Exhibit 10.1
AVRO ENERGY INC.
$250,000 Unit Offering
Dated May 31, 2010
******
1,000,000 Units
$0.25 Per Unit
******
SUBSCRIPTION AGREEMENT
The undersigned has received and read the Confidential Private Offering
Memorandum dated May 31, 2010, (the "Memorandum") of Avro Energy Inc. (the
"Company") offering (the "Offering") up to 1,000,000 Units (the "Units") at a
purchase price of $0.25 per Unit. Each Unit consists of one common share (a
"Share") and one half share purchase warrant (a "Half Warrant") Two Half
Warrants will entitle the holder thereof to acquire one Share at a purchase
price of $0.50 per Share for a period of 18 months from the date of issue. Terms
used and not defined herein have the same meaning as in the Memorandum.
ALL INFORMATION CONTAINED IN THIS SUBSCRIPTION AGREEMENT SHALL BE TREATED
CONFIDENTIALLY. However, the undersigned understands that the Company may
present this Subscription Agreement to such parties as it deems appropriate if
called upon to establish that the proposed issuance of the Shares to the
undersigned is exempt from registration under the Securities Act of 1933, as
amended (the "Securities Act"). Further, the undersigned understands that the
offering itself may be reported to the Securities and Exchange Commission (the
"SEC"), and relevant state securities agencies, pursuant to the requirements of
Regulation D.
INSTRUCTIONS: PLEASE COMPLETE ALL ITEMS BELOW, SIGN AND DATE THIS SUBSCRIPTION
AGREEMENT, AND RETURN IT TO THE COMPANY WITH A CHECK.
1. SUBSCRIPTION. Subject to the terms and conditions of this Subscription
Agreement, the undersigned hereby subscribes for and agrees to purchase
1,000,000 Units for a total cash payment of $250,000 (the "Subscription").
Simultaneously with the execution of this Subscription Agreement, the
undersigned is submitting a check in the full amount of his, her, or its
Subscription as set forth on the signature page below, in the form of a check
drawn on a bank domiciled in the United States, payable to "Avro Energy Inc" or
has made arrangements with the Company to wire transfer the funds into the
Company's operating account. The dollar amount so subscribed is hereby
irrevocably tendered as a subscription to purchase the Shares. The undersigned
agrees to be bound by the terms of Offering, including the registration rights,
as provided in the Memorandum.
2. ACCEPTANCE OF SUBSCRIPTION. The undersigned acknowledges that the Company has
the right to accept or reject this Subscription, in whole or in part, and that
this Subscription shall be deemed to be accepted by the Company only when it is
signed by the Company and a copy returned to the undersigned.
3. ACCREDITED INVESTOR STATUS. The undersigned hereby represents that he, she,
or it is an "Accredited Investor" as that term is defined Regulation D
promulgated by the SEC. The undersigned, or the individual representing the
undersigned entity, if applicable, has initialed below each of the categories
which apply to the investor and has attached to this Subscription Agreement
reasonable evidence of the investor's status as an "Accredited Investor."
(PLEASE INDICATE AND INITIAL ALL APPLICABLE CATEGORIES)
1
(1) a bank as defined in section 3(a)(2) of the Act, or any savings
----- and loan association or other institution as defined in section
3(a)(5)(A) of the Act whether acting in its individual or
fiduciary capacity;
(2) a broker or dealer registered pursuant to section 15 of the
----- Securities Exchange Act of 1934, as amended (the "Exchange Act");
(3) an insurance company as defined in section 2(13) of the Act;
-----
(4) an investment company registered under the Investment Company Act
----- of 1940 or a business development company as defined in section
2(a)(48) of such Act;
(5) a Small Business Investment Company licensed by the U.S. Small
----- Business Administration under section 301(c) or (d) of the Small
Business Investment Act of 1958;
(6) 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 $5,000,000; an employee benefit
plan within the meaning of the Employee Retirement Income Security
Act of 1974 if the investment decision is made by a plan
fiduciary, as defined in section 3(21) of such Act, 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 $5,000,000 or, if a self-directed plan,
with investment decisions made solely by persons that are
Accredited Investors;
(7) a private business development company as defined in section
----- 202(a)(22) of the Investment Advisers Act of 1940;
(8) an organization described in Section 501(c)(3) of the Code,
----- corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the
Shares, with total assets in excess of $5,000,000;
(9) a director or executive officer of the Company;
-----
(10) a natural person whose individual net worth (i.e., excess of total
----- assets over total liabilities), inclusive of home, home
furnishings and automobiles, or joint net worth with that person's
spouse, at the time of his purchase of the Shares exceeds
$1,000,000;
(11) a natural person who had an individual income in excess of
----- $200,000 in each of the two most recent calendar years or joint
income with that person's spouse in excess of $300,000 in each of
those years and has a reasonable expectation of reaching the same
income level in the current year. Individual income is defined for
this purpose as adjusted gross income as determined for Federal
income tax purposes, plus (i) any deductions for long-term capital
gains under Section 1202 of the Code, (ii) any depletion
deductions under Section 611, et seq., of the Code, (iii) any
interest income excluded under Section 103 of the Code, and (iv)
any partnership losses allocated to the Investor as reported on
Schedule E of Form 1040;
(12) a trust, with total assets in excess of $5,000,000, not formed for
----- the specific purpose of acquiring the Shares, whose purchase is
directed by a person who has such knowledge and experience in
financial and business matters that he is capable of evaluating
the merits and risks of the prospective investment; or
2
(13) any entity in which all of the equity owners are "Accredited
----- Investors."
