TORNADO GOLD INTERNATIONAL CORP.
SUBSCRIPTION AGREEMENT
Tornado Gold International Corp.
c/o Xxxxxxx X. Xxxx
Xxxxx Xxxx LLP
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Dear Xx. Xxxx:
The undersigned, ___________________________, hereby subscribes to
purchase the securities (the "Securities") of Tornado Gold International Corp.,
a Nevada corporation (the "Company"), consisting of ________ shares (the
"Shares") of the Company's Common Stock and a three-year warrant, in the form
attached hereto as Exhibit A (the "Warrant"), to purchase up to an equivalent
number of shares of the Company's Common Stock at an exercise price of $0.60 per
underlying share, in accordance with the following paragraphs and the terms and
conditions set forth in the Registration Rights Agreement in the form attached
hereto as Exhibit B (the "Registration Rights Agreement") and the supplemental
letter in the form attached hereto as Exhibit C (the "Supplemental Letter").
This subscription may be rejected in whole or in part by the Company, in its
sole and absolute discretion for any cause or for no cause. The Company
currently expects that the aggregate subscriptions for Securities will be
between a minimum of approximately $1.5 million and a maximum of approximately
$3 million. Finders' fees and brokers' commissions will aggregate approximately
eight percent and will be paid in cash, with the Company reserving the right to
compensate finders and brokers an additional sum for their expenses (on an
accountable or non-accountable basis) and to grant warrants in an amount not to
exceed eight percent of the aggregate number of Warrants granted in the total
offering and to undertake to register the underlying shares, all on terms
substantially similar to offered to the subscribers. Any questions regarding
this document or the investment described herein should be directed to Xxxxxxx
X. Xxxx, Xxxxx Xxxx LLP, 0000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000;
telephone: (000) 000-0000; fax: (000) 000-0000; e-mail: xxxxxx@xxxxxxxxxxxx.xxx.
1. Purchase. Subject to the terms and conditions hereof, the
undersigned hereby irrevocably agrees to purchase the Securities (consisting of
__________ Shares, and a Warrant to purchase up to an equivalent number of
shares of the Company's Common Stock) for an aggregate subscription price of
$___________ (or a "per-unit" subscription price of $0.30) and tenders such
purchase price by means of a check (cashiers, certified, or personal), money
order, or wire transfer made payable to: "Xxxxx Xxxx LLP Client Trust Account,
as Escrow Agent for Tornado Gold International Corp." The wire transfer
instructions are:
California Bank & Trust
0000 Xxxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000
(000)000-0000
Name: Xxxxx Xxxx LLP Client Trust Account
Routing: #000000000
Trust Account: #33-400021-41
f/b/o Tornado Gold International Corp. / 0195150
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2. Representations and Warranties of the Purchaser. The
undersigned hereby makes the following representations and
warranties to the Company, and the undersigned agrees to
indemnify, hold harmless, and pay all causes of action,
lawsuits, debts, controversies, damages, claims, demands and
judgments (including litigation expenses and reasonable
attorneys' fees) incurred by the Company, and its past and
present officers, directors, employees, agents, successors and
assigns, whether or not under federal or state securities
laws, arising out of or in connection with the undersigned's
misrepresentation or breach of any of the representations and
warranties set forth herein, including, without limitation,
(a) The undersigned is the sole and true party in interest and is
not purchasing the Securities for the benefit of any other
person and has not granted any other person any right or
option or any participation or beneficial interest in any of
the Securities;
(b) The undersigned confirms receipt and careful review of all
written material provided by, or on behalf of, the Company in
respect of its business and prospects, and all information
provided by the Company to its stockholders and the
undersigned in respect of its business and prospects,
including all attachments and exhibits thereto. The
undersigned understands that all books, records, and documents
of the Company relating to this investment have been and
remain available for inspection by the undersigned upon
reasonable notice. The undersigned confirms that all documents
requested by the undersigned have been made available, and
that the undersigned has been supplied with all of the
additional information concerning this investment that has
been requested. The undersigned confirms that he has obtained
sufficient information, in his judgment or that of his
independent purchaser representative, if any, to evaluate the
merits and risks of this investment. The undersigned confirms
that he has had the opportunity to obtain such independent
legal and tax advice and financial planning services as the
undersigned has deemed appropriate prior to making a decision
to subscribe for the Securities. In making a decision to
purchase the Securities, the undersigned has relied
exclusively upon his experience and judgment, or that of his
purchaser representative, if any, upon such independent
investigations as he, or they, deemed appropriate, and upon
information provided by the Company in writing or found in the
books, records, or documents of the Company;
(c) In evaluating the suitability of this investment the
undersigned has not relied upon any representations or other
information (whether oral or written), other than that
