do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of
such property by the Company and the subsidiaries. To the knowledge
of the Company, any real property and facilities held under lease by
the Company and the subsidiaries are held by them under valid,
subsisting and enforceable leases.
k) Offering. Assuming the accuracy and completeness of the
representations and warranties of the Investor in this Agreement,
the offer, sale and issuance of the Units contemplated by this
Agreement are exempt from the registration requirements of the
Securities Act, and the Company has not taken action that would
cause the loss of such exemption. Neither the Company nor any person
acting on the Company's behalf has sold or offered to sell or
solicited any offer to buy the Units by means of any form of general
solicitation or advertising.
l) Application of Takeover Protections. There is no control share
acquisition, business combination, poison pill (including any
distribution under a rights agreement) or other similar
anti-takeover provision under the Company's charter documents or the
laws of its state of incorporation that are applicable to the
Investor as a result of the consummation of the transactions
contemplated by this agreement. The foregoing notwithstanding, the
Company has authorized in its articles of incorporation blank check
preferred stock.
m) Disclosure. No representation or warranty by the Company contained
in this Agreement contains any untrue statement of material fact or
omits to state any material fact necessary, in light of the
circumstances under which it was made, to make the statements herein
not misleading.
n) Patents and Trademarks. The Company and its subsidiaries have, or
have rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, copyrights,
licenses and other similar rights that are necessary or material for
use in connection with their respective businesses.
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o) Regulatory Permits. To the knowledge of the Company, the Company and
its subsidiaries possess all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign
regulatory authorities necessary to conduct their respective
businesses.
p) Tax Returns. Except as set forth on Schedule 3.2(p), since January
1, 2001, the Company and each of WMMI and Calumet has filed all tax
returns required by law to be filed by it and has paid all
applicable taxes to the extent such taxes have become due, and the
Company has no knowledge of any tax deficiencies or interest or
penalties currently accrued or accruing, or alleged by a
governmental taxing authority to be currently accrued or accruing,
thereon with respect to itself and each subsidiary.
q) Environmental Laws. The operations carried on by the Company are in
material compliance with all applicable federal, state and municipal
environmental, health and safety statutes, regulations and permits.
To the Company's knowledge, none of such operations is subject to
any judicial or administrative proceeding alleging the violation of
any federal, state or municipal environmental, health or safety
statute or regulation or is subject to any investigation concerning
whether any remedial action is needed to respond to a release of any
Hazardous Material into the environment. For the purposes of this
subparagraph, "Hazardous Material" means any contaminant, pollutant,
subject waste, deleterious substance, industrial waste, toxic matter
or hazardous waste as defined by applicable federal, provincial,
state or municipal laws or regulations enacted for the protection of
the natural environment or human health.
r) OTC Bulletin Board. The Company's shares are currently quoted on the
OTC Bulletin Board operated by the National Association of
Securities Dealers.
s) SEC Reporting. The Company, as of the Closing Date, has filed all
reports (the "SEC Reports") required to be filed by it pursuant to
the Securities Exchange Act of 1934, as amended (the "1934 Act"). As
of their respective filing dates, each of the Company's SEC Filings
(and if any SEC Report filed prior to the date of this Agreement was
amended or superseded by a filing prior to the date of the Closing
Date, then as of the date of filing of such amendment or superseding
filing), (i) where required, were prepared in all material respects
in accordance with the requirements of the 1934 Act and the rules
and regulations promulgated thereunder, and (ii) did not contain any
untrue statements of a material fact and did not omit to state a
material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. Each
set of audited consolidated financial statements and unaudited
interim financial statements of the Company (including any notes
thereto) included in the SEC Reports (i) complies as to form in all
material respects with the published rules and regulations of the
SEC with respect thereto, and (ii) have been prepared in accordance
with the standards of the Public Company Accounting Oversight Board
(except as may be indicated therein or in the notes thereto) and
fairly present, in all material respects, the financial position of
the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended subject, in the
case of the unaudited interim financial statements, to normal
year-end adjustments which were not or are not expected to be
material in amount.
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t) Disclosure. The Company confirms that neither it nor any other
person acting on its behalf has provided the Investor with any
information that constitutes material, nonpublic information.
u) Sarbanes Oxley Compliance. Neither the Company nor any of its
officers has received notice from any governmental entity
questioning or challenging the accuracy, completeness, form or
manner of filing or submission of the certifications of the
principal executive officer and the principal accounting officer of
the Company pursuant to Section 302(a) and Section 906 of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 attached as exhibits to the SEC Reports.
v) Internal Controls. The Company and each of its subsidiaries maintain
a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management's
general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
4. COVENANTS
4.1 The Investor agrees to execute and deliver such further documents and to do
all such further acts and things as may be necessary to comply with the further
requirements for this Offering and to carry out the intent of this Agreement.