4. REPRESENTATIONS OF THE UNDERSIGNED. The undersigned hereby represents to the
Company as follows:
a. Restricted Securities. The undersigned understands that the Shares will
not have been registered pursuant to the Securities Act, or any state securities
act, and thus will be restricted securities as defined in Rule 144 promulgated
by the SEC. Therefore, under current interpretations and applicable rules, he,
she, or it will probably have to retain such Shares for a period of at least six
months (as proposed in recent amendments to Rule 144 adopted by the SEC or one
year if not) from the date of purchase and at the expiration of such holding
period his, her, or its sales may be confined to brokerage transactions of
limited amounts requiring certain notification filings with the SEC and such
disposition may be available only if the issuer is current in its filings with
the SEC under the Exchange Act, or other public disclosure requirements.
b. Non-distributive Intent. The undersigned acknowledges that the Shares
are being acquired for his, her, or its own account, for investment, and not
with the present view towards the distribution thereof and he, she, or it will
not dispose of any of the Shares except (i) pursuant to an effective
registration statement under the Securities Act, or (ii) in any other
transaction which, in the opinion of counsel acceptable to the issuer, is exempt
from registration under the Securities Act, or the rules and regulations of the
SEC thereunder, and that an appropriate legend will be placed upon each of the
certificates representing the securities, and stop transfer instructions shall
be placed with the transfer agent for the Shares.
c. Evidence of Compliance with Private Offering Exemption. The undersigned
represents and warrants that he, she, or it, either individually or together
with his, her, or its purchaser representative, has such knowledge and
experience in business and financial matters that he or she is capable of
evaluating the risks of the prospective investment, and that the financial
capacity of the undersigned investor is of such proportion that the total cost
of such person's commitment in the Shares would not be material when compared
with his, her, or its total financial capacity. The undersigned investor has
adequate means of providing for current needs and personal contingencies and has
no need to sell the Shares in the foreseeable future.
d. Access to Information. The undersigned has received and read and is
familiar with the Memorandum and the SEC reports and filings referenced therein,
and he, she, or it confirms that all documents, records, and books pertaining to
this proposed investment have been made available to him, her, or it.
e. Opportunity to Ask Questions. The undersigned has had an opportunity to
ask questions of and receive answers from duly designated representatives of the
Company concerning the terms and conditions of the Offering and has been
afforded an opportunity to examine such documents and other information which
the undersigned or his or her representative, if any, has requested for the
purpose of verifying the information set forth in the Memorandum and for the
purpose of answering any questions the undersigned may have concerning the
business and affairs of the Company. In addition, the undersigned has received
all requested additional information and documents.
f. Limitations on Transfer of Shares. The undersigned acknowledges that he,
she, or it is aware that there are substantial restrictions on the
transferability of the Shares. Since these Shares will not be registered under
the Securities Act or any applicable state securities laws, the Shares may not
be, and the undersigned agrees that they shall not be, transferred unless they
are registered under the Securities Act and state securities laws, or unless
such sale is exempt from such registration under the Securities Act and any
other applicable state securities laws or regulations. The undersigned further
acknowledges that the Company is under no obligation to aid in obtaining any
exemption from the registration requirements. The undersigned also acknowledges
that he, she, or it will be responsible for compliance with all conditions on
transfer imposed by any securities administrator of any state and for any
expenses incurred by the Company for legal or accounting services in connection
with reviewing such a proposed transfer and/or issuing opinions in connection
3
therewith. The undersigned also acknowledges that an appropriate legend will be
placed upon each of the certificates representing the Shares stating that they
have not been registered under the Securities Act and setting forth or referring
to the restrictions on transferability and sale of the Shares.
g. No Advertisements. The undersigned is not entering into this
Subscription Agreement as a result of or subsequent to any advertisement,
article, notice, or other communication published in any newspaper, magazine, or
similar media or broadcast on television or radio, or presented at any seminar
or meeting.
h. Investment Communications. All communications concerning investment in
the Shares made to the undersigned by the Company, or on its behalf by its duly
authorized representative(s), have been made only in the state in which the
undersigned has listed as his, her, or its mailing address.
i. Relationship to Company; Business or Financial Experience. The
undersigned, either individually or, if an entity, through its representative,
has a preexisting personal or business relationship with the Company or one of
its officers, directors, or controlling persons, or, by reason of his or her
business or financial experience (or the business or financial experience of his
or her professional advisors who are unaffiliated with and who are not
compensated by the Company), the undersigned has the capacity to protect his,
her, or its own interests in connection with the purchase of the Shares.
