----------------------------
PRIVATE PLACEMENT
SUBSCRIPTION AGREEMENT
----------------------------
Between:
INDEX OIL AND GAS INC.
And:
THE UNDERSIGNED SUBSCRIBER
PRIVATE PLACEMENT
SUBSCRIPTION AGREEMENT
THESES SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED, OR THE LAWS OF ANY STATE, AND ARE BEING ISSUED PURSUANT
TO AN EXEMPTION FROM REGISTRATION PERTAINING TO SUCH SECURITIES AND PURSUANT TO
A REPRESENTATION BY THE SECURITY HOLDER NAMED HEREON THAT SAID SECURITIES HAVE
BEEN ACQUIRED FOR PURPOSES OF INVESTMENT AND NOT FOR PURPOSES OF DISTRIBUTION.
THESE SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF REGISTRATION, OR THE AVAILABILITY OF AN EXEMPTION FROM SUCH
REGISTRATION. FURTHERMORE, NO OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION IS
TO TAKE PLACE WITHOUT THE PRIOR WRITTEN APPROVAL OF COUNSEL TO THE COMPANY. THE
STOCK TRANSFER AGENT HAS BEEN ORDERED TO EFFECTUATE TRANSFERS ONLY IN ACCORDANCE
WITH THE ABOVE INSTRUCTIONS.
PRIVATE SHARE ISSUE
To: INDEX OIL AND GAS INC. (hereinafter referred to as the "Company"), with an
address for notice and delivery located at #4, ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇.
The Company is offering up to 8,533,333 common shares of its own issue
(each being a "Share") to eligible investors (each such an investor who
subscribes to this issue by this document is hereinafter referred to as the
"Subscriber") at a price of $0.60 per Share for a total raise of $5,120,000. The
Company offers, and the Subscriber accepts, the Shares on the terms and
conditions as set forth in this subscription agreement (the "Agreement").
USE OF PROCEEDS:
The use of proceeds in this offering is for the Company to complete its
acquisition of Index Oil & Gas Ltd. Failure to close this acquisition will
result in all funds raised under this offering being reimbursed to the
subscribers of this offering.
Article 1
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SUBSCRIPTION FOR SHARES
1.1 Subscription for Shares. Based upon the hereinafter terms, conditions,
representations, warranties and covenants given by each party to the other, the
Subscriber hereto hereby irrevocably subscribes for and agrees to purchase
___________ Shares of the Company, at a subscription price of $0.60 USD per
Share, for aggregate consideration of $_______ (the "Subscription Price").
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1.2 Acceptance of Subscription. The Company, upon acceptance by its Board of
Directors (the "Board") of all or part of this subscription Agreement, agrees to
issue the accepted number of Shares, as fully paid and non-assessable, and as
consideration for the Subscriber's subscription, and to refund any excess
subscription monies of the Subscription Price of any non-accepted portion of
this subscription Agreement by the Board.
1.3 Subscriber's eligibility for subscription. The Subscriber acknowledges that
the Subscriber is purchasing the Shares on a private basis and is either:
(a) an eligible investor under the Subscriber's domicile laws; or
(b) is subscribing for a value in Shares constituting an exempt investment
under the laws of the Subscriber's domicile; or
(c) is subscribing pursuant to a qualifying offering memorandum and the
terms thereof; or
(d) is otherwise an eligible investor under the laws of the Subscriber's
domicile by virtue of the Subscriber's wealth, income and investment
knowledge and capacity.
1.4 Risks of subscription. The Subscriber acknowledges that no party independent
of the Company has made or will make any opinion or representations on the
merits or risks of an investment in any of the Shares unless sought out by the
Subscriber; which the Subscriber is encouraged to do.
Article 2
UNITED STATES ACCREDITED INVESTOR DECLARATIONS
2.1 Subscriber's Declarations as an "Accredited Investor". The undersigned
Subscriber warrants and certifies that the Subscriber is an "Accredited
Investor", as that term is defined in Regulation D promulgated under the United
States Securities Act of 1933, as amended (the "U.S. Act"), by virtue of the
Subscriber's qualification under one or more of the following categories {please
check the appropriate box or boxes where applicable}:
0 The Subscriber is a natural person whose individual net worth, or
joint net worth with that person's spouse, exceeds U.S. $1,000,000.
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O The Subscriber is a natural person who had an individual income in
excess of U.S. $200,000 in each of the two most recent years or joint
income with the Subscriber's spouse in excess of U.S. $300,000 in each
of those years and has a reasonable expectation of reaching the same
income level in the current year.
O The Subscriber is a corporation, organization described in section
501(c)(3) of the United States Internal Revenue Code, Massachusetts,
or similar business trust or partnership, not formed for the specific
purpose of acquiring the Shares, with total assets in excess of U.S.
$5,000,000.
O The Subscriber is a trust, with total assets in excess of U.S.
