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EXHIBIT 3.4
SUBSCRIPTION AGREEMENT - SS. 55(2)(4)
THIS AGREEMENT MADE EFFECTIVE AS OF THE 10th DAY OF OCTOBER, 1996 (the
"Effective Date").
BETWEEN:
OPTIMA PETROLEUM CORPORATION
Suite 600 - 595 Howe Street
Vancouver, British Columbia,
Canada, V6C 2T5;
(the "Company")
AND:
QUEENSCLIFF MANAGEMENT LTD.
Suite 500 - 221 West Esplanade
North Vancouver, British Columbia
V7M 3J3
(the "Purchaser")
WHEREAS:
A. The Purchaser wishes to subscribe for common shares, of the Company (the
"Securities");
B. It is the intention of the parties to this Agreement that this subscription
will be made pursuant to appropriate exemptions (the "Exemptions") from the
registration and prospectus or equivalent requirements of all rules, policies,
notices, orders and legislation of any kind whatsoever (collectively the
"Securities Rules") of all jurisdictions applicable to this subscription;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual
covenants and agreements herein contained, the receipt of which is hereby
acknowledged, the parties covenant and agree with each other (the "Agreement")
as follows:
1. Representations and Warranties of the Purchaser
1.1 The Purchaser represents and warrants to the Company, and acknowledges that
the Company is relying on these representations and warranties to, among other
things, ensure that it is complying with all of the applicable Securities Rules,
that:
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(a) in the case of the purchase by the Purchaser of the Securities as
principal, the Purchaser is purchasing such Securities as principal
for its own account, and not for the benefit of any other person,
and is purchasing a sufficient number of Securities such that the
aggregate acquisition cost to the Purchaser of such Securities is
not less than $97,000, if the Purchaser is a resident of British
Columbia, Alberta, Manitoba, New Brunswick, Prince Edward Island,
Newfoundland or an International Jurisdiction, or $150,000 if the
Purchaser is a resident of Saskatchewan, Ontario, Quebec or Nova
Scotia;
(b) in the case of the purchase of Securities by the Purchaser as agent
for a disclosed principal, each beneficial purchaser of such
Securities for whom the Purchaser is acting is purchasing as
principal for its own account, and not for the benefit of any other
person, and is purchasing a sufficient number of Securities so that
such beneficial purchaser has an aggregate acquisition cost for such
Securities of not less than $97,000, if the beneficial purchaser is
a resident of British Columbia, Alberta, Manitoba, New Brunswick,
Prince Edward Island, Newfoundland or an International Jurisdiction,
or $150,000 if the beneficial purchaser is a resident of
Saskatchewan, Ontario, Quebec or Nova Scotia, and the Purchaser is
an agent with due and proper authority to execute this Agreement and
all documentation in connection with the purchase on behalf of each
beneficial purchaser;
(c) in the case of the purchase of Securities by the Purchaser as a
trustee or as agent for a principal which is undisclosed or
identified by account number only, each beneficial purchaser of the
Securities for whom the Purchaser is acting is purchasing as
principal for its own account, and not for the benefit of any other
person, and is purchasing a sufficient number of Securities so that
such beneficial purchaser has an aggregate acquisition cost for such
Securities of not less than $97,000, if the beneficial purchaser is
a resident of British Columbia, Alberta, Manitoba, New Brunswick,
Prince Edward Island, Newfoundland or an International Jurisdiction,
or $150,000 if the beneficial purchaser is a resident of
Saskatchewan, Ontario, Quebec or Nova Scotia, and the Purchaser is a
trustee or agent with due and proper authority to execute this
Agreement and all documentation in connection with the purchase on
behalf of each beneficial purchaser;
(d) neither the Purchaser nor any beneficial purchaser on whose behalf
the Purchaser is acting has been formed, created, established or
incorporated for the purpose of permitting the purchase of the
Securities without a prospectus by groups of individuals whose
individual share of the aggregate acquisition cost for such
Securities is less than $97,000, if the beneficial purchaser is a
resident of British Columbia, Alberta, Manitoba, New Brunswick,
Prince Edward Island, Newfoundland or an International Jurisdiction,
or $150,000 if the beneficial purchaser is a resident of
