Exhibit 99(2)
SUBSCRIPTION AGREEMENT
SUBSCRIPTION FOR SHARES
NAME OF SUBSCRIBER: ........................(the "Purchaser")
SHARES SUBSCRIBED FOR: ........................common shares of
CanArgo Energy Corporation ("the Shares")
TOTAL SUBSCRIPTION PRICE
FOR THE SHARES: NOK..........
PLACEMENT AGENTS: The shares are subscribed for through Orkla
Enskilda Securities ASA / Sundal Collier
& Co ASA /Den norske BankASA, DnB Markets
(individually a "Agent" and collectively,
the "Agents")
DATE OF SUBSCRIPTION: 27 June 2000
DELIVERY OF THE SHARES: Approximately 3 July 2000 at Purchaser's
Separate VPS- account
PURCHASER'S SEPARATE
VPS-ACCOUNT: In connection with the Purchaser's subscription
under this Subscription Agreement, the Purchaser
hereby give the Agent where the Purchaser's
subscription is made an irrevocably proxy to
set up a separate VPS -account in the name of
the Purchaser. This separate VPS-account shall
for as long as the shares are restricted
under Regulation S promulgated under the
American Securities Act of 1933, be blocked for
all trades, hedging and similar transactions
in favour of such Agent.
The Purchaser acknowledges that the Shares are
the only securities to be held on the
Purchaser's Separate VPS-account.
The Purchaser shall provide the Agent with
the documentation required in connection with
the establishing of the Purchasers Separate
VPS-account.
SUBSCRIPTION PRICE: NOK 9.00 per Share
PAYMENT INSTRUCTIONS: Payment of the Total Subscription Price shall be
made in a wire transfer of NOK in immediately
available funds to the Den norske Bank
ASA for deposit in account no 7660 95 00030 on
or prior to 3 July 2000
DELAYED PAYMENT: On overdue payment, interest may be charged at
12 percent per annum. The Company or Agents
reserve the right to cancel the subscription
if Purchaser fails to comply with the Payment
instructions and to seek indemnity from the
Purchaser for any resulting losses, damages,
costs and expenses in accordance with
Norwegian law
REPRESENTATIONS BY PURCHASER: The Purchaser makes the representations,
warranties and covenants to the Company
set forth in Schedule 1 hereto, incorporated
by reference herein, by his signature to
this Agreement
PRIVATE PLACEMENT: The Shares are offered in a private placement
pursuant to an existing exemption from the
prospectus delivery requirements under
Norwegian law (the Securities Trade Act
1999 and in reliance upon and conformity with
an exemption from the registration
requirements of the United States Securities
Act of 1993, as amended ("the Securities
Act") afforded by Regulation S promulgated
under the Securities Act ("Regulation S") The
Offering will prior to the listing of the
Shares require a prospectus under the Stock
Exchange Regulations, Chapter 18 (offering
of more than 10 % of the share capital).
REGISTRATION COVENANT: The Company hereby covenants to and agrees with
the Purchaser that it shall use its
commercially reasonable efforts to prepare
and file with the United States Securities
and Exchange Commission a registration
statement on Form S-3, if available,
registering the Shares for resale under the
Securities Act as soon as practicable after the
date hereof upon the terms more fully set forth
in Schedule 1 attached hereto. The Company's
obligation to register the Purchaser's Shares
is contingent, however, upon the Purchaser
completing, executing and delivering to the
Company the Questionnaire attached hereto as
Schedule 3. The Company also covenants that it
will file and meet the requirements for a
prospectus under the Stock Exchange Regulations,
Chapter 18 (offering of more than 10 %
of the share capital).
COMPLETE AGREEMENT: The Purchaser agrees to be bound by the terms of
this Agreement and the Schedules attached hereto
including the Term Sheet; which form part of
the Agreement
NOTICES: Any notices to the parties shall be given at the
addresses included on the signatory page
of this Agreement.
GOVERNING LAW: Norwegian law shall govern This Agreement,
although all material issues relating to the
Securities Act and Regulation S shall be
governed by United States law. The Parties
consent to the Oslo City Court as exclusive
venue to resolve any claim or dispute
arising under this Agreement
Oslo, 27 June 2000
ORKLA ENSKILDA SECURITIES ASA/SUNDAL COLLIER & CO ASA /DEN NORSKE BANK ASA, DNB
MARKETS
ON BEHALF OF CANARGO ENERGY CORPORATION
_____________________________
Address: __________________________
__________________________
__________________________
PURCHASER:
Name: __________________________
Signature: __________________________
Organizational
Number/ Birth
Number __________________________
Address: __________________________
__________________________
__________________________
Fax no: __________________________
CanArgo Energy Corporation - Schedules 1 and 3 to the Subscription Agreement
On behalf of the Company and its US legal counsel we have been requested to
distribute a new version of schedule 1 and the Questionnaire ("Schedule 3")
referred to in the Subscription Agreement under "Registration Covenant"
Enclosed please find copies of a revised Schedule 1 and the new Schedule 3 to
the Subscription Agreement. The principal revisions to Schedule 1 set forth the
obligations of, and terms and conditions under which the Company has agreed to
register your Shares for resale under the United States Securities Act of 1933,
as amended (the"Act"). Schedule 3 is a Questionnaire that must bee completed by
you in order that the Company may prepare the registration statement on Form S-3
referred to in the Term Sheet and Subscription Agreement.
