EXHIBIT 4.10
UNITED STATES
SUBSCRIPTION AGREEMENT
FOR
COMMON SHARES
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TO:
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Gastar
Exploration Ltd. (the “Corporation”)
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AND TO:
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Pritchard
Capital Partners, LLC
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The undersigned (hereinafter referred to as the
“ Subscriber ”) hereby irrevocably subscribes
for and agrees to purchase the number of common shares of the
Corporation set forth below (the “ Common Shares
”), for the aggregate subscription price set forth below (the
“ Aggregate Subscription Price ”), representing
a subscription price of $2.65 (U.S.) per Common Share, upon and
subject to the terms and conditions set forth in “Terms and
Conditions of Subscription for Common Shares of Gastar Exploration
Ltd.” attached hereto (together with this page and the
attached Exhibits, the “ Subscription Agreement
”). In addition to this face page, the Subscriber must
also complete all applicable Exhibits attached
hereto.
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Number of Common Shares:
Aggregate Subscription Price
(U.S.): $
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(Name of Subscriber - please print)
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By:
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(Authorized Signature)
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Deliver the Common Shares as set forth
below:
(Name)
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(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, including ZIP
code)
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(Account reference, if applicable)
(Contact Name)
(Address, including ZIP code)
Register the Common Shares as
set forth below:
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(Telephone
Number) (E-Mail
Address)
(Taxpayer Identification
Number)
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(Name)
(Account reference, if applicable)
(Address, Including ZIP code )
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ACCEPTANCE: The Corporation hereby accepts the subscription
as set forth above on the terms and conditions contained in this
Subscription Agreement.
Dated: June
, 2005
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GASTAR
EXPLORATION LTD.
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Subscription No:
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By:
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Title:
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This is the first page of an
agreement comprised of 11 pages (not including
Exhibits).
TERMS AND CONDITIONS OF
SUBSCRIPTION FOR
COMMON SHARES OF
GASTAR EXPLORATION
LTD.
Terms of the Offering
1. The Subscriber acknowledges (on its own
behalf and, if applicable, on behalf of each person on whose behalf
the Subscriber is contracting) that this subscription is subject to
rejection or allotment by the Corporation in whole or in
part.
2. The Subscriber acknowledges (on its own
behalf and, if applicable, on behalf of each person on whose behalf
the Subscriber is contracting) that:
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the Common
Shares subscribed for by it hereunder form part of a larger
issuance and sale by the Corporation of up to 6,646,526 Common
Shares at an issue price of $2.65 (U.S.) per Common Share on a best
efforts marketed offering basis through the Agent (the “
Offering ”); and
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subject to
Section 10, the Offering is not subject to any minimum subscription
level, and therefore, any funds invested are available to the
Corporation and will be paid to the Corporation on the Closing
Date.
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Representations, Warranties and Covenants by
Subscriber
3. The Subscriber (on its own behalf and, if
applicable, on behalf of each person on whose behalf the Subscriber
is contracting) represents, warrants and covenants to the
Corporation and the Agent and their respective counsel (and
acknowledges that the Corporation and the Agent, and their
respective counsel, are relying thereon) that both at the date
hereof and at the Closing Time (as defined herein):
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Subscriber (i)
has been advised that trading in the Common Shares will be subject
to various limitations and holding periods of up to two years under
the securities laws of the United States and four months under the
securities laws of Canada regardless of the residence of the
Subscriber; (ii) has been independently advised as to restrictions
with respect to trading in the Common Shares imposed by applicable
securities legislation in the jurisdiction in which it resides;
(iii) confirms that no representation has been made to it by or on
behalf of the Corporation with respect thereto; it acknowledges
that it is aware of the characteristics of the Common Shares, the
risks relating to an investment therein, and of the fact that it
may not be able to resell the Common Shares except in accordance
with limited exemptions under applicable securities legislation and
regulatory policy until expiry of the applicable restricted period
and compliance with the other requirements of applicable law;
and
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Other than
the documents listed on Exhibit 2 hereto, which have been
previously provided to, or obtained by, Subscriber (the
“Disclosure Documents”), Subscriber has not received or
been provided with, nor has it requested, nor does it have any need
to receive, any offering memorandum, any prospectus, sales or
advertising literature, or any other document describing or
purporting to describe 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 Common Shares ; and
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Subscriber has
not become aware of any advertisement in printed media of general
and regular paid circulation (or other printed public media),
radio, television or telecommunications or other form of
