SUBSCRIPTION FOR UNITS
(Part 5 Accredited Investor Exemption Pursuant to "Multi-lateral Instrument
45-103 - Capital Raising Exemptions" - Alberta Residents Only and
Accredited Investor Exemption Pursuant to "Ontario Securities Commission Rule
45-501" - Ontario Residents Only)
TO: Deep Well Oil & Gas, Inc. (the "Corporation")
510 Royal Bank Building
10117 Jasper Avenue, AB T5J 1W8
The undersigned subscriber (the "Subscriber") acknowledges that the Corporation
is proceeding with an Offering of 5,000,000 units ("Units") at a price of
US$0.40 per Unit for gross proceeds of US$2,000,000. Each Unit is comprised of
one (1) common share ("Common Share") and one (1) Common Share purchase warrant
("Warrant"). The undersigned Subscriber hereby tenders to the Corporation this
subscription offer which, upon acceptance by the Corporation, will constitute an
agreement of the Subscriber to subscribe for, take up, purchase and pay for and,
on the part of the Corporation, to issue and sell to the Subscriber, the number
of Units set out below on the terms and subject to the conditions set out in
this Subscription Agreement. Until the Closing of the Offering, all subscription
funds shall be held in a non-interest bearing account of the Corporation. Upon
Closing of the Offering, all of the subscription proceeds (net of expenses
thereon) will be released to the Corporation. In the event the Offering does not
close, any and all subscription proceeds will be returned to subscribers without
interest, deduction or penalty. The Subscriber hereby acknowledges and agrees
that the terms and conditions contained in the attached Schedule "A" form part
of this Subscription Agreement and are incorporated herein by reference.
- --------------------------------------- ----------------------------------
Number of Units:
Name of Subscriber - please print
By:
Authorized Signature
Official Capacity or Title - please
print
(Please print name of individual whose signature appears above if different than
the name of the Subscriber printed above.)
Subscriber's Address
Facsimile Number
Telephone Number E-Mail Address
- ---------------------------------- ----------------------------------------
- ---------------------------------- ----------------------------------------
Aggregate Subscription Price (No. of
Units X US$0.40 per Unit):
- ---------------------------------- ----------------------------------------
- ---------------------------------- ----------------------------------------
No. of Common Shares Currently
Held (excluding Common Shares
comprising the Units subscribed
for herein):
- ---------------------------------- ----------------------------------------
- ---------------------------------- ----------------------------------------
Deliver the Units as set forth below:
Name
Account reference, if applicable
Contact Name
Address
Telephone Number E-Mail
Address
- ---------------------------------- ----------------------------------------
- ----------------------------------
Register the Units as set forth
below:
Name
Account reference, if applicable
Address
- --------------------------------------- ----------------------------------
ACCEPTANCE: The Corporation hereby accepts the above subscription as of this
_______ day of ____________________, 2005 and the Corporation represents and
warrants to the Subscriber that the representations and warranties made by the
Corporation are true and correct in all material respects as in all material
respects as of this date and that the Subscriber is entitled to rely thereon.
DEEP WELL OIL & GAS, INC.
By:
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This is the first page of an agreement comprised of 8 pages (not including
Exhibits).
SCHEDULE "A" -TERMS AND CONDITIONS OF SUBSCRIPTION FOR
UNITS OF DEEP WELL OIL & GAS, INC.
Definitions
In this Subscription Agreement:
(a) "Closing" or "Closing Date" means the closing of the Offering
initially expected to occur on or about August 12, 2005 or such
other date or dates as may be determined by the Corporation in its
sole discretion and such other subsequent closings as may be
required to complete the Offering;
(b) "Common Share" means a common share in the capital stock of the
Corporation;
(c) "Corporation" means Deep Well Oil & Gas, Inc.;
(d) "MI 45-102" means Multilateral Instrument 45-102 - Resale of
Securities;
(e) "MI 45-103" means Multilateral Instrument 45-103 - Capital Raising
Exemptions;
(f) "Offering" means the offering of Units by the Corporation at US$0.40
per Unit;
(g) "OSC Rule 45-501" means Ontario Securities Commission Rule 45-501-
Exempt Distributions;
(h) "Securities" means the Units, the Common Shares and the Warrants
comprising the Units, and the Warrant Shares;
(i) "Subscriber" means the person or company identified as the
Subscriber on the face page of this Subscription Agreement;
(j) "Subscription Agreement" means this agreement, together with the
schedules and exhibits attached hereto, as amended or supplemented
from time to time;
(k) "Subscription Price" means the aggregate subscription price paid by
the Subscriber, being the number of Units subscribed for multiplied
by US$0.40 per Unit;
(l) "Unit" means a unit consisting of one (1) Common Share and one (1)
Warrant of the Corporation;
(m) "Warrant" means one (1) Common Share purchase warrant of the
Corporation which entitles the holder to purchase one (1) Common
Share at a price of US$0.60 for a period of three (3) years from the
Closing Date; and
(n) "Warrant Share" means a Common Share issuable upon exercise of a
Warrant.
Terms of the Offering
1. The Subscriber hereby confirms its subscription for and agrees to take up the
Units as provided for on the initial page of this Subscription Agreement and
delivers herewith a certified cheque or bank draft payable to the Corporation in
the amount of the Subscription Price and authorizes the Corporation to release
the said funds for use by the Corporation on Closing against delivery to the
Subscriber of duly issued certificates representing the Common Shares and
Warrants comprising the Units subscribed for herein.
2. The Subscriber acknowledges that the Units subscribed for hereunder form part
of a larger issuance and sale by the Corporation of a maximum of 5,000,000 Units
of the Corporation at a subscription price of US$0.40 per Unit.
3. The Subscriber acknowledges that if the Offering does not close on any
subscriptions received, the amounts received for subscriptions will be promptly
returned by the Corporation to subscribers without interest, deduction or
penalty. The Units offered are subject to acceptance by the Corporation and to
rejection or allotment by the Corporation in whole or in part and the
Corporation reserves the right to discontinue the Offering at any time without
notice.