SCHEDULE 1
TO THE
SUBSCRIPTION AGREEMENT
A. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby represents,
-------------------------------------------
warrants and covenants to the Company as follows:
1. COMPLIANCE WITH UNITED STATES SECURITIES LAWS.
Purchaser understands and acknowledges that (a) the Shares have not been and,
except to the extent described in "Registration Covenant" below, will not be
registered under the Securities Act of 1933 as amended (the "Securities Act"),
and may not be offered or sold in the United States or to, or for the account or
benefit of, any "U.S. person" (as defined in Regulation S, which definition is
set out in Schedule 2 to the Subscription Agreement), unless such Shares are
registered under the US Securities Act and any applicable state securities or
blue sky laws or such offer or sale is made pursuant to exemptions from the
registration requirements of such laws, (b) the Shares are being offered and
sold pursuant to the terms of Regulation S promulgated under the Securities Act,
which permits securities to be sold to non-"U.S. persons" in "offshore
transactions" (as defined in Regulation S), subject to certain terms and
conditions, (c) the Company is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgements and understandings of
the Purchaser set forth herein in order to determine the availability of the
exemptions from registration under the Securities Act relied upon by the Company
and the suitability of the Purchaser to acquire the Shares; (d) the Shares have
been offered and sold to the Purchaser in an "offshore transaction" and
Purchaser has not engaged in any "directed selling efforts", as each such term
is defined in Regulation S, and (e) in the view of the Commission, the statutory
basis for the exemption from registration claimed for this Offering would not be
present if the Offering of the Shares, although in technical compliance with
Regulation S, is part of a plan or scheme to evade the registration provisions
of the Securities Act and, accordingly, the Purchaser is making the
representations and warranties in this Schedule to evidence its compliance with
the applicable requirements of the Securities Act and that its participation in
such Offering is not a part of any such plan or scheme.
2. STATUS OF PURCHASER.
(a) Purchaser is purchasing the Shares for its own account or for persons or
accounts as to which it exercises investment discretion for investment
and with no present intention to participate in a public distribution
of the shares or any interest therein. Neither Purchaser nor such
person or account is a "U.S. person" (as defined in Regulation S) and
neither Purchaser nor such other person or account has any present
intention to sell any of the Securities in the United States or to a U.S.
person or for the account or benefit of a U.S. person either now or
promptly after expiration of the first anniversary of the date hereof
("Restricted Period").
(b) Purchaser (and any person or account on whose behalf Purchaser is
purchasing) is knowledgeable, sophisticated and experienced in making,
and is qualified to make, decisions with respect to investments in
restricted securities (such as this Shares) and has reviewed and
considered all information it deems relevant in making a decision to
purchase the Shares. Purchaser acknowledges that it is capable of
evaluating the merits and risks of an investment in the Shares and to
make an informed decision relating thereto. In evaluating its
investment, Purchaser has consulted its own investment and/or legal
and/or tax advisors.
(c) Purchaser acknowledges that the Company has made available to Purchaser
the opportunity to ask questions and receive answers concerning the
terms and conditions of the offering of the Shares and the
business and financial condition of the Company and to obtain any
additional information that the Company possesses or can acquire
without unreasonable effort or expense that is necessary to verify
the accuracy of the information furnished in accordance herewith.
Purchaser and its advisors, if any, have received complete and
satisfactory answers to all such inquiries.
(d) Purchaser has agreed to purchase the Shares for investment purposes and
not with a view to a distribution. Purchaser is not an underwriter
of, or dealer in, the Shares and is not participating, pursuant to
a contractual arrangement, in the distribution of the Shares. To the
extent that the Shares are registered in the name of Purchaser's nominee,
Purchaser confirms that such nominee is acting as custodian for
Purchaser of such securities.
(e) Purchaser understands that no U.S. Federal or state or any foreign
governmental authority or agency has made or will make any
finding or determination relating to the fairness for public
investment in the Shares, or has passed upon or made, or will
pass upon or make, any recommendation or endorsement of the Shares.
(f) If Purchaser is a partnership, corporation, trust or other entity, the
individual executing this Subscription Note on its behalf
represents and warrants that:
(i) He or she has made due inquiry to determine the truthfulness
of the representations and warranties made by the Purchaser in
this Purchase Agreement; and
(ii) He or she is duly authorized under the corporation's charter and
by all requisite corporate action (and if the Purchaser is a
partnership, trust or other unincorporated entity, by the
agreements, deeds, indentures or other instruments pursuant to
which such entity was organized and all requisite action to be
taken by such entity) to make this investment and to enter into,
execute and deliver this Subscription Agreement on behalf
of such entity.
