================================================================================
Canada - BC, AB, ON
KODIAK ENERGY, INC. - UNIT SUBSCRIPTION AGREEMENT
-------------------------------------------------
A completed and originally executed copy of this Subscription Agreement and the
Schedule, if applicable, duly completed and signed, must be delivered to the
Corporation.
TO: Kodiak Energy, Inc.
(the "Corporation")
The undersigned (the "Subscriber") hereby irrevocably subscribes for and agrees
to purchase the number of units ("Units") set forth below for the subscription
price of $6.40 (Canadian) per Unit representing the aggregate consideration set
forth below (the "Subscription Amount"), upon and subject to the terms and
conditions set forth in the attached "TERMS AND CONDITIONS OF SUBSCRIPTION FOR
UNITS OF KODIAK ENERGY, INC." (the "Terms and Conditions") (together with this
page and the attached Schedule, the "Subscription Agreement"). Each Unit
consists of one share ("Common Share") in the common stock of the Corporation
and three Common Shares with attached "flow-through" benefits pursuant to the
Income Tax Act (Canada) ("Flow-Through Shares").
_______________________________________ _______________________________________
Subscriber's Particulars: Number of Units:____________________
_______________________________________ Subscription Amount: $_____________
Name of Subscriber - please print _______________________________________
If the Subscriber is signing as agent
for a principal and is not deemed to
By:____________________________________ be purchasing as principal pursuant to
Authorized Signature NI 45-106 (as defined herein) by
virtue of being either (i) a trust
_______________________________________ company or trust corporation acting on
Official Capacity or Title, if any behalf of a fully managed account
(please print) managed by the trust company or trust
corporation; or (ii) a person acting
_______________________________________ on behalf of a fully managed account
Name of Authorized Signing Authority managed by it, and in each case
(please print) satisfying the criteria set forth in
NI 45-106, complete the following and
_______________________________________ ensure that Schedule A is completed in
Subscriber's Residential Address respect of such principal:
_______________________________________ _______________________________________
City/Town Province Postal Code Name of Principal
_______________________________________
__________________ ___________________ Principal's Residential Address
Telephone Number Fax Number
_______________________________________
_______________________________________ City/Town Province Postal Code
e-mail address
_______________________________________
_______________________________________ Principal's Telephone Number
Social Insurance Number/
Corporate Account Number _______________________________________
Principal's e-mail address
_______________________________________
Principal's Social Insurance Number/
Corporate Account Number
_______________________________________ _______________________________________
Register the Common Shares as above |_| Certificates for Common Shares will be
, or as set forth below: delivered to the registered
shareholder unless delivery is
otherwise specified as set forth
below:
_______________________________________ _______________________________________
Name Name
_______________________________________ _______________________________________
Account reference, if applicable Account reference, if applicable
_______________________________________ _______________________________________
Address Street Contact Name
_______________________________________ _______________________________________
City/Town Province Postal Code Address
_______________________________________ _______________________________________
Telephone Number
_______________________________________ _______________________________________
ACCEPTANCE: The Corporation hereby accepts this Subscription Agreement,
subject to the Terms and Conditions.
DATED this _____ day of ___________________, 2006
KODIAK ENERGY, INC.
Per: _______________________________________________
_________________________
Subscription No:
_________________________
This is the first page of an agreement comprised of
17 pages (not including Schedule A).
2
TERMS AND CONDITIONS OF SUBSCRIPTION FOR FLOW-THROUGH SHARES OF
KODIAK ENERGY, INC.
1. The Subscriber acknowledges that the Subscriber's Units will be issued
in connection with the issue of 625,000 Units (or such other number of
Units as may be determined by the Corporation at a price of (Cdn.)
$6.40 per Unit ((Cdn.) $1.60 per Common Share) to be sold by the
Corporation by private placement to be dated on or before the Closing
Date (the "Offering").
2. Definitions. In this Subscription Agreement, unless the context
otherwise requires:
(a) "Accredited Investor Status Certificate" means the Accredited
Investor Status Certificate in the form attached hereto as
Schedule A which is required to be completed by a Subscriber
who is purchasing securities as an "accredited investor"
pursuant to NI 45-106;
(b) "affiliate", "distribution" and "insider" have the respective
meanings ascribed to them in the Securities Act (Alberta);
(c) "Canadian Development Expense(s)" or "CDE" means Canadian
development expenses described in paragraph (a) or (b) of the
definition of "Canadian development expense" in subsection
66.2(5) of the Tax Act or would be described in paragraph (f)
of such definition if the words "any of paragraphs (a) to (e)"
in that paragraph were read as "paragraph (a) or (b)",
excluding amounts which are prescribed to constitute "Canadian
exploration and development overhead expense" under the Act
and the amount of any assistance described in paragraphs
66(12.62)(a) and 66(12.601)(c) of the Tax Act;
(d) "Canadian Exploration Expense(s)" or "CEE" means expenses
described in paragraphs (a) or (d) of the definition of
"Canadian exploration expense" in subsection 66.1(6) of the
Tax Act, or would be described in paragraph (h) of such
definition if the words "paragraphs (a) to (d) and (f) to
(g.1)" were read as "paragraphs (a) and (d)", excluding
amounts which are prescribed to constitute "Canadian
exploration and development overhead expense" under the Tax
Act, the amount of any assistance described in paragraph
66(12.6)(a) of the Tax Act and the cost of any seismic data
which constitutes a "specified expense" within the meaning of
paragraph 66(12.6)(b.1) of the Tax Act;
(e) "Closing" means the completion of the issue and sale by the
Corporation and the purchase by the Subscribers of the Units
pursuant to the subscription agreements, in the form of this
Subscription Agreement, completed by Subscribers;
(f) "Closing Date" means December 21, 2006 or such other date as
the Corporation may determine;
(g) "Closing Time" means 10:00 a.m. (Calgary time) on the Closing
Date or such other time as the Corporation may determine;
(h) "CRA" means Canada Revenue Agency;
(i) "Designated Provinces" means British Columbia, Alberta and
Ontario and such other provinces that may be designated by the
Corporation prior to the Closing Date;
(j) "Expenditure Period" means the period commencing on the date
of acceptance by the Corporation of this Subscription
Agreement and ending on the earlier of:
(i) the date on which the Flow-Through Subscription
Amount has been fully expended in accordance with the
terms hereof; and
3
(ii) December 31, 2007;
(k) "Flow-Through Subscription Amount" means a dollar amount equal
to three-quarters of the Subscription Amount;
(l) "founder" means, in respect of the Corporation, a person who:
(i) acting alone, in conjunction, or in concert with one
or more persons, directly or indirectly, takes the
initiative in founding, organizing or substantially
reorganizing the business of the Corporation; and
(ii) at the time of the trade is actively involved in the
business of the Corporation;
(m) "material" means material in relation to the Corporation and
its subsidiaries considered on a consolidated basis;
(n) "Offering" has the meaning given thereto in section 1;
(o) "NI 45-106" means National Instrument 45-106 Prospectus and
Registration Exemptions;
(p) "person" includes:
(i) an individual;
(ii) a corporation;
(iii) a partnership, trust, fund and an association,
syndicate, organization or other organized group of
persons, whether incorporated or not; and
(iv) an individual or other person in that person's
capacity as a trustee, executor, administrator or
personal or other legal representative;
(q) "Principal-Business Corporation" means a "principal-business
corporation" as defined in subsection 66(15) of the Tax Act;
(r) "Qualifying CDE" means an amount of CDE incurred by the
Corporation which is eligible for renunciation as CEE under
subsection 66(12.601) of the Tax Act;
(s) "Qualifying Expenditures" means expenses that are Qualifying
CDE or CEE incurred by the Corporation during the Expenditure
Period;
(t) "Regulation" means a regulation promulgated pursuant to the
Tax Act;
(u) "Securities Commissions" means, collectively, the Securities
Exchange Commission of the United States and the securities
commission or other securities regulatory authority in each of
the Designated Provinces;
(v) "Securities Laws" means: (i) collectively, the applicable
securities laws of each of the Designated Provinces and the
respective instruments, regulations and rules made and forms
prescribed thereunder together with all applicable published
policy statements, blanket orders, rulings and notices of the
Securities Commissions; (ii) the U.S. Securities Act and all
rules and regulations made thereunder; and (iii) any other
securities laws, rules, regulations or other form of
governmental directive applicable to the Subscribers (or any
beneficial person whom the Subscriber is subscribing on behalf
of) or the Corporation;
4
(w) "spouse" means an individual who:
(i) is married to another individual and is not living
separate and apart within the meaning of the Divorce
Act (Canada), from the other individual;
(ii) is living with another individual in a marriage-like
relationship, including a marriage-like relationship
between individuals of the same gender; or
(iii) in Alberta, is an individual referred to in paragraph
(i) or (ii), or is an adult interdependent partner
within the meaning of the Adult Interdependent
Relationships Act (Alberta);
(x) "Subscribers" means all subscribers for the Units pursuant to
the Offering, including the Subscriber;
(y) "Tax Act" means the Income Tax Act (Canada), as amended from
time to time; and
(z) "U.S. Securities Act" means the United States Securities Act
of 1933.
