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Item 9.01
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Financial Statements and Exhibits.
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(d)
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Exhibits
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10.1
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(a)
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One (1) executed copy of this Agreement; and
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(b)
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if the Subscriber is a Canadian resident, a National Instrument 45-106 (“NI 45-106”) Questionnaire in the form attached as Exhibit A (the “Questionnaire”).
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(a)
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the Shares have not been registered under the U.S. Securities Act of 1933, as amended (the "1933 Act"), or under any securities or "blue sky" laws of any state of the United States and are being offered only in a transaction not involving any public offering within the meaning of the 1933 Act, and, unless so registered, may not be offered or sold in the United States or to a U.S. Person, as that term is defined in Regulation “S” (“Regulation “S”) promulgated by the Securities and Exchange Commission (the “SEC”) pursuant to the 1933 Act, except pursuant to an effective registration statement under the 1933 Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the 1933 Act, and in each case only in accordance with applicable state, provincial and foreign securities laws;
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(b)
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the Shares are being issued to the Subscriber by the Company pursuant to an exemption from applicable Canadian securities laws as set out in National Instrument 45-106 (“NI 45-106”) of the Canadian Securities Administrators adopted by the British Columbia Securities Commission (the "BCSC");
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(c)
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the Company has not undertaken, and will have no obligation, to register any of the Shares under the 1933 Act or any other securities legislation;
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(d)
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the decision to execute this Agreement and purchase the Shares has not been based upon any oral or written representation as to fact or otherwise made by or on behalf of the Company and such decision is based solely upon information provided by the Company in this document or that is publicly available on the EDGAR website maintained by the SEC (collectively, the "Company Information");
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(e)
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the Subscriber and the Subscriber's advisor(s) have had a reasonable opportunity to review the Company Information and to ask questions of and receive answers from the Company regarding the offering, and to obtain additional information, to the extent possessed or obtainable without unreasonable effort or expense, necessary to verify the accuracy of the information contained in the Company Information, or any other document provided to the Subscriber;
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(f)
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by execution hereof the Subscriber has waived the need for the Company to communicate its acceptance of the purchase of the Shares pursuant to this Agreement;
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(g)
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the Company is entitled to rely on the representations and warranties and the statements and answers of the Subscriber contained in this Agreement and the Questionnaire and the Subscriber will hold harmless the Company from any loss or damage it or they may suffer as a result of the Subscriber's failure to correctly complete this Agreement or the Questionnaire;
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(h)
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the issuance and sale of the Shares to the Subscriber will not be completed if it would be unlawful or if, in the discretion of the Company acting reasonably, it is not in the best interests of the Company;
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(i)
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the Subscriber has been advised to consult the Subscriber’s own legal, tax and other advisors with respect to the merits and risks of an investment in the Shares and with respect to the applicable resale restrictions, and it is solely responsible (and the Company is not in any way responsible) for compliance with:
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(i)
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any applicable laws of the jurisdiction in which the Subscriber is resident in connection with the distribution of the Shares hereunder, and
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(ii)
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applicable resale restrictions;
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(j)
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the statutory and regulatory basis for the exemption claimed for the offer and sale of the Shares, although in technical compliance with Regulation S, would not be available if the offering is part of a plan or scheme to evade the registration provisions of the 1933 Act;
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(k)
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in addition to resale restrictions imposed under U.S. securities laws, there are additional restrictions on the Subscriber’s ability to resell any of the Shares in Canada under applicable provincial securities laws and Multilateral Instrument 51-105 – Issuers Quoted in the U.S. Over the Counter Markets (“MI 51-105”) of the Canadian Securities Administrators;
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(l)
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the Company has advised the Subscriber that the Company is relying on an exemption from the requirements to provide the Subscriber with a prospectus and to sell the Shares through a person registered to sell securities and, as a consequence of acquiring the Shares pursuant to this exemption, certain protections, rights and remedies, including statutory rights of rescission or damages, will not be available to the Subscriber;
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(m)
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the Shares are not listed on any stock exchange and no representation has been made to the Subscriber that any of the Shares will become listed on any stock exchange;
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(n)
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neither the SEC, nor any other securities regulatory authority has reviewed or passed on the merits of the Shares;
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(o)
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no documents in connection with Subscriber’s acquisition of Shares have been reviewed by the SEC, nor by any other state securities administrators;
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(p)
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there is no government or other insurance covering any of the Shares;
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(q)
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the Company will refuse to register the transfer of any of the Shares to a U.S. Person not made pursuant to an effective registration statement under the 1933 Act or pursuant to an available exemption from the registration requirements of the 1933 Act and, in each case, in accordance with any other applicable laws; and
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(r)
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this Agreement is not enforceable by the Subscriber unless it has been accepted by the Company.