3. RESTRICTIONS ON RE-SALE
(a) During the Restricted Period, Purchaser shall not engage in any activity
for the purpose of, or which may reasonably be expected to have the
effect of, conditioning the market in the United States for the
Shares or directly or indirectly offer, sell, transfer, pledge or
otherwise dispose of the Shares, any interest therein in the
United States or to, or for the account or benefit of, a "U.S. person"
(as defined in Regulation S). Purchaser hereby also agrees that it
shall not, either directly or indirectly, sell short the Company's
Shares of Common Stock in the over-the-counter market or otherwise in
the United States or engage in any other hedging activities in
the United States during the Restricted Period and it has not
made any such sale in anticipation of purchasing the Shares.
(b) Purchaser understands that the Shares or any interest therein are only
transferable on the books and records of the Transfer Agents and
Registrar of the Common Stock of the Company. Purchaser further
understands that the Transfer Agents and Registrar will not register
any transfer of the Shares or any interest therein which the Company
in good faith believes violates the restrictions set forth herein.
(c) Unless registered under the Securities Act, any proposed offer, sale,
transfer, pledge or other disposition during the Restricted Period of any
of the Shares or any interest therein shall be subject to the condition
that Purchaser must deliver to the Company (i) a written certification
that neither record nor beneficial ownership of the Shares or any
interest therein, as the case may be, has been offered or sold in
the United States or to, or for the account or benefit of, any "U.S.
person" (as defined in Regulation S), (ii) a written certification of
the proposed transferee that such transferee (or any account for
which such transferee is acquiring such Shares or any interest therein,
as the case may be) is not a "U.S. person" (as defined in Regulation S),
that such transferee is acquiring such Shares or such interest therein,
as the case may be, for such transferee's own account (or an account over
which it has investment discretion) and for investment and not with a
view to a distribution, and that such transferee is knowledgeable
of and agrees to be bound by the restrictions on re-sale set forth in
this section and Regulation S during the Restricted Period, and (iii) a
written opinion of United States counsel, in form and substance
satisfactory to the Company, to the effect that the offer, sale,
transfer, pledge or other disposition of such Shares, or any interest
therein, as the case may be, are exempt from registration under the
Securities Act and any applicable state securities or blue sky laws.
(d) Purchaser will not, directly or indirectly, voluntarily offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers to buy,
purchase or otherwise acquire or take a pledge of) its rights under
this Subscription Agreement or the Shares or any interest therein
otherwise than in compliance with the Securities Act, any applicable
state securities or blue sky laws and any applicable securities laws
of jurisdictions outside the United States, and the rules and
regulations promulgated thereunder.
4. LEGENDS.
(a) Purchaser agrees for the duration of the Restricted Period that the
stock certificates representing the Shares (but not the electronic registration
of these in the VPS) shall bear the legend set forth below:
"The Shares of Common Stock represented by this certificate have
not been registered under the United States Securities Act of 1933,
as amended (the "Act"), or any other securities laws, and have been
issued in reliance upon the exemption from registration under the Act
contained in Regulation S under the Act. Prior to June 27, 2001,
no offer, sale, transfer, pledge or other disposition (collectively,
a "Disposal") of the Shares of Common Stock represented by this
certificate may be made: (a) in the United States or to, or for the
account or benefit of, any "U.S. person" (as defined in Regulation S)
unless (i) registered under the Act and any applicable state securities
or blue sky laws or (ii) exemptions from the registration requirements
of such laws are available and CanArgo Energy Corporation (the
"Company") receives a written opinion of United States legal counsel in
form and substance satisfactory to it to the effect that such Disposal
is exempt from such registration requirements; and (b) outside of the
United States or to, or for the account or benefit of a person who is
not a "U.S. person" (as defined in Regulation S) unless (i) the
beneficial owner of such Shares and the proposed transferee submit
certain certifications to the Company and (ii) the Company receives a
written opinion of United States legal counsel in form and substance
satisfactory to it to the effect that such Disposal is exempt from the
registration requirements of the Act."
5. RE-OFFERS BY PURCHASER IN THE UNITED STATES.
If Purchaser publicly re-offers all or any part of the Shares in the United
States, Purchaser (and/or certain persons who participate in any such re-offer)
may be deemed, under certain circumstances, to be an "underwriter" as defined in
Section 2(11) of the Securities Act. If Purchaser plans to make any such
re-offer, it will consult with United States legal counsel prior to any such
re-offer in order to determine its liabilities and obligations under this
Subscription Note, the Securities Act and any applicable state securities or
blue sky laws.
6. DUE EXECUTION, DELIVERY AND PERFORMANCE OF THE PURCHASE AGREEMENT AND
OTHER OBLIGATIONS.
Purchaser has full right, power, authority and capacity to enter into this
Subscription Agreement and to consummate the transactions contemplated hereby.