$5,000,000, not formed for the specific purpose of acquiring the
Shares, whose purchase is directed by a sophisticated person.
O The Subscriber is a director or executive officer of the Company.
O The Subscriber is a "private business development company" as that
term is defined in section 202(a)(22) of the United States Investment
Advisers Act of 1940.
O The Subscriber is either: (a) a "bank" as defined in section 3(a)(2)
of the U.S. Act, or a "savings and loan association or other
institution" as defined in section 3(a)(5)(A) of the U.S. Act, whether
acting in its individual or fiduciary capacity; or (b) a broker or
dealer registered pursuant to section 15 of the United States
Securities Exchange Act of 1934; or (c) an "insurance company" as
defined in section 2(13) of the U.S. Act; or (d) an investment company
registered under the United States Investment Company Act of 1940 or a
"business development company" as defined in section 2(a)(48) of the
United States Investment Company Act of 1940; or (e) a small business
investment company licensed by the United States "Small Business
Administration" under either of subsections 301(c) or (d) of the
United States Small Business Investment Act of 1958; or (f) a plan
established and maintained by a state, its political subdivisions, or
any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total
assets in excess of U.S. $5,000,000; or (g) an employee benefit plan
within the meaning of the United States Employee Retirement Income
Security Act of 1974, if the investment decision is made by a plan
fiduciary as defined in section 3(21) of the United States Employee
Retirement Income Security Act of 1974 which is either a bank, savings
and loan association, insurance company or registered investment
adviser, or if the employee benefit plan has total assets in excess of
U.S. $5,000,000 or, if a self-directed plan, with investment decisions
made solely by persons that are accredited investors.
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O The Subscriber is an entity in which all of the equity owners are
accredited investors under one or more of the categories set forth
hereinabove.
Article 3
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NON-US INVESTOR DECLARATION AND REGULATION S APPLICATION
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3.1 The Subscriber warrants that the Subscriber is not a US investor, directly
or indirectly, and the Subscriber is not subscribing as an agent or nominee or
trustee or in any other capacity, partly or wholly or directly or indirectly,
for a US person subject to US law.
The Subscriber represents and warrants that the Subscriber was not
specifically formed to acquire any of the Securities subscribed for in this
Agreement in violation of the provisions of Regulation S or Rule 144.
As the Company is a US company or a company whose securities are subject to
US law, the Subscriber hereby agrees, represents and warrants to the Company as
follows:
(i) Subscriber (i) is not a U.S. Person (as defined in Rule 902 of
Regulation S ("Regulation S") under the United States Securities Act of 1933
(the "1933 Act")), which definition includes, but is not limited to, any natural
person resident in the United States, any corporation or partnership
incorporated or organized under the laws of the United States, or any estate or
trust of which any executor, administrator or trustee is a U.S. Person); (ii) is
not purchasing any of the Securities for the account or benefit of any U.S.
Person or for offering, resale or delivery for the account or benefit of any
U.S. Person or for the account of any person in any jurisdiction other than the
jurisdiction set out in the name and address of Subscriber below; and (iii) was
not offered any Securities in the United States and was outside the United
States at the time of execution and delivery of this Subscription Agreement.
(ii) Subscriber acknowledges that the Securities have not been
registered under the 1933 Act and the Company has no obligation of filing a
registration statement under the 1933 Act in respect of the Securities. The
Subscriber agrees to resell the Securities only in accordance with the
provisions of Regulation S, pursuant to a registration under the 1933 Act, or
pursuant to an available exemption from such registration, and that hedging
transactions involving the Securities may not be conducted unless in compliance
with the 1933 Act. The Subscriber understands that any certificate representing
the Securities will bear a legend setting forth the foregoing restrictions. The
Subscriber understands that the Securities are restricted securities within the
meaning of Rule 144 promulgated under the 1933 Act; that the exemption from
registration under Rule 144 will not be available in any event for at least one
year from the date of purchase and payment of the Securities by the Subscriber,
and even then will not be available unless (i) a public trading market then
exists for the Common Stock of the Company, (ii) adequate information concerning
the Company is then available to the public, and (iii) other terms and
conditions of Rule 144 are complied with; and that any sale of the Securities
may be made by the Investor only in limited amounts in accordance with such
terms and conditions.
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(iii) No U.S. Person, either directly or indirectly, has any beneficial
interest in any of the Securities acquired by Subscriber hereunder, nor does
Subscriber have any agreement or understanding (written or oral) with any U.S.
Person respecting:
(a) the transfer or any assignment of any rights or interest in any of the
Securities;
(b) the division of profits, losses, fees, commissions or any financial
stake in connection with this subscription; or
(c) the voting of the Securities.
(iv) Subscriber understands that each person exercising any warrant
comprising a part of the Securities will be required to give to the Company at
the time of exercise written certification that such person is not a U.S. person
and that the warrant is not being exercised on behalf of a U.S. person.