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4. The Subscriber acknowledges that this Subscription Agreement and the Exhibits
hereto require the Subscriber to provide certain personal information to the
Corporation. Such information is being collected by the Corporation for the
purposes of completing the Offering, which includes, without limitation,
determining the Subscriber's eligibility to purchase the Units under applicable
securities legislation, preparing and registering certificates representing
Units to be issued to the Subscriber and completing filings required by any
stock exchange or securities regulatory authority. The Subscriber's personal
information may be disclosed by the Corporation to: (a) stock exchanges or
securities regulatory authorities, (b) the Corporation's registrar and transfer
agent, and (c) any of the other parties involved in the Offering, including
legal counsel and may be included in record books in connection with the
Offering. By executing this Subscription Agreement, the Subscriber is deemed to
be consenting to the foregoing collection, use and disclosure of the
Subscriber's personal information. The Subscriber also consents to the filing of
copies or originals of any of the Subscriber's documents described in Section 11
hereof as may be required to be filed with any stock exchange or securities
regulatory authority in connection with the transactions contemplated hereby.
5. THE SUBSCRIBER FURTHER ACKNOWLEDGES THAT AN INVESTMENT IN THE UNITS MUST BE
CONSIDERED SPECULATIVE AND IS SUBJECT TO A NUMBER OF RISK FACTORS. THE
SUBSCRIBER COVENANTS AND AGREES TO COMPLY WITH MI 45-103 OR OSC RULE 45-501, AS
APPLICABLE, MI 45-102 AND ANY OTHER APPLICABLE SECURITIES LEGISLATION, RULES,
REGULATIONS, ORDERS OR POLICIES CONCERNING THE PURCHASE, HOLDING OF, AND RESALE
OF THE SECURITIES. THE SECURITIES ARE SUBJECT TO RESALE RESTRICTIONS AND WILL
BEAR A LEGEND TO THAT EFFECT.
6. In addition to one manually signed, completed copy of this Subscription
Agreement, the Subscriber will execute and deliver to the Corporation all other
documentation as may be required by applicable securities legislation, rules,
policy statements, and orders, including MI 45-103 or OSC Rule 45-501, as
applicable, to permit the issue and sale of the Units. The Subscriber
acknowledges and agrees that any such documentation, when executed and delivered
by the Subscriber, will form part of and will be incorporated into this
Subscription Agreement with the same effect as if each constituted a
representation and warranty or covenant of the Subscriber hereunder in favour of
the Corporation, and the Subscriber consents to the filing of such documents
and/or information contained in such documents as may be required to be filed
with any securities or the regulatory authority in connection with the
transactions contemplated hereby.
Representations, Warranties and Covenants by Subscriber
7. The Subscriber represents, warrants and covenants to the Corporation (and
acknowledges that the Corporation and its counsel are relying thereon)
both at the date hereof and at the Closing Date that:
(a) the Subscriber has been independently advised as to restrictions
with respect to trading in the Units imposed by applicable
securities legislation, confirms that no representation has been
made to it by or on behalf of the Corporation with respect thereto,
acknowledges that it is aware of the characteristics of the Units,
the risks relating to an investment therein and of the fact that it
may not be able to resell the Securities except in accordance with
limited exemptions under applicable securities legislation and
regulatory policy, including MI 45-102 and the United States
Securities Act of 1933, as amended (as defined below) until expiry
of the applicable restricted period and compliance with the other
requirements of applicable law; and the Subscriber agrees that any
certificates representing the Securities, and all certificates
issued in exchange therefor or in substitution thereof, will bear a
legend indicating that the resale of such Securities is restricted;
and
(b) the Subscriber has not received or been provided with, nor has it
requested, nor does it have any need to receive, any offering
memorandum, or any other document (other than an annual report,
annual information form, interim report, information circular or any
other continuous disclosure document, the content of which is
prescribed by statute or regulation) describing the business and
affairs of the Corporation which has been prepared for delivery to,
and review by, prospective purchasers in order to assist it in
making an investment decision in respect of the Units; and
(c) the Subscriber has been afforded the opportunity (i) to ask such
questions as it deemed necessary of, and to receive answers from,
representatives of the Corporation concerning the terms and
conditions of the offering of the Units and (ii) to obtain such
additional information which the Corporation possesses or can
acquire without unreasonable effort or expense that the Subscriber
considered necessary in connection with its decision to invest in
the Units; and
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(d) the Subscriber has not become aware of any advertisement, article,
notice or other communication in printed media of general and
regular paid circulation (or other printed public media), radio,
television, the internet or telecommunications or other form of
advertisement (including electronic display) with respect to the
distribution of the Units; and
(e) this Agreement is made unconditionally as a result of the
Subscriber's desire to participate in the future development of the
Corporation; and
(f) the Subscriber is purchasing as principal and it knows that it is
purchasing the Units pursuant to an exemption under MI 45-103 or OSC
Rule 45-501, as applicable, and, as a consequence, is restricted
from using most of the civil remedies available under applicable
securities legislation, may not receive information that would
otherwise be required to be provided to it under applicable
securities legislation, and the Corporation is relieved from certain
obligations that would otherwise apply under applicable securities
legislation; and
(i) if a resident of Alberta, the Subscriber is a resident in or
otherwise subject to the applicable securities laws of Alberta and
it is an "accredited investor", as such term is defined in MI 45-103
promulgated under the Securities Act (Alberta) and has concurrently
executed and delivered a Representation Letter in the form attached
as Exhibit 1 to this Subscription Agreement; or
(ii) if a resident of Ontario, the Subscriber is a resident in or
otherwise subject to the applicable securities laws of Ontario and
is an "accredited investor", as such term is defined in OSC Rule
45-501 promulgated under the Securities Act (Ontario) and has
concurrently executed and delivered a Representation Letter in the
form attached as Exhibit 2 to this Subscription Agreement; and
(g) if the Subscriber is resident in any jurisdiction not referred to in
Subsection 7(f) above: (a) the purchase of the Units does not
contravene any of the applicable laws in the Subscriber's
jurisdiction of residence and does not trigger (i) any obligation to
prepare and file a prospectus, an offering memorandum or similar
document, or any other ongoing reporting requirements with respect
to such purchase or otherwise, or (ii) any registration or other
obligation on the part of the Corporation; (b) the sale of the Units
as contemplated in the Subscription Agreement complies with or is
exempt from applicable securities legislation of the Subscriber's
jurisdiction of residence and the Subscriber will provide such
evidence of compliance with all such matters as the Corporation may
request; (c) the Subscriber will comply with the provisions of
Section 5 and Subsection 7(a) as if they were a resident of Alberta;
and (d) and notwithstanding that the Subscriber is not a resident of
Alberta, it is an "accredited investor", as such term is defined in
MI 45-103 promulgated under the Securities Act (Alberta) and has
concurrently executed and delivered a Representation Letter in the
form attached as Exhibit 1 to this Subscription Agreement; and
(h) no person has made to the Subscriber any written or oral
representations:
(i) that any person will resell or repurchase any of the
Securities;
(ii) that any person will refund the purchase price of any of the
Securities;
(iii) as to the future price or value of any of the Securities; or
(iv) that any of the Securities will be listed and posted for
trading on a stock exchange or that application has been made
to list and post any of the Securities for trading on a stock
exchange; and
(i) the Subscriber has no knowledge of a "material fact" or "material
change" (as those terms are defined by applicable securities
legislation) in respect of the affairs of the Corporation that has
not been generally disclosed to the public, other than knowledge
relating directly to its subscription for the Units; and
(j) the Corporation may complete additional financings in the future,
and such future financings may have a dilutive effect on
then-current security holders of the Corporation, including the
Subscriber; and
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(k) it is aware that the Securities have not been and will not be
registered under the United States Securities Act of 1933, as
amended ("U.S. Securities Act") and that the Securities may not be
offered or sold in the United States or to, or for the account or
benefit of, a U.S. Person (as defined in Regulation S under the U.S.