Upon the execution and delivery of this Purchase Agreement by Purchaser, this
Purchase Agreement shall constitute the legal, valid and binding obligations of
Purchaser, except as the enforceability thereof may be limited by any applicable
bankruptcy, insolvency, reorganization or other similar laws, relating to or
affecting the enforcement of creditors rights generally and by general equitable
principles, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
7. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS
Notwithstanding any investigation made by Purchaser, all covenants, agreements,
representations and warranties made by Purchaser herein shall survive the
delivery to Purchaser of the Shares.
B. REGISTRATION COVENANTS.
(a) As soon as practicable after the date hereof, the Company shall
use its commercially reasonable efforts to effect such
registration of the Shares under the Securities Act as would
permit or facilitate the sale and distribution of all of such
Shares and, in connection therewith, shall prepare and file with
the SEC and shall use commercially reasonable efforts to cause to
become effective a Form S-3, if available, covering the shares;
provided, however, that the Company shall not be obligated to
effect more than one such registration, and; provided, further,
however, that the Purchaser shall provide all such information
and materials relating to the Purchaser as the Company may
reasonably request and as may be required to be disclosed
pursuant to applicable SEC rules and regulations, and take
all such action as may be reasonably required in order to permit
the Company to comply with all the requirements of the SEC
applicable to selling security holders in order to cause the
Form S-3 to be declared effective by the SEC, such provision
of information and materials to be a condition precedent to
the obligations of the Company pursuant to this Agreement.
(b) Notwithstanding subparagraph (a) above, the Company shall be
entitled on not more than one occasion in any 365 day period to
postpone the declaration of effectiveness of any registration
statement prepared and filed pursuant to subparagraph (a)
for a reasonable period of time, but not in excess of 60
calendar days after the applicable deadline, if the Board of
Directors of the Company, acting in good faith, determines that
there exists a the happening of any event during the period
that a registration statement described in subparagraph (a)
hereof is required to be effective as a result of which, in the
reasonable judgement of the Company, such registration statement
or the related prospectus contains or may contain any untrue
statement of a material fact or omits or may omit to state any
material fact required to be stated therein or necessary to make
the statements therein not misleading.
(c) The Purchaser agrees that, upon receipt of any notice from the
Company of the happening of a Material Event, the Purchaser will
forthwith discontinue any disposition of Shares pursuant to
any registration statement described in Subparagraph (a) until
the Purchaser's receipt of copies of supplemented or amended
prospectuses prepared by the Company (which the Company will
use its commercially reasonable efforts to prepare and file
promptly), and, if so directed by the Company, the Purchaser will
deliver to the Company all copies in their possession, other
than permanent file copies then in the Purchaser's possession,
of the prospectus covering such Shares current at the time of
receipt of such notice. So long as the Purchaser is deemed an
"affiliate" of the Company within the meaning of Rule
144(a)(1) it agrees to discontinue disposition of the Shares
during any restricted trading periods imposed on affiliates
by any domestic or foreign securities laws, rules or regulations
applicable to the Company, including, without limitation, any
rules and regulations of any exchange on which the Shares
are then listed for trading.
(d) Except as set forth in subparagraph 2, the company shall (i)
prepare and file with the sec the registration statement in
accordance with subparagraph (a) hereof with respect to the
shares and shall use commercially reasonable efforts to cause
such registration statement to become effective as provided
in subparagraph (a) and to keep such registration statement
described in subparagraph (a) continuously effective until
the earlier to occur of (a) the sale of all of the shares so
registered and (b) the first anniversary of the closing date
(it being understood that the company's obligations under
subparagraph (a) shall not be satisfied until such occurrence);
(ii) furnish to the purchaser such number of copies of any
prospectus (including any preliminary prospectus and any
amended or supplemented prospectus), as the purchaser may
reasonably request in order to effect the offering and sale of
the shares to be offered and sold, but only while the
company shall be required under the provisions hereof to cause
such registration statement to remain current; (iii) use its
commercially reasonable efforts to register or qualify the shares
of the shares covered by such registration statement under the
securities or "blue sky" laws of such jurisdictions as the
purchaser shall reasonably request (provided that the company
shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent
to service of process in any such jurisdiction where it has not
been qualified), and do any and all other acts or things which
may be reasonably necessary or advisable to enable the purchaser
to consummate the public sale or other disposition of the shares
in such jurisdictions; (iv) cause all such shares to be listed
on the Oslo Stock Exchange and, in connection with any
registration of the shares under the securities act, the National
Association of Securities Dealers, inc. Automated quotation
system or over the counter bulletin board on which similar
securities issued by the company are then listed; (v) notify
the purchaser of any material event; (vi) so long as any
registration statement described in subparagraph (a) remains
effective, promptly prepare, file and furnish to the purchaser
a reasonable number of copies of any supplement to or an
amendment of such prospectus as may be necessary so that,
as thereafter delivered to the purchasers of the shares, such
prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing; (vii)
notify the purchaser promptly after it shall receive notice
thereof, of the date and time any registration statement and
each post-effective amendment thereto has become effective or a
supplement to any prospectus forming a part of such registration
statement has been filed; (viii) notify the purchaser promptly
of any request by the sec for the amending or supplementing of
such registration statement or prospectus or for additional
information; and (ix) advise the purchaser promptly after
it shall receive notice or obtain knowledge thereof, of the
issuance of any stop order by the SEC suspending the
effectiveness of any registration statement or the initiation or
threatening of any proceeding for that purpose and promptly
use commercially reasonable efforts to prevent the issuance
of any stop order or to obtain its withdrawal if such stop
order should be issued.