advertisement (including electronic display) with respect to the
distribution of the Common Shares; and
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Subscriber is,
and at all times since the Subscriber received a copy of the
Disclosure Documents, was, a resident of and was offered the Common
Shares in the jurisdiction set forth as the
“Subscriber’s Address” under its signature on the
face page of this Subscription Agreement; if the state of his or
her principal residence, or the state of its principal office or
principal place of business, changes, or his, her or its address
changes in any other respect, before the consummation of his, her
or its purchase of the Common Shares subscribed for under this
Subscription Agreement, he, she or it will promptly notify the
Corporation, and if the change in the state or his or her principal
residence, or its principal office or principal place of business,
is to a state in which an offer and/or sale of the Common Shares is
prohibited by applicable law, any offer to sell Common Shares to
him, her or it made before notification of the change in the state
of his or her principal residence, or its principal office or
principal place of business, shall be deemed retracted and he, she
or it shall cease to be entitled to purchase Common Shares pursuant
to such offer; and
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Subscriber
acknowledges that:
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no securities
commission or similar regulatory authority has reviewed or passed
on the merits of the Common Shares or the adequacy or accuracy of
the information set forth in any document provided to Subscriber;
and
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there is no
government or other insurance covering the Common Shares;
and
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the Common
Shares are a speculative investment that involves a high degree of
risk of loss of entire investment; and
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there are
substantial restrictions on the Subscriber’s ability to
resell the Common Shares and it is the responsibility of the
Subscriber to find out what those restrictions are and to comply
with them before selling the Common Shares; and
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the Corporation
has advised the Subscriber that the Corporation is relying on an
exemption from the requirements to provide the Subscriber with a
prospectus and to sell securities through a person or company
registered to sell securities under the Securities Act
(Alberta) and other applicable securities laws and, as a
consequence of acquiring Common Shares pursuant to this exemption,
certain protections, rights and remedies provided by the
Securities Act (Alberta) and other applicable securities
laws, including statutory rights of rescission or damages, will not
be available to the Subscriber; and
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the Common
Shares shall not be resold until after the expiry of the applicable
“hold” or “restricted” period attaching to
such Common Shares under United States and Canadian laws, unless
sold pursuant to an exemption under all applicable securities laws,
and the certificates evidencing the Common Shares which it shall
receive will bear a legend referring to such restrictions on resale
and neither the Corporation nor any transfer agent of the
Corporation will register any transfers of such Common Shares not
made in compliance with such restrictions on resale; and
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the Common
Shares have not been approved or disapproved by the United States
Securities Exchange Commission (the “ SEC ”) or
any state securities commission nor has the SEC or any state
securities commission passed upon the accuracy or adequacy of any
representations of the Corporation; any representation to the
contrary is a criminal offense.
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Subscriber is
purchasing the Common Shares directly from the Corporation pursuant
to Regulation D under U.S. Securities Act of 1933 ,
as amended (the “ 1933 Act ”), and:
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Subscriber is
authorized to consummate the purchase of the Common Shares;
and
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Subscriber
understands and acknowledges that the Common Shares have not been
registered under the 1933 Act, or any applicable state securities
laws, and that the sale contemplated hereby is being made in
reliance on a private placement exemption to institutional
“accredited investors” as defined in Rule 501(a)(1),
(2), (3) or (7) of Regulation D Regulation D under the 1933 Act
(“ Institutional Accredited Investors ”) and
similar exemptions under state law. Accordingly, the Common Shares
will be “restricted securities” within the meaning of
Rule 144 under the 1933 Act, and therefore may not be offered or
sold by it, directly or indirectly, in the United States without
registration under United States federal and, if not preempted,
state securities laws, except in compliance with paragraph 3(f)(v)
and, the Subscriber understands that the certificates representing
the Common Shares issued to it will contain a legend in respect of
such restrictions which is set out in (vi) below; and
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Subscriber has
received, for its information only, a copy of this Subscription
Agreement and a copy of each of the Disclosure Documents and has
been offered the opportunity to ask questions and receive answers
concerning the terms and conditions of the Offering and to obtain
any information the Subscriber deems necessary to verify the
accuracy of any information regarding the Corporation; and has had
access to such additional information, if any, concerning the
Corporation as it has considered necessary in connection with its
investment decision to invest in the Common Shares; and
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Subscriber has
a pre-existing personal or business relationship with the
Corporation or one of its officers, directors or controlling
