APPENDIX F EXAMPLE OF SHARE SUBSCRIPTION AGREEMENT FOR CORPORATION ISSUING SHARES IN RELIANCE ON PROSPECTUS EXEMPTION XYZ COMPANY INC. SUBSCRIPTION AGREEMENT AND POWER OF ATTORNEY TO: XYZ COMPANY INC. ("XYZ" 100 Main St., Suite 100 Toronto, Ont., M4A 1X7 In this Subscription Agreement and Power of Attorney (the Subscription, unless otherwise indicated all references to dollar amounts are in Canadian currency. THE UNDERSIGNED (the Subscriber Subscriber: Address: Tel No.: Fax No: E-mail: John Doe 10 Smith St., Toronto, Ont., M3Z 2A9 416 777-8888 416 888-9999 jdoe@rogers.com subscribes for 5,000 COMMON SHARES (the "Shares" of XYZ COMPANY INC. The subscription price for each Share is ONE ($1.00 DOLLAR (the "Subscription Price". The total Subscription Price is: $5,000.00. XYZ WILL NOT ACCEPT PAYMENT IN ANY CURRENCY OTHER THAN CANADIAN DOLLARS. THE SUBSCRIPTION PRICE MUST BE PAID IN CANADIAN DOLLARS BY BANK WIRE TRANSFER TO XYZ s LAWYER IN ACCORDANCE WITH THE FOLLOWING WIRE TRANSFER INSTRUCTIONS: Lawyer's Name, in Trust Canadian Imperial Bank of Commerce Account No.:
Institution No.: 010 Transit No.: 00612 Swift Code: CIBCCATT Branch Address: Branch Manager: SUBSCRIBER S REPRESENTATION AS TO EXEMPT STATUS UNDER SECURITIES LAWS THE SUBSCIBER REPRESENTS AND WARRANTS TO XYZ THAT THE SUBSCRIBER IS PURCHASING AS PRINCIPAL AND IS ENTITLED TO PURCHASE THE SHARES WITHOUT THE BENEFIT OF A PROSPECTUS FOR ONE OR MORE OF THE FOLLOWING REASONS: Please review and place a checkmark in the applicable paragraph or paragraphs. Accredited Investor Exemption: The Subscriber is an accredited investor under National Instrument 45-106 ( Prospectus and Registration Exemptions see paragraph0 below because the Subscriber is [check applicable box(es]: an individual who, either alone or with my spouse, beneficially owns, directly or indirectly, financial assets having an aggregate realizable value that before taxes, but net of any related liabilities, exceeds $1,000,000; an individual whose net income before taxes exceeded $200,000 in each of the 2 most recent calendar years or whose net income before taxes combined with that of my spouse exceeded $300,000 in each of the 2 most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year; an individual who, either alone or with my spouse, has net assets of at least $5,000,000; a company entirely owned by accredited investors; and/or a founder, an affiliate of a founder, a spouse, parent, brother, sister, grandparent or child of an executive officer, director or a control person of a founder. Minimum amount investment Exemption: The Shares have an acquisition cost of not less than $150,000 paid in cash at the time of the trade.
TERMS AND CONDITIONS OF SUBSCRIPTION Subscription Subject to Acceptance by XYZ: Issuance of the Shares is subject to the acceptance of this Subscription by XYZ and XYZ, at its sole option, may refuse to accept all or any subscriptions received in which case the Subscription Price received from the Subscriber will be returned to the Subscriber without interest or deduction. Articles of Incorporation, By-Laws and Unanimous Shareholder Agreement: The Subscriber acknowledges that XYZ has made the following XYZ documents available to the Subscriber either by hard copy or online: Articles of Incorporation; By-Law One General Business By-Law; By-Law Two Election and Term of Directors; By-Law Three Transactions Requiring a Supermajority of Directors; and Unanimous Shareholder Agreement (the USA. The Subscriber irrevocably acknowledges, agrees to and accepts, without limitation, the provisions of the documents listed in paragraph 0, above. In accordance with the Powers of Attorney Act and the Substitute Decisions Act, 1992, the Subscriber hereby irrevocably constitutes and appoints XYZ and any duly authorized officer of XYZ as the Subscriber s true and lawful attorney and agent, with full power and authority in the Subscriber s name, place and stead, and for the Subscriber s use and benefit to execute the USA on the Subscriber s behalf. The Subscriber acknowledges and agrees that if this Subscription is accepted by XYZ the Subscriber will become a party to and be bound by the USA among XYZ and each party who, from time to time, becomes a Shareholder in accordance with the terms of the USA. In the event of a conflict between the provisions of this Subscription and the USA, the provisions of the USA shall prevail. Risk Acknowledgement: The Subscriber acknowledges that: This is a risky investment.
The Subscriber is investing entirely at the Subscriber s own risk. No securities regulatory authority has evaluated or endorsed the merits of the investment or the disclosure in any Offering Memorandum issued by XYZ. XYZ is not registered with a securities regulatory authority and has no duty to tell the Subscriber whether this investment is suitable for the Subscriber. The Subscriber will not be able to sell the Shares except in accordance with the USA and applicable securities laws. Without limiting the generality of the foregoing, the Subscriber acknowledges that: No market presently exists for the purchased Shares. The Shares are being sold pursuant to exemptions contained in National Instrument 45-106 ( Prospectus and Registration Exemptions and any subsequent disposition of Shares will require compliance with that Instrument including, but not limited to, applicable hold periods. XYZ is not and has no current intention of become a reporting issuer, or its equivalent, in any jurisdiction and this could result in the shareholders of XYZ having to hold their shares for an indefinite period of time if no statutory exemption may be relied upon or if no discretionary order or ruling is obtained with respect to the resale of such shares. The Subscriber could lose all the money the Subscriber has invested in XYZ. The Subscriber should not invest in XYZ unless the Subscriber can afford a complete loss of such investment and believes that the investment in XYZ is not unreasonably large when compared with the Subscriber's total financial capability. Changes in Legislation: Existing securities and tax laws, rules, regulations, by-laws, policies, guidelines, orders, decisions, rulings and instruments may be amended, repealed or substituted in a way that adversely affects the value of the Shares. Share Issues and Options: Subject to the USA, XYZ has the right to issue shares or grant options to third parties. XYZ also has the right to enter into anti-dilution agreements. In the absence of an anti-dilution agreement, the issuance of shares or granting of options to third parties will have the effect of diluting the Subscriber s interest in XYZ. Such issues or options may include parties not acting at arm s length from XYZ including, but not limited to, management.