(e) The Company shall not, directly or indirectly, enter into any
merger, consolidation or reorganization in which the Company
shall not be the surviving corporation unless the surviving
corporation shall, prior to such merger, consolidation or
reorganization, agree in writing to assume the obligations of
the Company under this Agreement, and for that purpose
references hereunder to "Shares" shall be deemed to include the
common stock, if any, that the Purchaser would be entitled to
receive in exchange for its securities under any such merger,
consolidation or reorganization; provided, however, that, to
the extent the Purchaser receives securities that are by their
terms convertible into or exercisable or exchangeable for
common stock of the issuer thereof, then only such shares of
common stock as are issued or issuable upon conversion, exercise
or exchange of said convertible, exercisable or exchangeable
securities shall be included within the definition of "Shares".
(f) The company shall pay all costs and expenses incurred in
connection with any registration of shares pursuant to
subparagraph (a), including, without limitation, all
commissions, transfer taxes, sec, nasd and "blue sky"
registration and filing fees, printing expenses, transfer
agents' and registrars' fees, and the fees and
disbursements of the company's outside counsel and independent
accountants. With respect to any registration of shares under
subparagraph (a). The purchaser shall pay its own costs and
expenses and all commissions, discounts, SEC and "blue sky"
registration, qualification and filing fees applicable to the
shares included therein.
(g) The company's obligation to register the shares pursuant to this
agreement may not be assigned by the purchaser to any person
or entity without the company's prior written consent.
(h) The registration rights set forth in subparagraph (a) shall
terminate at such time as all of the Shares then held by the
Purchaser can be sold by the Purchaser in accordance with the
provisions of Rule 144 or its equivalent under the Securities Act
or have been sold pursuant to a transaction effected through the
facilities of the Oslo Stock Exchange in accordance with the
provisions of Rule 904.
SCHEDULE 2
TO THE
SUBSCRIPTION AGREEMENT
DEFINITION OF U.S. PERSON UNDER REGULATION S
1. U.S. PERSON
(a) "U.S. person" means:
(i) Any natural person resident in the United States;
(ii) Any partnership or corporation organized or incorporated
under the laws of the United States;
(iii) Any estate of which any executor or administrator is a
U.S. person;
(iv) Any trust of which any trustee is a U.S. person;
(v) Any agency or branch of a foreign entity located in the
United States;
(vi) Any non-discretionary account or similar account (other
than an estate or trust) held by a dealer or other
fiduciary for the benefit or account of a U.S. person;
(vii) Any discretionary account or similar account (other
than an estate or trust) held by a dealer or other
fiduciary organized, incorporated, or (if an individual)
resident in the United States; and
(viii) Any partnership or corporation if: (A) organized or
incorporated under the laws of any foreign jurisdiction;
and (B) formed by a U.S. person principally for the purpose
of investing in securities not registered under the
Securities Act, unless it is organized or incorporated, and
owned, by accredited investors (as defined in Rule 501(a)
of the Securities Act) who are not natural persons, estates
or trusts.
(b) Notwithstanding paragraph (1)(a) of this rule, any discretionary
account or similar account (other than an estate or trust) held for
the benefit or account of a non-U.S. person by a dealer or other
professional fiduciary organized, incorporated, or (if an
individual) resident in the United States shall not be deemed a
"U.S. person."
(c) Notwithstanding paragraph (1)(a), any estate of which any
professional fiduciary acting as executor or administrator
is a U.S. person shall not be deemed a U.S. person if:
(i) An executor or administrator of the estate who is not a
U.S. person has sole or shared investment discretion with
respect to the assets of the estate; and
(ii) The estate is governed by foreign law.
(d) Notwithstanding paragraph (1)(a), any trust of which any
professional fiduciary acting as a trustee is a U.S. person shall
not be deemed a U.S. person if a trustee who is not a U.S. person
has sole or shared investment discretion with respect to the trust
assets, and no beneficiary of the trust (and no settlor if the
trust is revocable) is a U.S. person.
(e) Notwithstanding paragraph (1)(a), an employee benefit plan
established and administered in accordance with the law of a
country other than the United States and customary practices and
documentation of such country shall not be deemed a U.S. person.
(f) Notwithstanding paragraph (1)(a), any agency or branch of a U.S.
person located outside the United States shall not be deemed a
"U.S. person" if:
(i) The agency or branch operates for valid business reasons;
and
(ii) The agency or branch is engaged in the business of
insurance or banking and is subject to substantive
insurance or banking regulation, respectively, in the
jurisdiction where located.
(g) The International Monetary Fund, the International Bank for
Reconstruction and Development, the Inter- American Development
Bank, the Asian Development Bank, the African Development Bank,
the United Nations, and their agencies, affiliates and pension
plans and any other similar international organizations, their
agencies, affiliates and pension plans shall not be deemed "U.S.
persons."