Article 4
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RESTRICTED SECURITIES AND DISPOSITION UNDER "RULE 144"
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4.1 Registration Rights. The Subscriber acknowledges and understands that
neither the sale of the Shares which the Subscriber is acquiring nor any of the
Shares themselves have been registered under the U.S. Act or any state
securities laws. The Company will file a registration statement within six
months to register all of the stock issued pursuant to this offering. Upon
receipt of declaration from the Securities and Exchange Commission that the
registration statement is effective, the Subscriber will be free to dispose of
his shares without restriction.
4.2 Legending of the Shares. The Subscriber also acknowledges and understands
that the certificates representing the Shares will be stamped with the following
legend (or substantially equivalent language) restricting transfer in the
following manner:
"The securities represented by this certificate have not been
registered under the United States Securities Act of 1933, as
amended, or the laws of any state, and have been issued pursuant
to an exemption from registration pertaining to such securities
and pursuant to a representation by the security holder named
hereon that said securities have been acquired for purposes of
investment and not for purposes of distribution. These
securities may not be offered, sold, transferred, pledged or
hypothecated in the absence of registration, or the availability
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of an exemption from such registration. Furthermore, no offer,
sale, transfer, pledge or hypothecation is to take place without
the prior written approval of counsel to the Company being
affixed to this certificate. The stock transfer agent has been
ordered to effectuate transfers of this certificate only in
accordance with the above instructions.".
The Subscriber hereby consents to the Company making a notation on its
records or giving instructions to any transfer agent of the Shares in order to
implement the restrictions on transfer set forth and described hereinabove.
4.3 Disposition under Rule 144. The Subscriber also acknowledges and understands
that:
(a) the Shares are restricted securities within the meaning of Rule
144 promulgated under the U.S. Act. The Company will file a
registration statement within six months to register all of the
stock issued pursuant to this offering. Upon receipt of
declaration from the Securities and Exchange Commission that the
registration statement is effective, the Subscriber will be free
to dispose of his shares without restriction;
(b) the exemption from registration under Rule 144 will not be
available in any event for at least one year from the date of
purchase and payment of the Shares by the Subscriber, and even
then will not be available unless (i) a public trading market
then exists for the common stock of the Company, (ii) adequate
information concerning the Company is then available to the
public and (iii) other terms and conditions of Rule 144 are
complied with; and
(c) any sale of the Shares may be made by the Subscriber only in
limited amounts in accordance with such terms and conditions.
4.4 Further restrictions on disposition. The Subscriber further acknowledges and
understands that, without in anyway limiting the acknowledgements and
understandings as set forth hereinabove, the Subscriber agrees that the
Subscriber shall in no event make any disposition of all or any portion of the
Shares which the Subscriber is acquiring hereunder unless and until:
(a) there is then in effect a "Registration Statement" under the
U.S. Act covering such proposed disposition and such h
disposition is made in accordance with said Registration
Statement. The Company will file a registration statement within
six months to register all of the stock issued pursuant to this
offering. Upon receipt of declaration from the Securities and
Exchange Commission that the registration statement is
effective, the Subscriber will be free to dispose of his shares
without restriction; or
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(b) (i) the Subscriber shall have notified the Company of the
proposed disposition and shall have furnished the Company with a
detailed statement of the circumstances surrounding the proposed
disposition, (ii) the Subscriber shall have furnished the
Company with an opinion of the Subscriber's own counsel to the
effect that such disposition will not require registration of
any such Shares under the U.S. Act and (iii) such opinion of the
Subscriber's counsel shall have been concurred in by counsel for
the Company and the Company shall have advised the Subscriber of
such concurrence.
Article 5
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METHOD OF SUBSCRIPTION AND ACCEPTANCE BY THE COMPANY
----------------------------------------------------
5.1 Method of subscription. It is hereby acknowledged and agreed by the parties
hereto that any subscription for Shares shall be made by the Subscriber:
(a) by faxing to the Company, a completed copy of this Agreement
together with an executed copy of the signature page of this
Agreement; and
(b) by delivering to the Company, an originally executed copy of
this completed Agreement together with payment for the exact
Subscription Price for such Shares in the following manner:
(i) by delivery to the Company's above address of a bank
draft or cashier's cheque for the exact Subscription
Price for the Shares; or
(ii) Delivery by wire transfer to the escrow agent for the
Company, instructions which are attached.