furnished to the undersigned by the Company or its
representatives. The undersigned acknowledges and represents
that no representations or warranties have been made to the
undersigned by the Company or its directors, officers or any
agents or representatives with respect to the business of the
Company, the financial condition of the Company and\or the
economic, tax or any other aspect or consequence of the
purchase of the Securities and the undersigned has not relied
upon any information concerning the Company, written or oral,
other than supplied to the undersigned by the Company;
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(d) The undersigned has such knowledge and experience in financial
and business matters that the undersigned is capable of an
evaluation of the merits and risks of the undersigned's
investment in the Securities;
(e) THE UNDERSIGNED IS AWARE THAT AN INVESTMENT IN THE COMPANY IS
HIGHLY SPECULATIVE AND SUBJECT TO SUBSTANTIAL RISKS. The
undersigned is capable of bearing the high degree of economic
risk and burdens of this venture, including, but not limited
to, the possibility of a complete loss, the lack of a
sustained and orderly public market, and limited
transferability of the Securities, which may make the
liquidation of this investment impossible for the indefinite
future. The undersigned has the financial ability to bear the
economic risks of its investment, has adequate means of
providing for its current needs and personal contingencies,
and has no need for liquidity in this investment. The
undersigned's commitment to investments that are not readily
marketable is not disproportionate to its net worth, and this
investment will not cause such overall commitment to become
excessive;
(f) The offer to sell the Securities was directly communicated to
the undersigned by such a manner that the undersigned, or his
purchaser representative, if any, was able to ask questions of
and receive answers from the Company or a person acting on its
behalf concerning the terms and conditions of this
transaction. At no time, except in connection and concurrently
with such communicated offer, was the undersigned presented
with or solicited by or through any leaflet, public
promotional meeting, television advertisement, or any other
form of general advertising;
(g) The Securities are being acquired solely for the undersigned's
own account, for investment, and are not being purchased with
a view to resale, distribution, subdivision, or
fractionalization thereof;
(h) The undersigned understands that the Securities have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any state securities laws, in reliance
upon exemptions from regulation for non-public offerings. The
undersigned understands that the Securities or any interest
therein may not be, and agrees that the Securities or any
interest therein will not be, resold or otherwise disposed of
by the undersigned unless the Securities are subsequently
registered under the Securities Act and under appropriate
state securities laws or unless the Company receives an
opinion of counsel satisfactory to it that an exemption from
registration is available;
(i) The undersigned has been informed of and understands the
following:
(1) There are substantial restrictions on the
transferability of the Securities;
(2) No federal or state agency has made any finding or
determination as to the fairness for public investment,
nor any recommendation nor endorsement, of the
Securities;
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(j) None of the following information has ever been represented,
guaranteed, or warranted to the undersigned, expressly or by
implication by any broker, the Company, or agent or employee
of the foregoing, or by any other person:
(1) The approximate or exact length of time that the
undersigned will be required to remain a holder of the
Securities;
(2) The amount of consideration, profit, or loss to be
realized, if any, as a result of an investment in the
Company;
(3) That the past performance or experience of the Company,
its officers, directors, associates, agents, affiliates,
or employees or any other person will in any way
indicate or predict economic results in connection with
the plan of operations of the Company or the return on
the investment;
(k) The undersigned has not distributed any information relating
to this investment to anyone other than his purchaser
representative, if any, and no other person except such
personal representative and the undersigned has used this
information;
(l) The undersigned hereby agrees to indemnify the Company and to
hold it harmless from and against any and all liability,
damage, cost, or expense, including its reasonable attorneys'
fees and costs, incurred on account of or arising out of:
(1) Any material inaccuracy in the declarations,
representations, and warranties hereinabove set forth;
(2) The disposition of the Securities or any part thereof by
the undersigned, contrary to the foregoing declarations,
representations, and warranties;
(3) Any action, suit, or proceeding based upon:
(i) the claim that said declarations, representations,
or warranties were inaccurate or misleading or
otherwise cause for obtaining damages or redress
from the Company; or
(ii) the disposition of the Securities or any part
thereof.
The foregoing representations, warranties, agreements, undertakings and
acknowledgements are made by the undersigned with the intent that they be relied
upon in determining the undersigned's suitability as a purchaser of the
Securities. In addition, the undersigned agrees to notify the Company
immediately of any change in any representation, warranty or other information.