Securities Act) (a "U.S. Person") without registration under the
U.S. Securities Act or compliance with requirements of an exemption
or exclusion from registration and the applicable laws of all
applicable states and acknowledges that the Corporation has no
present intention of filing a registration statement under the U.S.
Securities Act in respect of the Securities; and
(l) the Units have not been offered to the Subscriber in the United
States; and
(m) it is not a U.S. Person and is not purchasing the Units on behalf
of, or for the account or benefit of, a U.S. Person; and
(n) the Subscriber undertakes and agrees that it will not offer or sell
the Securities in the United States unless such securities are
registered under the U.S. Securities Act and the securities laws of
all applicable states of the United States or an exemption or
exclusion from such registration requirements is available, and
further that it will not resell the Securities except in accordance
with the provisions of applicable securities legislation,
regulations, rules, policies and orders and stock exchange rules;
and
(o) it will not engage in hedging transactions with regard to the
Securities except in compliance with the U.S. Securities Act; and
(p) it understands and acknowledges that the Corporation must refuse to
register any transfer of the Securities not made in accordance with
an available exemption or exclusion from the registration
requirements of the U.S. Securities Act or pursuant to registration
under the U.S. Securities Act; and
(q) if the Subscriber is a "distributor" (as defined in Regulation S
under the U.S. Securities Act) or is an "affiliate" (as defined in
Rule 405 under the U.S. Securities Act) of a distributor or is
acting on behalf of a distributor, (i) it agrees that it will not
offer or sell the Securities during the one year period after the
completion of the distribution of the Units (the "Distribution
Compliance Period") to a U.S. Person or for the account or benefit
of a U.S. Person (other than a distributor), and (ii) if it sells
Securities to another distributor, a dealer (as defined in Section
2(a)(12) of the U.S. Securities Act) or a person receiving a selling
concession fee or other remuneration, during the Distribution
Compliance Period, the Subscriber agrees that it will send a written
confirmation or other notice to the purchaser stating that the
purchaser is subject to the same restrictions on offers and sales
that apply to a distributor and setting forth the restrictions on
offers and sales of Securities within the United States or to, or
for the account or benefit of, U.S. Persons; and
(r) the Subscriber understands and acknowledges that the Warrants may
not be exercised by or on behalf of a U.S. Person unless the Warrant
Shares issuable upon such exercise have been registered under the
U.S. Securities Act or an exemption or exclusion from such
registration is available; and
(s) the Subscriber understands and acknowledges that each person
exercising a Warrant will be required to provide either (i) written
certification that it is not a U.S. Person and the Warrant is not
being exercised on behalf of a U.S. Person, or (ii) a written
opinion of counsel, of recognized standing reasonably satisfactory
to the Corporation, to the effect that the Warrant being exercised
and the Warrant Shares issuable upon such exercise have been
registered under the U.S. Securities Act or are exempt from
registration thereunder; and
(t) if any Securities are being sold in the United States pursuant to
Rule 144 under the U.S. Securities Act, the United States
restrictive legend may be removed from the certificates representing
the Securities by delivering to the Corporation a written opinion of
counsel, of recognized standing reasonably satisfactory to the
Corporation, to the effect that the legend is no longer required
under applicable requirements of the U.S. Securities Act or state
securities laws; and
(u) if a corporation, partnership, unincorporated association or other
entity, it has the legal capacity to enter into and be bound by this
Subscription Agreement and further certifies that all necessary
approvals of directors, shareholders or otherwise have been given
and obtained; and
(v) if an individual, it is of the full age of majority and is legally
competent to execute this Subscription Agreement and take all action
pursuant hereto; and
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(w) it acknowledges that the net subscription proceeds (gross proceeds
less expenses, including legal fees which have not been paid by the
Corporation), will be immediately releasable to the Corporation on
the Closing Date or later closing dates, as the case may be; and
(x) this Subscription Agreement has been duly and validly authorized,
executed and delivered by and constitutes a legal, valid, binding
and enforceable obligation of the Subscriber; and
(y) the entering into of this Subscription Agreement and the
transactions contemplated hereby will not result in a violation of
any of the terms and provisions of any law applicable to it, or any
of its constating documents, or of any agreement to which the
Subscriber is a party or by which it is bound; and
(z) in the case of a subscription by the Subscriber for Units acting as
agent for a disclosed principal, it is duly authorized to execute
and deliver this Subscription Agreement and all other necessary
documentation in connection with such subscription on behalf of such
principal and this Subscription Agreement has been duly authorized,
executed and delivered by or on behalf of, and constitutes a legal,
valid and binding agreement of, such principal; and
(aa) the Subscriber has such knowledge in financial and business affairs
as to be capable of evaluating the merits and risks of the
Subscriber's investment and the Subscriber, or, where the Subscriber
is not purchasing as principal, each beneficial purchaser, is able
to bear the economic risk of loss of the Subscriber's entire
investment in the Units; and
(bb) except for the representations and warranties made by the
Corporation herein, it has relied solely upon publicly available
information relating to the Corporation and not upon any verbal or
written representation as to fact or otherwise made by or on behalf
of the Corporation and acknowledges that the Corporation's counsel
are acting as counsel to the Corporation and not as counsel to the
Subscriber; and
(cc) the Subscriber understands that Units are being offered for sale
only on a "private placement" basis and that the sale and delivery
of the Units is conditional upon such sale being exempt from the
requirements as to the filing of a prospectus or delivery of an
offering memorandum or upon the issuance of such orders, consents or
approvals as may be required to permit such sale without the
requirement of filing a prospectus or delivering an offering