5.2 Acceptance of subscription or return of Subscription Price by the Company.
The Subscriber acknowledges that the Company will be accepting subscriptions for
Shares on a first come, first serve, basis. As a consequence the Company, upon
acceptance by its Board of all or part of this subscription Agreement (the
"Acceptance"), hereby agrees to issue the accepted number of Shares, as fully
paid and non-assessable, and as consideration for the Subscriber's subscription,
and to refund any excess subscription monies of the Subscription Price of any
non-accepted portion of this subscription Agreement by the Board. In this regard
the Subscriber acknowledges that, although Shares may be issued to other
purchasers concurrently with the Company's Acceptance of all or part of this
9
subscription Agreement, there may be other sales of Shares by the Company, some
or all of which may close before or after the Acceptance herein. The Subscriber
further acknowledges that there is a risk that insufficient funds may be raised
by the Company upon the Company's Acceptance of all or part of this subscription
Agreement to fund the Company's objectives and that further closings may not
take place after Acceptance herein.
5.3 Delivery of Share certificate. The Company, within 14 calendar days of the
Acceptance by its Board of all or part of this subscription Agreement, agrees to
deliver to the Subscriber a certificate representing the accepted number of
Shares purchased by the Subscriber under this subscription Agreement and
registered in the name of the Subscriber.
Article 6
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INVESTMENT SUBSCRIPTION TERMS, CORPORATE DISCLOSURE AND GENERAL SUBSCRIBER
ACKNOWLEDGEMENTS AND WARRANTIES
---------------------------------------------------------------------------
6.1 Description of the Shares. The Company is issuing Shares at a price of U.S.
($0.50) Fifty Cents per Share. The Shares are a part of the common shares of the
Company and such common shares are the only class of shares of the Company
presently authorized. Copies of the constating documents of the Company
describing the common shares and the rights of shareholders are available upon
request.
6.2 Use of funds for the Shares and Release therefore. The Subscriber
acknowledges and agrees that the Subscription Price funds to be raised from the
Shares are to be employed for the business of the Company in accordance with
management's discretion as to the best use of the same for the Company's
business plans. The Company reserves the right at any time to alter its business
plans in accordance with management's appreciation of the market for the goods
and services of the Company. Without in any manner limiting the generality of
the foregoing, the Subscriber hereby acknowledges and agrees that, in
consideration, in part, of the Company's within Acceptance of this subscription
and agreement to issue Shares of the Company consequent thereon, the Subscriber
hereby does hereby release, remise and forever discharge each of the Company and
its respective directors, officers, employees, solicitors, agents, executors,
administrators, successors and assigns, of and from all manner of action and
actions, causes of action, suits, debts, dues, accounts, bonds, covenants,
contracts, claims, damages and demands, whether known or unknown, suspected or
unsuspected and whether at law or in equity, which against either of the Company
and/or any of its respective directors, officers, employees, solicitors, agents,
executors, administrators, successors and assigns, the Subscriber ever had, now
has, or which any of the Subscriber's respective successors or assigns, or any
of them hereafter can, shall or may have by reason of any matter arising from
the within use of funds (collectively, the "Release"). The Subscriber shall hold
harmless and indemnify the Company from and against, and shall compensate and
10
reimburse the same for, any loss, damage, claim, liability, fee (including
reasonable attorneys' fees), demand, cost or expense (regardless of whether or
not such loss, damage, claim, liability, fee, demand, cost or expense relates to
a third-party claim) that is directly or indirectly suffered or incurred by the
Company, or to which the Company becomes subject, and that arises directly or
indirectly from, or relates directly or indirectly to, any inaccuracy in or
breach of any representation, warranty, covenant or obligation of the Subscriber
contained in this Release and Agreement. This Release is irrevocable and will
not terminate in any circumstances.
6.3 The Subscriber's acknowledgments. The Subscriber acknowledges and agrees
that:
(a) Further financings: the Company may issue further offers similar
to the within which may bear higher or lower prices (as
determined by the Company in accordance with its appreciation of
market conditions). The Company may, and will, acquire debt
and/or equity financings in the future required or advisable in
the course of the Company's business development;
(b) Withdrawal or revocation: this Agreement is given for valuable
consideration and shall not be withdrawn or revoked by the
Subscriber once tendered to the Solicitors with the Subscription
Price;
(c) Agreement to be bound: the Subscriber hereby specifically agrees
to be bound by the terms of this Agreement as to all particulars
hereof and hereby reaffirms the acknowledgments, representations
and powers as set forth in this Agreement;
(d) Reliance on Subscriber's representations: the Subscriber
understands that the Company will rely on the acknowledgments,
representations and covenants of the Subscriber contained herein
in determining whether a sale of the Shares to the Subscriber is
in compliance with applicable securities laws. The Subscriber
warrants that all acknowledgments, representations and covenants
are true and accurate; and
(e) Waiver of pre-emptive rights: the Subscriber hereby grants,
conveys and vests unto the President of the Company, or unto
such other nominee or nominees of the President of the Company
as the President of the Company may determine from time to time,
in the President's sole and absolute discretion, as the
Subscriber's power of attorney solely for the purpose of waiving
any prior or pre-emptive rights which the Subscriber may have to
further issues of equity by the Company under applicable
corporate and securities laws.