3. Delivery and Payment. The Subscriber agrees that the following
documents shall be delivered to Kodiak Energy, Inc., ▇▇▇▇▇ ▇▇▇, ▇▇▇ -
▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ not later than 4:30 p.m.
(Calgary time) on the day that is 2 business days prior to the Closing
Date or such other date or place as the Corporation may advise:
(a) a completed and duly signed copy of this Subscription
Agreement;
(b) if the Subscriber is purchasing Units as an "accredited
investor" (as such term is defined in NI 45-106), a completed
and duly signed copy of the NI 45-106 Accredited Investor
Status Certificate attached hereto as Schedule A;
(c) any other documents required by applicable Securities Laws
which the Corporation requests; and
(d) a certified cheque or bank draft made payable in same day
freely transferable Canadian funds at par in Calgary, Alberta
to "Kodiak Energy, Inc." representing the aggregate
Subscription Amount payable by the Subscriber for the
Subscriber's Units, or such other method of payment against
delivery of the Units as the Corporation may accept.
The Subscriber acknowledges and agrees that such documents, when
executed and delivered by the Subscriber, will form part of and will be
incorporated into this Subscription Agreement with the same effect as
if each constituted a representation and warranty or covenant of the
Subscriber hereunder in favour of the Corporation. The Subscriber
consents to the filing of such documents as may be required to be filed
with the applicable securities regulatory authorities in connection
with the transactions contemplated hereby. The Subscriber acknowledges
and agrees that this subscription, the Subscription Amount and any
other documents delivered in connection herewith will be held by the
Corporation until Closing.
4. Closing. The transactions contemplated hereby will be completed at the
Closing at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP in Calgary,
Alberta.
The Subscriber acknowledges that certificates for the Subscriber's
Units will be available for delivery at the Closing against payment of
the Subscription Amount for the Subscriber's Units.
The Subscriber acknowledges and agrees that the subscription for Units
contemplated by this Subscription Agreement is subject to the
Corporation's acceptance of this Subscription Agreement, in whole or in
5
part, and compliance with all applicable Securities Laws and that the
Corporation may decline to complete this subscription in its sole
discretion. If any portion of this subscription is rejected or not
completed, the Corporation will promptly return any funds delivered to
the Corporation by the Subscriber as payment of the unused Subscription
Amount without deduction or interest.
The Corporation is hereby appointed to act in its sole and absolute
discretion as the Subscriber's agent to represent the Subscriber at the
Closing for the purpose of all closing matters and deliveries of
documents and receipt of certificates representing the Subscriber's
Units. Without limiting the generality of the foregoing, the
Corporation is irrevocably authorized, in its sole and absolute
discretion:
(a) to complete or correct manifest errors or omissions in the
information provided by the Subscriber in this Subscription
Agreement and any other forms or documents delivered by the
Subscriber in connection with the transactions contemplated
hereby, if any; and
(b) to receive on its behalf certificates representing the Units
purchased under this Subscription Agreement.
The Subscriber will take up, purchase and pay for the Subscriber's
Units at the Closing upon acceptance of this offer by the Corporation.
5. Representations, Warranties and Covenants of the Corporation. By
accepting this Subscription Agreement, the Corporation represents and
warrants to the Subscriber as follows:
(a) the Corporation has been duly incorporated and is validly
subsisting and in good standing under the laws of its
incorporation and the Corporation has all requisite corporate
power and capacity to enter into, and has all requisite
corporate power and capability to carry out its obligations
under, this Subscription Agreement;
(b) on the Closing Date, the Corporation will have taken all
corporate steps and proceedings necessary to approve the
transactions contemplated hereby, including the execution and
delivery of this Subscription Agreement;
(c) no order ceasing or suspending trading in the securities of
the Corporation nor prohibiting the sale of such securities
has been issued to the Corporation or its directors, officers
or promoters and, to the best of the knowledge of the
Corporation, no investigations or proceedings for such
purposes are pending or threatened;
(d) the Corporation has full corporate power and authority to
undertake the Offering of Units contemplated hereby and to
issue the Flow-Through Shares;
(e) as of the date hereof, the taxable capital amount of the
Corporation, as that expression is defined under subsection
66(12.6011) of the Act, does not exceed $15,000,000 for the
purpose of determining the Corporation's right to renounce
Qualifying CDE to the Subscriber pursuant to subsection
66(12.601) of the Tax Act;
(f) at the Closing Time, the Units will be duly and validly
created, authorized and issued as fully paid and
non-assessable Common Shares;
(g) the Corporation has complied and will comply with all
applicable corporate and Securities Laws in connection with
the offer, sale and issuance of the Units;
(h) the issuance and sale of the Flow-Through Shares and the
incurring and renouncing of Qualifying Expenditures to the
Subscriber pursuant hereto does not and will not conflict with
6
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 Corporation is a
party;
(i) the Corporation has not received notice from any applicable
regulatory authority that it is in material default of any
applicable Securities Laws;
(j) the Corporation is, and, at all material times will be, a
Principal-Business Corporation;
(k) except as a result of any agreement to which the Corporation
is not a party and of which the Corporation has no knowledge,
the Flow-Through Shares will, at the time of issuance, be
"flow-through shares" as defined in subsection 66(15) of the
Tax Act, and will not constitute "prescribed shares" for the
purpose of Regulation 6202.1 of the regulations to the Tax
Act;
(l) the Corporation will not be subject to the provisions of
subsection 66(12.67) of the Tax Act in a manner which impairs
the ability to renounce Qualifying Expenditures to the
Subscriber in an amount equal to the Flow-Through Subscription
Amount; and
(m) all Qualifying Expenditures renounced to the Subscriber
pursuant to this Subscription Agreement would be expenses
that, but for the renunciation to the Subscriber would be
entitled to deduct in computing its income for the purposes of
Part I of the Tax Act.