memorandum and, as a consequence (i) it is restricted from using
most of the civil remedies available under securities legislation;
(ii) it may not receive information that would otherwise be required
to be provided to it under securities legislation; and (iii) the
Corporation is relieved from certain obligations that would
otherwise apply under securities legislation; and
(dd) if required by applicable securities legislation, regulations,
rules, policies or orders, MI 45-103, OSC Rule 45-501 or by any
securities commission, stock exchange or other regulatory authority,
the Subscriber will execute, deliver, file and otherwise assist the
Corporation in filing, such reports, undertakings and other
documents with respect to the issue of the Units (including, without
limitation, a completed and duly executed Representation Letter,
attached as Exhibit 1 and Exhibit 2 hereto, as applicable); and
(ee) the Subscriber will not resell the Securities except in accordance
with the provisions of applicable securities legislation and stock
exchange rules, if applicable, in the future; and
(ff) the Subscriber deals at arm's length with the Corporation within the
meaning of the Income Tax Act (Canada) and will continue to deal at
arm's length with the Corporation at all times which are relevant
for this Subscription Agreement; and
(gg) none of the funds the Subscriber is using to purchase the Units are,
to the knowledge of the Subscriber, proceeds obtained or derived,
directly or indirectly, as a result of illegal activities; and
(hh) the funds representing the total Subscription Price which will be
advanced by the Subscriber to the Corporation hereunder will not
represent proceeds of crime for the purposes of the Proceeds of
Crime (Money Laundering) and Terrorist Financing Act (Canada) (the
"PCMLA") and the Subscriber acknowledges that the Corporation may in
the future be required by law to disclose the Subscriber's name and
other information relating to this Subscription Agreement and the
Subscriber's subscription hereunder, on a confidential basis,
pursuant to the PCMLA; and
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(ii) to the best of its knowledge, the subscription funds to be provided
by the Subscriber (i) have not been or will not be derived from or
related to any activity that is deemed criminal under the law of
Canada, the United States of America, or any other jurisdiction, and
(ii) are not being tendered on behalf of a person or entity who has
not been identified to the Subscriber and the Subscriber shall
promptly notify the Corporation if the Subscriber discovers that any
of such representations cease to be true, and to provide the
Corporation with appropriate information in connection therewith;
and
(jj) the Subscriber acknowledges that it has been encouraged to and
should obtain independent legal, income tax and investment advice
with respect to its subscription for these Units and accordingly,
has been independently advised as to the meanings of all terms
contained herein relevant to the Subscriber for purposes of giving
representations, warranties and covenants under this Subscription
Agreement.
Representations, Warranties and Covenants of the Corporation
8. The Corporation hereby represents and warrants to the Subscriber that it has
been duly incorporated and is a valid and subsisting corporation under the laws
of the State of Nevada, United States, is extra-provincially registered in the
Province of Alberta, Canada and has full corporate power and authority to enter
into this Subscription Agreement and to perform its obligations hereunder.
9. The Corporation hereby covenants with the Subscriber that it will take all
corporate action required to issue to the Subscriber the Units and the Common
Shares and the Warrants comprising the Units on the Closing Date.
Registration Rights
10. If the Corporation proposes to register, pursuant to any registration rights
agreement (a "Registration Rights Agreement"), for shareholders other than the
Subscriber, any of its Common Shares or other equity securities (or securities
convertible into equity securities) under the U.S. Securities Act in connection
with the public offering of such securities solely for cash (other than a
registration on Form S-8, Form S-4 or Form F-4), the Corporation will, at all
such times, promptly give the Subscriber written notice of such proposed
registration. Upon the written request of the Subscriber, given within 20 days
after the mailing of such notice by the Corporation, the Corporation will,
subject to the provisions of applicable Registration Rights Agreements, use its
commercial best efforts to cause a registration statement covering all of the
(i) Common Shares being acquired hereunder and (ii) Warrant Shares that each
such holder has requested to be registered to become effective under the U.S.
Securities Act. Only to the extent they apply to "piggy back" registrations,
such registration shall also be subject to the other provisions of each
applicable Registration Rights Agreement. For greater certainty, (i) such
registration shall not be subject to any provisions of any Registration Rights
Agreement that are applicable only to "demand" registrations, and (ii) the
Subscriber acknowledges that except as contemplated by this Section, the
Corporation is under no obligation hereunder to register any of its securities
or to complete any offering of its securities it proposes to make, and the
Corporation will therefore incur no liability (including any penalties that may
be incurred under a Registration Rights Agreement) to the Subscriber for its
failure to register any of its securities or to complete any offering of its
securities.
Closing
11. The Subscriber agrees to deliver to the Corporation, not later than 4:30
p.m. (Edmonton time) on the Closing Date: (a) this duly completed and executed
Subscription Agreement; (b) a certified cheque or bank draft payable to Deep
Well Oil & Gas, Inc. for the Subscription Price of the Units subscribed for
under this Subscription Agreement; (c) if the Subscriber is an "accredited
investor" in Alberta or is purchasing Units pursuant to Subsection 7(g), a fully
completed and duly executed Representation Letter, attached as Exhibit 1 hereto;
and (d) if the Subscriber is an "accredited investor" in Ontario, a fully
completed and duly executed Representation Letter, attached as Exhibit 2 hereto.
12. The purchase and sale of the Units pursuant to this Subscription Agreement
will be completed at the offices of the Corporation's solicitors, Parlee McLaws
llp, in Edmonton, Alberta on the Closing Date or such other place or time as the
Corporation decides in its sole discretion. On the Closing Date, the Corporation
shall receive all completed subscription agreements, including this Subscription
Agreement, and the Subscription Price against delivery by the Corporation of the
certificates representing the Units.