persons, or by reason of the Subscriber’s business or
financial experience, that it has such knowledge and experience in
financial and business matters as to be capable of evaluating the
merits and risks of its investment in the Common Shares and is able
to bear the economic risks of such investment and can be reasonably
assumed to have the capacity to protect his, her or its own
interests in connection with the transaction contemplated by this
Subscription Agreement; and
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Subscriber
agrees that if it decides to offer, sell or otherwise transfer any
of the Common Shares, it will not offer, sell or otherwise transfer
any of such Common Shares, directly or indirectly, except: (A) to
the Corporation, (B) outside the United States in accordance with
Rule 903 or 904 of Regulation S under the 1933 Act, and in
compliance with applicable local laws and regulations, (C) inside
or outside the United States after one year pursuant to the
exemption from registration under the 1933 Act provided by Rule 144
thereunder, (D) to a person it reasonably believes is a
“qualified institutional buyer” (as defined in Rule
144A under the 1933 Act) purchasing for its own account or for the
account of a qualified institutional buyer in a transaction meeting
the requirements of Rule 144A, (E) inside the United States, in any
other transaction exempt from registration under the 1933 Act and,
in any event, in compliance with any applicable state securities
laws of the United States, provided that prior to any transfer
pursuant to this clause (E), the Corporation may require a legal
opinion reasonably satisfactory to the Corporation that such
transfer is exempt from registration under the 1933 Act and
applicable state securities laws, and, in each instance, in
compliance with any applicable state securities laws of the United
States or (F) pursuant to a registration statement effective under
the 1933 Act and covering such offer, sale and transfer;
and
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Subscriber
understands that upon the original issuance thereof, and until such
time as the same is no longer required under applicable
requirements of the 1933 Act or state securities laws, the
certificates representing the Common Shares, and all certificates
issued in exchange therefor or in substitution thereof, shall bear
on the face of such certificates the following legend:
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THE SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR STATE
SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES,
AGREES FOR THE BENEFIT OF GASTAR EXPLORATION LTD. THAT SUCH
SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A)
TO GASTAR EXPLORATION LTD., (B) OUTSIDE THE UNITED STATES IN
ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S UNDER THE U.S.
SECURITIES ACT, (C) INSIDE OR OUTSIDE THE UNITED STATES, PURSUANT
TO THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER, (D) TO A PERSON THE HOLDER
REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL
BUYER” (AS DEFINED IN RULE 144A UNDER THE U.S. SECURITIES
ACT) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, OR (E) PURSUANT TO A REGISTRATION
STATEMENT EFFECTIVE UNDER THE U.S. SECURITIES ACT AND COVERING SUCH
OFFER, SALE OR TRANSFER (IT BEING UNDERSTOOD THAT THE ISSUER SHALL
BE UNDER NO OBLIGATION TO FILE SUCH REGISTRATION STATEMENT).
HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED HEREBY
MAY NOT BE CONDUCTED EXCEPT IN COMPLIANCE WITH THE U.S. SECURITIES
ACT;
provided , that if Common Shares are being sold in
compliance with the requirements of Rule 144 under the 1933 Act or
pursuant to an effective registration statement under the 1933 Act,
the above legend may be removed by delivery of (i) an opinion of
counsel of recognized standing reasonably satisfactory to the
Corporation to the effect that such Common Shares held by it are
being sold pursuant to Rule 144 of the 1933 Act or pursuant to an
effective registration statement under the 1933 Act, as the case
may be, and (ii) such other documentation reasonably requested by
the Corporation or its transfer agent;
provided , further , that if (i) it is not an
“affiliate” (as defined in Rule 405 under the 1933 Act)
of the
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Corporation, (ii) it has not been
such an affiliate in the preceding three months, and (iii) at least
two years (or such shorter period as may be permitted under Rule
144(k) or any successor rule) have elapsed since the later of the
date the Common Shares were acquired from the Corporation or from
an affiliate of the Corporation, then the above legend may be
removed from any certificates representing such Common Shares held
by it by delivery to the Corporation of an opinion of counsel of
recognized standing reasonably satisfactory to the Corporation, to
the effect that any such Common Shares held by it may be sold
pursuant to Rule 144(k) (or any successor rule) of the 1933 Act and
such legend is no longer required under applicable requirements of
the 1933 Act or state securities laws;
and the Corporation shall use its
reasonable best efforts to cause the registrar and transfer agent
of the Corporation to remove the foregoing U.S. legend within three
business days (excluding weekends and holidays) of receipt of the
foregoing, as applicable; and
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Each
certificate representing the Common Shares will carry a legend, and
any ownership statement issued under a direct registration system
or other electronic book-entry system acceptable to the applicable
Canadian securities regulator will bear a legend restriction
notation, stating “Unless permitted under securities
legislation, the holder of this security must not trade the
security before [insert the date that is 4 months and a day
after the distribution date.] ”
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Subscriber is
an Institutional Accredited Investor as set forth in Exhibit
1 hereto and is acquiring the Common Shares as principal for
its own account for investment, and not with a view to any resale,