6. Covenants of the Corporation. The Corporation covenants:
(a) to keep proper books, records and accounts of all Qualifying
Expenditures and all transactions affecting the Flow-Through
Subscription Amount and the Qualifying Expenditures and upon
reasonable notice, to make such books, records and accounts
available for inspection and audit by or on behalf of the
Subscriber during normal business hours at the Subscriber's
expense and to provide such other assistance to the Subscriber
as may be reasonably required should a dispute arise between
the Subscriber and CRA with respect to the Qualifying
Expenditures;
(b) to incur, during the Expenditure Period, Qualifying
Expenditures in such amount as enables the Corporation to
renounce to the Subscriber, as Qualifying Expenditures , in
accordance with the Tax Act and this Subscription Agreement,
Qualifying Expenditures in an amount equal to the Flow-Through
Subscription Amount;
(c) to renounce (in accordance with the Tax Act and this
Subscription Agreement) to the Subscriber, effective on or
before December 31, 2006, Qualifying Expenditures incurred
during the Expenditure Period in an amount equal to the
Flow-Through Subscription Amount;
(d) to renounce the Qualifying CDE incurred hereunder only in
accordance with subsection 66(12.601) of the Tax Act;
(e) to file with CRA, the form prescribed by subsection 66(12.68)
of the Tax Act together with a copy of the form of this
Subscription Agreement, within the time period prescribed by
law;
(f) to file with CRA, the form prescribed by subsection 66(12.7)
of the Tax Act on or before the last day of the first month
following each month in which any renunciation is made
pursuant to the terms of this Subscription Agreement;
7
(g) if the Corporation does not renounce to the Subscriber,
effective on or before December 31, 2006, Qualifying
Expenditures in an amount equal to the Flow-Through
Subscription Amount, the Corporation shall indemnify the
Subscriber as to, and pay to the Subscriber, an amount equal
to the amount of any tax payable or that may become payable
under the Tax Act (and under any corresponding provincial
legislation) by the Subscriber as a consequence of such
failure, such payment to be made on a timely basis once the
amount is definitively determined;
(h) to deliver to the Subscriber at the Subscriber's address set
forth above, not later than February 28, 2007, Form T101
Supplementary setting forth the aggregate amount of Qualifying
Expenditures renounced to the Subscriber pursuant hereto for
filing with the Subscriber's tax return;
(i) that the Corporation will not reduce the amount renounced to
the Subscriber hereunder and, in the event the Minister
responsible for CRA reduces the amount renounced to the
Subscriber pursuant to subsection 66(12.73) of the Tax Act,
the Corporation will indemnify the Subscriber as to, and pay
to the Subscriber, an amount equal to the amount of any tax
payable under the Tax Act (and under any corresponding
provincial legislation) by the Subscriber as a consequence of
such reduction, such payment to be made on a timely basis once
the amount is definitively determined;
(j) to maintain its status as a Principal-Business Corporation
until January 1, 2008;
(k) that the Corporation has not and will not enter into
transactions or take deductions which would otherwise reduce
its cumulative CEE or cumulative CDE to an extent which would
preclude a renunciation of Qualifying Expenditures hereunder
in an amount equal to the Flow-Through Subscription Amount
effective on or before December 31, 2006;
(l) that none of the Qualifying Expenditures will be renounced
pursuant to a "prohibited relationship" as defined in
subsection 66(12.671) of the Tax Act;
(m) to file, within the time(s) prescribed by the Tax Act or the
Regulations to the Tax Act, as applicable, all forms required
under the Tax Act or the Regulations necessary to effectively
renounce Qualifying Expenditures equal to the Flow-Through
Subscription Amount to the Subscriber effective on or before
December 31, 2006 and to provide the Subscriber with a copy of
all such forms as required to be provided thereto, all on a
timely basis; and
(n) to renounce Qualifying Expenditures pursuant to this
Subscription Agreement and other subscription agreements
entered into pursuant to the Offering pro rata based on the
number of Flow-Through Shares issued or to be issued pursuant
hereto and thereto before or concurrent with the renouncing of
Qualifying Expenditures pursuant to any other agreement (a
"Subsequent Agreement") which the Corporation shall, after the
Closing Date, enter into and if the Corporation is required by
the Tax Act or the Regulations or the Minister of National
Revenue to reduce Qualifying Expenditures previously renounced
to Subscribers pursuant to the Offering, such reduction shall,
to the extent possible, be made pro rata based on the number
of Flow-Through Shares issued pursuant to the Offering only
after it has first reduced to the extent possible all
Qualifying Expenditures renounced to persons under Subsequent
Agreements.
7. Registration Rights
(a) Grant of Right. The Corporation shall use its commercially
reasonable efforts to file on or before April 30, 2007, a
registration statement with the SEC registering for resale by
the Subscriber or successor in interest the Common Shares
underlying the Units issued hereunder, on Form SB-2 or such
8
other registration statement form applicable to the Common
Shares and the Corporation for resale purposes. The
Corporation will use its commercially reasonable efforts to
have such registration statement declared effective by the SEC
as promptly as practicable after filing. The Corporation will
use its commercially reasonable efforts to maintain the
effectiveness of such registration statement, including the
filing of any required new or post effective registration
statements until such time as the Subscriber or successor in
interest is able to sell the Common Shares under Rule 144
without restriction as to the volume limitations of such rule,
and the Corporation hereby covenants to keep current its
public disclosure under the United States Federal securities
laws so that Rule 144 is available to the Subscriber or its
successors in interest. Notwithstanding the foregoing, is
understood that there are no liquidated or other penalties due
to the Subscribers or successors in interest for the failure
to file or have declared effective such registration statement
or to maintain its effectiveness, or keep current its
information in order to make available Rule 144 to any seller
of Common Shares, other than ordinary contract damages.
Notwithstanding the grant of the foregoing registration
rights, any Subscriber or successor in interest whose Common
Shares are considered ineligible for registration as resale
securities at market prices under the United States Federal
securities laws shall not be entitled to the registration
rights herein provided. At any time that an effective
registration statement is not available for use by a
Subscriber or successor in interest, upon written notice from
the Corporation, the Subscriber or successor in interest
agrees to cease using the registration statement for resales
until informed in writing that the registration statement or
another registration statement may be used for resales under
this provision.
(b) Non-Transferability of Registration Rights. Because of the
limitations of the United States Federal securities laws in
relation to the ability of the Corporation to change the
selling shareholders, once the registration statement provided
for under the immediately preceding section is declared
effective by the SEC, the registration rights herein provided
shall become non-transferable and non-assignable by the
Subscriber. Prior to the time specified in the immediately
preceding sentence, the registration rights granted to each
Subscriber in the immediately preceding section may be
transferred by the Subscriber or subsequent holder to another
holder of Common Shares who acquires record ownership of
Common Shares.