2. UNITED STATES. "United States" means the United States of America, its
territories and possessions, any State of the United States, and the District of
Columbia.
SCHEDULE 3
TO
SUBSCRIPTION AGREEMENT
CANARGO ENERGY CORPORATION
SELLING SECURITYHOLDER QUESTIONNAIRE
------------------------------------
Ladies and Gentlemen:
It is expected that the undersigned will be a Selling Securityholder
to be named in a forthcoming registration of a secondary offering of common
stock, $.01 par value per share, ("Common Stock) of CanArgo Energy Corporation
(the "Company"). The undersigned hereby furnishes the following information for
use by the Company in connection with the preparation of a Registration
Statement on Form S-3 (the "Registration Statement") to be filed with the
Securities and Exchange Commission ("SEC").
Please answer every question. If the answer to any question is "no",
"not applicable" or "as stated", please so state. Complete all questions with
information correct as of June 27, 2000, unless otherwise indicated. If there
is not enough room for your answer to any of the following questions, please use
separate sheets and attach them to the questionnaire.
1. Please type or print your name exactly as it should appear in the
Registration Statement. Provide your current address.
Name: ___________________________________________
Principal Residence or Mailing Address: __________________________
__________________________
__________________________
2. Your Security Holdings
(a) State the total number of shares of Common Stock owned
"beneficially" by you as of June 27, 2000:
TITLE OF NUMBER OF SECURITIES OWNED
SECURITY BENEFICIALLY AS OF
JUNE 27, 2000
- -----------------------------------------------------------------------------
Common Stock . . . . . . . . . . . . . . . . .
(b) If, as a result of applying the rules regarding beneficial ownership
summarized in Appendix A to this Questionnaire, you have included in
the amount stated in response to Question 2(a) above securities
which are not owned of record by you, please give details as to the
nature of such "beneficial" ownership of such securities and state the
amount of the securities so owned.
TITLE OF NUMBER OF NATURE OF BENEFICIAL
SECURITY SECURITIES OWNERSHIP
- --------------------------------------------------------------------------------
Common Stock . . . . . . .
(c) If, as a result of applying the rules regarding beneficial ownership
summarized in Appendix A to this Questionnaire, you have excluded
from the amount stated in response to Question 2(a) above securities
which are not owned of record by you, please state the amount so
excluded and explain why you are not the "beneficial" owner of
such securities.
TITLE OF NUMBER OF EXPLANATION OF NON-
SECURITY SECURITIES BENEFICIAL OWNERSHIP
- --------------------------------------------------------------------------
Common Stock . . . . . . .
(d) If you share beneficial ownership, i.e., share voting power or
investment power as defined in Appendix A, please indicate the other
beneficial owner(s) and describe the circumstances below.
TITLE OF NUMBER OF NAME OF PERSON AND
SECURITY SECURITIES NATURE OF SHARED VOTING
OR INVESTMENT POWER
- -------------------------------------------------------------------------------
Common Stock . . . . . . .
3. Indicate below any person or entity that acts together with you in
acquiring, holding, voting or disposing of securities of the Company
and may therefore be considered to be a part of a "group" with you for
United States federal securities law purposes:
TITLE OF NUMBER OF NAME OF PERSONS
SECURITY SECURITIES IN GROUP
- ---------------------------------------------------------------------------
Common Stock . . . . . . .
4. If you have the right to purchase any additional securities of the
Company of any class, please indicate the number of securities you have a
right to purchase and any contingencies relating to the same.
TITLE OF NUMBER OF
SECURITY SECURITIES CONTINGENCIES
- --------------------------------------------------------
Common Stock . .
5. Unless otherwise indicated below, all of the shares of Common Stock
purchased by you will be included in the Registration Statement. Such
number of shares of Common Stock represent the maximum number of such
securities, which may be included by the Company on the Registration
Statement to be registered for sale by you. Indicate below by check
mark whether you wish all of such shares of Common Stock to be
registered, or whether you wish a lesser number to be registered, in
which case insert such lesser number. As stated above, security-
holders who fail to complete this question will have all of such
securities registered.
TITLE OF PLEASE REGISTER ALL REGISTER THE FOLLOWING
SECURITY SUCH SECURITIES LESSER NUMBER OF
SECURITIES
- ---------------------------------------------------------------------------
Common Stock . . . . . or
6. (a) Please describe any position, office or other relationship which you
have had with the Company or any person or entity affiliated with the
Company during the last three years. For purposes of this
Question 6, a person or entity is "affiliated" with the Company if
that person or entity directly, or indirectly through intermediaries,
controls or is controlled by, or is under common control with, the
Company.
Answer:
(b) Does blood, marriage or adoption relate you to an executive officer
or director of the Company or any person who has been chosen to become a
director or officer of the Company?
Relationships more remote than first cousin need not be mentioned.
If yes, please identify the officer or director and describe the
nature of the relationship.