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6.
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Representations, Warranties and Covenants of the Subscriber
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(a)
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the Subscriber is not a U.S. Person;
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(b)
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the Subscriber is not acquiring the Shares for the account or benefit of, directly or indirectly, any U.S. Person;
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(c)
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the Subscriber is resident in the jurisdiction set out under the heading “Name and Address of Subscriber” on the signature page of this Agreement;
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(d)
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the sale of the Shares to the Subscriber as contemplated by the delivery of this Agreement, the acceptance of it by the Company and the issuance of the Shares to the Subscriber complies with all applicable laws of the Subscriber’s jurisdiction of residence or domicile;
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(e)
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the Subscriber:
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(i)
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is knowledgeable of, or has been independently advised as to, the applicable laws of the securities regulators having application in the jurisdiction in which the Subscriber is resident (the “International Jurisdiction”) which would apply to the acquisition of the Shares,
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(ii)
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is acquiring the Shares pursuant to exemptions from prospectus or equivalent requirements under applicable laws or, if such is not applicable, the Subscriber is permitted to acquire the Shares under the applicable laws of the securities regulators in the International Jurisdiction without the need to rely on any exemptions,
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(iii)
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represents and warrants that the applicable laws of the authorities in the International Jurisdiction do not require the Company to make any filings or seek any approvals of any kind whatsoever from any securities regulator of any kind whatsoever in the International Jurisdiction in connection with the offer, issue, sale or resale of any of the Shares,
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(iv)
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represents and warrants that the purchase of the Shares by the Subscriber does not trigger:
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A.
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any obligation to prepare and file a prospectus or similar document, or any other report with respect to such purchase in the International Jurisdiction, or
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B.
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any continuous disclosure reporting obligation of the Company in the International Jurisdiction, and
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(v)
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will, if requested by the Company, deliver to the Company a certificate or opinion of local counsel from the International Jurisdiction which will confirm the matters referred to in subparagraphs (ii), (iii) and (iv) above to the satisfaction of the Company, acting reasonably;
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(f)
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the Subscriber has the legal capacity and competence to enter into and execute this Agreement and to take all actions required pursuant hereto and, if the Subscriber is a corporate entity, it is duly incorporated and validly subsisting under the laws of its jurisdiction of incorporation and all necessary approvals by its directors, shareholders and others have been obtained to authorize execution and performance of this Agreement on behalf of the Subscriber;
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(g)
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the entering into of this Agreement and the transactions contemplated hereby do not result in the violation of any of the terms and provisions of any law applicable to, or, if applicable, the constating documents of, the Subscriber or of any agreement, written or oral, to which the Subscriber may be a party or by which the Subscriber is or may be bound;
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(h)
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the Subscriber has duly executed and delivered this Agreement and it constitutes a valid and binding agreement of the Subscriber enforceable against the Subscriber;
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(i)
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the Subscriber is aware that an investment in the Company is speculative and involves certain risks (including those risks disclosed in the Public Record), including the possible loss of the entire investment;
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(j)
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the Subscriber has made an independent examination and investigation of an investment in the Shares and the Company and agrees that the Company will not be responsible in any way whatsoever for the Subscriber’s decision to invest in the Shares and the Company;
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(k)
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all information contained in the Questionnaire, is complete and accurate and may be relied upon by the Company, and the Subscriber will notify the Company immediately of any material change in any such information occurring prior to the acceptance of this Agreement;
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(l)
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the Subscriber is acquiring the Shares for its own account for investment purposes only and not for the account of any other person and not for distribution, assignment or resale to others, and no other person has a direct or indirect beneficial interest is such Shares, and the Subscriber has not subdivided his interest in the Shares with any other person;
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(m)
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the Subscriber (i) is able to fend for itself in the Subscription; (ii) has such knowledge and experience in business matters as to be capable of evaluating the merits and risks of its prospective investment in the Shares; and (iii) has the ability to bear the economic risks of its prospective investment and can afford the complete loss of such investment;
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(n)
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the Subscriber is not an underwriter of, or dealer in, any of the Shares, nor is the Subscriber participating, pursuant to a contractual agreement or otherwise, in the distribution of the Shares or any of them;