(c) Information; Indemnification. Each Subscriber and transferee
or assignee thereof of the registration rights herein provided
shall provide the Corporation with all information required
with respect to its ownership of securities of the
Corporation, persons having voting and dispositive authority
over the Common Shares, related party relationships with the
Corporation, relations with any broker-dealers in the United
States and Canada and plan of distribution, and such other
information as may be reasonably requested by the Corporation
for disclosure in the registration statement on which the
Common Shares are included. The failure to provide any such
information when requested by the Corporation, will permit the
Corporation to remove from the registration statement any or
all of the Common Shares of the Subscriber or his transferee
or assignee and in such event the rights herein provided will
terminate as to such Common Shares. The Corporation and the
Subscriber or the Subscriber's transferee or assignee in the
event of any transfer or assignment of the Common Shares will
indemnify each other in usual and customary manner for
misstatements and omissions in their respective information
included in the registration statement.
(d) Expenses. The Corporation shall pay all the costs and expenses
associated with the registration of the Common Shares for
resale under the United States federal and state securities
laws. The Subscriber or its transferee or its assignee will
pay all commissions and expenses in connection with the sale
of any of the Common Shares so registered and any fees and
expenses of any persons engaged by them to review the
registration statement on their behalf, including attorney and
accountant fees and expenses.
9
8. Subscriber's Representations Warranties & Acknowledgments. The
Subscriber (on its own behalf and, if applicable, on behalf of each
person on whose behalf the Subscriber is contracting) represents,
warrants, covenants and acknowledges to the Corporation (and
acknowledges that the Corporation and its counsel are relying thereon),
that both at the date hereof and at the Closing Time:
(a) Authorization and Effectiveness. If the Subscriber is an
individual, it is of the full age of majority and has all
requisite legal capacity and competence to execute and deliver
this Subscription Agreement and to observe and perform its
covenants and obligations hereunder, or if the Subscriber is a
corporation, the Subscriber is a valid and subsisting
corporation, has the necessary corporate capacity and
authority to execute and deliver this Subscription Agreement
and to observe and perform its covenants and obligations
hereunder and has taken all necessary corporate action in
respect thereof or, if the Subscriber is a partnership,
syndicate or other form of unincorporated organization, the
Subscriber has the necessary legal capacity and authority to
execute and deliver this Subscription Agreement and to observe
and perform its covenants and obligations hereunder and has
obtained all necessary approvals in respect thereof, and, if
the Subscriber is subscribing for Units hereunder as agent for
a disclosed principal, it is duly authorized to execute and
deliver this Subscription Agreement and all other necessary
documentation in connection with such subscription on behalf
of such principal and, in any case, upon acceptance by the
Corporation, this Subscription Agreement has been duly and
validly authorized, executed and delivered by the Subscriber
and constitutes a legal, valid and binding contract of the
Subscriber (and any beneficial purchaser whom the Subscriber
is subscribing on behalf of) enforceable against the
Subscriber (and any beneficial purchaser whom the Subscriber
is subscribing on behalf of) in accordance with its terms and
will not result in a violation of any of the Subscriber's
constating documents, any of the terms or provisions of any
law applicable to the Subscriber or any agreement to which the
Subscriber is a party or by which it is bound;
(b) Residence. The Subscriber is a resident of the jurisdiction
referred to under "Subscriber's Particulars" on page 1 above;
(c) No Offering Memorandum. The Subscriber has not received, nor
has it requested, nor does it have any need to receive, any
offering memorandum, or any other document (other than
financial statements, interim financial statements or any
other document, the content of which is prescribed by statute
or regulation) describing the business and affairs of the
Corporation which has been prepared for delivery to, and
review by, prospective subscribers in order to assist it in
making an investment decision in connection with this Offering
and it has not become aware of any advertisement in printed
media of general and regular paid circulation (or other
printed public media) or on radio, television or
telecommunications or other form of advertisement (including
electronic display such as the Internet) with respect to the
distribution of the Units;
(d) Purchasing as Principal. Except as provided in subsection 8(f)
hereof, the Subscriber is purchasing the Subscriber's Units as
principal (as defined in all applicable Securities Laws) for
its own account, and not for the benefit of any other person;
(e) Purchasing for Investment Only. Except as provided in
subsection 8(f) hereof, the Subscriber is purchasing the
Subscriber's Units for investment only and not with a view to
resale or distribution. The Subscriber is aware that no
prospectus has been filed with any of the Securities
Commissions or similar regulatory authority in connection with
the sale of the Units, and it is purchasing the Units pursuant
to an exemption from the prospectus requirement or similar
requirement under applicable Securities Laws and, as a
consequence: (i) it is restricted from using most of the civil
remedies available under Securities Laws; (ii) it may not
receive information that would otherwise be required to be
10
provided to it under Securities Laws; and (iii) the
Corporation is relieved of certain obligations that would
otherwise apply under Securities Laws;
(f) Purchasing as Agent or Trustee. In the case of the purchase
hereunder by the Subscriber of Units as agent or trustee for
any principal whose identity is disclosed or undisclosed or
identified by account number only, each beneficial purchaser
of the Units hereunder is purchasing the Units as principal
for its own account, and not for the benefit of any other
person, for investment only and not with a view to resale or
distribution, is a resident of the jurisdiction as set out
under "Subscriber's Particulars" on page 1 above, and the
Subscriber has due and proper authority to act as agent or
trustee for and on behalf of such beneficial purchaser in
connection with the transactions contemplated hereby, and this
Subscription Agreement has been duly authorized, executed and
delivered by or on behalf of, and constitutes a legal, valid
and binding agreement of, such beneficial purchaser, and
(i) it is an "accredited investor" as defined in
paragraph (p) or (q) of the definition of "accredited
investor" in NI 45-106 provided, however that it is
not a trust company or trust corporation registered
under the laws of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island that is not
registered under the Trust and Loan Companies Act
(Canada) or under comparable legislation in another
jurisdiction of Canada and has concurrently executed
and delivered the Accredited Investor Status
Certificate in the form attached hereto as Schedule A
and has initialled indicating that the Subscriber
satisfies the category of "accredited investor" set
forth in paragraph (p) or (q) thereof; or
(ii) the Subscriber is acting as agent for one or more
disclosed principals, each of which principal is
purchasing as a principal for its own account, not
for the benefit of any other person, and not with a
view to the resale or distribution of all or any of
the Units, and each of which principals complies with
subsection 8(g) below;
(g) Subscriber Has Benefit of Statutory Exemptions. Unless the
Subscriber complies with the provisions of subsection 8(f)
hereof, the Subscriber fully complies with one of the criteria
set forth below:
[▇▇▇▇ BELOW THE CATEGORY, WHICH DESCRIBES YOU]
(i) |_| it is a resident of British Columbia, Alberta
or Ontario and is an "accredited investor" as such
term is defined in NI 45-106 and specifically
represents and warrants that one or more of the
categories set forth in the Accredited Investor
Status Certificate correctly, and in all respects,
describes the Subscriber and the Subscriber has so
indicated by marking the box next to the category
which so describes it and executing and delivering a
copy of the Accredited Investor Status Certificate
attached hereto as Schedule A with this Subscription
Agreement and if the Subscriber is purchasing Units
as an "accredited investor" as defined in paragraph
(p) of the definition of "accredited investor" in NI
45-106 it is not a person created or used solely to
purchase or hold securities as an "accredited
investor"; or
(ii) |_| it is a resident of British Columbia or Alberta
and it is:
[CIRCLE THE APPROPRIATE SUBCLAUSE A - 1]
A. a "director", "executive officer" or
"control person" (as such terms are defined