3. Transferability. The undersigned agrees not to transfer or assign
the obligations or duties contained in this Subscription Agreement or any of the
undersigned's interest herein except to a subsidiary or affiliate of the
undersigned.
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4. Accredited Investor; Off-Shore Transaction; Not a U.S. Person.
The undersigned is an "accredited investor," as that term is defined in Rule
501(c) of Regulation D promulgated under the Securities Act. This Subscription
and the transactions contemplated herein constitute an "off-shore transaction,"
as that term is defined in Rule 902(h) of Regulation S promulgated under the
Securities Act. The undersigned is not a "U.S. Person," as that term is defined
in Rule 902(k) of Regulation S promulgated under the Securities Act.
5. Acknowledgements, Understandings, and Agreements of the
Purchaser. The undersigned acknowledges, understands, and agrees that:
(a) The Company reserves the right to reject all or any part of
this subscription in their sole and absolute discretion for
any cause or for no cause;
(b) The undersigned will be promptly notified by the Company
whether this subscription has been accepted, either in whole
or in part, and if not accepted in whole, agrees to accept the
return of a proportionate part of the funds tendered to the
Company as a refund or a return, and in either case without
interest thereon or deduction therefrom;
(c) The Securities shall be deemed issued and owned by the
undersigned upon the Company's receipt of the purchase price
therefor and its acceptance thereof;
(d) The Securities and Exchange Commission (the "SEC") currently
takes the position that coverage of short sales of shares of
the Company's Common Stock "against the box" prior to the
effective date of a Registration Statement registering the
re-sale of the Shares is a violation of Section 5 of the
Securities Act, as set forth in Item 65, Section 5 under
Section A, of the Manual of Publicly Available Telephone
Interpretations, dated July 1997, compiled by the Office of
Chief Counsel, Division of Corporation Finance of the SEC; and
(e) The undersigned shall not use any of the Shares to cover any
short sales made prior to the effective date of such
registration statement or the date on which the shares are
subject to sale under Rule 144.
6. State Securities Laws. The offering and sale of the Securities is
intended to be exempt from qualification under the securities laws of such
states in which the securities are offered and sold.
7. Regulation D and Regulation S. Notwithstanding anything herein to
the contrary, every person or entity who, in addition to or in lieu of the
undersigned, is deemed to be a "purchaser" pursuant to Regulation D or
Regulation S promulgated under the Securities Act or any state law, does hereby
make and join in making all of the covenants, representations, and warranties
made by the undersigned.
8. Acceptance. Execution and delivery of this Subscription Agreement
shall constitute an irrevocable offer to purchase the Securities indicated,
which offer may be accepted or rejected in whole or in part by the Company in
its sole and absolute discretion for any cause or for no cause. Acceptance of
this offer by the Company shall be indicated by its execution hereof.
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9. Binding Agreement. The undersigned agrees that the undersigned
may not cancel, terminate, or revoke this Subscription Agreement or any
agreement of the undersigned made hereunder, and that this Subscription
Agreement shall survive the death or disability of the undersigned and shall be
binding upon the heirs, successors, assigns, executors, administrators,
guardians, conservators, or personal representatives of the undersigned.
10. Choice of Law; Forum. Notwithstanding the place where this
Subscription Agreement or any counterpart hereof may be executed by any of the
parties hereto, the parties expressly agree that all the terms and provisions
hereof shall be construed under the laws of the State of Nevada and that any
actions related hereto shall be brought in a court of competent jurisdiction
located in the County of Xxxxx, State of Nevada.
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement on the date set forth on the signature page.
The undersigned desires to take title in the Securities as an
__________________ [individual, trust, partnership, corporation]. The exact
spelling of name(s) under which title to the Securities shall be taken, and the
exact location for delivery of the Securities, is (please print):
Name(s) _______________________________________________________________
(address)_________________________________
_________________________________
_________________________________
_________________________________
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SUBSCRIPTION AGREEMENT
SIGNATURE PAGE
Purchase Price subscribed: $_______ Number of Shares subscribed:_________
Number of Warrant Shares: ___________
_____________________________________________________________________________
Name of Purchaser(s) (Please print or type)
__________________________________________
Signature
__________________________________________
Signature
Social Security/Tax Identification Number:______________________________
Mailing Address:________________________________
________________________________
________________________________
________________________________
Executed at ________________________, this ________ day of ___________, 2006.
(location)
SUBSCRIPTION ACCEPTED:
TORNADO GOLD INTERNATIONAL CORP.
By:_______________________________________
Xxxx X. Xxxxxx, President and CEO
DATE: _____________ ___, 2006
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