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(o)
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the Subscriber is not aware of any advertisement of any of the Shares and is not acquiring the Shares as a result of any form of general solicitation or general advertising, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media, or broadcast over radio or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising;
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(p)
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no person has made to the Subscriber any written or oral representations:
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(i)
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that any person will resell or repurchase any of the Shares,
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(ii)
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that any person will refund the purchase price of any of the Shares, or
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(iii)
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as to the future price or value of any of the Shares;
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(q)
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the Subscriber understands and agrees that none of the Shares have been registered under the 1933 Act, or under any state securities or “blue sky” laws of any state of the United States, and, unless so registered, may not be offered or sold in the United States or, directly or indirectly, to U.S. Persons except in accordance with the provisions of Regulation S, pursuant to an effective registration statement under the 1933 Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the 1933 Act and in each case only in accordance with applicable state, provincial and foreign securities laws;
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(r)
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the Subscriber understands and agrees that offers and sales of any of the Shares prior to the expiration of the period specified in Regulation S (such period hereinafter referred to as the “Distribution Compliance Period”) shall only be made in compliance with the safe harbor provisions set forth in Regulation S, pursuant to the registration provisions of the 1933 Act or an exemption therefrom, and that all offers and sales after the Distribution Compliance Period shall be made only in compliance with the registration provisions of the 1933 Act or an exemption therefrom and in each case only in accordance with applicable state and provincial securities laws;
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(s)
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the Subscriber acknowledges that it has not acquired the Shares as a result of, and will not itself engage in, any “directed selling efforts” (as defined in Regulation S under the 1933 Act) in the United States in respect of any of the Shares which would include any activities undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the resale of any of the Shares; provided, however, that the Subscriber may sell or otherwise dispose of any of the Shares pursuant to registration of any of the Shares pursuant to the 1933 Act and any applicable securities laws or under an exemption from such registration requirements and as otherwise provided herein;
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(t)
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hedging transactions involving the Shares may not be conducted unless such transactions are in compliance with the provisions of the 1933 Act and in each case only in accordance with applicable securities laws;
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(u)
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a subsequent trade in any of the Shares in or from any province or territory of Canada will be a distribution subject to the prospectus requirements of applicable provincial securities laws unless certain conditions are met, which conditions include, among others, a requirement that any certificate representing the any of the Shares (or ownership statement issued under a direct registration system or other book entry system) bear the restrictive legend specified in MI 51-105 or National Instrument 45-102, as applicable (the “51-105 Legend”);
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(v)
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as the Subscriber is not a resident of Canada, the Subscriber undertakes not to trade or resell any of the Shares in or from Canada unless the trade or resale is made in accordance with MI 51-105 or National Instrument 45-102, as applicable, and the Subscriber understands and agrees that the Company and others will rely upon the truth and accuracy of these representations and warranties made in this subsection and agrees that if such representations and warranties are no longer accurate or have been breached, the Subscriber shall immediately notify the Company;
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(w)
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by executing and delivering this Agreement and as a consequence of the representations and warranties made by the Subscriber in this subsection, the Subscriber directs the Company not to include the 51-105 Legend on any certificates representing any of the Shares to be issued to the Subscriber and, as a consequence, the Subscriber will not be able to rely on the resale provisions of MI 51-105, and any subsequent trade in any of the Shares in or from any jurisdiction of Canada will be a distribution subject to the prospectus requirements of applicable Canadian securities laws;
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(x)
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if the Subscriber wishes to trade or resell any of the Shares in or from any jurisdiction of Canada, the Subscriber agrees and undertakes to return, prior to any such trade or resale, any certificate representing any of the Shares to the Company’s transfer agent to have the 51-105 Legend imprinted on such certificate or to instruct the Company’s transfer agent to include the 51-105 Legend on any ownership statement issued under a direct registration system or other book entry system; and
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(y)
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the Subscriber acknowledges and agrees that the Company shall not consider the Subscriber’s acceptance unless the undersigned provides to the Company, along with an executed copy of this Agreement:
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(i)
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fully completed and executed Questionnaire in the form attached hereto as Exhibit A; and
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(ii)
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such other supporting documentation that the Company or its legal counsel may request to establish the Subscriber’s qualification as a qualified investor.