5. FOREIGN INVESTORS. If the undersigned is not a U.S. person (as defined
below), he, she, or it represents and warrants to the Company, in addition to
the foregoing representations and warranties, as follows:
a. Non-U.S. Person. At all times during the offer and sale of the Shares by
the Company to the undersigned, the undersigned has not been, and is not
presently, a U.S. Person. The term "U.S. Person" as used herein shall mean any
person who is a citizen or resident of the United States or Canada, or any
state, territory or possession thereof, including but not limited to any estate
of any such person, or any corporation, partnership, trust or other entity
created or existing under the laws thereof, or any entity controlled or owned by
any of the foregoing. In addition, the undersigned is not acquiring the Shares
for the account or benefit of a U.S. Person.
b. Compliance with Foreign Laws. The undersigned has satisfied and observed
the laws of such person's jurisdiction in connection with any invitation to
subscribe for the Shares or any use of this Subscription Agreement, including:
(i) the legal requirements of the undersigned's jurisdiction for the purchase of
the Shares; (ii) any foreign exchange restrictions applicable to such purchase;
(iii) any governmental or other consents that may need to be obtained; and (iv)
the income tax and other tax consequences, if any, which may be relevant to the
purchase, holding, redemption, sale, or transfer of the Shares. The
undersigned's subscription and payment for, and such person's continued
beneficial ownership of, the Shares will not violate any applicable securities
or other laws of the undersigned's jurisdiction.
c. Offer and Sale of the Shares Outside U.S. At all times during the offer
and sale of the Shares by the Company to the undersigned, the undersigned has
been outside of the U.S.
d. Limitation on Resales. For a period of at least six months (as presently
proposed by the SEC, or one year if the proposed amendments are not finalized)
from the close of this offering, no resales of the Shares shall occur except (i)
in accordance with the provisions of Regulation S (Rule 901 through 905, and
Preliminary Notes), as promulgated by the U.S. Securities and Exchange
Commission, (ii) pursuant to registration under the Securities Act, or (iii)
pursuant to an available exemption from registration; and no hedging
transactions involving these securities shall be conducted unless in compliance
with the Securities Act.
e. Legend. For a period of at least six months from the close of this
offering, the undersigned consents to the placement of a legend on certificates
representing the Shares to the effect that transfer is prohibited except (i) in
accordance with the provisions of Regulation S, (ii) pursuant to registration
under the Securities Act, or (iii) pursuant to an available exemption from
registration; and that hedging transactions involving the Shares may not be
conducted unless in compliance with the Securities Act.
4
f. Transfer Restrictions. For a period of at least six months from the
close of this Offering, the undersigned consents to the refusal of the Company
to register any transfer of these Shares not made (i) in accordance with the
provisions of Regulation S, (ii) pursuant to registration under the Securities
Act, or (iii) pursuant to an available exemption from registration.
6. INVESTOR INFORMATION. Please provide the following information for the
records of the Company:
Name:
--------------------------------------------------
Street Address:
--------------------------------------------------
Mailing Address:
--------------------------------------------------
Telephone No.:
--------------------------------------------------
FAX No.:
--------------------------------------------------
Email Address:
--------------------------------------------------
Social Security Number or Tax Identification Number, as applicable:
----------------------------------------------------------------------
Designate the exact name or names to appear on the stock certificate
and any form of ownership, if applicable:
----------------------------------------------------------------------
5
IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement
this _____ day of _______ 2010.
SIGNATURE
If the undersigned is an INDIVIDUAL, complete the following:
----------------------------------- ------------------------------------
Print Name of Individual Signature of Individual
If the undersigned is a PARTNERSHIP, CORPORATION, LIMITED LIABILITY
COMPANY, or TRUST, complete the following:
NOTE: By signing below, the individual executing this Subscription
Agreement on behalf of the undersigned entity represents and warrants to the
Company that (i) the entity is duly authorized to enter into this Subscription
Agreement; (ii) he or she is duly authorized to represent the entity in this
Offering; and (iii) he or she is duly authorized to execute this Subscription
Agreement on behalf of the entity. A partnership, corporation, limited liability
company, or trust must attach a copy of its partnership agreement, articles of
incorporation, articles of organization, or other governing instrument, in each
case as amended and in effect on the date hereof, as well as other documents
which authorize investment in the shares and execution of the subscription
agreement (e.g., resolutions of the board of directors). Include documents
demonstrating authority of signing officer or agent to act on behalf of the
entity. All documentation must be complete and correct as of the date hereof.
--------------------------------------------------------------------------------
Type or Print Name of Partnership, Corporation, Limited Liability Company, or
Trust
----------------------------------- --------------------------------------
Type or print name of Individual Signature of Individual Signing
Signing on Behalf of Partnership, on Behalf of Partnership, Corporation,
Corporation, Limited Liability Limited Liability Company, or Trust
Company, or Trust
COMPANY ACCEPTANCE
Accepted this _______ day of ___________________ 2010.
By Its
--------------------------------- -----------------------------------
6