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6.4 The Subscriber's representations, warranties and understandings. The
Subscriber acknowledges, represents and warrants to the Company and understands
that:
(a) Experience: the Subscriber has the requisite knowledge and
experience in financial and business matters for properly
evaluating the risks of an investment in the Company;
(b) Information: the Subscriber has received all information
regarding the Company reasonably requested by the Subscriber;
(c) Risk: the Subscriber understands that an investment in the
Company involves certain risks of which the Subscriber has taken
full cognizance, and which risks the Subscriber fully
understands;
(d) Adequacy of information: the Subscriber has been given the
opportunity to ask questions of, and to receive answers from,
the Company concerning the terms and conditions of the offering
and to obtain additional information necessary to verify the
accuracy of the information contained in the information
described in paragraph "(b)" hereinabove, or such other
information as the Subscriber desired in order to evaluate an
investment in the Company;
(e) Residency: the residence of the Subscriber as set forth
hereinbelow is the true and correct residence of the Subscriber
and the Subscriber has no present intention of becoming a
resident or domiciliary of any other State or jurisdiction;
(f) Independent investigation: in making a decision to invest in the
Company the Subscriber has relied solely upon independent
investigations made by the Subscriber, and the particular tax
consequences arising from an investment in the Company will
depend upon the Subscriber's individual circumstances;
(g) Principal: the Subscriber is purchasing the Shares as principal
for the Subscriber's own account and not for the benefit of any
other person, except as otherwise stated herein, and not with a
view to the resale or distribution of all or any of the Shares;
(h) Decision to purchase: the decision of the Subscriber to enter
into this Agreement and to purchase Shares pursuant hereto has
been based only on the representations of this Agreement and any
collateral business plan or offering memorandum provided
herewith or based upon the Subscriber's relationship with a
director and/or senior officer of the Company. It is not made on
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other information relating to the Company and not upon any oral
representation as to fact or otherwise made by or on behalf of
the Company or any other person. The Subscriber agrees that the
Company assumes no responsibility or liability of any nature
whatsoever for the accuracy, adequacy or completeness of any
business plan information, which has been created based upon the
Company's management experience. In particular, and without
limiting the generality of the foregoing, the decision to
subscribe for Shares has not been influenced by:
(i) newspaper, magazine or other media articles or reports
related to the Company or its business;
(ii) promotional literature or other materials used by the
Company for sales or marketing purposes; or
(iii) any representations, oral or otherwise, that the Company
will become a listed company, that any of the Shares
will be repurchased or have any guaranteed future
realizable value or that there is any certainty as to
the success of the Company or the liquidity or value of
any of the Shares;
(i) Advertisements: the Subscriber acknowledges that the Subscriber
has not purchased Shares as a result of any 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;
(j) Information not received: the Subscriber has not received, nor
has the Subscriber requested, nor does the Subscriber have any
need to receive, any offering memorandum or any other document
(other than financial statements or any other document the
content of which is prescribed by statute or regulation)
describing the business and affairs of the Company which has
been prepared for delivery to, and review by, prospective
purchasers in order to assist them in making an investment
decision in respect of the Shares, and the Subscriber has not
become aware of any advertisement in printed media of general
and regular paid circulation, radio or television with respect
to the distribution of the Shares;
(k) Information received: the Subscriber has had access to such
additional information, if any, concerning the Company as the
Subscriber has considered necessary in connection with the
Subscriber's investment decision to acquire the Shares;
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(l) Satisfaction with information received: the Subscriber
acknowledges that, to the Subscriber's satisfaction:
(i) the Subscriber has either had access to or has been
furnished with sufficient information regarding the
Company and the terms of this investment transaction to
the Subscriber's satisfaction;
(ii) the Subscriber has been provided the opportunity to ask
questions concerning this investment transaction and the
terms and conditions thereof and all such questions have
been answered to the Subscriber's satisfaction; and
(iii) the Subscriber has been given ready access to and an
opportunity to review any information, oral or written,
that the Subscriber has requested, in particular to any
offering memorandum or business plan of the Company, if
available concurrent with or as a part of this
Agreement;
(m) Reliance of representative: the Subscriber, by reason of the
Subscriber's knowledge and experience in financial and business
matters, is capable of evaluating the risks and merits of an
investment in the Shares or, if the Subscriber is relying upon
the investment advice of a representative who has advised the
undersigned in connection with this investment (the
"Representative"), the undersigned believes the Representative
to be sophisticated and competent in the area of investment
advice and analysis and therefore capable of evaluating the
risks and merits of an investment in the Shares;
(n) Economic risk: the Subscriber has such knowledge and experience
in financial and business affairs as to be capable of evaluating
the merits and risks of the Subscriber's investment in and to
any of the Shares, and the Subscriber is able to bear the
economic risk of a total loss of the Subscriber's investment in
and to any of the Shares;
(o) Speculative investment: the Subscriber understands that an
investment in any of the Shares is a speculative investment and
that there is no guarantee of success of the Company's
management's plans. Management's plans are an effort to apply
present knowledge and experience to project a future course of
action, which is hoped will result in financial success
employing the Company's assets and with the present level of
management's skills and of those whom the Company will need to
attract (which cannot be assured). Additionally, all plans are
capable of being frustrated by new or unrecognized or