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7.
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Indemnity and hold harmless
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8.
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Acknowledgement and Waiver
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9.
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Representations and Warranties will be Relied Upon by the Company
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10.
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Resale Restrictions
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11.
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Collection of Personal Information
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(a)
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the Corporation may deliver to the Alberta Securities Commission and/or the SEC certain personal information pertaining to the Subscriber, including such Subscriber’s full name, residential address and telephone number, the number of shares or other securities of the Corporation owned by the Subscriber, the number of Shares purchased by the Subscriber and the total purchase price paid for such Shares, the prospectus exemption relied on by the Corporation and the date of distribution of the Shares,
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(b)
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such information is being collected indirectly by the Alberta Securities Commission under the authority granted to it in securities legislation, such information is being collected for the purposes of the administration and enforcement of the securities legislation of Alberta.
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12.
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Costs
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13.
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Governing Law
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14.
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Survival
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15.
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Assignment
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16.
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Severability
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17.
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Entire Agreement
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18.
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Notices
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19.
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Counterparts and Electronic Means
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Details of Subscriber:
/s/ John Hislop
(Name of Subscriber - please print)
By: _______________________________________________
(Authorized Signature)
_______________________________________________
(Official Capacity or Title - please print)
_______________________________________________
(Please print name of individual whose signature appears above if different than the name of the Subscriber printed above.)
_______________________________________________
(Subscriber's Address)
_______________________________________________
(Subscriber's Address)
_______________________________________________
(Telephone Number)
_______________________________________________
(E-Mail Address)
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Deliver the Shares as set forth below:
_______________________________________________
(Name)
_______________________________________________
(Account reference, if applicable)
_______________________________________________
(Contact Name)
_______________________________________________
(Address)
_______________________________________________
(Address)
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Register the Shares as set forth below:
_______________________________________________
(Name)
_______________________________________________
(Account reference, if applicable)
_______________________________________________
(Address)
_______________________________________________
(Address)
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A C C E P T A N C E
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1.
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the Subscriber satisfies one or more of the categories of “accredited investor” (as that term is defined in NI 45-106) indicated below (please check the appropriate box):
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(a) an individual who either alone or with a spouse beneficially owns financial assets (as defined in NI 45-106) having an aggregate realizable value that before taxes, but net of any related liabilities, exceeds CDN$1,000,000;
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(b) an individual whose net income before taxes exceeded CDN$200,000 in each of the two more recent calendar years or whose net income before taxes combined with that of a spouse exceeded CDN$300,000 in each of those years and who, in either case, reasonably expects to exceed that net income level in the current calendar year;
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(c) an individual who, either alone or with a spouse, has net assets of at least CDN $5,000,000;
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(d) a person, other than an individual or investment fund, that had net assets of at least CDN$5,000,000 as reflected on its most recently prepared financial statements.
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(e) a person registered under securities legislation of a jurisdiction of Canada as an advisor or dealer, or an individual registered or formerly registered as a representative of such an adviser or dealer, other than a limited market dealer registered under the Securities Act (Ontario) or the Securities Act (Newfoundland);
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(f) an investment fund that distributes or has distributed its securities only to: (i) persons that are or were accredited investors at the time of distribution, (ii) persons that acquire or acquired securities in the sections referred to in Sections 2.10 [Minimum amount investment] or 2.19 [Additional investment in investment funds] of NI 45-106; or (iii) persons described in (i) or (iii) that acquire or acquired securities under Section 2.18 [Investment fund reinvestment] of NI 45-106; or
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(g) a person in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law are persons or companies that are accredited investors.
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