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13. The Corporation shall be entitled to rely on delivery of a facsimile copy of
executed subscriptions, and acceptance by the Corporation of such facsimile
subscriptions shall be legally effective to create a valid and binding agreement
between the Subscriber and the Corporation in accordance with the terms hereof.
General
14. The Subscriber agrees that the representations, warranties and covenants of
the Subscriber herein will be true and correct both as of the execution of this
Subscription Agreement and as of the Closing Date and will survive the
completion of the issuance of the Units. The representations, warranties and
covenants of the Subscriber herein are made with the intent that they be relied
upon by the Corporation and it's counsel in determining the eligibility of a
purchaser of Units and the Subscriber agrees to indemnify the Corporation,
including its respective affiliates, shareholders, directors, officers,
partners, employees, advisors and agents, against all losses, claims, costs,
expenses and damages or liabilities which any of them may suffer or incur which
are caused or arise from a breach thereof. The Subscriber undertakes to
immediately notify the Corporation at 510 Royal Bank Building, 10117 Jasper
Avenue, Edmonton, Alberta, T5J 1W8, Attention: Curtis Sparrow (Fax Number: (780)
409-8146), of any change in any statement or other information relating to the
Subscriber set forth herein which takes place prior to the Closing Date.
15. The obligations of the parties hereunder are subject to acceptance of the
terms of the Offering by any required regulatory approvals.
16. The Subscriber acknowledges and agrees that all costs incurred by the
Subscriber (including any fees and disbursements of any special counsel retained
by the Subscriber) relating to the purchase of the Units by the Subscriber shall
be borne by the Subscriber.
17. The contract arising out of this Subscription Agreement and all documents
relating thereto shall be governed by and construed in accordance with the laws
of the Province of Alberta and the federal laws of Canada applicable therein.
The parties irrevocably attorn to the exclusive jurisdiction of the courts of
the Province of Alberta.
18. Time shall be of the essence hereof.
19. This Subscription Agreement represents the entire agreement of the parties
hereto relating to the subject matter hereof and there are no representations,
covenants or other agreements relating to the subject matter hereof except as
stated or referred to herein.
20. The terms and provisions of this Subscription Agreement shall be binding
upon and enure to the benefit of the Subscriber and the Corporation and their
respective heirs, executors, administrators, successors and assigns; provided
that, except for the assignment by a Subscriber who is acting as nominee or
agent to a beneficial owner and as otherwise herein provided, this Subscription
Agreement shall not be assignable by any party without prior written consent of
the other parties.
21. The Subscriber, on its own behalf and, if applicable, on behalf of others
for whom it is contracting hereunder, agrees that this subscription is made for
valuable consideration and may not be withdrawn, cancelled, terminated or
revoked by the Subscriber, on its own behalf and, if applicable, on behalf of
others for whom it is contracting hereunder.
22. Neither this Subscription Agreement nor any provision hereof shall be
modified, changed, discharged or terminated except by an instrument in writing
signed by the party against whom any waiver, change, discharge or termination is
sought.
23. The invalidity, illegality or unenforceability of any provision of this
Subscription Agreement shall not affect the validity, legality or enforceability
of any other provision hereof.
24. The Subscriber acknowledges and agrees that acceptance of this Subscription
Agreement will be conditional, among other things, upon the sale of Units to the
Subscriber being exempt from any prospectus and offering memorandum requirements
of all applicable securities laws. The Corporation will be deemed to have
accepted this Subscription Agreement upon the delivery on the Closing Date of
the certificates representing the Units to or upon the direction of the
Subscriber in accordance with the provisions hereof.
25. The headings used in this Subscription Agreement have been inserted for
convenience of reference only and shall not affect the meaning or interpretation
of this Subscription Agreement or any provision hereof.
8
26. The covenants, representations and warranties contained herein shall survive
the Closing of the transactions contemplated hereby.
27. Each party shall from time to time do such further acts and execute and
deliver such further documents as shall be reasonably required in order to fully
perform and carry out the terms of this Subscription Agreement.
28. In this Subscription Agreement, words importing the singular include the
plural and vice versa and words importing persons include firms or corporations.
29. This Subscription Agreement may be executed in any number of counterparts
with the same effect as if all parties to this Subscription Agreement had signed
the same document and all counterparts will be construed together and constitute
one and the same instrument.
30. All notices hereunder will be in writing and addressed to the party for whom
it is intended at the address indicated herein. Either party may by notice to
the other party change its address for service. Any notice personally delivered
will be deemed to have been given or made on the date it was actually delivered,
or if sent by electronic facsimile, will be deemed to have been given or made on
the business day next following the date upon which it was transmitted.
31. In this Subscription Agreement references to "$" are to United States
dollars unless stated otherwise.
9
EXHIBIT 1
REPRESENTATION LETTER
(FOR ALBERTA ACCREDITED INVESTORS)
TO: DEEP WELL OIL & GAS, INC. (the "Corporation")
In connection with the purchase of units of the Corporation ("Units") by
the undersigned subscriber or, if applicable, the principal on whose behalf the
undersigned is purchasing as agent (the "Subscriber" for the purposes of this
Exhibit 1), the Subscriber hereby represents, warrants, covenants and certifies
to the Corporation that:
1. The Subscriber is resident in Alberta or is subject to the laws of the
Province of Alberta;
2. The Subscriber, unless it is a person or company described in paragraph (p)
or (q) in the attached Appendix "A" that is deemed pursuant to the provisions of
section 1.2 of Multilateral Instrument 45-103 entitled "Capital Raising
Exemptions" to be purchasing as principal, is purchasing the Units as principal
for its own account;
3. The Subscriber is an "accredited investor" within the meaning of Multilateral
Instrument 45-103 entitled "Capital Raising Exemptions" by virtue of satisfying
the indicated criterion as set out in Appendix "A" to this Representation
Letter; and
4. Upon execution of this Exhibit 1 by the Subscriber, this Exhibit 1 shall be
incorporated into and form a part of the Subscription Agreement.
Dated: _________________________, 2005.