OTHER PROVISIONS Compliance with Securities Legislation: The Subscriber agrees to comply with the applicable securities legislation in force and effect in the jurisdiction in which the Subscriber is a resident concerning the purchase of and holding of shares and concerning any resale or transfer of Shares. Subscriber s Further Representations and Warranties: The Subscriber represents and warrants that: If the Subscriber is an individual, the Subscriber is of the age of majority and has the legal capacity and competence to execute and be bound by this Subscription and to enter into and be bound by the USA. If the Subscriber is a corporation, partnership, unincorporated association or other entity, the Subscriber has full power and authority and is legally competent to execute and be bound by this Subscription and to enter into and be bound by the USA, and to take all actions required pursuant thereto, and that all necessary approvals of directors, shareholders, partners, members, and otherwise have been given or obtained. No offer of Shares was made to the Subscriber in the United States (as defined in Regulation S under the U.S. Securities Act of 1933, the Subscriber is executing this Subscription outside of the United States and the Subscriber has no intention to distribute, either directly or indirectly, any shares to any person within the United States except in compliance with the USA and applicable law. Confidentiality: The Subscriber agrees to keep confidential all information provided to the Subscriber relating to the business and affairs of XYZ and not to distribute or otherwise make available any such information to any other person or otherwise exploit any such information. Statutory Right to Action for Damages or Rescission: This Subscription is not intended to be an Offering Memorandum within the meaning Ontario Rule 14-501. If, notwithstanding the foregoing, this Subscription is deemed by the Ontario Securities Commission or any court or tribunal of competent authority to be an Offering Memorandum that contains a misrepresentation, then the Subscriber will have the following rights without regard to whether the Subscriber relied on the misrepresentation: The Subscriber has a right of action for damages against XYZ. The Subscriber may elect to exercise a right of rescission against XYZ. If the Subscriber exercises this right, the Subscriber ceases to have
a right of action for damages against XYZ. Notwithstanding the foregoing, XYZ is not liable if it proves that the Subscriber purchased the Shares with knowledge of the misrepresentation. In an action for damages XYZ is not liable for all or any portion of the damages that XYZ proves do not represent the depreciation in value of the Shares as a result of the misrepresentation relied upon. In no case shall the amount recoverable exceed the price at which the Shares were offered. Subscription Not Revocable: Subject to paragraph0, this Subscription is nonrevocable. Time of the Essence: Time shall be of the essence of this Subscription. Severability: The invalidity of any provision of this Subscription shall not affect the validity of any other provision of this Subscription. Subscription Not Assignable: This Subscription is not assignable. Successors: This Subscription shall enure to the benefit of and be binding upon the Subscriber and XYZ and their respective heirs, personal representatives and successors. Entire Agreement and Exclusion of Collateral Agreements, Representations and Understandings: (a (b (c (d This Subscription together with the USA constitute the entire agreement with respect to its subject matter and supersedes all prior agreements, understandings, negotiations and discussions, written or oral, with respect to that subject matter. There are no conditions, representations, warranties or other agreements between the Subscriber and XYZ or any of its directors, officers, shareholders or agents in connection with the subject matter of this Subscription, whether written or oral, express or implied, statutory or otherwise, except as specifically set out in this Subscription. This Subscription may not be amended or modified in any respect except by further agreement in writing. The Parties irrevocably agree that this paragraph0 is intended to exclude tort liability including, without limitation, liability for representations and/or misrepresentations that may otherwise have given rise to a claim under tort law independent of this Subscription.
Governing Law: This Subscription shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada which apply within the Province of Ontario (excluding any conflict of laws, rule or principle which might refer such interpretation to the laws of another jurisdiction. Any proceedings relating to the subject matter of this Subscription shall be brought in the City of Toronto. Contra Proferentem Rule: Notwithstanding any rule of construction to the contrary, the Subscriber agrees that should any court or tribunal of competent jurisdiction make a finding that a provision of this Subscription is ambiguous or uncertain, and then such ambiguity or uncertainty shall not be construed against XYZ by reason only of the authorship of this Subscription. Independent Professional Advice: The Subscriber hereby acknowledges that the Subscriber has been advised and encouraged to seek independent legal, accounting and financial advice with respect to this transaction to determine the appropriateness of the investment in relation to the Subscriber s own financial objectives. DATED.
SIGNED, SEALED AND DELIVERED IN THE PRESENCE OF Witness to Signature of Subscriber PRINT NAME: Address and telephone number of Witness: Signature of Subscriber or authorized officer of Subscriber IF AUTHORIZED OFFICER - PRINT NAME AND POSITION: I have authority to bind the corporation ACCEPTANCE OF SUBSCRIPTION The foregoing Subscription Agreement is hereby accepted by XYZ effective as of [Date]. XYZ COMPANY INC., Per: Authorized Signatory