distribution or other disposition of the Common Shares, in
violation of United States securities laws; the Subscriber has no
contract, undertaking, agreement or arrangement with any person to
sell, transfer, assign or pledge to such person or anyone else all
or any part of the Common Shares for which the Subscriber hereby
subscribes, and the Subscriber has no plans or intentions to enter
into any such contract, undertaking or arrangement; and
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Subscriber has
concurrently executed and delivered Exhibit 1 hereto with
this Subscription Agreement which Exhibit is incorporated into and
forms a part of this Subscription Agreement; and
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Subscriber has
read, is fully familiar with, and completely understands, the
Disclosure Documents and any other documents and information which
he, she or it deems material to making an investment decision with
respect to the Common Shares; and
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the financial
condition of the Subscriber is such that he, she or it has no need
for liquidity with respect to his, her or its investment in the
Common Shares to satisfy any existing or contemplated undertaking
or indebtedness, and he, she or it has no need for a current return
on his, her or its investment in the Common Shares; he, she or it
is able to bear the economic risk of his, her or its investment in
the Common Shares for an indefinite period of time, including the
risk of losing all of his, her or its investment, and the loss of
his, her or its entire investment in the Common Shares would not
materially adversely affect the standard of living of the
Subscriber or his or her family; and
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all information
that the Subscriber has provided in this Subscription Agreement
concerning the Subscriber and his, her or its financial condition
is correct and complete as of the date set forth below, and if
there should by any material change in such information prior to
the acceptance of the Subscriber’s subscription for the
Common Shares subscribed for under this Subscription Agreement, the
Subscriber will immediately so notify the Corporation;
and
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Subscriber
understands and acknowledges that the certificates representing the
Common Shares will also bear a legend that the securities cannot be
traded through the facilities of stock exchanges in Canada since
the certificate is not freely transferable and consequently is not
“good delivery” in transactions on such stock exchanges
unless on or prior to such trade, arrangements have been made to
remove the legends as provided in the provisos of paragraph
3(f)(vi) hereof, and it acknowledges that such stock exchanges
would deem the selling security holder to be responsible for any
loss incurred on a sale made by such security holder in such
securities; and
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Subscriber
understands and acknowledges that the Corporation has the right to
instruct the transfer agent for the Common Shares not to record a
transfer by any person in the United States without first being
notified by the Corporation that it is satisfied that such transfer
is exempt from or not subject to registration under the 1933 Act
and any applicable state securities laws; and
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Subscriber
acknowledges that it has not purchased the Common Shares as a
result of any general solicitation or general advertising, as such
terms are defined in Regulation D under the 1933 Act, including,
without limitation, advertisements, articles, notices or other
communications published in any newspaper, magazine or similar
media or broadcast over radio or television, or any seminar or
meeting whose attendees have been invited by general solicitation
or general advertising; and
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except as
provided herein, no person has made to the Subscriber any written
or oral representation:
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that any person
will resell or repurchase the Common Shares;
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that any person
will refund the purchase price of the Common Shares; or
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as to the
future price or value of the Common Shares; and
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Subscriber
understands and acknowledges that the Corporation (i) is not
presently, nor is the Corporation under any obligation to become, a
“foreign private issuer”, as such term is defined in
Regulation S of the 1933 Act and (ii) because the Corporation is
not a foreign private issuer, the 1933 Act restricts the offer,
sale or transfer of the Common Shares both within and outside of
the United States, as set forth in this Subscription Agreement;
and
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if a
corporation, partnership, unincorporated association or other
entity, Subscriber 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
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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
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in the case of
a subscription by Subscriber for Common Shares 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,
binding and enforceable agreement of, such principal;
and
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except for the
representations and warranties made by the Corporation in this
Agreement and the Subscriber’s review of the Disclosure
Documents, Subscriber 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
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Subscriber
acknowledges that the Corporation’s counsel and the
Agent’s counsel are acting as counsel to the Corporation and
the Agent, respectively, and not as counsel to the Subscriber;
and
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Subscriber
understands, acknowledges and is aware that the Common Shares are
being offered for
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