Print name of Subscriber
By:
-------------------------------------------
Signature
-------------------------------------------
Print name of Signatory (if different
from Subscriber)
-------------------------------------------
Title
IMPORTANT: PLEASE INITIAL THE APPROPRIATE PARAGRAPH(S) ON APPENDIX "A"
10
APPENDIX "A"
to Exhibit 1
Accredited Investor - (defined in MI 45-103) means:
(a) a Canadian financial institution, or an authorized foreign bank
listed in Schedule III of the Bank Act (Canada); or
(b) the Business Development Bank of Canada incorporated under the
Business Development Bank of Canada Act (Canada); or
(c) an association under the Cooperative Credit Associations Act
(Canada) located in Canada or a central cooperative credit
society for which an order has been made under subsection 473(1)
of that Act; or
(d) a subsidiary of any person or company referred to in paragraphs
(a) to (c), if the person or company owns all of the voting
securities of the subsidiary, except the voting securities
required by law to be owned by directors of that subsidiary; or
(e) a person or company registered under the securities legislation
of a jurisdiction of Canada, as an adviser or dealer, other than
a limited market dealer registered under the Securities Act
(Ontario) or the Securities Act (Newfoundland and Labrador); or
(f) an individual registered or formerly registered under the
securities legislation of a jurisdiction of Canada, as a
representative of a person or company referred to in paragraph
(e); or
(g) the government of Canada or a jurisdiction of Canada, or any
crown corporation, agency or wholly-owned entity of the
government of Canada or a jurisdiction of Canada; or
(h) a municipality, public board or commission in Canada; or (i) any
national, federal, state, provincial, territorial or municipal
government of or in any foreign jurisdiction, or any agency
of that government; or
(j) a pension fund that is regulated by either the Office of the
Superintendent of Financial Institutions (Canada) or a pension
commission or similar regulatory authority of a jurisdiction of
Canada; or
(k) an individual who, either alone or with a spouse, beneficially
owns, directly or indirectly, financial assets having an
aggregate realizable value that before taxes, but net of any
related liabilities, exceeds CAD$1,000,000; or
(l) an individual whose net income before taxes exceeded CAD$200,000
in each of the two most recent years or whose net income before
taxes combined with that of a spouse exceeded CAD$300,000 in
each of the two most recent years and who, in either case,
reasonably expects to exceed that net income level in the
current year; or
(m) a person or company, other than a mutual fund or non-redeemable
investment fund, that, either alone or with a spouse, has net
assets of at least CAD$5,000,000 and unless the person or
company is an individual, that amount is shown on its most
recently prepared financial statements; or
(n) a mutual fund or non-redeemable investment fund that, in the
local jurisdiction, distributes its securities only to persons
or companies that are "accredited investors" (as defined in MI
45-103); or
(o) a mutual fund or non-redeemable investment fund that, in the
local jurisdiction, is distributing or has distributed its
securities under one or more prospectuses for which the
regulator has issued receipts; or
1
(p) a trust company or trust corporation registered or authorized to
carry on business under the Trust and Loan Companies Act
(Canada) or under comparable legislation in a jurisdiction of
Canada or a foreign jurisdiction, trading as a trustee or agent
on behalf of a fully managed account; or
(q) a person or company trading as agent on behalf of a fully
managed account if that person or company is registered or
authorized to carry on business under the securities legislation
of a jurisdiction of Canada or a foreign jurisdiction as a
portfolio manager or under an equivalent category of adviser or
is exempt from registration as a portfolio manager or the
equivalent category of adviser; or
(r) a registered charity under the Income Tax Act (Canada) that, in
regard to the trade, has obtained advice from an eligibility
adviser or other adviser registered to provide advice on the
securities being traded; or
(s) an entity organized in a foreign jurisdiction that is analogous
to any of the entities referred to in paragraphs (a) through (e)
and paragraph (j) in form and function; or
(t) a person or company in respect of which all of the owners of
interests, direct or indirect, legal or beneficial, except the
voting securities required by law to be owned by directors, are
persons or companies that are "accredited investors" (as defined
in MI 45-103).
NOTE: The investor must initial beside the applicable portion of the
above definition.
For the purposes hereof:
(a) "affiliate" means an issuer connected with another issuer because
(i) one of them is the subsidiary of the other, or
(ii) each of them is controlled by the same person or company;
(b) "beneficial ownership" of securities by a person occurs
(i) for the purposes of Alberta securities law, when such securities are
beneficially owned by
(A) a company controlled by that person or an affiliate of that
company,
(B) an affiliate of that person, or
(C) through a trustee, legal representative, agent or other
intermediary of that person;
(c) "Canadian financial institution" means a bank, loan corporation,
trust company, insurance company, treasury branch, credit union or
caisse populaire that, in each case, is authorized to carry on
business in Canada or a jurisdiction, or the Confederation des
caisses populaires et d'economie Desjardins du Quebec;
(d) "director" when used in relation to a person, includes a person
acting in a capacity similar to that of a director of a company;
(e) "eligibility adviser" means an investment dealer or equivalent
category of registration, registered under the securities
legislation of the jurisdiction of a purchaser and authorized to
give advice with respect to the type of security being distributed;
(f) "financial assets" means cash and securities;
(g) "foreign jurisdiction" means a country other than Canada or a
political subdivision of a country other than Canada;
(h) "founder", in respect of the Corporation, means a person or company
who,
2
(i) acting alone, in conjunction or in concert with one or more other
persons or companies, directly or indirectly, has taken the
initiative in founding, organizing or substantially reorganizing the
business of the Corporation, and
(ii) at the time of the proposed trade, is actively involved in the
business of the Corporation;
(i) "fully managed account" means an account for which a person or
company makes the investment decisions if that person or company has
full discretion to trade in securities for the account without
requiring the client's express consent to a transaction;
(j) "jurisdiction" means a province or territory of Canada except when
used in the term "foreign jurisdiction";
(k) "local jurisdiction" means the jurisdiction in which the applicable
securities regulatory authority is situate;
(l) "individual" means a natural person, but does not include
(i) a partnership, unincorporated association, unincorporated syndicate,
unincorporated organization or a trust, or
(ii) a natural person in the person's capacity as trustee, executor,
administrator or other legal representative;
(m) "mutual fund" includes an issuer of securities that entitles the
holder to receive on demand, or within a specified period after
demand, an amount computed by reference to the value of a
proportionate interest in the whole or in part of the net assets,
including a separate fund or trust account, of an issuer of the
securities;
(n) "non-redeemable investment fund" means an issuer,
(i) where contributions of security holders are pooled for investment,
(ii) where security holders do not have day-to-day control over the
management and investment decisions of an issuer, whether or not
they have the right to be consulted or to give directions, and
(iii) whose securities do not entitle the security holder to receive on
demand, or within a specified period after demand, an amount
computed by reference to the value of a proportionate interest in
the whole or in part of the net assets of an issuer;