Saskatchewan, Ontario, Quebec or Nova Scotia;
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(e) if the Purchaser and any beneficial purchaser for whom it is acting
is resident of an "International Jurisdiction" (which means a
country other than Canada or the United States) then:
(i) the Purchaser is knowledgeable of, or has been independently
advised as to, the applicable Securities Rules of the
International Jurisdiction which would apply to this
subscription, if there are any;
(ii) the Purchaser is purchasing the Securities pursuant to
Exemptions under the Securities Rules of that International
Jurisdiction or, if such is not applicable, the Purchaser is
permitted to purchase the Securities under the applicable
Securities Rules of the International Jurisdiction without the
need to rely on Exemptions; and
(iii) the applicable Securities Rules do not require the Company to
make any filings or seek any approvals of any kind whatsoever
from any regulatory authority of any kind whatsoever in the
International Jurisdiction; and
the Purchaser will, if requested by the Company, deliver to the
Company a certificate or opinion of local counsel from the
International Jurisdiction which will confirm the matters referred
to in subparagraphs (ii) and (iii) above to the satisfaction of the
Company, acting reasonably;
(f) the Purchaser and any beneficial purchaser for whom it is acting is
not a "U.S. Person" (as defined under Regulation S made under the
United States Securities Act of 1933, which definition includes an
individual resident in the United States and an estate or trust of
which any executor or administrator or trustee, respectively, is a
U. S. Person) and the Purchaser understands and acknowledges that
the Securities have not and will not be registered under the United
States Securities Act of 1933, and, subject to certain exceptions,
the Securities may not be offered or sold within the United States;
(g) the Purchaser acknowledges that the Company is relying on the
Exemptions in order to complete the trade and distribution of the
Securities and the Purchaser is aware of the criteria of the
Exemptions to be met by the Purchaser, including those referred to
in the Form 20A attached hereto and, if applicable, the Purchaser
meets those criteria;
(h) the Purchaser acknowledges that because this subscription is being
made pursuant to the Exemptions:
(i) the Purchaser is restricted from using certain of the civil
remedies available under the applicable Securities Rules;
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(ii) the Purchaser may not receive information that might otherwise
be required to be provided to the Purchaser under the
applicable Securities Rules if the Exemptions were not being
used; and
(iii) the Company is relieved from certain obligations that would
otherwise apply under the applicable Securities Rules if the
Exemptions were not being used;
(i) the Securities are not being subscribed for by the Purchaser as a
result of any material information about the Company's affairs that
has not been publicly disclosed;
(j) the offer and sale of these Securities was not accompanied by an
advertisement and the Purchaser was not induced to purchase these
Securities as a result of any advertisement made by the Company; and
(k) if the Purchaser is a corporation, the Purchaser is a valid and
subsisting corporation, has the necessary corporate capacity and
authority to execute and deliver this Agreement and to observe and
perform its covenants and obligations hereunder and has taken all
necessary corporate action in respect thereof, or, if the Purchaser
is a partnership, syndicate, trust or other form of unincorporated
organization, the Purchaser has the necessary legal capacity and
authority to execute and deliver this Agreement and to observe and
perform its covenants and obligations hereunder and has obtained all
necessary approvals in respect thereof, and, in either case, upon
the Company executing and delivering this Agreement, this Agreement
will constitute a legal, valid and binding contract of the Purchaser
enforceable against the Purchaser in accordance with its terms and
neither the agreement resulting from such acceptance nor the
completion of the transactions contemplated hereby conflicts with,
or will conflict with, or results, or will result, in a breach or
violation of any law applicable to the Purchaser, any constating
documents of the Purchaser or any agreement to which the Purchaser
is a party or by which the Purchaser is bound.