4.2 The Issuer agrees that material future contracts, exploration agreements,
property transfers and sales (both real and personal), consultancy arrangements
and all other decisions of a material nature to the overall business of the
Company are fully reviewed by the Independent Board Members of the Company.
Further, if a majority of the Independent Board Members object to the entering
into of any such contracts, or other actions enumerated above on the basis of
there being a conflict of interest with one or more of the Officers and/or
Directors of the Company, then the Company will not enter into such agreement.
For the purposes of this paragraph, an "Independent Board Member" shall be any
Board member not also an Officer of the Company, and having no other nexus with
the proposal being considered, other than as Director of the Company.
4.3 The Company hereby indemnifies and holds harmless the Investor, any of its
affiliates and the directors, officers, employees, shareholders and agents of
any of the foregoing from time to time (for purposes of this paragraph each an
"Indemnified Person") from and against all losses, claims, damages, liabilities,
actions or demands including, without limiting the generality of the foregoing,
amounts paid in any settlement approved by the Company of any action, suit,
proceeding or claim but excluding lost profits and consequential damages, to
which each Indemnified Person may become subject insofar as such losses, claims,
damages, liabilities, actions or demands arise out of or are based upon,
directly or indirectly, any breach of a representation, warranty, covenant or
obligation of the Company contained in this Subscription Agreement or any
certificate or other document delivered by the Company in connection herewith,
and will reimburse such Indemnified Person for any legal or other expenses
reasonably incurred by such Indemnified Person in connection with investigating
or defending any such loss, claim, damage, liability, tax action or demand. For
greater certainty, the foregoing shall not apply to any loss sustained by an
Indemnified Person by reason of the holding, ownership or disposition of the
Units or to any failure of an Indemnified Person to derive earnings or make a
profit from any of the Units.
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5. SECURITIES LAWS MATTERS
5.1 The Investor is aware of and acknowledges to and agrees with the Issuer as
follows:
(a) The Investor is an accredited investor as that term is defined in
Rule 501(a).
(b) The Units, the Shares, the Warrants and the Common Shares underlying
the Shares and Warrants have not been registered under the
Securities Act in reliance on the exemptions under the Securities
Act.
(c) The Investor is acquiring the Units for its own account for
investment and not with a view to or for resale in connection with
any distribution of the Units. The Investor has not offered or sold
any portion of the Units and has no present intention of dividing
the Units with others or of selling, distributing or otherwise
disposing of any portion of the Units either currently or after the
passage of a fixed or determinable period of time or upon the
occurrence or non-occurrence of any predetermined event or
circumstance.
(d) The Investor covenants that it will not make any resale, transfer or
other disposition of the Units, the Shares, the Warrants and the
Common Shares underlying the Shares and Warrants except pursuant to
registration under the Securities Act, or pursuant to an available
exemption from registration (accompanied by an opinion of counsel
acceptable to the Company that such resale, transfer or other
disposition is exempt from the registration provisions of all
applicable federal and state laws).
(e) The Investor understands and agrees that, in addition to the
restrictions set forth in this Agreement, the following legend will
be placed on any certificate(s) or other document(s) evidencing the
Units, the Shares, the Warrants and the Common Shares underlying the
Shares and Warrants in substantially the following form and the
Investor must comply with the terms and conditions set forth in such
legends prior to any resales, pledges, hypothecations or other
transfers of the Units:
"The [______] represented by this certificate have not been
registered under any securities laws and may not be transferred, nor
will any assignee, vendee, transferee, or endorsee hereof be
recognized as having an interest in such [______] by the Company for
any purpose, unless (a) the stockholder wishing to transfer the
[______] provides an opinion of counsel satisfactory to the Company
stating that the proposed transfer of the [______] is exempt from
the registration provisions of all applicable federal and state
laws, (b) said securities have been registered pursuant to the
Securities Act of 1933, as amended (the "Act") and a registration
statement under the Act with respect to such [______] shall then be
in effect and such transfer has been qualified under applicable
state securities laws, or (c) in accordance with the provisions of
Regulation S under the Act."
(f) Stop transfer instructions have been or will be placed on any
certificates or other documents evidencing the Units, the Shares,
the Warrants and the Common Shares underlying the Shares and
Warrants so as to restrict the resale, pledge, hypothecation or
other transfer thereof in accordance with the provisions hereof. The
parties agree that the Company shall refuse to register any transfer
of the Units (or any securities issued upon conversion thereof) not
made pursuant to registration under the Securities Act or pursuant
to an available exemption from registration under the Securities Act
(accompanied by an opinion of counsel acceptable to the Company that
such resale, transfer or other disposition is exempt from the
registration provisions of all applicable federal and state laws).