(o) "person or company" includes
(i) for the purposes of Alberta securities law, an individual,
corporation, partnership, unincorporated or incorporated
association, unincorporated or incorporated syndicate,
unincorporated or other incorporated organization, trust, trustee,
executor, administrator or other legal representative;
(p) "regulator" means
(i) the Executive Director, as defined under section 1 of the Securities
Act (Alberta);
(ii) such other person as is referred to in Appendix D of National
Instrument 14-101 - Definitions;
3
APPENDIX "A"
to Exhibit 1
(q) "related liabilities" means:
(i) liabilities incurred or assumed for the purpose of financing the
acquisition or ownership of financial assets; or
(ii) liabilities that are secured by financial assets;
(r) "securities legislation" means
(i) for Alberta, the Securities Act (Alberta) and the regulations and
rules under such Act and the blanket rulings and orders issued by
the Alberta Securities Commission, and
(ii) for other Canadian jurisdictions, such other statutes and
instruments as are listed in Appendix B of National Instrument
14-101 - Definitions;
(s) "securities regulatory authority" means
(i) the Alberta Securities Commission;
(ii) in respect of any local jurisdiction other than Alberta, means the
securities commission or similar regulatory authority listed in
Appendix C of National Instrument 14-101 - Definitions;
(t) "voting security" means any security which:
(i) is not a debt security; and
(ii) carries a voting right either under all circumstances or under some
circumstances that have occurred and are continuing;
(u) An issuer is considered to be "controlled" by a person or company
if:
(i) for the purposes of Alberta securities law,
a) voting securities of the issuer carrying more than 50% of the
votes that may be cast to elect directors are held, other than
for the purpose of giving collateral for a bona fide debt, by
or for the benefit of that person or company; and
b) the votes carried by the securities referred to in (a) are
sufficient, if exercised, to elect a majority of the board of
directors of the issuer.
4
EXHIBIT "2"
REPRESENTATION LETTER
(FOR ONTARIO ACCREDITED INVESTORS)
TO: DEEP WELL OIL & GAS, INC. (the "Corporation")
In connection with the purchase of units in the capital of the Corporation
(the "Units") by the undersigned subscriber or, if applicable, each beneficial
purchaser for whom the undersigned is acting (the "Subscriber" for the purposes
of this Exhibit 2), the Subscriber hereby represents, warrants, covenants and
certifies to the Corporation that:
1. The Subscriber is resident in Ontario or is subject to the laws of the
Province of Ontario;
2. The Subscriber is purchasing the Units as principal for its own account;
3. The Subscriber is an "accredited investor" within the meaning of Ontario
Securities Commission Rule 45-501 promulgated under the Securities Act (Ontario)
by virtue of satisfying the indicated criterion as set out in Appendix "A" to
this Representation Letter; and
4. Upon execution of this Exhibit 2 by the Subscriber, this Exhibit 2 shall be
incorporated into and form a part of the Subscription Agreement.
Dated: _______________________, 2005.
Print name of Subscriber
By:
--------------------------------------------
Signature
--------------------------------------------
Print name of Signatory (if different
from Subscriber)
--------------------------------------------
Title
IMPORTANT: PLEASE INITIAL THE APPROPRIATE PARAGRAPH(S) ON APPENDIX "A"
APPENDIX "A"
to Exhibit 2
Accredited Investor - (defined in Ontario Securities Commission Rule
45-501) means:
(a) a bank listed in Schedule I or II of the Bank Act (Canada), or
an authorized foreign bank listed in Schedule III of the Bank
Act (Canada);
(b) the Business Development Bank incorporated under the Business
Development Bank Act (Canada);
(c) a loan corporation or trust corporation registered under the
Loan and Trust Corporations Act (Ontario) or under the Trust and
Loan Companies Act (Canada), or under comparable legislation in
any other jurisdiction;
(d) a co-operative credit society, credit union central, federation
of caisses populaire, credit union or league, or regional caisse
populaire, or an association under the Cooperative Credit
Associations Act (Canada), in each case, located in Canada;
(e) a company licensed to do business as an insurance company in any
jurisdiction;
(f) a subsidiary entity of any person or company referred to in
paragraph (a), (b), (c), (d) or (e), where the person or company
owns all of the voting shares of the subsidiary entity;
(g) a person or company registered under the Securities Act
(Ontario) or securities legislation in another jurisdiction as
an adviser or dealer, other than a limited market dealer;
(h) the government of Canada or of any jurisdiction, or any crown
corporation, instrumentality or agency of a Canadian federal,
provincial or territorial government;
(i) any Canadian municipality or any Canadian provincial or
territorial capital city;
(j) any national, federal, state, provincial, territorial or
municipal government of or in any foreign jurisdiction, or any
instrumentality or agency thereof;
(k) a pension fund that is regulated by either the Office of the
Superintendent of Financial Institutions (Canada) or a
provincial pension commission or similar regulatory authority;
(l) a registered charity under the Income Tax Act (Canada); (m) an
individual who beneficially owns, or who together with a spouse
beneficially own, financial assets having an aggregate
realizable value that, before taxes but net of any related
liabilities, exceeds CAD$1,000,000;
(n) an individual whose net income before taxes exceeded CAD$200,000
in each of the two most recent years or whose net income before
taxes combined with that of a spouse exceeded CAD$300,000 in
each of those years and who, in either case, has a reasonable
expectation of exceeding the same net income level in the
current year;
(o) an individual who has been granted registration under the
Securities Act (Ontario) or securities legislation in another
jurisdiction as a representative of a person or company referred
to in paragraph (g), whether or not the individual's
registration is still in effect;
(p) a promoter of the issuer or an affiliated entity of a promoter
of the issuer;
(q) a spouse, parent, brother, sister, grandparent or child of an
officer, director or promoter of the issuer;
APPENDIX "A"
to Exhibit 2
(r) a person or company that, in relation to the issuer, is an
affiliated entity or a person or company referred to in clause
(c) of the definition of distribution in subsection 1(1) of the
Securities Act (Ontario) ("Control Person");
(s) an issuer that is acquiring securities of its own issue; (t) a
company, limited liability company, limited partnership, limited
liability partnership, trust or estate, other than a mutual fund
or non-redeemable investment fund, that had net assets of at
least CAD$5,000,000 as reflected in its most recently prepared
financial statements;
(u) a person or company that is recognized by the Ontario Securities
Commission as an accredited investor;
(v) a mutual fund or non-redeemable investment fund that, in
Ontario, distributes its securities only to persons or companies
that are accredited investors;
(w) a mutual fund or non-redeemable investment fund that, in
Ontario, distributes its securities under a prospectus for which
a receipt has been granted by the Director (as defined in the
Securities Act (Ontario)) or, if it has ceased distribution of
its securities, has previously distributed its securities in
this manner;
(x) a fully managed account if it is acquiring a security that is
not a security of a mutual fund or non-redeemable investment
fund;
(y) an account that is fully managed by a trust corporation
registered under the Loan and Trust Corporations Act (Ontario)
or under the Trust and Loan Companies Act (Canada), or under
comparable legislation in any other jurisdiction;
(z) an entity organized outside of Canada that is analogous to any
of the entities referred to in paragraphs (a) through (g) and
paragraph (k) in form and function; or
(aa) a person or company in respect of which all of the owners of
interests, direct or indirect, legal or beneficial, are persons
or companies that are "accredited investors" (as defined in OSC
Rule 45-501).