Answer:
(c) Have you been a member or employee of, or otherwise associated with
any firm that has provided accounting services to the Company in the last
fiscal year or that the Company proposes to have perform such services in
the current fiscal year? If yes, please describe:
Answer:
7. Do you know of any voting trust, agreement or other plan or arrangements
designed to control or direct the voting of the Company's Capital Stock? If so,
please describe in detail:
Answer:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
8. Are you a party to or are you aware of any contractual arrangements,
including any pledge of securities of the Company, the operation or the terms of
which may at a subsequent date result in a change of control in the Company? If
so, please describe.
Answer:
9. Transactions with the Company
--------------------------------
Have you, any member of your "immediate family" or any firm,
corporation or other entity with which you or any immediate family member
had, have or will have a position or relationship, had a direct or
indirect interest in any transaction or proposed transaction to which
the Company was or is to be a party?
The term "immediate family" means your spouse, parents, children,
siblings, mothers and fathers-in-law, sons and daughters-in-law and
brothers and sisters-in-law.
You may exclude a transaction if the amount involved in the
transaction or series of similar transactions, including all periodic
payments in the case of a lease or other agreement providing for
periodic payments, does not exceed $60,000. If yes, please describe:
Answer:
10. Plan of Distribution
----------------------
Please read the following description of a proposed plan of distribution
of your Shares and if conforms with the manner of your proposed
sale of the Shares kindly check to box provided below:
The following correctly summarizes the intended manner of the
undersigned's proposed distribution of its Shares (the terms "we"
and "us" refer to the Company).
" We are registering the Common Stock on behalf of the Selling
Stockholders. As used herein, the term Selling Stockholders includes donees and
pledgees selling shares received from the Selling Stockholders after the date of
this Prospectus. All costs, expenses and fees in connection with the
registration of the Common Stock offered hereby will be borne by us. Brokerage
commissions and similar selling expenses, if any, attributable to the sale of
the Common Stock by the Selling Stockholders will be borne by the Selling
Stockholders. The sale of the Common Stock by the Selling Stockholders may be
effected from time to time in transactions (which may include block transactions
by or for the account of the Selling Stockholders) through the facilities of a
national or foreign stock exchange on which the shares may be listed for
trading, in the over-the-counter market or in negotiated transactions, through
the writing of options on the Common Stock, a combination of such methods of
sale or otherwise. Sales may be made at fixed prices, which may be changed, at
market prices prevailing at the time of sale, or at negotiated prices. Such
transactions may or may not involve brokers or dealers. The Selling
Stockholders have advised us that they have not entered into any agreements,
understandings or arrangements with any underwriters or broker-dealers regarding
the sale of its securities, nor is there an underwriter or coordinating broker
acting in connection with the proposed sale of the Common Stock.
The Selling Stockholders may effect such transactions by selling their
Common Stock directly to purchasers, through broker-dealers acting as its agents
or to broker-dealers who may purchase shares as principals and thereafter sell
the Common Stock from time to time through the facilities of a national or
foreign stock exchange on which the shares may be listed for trading, in the
over-the-counter market, in negotiated transactions or otherwise. Such
broker-dealers, if any, may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholders and/or the purchasers
for whom such broker-dealers may act as agents or to whom they may sell as
principals or both (which compensation as to a particular broker-dealer may be
in excess of customary commissions). The Selling Stockholders may agree to
indemnify any agent, dealer or broker-dealer that participates in transactions
involving sales of the Common Stock against certain liabilities, including
liabilities arising under the Securities Act.
The Selling Stockholders and broker-dealers, if any, acting in connection
with such sale might be deemed to be Aunderwriters@ within the meaning of
Section 2 (11) of the Securities Act and any commission received by them and any
profit on the resale of the Shares might be deemed to be underwriting discounts
and commissions under the Securities Act. Because the Selling Stockholders may
be deemed to be an "underwriter" within the meaning of Section 2 (11) of the
Securities Act, they may be subject to the prospectus delivery requirements of
the Securities Act. We have informed the Selling Stockholders that the
anti-manipulative provisions of Regulation M promulgated under the Securities
Exchange Act of 1934, as amended, may apply to its sales in the market.
We also understand that some or all of the Common Stock offered hereby may
from time to time be sold pursuant to Rules 144, 144A or 904 under the
Securities Act provided the requirements of such rules, including, without
limitation, the holding period and the manner of sale requirements, are met."
The answers to the foregoing questions are true and accurate to the best of my
information and belief. I agree to promptly notify Anthony Potter at 001 403
777-4283 of any changes in the foregoing answers which should be made as a
result of prior inaccuracies or developments occurring before the effective date
of the proposed Registration Statement.