in NI 45-106 and reproduced in Schedule A to
11
this Subscription Agreement) of the
Corporation or of an affiliate of the
Corporation; or
B. a spouse, parent, grandparent, brother,
sister or child of any person referred to in
subclause A above; or
C. a parent, grandparent, brother, sister or
child of the spouse of any person referred
to in subclause A above; or
D. a "close personal friend" (within the
meaning thereof as set out in Companion
Policy 45-106CP to NI 45-106) of any person
referred to in subclause A above and, if
requested by the Corporation, will provide a
signed statement describing the relationship
with any such persons; or
E. a "close business associate" (within the
meaning thereof as set out in Companion
Policy 45-106CP to NI 45-106) of any person
referred to in subclause A above and, if
requested by the Corporation, will provide a
signed statement describing the relationship
with any such persons; or
F. a "founder" (as such term is defined in NI
45-106 and reproduced in Schedule A to this
Subscription Agreement) of the Corporation
or a spouse, parent, grandparent, brother,
sister, child, close personal friend or
close business associate of a founder of the
Corporation and, if requested by the
Corporation, will provide a signed statement
describing the relationship with any such
persons; or
G. a parent, grandparent, brother, sister or
child of the spouse of a founder of the
Corporation; or
H. a person or company of which a majority of
the voting securities are beneficially owned
by, or a majority of the directors are,
persons referred to in subclauses A to G
above; or
I. a trust or estate of which all of the
beneficiaries or a majority of the trustees
are persons described in subclauses A to G
above; or
(iii) |_| it is a resident of Ontario and it has purchased
the Units as principal and it is:
[CIRCLE THE APPROPRIATE SUBCLAUSE A - D]
A. a founder of the Corporation;
B. an affiliate of a founder of the
Corporation;
C. a spouse, parent, brother, sister,
grandparent or child of an executive
officer, director or founder of the
Corporation; or
D. a person that is a control person of the
Corporation; or
12
(iv) |_| it is purchasing the Units as principal and
is purchasing a sufficient number of Units such that
the aggregate acquisition cost to the Subscriber is
not less than $150,000, paid in cash at the time of
the trade; provided however that the Subscriber has
not been created or used solely to purchase or hold
securities in reliance on this exemption; or
(v) |_| it is an "employee", "executive officer",
"director" or "consultant" (as such terms (other than
employee) are defined in NI 45-106 and reproduced in
Appendix A to this Subscription Agreement) of the
Corporation or an affiliated entity of the
Corporation or a permitted assign of such person and
its participation in the trade is voluntary, meaning
it is not induced to participate in the trade by
expectation of employment or continued employment
with the Corporation or an affiliated entity of the
Corporation; or
(vi) |_| it is a resident of a jurisdiction referred to in
the preceding paragraphs but it is not purchasing
thereunder, and instead is purchasing pursuant to a
statutory exemption or an exemption order permitting
such purchase, which exemption or order has the
effect of eliminating any requirement for a
prospectus or similar disclosure document in respect
of the purchase of Units by the Subscriber, the
details of which are disclosed to the Corporation to
its satisfaction;
(h) Residents of Other Jurisdictions. If the Subscriber is a
resident of any jurisdiction not referred to in subsection
8(g) it complies with requirements available to it under
applicable securities legislation and shall deliver to the
Corporation such particulars of the exemption(s) and the
Subscriber's qualifications thereunder as the Corporation may
reasonably request;
(i) No Undisclosed Information. The Subscriber's Units are not
being purchased by the Subscriber as a result of any material
information concerning the Corporation that has not been
publicly disclosed and the Subscriber's decision to enter into
this Subscription Agreement and acquire the Subscriber's Units
has not been made as a result of any oral or written
representation as to fact or otherwise made by or on behalf of
the Corporation or any other person and is based entirely upon
currently available public information concerning the
Corporation;
(j) Investment Suitability. The Subscriber and any beneficial
purchaser referred to in subsection 8(f) hereof has such
knowledge and experience in financial and business affairs as
to be capable of evaluating the merits and risks of the
investment hereunder in the Subscriber's Units and is able to
bear the economic risk of loss of such investment;
(k) U.S. Matters. The Subscriber:
(i) is aware that the Units have not been registered and
will not be registered under the U.S. Securities Act
or the securities laws of any state and that these
securities may not be offered or sold in the United
States without registration under the U.S. Securities
Act or compliance with requirements of an exemption
from registration.
(ii) acknowledges the Units have not been offered to the
Subscriber in the United States, and the individuals
making the order to purchase the Units or executing
and delivering this Subscription Agreement on behalf
of the Subscriber were not in the United States when
the order was placed and this Subscription Agreement
was executed and delivered;
13
(iii) it is not a "U.S. Person" (as defined in Regulation S
under the U.S. Securities Act, which definition
includes, but is not limited to, an individual
resident in the United States, an estate or trust of
which any executor or administrator or trustee,
respectively, is a U.S. Person and any partnership or
corporation organized or incorporated under the laws
of the United States) and is not purchasing the Units
on behalf of, or for the account or benefit of, a
person in the United States or a U.S. Person; and
(iv) undertakes and agrees that it will not offer or sell
the Units in the United States unless such securities
are registered under the U.S. Securities Act and the
securities laws of all applicable states of the
United States or an exemption from such registration
requirements is available, and further that it will
not resell the Units except in accordance with the
provisions of applicable Securities Laws;
(l) Tax Act Matters.
(i) If the Subscriber or beneficial purchaser, as the
case may be, is a corporation, trust or partnership,
to the best of its knowledge, it does not have, and
will not knowingly have, in respect of the
renunciation of Qualifying Expenditures hereunder, a
"prohibited relationship" with the Corporation within
the meaning of subsection 66(12.671) of the Tax Act;
and
(ii) The Subscriber or the beneficial purchaser, as the
case may be, deals, and until January 1, 2008 will
deal, at arm's length with the Corporation for
purposes of the Tax Act;
(m) Subscription Funds. The Subscriber represents and warrants
that the funds representing the Subscription Amount which will
be advanced by the Subscriber to the Corporation hereunder
will not represent proceeds of crime for the purposes of the
Proceeds of Crime (Money Laundering) and Terrorist Financing
Act (Canada) (the "PCMLTFA") and the Subscriber acknowledges
that the Corporation may in the future be required by law to
disclose the Subscriber's name and other information relating
to this Subscription Agreement and the Subscriber's
subscription hereunder, on a confidential basis, pursuant to
the PCMLTFA. To the best of its knowledge: (a) none of the
subscription funds to be provided by the Subscriber (i) have
been or will be derived from or related to any activity that
is deemed criminal under the laws of Canada, the United States
of America, or any other jurisdiction or (ii) are being
tendered on behalf of a person or entity who has not been
identified to the Subscriber; and (b) it shall promptly notify
the Corporation if the Subscriber discovers that any of such
representations ceases to be true and provide the Corporation
with appropriate information in connection therewith; and
(n) Further Acknowledgments. The Subscriber acknowledges that:
(i) no securities commission or similar regulatory
authority has reviewed or passed on the merits of the
Units;
(ii) there is no government or other insurance covering
the Units;
(iii) there are risks associated with the purchase of the
Units;
(iv) there are restrictions on the Subscriber's ability to
resell the Units and it is the responsibility of the
Subscriber to find out what those restrictions are
and to comply with them before selling the Units; and
14
(v) the Corporation has advised the Subscriber that the
Subscriber is relying on an exemption from the
requirements to provide the Subscriber with a
prospectus and to sell Units through a person or
company registered to sell securities under the
Securities Act (Alberta) and other applicable
Securities Laws and, as a consequence of acquiring
Units pursuant to this exemption, certain
protections, rights and remedies provided by the
Securities Act (Alberta) and other applicable
Securities Laws, including statutory rights of
rescission or damages, will not be available to the
Subscriber.