1.2 The Company represents and warrants to the Purchaser, and acknowledges that
the Purchaser is relying on these representations and warranties in entering
into this Agreement, that:
(a) the Company is a valid and subsisting corporation duly incorporated
and in good standing under the laws of the jurisdiction in which it
was incorporated, continued or amalgamated;
(b) the Company is a reporting issuer in British Columbia, and
Ontario and the Company is not, to the best of its knowledge, in
material default of any of the requirements of the applicable
Securities Rules of those jurisdictions;
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(c) the Company's subsidiaries (the "Subsidiaries"), if any, are valid
and subsisting corporations and in good standing under the laws of
the jurisdictions in which they were incorporated;
(d) the common shares of the Company are listed and posted for trading
on the VSE and TSE and, to the best of its knowledge, the Company is
not in material default of any of the listing requirements of the
VSE or TSE;
(e) upon their issuance, the Shares will be validly issued and
outstanding fully paid and non-assessable common shares of the
Company registered as directed by the Purchaser, free and clear of
all trade restrictions (except as may be imposed by operation of the
applicable Securities Rules) and, except as may be created by the
Purchaser, liens, charges or encumbrances of any kind whatsoever;
(f) upon their issuance, the Warrants will be validly created, issued
and outstanding, registered as directed by the Purchaser, and, upon
their issuance, the shares issued on the exercise of the Warrants
will be validly issued and outstanding fully paid and non-assessable
common shares of the Company registered as directed by the
Purchaser, and both will be free and clear of all trade restrictions
(except as may be imposed by operation of the applicable Securities
Rules) and, except as may be created by the Purchaser, liens,
charges or encumbrances of any kind whatsoever;
(g) the Company and its Subsidiaries, if any, hold all licences and
permits that are required for carrying on their business in the
manner in which such business has been carried on and the Company
and its Subsidiaries, if any, have the corporate power and capacity
to own the assets owned by them and to carry on the business carried
on by them and they are duly qualified to carry on business in all
jurisdictions in which they carry on business;
(h) to the best of its knowledge, there are no material actions, suits,
judgments, investigations or proceedings of any kind whatsoever
outstanding, pending or threatened against or affecting the Company
or its Subsidiaries, if any, at law or in equity or before or by any
Federal, Provincial, State, Municipal or other governmental
department, commission, board, bureau or agency of any kind
whatsoever and, to the best of the Company's knowledge, there is no
basis therefor;
(i) the Company has good and sufficient right and authority to enter
into this Agreement and complete its transactions contemplated under
this Agreement on the terms and conditions set forth herein; and
(j) to the best of its knowledge, the execution and delivery of this
Agreement, the performance of its obligations under this Agreement
and the completion of its transactions contemplated under this
Agreement will not conflict with, or result
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in the breach of or the acceleration of any indebtedness under, or
constitute default under, the constating documents of the Company or
any indenture, mortgage, agreement, lease, licence or other
instrument of any kind whatsoever to which the Company is a party or
by which it is bound, or any judgment or order of any kind
whatsoever of any Court or administrative body of any kind
whatsoever by which it is bound.
2. SUBSCRIPTION
2.1 The Purchaser hereby subscribes the subscription funds (the "Subscription
Funds") referred to below for and agrees to take up the common shares without
par value in the capital stock of the Company (a "Share" or the "Shares")
referred to below at a price of Cdn. $3.85 per Share.
2.2 On or before the 10th day of November, 1996, the Purchaser shall deliver to
the Company, the Subscription Funds for the Securities subscribed for in the
form of cash, solicitor's trust cheque, certified cheque, bank draft, money
order or wire transfer payable to the Company. The Company will be entitled to
use the Subscription Funds immediately upon the receipt thereof. Pending receipt
of Regulatory Approval, the Subscription Funds will be considered a loan from
the Purchaser to the Company which will be repaid in full on December 31, 1996
should Regulatory Approval not be obtained by the date specified in paragraph
4.1.
3. COVENANTS, AGREEMENTS AND ACKNOWLEDGMENTS
3.1 The Purchaser covenants and agrees with the Company to:
(a) concurrent with the execution of this Agreement, fully complete and
execute the TSE questionnaire and, if the Purchaser is an individual
(which means a natural person, but does not include a partnership,
unincorporated association, unincorporated syndicate, unincorporated
organization or trust, or a natural person in his capacity as a
trustee, executor, administrator or personal or other legal
representative), the Form 20A scheduled to this Agreement; and
(b) hold and not sell, transfer or in any manner dispose of the Shares
prior to midnight on the first anniversary of the Effective Date
unless the Purchaser has obtained the prior written consent of the
TSE to the sale, transfer or disposition, and the sale, transfer or
disposition is made in accordance with all applicable Securities
Rules.
3.2 The Purchaser acknowledges and agrees that the Shares will be subject to
such trade restrictions as may be imposed by operation of the applicable
Securities Rules, and the share certificate or certificates representing the
Shares will bear such legends as may be required by the applicable Securities
Rules and by the rules and policies of the TSE.