The Company shall not treat as the owner of the Units (or any
securities issued upon conversion thereof), or otherwise accord
voting or dividend rights to, any transferee to whom Units (or any
securities issued upon conversion thereof) have been transferred in
contravention of this Agreement.
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(g) The Investor is not subscribing for Units 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.
(h) The Investor agrees to furnish any additional information requested
to assure compliance with applicable federal and state Securities
Laws in connection with the purchase and sale of this Units.
(i) The Investor understands that the Units, the Shares, the Warrants
and the Common Shares underlying the Shares and Warrants are
"restricted securities" under applicable federal securities laws and
that the Securities Act and the rules of the Commission provide in
substance that the Investor may dispose of such securities only
pursuant to an effective registration statement under the Securities
Act or an exemption therefrom.
(j) The Investor agrees: (i) that the Investor will not sell, assign,
pledge, give, transfer or otherwise dispose of the Units, the
Shares, the Warrants and the Common Shares underlying the Shares and
Warrants or make any offer or attempt to do any of the foregoing,
except pursuant to a registration of such securities under the
Securities Act and all applicable U.S. state securities laws or in a
transaction which is exempt from the registration provisions of the
Securities Act and all applicable U.S. state securities laws; (ii)
that the Company and any transfer agent for the Units, the Shares,
the Warrants and the Common Shares underlying the Shares and
Warrants shall not be required to give effect to any purported
transfer of any of such securities except upon compliance with the
foregoing restrictions; and (iii) that a restrictive legend will be
placed on the certificates representing such securities.
(k) The Investor has not offered or sold any portion of the subscribed
for Units and has no present intention of dividing such Units with
others or of reselling or otherwise disposing of any portion of such
Units either currently or after the passage of a fixed or
determinable period of time or upon the occurrence on nonoccurrence
of any predetermined event or circumstance.
(l) The Investor agrees to furnish any additional information requested
to assure compliance with applicable U.S. Securities Laws in
connection with the purchase and sale of the Units.
6. GENERAL
6.1 This Agreement may be executed in any number of counterparts, each of
which will be taken to be an original; but such counterparts will together
constitute one document.
6.2 Neither the Investor nor the Issuer may assign all or any part of his, her
or its interest in or to this Agreement without the written consent of the
other and any purported assignment without such consent will be void.
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6.3 This Agreement is to be governed and interpreted according to the laws of
the State of Nevada without regard to conflict of laws or principles.
6.4 This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their successors, personal representatives and
permitted assigns.
6.5 Time is of the essence of this Agreement.
6.6 The parties to this Agreement may amend this Agreement only in writing.
6.7 The parties to this Agreement will execute and deliver such investor
questionnaires, documents, transfers, assurances, Unit certificates and
procedures necessary for the purposes of giving effect to or perfecting
the transactions contemplated by this Agreement.
6.8 All notices or other communications given or made hereunder shall be in
writing and shall be delivered or mailed by registered or certified mail,
return receipt requested, postage prepaid, to the address given above, and
such notice will be deemed to be given on the date of receipt.
7. PAYMENT INSTRUCTIONS
Payment for the Units shall be made by bank wire transfer, certified cheque, or
bank draft (without deduction of bank service charges or otherwise) payable to
"Western Goldfields". The entire subscription price for all Units must be paid
at the time of subscription. In the case of a bank wire transfer, funds should
be wired to:
Name: Western Goldfields, Inc. (Specify Savings Account)
Bank: Bank of America
Address: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Account No: 0049 6701 3848
ABA: ▇▇▇▇▇▇▇▇▇
8. REGISTRATION AND DELIVERY INSTRUCTIONS
The Investor hereby directs that at the time of the closing, the certificates
representing the Units shall be registered and delivered as follows:
Name: ____________________________
Address: ____________________________
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The Issuer is authorized to deliver the Units to:
Name: ____________________________
Address: ____________________________
Attention: _________________________________
(Contact Name & Tel Number)
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IN WITNESS WHEREOF the parties hereto have hereunder set their hands as of the
date first stated above.
Western Goldfields, Inc.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Financial Officer
If Investor is an individual:
------------------------------------- ----------------------------------
Name of Investor Signature of Investor
------------------------------------- ----------------------------------
Name of Witness Signature of Witness
-------------------------------------
Address of Investor
-------------------------------------
Occupation
OR
If Investor is a corporation:
Name of Corporation:
-------------------------------------
By: /s/ W.P.S. ▇▇▇▇▇▇▇▇
----------------------------------
Name: W.P.S. ▇▇▇▇▇▇▇▇
Title: Director of General Partner
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