unappreciated present or future circumstances, which can
typically not be accurately, or at all, predicted;
14
(p) Address: the Subscriber is resident as set out on the last page
of this Agreement as the "Subscriber's Address", and the address
as set forth on the last page of this Agreement is the true and
correct address of the Subscriber;
(q) Risk and resale restriction: the Subscriber is aware of the
risks and other characteristics of the Shares and of the fact
that the Subscriber will not be able to resell the Shares except
in accordance with the applicable securities legislation and
regulatory policy;
(r) Representations as to resale: no person has made to the
Subscriber any written or oral representations:
(i) that any person will resell or repurchase any of the
Shares;
(ii) that any person will refund the purchase of any of the
Shares;
(iii) as to the future price or value of any of the Shares; or
(iv) that any of the Shares will be listed and posted for
trading on any stock exchange, over-the-counter or
bulletin board market, or that application has been made
to list and post any of the Shares for trading on any
stock exchange, over-the-counter or bulletin board
market; and
the Subscriber will not resell the Shares except in accordance
with the provisions of applicable securities legislation and
stock exchange, over-the-counter and/or bulletin board market
rules;
(s) Reports and undertakings: if required by applicable securities
legislation, policy or order or by any securities commission,
stock exchange or other regulatory authority, the Subscriber
will execute and otherwise assist the Company in filing such
reports, undertakings and other documents as may be reasonably
required with respect to the issue of the Shares;
(t) Resale restrictions: the Subscriber has been independently
advised as to the applicable hold period imposed in respect of
the Shares by securities legislation in the jurisdiction in
which the Subscriber's resides and confirms that no
representation has been made respecting the applicable hold
periods for the Shares and is aware of the risks and other
characteristics of the Shares and of the fact that the
15
Subscriber may not be able to resell the Shares except in
accordance with the applicable securities legislation and
regulatory policy. In this regard the Subscriber agrees that if
the Subscriber decides to offer, sell or otherwise transfer any
of the Shares the Subscriber will not offer, sell or otherwise
transfer any of such Shares, directly or indirectly, unless:
(i) the sale is to the Company; or
(ii) the sale is made outside the United States in compliance
with the requirements of Rule 904 of Regulation S under
the U.S. Act and in compliance with applicable state
securities laws; or
(iii) the sale is made pursuant to an exemption from
registration under the U.S. Act provided by Rule 144
thereunder and as set forth in Article "3" hereinabove,
if applicable, and in compliance with applicable state
securities laws; or
(iv) with the prior written consent of the Company, the sale
is made pursuant to another applicable exemption from
registration under the U.S. Act and in compliance with
applicable state securities laws;
(u) No prospectus filing: the Subscriber acknowledges that this is
an offering made on a private basis without a prospectus and
that no federal, state, provincial or other agency has made any
finding or determination as to the merits of the investment nor
made any recommendation or endorsement of the Shares, and that:
(i) the Subscriber may be or is restricted from using most
of the civil remedies available under applicable
securities legislation; and
(ii) the Company is relieved from certain obligations that
would otherwise apply under applicable securities
legislation;
(v) Confidentiality: the Subscriber understands that the Company's
business plan and this Agreement are confidential. Furthermore,
the Subscriber has not distributed such, or divulged the
contents thereof, to anyone other than such legal or financial
advisors as the Subscriber has deemed desirable for purposes of
evaluating an investment in the Shares, and the Subscriber has
not made any copies thereof except for the Subscriber's own
records;
16
(w) Age of majority: the Subscriber, if an individual, has attained
the age of majority and is legally competent to execute this
Agreement and to take all actions required pursuant hereto;
(x) Authorization and formation of Subscriber: the Subscriber, if a
corporation, partnership, trust or other form of business
entity, is authorized and otherwise duly qualified to purchase
and hold the Shares, and such entity has not been formed for the
specific purpose of acquiring Shares in this issue. If the
Subscriber is one of the aforementioned entities it hereby
agrees that, upon request of the Company, it will supply the
Company with any additional written information that may be
requested by the Company. In addition, the entering into of this
Agreement and the transactions contemplated hereby will not
result in the violation of any of the terms of and provisions of
any law applicable to, or the constating documents, if a
corporation, of, the Subscriber or of any agreement, written or
oral, to which the Subscriber may be a party or by which the
Subscriber may be bound;
(y) Legal obligation: this Agreement has been duly and validly
authorized, executed and delivered by and constitutes a legal,
valid, binding and enforceable obligation of the Subscriber;
(z) Legal and tax consequences. the Subscriber acknowledges that an
investment in the securities of the Company may have tax
consequences to the Subscriber under applicable law, which the
Subscriber is solely responsible for determining, and the
Subscriber also acknowledges and agrees that the Subscriber is
responsible for obtaining its own legal and tax advice;
(aa) Compliance with applicable laws: the Subscriber knows of no
reason (and is sufficiently knowledgeable to determine the same
or has sought legal advice) why the delivery of this Agreement,
the acceptance of it by the Company and the issuance of the
Shares to the Subscriber will not comply with all applicable
laws of the Subscriber's jurisdiction of residence or domicile,
and all other applicable laws, and the Subscriber has no reason
to believe that the Subscriber's subscription hereby will cause
the Company to become subject to or required to comply with any
disclosure, prospectus or reporting requirements or to be
subject to any civil or regulatory review or proceeding. In
addition, the Subscriber will comply with all applicable
securities laws and will assist the Company in all reasonable
manner to comply with all applicable securities laws; and
(ab) Encumbrance or transfer of Shares: the Subscriber will not sell,
assign, gift, pledge or encumber in any manner whatsoever any of
the Shares herein subscribed for without the prior written
consent of the Company and in accordance with applicable
securities legislation.