Name of Securityholder: _____________________________
(Please Type or Print)
Date: Signature: _____________________________
Authorized Signatory
APPENDIX A - DEFINITIONS
------------------------
ASSOCIATE AND ASSOCIATED:
- --------------------------
"Associate" and "associated" are used to indicated the existence of a
relationship with another person or entity. A person is an associate of (and
associated with) each of the following:
(a) Any business or other enterprise of which he is
(i) a partner, officer or director; or
(ii) directly or indirectly, the beneficial
owner of 10% or more or any class of
equity securities;
(b) Any trust or estate in which he has a beneficial interest
or of which he is a trustee, executor, administrator
or similar fiduciary; and
(c) Any member of his family. (Immediate family includes
one's spouse; parents; children; siblings; mothers and
fathers-in-law; and brothers and sisters-in-law.)
BENEFICIAL AND BENEFICIALLY:
- -----------------------------
"Beneficial" and "beneficially" refer to ownership of securities
registered in a person's name, or in bearer form, or otherwise held by him or by
others for his benefit (including those held in trusts in which he has an
interest; those held for his account by pledgees; those owned by a partnership
of which he is a member; those owned by any corporation which he should regard
as a personal holding corporation; or those held in the name of another person
if by reason of arrangement he obtains benefits substantially equivalent to
ownership or can vest and revest title in himself immediately or at some future
date).
Under revised rules adopted by the Securities and Exchange Commission,
you are deemed to be the beneficial owner of a security if you directly or
indirectly, through any contract, arrangement, understanding, relationship or
otherwise (1) have or share voting power, or (2) have or share investment power
over the security. Voting power includes the power to vote, or to direct the
voting of, a security. Investment power includes the power to dispose of the
security or to direct its disposition.
If you are a trustee, you are the beneficial owner of equity securities
held in trust where you or members of your immediate family have a vested
interest in the income or principal of a trust or own a beneficial vested
interest in a trust. Where you are the settlor of a trust and you retain the
power to revoke the trust without the consent of all the beneficiaries, you are
the beneficial owner.
You are also the beneficial owner of any security of which you have a
right to acquire beneficial ownership at any time within 60 days. For example,
you beneficially own any security that you are entitled to acquire within 60
days through any means, including but not limited to (1) the exercise of any
option, warrant, or right, (b) conversion of a convertible security, (c)
pursuant to the power to revoke a trust, discretionary account or similar
arrangement or (d) pursuant to the automatic termination of a trust,
discretionary account or similar arrangement. In addition, any person who
acquires an option, warrant, right to convertible security or any power
specified in (c) above, with the purpose or effect of changing or influencing
the control of the issuer, or in connection with or as a participant in any
transaction having such purpose or effect, immediately upon such acquisition
shall be deemed to be the beneficial owner of the securities which may be
acquired through the exercise or conversion of such option, warrant, right,
convertible security or power.
If any equity securities of the Company are held by a corporation of
which you are a majority shareholder, you are deemed the beneficial owner of
such securities.
In the absence of special circumstances you should include as
beneficially owned by you any equity securities of the Company held in the name
of your spouse, your minor children, or in the name of a relative who shares
your home. The conclusion that you own such securities is based on the fact
that such a relationship ordinarily would result in your having the power to
exercise a controlling influence over either the purchase, voting or the
disposition of such securities. The Securities and Exchange Commission takes
the position that you also own such securities if you obtain benefits
substantially equivalent to those of ownership, such as the "applica-tion of the
income derived from such securities to maintain a common home [or] to meet
expenses which [you] otherwise would meet from other sources. However, you are
entitled to disclaim beneficial ownership of such securities if in your judgment
the circumstances appear to justify a disclaimer.
Under the Securities and Exchange Commission's new beneficial ownership rules,
all equity securities of the Company owned by you must be aggregated in
calculating the number of shares beneficially owned by you, regardless of the
form which such ownership takes. Please note that under the new rules, a single
security may be deemed to be beneficially owned by more than one person.
CONTROL OR CONTROL PERSON:
- ----------------------------
"Control" means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a company, whether through
the ownership of voting securities, by contract or otherwise. Every person who,
by or through stock ownership, agency, or otherwise, or who, pursuant to or in
connection with an agreement or understanding with one or more other persons by
or through stock ownership, agency, or otherwise, controls any person is a
"control person."
GROUP:
- -----
A "group" exists when two or more persons act as a partnership, limited
partnership, syndicate, or other group for the purpose of acquiring, holding or
disposing of securities of a company.
----------
INTEREST:
- --------
In addition to a direct interest, the term "interest" includes any indirect
interest such as through a partnership, corporation, trust or estate of which
one is a partner (other than a limited partner owning less than a 10% interest
in the partnership), officer, director, holder of a 10% or more equity interest,
trustee, executor, administrator or similar fiduciary.
SECURITY AND SECURITIES:
- -------------------------
"Security" and "securities" mean any note, stock, treasury stock, bond,
debenture, evidence of indebte dness, certificate of interest or participation
in any profit sharing agreement, collateral-trust certificate, preorganization
certificate or subscription, transferable share, investment contract,
voting-trust certificate, certificate of deposit for a security, fractional
undivided interest in oil, gas or other mineral right, or, in general, any
interest or instrument commonly known as a "security", or any certificate of
interest or participation in, temporary or interim certificate for, receipt for,
guarantee of, or warrant or right to subscribe to or purchase any of the
foregoing.