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3.3 The Company covenants and agrees with the Purchaser to:
(a) file the documents necessary to be filed under the applicable
Securities Rules, including Forms 20 (or the forms equivalent
thereto), within the required time; and
(b) use its best efforts to obtain Regulatory Approval prior to the
deadline referred to herein.
4. REGULATORY APPROVAL
4.1 Notwithstanding any other term of this Agreement, this Agreement and the
subscription provided for hereunder are subject to the Company obtaining the
approval of the TSE ("Regulatory Approval") by the 22nd day of November, 1996.
In the event that Regulatory Approval is not obtained by this date, this
Agreement will terminate and be of no further force and effect and the
Subscription Funds will be returned to the Purchaser without interest or
deduction.
5. CLOSING
5.1 The completion of the subscription contemplated under this Agreement shall
occur on or before the tenth business day (the "Closing Date") following the
date Regulatory Approval is given. The Company shall deliver to the Purchaser,
no later than the Closing Date, a share certificate or certificates representing
the Shares to the Purchaser as provided for below by the Purchaser.
6. GENERAL
6.1 For the purposes of this Agreement, time is of the essence.
6.2 The parties hereto shall execute and deliver all such further documents and
instruments and do all such acts and things as may, either before or after the
execution of this Agreement, be reasonably required to carry out the full intent
and meaning of this Agreement.
6.3 This Agreement shall be subject to, governed by and construed in accordance
with the laws of British Columbia.
6.4 This Agreement may not be assigned by either party hereto.
6.5 This Agreement may be signed by the parties in as many counterparts as may
be deemed necessary, each of which so signed shall be deemed to be an original,
and all such counterparts together shall constitute one and the same instrument.
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IN WITNESS WHEREOF the parties have executed this written Agreement effective as
of the Effective Date.
The CORPORATE SEAL of )
OPTIMA PETROLEUM CORPORATION was )
hereunto affixed in the presence of: )
) c/s
)
____________________________________ )
TO BE COMPLETED BY THE PURCHASER:
A. NAME AND ADDRESS (NOTE: CANNOT BE A U.S. ADDRESS) The name and address (to
establish the Purchaser's jurisdiction of residence for the purpose of
determining the applicable Securities Rules) of the purchaser (the "Purchaser")
is as follows:
Queenscliff Management Ltd.
Suite 500 - 221 West Esplanade
North Vancouver, B.C. V7M 3J3
B. REGISTRATION INSTRUCTIONS (NOTE: CANNOT BE A U.S. ADDRESS) The name and
address of the person in whose name the Purchaser's Securities are to be
registered is as follows (if the name and address is the same as was inserted in
paragraph A above, then insert "N/A"):
N /A
_________________________________
Name
_________________________________
Street Address
_________________________________
_________________________________
City and Province
_________________________________
Country
_____________
Postal Code
C. DELIVERY INSTRUCTIONS (NOTE: CANNOT BE A U.S. ADDRESS) The name and address
of the person to whom the certificates representing the Purchaser's Securities
referred to in paragraph A above are to be delivered is as follows (if the name
and address is the same as was inserted in paragraph A above, then insert
"N/A"):
N /A
_________________________________
Name
_________________________________
Street Address
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_________________________________
_________________________________
City and Province
_________________________________
Country
_____________
Postal Code
D. SUBSCRIPTION AMOUNT The minimum is Cdn. $97,000 if the Purchaser is a
resident (as per the address inserted in paragraph A above) of British Columbia.
Alberta, Manitoba. New Brunswick, Prince Edward Island, Newfoundland or an
International Jurisdiction, or Cdn. $150,000 if the Purchaser is a resident of
Saskatchewan, Ontario, Quebec or Nova Scotia.:
Subscription Funds: Cdn. $1,001,000.
Number of Securities: 260,000 Shares
Note: The number of Securities must equal the Subscription Funds divided
by price of Cdn. $3.85 per Security.
TO BE COMPLETED AND SIGNED BY THE PURCHASER:
Queenscliff Management Ltd.
Name of the "Purchaser" - use the name
inserted in paragraph A above.
Per: /s/ David N. Matheson
__________________________________
Signature of Purchaser
President
__________________________________
Title (if applicable)
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