The Subscriber acknowledges and agrees that the foregoing
representations, warranties and acknowledgments are made by it with the
intention that they may be relied upon in determining its eligibility
or (if applicable) the eligibility of others on whose behalf it is
contracting hereunder to purchase the Subscriber's Units under
applicable Securities Laws. The Subscriber further agrees that
acceptance of delivery of certificates for the Subscriber's Units by or
on behalf of the subscriber on the Closing Date, it shall be
representing and warranting that the foregoing representations and
warranties are true and correct as at the Closing Time with the same
force and effect as if they had been made by the Subscriber at the
Closing Time and that they shall survive the purchase by the Subscriber
of the Subscriber's Units and shall continue in full force and effect
notwithstanding any subsequent disposition by the Subscriber of the
Subscriber's Units. The Subscriber undertakes to notify the Corporation
immediately of any change in any representation, warranty or other
information relating to the Subscriber set forth herein which takes
place prior to the Closing Time.
9. Covenants of the Subscriber. The Subscriber will:
(a) not resell any of the Units acquired (directly or indirectly)
hereunder, in whole or in part, directly or indirectly, except
in accordance with the provisions of applicable Securities
Laws;
(b) execute, deliver, file and otherwise assist the Corporation in
filing such further reports, undertakings, agreements,
documents and writings, do all acts and things, and provide
such further assurances as may be required to give effect to
this Subscription Agreement as required, and, without limiting
the generality of the foregoing, will execute and deliver all
documents, agreements and writings and provide such
assurances, undertakings, information and investment letters
as may be required from time to time by the Securities
Commissions or other regulatory authorities having
jurisdiction over the Corporation's affairs or as may be
required under the applicable Securities Laws with respect to
the issue and resale of the Units; and
(c) provide the Corporation and applicable securities regulatory
authorities, on request, particulars as to the identity of any
undisclosed principals as may be required by the Corporation.
10. Resale Restrictions.
(a) The Subscriber acknowledges that the Units are subject to
resale restrictions imposed under applicable Securities Laws,
or the rules or policies of regulatory bodies having
jurisdiction over the Units or trading in such Units and, as a
consequence, the Subscriber may not be able to resell the
Units except in accordance with resale restrictions and
limited exemptions under applicable Securities Laws.
(b) The Subscriber has the sole responsibility to determine and
comply with restrictions on resale before reselling any of the
Units (and neither the Corporation nor its legal counsel, is
in any manner responsible therefor) and has been independently
advised as to applicable hold periods and restrictions with
respect to trading in the Units imposed by applicable
Securities Laws and regulatory policy including applicable
15
Securities Laws in the jurisdiction in which it resides and
the jurisdiction in which such Units will come to rest, and
confirms that no representation has been made to it by or on
behalf of the Corporation with respect thereto.
(c) The Subscriber acknowledges and agrees that all certificates
representing Units held by the Subscriber will have a legend
affixed thereto which describes certain resale restrictions
applicable under Securities Laws applicable in the Designated
Provinces and, if applicable, the United States.
11. No Regulatory Endorsement. The Subscriber is aware that no stock
exchange or governmental agency, authority, regulatory body, securities
commission or other entity has made any finding or determination as to
the merit of investment in, nor has any such stock exchange or
governmental agency, authority, regulatory body, securities commission,
or other entity made any recommendation or endorsement with respect to,
the Units.
12. No Representations. The Subscriber acknowledges that no person has made
to the Subscriber any written or oral representations that any person
will resell or repurchase the Units, that any person will refund the
Subscription Amount of the Units, or to the future price or value of
the Units. In addition, except as provided in this Subscription
Agreement, the Subscriber has relied solely upon publicly available
information relating to the Corporation and not upon any verbal or
written representation as to fact or otherwise made by or on behalf of
the Corporation.
13. Subscriber's Expenses. The Subscriber acknowledges and agrees that all
costs and expenses incurred by the Subscriber (including any fees and
disbursements of special counsel retained by the Subscriber) relating
to the purchase of the Units shall be borne by the Subscriber.
14. Legal and Tax Advice. The Subscriber acknowledges and agrees that it is
solely responsible for obtaining such legal advice and tax advice as it
considers appropriate in connection with the execution, delivery and
performance by it of this Subscription Agreement and the completion of
the transactions contemplated hereby. The Subscriber further
acknowledges and agrees that the Corporation's legal counsel is acting
exclusively on the Corporation's behalf and not as counsel to the
Subscriber.
15. Indemnity. The Subscriber agrees to indemnify and hold harmless the
Corporation and the Corporation's directors, officers, employees,
agents, partners, advisers, affiliates and shareholders from and
against any and all loss, liability, claim, damage and expense
(including, but not limited to, any and all fees, costs and expenses
reasonably incurred in investigating, preparing or defending against
any claim, law suit, administrative proceeding or investigation whether
commenced or threatened) arising out of or based upon any
representation or warranty of the Subscriber contained herein or in any
document furnished by the Subscriber to the Corporation in connection
herewith being untrue in any material respect or any breach or failure
by the Subscriber to comply with any covenant or agreement made by the
Subscriber herein or in any document furnished by the Subscriber to the
Corporation in connection herewith.
16. Assignment. The terms and provisions of this Subscription Agreement
shall be binding upon and enure to the benefit of the Subscriber, the
Corporation and their respective successors and assigns; provided that
this Subscription Agreement shall not be assignable by a party without
the prior written consent of the other party.
17. Personal Information. This Subscription Agreement and the schedule
hereto require the Subscriber to provide certain personal information
to the Corporation. Such information is being collected by the
Corporation for the purposes of completing this offering of Units,
which includes, without limitation, determining the Subscriber's
eligibility to purchase the Units under applicable Securities Laws,
preparing and registering certificates representing Units to be issued
to the Subscriber and completing filings required by any securities
regulatory authority. The Subscriber's personal information may be
disclosed by the Corporation to: (a) stock exchanges and securities
16
regulatory authorities, (b) the Corporation's registrar and transfer
agent, (c) CRA, and (d) any of the other parties involved in this
offering of Units, including the Corporation's legal counsel. By
executing this Subscription Agreement, the Subscriber is deemed to be
consenting to the foregoing collection, use and disclosure of the
Subscriber's personal information. The Subscriber also consents to the
filing of copies or originals of any of the Subscriber's documents
described in this Subscription Agreement as may be required to be filed
with any securities regulatory authority in connection with the
transactions contemplated by this Subscription Agreement and the
inclusion of them in the closing books prepared in connection with the
transactions contemplated by this Subscription Agreement. The
Subscriber hereby acknowledges that it has been notified by the
Corporation: (i) of the delivery to the Ontario Securities Commission
(the "OSC") of the Subscriber's personal information; (ii) that the
Subscriber's personal information is being collected indirectly by the
OSC under the authority granted to it in the securities legislation;
(iii) the Subscriber's personal information is being collected for the
purposes of the administration and enforcement of the securities
legislation of Ontario; and (iv) the contact information of the public
official in Ontario who can answer questions about the OSC's indirect
collection of personal information is, Administrative Assistant to the
Director of Corporate Finance, the Ontario Securities Commission, ▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇, telephone
(▇▇▇) ▇▇▇-▇▇▇▇, facsimile (▇▇▇) ▇▇▇-▇▇▇▇.