17
6.5 Reliance on Subscriber's representations and warranties and indemnification.
The Subscriber understands that the Company will rely on the representations and
warranties of the Subscriber herein in determining whether a sale of the Shares
to the Subscriber is in compliance with federal and applicable state and
provincial securities laws. The Subscriber hereby agrees to indemnify the
Company and its affiliates and hold the Company and its affiliates harmless from
and against any and all liability, damage, cost or expense (including reasonable
attorney's fees) incurred on account of or arising out of: (i) any inaccuracy in
the Subscriber's acknowledgements, representations or warranties set forth in
this Agreement; (ii) the disposition of any of the Shares which the Subscriber
will receive, contrary to the Subscriber's acknowledgements, representations or
warranties in this Agreement or otherwise; (iii) any suit or proceeding based
upon the claim that such acknowledgments, representations or warranties were
inaccurate or misleading or otherwise cause for obtaining damages or redress
from the Company or its affiliates; and (iv) the Subscriber's failure to fulfill
any or all of the Subscriber's obligations herein.
6.6 Change in Subscriber's representations and warranties. All of the
information set forth hereinabove with respect to the Subscriber and including,
without limitation, the acknowledgements, representations and warranties set
forth hereinabove, is correct and complete as of the date hereof and, if there
should be any material change in such information prior to the acceptance of
this subscription by the Company, the Subscriber will immediately furnish the
revised or corrected information to the Company.
Article 7
---------
COMPANY REPRESENTATIONS AND WARRANTIES
--------------------------------------
7.1 Representations and warranties of the Company. The Company acknowledges,
represents and warrants to and with the Subscriber that:
(a) Standing: the Company is a valid and subsisting corporation duly
incorporated and in good standing under the laws of the
jurisdiction in which it is incorporated, continued or
amalgamated;
(b) Business: the Company is duly registered and licensed to carry
on business in the jurisdictions in which it carries on business
or owns property where so required by the laws of that
jurisdiction;
(c) Reservation of Shares: the Company will reserve or set aside
sufficient shares in its treasury to issue to the Subscriber the
Shares if the Company accepts all or any part of the within
subscription;
18
(d) Subscription materials: this subscription Agreement and all
other written or oral representations made by the Company to the
Subscriber in connection with the within subscription for Shares
are and will be accurate in all material respects and do not and
will not omit any fact, the omission of which does or will make
such representations misleading or incorrect;
(e) Compliance with securities legislation: the Company has complied
and will comply fully with the requirements of all applicable
corporate and securities laws and administrative policies and
directions in relation to the issue and trading of its
securities and in all matters relating to the within
subscription;
(f) Compliance with corporate materials: the issue and sale of the
Shares by the Company does not and will not conflict with, and
does not and will not result in a breach of, any of the terms of
the Company's incorporating documents or any agreement or
instrument to which the Company is a party;
(g) Corporate authority: this Agreement has been or will be, when
accepted, duly authorized by all necessary corporate action on
the part of the Company, and the Company has full corporate
power and authority to undertake the within subscription for
Shares; and
(h) Restrictions on Shares: no order ceasing, halting or suspending
trading in securities of the Company or prohibiting the sale of
such securities has been issued to and is outstanding against
the Company or any of its directors, officers or promoters or
against any other companies that have common directors, officers
or promoters, and no investigations or proceedings for such
purposes are pending or threatened.