NOTE: The investor must initial beside the applicable portion of the
above definition.
For the purposes hereof:
(v) "company" means any corporation, incorporated association, incorporated
syndicate or other incorporated organization;
(w) "Control Person" means any person, company or combination of persons or
companies holding a sufficient number of any securities of the issuer to
affect materially the control of the issuer but any holding of any person,
company or combination of persons or companies holding more than 20% of
the outstanding voting securities of the issuer, in the absence of
evidence to the contrary, shall be deemed to affect materially the control
of the issuer;
(x) "director" where used in relation to a person, includes a person acting in
a capacity similar to that of a director of a company;
(y) "entity" means a company, syndicate, partnership, trust or unincorporated
organization;
(z) "financial assets" means cash, securities, or any contract of insurance or
deposit or evidence thereof that is not a security for the purposes of the
Securities Act (Ontario);
(aa) "fully managed account" means an investment portfolio account of a client
established in writing with a portfolio adviser who makes investment
decisions for the account and has full discretion to trade in securities
of the account without requiring the client's express consent to a
transaction;
(bb) "individual" means a natural person, but does not include a partnership,
unincorporated association, unincorporated syndicate, unincorporated
organization, trust, or a natural person in his or her capacity as
trustee, executor, administrator or other legal personal representative;
(cc) "mutual fund" means an issuer whose primary purpose is to invest money
provided by its security holders and whose securities entitle the holder
to receive on demand, or within a specified period after demand, an amount
computed by reference to the value of a proportionate interest in the
whole or in a part of the net assets, including a separate fund or trust
account, of the issuer;
(dd) "non-redeemable investment fund" means an issuer:
(i) whose primary purpose is to invest money provided by its securityholders;
(ii) that does not invest,
(A) for the purpose of exercising or seeking to exercise control of an issuer,
other than an issuer that is a mutual fund or a non-redeemable investment
fund, or
(B) for the purpose of being actively involved in the management of any issuer
in which it invests, other than an issuer that is a mutual fund or a
non-redeemable investment fund; and
(iii) that is not a mutual fund;
(ee) "officer" means the chair, any vice-chair of the board of directors, the
president, any vice president, the secretary, the assistant secretary, the
treasurer, the assistant treasurer, and the general manager of a company,
and any other person designated an officer of a company by by-law or
similar authority, or any individual acting in a similar capacity on
behalf of an issuer;
(ff) "person" means an individual, partnership, unincorporated association,
unincorporated syndicate, unincorporated organization, trust, trustee,
executor, administrator, or other legal representative;
(gg) "portfolio adviser" means
(i) a portfolio manager; or
(ii) a broker or investment dealer exempted from registration as an adviser
under subsection 148(1) of the Regulation made under the Securities Act
(Ontario) if that broker or investment dealer is not exempt from the
by-laws or regulations of the Toronto Stock Exchange or the Investment
Dealers' Association of Canada referred to in that subsection;
(hh) "promoter" means (a) a person or company who, acting alone or in
conjunction with one or more other persons, companies or a combination
thereof, directly or indirectly, has taken the initiative in founding,
organizing or substantially reorganizing the business of the issuer, or
(b) a person or company who, in connection with the founding, organizing
or substantial reorganizing of the business of the issuer, directly or
indirectly, receives in consideration of services or property, or both
services and property, 10% or more of any class of securities of the
issuer or 10% or more of the proceeds from the sale of any class of
securities of a particular issue, but a person or company who receives
such securities or proceeds either solely as underwriting commissions or
solely in consideration of property shall not be deemed a promoter within
the meaning of this definition if such person or company does not
otherwise take part in founding, organizing or substantially reorganizing
the business;
(ii) "related liabilities" means liabilities incurred or assumed for the
purpose of financing the acquisition or ownership of financial assets and
liabilities that are secured by financial assets; and
(jj) "spouse", in relation to an individual, means another individual to whom
that individual is married, or another individual of the opposite sex or
the same sex with whom that individual is living in a conjugal
relationship outside marriage.
Affiliated Entities, Control and Subsidiaries
1. A person or company is considered to be an affiliated entity of another
person or company if one is a subsidiary entity of the other, or if both are
subsidiary entities of the same person or company, or if each of them is
controlled by the same person or company.
2. A person or company is considered to be controlled by a person or company if
(a) in the case of a person or company,
(i) voting securities of the first mentioned person or company carrying
more than 50% of the votes for the election of directors are held,
otherwise than by way of security only, by or for the benefit of,
the other person or company, and
(ii) the votes carried by the securities are entitled, if exercise, to
elect a majority of the directors of the first-mentioned person or
company.
(b) in the case of a partnership that does not have directors, other than a
limited partnership, the second-mentioned person or company holds more
than 50% of the interests in the partnership; or
(c) in the case of a limited partnership, the general partner is the
second-mentioned person or company.
3. A person or company is considered to be a subsidiary entity of another
person or company if
(a) it is controlled by,
(i) that other, or
(ii) that other and one or more persons or companies, each of which is
controlled by that other, or
(iii) two or more persons or companies, each of which is controlled by
that other, or
(b) it is a subsidiary entity of a person or company that is the other's
subsidiary entity.