18. Survival. All representations, warranties, agreements and covenants
made or deemed to be made by the Subscriber herein will survive Closing
of the Offering.
19. Governing Law. This Subscription Agreement shall be governed by and
construed in accordance with the laws of the Province of Alberta and
the federal laws of Canada applicable therein. The Subscriber on its
own behalf and, if applicable, on behalf of others for whom it is
contracting hereunder, hereby irrevocably attorns to the jurisdiction
of the courts of the Province of Alberta with respect to any matters
arising out of this Subscription Agreement.
20. Facsimile Subscriptions and Counterparts. The Corporation shall be
entitled to rely on delivery by facsimile machine of an executed copy
of this Subscription Agreement, including the completed schedule
hereto, and acceptance by the Corporation of such facsimile copy shall
be legally effective to create a valid and binding agreement between
the Subscriber and the Corporation in accordance with the terms hereof.
This Subscription Agreement may be executed in any number of
counterparts, each of which when delivered, either in original or
facsimile form, shall be deemed to be an original and all of which
together shall constitute one and the same document.
21. Entire Agreement and Modification. This Subscription Agreement
(including the schedule hereto) contains the entire agreement of the
parties hereto relating to the subject matter hereof and there are no
representations, covenants or other agreements relating to the subject
matter hereof except as stated or referred to herein. Subject to the
terms hereof, neither this Subscription Agreement nor any provision
hereof shall be modified, changed, discharged or terminated except by
an instrument in writing signed by the party against whom any waiver,
change, discharge or termination is sought.
22. Headings. The headings contained herein are for convenience only and
shall not affect the meanings or interpretation hereof.
23. Language. The Subscriber acknowledges its consent and requests that all
documents evidencing or relating in any way to its purchase of Units be
drawn up in the English language only. Nous reconnaissons par les
presentes avoir consenti et demande que tous les documents faisant foi
ou se rapportant de quelque maniere a notre achat des actions
accreditives soient rediges en anglais seulement.
24. Time of Essence. Time is of the essence of this Subscription Agreement.
17
25. Effective Date. This Subscription Agreement is intended to and shall
take effect on the Closing Date, notwithstanding its actual date of
execution or delivery by any of the parties.
26. Currency. Except if specifically stated otherwise, all dollar amounts
herein (including the Schedule hereto) are in Canadian dollars.
27. Severability. If any one or more of the provisions contained in this
Subscription Agreement should be invalid, illegal or unenforceable in
any respect in any jurisdiction, the validity, legality and
enforceability of such provision or provisions shall not in any way be
affected or impaired thereby in any other jurisdiction and the
validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby,
unless in either case as a result of such determination this
Subscription Agreement would fail of its essential purpose.
A-1
SCHEDULE A
ACCREDITED INVESTOR STATUS CERTIFICATE
The undersigned Subscriber hereby represents and warrants to the Corporation, as
an integral part of the attached Subscription Agreement, that he, she or it is
correctly and in all respects described by the category or categories set forth
directly next to which the Subscriber has marked below.
[▇▇▇▇ BELOW THE CATEGORY OR CATEGORIES WHICH DESCRIBES YOU]
|_| (a) A Canadian financial institution, or a Schedule III bank.
|_| (b) The Business Development Bank of Canada incorporated under the
Business Development Bank of Canada Act (Canada).
|_| (c) A subsidiary of any person referred to in paragraphs (a) or
(b), if the person owns all of the voting securities of the
subsidiary, except the voting securities required by law to be
owned by directors of that subsidiary.
|_| (d) A person registered under the securities legislation of a
jurisdiction of Canada as an adviser or dealer, other than a
person registered solely as a limited market dealer under one
or both of the Securities Act (Ontario) or the Securities Act
(Newfoundland and Labrador).
|_| (e) An individual registered or formerly registered under the
securities legislation of a jurisdiction of Canada as a
representative of a person referred to in paragraph (d).
|_| (f) The Government of Canada or a jurisdiction of Canada, or any
crown corporation, agency or wholly owned entity of the
Government of Canada or a jurisdiction of Canada.
|_| (g) A municipality, public board or commission in Canada and a
metropolitan community, school board, the Comite de gestion de
la taxe scolaire de l'ile de Montreal or an intermunicipal
management board in Quebec.
|_| (h) Any national, federal, state, provincial, territorial or
municipal government of or in any foreign jurisdiction, or any
agency of that government.
|_| (i) A pension fund that is regulated by either the Office of the
Superintendent of Financial Institutions (Canada) or a pension
commission or similar regulatory authority of a jurisdiction
of Canada.
|_| (j) An individual who, either alone or with a spouse, beneficially
owns, directly or indirectly, financial assets having an
aggregate realizable value that before taxes, but net of any
related liabilities, exceeds $1,000,000.
|_| (k) An individual whose net income before taxes exceeded $200,000
in each of the 2 most recent calendar years or whose net
income before taxes combined with that of a spouse exceeded
$300,000 in each of the 2 most recent calendar years and who,
in either case, reasonably expects to exceed the net income
level in the current calendar year.
|_| (l) An individual who, either alone or with a spouse, has net
assets of at least $5,000,000.
|_| (m) A person, other than an individual or investment fund, that
has net assets of at least $5,000,000 as shown on its most
recently prepared financial statements.
|_| (n) An investment fund that distributes or has distributed its
securities only to:
(A) a person that is or was an accredited investor at the
time of the distribution,
(B) a person that acquires or acquired securities in the
circumstances referred to in sections 2.10 and 2.19
of NI 45-106, or
(C) a person described in paragraph (A) or (B) that
acquires or acquired securities under section 2.18 of
NI 45-106.
|_| (o) An investment fund that distributes or has distributed
securities under a prospectus in a jurisdiction of Canada for
which the regulator or, in Quebec, the securities regulatory
authority, has issued a receipt.
A-2
|_| (p) A trust company or trust corporation registered or authorized
to carry on business under the Trust and Loan Companies Act
(Canada) or under comparable legislation in a jurisdiction of
Canada or a foreign jurisdiction, acting on behalf of a fully
managed account managed by the trust company or trust
corporation, as the case may be.
|_| (q) A person acting on behalf of a fully managed account managed
by that person, if that person: (A) is registered or
authorized to carry on business as an adviser or the
equivalent under the
securities legislation of a jurisdiction of Canada or
a foreign jurisdiction, and (B) in Ontario, is purchasing a
security that is not a security of an investment fund.
|_| (r) A registered charity under the Income Tax Act (Canada) that,
in regard to the trade, has obtained advice from an
eligibility adviser or an adviser registered under the
securities legislation of the jurisdiction of the registered
charity to give advice on the securities being traded.
|_| (s) An entity organized in a foreign jurisdiction that is
analogous to any of the entities referred to in paragraphs (a)
to (d) or paragraph (i) in form and function.
|_| (t) A person in respect of which all of the owners of interests,
direct, indirect or beneficial, except the voting securities
required by law to be owned by directors, are persons that are
accredited investors.
|_| (u) An investment fund that is advised by a person registered as
an adviser or a person that is exempt from registration as an
adviser.
|_| (v) A person that is recognized or designated by the securities
regulatory authority or, except in Ontario and Quebec, the
regulator as: (A) an accredited investor, or (B) an exempt
purchaser in Alberta or British Columbia.