7.2 Reliance on Company's representations and warranties. The Subscriber
acknowledges that no information or representation concerning the Company has
been provided to the Subscriber other than those contained in this Agreement,
and that the Subscriber is relying entirely upon this Agreement. Any other
information given or statement made is given or made without liability or
responsibility howsoever arising on the part of the Company. No person acting as
agent of the Company has any authority to make or give any representation or
warranty whatsoever in relation to the Company or the Shares. Any such
information given or statement made is given or made without liability or
responsibility howsoever arising on the part of the Company, and the Subscriber
hereby releases the Company from any claims that may arise in respect thereof.
19
Article 8
---------
GENERAL PROVISIONS
------------------
8.1 Address for delivery. Each notice, demand or other communication required or
permitted to be given under this Agreement shall be in writing and shall be sent
by delivery (electronic or otherwise) or prepaid registered mail deposited in a
post office in Canada addressed to the Subscriber or the Company at the address
specified in this Agreement. The date of receipt of such notice, demand or other
communication shall be the date of delivery thereof if delivered, or, if given
by registered mail as aforesaid, shall be deemed conclusively to be the fifth
day after the same shall have been so mailed, except in the case of interruption
of postal services for any reason whatsoever, in which case the date of receipt
shall be the date on which the notice, demand or other communication is actually
received by the addressee. Either party may at any time and from time to time
notify the other party in writing of a change of address and the new address to
which notice shall be given to it thereafter until further change.
8.2 Severability and construction. Each Article, section, sub-section,
paragraph, sub-paragraph, term and provision of this Agreement, and any portion
thereof, shall be considered severable, and if, for any reason, any portion of
this Agreement is determined to be invalid, contrary to or in conflict with any
applicable present or future law, rule or regulation, that ruling shall not
impair the operation of, or have any other effect upon, such other portions of
this Agreement as may remain otherwise intelligible (all of which shall remain
binding on the parties and continue to be given full force and agreement as of
the date upon which the ruling becomes final).
8.3 Gender and number. This Agreement is to be read with all changes in gender
or number as required by the context.
8.4 Time of the essence. Time is of the essence of this Agreement.
8.5 Governing law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada, U.S.A., and the laws of the
United States applicable therein. Any dispute regarding matters as between the
Subscriber and the Company, whether as a subscriber or shareholder and whether
arising under this Agreement or pursuant to shareholder rights pursuant to the
constating documents of the Company or applicable law, shall be adjudicated in
the Courts of the State of Nevada, U.S.A. unless the Company shall permit
otherwise.
8.6 Survival of representations and warranties. The covenants, representations
and warranties contained herein shall survive the closing of the transactions
contemplated hereby.
8.7 Counterparts. This Agreement may be signed by the parties hereto in as many
counterparts as may be necessary, each of which so signed shall be deemed to be
an original, and such counterparts together shall constitute one and the same
instrument and notwithstanding the date of execution will be deemed to bear the
execution date as set forth in this Agreement. This Agreement may also be
executed and exchanged by facsimile and such facsimile copies shall be valid and
enforceable agreements.
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8.8 Entire Agreement and amendments. This Agreement constitutes the only
agreement between the parties with respect to the subject matter hereof and
shall supersede any and all prior negotiations and understandings. There are no
collateral agreements or understandings hereto and this Agreement, and the
documents contemplated herein, constitutes the totality of the parties'
agreement. This Agreement may be amended or modified in any respect by written
instrument only.
8.9 Successors and assigns. The terms and provisions of this Agreement shall be
binding upon and enure to the benefit of the Subscriber, the Company and their
respective successors and lawfully permitted assigns; provided that, except as
herein provided, this Agreement shall not be assignable by any party without the
written consent of the other. The benefit and obligations of this Agreement,
insofar as they extend to or affect the Subscriber, shall pass with any
assignment or transfer of any of the Shares in accordance with the terms of this
Agreement.
8.10 Effective date. This Agreement shall take effect upon the date of
acceptance by the Company.
IN WITNESS WHEREOF the Parties hereto have hereunto set their respective
hands and seals in the presence of their duly authorized signatories effective
as at the date first above written.
21
Subscription by Subscriber:
---------------------------
Dated at _____________, __________, on this _______day of ___________, 2005.
--------------------------------- ---------------------------------
Name of Subscriber - please print ---------------------------------
Subscriber's Address
By:
----------------------------------------- ----------------------------------
Official Capacity or Title - please print
----------------------------------------- ----------------------------------
Authorized Signature Telephone Number
----------------------------------------- ----------------------------------
Please print name of individual whose Facsimile Number
signature appears above if different than
the name of the Subscriber printed above
Acceptance by the Company:
--------------------------
INDEX OIL AND GAS INC. hereby accepts the above subscription by the
Subscriber on this ________ day of ______________, 2005.
The CORPORATE SEAL of )
INDEX OIL AND GAS INC. )
----------------------
the Company herein, )
was hereunto affixed in the presence of: ) (C/S)
)
----------------------------------------- )
Authorized Signatory )