Note: A summary of the meanings of certain of the terms used in this Accredited
Investor Status Certificate follows the signature block below.
DATED ______________________________________________, 2006
_______________________________________________________________
Name of Subscriber (please print)
By: ______________________________________________
_______________________________________________________________
Official Capacity or Title, if any (please print)
_______________________________________________________________
Name of Authorized Signing Authority (please print)
A-3
For the purposes of this Accredited Investor Status Certificate the
following definitions are included for convenience:
(a) "affiliate" means an issuer connected with another issuer
because
(i) one of them is the subsidiary of the other;
(ii) each of them is controlled by the same person; or
(iii) for the purposes of Saskatchewan securities law, both
are subsidiaries of the same issuer;
(b) "bank" means a bank named in Schedule I or II of the Bank Act
(Canada);
(c) "Canadian financial institution" means:
(i) an association governed by the Cooperative Credit
Associations Act (Canada) or a central cooperative
credit society for which an order has been made under
section 473(1) of that Act; or
(ii) a bank, loan corporation, trust company, trust
corporation, insurance company, treasury branch,
credit union, caisse populaire, financial services
cooperative, or league that, in each case, is
authorized by an enactment of Canada or a
jurisdiction of Canada to carry on business in Canada
or a jurisdiction of Canada;
(d) "consultant" means, for an issuer, a person, other than an
employee, executive officer, or director of the issuer or of a
related entity of the issuer, that:
(i) is engaged to provide services to the issuer or a
related entity of the issuer, other than services
provided in relation to a distribution;
(ii) provides the services under a written contract with
the issuer or a related entity of the issuer; and
(iii) spends or will spend a significant amount of time and
attention on the affairs and business of the issuer
or a related entity of the issuer;
and includes, for an individual consultant, a corporation of
which the individual consultant is an employee or shareholder,
and a partnership of which the individual consultant is an
employee or partner;
(e) "control person" has the same meaning as in securities
legislation except in Manitoba, Newfoundland and Labrador,
Northwest Territories, Nova Scotia, Nunavut, Ontario, ▇▇▇▇▇▇
▇▇▇▇▇▇ Island and Quebec, where control person means any
person that holds or is one of a combination of persons that
holds:
(i) a sufficient number of any securities of an issuer so
as to affect materially the control of the issuer; or
(ii) more than 20% of the outstanding voting securities of
an issuer except where there is evidence showing that
the holding of those securities does not affect
materially the control of that issuer;
(f) "debt security" means any bond, debenture, note or similar
instrument representing indebtedness, whether secured or
unsecured;
A-4
(g) "director" means:
(i) a member of the board of directors of a company or an
individual who performs similar functions for a
company; and
(ii) with respect to a person that is not a company, an
individual who performs functions similar to those of
a director of a company;
(h) "eligibility adviser" means:
(i) a person that is registered as an investment dealer
or in an equivalent category of registration under
the securities legislation of the jurisdiction of a
purchaser and authorized to give advice with respect
to the type of security being distributed; and
(ii) in Saskatchewan or Manitoba, also means a lawyer who
is a practicing member in good standing with a law
society of a jurisdiction of Canada or a public
accountant who is a member in good standing of an
institute or association of chartered accountants,
certified general accountants or certified management
accountants in a jurisdiction of Canada provided that
the lawyer or public accountant must not:
(A) have a professional, business or personal
relationship with the issuer, or any of its
directors, executive officers, founders, or
control persons, and
(B) have acted for or been retained personally
or otherwise as an employee, executive
officer, director, associate or partner of a
person that has acted for or been retained
by the issuer or any of its directors,
executive officers, founders or control
persons within the previous 12 months;
(i) "executive officer" means, for the Corporation, an individual
who is:
(i) a chair, vice-chair or president;
(ii) a vice-president in charge of a principal business
unit, division or function including sales, finance
or production;
(iii) an officer of the Corporation or any of its
subsidiaries and who performs a policy-making
function in respect of the Corporation; or
(iv) performing a policy-making function in respect of the
Corporation;
(j) "financial assets" means:
(i) cash;
(ii) securities; or
(iii) a contract of insurance, a deposit or an evidence of
a deposit that is not a security for the purposes of
securities legislation;
(k) "foreign jurisdiction" means a country other than Canada or a
political subdivision of a country other than Canada;
A-5
(l) "founder" means, in respect of an issuer, a person who,
(i) acting alone, in conjunction, or in concert with one
or more persons, directly or indirectly, takes the
initiative in founding, organizing or substantially
reorganizing the business of the issuer, and
(ii) at the time of the trade is actively involved in the
business of the issuer;
(m) "fully managed account" means an account of a client for which
a person makes the investment decisions if that person has
full discretion to trade in securities for the account without
requiring the client's express consent to a transaction;
(n) "individual" means a natural person, but does not include
(i) a partnership, unincorporated association,
unincorporated syndicate, unincorporated organization
or a trust, or
(ii) a natural person in the person's capacity as trustee,
executor, administrator or other legal
representative;
(o) "investment fund" means a mutual fund or a non-redeemable
investment fund, and, for greater certainty in British
Columbia, includes an EVCC and a VCC, both as defined in
National Instrument 81-106 Investment Fund Continuous
Disclosure;
(p) "jurisdiction" means a province or territory of Canada except
when used in the term foreign jurisdiction;
(q) "mutual fund" includes an issuer of securities that entitles
the holder to receive on demand or within a specified period
after demand, an amount computed by reference to the value of
a proportionate interest in the whole or in part of the net
assets, including a separate fund or trust account, of the
issuer of the securities;
(r) "NI 45-106" means National Instrument 45-106 Prospectus and
Registration Exemptions;
(s) "non-redeemable investment fund" means an issuer,
(i) whose primary purpose is to invest money provided by
its securityholders;
(ii) that does not invest for the purpose of exercising or
seeking to exercise effective control of an issuer,
other than an issuer that is a mutual fund or a
non-redeemable investment fund or for the purpose of
being actively involved in the management of any
issuer in which it invests, other than an issuer that
is a mutual fund or a non-redeemable investment fund;
and
(iii) that is not a mutual fund;
(t) "person" includes:
(i) an individual;
(ii) a corporation;
(iii) a partnership, trust, fund and an association,
syndicate, organization or other organized group of
persons, whether incorporated or not; and
A-6
(iv) an individual or other person in that person's
capacity as a trustee, executor, administrator or
personal or other legal representative;
(u) "related liabilities" means:
(i) liabilities incurred or assumed for the purpose of
financing the acquisition or ownership of financial
assets; or
(ii) liabilities that are secured by financial assets;
(v) "Schedule III bank" means an authorized foreign bank named in
Schedule III of the Bank Act (Canada);
(w) "spouse" means, an individual who:
(i) is married to another individual and is not living
separate and apart within the meaning of the Divorce
Act (Canada), from the other individual;
(ii) is living with another individual in a marriage-like
relationship, including a marriage-like relationship
between individuals of the same gender; or
(iii) in Alberta, is an individual referred to in paragraph
(i) or (ii), or is an adult interdependent partner
within the meaning of the Adult Interdependent
Relationships Act (Alberta); and
(x) "subsidiary" means an issuer that is controlled directly or
indirectly by another issuer and includes a subsidiary of that
subsidiary.
All monetary references in this Schedule A are in Canadian dollars.
--------------------------------------------------------------------------------